Exhibit 10.1

 

 

CLASS B UNIT PURCHASE AGREEMENT

by and between

BOARDWALK PIPELINE PARTNERS, LP

and

BOARDWALK PIPELINES HOLDING CORP.

 

 

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TABLE OF CONTENTS

 

   ARTICLE I       DEFINITIONS    Section 1.1    Definitions    1    ARTICLE II
      AGREEMENT TO SELL AND PURCHASE    Section 2.1    Sale and Purchase    4
Section 2.2    Closing    4 Section 2.3    Mutual Conditions    4 Section 2.4   
The Purchaser’s Conditions    5 Section 2.5    Boardwalk’s Conditions    5
Section 2.6    Boardwalk Deliveries    6 Section 2.7    Purchaser Deliveries   
7    ARTICLE III       REPRESENTATIONS AND WARRANTIES OF BOARDWALK   
Section 3.1    Existence    7 Section 3.2    No Conflict    8 Section 3.3    No
Default    8 Section 3.4    Authority    8 Section 3.5    Due Authorization    8
Section 3.6    Valid Issuance    9 Section 3.7    No Preemptive or Registration
Rights    9 Section 3.8    Periodic Reports    9 Section 3.9    Litigation    9
Section 3.10    Certain Fees    10 Section 3.11    No Side Agreements    10
Section 3.12    No Registration    10 Section 3.13    No Integration    10   
ARTICLE IV       REPRESENTATIONS AND WARRANTIES OF THE PURCHASER    Section 4.1
   Existence    10 Section 4.2    Authorization, Enforceability    10
Section 4.3    No Breach    11 Section 4.4    Certain Fees    11 Section 4.5   
No Side Agreements    11 Section 4.6    Investment    11

 

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Section 4.7    Nature of Purchaser    11 Section 4.8    Restricted Securities   
12 Section 4.9    Legend    12    ARTICLE V       COVENANTS    Section 5.1   
Taking of Necessary Action    12 Section 5.2    Other Actions    12 Section 5.3
   Payment of Expenses    12    ARTICLE VI       MISCELLANEOUS    Section 6.1   
Interpretation and Survival of Provisions    13 Section 6.2    Survival of
Provisions    13 Section 6.3    No Waiver; Modifications in Writing    13
Section 6.4    Binding Effect; Assignment    14 Section 6.5    Communications   
14 Section 6.6    Removal of Legend    15 Section 6.7    Entire Agreement    15
Section 6.8    Governing Law    15 Section 6.9    Execution in Counterparts   
15 Section 6.10    Termination    15 Section 6.11    Recapitalization,
Exchanges, Etc. Affecting the Class B Units    16 Exhibit A — Form of Amendment
No. 2 to the Second Amended and Restated Agreement of Limited Partnership of
Boardwalk Pipeline Partners, LP    Exhibit B — Form of Registration Rights
Agreement    Exhibit C — Form of Opinion of Vinson & Elkins L.L.P.   

 

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CLASS B UNIT PURCHASE AGREEMENT

This CLASS B UNIT PURCHASE AGREEMENT, dated as of April 24, 2008 (this
“Agreement”), is by and between BOARDWALK PIPELINE PARTNERS, LP, a Delaware
limited partnership (“Boardwalk”), and BOARDWALK PIPELINES HOLDING CORP., a
Delaware corporation (the “Purchaser”).

WHEREAS, Boardwalk desires to sell to the Purchaser, and the Purchaser desires
to purchase from Boardwalk, certain Class B Units, in accordance with the
provisions of this Agreement;

WHEREAS, the General Partner (as hereinafter defined) has, concurrently with the
execution hereof, agreed to exercise its right to make additional capital
contributions pursuant to Section 5.2(b) of the Partnership Agreement (such
contribution, the “GP 2% Contribution”) in connection with the issuance of the
Class B Units contemplated hereby; and

WHEREAS, Boardwalk has agreed to provide the Purchaser with certain registration
rights with respect to the Common Units underlying the Class B Units acquired
pursuant hereto.

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

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:

“Affiliate” means, with respect to 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.

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

“BGL” means Boardwalk GP, LLC, a Delaware limited liability company.

“Boardwalk” has the meaning set forth in the introductory paragraph.

“Boardwalk Entity” means Boardwalk and its Subsidiaries.

“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 Kentucky shall not be regarded as a Business Day.

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“Class B Amendment” means Amendment No. 2 to the Second Amended and Restated
Agreement of Limited Partnership of Boardwalk, in all material respects in the
form attached to this Agreement as Exhibit A.

“Class B Unit Price” has the meaning specified in Section 2.1(b).

“Class B Units” means the Class B Units representing limited partner interests
in Boardwalk as established by the Class B Amendment.

“Closing” has the meaning specified in Section 2.2.

“Closing Date” has the meaning specified in Section 2.2.

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

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

“Delaware LP Act” has the meaning specified in Section 3.1.

“Delaware LLC Act” has the meaning specified in Section 3.1.

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

“General Partner” means Boardwalk GP, LP, a Delaware limited partnership.

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

“GP 2% Contribution” has the meaning set forth in the recitals.

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

“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. For the purpose of this Agreement, a Person shall be
deemed to be the owner of any Property that it has acquired or holds subject to
a conditional sale agreement, or leases under a financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person in a transaction intended to create a financing.

 

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“Material Adverse Effect” has the meaning specified in Section 3.1.

“NYSE” means The New York Stock Exchange, Inc.

“Operative Documents” means, collectively, this Agreement, the Registration
Rights Agreement, the Class B Amendment and any other agreements or instruments
executed and delivered by the Parties on even date herewith or at the Closing
relating to the issuance and sale of the Class B Units, or any amendments,
supplements, continuations or modifications thereto.

“Partnership Agreement” means the Second Amended and Restated Agreement of
Limited Partnership of Boardwalk dated September 19, 2006, as amended from time
to time, including by the Class B Amendment.

“Partnership Securities” means any class or series of equity interest in
Boardwalk (but excluding any options, rights, warrants and appreciation rights
relating to an equity interest in Boardwalk), including without limitation
Common Units, Class B Units, Subordinated Units and Incentive Distribution
Rights (as defined in the Partnership Agreement).

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

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

“Purchase Price” means an amount equal to the product of the number of Class B
Units multiplied by the Class B Unit Price.

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

“Registration Rights Agreement” means the Registration Rights Agreement, to be
entered into at the Closing, between Boardwalk and the Purchaser in the form
attached hereto as Exhibit B.

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

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

“Subordinated Units” means the subordinated units representing limited partner
interests in Boardwalk.

“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)

 

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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.

“Unitholders” means the unitholders of Boardwalk.

ARTICLE II

AGREEMENT TO SELL AND PURCHASE

Section 2.1 Sale and Purchase.

(a) Subject to the terms and conditions hereof, Boardwalk hereby agrees to issue
and sell to the Purchaser and the Purchaser hereby agrees to purchase from
Boardwalk, 22,866,667 Class B Units, and the Purchaser agrees to pay Boardwalk
the Class B Unit Price for each Purchased Unit as set forth in paragraph
(b) below.

(b) The amount per Class B Unit the Purchaser will pay to Boardwalk to purchase
the Class B Units (the “Class B Unit Price”) hereunder shall be $30.00.

Section 2.2 Closing. Subject to the terms and conditions hereof, the
consummation of the purchase and sale of the Class B Units hereunder (the
“Closing”) shall take place at the offices of Vinson & Elkins L.L.P., 666 Fifth
Avenue, 26th Floor, New York, New York on June 17, 2008 or such other date
mutually agreed by the parties (the date of such closing, the “Closing Date”).

Section 2.3 Mutual Conditions. The respective obligations of each party to
consummate the purchase and issuance and sale of the Class B Units shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any or all of which may be waived by a party on behalf of
itself in writing, in whole or in part, to the extent permitted by applicable
Law):

(a) no Law shall have been enacted or promulgated, and no action shall have been
taken, by any Governmental Authority of competent jurisdiction that temporarily,
preliminarily or permanently restrains, precludes, enjoins or otherwise
prohibits the consummation of the transactions contemplated hereby or makes the
transactions contemplated hereby illegal; and

 

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

Section 2.4 The Purchaser’s Conditions. The obligation of the Purchaser to
consummate the purchase of the Class B Units shall be subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
(any or all of which may be waived by the Purchaser in writing, in whole or in
part, to the extent permitted by applicable Law):

(a) Boardwalk shall have performed and complied with the covenants and
agreements contained in this Agreement that are required to be performed and
complied with by Boardwalk on or prior to the Closing Date;

(b) The representations and warranties of Boardwalk contained in this Agreement
that are qualified by materiality or a Material Adverse Effect shall be true and
correct when made and as of the Closing Date and all other representations and
warranties of Boardwalk shall be true and correct in all material respects when
made and as of the Closing Date, in each case as though made at and as of the
Closing Date (except that representations made as of a specific date shall be
required to be true and correct as of such date only);

(c) The NYSE shall have authorized, upon official notice of issuance, the
listing of Common Units upon conversion of Class B Units, as set forth in the
Class B Amendment.

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

(e) The Class B Amendment, in all material respects in the form attached as
Exhibit A to this Agreement but with such additional modifications as shall be
consented to by the Purchaser (such consent not to be unreasonably withheld),
shall have been duly adopted and be in full force; and

(f) Boardwalk shall have delivered, or caused to be delivered, to the Purchaser
at the Closing, Boardwalk’s closing deliveries described in Section 2.6.

Section 2.5 Boardwalk’s Conditions. The obligation of Boardwalk to consummate
the sale of the Class B Units to the Purchaser shall be subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
with respect to the Purchaser (any or all of which may be waived by Boardwalk in
writing, in whole or in part, to the extent permitted by applicable Law):

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

(b) the Purchaser shall have delivered, or caused to be delivered, to Boardwalk
at the Closing the Purchaser’s closing deliveries described in Section 2.7;

 

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(c) Boardwalk and the General Partner shall have received an opinion from
Vinson & Elkins L.L.P., legal counsel to Boardwalk, dated as of the Closing, in
the form and substance of paragraphs (i) – (v) contained on Exhibit C hereto;
and

(d) the General Partner shall have made the GP 2% Contribution.

Section 2.6 Boardwalk Deliveries. At the Closing, subject to the terms and
conditions hereof, Boardwalk will deliver, or cause to be delivered, to the
Purchaser:

(a) A certificate or certificates representing the Class B Units (bearing the
legend set forth in Section 4.9) and meeting the requirements of the Partnership
Agreement, free and clear of any Liens, other than transfer restrictions under
the Partnership Agreement and applicable federal and state securities laws;

(b) A certificate of the Secretary of State of the State of Delaware, dated a
recent date, to the effect that Boardwalk is in good standing;

(c) A cross-receipt executed by Boardwalk and delivered to the Purchaser
certifying that it has received the Purchase Price from the Purchaser as of the
Closing Date;

(d) An opinion addressed to the Purchaser from Vinson & Elkins L.L.P., legal
counsel to Boardwalk, dated as of the Closing, in the form and substance
attached hereto as Exhibit C;

(e) The Registration Rights Agreement in substantially the form attached hereto
as Exhibit B, which shall have been duly executed by Boardwalk;

(f) A certificate, dated the Closing Date and signed by the Chief Executive
Officer and the Chief Financial Officer of BGL, in their capacities as such,
stating that:

(i) Boardwalk has performed and complied with the covenants and agreements
contained in this Agreement that are required to be performed and complied with
by Boardwalk on or prior to the Closing Date; and

(ii) The representations and warranties of Boardwalk contained in this Agreement
that are qualified by materiality or Material Adverse Effect are true and
correct as of the Closing Date and all other representations and warranties of
Boardwalk are true and correct in all material respects as of the Closing Date
(except that representations made as of a specific date shall be required to be
true and correct as of such date only); and

(g) A certificate of the Secretary or Assistant Secretary of BGL, on behalf of
Boardwalk, certifying as to (1) the Partnership Agreement, as amended, (2) board
resolutions authorizing the execution and delivery of the Operative Documents
and the consummation of the transactions contemplated thereby, including the
issuance of the Class B Units and (3) its incumbent officers authorized to
execute the Operative Documents, setting forth the name and title and bearing
the signatures of such officers.

 

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Section 2.7 Purchaser Deliveries. At the Closing, subject to the terms and
conditions hereof, the Purchaser will deliver, or cause to be delivered, to
Boardwalk:

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

(b) The Registration Rights Agreement in substantially the form attached hereto
as Exhibit A, which shall have been duly executed by the Purchaser;

(c) A cross-receipt executed by the Purchaser and delivered to Boardwalk
certifying that it has received the Class B Units as of the Closing Date;

(d) Such documents and instruments that may be required by the General Partner
pursuant to Section 10.4 of the Partnership Agreement (including a properly
completed Taxation Certification), which shall have been duly executed by the
Purchaser; and

(e) A certificate from the Purchaser, dated the Closing Date and signed by an
appropriate officer of the Purchaser, in his or her capacity as such, stating
that:

(i) The Purchaser has performed and complied with the covenants and agreements
contained in this Agreement that are required to be performed and complied with
by it on or prior to the Closing Date; and

(ii) The representations and warranties of the Purchaser contained in this
Agreement that are qualified by materiality are true and correct as of the
Closing Date and all other representations and warranties of the Purchaser are
true and correct in all material respects as of the Closing Date (except that
representations made as of a specific date shall be required to be true and
correct as of such date only).

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BOARDWALK

Boardwalk represents and warrants to the Purchaser as follows:

Section 3.1 Existence. Each of the General Partner, BGL and the Boardwalk
Entities has been duly formed and is validly existing and in good standing as a
limited partnership under the Delaware Revised Uniform Limited Partnership Act
(the “Delaware LP Act”) or a limited liability company under the Delaware
Limited Liability Company Act (the “Delaware LLC Act”), as applicable, has the
full partnership or limited liability company power and authority necessary to
own or hold its properties and assets and to conduct the businesses in which it
is engaged, and is duly registered or qualified to do business and in good
standing as a foreign limited partnership or limited liability company in each
jurisdiction in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to so register or
qualify could not reasonably be expected to (i) have a material adverse effect
on the condition (financial or other), results of operations, securityholders’
equity, properties or business of the Boardwalk Entities taken as a whole (a
“Material Adverse Effect”) or (ii) subject the limited partners of Boardwalk to
any material liability or disability.

 

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Section 3.2 No Conflict. None of the offering, issuance and sale by Boardwalk of
the Class B Units and the application of the proceeds therefrom, the execution,
delivery and performance of the Operative Documents by Boardwalk, or the
consummation of the transactions contemplated hereby or thereby (including
issuance of Common Units upon conversion of the Class B Units) (i) conflicts or
will conflict with, or constitutes or will constitute a violation of, the
certificate or agreement of limited partnership, certificate of formation,
limited liability company agreement or other organizational documents of the
Boardwalk Entities, (ii) conflicts or will conflict with, or constitutes or will
constitute a breach or violation of or a default under (or an event that, with
notice or lapse of time or both, would constitute such a breach or violation of
or default under), any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which any of the Boardwalk Entities is a
party, by which any of them is bound or to which any of their respective
properties or assets is subject, (iii) violates or will violate any statute,
law, ordinance, regulation, order, judgment, decree or injunction of any court
or governmental agency or body to which any of the Boardwalk Entities or any of
their respective properties or assets may be subject or (iv) will result in the
creation or imposition of any Lien upon any property or assets of any Boardwalk
Entity which conflicts, breaches, violations, defaults or Liens, in the case of
clauses (ii), (iii) or (iv), would, individually or in the aggregate, have a
Material Adverse Effect.

