---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 22, 2016

ENTERPRISE PRODUCTS PARTNERS L.P.

(Exact name of registrant as specified in its charter)

 

Delaware	1-14323	76-0568219
(State or Other Jurisdiction of	(Commission File Number)	(I.R.S. Employer
Incorporation or Organization)		Identification No.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

---

 

5.02  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Unless the context requires otherwise, references to "we," "us," "our," "Partnership," or "Enterprise Products Partners" within the context of this Current Report on Form 8-K refer to Enterprise Products Partners L.P.

Unless otherwise agreed to by EPCO and a majority in interest of the limited partners of each Employee Partnership, such Employee Partnership will terminate at the earliest to occur of (i) thirty days following its vesting date, (ii) a change of control or (iii) a dissolution of the Employee Partnership.  Class B limited partner interests in EPD PubCo I vest four years from February 22, 2016, and Class B limited partner interests in each of EPD PubCo II and EPD PrivCo I vest five years from that date.

The Employee Partnerships have the following material terms regarding their quarterly cash distributions to partners:

 

 

Copies of the limited partnership agreements of each Employee Partnership are attached as Exhibit 10.1, 10.2 and 10.3 to this Current Report on Form 8-K, respectively.  The foregoing description of the Employee Partnerships is qualified in its entirety by such exhibits, which are incorporated by reference herein.

Item 9.01.  Financial Statements and Exhibits.

(d)  Exhibits.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

		ENTERPRISE PRODUCTS PARTNERS L.P.
		By:       Enterprise Products Holdings LLC,              its General Partner
Date: February 26, 2016		By:	/s/ MICHAEL J. KNESEK
		Name:	Michael J. Knesek
		Title:	Senior Vice President, Controller and Principal Accounting Officer of Enterprise Products Holdings LLC

Exhibits

 

EXHIBIT 10.1

 

 

 

 

 

AGREEMENT OF LIMITED PARTNERSHIP

OF

EPD PUBCO UNIT I L.P.

Dated as of

February 22, 2016

 

 

 

 

 

 

 

 

AGREEMENT OF LIMITED PARTNERSHIP
OF
EPD PUBCO UNIT I L.P.

This Agreement of Limited Partnership (this "Agreement") of EPD PubCo Unit I L.P., a Delaware limited partnership (the "Partnership"), is made and entered into effective as of February 22, 2016 by and among the Partners (as defined below).

FOR AND IN CONSIDERATION OF the mutual covenants, rights, and obligations set forth herein, the benefits to be derived therefrom, and other good and valuable consideration, the receipt and sufficiency of which each Partner acknowledges and confesses, the Partners hereby agree as follows:

"Act" means the Delaware Revised Uniform Limited Partnership Act and any successor statute, as amended from time to time.

"Adjusted Capital Account" means, with respect to any Partner, the balance in such Partner's Capital Account after giving effect to the following adjustments:

(a)	Credit to such Capital Account of any amounts that such Partner is obligated or deemed obligated to contribute pursuant to the penultimate sentences of Sections 1.704‑2(g)(1) and 1.704‑2(i)(5) of the Regulations; and

(b)	Debit to such Capital Account the items described in Sections 1.704‑1(b)(2)(ii)(d)(4), 1.704‑1(b)(2)(ii)(d)(5) and 1.704‑1(b)(2)(ii)(d)(6) of the Regulations.

The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Section 1.704‑1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.

"Adjustment Date" means the (i) the fifth Business Day following the payment date with respect to each distribution made by EPD with respect to EPD Units, and (ii) the fifth Business Day following the receipt of any proceeds by the Partnership from the disposition of EPD Units.

"Affiliate" means with respect to any Person any other Person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.  For the purpose of this definition, "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management

and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

"Agreement" has the meaning given it in the introductory paragraph hereof.

"Applicable Percentage" means with respect to a disposition of less than all the EPD Units owned by the Partnership, the quotient (expressed as a percentage) of the number of EPD Units held by the Partnership immediately after such disposition divided by the number of EPD Units held by the Partnership immediately before such disposition.

"Assigned EPD Units" means those 2,723,052 EPD Units of which Beneficial Ownership (subject to the retention of the Retained Distribution) was assigned to the Partnership by the Class A Limited Partner pursuant to the Assignment.

"Assignment" means the irrevocable assignment under the Contribution Agreement pursuant to which Beneficial Ownership of the Assigned EPD Units has been assigned by the Class A Limited Partner to the Partnership.

"Bankrupt Partner" means any Partner (whether a General Partner or a Limited Partner) with respect to which an event of the type described in Section 17‑402(a)(4) or (5) of the Act (or any equivalent successor provision) shall have occurred, subject to the lapsing of any period of time therein specified.

"Beneficial Ownership" means, with respect to the Assigned EPD Units, dominion and control (within the meaning of Treasury Regulation Section 1.704-1(e)(2)) representing all the rights and obligations held by the Class A Limited Partner with respect to the Assigned EPD Units prior to the Assignment as well as such residual rights exercised on behalf of the Assigned EPD Units after the Assignment, subject to the retention of the Retained Distribution.

"Business Day" means any day other than a Saturday, Sunday, or day on which commercial banks in the State of Texas are authorized or required to be closed for business.

"Capital Account" means the account maintained for each Partner pursuant to Section 4.04.

"Capital Contribution" means any contribution by a Partner to the capital of the Partnership.

"Certificate" means the Certificate of Limited Partnership of the Partnership referred to in Section 2.05, as it may be amended or restated from time to time.

"Change of Control" means Duncan shall (i) cease to own, directly or indirectly, at least a majority of the equity interests in the General Partner or the general partner of EPD, or (ii) shall cease to have the ability to elect, directly or indirectly, at least a majority of the directors of the general partner of EPD.

"Class A Capital Base" means:

(i)	the Contributed Unit Fair Market Value multiplied by the number of Assigned EPD Units,

(ii)	reduced by the Retained Distribution, and

(iii)

adjusted on each Adjustment Date as follows:

(a)

increased by the Class A Preference Return that has accrued since the previous Adjustment Date (or in the case of the first Adjustment Date, since the Closing Date); and

(b)

decreased by all distributions made to the Class A Limited Partner since the previous Adjustment Date (or in the case of the first Adjustment Date, since the Closing Date).

The Class A Capital Base on the Closing Date shall be based on clauses (i) and (ii), above, which amount shall be finally determined once the amount of the Retained Distribution can be calculated.

"Class A Limited Partner" means EPCO Holdings, Inc., a Delaware corporation, and its successors and assigns.

"Class A Preference Return" means the sum of the amounts determined for each day, equal to the Class A Preference Return Rate multiplied by the Class A Capital Base.

"Class A Preference Return Amount" means the aggregate Class A Preference Return minus all prior distributions to the Class A Limited Partner pursuant to Sections 5.03(a) and 5.04(a).

"Class A Preference Return Rate" means a percent per annum equal to 6.6638% ((i) $1.56 (the per annum distribution rate based on the distribution announced with respect to the January 29, 2016 Record Date for EPD Units) divided by (ii) the Contributed Unit Fair Market Value), divided by 365 or 366 days, as the case may be during such calendar year.

"Class B Limited Partner" means any Person executing (by power of attorney or otherwise) this Agreement as of the date hereof as a Class B Limited Partner or hereafter admitted to the Partnership as a Class B Limited Partner as herein provided, but shall not include any Person who has ceased to be a Class B Limited Partner in the Partnership.

"Class B Percentage Interest" means with respect to each Class B Limited Partner the quotient (expressed as a percentage) of (i) such Class B Limited Partner's Sharing Points, divided by (ii) the Sharing Points of all Class B Limited Partners.  For purposes of calculating the Class B Percentage Interest, Sharing Points attributable to interests in the Partnership that are forfeited pursuant to Section 3.07 shall be ignored.

"Closing Date" means February 22, 2016, the date on which the Class A Limited Partner contributed Beneficial Ownership of the Assigned EPD Units to the Partnership pursuant to the Contribution Agreement.

"Code" means the Internal Revenue Code of 1986, and any successor statute, as amended from time to time.

"Contributed Unit Fair Market Value" means $23.41 (the closing sales price per EPD Unit on the New York Stock Exchange on February 22, 2016).

"Contribution Agreement" means that agreement by and between EPCO Holdings, Inc. and EPD PubCo Unit I L.P., dated as of February 22, 2016.

"Default Interest Rate" means a varying per annum rate equal at any given time to the lesser of (a) four percentage points in excess of the General Interest Rate and (b) the maximum rate permitted by applicable law.

"Disability" means the event whereby a Limited Partner becomes entitled to receive long-term disability benefits under the long-term disability plan of the General Partner or any of its Affiliates.

"Dispose," "Disposing," or "Disposition" means a sale, assignment, transfer, exchange, mortgage, pledge, grant of a security interest, or other disposition or encumbrance, or the acts thereof, other than by divorce, legal separation or other dissolution of a Partner's marriage.

"Duncan" means, collectively, individually or in any combination, the descendants, heirs and/or legatees of Dan L. Duncan and/or distributees of Dan L. Duncan's estate, and/or trusts (including voting trusts) established for the benefit of his descendants, such legatees and/or distributees and/or their respective descendants, heirs, legatees and distributees.

"EPCO" means Enterprise Products Company, a Texas corporation.

"EPD" means Enterprise Products Partners L.P., a Delaware limited partnership.

"EPD Units" means (1) the Assigned EPD Units for so long as the Contribution Agreement is effective, and (2) thereafter, the partnership units representing limited partner interests in EPD.

"General Interest Rate" means a varying per annum rate equal at any given time to the lesser of (a) the interest rate publicly quoted by J.P. Morgan Chase from time to time as its prime commercial or similar reference interest rate, and (b) the maximum rate permitted by applicable law.

"General Partner" means EPCO, or any Person hereafter admitted to the Partnership as a general partner as herein provided, but shall not include any Person who has ceased to be a general partner in the Partnership.

"Investment Company Act" means the Investment Company Act of 1940, and any successor statute, as amended from time to time.

"Limited Partner" means the Class A Limited Partner or any Class B Limited Partner.

"Net Income" and "Net Loss" mean, respectively, subject to Section 4.04, an amount equal to the Partnership's taxable income or loss taking the Assignment into account determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

"Partner" means the General Partner, the Class A Limited Partner or any Class B Limited Partner.

"Partnership" has the meaning given it in the introductory paragraph.

"Person" has the meaning given it in the Act.

"Qualifying Termination" means the termination of a Class B Limited Partner's employment with the General Partner and its Affiliates due to (i) death, (ii) receiving long-term disability benefits under the long-term disability plan of the General Partner or any of its Affiliates or (iii) retirement with the approval of the General Partner (which may be given or withheld in its sole discretion) on or after reaching age 65, provided that such retirement occurs on or after February 22, 2018.

"Regulations" means the regulations promulgated under Section 704 of the Code.

