AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF DCP MIDSTREAM PARTNERS, LP
AMENDMENT
NO. 1 TO
SECOND
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
This
Amendment No. 1 (this “Amendment
No. 1”)
to the
Amended and Restated Agreement of Limited Partnership (as amended, the
“Partnership
Agreement”)
of DCP
Midstream Partners, LP (the “Partnership”)
is
hereby adopted by DCP Midstream GP, LP, a Delaware limited partnership (the
“General
Partner”),
as
general partner of the Partnership. Capitalized terms used but not defined
herein are used as defined in the Partnership Agreement.
WHEREAS,
the
General Partner desires to amend the Partnership Agreement to make certain
adjustments to certain allocation provisions and the definitions related
thereto, which adjustments shall be effective in accordance with Section 761(c)
of the Code as of January 1, 2007; and
WHEREAS,
acting
pursuant to the power and authority granted to it under Section 13.1(d) of
the Partnership Agreement, the General Partner has determined that the following
amendment to the Partnership Agreement does
not
require the approval of any Limited Partner.
NOW
THEREFORE,
the
General Partner does hereby amend the Partnership Agreement as
follows:
Section
1. Amendment.
(a) Section
1.1 is hereby amended to add or amend and restate the following
definitions:
(i) “Disposed
of Adjusted Property”
has
the
meaning assigned to such term in Section 6.1(d)(xii)(B).
(ii) “Net
Termination Gain”
means,
for any taxable year, the sum, if positive, of all items of income, gain, loss
or deduction recognized by the Partnership (a) after the Liquidation Date or
(b)
upon the sale, exchange or other disposition of all or substantially all of
the
assets of the Partnership Group, taken as a whole, in a single transaction
or a
series of related transactions (excluding any disposition to a member of the
Partnership Group). The items included in the determination of Net Termination
Gain shall be determined in accordance with Section 5.5(b) and shall not include
any items of income, gain or loss specially allocated under Section
6.1(d).
(iii) “Net
Termination Loss”
means,
for any taxable year, the sum, if negative, of all items of income, gain, loss
or deduction recognized by the Partnership (a) after the Liquidation Date or
(b)
upon the sale, exchange or other disposition of all or substantially all of
the
assets of the Partnership Group, taken as a whole, in a single transaction
or a
series of related transactions (excluding any disposition to a member of the
Partnership Group). The items included in the determination of Net Termination
Loss shall be determined in accordance with Section 5.5(b) and shall not include
any items of income, gain or loss specially allocated under Section
6.1(d).
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(b) Section 5.5(d)
is hereby amended and restated in its entirety as follows:
(i) In
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance
of additional Partnership Interests for cash or Contributed Property, the
issuance of Partnership Interests as consideration for the provision of services
or the conversion of the General Partner’s Combined Interest to Common Units
pursuant to Section 11.3(b), the Capital Accounts of all Partners and the
Carrying Value of each Partnership property immediately prior to such issuance
shall be adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as if such Unrealized
Gain or Unrealized Loss had been recognized on an actual sale of each such
property for an amount equal to its fair market value immediately prior to
such
issuance and had been allocated to the Partners at such time pursuant to Section
6.1(c) in the same manner as any item of gain or loss actually recognized
following an event giving rise to the dissolution of the Partnership would
have
been allocated. In determining such Unrealized Gain or Unrealized Loss, the
aggregate cash amount and fair market value of all Partnership assets (including
cash or cash equivalents) immediately prior to the issuance of additional
Partnership Interests shall be determined by the General Partner using such
method of valuation as it may adopt; provided, however, that the General
Partner, in arriving at such valuation, must take fully into account the fair
market value of the Partnership Interests of all Partners at such time. The
General Partner shall allocate such aggregate value among the assets of the
Partnership (in such manner as it determines) to arrive at a fair market value
for individual properties.
(ii) In
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately
prior to any actual or deemed distribution to a Partner of any Partnership
property (other than a distribution of cash that is not in redemption or
retirement of a Partnership Interest), the Capital Accounts of all Partners
and
the Carrying Value of all Partnership property shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable to
such
Partnership property, as if such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property immediately prior to such
distribution for an amount equal to its fair market value, and had been
allocated to the Partners, at such time, pursuant to Section 6.1(c) in the
same
manner as any item of gain or loss actually recognized following an event giving
rise to the dissolution of the Partnership would have been allocated. In
determining such Unrealized Gain or Unrealized Loss the aggregate cash amount
and fair market value of all Partnership assets (including cash or cash
equivalents) immediately prior to a distribution shall (A) in the case of an
actual distribution that is not made pursuant to Section 12.4 or in the case
of
a deemed distribution, be determined and allocated in the same manner as that
provided in Section 5.5(d)(i) or (B) in the case of a liquidating distribution
pursuant to Section 12.4, be determined and allocated by the Liquidator using
such method of valuation as it may adopt.