Section 3.3 No Default. None of the Boardwalk Entities (i) is in violation of
its certificate or agreement of limited partnership, certificate of formation or
limited liability company agreement, or other organizational documents, (ii) is
in breach of or default under any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party, by which it is bound or to which any of its
properties or assets is subject (and no event has occurred that, with notice or
lapse of time or both, would constitute such a breach or default), (iii) is in
violation of any statute, law, ordinance, rule, regulation, order, judgment,
decree or injunction of any court or governmental agency or body to which it or
its property or assets may be subject or (iv) has failed to obtain any license,
permit, certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its business,
except, in the case of clauses (ii) or (iv), as could not reasonably be expected
to have a Material Adverse Effect.

Section 3.4 Authority. On the Closing Date, Boardwalk will have all requisite
power and authority to issue, sell and deliver the Class B Units, in accordance
with and upon the terms and conditions set forth in this Agreement and the
Partnership Agreement. On the Closing Date, all corporate, partnership or
limited liability company action, as the case may be, required to be taken by
the General Partner, BGL and Boardwalk for the authorization, issuance, sale and
delivery of the Class B Units, the execution and delivery of the Operative
Documents and the consummation of the transactions contemplated hereby and
thereby shall have been validly taken.

Section 3.5 Due Authorization. Each of the Operative Documents has been duly and
validly authorized and has been or, with respect to the Operative Documents to
be delivered at the Closing Date, will be, validly executed and delivered by
Boardwalk and constitutes, or will

 

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constitute, the legal, valid and binding obligations of Boardwalk, enforceable
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer and similar laws affecting
creditors’ rights generally or by general principles of equity, including
principles of commercial reasonableness, fair dealing and good faith.

Section 3.6 Valid Issuance. The Class B Units to be issued and sold by Boardwalk
to the Purchaser hereunder have been duly authorized in accordance with the
Partnership Agreement and, when issued and delivered against payment therefor
pursuant to this Agreement, will be validly issued in accordance with the
Partnership Agreement, fully paid (to the extent required under the Partnership
Agreement) and non-assessable (except as such nonassessability may be affected
by matters described in Sections 17-303, 17-607 and 17-804 of the Delaware LP
Act). The Class B Units shall have those rights, preferences, privileges and
restrictions governing the Class B Units, which shall be reflected in the Class
B Amendment. The Common Units issuable upon conversion of the Class B Units and
the limited partner interests represented thereby, upon issuance in accordance
with the terms of the Class B Units as reflected in the Class B Amendment have
been duly authorized in accordance with to the Partnership Agreement and will be
validly issued, fully paid (to the extent required by applicable law and the
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by matters described in Sections 17-303, 17-607 and 17-804 of the
Delaware LP Act).

Section 3.7 No Preemptive or Registration Rights. Except as set forth in the
Partnership Agreement, there are no preemptive rights or other rights to
subscribe for or to purchase, nor any restriction upon the voting or transfer
of, any capital stock or partnership or membership interests of any of the
Boardwalk Entities, in each case pursuant to any other agreement or instrument
to which any of such entities is a party or by which any one of them may be
bound. Except as contemplated by this Agreement and the Registration Rights
Agreement, or provided for in the Partnership Agreement, (i) neither the
execution of this Agreement, the issuance of the Class B Units as contemplated
by this Agreement nor the conversion of the Class B Units into Common Units
gives rise to any rights for or relating to the registration of any Partnership
Securities, and (ii) there are no contracts, agreements or understandings
between any Boardwalk Entity and any person granting such person the right to
require Boardwalk to file a registration statement under the Securities Act with
respect to any securities of Boardwalk owned or to be owned by such person, or
to require Boardwalk to include such securities in any securities registered or
to be registered pursuant to any registration statement filed by or required to
be filed by Boardwalk under the Securities Act.

Section 3.8 Periodic Reports. Boardwalk has filed all forms, reports, schedules
and statements required to be filed by it under the Exchange Act subsequent to
December 31, 2007 and when they were filed with the Commission, each such form,
report, schedule and statement conformed in all material respects to the
requirements of the Exchange Act and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.

Section 3.9 Litigation. Except as described in Boardwalk’s Annual Report on Form
10-K for the year ended December 31, 2007, there are no legal or governmental
proceedings pending to which any Boardwalk Entity is a party or to which any
property or asset of any Boardwalk Entity is subject that could reasonably be
expected to have, individually or in

 

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the aggregate, a Material Adverse Effect or a material adverse effect on the
performance of this Agreement or the consummation of the transactions
contemplated hereby, and to the knowledge of Boardwalk, no such proceedings are
threatened by Governmental Authorities or others.

Section 3.10 Certain Fees. No fees or commissions are or will be payable by
Boardwalk to brokers, finders, or investment bankers with respect to the sale of
any of the Class B Units or the consummation of the transaction contemplated by
this Agreement. Boardwalk agrees that it will indemnify and hold harmless the
Purchaser from and against any and all claims, demands, or liabilities for
broker’s, finder’s, placement, or other similar fees or commissions incurred by
Boardwalk or alleged to have been incurred by Boardwalk in connection with the
sale of the Class B Units or the consummation of the transactions contemplated
by this Agreement.

Section 3.11 No Side Agreements. There are no agreements by, among or between
Boardwalk or any of its Affiliates, on the one hand, and the Purchaser or any of
its Affiliates, on the other hand, with respect to the transactions contemplated
hereby other than the Operative Documents nor promises or inducements for future
transactions between or among any of such parties.

Section 3.12 No Registration. Assuming the accuracy of the representations and
warranties of the Purchaser contained in Section 4.6 and Section 4.7, the
issuance and sale of the Class B Units pursuant to this Agreement is exempt from
registration requirements of the Securities Act of 1933, as amended.

Section 3.13 No Integration. Neither Boardwalk nor any of its Subsidiaries have,
directly or indirectly through any agent, sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any “security” (as defined
in the Securities Act of 1933, as amended) that is or will be integrated with
the sale of the Class B Units in a manner that would require registration under
the Securities Act of 1933, as amended.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to Boardwalk that:

Section 4.1 Existence. The Purchaser is duly organized and validly existing and
in good standing as a corporation under the laws of the State of Delaware, with
all corporate power and authority to own properties and to conduct its business
as currently conducted.

Section 4.2 Authorization, Enforceability. The Purchaser has all necessary
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and the Registration Rights Agreement and to consummate the
transactions contemplated thereby, and the execution, delivery and performance
by the Purchaser of this Agreement and the Registration Rights Agreement has
been duly authorized by all necessary action on the part of the Purchaser; and
this Agreement and the Registration Rights Agreement constitute the legal, valid
and binding obligations of the Purchaser, enforceable in accordance with their
terms, except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer and similar laws affecting creditors’ rights generally or by
general principles of equity, including principles of commercial reasonableness,
fair dealing and good faith.

 

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Section 4.3 No Breach. The execution, delivery and performance of this Agreement
and the Registration Rights Agreement by the Purchaser and the consummation by
the Purchaser of the transactions contemplated hereby and thereby will not
(a) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material agreement to which
the Purchaser is a party or by which the Purchaser is bound or to which any of
the property or assets of the Purchaser is subject, (b) conflict with or result
in any violation of the provisions of the organizational documents of the
Purchaser, or (c) violate any statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Purchaser or the
property or assets of the Purchaser, except in the cases of clauses (a) and (c),
for such conflicts, breaches, violations or defaults as would not prevent the
consummation of the transactions contemplated by this Agreement and the
Registration Rights Agreement.

Section 4.4 Certain Fees. No fees or commissions are or will be payable by the
Purchaser to brokers, finders, or investment bankers with respect to the
purchase of any of the Class B Units or the consummation of the transaction
contemplated by this Agreement. The Purchaser agrees that it will indemnify and
hold harmless Boardwalk from and against any and all claims, demands, or
liabilities for broker’s, finder’s, placement, or other similar fees or
commissions incurred by the Purchaser or alleged to have been incurred by the
Purchaser in connection with the purchase of the Class B Units or the
consummation of the transactions contemplated by this Agreement.

Section 4.5 No Side Agreements. There are no other agreements by, among or
between the Purchaser and any of its Affiliates, on the one hand, and Boardwalk
or any of its Affiliates, on the other hand, with respect to the transactions
contemplated hereby other than the Operative Documents nor promises or
inducements for future transactions between or among any of such parties.

Section 4.6 Investment. The Class B Units are being acquired for the Purchaser’s
own account and with no intention of distributing the Class B Units or any part
thereof, and the Purchaser has no present intention of selling or granting any
participation in or otherwise distributing the same in any transaction in
violation of the securities laws of the United States or any state, without
prejudice, however, to the Purchaser’s right at all times to sell or otherwise
dispose of all or any part of the Class B Units under a registration statement
under the Securities Act and applicable state securities laws or under an
exemption from such registration available thereunder (including, without
limitation, if available, Rule 144 promulgated thereunder). If the Purchaser
should in the future decide to dispose of any of the Class B Units, the
Purchaser understands and agrees (a) that it may do so only in compliance with
the Securities Act and applicable state securities law, as then in effect, which
may include a sale contemplated by any registration statement pursuant to which
such securities are being offered, and (b) that stop-transfer instructions to
that effect will be in effect with respect to such securities.

Section 4.7 Nature of Purchaser. The Purchaser represents and warrants to, and
covenants and agrees with, Boardwalk that, (a) it is an “accredited investor”
within the meaning

 

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of Rule 501 of Regulation D promulgated by the Commission pursuant to the
Securities Act and (b) by reason of its business and financial experience it has
such knowledge, sophistication and experience in making similar investments and
in business and financial matters generally so as to be capable of evaluating
the merits and risks of the prospective investment in the Class B Units, is able
to bear the economic risk of such investment and, at the present time, would be
able to afford a complete loss of such investment.

Section 4.8 Restricted Securities. The Purchaser understands that the Class B
Units are characterized as “restricted securities” under the federal securities
Laws inasmuch as they are being acquired from Boardwalk in a transaction not
involving a public offering and that under such Laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances. In this connection, the Purchaser represents
that it is knowledgeable with respect to Rule 144 of the Commission promulgated
under the Securities Act.

Section 4.9 Legend. It is understood that the certificates evidencing the Class
B Units will bear the legend required by the Partnership Agreement as well as
the following legend: “These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold or offered for sale in
the absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel satisfactory to the Company that such
registration is not required or unless sold pursuant to Rule 144 of such Act.
These securities may be pledged in connection with a bona fide margin account or
other loan secured by such securities.”

ARTICLE V

COVENANTS

Section 5.1 Taking of Necessary Action. Each of the Parties hereto shall use its
commercially reasonable efforts promptly to take or cause to be taken all action
and promptly to do or cause to be done all things necessary, proper or advisable
under applicable Law and regulations to consummate and make effective the
transactions contemplated by this Agreement.

Section 5.2 Other Actions. Boardwalk shall (i) cause the Class B Amendment to be
adopted immediately prior to the issuance and sale of the Class B Units
contemplated by this Agreement and (ii) file prior to the Closing a supplemental
listing application with the NYSE to list the Common Units underlying the Class
B Units.

Section 5.3 Payment of Expenses. Boardwalk hereby agrees to reimburse the
Purchaser, upon demand, for its reasonable out-of-pocket expenses incurred in
connection with (i) the preparation of the Operative Documents, (ii) the issue,
sale and delivery of the Class B Units and (iii) any listing of the Class B
Units, or the Common Units into which the Class B Units are convertible, on any
securities exchange or qualification of the Class B Units or such Common Units
for quotation on the NYSE.

 

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ARTICLE VI

MISCELLANEOUS

Section 6.1 Interpretation and Survival of Provisions. Article, Section,
Schedule, and Exhibit references are to this Agreement, unless otherwise
specified. All references to instruments, documents, contracts, and agreements
are references to such instruments, documents, contracts, and agreements as the
same may be amended, supplemented, and otherwise modified from time to time,
unless otherwise specified. The word “including” shall mean “including but not
limited to.” Whenever any party has an obligation under the Operative Documents,
the expense of complying with that obligation shall be an expense of such party
unless otherwise specified. Whenever any determination, consent, or approval is
to be made or given by the Purchaser, such action shall be in the Purchaser’s
sole discretion unless otherwise specified in this Agreement. If any provision
in the Operative Documents is held to be illegal, invalid, not binding, or
unenforceable, such provision shall be fully severable and the Operative
Documents shall be construed and enforced as if such illegal, invalid, not
binding, or unenforceable provision had never comprised a part of the Operative
Documents, and the remaining provisions shall remain in full force and effect.
The Operative Documents have been reviewed and negotiated by sophisticated
parties with access to legal counsel and shall not be construed against the
drafter.

Section 6.2 Survival of Provisions. The representations and warranties set forth
in Sections 3.1, 3.4, 3.6, 3.7, 3.10, 3.11, 3.12, 4.4, 4.5, 4.7, 4.8 and 4.9
hereunder shall survive the execution and delivery of this Agreement
indefinitely, and the other representations and warranties set forth herein
shall survive for a period of twelve (12) months following the Closing Date
regardless of any investigation made by or on behalf of Boardwalk or the
Purchaser. The covenants made in this Agreement or any other Operative Document
shall survive the Closing of the transactions described herein and remain
operative and in full force and effect regardless of acceptance of any of the
Class B Units and payment therefor and repayment, conversion, exercise or
repurchase thereof.

Section 6.3 No Waiver; Modifications in Writing.

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

(b) Specific Waiver. Except as otherwise provided herein, no amendment, waiver,
consent, modification, or termination of any provision of this Agreement or any
other Operative Document (except in the case of the Partnership Agreement, for
amendments adopted pursuant to the terms thereof) shall be effective unless
signed by each of the parties hereto or thereto affected by such amendment,
waiver, consent, modification, or termination. Any amendment, supplement or
modification of or to any provision of this Agreement or any other Operative
Document, any waiver of any provision of this Agreement or any other Operative
Document, and any consent to any departure by Boardwalk from the terms of any
provision of this Agreement or

 

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any other Operative Document shall be effective only in the specific instance
and for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on Boardwalk in
any case shall entitle Boardwalk to any other or further notice or demand in
similar or other circumstances.

Section 6.4 Binding Effect; Assignment.

(a) Binding Effect. This Agreement shall be binding upon Boardwalk, the
Purchaser, and their respective successors and permitted assigns. Except as
expressly provided in this Agreement, this Agreement shall not be construed so
as to confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and permitted assigns.

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

Section 6.5 Communications. All notices and demands provided for hereunder shall
be in writing and shall be given by registered or certified mail, return receipt
requested, telecopy, air courier guaranteeing overnight delivery or personal
delivery to the following addresses:

 

  (a) If to the Purchaser:

Boardwalk Pipelines Holding Corp.