"Required Interest" means one or more Class B Limited Partners having among them more than 50% of the Class B Percentage Interests of all Limited Partners in its or their capacities as such.

"Retained Distribution" has the meaning set forth in the Contribution Agreement.

"Sharing Points" means, with respect to each Class B Limited Partner, the number of Sharing Points granted by the General Partner to such Class B Limited Partner (which number is set forth on the Power of Attorney executed by the Class B Limited Partner and delivered to the General Partner), as the same may be amended from time to time pursuant to the terms of this Agreement.

"Vesting Date" means the earliest of (i) the fourth anniversary of the date of this Agreement, (ii) a Change of Control or (iii) dissolution of the Partnership.

Agreement by such Partner have been duly taken, and such authorization, execution, delivery, and performance do not conflict with any other agreement or arrangement to which such Partner is a party or by which it is bound, and (d) such Partner is acquiring its interest in the Partnership for investment purposes and not with a view to distribution thereof.

allocations of Partnership loss and deduction (or items thereof), including loss and deduction described in Regulation Section 1.704‑1(b)(2)(iv)(g), but excluding items described in clause (b)(iii) above and loss or deduction described in Regulation Section 1.704‑1(b)(4)(i).  The Partners' Capital Accounts also shall be maintained and adjusted as permitted by the provisions of Regulation Section 1.704‑1(b)(2)(iv)(f) and as required by the other provisions of Regulation Sections 1.704‑1(b)(2)(iv) and 1.704‑1(b)(4), including adjustments to reflect the allocations to the Partners of depreciation, amortization, and gain or loss as computed for book purposes rather than the allocation of the corresponding items as computed for tax purposes, as required by Regulation Section 1.704‑1(b)(2)(iv)(g).  A Partner that has more than one interest in the Partnership shall have a single Capital Account that reflects all such interests, regardless of the class of interests owned by such Partner and regardless of the time or manner in which such interests were acquired; provided, that Partners that are Affiliates but nevertheless separate legal entities shall have separate Capital Accounts.  Upon the transfer of all or part of an interest in the Partnership, the Capital Account of the transferor that is attributable to the transferred interest in the Partnership shall carry over to the transferee Partner in accordance with the provisions of Regulation Section 1.704‑1(b)(2)(iv)(l).

 

 

-13-

---

5.02            Income Tax Allocations.

 

 

Partners in the same manner as such items are allocated for purposes of maintaining Capital Account under Section 5.01.

5.03           Distributions of Cashflow from EPD Units.  Promptly following the receipt of any distributions with respect to EPD Units (other than any Retained Distribution), the General Partner shall cause to be distributed to the Partners such receipts (and any income from the temporary investment thereof) in the manner set forth below, provided, that the General Partner may withhold and not distribute such portion of any such receipts that the General Partner has determined in its sole but good faith discretion should be withheld to pay expenses of the Partnership.  Distribution to the Partners pursuant to this Section 5.03 shall be made as follows:

In the event any Retained Distribution is received by the Partnership, the Partners acknowledge that such Retained Distribution is the property of the Class A Limited Partner, and the Partnership shall promptly pay any such Retained Distribution over to the Class A Limited Partner.  Any payment of a Retained Distribution to the Class A Limited Partner pursuant to this paragraph shall not be treated as a "distribution" for purposes of this Agreement.

5.04            Distributions of Proceeds from Sales of EPD Units.  Promptly following the receipt of any proceeds from the sale of any EPD Units by the Partnership, the General Partner shall cause to be distributed to the Partners such receipts in the manner set forth below, provided that the General Partner may withhold and not distribute such portion of any such receipts that

 

 

the General Partner has determined in its sole but good faith discretion should be withheld to pay expenses of the Partnership.  Distribution to the Partners pursuant to this Section 5.04 shall be made as follows:

5.05            Restrictions on Distributions of EPD Units.  The Partners and the Partnership hereby agree that they shall not cause the Partnership to offer for sale, sell, pledge or otherwise transfer, distribute or dispose of the EPD Units held by the Partnership prior to the Vesting Date, other than as approved by the General Partner (in its sole discretion) in connection with a Change of Control.

ARTICLE VI
MANAGEMENT AND OPERATION

6.01            Management of Partnership Affairs.  Except for situations in which the approval of the Limited Partners is expressly required by this Agreement or by non-waivable provisions of applicable law, the General Partner shall have full, complete, and exclusive authority to manage and control the business, affairs, and properties of the Partnership, to make all decisions regarding the same, and to perform any and all other acts or activities customary or incident to the management of the Partnership's business.  The General Partner shall receive no compensation for its services as such.  Subject to the other express provisions hereof, the General Partner shall make or take all decisions and actions for the Partnership not otherwise provided for herein, including, without limitation, the following:

 

 

6.02            Duties and Obligations of General Partner.  The General Partner shall endeavor to conduct the affairs of the Partnership in the best interests of the Partnership and the mutual best interests of the Partners, including, without limitation, the safekeeping and use of all Partnership funds and assets and the use thereof for the benefit of the Partnership.  The General Partner at all times shall act in good faith in all activities relating to the conduct of the business of the Partnership.  The General Partner shall devote such time as it deems necessary to conduct the business and affairs of the Partnership in an appropriate manner.

6.03            Release and Indemnification.  TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTNERSHIP AND EACH OTHER PARTNER ON BEHALF OF ITSELF AND ITS SUCCESSORS AND ASSIGNS HEREBY RELEASES, ACQUITS, AND FOREVER DISCHARGES THE GENERAL PARTNER AND THE CLASS A LIMITED PARTNER, THEIR PARTNERS OR SHAREHOLDERS, AND THEIR DIRECTORS, OFFICERS, EMPLOYEES, PARTNERS, REPRESENTATIVES, AND AGENTS AND EACH OTHER PERSON, IF ANY, CONTROLLING OR EMPLOYING SUCH PERSONS OR ENTITIES (COLLECTIVELY, THE "INDEMNITEES") FROM ALL CLAIMS, DEMANDS, OR CAUSES OF ACTION OF ANY CHARACTER THAT SUCH PARTY MAY HAVE, WHETHER KNOWN OR UNKNOWN, AGAINST ANY INDEMNITEE IN CONNECTION WITH THE PARTNERSHIP AND/OR THE BUSINESS CONDUCTED BY THE PARTNERSHIP; PROVIDED, HOWEVER, THAT SUCH RELEASE SHALL NOT APPLY TO ACTIONS CONSTITUTING WILLFUL MISCONDUCT OR BAD FAITH.  TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTNERSHIP SHALL INDEMNIFY AND HOLD HARMLESS EACH INDEMNITEE FROM AND AGAINST ALL LOSSES, COSTS, CLAIMS, LIABILITIES, DAMAGES, EXPENSES (INCLUDING, WITHOUT LIMITATION, COSTS OF SUIT AND ATTORNEYS' FEES) SUCH INDEMNITEE MAY INCUR IN CONNECTION WITH THE GENERAL PARTNER'S PERFORMING ITS OBLIGATIONS HEREUNDER (INCLUDING WITHOUT LIMITATION LOSSES, COSTS, CLAIMS, LIABILITIES, DAMAGES AND EXPENSES ARISING FROM, OR ALLEGED TO ARISE FROM, THE INDEMNITEE'S ACTIVE OR PASSIVE, SOLE OR CONCURRENT, NEGLIGENCE OR GROSS NEGLIGENCE), AND THE PARTNERSHIP SHALL ADVANCE EXPENSES ASSOCIATED WITH THE DEFENSE

 

 

6.04            Power of Attorney.

 

 

necessary or appropriate, in the discretion of the General Partner or the liquidator, to effectuate the terms or intent of this Agreement; provided, that when required by any provision of this Agreement that establishes a percentage of the Limited Partners required to take any action, the General Partner and the liquidator may exercise the power of attorney made in this Section 6.04 only after the necessary vote, consent or approval of the Limited Partners.

This Section 6.04 shall be construed as authorizing the General Partner to amend this Agreement in any manner subject to any provision of this Agreement that establishes a percentage of the Limited Partners required to take any action.

ARTICLE VII
RIGHTS OF OTHER PARTNERS

7.01            Information.  In addition to the other rights specifically set forth herein, each Partner shall have access to all information to which such Partner is entitled to have access pursuant to Section 17‑305 of the Act under the circumstances and subject to the conditions therein stated.  Without limiting the provisions of Section 17‑305(b) of the Act, the Partners agree that if the General Partner from time to time enters into on behalf of the Partnership or the General Partner contractual obligations regarding the confidentiality of information received with respect to the Partnership's business or assets, it shall not be reasonable for any other Partner or assignee or representative thereof to examine or copy such information unless such Partner agrees to comply with the terms of such contractual obligations including without limitation executing a counterpart of any applicable confidentiality agreements.

7.02            Limitations.  No Limited Partner shall have the authority or power in its capacity as such to act for or on behalf of the Partnership or any other Partner, to do any act that would be binding on the Partnership or any other Partner, or to incur any expenditures on behalf of or with respect to the Partnership.  No Limited Partner shall have the right or power to withdraw from the Partnership.

 

 

7.03            Limited Liability.  No Limited Partner shall be liable for the losses, debts, liabilities, contracts, or other obligations of the Partnership except to the extent required by law or otherwise set forth herein.

ARTICLE VIII
TAXES

8.01            Tax Returns.  The General Partner shall cause to be prepared and filed all necessary federal and state income tax returns for the Partnership, including making the elections described in Section 8.02.  Each Partner shall furnish to the General Partner all pertinent information in its possession relating to Partnership operations that is necessary to enable such income tax returns to be prepared and filed.

8.02            Tax Elections.  The following elections shall be made on the appropriate returns of the Partnership:

No election shall be made by the Partnership or any Partner to be treated as an association taxable as a corporation or to be excluded from the application of the provisions of Subchapter K of Chapter 1 of Subtitle A of the Code or any similar provisions of applicable state laws.

8.03            Tax Matters Partner.  The General Partner shall be the "tax matters partner" of the Partnership pursuant to Section 6231(a)(7) of the Code.  The General Partner shall take such action as may be necessary to cause each other Partner to become a "notice partner" within the meaning of Section 6223 of the Code.  The General Partner shall inform each other Partner of all significant matters that may come to its attention in its capacity as tax matters partner by giving notice thereof within ten Business Days after becoming aware thereof and, within such time, shall forward to each other Partner copies of all significant written communications it may receive in such capacity.  The General Partner shall not take any action contemplated by Sections 6222 through 6232 of the Code without the consent of a Required Interest.  This provision is not intended to authorize the General Partner to take any action left to the determination of an individual Partner under Sections 6222 through 6232 of the Code.

 

 

ARTICLE IX
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS

9.01            Maintenance of Books.  The books of account for the Partnership shall be maintained on a cash basis in accordance with the terms of this Agreement except that the Capital Accounts of the Partners shall be maintained in accordance with Section 4.04.  The calendar year shall be the accounting year of the Partnership.

