Exhibit 1.1
EXECUTION VERSION
Foresight
Energy LP
17,500,000 Common Units
Representing Limited Partner Interests,
plus an option to purchase up to
2,625,000 additional Common Units to cover over allotments
Underwriting Agreement
June 17, 2014
Barclays Capital Inc.
Citigroup Global Markets Inc.
Morgan Stanley & Co. LLC
As Representatives of the several Underwriters,
c/o
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
- and -
Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Foresight Energy LP, a
limited partnership organized under the laws of Delaware (the “Partnership”), proposes to sell to the several underwriters named in Schedule I hereto (the “Underwriters”), for whom you (the “Representatives”) are acting
as representatives, 17,500,000 common units, each representing a limited partner interest in the Partnership (the “Common Units”) (said common units to be issued and sold by the Partnership being hereinafter called the “Underwritten
Securities”). The Partnership also proposes to grant to the Underwriters an option to purchase up to 2,625,000 additional Common Units to cover over-allotments, if any (the “Option Securities”; the Option Securities, together with the
Underwritten Securities, being hereinafter called the “Securities”). The use of the neuter in this Agreement shall include the feminine and masculine wherever appropriate. Certain terms used herein are defined in Section 21 hereof.
Barclays Capital Inc. has agreed to reserve a portion of the Underwritten Securities to be
purchased by it under this Agreement for sale to the directors, officers, members, employees, business associates, affiliates and other related parties of Foresight Reserves, L.P. (“Foresight Reserves”), a Nevada limited partnership, or
the General Partner (as defined below) (collectively, “Participants”), as set forth in the Prospectus under the heading “Underwriting” (the “Directed Securities Program”). The Securities to be sold by Barclays Capital
Inc. and its affiliates pursuant to the Directed Securities Program are referred to hereinafter as the “Directed Securities.” Any Directed Securities not orally confirmed for purchase by any Participant by the end of the business day on
which this Agreement is executed may be offered to the public by the Underwriters as set forth in the Prospectus (as defined below).
It
is understood and agreed to by all parties that as of the date hereof:
(a) Foresight Reserves directly owns a 100% membership interest in
Foresight Energy GP LLC (the “General Partner”), a Delaware limited liability company and the sole general partner of the Partnership with a non-economic general partner interest in the Partnership;
(b) Foresight Reserves directly owns a 100% limited partner interest in the Partnership;
(c) Foresight Reserves directly owns a 99.33% membership interest in Foresight Energy LLC (“Foresight Energy LLC”), a Delaware
limited liability company and Michael J. Beyer (“Beyer”) owns a 0.67% membership interest in Foresight Energy LLC; and
It is
further understood and agreed to by the parties hereto that the following transactions will occur prior to or on the Closing Date (as defined herein):
(a) Foresight Reserves, Beyer, Foresight Energy LLC, the General Partner and the Partnership will enter into a contribution agreement
(including the other documents referred to therein, the “Contribution Agreement”), pursuant to which Foresight Reserves and Beyer will contribute all of their membership interests in Foresight Energy LLC to the Partnership in exchange for
(i) the issuance to Foresight Reserves and Beyer of the Sponsor Units (as defined below), (ii) the issuance to Foresight Reserves and Beyer of the right to receive the issuance of additional common units described in clause (a) of the
definition of “Deferred Issuance and Distribution” in the Partnership Agreement (as defined below); (iii) the issuance to Foresight Reserves and Beyer of the right to receive the distribution(s) of cash described in clause (b) of
the definition of “Deferred Issuance and Distribution” in the Partnership Agreement; and (iv) the issuance to Foresight Reserves and Beyer of the continuation of the right to receive reimbursement (pursuant to Section 5.6(c) of
the Partnership Agreement) for certain capital expenditures attributable to the assets of Foresight Energy LLC incurred within the two-year period prior to the date of formation of Foresight Energy LLC as a partnership (for tax purposes);
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(b) The General Partner will amend and restate the Partnership’s agreement of limited
partnership (as amended from time to time, the “Partnership Agreement”);
(c) the Partnership will issue to Foresight Reserves
and Beyer an aggregate of 47,238,895 common units and 64,738,895 subordinated units (collectively, the “Sponsor Units”);
(d)
the Partnership will issue to the General Partner the Incentive Distribution Rights (as defined in the Partnership Agreement);
(e) the
public offering of the Securities contemplated hereby will be consummated;
(f) to the extent the Underwriters exercise their option to
purchase Option Securities, the Partnership will issue such Option Securities to the public and distribute the net proceeds to Foresight Reserves and Beyer on a pro rata basis;
(g) to the extent the Underwriters do not exercise their option to purchase additional common units, the Partnership will issue those common
units to Foresight Reserves and Beyer on a pro rata basis; and
(h) the Partnership will use the net proceeds received from the sale of
the Securities as provided in the “Use of Proceeds” section of the Preliminary Prospectus and the Prospectus.
The transactions contemplated in
subsections (a) through (i) above are referred to herein as the “IPO Reorganization.”
1.
Representations and
Warranties
. Each of Foresight Energy LLC, the General Partner and the Partnership (the “Partnership Parties”), jointly and severally, represents and warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Partnership has prepared and filed with the Commission a registration statement (file number
333-179304) on Form S-1, including a related preliminary prospectus, for registration under the Act of the offering and sale of the Securities. Such Registration Statement, including any amendments thereto filed prior to the Execution Time, has
become effective. The Partnership may have filed one or more amendments thereto, including a related preliminary prospectus, each of which has previously been furnished to you. The Partnership will file with the Commission a final prospectus in
accordance with Rule 424(b). As filed, such final prospectus shall contain all information required by the Act and the rules thereunder and, except to the extent the Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latest
Preliminary Prospectus) as the Partnership has advised you, prior to the Execution Time, will be included or made therein.
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(b) On the Effective Date, the Registration Statement did, and when the
Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date (as defined herein) and on any date on which Option Securities are purchased, if such date is not the Closing Date (a “settlement date”), the Prospectus (and
any supplement thereto) will, comply in all material respects with the applicable requirements of the Act and the Exchange Act and the respective rules thereunder; and on the Effective Date and at the Execution Time, the Registration Statement did
not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and on the date of any filing pursuant to Rule
424(b) and on the Closing Date and any settlement date, the Prospectus (together with any supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Partnership Parties make no representations or warranties as to the information contained in or omitted from the Registration
Statement, or the Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Partnership by or on behalf of any Underwriter specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto), it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof.
(c) (i) The Disclosure Package, (ii) each electronic road show, when taken together as a whole with the Disclosure
Package, and (iii) any individual Written Testing-the-Waters Communication, when taken together as a whole with the Disclosure Package, do not contain any untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and in conformity with written
information furnished to the Partnership by any Underwriter specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in
Section 8(b) hereof.
(d) Each of the statements made by the Partnership in the Registration Statement and the
Disclosure Package and to be made in the Prospectus (and any supplements thereto) within the coverage of Rule 175(b) under the Securities Act, including (but not limited to) any statements with respect to projected results of operations, estimated
cash available for distribution and future cash distributions of the Partnership, and any statements made in support thereof or related thereto under the heading “Cash Distribution Policy and Restrictions on Distributions” in the
Preliminary Prospectus and the Prospectus or the anticipated ratio of taxable income to distributions, was made or will be made with a reasonable basis and in good faith.
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(e) (i) At the time of filing the Registration Statement and (ii) as of the
Execution Time (with such date being used as the determination date for purposes of this clause (ii)), the Partnership was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account of any determination by the Commission
pursuant to Rule 405 that it is not necessary that the Partnership be considered an Ineligible Issuer.
(f) From
August 3, 2012 through the Execution Time, the Partnership has been and is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters
Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.
(g) The Partnership (i) has not alone engaged in any Testing-the-Waters Communication and (ii) has not authorized
anyone other than the Representatives to engage in Testing-the-Waters Communications. The Partnership has not distributed any Written Testing-the-Waters Communications. “Written Testing-the-Waters Communication” means any
Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.
(h) Each Issuer Free Writing Prospectus does not include any information that conflicts with the information contained in the
Registration Statement, including any document incorporated by reference therein that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to the Partnership by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter
consists of the information described as such in Section 8(b) hereof.
(i) Each of the Partnership, the General
Partner, Foresight Energy LLC and the subsidiaries of Foresight Energy LLC (the “Subsidiaries”) (i) has been duly incorporated or formed and is validly existing as a limited partnership, limited liability company or corporation, as
applicable, in good standing under the laws of the jurisdiction in which it is chartered or organized with full power and authority (corporate or otherwise) to enter into and perform its obligations under the Partnership Agreement and the
Contribution Agreement to which it is a party, own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Package and the Prospectus, and (ii) is duly qualified to do business as a
foreign corporation, limited partnership or limited liability company and is in good standing under the laws of each jurisdiction that requires such qualification, except where the failure to be so qualified or in good standing would not reasonably
be expected to have a Material
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Adverse Effect (as defined below). Prior to giving effect to the IPO Reorganization, the Partnership has no subsidiaries, has no assets, other than cash in an amount equal to approximately $1,000
and has conducted no operations other than those incidental to maintaining its existence.
(j) The equity interests of the
Partnership conform to the description thereof contained in the Disclosure Package and the Prospectus; the outstanding partnership interests of the Partnership have been duly authorized and validly issued and are fully paid and, in the case of
limited partner interests, are nonassessable (except as such nonassessability may be affected by Section 17-607 and 17-804 of the Delaware Limited Partnership Act (the “Delaware LP Act”)); the Incentive Distribution Rights (as defined
in the Partnership Agreement) to be issued to the General Partner and the limited partner interests represented thereby have been duly authorized, when issued in accordance with the Partnership Agreement, will be validly issued and fully paid and
nonassessable (except as such nonassessability may be affected by matters described in Section 17-607 and 17-804 of the Delaware LP Act), and will be owned by the General Partner free and clear of all liens, encumbrances, security interests,
charges or other claims (“Liens”) (except restrictions on transferability and other Liens as described in the Disclosure Package and the Prospectus); the Securities being sold hereunder by the Partnership have been duly authorized, and,
when issued and delivered to and paid for by the Underwriters pursuant to this Agreement, will be validly issued and fully paid and nonassessable (except as such nonassessability may be affected by matters described in Sections 17-607 and 17-804 of
the Delaware LP Act); the Securities being sold by the Partnership are duly listed, and admitted and authorized for trading, on the New York Stock Exchange, subject to official notice of issuance; the certificates for the Securities, if any are
certificated, are in valid and sufficient form; the holders of outstanding partnership interests of the Partnership are not entitled to preemptive or other rights to subscribe for the Securities, other than as set forth in the Partnership Agreement,
which rights have been waived; and, except as set forth in the Disclosure Package and the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange
any securities for, partnership interests in the Partnership are outstanding.
(k) The General Partner has, and, on the
Closing Date will have, full power and authority to act as general partner of the Partnership in all material respects as described in the Disclosure Package and Prospectus.
(l) Foresight Reserves owns, and on the Closing Date, after giving effect to the IPO Reorganization, Foresight Reserves and
Beyer will own, all of the issued and outstanding membership interests of the General Partner; such membership interests have been duly authorized and validly issued in accordance with the limited liability company agreement of the General Partner
(the “GP LLC Agreement”), and are fully paid (to the extent required by the GP LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act
(the “Delaware LLC Act”)); and Foresight Reserves owns such membership interests free and clear of all Liens.
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(m) All of the outstanding limited liability company units of Foresight Energy
LLC and shares of capital stock or other ownership interests of each of the Subsidiaries have been duly authorized and validly issued and are fully paid and nonassessable. All of the outstanding limited liability company units of Foresight Energy
LLC are, prior to the IPO Reorganization, directly owned by Foresight Reserves and Beyer, and will be, on the Closing Date after giving effect to the IPO Reorganization, owned by the Partnership, and, except as otherwise set forth in the Disclosure
Package and the Prospectus, all of the outstanding shares of capital stock or other ownership interests of the Subsidiaries are owned by Foresight Energy LLC either directly or through wholly-owned subsidiaries, in each case, free and clear of any
Lien, have been issued in compliance with all federal and state and foreign securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities, and the holders thereof are not
subject to personal liability by reason of being such holders.
(n) The General Partner is, and on the Closing Date, will
be, the sole general partner of the Partnership with a non-economic general partner interest in the Partnership; such general partner interest has been duly authorized and validly issued in accordance with the Partnership Agreement; and the General
Partner owns such general partner interest free and clear of all Liens (except restrictions on transferability as described in the Disclosure Package and the Prospectus).
(o) Except as described in the Disclosure Package and the Prospectus, none of the Partnership Parties will, on the Closing
Date, own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity.
(p) There is no franchise, contract or other document of a character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not described or filed as required (and the Preliminary Prospectus contains in all material respects the same description of the foregoing matters contained in the Prospectus); and the
statements in the Prospectus under the headings “Business—Legal Proceedings and Liabilities,” “Environmental and Other Regulatory Matters,” “Cash Distribution Policy and Restrictions on Distributions,” “How We
Make Distributions to Our Partners,” “Description of Indebtedness,” “Description of Common Units,” and “The Partnership Agreement” fairly summarize the matters therein described. The statements in the Prospectus
under the heading “Material U.S. Federal Income Tax Consequences,” insofar as such statements summarize United States federal income tax law, constitute, as of the date hereof, an accurate summary in all material respects (subject to the
qualifications, exceptions, assumptions and limitations described therein and herein).
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(q) This Agreement has been duly authorized, executed and delivered by each of
the Partnership Parties.
(r) The Partnership is not, and, after giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in the Disclosure Package and the Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended.
(s) At or before the Closing Date:
(i) the Partnership Agreement will have been duly authorized, executed and delivered by the General Partner and Foresight
Reserves and will be a valid and legally binding agreement of the General Partner and Foresight Reserves, enforceable against each of them in accordance with its terms; and
(ii) the Contribution Agreement will have been duly authorized, executed and delivered by each of the Partnership Parties
thereto and will be a valid and legally binding agreement of each of them, enforceable against each of them in accordance with each Transaction Document’s respective terms;
provided that, with respect to each agreement described in this Section 1(s), the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law); provided further that the indemnity, contribution and exoneration provisions contained in any of such agreements may be limited by applicable laws and public policy.
The Partnership Agreement, the GP LLC Agreement, the limited liability company agreement of Foresight Energy LLC (as amended from time to time,
the “Foresight Energy LLC Agreement”) and the Contribution Agreement are herein collectively referred to as the “Operative Agreements.”
(t) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in
connection with the consummation of the IPO Reorganization or any other transactions contemplated by this Agreement or the Operative Agreements by the Partnership Parties hereto or thereto, except such as have been obtained under the Act, the
Exchange Act and such as may be required under the applicable state securities laws or blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner contemplated herein and in
the Disclosure Package and the Prospectus.
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(u) None of (i) the execution, delivery and performance of this Agreement
and the Operative Agreements by the Partnership Parties that are parties hereto or thereto, as the case may be, (ii) the issuance and sale by the Partnership of the Securities, (iii) the consummation of the IPO Reorganization and any other
of the transactions herein or therein contemplated by this Agreement or the Operative Agreements, (iv) the fulfillment of the terms hereof or thereof or (v) the application of the proceeds as described under the heading “Use of
Proceeds” in the Preliminary Prospectus and the Prospectus will conflict with, result in a breach or violation or imposition of any Lien upon any property or assets of any of the Partnership Parties or any of the Subsidiaries pursuant to,
(A) the limited partnership agreement, limited liability company agreement, certificate of limited partnership, certificate of formation or conversion, certificate or articles of incorporation, bylaws or other constituent document
(collectively, the “Organizational Documents”) of any of the Partnership Parties or any of the Subsidiaries; (B) the terms of any indenture, mortgage, deed of trust, note agreement, loan agreement or other agreement, or instrument to
which any of the Partnership Parties or any of the Subsidiaries is a party or bound or to which its or their property is subject; or (C) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having jurisdiction over any of the Partnership Parties or any of the Subsidiaries or any of its or their properties, except, with respect to clauses (B) and (C), as would not reasonably
be expected to have a Material Adverse Effect or a material adverse effect on the performance of this Agreement, or the consummation of any of the transactions contemplated hereby or thereby.
(v) The Contribution Agreement will be legally sufficient to transfer or convey to, or vest in, the Partnership, Foresight
Energy LLC and the Subsidiaries satisfactory title to, or valid rights to use or manage, all properties not already held by them that are, individually or in the aggregate, required to enable the Partnership, Foresight Energy LLC and the
Subsidiaries to conduct their operations in all material respects as contemplated by the Disclosure Package and the Prospectus. The Partnership, Foresight Energy LLC and the Subsidiaries, upon execution and delivery of the Contribution Agreement,
will succeed in all material respects to the business, assets, properties, liabilities and operations reflected by the consolidated financial statements of the Partnership.
(w) The consolidated historical financial statements and schedules of the Partnership and its consolidated subsidiaries, and
Foresight Energy LLC and its consolidated subsidiaries included in the Disclosure Package, the Preliminary Prospectus, the Prospectus and the Registration Statement present fairly in all material respects the financial condition, results of
operations and cash flows of the Partnership and its subsidiaries, and Foresight Energy LLC and its subsidiaries, respectively, as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the Act
and have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis in all material respects
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throughout the periods involved (except as otherwise noted therein); the selected financial data set forth under the heading “Selected Historical Financial Information” in the
Preliminary Prospectus, the Prospectus and Registration Statement fairly present in all material respects, on the basis stated in the Preliminary Prospectus, the Prospectus and the Registration Statement, the information included therein; the pro
forma financial statements included in the Disclosure Package, the Preliminary Prospectus, the Prospectus and the Registration Statement include assumptions that provide a reasonable basis for presenting the significant effects directly attributable
to the transactions and events described therein, the related pro forma adjustments give appropriate effect to those assumptions, the pro forma adjustments reflect the proper application of those adjustments to the historical financial statement
amounts in the pro forma financial statements included in the Disclosure Package, the Preliminary Prospectus, the Prospectus and the Registration Statement; the pro forma financial statements included in the Disclosure Package, the Preliminary
Prospectus, the Prospectus and the Registration Statement comply in all material respects as to form with the applicable accounting requirements of Regulation S-X under the Act; and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those statements. The statistical and market-related data and forward-looking statements included in the Disclosure Package, the Preliminary Prospectus, the Prospectus and the Registration Statement are based
on or derived from sources that the Partnership Parties and the Subsidiaries believe to be reliable and accurate in all material respects and represent their good faith estimates that are made on the basis of data derived from such sources.
(x) No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
any of the Partnership Parties or their property, or management is pending or, to the knowledge of the Partnership, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement, or the
consummation of any of the transactions contemplated hereby or thereby or (ii) could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the
Partnership, Foresight Energy LLC and the Subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business (a “Material Adverse Effect”), except as set forth in or contemplated in the Disclosure
Package and the Prospectus (exclusive of any amendment or supplement thereto).
(y) Each of the Partnership, Foresight
Energy LLC and each of the Subsidiaries owns or leases all such properties as are necessary to the conduct of its operations as presently conducted, except as set forth in the Disclosure Package and the Prospectus (exclusive of any amendment or
supplement thereto) or as would not reasonably be expected to have a Material Adverse Effect.
(z) None of the Partnership
Parties or the Subsidiaries is in violation or default of (i) any provision of its charter or bylaws, or comparable constituting
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documents; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to any of the Partnership Parties or any of the Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having jurisdiction over such Partnership Party or such Subsidiary or any of its properties, as applicable, except (A) as described in each of the Disclosure Package and
the Prospectus or (B) as would not reasonably be expected to have a Material Adverse Effect with respect to clauses (ii) and (iii).
(aa) Weir International, Inc. (“Weir”), who has delivered the April 2014 Weir Reserve and Resource Study concerning
estimates of the Partnership’s proven and probable coal reserves (the “Weir Study”), was, as of January 1, 2014, and is, as of the date hereof, an independent engineering firm with respect to the Company.
(bb) The factual information underlying the estimates of the Partnership’s proven and probable coal reserves, which was
supplied by the Partnership to Weir for the purposes of preparing the Weir Study, was true and correct in all material respects on the dates such estimates were made and such information was supplied and was prepared in accordance with customary
industry practices; other than intervening market commodity price fluctuations (which are not included in such reports), and except as disclosed in the Disclosure Package, the Partnership is not aware of any facts or circumstances that would result
in a material adverse change in the estimates of the Partnership’s proven and probable coal reserves, as reflected in the reports referenced in the Weir Study; the Partnership has no reason to believe that as of the dates indicated in the
Registration Statement, the Disclosure Package and the Prospectus such proven and probable coal reserves have materially declined or decreased since the dates of the reports referenced in the Weir Study (other than, in all cases, updates to previous
reports prepared by Weir and disclosed to the Representatives).
(cc) Ernst & Young LLP, who have certified
certain financial statements of the Partnership and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements and schedules included in the Disclosure Package and the Prospectus, are
independent public accountants with respect to the Partnership within the meaning of the Act and the applicable published rules and regulations thereunder.
(dd) Each of the Partnership, Foresight Energy LLC and the Subsidiaries has filed all applicable tax returns that are required
to be filed or has requested extensions thereof (except in any case in which the failure so to file would not reasonably be expected to have a Material Adverse Effect and except as set forth in or contemplated in the Disclosure Package and the
Prospectus (exclusive of any amendment or supplement thereto)) and has paid all taxes required to be paid by it and any other similar assessment, fine or penalty levied
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against it, to the extent that any of the foregoing is due and payable, except for any such similar assessment, fine or penalty that is currently being contested in good faith, or as would not
reasonably be expected to have a Material Adverse Effect and except as set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto).
(ee) No labor problem or dispute with the employees of the Partnership, Foresight Energy LLC or any of the Subsidiaries exists
or, to the knowledge of the Partnership, Foresight Energy LLC or any of the Subsidiaries, is threatened, and none of the Partnership Parties are aware of any existing or imminent labor disturbance by the employees of any of its or the
Subsidiaries’ principal suppliers, contractors or customers, except as would not reasonably be expected to have a Material Adverse Effect and except, in each case, as set forth in or contemplated in the Disclosure Package and the Prospectus
(exclusive of any amendment or supplement thereto).
(ff) No Subsidiary is, and Foresight Energy LLC is not, and will not
be on the Closing Date after giving effect to the IPO Reorganization, currently prohibited, directly or indirectly, from (i) paying any dividends to Foresight Energy LLC or distributions to the members (including the Partnership, to the extent
applicable) of Foresight Energy LLC (the “Members”), respectively, (ii) making any other distribution on its capital stock or limited liability company units, respectively, (iii) repaying to Foresight Energy LLC or the Members,
respectively, any loans or advances to it from Foresight Energy LLC or the Members, respectively, or (iv) transferring any of its property or assets to it or any other Subsidiary, except as described in or contemplated in the Disclosure
Package, or the Prospectus (in each case, exclusive of any amendment or supplement thereto).
(gg) The Partnership,
Foresight Energy LLC and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged in the
reasonable judgment of the Partnership, Foresight Energy LLC and the Subsidiaries; all policies of insurance and fidelity or surety bonds insuring the Partnership, Foresight Energy LLC or any of the Subsidiaries or their respective businesses,
assets, employees, officers and directors are in full force and effect in all material respects; the Partnership, Foresight Energy LLC and their subsidiaries are in compliance in all material respects with the terms of such policies and instruments;
there are no material claims by the Partnership, Foresight Energy LLC or any of the Subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither
the Partnership, Foresight Energy LLC nor any such Subsidiary has been refused any insurance coverage sought or applied for; and neither the Partnership, Foresight Energy LLC nor any such Subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its
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business at a cost that would not reasonably be expected to have a Material Adverse Effect except as set forth in or contemplated in the Disclosure Package and the Prospectus (in each case,
exclusive of any amendment or supplement thereto).
(hh) The Partnership, Foresight Energy LLC and the Subsidiaries possess
all licenses, certificates, permits and other authorizations issued by all applicable authorities necessary to conduct their respective businesses as presently conducted, and neither the Partnership, Foresight Energy LLC nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be
expected to have a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto).
(ii) The Partnership, Foresight Energy LLC and each of the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Prospectus, since the end of the Partnership’s, Foresight Energy LLC’s and each of the
Subsidiaries’ most recent audited fiscal year, there has been (i) no material weakness in the internal control over financial reporting of each of the Partnership, Foresight Energy LLC and the Subsidiaries (whether or not remediated) and
(ii) no change in the internal control over financial reporting of each of the Partnership, Foresight Energy LLC and the Subsidiaries that has materially affected, or is reasonably likely to materially affect, each of their internal controls
over financial reporting.
(jj) The Partnership, Foresight Energy LLC and the Subsidiaries maintain “disclosure
controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act); such disclosure controls and procedures are designed to ensure that the information required to be be disclosed by the Partnership in the reports it
files or will file or submit under the Exchange Act, as applicable, is accumulated and communicated to management of the General Partner, including its principal executive officers and principal financial officers, as appropriate, to allow timely
decisions regarding required disclosure to be made. Such disclosure controls and procedures are effective in all material respects to perform the functions for which they were established to the extent required by Rule 13a-15 of the Exchange Act.
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(kk) None of the Partnership Parties has taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Partnership to facilitate the sale or
resale of the Securities.
(ll) The Partnership, Foresight Energy LLC and the Subsidiaries are (i) in compliance with
any and all applicable laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”); (ii) have received and
are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) have not received notice of any actual or potential liability under any
Environmental Law, except where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability would not, individually or in the aggregate, have a Material Adverse Effect, except as set
forth in or contemplated in the Disclosure Package or the Prospectus (exclusive of any amendment or supplement thereto). Except as set forth in the Disclosure Package or the Prospectus, neither the Partnership, Foresight Energy LLC nor any of the
Subsidiaries have been named as a “potentially responsible party” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.
(mm) In the ordinary course of its business, each of the Partnership and Foresight Energy LLC periodically reviews the effect
of Environmental Laws on the business, operations and properties of the Partnership, Foresight Energy LLC and the Subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third
parties); on the basis of such review, each of the Partnership and Foresight Energy LLC has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, have a Material Adverse Effect, except as set forth in
or contemplated in the Disclosure Package or the Prospectus (exclusive of any amendment or supplement thereto).
(nn)
Except as would not reasonably be expected to have a Material Adverse Effect, (i) the minimum funding standard under Section 302 of the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (“ERISA”), has been satisfied by each “pension plan” (as defined in Section 3(2) of ERISA) which has been established or maintained by the Partnership, Foresight Energy LLC and/or one or more of
the Subsidiaries; (ii) each of the Partnership, Foresight Energy LLC and the Subsidiaries has fulfilled its obligations, if any, under Section 515 of ERISA; (iii) each pension plan and welfare plan established or maintained by the
Partnership, Foresight Energy LLC and/or one or more of the Subsidiaries is in
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compliance with the currently applicable provisions of ERISA; and (iv) neither the Partnership, Foresight Energy LLC nor any of the Subsidiaries has incurred or could reasonably be expected
to incur any withdrawal liability under Section 4201 of ERISA, any liability under Section 4062, 4063, or 4064 of ERISA, or any other liability under Title IV of ERISA.
(oo) At the Effective Date, the Partnership Parties and, to the knowledge of the Partnership Parties, to the extent required by
law, the officers and directors of the General Partner, in their capacities as such were, and on the Closing Date, will be, in compliance with the applicable provisions of the Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Sarbanes Oxley Act”).
(pp) To the extent that information is required to be publicly
disclosed under the U.K. Financial Services Authority’s Price Stabilising Rules (the “Stabilizing Rules”) before stabilizing transactions can be undertaken in compliance with the safe harbor provided under such Stabilizing Rules, such
information has been adequately publicly disclosed (within the meaning of the Stabilizing Rules).
(qq) The operations of
the Partnership, Foresight Energy LLC and the Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations
thereunder applicable to the Partnership, Foresight Energy LLC and the Subsidiaries and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Partnership or any of the Subsidiaries with respect to the Money Laundering Laws is pending or, to the
knowledge of the Partnership and Foresight Energy LLC, threatened.
(rr) None of the Partnership, Foresight Energy LLC, or
any of the Subsidiaries, or, to the knowledge of the Partnership and Foresight Energy LLC, any director, officer, agent, employee or affiliate of the Partnership, Foresight Energy LLC or the Subsidiaries, is an entity or individual (a
“Person”) that is, or is owned or controlled by a Person that is currently the subject or target of any sanctions administered or enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC
Sanctions”), or located, organized or resident in a country or territory that is the subject of OFAC Sanctions (including, without limitation, Cuba, Iran, North Korea, Sudan and Syria); neither the Partnership nor Foresight Energy LLC will
directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing or
facilitating the activities or business of any person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions or in any other manner that will result in a
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violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise); and, for the past five years, the Partnership,
Foresight Energy LLC and the Subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not engaged in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or
transaction is or was the subject of Sanctions.