9 Greenway Plaza, Suite 2800

Houston, TX 77046

Attention: Corporate Secretary

Facsimile: (866) 459-7336

with a copy to:

Loews Corporation

667 Madison Avenue

New York, NY 10021

Attention: Corporate Secretary

Facsimile: (212) 521-2997

 

  (b) If to Boardwalk:

Boardwalk Pipeline Partners, LP

9 Greenway Plaza, Suite 2800

Houston, TX 77046

Attention: Corporate Secretary

Facsimile: (866) 459-7336

 

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

Section 6.6 Removal of Legend. The Purchaser may request Boardwalk to remove the
legend described in Section 4.9 from the certificates evidencing the Class B
Units by submitting to Boardwalk such certificates, together with an opinion of
counsel to the effect that such legend is no longer required under the
Securities Act or applicable state laws, as the case may be. Boardwalk shall
cooperate with the Purchaser to effect the removal of such legend.

Section 6.7 Entire Agreement. This Agreement, the other Operative Documents and
the other agreements and documents referred to herein are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or the other Operative Documents with respect to the
rights granted by Boardwalk or any of its Affiliates or the Purchaser or any of
its Affiliates set forth herein or therein. This Agreement, the other Operative
Documents and the other agreements and documents referred to herein or therein
supersede all prior agreements and understandings between the parties with
respect to such subject matter.

Section 6.8 Governing Law. This Agreement will be construed in accordance with
and governed by the laws of the State of New York.

Section 6.9 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.

Section 6.10 Termination.

(a) Notwithstanding anything herein to the contrary, this Agreement may be
terminated at any time at or prior to the Closing by either party, upon a breach
in any material respect by the other party of any covenant or agreement set
forth in this Agreement.

(b) Notwithstanding anything herein to the contrary, this Agreement shall
automatically terminate at any time at or prior to the Closing if a statute,
rule, order, decree or regulation shall have been enacted or promulgated, or if
any action shall have been taken by any Governmental Authority of competent
jurisdiction that permanently restrains, permanently precludes, permanently
enjoins or otherwise permanently prohibits the consummation of the transactions
contemplated by this Agreement or makes the transactions contemplated by this
Agreement illegal.

 

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(c) In the event of the termination of this Agreement as provided in this
Section 6.10, this Agreement shall forthwith become null and void. In the event
of such termination, there shall be no liability on the part of any party
hereto; provided that nothing herein shall relieve any party from any liability
or obligation with respect to any willful breach of this Agreement.

Section 6.11 Recapitalization, Exchanges, Etc. Affecting the Class B Units. The
provisions of this Agreement shall apply to the full extent set forth herein
with respect to any and all units of Boardwalk or any successor or assign of
Boardwalk (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for or in substitution of, the Class B
Units, and shall be appropriately adjusted for combinations, recapitalizations
and the like occurring after the date of this Agreement and prior to the
Closing.

[Signature pages follow.]

 

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

 

BOARDWALK PIPELINE PARTNERS, LP By:  

BOARDWALK GP, LP

(its General Partner)

By:   BOARDWALK GP, LLC   (its General Partner) By:  

/s/ Jamie L. Buskill

Name:   Jamie L. Buskill Title:   Chief Financial Officer BOARDWALK PIPELINES
HOLDING CORP. By:  

/s/ Jamie L. Buskill

Name:   Jamie L. Buskill Title:   Chief Financial Officer

Signature Page to Purchase Agreement

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Exhibit A – Form of Amendment No. 2 to

Second Amended and Restated Agreement of Limited Partnership

Exhibit A to Purchase Agreement

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AMENDMENT NO. 2 TO THE SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP OF

BOARDWALK PIPELINE PARTNERS, LP

THIS AMENDMENT NO. 2 TO THE SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF BOARDWALK PIPELINE PARTNERS, LP (this “Amendment”), dated as of
            , 2008, is entered into and effectuated by Boardwalk GP, LP, a
Delaware limited partnership, as the General Partner, pursuant to authority
granted to it in Sections 5.6 and 13.1 of the Second Amended and Restated
Agreement of Limited Partnership of Boardwalk Pipeline Partners, LP, dated as of
September 19, 2006 (as amended by Amendment No.1, the “Partnership Agreement”).
Capitalized terms used but not defined herein are used as defined in the
Partnership Agreement.

WHEREAS, Section 5.6 of the Partnership Agreement provides that the Partnership,
without the approval of any Limited Partners, may issue additional Partnership
Securities, or classes or series thereof, for any Partnership purpose at any
time and from time to time, and may issue such Partnership Securities to such
Persons, for such consideration and on such terms and conditions as shall be
established by the General Partner; and

WHEREAS, Section 13.1(g) of the Partnership Agreement provides that the General
Partner, without the approval of any Partner, may amend any provision of the
Partnership Agreement necessary or appropriate in connection with the
authorization of issuance of any class or series of Partnership Securities
pursuant to Section 5.6 of the Partnership Agreement; and

WHEREAS, Section 13.1(d)(i) of the Partnership Agreement provides that the
General Partner, without the approval of any Limited Partner, may amend any
provision of the Partnership Agreement to reflect a change that the General
Partner determines does not adversely affect the Limited Partners (including any
particular class of Partnership Interests as compared to other classes of
Partnership Interests) in any material respect; and

WHEREAS, the Partnership has entered into a Class B Unit Purchase Agreement,
dated as of April 24, 2008 (the “Purchase Agreement”), with Boardwalk Pipelines
Holding Corp., a Delaware corporation (“BPHC”); and

WHEREAS, the Purchase Agreement obligates the Partnership to issue limited
partner interests to be designated as Class B Units having the terms set forth
herein; and

WHEREAS, the General Partner deems it in the best interest of the Partnership to
effect this Amendment in order to provide for (i) the authorization of a class
of Limited Partner Units designated as “Class B Units,” (ii) the issuance of
Class B Units to BPHC pursuant to the Purchase Agreement and (iii) such other
matters as are provided herein.

Exhibit A to Purchase Agreement

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NOW, THEREFORE, it is hereby agreed as follows:

A. Amendment. The Partnership Agreement is hereby amended as follows:

1. Section 1.1 is hereby amended to add the following definitions:

“Class B Unit” means a Unit representing a fractional part of the Partnership
Interests of all Limited Partners and Assignees and having the rights and
obligations specified with respect to the Class B Units in this Agreement. The
term “Class B Unit” as used herein does not include a Common Unit or
Subordinated Unit. A Class B Unit that is convertible into a Common Unit shall
not constitute a Common Unit until such conversion occurs.

“Class B Unit Arrearage” means, with respect to any Class B Unit, whenever
issued, as to any Quarter within the Subordination Period, the excess, if any,
of (a) the Class B Unit Quarterly Distribution with respect to a Class B Unit in
respect of such Quarter over (b) the sum of all cash distributed with respect to
a Class B Unit in respect of such Quarter pursuant to Section 6.4(a)(i).

“Class B Unit Quarterly Distribution” means $0.30 per Class B Unit per Quarter,
subject to adjustment in accordance with Sections 6.6 and 6.9.

“Class B Unit Return” means with respect to any Class B Unit, whenever issued,
and as of the end of any taxable period, an amount equal to the product of
(A) the Class B Unit Quarterly Distribution multiplied by (B) the number of
Quarters (or portions thereof) having occurred in the current taxable period and
all prior taxable periods beginning on or after July 1, 2008.

“Commences Commercial Service,” “Commenced Commercial Service” and “Commencement
of Commercial Service” shall mean the date a Capital Improvement is first put
into service by a Group Member following, if applicable, completion of
construction and testing.

“Conversion Date” means, with respect any Class B Unit, the time immediately
prior to the close of business on the date of which a Certificate representing
such Class B Unit and a duly signed Conversion Notice have been received by the
Partnership.

“Conversion Notice” means notice of conversion of Class B Units substantially in
the form of Exhibit B to this Agreement.

“Cumulative Class B Unit Arrearage” means, with respect to any Class B Unit,
whenever issued, and as of the end of any Quarter, the excess, if any, of
(a) the sum resulting from adding together the Class B Unit Arrearage as to an
Initial Class B Unit for each of the Quarters within the Subordination Period
ending on or before the last day of such Quarter over (b) the sum of any
distributions theretofore made pursuant to Sections 6.4(a)(iii) and 6.5(a) with
respect to an Initial Class B Unit (including any distributions to be made in
respect of the last of such Quarters).

“Initial Class B Unit” means the Class B Units issued pursuant to the Purchase
Agreement.

“Purchase Agreement” means the Class B Unit Purchase Agreement, dated as of
April 24, 2008, between the Partnership and Boardwalk Pipelines Holding Corp.

“Retained Converted Class B Unit” has the meaning assigned to such term in
Section 5.5(c)(iii).

 

Exhibit A to Purchase Agreement

2

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2. Section 1.1 is hereby amended by amending and restating the final sentence to
the definition of “Common Unit”:

The term “Common Unit” does not refer to a Subordinated Unit or a Class B Unit,
in each case, prior to its conversion into a Common Unit pursuant to the terms
hereof.

3. Section 1.1 is hereby amended by adding the following as the final sentence
to the definition of “Outstanding”:

Class B Units will be deemed not to be Outstanding for the purpose of the
definition of “Subordination Period” or the application of Section 5.7(a) for
any Quarter ending on or prior to June 30, 2008.

4. Section 1.1 is hereby amended by amending and restating the following
definitions:

“Common Unit Arrearage” means, with respect to any Common Unit, whenever issued,
as to any Quarter within the Subordination Period, the excess, if any, of
(a) the Minimum Quarterly Distribution with respect to a Common Unit in respect
of such Quarter over (b) the sum of all Available Cash distributed with respect
to a Common Unit in respect of such Quarter pursuant to Sections 6.4(a)(i) and
(ii) and 6.4(b)(i).

“Conflicts Committee” means a committee of the Board of Directors of the General
Partner composed entirely of two or more directors who are not (a) security
holders, officers or employees of the General Partner, (b) officers, directors
or employees of any Affiliate of the General Partner (other than, if the General
Partner is a limited partnership, directors or managers of the general partner
of the General Partner who otherwise satisfy the requirements of this
definition) or (c) holders of any ownership interest in the Partnership Group
other than Common Units and who also meet 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.

“Cumulative Common Unit Arrearage” means, with respect to any Common Unit,
whenever issued, and as of the end of any Quarter, the excess, if any, of
(a) the sum resulting from adding together the Common Unit Arrearage as to an
Initial Common Unit for each of the Quarters within the Subordination Period
ending on or before the last day of such Quarter over (b) the sum of any
distributions theretofore made pursuant to Sections 6.5(a) and (b), 6.4(a)(iii)
and (iv) and 6.4(b)(ii) with respect to an Initial Common Unit (including any
distributions to be made in respect of the last of such Quarters).

“Expansion Capital Expenditures” means cash expenditures for Acquisitions or
Capital Improvements. Expansion Capital Expenditures shall include interest (and
related fees) on debt incurred and distributions on equity incurred, in each
case, to finance the construction of a Capital Improvement and paid during the
period beginning on the date that the Partnership enters into a Capital
Improvement and ending on the earlier to occur of the date that such Capital
Improvement Commences Commercial Service or the date that such Capital
Improvement is abandoned or disposed of. Debt incurred or equity issued to fund
such construction period

 

Exhibit A to Purchase Agreement

3

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interest payments, or such construction period distributions on equity paid
during such period, shall also be deemed to be debt or equity, as the case may
be, incurred to finance the construction of a Capital Improvement.

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

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

“Subordination Period” means the period commencing on the Closing Date and
ending on the first to occur of the following dates:

(a) the second Business Day following the distribution of Available Cash to
Partners pursuant to Section 6.3(a) in respect of any Quarter, in respect of
which (A) distributions of Available Cash from Operating Surplus on each of the
Outstanding Common Units, Class B Units, Subordinated Units, General Partner
Units and any other Outstanding Units that are senior or equal in right of
distribution to the Subordinated Units with respect to each of the three
consecutive, non-overlapping four-Quarter periods immediately preceding such
date equaled or exceeded the sum of the Minimum Quarterly Distribution (treating
the Class B Unit Quarterly Distribution as the Minimum Quarterly Distribution
with respect to the Class B Units for this purpose) on all Outstanding Common
Units, Class B Units and Subordinated Units and any other Outstanding Units that
are senior or equal in right of distribution to the Subordinated Units and the
General Partner Units during such periods and (B) the Adjusted Operating Surplus
for each of the three consecutive, non-overlapping four-Quarter periods
immediately preceding such date equaled or exceeded the sum of the Minimum
Quarterly Distribution (treating the Class B Unit Quarterly Distribution as the
Minimum Quarterly Distribution with respect to the Class B Units for this
purpose) on all of the Common Units, Class B Units, Subordinated Units and any
other Units that are senior or equal in right of distribution to the
Subordinated Units that were Outstanding during such periods on a Fully Diluted
Basis, plus the related distribution on the General Partner Units and (ii) there
are no Cumulative Common Unit Arrearages; and

(b) the date on which the General Partner is removed as general partner of the
Partnership upon the requisite vote by holders of Outstanding Units under
circumstances where Cause does not exist and no Units held by the General
Partner and its Affiliates are voted in favor of such removal.

“Unit Majority” means, (i) during the Subordination Period, at least a majority
of the Outstanding Common Units and Class B Units (excluding Common Units and
Class B Units owned by the General Partner and its Affiliates) voting as a
single class, and at least a majority of the Outstanding Subordinated Units
voting as a class, and (ii) after the end of the Subordination Period, at least
a majority of the Outstanding Units voting as a single class.

 

Exhibit A to Purchase Agreement

4

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

5. Article V is hereby amended to add a new Section 5.5(c)(iii) as follows:

(iii) Immediately prior to the transfer of a Class B Unit or of a Class B Unit
that has converted into a Common Unit pursuant to Section 5.11(c) by a holder
thereof (other than a transfer to an Affiliate unless the General Partner elects
to have this subparagraph 5.5(c)(iii) apply), the Capital Account maintained for
such Person with respect to its Class B Units or converted Class B Units will
(A) first, be allocated to the Class B Units or converted Class B Units to be
transferred in an amount equal to the product of (x) the number of such Class B
Units or converted Class B Units to be transferred and (y) the Per Unit Capital
Amount for a Common Unit, and (B) second, any remaining balance in such Capital
Account will be retained by the transferor, regardless of whether it has
retained any Class B Units or converted Class B Units (“Retained Converted Class
B Units”). Following any such allocation, the transferor’s Capital Account, if
any, maintained with respect to the retained Class B Units or converted Class B
Units, if any, will have a balance equal to the amount allocated under clause
(B) above, and the transferee’s Capital Account established with respect to the
transferred Class B Units or converted Class B Units will have a balance equal
to the amount allocated under clause (A) hereinabove.