9.02            Financial Statements.  Within 120 days after the end of each fiscal year during the term of the Partnership, the General Partner shall cause each other Partner to be furnished with an unaudited balance sheet, an income statement, and a statement of changes in Partners' capital of the Partnership for, or as of the end of, such period.  All financial statements shall be prepared in accordance with accounting principles generally employed for cash-basis records consistently applied (except as therein noted).

9.03            Bank Accounts.  The General Partner shall establish and maintain one or more separate accounts for Partnership funds in the Partnership name at such financial institutions as it may designate.  The General Partner may not commingle the Partnership's funds with other funds of any Partner.

ARTICLE X
WITHDRAWAL, BANKRUPTCY, REMOVAL, ETC.

10.01           Withdrawal, Bankruptcy, Etc. of General Partner.

 

 

have made such Capital Contribution as such Limited Partners may specify and shall have executed and delivered to the Partnership a document including such new General Partner's notice address, acceptance of all the terms and provisions of this Agreement, an agreement to perform and discharge timely all of its obligations and liabilities hereunder, and a representation and warranty that the representation and warranties in Section 3.02 are true and correct with respect to such new General Partner.  Notwithstanding the foregoing provisions of this Section 10.01(c), the right to select such new General Partner shall not exist or be exercised unless the Partnership shall have received the favorable opinion of the Partnership's legal counsel or of other legal counsel acceptable to the Limited Partners making such selection to the effect that such selection and admission will not result in (i) the loss of limited liability of any Limited Partner (except to the extent a Limited Partner has consented to become the General Partner) or (ii) in the Partnership being treated as an association taxable as a corporation for federal income tax purposes.  Notwithstanding the foregoing provisions of this Section 10.01(c), no such new General Partner shall be admitted (and the existing General Partner shall continue as such) if the event that permitted the selection of a new General Partner shall have been an event of the type described in Section 17‑402(a)(5) of the Act that with the passage of time would cause the existing General Partner to become a Bankrupt Partner but, due to the failure of such situation to continue, such General Partner does not become a Bankrupt Partner.

10.02           Conversion of Interest.  Immediately upon the General Partner's ceasing to be General Partner following the admission of a new General Partner pursuant to Section 10.01(c), the former General Partner's interest in the Partnership as a General Partner shall be converted into the interest of a Limited Partner in the Partnership having the same economic rights as specified for the General Partner herein immediately prior to its ceasing to be a General Partner, and such General Partner shall automatically and without further action be admitted to the Partnership as a Limited Partner.

ARTICLE XI
DISSOLUTION, LIQUIDATION, AND TERMINATION

11.01           Dissolution.  The Partnership shall be dissolved and its affairs shall be wound up upon the first to occur of any of the following:

 

 

it being understood that if an "event of withdrawal of a general partner" (as defined in Section 17‑101(3) of the Act) shall occur with respect to the General Partner and at least one other General Partner shall have been or is about to be admitted pursuant to Section 3.03(b), 10.01(c), or 10.02, the Partnership shall not dissolve but shall continue and the remaining General Partner shall, and hereby agrees to, carry on the business of the Partnership.

11.02           Liquidation and Termination.  Upon dissolution of the Partnership, unless it is continued as provided in Section 11.01, the General Partner shall act as liquidator or may appoint one or more other Persons as liquidator; provided, however, that if the Partnership shall be dissolved on account of an event of the type described in Section 17‑402(a)(4) through (10) of Act with respect to the General Partner, the liquidator shall be one or more Persons selected in writing by the Class A Limited Partner and a Required Interest.  The liquidator shall proceed diligently to wind up the affairs of the Partnership and make final distributions as provided herein, and shall file any amendments to the Certificate as may be required by applicable law.  The costs of liquidation shall be borne as a Partnership expense.  Until final distribution, the liquidator shall continue to manage the Partnership assets with all of the power and authority of the General Partner.  The steps to be accomplished by the liquidator are as follows:

 

 

during which the liquidation of the Partnership occurs (other than those made by reason of this clause); and such distributions shall be made by the end of the taxable year of the Partnership during which the liquidation of the Partnership occurs (or, if later, within 90 days after the date of such liquidation).  While the General Partner has the right to sell EPD Units as noted in Section 5.04, and subject to the restrictions set forth in Section 5.05, it is the intent of the General Partner upon liquidation and termination of the Partnership to distribute EPD Units to the Partners rather than sell the EPD Units and distribute the cash proceeds of such sale to the Partners.

For purposes of this Section 11.02(c), the "fair market value" of each EPD Unit held by the Partnership on the Vesting Date shall be equal to the average of the closing sale prices per EPD Unit for the 20 trading days ending on the Vesting Date (or, if no closing sale price is reported, the average of the bid and asked prices) as reported in the composite transactions for the principal United States securities exchange on which the EPD Units are traded or if the EPD Units are not listed on a national or regional stock exchange, as reported by The NASDAQ National Market.  All distributions in kind to the Partners shall be made subject to the liability of each distributee for costs, expenses, and liabilities theretofore incurred or for which the Partnership shall have committed prior to the date of termination and such costs, expenses, and liabilities shall be allocated to such distributee pursuant to this Section 11.02.  The distribution of property to a Partner in accordance with the provisions of this Section 11.02 shall constitute a complete return to the Partner of its Capital Contributions and a complete distribution to the Partner of its interest in the Partnership and all the Partnership's property and shall constitute a compromise to which all Partners have consented within the meaning of Section 17‑502(b) of the Act.

11.03           Cancellation of Certificate.  Upon completion of the distribution of Partnership assets as provided herein, the Partnership shall be terminated, and the General Partner (or, if there shall be no General Partner, the Limited Partners) shall cause the cancellation of the Certificate and any other filings made pursuant to Section 2.05 and shall take such other actions as may be necessary to terminate the Partnership.

ARTICLE XII
GENERAL PROVISIONS

12.01           Offset.  In the event that any sum is payable to any Partner pursuant to this Agreement, any amounts owed by such Partner to the Partnership shall be deducted from said sum before payment to said Partner.

12.02           Notices.  All notices or requests or consents provided for or permitted to be given pursuant to this Agreement must be in writing and must be given (a) by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or (b) by delivering such notice by courier or in person to such party.  Notices given or served pursuant hereto shall be effective two Business Days after such deposit, or upon receipt if delivered in person to the person to be notified.  All notices to be sent to a Partner shall be sent to or made at the address given on the Power of Attorney executed by the Partner and delivered to the General Partner on the date hereof or in the instrument described

 

 

in Section 3.03(c), 3.04, or 10.01(c), or such other address as such Partner may specify by notice to the General Partner.  Any notice to the Partnership shall be given to the General Partner.

12.03           Entire Agreement; Supersedure.  This Agreement constitutes the entire agreement of the Partners relating to the matters contained herein and supersedes all prior contracts or agreements, whether oral or written, among the parties hereto with respect to such matters.

12.04           Effect of Waiver or Consent.  No waiver or consent, express or implied, by any Person with respect to any breach or default by any other Person of its obligations hereunder shall be deemed or construed to be a consent or waiver with respect to any other breach or default by such other Person of the same or any other obligations of such other Person hereunder.  Failure on the part of any Person to complain of any act or omission of any other Person, or to declare any other Person in default, irrespective of how long such failure continues, shall not constitute a waiver by such Person of its rights hereunder until the applicable limitation period has run.

12.05           Amendment or Modification.  This Agreement may be amended or modified from time to time only by a written instrument executed by the General Partner; provided, however, that (a) the vesting and distribution provisions of this Agreement may be amended or modified only by a written instrument executed by the General Partner, the Class A Limited Partner and a Required Interest, and (b) no amendment or modification reducing a Partner's Sharing Points (other than to reflect changes otherwise provided hereby) or increasing its duties or adversely affecting its limited liability shall be effective without such Partner's consent.

12.06           Binding Effect; Joinder of Additional Parties.  Subject to the restrictions on Dispositions set forth herein, this Agreement shall be binding upon and shall inure to the benefit of the Partners, as well as the respective heirs, legal representatives, successors, and assigns of such Partners.

12.07           Construction.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICTS-OF-LAW RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR CONSTRUCTION OF THIS AGREEMENT TO THE LAWS OF ANOTHER JURISDICTION.  The headings in this Agreement are inserted for convenience and identification only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof.  Whenever the context requires, the gender of all words used in this Agreement shall include the masculine, feminine, and neuter.  All references to Articles and Sections refer to articles and sections of this Agreement.  All sums and amounts payable or to be payable pursuant to the provisions of this Agreement shall be payable in coin or currency of the United States of America that, at the time of payment, is legal tender for the payment of public and private debts in the United States of America.  If any provision of this Agreement or the application thereof to any Person or circumstance shall be held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

 

 

12.08           Further Assurances.  In connection with this Agreement, as well as all transactions contemplated by this Agreement, each Partner agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out, and perform all of the terms, provisions, and conditions of this Agreement and all such transactions.

12.09           Indemnification.  To the fullest extent permitted by law, each Partner shall indemnify the Partnership and each other Partner and hold them harmless from and against all losses, costs, liabilities, damages, and expenses (including, without limitation, costs of suit and attorney's fees) they may incur on account of any breach by such indemnifying Partner of this Agreement.

12.10           Waiver of Certain Rights.  Each Partner irrevocably waives any right it might have to maintain any action for dissolution of the Partnership or to maintain any action for partition of the property of the Partnership.

12.11           Counterparts.  This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document.  All counterparts shall be construed together and shall constitute one and the same instrument.

12.12           Dispute Resolution.   (a) If the General Partner and one or more Limited Partners are unable to resolve any controversy, dispute, claim or other matter in question arising out of, or relating to, this Agreement, any provision hereof, the alleged breach hereof, or in any way relating to the subject matter of this Agreement, or the relationship between the parties created by this Agreement, including questions concerning the scope and applicability of this Section 12.12, whether sounding in contract, tort or otherwise, at law or in equity, under state or federal law, whether provided by statute or common law, for damages or any other relief (any such controversy, dispute, claim or other matter in question, a "Dispute"), on or before the 30th day following the receipt by the General Partner or such Limited Partners of written notice of such Dispute from the other party, which notice describes in reasonable detail the nature of the Dispute and the facts and circumstances relating thereto, the General Partner or such Limited Partners may, by delivery of written notice to the other party, require that a representative of the General Partner and of such Limited Partners meet at a mutually agreeable time and place in an attempt to resolve such Dispute.  Such meeting shall take place on or before the 15th day following the date of the notice requiring such meeting, and if the Dispute has not been resolved within 15 days following such meeting, the General Partner or such Limited Partners may cause such Dispute to be resolved by binding arbitration in Houston, Texas, by submitting such Dispute for arbitration within 30 days following the expiration of such 15-day period.  This agreement to arbitrate shall be specifically enforceable against the parties.