(ss) Neither the Partnership, Foresight Energy LLC nor any of the
Subsidiaries nor, to the knowledge of the Partnership and Foresight Energy LLC, any director, officer, agent, employee or affiliate of the Partnership, Foresight Energy LLC, or the Subsidiaries, is aware of or has taken any action, directly or
indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any
means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of
value, to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and the Partnership, Foresight Energy
LLC, and the Subsidiaries and, to the knowledge of the Partnership and Foresight Energy LLC, its and affiliates have conducted their businesses in compliance with the FCPA and maintain and procedures which are reasonably expected to ensure
compliance therewith.
(tt) To the knowledge of the Partnership and Foresight Energy LLC, all information related to the
coal reserves of Foresight Energy LLC and the Subsidiaries (including, without limitation, Foresight Energy LLC’s estimated proven and probable and total clean recoverable tons, in the aggregate and by region and mining complex location)
included in the Disclosure Package and the Prospectus (the “Coal Reserve Information”), (i) was and is accurate in all material respects, (ii) complies in all material respects with the requirements of the Act and the
requirements of the Exchange Act, as applicable, and (iii) when read together with the other information in the Disclosure Package and the Prospectus, as applicable, did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(uu) Each of the Partnership Parties has duly authorized the IPO Reorganization and, on the Closing Date, each of the
Partnership Parties shall have filed all notices, reports, documents or other information required to be filed by it pursuant to, and have obtained any and all authorizations, approvals, orders, consents, licenses, certificates, permits,
registrations or qualifications required to be obtained under, and have otherwise complied with all requirements of, all applicable laws in connection with the consummation of the IPO Reorganization, except in each case where such failure would not,
individually or in the aggregate, have a Material Adverse Effect; and the IPO Reorganization shall be legal, effective and valid and in accordance with the laws of the State of Delaware.
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(vv) Except as described in the Disclosure Package, there are no contracts,
agreements or understandings between the Partnership and any person granting such person the right to require the Partnership to file a registration statement under the Act with respect to any securities of the Partnership or to require the
Partnership to include such securities with the Securities registered pursuant to the Registration Statement.
(ww)
Subsequent to the respective dates as of which information is given in each of the Registration Statement, Disclosure Package and the Prospectus, (i) neither the Partnership, Foresight Energy LLC nor any of the Subsidiaries have incurred any
material liability or obligation, direct or contingent, nor entered into any material transaction; (ii) neither the Partnership nor Foresight Energy LLC have purchased any of the Partnership’s outstanding equity interests, nor declared,
paid or otherwise made any dividend or distribution of any kind on the Partnership’s equity interests other than ordinary and customary dividends or distributions; and (iii) there has not been any material change in the capital stock,
short term debt or long term debt of the Partnership, Foresight Energy LLC or any of the Subsidiaries, except in each case as described in each of the Registration Statement, the Disclosure Package and the Prospectus, respectively.
(xx) Except as described in the Disclosure Package, neither the Partnership nor Foresight Energy LLC has sold, issued or
distributed any the equity interests or membership interests, respectively during the six month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulation D or S of, the Act.
(yy) The Registration Statement, the Preliminary Prospectus, the Disclosure Package and the Prospectus comply, and any
amendments or supplements thereto will comply, with any applicable laws or regulations of foreign jurisdictions in which the Registration Statement, the Preliminary Prospectus, the Disclosure Package and the Prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Securities Program.
(zz) No consent, approval,
authorization or order of, or qualification with, any governmental body or agency, other than those obtained, is required in connection with the offering of the Directed Securities in any jurisdiction where the Directed Securities are being offered.
(aaa) The Partnership has not offered, or caused the Representatives to offer, Securities to any person pursuant to the
Directed Securities Program with the specific intent to unlawfully influence (i) a customer or supplier of the Partnership or Foresight Energy LLC to alter the customer’s or supplier’s level or type of business with the Partnership or
Foresight Energy LLC, or (ii) a trade journalist or publication to write or publish favorable information about the Partnership or Foresight Energy LLC or their products.
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(bbb) To the knowledge of the Partnership Parties, there are no affiliations or
associations between any member of the Financial Industry Regulatory Authority (“FINRA”) and the Partnership, the General Partner, any of the General Partner’s officers or directors or the Partnership’s 5% or greater unitholders,
except as described in the Registration Statement, the Disclosure Package and the Prospectus.
Any certificate signed by
any officer of the Partnership or Foresight Energy LLC and delivered to the Representatives or counsel for the Underwriters in connection with the offering of the Securities shall be deemed a representation and warranty by the Partnership or
Foresight Energy LLC, respectively, as to matters covered thereby, to each Underwriter.
2.
Purchase and Sale
. (a) Subject to
the terms and conditions and in reliance upon the representations and warranties herein set forth, the Partnership agrees to issue and sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the
Partnership, at a purchase price of $18.85 per unit, the amount of the Underwritten Securities set forth opposite such Underwriter’s name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the
Partnership hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to 2,625,000 Option Securities at the same purchase price per unit as the Underwriters shall pay for the Underwritten Securities, less an
amount per unit equal to any dividends or distributions declared by the Partnership and payable on the Underwritten Securities but not payable on the Option Securities. Said option may be exercised only to cover over-allotments in the sale of the
Underwritten Securities by the Underwriters. Such option may be exercised in whole or in part at any time on or before the 30th calendar day after the date of the Prospectus upon written notice by the Representatives to the Partnership setting
forth the number of Option Securities as to which the several Underwriters are exercising the option and the settlement date. The maximum number of Option Securities to be sold by the Partnership is 2,625,000. In the event that the Underwriters
exercise less than their full over-allotment option, the number of Option Securities to be sold by the Partnership shall be, as nearly as practicable, in the same proportion as the maximum number of Option Securities to be sold by the Partnership.
The number of Option Securities to be purchased by each Underwriter shall be the same percentage of the total number of Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities,
subject to such adjustments as you in your absolute discretion shall make to eliminate any fractional Securities.
3.
Delivery and
Payment
. Delivery of and payment for the Underwritten Securities and the Option Securities (if the option provided for in
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Section 2(b) hereof shall have been exercised on or before the third Business Day immediately preceding the Closing Date) shall be made at 10:00 AM, New York City time, on June 23,
2014, or at such time on such later date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between the Representatives and the Partnership or as
provided in Section 10 hereof (such date and time of delivery and payment for the Securities being herein called the “Closing Date”). Delivery of the Securities shall be made to the Representatives for the respective accounts of the
several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Partnership by wire transfer payable in same-day funds to the account specified by the
Partnership. Delivery of the Underwritten Securities and the Option Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the third Business Day immediately preceding the Closing Date, the
Partnership will deliver the Option Securities (at the expense of the Partnership) to the Representatives, at such place that the Representatives shall designate, on the date specified by the Representatives (which shall be within three Business
Days after exercise of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Partnership by wire
transfer payable in same-day funds to the account specified by the Partnership. If settlement for the Option Securities occurs after the Closing Date, the Partnership will deliver to the Representatives on the settlement date for the Option
Securities, and the obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4.
Offering by Underwriters
. It is understood that the several Underwriters
propose to offer the Securities for sale to the public as set forth in the Prospectus.
5.
Agreements
. The Partnership and
Foresight Energy LLC agree with the several Underwriters that:
(a) Prior to the termination of the offering of the
Securities, the Partnership will not file any amendment of the Registration Statement or supplement to the Prospectus or any Rule 462(b) Registration Statement unless the Partnership has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you reasonably and timely have objected (provided that nothing herein shall prevent the Company from making any amendment or supplement that, in the opinion of counsel to the Company,
is required by law or regulation). The Partnership will cause the Prospectus and any supplement thereto to be filed in a form approved by the Representatives with the Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence
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satisfactory to the Representatives of such timely filing. The Partnership will promptly advise the Representatives (i) when the Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement shall have been filed with the Commission, (ii) when, prior to termination of the offering of the Securities, any amendment to
the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration Statement, or for any supplement to
the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Partnership of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the institution or threatening of any proceeding for
such purpose. The Partnership will use its best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of
objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its best
efforts to have such amendment or new registration statement declared effective as soon as practicable.
(b) If at any time
prior to the filing of the Prospectus pursuant to Rule 424(b), any event occurs as a result of which the Disclosure Package, would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, or if it should be necessary to amend or supplement the Disclosure Package to comply with applicable law, the Partnership will promptly (i) notify the
Representatives of any such event; (ii) subject to the second sentence of Section 5(a), prepare an amendment or supplement to correct such statement or omission or effect such compliance; and (iii) supply any amendment or supplement
to the Representatives and counsel for the Underwriters without charge in such quantities as they may reasonably request.
(c) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under which they were made at such time not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act or the rules
thereunder, the Partnership promptly will (i) notify the Representatives of any such event; (ii) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment or supplement
which
20
will correct such statement or omission or effect such compliance; and (iii) supply any supplemented Prospectus to you in such quantities as you may reasonably request.
(d) As soon as practicable, the Partnership will make generally available to its unitholders and to the Representatives an
earnings statement or statements of the Partnership and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act, including, at the Partnership’s election, an “earnings statement” as defined in
Rule 158.
(e) The Partnership will furnish to the Representatives and counsel for the Underwriters, without charge,
signed copies of the Registration Statement (including exhibits thereto) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus and any supplement thereto as the
Representatives may reasonably request.
(f) The Partnership will arrange, if necessary, for the qualification of the
Securities for sale by the Underwriters under the laws of such jurisdictions as the Representatives may designate and will maintain such qualifications in effect so long as required for the distribution of the Securities; provided that in no event
shall the Partnership be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the
Securities, in any jurisdiction where it is not now so subject. The Partnership and Foresight Energy LLC will promptly advise the Representatives of the receipt by the Partnership or Foresight Energy LLC of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.
(g) Neither the Partnership nor the General Partner will, without the prior written consent of the Representatives, offer,
sell, contract to sell, pledge, otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Partnership or the General Partner or any affiliate of the Partnership or the General Partner or any person in privity with the Partnership or the General Partner or any affiliate of the Partnership or the General
Partner) directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act, any other Common Units or any securities convertible into, or exercisable, or exchangeable for, Common Units; or publicly announce an intention to effect any such transaction, for a
period of 180
21
days after the date of this Agreement; provided, however, that the Partnership and the General Partner may issue and sell Common Units pursuant to (i) this Agreement, (ii) any employee
stock option plan, other employee compensation plan, stock ownership plan or dividend reinvestment plan of the Partnership in effect at the Execution Time and as described or contemplated in the Prospectus, and (iii) the Partnership may issue
Common Units issuable upon the conversion of securities or the exercise of warrants outstanding at the Execution Time and as described in the Prospectus.
(h) None of the Partnership Parties will take, directly or indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Partnership to facilitate the sale or resale of the Securities.
(i) The Partnership and Foresight Energy LLC, jointly and severally, agree to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary Prospectus, the Prospectus and each Issuer
Free Writing Prospectus, and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration
Statement, each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and all amendments or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp or transfer taxes in connection with the original issuance and sale of the Securities to the
Underwriters; (iv) the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Securities;
(iv) the registration of the Securities under the Exchange Act and the listing of the Securities on the New York Stock Exchange; (v) any registration or qualification of the Securities for offer and sale under the securities or blue sky
laws of the several states, and any other jurisdictions specified pursuant to Section 5(f) (including filing fees and the reasonably incurred and documented fees and expenses of counsel for the Underwriters relating to such registration and
qualification up to $5,000); (vi) any filings required to be made with the Financial Industry Regulatory Authority (including filing fees and the reasonably incurred and documented fees and expenses of counsel for the Underwriters relating to
such filings); (vii) the transportation and other expenses incurred by or on behalf of representatives of the Partnership or Foresight Energy LLC in connection with presentations to prospective purchasers of the Securities; (viii) the fees
and expenses of the Partnership’s and Foresight Energy LLC’s accountants and the fees and expenses of counsel for the Partnership; (ix) all reasonably incurred and documented fees and disbursements of counsel incurred by the
Underwriters in connection with the
22
Directed Securities Program, and stamp duties, similar taxes or duties or other taxes, if any, incurred by the Underwriters in connection with the Directed Securities Program, (x) in
addition to the costs and expenses outlined in this Section 5(i)(v), (vi) and (ix), the Company will reimburse all reasonable out-of-pocket expenses of the Underwriters incurred in connection with the Offering hereunder in an aggregate
amount not to exceed $50,000; and (x) all other costs and expenses incident to the performance by the Partnership and Foresight Energy LLC of their obligations hereunder. Except as provided in this Section 5(i), the Underwriters shall pay
their own costs and expenses, including the costs and expenses of their counsel, any transfer taxes on the Securities which they may sell and expenses of advertising any offering of the Securities made by the Underwriters.
(j) The Partnership agrees that, unless it has or shall have obtained the prior written consent of the Representatives, and
each Underwriter, severally and not jointly, agrees with the Partnership that, unless it has or shall have obtained, as the case may be, the prior written consent of the Partnership, it has not made and will not make any offer relating to the
Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by the Partnership with the Commission or retained by the
Partnership under Rule 433; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Schedule II hereto and any electronic road show. Any such free
writing prospectus consented to by the Representatives or the Partnership is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Partnership agrees that (x) it has treated and will treat, as the case may be, each
Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in
respect of timely filing with the Commission, legending and record keeping.
(k) The Partnership will apply the net
proceeds from the sale of the Securities as set forth under “Use of Proceeds” in the Disclosure Package and the Prospectus.
(l) The Partnership will comply with all applicable securities and other laws, rules and regulations in each jurisdiction in
which the Directed Securities are offered in connection with the Directed Securities Program.
(m) The Partnership will
notify promptly the Representatives if the Partnership ceases to be an Emerging Growth Company at any time prior to the later of (a) completion of the distribution of the Securities within the meaning of the Securities Act and
(b) completion of the 180-day restricted period referred to in Section 5(g) hereof.
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(n) If at any time following the distribution of any Written Testing-the-Waters
Communication, any event occurs as a result of which such Written Testing-the-Waters Communication would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the
circumstances under which they were made at such time not misleading, the Partnership will (i) notify promptly the Representatives so that use of the Written Testing-the-Waters Communication may cease until it is amended or supplemented;
(ii) amend or supplement the Written Testing-the-Waters Communication to correct such statement or omission; and (iii) supply any amendment or supplement to the Representatives in such quantities as may be reasonably requested.
6.
Conditions to the Obligations of the Underwriters
. The obligations of the Underwriters to purchase the Underwritten Securities and
the Option Securities, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Partnership Parties contained herein as of the Execution Time, the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of the Partnership Parties made in any certificates pursuant to the provisions hereof, to the performance by each of the Partnership Parties of their respective obligations hereunder and to
the following additional conditions:
(a) The Prospectus, and any supplement thereto, have been filed in the manner and
within the time period required by Rule 424(b); and any material required to be filed by the Partnership pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time periods prescribed for such
filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) Each of the Partnership and Foresight Energy LLC shall have requested and caused each of (i) Cahill Gordon &
Reindel
LLP
, special counsel for the Partnership, the General Partner and Foresight Energy LLC, (ii) Vinson & Elkins LLP, special counsel for the Partnership and (iii) Bailey & Glasser LLP, counsel for the
Partnership, the General Partner and Foresight Energy LLC to furnish to the Representatives its opinion, dated the Closing Date and addressed to the Representatives, to the effect set forth in Exhibit A, Exhibit B and Exhibit C hereto, respectively.
(c) The Representatives shall have received from Shearman & Sterling LLP, counsel for the Underwriters, such
opinion or opinions, dated the Closing Date and addressed to the Representatives, with respect to the issuance and sale of the Securities, the Registration Statement, the Disclosure Package, the Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require, and the Partnership Parties shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. In giving such opinion
such counsel
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may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York, the General Corporation Law of the State of Delaware and the federal securities laws
of the United States, upon the opinions of counsel satisfactory to the Representative. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of
officers and other representatives of the Partnership and Foresight Energy LLC and each of the Subsidiaries and certificates of public officials.
(d) The Representatives shall have received an opinion, dated the Closing Date, from Baker Botts L.L.P., counsel for the
Underwriters, in the form agreed to with the Representatives.
(e) Each of the Partnership and Foresight Energy LLC shall
have furnished to the Representatives a certificate, signed by (x) the Chief Executive Officer of the General Partner and Foresight Energy LLC and (y) the Chief Financial Officer of the General Partner and Foresight Energy LLC, dated the
Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Disclosure Package, the Prospectus and any amendment or supplement thereto, as well as each electronic road show used in
connection with the offering of the Securities, and this Agreement and that:
(i) the representations and warranties of
each of the Partnership Parties in this Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date and such Partnership Party has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness
of the Registration Statement or any notice objecting to its use has been issued and no proceedings for that purpose have been instituted or, to the knowledge of the Partnership Parties, threatened; and
(iii) since the date of the most recent financial statements included in the Disclosure Package and the Prospectus (exclusive
of any supplement thereto), there has been no material adverse change in the condition (financial or otherwise), prospects, earnings, business or properties of the Partnership, Foresight Energy LLC and the Subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).
(f) At the Execution Time and at the Closing Date, the Partnership and Foresight Energy LLC shall have requested and caused
Ernst & Young LLP to furnish to the Representatives letters, dated respectively as of the Execution Time and as of the Closing Date, in form and substance satisfactory to the
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Representatives together with signed or reproduced copies of such letters for each of the other Underwriters containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Disclosure Package and the Prospectus and confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the applicable rules and regulations adopted by the Commission thereunder.
(g) On the Closing Date, the IPO Reorganization shall have been consummated as described in the Disclosure Package and the
Prospectus, and shall be legal, effective and valid and in accordance with the laws of the State of Delaware.
(h)
Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereto) and the Prospectus (exclusive of any supplement thereto), there shall not have been
(i) any change or decrease specified in the letter or letters referred to in paragraph (f) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or
otherwise), prospects, earnings, business or properties of the Partnership, Foresight Energy LLC and the Subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or
contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the Prospectus (exclusive of
any amendment or supplement thereto).
(i) Subsequent to the Execution Time, there shall not have been any decrease in the
rating of any of the Partnership’s or Foresight Energy LLC’s debt securities by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 3(a)(62) under the Exchange Act) or any notice given of
any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change.
(j) Prior to the Closing Date, the Partnership Parties shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request.
(k) The Securities shall have been listed and
admitted and authorized for trading on the New York Stock Exchange, and satisfactory evidence of such actions shall have been provided to the Representatives.
(l) At the Execution Time, the Partnership shall have furnished to the Representatives a letter substantially in the form of
Exhibit D hereto from Foresight Reserves, each officer and director of Foresight Reserves and the General Partner addressed to the Representatives.
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If any of the conditions specified in this Section 6 shall not have been fulfilled when and
as provided in this Agreement, this Agreement and all obligations of the Underwriters hereunder may be cancelled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Partnership in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Shearman & Sterling LLP, counsel for the Underwriters, 599 Lexington Avenue, New York, NY 10022, on the Closing Date.
7.
Reimbursement of Underwriters’ Expenses
. If the sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 11 hereof or because of any refusal, inability or failure on the part of the Partnership
Parties to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Partnership and Foresight Energy LLC, jointly and severally, will reimburse the Underwriters severally
through the Representatives on demand for all out-of pocket expenses (including reasonably incurred and documented fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the
Securities.
8.
Indemnification and Contribution
. (a) Each of the Partnership Parties, jointly and severally, agree to
indemnify and hold harmless each Underwriter, the directors, officers, employees, affiliates and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other U.S. federal or state statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Securities as
originally filed or in any amendment thereof, or in any Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus, or any Written Testing-the-Waters Communication or in any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, not misleading, and (subject to the limitations set forth in the proviso to this
Section 8(a)) agrees to reimburse each such indemnified party, as incurred, for any reasonably incurred and documented legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that each of the Partnership Parties will not be liable in any such case to the extent that any such loss, claim, damage or
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liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, Preliminary Prospectus, the
Prospectus, or any Issuer Free Writing Prospectus or in any amendment thereof or supplement thereto, in reliance upon and in conformity with written information furnished to the Partnership by or on behalf of any Underwriter specifically for
inclusion therein, it being understood and agreed that the only such information furnished by the Underwriters consists of the information described in the last sentence of Section 8(b). This indemnity agreement will be in addition to any
liability which each of the Partnership Parties may otherwise have.
(b) Each Underwriter, severally and not jointly,
agrees to indemnify and hold harmless each of the Partnership Parties, each of their respective directors, each of the Partnership’s officers who signs the Registration Statement, and each person who controls the Partnership or Foresight Energy
LLC within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Partnership by or on behalf
of such Underwriter specifically for inclusion in the Registration Statement, Preliminary Prospectus, the Term Sheet, the Prospectus or any Issuer Free Writing Prospectus prepared by or on behalf of, used by, or referred to by the Partnership (or in
any amendment or supplement thereto). This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. Each of the Partnership Parties acknowledge that the statements set forth in the third paragraph under the
heading “Underwriting,” in the Preliminary Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in the Preliminary Prospectus, the Prospectus or any
Issuer Free Writing Prospectus or in any amendment or supplement thereto.
(c) Promptly after receipt by an indemnified
party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing
of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel (including one local counsel in each jurisdiction) of the indemnifying party’s choice at the indemnifying party’s
expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not
appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party.
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Notwithstanding the indemnifying party’s election to appoint counsel (including one local counsel in each jurisdiction) to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonably incurred and documented fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
(d) In the event that
the indemnity provided in paragraph (a), (b) or (c) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Partnership Parties, jointly and severally, and the Underwriters
severally agree to contribute to the aggregate losses, claims, damages and liabilities (including documented legal or other expenses reasonably incurred in connection with investigating or defending any loss, claim, damage, liability or action)
(collectively “Losses”) to which the Partnership Parties and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Partnership Parties on the one hand and by
the Underwriters on the other hand from the offering of the Securities; provided, however, that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the
Partnership Parties, jointly and severally, and the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Partnership Parties on the one hand and of
the Underwriters on the other hand in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the
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Partnership Parties shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by the Partnership, and benefits received by the Underwriters
shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Partnership Parties on the one hand or the Underwriters on the other hand, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Underwriters’ respective obligations to contribute pursuant to this Section 8 are several in proportion to the
respective number of Securities they have purchased hereunder, and not joint. Each of the Partnership Parties and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the provisions of this Section 8, in no event shall any Underwriter be required to contribute any amount in
excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Securities exceeds the amount of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omission. For purposes of this Section 8, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer,
employee, affiliate and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls any of the Partnership Parties within the meaning of either the Act or the Exchange Act, each officer of the
Partnership who shall have signed the Registration Statement and each director of the Partnership or Foresight Energy LLC shall have the same rights to contribution as the Partnership and Foresight Energy LLC, subject in each case to the applicable
terms and conditions of this paragraph (d). The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.
9.
Directed Securities Program Indemnification
.
(a) Each of the Partnership Parties, jointly and severally, agree to
indemnify and hold harmless each Underwriter, the directors, officers, employees, affiliates and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act (the “Underwriter
Entities”) from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action, loss, claim, damage
or liability), joint or several, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue
30
statement or alleged untrue statement of a material fact contained in any material prepared by or with the consent of any of the Partnership Parties for distribution to Participants in connection
with the Directed Securities Program or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) caused by the failure of any
Participant to pay for and accept delivery of Directed Securities that the Participant agreed to purchase; or (iii) related to, arising out of, or in connection with the Directed Securities Program, other than losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially determined to have resulted from the bad faith or gross negligence of the Underwriter Entities.
(b) Promptly after receipt by an Underwriter Entity under this Section 9 of notice of the commencement of any action, such
Underwriter Entity will, if a claim in respect thereof is to be made against the Partnership Parties under this Section 9, notify the Partnership and Foresight Energy LLC in writing of the commencement thereof; but the failure so to notify any
of the Partnership Parties (i) will not relieve it from liability under paragraph (a) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by it of substantial rights and
defenses and (ii) will not, in any event, relieve the Partnership Parties from any obligations to any Underwriter Entity other than the indemnification obligation provided in paragraph (a) above. The Partnership Parties shall be
entitled to appoint counsel (including one local counsel in each jurisdiction) of their choice at their expense to represent such Underwriter Entity in any action for which indemnification is sought (in which case the Partnership Parties shall not
thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not appointed by Company or Foresight Energy LLC, retained by such Underwriter Entity or parties except as set forth below); provided, however,
that such counsel shall be reasonably satisfactory to such Underwriter Entity. Notwithstanding the Partnership Parties’ election to appoint counsel (including one local counsel in each jurisdiction) to represent an Underwriter Entity in an
action, such Underwriter Entity shall have the right to employ separate counsel (including local counsel), and the Partnership Parties shall bear the reasonably incurred and documented fees, costs and expenses of such separate counsel if
(i) the use of counsel chosen by the Partnership Parties to represent such Underwriter Entity would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both
such Underwriter Entity and any of the Partnership Parties and such Underwriter Entity shall have reasonably concluded that there may be legal defenses available to it and/or other Underwriter Entities that are different from or additional to those
available to the any of the Partnership Parties, (iii) none of the Partnership Parties shall have employed counsel reasonably satisfactory to such Underwriter Entity to represent such Underwriter Entity within a reasonable time after notice of
the institution of such action or (iv) the Partnership Parties shall authorize such Underwriter Entity to employ separate counsel at the expense of the Partnership Parties. The Partnership Parties will not, without the prior written consent of
the Underwriter Entities, settle or compromise or consent to the entry of any judgment with
31
respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the Underwriter Entities are
actual or potential parties to such claim or action) unless such settlement, compromise or consent (i) includes an unconditional release of each Underwriter Entity from all liability arising out of such claim, action, suit or proceeding and
(ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
(c) In the event that the indemnity provided in paragraph (a) or (b) of this Section 9 is unavailable to or
insufficient to hold harmless an Underwriter Entity for any reason, each of the Partnership Parties, jointly and severally, and such Underwriter Entity agree to contribute to the aggregate Losses to which the Partnership Parties and such Underwriter
Entity may be subject in such proportion as is appropriate to reflect the relative benefits received by the Partnership Parties on the one hand and by the Underwriter Entities on the other hand from the offering of the Directed Securities; provided,
however, that in no case shall any Underwriter Entity (except as may be provided in any agreement among underwriters relating to the offering of the Directed Securities) be responsible for any amount in excess of the underwriting discount or
commission applicable to the Directed Securities purchased by such Underwriter Entity hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, each of the Partnership Parties, jointly and severally,
and such Underwriter Entity shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Partnership Parties on the one hand and of such Underwriter Entity on the other hand in
connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Partnership Parties shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) of Directed Securities received by the Partnership and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions from the Directed Securities, in each case as
set forth on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue or alleged untrue statement or the omission or alleged omission relates to information provided by the
Partnership Parties on the one hand or the Underwriter Entities on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Partnership
Parties and the Underwriter Entities agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this Section 9, no Underwriter Entity shall be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with
respect to the offering of the Directed Securities exceeds the amount of any damages that such Underwriter Entity has otherwise been required to pay. For purposes of this Section 9, each person who
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controls an Underwriter Entity within the meaning of either the Act or the Exchange Act and each director, officer, employee, affiliate and agent of an Underwriter Entity shall have the same
rights to contribution as such Underwriter Entity, subject in each case to the applicable terms and conditions of this paragraph (c). The remedies provided for in this Section 9 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
10.
Default by an Underwriter
. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under
this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the amount of Securities set forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate amount of Securities
which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Securities set forth in Schedule I hereto, the remaining Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Underwriter or the Partnership Parties. In
the event of a default by any Underwriter as set forth in this Section 10, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Partnership Parties and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
11.
Termination
. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given to the Partnership prior to delivery of and payment for the Securities, if at any time prior to such time (i) trading in the Partnership’s Common Units shall
have been suspended by the Commission or the New York Stock Exchange, (ii) trading in securities generally on the New York Stock Exchange or the NASDAQ Global Market shall have been suspended or limited or minimum prices shall have been
established on such exchange, (iii) a banking moratorium shall have been declared either by U.S. federal or New York State authorities or (iv) there shall have occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representatives, impractical or inadvisable to proceed with the offering or delivery of
the Securities as contemplated by the Preliminary Prospectus or the Prospectus (exclusive of any amendment or supplement thereto).
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12.