6. Section 5.7(a) is hereby amended and restated as follows:

(a) All of the Subordinated Units will convert into Common Units on a
one-for-one basis on the second Business Day following the distribution of
Available Cash to Partners pursuant to Section 6.3(a) in respect of any Quarter
ending on or after December 31, 2006, in respect of which:

(i) distributions of Available Cash from Operating Surplus under Section 6.4 on
each of the Outstanding Common Units, Class B Units, Subordinated Units and any
other Outstanding Units that are senior or equal in right of distribution to the
Subordinated Units with respect to the four-Quarter period immediately preceding
such date equaled or exceeded the sum of the Third Target Distribution (treating
the Class B Unit Quarterly Distribution as the Third Target Distribution with
respect to the Class B Units for this purpose) on all of the Outstanding Common
Units, Class B Units, Subordinated Units and any other Outstanding Units that
are senior or equal in right of distribution to the Subordinated Units during
such period;

 

Exhibit A to Purchase Agreement

5

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(ii) the Adjusted Operating Surplus for the four-Quarter period immediately
preceding such date equaled or exceeded the sum of the Third Target Distribution
(treating the Class B Unit Quarterly Distribution as the Third Target
Distribution with respect to the Class B Units for this purpose) on all of the
Common Units, Class B Units, Subordinated Units and any other Units that are
senior or equal in right of distribution to the Subordinated Units that were
Outstanding during such period on a Fully Diluted Basis, plus the related
distribution on the General Partner Units during such period; and

(iii) there are no Cumulative Common Unit Arrearages.

7. Section 5.9(a) is hereby amended to add a new final sentence as follows:

For the avoidance of doubt, upon any Pro Rata distribution of Partnership
Securities to all Record Holders of Common Units or any subdivision or
combination (or reclassified into a greater or smaller number) of Common Units,
the Partnership will proportionately adjust the number of Class B Units as
follows: (a) if the Partnership issues Partnership Securities as a distribution
on its Common Units or subdivides the Common Units (or reclassifies them into a
greater number of Common Units) then the Class B Units shall be subdivided into
a number of Class B Units equal to the result of multiplying the number of Class
B Units by a fraction, (A) the numerator of which shall be the sum of the number
of Common Units outstanding immediately prior to such distribution or
subdivision plus the total number of Partnership Securities constituting such
distribution or newly created by such subdivision; and (B) the denominator of
which shall be the number of Common Units outstanding immediately prior to such
distribution or subdivision; and (b) if the Partnership combines the Common
Units (or reclassifies them into a smaller number of Common Units) then the
Class B Units shall be combined into a number of Class B Units equal to the
result of multiplying the number of Class B Units by a fraction, (A) the
numerator of which shall be the sum of the number of Common Units outstanding
immediately following to such combination; and (B) the denominator of which
shall be the number of Common Units outstanding immediately prior to such
combination.

8. Article V is hereby amended to add a new Section 5.11 creating a new series
of Units as follows:

Section 5.11 Establishment of Class B Units.

(a) There is hereby created a series of Limited Partner Units to be designated
as “Class B Units,” consisting of a total of 22,866,667 Class B Units and having
the terms and conditions set forth herein.

(b) The holders of the Class B Units shall have rights upon dissolution and
liquidation of the Partnership, including the right to share in any liquidating
distributions pursuant to Section 12.4, in accordance with Article XII of the
Partnership Agreement.

(c) (i) Subject to and upon compliance with this Section 5.11(c), at the option
of the holders of Class B Units, any and all Class B Units may be converted into
fully paid and nonassessable Common Units (calculated in Common Units as to each
conversion to seven decimal places and rounded down to six decimal places) as
hereinafter provided (the “Conversion”); provided, however, such conversion
right (the “Conversion Right”) shall not commence until June 30, 2013.

 

Exhibit A to Purchase Agreement

6

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(ii) The Class B Units will convert into Common Units on a one-for-one basis
upon exercise of the Conversion Right.

(iii) In order to exercise the Conversion Right, the holder of any Class B Unit
to be converted shall surrender the Certificate representing such Class B Unit,
duly endorsed or assigned to the Partnership or in blank, at any office or
agency of the Partnership maintained for that purpose (which may be the Transfer
Agent), accompanied by a duly signed Conversion Notice substantially in the form
provided in Exhibit B hereto, stating that the holder of Class B Units elects to
convert the Class B Units represented by such Certificate, or, if less than the
entire number of Class B Units represented by such Certificate are to be
converted, the whole number of such Class B Units to be converted. Any such
delivery of Certificates and the Conversion Notice shall be irrevocable. Only
whole numbers of Class B Units may be converted. If a Class B Unit is
surrendered for conversion during the period from the close of business on any
Record Date next preceding any distribution date to the opening of business on
such distribution date, the distribution payable in respect of a Class B Unit on
such Distribution Date shall be paid to the holder of Class B Units of such
Class B Unit on the Record Date, notwithstanding that such Class B Unit has been
surrendered for conversion or the Conversion Date with respect to such Class B
Unit has occurred. If a Class B Unit is surrendered for conversion and the
Conversion Date with respect to such Class B Unit occurs prior to a Record Date
for distributions, such Class B Unit will, as provided below, have been deemed
transferred to the Partnership and cancelled on such Conversion Date, and
therefore no distribution will be made on the cancelled Class B Unit on the
related distribution date, whether or not the Partnership has yet delivered to
the holder of Class B Units the Certificates representing Common Units
deliverable upon the conversion. Except as provided in this
Section 5.11(c)(iii), no cash or other payment or adjustment shall be made upon
any conversion on account of any distribution declared from the distribution
date next preceding the Conversion Date in respect of any Class B Unit
surrendered for conversion, or on account of any distribution declared or
payable on the Common Unit deliverable upon conversion.

(iv) Class B Units being converted shall be deemed to have been converted on the
Conversion Date, and at such time the rights of the holder of such Class B Units
as holder of Class B Units shall cease, including any rights under the
Partnership Agreement, except such Person shall continue to be a Limited Partner
and shall have the right to receive Common Units from the Partnership in
conversion for such Class B Units in accordance with this Section 5.11(c), and
such Class B Units shall upon the Conversion Date be deemed to be transferred
to, and cancelled by, the Partnership. Within three Trading Days after the
Conversion Date, the Partnership shall deliver to the Transfer Agent, for
delivery to the holder of Class B Units being converted, a Certificate or

 

Exhibit A to Purchase Agreement

7

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Certificates for the number of Common Units deliverable upon conversion,
together with payment in lieu of any fraction of a Common Unit, if any, as
provided in Section 5.11(c)(vi) below. Such Certificate or Certificates for
Common Units shall be registered in the name of the holder of the Class B Units
surrendered for conversion. Holders of Class B Units, in their capacity as such,
have no rights in respect of Common Units unless and until the Class B Units are
converted and Common Units registered in the name of the holder have been issued
and delivered to such holder or to the Transfer Agent as described above. If a
Record Date for distributions in respect of Common Units occurs between the
Conversion Date and the earlier of the date on which Common Units issued upon
conversion of Class B Units are registered in the name of the holder of such
converted Class B Units and the date on which the Partnership delivers to the
Transfer Agent the Certificates for Common Units deliverable upon such
conversion as provided above, the Partnership shall (i) with respect to such
distribution to be made with respect to the Common Unit deliverable by the
Partnership with respect to such conversion, forward such distribution with
respect to such Common Units to the holder of Class B Units surrendering such
Class B Units for conversion at the address reflected on the records of the
Transfer Agent, or as shown on the Conversion Notice, and (ii) with respect to a
Record Date for voting or consent of Common Units, provide the holder of Class B
Units surrendering such Class B Units for conversion a proxy enabling such
holder of Class B Units to vote or consent with respect to the vote or consent
of such Common Units for the matters related to such Record Date.

(v) In the case of any Certificate representing Class B Units which are
converted in part only, upon such conversion the Transfer Agent shall
authenticate and deliver to the holder of Class B Units thereof, at the expense
of the Partnership, a new Certificate representing the number of Class B Units
not so converted.

(vi) No fractional Common Unit shall be delivered upon conversion of any Class B
Units. If more than one Certificate representing Class B Units shall be
surrendered for conversion with the same Conversion Date by the same holder of
Class B Units, the number of full Common Units which shall be deliverable upon
conversion thereof shall be computed on the basis of the aggregate number of
whole Class B Units so surrendered. Instead of any fractional Common Unit which
would otherwise be issuable upon conversion of any Class B Units, the
Partnership shall calculate and pay a cash adjustment in respect of such
fraction (calculated with respect to a Common Unit to seven decimal places and
rounded down to six decimal places) in an amount equal to the same fraction of
the Closing Price on the Conversion Date (or, if such day is not a Trading Day,
on the Trading Day immediately preceding such day), or at the Partnership ‘s
option, the Partnership may round the number of Common Units delivered up to the
next higher whole Common Unit.

(vii) If a holder converts a Class B Unit, the Partnership shall pay any
documentary, stamp or similar issue or transfer taxes or duties relating to the

 

Exhibit A to Purchase Agreement

8

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issuance or delivery of Common Units upon exercise of such conversion rights.
However, the holder shall pay any tax or duty which may be payable relating to
any transfer involving the issuance or delivery of Common Units in a name other
than the holder’s name. The Transfer Agent may refuse to deliver the Certificate
representing Common Units being issued in a name other than the holder’s name
until the Transfer Agent receives a sum sufficient to pay any tax or duties
which will be due because the shares are to be issued in a name other than the
holder’s name. Nothing herein shall preclude any tax withholding required by law
or regulation.

(viii) (A) The Partnership shall keep free from preemptive rights a sufficient
number of Common Units to permit the conversion of all outstanding Class B Units
into Common Units to the extent provided in, and in accordance with, this
Section 5.11(c).

(B) All Common Units delivered upon conversion of the Class B Units shall be
newly issued, shall be duly authorized and validly issued, and shall be free
from preemptive rights and free of any lien or adverse claim.

(C) The Partnership shall comply with all applicable securities laws regulating
the offer and delivery of any Common Units upon conversion of Class B Units and,
if the Common Units are then listed or quoted on the New York Stock Exchange,
the Nasdaq or any other United States national or regional securities exchange
or other market, shall list or cause to have quoted and keep listed and quoted
the Common Units issuable upon conversion of the Class B Units to the extent
permitted or required by the rules of such exchange or market.

(D) Notwithstanding anything herein to the contrary, nothing herein shall give
to any holder of Class B Units any rights as a creditor in respect solely of its
right to conversion.

(d) Subject to Section 13.3(c), the Class B Units will have such voting rights
pursuant to the Agreement as such Class B Units would have if they were Common
Units that were then Outstanding and shall vote together with the Common Units
as a single class, except that the Class B Units shall be entitled to vote as a
separate class on any matter on which Unitholders are entitled to vote that
adversely affects the rights or preferences of the Class B Units in relation to
other classes of Partnership Interests in any material respect or as required by
law. The approval of a majority of the Class B Units shall be required to
approve any matter for which the holders of the Class B Units are entitled to
vote as a separate class. When voting together with the Common Units as a single
class, each Class B Unit will be entitled to the number of votes equal to the
number of Common Units into which a Class B Unit is convertible at the time of
the Record Date for the vote or written consent on the matter.

(e) The Class B Units will be evidenced by Certificates in such form as the
General Partner may approve (containing appropriate legends concerning transfer
restrictions, securities laws and any other requirements); the General Partner
will act as registrar and transfer agent for the Class B Units.

 

Exhibit A to Purchase Agreement

9

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(f) If (i) the Partnership issues rights, warrants or appreciation rights to all
holders of its Common Units entitling them for a period of not more than 60
calendar days to subscribe for or purchase Common Units at a price per unit less
than the Current Market Price on the Business Day immediately preceding the date
of announcement of such issuance or (ii) the Partnership or any Subsidiary of
the Partnership distributes cash or other consideration in respect of a tender
offer or exchange offer made by the Partnership or any Subsidiary of the
Partnership for all or any portion of the Common Units where the sum of the
aggregate amount of such cash distributed and the aggregate fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and set forth in a resolution of the Board of Directors), as of the
Expiration Date (as defined below), of such other consideration distributed
expressed as an amount per Common Unit validly tendered or exchanged, and
accepted for purchase, pursuant to such tender offer or exchange offer as of the
last time at which tenders or exchanges could have been made pursuant to such
tender offer or exchange offer (such tendered or exchanged Common Units, the
“Purchased Units”) exceeds the Current Market Price per Common Unit per Common
Unit on the first Trading Day immediately following the last date (such last
date, the “Expiration Date”) on which tenders or conversions could have been
made pursuant to such tender offer or exchange offer (as the same may be amended
through the Expiration Date), then in each such case the Partnership will make
proper provision such that such subscription, purchase, tender offer or exchange
offer is made to the Class B Units as if such Class B Units were Common Units
and receive the same rights, warrants, appreciation rights, cash or other
consideration, as the case may be, per Class B Unit as would be payable to a
Common Unit.

(g) If (1) there shall occur (a) any reclassification of the Common Units (other
than a change as a result of a subdivision or combination of the Partnership’s
Common Units); (b) a statutory unit exchange, consolidation, merger or
combination involving the Partnership other than a merger in which the
Partnership is the continuing partnership and which does not result in any
reclassification of, or change (other than as a result of a subdivision or
combination pursuant to the final sentence of Section 5.9(a) above) in,
outstanding Common Units; or (c) a sale or conveyance as an entirety or
substantially as an entirety of the property and assets of the Partnership,
directly or indirectly, to another Person; and (2) pursuant to such
reclassification, statutory unit exchange, consolidation, merger, combination,
sale or conveyance, outstanding Common Units are converted or exchanged into or
for stock (other than Common Units), other securities, other property, assets or
cash, then the Partnership, or such successor or surviving, purchasing or
transferee Person, as the case may be, shall, as a condition precedent to such
reclassification, statutory unit exchange, consolidation, merger, combination,
sale or conveyance, execute an amendment to the Partnership Agreement providing
that, at and after the effective time of such reclassification, statutory unit
exchange, consolidation, sale or conveyance, the right to convert a Class B Unit
will be changed into a right to convert it into the kind and amount of stock,
other securities or other property or assets (including cash or any combination
thereof) that a holder of a Common Unit immediately prior to such
reclassification, statutory unit exchange, consolidation, merger, combination,
sale or conveyance would have owned or been entitled to receive (the “Reference
Property”) upon such transaction immediately prior to such reclassification,
statutory unit exchange, consolidation, merger, combination, sale or conveyance.
If the reclassification, statutory unit exchange, consolidation, merger,
combination, sale or

 

Exhibit A to Purchase Agreement

10

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conveyance causes the Common Units to be converted into the right to receive
more than a single type of consideration (determined based in part upon any form
of election), the Reference Property into which the Class B Units will be
convertible will be deemed to be the weighted average of the types and amounts
of consideration received by the holders of Common Units that affirmatively make
such an election. However, at and after the effective time of the
reclassification, statutory unit exchange, consolidation, merger, combination,
sale or conveyance, any amount otherwise payable in cash upon conversion of the
Class B Units will continue to be payable in cash. None of the foregoing
provisions shall affect the right of a holder of Class B Units to convert its
Class B Units in accordance with the provisions of this Section 5.11(c) prior to
the effective date of such reclassification, statutory unit exchange,
consolidation, merger, combination, sale or conveyance.

(h) If the Partnership proposes to distribute to holders of its Partnership
Interests any equity interests of the Partnership, evidences of indebtedness or
other non-cash assets, or rights or warrants (excluding distributions and rights
or warrants referred to in subsection (f) or (g) of this Section 5.11) (such
capital stock, evidences of indebtedness or other non-cash assets, or rights or
warrants “Property”), the aggregate fair market value of such Property shall be
determined by the Board of Directors (whose determination shall be conclusive
and set forth in a resolution of the Board of Directors). Such Property will
then be distributed as if it were Available Cash (from Operating Surplus or
Capital Surplus as determined pursuant to the provisions of Section 6.3 or 6.5).