 

 

administered by the American Arbitration Association but instead shall be self-administered by the parties until the arbitrators are selected and then the proceeding shall be administered by the arbitrators.

 

 

such arbitrators has past or present minimal relationships with the party that appointed such arbitrator.  Evident partiality on the part of an arbitrator exists only where the circumstances are such that a reasonable person would have to conclude there in fact existed actual bias and a mere appearance or impression of bias will not constitute evident partiality or otherwise disqualify an arbitrator.  Minimal or trivial past or present relationships between the neutral arbitrator and the party selecting such arbitrator or any of the other arbitrators, or the failure to disclose such minimal or trivial past or present relationships, will not by themselves constitute evident partiality or otherwise disqualify any arbitrator.  Upon selection of the third arbitrator, each of the three arbitrators shall agree in writing to abide faithfully by the terms of this agreement to arbitrate.  The three arbitrators shall make all of their decisions by majority vote.  If one of the party-appointed arbitrators refuses to participate in the proceedings or refuses to vote, the decision of the other two arbitrators shall be binding.  If an arbitrator dies or becomes physically incapacitated and is unable to fulfill his or her duties as an arbitrator, the arbitration proceeding shall continue with a substitute arbitrator selected as follows: if the incapacitated arbitrator is a party-appointed arbitrator, the party shall promptly select a new arbitrator, and if the incapacitated arbitrator is the neutral arbitrator, the two-party appointed arbitrators shall select a substitute neutral arbitrator, failing agreement on which the General Partner and such Limited Partners (or either of them) shall apply to any United States District Judge for the Southern District of Texas, who shall appoint the substitute neutral arbitrator.

 

any court.  The arbitrators' award may be confirmed in, and judgment upon the award entered by, any federal or State court having jurisdiction over the parties.

12.13           No Effect on Employment Relationship.  Nothing in this Agreement shall confer upon any employee of the General Partner or any Affiliate thereof any right to continued employment nor shall it interfere in any way with the right of the General Partner or any of its Affiliates to terminate the employment of any employee at any time.

12.14           Legal Representation.  This Agreement and related documents have been prepared by Vinson & Elkins LLP and Andrews Kurth LLP, as counsel for the General Partner, and not as counsel for any other Partner or the Partnership.  Each party other than the General Partner has been advised to seek independent counsel in connection with this Agreement and the related documents.

[Signature Pages to Follow.]

 

 

 

 

IN WITNESS WHEREOF, the Partners have executed this Agreement as of the date first set forth above.

Agreement of Limited Partnership of EPD PubCo Unit I L.P.

FORM OF POWER OF ATTORNEY

For Executing Agreement of Limited Partnership of EPD PubCo Unit I L.P.

Know all by these presents, that the undersigned hereby constitutes and appoints Enterprise Products Company, a Texas corporation, and its authorized representatives the undersigned's true and lawful attorney-in-fact to:

(1)

execute for and on behalf of the undersigned as a Class B limited partner thereunder that certain Agreement of Limited Partnership of EPD PubCo Unit I L.P. (the "Partnership Agreement"); and

(2)

take any other action of any type whatsoever in connection with the foregoing that, in the opinion of each such attorney-in-fact, may be of benefit to, in the best interest of, or legally required of the undersigned, it being understood that the documents executed by the attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as the attorney-in-fact may approve in the attorney-in-fact's discretion.

The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform all and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that the attorney-in-fact, or the attorney-in-facts substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted.

The undersigned acknowledges and agrees by execution of this Power of Attorney that the undersigned's initial Sharing Points (as defined in the Partnership Agreement) under the Partnership Agreement equal ________, which represents ____% of the total initial Sharing Points granted by the General Partner pursuant to the Partnership Agreement.

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of the date written below.

 

Signature

Type or Print Name

Date

EXHIBIT 10.2

 

 

 

 

AGREEMENT OF LIMITED PARTNERSHIP

OF

EPD PUBCO UNIT II L.P.

Dated as of

February 22, 2016

 

 

 

 

ARTICLE I
DEFINITIONS
1.01	Certain Definitions	1
1.02	Other Definitions	6
ARTICLE II
ORGANIZATIONAL MATTERS
2.01	Formation	6
2.02	Name	6
2.03	Registered Office; Registered Agent; Other Offices	6
2.04	Purposes	6
2.05	Certificate; Foreign Qualification	7
2.06	Term	7
2.07	Merger or Consolidation	7
ARTICLE III
PARTNERS; DISPOSITIONS OF INTERESTS
3.01	Partners	7
3.02	Representations and Warranties	7
3.03	Restrictions on the Disposition of an Interest	8
3.04	Additional Partners	9
3.05	Interests in a Partner	10
3.06	Spouses of Partners	10
3.07	Vesting of Limited Partners	10
3.08	Services Provided by the Partners	10
3.09	Investment Company Act Matters	10
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.01	Initial and Additional Capital Contributions	11
4.02	Return of Contributions	11
4.03	Advances by General Partner	11
4.04	Capital Accounts	11
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.01	Allocations	12
5.02	Income Tax Allocations	14
5.03	Distributions of Cashflow from EPD Units	15
5.04	Distributions of Proceeds from Sales of EPD Units	15

5.05	Restrictions on Distributions of EPD Units	16
ARTICLE VI
MANAGEMENT AND OPERATION
6.01	Management of Partnership Affairs	16
6.02	Duties and Obligations of General Partner	17
6.03	Release and Indemnification	17
6.04	Power of Attorney	18
ARTICLE VII
RIGHTS OF OTHER PARTNERS
7.01	Information	19
7.02	Limitations	19
7.03	Limited Liability	20
ARTICLE VIII
TAXES
8.01	Tax Returns	20
8.02	Tax Elections	20
8.03	Tax Matters Partner	20
ARTICLE IX
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
9.01	Maintenance of Books	21
9.02	Financial Statements	21
9.03	Bank Accounts	21
ARTICLE X
WITHDRAWAL, BANKRUPTCY, REMOVAL, ETC.
10.01	Withdrawal, Bankruptcy, Etc. of General Partner	21
10.02	Conversion of Interest	22
ARTICLE XI
DISSOLUTION, LIQUIDATION, AND TERMINATION
11.01	Dissolution	22
11.02	Liquidation and Termination	23
11.03	Cancellation of Certificate	24
ARTICLE XII
GENERAL PROVISIONS
12.01	Offset	24

12.02	Notices	24
12.03	Entire Agreement; Supersedure	25
12.04	Effect of Waiver or Consent	25
12.05	Amendment or Modification	25
12.06	Binding Effect; Joinder of Additional Parties	25
12.07	Construction	25
12.08	Further Assurances	26
12.09	Indemnification	26
12.10	Waiver of Certain Rights	26
12.11	Counterparts	26
12.12	Dispute Resolution	26
12.13	No Effect on Employment Relationship	29
12.14	Legal Representation	29

 

AGREEMENT OF LIMITED PARTNERSHIP
OF
EPD PUBCO UNIT II L.P.

This Agreement of Limited Partnership (this "Agreement") of EPD PubCo Unit II L.P., a Delaware limited partnership (the "Partnership"), is made and entered into effective as of February 22, 2016 by and among the Partners (as defined below).

FOR AND IN CONSIDERATION OF the mutual covenants, rights, and obligations set forth herein, the benefits to be derived therefrom, and other good and valuable consideration, the receipt and sufficiency of which each Partner acknowledges and confesses, the Partners hereby agree as follows:

"Act" means the Delaware Revised Uniform Limited Partnership Act and any successor statute, as amended from time to time.

"Adjusted Capital Account" means, with respect to any Partner, the balance in such Partner's Capital Account after giving effect to the following adjustments:

(a)	Credit to such Capital Account of any amounts that such Partner is obligated or deemed obligated to contribute pursuant to the penultimate sentences of Sections 1.704‑2(g)(1) and 1.704‑2(i)(5) of the Regulations; and

(b)	Debit to such Capital Account the items described in Sections 1.704‑1(b)(2)(ii)(d)(4), 1.704‑1(b)(2)(ii)(d)(5) and 1.704‑1(b)(2)(ii)(d)(6) of the Regulations.

The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Section 1.704‑1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.

"Adjustment Date" means the (i) the fifth Business Day following the payment date with respect to each distribution made by EPD with respect to EPD Units, and (ii) the fifth Business Day following the receipt of any proceeds by the Partnership from the disposition of EPD Units.

"Affiliate" means with respect to any Person any other Person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.  For the purpose of this definition, "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management

 

 

and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

"Agreement" has the meaning given it in the introductory paragraph hereof.

"Applicable Percentage" means with respect to a disposition of less than all the EPD Units owned by the Partnership, the quotient (expressed as a percentage) of the number of EPD Units held by the Partnership immediately after such disposition divided by the number of EPD Units held by the Partnership immediately before such disposition.

"Assigned EPD Units" means those 2,834,198 EPD Units of which Beneficial Ownership (subject to the retention of the Retained Distribution) was assigned to the Partnership by the Class A Limited Partner pursuant to the Assignment.

"Assignment" means the irrevocable assignment under the Contribution Agreement pursuant to which Beneficial Ownership of the Assigned EPD Units has been assigned by the Class A Limited Partner to the Partnership.

"Bankrupt Partner" means any Partner (whether a General Partner or a Limited Partner) with respect to which an event of the type described in Section 17‑402(a)(4) or (5) of the Act (or any equivalent successor provision) shall have occurred, subject to the lapsing of any period of time therein specified.

"Beneficial Ownership" means, with respect to the Assigned EPD Units, dominion and control (within the meaning of Treasury Regulation Section 1.704-1(e)(2)) representing all the rights and obligations held by the Class A Limited Partner with respect to the Assigned EPD Units prior to the Assignment as well as such residual rights exercised on behalf of the Assigned EPD Units after the Assignment, subject to the retention of the Retained Distribution.

"Business Day" means any day other than a Saturday, Sunday, or day on which commercial banks in the State of Texas are authorized or required to be closed for business.

"Capital Account" means the account maintained for each Partner pursuant to Section 4.04.

"Capital Contribution" means any contribution by a Partner to the capital of the Partnership.

"Certificate" means the Certificate of Limited Partnership of the Partnership referred to in Section 2.05, as it may be amended or restated from time to time.

"Change of Control" means Duncan shall (i) cease to own, directly or indirectly, at least a majority of the equity interests in the General Partner or the general partner of EPD, or (ii) shall cease to have the ability to elect, directly or indirectly, at least a majority of the directors of the general partner of EPD.

 

 

"Class A Capital Base" means:

(i)	the Contributed Unit Fair Market Value multiplied by the number of Assigned EPD Units,

(ii)	reduced by the Retained Distribution, and

(iii)

adjusted on each Adjustment Date as follows:

(a)

increased by the Class A Preference Return that has accrued since the previous Adjustment Date (or in the case of the first Adjustment Date, since the Closing Date); and

(b)

decreased by all distributions made to the Class A Limited Partner since the previous Adjustment Date (or in the case of the first Adjustment Date, since the Closing Date).