Representations and Indemnities to Survive
. The respective agreements,
representations, warranties, indemnities, rights of contribution and other statements of the Partnership Parties or their respective officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter or the Partnership Parties or any of the indemnified persons referred to in Sections 8 and 9 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7, 8 and 9 hereof shall survive the termination or cancellation of this Agreement.
13.
Notices
.
All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered or telefaxed to Barclays Capital Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Syndicate
Registration (Fax: (646) 834-8133) (with a copy, in the case of any notice pursuant to Sections 8 or 9, to the Director of Litigation, Office of the General Counsel, Barclays Capital Inc., 745 Seventh Avenue, New York, New York 10019); the
Citigroup Global Markets Inc. General Counsel (fax no.:
(212) 816-7912) and
confirmed to the General Counsel, Citigroup Global Markets Inc., at 388 Greenwich Street, New York, New York, 10013,
Attention: General Counsel, and Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention: Equity Syndicate Desk, with a copy to the Legal Department; or, if sent to the Partnership Parties will be
mailed, delivered or telefaxed to fax no. (561) 626-4938 and confirmed to it at 211 North Broadway, Suite 2600, St. Louis, Missouri 63102 Attention: General Counsel, with a copy which shall not constitute notice to Brian Glasser,
Bailey & Glasser LLP, 209 Capitol St. Charleston, West Virginia 25301.
14.
Successors
. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective successors and the indemnified persons referred to in Section 8 hereof and their respective successors, no other person will have any right or obligation hereunder.
15.
Integration
. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Partnership
Parties and the Underwriters, or any of them, with respect to the subject matter hereof.
16.
Applicable Law
. This Agreement or any
claim, controversy or dispute arising under or related to this Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.
17.
Waiver of Jury Trial
. Each of the Partnership Parties and the Underwriters hereby irrevocably waive, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
18.
No Fiduciary Duty
. Each of the Partnership Parties hereby acknowledge that (a) the purchase and sale of the Securities
pursuant to this Agreement is an arm’s-length commercial transaction between the Partnership Parties, on the one hand,
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and the Underwriters and any affiliate through which it may be acting, on the other hand, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Partnership
Parties and (c) the Partnership’s engagement of the Underwriters in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, each of the Partnership
Parties agree that they are solely responsible for making their own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Partnership Parties on related or other matters).
Each of the Partnership Parties agree that they will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Partnership or Foresight Energy LLC, in connection with
such transaction or the process leading thereto.
19.
Patriot Act
. In accordance with the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Partnership, which information may include the name
and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.
20.
Counterparts
. This Agreement may be signed in one or more counterparts (which may include counterparts delivered by any standard
form of telecommunication), each of which shall constitute an original and all of which together shall constitute one and the same agreement.
21.
Headings
. The section headings used herein are for convenience only and shall not affect the construction hereof.
22.
Definitions
. The terms that follow, when used in this Agreement, shall have the meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions or trust companies are authorized or obligated by law to close in The City of New York.
“Commission” shall mean
the Securities and Exchange Commission.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Disclosure Package” shall mean (i) the Preliminary Prospectus that is generally distributed to investors and used to offer the
Securities, (ii) the Issuer Free Writing Prospectuses, if any, identified in Schedule II hereto and any other information identified in Schedule II hereto, and (iii) any other Free Writing Prospectus that the parties hereto shall hereafter
expressly agree in writing to treat as part of the Disclosure Package.
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“Effective Date” shall mean each date and time that the Registration Statement, any
post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement became or becomes effective.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
“Execution Time” shall mean June 17, 2014 at 4:15 p.m. Eastern time.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“Investment Company Act” shall mean the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433.
“Preliminary Prospectus” shall mean any preliminary prospectus referred to in Section 1(a) above and any preliminary
prospectus included in the Registration Statement at the Effective Date that omits Rule 430A Information.
“Prospectus”
shall mean the prospectus relating to the Securities that is first filed pursuant to Rule 424(b) after the Execution Time.
“Registration Statement” shall mean the registration statement referred to in Section 1(a) above, including exhibits and
financial statements and any prospectus supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430A, as amended at the Execution Time and, in
the event any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior to the Closing Date, shall also mean such registration statement as so amended or such Rule 462(b) Registration Statement, as the case
may be.
“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule 405”,
“Rule 415”, “Rule 424”, “Rule 430A” and “Rule 433” refer to such rules under the Act.
“Rule 430A Information” shall mean information with respect to the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule 430A.
“Rule 462(b) Registration Statement” shall
mean a registration statement and any amendments thereto filed pursuant to Rule 462(b) relating to the offering covered by the registration statement referred to in Section 1(a) hereof.
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If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Partnership, the General Partner, Foresight Energy LLC and the several Underwriters.
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Very truly yours,
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FORESIGHT ENERGY LP
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By:
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/s/ Michael J. Beyer
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Name:
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Michael J. Beyer
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Title:
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President & Chief Executive Officer
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FORESIGHT ENERGY LLC
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By:
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/s/ Michael J. Beyer
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Name:
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Michael J. Beyer
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Title:
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President & Chief Executive Officer
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FORESIGHT ENERGY GP LLC
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By:
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/s/ Michael J. Beyer
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Name:
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Michael J. Beyer
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Title:
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President & Chief Executive Officer
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Foresight Energy LP – Underwriting Agreement
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|
|
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The foregoing Agreement is hereby confirmed and accepted as of the date first above written.
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|
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Barclays Capital Inc.
Citigroup
Global Markets Inc.
Morgan Stanley & Co. LLC
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By:
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Barclays Capital Inc.
|
|
|
|
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By:
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/s/ Victoria Hale
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Name:
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Victoria Hale
|
|
|
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Title:
|
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Vice President
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Foresight Energy LP – Underwriting Agreement
|
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By:
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Citigroup Global Markets Inc.
|
|
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|
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By:
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/s/ Matthew J. Kenney
|
|
|
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Name:
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Matthew J. Kenney
|
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Title:
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Director – Investment Banking
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Foresight Energy LP – Underwriting Agreement
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By:
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Morgan Stanley & Co. LLC
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By:
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/s/ Robert Shepardson
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Name:
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Robert Shepardson
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Title:
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Managing Director
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For themselves and the other several Underwriters named in Schedule I to the foregoing Agreement.
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Foresight Energy LP – Underwriting Agreement
SCHEDULE I
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Underwriters
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Number of Underwritten
Securities to be
Purchased
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Barclays Capital Inc.
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3,966,666
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Citigroup Global Markets Inc.
|
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3,966,666
|
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Morgan Stanley & Co. LLC
|
|
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3,966,666
|
|
|
J.P. Morgan Securities LLC
|
|
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1,575,000
|
|
|
Goldman, Sachs & Co.
|
|
|
1,400,000
|
|
|
Deutsche Bank Securities Inc.
|
|
|
1,050,000
|
|
|
Stifel, Nicolaus & Company, Incorporated
|
|
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525,001
|
|
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Credit Agricole Securities (USA) Inc.
|
|
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525,001
|
|
|
PNC Capital Markets LLC
|
|
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262,500
|
|
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The Huntington Investment Company
|
|
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262,500
|
|
|
|
|
|
|
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Total
|
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17,500,000
|
|
|
|
|
|
|
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SCHEDULE II
Schedule of Free Writing Prospectuses included in the Disclosure Package
None
Other information included in the Disclosure Package
The following information is also included in the Disclosure Package:
1. The initial price to the public of the Securities is $20.00 per share.
SCHEDULE III
Schedule of Written Testing-the-Waters Communication
None.
EXHIBIT A
Form of Opinion of Cahill Gordon & Reindel
LLP
, special counsel for the
Partnership and Foresight Energy LLC, to be delivered pursuant to Section 6(b) of
the Underwriting Agreement
[ ], 2014
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
as representatives of the several
Underwriters named in Schedule I
to the Underwriting Agreement
Re: Foresight Energy LP
Ladies and
Gentlemen:
We have acted as special counsel to Foresight Energy LP, a Delaware limited partnership (the “Partnership”),
Foresight Energy GP LLC, a Delaware limited liability company (the “General Partner”) and Foresight Energy LLC, a Delaware limited liability company (“Foresight Energy” and together with the Partnership and the General Partner,
the “Partnership Entities”), in each case in connection with the issuance and sale by the Partnership to you and the other underwriters named in Schedule I to the Underwriting Agreement (as defined below) (collectively, the
“Underwriters”) of an aggregate amount of 20,125,000 of the Partnership’s common units representing limited partner interests (which include 17,500,000 Underwritten Securities and up to 2,625,000 Option Securities) (the
“Securities”). This opinion is being furnished to you pursuant to Section 6(b) of the underwriting agreement, dated [ ], 2014 (the “Underwriting
Agreement”), by and among the Partnership Entities and the Underwriters. Capitalized terms used herein without definition have the meanings specified in the Underwriting Agreement.
A registration statement on Form S-1 (SEC File No. 333-179304) relating to the Securities
was filed by the Partnership with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder (the “Act”), and, as thereafter
amended, became effective on [ ], 2014. The registration statement, as amended at the time it became effective, including information deemed included therein in accordance with
the provisions of Rule 430A under the Act, but excluding exhibits thereto, is hereinafter referred to as the “Registration Statement,” and the prospectus dated [ ],
2014, in the form filed with the Commission pursuant to Rule 424(b) under the Act, is hereinafter referred to as the “Prospectus”.
In rendering the opinions set forth herein, we have examined originals, photocopies or conformed copies, certified or otherwise identified to
our satisfaction of such records, agreements, instruments and documents of the Partnership Entities, certificates of public officials and other certificates provided to us by the Partnership Entities. In our examination, we have assumed (a) the
due authorization, execution and delivery by each of the parties thereto of the Underwriting Agreement (other than the Partnership Entities), (b) that each of such parties (other than Foresight Energy) has the legal power to act in the
respective capacity or capacities in which it is to act thereunder, (c) the authenticity of all documents submitted to us as originals, (d) the conformity to the original documents of all documents submitted to us as copies, (e) the
genuineness of all signatures on all documents submitted to us and (f) the legal capacity of all natural persons who have executed the Underwriting Agreement. We express no opinion with respect to any matters that would require us to perform a
mathematical calculation or make a financial or accounting determination.
Whenever our opinion is indicated to be “to our
knowledge,” it should be understood that during the course of our representation of the Partnership Entities our investigation to determine the existence or absence of facts has been limited to customary diligence. The words “to our
knowledge” and similar language used in the opinions expressed below are limited to the knowledge of the lawyers within our firm who have provided regular and substantive legal services to the Partnership Entities and their subsidiaries.
We advise you that, based upon the foregoing, in our opinion:
1. Each of Foresight Energy and its Delaware subsidiaries has been duly formed, is validly existing as a limited liability company or
corporation, as the case may be, and is in good standing under the laws of Delaware, with the power and authority to own its properties and conduct its business as described in the Prospectus. Each of Foresight Energy and its Delaware subsidiaries
is duly qualified to do business and in good standing as a foreign corporation or other business entity in each jurisdiction in which its ownership or lease of property or the conduct of its businesses requires such qualification, except where the
failure to be so qualified or in good standing, in the aggregate, could not reasonably be expect to have a Material Adverse Effect.
2. The Underwriting Agreement has been duly authorized, executed and delivered by the Partnership
Entities.
3. As of the Closing Date, after giving effect to the IPO Reorganization, the Partnership owns all of the issued and
outstanding member interests in Foresight Energy and the Partnership is the only member of Foresight Energy; such member interests have been duly authorized and validly issued in accordance with the limited liability company agreement of the
Foresight Energy (the “Foresight Energy Operating Agreement”) and are fully paid (to the extent required under the Foresight Energy Operating Agreement), and nonassessable (except as such nonassessability may be affected by Sections 18-607
and 18-804 of the Delaware LLC Act).
4. The issuance and sale of the Securities by the Partnership and the application of the proceeds
therefrom, the execution, delivery and performance by the Partnership Entities of the Underwriting Agreement and the Foresight Energy LLC Agreement and the compliance by the Partnership Entities with the Underwriting Agreement and the Foresight
Energy LLC Agreement and the consummation by the Partnership Entities of the transactions contemplated therein (including the IPO Reorganization) to be performed by it do not (A) require any consent, approval, authorization or other order of,
or any registrations, declarations or filings with, any United States federal, State of Delaware or State of New York court or governmental body or agency (except for those obtained or made under the Act and the rules and regulations promulgated
under the Act, the Exchange Act, such as may be required under state securities or Blue Sky laws, the rules of the New York Stock Exchange or the rules of FINRA), (B) violate or result in a breach or violation of or constitute default under
(nor constitute any event which with notice, lapse of time, or both, would constitute breach of or default under) the terms, conditions or provisions of the Certificate of Formation of the Partnership, the Partnership Agreement or any of the
contracts listed on Schedule 1 hereto (each an “Applicable Contract”) or (C) violate any applicable law, rule or administrative regulation of the United States, the Delaware Revised Uniform Limited Partnership Act (the “Delaware
LP Act”) or the State of New York, or any order or administrative or court decree of any United States, State of Delaware or State of New York governmental body or agency or court of which we have knowledge (except, we have not been requested
to and do not express any opinion as to any state securities or Blue Sky laws).
5. Except as described in the Registration Statement, the
Preliminary Prospectus and the Prospectus, there are no restrictions upon the voting or transfer of any partnership or membership interests in the Foresight Energy pursuant to its organizational documents or any agreement or instrument listed as an
exhibit to the Registration Statement to which Foresight Energy is a party.
6. The Partnership is not and will not become, as a result of
the offering and sale of the Securities and the application of proceeds therefrom, an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.
7. The Registration Statement has become effective under the Act, the required filing of the
Prospectus pursuant to Rule 424(b) and Rule 430A under the Act has been made and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement or order suspending or preventing the use of the Prospectus or Preliminary
Prospectus has been issued or proceeding for that purpose has been instituted by the Commission.
8. Except as to financial statements,
the notes and schedules thereto and other financial and accounting data included in the Registration Statement, the Preliminary Prospectus, each Issuer Free Writing Prospectus included in the Disclosure Package or the Prospectus, as to which we have
not been requested to and do not express any opinion, the Registration Statement as of its effective date and the Preliminary Prospectus, each Issuer Free Writing Prospectus included in the Disclosure Package and the Prospectus, as of their
respective dates, appear on their face to comply as to form in all material respects with the applicable requirements of the Act and the rules and regulations of the Commission thereunder.
In giving our opinion, we are relying, without independent verification as to certain matters of fact, upon certificates and written
statements of officers of the Partnership and upon the representations and warranties set forth in the Underwriting Agreement.
This
letter does not cover any laws, statutes, governmental rules or regulations or decisions which in our experience are not generally applicable to transactions of the kind covered by the Underwriting Agreement or covered by opinions typically
delivered in connection with transactions of the kind covered by the Underwriting Agreement.
We are members of the Bar of the State of
New York and do not purport to be experts in or to express any opinion concerning the laws of any jurisdictions other than the laws of the State of New York, the Delaware LP Act, Delaware Limited Liability Company Act and the federal laws of the
United States of America. In rendering the opinions set forth above, we express no opinion as to the laws of any jurisdictions other than the laws of the State of New York, the Delaware LP Act, the Delaware Limited Liability Company Act and the
federal laws of the United States.
This opinion is solely for your benefit in connection with your purchase of the Securities on the date
hereof and may not be delivered to, used or relied upon for any other purpose or by any person other than you without our prior written consent; provided, however, that we hereby consent to American Stock Transfer and Trust Company, LLC, as transfer
agent and registrar for the Securities, relying on the opinion in paragraph 8 above, subject to the assumptions, qualifications and conditions set forth herein, as if the opinion set forth in such paragraph was addressed directly to American Stock
Transfer and Trust Company, LLC, as transfer agent and registrar.
Very truly yours,
Schedule 1
Applicable Contracts
1.
Indenture, dated as of August 23, 2013, by and among Foresight Energy LLC, Foresight Energy Finance Corporation, the Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee
2. Amendment Agreement (including the Amended and Restated Credit Agreement), dated as of August 23, 2013 by and among Foresight Energy
LLC, certain subsidiaries of Foresight Energy LLC, Citibank, N.A., as administrative agent, and the lenders party thereto
3. Credit
Agreement, dated as of January 5, 2010, by and among Sugar Camp Energy LLC, as the borrower, Foresight Energy LLC, as a guarantor, Crédit Agricole Corporate and Investment Bank, as Administrative Agent (formerly known as Calyon New York
Branch) and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer Französischen Société Anonyme (formerly known as Calyon Deutschland Niederlassung Einer Französischen Societé Anonyme),
as Hermes Agent (formerly known as CALYON Deutschland Niederlassung Einer Französischen Societé Anonyme) (the “Sugar Camp Credit Agreement”)
4. First Amendment to the Sugar Camp Credit Agreement dated as of February 5, 2010, by and among Sugar Camp Energy LLC, Crédit
Agricole Corporate and Investment Bank (formerly known as Caylon New York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer Französischen Société Anonyme
(formerly known as Calyon Deutschland Niederlassung Einer Französischen Societé Anonyme), as Hermes Agent
5. Second Amendment
to the Sugar Camp Credit Agreement and First Amendment to Foresight Guarantee, dated as of August 4, 2010, by and among Sugar Camp Energy LLC, Crédit Agricole Corporate and Investment Bank (formerly known as Caylon New York Branch), as
Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer Französischen Société Anonyme (formerly known as Calyon Deutschland Niederlassung Einer Französischen
Societé Anonyme), as Hermes Agent
6. Third Amendment to the Sugar Camp Credit Agreement, dated as of September 24, 2010, by
and among Sugar Camp Energy LLC, Crédit Agricole Corporate and Investment Bank (formerly known as Caylon New York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer
Französischen Société Anonyme (formerly known as Calyon Deutschland Niederlassung Einer Französischen Societé Anonyme), as Hermes Agent
7. Fourth Amendment to the Sugar Camp Credit Agreement, dated as of May 27, 2011, by and among Sugar Camp Energy LLC, Crédit
Agricole Corporate and Investment Bank (formerly known as Caylon New York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer Französischen Société Anonyme
(formerly known as Calyon Deutschland Niederlassung Einer Französischen Societé Anonyme), as Hermes Agent
8. Fifth Amendment to the Sugar Camp Credit Agreement and First Amendment to Guaranty, dated as
of March 8, 2012, by and among Sugar Camp Energy LLC, Crédit Agricole Corporate and Investment Bank (formerly known as Caylon New York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank
Deutschland, Niederlassung Einer Französischen Société Anonyme (formerly known as Calyon Deutschland Niederlassung Einer Französischen Societé Anonyme), as Hermes Agent
9. Sixth Amendment to the Sugar Camp Credit Agreement and Second Amendment to Guaranty, dated as of August 23, 2013, by and among Sugar
Camp Energy LLC, Crédit Agricole Corporate and Investment Bank (formerly known as Caylon New York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer Französischen
Société Anonyme (formerly known as Calyon Deutschland Niederlassung Einer Französischen Societé Anonyme), as Hermes Agent
10. Guaranty of the Sugar Camp Credit Agreement by Foresight Energy LLC, as guarantor, in favor of Crédit Agricole Corporate and
Investment Bank, as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer Französischen Société Anonyme, as Hermes Agent dated May 27, 2011
11. Credit Agreement, dated as of May 14, 2010, by and among Hillsboro Energy LLC, as the borrower, Foresight Energy LLC, as a guarantor,
Credit Agricole Corporate and Investment Bank (formerly known as Calyon New York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer Französischen Société
Anonyme, as Hermes Agent (the “Hillsboro Credit Agreement”)
12. First Amendment to the Hillsboro Credit Agreement, dated as of
June 17, 2010, by and among Hillsboro Energy LLC, Foresight Energy LLC, Crédit Agricole Corporate and Investment Bank (formerly known as Calyon New York Branch), as Administrative Agent, and Crédit Agricole Corporate and
Investment Bank Deutschland, Niederlassung Einer Französischen Société Anonyme, as Hermes Agent
13. Second Amendment
to the Hillsboro Credit Agreement and First Amendment to Foresight Guaranty dated as of August 4, 2010, by and among Hillsboro Energy LLC, Foresight Energy LLC, Crédit Agricole Corporate and Investment Bank (formerly known as Calyon New
York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer Französischen Société Anonyme, as Hermes Agent
14. Third Amendment to the Hillsboro Credit Agreement dated as of September 24, 2010, by and among Hillsboro Energy LLC, Foresight Energy
LLC,
Crédit Agricole Corporate and Investment Bank (formerly known as Calyon New York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland,
Niederlassung Einer Französischen Société Anonyme, as Hermes Agent
15. Fourth Amendment to the Hillsboro Credit
Agreement dated as of May 27, 2011, by and among Hillsboro Energy LLC, Foresight Energy LLC, Crédit Agricole Corporate and Investment Bank (formerly known as Calyon New York Branch), as Administrative Agent, and Crédit Agricole
Corporate and Investment Bank Deutschland, Niederlassung Einer Französischen Société Anonyme, as Hermes Agent
16.
Fifth Amendment to the Hillsboro Credit Agreement and First Amendment to Guaranty dated as of March 8, 2012, by and among Hillsboro Energy LLC, Foresight Energy LLC, Crédit Agricole Corporate and Investment Bank (formerly known as Calyon
New York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer Französischen Société Anonyme, as Hermes Agent
17. Sixth Amendment to the Hillsboro Credit Agreement and Second Amendment to Guaranty dated as of August 16, 2013, by and among
Hillsboro Energy LLC, Foresight Energy LLC, Crédit Agricole Corporate and Investment Bank (formerly known as Calyon New York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung
Einer Französischen Société Anonyme, as Hermes Agent
18. Guaranty of the Hillsboro Credit Agreement by Foresight
Energy LLC, as guarantor, in favor of Crédit Agricole Corporate and Investment Bank (formerly known as Caylon New York Branch), as Administrative Agent, and Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung Einer
Französischen Société Anonyme, as Hermes Agent dated May 27, 2011
19. Master Lease Agreement between PNC
Equipment Finance, LLC, as Lessor and Foresight Energy Services LLC, as Lessee dated October 31, 2013, that Master Lease Guaranty delivered by Foresight Energy LLC in favor of PNC Equipment Finance, LLC in connection with Master Lease
Agreement, and that Real Property Waiver for the benefit of PNC Equipment Finance, LLC by Williamson Energy LLC, Sugar Camp Energy LLC and Hillsboro Energy LLC dated October 31, 2013
20. Master Lease Agreement dated March 30, 2012, among BB&T Equipment Finance Corporation (“BB&T”), as Lessor,
Hillsboro Energy LLC, Sugar Camp Energy, LLC and Williamson Energy, LLC, collectively as Lessee, and Foresight Energy LLC, as guarantor
21. General Terms and Conditions between Foresight Coal Sales LLC as agent for Williamson Energy LLC and Sugar Camp Energy LLC and Citigroup
Global Markets Limited dated March 29, 2011, and that Purchase Order No. 1 with a Transaction Date of January 11, 2011, Purchase Order No. 2 with a Transaction Date of February 4, 2011 and Purchase Order No. 3 with a
Transaction Date of March 22, 2011,
as amended by the terms of that Settlement Agreement dated May 1, 2013 (with certain confidential information omitted, which omitted information is the subject of a confidential treatment
request and has been filed separately with the Securities and Exchange Commission)
22. Master Fuel Purchase and Sales Agreement between Williamson Energy
LLC and The Dayton Power and Light Company dated August 16, 2007 and that Transaction Confirmation ID No. 507002 having a Transaction Date of October 2, 2007, as amended by Amendment One dated August 26, 2010 and Amendment Two
dated January 2, 2013 (with certain confidential information omitted, which omitted information is the subject of a confidential treatment request and has been filed separately with the Securities and Exchange Commission)
23. Amendment and Restatement of the Short Phantom Equity Agreement dated December 21, 2012 among Foresight Energy Services LLC, Drexel Short, Foresight
Management, LLC and Foresight Reserves, L.P.
EXHIBIT B
Form of Opinion of Vinson & Elkins LLP, special counsel for the Partnership and
Foresight Energy LLC, to be delivered pursuant to Section 6(b) of the Underwriting
Agreement
[Date]
Barclays Capital Inc.
Citigroup Global Markets Inc.
Morgan Stanley & Co. LLC
As Representatives of the
several Underwriters,
c/o
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
- and -
Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
This letter is provided to you pursuant to Section 6(b) of the Underwriting Agreement, dated as of
[ ] (the “Underwriting Agreement”), by and among Foresight Energy LP, a Delaware limited partnership (the
“Partnership”), Foresight Energy GP LLC, a Delaware limited liability company (the “General Partner”), and Foresight Energy LLC, a Delaware limited liability company (“Foresight Energy”, and together with the
Partnership and the General Partner, the “Partnership Parties”), and you, as representatives of the Underwriters listed in Schedule I of the Underwriting Agreement (the “Underwriters”), pursuant to which the Underwriters have
severally agreed to purchase from the Partnership [ ] common units representing limited partner interests in the Partnership (the
“Underwritten Securities,” and together with [ ] common units that may be sold by the Partnership pursuant to the
exercise of the option granted to the Underwriters to purchase additional common units, the “Securities”), on the terms and for the purposes set forth in the Underwriting Agreement. Any
capitalized term used in this letter and not defined herein shall have the meaning assigned to such term in the Underwriting Agreement.
We have acted as counsel to the Partnership in connection with the offer and sale by the Partnership of the Securities. In connection with the
opinions set forth below, we have examined and relied upon originals or copies, certified or otherwise identified to us to our satisfaction, of:
(i) executed originals or counterparts of the Underwriting Agreement, the Registration Rights Agreement dated as of
[ ], by and among the Partnership, Foresight Reserves, LP, a Nevada limited partnership (“Reserves”), and Michael J.
Beyer (“Beyer”) and the Contribution Agreement dated as of [ ], by and among the Partnership, the General Partner,
Reserves, and Beyer (the “Contribution Agreement”);
(ii) the limited liability company agreement or partnership
agreement, certificate of formation or limited partnership, as applicable, of the Partnership Parties;
(iii) the
resolutions of the Board of Directors, Board of Managers or equivalent governing body, as applicable, of each of the Partnership Parties, and the resolutions of the Pricing Committee of the General Partner relating to the authorization, issuance and
sale of the Securities;
(iv) the Registration Statement, the Preliminary Prospectus dated
[ ] (the “Pricing Prospectus”)
1
and the Prospectus;
(v) the Secretary’s Certificates delivered to you by the Partnership Parties on the Closing Date;
(vi) the Officers’ Certificates delivered to you by the Partnership Parties on the Closing Date; and
(vii) such other certificates, records or comparable documents of public officials and of officers and representatives of the
Partnership Parties as we have deemed relevant and necessary as a basis for the opinions set forth herein.
Based upon the foregoing, we
are of the opinion that as of the date hereof and subject to the qualifications and limitations set forth herein:
1. The Partnership has
been duly formed and is validly existing in good standing as a limited partnership under the Delaware LP Act, with all partnership power and authority necessary to enter into, and perform its obligations under, the Underwriting
|
1
|
Note: To the extent any Free Writing Prospectuses are listed on Schedule II to the UA, this item and the references in the opinion paragraphs should include the “Disclosure Package.”
|
Agreement and the Contribution Agreement to which it is a party, to own or lease its properties currently owned or leased or to be owned or leased on the Closing Date, and to conduct its business
as currently conducted or as to be conducted on the Closing Date, in each case, in all material respects as described in the Registration Statement, the Pricing Prospectus and the Prospectus. The Partnership is duly registered or qualified to
transact business in and is in good standing as a foreign limited partnership under the laws of each jurisdiction set forth opposite its name on
Annex A
hereto.
2. The General Partner has been duly formed and is validly existing in good standing as a limited liability company under the Delaware LLC
Act, with all limited liability company power and authority necessary to enter into, and perform its obligations under, the Underwriting Agreement and the Contribution Agreement to which it is a party, to act as general partner of the Partnership
and to conduct its business as currently conducted or as to be conducted on the Closing Date, in each case, in all material respects as described in the Registration Statement, the Pricing Prospectus and the Prospectus. The General Partner is duly
registered or qualified to transact business and is in good standing as a foreign limited liability company under the laws of each jurisdiction set forth opposite its name on
Annex A
hereto.
3. The General Partner has full limited liability company power and authority to serve as general partner of the Partnership in all material
respects.
4. As of the Closing Date, the General Partner is the sole general partner of the Partnership. The general partner interest of
the Partnership owned by the General Partner has been duly authorized and validly issued in accordance with the Partnership Agreement. The General Partner owns such general partner interest free and clear of all Liens (A) in respect of which a
financing statement under the Uniform Commercial Code of the State of Delaware naming the General Partner as debtor is on file in the office of the Secretary of State of the State of Delaware, or (B) otherwise known to us, without independent
investigation.