(i) A Unitholder shall not be permitted to transfer a Class B Unit or a Class B
Unit that has converted into a Common Unit pursuant to Section 5.11 (other than
a transfer to an Affiliate) if the remaining balance in the transferring
Unitholder’s Capital Account with respect to the retained Class B Units or
Retained Converted Class B Units would be negative after giving effect to the
allocation under Section 5.5(c)(iii)(B).

(j) A Unitholder holding a Class B Unit that has converted into a Common Unit
pursuant to Section 5.11 shall not be issued a Common Unit Certificate pursuant
to Section 4.1, and shall not be permitted to transfer its converted Class B
Units to a Person that is not an Affiliate of the holder until such time as the
General Partner determines, based on advice of counsel, that a converted Class B
Unit should have, as a substantive matter, like intrinsic economic and federal
income tax characteristics, in all material respects, to the intrinsic economic
and federal income tax characteristics of an Initial Common Unit. In connection
with the condition imposed by this Section 5.11(j), the General Partner may take
whatever steps are required to provide economic uniformity to the converted
Class B Units in preparation for a transfer of such converted Class B Units,
including the application of Sections 5.5(c)(iii) and 5.11(i); provided,
however, that no such steps may be taken that would have a material adverse
effect on the Unitholders holding Common Units represented by Common Unit
Certificates.

 

Exhibit A to Purchase Agreement

11

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9. The first paragraph of Section 6.1 and Sections 6.1(a), (b) and (c) are
hereby amended and restated as follows:

Section 6.1 Allocations for Capital Account Purposes.

For purposes of maintaining the Capital Accounts and in determining the rights
of the Partners among themselves, the Partnership’s items of income, gain, loss
and deduction (computed in accordance with Section 5.5(b)) shall be allocated
among the Partners in each taxable period as provided herein below. For the
avoidance of doubt, cumulative allocations pursuant to Sections referenced in
this Section 6.1 shall include amounts previously allocated under predecessor
provisions thereto.

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

(i) First, 100% to the General Partner, in an amount equal to the aggregate Net
Losses allocated to the General Partner pursuant to Section 6.1(b)(iii) for all
previous taxable periods until the aggregate Net Income allocated to the General
Partner pursuant to this Section 6.1(a)(i) for the current taxable period and
all previous taxable periods is equal to the aggregate Net Losses allocated to
the General Partner pursuant to Section 6.1(b)(iii) for all previous taxable
periods;

(ii) Second, 100% to all Unitholders, Pro Rata, until the aggregate Net Income
allocated to such Unitholders pursuant to this Section 6.1(a)(ii) for the
current taxable period and all previous taxable periods is equal to the
aggregate Net Losses allocated to such Unitholders pursuant to
Section 6.1(b)(ii) for all previous taxable periods;

(iii) Third, 100% to the Unitholders, Pro Rata, until the amount allocated
pursuant to this Section 6.1(a)(iii) to the Unitholders holding Class B Units
for the current taxable period and all previous taxable periods is equal to the
then existing Class B Unit Return;

(iv) Fourth, if a disparity exists between the Per Unit Capital Amounts of the
Common Units and the Class B Units, (A) to the General Partner in accordance
with its Percentage Interest and (B) if (x) the Per Unit Capital Amounts of the
Class B Units is higher, then to the Unitholders holding Common Units or
Subordinated Units, otherwise (y) to the Unitholders holding Class B Units, in
either case their Pro Rata share of a percentage equal to 100% less the General
Partner’s Percentage Interest, until such disparity has been eliminated; and

(v) Thereafter, the balance, if any, (x) to the General Partner in accordance
with its Percentage Interest and (y) to all Unitholders holding Common Units or
Subordinated Units, their Pro Rata share of a percentage equal to 100% less the
General Partner’s Percentage Interest.

 

Exhibit A to Purchase Agreement

12

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

(i) First, 100% to all Unitholders, Pro Rata, until the aggregate Net Losses
allocated pursuant to this Section 6.1(b)(i) for the current taxable period and
all previous taxable periods is equal to the aggregate Net Income allocated to
the Unitholders pursuant to Section 6.1(a)(v), for all previous taxable periods,
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
holding Limited Partner Units to have a deficit balance in its Adjusted Capital
Account at the end of such taxable period (or increase any existing deficit
balance in its Adjusted Capital Account);

(ii) Second, 100% to all Unitholders, Pro Rata; provided, that Net Losses shall
not be allocated pursuant to this Section 6.1(b)(ii) to the extent that such
allocation would cause any Unitholder holding Limited Partner Units to have a
deficit balance in its Adjusted Capital Account at the end of such taxable
period (or increase any existing deficit balance in its Adjusted Capital
Account); and

(iii) Thereafter, the balance, if any, 100% to the General Partner.

(c) Net Termination Gains and Losses. After giving effect to the special
allocations set forth in Section 6.1(d), all items of income, gain, loss and
deduction taken into account in computing Net Termination Gain or Net
Termination Loss for such taxable period shall be allocated in the same manner
as such Net Termination Gain or Net Termination Loss is allocated hereunder. All
allocations under this Section 6.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided under this
Section 6.1 and after all distributions of Available Cash provided under
Sections 6.4 and 6.5 have been made; provided, however, that solely for purposes
of this Section 6.1(c), Capital Accounts shall not be adjusted for distributions
made pursuant to Section 12.4.

(i) If a Net Termination Gain is recognized (or deemed recognized pursuant to
Section 5.5(d)), such Net Termination Gain shall be allocated among the Partners
in the following manner (and the Capital Accounts of the Partners shall be
increased by the amount so allocated in each of the following subclauses, in the
order listed, before an allocation is made pursuant to the next succeeding
subclause):

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

(B) Second, (x) to the General Partner in accordance with its Percentage
Interest and (y) to all Unitholders holding Common Units or Class B Units, their
Pro Rata shares of a percentage equal to 100% less the

 

Exhibit A to Purchase Agreement

13

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General Partner’s Percentage Interest, until the Capital Account in respect of
each Common Unit then Outstanding is equal to the sum of (1) its Unrecovered
Initial Unit Price, (2) the Minimum Quarterly Distribution for the Quarter
during which the Liquidation Date occurs, reduced by any distribution pursuant
to Section 6.4(a)(i) and (a)(ii), (b)(i), (c)(i) and (c)(ii) or (d)(i) with
respect to such Common Unit for such Quarter (the amount determined pursuant to
this clause (2) is hereinafter referred to as the “Unpaid MQD”) and (3) any then
existing Cumulative Common Unit Arrearage; provided however, that for taxable
periods ending on or prior to the Conversion Date, amounts allocated pursuant to
this Section 6.1(c)(i)(B) to the Unitholders holding Class B Units shall not
cause the Class B Unit Per Unit Capital Amount to exceed the sum of (i) the
Class B Unit Unrecovered Initial Unit Price and (ii) the Class B Unit Return,
reduced by any distribution pursuant to Section 6.4(a)(i) or (b)(i) with respect
to such Class B Unit;

(C) Third, if such Net Termination Gain is recognized (or is deemed to be
recognized) prior to the conversion of the last Outstanding Subordinated Unit,
(x) to the General Partner in accordance with its Percentage Interest and
(y) all Unitholders holding Subordinated Units, their Pro Rata share of a
percentage equal to 100% less the General Partner’s Percentage Interest, until
the Capital Account in respect of each Subordinated Unit then Outstanding equals
the sum of (1) its Unrecovered Initial Unit Price and (2) the Minimum Quarterly
Distribution for the Quarter during which the Liquidation Date occurs, reduced
by any distribution pursuant to Section 6.4(a)(v) or (b)(iii) with respect to
such Subordinated Unit for such Quarter;

(D) Fourth, if a disparity exists between the Per Unit Capital Amounts of the
Common Units and the Class B Units, (A) to the General Partner in accordance
with its Percentage Interest and (B) if (x) the Per Unit Capital Amounts of the
Class B Units is higher, then to the Unitholders holding Common Units or
Subordinated Units, otherwise (y) to the Unitholders holding Class B Units, in
either case their Pro Rata share of a percentage equal to 100% less the General
Partner’s Percentage Interest, until such disparity has been eliminated;

(E) Fifth, 100% to all Unitholders, Pro Rata, until the Capital Account in
respect of each Common Unit then Outstanding is equal to the sum of (1) its
Unrecovered Initial Unit Price, (2) the Unpaid MQD, (3) any then existing
Cumulative Common Unit Arrearage, and (4) the excess of (aa) the First Target
Distribution less the Minimum Quarterly Distribution for each Quarter of the
Partnership’s existence over (bb) the cumulative per Unit amount of any
distributions of Available Cash that is deemed to be Operating Surplus made
pursuant to Sections 6.4(a)(vi), (b)(iv), (c)(iii) and (d)(ii) (the sum of (1),
(2), (3) and (4) is hereinafter referred to as the “First Liquidation Target
Amount”);

 

Exhibit A to Purchase Agreement

14

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(F) Sixth, (x) to the General Partner in accordance with its Percentage
Interest, (y) 13% to the holders of the Incentive Distribution Rights, Pro Rata,
and (z) to all Unitholders holding Limited Partner Units, their Pro Rata share
of a percentage equal to 100% less the sum of the percentages applicable to
subclause (x) and (y) of this clause (F), until the Capital Account in respect
of each Common Unit then Outstanding is equal to the sum of (1) the First
Liquidation Target Amount, and (2) the excess of (aa) the Second Target
Distribution less the First Target Distribution for each Quarter of the
Partnership’s existence over (bb) the cumulative per Unit amount of any
distributions of Available Cash that is deemed to be Operating Surplus made
pursuant to Sections 6.4(a)(vii), (b)(v), (c)(iv) and (d)(iii) (the sum of
(1) and (2) is hereinafter referred to as the “Second Liquidation Target
Amount”);

(G) Seventh, (x) to the General Partner in accordance with its Percentage
Interest, (y) 23% to the holders of the Incentive Distribution Rights, Pro Rata,
and (z) to all Unitholders holding Limited Partner Units, their Pro Rata share
of a percentage equal to 100% less the sum of the percentages applicable to
subclause (x) and (y) of this clause (G), until the Capital Account in respect
of each Common Unit then Outstanding is equal to the sum of (1) the Second
Liquidation Target Amount, and (2) the excess of (aa) the Third Target
Distribution less the Second Target Distribution for each Quarter of the
Partnership’s existence over (bb) the cumulative per Unit amount of any
distributions of Available Cash that is deemed to be Operating Surplus made
pursuant to Sections 6.4(a)(viii), (b)(vi), (c)(v) and (d)(iv) (the sum of
(1) and (2) is hereinafter referred to as the “Third Liquidation Target
Amount”); and

(H) Finally, (x) to the General Partner in accordance with its Percentage
Interest, (y) 48% to the holders of the Incentive Distribution Rights, Pro Rata,
and (z) to all Unitholders holding Limited Partner Units, their Pro Rata share
of a percentage equal to 100% less the sum of the percentages applicable to
subclause (x) and (y) of this clause (H).

(ii) If a Net Termination Loss is recognized (or deemed recognized pursuant to
Section 5.5(d)), such Net Termination Loss shall be allocated among the Partners
in the following manner:

(A) First, if such Net Termination Loss is recognized (or is deemed to be
recognized) prior to the conversion of the last Outstanding Subordinated Unit,
(x) to the General Partner in accordance with its Percentage Interest and (y) to
all Unitholders holding Subordinated Units, their Pro Rata share of a percentage
equal to 100% less the General Partner’s Percentage Interest, until the Capital
Account in respect of each Subordinated Unit then Outstanding has been reduced
to zero;

 

Exhibit A to Purchase Agreement

15

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(B) Second, if a disparity exists between the Per Unit Capital Amounts of the
Common Units and the Class B Units, (A) to the General Partner in accordance
with its Percentage Interest and (B) to all Unitholders holding such class with
the higher Per Unit Capital Amount their Pro Rata share of a percentage equal to
100% less the General Partner’s Percentage Interest, until such disparity has
been eliminated; provided, that Net Termination Loss shall not be allocated
pursuant to this Section 6.1(c)(ii)(B) to the extent that such allocation would
cause any Unitholder holding Limited Partner Units to have a deficit balance in
its Capital Account at the end of such taxable period (or increase any existing
deficit balance in its Capital Account);

(C) Third, (x) to the General Partner in accordance with its Percentage Interest
and (y) to all Unitholders holding Common Units or Class B Units, their Pro Rata
share of a percentage equal to 100% less the General Partner’s Percentage
Interest, until the Capital Account in respect of each Common Unit and Class B
Unit then Outstanding has been reduced to zero; and

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

10. Section 6.1 is hereby amended by adding the following as the conclusion to
the final sentence of Section 6.1(d)(iii)(A):

; provided however, that prior to the Conversion Date, this
Section 6.1(d)(iii)(A) shall not apply with respect to any discrepancy between
the amount of cash or the Net Agreed Value of property distributed in respect of
the Common Units and Subordinated Units on the one hand and the Class B Units on
the other hand.

11. Section 6.4 is hereby amended and restated as follows:

Section 6.4 Distributions of Available Cash from Operating Surplus.