The Class A Capital Base on the Closing Date shall be based on clauses (i) and (ii), above, which amount shall be finally determined once the amount of the Retained Distribution can be calculated.

"Class A Limited Partner" means EPCO Holdings, Inc., a Delaware corporation, and its successors and assigns.

"Class A Preference Return" means the sum of the amounts determined for each day, equal to the Class A Preference Return Rate multiplied by the Class A Capital Base.

"Class A Preference Return Amount" means the aggregate Class A Preference Return minus all prior distributions to the Class A Limited Partner pursuant to Sections 5.03(a) and 5.04(a).

"Class A Preference Return Rate" means a percent per annum equal to 6.6638% ((i) $1.56 (the per annum distribution rate based on the distribution announced with respect to the January 29, 2016 Record Date for EPD Units) divided by (ii) the Contributed Unit Fair Market Value), divided by 365 or 366 days, as the case may be during such calendar year.

"Class B Limited Partner" means any Person executing (by power of attorney or otherwise) this Agreement as of the date hereof as a Class B Limited Partner or hereafter admitted to the Partnership as a Class B Limited Partner as herein provided, but shall not include any Person who has ceased to be a Class B Limited Partner in the Partnership.

"Class B Percentage Interest" means with respect to each Class B Limited Partner the quotient (expressed as a percentage) of (i) such Class B Limited Partner's Sharing Points, divided by (ii) the Sharing Points of all Class B Limited Partners.  For purposes of calculating the Class B Percentage Interest, Sharing Points attributable to interests in the Partnership that are forfeited pursuant to Section 3.07 shall be ignored.

 

 

"Closing Date" means February 22, 2016, the date on which the Class A Limited Partner contributed Beneficial Ownership of the Assigned EPD Units to the Partnership pursuant to the Contribution Agreement.

"Code" means the Internal Revenue Code of 1986, and any successor statute, as amended from time to time.

"Contributed Unit Fair Market Value" means $23.41 (the closing sales price per EPD Unit on the New York Stock Exchange on February 22, 2016).

"Contribution Agreement" means that agreement by and between EPCO Holdings, Inc. and EPD PubCo Unit II L.P., dated as of February 22, 2016.

"Default Interest Rate" means a varying per annum rate equal at any given time to the lesser of (a) four percentage points in excess of the General Interest Rate and (b) the maximum rate permitted by applicable law.

"Disability" means the event whereby a Limited Partner becomes entitled to receive long-term disability benefits under the long-term disability plan of the General Partner or any of its Affiliates.

"Dispose," "Disposing," or "Disposition" means a sale, assignment, transfer, exchange, mortgage, pledge, grant of a security interest, or other disposition or encumbrance, or the acts thereof, other than by divorce, legal separation or other dissolution of a Partner's marriage.

"Duncan" means, collectively, individually or in any combination, the descendants, heirs and/or legatees of Dan L. Duncan and/or distributees of Dan L. Duncan's estate, and/or trusts (including voting trusts) established for the benefit of his descendants, such legatees and/or distributees and/or their respective descendants, heirs, legatees and distributees.

"EPCO" means Enterprise Products Company, a Texas corporation.

"EPD" means Enterprise Products Partners L.P., a Delaware limited partnership.

"EPD Units" means (1) the Assigned EPD Units for so long as the Contribution Agreement is effective, and (2) thereafter, the partnership units representing limited partner interests in EPD.

"General Interest Rate" means a varying per annum rate equal at any given time to the lesser of (a) the interest rate publicly quoted by J.P. Morgan Chase from time to time as its prime commercial or similar reference interest rate, and (b) the maximum rate permitted by applicable law.

"General Partner" means EPCO, or any Person hereafter admitted to the Partnership as a general partner as herein provided, but shall not include any Person who has ceased to be a general partner in the Partnership.

 

 

"Investment Company Act" means the Investment Company Act of 1940, and any successor statute, as amended from time to time.

"Limited Partner" means the Class A Limited Partner or any Class B Limited Partner.

"Net Income" and "Net Loss" mean, respectively, subject to Section 4.04, an amount equal to the Partnership's taxable income or loss taking the Assignment into account determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

"Partner" means the General Partner, the Class A Limited Partner or any Class B Limited Partner.

"Partnership" has the meaning given it in the introductory paragraph.

"Person" has the meaning given it in the Act.

 

 

"Qualifying Termination" means the termination of a Class B Limited Partner's employment with the General Partner and its Affiliates due to (i) death, (ii) receiving long-term disability benefits under the long-term disability plan of the General Partner or any of its Affiliates or (iii) retirement with the approval of the General Partner (which may be given or withheld in its sole discretion) on or after reaching age 65, provided that such retirement occurs on or after August 22, 2018.

"Regulations" means the regulations promulgated under Section 704 of the Code.

"Required Interest" means one or more Class B Limited Partners having among them more than 50% of the Class B Percentage Interests of all Limited Partners in its or their capacities as such.

"Retained Distribution" has the meaning set forth in the Contribution Agreement.

"Sharing Points" means, with respect to each Class B Limited Partner, the number of Sharing Points granted by the General Partner to such Class B Limited Partner (which number is set forth on the Power of Attorney executed by the Class B Limited Partner and delivered to the General Partner), as the same may be amended from time to time pursuant to the terms of this Agreement.

"Vesting Date" means the earliest of (i) the fifth anniversary of the date of this Agreement, (ii) a Change of Control or (iii) dissolution of the Partnership.

 

 

 

 

Agreement by such Partner have been duly taken, and such authorization, execution, delivery, and performance do not conflict with any other agreement or arrangement to which such Partner is a party or by which it is bound, and (d) such Partner is acquiring its interest in the Partnership for investment purposes and not with a view to distribution thereof.

 

 

 

 

 

 

 

 

allocations of Partnership loss and deduction (or items thereof), including loss and deduction described in Regulation Section 1.704‑1(b)(2)(iv)(g), but excluding items described in clause (b)(iii) above and loss or deduction described in Regulation Section 1.704‑1(b)(4)(i).  The Partners' Capital Accounts also shall be maintained and adjusted as permitted by the provisions of Regulation Section 1.704‑1(b)(2)(iv)(f) and as required by the other provisions of Regulation Sections 1.704‑1(b)(2)(iv) and 1.704‑1(b)(4), including adjustments to reflect the allocations to the Partners of depreciation, amortization, and gain or loss as computed for book purposes rather than the allocation of the corresponding items as computed for tax purposes, as required by Regulation Section 1.704‑1(b)(2)(iv)(g).  A Partner that has more than one interest in the Partnership shall have a single Capital Account that reflects all such interests, regardless of the class of interests owned by such Partner and regardless of the time or manner in which such interests were acquired; provided, that Partners that are Affiliates but nevertheless separate legal entities shall have separate Capital Accounts.  Upon the transfer of all or part of an interest in the Partnership, the Capital Account of the transferor that is attributable to the transferred interest in the Partnership shall carry over to the transferee Partner in accordance with the provisions of Regulation Section 1.704‑1(b)(2)(iv)(l).

(i)	Partnership Minimum Gain Chargeback.  Notwithstanding any other provision of this Section 5.01, if there is a net decrease in Partnership Minimum Gain during any Partnership taxable period, each Partner shall be allocated items of

 

 

 

Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Regulation Sections 1.704‑2(f)(6), 1.704‑2(g)(2) and 1.704‑2(j)(2)(i), or any successor provision.  For purposes of this Section 5.01(b), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.01(b) with respect to such taxable period (other than an allocation pursuant to Sections 5.01(b)(vi) and 5.01(b)(vii)).  This Section 5.01(b)(i) is intended to comply with the Partnership Minimum Gain chargeback requirement in Regulation Section 1.704‑2(f) and shall be interpreted consistently therewith.

(ii)

Chargeback of Partner Nonrecourse Debt Minimum Gain.  Notwithstanding the other provisions of this Section 5.01 (other than Section 5.01(b)(i)), except as provided in Regulation Section 1.704‑2(i)(4), if there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Regulation Sections 1.704‑2(i)(4) and 1.704‑2(j)(2)(ii), or any successor provisions.  For purposes of this Section 5.01(b), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.01(b), other than Section 5.01(b)(i) and other than an allocation pursuant to Sections 5.01(b)(vi) and 5.01(b)(vii), with respect to such taxable period.  This Section 5.01(b)(ii) is intended to comply with the chargeback of items of income and gain requirement in Regulation Section 1.704‑2(i)(4) and shall be interpreted consistently therewith.

(iii)

Qualified Income Offset.  In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Regulation Sections 1.704‑1(b)(2)(ii)(d)(4), 1.704‑1(b)(2)(ii)(d)(5), or 1.704‑1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Section 5.01(b)(i) or (ii).

(iv)

Gross Income Allocations.  In the event any Partner has a deficit balance in its Capital Account at the end of any Partnership taxable period in excess of the sum of (A) the amount such Partner is required to restore pursuant to the provisions of this Agreement and (B) the amount such Partner is deemed obligated to restore pursuant to Regulation Sections 1.704‑2(g) and 1.704‑2(i)(5), such Partner shall be specially allocated items of Partnership gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 5.01(b)(iv) shall be made only if and to the extent that such Partner would have a deficit balance in its Capital Account as adjusted after all other allocations provided for in this Section 5.01 have been tentatively made as if this Section 5.01(b)(iv) were not in this Agreement.

 

 

(v)

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

(vi)

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

(vii)

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

(viii)

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

 

 

Partners in the same manner as such items are allocated for purposes of maintaining Capital Account under Section 5.01.

In the event any Retained Distribution is received by the Partnership, the Partners acknowledge that such Retained Distribution is the property of the Class A Limited Partner, and the Partnership shall promptly pay any such Retained Distribution over to the Class A Limited Partner.  Any payment of a Retained Distribution to the Class A Limited Partner pursuant to this paragraph shall not be treated as a "distribution" for purposes of this Agreement.

 

 

the General Partner has determined in its sole but good faith discretion should be withheld to pay expenses of the Partnership.  Distribution to the Partners pursuant to this Section 5.04 shall be made as follows:

 

 

 

 

(i)

execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (A) all certificates, documents and other instruments (including this Agreement and the Certificate of Limited Partnership and all amendments or restatements hereof or thereof) that the General Partner or the liquidator deems necessary or appropriate to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property; (B) all certificates, documents and other instruments that the General Partner or the liquidator deems necessary or appropriate to reflect, in accordance with its terms, any amendment, change, modification or restatement of this Agreement; (C) all certificates, documents and other instruments (including conveyances and a certificate of cancellation) that the General Partner or the liquidator deems necessary or appropriate to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement; and (D) all certificates, documents and other instruments relating to the admission, withdrawal, removal or substitution of any Partner; and

(ii)

execute, swear to, acknowledge, deliver, file and record all ballots, consents, approvals, waivers, certificates, documents and other instruments necessary or appropriate, in the discretion of the General Partner or the liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the Partners hereunder or is consistent with the terms of this Agreement or is

 

 

necessary or appropriate, in the discretion of the General Partner or the liquidator, to effectuate the terms or intent of this Agreement; provided, that when required by any provision of this Agreement that establishes a percentage of the Limited Partners required to take any action, the General Partner and the liquidator may exercise the power of attorney made in this Section 6.04 only after the necessary vote, consent or approval of the Limited Partners.