5. As of the Closing Date, after giving effect to the IPO Reorganization, the issued and outstanding limited partner
interests in the Partnership consist of (A) the [
—
] Subordinated Units and the [
—
] Common Units being issued to Reserves and Beyer,
(B) the [
—
] Common Units constituting the Securities and (C) the Incentive Distribution Rights issued to the General Partner.
6. The outstanding limited partner interests of the Partnership, including the Subordinated Units and the Common Units being issued to
Reserves and Beyer and the Incentive Distribution Rights after giving effect to the IPO Reorganization, have been duly authorized in accordance with the Partnership Agreement and are validly issued, fully paid (to the extent required under the
Partnership Agreement) and nonassessable, and the Securities to be sold by the Partnership, and the limited partner interests represented thereby, have been duly authorized in accordance with the Partnership Agreement and, when issued and delivered
to the Underwriters against payment therefor in accordance with the Underwriting Agreement, will be validly issued, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except, in each case, as such nonassessability
may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).
7. Reserves and Beyer own the Sponsor Units and the General Partner owns the Incentive
Distribution Rights, in each case, free and clear of all Liens (A) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming either Reserves or Beyer as debtor is on file in the office of the
Secretary of State of the State of Delaware, or (B) otherwise known to us, without independent investigation.
8. The Partnership has
all requisite partnership power and authority to issue, sell and deliver the Securities to be sold by it, in accordance with and upon the terms and conditions set forth in the Underwriting Agreement, the Partnership Agreement, the Registration
Statement, the Pricing Prospectus and the Prospectus. All partnership and limited liability action, as the case may be, required to be taken by General Partner, the Partnership, and Foresight Energy or any of their members or partners (in their
capacity as such) for the authorization, issuance, sale (as applicable) and delivery of the Securities, the execution and delivery of the Underwriting Agreement and the Contribution Agreement and the consummation of the transactions contemplated by
the Underwriting Agreement and the Contribution Agreement have been validly taken.
9. Reserves owns 99.33% of the issued and outstanding
member interests in the General Partner and Beyer owns 0.67% of the issued and outstanding member interests in the General Partner, and Reserves and Beyer are the only members of the General Partner; such member interests have been duly authorized
and validly issued in accordance with the limited liability company agreement of the General Partner (the “GP Operating Agreement”) and are fully paid (to the extent required under the GP Operating Agreement), and nonassessable (except as
such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act).
10. The Contribution Agreement has been
duly authorized, executed and delivered by the Partnership, the General Partner and Reserves and has been duly executed and delivered by Beyer, and each is a valid and legally binding agreement of each such party, enforceable against each such party
in accordance with its terms; the GP Operating Agreement has been duly authorized, executed and delivered by Reserves, and has been duly executed and delivered by Beyer, and is a valid and legally binding agreement of Reserves and Beyer, enforceable
against each of them in accordance with its terms.
11. Except as described in the Registration Statement, the Pricing Prospectus and the
Prospectus, there are no options, warrants, preemptive rights, rights of first refusal or other rights to subscribe for or to purchase any membership interests or partnership interests in any of the Partnership Parties pursuant to any of their
Organizational Documents or any agreement or instrument listed as an exhibit to the Registration Statement. To our knowledge, neither the filing of the Registration Statement nor the offering or sale of the Securities as contemplated by the
Underwriting Agreement gives rise to any rights for or relating to the registration of any Securities or other securities of the Partnership.
12. Except as described in the Registration Statement, the Pricing Prospectus and the Prospectus,
there are no restrictions upon the voting or transfer of any partnership or membership interests in the Partnership Parties pursuant to any of their Organizational Documents or any agreement or instrument listed as an exhibit to the Registration
Statement to which the Partnership or the General Partner is a party.
13. The statements set forth in the Registration Statement, the
Pricing Prospectus and the Prospectus under the captions “Cash Distribution Policy and Restrictions on Distributions,” “How We Make Distributions to Our Partners,” “Description of Common Units,” “The Partnership
Agreement,” “Conflicts of Interest and Fiduciary Duties,” “Units Eligible for Future Sale” and “Investment in Foresight Energy LP by Employee Benefit Plans” insofar as they purport to constitute summaries of the
terms of statutes, rules or regulations, the Delaware LP Act or the Delaware LLC Act or of any specific agreement or instrument, constitute accurate summaries thereof in all material respects. The descriptions of the Securities contained in the
Registration Statement, the Pricing Prospectus and the Prospectus under the captions “Cash Distribution Policy and Restrictions on Distributions,” “How We Make Distributions to Our Partners,” “Description of Common
Units,” “Units Eligible for Future Sale” and “The Partnership Agreement” constitute accurate summaries of the terms of the Securities in all material respects.
14. The opinion letter of Vinson & Elkins L.L.P. that is filed as Exhibit 8.1 to the Registration Statement is confirmed, and the
Underwriters may rely upon such opinion letter as if it were addressed to them.
15. The Partnership is not, and after giving effect to
the offering and sale of the Securities and the application of the proceeds thereof as described in the Registration Statement, the Pricing Prospectus and the Prospectus, will not be, an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended.
16. The Contribution Agreement is in a form legally sufficient as between the parties thereto
to transfer all of the equity interests in Foresight Energy to the Partnership, as described in the Contribution Agreement, subject to the conditions, reservations, encumbrances and limitations described therein.
In rendering the opinions expressed herein, we have:
(a) relied in respect of matters of fact upon representations of the Partnership Parties set forth in the Underwriting
Agreement, certificates of officers and other employees of the Partnership Parties and upon information obtained from public officials;
(b) assumed that all documents submitted to us as originals are authentic, that all copies submitted to us conform to the
originals thereof, and that the signatures on all documents examined by us are genuine;
(c) with respect to opinions expressed above as to valid existence and good
standing, based such opinions upon certificates of good standing by the Secretary of State of the State of Delaware dated as of a date not more than 14 days prior to the date hereof and bring down verbal confirmations by such Secretary of State as
reported to us by [CT Corporation System] as of the date hereof, and we express no conclusions beyond what are stated in such certificates and reports;
(d) with respect to the opinions expressed in paragraphs (4) and (7) above relating to the existence of any Lien for
which a financing statement under the Uniform Commercial Code is on file, relied solely upon our review of reports, dated as of recent dates, prepared by [CT Corporation System], purporting to describe all financing statements on file as of the
dates specified therein in the office of the Secretary of State of the State of Delaware, the Secretary of State of the State of Missouri, or the Secretary of State of the State of
[ ];. and
(e) assumed that, to the extent documents constitute agreements of parties other than the Partnership Parties, Reserves or
Beyer, they are valid and binding obligations of such other parties, enforceable against such other parties in accordance with their terms.
This letter
and the opinions expressed herein are limited to matters governed by the federal laws of the United States of America, the laws of the State of New York, the Delaware LP Act and the Delaware LLC Act, in each case as currently in effect, and we do
not express any opinion as to the law of any other jurisdiction. We do not express any opinion with respect to (a) any permits to own or operate any real or personal property or (b) state or local tax statutes to which any limited partners
of the Partnership Parties may be subject.
This letter and the opinions expressed herein are furnished to you in connection with the transactions
contemplated by the Underwriting Agreement and are solely for the benefit of the Underwriters in connection with such transactions and may not be relied upon by any other person or entity or furnished to anyone else or relied upon for any other
purpose without our prior written consent. This letter speaks as of the date hereof, and we undertake no (and hereby disclaim) obligation to advise you of any events occurring subsequent to the date hereof that might affect any of the matters
covered by any of the opinions expressed herein. Except for the use permitted herein, this letter and the opinions expressed herein are not to be quoted or reproduced in whole or in part or otherwise referred to in any manner nor is this opinion
letter to be filed with any governmental agency or delivered to any other person without our prior written consent.
EXHIBIT C
Form of Opinion of Bailey & Glasser LLP, counsel for the Partnership and
Foresight Energy LLC, to be delivered pursuant to Section 6(b) of the Underwriting
Agreement
[DATE]
Barclays Capital Inc.
Citigroup Global Markets Inc.
Morgan Stanley & Co. LLC
As Representatives of the
several Underwriters,
c/o
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
- and -
Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
We have acted as special counsel to Foresight Energy LP (the “
Partnership
”), Foresight Energy GP LLC (the “
General
Partner
”) and Foresight Energy LLC and its subsidiaries listed on Schedule I (collectively, with the Partnership and the General Partner, the “
Covered Parties
”)
,
in connection with the execution and delivery of the
Underwriting Agreement dated June [
—
], 2014 (the “
Agreement
”), by and among the Covered Parties and Barclays Capital Inc., Morgan Stanley & Co. LLC and Citigroup Global
Markets Inc., as representatives of the several underwriters listed on Schedule I thereto, relating to the issuance and sale by the Partnership of
[ ] common units, each representing a limited partnership interest in the Partnership (the “
Securities
”), and the
related Transaction Documents described on Schedule II to which they are a party (the “
Offer
”).
This opinion is being
furnished to you at the request of the Partnership pursuant to Section 6(b)(iii) of the Agreement. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Agreement.
This opinion is solely for the benefit of and may be relied upon only by you in connection with
the Offer and may not be quoted or relied upon by any other person or entity (a “
Person
”). This opinion may not be relied upon by, nor may copies be delivered to, any other Person or used for any other purpose without our prior
written consent other than disclosure on a non-reliance basis to potential transferees, rating agencies and as required by law.
We are
members of the Bar of the State of West Virginia. Except as expressly set forth in paragraph (b) to the qualifications of this Opinion, we do not hold ourselves out as experts on, nor do we express any opinion as to or with respect to the
applicability of the laws of any jurisdiction other than the laws of the State of West Virginia and the federal laws of the United States (collectively, the “
Opining Jurisdictions
”). As used in this opinion, the terms
“breach,” “default” and “violate” refer to any act or failure that by itself, or with the giving of notice or passage of time, or both, would constitute an event of default or other event empowering another Person, or a
court, to take remedial or other action. Any opinions with respect to the Transaction Documents that are, by contract, to be construed by the law of a jurisdiction other than an Opining Jurisdiction are based on our assumption that the law of the
jurisdiction identified in such Transaction Document is identical in all respect to West Virginia Law.
We express no opinion with respect
to any of the following legal issues: (a) state or federal securities laws or regulations and laws and regulations relating to commodity (and other) futures and indices and other similar instruments; (b) pension and employee benefit laws
and regulations; (c) federal and state antitrust and unfair competition laws and regulations; (d) federal and state laws and regulations concerning filing and notice requirements; (e) fraudulent transfer and fraudulent conveyance
laws; (f) federal and state tax laws and regulations; (g) compliance with fiduciary duty requirements; (h) the statutes, ordinances, administrative decisions, rules and regulations of counties, towns, municipalities and special
political subdivisions, and judicial decisions to the extent they deal with the foregoing; and (i) federal and state labor laws and regulations.
In rendering the opinions set forth herein, we have examined copies of the documents listed on Schedule II (the “
Transaction
Documents
”). In addition to our review of the Transaction Documents, we have reviewed the following: (a) the Certificate of Formation of Foresight Energy LP dated January 26, 2012, as filed with the Delaware Secretary of State and
(b) the Agreement of Limited Partnership of Foresight Energy LP, dated [
—
]. Furthermore, we have reviewed such documents and given consideration to such matters of law and fact as we have
deemed appropriate, in our professional judgment, to render this opinion. We have also relied, without further independent investigation as to certain matters of fact, on information obtained from public officials, from the Partnership and from
other sources believed by us to be responsible.
In rendering the opinions expressed below, we have assumed each of the following:
(a) that no natural person executing any document or instrument, whether on his own behalf or on behalf of any other entity, is under any
disability;
(b) that each of the parties to the Transaction Documents, other than the Covered Parties, has
the power and authority to enter into, execute and deliver and perform the Transaction Documents to which they are a party, and the Transaction Documents have been duly authorized, executed and delivered by, and constitute the valid and binding
obligation, of each of such parties, other than the Covered Parties;
(c) that each party to the transactions called for in the
Transaction Documents (the “
Transactions
”) other than the Covered Parties has complied with all legal requirements pertaining to its status as such status relates to its rights to enforce the terms and provisions contained in the
Transaction Documents, as applicable, with respect to the Covered Parties;
(d) that each document submitted to us for review is accurate
and complete, each such document that is an original is authentic, each such document that is a copy conforms to an authentic original, and all signatures other than those on behalf of the Covered Parties on each such document are genuine;
(e) that each certificate issued by a government official concerning a person’s property or status is accurate, complete and authentic
and all official public records (including their proper indexing and filing) are accurate and complete;
(f) that there has not been any
mutual mistake of fact or misunderstanding, fraud, duress or undue influence in connection with the Transactions;
(g) that the conduct of
the parties to the Transactions has complied with any requirement of good faith, fair dealing and conscionability;
(h) that the parties
to the Transactions, including you and any agents for you in connection with the Transactions, have acted in good faith and without notice of any defense against the enforcement of any rights created by, or adverse claim to, any property transferred
as a part of the Transactions;
(i) that all statutes, judicial and administrative decisions, and rules and regulations of governmental
agencies constituting the law of the Opining Jurisdictions are generally available (i.e. in terms of access and distribution following publication or other releases to lawyers practicing in the Opining Jurisdictions) and are in a format which makes
legal research reasonably feasible;
(j) that the constitutionality or validity of a relevant statute, rule, regulation or agency action
is not in issue unless a reported decision in the Opining Jurisdictions has specifically addressed but not resolved, or has established, its unconstitutionality or validity;
(k) that contracts (other than the Transaction Documents) to which the Covered Parties or one of
them is a party or by which its property is bound (each, an “
Other Agreement
”), and court and administrative orders, writs, judgments and decrees (each, a “
Court Order
”), would be enforced as written;
(l) that none of the parties will in the future take any discretionary action (including a decision not to act) permitted under a Transaction
Document that would result in a violation of law or constitute a breach or default under any Other Agreement or Court Orders;
(m) that
the parties will obtain and maintain all permits and governmental approvals required in the future, and take all actions similarly required, relevant to the subsequent consummation of the Transactions or performance of the obligations set forth in
the Transaction Documents;
(n) that all requisite governmental and regulatory approvals and consents for the execution, delivery and
performance of the Transaction Documents by all parties other than the Covered Parties have been obtained; and
(o) that all terms and
conditions of, or relating to, the transactions contemplated by the Transaction Documents are correctly and completely embodied in the Transaction Documents and that there are no agreements or understandings among the parties or usage of trade or
course of prior dealing among the parties that would, in any case, define, supplement or qualify the terms of any of the Transaction Documents.
Each assumption specifically described in this opinion is made with your express consent and approval. However, in this opinion we have not
relied on information (including certificates or other documentation) or assumptions, otherwise appropriate in the circumstances, if we have knowledge that the information or assumptions are false or if we have knowledge of facts that under the
circumstances would make the reliance unreasonable.
Based upon and subject to the foregoing, and subject to the additional qualifications
stated herein, we are of the opinion that:
(i) except as otherwise disclosed in the Disclosure Package or the Prospectus, there are no
legal or governmental proceedings pending or threatened to which the Partnership, the General Partner, Foresight Energy LLC or any of its subsidiaries is a party which if determined adversely to the Partnership, the General Partner, Foresight Energy
LLC or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.
(j) each of the Partnership,
Foresight Energy LLC and each of the Subsidiaries owns or leases all such properties as are necessary to the conduct of its operations as presently conducted, except as set forth in or contemplated in the Disclosure Package and the Prospectus
(exclusive of any amendment or supplement thereto) or as would not reasonably be expected to have a Material Adverse Effect.
(k) none of (i) the execution, delivery and performance of the Agreement by each of the
Partnership, the General Partner and Foresight Energy LLC, (ii) the issuance and sale by the Partnership of the Securities, (iii) the consummation of the IPO Reorganization and any of the transactions contemplated by the Agreement or
(iv) the fulfillment or the performance of the terms of the Agreement, will result in a breach or violation of or constitute a default under (nor constitute any event which with notice, lapse of time, or both, would constitute a breach of or
default under), any provisions of (A) the Organizational Documents of any of the Partnership, the General Partner or Foresight Energy LLC, (B) any provisions of any contract or agreement listed as an exhibit in the Disclosure Package or
the Prospectus (except that in making such determination under this clause (B), such counsel may rely upon management’s representations of its calculations with respect to financial covenants, ratios or financial tests or any aspect of the
financial condition, financial reporting or results of operations of the Partnership, the General Partner or Foresight Energy LLC or any of the Subsidiaries without any obligation of independent review or investigation as to the calculation or
determination of the components included in any such calculation, financial reports or determinations), (C) any Applicable Law or (D) to such counsel’s knowledge, any judgment, order or decree applicable to any of the Covered Parties
of any Governmental Authority, which in the case of clauses (B) or (C) breach or default could reasonably be expected to have a Material Adverse Effect.
(l) the statements in the Disclosure Package or the Prospectus under the headings (i) “Business—Legal Proceedings and
Liabilities”, (ii) “Environmental and other Regulatory Matters,” and (iii) “Certain Relationships and Related Party Transactions” fairly summarize the matters therein described (subject to the qualifications,
exceptions, assumptions and limitations described therein and herein).
The opinions expressed herein are subject to the following
qualifications:
(a) Whenever this opinion is qualified by the phrase “to our knowledge” or “of which we have
knowledge” or similar language with respect to the existence or absence of facts, it is intended to indicate that during the course of our representation as counsel to the Covered Parties in connection with the transactions under the
Transaction Documents, no information has come to the attention of the lawyers within our firm who have devoted substantive attention to the Covered Parties (the “
Primary Lawyer Group
”) which would give us knowledge of the existence
of such facts. In the first sentence of this paragraph, “attention” refers to the conscious awareness of the members of the Primary Lawyer Group after consultation with such other attorneys in the firm and review of such documents in our
possession as they considered appropriate. However, we have not undertaken any independent investigation to determine the existence or absence of such facts, and any limited inquiry undertaken by us during the preparation of this Opinion should not
be regarded as such an investigation and no inference as to our knowledge of the existence or absence of such facts should be drawn from our representation of the Covered Parties. No inquiry has been made of lawyers within this firm other than the
Primary Lawyer Group. We have not made any investigation of the records of any governmental or arbitral body or authority to determine the existence of any legal or administrative proceedings or any contracts, agreements, judgments, decrees or
orders binding on the Covered Parties or any of their properties, which would or could alter any of the statements or opinions set forth herein.
(b) All opinions expressed herein are limited to the laws of the Opining Jurisdictions, and we do not express any opinion as to the laws of
any other jurisdiction.
This opinion is rendered solely for your benefit and your respective counsel and only as to the
matters specifically set forth herein and may not be relied upon by any other person or entity without our prior written consent.
This
opinion is rendered as of the effective date set forth above, and we express no opinion as to circumstances or events which may occur subsequent to such date and unless we amend or otherwise update this opinion, this opinion shall not apply to any
amendment of or modification to any of the Transaction Documents. We have assumed no obligation to update or to supplement this opinion or to advise you of matters which may subsequently come to our attention.
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Very truly yours,
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BAILEY & GLASSER, LLP
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SCHEDULE I
FORESIGHT ENERGY LLC SUBSIDIARIES
Foresight
Energy Finance Corporation
Foresight Coal Sales LLC
Foresight Energy Services LLC
Foresight International Coal Sales
Limited
Foresight Supply Company LLC
Hillsboro Energy LLC
Macoupin Energy LLC
Oeneus LLC dba Savatran LLC
Sugar Camp Energy, LLC
Williamson Energy, LLC
SCHEDULE II
TRANSACTION DOCUMENTS
Underwriting Agreement
Contribution Agreement
Disclosure Package
[Documents effectuating the IPO Reorganization]
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Form of
Lock-Up
Agreement
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EXHIBIT D
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[Letterhead]
Foresight Energy LP
Public
Offering of Common Units
June 17, 2014
Barclays Capital Inc.
Citigroup Global Markets Inc.
Morgan Stanley & Co. LLC
As Representatives of the
several Underwriters,
c/o
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
- and -
Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed Underwriting Agreement (the “Underwriting Agreement”), among
Foresight Energy LP, a limited partnership organized under the laws of Delaware (the “Partnership”), Foresight Energy GP LLC, Foresight Energy LLC and each of you as representatives of a group of Underwriters named therein, relating to an
underwritten public offering of common units representing limited partner interests of the Partnership (the “Common Units”).
In
order to induce you and the other Underwriters to enter into the Underwriting Agreement, the undersigned will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge or otherwise dispose of, (or enter
into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the
undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement
with the Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder (the “Exchange Act”) with respect to, any Common Units of the Partnership or
any securities convertible into, or exercisable or exchangeable for such Common Units, or publicly announce an intention to effect any such transaction, for a period of 180 days after the date of the Underwriting Agreement (the “Lock-up
Period”). The foregoing sentence shall not apply to: (a) transfers of Common Units or any security convertible into Common Units acquired in open market transactions after the completion of the offering, provided that no filing under
Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of Common Units, shall be required or shall be voluntarily made during the Lock-up Period in connection with such transfers; and (b) transfers of Common Units
or any security convertible into Common Units: (i) as a bona fide gift or gifts, or by will or intestate succession upon the death of the undersigned, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate
family of the undersigned, (iii) as a distribution or transfer to: (x) limited partners, members, stockholders or affiliates of the undersigned or (y) any corporation, partnership, limited liability company or other entity which
controls the undersigned or to entities under common control with the undersigned; (iv) in connection with the exercise (including cashless exercise) of convertible securities or options to purchase Common Units pursuant to employee benefit
plans on the terms of such plans as described or contemplated in the Preliminary Prospectus used in the road show and the Prospectus; or (v) with the prior written consent of the Representatives where the transferee signs and delivers a lock up
letter substantially in the form of this Lock-up Agreement to the Representatives;
provided
that in the case of any transfer under each of clauses (b) (i), (ii), (iii) and (iv) it shall be a condition to such transfer that
(A) each transferee shall sign and deliver a lock up letter substantially in the form of this Lock-up Agreement to the Representatives; (B) any such transfer shall not involve a disposition for value; and (C) no filing under
Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of Common Units, shall be required or shall be voluntarily made during the Lock-up Period. For purposes of this Lock-up Agreement, “immediate family”
shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. If the undersigned is an officer or director of the Partnership, the undersigned further agrees that the foregoing restrictions shall be equally
applicable to any issuer-Directed Securities of Underwritten Securities the undersigned may purchase in the Offering.
Notwithstanding
anything herein to the contrary, this Lock-up Agreement shall not prevent the undersigned from establishing a written plan meeting the requirements of Rule 10b5–1 (a “10b5–1 Plan”) under the Exchange Act, relating to the sale of
securities of the Partnership;
provided
that the securities subject to such plan may not be sold until after the expiration of the Lock-up Period and provided further that the establishment of such plan will not result in any public filing or
other public announcement of such plan by the undersigned or the Partnership during the Lock-up Period. [Further, this Lock-up Agreement shall not prevent the undersigned from
transferring its Common Units to [Riverstone]
2
(“Riverstone”) in exchange for the redemption of the undersigned’s equity owned
by Riverstone; provided that (a) such transfer shall not occur until after 90 days after the date of the Underwriting Agreement, (b) Riverstone shall sign and deliver a lock up letter substantially in the form of this Lock-up Agreement to
the Representatives and (c) if a filing is required pursuant to Section 16 of the Exchange Act, such filing would state that the transfer was made in connection with the redemption of equity of the undersigned.]
3
If for any reason the Underwriting Agreement shall be terminated prior to the Closing
Date (as defined in the Underwriting Agreement), the agreement set forth above shall likewise be automatically terminated and be of no further effect.
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Yours very truly,
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[Signature of officer, director, Foresight Reserves or the General Partner]
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[Name and address of officer, director, Foresight Reserves or the General Partner]
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2
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NTD: Cahill to provide appropriate legal entity.