(a) During the Subordination Period and Prior to the Conversion of all Class B
Units. Available Cash with respect to any Quarter within the Subordination
Period and prior to the Conversion of all Class B Units that is deemed to be
Operating Surplus pursuant to the provisions of Section 6.3 or 6.5 shall,
subject to Section 17-607 of the Delaware Act, be distributed as follows, except
as otherwise required by Section 5.6 in respect of other Partnership Securities
issued pursuant thereto:

(i) First, (x) to the General Partner in accordance with its Percentage Interest
and (y) to all Unitholders holding Common Units or Class B Units, their Pro Rata
share of a percentage equal to 100% less the General Partner’s Percentage
Interest, until there has been distributed in respect of each Common Unit and
Class B Unit then Outstanding an amount equal to the Class B Unit Quarterly
Distribution for such Quarter;

 

Exhibit A to Purchase Agreement

16

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(ii) Second, (x) to the General Partner in accordance with its Percentage
Interest and (y) to all Unitholders holding Common Units, their Pro Rata share
of a percentage equal to 100% less the General Partner’s Percentage Interest,
until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to the excess of the Minimum Quarterly Distribution over the
Class B Unit Quarterly Distribution for such Quarter;

(iii) Third, (x) to the General Partner in accordance with its Percentage
Interest and (y) to all Unitholders holding Common Units or Class B Units, their
Pro Rata share of a percentage equal to 100% less the General Partner’s
Percentage Interest, until there has been distributed in respect of each Class B
Unit and Common Unit then Outstanding an amount equal to the Cumulative Class B
Unit Arrearage existing with respect to such Quarter;

(iv) Fourth, (x) to the General Partner in accordance with its Percentage
Interest and (y) to all Unitholders holding Common Units, their Pro Rata share
of a percentage equal to 100% less the General Partner’s Percentage Interest,
until there has been distributed in respect of each Common Unit then Outstanding
(including distributions pursuant to clause (iii) above) an amount equal to the
Cumulative Common Unit Arrearage existing with respect to such Quarter;

(v) Fifth, (x) to the General Partner in accordance with its Percentage Interest
and (y) to all Unitholders holding Subordinated Units, their Pro Rata share of a
percentage equal to 100% less the General Partner’s Percentage Interest, until
there has been distributed in respect of each Subordinated Unit then Outstanding
an amount equal to the Minimum Quarterly Distribution for such Quarter;

(vi) Sixth, to all Unitholders holding Common Units and Subordinated Units, in
accordance with their respective Percentage Interests, until there has been
distributed in respect of each Common Unit and Subordinated Unit then
Outstanding an amount equal to the excess of the First Target Distribution over
the Minimum Quarterly Distribution for such Quarter;

(vii) Seventh, (A) to the General Partner in accordance with its Percentage
Interest; (B) 13% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Common Units and Subordinated Units, their
Pro Rata share of a percentage equal to 100% less the sum of the percentages
applicable to subclauses (A) and (B) of this clause (vii) until there has been
distributed in respect of each Common Unit and Subordinated Unit then
Outstanding an amount equal to the excess of the Second Target Distribution over
the First Target Distribution for such Quarter;

(viii) Eighth, (A) to the General Partner in accordance with its Percentage
Interest, (B) 23% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Common Units and Subordinated

 

Exhibit A to Purchase Agreement

17

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Units, their Pro Rata share of a percentage equal to 100% less the sum of the
percentages applicable to subclauses (A) and (B) of this subclause (viii), until
there has been distributed in respect of each Common Unit and Subordinated Unit
then Outstanding an amount equal to the excess of the Third Target Distribution
over the Second Target Distribution for such Quarter; and

(ix) Thereafter, (A) to the General Partner in accordance with its Percentage
Interest; (B) 48% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Common Units and Subordinated Units, their
Pro Rata share of a percentage equal to 100% less the sum of the percentages
applicable to subclauses (A) and (B) of this clause (ix);

provided, however, if the Class B Unit Quarterly Distribution, the Minimum
Quarterly Distribution, the First Target Distribution, the Second Target
Distribution and the Third Target Distribution have been reduced to zero
pursuant to the second sentence of Section 6.6(a), the distribution of Available
Cash that is deemed to be Operating Surplus with respect to any Quarter will be
made solely in accordance with Section 6.4(a)(ix); provided, further, that
Available Cash with respect to any Quarter ending on or prior to June 30, 2008
that is deemed to be Operating Surplus pursuant to the provisions of Section 6.3
or 6.5 shall be distributed pursuant to the provisions of Section 6.4(b).

(b) During the Subordination Period and After the Conversion of all Class B
Units. Available Cash with respect to any Quarter within the Subordination
Period and after the Conversion of all Class B Units (or for Quarters ending on
or prior to June 30, 2008) that is deemed to be Operating Surplus pursuant to
the provisions of Section 6.3 or 6.5 shall, subject to Section 17-607 of the
Delaware Act, be distributed as follows, except as otherwise required by
Section 5.6 in respect of other Partnership Securities issued pursuant thereto:

(i) First, (x) to the General Partner in accordance with its Percentage Interest
and (y) to all Unitholders holding Common Units, their Pro Rata share of a
percentage equal to 100% less the General Partner’s Percentage Interest, until
there has been distributed in respect of each Common Unit then Outstanding an
amount equal to the Minimum Quarterly Distribution for such Quarter;

(ii) Second, (x) to the General Partner in accordance with its Percentage
Interest and (y) to all Unitholders holding Common Units, their Pro Rata share
of a percentage equal to 100% less the General Partner’s Percentage Interest,
until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to the Cumulative Common Unit Arrearage existing with respect to
such Quarter;

(iii) Third, (x) to the General Partner in accordance with its Percentage
Interest and (y) to all Unitholders holding Subordinated Units, their Pro Rata
share of a percentage equal to 100% less the General Partner’s Percentage
Interest, until there has been distributed in respect of each Subordinated Unit
then Outstanding an amount equal to the Minimum Quarterly Distribution for such
Quarter;

 

Exhibit A to Purchase Agreement

18

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

(v) Fifth, (A) to the General Partner in accordance with its Percentage
Interest; (B) 13% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Limited Partner Units, their Pro Rata share
of a percentage equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this clause (v) until there has been distributed in
respect of each Unit then Outstanding an amount equal to the excess of the
Second Target Distribution over the First Target Distribution for such Quarter;

(vi) Sixth, (A) to the General Partner in accordance with its Percentage
Interest, (B) 23% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Limited Partner Units, their Pro Rata share
of a percentage equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this subclause (vi), until there has been distributed
in respect of each Unit then Outstanding an amount equal to the excess of the
Third Target Distribution over the Second Target Distribution for such Quarter;
and

(vii) Thereafter, (A) to the General Partner in accordance with its Percentage
Interest; (B) 48% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Limited Partner Units, their Pro Rata share
of a percentage equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this clause (vii);

provided, however, if the Minimum Quarterly Distribution, the First Target
Distribution, the Second Target Distribution and the Third Target Distribution
have been reduced to zero pursuant to the second sentence of Section 6.6(a), the
distribution of Available Cash that is deemed to be Operating Surplus with
respect to any Quarter will be made solely in accordance with
Section 6.4(b)(vii).

(c) After the Subordination Period and Prior to the Conversion of all Class B
Units. Available Cash with respect to any Quarter after the Subordination Period
and prior to the conversion or exchange of all Class B Units that is deemed to
be Operating Surplus pursuant to the provisions of Section 6.3 or 6.5, subject
to Section 17-607 of the Delaware Act, shall be distributed as follows, except
as otherwise required by Section 5.6 in respect of other Partnership Securities
issued pursuant thereto:

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

(ii) Second, (x) to the General Partner in accordance with its Percentage
Interest and (y) to all Unitholders holding Common Units, their Pro Rata share
of a percentage equal to 100% less the General Partner’s Percentage

 

Exhibit A to Purchase Agreement

19

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

Interest, until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the excess of the Minimum Quarterly Distribution
over the Class B Unit Quarterly Distribution for such Quarter;

(iii) Third, (x) to the General Partner in accordance with its Percentage
Interest and (y) to all Unitholders holding Common Units, their Pro Rata share
of a percentage equal to 100% less the General Partner’s Percentage Interest,
until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to the excess of the First Target Distribution over the Minimum
Quarterly Distribution for such Quarter;

(iv) Fourth, (A) to the General Partner in accordance with its Percentage
Interest; (B) 13% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Common Units, their Pro Rata share of a
percentage equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this clause (iii), until there has been distributed in
respect of each Common Unit then Outstanding an amount equal to the excess of
the Second Target Distribution over the First Target Distribution for such
Quarter;

(v) Fifth, (A) to the General Partner in accordance with its Percentage
Interest; (B) 23% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Common Units, their Pro Rata share of a
percentage equal to 100% less the sum of the percentages applicable to subclause
(A) and (B) of this clause (iv), until there has been distributed in respect of
each Common Unit then Outstanding an amount equal to the excess of the Third
Target Distribution over the Second Target Distribution for such Quarter; and

(vi) Thereafter, (A) to the General Partner in accordance with its Percentage
Interest; (B) 48% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Common Units, their Pro Rata share of a
percentage equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this clause (v);

provided, however, if the Class B Unit Quarterly Distribution, the First Target
Distribution, the Second Target Distribution and the Third Target Distribution
have been reduced to zero pursuant to the second sentence of Section 6.6(a), the
distribution of Available Cash that is deemed to be Operating Surplus with
respect to any Quarter will be made solely in accordance with Section
6.4(c)(vi).

(d) After the Subordination Period and the Conversion of all Class B Units.
Available Cash with respect to any Quarter after the Subordination Period and
the Conversion of all Class B Units that is deemed to be Operating Surplus
pursuant to the provisions of Section 6.3 or 6.5, subject to Section 17-607 of
the Delaware Act, shall be distributed as follows, except as otherwise required
by Section 5.6(b) in respect of other Partnership Securities issued pursuant
thereto:

(i) First, 100% to all Unitholders, Pro Rata, until there has been distributed
in respect of each Unit then Outstanding an amount equal to the Minimum
Quarterly Distribution for such Quarter;

 

Exhibit A to Purchase Agreement

20

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

(ii) Second, 100% to all Unitholders, Pro Rata, until there has been distributed
in respect of each Unit then Outstanding an amount equal to the excess of the
First Target Distribution over the Minimum Quarterly Distribution for such
Quarter;

(iii) Third, (A) to the General Partner in accordance with its Percentage
Interest; (B) 13% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Limited Partner Units, their Pro Rata share
of a percentage equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this clause (iii), until there has been distributed in
respect of each Unit then Outstanding an amount equal to the excess of the
Second Target Distribution over the First Target Distribution for such Quarter;

(iv) Fourth, (A) to the General Partner in accordance with its Percentage
Interest; (B) 23% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Limited Partner Units, their Pro Rata share
of a percentage equal to 100% less the sum of the percentages applicable to
subclause (A) and (B) of this clause (iv), until there has been distributed in
respect of each Unit then Outstanding an amount equal to the excess of the Third
Target Distribution over the Second Target Distribution for such Quarter; and

(v) Thereafter, (A) to the General Partner in accordance with its Percentage
Interest; (B) 48% to the holders of the Incentive Distribution Rights, Pro Rata;
and (C) to all Unitholders holding Limited Partner Units, their Pro Rata share
of a percentage equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this clause (v);

provided, however, if the Minimum Quarterly Distribution, the First Target
Distribution, the Second Target Distribution and the Third Target Distribution
have been reduced to zero pursuant to the second sentence of Section 6.6(a), the
distribution of Available Cash that is deemed to be Operating Surplus with
respect to any Quarter will be made solely in accordance with Section 6.4(d)(v).

12. Section 6.5 is hereby amended and restated as follows:

Section 6.5 Distributions of Available Cash from Capital Surplus.

Available Cash that is deemed to be Capital Surplus pursuant to the provisions
of Section 6.3(a) shall, subject to Section 17-607 of the Delaware Act, be
distributed, unless the provisions of Section 6.3 require otherwise, as follows:
(A) to the General Partner in accordance with its Percentage Interest; (B) to
all Unitholders holding Class B Units, their Pro Rata share of a percentage
equal to (x) 100% less the General Partner’s Percentage Interest, multiplied by
(y) a fraction, the numerator of which is the aggregate Unrecovered Initial Unit
Price for all Class B Units and the denominator of which is the aggregate
Unrecovered Initial Unit Price for all

 

Exhibit A to Purchase Agreement

21

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

Limited Partner Units and (C) to all Unitholders holding Common Units and
Subordinated Units, their Pro Rata share of a percentage equal to 100% less the
sum of the percentages applicable to subclauses (A) and (B) of this sentence,
until a hypothetical holder of a Common Unit acquired on the Closing Date has
received with respect to such Common Unit, during the period since the Closing
Date through such date, distributions of Available Cash that are deemed to be
Capital Surplus in an aggregate amount equal to the Initial Unit Price.
Available Cash that is deemed to be Capital Surplus shall then be distributed as
follows:

(a) First, (i) to the General Partner in accordance with its Percentage Interest
and (ii) to all Unitholders holding Common Units or Class B Units, their Pro
Rata share of a percentage equal to 100% less the General Partner’s Percentage
Interest, until there has been distributed in respect of each Class B Unit and
Common Unit then Outstanding an amount equal to the Cumulative Class B Unit
Arrearage;

(b) Second, (i) to the General Partner in accordance with its Percentage
Interest and (ii) to all Unitholders holding Common Units, their Pro Rata share
of a percentage equal to 100% less the General Partner’s Percentage Interest,
until there has been distributed in respect of each Common Unit then Outstanding
(including distributions pursuant to clause (a) above) an amount equal to the
Cumulative Common Unit Arrearage; and

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

13. Section 6.6 is hereby amended and restated as follows:

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

(a) The Class B Unit Quarterly Distribution, Minimum Quarterly Distribution,
First Target Distribution, Second Target Distribution, Third Target
Distribution, Common Unit Arrearages, Cumulative Common Unit Arrearages, Class B
Unit Arrearages and Cumulative Class B Unit Arrearages shall be proportionately
adjusted in the event of any distribution, combination or subdivision (whether
effected by a distribution payable in Units or otherwise) of Units or other
Partnership Securities in accordance with Section 5.9. In the event of a
distribution of Available Cash that is deemed to be from Capital Surplus, the
then applicable Class B Unit Quarterly Distribution, Minimum Quarterly
Distribution, First Target Distribution, Second Target Distribution and Third
Target Distribution, shall be adjusted proportionately downward to equal the
product obtained by multiplying the otherwise applicable Class B Unit Quarterly
Distribution, Minimum Quarterly Distribution, First Target Distribution, Second
Target Distribution and Third Target Distribution, as the case may be, by a
fraction of which the numerator is the Unrecovered Initial Unit Price of the
Common Units immediately after giving effect to such distribution and of which
the denominator is the Unrecovered Initial Unit Price of the Common Units
immediately prior to giving effect to such distribution.

(b) The Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution, shall also be subject to adjustment
pursuant to Section 6.9.

 

Exhibit A to Purchase Agreement

22

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

14. Section 6.8 is hereby amended and restated as follows:

Section 6.8 Special Provisions Relating to the Holders of Incentive Distribution
Rights.

Notwithstanding anything to the contrary set forth in this Agreement, the
holders of the Incentive Distribution Rights (a) shall (i) possess the rights
and obligations provided in this Agreement with respect to a Limited Partner
pursuant to Articles III and VII and (ii) have a Capital Account as a Partner
pursuant to Section 5.5 and all other provisions related thereto and (b) shall
not (i) be entitled to vote on any matters requiring the approval or vote of the
holders of Outstanding Units, except as provided by law, (ii) be entitled to any
distributions other than as provided in Sections 6.4 and 12.4 or (iii) be
allocated items of income, gain, loss or deduction other than as specified in
this Article VI.

15. Exhibit B to this Amendment is hereby added to the Partnership Agreement as
Exhibit B thereto.

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

C. Governing Law. This Amendment shall be governed by, and interpreted in
accordance with, the laws of the State of Delaware, all rights and remedies
being governed by such laws without regard to principles of conflicts of laws.

D. Severability. Each provision of this Amendment shall be considered severable
and if for any reason any provision or provisions herein are determined to be
invalid, unenforceable or illegal under any existing or future law, such
invalidity, unenforceability or illegality shall not impair the operation of or
affect those portions of this Amendment that are valid, enforceable and legal.

[Signatures on following page]

 

Exhibit A to Purchase Agreement

23

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

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

 

GENERAL PARTNER:

BOARDWALK GP, LP By:   Boardwalk GP, LLC, its general partner By:  

 

Name:   Jamie L. Buskill Title:   Chief Financial Officer

LIMITED PARTNERS:

All Limited Partners now and hereafter admitted as Limited Partners of the
Partnership, pursuant to powers of attorney now and hereafter executed in favor
of, and granted and delivered to the General Partner. BOARDWALK GP, LP By:  
Boardwalk GP, LLC, its general partner By:  

 

Name:   Jamie L. Buskill Title:   Chief Financial Officer

 

Exhibit A to Purchase Agreement

SIGNATURE PAGE

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

EXHIBIT B

CONVERSION NOTICE

The undersigned record holder of Class B Units of Boardwalk Pipeline Partners,
LP (the “Partnership”) hereby surrenders for conversion pursuant to Section 5.11
of the Partnership Agreement of the Partnership the Class B Units represented by
the Certificates described below.