This Section 6.04 shall be construed as authorizing the General Partner to amend this Agreement in any manner subject to any provision of this Agreement that establishes a percentage of the Limited Partners required to take any action.

 

 

No election shall be made by the Partnership or any Partner to be treated as an association taxable as a corporation or to be excluded from the application of the provisions of Subchapter K of Chapter 1 of Subtitle A of the Code or any similar provisions of applicable state laws.

 

 

 

have made such Capital Contribution as such Limited Partners may specify and shall have executed and delivered to the Partnership a document including such new General Partner's notice address, acceptance of all the terms and provisions of this Agreement, an agreement to perform and discharge timely all of its obligations and liabilities hereunder, and a representation and warranty that the representation and warranties in Section 3.02 are true and correct with respect to such new General Partner.  Notwithstanding the foregoing provisions of this Section 10.01(c), the right to select such new General Partner shall not exist or be exercised unless the Partnership shall have received the favorable opinion of the Partnership's legal counsel or of other legal counsel acceptable to the Limited Partners making such selection to the effect that such selection and admission will not result in (i) the loss of limited liability of any Limited Partner (except to the extent a Limited Partner has consented to become the General Partner) or (ii) in the Partnership being treated as an association taxable as a corporation for federal income tax purposes.  Notwithstanding the foregoing provisions of this Section 10.01(c), no such new General Partner shall be admitted (and the existing General Partner shall continue as such) if the event that permitted the selection of a new General Partner shall have been an event of the type described in Section 17‑402(a)(5) of the Act that with the passage of time would cause the existing General Partner to become a Bankrupt Partner but, due to the failure of such situation to continue, such General Partner does not become a Bankrupt Partner.

 

 

it being understood that if an "event of withdrawal of a general partner" (as defined in Section 17‑101(3) of the Act) shall occur with respect to the General Partner and at least one other General Partner shall have been or is about to be admitted pursuant to Section 3.03(b), 10.01(c), or 10.02, the Partnership shall not dissolve but shall continue and the remaining General Partner shall, and hereby agrees to, carry on the business of the Partnership.

(i)

the fair market value of the property shall be determined and the capital accounts of the Partners shall be adjusted to reflect the manner in which the unrealized income, gain, loss, and deduction inherent in such property (that has not been reflected in the capital accounts previously) would be allocated among the Partners if there were a taxable disposition of such property for the fair market value of such property on the Vesting Date; and

(ii)	the Partnership property shall be distributed among the Partners in accordance with the positive capital account balances of the Partners, as determined after taking into account all capital account adjustments for the taxable year of the Partnership

For purposes of this Section 11.02(c), the "fair market value" of each EPD Unit held by the Partnership on the Vesting Date shall be equal to the average of the closing sale prices per EPD Unit for the 20 trading days ending on the Vesting Date (or, if no closing sale price is reported, the average of the bid and asked prices) as reported in the composite transactions for the principal United States securities exchange on which the EPD Units are traded or if the EPD Units are not listed on a national or regional stock exchange, as reported by The NASDAQ National Market.  All distributions in kind to the Partners shall be made subject to the liability of each distributee for costs, expenses, and liabilities theretofore incurred or for which the Partnership shall have committed prior to the date of termination and such costs, expenses, and liabilities shall be allocated to such distributee pursuant to this Section 11.02.  The distribution of property to a Partner in accordance with the provisions of this Section 11.02 shall constitute a complete return to the Partner of its Capital Contributions and a complete distribution to the Partner of its interest in the Partnership and all the Partnership's property and shall constitute a compromise to which all Partners have consented within the meaning of Section 17‑502(b) of the Act.

 

 

in Section 3.03(c), 3.04, or 10.01(c), or such other address as such Partner may specify by notice to the General Partner.  Any notice to the Partnership shall be given to the General Partner.

 

 

 

 

administered by the American Arbitration Association but instead shall be self-administered by the parties until the arbitrators are selected and then the proceeding shall be administered by the arbitrators.

 

 

such arbitrators has past or present minimal relationships with the party that appointed such arbitrator.  Evident partiality on the part of an arbitrator exists only where the circumstances are such that a reasonable person would have to conclude there in fact existed actual bias and a mere appearance or impression of bias will not constitute evident partiality or otherwise disqualify an arbitrator.  Minimal or trivial past or present relationships between the neutral arbitrator and the party selecting such arbitrator or any of the other arbitrators, or the failure to disclose such minimal or trivial past or present relationships, will not by themselves constitute evident partiality or otherwise disqualify any arbitrator.  Upon selection of the third arbitrator, each of the three arbitrators shall agree in writing to abide faithfully by the terms of this agreement to arbitrate.  The three arbitrators shall make all of their decisions by majority vote.  If one of the party-appointed arbitrators refuses to participate in the proceedings or refuses to vote, the decision of the other two arbitrators shall be binding.  If an arbitrator dies or becomes physically incapacitated and is unable to fulfill his or her duties as an arbitrator, the arbitration proceeding shall continue with a substitute arbitrator selected as follows: if the incapacitated arbitrator is a party-appointed arbitrator, the party shall promptly select a new arbitrator, and if the incapacitated arbitrator is the neutral arbitrator, the two-party appointed arbitrators shall select a substitute neutral arbitrator, failing agreement on which the General Partner and such Limited Partners (or either of them) shall apply to any United States District Judge for the Southern District of Texas, who shall appoint the substitute neutral arbitrator.

 

 

any court.  The arbitrators' award may be confirmed in, and judgment upon the award entered by, any federal or State court having jurisdiction over the parties.

[Signature Pages to Follow.]

IN WITNESS WHEREOF, the Partners have executed this Agreement as of the date first set forth above.

Agreement of Limited Partnership of EPD PubCo Unit II L.P.

FORM OF POWER OF ATTORNEY

For Executing Agreement of Limited Partnership of EPD PubCo Unit II L.P.

Know all by these presents, that the undersigned hereby constitutes and appoints Enterprise Products Company, a Texas corporation, and its authorized representatives the undersigned's true and lawful attorney-in-fact to:

(1)	execute for and on behalf of the undersigned as a Class B limited partner thereunder that certain Agreement of Limited Partnership of EPD PubCo Unit II L.P. (the "Partnership Agreement"); and

(2)

take any other action of any type whatsoever in connection with the foregoing that, in the opinion of each such attorney-in-fact, may be of benefit to, in the best interest of, or legally required of the undersigned, it being understood that the documents executed by the attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as the attorney-in-fact may approve in the attorney-in-fact's discretion.

The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform all and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that the attorney-in-fact, or the attorney-in-facts substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted.

The undersigned acknowledges and agrees by execution of this Power of Attorney that the undersigned's initial Sharing Points (as defined in the Partnership Agreement) under the Partnership Agreement equal ________, which represents ____% of the total initial Sharing Points granted by the General Partner pursuant to the Partnership Agreement.

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of the date written below.

EXHIBIT 10.3

 

 

AGREEMENT OF LIMITED PARTNERSHIP

OF

EPD PRIVCO UNIT I L.P.

Dated as of

February 22, 2016

 

 

 

 

ARTICLE I
DEFINITIONS
1.01	Certain Definitions	1
1.02	Other Definitions	6
ARTICLE II
ORGANIZATIONAL MATTERS
2.01	Formation	6
2.02	Name	6
2.03	Registered Office; Registered Agent; Other Offices	6
2.04	Purposes	6
2.05	Certificate; Foreign Qualification	7
2.06	Term	7
2.07	Merger or Consolidation	7
ARTICLE III
PARTNERS; DISPOSITIONS OF INTERESTS
3.01	Partners	7
3.02	Representations and Warranties	7
3.03	Restrictions on the Disposition of an Interest	8
3.04	Additional Partners	9
3.05	Interests in a Partner	10
3.06	Spouses of Partners	10
3.07	Vesting of Limited Partners	10
3.08	Services Provided by the Partners	10
3.09	Investment Company Act Matters	10
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.01	Initial and Additional Capital Contributions	11
4.02	Return of Contributions	11
4.03	Advances by General Partner	11
4.04	Capital Accounts	11
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.01	Allocations	12
5.02	Income Tax Allocations	14
5.03	Distributions of Cashflow from EPD Units	15
5.04	Distributions of Proceeds from Sales of EPD Units	15

5.05	Restrictions on Distributions of EPD Units	16
ARTICLE VI
MANAGEMENT AND OPERATION
6.01	Management of Partnership Affairs	16
6.02	Duties and Obligations of General Partner	17
6.03	Release and Indemnification	17
6.04	Power of Attorney	18
ARTICLE VII
RIGHTS OF OTHER PARTNERS
7.01	Information	19
7.02	Limitations	19
7.03	Limited Liability	20
ARTICLE VIII
TAXES
8.01	Tax Returns	20
8.02	Tax Elections	20
8.03	Tax Matters Partner	20
ARTICLE IX
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
9.01	Maintenance of Books	21
9.02	Financial Statements	21
9.03	Bank Accounts	21
ARTICLE X
WITHDRAWAL, BANKRUPTCY, REMOVAL, ETC.
10.01	Withdrawal, Bankruptcy, Etc. of General Partner	21
10.02	Conversion of Interest	22
ARTICLE XI
DISSOLUTION, LIQUIDATION, AND TERMINATION
11.01	Dissolution	22
11.02	Liquidation and Termination	23
11.03	Cancellation of Certificate	24
ARTICLE XII
GENERAL PROVISIONS
12.01	Offset	24

12.02	Notices	24
12.03	Entire Agreement; Supersedure	25
12.04	Effect of Waiver or Consent	25
12.05	Amendment or Modification	25
12.06	Binding Effect; Joinder of Additional Parties	25
12.07	Construction	25
12.08	Further Assurances	26
12.09	Indemnification	26
12.10	Waiver of Certain Rights	26
12.11	Counterparts	26
12.12	Dispute Resolution	26
12.13	No Effect on Employment Relationship	29
12.14	Legal Representation	29

 

 

AGREEMENT OF LIMITED PARTNERSHIP
OF
EPD PRIVCO UNIT I L.P.

This Agreement of Limited Partnership (this "Agreement") of EPD PrivCo Unit I L.P., a Delaware limited partnership (the "Partnership"), is made and entered into effective as of February 22, 2016 by and among the Partners (as defined below).