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3
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NTD: To be included in Lock-up Agreement signed by Foresight Reserves
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Exhibit 3.1
Execution Version
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
FORESIGHT ENERGY LP
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
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Section 1.1
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Definitions
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1
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Section 1.2
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Construction
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24
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ARTICLE II
ORGANIZATION
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Section 2.1
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Formation
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24
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Section 2.2
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Name
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24
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Section 2.3
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Registered Office; Registered Agent; Principal Office; Other Offices
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25
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Section 2.4
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Purpose and Business
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25
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Section 2.5
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Powers
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25
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Section 2.6
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Term
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25
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Section 2.7
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Title to Partnership Assets
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26
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ARTICLE III
RIGHTS OF LIMITED PARTNERS
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Section 3.1
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Limitation of Liability
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26
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Section 3.2
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Management of Business
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26
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Section 3.3
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Outside Activities of the Limited Partners
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26
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Section 3.4
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Rights of Limited Partners
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27
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ARTICLE IV
CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
REDEMPTION OF PARTNERSHIP INTERESTS
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Section 4.1
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Certificates
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28
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Section 4.2
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Mutilated, Destroyed, Lost or Stolen Certificates
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28
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Section 4.3
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Record Holders
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29
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Section 4.4
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Transfer Generally
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29
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Section 4.5
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Registration and Transfer of Limited Partner Interests
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30
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Section 4.6
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Transfer of the General Partner’s General Partner Interest
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31
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Section 4.7
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Restrictions on Transfers
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31
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Section 4.8
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Eligibility Certificates; Ineligible Holders
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32
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Section 4.9
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Redemption of Partnership Interests of Ineligible Holders
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33
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ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
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Section 5.1
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Organizational Contributions
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34
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Section 5.2
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Contributions by the General Partner and its Affiliates
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35
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Section 5.3
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Contributions by Initial Limited Partners
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35
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Section 5.4
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Interest and Withdrawal
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35
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Section 5.5
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Capital Accounts
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35
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Section 5.6
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Issuances of Additional Partnership Interests and Derivative Instruments
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39
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- i -
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Section 5.7
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Conversion of Subordinated Units
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40
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Section 5.8
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Limited Preemptive Right
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41
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Section 5.9
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Splits and Combinations
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41
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Section 5.10
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Fully Paid and Non-Assessable Nature of Limited Partner Interests
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42
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Section 5.11
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Issuance of Common Units in Connection with Reset of Incentive Distribution Rights
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42
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ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
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|
|
|
|
|
Section 6.1
|
|
Allocations for Capital Account Purposes
|
|
|
44
|
|
|
Section 6.2
|
|
Allocations for Tax Purposes
|
|
|
56
|
|
|
Section 6.3
|
|
Distributions; Characterization of Distributions; Distributions to Record Holders
|
|
|
57
|
|
|
Section 6.4
|
|
Distributions from Operating Surplus
|
|
|
58
|
|
|
Section 6.5
|
|
Distributions from Capital Surplus
|
|
|
60
|
|
|
Section 6.6
|
|
Adjustment of Target Distribution Levels
|
|
|
60
|
|
|
Section 6.7
|
|
Special Provisions Relating to the Holders of Subordinated Units
|
|
|
60
|
|
|
Section 6.8
|
|
Special Provisions Relating to the Holders of IDR Reset Common Units
|
|
|
61
|
|
|
Section 6.9
|
|
Entity-Level Taxation
|
|
|
61
|
|
|
|
|
|
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
|
|
|
|
|
|
|
|
|
|
Section 7.1
|
|
Management
|
|
|
62
|
|
|
Section 7.2
|
|
Replacement of Fiduciary Duties
|
|
|
65
|
|
|
Section 7.3
|
|
Certificate of Limited Partnership
|
|
|
65
|
|
|
Section 7.4
|
|
Restrictions on the General Partner’s Authority
|
|
|
65
|
|
|
Section 7.5
|
|
Reimbursement of the General Partner
|
|
|
65
|
|
|
Section 7.6
|
|
Outside Activities
|
|
|
66
|
|
|
Section 7.7
|
|
Indemnification
|
|
|
67
|
|
|
Section 7.8
|
|
Liability of Indemnitees
|
|
|
69
|
|
|
Section 7.9
|
|
Resolution of Conflicts of Interest; Standards of Conduct and Modification of Duties
|
|
|
70
|
|
|
Section 7.10
|
|
Other Matters Concerning the General Partner
|
|
|
72
|
|
|
Section 7.11
|
|
Purchase or Sale of Partnership Interests
|
|
|
72
|
|
|
Section 7.12
|
|
Registration Rights of the General Partner and its Affiliates
|
|
|
72
|
|
|
Section 7.13
|
|
Reliance by Third Parties
|
|
|
75
|
|
|
|
|
|
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
|
|
|
|
|
|
|
|
|
|
Section 8.1
|
|
Records and Accounting
|
|
|
76
|
|
|
Section 8.2
|
|
Fiscal Year
|
|
|
76
|
|
|
Section 8.3
|
|
Reports
|
|
|
76
|
|
- ii -
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE IX
TAX MATTERS
|
|
|
|
|
|
|
|
|
|
Section 9.1
|
|
Tax Returns and Information
|
|
|
77
|
|
|
Section 9.2
|
|
Tax Elections
|
|
|
77
|
|
|
Section 9.3
|
|
Tax Controversies
|
|
|
77
|
|
|
Section 9.4
|
|
Withholding; Tax Payments
|
|
|
78
|
|
|
|
|
|
ARTICLE X
ADMISSION OF PARTNERS
|
|
|
|
|
|
|
|
|
|
Section 10.1
|
|
Admission of Limited Partners
|
|
|
78
|
|
|
Section 10.2
|
|
Admission of Successor General Partner
|
|
|
79
|
|
|
Section 10.3
|
|
Amendment of Agreement and Certificate of Limited Partnership
|
|
|
79
|
|
|
|
|
|
ARTICLE XI
WITHDRAWAL OR REMOVAL OF PARTNERS
|
|
|
|
|
|
|
|
|
|
Section 11.1
|
|
Withdrawal of the General Partner
|
|
|
79
|
|
|
Section 11.2
|
|
Removal of the General Partner
|
|
|
81
|
|
|
Section 11.3
|
|
Interest of Departing General Partner and Successor General Partner
|
|
|
82
|
|
|
Section 11.4
|
|
Conversion of Subordinated Units
|
|
|
83
|
|
|
Section 11.5
|
|
Withdrawal of Limited Partners
|
|
|
84
|
|
|
|
|
|
ARTICLE XII
DISSOLUTION AND LIQUIDATION
|
|
|
|
|
|
|
|
|
|
Section 12.1
|
|
Dissolution
|
|
|
84
|
|
|
Section 12.2
|
|
Continuation of the Business of the Partnership After Dissolution
|
|
|
84
|
|
|
Section 12.3
|
|
Liquidator
|
|
|
85
|
|
|
Section 12.4
|
|
Liquidation
|
|
|
86
|
|
|
Section 12.5
|
|
Cancellation of Certificate of Limited Partnership
|
|
|
86
|
|
|
Section 12.6
|
|
Return of Contributions
|
|
|
86
|
|
|
Section 12.7
|
|
Waiver of Partition
|
|
|
86
|
|
|
Section 12.8
|
|
Capital Account Restoration
|
|
|
87
|
|
|
|
|
|
ARTICLE XIII
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
|
|
|
|
|
|
|
|
|
|
Section 13.1
|
|
Amendments to be Adopted Solely by the General Partner
|
|
|
87
|
|
|
Section 13.2
|
|
Amendment Procedures
|
|
|
88
|
|
|
Section 13.3
|
|
Amendment Requirements
|
|
|
89
|
|
|
Section 13.4
|
|
Special Meetings
|
|
|
90
|
|
|
Section 13.5
|
|
Notice of a Meeting
|
|
|
90
|
|
|
Section 13.6
|
|
Record Date
|
|
|
90
|
|
|
Section 13.7
|
|
Postponement and Adjournment
|
|
|
91
|
|
|
Section 13.8
|
|
Waiver of Notice; Approval of Meeting; Approval of Minutes
|
|
|
91
|
|
|
Section 13.9
|
|
Quorum and Voting
|
|
|
91
|
|
|
Section 13.10
|
|
Conduct of a Meeting
|
|
|
92
|
|
|
Section 13.11
|
|
Action Without a Meeting
|
|
|
92
|
|
- iii -
|
|
|
|
|
|
|
|
|
Section 13.12
|
|
Right to Vote and Related Matters
|
|
|
93
|
|
|
Section 13.13
|
|
Voting of Incentive Distribution Rights
|
|
|
93
|
|
|
|
|
|
ARTICLE XIV
MERGER OR CONSOLIDATION
|
|
|
|
|
|
|
|
|
|
Section 14.1
|
|
Authority
|
|
|
94
|
|
|
Section 14.2
|
|
Procedure for Merger or Consolidation
|
|
|
94
|
|
|
Section 14.3
|
|
Approval by Limited Partners
|
|
|
95
|
|
|
Section 14.4
|
|
Certificate of Merger
|
|
|
97
|
|
|
Section 14.5
|
|
Effect of Merger or Consolidation
|
|
|
97
|
|
|
|
|
|
ARTICLE XV
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS
|
|
|
|
|
|
|
|
|
|
Section 15.1
|
|
Right to Acquire Limited Partner Interests
|
|
|
98
|
|
|
|
|
|
ARTICLE XVI
GENERAL PROVISIONS
|
|
|
|
|
|
|
|
|
|
Section 16.1
|
|
Addresses and Notices; Written Communications
|
|
|
99
|
|
|
Section 16.2
|
|
Further Action
|
|
|
100
|
|
|
Section 16.3
|
|
Binding Effect
|
|
|
100
|
|
|
Section 16.4
|
|
Integration
|
|
|
100
|
|
|
Section 16.5
|
|
Creditors
|
|
|
100
|
|
|
Section 16.6
|
|
Waiver
|
|
|
100
|
|
|
Section 16.7
|
|
Third-Party Beneficiaries
|
|
|
100
|
|
|
Section 16.8
|
|
Counterparts
|
|
|
100
|
|
|
Section 16.9
|
|
Applicable Law; Forum, Venue and Jurisdiction; Waiver of Trial by Jury
|
|
|
101
|
|
|
Section 16.10
|
|
Invalidity of Provisions
|
|
|
102
|
|
|
Section 16.11
|
|
Consent of Partners
|
|
|
102
|
|
|
Section 16.12
|
|
Facsimile Signatures
|
|
|
102
|
|
- iv -
FIRST AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF FORESIGHT ENERGY LP
THIS FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF FORESIGHT ENERGY LP dated as of June 23, 2014, is entered into by and
between Foresight Energy GP LLC, a Delaware limited liability company, as the General Partner, and Foresight Reserves LP, a Delaware limited partnership, as the Organizational Limited Partner, together with any other Persons who become Partners in
the Partnership or parties hereto as provided herein. In consideration of the covenants, conditions and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1
Definitions
. The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary,
applied to the terms used in this Agreement.
“
Additional Book Basis
” means, with respect to any Adjusted
Property, the portion of the Carrying Value of such Adjusted Property that is attributable to positive adjustments made to such Carrying Value, as determined in accordance with the provisions set forth below in this definition of Additional Book
Basis. For purposes of determining the extent to which Carrying Value constitutes Additional Book Basis:
(a) Any negative
adjustment made to the Carrying Value of an Adjusted Property as a result of either a Book-Down Event or a Book-Up Event shall first be deemed to offset or decrease that portion of the Carrying Value of such Adjusted Property that is attributable to
any prior positive adjustments made thereto pursuant to a Book-Up Event or Book-Down Event.
(b) If Carrying Value that constitutes
Additional Book Basis is reduced as a result of a Book-Down Event (an “
Additional Book Basis Reduction
”) and the Carrying Value of other property is increased as a result of such Book-Down Event (a “
Carrying Value
Increase
”), then any such Carrying Value Increase shall be treated as Additional Book Basis in an amount equal to the lesser of (i) the amount of such Carrying Value Increase and (ii) the amount determined by proportionately
allocating the Carrying Value Increases resulting from such Book-Down Event the lesser of (A) the aggregate Additional Book Basis Reductions resulting from such Book-Down Event and (B) the amount by which the Aggregate Remaining Net
Positive Adjustments after such Book-Down Event exceed the remaining Additional Book Basis attributable to all of the Partnership’s Adjusted Property after such Book-Down Event (determined without regard to the application of this
clause (b) to such Book-Down Event).
“
Additional Book Basis Derivative Items
” means any Book Basis
Derivative Items that are computed with reference to Additional Book Basis. To the extent that the Additional Book Basis attributable to all of the Partnership’s Adjusted Property as of the beginning of any taxable period exceeds the Aggregate
Remaining Net Positive Adjustments as of the beginning of such period (the “
Excess Additional Book Basis
”), the Additional Book Basis Derivative Items for
F
ORESIGHT
E
NERGY
LP
F
IRST
A
MENDED
AND
R
ESTATED
A
GREEMENT
OF
L
IMITED
P
ARTNERSHIP
1
such period shall be reduced by the amount that bears the same ratio to the amount of Additional Book Basis Derivative Items determined without regard to this sentence as the Excess
Additional Book Basis bears to the Additional Book Basis as of the beginning of such period. With respect to a Disposed of Adjusted Property, the Additional Book Basis Derivative Items shall be the amount of Additional Book Basis taken into account
in computing gain or loss from the disposition of such Disposed of Adjusted Property;
provided
that the provisions of the immediately preceding sentence shall apply to the determination of the Additional Book Basis Derivative Items
attributable to Disposed of Adjusted Property.
“
Adjusted Capital Account
” means, with respect to any
Partner, the balance in such Partner’s Capital Account at the end of each taxable period of the Partnership, after giving effect to the following adjustments:
(a) Credit to such Capital Account any amounts which such Partner is (x) obligated to restore under the standards set by Treasury
Regulation Section 1.704-1(b)(2)(ii)(c) or (y) deemed obligated to restore pursuant to the penultimate sentences of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) Debit to such Capital Account the items described in Treasury Regulation 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). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The “Adjusted
Capital Account” of a Partner in respect of any Partnership Interest shall be the amount that such Adjusted Capital Account would be if such Partnership Interest were the only interest in the Partnership held by such Partner from and after the
date on which such Partnership Interest was first issued.
“
Adjusted Operating Surplus
” means, with respect to any
period, (a) Operating Surplus generated with respect to such period; (b) less (i) the amount of any net increase during such period in Working Capital Borrowings (or the Partnership’s proportionate share of any net increase in
Working Capital Borrowings in the case of Subsidiaries that are not wholly owned); and (ii) the amount of any net decrease during such period in cash reserves (or the Partnership’s proportionate share of any net decrease in cash reserves
in the case of Subsidiaries that are not wholly owned) for Operating Expenditures not relating to an Operating Expenditure made during such period; and (c) plus (i) the amount of any net decrease during such period in Working Capital
Borrowings (or the Partnership’s proportionate share of any net decrease in Working Capital Borrowings in the case of Subsidiaries that are not wholly owned); (ii) the amount of any net increase during such period in cash reserves (or the
Partnership’s proportionate share of any net increase in cash reserves in the case of Subsidiaries that are not wholly owned) for Operating Expenditures required by any debt instrument for the repayment of principal, interest or premium; and
(iii) the amount of any net decrease made in subsequent periods in cash reserves for Operating Expenditures initially established during such period to the extent such decrease results in a reduction in Adjusted Operating Surplus in subsequent
periods pursuant to clause (b)(ii) above. Adjusted Operating Surplus does not include that portion of Operating
F
ORESIGHT
E
NERGY
LP
F
IRST
A
MENDED
AND
R
ESTATED
A
GREEMENT
OF
L
IMITED
P
ARTNERSHIP
2
Surplus included in clause (a)(i) of the definition of Operating Surplus. To the extent that disbursements made, cash received or cash reserves established, increased or reduced after the
end of a period are included in the determination of Operating Surplus for such period (as contemplated by the proviso in the definition of “Operating Surplus”) such disbursements, cash receipts and changes in cash reserves shall be deemed
to have occurred in such period (and not in any future period) for purposes of calculating increases or decreases in Working Capital Borrowings or cash reserves during such period.
“
Adjusted Property
” means any property the Carrying Value of which has been adjusted pursuant to Section 5.5(d).
“
Affiliate
” means, with respect to any Person, any other Person that directly or indirectly through one or
more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“
Aggregate Quantity of IDR Reset Common Units
” is defined in Section 5.11(a).
“
Aggregate Remaining Net Positive Adjustments
” means, as of the end of any taxable period, the sum of the Remaining
Net Positive Adjustments of all the Partners.
“
Agreed Allocation
” means any allocation, other than a
Required Allocation, of an item of income, gain, loss or deduction pursuant to the provisions of Section 6.1, including a Curative Allocation (if appropriate to the context in which the term “Agreed Allocation” is used).
“
Agreed Value
” of (a) a Contributed Property means the fair market value of such property at the time of
contribution and (b) an Adjusted Property means the fair market value of such Adjusted Property on the date of the Revaluation Event, in each case as determined by the General Partner.
“
Agreement
” means this First Amended and Restated Agreement of Limited Partnership of Foresight Energy LP, as it may
be amended, supplemented or restated from time to time.
“
Associate
” means, when used to indicate a
relationship with any Person, (a) any corporation or organization of which such Person is a director, officer, manager, general partner or managing member or is, directly or indirectly, the owner of 20% or more of any class of voting stock or
other voting interest; (b) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such
Person, or any relative of such spouse, who has the same principal residence as such Person.
“
Bad Faith
”
means, with respect to any determination, action or omission, of any Person, board or committee, that such Person, board or committee reached such determination, or engaged in or failed to engage in such act or omission, with the belief that such
determination, action or omission was adverse to the interest of the Partnership.
F
ORESIGHT
E
NERGY
LP
F
IRST
A
MENDED
AND
R
ESTATED
A
GREEMENT
OF
L
IMITED
P
ARTNERSHIP
3
“
Beyer
” means Michael J. Beyer.
“
Board of Directors
” means the board of directors of the General Partner.
“
Book Basis Derivative Items
” means any item of income, deduction, gain or loss that is computed with reference to the
Carrying Value of an Adjusted Property (e.g., depreciation, depletion, or gain or loss with respect to an Adjusted Property).
“
Book-Down Event
” means a Revaluation Event that gives rise to a Net Termination Loss.
“
Book-Tax Disparity
” means with respect to any item of Contributed Property or Adjusted Property, as of the date of
any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for U.S. federal income tax purposes as of such date. A Partner’s share of the Partnership’s
Book-Tax Disparities in all of its Contributed Property and Adjusted Property will be reflected by the difference between such Partner’s Capital Account balance as maintained pursuant to Section 5.5 and the hypothetical balance of such
Partner’s Capital Account computed as if it had been maintained strictly in accordance with U.S. federal income tax accounting principles.
“
Book-Up Event
” means a Revaluation Event that gives rise to a Net Termination Gain.
“
Business Day
” means Monday through Friday of each week, except that a legal holiday recognized as such by the
government of the United States of America or the State of Missouri shall not be regarded as a Business Day.
“
Capital Account
” means the capital account maintained for a Partner pursuant to Section 5.5. The “Capital
Account” of a Partner in respect of any Partnership Interest shall be the amount that such Capital Account would be if such Partnership Interest were the only interest in the Partnership held by such Partner from and after the date on which
such Partnership Interest was first issued.
“
Capital Contribution
” means any cash, cash equivalents or the
Net Agreed Value of Contributed Property that a Partner contributes to the Partnership or that is contributed or deemed contributed to the Partnership on behalf of a Partner (including, in the case of an underwritten offering of Units, the amount of
any underwriting discounts or commissions).
“
Capital Improvement
” means any (a) addition or improvement to
the assets owned by any Group Member, (b) acquisition (through an asset acquisition, merger, stock acquisition or other form of investment) of existing, or the construction or development of new, assets by any Group Member, or (c) capital
contribution by a Group Member to a Person that is not a Subsidiary of a Group Member, in which a Group Member has, or after such capital contribution
F
ORESIGHT
E
NERGY
LP
F
IRST
A
MENDED
AND
R
ESTATED
A
GREEMENT
OF
L
IMITED
P
ARTNERSHIP
4
will have, an equity interest to fund the Group Member’s pro rata share of the cost of the acquisition of existing, or the construction or development of new or the improvement of existing,
assets, in each case if such addition, improvement, acquisition, construction or development is made to increase the long-term operating capacity or net income of the Partnership Group from the long-term operating capacity or net income of the
Partnership Group, in the case of clauses (a) and (b), or such Person, in the case of clause (c), from that existing immediately prior to such addition, improvement, acquisition or construction.
“
Capital Surplus
” means cash and cash equivalents distributed by the Partnership in excess of Operating Surplus, as
described in Section 6.3(b).
“
Carrying Value
” means (a) with respect to a Contributed Property or an
Adjusted Property, the Agreed Value of such property reduced (but not below zero) by all depreciation, amortization and other cost recovery deductions charged to the Partners’ Capital Accounts in respect of such property, and (b) with
respect to any other Partnership property, the adjusted basis of such property for U.S. federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with
Section 5.5(d) and to reflect changes, additions or other adjustments to the Carrying Value for dispositions and acquisitions of Partnership properties, as deemed appropriate by the General Partner.
“
Cause
” means a court of competent jurisdiction has entered a final, non-appealable judgment finding the General
Partner is liable to the Partnership or any Limited Partner for actual fraud or willful misconduct in its capacity as a general partner of the Partnership.
“
Certificate
” means a certificate in such form (including in global form if permitted by applicable rules and
regulations) as may be adopted by the General Partner, issued by the Partnership evidencing ownership of one or more Partnership Interests. The initial form of certificate approved by the General Partner for Common Units is attached as Exhibit A to
this Agreement.
“
Certificate of Limited Partnership
” means the Certificate of Limited Partnership of the
Partnership filed with the Secretary of State of the State of Delaware as referenced in Section 7.3, as such Certificate of Limited Partnership may be amended, supplemented or restated from time to time.
“
Citizenship Eligibility Trigger
” is defined in Section 4.8(a)(ii).
“
claim
” (as used in Section 7.12(c)) is defined in Section 7.12(c).
“
Closing Date
” means the first date on which Common Units are issued and delivered by the Partnership to the Underwriters
pursuant to the provisions of the Underwriting Agreement. “Closing Price” means, in respect of any class of Limited Partner Interests, as of the date of determination, the last sale price on such day, regular way, or in case no such sale
takes place
F
ORESIGHT
E
NERGY
LP
F
IRST
A
MENDED
AND
R
ESTATED
A
GREEMENT
OF
L
IMITED
P
ARTNERSHIP
5
on such day, the average of the closing bid and asked prices on such day, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the principal National Securities Exchange on which such Limited Partner Interests are listed or admitted to trading or, if such Limited Partner Interests are not listed or admitted to trading on any
National Securities Exchange, the last quoted price on such day or, if not so quoted, the average of the high bid and low asked prices on such day in the over-the-counter market, as reported by the primary reporting system then in use in relation to
such Limited Partner Interests of such class, or, if on any such day such Limited Partner Interests of such class are not quoted by any such organization, the average of the closing bid and asked prices on such day as furnished by a professional
market maker making a market in such Limited Partner Interests of such class selected by the General Partner, or if on any such day no market maker is making a market in such Limited Partner Interests of such class, the fair value of such Limited
Partner Interests on such day as determined by the General Partner.
“
Code
” means the U.S. Internal Revenue Code
of 1986, as amended and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.
“
Combined Interest
” is defined in Section 11.3(a).
“
Commences Commercial Service
,” “
Commenced Commercial Service
” and “
Commencement of
Commercial Service
” means a Capital Improvement or replacement asset is first put into commercial service by a Group Member (or other Person that is not a Subsidiary of a Group Member, as contemplated in the definition of “Capital
Improvement”) following, if applicable, completion of construction, acquisition, development and testing.
“
Commission
” means the United States Securities and Exchange Commission.
“
Common Unit
” means a Partnership Interest having the rights and obligations specified with respect to Common Units in
this Agreement. The term “Common Unit” does not refer to or include any Subordinated Unit prior to its conversion into a Common Unit pursuant to the terms hereof.
“
Common Unit Arrearage
” means, with respect to any Common Unit, whenever issued, with respect to any Quarter wholly
within the Subordination Period, the excess, if any, of (a) the Minimum Quarterly Distribution with respect to a Common Unit in respect of such Quarter over (b) the sum of all cash and cash equivalents distributed with respect to a Common
Unit in respect of such Quarter pursuant to Section 6.4(a)(i).
“
Conflicts Committee
” means a committee of the
Board of Directors composed entirely of one or more directors, each of whom is determined by the Board of Directors, after reasonable inquiry, (a) to not be an officer or employee of the General Partner (b) to not be an officer or employee
of any Affiliate of the General Partner or a director of any Affiliate of the General Partner (other than any Group Member), (c) to not be a holder of any ownership interest in the General Partner or any of its Affiliates, including any Group
Member, that would be likely to
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have an adverse impact on the ability of such director to act in an independent manner with respect to the matter submitted to the Conflicts Committee, other than Common Units and awards that are
granted to such director under the LTIP, and (d) to be independent under the independence standards for directors who serve on an audit committee of a board of directors established by the Securities Exchange Act and the rules and regulations
of the Commission thereunder and by the National Securities Exchange on which any class of Partnership Interests is listed or admitted to trading.
“
Construction Debt
” means debt incurred to fund (a) all or a portion of a Capital Improvement or replacement
asset, (b) interest payments (including periodic net payments under related interest rate swap agreements) and related fees on other Construction Debt or (c) distributions paid in respect of Construction Equity, and incremental Incentive
Distributions in respect thereof.
“
Construction Equity
” means equity issued to fund (a) all or a
portion of a Capital Improvement or replacement asset, (b) interest payments (including periodic net payments under related interest rate swap agreements) and related fees on Construction Debt or (c) distributions paid in respect of
Construction Equity, and incremental Incentive Distributions in respect thereof.
“
Construction Period
”
means the period beginning on the date that a Group Member (or other Person that is not a Subsidiary of a Group Member, as contemplated in the definition of “Capital Improvement”) enters into a binding obligation to commence a Capital
Improvement or replacement asset and ending on the earlier to occur of the date that such Capital Improvement or replacement asset Commences Commercial Service and the date that the Group Member (or other Person that is not a Subsidiary of a Group
Member, as contemplated in the definition of “Capital Improvement”) abandons or disposes of such Capital Improvement or replacement asset.
“
Contributed Property
” means each property, in such form as may be permitted by the Delaware Act, but excluding cash,
contributed to the Partnership. Once the Carrying Value of a Contributed Property is adjusted pursuant to Section 5.5(d), such property shall no longer constitute a Contributed Property, but shall be deemed an Adjusted Property.
“
Contribution Agreement
” means that certain Contribution, Conveyance and Assumption Agreement, dated as of June
10, 2014, among the General Partner, the Partnership, Foresight Reserves and Beyer, together with the additional conveyance documents and instruments contemplated or referenced thereunder, as such may be amended, supplemented or restated from time
to time.
“
Cumulative Common Unit Arrearage
” means, with respect to any Common Unit, whenever issued, and as of
the end of any Quarter, the excess, if any, of (a) the sum of the Common Unit Arrearages with respect to an Initial Common Unit for each of the Quarters wholly within the Subordination Period ending on or before the last day of such Quarter
over (b)
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the sum of any distributions theretofore made pursuant to Section 6.4(a)(ii) and Section 6.5(b) with respect to an Initial Common Unit (including any distributions to be made in respect
of the last of such Quarters).
“
Curative Allocation
” means any allocation of an item of income, gain, deduction,
loss or credit pursuant to the provisions of Section 6.1(d)(xi).
“
Current Market Price
” means, in respect
of any class of Limited Partner Interests, as of the date of determination, the average of the daily Closing Prices per Limited Partner Interest of such class for the 20 consecutive Trading Days immediately prior to such date.
“
Deferred Issuance and Distribution
” means both (a) the issuance by the Partnership of a number of additional
Common Units that is equal to the excess, if any, of (x) 2,625,000 over (y) the aggregate number, if any, of Common Units actually purchased by and issued to the Underwriters pursuant to the Over-Allotment Option on the Option Closing
Date(s), and (b) a reimbursement of preformation capital expenditures in an amount equal to the aggregate amount of cash, if any, contributed by the Underwriters to the Partnership on the Option Closing Date with respect to Common Units issued
by the Partnership upon each exercise of the Over-Allotment Option as described in Section 5.3(b), if any.
“
Delaware Act
” means the Delaware Revised Uniform Limited Partnership Act, 6 Del C. Section 17-101, et seq., as
amended, supplemented or restated from time to time, and any successor to such statute.
“
Departing General
Partner
” means a former General Partner from and after the effective date of any withdrawal or removal of such former General Partner pursuant to Section 11.1 or 11.2.
“
Derivative Instruments
” means options, rights, warrants, appreciation rights, tracking profit and phantom interests
and other derivative instruments (other than equity interests in the Partnership) relating to, convertible into or exchangeable for Partnership Interests.
“
Disposed of Adjusted Property
” is defined in Section 6.1(d)(xiii)(B).
“
Economic Risk of Loss
” has the meaning set forth in Treasury Regulation Section 1.752-2(a).
“
Eligibility Certificate
” is defined in Section 4.8(b).
“
Eligible Holder
” means a Limited Partner whose, or whose owners (a) U.S. federal income tax status or lack of
proof of U.S. federal income tax status does not have and is not reasonably likely to have, as determined by the General Partner, the material adverse effect described in Section 4.8(a)(i) or (b) nationality, citizenship or other related
status does not create and is not reasonably likely to create, as determined by the General Partner, a substantial risk of cancellation or forfeiture as described in Section 4.8(a)(ii).
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“
Estimated Incremental Quarterly Tax Amount
” is defined in Section
6.9.
“
Estimated Maintenance Capital Expenditures
” means an estimate made by the Board of Directors (with
the concurrence of the Conflicts Committee) of the average quarterly Maintenance Capital Expenditures that the Partnership will need to incur over the long term to maintain the operating capacity or net income of the Partnership Group (including the
Partnership’s proportionate share of the average quarterly Maintenance Capital Expenditures of its Subsidiaries that are not wholly owned) existing at the time the estimate is made. The Board of Directors (with the concurrence of the Conflicts
Committee) will be permitted to make such estimate in any manner it determines reasonable. The estimate will be made at least annually and whenever an event occurs that is likely to result in a material adjustment to the amount of future Estimated
Maintenance Capital Expenditures. The Partnership shall disclose to its Partners any change in the amount of Estimated Maintenance Capital Expenditures in its reports made in accordance with Section 8.3 to the extent not previously disclosed.
Any adjustments to Estimated Maintenance Capital Expenditures shall be prospective only.
“
Event Issue
Value
” means, with respect to any Common Unit as of any date of determination, (a) in the case of a Revaluation Event that includes the issuance of Common Units pursuant to a public offering and solely for cash, the price paid for such
Common Units, or (b) in the case of any other Revaluation Event, the Closing Price of the Common Units on the date of such Revaluation Event or, if the General Partner determines that a value for the Common Unit other than such Closing Price
more accurately reflects the Event Issue Value, the value determined by the General Partner.
“
Event of
Withdrawal
” is defined in Section 11.1(a).
“
Excess Additional Book Basis
” is defined in the
definition of Additional Book Basis Derivative Items.
“
Excess Distribution
” is defined in Section
6.1(d)(iii)(A).
“
Excess Distribution Unit
” is defined in Section 6.1(d)(iii)(A).
“
Expansion Capital Expenditures
” means cash expenditures (including transaction expenses) for Capital Improvements,
and shall not include Maintenance Capital Expenditures or Investment Capital Expenditures. Expansion Capital Expenditures shall include interest payments (including periodic net payments under related interest rate swap agreements) and related fees
on Construction Debt to fund Expansion Capital Expenditures and paid in respect of the Construction Period. Where cash expenditures are made in part for Expansion Capital Expenditures and in part for other purposes, the General Partner shall
determine the allocation between the amounts paid for each.
“
Final Subordinated Units
” is defined in
Section 6.1(d)(x)(A).
“
First Liquidation Target Amount
” is defined in Section 6.1(c)(i)(D).
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“
First Target Distribution
” means $0.3881 per Unit per Quarter (or, with respect
to periods of less than a full fiscal quarter, it means the product of such amount multiplied by a fraction of which the numerator is the number of days in such period, and the denominator is the total number of days in such fiscal quarter), subject
to adjustment in accordance with Sections 5.11, 6.6 and Section 6.9.
“
Foresight Reserves
” means Foresight Reserves,
LP, a Delaware limited partnership.
