AMENDMENT NO. 2 TO AMENDED AND
RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
REGENCY ENERGY PARTNERS LP
This Amendment
No. 2 to the Amended and Restated Agreement of Limited
Partnership of Regency Energy Partners LP (this
“Amendment”), dated as of September 21, 2006, is
entered into and effectuated by Regency GP LP, a Delaware limited
partnership, as the General Partner, pursuant to authority granted
to it in Section 5.6 of the Amended and Restated Agreement of
Limited Partnership of Regency Energy Partners LP, dated as of
February 3, 2006, and as amended by Amendment No. 1
thereto, dated as of August 15, 2006 (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
General Partner, 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 for such
consideration and on such terms and conditions as shall be
established by the General Partner in its sole discretion;
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 advisable 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, the
General Partner deems it in the best interest of the Partnership to
effect this Amendment in order to provide for the issuance of the
Class C Common Units to certain purchasers pursuant to that
certain Class C Unit Purchase Agreement to be dated
September 21, 2006 among the Partnership and the purchasers
named therein;
NOW, THEREFORE,
the Partnership Agreement is hereby amended as follows:
(a) Section 1.1
is hereby amended to add or amend and restated the following
definitions:
(i) “
Class B Common Unit ” means a Partnership
Security representing a fractional part of the Partnership
Interests of all Limited Partners, and having the rights and
obligations specified with respect to the Class B Common Units
in this Agreement. Unless Amendment No. 1 to the Partnership
Agreement provides for specific, different rights, preferences or
designations, the term “ Class B Common Unit
” refers to a Common Unit and each Class B Unit shall be
treated as if it were a Common Unit for all purposes.
(ii) “
Class C Common Unit ” means a Partnership
Security representing a fractional part of the Partnership
Interests of all Limited Partners, and having the
rights and
obligations specified with respect to the Class C Common Units
in this Agreement. Unless this Amendment provides for specific,
different rights, preferences or designations, the term “
Class C Common Unit ” refers to a Common Unit and
each Class C Common Unit shall be treated as if it were a
Common Unit for all purposes.
(iii) “
Class C Conversion Date” has the meaning assigned
to such term in Section 5.12(b)(viii).
(iv) “
Issue Price ” means the price at which a Unit is
purchased from the Partnership, after taking into account any sales
commission or underwriting discount charged to the Partnership and
after taking into account any other form of discount with respect
to the price at which a Unit is purchased from the Partnership;
provided, however, in the case of the Class C Common
Units, the Issue Price shall be deemed to be $21.00 per
unit.
(v) “
Partnership Security ” means any class or series of
equity interest in the Partnership (but excluding any options,
rights, warrants and appreciation rights relating to an equity
interest in the Partnership), including without limitation Common
Units, Class B Common Units, Class C Common Units,
Subordinated Units and Incentive Distribution Rights.
(vi) “
Private Placement Value ” means with respect to the
Class C Common Units, $23.05 per unit.
(vii) “
Share of Additional Book Basis Derivative Items ”
means, in connection with any allocation of Additional Book Basis
Derivative Items for any taxable period, (i) with respect to
the Unitholders holding Common Units, Class B Common Units,
Class C Common Units or Subordinated Units, the amount that
bears the same ratio to such Additional Book Basis Derivative Items
as the Unitholders’ Remaining Net Positive Adjustments as of
the end of such period bears to the Aggregate Remaining Net
Positive Adjustments as of that time, (ii) with respect to the
General Partner (as holder of the General Partner Interest), the
amount that bears the same ratio to such additional Book Basis
Derivative Items as the General Partner’s Remaining Net
Positive Adjustments as of the end of such period bears to the
Aggregate Remaining Net Positive Adjustment as of that time, and
(iii) with respect to the Partners holding Incentive
Distribution Rights, the amount that bears the same ratio to such
Additional Book Basis Derivative Items as the Remaining Net
Positive Adjustments of the Partners holding the Incentive
Distribution Rights as of the end of such period bears to the
Aggregate Remaining Net Positive Adjustments as of that
time.
(viii) “
Unit ” means a Partnership Security that is designated
as a “ Unit ” and shall include Common Units,
Class B Common Units, Class C Common Units and
Subordinated Units but shall not include (i) General Partner
Units (or the General Partner Interest represented thereby) or
(ii) Incentive Distribution Rights.
2
(ix) “
Unit Majority ” means, during the Subordination
Period, at least a majority of the Outstanding Common Units,
Class B Common Units and Class C Common Units (excluding
Common Units, Class B Common Units and Class C Common
Units owned by the General Partner and its Affiliates) voting as a
class and at least a majority of the Outstanding Subordinated Units
voting as a single class and, after the end of the Subordination
Period, at least a majority of the Outstanding Units.
(x) “
Unit Purchase Agreement ” means the Class C Unit
Purchase Agreement, dated as of September 21, 2006, among the
Partnership and the purchasers named therein.
(b) Section 4.8(c)
of the Partnership Agreement is hereby amended and restated to read
in its entirety:
The transfer of
a Subordinated Unit that has converted into a Common Unit shall be
subject to the restrictions imposed by Section 6.7(c). The
transfer of a Class C Unit that has converted into a Common
Unit shall be subject to the restrictions imposed by
Section 6.7(d).
(c) Section 5.5(a)
of the Partnership Agreement is hereby amended to add the following
at the end of such section:
The initial
Capital Account balance in respect of each Class C Common Unit
shall be the Private Placement Value for such Class C Common
Unit, and the initial Capital Account balance of each holder of
Class C Common Units in respect of all Class C Common
Units held shall be the product of such initial balance for a
Class C Common Unit multiplied by the number of Class C
Common Units held thereby. Immediately following the cr
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