FOR AND IN CONSIDERATION OF the mutual covenants, rights, and obligations set forth herein, the benefits to be derived therefrom, and other good and valuable consideration, the receipt and sufficiency of which each Partner acknowledges and confesses, the Partners hereby agree as follows:

"Act" means the Delaware Revised Uniform Limited Partnership Act and any successor statute, as amended from time to time.

"Adjusted Capital Account" means, with respect to any Partner, the balance in such Partner's Capital Account after giving effect to the following adjustments:

(a)	Credit to such Capital Account of any amounts that such Partner is obligated or deemed obligated to contribute pursuant to the penultimate sentences of Sections 1.704‑2(g)(1) and 1.704‑2(i)(5) of the Regulations; and

(b)	Debit to such Capital Account the items described in Sections 1.704‑1(b)(2)(ii)(d)(4), 1.704‑1(b)(2)(ii)(d)(5) and 1.704‑1(b)(2)(ii)(d)(6) of the Regulations.

The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Section 1.704‑1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.

"Adjustment Date" means the (i) the fifth Business Day following the payment date with respect to each distribution made by EPD with respect to EPD Units, and (ii) the fifth Business Day following the receipt of any proceeds by the Partnership from the disposition of EPD Units.

"Affiliate" means with respect to any Person any other Person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.  For the purpose of this definition, "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management

 

and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

"Agreement" has the meaning given it in the introductory paragraph hereof.

"Applicable Percentage" means with respect to a disposition of less than all the EPD Units owned by the Partnership, the quotient (expressed as a percentage) of the number of EPD Units held by the Partnership immediately after such disposition divided by the number of EPD Units held by the Partnership immediately before such disposition.

"Assigned EPD Units" means those 1,111,438 EPD Units of which Beneficial Ownership (subject to the retention of the Retained Distribution) was assigned to the Partnership by the Class A Limited Partner pursuant to the Assignment.

"Assignment" means the irrevocable assignment under the Contribution Agreement pursuant to which Beneficial Ownership of the Assigned EPD Units has been assigned by the Class A Limited Partner to the Partnership.

"Bankrupt Partner" means any Partner (whether a General Partner or a Limited Partner) with respect to which an event of the type described in Section 17‑402(a)(4) or (5) of the Act (or any equivalent successor provision) shall have occurred, subject to the lapsing of any period of time therein specified.

"Beneficial Ownership" means, with respect to the Assigned EPD Units, dominion and control (within the meaning of Treasury Regulation Section 1.704-1(e)(2)) representing all the rights and obligations held by the Class A Limited Partner with respect to the Assigned EPD Units prior to the Assignment as well as such residual rights exercised on behalf of the Assigned EPD Units after the Assignment, subject to the retention of the Retained Distribution.

"Business Day" means any day other than a Saturday, Sunday, or day on which commercial banks in the State of Texas are authorized or required to be closed for business.

"Capital Account" means the account maintained for each Partner pursuant to Section 4.04.

"Capital Contribution" means any contribution by a Partner to the capital of the Partnership.

"Certificate" means the Certificate of Limited Partnership of the Partnership referred to in Section 2.05, as it may be amended or restated from time to time.

"Change of Control" means Duncan shall (i) cease to own, directly or indirectly, at least a majority of the equity interests in the General Partner or the general partner of EPD, or (ii) shall cease to have the ability to elect, directly or indirectly, at least a majority of the directors of the general partner of EPD.

 

 

"Class A Capital Base" means:

(i)	the Contributed Unit Fair Market Value multiplied by the number of Assigned EPD Units,

(ii)	reduced by the Retained Distribution, and

(iii)

adjusted on each Adjustment Date as follows:

(a)

increased by the Class A Preference Return that has accrued since the previous Adjustment Date (or in the case of the first Adjustment Date, since the Closing Date); and

(b)

decreased by all distributions made to the Class A Limited Partner since the previous Adjustment Date (or in the case of the first Adjustment Date, since the Closing Date).

The Class A Capital Base on the Closing Date shall be based on clauses (i) and (ii), above, which amount shall be finally determined once the amount of the Retained Distribution can be calculated.

"Class A Limited Partner" means EPCO Holdings, Inc., a Delaware corporation, and its successors and assigns.

"Class A Preference Return" means the sum of the amounts determined for each day, equal to the Class A Preference Return Rate multiplied by the Class A Capital Base.

"Class A Preference Return Amount" means the aggregate Class A Preference Return minus all prior distributions to the Class A Limited Partner pursuant to Sections 5.03(a) and 5.04(a).

"Class A Preference Return Rate" means a percent per annum equal to 6.6638% ((i) $1.56 (the per annum distribution rate based on the distribution announced with respect to the January 29, 2016 Record Date for EPD Units) divided by (ii) the Contributed Unit Fair Market Value), divided by 365 or 366 days, as the case may be during such calendar year.

"Class B Limited Partner" means any Person executing (by power of attorney or otherwise) this Agreement as of the date hereof as a Class B Limited Partner or hereafter admitted to the Partnership as a Class B Limited Partner as herein provided, but shall not include any Person who has ceased to be a Class B Limited Partner in the Partnership.

"Class B Percentage Interest" means with respect to each Class B Limited Partner the quotient (expressed as a percentage) of (i) such Class B Limited Partner's Sharing Points, divided by (ii) the Sharing Points of all Class B Limited Partners.  For purposes of calculating the Class B Percentage Interest, Sharing Points attributable to interests in the Partnership that are forfeited pursuant to Section 3.07 shall be ignored.

 

 

"Closing Date" means February 22, 2016, the date on which the Class A Limited Partner contributed Beneficial Ownership of the Assigned EPD Units to the Partnership pursuant to the Contribution Agreement.

"Code" means the Internal Revenue Code of 1986, and any successor statute, as amended from time to time.

"Contributed Unit Fair Market Value" means $23.41 (the closing sales price per EPD Unit on the New York Stock Exchange on February 22, 2016).

"Contribution Agreement" means that agreement by and between EPCO Holdings, Inc. and EPD PrivCo Unit I L.P., dated as of February 22, 2016.

"Default Interest Rate" means a varying per annum rate equal at any given time to the lesser of (a) four percentage points in excess of the General Interest Rate and (b) the maximum rate permitted by applicable law.

"Disability" means the event whereby a Limited Partner becomes entitled to receive long-term disability benefits under the long-term disability plan of the General Partner or any of its Affiliates.

"Dispose," "Disposing," or "Disposition" means a sale, assignment, transfer, exchange, mortgage, pledge, grant of a security interest, or other disposition or encumbrance, or the acts thereof, other than by divorce, legal separation or other dissolution of a Partner's marriage.

"Duncan" means, collectively, individually or in any combination, the descendants, heirs and/or legatees of Dan L. Duncan and/or distributees of Dan L. Duncan's estate, and/or trusts (including voting trusts) established for the benefit of his descendants, such legatees and/or distributees and/or their respective descendants, heirs, legatees and distributees.

"EPCO" means Enterprise Products Company, a Texas corporation.

"EPD" means Enterprise Products Partners L.P., a Delaware limited partnership.

"EPD Units" means (1) the Assigned EPD Units for so long as the Contribution Agreement is effective, and (2) thereafter, the partnership units representing limited partner interests in EPD.

"General Interest Rate" means a varying per annum rate equal at any given time to the lesser of (a) the interest rate publicly quoted by J.P. Morgan Chase from time to time as its prime commercial or similar reference interest rate, and (b) the maximum rate permitted by applicable law.

"General Partner" means EPCO, or any Person hereafter admitted to the Partnership as a general partner as herein provided, but shall not include any Person who has ceased to be a general partner in the Partnership.

 

 

"Investment Company Act" means the Investment Company Act of 1940, and any successor statute, as amended from time to time.

"Limited Partner" means the Class A Limited Partner or any Class B Limited Partner.

"Net Income" and "Net Loss" mean, respectively, subject to Section 4.04, an amount equal to the Partnership's taxable income or loss taking the Assignment into account determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

"Partner" means the General Partner, the Class A Limited Partner or any Class B Limited Partner.

"Partnership" has the meaning given it in the introductory paragraph.

"Person" has the meaning given it in the Act.

 

 

"Qualifying Termination" means the termination of a Class B Limited Partner's employment with the General Partner and its Affiliates due to (i) death, (ii) receiving long-term disability benefits under the long-term disability plan of the General Partner or any of its Affiliates or (iii) retirement with the approval of the General Partner (which may be given or withheld in its sole discretion) on or after reaching age 65, provided that such retirement occurs on or after August 22, 2018.

"Regulations" means the regulations promulgated under Section 704 of the Code.

"Required Interest" means one or more Class B Limited Partners having among them more than 50% of the Class B Percentage Interests of all Limited Partners in its or their capacities as such.

"Retained Distribution" has the meaning set forth in the Contribution Agreement.

"Sharing Points" means, with respect to each Class B Limited Partner, the number of Sharing Points granted by the General Partner to such Class B Limited Partner (which number is set forth on the Power of Attorney executed by the Class B Limited Partner and delivered to the General Partner), as the same may be amended from time to time pursuant to the terms of this Agreement.

"Vesting Date" means the earliest of (i) the fifth anniversary of the date of this Agreement, (ii) a Change of Control or (iii) dissolution of the Partnership.

 

 

 

 

Agreement by such Partner have been duly taken, and such authorization, execution, delivery, and performance do not conflict with any other agreement or arrangement to which such Partner is a party or by which it is bound, and (d) such Partner is acquiring its interest in the Partnership for investment purposes and not with a view to distribution thereof.

 

 

 

 

 

 

 

 

allocations of Partnership loss and deduction (or items thereof), including loss and deduction described in Regulation Section 1.704‑1(b)(2)(iv)(g), but excluding items described in clause (b)(iii) above and loss or deduction described in Regulation Section 1.704‑1(b)(4)(i).  The Partners' Capital Accounts also shall be maintained and adjusted as permitted by the provisions of Regulation Section 1.704‑1(b)(2)(iv)(f) and as required by the other provisions of Regulation Sections 1.704‑1(b)(2)(iv) and 1.704‑1(b)(4), including adjustments to reflect the allocations to the Partners of depreciation, amortization, and gain or loss as computed for book purposes rather than the allocation of the corresponding items as computed for tax purposes, as required by Regulation Section 1.704‑1(b)(2)(iv)(g).  A Partner that has more than one interest in the Partnership shall have a single Capital Account that reflects all such interests, regardless of the class of interests owned by such Partner and regardless of the time or manner in which such interests were acquired; provided, that Partners that are Affiliates but nevertheless separate legal entities shall have separate Capital Accounts.  Upon the transfer of all or part of an interest in the Partnership, the Capital Account of the transferor that is attributable to the transferred interest in the Partnership shall carry over to the transferee Partner in accordance with the provisions of Regulation Section 1.704‑1(b)(2)(iv)(l).