“
Fully Diluted Weighted Average Basis
” means, when calculating the number of
Outstanding Units for any period, the sum of (1) the weighted average number of Outstanding Units during such period plus (2) all Partnership Interests and Derivative Instruments (a) that are convertible into or exercisable or
exchangeable for Units or for which Units are issuable, each case that are senior to or pari passu with the Subordinated Units, (b) whose conversion, exercise or exchange price is less than the Current Market Price on the date of such
calculation, (c) that may be converted into or exercised or exchanged for such Units prior to or during the Quarter immediately following the end of the period for which the calculation is being made without the satisfaction of any contingency
beyond the control of the holder other than the payment of consideration and the compliance with administrative mechanics applicable to such conversion, exercise or exchange and (d) that were not converted into or exercised or exchanged for
such Units during the period for which the calculation is being made;
provided
,
however
, that for purposes of determining the number of Outstanding Units on a Fully Diluted Weighted Average Basis when calculating whether the
Subordination Period has ended or the Subordinated Units are entitled to convert into Common Units pursuant to Section 5.7, such Partnership Interests and Derivative Instruments shall be deemed to have been Outstanding Units only for the four
Quarters that comprise the last four Quarters of the measurement period;
provided
,
further
, that if consideration will be paid to any Group Member in connection with such conversion, exercise or exchange, the number of Units to be
included in such calculation shall be that number equal to the difference between (i) the number of Units issuable upon such conversion, exercise or exchange and (ii) the number of Units that such consideration would purchase at the
Current Market Price.
“
General Partner
” means Foresight Energy GP LLC, a Delaware limited liability company, and its
successors and permitted assigns that are admitted to the Partnership as general partner of the Partnership, in their capacities as general partner of the Partnership (except as the context otherwise requires).
“
General Partner Interest
” means the management and ownership interest of the General Partner in the Partnership (in its
capacity as a general partner and without reference to any Limited Partner Interest held by it) and includes any and all rights, powers and benefits to which the General Partner is entitled as provided in this Agreement, together with all
obligations of the General Partner to comply with the terms and provisions of this Agreement. The General Partner Interest does not include any rights to profits or losses or any rights to receive distributions from operations or upon the
liquidation or winding-up of the Partnership.
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“
Good Faith
” means, with respect to any determination, action or omission, of
any Person, board or committee, that such determination, action or omission was not taken in Bad Faith.
“
Gross Liability
Value
” means, with respect to any Liability of the Partnership described in Treasury Regulation Section 1.752-7(b)(3)(i), the amount of cash that a willing assignor would pay to a willing assignee to assume such Liability in an
arm’s-length transaction.
“
Group
” means two or more Persons that with or through any of their respective Affiliates
or Associates have any contract, arrangement, understanding or relationship for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or consent solicitation
made to 10 or more Persons), exercising investment power or disposing of any Partnership Interests with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, Partnership Interests.
“
Group Member
” means a member of the Partnership Group.
“
Group Member Agreement
” means the partnership agreement of any Group Member, other than the Partnership, that is a limited
or general partnership, the limited liability company agreement of any Group Member that is a limited liability company, the certificate of incorporation and bylaws or similar organizational documents of any Group Member that is a corporation, the
joint venture agreement or similar governing document of any Group Member that is a joint venture and the governing or organizational or similar documents of any other Group Member that is a Person other than a limited or general partnership,
limited liability company, corporation or joint venture, as such may be amended, supplemented or restated from time to time.
“
Hedge Contract
” means any exchange, swap, forward, cap, floor, collar, option or other similar agreement or arrangement
entered into for the purpose of reducing the exposure of the Partnership Group to fluctuations in the price of hydrocarbons, interest rates, basis differentials or currency exchange rates in their operations or financing activities, in each case,
other than for speculative purposes.
“
Holder
” as used in Section 7.12, is defined in Section 7.12(a).
“
IDR Reset Common Unit
” is defined in Section 5.11(a).
“
IDR Reset Election
” is defined in Section 5.11(a).
“
Incentive Distribution Right
” means a Limited Partner Interest having the rights and obligations specified with respect to
Incentive Distribution Rights in this Agreement.
“
Incentive Distributions
” means any amount of cash distributed to the
holders of the Incentive Distribution Rights pursuant to Section 6.4.
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“
Incremental Income Taxes
” is defined in Section 6.9.
“
Indemnified Persons
” is defined in Section 7.12(c).
“
Indemnitee
” means (a) any General Partner, (b) any Departing General Partner, (c) any Person who is or was an
Affiliate of the General Partner or any Departing General Partner, (d) any Person who is or was a manager, managing member, general partner, director, officer, fiduciary or trustee of any Group Member, a General Partner, any Departing General
Partner or any of their respective Affiliates, (e) any Person who is or was serving at the request of a General Partner, any Departing General Partner or any of their respective Affiliates as an officer, director, manager, managing member,
general partner, fiduciary or trustee of another Person owing a fiduciary or similar duty to any Group Member;
provided
that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or
custodial services, (f) any Person who controls a General Partner or Departing General Partner and (g) any Person the General Partner designates as an “Indemnitee” for purposes of this Agreement because such Person’s
service, status or relationship exposes such Person to potential claims, demands, actions, suits or proceedings relating to the Partnership Group’s business and affairs.
“
Ineligible Holder
” is defined in Section 4.8(c).
“
Initial Common Units
” means the Common Units sold in the Initial Offering.
“
Initial Limited Partners
” means the Organizational Limited Partner (with respect to the Common Units and Subordinated Units
received by it as described in Section 5.2), the General Partner (with respect to the Incentive Distribution Rights), Beyer and the Underwriters, in each case upon being admitted to the Partnership in accordance with Section 10.1.
“
Initial Offering
” means the initial offering and sale of Common Units to the public, as described in the Registration
Statement, including any offer and sale of Common Units pursuant to the exercise of the Over-Allotment Option.
“
Initial Unit
Price
” means (a) with respect to the Common Units and the Subordinated Units, the initial public offering price per Common Unit at which the Underwriters first offered the Common Units to the public for sale as set forth on the cover
page of the prospectus included as part of the Registration Statement and first issued at or after the time the Registration Statement first became effective or (b) with respect to any other class or series of Units, the price per Unit at which
such class or series of Units is initially sold by the Partnership, as determined by the General Partner, in each case adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision or combination of
Units.
“
Interim Capital Transactions
” means the following transactions if they occur prior to the Liquidation Date:
(a) borrowings, refinancings or refundings of indebtedness (other than Working Capital Borrowings and other than for items purchased on open account or for a deferred purchase price in the ordinary course of business) by any Group Member and
sales of debt securities of any Group Member; (b) sales of equity interests of any Group Member
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(including the Common Units sold to the Underwriters pursuant to the Underwriting Agreement); and (c) sales or other dispositions of any assets of any Group Member other than (i) sales
or other dispositions of inventory, accounts receivable and other assets in the ordinary course of business, and (ii) sales or other dispositions of assets as part of normal retirements or replacements.
“
Investment Capital Expenditures
” means capital expenditures other than Maintenance Capital Expenditures and Expansion
Capital Expenditures.
“
Liability
” means any liability or obligation of any nature, whether accrued, contingent or
otherwise.
“
Limited Partner
” means, unless the context otherwise requires, each Initial Limited Partner, each additional
Person that becomes a Limited Partner pursuant to the terms of this Agreement and any Departing General Partner upon the change of its status from General Partner to Limited Partner pursuant to Section 11.3, in each case, in such Person’s
capacity as a limited partner of the Partnership.
“
Limited Partner Interest
” means the ownership interest of a Limited
Partner in the Partnership, which may be evidenced by Common Units, Subordinated Units, Incentive Distribution Rights or other Partnership Interests or a combination thereof or interest therein, and includes any and all benefits to which such
Limited Partner is entitled as provided in this Agreement, together with all obligations of such Limited Partner hereunder.
“
Liquidation Date
” means (a) in the case of an event giving rise to the dissolution of the Partnership of the type
described in clauses (a) and (b) of the first sentence of Section 12.2, the date on which the applicable time period during which the holders of Outstanding Units have the right to elect to continue the business of the Partnership has
expired without such an election being made, and (b) in the case of any other event giving rise to the dissolution of the Partnership, the date on which such event occurs.
“
Liquidator
” means one or more Persons selected by the General Partner to perform the functions described in
Section 12.4 as liquidating trustee of the Partnership within the meaning of the Delaware Act.
“
LTIP
” means benefit
plans, programs and practices adopted by the General Partner pursuant to Section 7.5(c).
“
Maintenance Capital
Expenditures
” means cash expenditures (including expenditures for the addition or improvement to or replacement of the assets owned by any Group Member or for the acquisition of existing, or the construction or development of new, assets)
made to maintain the long-term operating capacity or net income of the Partnership Group. Maintenance Capital Expenditures shall include interest payments (including periodic net payments under related interest rate swap agreements) on Construction
Debt to fund replacement assets and paid in respect of the Construction Period and the amount of cash distributions paid in respect of Construction Equity to fund replacement assets (and incremental Incentive Distributions in respect thereof) and
paid in respect of the Construction Period.
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“
Merger Agreement
” is defined in Section 14.1.
“
Minimum Quarterly Distribution
” means $0.3375 per Unit per Quarter (or with respect to periods of less than a full fiscal
quarter, it means the product of such amount multiplied by a fraction of which the numerator is the number of days in such period and the denominator is the total number of days in such fiscal quarter), subject to adjustment in accordance with
Sections 5.11, 6.6 and 6.9.
“
National Securities Exchange
” means an exchange registered with the Commission under
Section 6(a) of the Securities Exchange Act (or any successor to such Section) and any other securities exchange (whether or not registered with the Commission under Section 6(a) (or successor to such Section) of the Securities Exchange
Act) that the General Partner shall designate as a National Securities Exchange for purposes of this Agreement.
“
Net Agreed
Value
” means, (a) in the case of any Contributed Property, the Agreed Value of such property reduced by any Liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed and
(b) in the case of any property distributed to a Partner by the Partnership, the Partnership’s Carrying Value of such property (as adjusted pursuant to Section 5.5(d)(ii)) at the time such property is distributed, reduced by any
Liabilities either assumed by such Partner upon such distribution or to which such property is subject at the time of distribution.
“
Net Income
” means, for any taxable period, the excess, if any, of the Partnership’s items of income and gain (other
than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable period over the Partnership’s items of loss and deduction (other than those items taken into account in the computation of
Net Termination Gain or Net Termination Loss) for such taxable period. The items included in the calculation of Net Income shall be determined in accordance with Section 5.5 and shall not include any items specially allocated under
Section 6.1(d);
provided
, that the determination of the items that have been specially allocated under Section 6.1(d) shall be made without regard to any reversal of such items under Section 6.1(d)(xiii).
“
Net Loss
” means, for any taxable period, the excess, if any, of the Partnership’s items of loss and deduction (other
than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable period over the Partnership’s items of income and gain (other than those items taken into account in the computation of Net
Termination Gain or Net Termination Loss) for such taxable period. The items included in the calculation of Net Loss shall be determined in accordance with Section 5.5 and shall not include any items specially allocated under
Section 6.1(d);
provided
, that the determination of the items that have been specially allocated under Section 6.1(d) shall be made without regard to any reversal of such items under Section 6.1(d)(xiii).
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“
Net Positive Adjustments
” means, with respect to any Partner, the excess, if
any, of the total positive adjustments over the total negative adjustments made to the Capital Account of such Partner pursuant to Book-Up Events and Book-Down Events.
“
Net Termination Gain
” means, for any taxable period, (a) the sum, if positive, of all items of income, gain, loss or
deduction (determined in accordance with Section 5.5) that are recognized (i) after the Liquidation Date or (ii) upon the sale, exchange or other disposition of all or substantially all of the assets of the Partnership Group, taken as
a whole, in a single transaction or a series of related transactions (excluding any disposition to a member of the Partnership Group), or (b) the excess, if any, of the aggregate amount of Unrealized Gain over the aggregate amount of Unrealized
Loss deemed recognized by the Partnership pursuant to Section 5.5(d) on the date of a Revaluation Event;
provided
,
however
, the items included in the determination of Net Termination Gain shall not include any items of income,
gain or loss specially allocated under Section 6.1(d).
“
Net Termination Loss
” means, for any taxable period,
(a) the sum, if negative, of all items of income, gain, loss or deduction (determined in accordance with Section 5.5) that are recognized (i) after the Liquidation Date or (ii) upon the sale, exchange or other disposition of all
or substantially all of the assets of the Partnership Group, taken as a whole, in a single transaction or a series of related transactions (excluding any disposition to a member of the Partnership Group), or (b) the excess, if any, of the
aggregate amount of Unrealized Loss over the aggregate amount of Unrealized Gain deemed recognized by the Partnership pursuant to Section 5.5(d)on the date of a Revaluation Event;
provided
,
however
, items included in the
determination of Net Termination Loss shall not include any items of income, gain or loss specially allocated under Section 6.1(d).
“
Noncompensatory Option
” has the meaning set forth in Treasury Regulation Section 1.721-2(f).
“
Nonrecourse Built-in Gain
” means with respect to any Contributed Properties or Adjusted Properties that are subject to a
mortgage or pledge securing a Nonrecourse Liability, the amount of any taxable gain that would be allocated to the Partners pursuant to Section 6.2(b) if such properties were disposed of in a taxable transaction in full satisfaction of such
liabilities and for no other consideration.
“
Nonrecourse Deductions
” means any and all items of loss, deduction or
expenditure (including any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(b), are attributable to a Nonrecourse Liability.
“
Nonrecourse Liability
” has the meaning set forth in Treasury Regulation Section 1.752-1(a)(2).
“
Notice of Election to Purchase
” is defined in Section 15.1(b).
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“
Operating Expenditures
” means all Partnership Group cash expenditures (or the
Partnership’s proportionate share of expenditures in the case of Subsidiaries that are not wholly owned), including taxes, reimbursements of expenses of the General Partner and its Affiliates, payments made under any Hedge Contracts, officer
compensation, repayment of Working Capital Borrowings, interest and principal payments on indebtedness and Estimated Maintenance Capital Expenditures, subject to the following:
(a) repayments of Working Capital Borrowings deducted from Operating Surplus pursuant to clause (b)(iii) of the definition of
“Operating Surplus” shall not constitute Operating Expenditures when actually repaid;
(b) payments (including prepayments and
prepayment penalties and the purchase price of indebtedness that is repurchased and cancelled) of principal of and premium on indebtedness other than Working Capital Borrowings shall not constitute Operating Expenditures;
(c) Operating Expenditures shall not include (i) Expansion Capital Expenditures, (ii) actual Maintenance Capital Expenditures,
(iii) Investment Capital Expenditures, (iv) payment of transaction expenses (including taxes) relating to Interim Capital Transactions, (v) distributions to Partners or (vi) repurchases of Partnership Interests, other than
repurchases of Partnership Interests to satisfy obligations under employee benefit plans, or reimbursements of expenses of the General Partner for such purchases. Where cash expenditures are made in part for Maintenance Capital Expenditures and in
part for other purposes, the General Partner shall determine the allocation between the amounts paid for each; and
(d) (i) payments
made in connection with the initial purchase of any Hedge Contract shall be amortized over the life of such Hedge Contract and (ii) payments made in connection with the termination of any Hedge Contract prior to its scheduled settlement or
termination date shall be included in equal quarterly installments over what would have been the remaining scheduled term of such Hedge Contract had it not been so terminated.
“
Operating Surplus
” means, with respect to any period ending prior to the Liquidation Date, on a cumulative basis and without
duplication,
(a) the sum of (i) $125 million, (ii) all cash receipts of the Partnership Group (or the Partnership’s
proportionate share of cash receipts in the case of Subsidiaries that are not wholly owned) for the period beginning on the Closing Date and ending on the last day of such period, but excluding cash receipts from Interim Capital Transactions and
provided that cash receipts from the termination of any Hedge Contract prior to its scheduled settlement or termination date shall be included in equal quarterly installments over what would have been the remaining scheduled life of such Hedge
Contract had it not been so terminated and (iii) the amount of cash distributions paid in respect of Construction Equity to fund Expansion Capital Expenditures (and incremental Incentive Distributions in respect thereof) and paid in respect of
the Construction Period, less
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(b) the sum of (i) Operating Expenditures for the period beginning on the Closing Date and
ending on the last day of such period; (ii) the amount of cash reserves established by the General Partner (or the Partnership’s proportionate share of cash reserves in the case of Subsidiaries that are not wholly owned) to provide funds
for future Operating Expenditures; (iii) all Working Capital Borrowings not repaid within twelve (12) months after having been incurred, or repaid within such twelve month period with the proceeds of additional Working Capital Borrowings
and (iv) any cash loss realized on disposition of an Investment Capital Expenditure;
provided
,
however
, that disbursements made
(including contributions to a Group Member or disbursements on behalf of a Group Member), cash received or cash reserves established, increased or reduced after the end of such period but on or before the date on which cash or cash equivalents will
be distributed with respect to such period shall be deemed to have been made, received, established, increased or reduced, for purposes of determining Operating Surplus, within such period if the General Partner so determines.
Notwithstanding the foregoing, (x) “Operating Surplus” with respect to the Quarter in which the Liquidation Date occurs and any
subsequent Quarter shall equal zero; and (y) cash receipts from an Investment Capital Expenditure shall be treated as cash receipts only to the extent they are a return on principal, but in no event shall a return of principal be treated as
cash receipts.
“
Opinion of Counsel
” means a written opinion of counsel (who may be regular counsel to the Partnership or
the General Partner or any of its Affiliates) acceptable to the General Partner.
“
Option Closing Date
” means the date or
dates on which any Common Units are sold by the Partnership to the Underwriters upon exercise of the Over-Allotment Option.
“
Organizational Limited Partner
” means Foresight Reserves, in its capacity as the organizational limited partner of the
Partnership pursuant to this Agreement.
“
Outstanding
” means, with respect to Partnership Interests, all Partnership
Interests that are issued by the Partnership and reflected as outstanding on the Partnership’s books and records as of the date of determination;
provided
,
however
, that if at any time any Person or Group (other than the General
Partner or its Affiliates) beneficially owns 20% or more of the Partnership Interests of any class, none of the Partnership Interests owned by such Person or Group shall be entitled to be voted on any matter or be considered to be Outstanding when
sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for other similar purposes under this Agreement, except that Partnership
Interests so owned shall be considered to be Outstanding for purposes of Section 11.1(b)(iv) (such Partnership Interests shall not, however, be treated as a separate class of Partnership Interests for purposes of this Agreement or the Delaware
Act);
provided
,
further
, that the foregoing limitation shall not apply to (i) any Person or Group who acquired 20% or more of the Partnership Interests of any class directly from the General Partner
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or its Affiliates (other than the Partnership), (ii) any Person or Group who acquired 20% or more of the Partnership Interests of any class directly or indirectly from a Person or Group
described in clause (i) provided that the General Partner shall have notified such Person or Group in writing that such limitation shall not apply, or (iii) any Person or Group who acquired 20% or more of any Partnership Interests issued
by the Partnership provided that the General Partner shall have notified such Person or Group in writing that such limitation shall not apply.
“
Over-Allotment Option
” means the over-allotment option granted to the Underwriters by the Partnership pursuant to the
Underwriting Agreement.
“
Partner Nonrecourse Debt
” has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(4).
“
Partner Nonrecourse Debt Minimum Gain
” has the meaning set forth in Treasury Regulation
Section 1.704-2(i)(2).
“
Partner Nonrecourse Deductions
” means any and all items of loss, deduction or expenditure
(including any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(i), are attributable to a Partner Nonrecourse Debt.
“
Partners
” means the General Partner and the Limited Partners.
“
Partnership
” means Foresight Energy LP, a Delaware limited partnership.
“
Partnership Group
” means, collectively, the Partnership and its Subsidiaries.
“
Partnership Interest
” means any class or series of equity interest (or, in the case of the General Partner, management
interest) in the Partnership, which shall include any General Partner Interest and Limited Partner Interests but shall exclude all Derivative Instruments.
“
Partnership Minimum Gain
” means that amount determined in accordance with the principles of Treasury Regulation
Sections 1.704-2(b)(2) and 1.704-2(d).
“
Percentage Interest
” means as of any date of determination and as to any
Unitholder with respect to Units, the quotient obtained by dividing (a) the number of Units held by such Unitholder by (b) the total number of Outstanding Units. The Percentage Interest with respect to an Incentive Distribution Right shall
at all times be zero. The Percentage Interest with respect to the General Partner Interest shall at all times be zero.
“
Person
” means an individual or a corporation, firm, limited liability company, partnership, joint venture, trust,
unincorporated organization, association, government agency or political subdivision thereof or other entity.
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“
Per Unit Capital Amount
” means, as of any date of determination, the Capital
Account, stated on a per Unit basis, underlying any class of Units held by a Person other than the General Partner or any Affiliate of the General Partner who holds Units.
“
Privately Placed Units
” means any Common Units issued for cash or property other than pursuant to a public offering.
“
Pro Rata
” means (a) when used with respect to Units or any class thereof, apportioned among all designated Units in
accordance with their relative Percentage Interests, (b) when used with respect to Partners or Record Holders, apportioned among all Partners or Record Holders in accordance with their relative Percentage Interests and (c) when used with
respect to holders of Incentive Distribution Rights, apportioned among all holders of Incentive Distribution Rights in accordance with the relative number or percentage of Incentive Distribution Rights held by each such holder.
“
Purchase Date
” means the date determined by the General Partner as the date for purchase of all Outstanding Limited Partner
Interests of a certain class (other than Limited Partner Interests owned by the General Partner and its Affiliates) pursuant to Article XV.
“
Quarter
” means, unless the context requires otherwise, a fiscal quarter of the Partnership, or, with respect to the fiscal
quarter of the Partnership in which the Closing Date occurs, the portion of such fiscal quarter after the Closing Date.
“
Rate
Eligibility Trigger
” is defined in Section 4.8(a)(i).
“
Recapture Income
” means any gain recognized by the
Partnership (computed without regard to any adjustment required by Section 734 or Section 743 of the Code) upon the disposition of any property or asset of the Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such property or asset.
“
Record Date
” means the
date established by the General Partner or otherwise in accordance with this Agreement for determining (a) the identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited Partners or entitled to vote by ballot or
give approval of Partnership action in writing without a meeting or entitled to exercise rights in respect of any lawful action of Limited Partners or (b) the identity of Record Holders entitled to receive any report or distribution or to
participate in any offer.
“
Record Holder
” means (a) with respect to any class of Partnership Interests for which a
Transfer Agent has been appointed, the Person in whose name a Partnership Interest of such class is registered on the books of the Transfer Agent as of the closing of business on a particular Business Day, or (b) with respect to other classes
of Partnership Interests, the Person in whose name any such other Partnership Interest is registered on the books that the General Partner has caused to be kept as of the closing of business on such Business Day.
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“
Redeemable Interests
” means any Partnership Interests for which a redemption
notice has been given, and has not been withdrawn, pursuant to Section 4.9.
“
Registration Statement
” means the
Registration Statement on Form S-1 (Registration No. 333-179304) as it has been or as it may be amended or supplemented from time to time, filed by the Partnership with the Commission under the Securities Act to register the offering and sale
of the Common Units in the Initial Offering.
“
Remaining Net Positive Adjustments
” means as of the end of any taxable
period, (a) with respect to the Unitholders, the excess of (i) the Net Positive Adjustments of the Unitholders as of the end of such period over (ii) the sum of those Unitholders’ Share of Additional Book Basis Derivative Items
for each prior taxable period, and (b) with respect to the holders of Incentive Distribution Rights, the excess of (x) the Net Positive Adjustments of the holders of Incentive Distribution Rights as of the end of such period over
(y) the sum of the Share of Additional Book Basis Derivative Items of the holders of the Incentive Distribution Rights for each prior taxable period.
“
Required Allocations
” means any allocation of an item of income, gain, loss or deduction pursuant to Section 6.1(d)(i),
Section 6.1(d)(ii), Section 6.1(d)(iv), Section 6.1(d)(v), Section 6.1(d)(vi), Section 6.1(d)(vii) or Section 6.1(d)(ix).
“
Reset MQD
” is defined in Section 5.11(a).
“
Reset Notice
” is defined in Section 5.11(b).
“
Revaluation Event
” means an event that results in adjustment of the Carrying Value of each Partnership property pursuant to
Section 5.5(d).
“
Second Liquidation Target Amount
” is defined in Section 6.1(c)(i)(E).
“
Second Target Distribution
” means $ 0.4219 per Unit per Quarter (or, with respect to periods of less than a full fiscal
quarter, it means the product of such amount multiplied by a fraction of which the numerator is the number of days in such period, and the denominator is the total number of days in such fiscal quarter), subject to adjustment in accordance with
Sections 5.11, 6.6 and 6.9.
“
Securities Act
” means the Securities Act of 1933, as amended, supplemented or restated
from time to time and any successor to such statute.
“
Securities Exchange Act
” means the Securities Exchange Act of
1934, as amended, supplemented or restated from time to time and any successor to such statute.
“
Share of Additional Book Basis
Derivative Items
” means in connection with any allocation of Additional Book Basis Derivative Items for any taxable period, (a) with respect to the Unitholders, the amount that bears the same ratio to such Additional Book Basis
Derivative
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Items as the Unitholders’ Remaining Net Positive Adjustments as of the end of such taxable period bears to the Aggregate Remaining Net Positive Adjustments as of that time, and (b) with
respect to the holders of Incentive Distribution Rights, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Remaining Net Positive Adjustments of the holders of the Incentive Distribution Rights as of the end
of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time.
“
Special Approval
” means
approval by a majority of the members of the Conflicts Committee or, if the Conflicts Committee has only one member, the sole member of the Conflicts Committee.
“
Subordinated Unit
” means a Partnership Interest having the rights and obligations specified with respect to Subordinated
Units in this Agreement. The term “Subordinated Unit” does not refer to or include a Common Unit. A Subordinated Unit that is convertible into a Common Unit shall not constitute a Common Unit until such conversion occurs.
“
Subordination Period
” means the period commencing on the Closing Date and ending on the first to occur of the following
dates:
(a) the first Business Day following the distribution pursuant to Section 6.3(a) in respect of any Quarter beginning with the
Quarter ending March 31, 2017 in respect of which (i) (A) aggregate distributions from Operating Surplus on the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of
distribution to the Subordinated Units, in each case with respect to each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all
Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units, in each case in respect of such periods and (B) the Adjusted Operating Surplus for each
of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and any other Units that are senior or
equal in right of distribution to the Subordinated Units, in each case that were Outstanding during such periods on a Fully Diluted Weighted Average Basis, and (ii) there are no Cumulative Common Unit Arrearages;
(b) the first Business Day following the distribution pursuant to Section 6.3(a) in respect of any Quarter in respect of which
(i) (A) aggregate distributions from Operating Surplus on the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units, with respect to the
four-Quarter period immediately preceding such date equaled or exceeded 150% of the Minimum Quarterly Distribution on all of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of
distribution to the Subordinated Units, in respect of such period, and (B) the Adjusted Operating Surplus for the four-Quarter period immediately preceding such date equaled or exceeded 150% of the sum of the Minimum
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Quarterly Distribution on all of the Common Units and Subordinated Units and any other Units that are senior or equal in right of distribution to the Subordinated Units, in each case that were
Outstanding during such period on a Fully Diluted Weighted Average Basis and the corresponding Incentive Distributions and (ii) there are no Cumulative Common Unit Arrearages; and
(c) the first date on which there are no longer outstanding any Subordinated Units due to the conversion of Subordinated Units into Common
Units pursuant to Section 5.7 or otherwise.
“
Subsidiary
” means, with respect to any Person, (a) a corporation
of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of
determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general
partner of such partnership, but only if such Person, directly or by one or more Subsidiaries of such Person, or a combination thereof, controls such partnership on the date of determination or (c) any other Person in which such Person, one or
more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.
“
Surviving Business Entity
” is defined in Section 14.2(b)(ii).
“
Target Distribution
” means each of the Minimum Quarterly Distribution, the First Target Distribution, Second Target
Distribution and Third Target Distribution.
“
Third Target Distribution
” means $0.5063 per Unit per Quarter (or, with
respect to periods of less than a full fiscal quarter, it means the product of such amount multiplied by a fraction of which the numerator is the number of days in such period, and the denominator is the total number of days in such fiscal quarter),
subject to adjustment in accordance with Sections 5.11, 6.6 and 6.9.
“
Trading Day
” means a day on which the
principal National Securities Exchange on which the referenced Partnership Interests of any class are listed or admitted to trading is open for the transaction of business or, if such Partnership Interests are not listed or admitted to trading on
any National Securities Exchange, a day on which banking institutions in New York City generally are open.
“
transfer
” is
defined in Section 4.4(a).
“
Transfer Agent
” means such bank, trust company or other Person (including the General
Partner or one of its Affiliates) as may be appointed from time to time by the Partnership to act as registrar and transfer agent for any class of Partnership Interests;
provided
, that if no Transfer Agent is specifically designated for any
class of Partnership Interests, the General Partner shall act in such capacity.
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“
Underwriter
” means each Person named as an underwriter in the Underwriting
Agreement who purchases Common Units pursuant thereto.