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(c) Section
6.1(d)(xii) is hereby amended and restated in its entirety as
follows:
Corrective
and Other Allocations.
In the
event of any allocation of Additional Book Basis Derivative Items or any
Book-Down Event or any recognition of a Net Termination Loss, the following
rules shall apply:
(A) Except
as
provided in Section 6.1(d)(xii)(B), in the case of any allocation of Additional
Book Basis Derivative Items (other than an allocation of Unrealized Gain or
Unrealized Loss under Section 5.5(d) hereof) with respect to any Partnership
property, the General Partner shall allocate such Additional Book Basis
Derivative Items (1) to (aa) the holders of Incentive Distribution Rights and
(bb) the General Partner in the same manner that the Unrealized Gain or
Unrealized Loss attributable to such property is allocated pursuant to Section
5.5(d)(i) or Section 5.5(d)(ii) and (2) to all Unitholders, Pro Rata, to the
extent that the Unrealized Gain or Unrealized Loss attributable to such property
is allocated to any Unitholders pursuant to Section 5.5(d)(i) or Section
5.5(d)(ii).
(B) In
the
case of any allocation of Additional Book Basis Derivative Items (other than
an
allocation of Unrealized Gain or Unrealized Loss under Section 5.5(d) hereof
or
an allocation of Net Termination Gain or Net Termination Loss pursuant to
Section 6.1(c) hereof) as a result of a sale or other taxable disposition of
any
Partnership asset that is an Adjusted Property (“Disposed
of Adjusted Property”),
the
General Partner shall allocate (1) additional items of income and gain (aa)
away
from the holders of Incentive Distribution Rights and the General Partner and
(bb) to the Unitholders, or (2) additional items of deduction and loss (aa)
away
from the Unitholders and (bb) to the holders of Incentive Distribution Rights
and the General Partner, to the extent that the Additional Book Basis Derivative
Items allocated to the Unitholders exceed their Share of Additional Book Basis
Derivative Items with respect to such Disposed of Adjusted Property. For this
purpose, the Unitholders shall be treated as being allocated Additional Book
Basis Derivative Items to the extent that such Additional Book Basis Derivative
Items have reduced the amount of income that would otherwise have been allocated
to the Unitholders under this Agreement (e.g., Additional Book Basis Derivative
Items taken into account in computing cost of goods sold would reduce the amount
of book income otherwise available for allocation among the Partners). Any
allocation made pursuant to this Section 6.1(d)(xii)(B) shall be made after
all
of the other Agreed Allocations have been made as if this Section 6.1(d)(xii)
were not in this Agreement and, to the extent necessary, shall require the
reallocation of items that have been allocated pursuant to such other Agreed
Allocations.
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(C) In
the
case of any negative adjustments to the Capital Accounts of the Partners
resulting from a Book-Down Event or from the recognition of a Net Termination
Loss, such negative adjustment (1) shall first be allocated, to the extent
of
the Aggregate Remaining Net Positive Adjustments, in such a manner, as
determined by the General Partner, that to the extent possible the aggregate
Capital Accounts of the Partners will equal the amount that would have been
the
Capital Account balance of the Partners if no prior Book-Up Events had occurred,
and (2) any negative adjustment in excess of the Aggregate Remaining Net
Positive Adjustments shall be allocated pursuant to Section 6.1(c)
hereof.
(D) In
making
the allocations required under this Section 6.1(d)(xii), the General Partner
may
apply whatever conventions or other methodology it determines will satisfy
the
purpose of this Section 6.1(d)(xii).
Section
2. General
Authority.
The
appropriate officers of the General Partner are hereby authorized to make such
further clarifying and conforming changes to the Partnership Agreement as they
deem necessary or appropriate, and to interpret the Partnership Agreement,
to
give effect to the intent and purpose of this Amendment No. 1.
Section
3. Ratification
of Partnership Agreement.
Except
as expressly modified and amended herein, all of the terms and conditions of
the
Partnership Agreement shall remain in full force and effect.
Section
4. Governing
Law.
This
Amendment No. 1 will be governed by and construed in accordance with the
laws of the State of Delaware.
IN
WITNESS WHEREOF,
the
General Partner has executed this Amendment No. 1 as of April 11,
2008.
GENERAL PARTNER: | ||
DCP MIDSTREAM GP, LP | ||
|
By: | DCP
MIDSTREAM GP,
LLC,
its
general partner
|
By: | /s/ Xxxx X. Xxxxx | |
Name: | Xxxx X. Xxxxx | |
Title: | President & CEO |
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