AMENDMENT NO. 12 TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ENERGY TRANSFER PARTNERS, L.P.
AMENDMENT NO. 12
TO
OF
This Amendment No. 12 (this “Amendment No. 12”) to the Amended and Restated Agreement
of Limited Partnership of Energy Transfer Partners, L.P. (the “Partnership”), dated as of
June 27, 1996, as amended as of August 9, 2000, January 5, 2001, October 5, 2001, February 4, 2002,
January 15, 2004, February 13, 2004, March 15, 2005, February 6, 2006, May 1, 2006, November 1,
2006 and November 9, 2007 (as so amended, the “Partnership Agreement”) is hereby adopted by
Energy Transfer Partners GP, L.P., 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
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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).
(c) 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 Units for cash or Contributed Property, the issuance of Units
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 Net Termination Gain or Net Termination Loss
actually recognized would have been allocated pursuant to such provision. In
determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and
fair market value of all Partnership assets (including, without limitation, cash or
cash equivalents) immediately prior to the issuance of additional Units shall be
determined by the General Partner using such reasonable 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
in its discretion to be reasonable) 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
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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 Net
Termination Gain or Net Termination Loss actually recognized would have been
allocated pursuant to such provision. In determining such Unrealized Gain or
Unrealized Loss the aggregate cash amount and fair market value of all Partnership
assets (including, without limitation, 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.
(d) 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 treated as recognized 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 Unrealized Gain or Unrealized Loss
attributable to such property would be allocated if treated as recognized
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 would be allocated to any Unitholders if
treated as recognized 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
treated as recognized 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 including, for this purpose, any inventory,
(“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
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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.
(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 reasonably 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, in its sole discretion, may apply whatever conventions
or other methodology it deems reasonable to 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. 12.
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. 12 will be governed by and construed in
accordance with the laws of the State of Delaware.
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IN
WITNESS WHEREOF, the General Partner has executed this Amendment
No. 12 as of April 23, 2008.
| GENERAL PARTNER: | ||||||
| ENERGY TRANSFER PARTNERS GP, L.P. | ||||||
| By: ENERGY TRANSFER PARTNERS, L.L.C. | ||||||
| its general partner | ||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Financial Officer | ||||||
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