“
Underwriting Agreement
” means that certain Underwriting
Agreement, dated as of June 17, 2014, among the Underwriters, the Partnership, the General Partner and the other parties thereto, providing for the purchase of Common Units by the Underwriters.
“
Unit
” means a Partnership Interest that is designated as a “Unit” and shall include Common Units and Subordinated
Units but shall not include (i) the General Partner Interest or (ii) Incentive Distribution Rights.
“
Unitholders
” means the Record Holders of Units.
“
Unit Majority
” means (a) during the Subordination Period, a majority of the Outstanding Common Units (excluding Common
Units whose voting power is, with respect to the subject vote, controlled by the General Partner or its Affiliates), voting as a class, and a majority of the Outstanding Subordinated Units, voting as a class, and (b) after the end of the
Subordination Period, a majority of the Outstanding Common Units.
“
Unpaid MQD
” is defined in Section 6.1(c)(i)(B).
“
Unrealized Gain
” attributable to any item of Partnership property means, as of any date of determination, the excess, if
any, of (a) the fair market value of such property as of such date (as determined under Section 5.5(d)) over (b) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 5.5(d)
as of such date).
“
Unrealized Loss
” attributable to any item of Partnership property means, as of any date of
determination, the excess, if any, of (a) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 5.5(d) as of such date) over (b) the fair market value of such property as of such
date (as determined under Section 5.5(d)).
“
Unrecovered Initial Unit Price
” means at any time, with respect to a Unit,
the Initial Unit Price less the sum of all distributions constituting Capital Surplus theretofore made in respect of an Initial Common Unit and any distributions of cash (or the Net Agreed Value of any distributions in kind) in connection with the
dissolution and liquidation of the Partnership theretofore made in respect of an Initial Common Unit, adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision, or combination of such Units.
“
Unrestricted Person
” means (a) each Indemnitee, (b) each Partner, (c) each Person who is or was a member,
partner, director, officer, employee or agent of any Group Member, a General Partner or any Departing General Partner or any Affiliate of any Group Member, a
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General Partner or any Departing General Partner and (d) any Person the General Partner designates as an “Unrestricted Person” for purposes of this Agreement. “U.S. GAAP”
means United States generally accepted accounting principles, as in effect from time to time, consistently applied.
“
Withdrawal
Opinion of Counsel
” is defined in Section 11.1(b).
“
Working Capital Borrowings
” means borrowings used solely
for working capital purposes or to pay distributions to Partners, made pursuant to a credit facility, commercial paper facility or other similar financing arrangement;
provided
that when incurred it is the intent of the borrower to repay such
borrowings within 12 months from sources other than additional Working Capital Borrowings.
Section 1.2
Construction
. Unless
the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms; (b) references to Articles and Sections refer to Articles and Sections of this Agreement;
(c) the terms “include”, “includes”, “including” and words of like import shall be deemed to be followed by the words “without limitation”; and (d) the terms “hereof”, “herein”
and “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement. The table of contents and headings contained in this Agreement are for reference purposes only, and shall not affect in any way the
meaning or interpretation of this Agreement. The General Partner has the power to construe and interpret this Agreement and to act upon any such construction or interpretation. Any construction or interpretation of this Agreement by the General
Partner and any action taken pursuant thereto and any determination made by the General Partner in good faith shall, in each case, be conclusive and binding on all Record Holders and all other Persons for all purposes.
ARTICLE II
ORGANIZATION
Section 2.1
Formation
. The General Partner and the Organizational Limited Partner have previously formed the Partnership as a
limited partnership pursuant to the provisions of the Delaware Act. This amendment and restatement shall become effective on the date of this Agreement. Except as expressly provided to the contrary in this Agreement, the rights, duties (including
fiduciary duties), liabilities and obligations of the Partners and the administration, dissolution and termination of the Partnership shall be governed by the Delaware Act.
Section 2.2
Name
. The name of the Partnership shall be “Foresight Energy LP.” The Partnership’s business may be
conducted under any other name or names as determined by the General Partner, including the name of the General Partner. The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in
the Partnership’s name where necessary for the purpose of complying with the laws of any jurisdiction that so requires. The General Partner may change the name of the Partnership at any time and from time to time and shall notify the Limited
Partners of such change in the next regular communication to the Limited Partners.
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Section 2.3
Registered Office; Registered Agent; Principal Office; Other Offices
.
Unless and until changed by the General Partner, the registered office of the Partnership in the State of Delaware shall be located at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, and the registered agent for service of process on
the Partnership in the State of Delaware at such registered office shall be Corporation Service Company. The principal office of the Partnership shall be located at 211 North Broadway, Suite 2600, Saint Louis, MO 63102, or such other place as the
General Partner may from time to time designate by notice to the Limited Partners. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner determines to be necessary or
appropriate. The address of the General Partner shall be 211 North Broadway, Suite 2600, Saint Louis, MO 63102, or such other place as the General Partner may from time to time designate by notice to the Limited Partners.
Section 2.4
Purpose and Business
. The purpose and nature of the business to be conducted by the Partnership shall be to
(a) engage directly in, or enter into or form, hold and dispose of any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any business activity that is approved by the General
Partner, in its sole discretion, and that lawfully may be conducted by a limited partnership organized pursuant to the Delaware Act and, in connection therewith, to exercise all of the rights and powers conferred upon the Partnership pursuant to the
agreements relating to such business activity, and (b) do anything necessary or appropriate to the foregoing, including the making of capital contributions or loans to a Group Member;
provided
,
however
, that the General Partner
shall not cause the Partnership to engage, directly or indirectly, in any business activity that the General Partner determines would be reasonably likely to cause the Partnership to be treated as an association taxable as a corporation or otherwise
taxable as an entity for U.S. federal income tax purposes. To the fullest extent permitted by law, the General Partner shall have no duty or obligation to propose or approve, and may, in its sole discretion, decline to propose or approve, the
conduct by the Partnership Group of any business.
Section 2.5
Powers
. The Partnership shall be empowered to do any and all
acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described in Section 2.4 and for the protection and benefit of the Partnership.
Section 2.6
Term
. The term of the Partnership commenced upon the filing of the Certificate of Limited Partnership in accordance
with the Delaware Act and shall continue in existence until the dissolution of the Partnership in accordance with the provisions of Article XII. The existence of the Partnership as a separate legal entity shall continue until the cancellation
of the Certificate of Limited Partnership as provided in the Delaware Act.
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Section 2.7
Title to Partnership Assets
. Title to Partnership assets, whether real,
personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof.
Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner, one or more of its Affiliates or one or more nominees, as the General Partner may determine. The General Partner hereby declares and
warrants that any Partnership assets for which record title is held in the name of the General Partner or one or more of its Affiliates or one or more nominees shall be held by the General Partner or such Affiliate or nominee for the use and benefit
of the Partnership in accordance with the provisions of this Agreement;
provided
,
however
, that the General Partner shall use reasonable efforts to cause record title to such assets (other than those assets in respect of which the
General Partner determines that the expense and difficulty of conveyancing makes transfer of record title to the Partnership impracticable) to be vested in the Partnership or one or more of the Partnership’s designated Affiliates as soon as
reasonably practicable;
provided
,
further
, that, prior to the withdrawal or removal of the General Partner or as soon thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer of record title to
the Partnership and, prior to any such transfer, will provide for the use of such assets in a manner satisfactory to the General Partner. All Partnership assets shall be recorded as the property of the Partnership in its books and records,
irrespective of the name in which record title to such Partnership assets is held.
ARTICLE III
RIGHTS OF LIMITED PARTNERS
Section 3.1
Limitation of Liability
. The Limited Partners shall have no liability under this Agreement except as expressly
provided in this Agreement or the Delaware Act.
Section 3.2
Management of Business
. No Limited Partner, in its capacity as
such, shall participate in the operation, management or control (within the meaning of the Delaware Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise
bind the Partnership. No action taken by any Affiliate of the General Partner or any officer, director, employee, manager, member, general partner, agent or trustee of the General Partner or any of its Affiliates, or any officer, director, employee,
manager, member, general partner, agent or trustee of a Group Member, in its capacity as such, shall be considered participating in the control of the business of the Partnership by a limited partner of the Partnership (within the meaning of
Section 17-303(a) of the Delaware Act) nor shall any such action affect, impair or eliminate the limitations on the liability of the Limited Partners under this Agreement.
Section 3.3
Outside Activities of the Limited Partners
. Subject to the provisions of Section 7.6, which shall continue to be
applicable to the Persons referred to therein, regardless of whether such Persons shall also be Limited Partners, each Limited Partner shall be entitled to and may have business interests and engage in business activities in addition to those
relating to the Partnership, including business interests and activities in direct competition with the Partnership Group. Neither the Partnership nor any of the other Partners shall have any rights by virtue of this Agreement in any business
ventures of any Limited Partner.
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Section 3.4
Rights of Limited Partners
.
(a) Each Limited Partner shall have the right, for a purpose that is reasonably related, as determined by the General Partner, to such Limited
Partner’s interest as a Limited Partner in the Partnership, upon reasonable written demand stating the purpose of such demand and at such Limited Partner’s own expense, to obtain:
(i) true and full information regarding the status of the business and financial condition of the Partnership (
provided
that the requirements of this Section 3.4(a)(i) shall be satisfied if the Limited Partner is furnished the Partnership’s most recent annual report and any subsequent quarterly or periodic reports required to be filed (or which would be
required to be filed) with the Commission pursuant to Section 13 of the Exchange Act);
(ii) a current list of the
name and last known business, residence or mailing address of each Record Holder; and
(iii) a copy of this Agreement and
the Certificate of Limited Partnership and all amendments thereto, together with copies of the executed copies of all powers of attorney pursuant to which this Agreement, the Certificate of Limited Partnership and all amendments thereto have been
executed.
(b) The rights pursuant to Section 3.4(a) replace in their entirety any rights to information provided for in
Section 17-305(a) of the Delaware Act and each of the Partners, each other Person who acquires an interest in a Partnership Interest and each other Person bound by this Agreement hereby agrees to the fullest extent permitted by law that they do
not have any rights as Partners to receive any information either pursuant to Sections 17-305(a) of the Delaware Act or otherwise except for the information identified in Section 3.4(a).
(c) The General Partner may keep confidential from the Limited Partners, for such period of time as the General Partner deems reasonable,
(i) any information that the General Partner reasonably believes to be in the nature of trade secrets or (ii) other information the disclosure of which the General Partner believes (A) is not in the best interests of the Partnership
Group, (B) could damage the Partnership Group or its business or (C) that any Group Member is required by law or by agreement with any third party to keep confidential.
(d) Notwithstanding any other provision of this Agreement or Section 17-305 of the Delaware Act, each of the Partners, each other Person
who acquires an interest in a Partnership Interest and each other Person bound by this Agreement hereby agrees to the fullest extent permitted by law that they do not have rights to receive information from the Partnership or any Indemnitee for the
purpose of determining whether to pursue litigation or assist in pending litigation against the Partnership or any Indemnitee relating to the affairs of the Partnership except pursuant to the applicable rules of discovery relating to litigation
commenced by such Person.
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ARTICLE IV
CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS
Section 4.1
Certificates
. Notwithstanding anything to the contrary herein, unless the General Partner shall determine otherwise in
respect of some or all of any or all classes of Partnership Interests, Partnership Interests shall not be evidenced by certificates. Certificates that are issued shall be executed on behalf of the Partnership by the Chairman of the Board, President
or any Executive Vice President or Vice President and the Chief Financial Officer or the Secretary or any Assistant Secretary of the General Partner. No Certificate for a class of Partnership Interests shall be valid for any purpose until it has
been countersigned by the Transfer Agent for such class of Partnership Interests;
provided
,
however
, that if the General Partner elects to cause the Partnership to issue Partnership Interests of such class in global form, the
Certificate shall be valid upon receipt of a certificate from the Transfer Agent certifying that the Partnership Interests have been duly registered in accordance with the directions of the Partnership. Subject to the requirements of
Section 6.7(c), if Common Units are evidenced by Certificates, on or after the date on which Subordinated Units are converted into Common Units, the Record Holders of such Subordinated Units (a) if the Subordinated Units are evidenced by
Certificates, may exchange such Certificates for Certificates evidencing Common Units or (b) if the Subordinated Units are not evidenced by Certificates, shall be issued Certificates evidencing Common Units.
Section 4.2
Mutilated, Destroyed, Lost or Stolen Certificates
.
(a) If any mutilated Certificate is surrendered to the Transfer Agent, the appropriate officers of the General Partner on behalf of the
Partnership shall execute, and the Transfer Agent shall countersign and deliver in exchange therefor, a new Certificate evidencing the same number and type of Partnership Interests as the Certificate so surrendered.
(b) The appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and the Transfer Agent shall
countersign, a new Certificate in place of any Certificate previously issued if the Record Holder of the Certificate:
(i)
makes proof by affidavit, in form and substance satisfactory to the General Partner, that a previously issued Certificate has been lost, destroyed or stolen;
(ii) requests the issuance of a new Certificate before the General Partner has notice that the Certificate has been acquired by
a purchaser for value in good faith and without notice of an adverse claim;
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(iii) if requested by the General Partner, delivers to the General Partner a
bond, in form and substance satisfactory to the General Partner, with surety or sureties and with fixed or open penalty as the General Partner may direct to indemnify the Partnership, the Partners, the General Partner and the Transfer Agent against
any claim that may be made on account of the alleged loss, destruction or theft of the Certificate; and
(iv) satisfies any
other reasonable requirements imposed by the General Partner or the Transfer Agent.
If a Limited Partner fails to notify the General
Partner within a reasonable period of time after such Limited Partner has notice of the loss, destruction or theft of a Certificate, and a transfer of the Limited Partner Interests represented by the Certificate is registered before the Partnership,
the General Partner or the Transfer Agent receives such notification, the Limited Partner shall be precluded from making any claim against the Partnership, the General Partner or the Transfer Agent for such transfer or for a new Certificate.
(c) As a condition to the issuance of any new Certificate under this Section 4.2, the General Partner may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Transfer Agent) reasonably connected therewith.
Section 4.3
Record Holders
. The Partnership and the General Partner shall be entitled to recognize the Record Holder as the
Partner with respect to any Partnership Interest and, accordingly, shall not be bound to recognize any equitable or other claim to, or interest in, such Partnership Interest on the part of any other Person, regardless of whether the Partnership
shall have actual or other notice thereof, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any National Securities Exchange on which such Partnership Interests are listed or admitted to trading.
Without limiting the foregoing, when a Person (such as a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other representative capacity for another Person in
acquiring and/or holding Partnership Interests, as between the Partnership on the one hand, and such other Persons on the other, such representative Person shall be (a) the Record Holder of such Partnership Interest and (b) bound by this
Agreement and shall have the rights and obligations of a Partner hereunder as, and to the extent, provided herein.
Section 4.4
Transfer Generally
.
(a) The term “transfer,” when used in this Agreement with respect to a Partnership Interest, shall
mean a transaction by which the holder of a Partnership Interest assigns such Partnership Interest to another Person who is or becomes a Partner, and includes a sale, assignment, gift, exchange or any other disposition by law or otherwise, excluding
a pledge, encumbrance, hypothecation or mortgage but including any transfer upon foreclosure of any pledge, encumbrance, hypothecation or mortgage.
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(b) No Partnership Interest shall be transferred, in whole or in part, except in accordance with
the terms and conditions set forth in this Article IV. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article IV shall be, to the fullest extent permitted by law, null and void.
(c) Nothing contained in this Agreement shall be construed to prevent a disposition by any stockholder, member, partner or other owner of any
Partner of any or all of the shares of stock, membership interests, partnership interests or other ownership interests in such Partner and the term “transfer” shall not mean any such disposition.
Section 4.5
Registration and Transfer of Limited Partner Interests
.
(a) The General Partner shall keep or cause to be kept on behalf of the Partnership a register in which, subject to such reasonable
regulations as it may prescribe and subject to the provisions of Section 4.5(b), the Partnership will provide for the registration and transfer of Limited Partner Interests.
(b) The Partnership shall not recognize any transfer of Limited Partner Interests evidenced by Certificates until the Certificates evidencing
such Limited Partner Interests are surrendered for registration of transfer. No charge shall be imposed by the General Partner for such transfer;
provided
, that as a condition to the issuance of any new Certificate under this
Section 4.5, the General Partner may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto. Upon surrender of a Certificate for registration of transfer of any Limited
Partner Interests evidenced by a Certificate, and subject to the provisions hereof, the appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and in the case of Certificates evidencing Limited Partner
Interests, the Transfer Agent shall countersign and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Certificates evidencing the same aggregate
number and type of Limited Partner Interests as was evidenced by the Certificate so surrendered.
(c) By acceptance of the transfer of any
Limited Partner Interests in accordance with this Section 4.5 and except as provided in Section 4.8, each transferee of a Limited Partner Interest (including any nominee holder or an agent or representative acquiring such Limited Partner
Interests for the account of another Person) acknowledges and agrees to the provisions of Section 10.1(a).
(d) Subject to
(i) the foregoing provisions of this Section 4.5, (ii) Section 4.3, (iii) Section 4.7, (iv) with respect to any class or series of Limited Partner Interests, the provisions of any statement of designations or an amendment to
this Agreement establishing such class or series, (v) any contractual provisions binding on any Limited Partner and (vi) provisions of applicable law including the Securities Act, Limited Partner Interests shall be freely transferable.
(e) The General Partner and its Affiliates shall have the right at any time to transfer their Subordinated Units, Common Units and
Incentive Distribution Rights to one or more Persons.
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Section 4.6
Transfer of the General Partner’s General Partner Interest
.
(a) The General Partner may at its option transfer all or any part of its General Partner Interest without approval from any other Partner.
(b) Notwithstanding anything herein to the contrary, no transfer by the General Partner of all or any part of its General Partner
Interest to another Person shall be permitted unless (i) the transferee agrees to assume the rights and duties of the General Partner under this Agreement and to be bound by the provisions of this Agreement, (ii) the Partnership receives
an Opinion of Counsel that such transfer would not result in the loss of limited liability under the Delaware Act of any Limited Partner or cause the Partnership to be treated as an association taxable as a corporation or otherwise to be taxed as an
entity for U.S. federal income tax purposes (to the extent not already so treated or taxed) and (iii) such transferee also agrees to purchase all (or the appropriate portion thereof, if applicable) of the partnership or membership interest held
by the General Partner as the general partner or managing member, if any, of each other Group Member. In the case of a transfer pursuant to and in compliance with this Section 4.6, the transferee or successor (as the case may be) shall, subject
to compliance with the terms of Section 10.2, be admitted to the Partnership as the General Partner effective immediately prior to the transfer of the General Partner Interest, and the business of the Partnership shall continue without
dissolution.
Section 4.7
Restrictions on Transfers
.
(a) Notwithstanding the other provisions of this Article IV, no transfer of any Partnership Interests shall be made if such transfer would
(i) violate the then applicable federal or state securities laws or rules and regulations of the Commission, any state securities commission or any other governmental authority with jurisdiction over such transfer, (ii) terminate the
existence or qualification of the Partnership under the laws of the jurisdiction of its formation, or (iii) cause the Partnership to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for U.S. federal
income tax purposes (to the extent not already so treated or taxed).
(b) The General Partner may impose restrictions on the transfer of
Partnership Interests if it determines, with the advice of counsel, that such restrictions are necessary or advisable to (i) avoid a significant risk of the Partnership becoming taxable as a corporation or otherwise becoming taxable as an
entity for U.S. federal income tax purposes or (ii) preserve the uniformity of the Limited Partner Interests (or any class or classes thereof). The General Partner may impose such restrictions by amending this Agreement;
provided
,
however
, that any amendment that would result in the delisting or suspension of trading of any class of Limited Partner Interests on the principal National Securities Exchange on which such class of Limited
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Partner Interests is then listed or admitted to trading must be approved, prior to such amendment being effected, by the holders of a majority of the Outstanding Limited Partner Interests of such
class.
(c) Nothing contained in this Agreement, other than Section 4.7(a), shall preclude the settlement of any transactions
involving Partnership Interests entered into through the facilities of any National Securities Exchange on which such Partnership Interests are listed or admitted to trading.
Section 4.8
Eligibility Certificates; Ineligible Holders
.
(a) If at any time the General Partner determines, with the advice of counsel, that:
(i) the U.S. federal income tax status (or lack of proof of the U.S. federal income tax status) of one or more Limited Partners
or their owners has or is reasonably likely to have a material adverse effect on the rates that can be charged to customers by any Group Member with respect to assets that are subject to regulation by the Federal Energy Regulatory Commission or
similar regulatory body (a “
Rate Eligibility Trigger
”); or
(ii) any Group Member is subject to any
federal, state or local law or regulation that would create a substantial risk of cancellation or forfeiture of any property in which the Group Member has an interest based on the nationality, citizenship or other related status of a Limited Partner
or its owner(s) (a “
Citizenship Eligibility Trigger
”);
then, the General Partner may adopt such amendments to this Agreement as
it determines to be necessary or appropriate to (x) in the case of a Rate Eligibility Trigger, obtain such proof of the U.S. federal income tax status of the Limited Partners and, to the extent relevant, their owners, as the General Partner
determines to be necessary or appropriate to reduce the risk of occurrence of a material adverse effect on the rates that can be charged to customers by any Group Member or (y) in the case of a Citizenship Eligibility Trigger, obtain such proof
of the nationality, citizenship or other related status of the Limited Partners and, to the extent relevant, their owners as the General Partner determines to be necessary or appropriate to eliminate or mitigate the risk of cancellation or
forfeiture of any properties or interests therein.
(b) Such amendments may include provisions requiring all Partners to certify as to
their (and their owners’) status as Eligible Holders upon demand and on a regular basis, as determined by the General Partner, and may require transferees of Units to so certify prior to being admitted to the Partnership as Partners (any such
required certificate, an “
Eligibility Certificate
”).
(c) Such amendments may provide that any Partner who fails
to furnish to the General Partner within a reasonable period requested proof of its (and its owners’) status as an
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Eligible Holder or if upon receipt of such Eligibility Certificate or other requested information the General Partner determines that a Limited Partner (or its owner) is not an Eligible Holder
(an “
Ineligible Holder
”), the Partnership Interests owned by such Limited Partner shall be subject to redemption in accordance with the provisions of Section 4.9. In addition, the General Partner shall be substituted and
treated as the owner of all Partnership Interests owned by an Ineligible Holder.
(d) The General Partner shall, in exercising voting
rights in respect of Partnership Interests held by it on behalf of Ineligible Holders, cast such votes in the same manner and in the same ratios as the votes of Partners (including the General Partner and its Affiliates) in respect of Partnership
Interests other than those of Ineligible Holders are cast.
(e) Upon dissolution of the Partnership, an Ineligible Holder shall have no
right to receive a distribution in kind pursuant to Section 12.4 but shall be entitled to the cash equivalent thereof, and the Partnership shall provide cash in exchange for an assignment of the Ineligible Holder’s share of any
distribution in kind. Such payment and assignment shall be treated for purposes hereof as a purchase by the Partnership from the Ineligible Holder of the portion of his Partnership Interest representing his right to receive his share of such
distribution in kind.
(f) At any time after he can and does certify that he has become an Eligible Holder, an Ineligible Holder may, upon
application to the General Partner, request that with respect to any Partnership Interests of such Ineligible Holder not redeemed pursuant to Section 4.9, such Ineligible Holder be admitted as a Partner, and upon approval of the General
Partner, such Ineligible Holder shall be admitted as a Partner and shall no longer constitute an Ineligible Holder and the General Partner shall cease to be deemed to be the owner in respect of such Ineligible Holder’s Partnership Interests.
Section 4.9
Redemption of Partnership Interests of Ineligible Holders
.
(a) If at any time a Partner fails to furnish an Eligibility Certificate or other information requested within the period of time specified in
amendments adopted pursuant to Section 4.8 or if upon receipt of such Eligibility Certificate, the General Partner determines, with the advice of counsel, that a Partner is an Ineligible Holder, the Partnership may, unless the Partner
establishes to the satisfaction of the General Partner that such Partner is an Eligible Holder or has transferred his Limited Partner Interests to a Person who is an Eligible Holder and who furnishes an Eligibility Certificate to the General Partner
prior to the date fixed for redemption as provided below, redeem the Partnership Interest of such Partner as follows:
(i)
The General Partner shall, not later than the 30th day before the date fixed for redemption, give notice of redemption to the Partner, at his last address designated on the records of the Partnership or the Transfer Agent, as applicable, by
registered or certified mail, postage prepaid. The notice shall be deemed to have been given when so mailed. The notice shall specify the
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Redeemable Interests, the date fixed for redemption, the place of payment, that payment of the redemption price will be made upon redemption of the Redeemable Interests (or, if later in the case
of Redeemable Interests evidenced by Certificates, upon surrender of the Certificate evidencing the Redeemable Interests) and that on and after the date fixed for redemption no further allocations or distributions to which the Partner would
otherwise be entitled in respect of the Redeemable Interests will accrue or be made.
(ii) The aggregate redemption price
for Redeemable Interests shall be an amount equal to the Current Market Price (the date of determination of which shall be the date fixed for redemption) of Partnership Interests of the class to be so redeemed multiplied by the number of Partnership
Interests of each such class included among the Redeemable Interests. The redemption price shall be paid, as determined by the General Partner, in cash or by delivery of a promissory note of the Partnership in the principal amount of the redemption
price, bearing interest at the rate of 8% annually and payable in three equal annual installments of principal together with accrued interest, commencing one year after the redemption date.
(iii) The Partner or his duly authorized representative shall be entitled to receive the payment for the Redeemable Interests
at the place of payment specified in the notice of redemption on the redemption date (or, if later in the case of Redeemable Interests evidenced by Certificates, upon surrender by or on behalf of the Partner at the place specified in the notice of
redemption, of the Certificate evidencing the Redeemable Interests, duly endorsed in blank or accompanied by an assignment duly executed in blank).
(iv) After the redemption date, Redeemable Interests shall no longer constitute issued and Outstanding Limited Partner
Interests.
(b) The provisions of this Section 4.9 shall also be applicable to Partnership Interests held by a Partner as nominee of
a Person determined to be an Ineligible Holder.
(c) Nothing in this Section 4.9 shall prevent the recipient of a notice of
redemption from transferring his Partnership Interest before the redemption date if such transfer is otherwise permitted under this Agreement. Upon receipt of notice of such a transfer, the General Partner shall withdraw the notice of redemption,
provided
the transferee of such Partnership Interest certifies to the satisfaction of the General Partner that he is an Eligible Holder. If the transferee fails to make such certification, such redemption will be effected from the transferee
on the original redemption date.
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
Section 5.1
Organizational Contributions
. In connection with the formation of the Partnership under the Delaware Act, the General
Partner has been admitted as the General
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Partner of the Partnership. The Organizational Limited Partner made an initial Capital Contribution to the Partnership in the amount of $1,000.00 in exchange for a Limited Partner Interest equal
to a 100% Percentage Interest and has been admitted as a Limited Partner of the Partnership. As of the Closing Date, and effective with the admission of another Limited Partner to the Partnership, the interests of the Organizational Limited Partner
will be redeemed as provided in the Contribution Agreement and the initial Capital Contributions of the Organizational Limited Partner will be refunded. One-hundred percent of any interest or other profit that may have resulted from the investment
or other use of such initial Capital Contributions will be allocated and distributed to the Organizational Limited Partner.
Section 5.2
Contributions by the General Partner and its Affiliates
.
(a) On the Closing Date and pursuant to the Contribution Agreement: (i) the Partnership shall issue to the General Partner the Incentive
Distribution Rights, and (ii) the Organizational Limited Partner and Beyer shall contribute to the Partnership, as a Capital Contribution, the Reserves Contribution (as defined in the Contribution Agreement) in exchange for 47,238,895 Common
Units, 64,738,895 Subordinated Units, collectively, and the right to receive the Deferred Issuance and Distribution. The Organizational Limited Partner retained the right to receive reimbursement for certain capital expenditures attributable to the
assets of the Contributed Subsidiaries incurred within the two-year period prior to the Contribution Date pursuant to Section 5.6(c) hereof and Section 2.02(b) of the Registration Rights Agreement.
Section 5.3
Contributions by Initial Limited Partners
.
(a) On the Closing Date and pursuant to the Underwriting Agreement, each Underwriter shall contribute cash to the Partnership in exchange for
the issuance by the Partnership of Common Units to each Underwriter, all as set forth in the Underwriting Agreement.
(b) Upon the
exercise, if any, of the Over-Allotment Option, each Underwriter shall contribute cash to the Partnership in exchange for the issuance by the Partnership of Common Units to each Underwriter, all as set forth in the Underwriting Agreement.