 

Name of Record Holder:   

 

 

Title:  

 

 

Address:

 

 

 

 

 

Telephone Number:   

 

 

Tax Identification or Social Security Number:  

 

Certificates Surrendered

 

Certificate Number

 

Number of Class B Units Represented by Certificate

 

 

 

 

 

 

 

 

 

Total Number of Class B Units  

 

(If you desire to convert less than all Class B Units scheduled above, complete
the blank below with respect to the number of Class B Units to be converted.)

 

Number of Class B Units to be converted:  

 

Note: If no number of Class B Units is indicated, all Class B Units represented
by the Certificates scheduled above will be converted.

 

Exhibit A to Purchase Agreement

B-1

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

Signatures

This Conversion Notice must be signed by the record holder(s) exactly as the
name(s) appear on the Certificate(s) representing the Class B Units scheduled
above, or if delivered by a participant in the depositary for the Class B Units,
exactly as such participant’s name appears on the security position listing as
the owner of Class B Units. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, please set forth the full
title. Proper evidence of such person’s authority may be required by the
Partnership.

 

Dated:  

 

Signature(s) of Record Holders:

 

 

Print name(s) of Record Holders:

 

 

Print title(s) of Signatories:

 

 

 

B-2

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

Exhibit B – Form of Registration Rights Agreement

 

Exhibit B to Purchase Agreement

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

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of                     , 2008, by and between Boardwalk Pipeline Partners,
LP, a Delaware limited partnership (the “Partnership”), and Boardwalk Pipelines
Holding Corp., a Delaware corporation (the “Purchaser”).

WHEREAS, this Agreement is made in connection with the Closing of the issuance
and sale of the Class B Units pursuant to the Class B Unit Purchase Agreement,
dated as of April 24, 2008, by and between the Partnership and the Purchaser
(the “Purchase Agreement”);

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

WHEREAS, it is a condition to the obligations of the Purchaser and the
Partnership under the Purchase Agreement that this Agreement be executed and
delivered.

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

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. Capitalized terms used herein without definition shall
have the meanings given to them in the Purchase Agreement. The terms set forth
below are used herein as so defined:

“Agreement” has the meaning given to such term in the introductory paragraph.

“Effectiveness Period” has the meaning given to such term in Section 2.01 of
this Agreement.

“Holder” means the record holder of (i) any Registrable Securities and
(ii) Class B Units prior to their conversion into Common Units.

“Losses” has the meaning given to such term in Section 2.07(a) of this
Agreement.

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

“Purchase Agreement” has the meaning given to such term in the Recitals of this
Agreement.

“Purchaser” has the meaning given to such term in the introductory paragraph of
this Agreement.

 

Exhibit B to Purchase Agreement

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

“Registrable Securities” means the Common Units issuable upon conversion of the
Class B Units, which Registrable Securities are subject to the rights provided
herein until such rights terminate pursuant to the provisions hereof.

“Registration Expenses” has the meaning given to such term in Section 2.06(b) of
this Agreement.

“Selling Expenses” has the meaning given to such term in Section 2.06(b) of this
Agreement.

“Selling Holder” means a Holder who is selling Registrable Securities pursuant
to a registration statement.

“Registration Statement” has the meaning given to such term in Section 2.01 of
this Agreement.

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

Section 1.02 Registrable Securities. Any Registrable Security will cease to be a
Registrable Security (a) at the time a registration statement covering such
Registrable Security has been declared effective by the Commission and such
Registrable Security has been sold or disposed of pursuant to such effective
registration statement; (b) at the time such Registrable Security has been
disposed of pursuant to Rule 144 (or any similar provision then in effect under
the Securities Act); (c) 10 years after the Purchaser ceases to be an Affiliate
of the general partner of the Partnership (including where the General Partner
ceases to be the general partner of the Partnership); (d) if such Registrable
Security is held by the Partnership or one of its subsidiaries; (e) at the time
such Registrable Security has been sold in a private transaction in which the
transferor’s rights under this Agreement are not assigned to the transferee of
such securities; or (f) if such Registrable Security has been sold in a private
transaction in which the transferor’s rights under this Agreement are assigned
to the transferee and such transfereee is not an Affiliate of the general
partner of the Partnership, at the time that is the later of two years following
(i) the conversion of the Class B Units into Common Units and (ii) the transfer
of such Registrable Security to such transferee.

ARTICLE II

REGISTRATION RIGHTS

Section 2.01 Demand Registration. Upon the written request (a “Notice”) of the
Holders of at least 2 million of the then-outstanding Registrable Securities,
subject to adjustment pursuant to Section 3.04, the Partnership shall file with
the Commission as soon as reasonably practicable following the receipt of the
Notice a registration statement (each, a “Registration Statement”) under the
Securities Act providing for the resale of the Registrable Securities (which
may, at the option of the Holders giving such Notice, be a registration
statement under the

 

Exhibit B to Purchase Agreement

2

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

Securities Act that provides for the resale of the Registrable Securities
pursuant to Rule 415 from time to time by the Holders). The Partnership shall
use its commercially reasonable efforts to cause such Registration Statement to
be declared effective by the Commission as soon as reasonably practicable after
the initial filing of the Registration Statement. Any Registration Statement
shall provide for the resale pursuant to any method or combination of methods
legally available to, and requested by, the Holders of any and all Registrable
Securities covered by such Registration Statement. The Partnership shall use its
commercially reasonable efforts to cause each Registration Statement filed
pursuant to this Section 2.01 to be continuously effective, supplemented and
amended to the extent necessary to ensure that it is available for the resale of
all Registrable Securities by the Holders until all Registrable Securities
covered by such Registration Statement have ceased to be Registrable Securities
(the “Effectiveness Period”). Each Registration Statement when effective (and
the documents incorporated therein by reference) shall comply as to form with
all applicable requirements of the Securities Act and shall not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
There shall be no limit on the number of Registration Statements that may be
required by the Holders hereunder.

Section 2.02 Underwritten Offerings.

(a) Request for Underwritten Offering. In the event that one or more Holders
collectively holding more than 2 million Registrable Securities, subject to
adjustment pursuant to Section 3.04, elects to dispose of Registrable Securities
under a Registration Statement pursuant to an Underwritten Offering, the
Partnership shall, upon request by such Holders, retain underwriters in order to
permit such Holders to effect such sale though an Underwritten Offering. The
obligation of the Partnership to retain underwriters shall include entering into
an underwriting agreement in customary form with the Managing Underwriter or
Underwriters, which shall include, among other provisions, indemnities to the
effect and to the extent provided in Section 2.07 and taking all reasonable
actions as are requested by the Managing Underwriter or Underwriters to expedite
or facilitate the disposition of such Registrable Securities. The Partnership
shall, upon request of the Holders, cause its management to participate in a
roadshow or similar marketing effort on behalf of the Purchaser requested by the
Purchaser.

(b) Limitation on Underwritten Offerings. In no event shall the Partnership be
required hereunder to participate in more than two Underwritten Offerings in any
12-month period.

(c) General Procedures. In connection with any Underwritten Offering under this
Agreement, the Partnership shall be entitled to select the Managing Underwriter
or Underwriters. In connection with an Underwritten Offering contemplated by
this Agreement, each Selling Holder and the Partnership shall be obligated to
enter into an underwriting agreement that contains such representations,
covenants, indemnities and other rights and obligations as are customary in
underwriting agreements for firm commitment offerings of securities. No Selling
Holder may participate in such Underwritten Offering unless such Selling Holder
agrees to sell its Registrable Securities on the basis provided in such
underwriting agreement and completes and executes all questionnaires, powers of
attorney, indemnities and other documents reasonably required under the terms of
such underwriting agreement. Each

 

Exhibit B to Purchase Agreement

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Selling Holder may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Partnership to and for the benefit of such underwriters also be made to and for
such Selling Holder’s benefit and that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting agreement also be
conditions precedent to such Selling Holder’s obligations. No Selling Holder
shall be required to make any representations or warranties to or agreements
with the Partnership or the underwriters other than representations, warranties
or agreements regarding such Selling Holder and its ownership of the securities
being registered on its behalf, its intended method of distribution and any
other representation required by Law. If any Selling Holder disapproves of the
terms of an underwriting, such Selling Holder may elect to withdraw from the
Underwritten Offering by notice to the Partnership and the Managing Underwriter;
provided, however, that such withdrawal must be made at a time prior to the time
of pricing of such Underwritten Offering. No such withdrawal shall affect the
Partnership’s obligation to pay Registration Expenses.

Section 2.03 Delay Rights. If the General Partner determines that the
Partnership’s compliance with its obligations under this Article II would be
materially detrimental to the Partnership and its Partners (as defined in the
Partnership Agreement) because such registration would (a) materially interfere
with a significant acquisition, reorganization or other similar transaction
involving the Partnership, (b) require premature disclosure of material
information that the Partnership has a bona fide business purpose for preserving
as confidential or (c) render the Partnership unable to comply with applicable
securities laws, then the Partnership shall have the right to postpone
compliance with its obligations under Section 2.01 and Section 2.02 for a period
of not more than six months, provided, that such right pursuant to this
Section 2.03 may not be utilized more than once in any 12-month period.

Section 2.04 Sale Procedures. In connection with its obligations under this
Article II, the Partnership will, as expeditiously as possible:

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

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

(c) furnish to each Selling Holder (i) as far in advance as reasonably
practicable before filing a Registration Statement or any supplement or
amendment thereto, upon request, copies of reasonably complete drafts of all
such documents proposed to be filed (including

 

Exhibit B to Purchase Agreement

4

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exhibits and each document incorporated by reference therein to the extent then
required by the rules and regulations of the Commission), and provide each such
Selling Holder the opportunity to object to any information pertaining to such
Selling Holder and its plan of distribution that is contained therein and make
the corrections reasonably requested by such Selling Holder with respect to such
information prior to filing a Registration Statement or supplement or amendment
thereto, and (ii) such number of copies of such Registration Statement and the
prospectus included therein and any supplements and amendments thereto as such
Persons may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities covered by such Registration
Statement;

(d) if applicable, use its commercially reasonable efforts to register or
qualify the Registrable Securities covered by a Registration Statement under the
securities or blue sky laws of such jurisdictions as the Selling Holders or, in
the case of an Underwritten Offering, the Managing Underwriter, shall reasonably
request; provided, however, that the Partnership will not be required to qualify
generally to transact business in any jurisdiction where it is not then required
to so qualify or to take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject;

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

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

 

Exhibit B to Purchase Agreement

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

(h) in the case of an Underwritten Offering, furnish upon request, (i) an
opinion of counsel for the Partnership dated the date of the closing under the
underwriting agreement, and (ii) a “cold comfort” letter, dated the pricing date
of such Underwritten Offering (to the extent available) and a letter of like
kind dated the date of the closing under the underwriting agreement, in each
case, signed by the independent public accountants who have certified the
Partnership’s financial statements included or incorporated by reference into
the applicable registration statement, and each of the opinion and the “cold
comfort” letter shall be in customary form and covering substantially the same
matters with respect to such registration statement (and the prospectus and any
prospectus supplement included therein) as have been customarily covered in
opinions of issuer’s counsel and in accountants’ letters delivered to the
underwriters in Underwritten Offerings of securities by the Partnership and such
other matters as such underwriters and Selling Holders may reasonably request;

(i) otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder;

(j) make available to the appropriate representatives of the Managing
Underwriter and Selling Holders access to such information and Partnership
personnel as is reasonable and customary to enable such parties to establish a
due diligence defense under the Securities Act;

(k) cause all such Registrable Securities registered pursuant to this Agreement
to be listed on each securities exchange or nationally recognized quotation
system on which similar securities issued by the Partnership are then listed;

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

(m) provide a transfer agent and registrar for all Registrable Securities
covered by such registration statement not later than the effective date of such
registration statement; and

(n) enter into customary agreements and take such other actions as are
reasonably requested by the Selling Holders or the underwriters, if any, in
order to expedite or facilitate the disposition of such Registrable Securities.

Each Selling Holder, upon receipt of notice from the Partnership of the
happening of any event of the kind described in subsection (f) of this
Section 2.04, shall forthwith discontinue

 

Exhibit B to Purchase Agreement

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disposition of the Registrable Securities until such Selling Holder’s receipt of
the copies of the supplemented or amended prospectus contemplated by subsection
(f) of this Section 2.04 or until it is advised in writing by the Partnership
that the use of the prospectus may be resumed, and has received copies of any
additional or supplemental filings incorporated by reference in the prospectus,
and, if so directed by the Partnership, such Selling Holder will, or will
request the managing underwriter or underwriters, if any, to deliver to the
Partnership (at the Partnership’s expense) all copies in their possession or
control, other than permanent file copies then in such Selling Holder’s
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.

Section 2.05 Cooperation by Holders. The Partnership shall have no obligation to
include in a Registration Statement, or in an Underwritten Offering pursuant to
Section 2.02(a), Registrable Securities of a Selling Holder who has failed to
timely furnish such information that, in the opinion of counsel to the
Partnership, is reasonably required in order for the registration statement or
prospectus supplement, as applicable, to comply with the Securities Act.

Section 2.06 Expenses.

(a) Expenses. The Partnership will pay all reasonable Registration Expenses
including in the case of an Underwritten Offering, regardless of whether any
sale is made pursuant to such Underwritten Offering. Each Selling Holder shall
pay all Selling Expenses in connection with any sale of its Registrable
Securities hereunder. In addition, except as otherwise provided in Section 2.07,
the Partnership shall not be responsible for legal fees incurred by Holders in
connection with the exercise of such Holders’ rights hereunder.

(b) Certain Definitions. “Registration Expenses” means all expenses incident to
the Partnership’s performance under or compliance with this Agreement to effect
the registration of Registrable Securities on a Registration Statement pursuant
to Section 2.01 and/or in connection with an Underwritten Offering pursuant to
Section 2.02(a), and the disposition of such Registrable Securities, including,
without limitation, all registration, filing, securities exchange listing and
New York Stock Exchange fees, all registration, filing, qualification and other
fees and expenses of complying with securities or blue sky laws, fees of the
Financial Industry Regulatory Authority, fees of transfer agents and registrars,
all word processing, duplicating and printing expenses, any transfer taxes and
the fees and disbursements of counsel and independent public accountants for the
Partnership, including the expenses of any special audits or “cold comfort”
letters required by or incident to such performance and compliance. “Selling
Expenses” means all underwriting fees, discounts and selling commissions
allocable to the sale of the Registrable Securities.

Section 2.07 Indemnification.