(i)	Net Income:

(A)	First, to the Class A Limited Partner until the Class A Limited Partner's Adjusted Capital Account equals the Class A Capital Base; and

(B)	Thereafter, to the Class B Limited Partners in accordance with the Class B Percentage Interests.

(ii)

Net Loss:

(A)	First, to the Class B Limited Partners in accordance with the Class B Percentage Interests until the Adjusted Capital Accounts of the Class B Limited Partners are reduced to zero; and

(B)	Thereafter, to the Class A Limited Partner.

(i)	Partnership Minimum Gain Chargeback.  Notwithstanding any other provision of this Section 5.01, if there is a net decrease in Partnership Minimum Gain during any Partnership taxable period, each Partner shall be allocated items of

(ii)

Chargeback of Partner Nonrecourse Debt Minimum Gain.  Notwithstanding the other provisions of this Section 5.01 (other than Section 5.01(b)(i)), except as provided in Regulation Section 1.704‑2(i)(4), if there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Regulation Sections 1.704‑2(i)(4) and 1.704‑2(j)(2)(ii), or any successor provisions.  For purposes of this Section 5.01(b), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.01(b), other than Section 5.01(b)(i) and other than an allocation pursuant to Sections 5.01(b)(vi) and 5.01(b)(vii), with respect to such taxable period.  This Section 5.01(b)(ii) is intended to comply with the chargeback of items of income and gain requirement in Regulation Section 1.704‑2(i)(4) and shall be interpreted consistently therewith.

(iii)

Qualified Income Offset.  In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Regulation Sections 1.704‑1(b)(2)(ii)(d)(4), 1.704‑1(b)(2)(ii)(d)(5), or 1.704‑1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Section 5.01(b)(i) or (ii).

(iv)

Gross Income Allocations.  In the event any Partner has a deficit balance in its Capital Account at the end of any Partnership taxable period in excess of the sum of (A) the amount such Partner is required to restore pursuant to the provisions of this Agreement and (B) the amount such Partner is deemed obligated to restore pursuant to Regulation Sections 1.704‑2(g) and 1.704‑2(i)(5), such Partner shall be specially allocated items of Partnership gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 5.01(b)(iv) shall be made only if and to the extent that such Partner would have a deficit balance in its Capital Account as adjusted after all other allocations provided for in this Section 5.01 have been tentatively made as if this Section 5.01(b)(iv) were not in this Agreement.

 

 

 

(v)

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

(vi)

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

(vii)

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

(viii)

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

 

 

Partners in the same manner as such items are allocated for purposes of maintaining Capital Account under Section 5.01.

In the event any Retained Distribution is received by the Partnership, the Partners acknowledge that such Retained Distribution is the property of the Class A Limited Partner, and the Partnership shall promptly pay any such Retained Distribution over to the Class A Limited Partner.  Any payment of a Retained Distribution to the Class A Limited Partner pursuant to this paragraph shall not be treated as a "distribution" for purposes of this Agreement.

 

 

the General Partner has determined in its sole but good faith discretion should be withheld to pay expenses of the Partnership.  Distribution to the Partners pursuant to this Section 5.04 shall be made as follows:

 

 

 

 

(i)

execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (A) all certificates, documents and other instruments (including this Agreement and the Certificate of Limited Partnership and all amendments or restatements hereof or thereof) that the General Partner or the liquidator deems necessary or appropriate to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property; (B) all certificates, documents and other instruments that the General Partner or the liquidator deems necessary or appropriate to reflect, in accordance with its terms, any amendment, change, modification or restatement of this Agreement; (C) all certificates, documents and other instruments (including conveyances and a certificate of cancellation) that the General Partner or the liquidator deems necessary or appropriate to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement; and (D) all certificates, documents and other instruments relating to the admission, withdrawal, removal or substitution of any Partner; and

(ii)

execute, swear to, acknowledge, deliver, file and record all ballots, consents, approvals, waivers, certificates, documents and other instruments necessary or appropriate, in the discretion of the General Partner or the liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the Partners hereunder or is consistent with the terms of this Agreement or is

This Section 6.04 shall be construed as authorizing the General Partner to amend this Agreement in any manner subject to any provision of this Agreement that establishes a percentage of the Limited Partners required to take any action.

 

 

No election shall be made by the Partnership or any Partner to be treated as an association taxable as a corporation or to be excluded from the application of the provisions of Subchapter K of Chapter 1 of Subtitle A of the Code or any similar provisions of applicable state laws.

 

 

 

 

have made such Capital Contribution as such Limited Partners may specify and shall have executed and delivered to the Partnership a document including such new General Partner's notice address, acceptance of all the terms and provisions of this Agreement, an agreement to perform and discharge timely all of its obligations and liabilities hereunder, and a representation and warranty that the representation and warranties in Section 3.02 are true and correct with respect to such new General Partner.  Notwithstanding the foregoing provisions of this Section 10.01(c), the right to select such new General Partner shall not exist or be exercised unless the Partnership shall have received the favorable opinion of the Partnership's legal counsel or of other legal counsel acceptable to the Limited Partners making such selection to the effect that such selection and admission will not result in (i) the loss of limited liability of any Limited Partner (except to the extent a Limited Partner has consented to become the General Partner) or (ii) in the Partnership being treated as an association taxable as a corporation for federal income tax purposes.  Notwithstanding the foregoing provisions of this Section 10.01(c), no such new General Partner shall be admitted (and the existing General Partner shall continue as such) if the event that permitted the selection of a new General Partner shall have been an event of the type described in Section 17‑402(a)(5) of the Act that with the passage of time would cause the existing General Partner to become a Bankrupt Partner but, due to the failure of such situation to continue, such General Partner does not become a Bankrupt Partner.

 

 

it being understood that if an "event of withdrawal of a general partner" (as defined in Section 17‑101(3) of the Act) shall occur with respect to the General Partner and at least one other General Partner shall have been or is about to be admitted pursuant to Section 3.03(b), 10.01(c), or 10.02, the Partnership shall not dissolve but shall continue and the remaining General Partner shall, and hereby agrees to, carry on the business of the Partnership.

(i)

the fair market value of the property shall be determined and the capital accounts of the Partners shall be adjusted to reflect the manner in which the unrealized income, gain, loss, and deduction inherent in such property (that has not been reflected in the capital accounts previously) would be allocated among the Partners if there were a taxable disposition of such property for the fair market value of such property on the Vesting Date; and

(ii)	the Partnership property shall be distributed among the Partners in accordance with the positive capital account balances of the Partners, as determined after taking into account all capital account adjustments for the taxable year of the Partnership

For purposes of this Section 11.02(c), the "fair market value" of each EPD Unit held by the Partnership on the Vesting Date shall be equal to the average of the closing sale prices per EPD Unit for the 20 trading days ending on the Vesting Date (or, if no closing sale price is reported, the average of the bid and asked prices) as reported in the composite transactions for the principal United States securities exchange on which the EPD Units are traded or if the EPD Units are not listed on a national or regional stock exchange, as reported by The NASDAQ National Market.  All distributions in kind to the Partners shall be made subject to the liability of each distributee for costs, expenses, and liabilities theretofore incurred or for which the Partnership shall have committed prior to the date of termination and such costs, expenses, and liabilities shall be allocated to such distributee pursuant to this Section 11.02.  The distribution of property to a Partner in accordance with the provisions of this Section 11.02 shall constitute a complete return to the Partner of its Capital Contributions and a complete distribution to the Partner of its interest in the Partnership and all the Partnership's property and shall constitute a compromise to which all Partners have consented within the meaning of Section 17‑502(b) of the Act.

 

 

in Section 3.03(c), 3.04, or 10.01(c), or such other address as such Partner may specify by notice to the General Partner.  Any notice to the Partnership shall be given to the General Partner.

 

 

 

 

administered by the American Arbitration Association but instead shall be self-administered by the parties until the arbitrators are selected and then the proceeding shall be administered by the arbitrators.

 

 

such arbitrators has past or present minimal relationships with the party that appointed such arbitrator.  Evident partiality on the part of an arbitrator exists only where the circumstances are such that a reasonable person would have to conclude there in fact existed actual bias and a mere appearance or impression of bias will not constitute evident partiality or otherwise disqualify an arbitrator.  Minimal or trivial past or present relationships between the neutral arbitrator and the party selecting such arbitrator or any of the other arbitrators, or the failure to disclose such minimal or trivial past or present relationships, will not by themselves constitute evident partiality or otherwise disqualify any arbitrator.  Upon selection of the third arbitrator, each of the three arbitrators shall agree in writing to abide faithfully by the terms of this agreement to arbitrate.  The three arbitrators shall make all of their decisions by majority vote.  If one of the party-appointed arbitrators refuses to participate in the proceedings or refuses to vote, the decision of the other two arbitrators shall be binding.  If an arbitrator dies or becomes physically incapacitated and is unable to fulfill his or her duties as an arbitrator, the arbitration proceeding shall continue with a substitute arbitrator selected as follows: if the incapacitated arbitrator is a party-appointed arbitrator, the party shall promptly select a new arbitrator, and if the incapacitated arbitrator is the neutral arbitrator, the two-party appointed arbitrators shall select a substitute neutral arbitrator, failing agreement on which the General Partner and such Limited Partners (or either of them) shall apply to any United States District Judge for the Southern District of Texas, who shall appoint the substitute neutral arbitrator.

 

 

any court.  The arbitrators' award may be confirmed in, and judgment upon the award entered by, any federal or State court having jurisdiction over the parties.

[Signature Pages to Follow.]

IN WITNESS WHEREOF, the Partners have executed this Agreement as of the date first set forth above.

Agreement of Limited Partnership of EPD PrivCo Unit I L.P.

FORM OF POWER OF ATTORNEY

For Executing Agreement of Limited Partnership of EPD PrivCo Unit I L.P.

Know all by these presents, that the undersigned hereby constitutes and appoints Enterprise Products Company, a Texas corporation, and its authorized representatives the undersigned's true and lawful attorney-in-fact to:

(1)	execute for and on behalf of the undersigned as a Class B limited partner thereunder that certain Agreement of Limited Partnership of EPD PrivCo Unit I L.P. (the "Partnership Agreement"); and

(2)

take any other action of any type whatsoever in connection with the foregoing that, in the opinion of each such attorney-in-fact, may be of benefit to, in the best interest of, or legally required of the undersigned, it being understood that the documents executed by the attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as the attorney-in-fact may approve in the attorney-in-fact's discretion.

The undersigned hereby grants to each attorney-in-fact full power and authority to do and perform all and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that the attorney-in-fact, or the attorney-in-facts substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted.

The undersigned acknowledges and agrees by execution of this Power of Attorney that the undersigned's initial Sharing Points (as defined in the Partnership Agreement) under the Partnership Agreement equal ________, which represents ____% of the total initial Sharing Points granted by the General Partner pursuant to the Partnership Agreement.

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of the date written below.