(a) By the Partnership. In the event of a registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, the Partnership
will indemnify and hold harmless each Selling Holder thereunder, its directors,
officers, employees and agents, and each underwriter, pursuant to the applicable
underwriting agreement with such underwriter, of Registrable Securities
thereunder and each Person, if any, who controls such Selling Holder

 

Exhibit B to Purchase Agreement

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within the meaning of the Securities Act and the Exchange Act, and its
directors, officers, employees or agents, against any losses, claims, damages,
expenses or liabilities (including reasonable attorneys’ fees and expenses)
(collectively, “Losses”), joint or several, to which such Selling Holder,
director, officer, employee, agent or underwriter or controlling Person may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such Losses (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact (in the case of any prospectus, in light
of the circumstances under which such statement is made) contained in a
Registration Statement, any preliminary prospectus or prospectus supplement,
free writing prospectus or final prospectus or prospectus supplement contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein (in the case of
a prospectus, in light of the circumstances under which they were made) not
misleading, and will reimburse each such Selling Holder, its directors,
officers, employee and agents, each such underwriter and each such controlling
Person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Loss or actions or proceedings as such
expenses are incurred; provided, however, that the Partnership will not be
liable in any such case if and to the extent that any such Loss arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by such
Selling Holder, its directors, officers, employees and agents or any underwriter
or such controlling Person in writing specifically for use in a Registration
Statement, or prospectus or any amendment or supplement thereto, as applicable.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Selling Holder or any such directors,
officers, employees agents or any underwriter or controlling Person, and shall
survive the transfer of such securities by such Selling Holder.

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

(c) Notice. Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party other than under this Section 2.07. In any action brought
against any indemnified party, it shall notify the indemnifying party of the
commencement thereof. The indemnifying party shall be entitled to participate in
and, to the extent it shall wish,

 

Exhibit B to Purchase Agreement

8

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to assume and undertake the defense thereof with counsel reasonably satisfactory
to such indemnified party and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 2.07 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided,
however, that, (i) if the indemnifying party has failed to assume the defense or
employ counsel reasonably acceptable to the indemnified party or (ii) if the
defendants in any such action include both the indemnified party and the
indemnifying party and counsel to the indemnified party shall have concluded
that there may be reasonable defenses available to the indemnified party that
are different from or additional to those available to the indemnifying party,
or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, then the indemnified
party shall have the right to select a separate counsel and to assume such legal
defense and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other reasonable
expenses related to such participation to be reimbursed by the indemnifying
party as incurred. Notwithstanding any other provision of this Agreement, no
indemnified party shall settle any action brought against it with respect to
which it is entitled to indemnification hereunder without the consent of the
indemnifying party, unless the settlement thereof imposes no liability or
obligation on, and includes a complete and unconditional release from all
liability of, the indemnifying party.

(d) Contribution. If the indemnification provided for in this Section 2.07 is
held by a court or government agency of competent jurisdiction to be unavailable
to any indemnified party or is insufficient to hold them harmless in respect of
any Losses, then each such indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Loss in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and of
such indemnified party on the other in connection with the statements or
omissions that resulted in such Losses, as well as any other relevant equitable
considerations; provided, however, that in no event shall such Selling Holder be
required to contribute an aggregate amount in excess of the dollar amount of
proceeds (net of Selling Expenses) received by such Selling Holder from the sale
of Registrable Securities giving rise to such indemnification. The relative
fault of the indemnifying party on the one hand and the indemnified party on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact has been made by, or relates to, information
supplied by such party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this paragraph were to be determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to herein. The amount paid by an
indemnified party as a result of the Losses referred to in the first sentence of
this paragraph shall be deemed to include any legal and other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any Loss that is the subject of this paragraph. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who is not
guilty of such fraudulent misrepresentation.

 

Exhibit B to Purchase Agreement

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(e) Other Indemnification. The provisions of this Section 2.07 shall be in
addition to any other rights to indemnification or contribution that an
indemnified party may have pursuant to law, equity, contract or otherwise.

Section 2.08 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of the
Registrable Securities to the public without registration, the Partnership
agrees to use its commercially reasonable efforts to:

(a) Make and keep public information regarding the Partnership available, as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times from and after the date hereof;

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

(c) So long as a Holder owns any Registrable Securities, furnish to such Holder
forthwith upon request a copy of the most recent annual or quarterly report of
the Partnership, and such other reports and documents so filed as such Holder
may reasonably request in availing itself of any rule or regulation of the
Commission allowing such Holder to sell any such securities without
registration.

Section 2.09 Transfer or Assignment of Registration Rights. The rights to cause
the Partnership to register Registrable Securities granted to the Purchaser by
the Partnership under this Article II may be transferred or assigned by the
Purchaser to one or more transferee(s) or assignee(s) of such Registrable
Securities (or Class B Units prior to conversion); provided, however, that
(a) unless such transferee or assignee is an Affiliate of the Purchaser, each
such transferee or assignee holds Registrable Securities (or Class B Units prior
to conversion) representing at least 2 million of the then-outstanding
Registrable Securities or Class B Units, subject to adjustment pursuant to
Section 3.04, (b) the Partnership is given written notice prior to any said
transfer or assignment, stating the name and address of each such transferee and
identifying the securities with respect to which such registration rights are
being transferred or assigned, and (c) each such transferee assumes in writing
responsibility for its portion of the obligations of the Purchaser under this
Agreement.

Section 2.10 Restrictions on Public Sale by Holders of Registrable Securities.
Each Holder who, along with its Affiliates, holds at least 2 million of the
then-outstanding Registrable Securities, subject to adjustment pursuant to
Section 3.04, agrees not to effect any public sale or distribution of the
Registrable Securities during the 30 calendar day period beginning on the date
of a prospectus or prospectus supplement filed with the Commission with respect
to the pricing of an Underwritten Offering, provided that (i) the duration of
the foregoing restrictions shall be no longer than the duration of the shortest
restriction generally imposed by the underwriters on the Partnership or the
officers, directors or any other unitholder of the Partnership on whom a
restriction is imposed and (ii) the restrictions set forth in this Section 2.10
shall not apply to any Registrable Securities that are included in such
Underwritten Offering by such Holder.

 

Exhibit B to Purchase Agreement

10

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ARTICLE III

MISCELLANEOUS

Section 3.01 Communications. All notices and other communications provided for
or permitted hereunder shall be made in writing by facsimile, electronic mail,
courier service or personal delivery:

(a) if to the Purchaser:

 

      Boardwalk Pipelines Holding Corp.       9 Greenway Plaza, Suite 2800
      Houston, TX 77046       Attention: Corporate Secretary       Facsimile:
(866) 459-7336       with a copy to:       Loews Corporation       667 Madison
Avenue       New York, NY 10021       Attention: Corporate Secretary
      Facsimile: (212) 521-2997

(b) if to a transferee of the Purchaser, to such Holder at the address provided
pursuant to Section 2.09; and

(c) if to the Partnership:

 

      Boardwalk Pipeline Partners, LP       9 Greenway Plaza, Suite 2800
      Houston, TX 77046       Attention: Corporate Secretary       Facsimile:
(866) 459-7336

All such notices and communications shall be deemed to have been received at the
time delivered by hand, if personally delivered; when receipt acknowledged, if
sent via facsimile or sent via Internet electronic mail; and when actually
received, if sent by courier service or any other means.

Section 3.02 Successor and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
subsequent Holders of Registrable Securities to the extent permitted herein.

Section 3.03 Assignment of Rights. All or any portion of the rights and
obligations of any Purchaser under this Agreement may be transferred or assigned
by such Purchaser in accordance with Section 2.09 hereof.

 

Exhibit B to Purchase Agreement

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Section 3.04 Recapitalization, Exchanges, Etc. Affecting the Registrable
Securities. The provisions of this Agreement shall apply to the full extent set
forth herein with respect to any and all units of the Partnership or any
successor or assign of the Partnership (whether by merger, consolidation, sale
of assets or otherwise) that may be issued in respect of, in exchange for or in
substitution of, the Registrable Securities, and shall be appropriately adjusted
for combinations, unit splits, recapitalizations, pro rata distributions of
units and the like occurring after the date of this Agreement.

Section 3.06 Specific Performance. Damages in the event of breach of this
Agreement by a party hereto may be difficult, if not impossible, to ascertain,
and it is therefore agreed that each such Person, in addition to and without
limiting any other remedy or right it may have, will have the right to an
injunction or other equitable relief in any court of competent jurisdiction,
enjoining any such breach, and enforcing specifically the terms and provisions
hereof, and each of the parties hereto hereby waives any and all defenses it may
have on the ground of lack of jurisdiction or competence of the court to grant
such an injunction or other equitable relief. The existence of this right will
not preclude any such Person from pursuing any other rights and remedies at law
or in equity that such Person may have.

Section 3.07 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.

Section 3.08 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

Section 3.09 Governing Law. The Laws of the State of New York shall govern this
Agreement.

Section 3.10 Severability of Provisions. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting or impairing the
validity or enforceability of such provision in any other jurisdiction.

Section 3.11 Scope of Agreement. The rights granted pursuant to this Agreement
are intended to supplement and not to reduce or replace any rights any Holders
may have under the Partnership Agreement with respect to the Registrable
Securities. This Agreement is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. Except as provided in the Partnership Agreement, there
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the rights granted by the
Partnership set forth herein. Except as provided in the Partnership Agreement,
this Agreement and the Purchase Agreement supersede all prior agreements and
understandings between the parties with respect to such subject matter.

 

Exhibit B to Purchase Agreement

12

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Section 3.12 Amendment. This Agreement may be amended only by means of a written
amendment signed by the Partnership and the Holders of a majority of the then
outstanding Registrable Securities; provided, however, that no such amendment
shall materially and adversely affect the rights of any Holder hereunder without
the consent of such Holder.

Section 3.13 No Presumption. If any claim is made by a party relating to any
conflict, omission, or ambiguity in this Agreement, no presumption or burden of
proof or persuasion shall be implied by virtue of the fact that this Agreement
was prepared by or at the request of a particular party or its counsel.

Section 3.14 Aggregation of Registrable Securities. All Registrable Securities
held or acquired by Persons who are Affiliates of one another shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.

Section 3.15 Obligations Limited to Parties to Agreement. Each of the Parties
hereto covenants, agrees and acknowledges that no Person other than the
Partnership and the Purchaser shall have any obligation hereunder and that,
notwithstanding that one or more of the Purchaser may be a corporation,
partnership or limited liability company, no recourse under this Agreement or
under any documents or instruments delivered in connection herewith or therewith
shall be had against any former, current or future director, officer, employee,
agent, general or limited partner, manager, member, stockholder or Affiliate of
any of the Purchaser or any former, current or future director, officer,
employee, agent, general or limited partner, manager, member, stockholder or
Affiliate of any of the foregoing, whether by the enforcement of any assessment
or by any legal or equitable proceeding, or by virtue of any applicable Law, it
being expressly agreed and acknowledged that no personal liability whatsoever
shall attach to, be imposed on or otherwise by incurred by any former, current
or future director, officer, employee, agent, general or limited partner,
manager, member, stockholder or Affiliate of any of the Purchaser or any former,
current or future director, officer, employee, agent, general or limited
partner, manager, member, stockholder or Affiliate of any of the foregoing, as
such, for any obligations of the Purchaser under this Agreement or any documents
or instruments delivered in connection herewith or therewith or for any claim
based on, in respect of or by reason of such obligation or its creation, except
in each case for any assignee of a Purchaser hereunder.

Section 3.16 Interpretation. Article and Section references to this Agreement,
unless otherwise specified. All references to instruments, documents, contracts
and agreements are references to such instruments, documents, contracts and
agreements as the same may be amended, supplemented and otherwise modified from
time to time, unless otherwise specified. The word “including” shall mean
“including but not limited to.” Whenever any determination, consent or approval
is to be made or given by a Purchaser under this Agreement, such action shall be
in such Purchaser’s sole discretion unless otherwise specified.

 

Exhibit B to Purchase Agreement

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

 

BOARDWALK PIPELINE PARTNERS, LP By:   BOARDWALK GP, LP   (its General Partner)
By:   BOARDWALK GP, LLC   (its General Partner) By:  

 

Name:   Title:   BOARDWALK PIPELINES HOLDING CORP. By:  

 

Name:   Title:  

 

Exhibit B to Purchase Agreement

Signature Page

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Exhibit C – Form of Opinion of Vinson & Elkins L.L.P.

Capitalized terms used but not defined herein have the meanings assigned to such
terms in the Class B Unit Purchase Agreement (the “Purchase Agreement”).
Boardwalk shall furnish to the Purchaser at the Closing an opinion of Vinson &
Elkins L.L.P., counsel for Boardwalk, addressed to the Purchaser and dated the
Closing Date in form satisfactory to the Purchaser, stating that:

(i) The Class B Units to be issued and sold to the Purchasers by Boardwalk
pursuant to the Purchase Agreement and the limited partner interests represented
thereby, have been duly authorized in accordance with the Partnership Agreement
and, when issued and delivered to the Purchaser against payment therefor in
accordance with the terms of the Purchase Agreement, will be validly issued in
accordance with the terms of the Partnership Agreement, fully paid (to the
extent required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by matters described in Sections 17-303,
17-607 and 17-804 of the Delaware LP Act).

(ii) The Common Units issuable upon conversion of the Class B Units and the
limited partner interests represented thereby, upon issuance in accordance with
the terms of Class B Units as reflected in the Class B Amendment, have been duly
authorized in accordance with the Partnership Agreement and will be validly
issued, fully paid (to the extent required by applicable law and the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).

(iii) Except for the approvals required by the Commission in connection with
Boardwalk’s obligations under the Registration Rights Agreement, no
authorization, consent, approval, waiver, license, qualification, filing,
declaration, qualification or registration with, any Governmental Authority is
required for the issuance and sale by Boardwalk of the Class B Units, the
execution, delivery and performance by Boardwalk of the Operative Documents or
the consummation of the transactions contemplated by the Operative Documents,
except those that have been obtained or as may be required under state
securities or “Blue Sky” laws, as to which we do not express any opinion.

(iv) Assuming the accuracy of the representations and warranties of the
Purchaser and Boardwalk contained in the Purchase Agreement, the issuance and
sale of the Class B Units by Boardwalk to the Purchaser solely in the manner
contemplated by the Purchase Agreement is exempt from registration requirements
of the Securities Act of 1933, as amended; provided that such counsel will
express no opinion as to any subsequent sale.

(v) None of the offering, issuance and sale by Boardwalk of the Class B Units,
the conversion of the Purchased Units into Common Units, or the execution,
delivery and performance of the Operative Documents (A) constitutes or will
constitute a violation of the Partnership Agreement, (B) constitutes or will
constitute a breach or violation of, or a default under (or an event which, with
notice or lapse of time or both, would constitute such an event), any agreement
filed or incorporated by reference as an exhibit to Boardwalk’s Annual Report on

 

Exhibit C to Purchase Agreement

1

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Form 10-K for the period ended December 31, 2007 or (C) results or will result
in any violation of the Delaware Revised Uniform Limited Partnership Act or U.S.
federal law, which in the case of clauses (B) or (C) would be reasonably
expected to have a Material Adverse Effect; provided, however, that no opinion
is expressed pursuant to this paragraph (v) with respect to federal or state
securities or anti-fraud statutes, rules or regulations.

(vi) Each of Operative Documents has been duly authorized and validly executed
and delivered by Boardwalk, and is enforceable against Boardwalk in accordance
with its terms, except as the enforceability thereof may be limited by
(A) applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws from time to time in effect affecting creditors’
rights and remedies generally and by general principles of equity (regardless of
whether such principles are considered in a proceeding in equity or at law) and
(B) public policy, applicable law relating to fiduciary duties and
indemnification and an implied covenant of good faith and fair dealing.

 

Exhibit C to Purchase Agreement

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