Section 5.4
Interest and Withdrawal
. No interest shall be paid by the Partnership on Capital Contributions. No Partner shall be
entitled to the withdrawal or return of its Capital Contribution, except to the extent, if any, that distributions made pursuant to this Agreement or upon liquidation of the Partnership may be considered as such by law and then only to the extent
provided for in this Agreement. Except to the extent expressly provided in this Agreement, no Partner shall have priority over any other Partner either as to the return of Capital Contributions or as to profits, losses or distributions.
Section 5.5
Capital Accounts
.
(a) The Partnership shall maintain for each Partner (or a beneficial owner of Partnership Interests held by a nominee in any case in which the
nominee has furnished the
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identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or any other method acceptable to the General Partner) owning a Partnership Interest a separate
Capital Account with respect to such Partnership Interest in accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of all Capital Contributions made by the
Partner with respect to such Partnership Interest and (ii) all items of Partnership income and gain computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest pursuant to Section 6.1, and
decreased by (x) the amount of cash or Net Agreed Value of all actual and deemed distributions of cash or property made to the Partner with respect to such Partnership Interest and (y) all items of Partnership deduction and loss computed
in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest pursuant to Section 6.1.
(b) For
purposes of computing the amount of any item of income, gain, loss or deduction that is to be allocated pursuant to Article VI and is to be reflected in the Partners’ Capital Accounts, the determination, recognition and classification of any
such item shall be the same as its determination, recognition and classification for U.S. federal income tax purposes (including any method of depreciation, cost recovery or amortization used for that purpose), provided, that:
(i) Solely for purposes of this Section 5.5, the Partnership shall be treated as owning directly its proportionate share
(as determined by the General Partner based upon the provisions of the applicable Group Member Agreement) of all property owned by (x) any other Group Member that is classified as a partnership for U.S. federal income tax purposes and
(y) any other partnership, limited liability company, unincorporated business or other entity classified as a partnership for U.S. federal income tax purposes of which a Group Member is, directly or indirectly, a partner, member or other equity
holder.
(ii) All fees and other expenses incurred by the Partnership to promote the sale of (or to sell) a Partnership
Interest that can neither be deducted nor amortized under Section 709 of the Code, if any, shall, for purposes of Capital Account maintenance, be treated as an item of deduction at the time such fees and other expenses are incurred and shall be
allocated among the Partners pursuant to Section 6.1.
(iii) The computation of all items of income, gain, loss and
deduction shall be made (x) except as otherwise provided in this Agreement and Treasury Regulation Section 1.704-1(b)(2)(iv)(m), without regard to any election under Section 754 of the Code that may be made by the Partnership, and
(y) as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalized for U.S. federal income
tax purposes.
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(iv) To the extent an adjustment to the adjusted tax basis of any Partnership
asset pursuant to Section 734(b) of the Code (including pursuant to Treasury Regulation Section 1.734-2(b)(1)) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital
Accounts, the amount of such adjustment in the Capital Accounts shall be treated as an item of gain or loss.
(v) In the
event the Carrying Value of Partnership property is adjusted pursuant to Section 5.5(d), any Unrealized Gain resulting from such adjustment shall be treated as an item of gain and any Unrealized Loss resulting from such adjustment shall be
treated as an item of loss.
(vi) Any income, gain or loss attributable to the taxable disposition of any Partnership
property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the property’s Carrying Value as of such date.
(vii) Any deductions for depreciation, cost recovery or amortization attributable to any Contributed Property or Adjusted
Property shall be determined under the rules prescribed by Treasury Regulation Section 1.704-3(d) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment.
(viii) The Gross Liability Value of each Liability of the Partnership described in Treasury Regulation
Section 1.752-7(b)(3)(i) shall be adjusted at such times as provided in this Agreement for an adjustment to Carrying Values. The amount of any such adjustment shall be treated for purposes hereof as an item of loss (if the adjustment increases
the Carrying Value of such Liability of the Partnership) or an item of gain (if the adjustment decreases the Carrying Value of such Liability of the Partnership).
(c) (i) Except as otherwise provided in this Section 5.5(c), a transferee of a Partnership Interest shall succeed to a pro rata portion
of the Capital Account of the transferor relating to the Partnership Interest so transferred.
(ii) Subject to
Section 6.7(b), immediately prior to the transfer of a Subordinated Unit or of a Subordinated Unit that has converted into a Common Unit pursuant to Section 5.7 by a holder thereof (in each case, other than a transfer to an Affiliate
unless the General Partner elects to have this subparagraph 5.5(c)(ii) apply), the Capital Account maintained for such Person with respect to its Subordinated Units or converted Subordinated Units will (A) first, be allocated to the
Subordinated Units or converted Subordinated Units to be transferred in an amount equal to the product of (x) the number of such Subordinated Units or converted Subordinated Units to be transferred and (y) the
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Per Unit Capital Amount for a Common Unit, and (B) second, any remaining balance in such Capital Account will be retained by the transferor, regardless of whether it has retained any
Subordinated Units or converted Subordinated Units. Following any such allocation, the transferor’s Capital Account, if any, maintained with respect to the retained Subordinated Units or retained converted Subordinated Units, if any, will have
a balance equal to the amount allocated under clause (B) above, and the transferee’s Capital Account established with respect to the transferred Subordinated Units or transferred converted Subordinated Units will have a balance equal to
the amount allocated under clause (A) above.
(iii) Subject to Section 6.8(b), immediately prior to the transfer
of an IDR Reset Common Unit by a holder thereof (other than a transfer to an Affiliate unless the General Partner elects to have this subparagraph 5.5(c)(iii) apply), the Capital Account maintained for such Person with respect to its IDR Reset
Common Units will (A) first, be allocated to the IDR Reset Common Units to be transferred in an amount equal to the product of (x) the number of such IDR Reset Common Units to be transferred and (y) the Per Unit Capital Amount for a
Common Unit, and (B) second, any remaining balance in such Capital Account will be retained by the transferor, regardless of whether it has retained any IDR Reset Common Units. Following any such allocation, the transferor’s Capital
Account, if any, maintained with respect to the retained IDR Reset Common Units, if any, will have a balance equal to the amount allocated under clause (B) above, and the transferee’s Capital Account established with respect to the
transferred IDR Reset Common Units will have a balance equal to the amount allocated under clause (A) above.
(d) (i) Consistent with
Treasury Regulation Section 1.704-1(b)(2)(iv)(f) and 1.704-1(b)(2)(iv)(h)(2), on an issuance of additional Partnership Interests for cash or Contributed Property, the issuance of a Noncompensatory Option, the issuance of Partnership Interests
as consideration for the provision of services, the issuance of IDR Reset Common Units pursuant to Section 5.11, or the conversion of the Combined Interest to Common Units pursuant to Section 11.3(b), the Carrying Value of each Partnership
property immediately prior to such issuance shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property;
provided
,
however
, that in the event of the issuance of a
Partnership Interest pursuant to the exercise of a Noncompensatory Option where the right to share in Partnership capital represented by such Partnership Interest differs from the consideration paid to acquire and exercise such option, the Carrying
Value of each Partnership property immediately after the issuance of such Partnership Interest shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property and the Capital Accounts
of the Partners shall be adjusted in a manner consistent with Treasury Regulation Section 1.704-1(b)(2)(iv)(s);
provided further
, that in the event of an issuance of Partnership Interests for a de minimis amount of cash or Contributed
Property, in the event of an issuance of a Noncompensatory Option to acquire a de minimis Partnership Interest
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or in the event of an issuance of a de minimis amount of Partnership Interests as consideration for the provision of services, the General Partner may determine that such adjustments are
unnecessary for the proper administration of the Partnership. In determining such Unrealized Gain or Unrealized Loss, the aggregate fair market value of all Partnership property (including cash or cash equivalents) immediately prior to the issuance
of additional Partnership Interests (or, in the case of a Revaluation Event resulting from the exercise of a Noncompensatory Option, immediately after the issuance of the Partnership Interest acquired pursuant to the exercise of such Noncompensatory
Option) shall be determined by the General Partner using such method of valuation as it may adopt. In making its determination of the fair market values of individual properties, the General Partner may first determine an aggregate value for the
assets of the Partnership that takes into account the current trading price of the Common Units, the fair market value of all other Partnership Interests at such time and the amount of Partnership Liabilities. The General Partner may allocate such
aggregate value among the individual properties of the Partnership (in such manner as it determines appropriate). Absent a contrary determination by the General Partner, the aggregate fair market value of all Partnership assets (including, without
limitation, cash or cash equivalents) immediately prior to a Revaluation Event shall be the value that would result in the Capital Account for each Common Unit that is Outstanding prior to such Revaluation Event being equal to the Event Issue Value.
(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately prior to any distribution to a
Partner of any Partnership property (other than a distribution of cash that is not in redemption or retirement of a Partnership Interest), the Carrying Value of all Partnership property shall be adjusted upward or downward to reflect any Unrealized
Gain or Unrealized Loss attributable to such Partnership property. In determining such Unrealized Gain or Unrealized Loss the aggregate fair market value of all Partnership property (including cash or cash equivalents) immediately prior to a
distribution shall (A) in the case of a distribution other than one made pursuant to Section 12.4, be determined in the same manner as that provided in Section 5.5(d)(i) or (B) in the case of a liquidating distribution pursuant
to Section 12.4, be determined by the Liquidator using such method of valuation as it may adopt.
Section 5.6
Issuances of
Additional Partnership Interests and Derivative Instruments
.
(a) The Partnership may issue additional Partnership Interests and
Derivative Instruments for any Partnership purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as the General Partner shall determine, all without the approval of any Limited Partners.
(b) Each additional Partnership Interest authorized to be issued by the Partnership pursuant to Section 5.6(a) may be issued in one
or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties (which may be senior to existing classes and series of Partnership Interests), as shall be fixed by the General Partner,
including (i) the right to share in Partnership profits and losses or items thereof;
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(ii) the right to share in Partnership distributions; (iii) the rights upon dissolution and liquidation of the Partnership; (iv) whether, and the terms and conditions upon which,
the Partnership may or shall be required to redeem the Partnership Interest (including sinking fund provisions); (v) whether such Partnership Interest is issued with the privilege of conversion or exchange and, if so, the terms and conditions
of such conversion or exchange; (vi) the terms and conditions upon which each Partnership Interest will be issued, evidenced by Certificates and assigned or transferred; (vii) the method for determining the Percentage Interest as to such
Partnership Interest; and (viii) the right, if any, of each such Partnership Interest to vote on Partnership matters, including matters relating to the relative rights, preferences and privileges of such Partnership Interest.
(c) Subject to, and in accordance with, the terms of the Registration Rights Agreement, upon request of the Organizational Limited Partner,
the Partnership will undertake an offering of additional Common Units, and will use the proceeds thereof (net of underwriting discounts and commissions) to redeem an equal number of Common Units from the limited partner in full or partial
satisfaction of the Organizational Limited Partner’s right to reimbursement pursuant to Section 2.1 of the Contribution Agreement.
(d) The General Partner shall take all actions that it determines to be necessary or appropriate in connection with (i) each issuance of
Partnership Interests and Derivative Instruments pursuant to this Section 5.6, (ii) the conversion of the Combined Interest into Units pursuant to the terms of this Agreement, (iii) the issuance of Common Units pursuant to
Section 5.11, (iv) reflecting admission of such additional Limited Partners in the books and records of the Partnership as the Record Holders of such Limited Partner Interests and (v) all additional issuances of Partnership Interests.
The General Partner shall determine the relative rights, powers and duties of the holders of the Units or other Partnership Interests being so issued. The General Partner shall do all things necessary to comply with the Delaware Act and is
authorized and directed to do all things that it determines to be necessary or appropriate in connection with any future issuance of Partnership Interests or in connection with the conversion of the Combined Interest into Units pursuant to the terms
of this Agreement, including compliance with any statute, rule, regulation or guideline of any federal, state or other governmental agency or any National Securities Exchange on which the Units or other Partnership Interests are listed or admitted
to trading.
(e) No fractional Units shall be issued by the Partnership.
Section 5.7
Conversion of Subordinated Units
.
(a) All of the Subordinated Units shall convert into Common Units on a one-for-one basis on the first Business Day following the distribution
pursuant to Section 6.3(a) in respect of the final full Quarter of the Subordination Period.
(b) The Subordinated Units may convert
into Common Units on a one-for-one basis as set forth in, and pursuant to the terms of, Section 11.4.
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Section 5.8
Limited Preemptive Right
. Except as provided in this Section 5.8 or
as otherwise provided in a separate agreement by the Partnership, no Person shall have any preemptive, preferential or other similar right with respect to the issuance of any Partnership Interest, whether unissued, held in the treasury or hereafter
created. The General Partner shall have the right, which it may from time to time assign in whole or in part to any of its Affiliates, to purchase Partnership Interests from the Partnership whenever, and on the same terms that, the Partnership
issues Partnership Interests to Persons other than the General Partner and its Affiliates, to the extent necessary to maintain the Percentage Interests of the General Partner and its Affiliates equal to that which existed immediately prior to the
issuance of such Partnership Interests. The determination by the General Partner to exercise (or refrain from exercising) its right pursuant to the immediately preceding sentence shall be a determination made in its individual capacity.
Section 5.9
Splits and Combinations
.
(a) The Partnership may make a distribution of Partnership Interests to all Record Holders or may effect a subdivision or combination of
Partnership Interests. Upon any such event, each Partner shall have the same Percentage Interest in the Partnership as before such event (subject to the effect of Section 5.9(d)), and any amounts calculated on a per Unit basis (including any
Common Unit Arrearage or Cumulative Common Unit Arrearage) or stated as a number of Units shall be proportionately adjusted retroactive to the beginning of the Partnership.
(b) Whenever such a distribution, subdivision or combination of Partnership Interests is declared, the General Partner shall select a Record
Date as of which the distribution, subdivision or combination shall be effective and shall send notice thereof at least 20 days prior to such Record Date to each Record Holder as of a date not less than 10 days prior to the date of such notice.
(c) Promptly following any such distribution, subdivision or combination, the Partnership may issue Certificates to the Record Holders of
Partnership Interests as of the applicable Record Date representing the new number of Partnership Interests held by such Record Holders, or the General Partner may adopt such other procedures that it determines to be necessary or appropriate to
reflect such changes. If any such combination results in a smaller total number of Partnership Interests Outstanding, the Partnership shall require, as a condition to the delivery to a Record Holder of such new Certificate, the surrender of any
Certificate held by such Record Holder immediately prior to such Record Date.
(d) The Partnership shall not issue fractional Units upon
any distribution, subdivision or combination of Units. If a distribution, subdivision or combination of Units would result in the issuance of fractional Units but for the provisions of Section 5.6(e) and this Section 5.9(d), each
fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the next higher Unit).
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Section 5.10
Fully Paid and Non-Assessable Nature of Limited Partner Interests
. All
Limited Partner Interests issued pursuant to, and in accordance with the requirements of, this Article V shall be fully paid and non-assessable Limited Partner Interests in the Partnership, except as such non-assessability may be affected by
Section 17-607 or 17-804 of the Delaware Act.
Section 5.11
Issuance of Common Units in Connection with Reset of Incentive
Distribution Rights
.
(a) Subject to the provisions of this Section 5.11, the holder of the Incentive Distribution
Rights (or, if there is more than one holder of the Incentive Distribution Rights, the holders of a majority in interest of the holders of Incentive Distribution Rights) shall have the option, at any time when there are no Subordinated Units
outstanding and the Partnership has made a distribution pursuant to Section 6.4(a)(vii) or Section 6.4(b)(v) for each of the four most recently completed Quarters (and the aggregate amounts distributed in respect of such four Quarter
period did not exceed the aggregate Adjusted Operating Surplus for such four Quarter period), to make an election (the “
IDR Reset Election
”) to cause the Target Distributions to be reset in accordance with the provisions of
Section 5.11(e) and, in connection therewith, the holder or holders of the Incentive Distribution Rights will become entitled to receive their Pro Rata share of a number of Common Units (the “
IDR Reset Common Units
”)
equal to the result of dividing (i) the amount of cash distributions made by the Partnership for the Quarter immediately preceding the giving of the Reset Notice in respect of the Incentive Distribution Rights by (ii) the cash distribution
made by the Partnership in respect of each Common Unit for the Quarter immediately preceding the giving of the Reset Notice (the “
Reset MQD
”) (the number of Common Units determined by such quotient is referred to herein as
the “
Aggregate Quantity of IDR Reset Common Units
”). The making of the IDR Reset Election in the manner specified in Section 5.11(b) shall cause the Target Distributions to be reset in accordance with the provisions of
Section 5.11(e) and, in connection therewith, the holder or holders of the Incentive Distribution Rights will become entitled to receive Common Units on the basis specified above, without any further approval required by the General Partner or
the Unitholders, at the time specified in Section 5.11(c) unless the IDR Reset Election is rescinded pursuant to Section 5.11(d).
(b) To exercise the right specified in Section 5.11(a), the holder of the Incentive Distribution Rights (or, if there is more than one
holder of the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights) shall deliver a written notice (the “
Reset Notice
”) to the Partnership. Within 10 Business Days after
the receipt by the Partnership of such Reset Notice, the Partnership shall deliver a written notice to the holder or holders of the Incentive Distribution Rights of the Partnership’s determination of the aggregate number of Common Units that
each holder of Incentive Distribution Rights will be entitled to receive.
(c) The holder or holders of the Incentive Distribution Rights
will be entitled to receive the Aggregate Quantity of IDR Reset Common Units on the fifteenth Business Day
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after receipt by the Partnership of the Reset Notice;
provided
,
however
, that the issuance of Common Units to the holder or holders of the Incentive Distribution Rights shall not
occur prior to the approval of the listing or admission for trading of such Common Units by the principal National Securities Exchange upon which the Common Units are then listed or admitted for trading if any such approval is required pursuant to
the rules and regulations of such National Securities Exchange.
(d) If the principal National Securities Exchange upon which the Common
Units are then traded has not approved the listing or admission for trading of the Common Units to be issued pursuant to this Section 5.11 on or before the 30th calendar day following the Partnership’s receipt of the Reset Notice and such
approval is required by the rules and regulations of such National Securities Exchange, then the holder of the Incentive Distribution Rights (or, if there is more than one holder of the Incentive Distribution Rights, the holders of a majority in
interest of the Incentive Distribution Rights) shall have the right to either rescind the IDR Reset Election or elect to receive other Partnership Interests having such terms as the General Partner may approve that will provide (i) the same
economic value, in the aggregate, as the Aggregate Quantity of IDR Reset Common Units would have had at the time of the Partnership’s receipt of the Reset Notice, as determined by the General Partner, and (ii) for the subsequent conversion
(on terms acceptable to the National Securities Exchange upon which the Common Units are then traded) of such Partnership Interests into Common Units within not more than 12 months following the Partnership’s receipt of the Reset Notice upon
the satisfaction of one or more conditions that are reasonably acceptable to the holder of the Incentive Distribution Rights (or, if there is more than one holder of the Incentive Distribution Rights, the holders of a majority in interest of the
Incentive Distribution Rights).
(e) The Target Distributions shall be adjusted at the time of the issuance of Common Units or other
Partnership Interests pursuant to this Section 5.11 such that (i) the Minimum Quarterly Distribution shall be reset to be equal to the Reset MQD, (ii) the First Target Distribution shall be reset to equal 115% of the Reset MQD,
(iii) the Second Target Distribution shall be reset to equal 125% of the Reset MQD and (iv) the Third Target Distribution shall be reset to equal 150% of the Reset MQD.
(f) Upon the issuance of IDR Reset Common Units pursuant to Section 5.11(a) (or other Partnership Interests as described in
Section 5.11(d)), the Capital Account maintained with respect to the Incentive Distribution Rights shall (i) first, be allocated to IDR Reset Common Units (or other Partnership Interests) in an amount equal to the product of (x) the
Aggregate Quantity of IDR Reset Common Units (or other Partnership Interests) and (y) the Per Unit Capital Amount for an Initial Common Unit, and (ii) second, any remaining balance in such Capital Account will be retained by the holder(s)
of the Incentive Distribution Rights. If there is not a sufficient Capital Account associated with the Incentive Distribution Rights to allocate the full Per Unit Capital Amount for an Initial Common Unit to the IDR Reset Common Units in accordance
with clause (i) of this Section 5.11(f), the IDR Reset Common Units shall be subject to Sections 6.1(d)(x)(B) and (C).
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ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
Section 6.1
Allocations for Capital Account Purposes
. For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership’s items of income, gain, loss and deduction (computed in accordance with Section 5.5(b)) for each taxable period shall be allocated among the Partners as provided herein below.
(a)
Net Income.
Net Income for each taxable period (including a pro rata part of each item of income, gain, loss and deduction taken
into account in computing Net Income for such taxable period) shall be allocated as follows:
(i) First, to the General
Partner until the aggregate amount of Net Income allocated to the General Partner pursuant to this Section 6.1(a)(i) for the current and all previous taxable periods is equal to the aggregate amount of Net Loss allocated to the General Partner
pursuant to Section 6.1(b)(ii) for all previous taxable periods; and
(ii) Second, the balance, if any, 100% to the
Unitholders, Pro Rata.
(b)
Net Loss
. Net Loss for each taxable period (including a pro rata part of each item of income, gain,
loss and deduction taken into account in computing Net Loss for such taxable period) shall be allocated as follows:
(i)
First, to the Unitholders, Pro Rata; provided, that Net Loss shall not be allocated pursuant to this Section 6.1(b)(i) to the extent that such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital Account at
the end of such taxable period (or increase any existing deficit balance in its Adjusted Capital Account); and
(ii)
Second, the balance, if any, 100% to the General Partner.
(c)
Net Termination Gains and Losses
. Net Termination Gain or Net
Termination Loss for each taxable period shall be allocated in the manner set forth in this Section 6.1(c). All allocations under this Section 6.1(c) shall be made after Capital Account balances have been adjusted by all other allocations
provided under this Section 6.1 and after all distributions of cash and cash equivalents provided under Section 6.4 and Section 6.5 have been made;
provided
,
however
, that solely for purposes of this Section 6.1(c),
Capital Accounts shall not be adjusted for distributions made pursuant to Section 12.4.
(i) Except as provided in
Section 6.1(c)(iv) and subject to the provisions set forth in the last sentence of this Section 6.1(c)(i), Net Termination Gain (including a pro rata part of each item of income, gain, loss, and deduction taken into account in computing
Net Termination Gain) shall be allocated in the following order and priority:
(A) First, to each Partner having a deficit
balance in its Adjusted Capital Account, in the proportion that such deficit balance bears to the total deficit balances in the Adjusted Capital Accounts of all Partners, until each such Partner has been allocated Net Termination Gain equal to any
such deficit balance in its Adjusted Capital Account;
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(B) Second, to all Unitholders holding Common Units, Pro Rata, until the Capital
Account in respect of each Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Initial Unit Price, (2) the Minimum Quarterly Distribution for the Quarter during which the Liquidation Date occurs, reduced by any
distribution pursuant to Section 6.4(a)(i) or Section 6.4(b)(i) with respect to such Common Unit for such Quarter (the amount determined pursuant to this clause (2) is hereinafter referred to as the “
Unpaid
MQD
”) and (3) any then existing Cumulative Common Unit Arrearage;
(C) Third, if such Net Termination
Gain is recognized (or is deemed to be recognized) prior to the conversion of the last Outstanding Subordinated Unit into a Common Unit, to all Unitholders holding Subordinated Units, Pro Rata, until the Capital Account in respect of each
Subordinated Unit then Outstanding equals the sum of (1) its Unrecovered Initial Unit Price, determined for the taxable period (or portion thereof) to which this allocation of gain relates, and (2) the Minimum Quarterly Distribution for
the Quarter during which the Liquidation Date occurs, reduced by any distribution pursuant to Section 6.4(a)(iii) with respect to such Subordinated Unit for such Quarter;
(D) Fourth, to all Unitholders, Pro Rata, until the Capital Account in respect of each Common Unit then Outstanding is equal
to the sum of (1) its Unrecovered Initial Unit Price, (2) the Unpaid MQD, (3) any then existing Cumulative Common Unit Arrearage, and (4) the excess of (aa) the First Target Distribution less the Minimum Quarterly
Distribution for each Quarter after the Closing Date or the date of the most recent IDR Reset Election, if any, over (bb) the cumulative per Unit amount of any distributions of cash or cash equivalents that are deemed to be Operating Surplus
made pursuant to Section 6.4(a)(iv) and Section 6.4(b)(ii) for such period (the sum of (1), (2), (3) and (4) is hereinafter referred to as the “
First Liquidation Target Amount
”);
(E) Fifth, 15% to the holders of the Incentive Distribution Rights, Pro Rata, and 85.0% to all Unitholders, Pro Rata, until
the Capital
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Account in respect of each Common Unit then Outstanding is equal to the sum of (1) the First Liquidation Target Amount, and (2) the excess of (aa) the Second Target Distribution
less the First Target Distribution for each Quarter after the Closing Date or the date of the most recent IDR Reset Election, if any, over (bb) the cumulative per Unit amount of any distributions of cash or cash equivalents that are deemed to
be Operating Surplus made pursuant to Section 6.4(a)(v) and Section 6.4(b)(iii) for such period (the sum of (1) and (2) is hereinafter referred to as the “
Second Liquidation Target Amount
”);
(F) Sixth, 25% to the holders of the Incentive Distribution Rights, Pro Rata, and 75% to all Unitholders, Pro Rata, until the
Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) the Second Liquidation Target Amount, and (2) the excess of (aa) the Third Target Distribution less the Second Target Distribution for each Quarter
after the Closing Date or the date of the most recent IDR Reset Election, if any, over (bb) the cumulative per Unit amount of any distributions of cash or cash equivalents that are deemed to be Operating Surplus made pursuant to
Section 6.4(a)(vi) and Section 6.4(b)(iv) for such period; and
(G) Finally, 50% to the holders of the Incentive
Distribution Rights, Pro Rata, and 50% to all Unitholders, Pro Rata.
Notwithstanding the foregoing provisions in this
Section 6.1(c)(i), the General Partner may adjust the amount of any Net Termination Gain arising in connection with a Revaluation Event that is allocated to the holders of Incentive Distribution Rights in a manner that will result (1) in
the Capital Account for each Common Unit that is Outstanding prior to such Revaluation Event being equal to the Event Issue Value and (2) to the greatest extent possible, the Capital Account with respect to the Incentive Distribution Rights
that are Outstanding prior to such Revaluation Event being equal to the amount of Net Termination Gain that would be allocated to the holders of the Incentive Distribution Rights pursuant to this Section 6.1(c)(i) if the Capital Accounts with
respect to all Partnership Interests that were Outstanding immediately prior to such Revaluation Event and the Carrying Value of each Partnership property were equal to zero.
(ii) Except as otherwise provided by Section 6.1(c)(iii) or Section 6.1(c)(iv), Net Termination Loss shall be
allocated:
(A) First, if Subordinated Units remain Outstanding, to all Unitholders holding Subordinated Units, Pro Rata,
until the Adjusted Capital Account in respect of each Subordinated Unit then Outstanding has been reduced to zero;
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(B) Second, to all Unitholders holding Common Units, Pro Rata, until the
Adjusted Capital Account in respect of each Common Unit then Outstanding has been reduced to zero; and
(C) Third, the
balance, if any, 100% to the General Partner.
(iii) Any Net Termination Loss deemed recognized pursuant to clause (b)
of the definition of Net Termination Loss as a result of a Revaluation Event prior to the conversion of the last Outstanding Subordinated Unit and prior to the Liquidation Date shall be allocated:
(A) First, to the Unitholders, Pro Rata, until the Capital Account in respect of each Common Unit then Outstanding equals the
Event Issue Value; provided that Net Termination Loss shall not be allocated pursuant to this Section 6.1(c)(iii)(A) to the extent such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital Account at the end
of such taxable period (or increase any existing deficit in its Adjusted Capital Account);
(B) Second, to all Unitholders
holding Subordinated Units, Pro Rata; provided that Net Termination Loss shall not be allocated pursuant to this Section 6.1(c)(iii)(B) to the extent such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital
Account at the end of such taxable period (or increase any existing deficit in its Adjusted Capital Account); and
(C)
Third, the balance, if any, to the General Partner.
(iv) If (A) a Net Termination Loss has been allocated pursuant to
Section 6.1(c)(iii), (B) a Net Termination Gain or Net Termination Loss subsequently occurs (other than as a result of a Revaluation Event) prior to the conversion of the last Outstanding Subordinated Unit and (C) after tentatively
making all allocations of such Net Termination Gain or Net Termination Loss provided for in Section 6.1(c)(i) or Section 6.1(c)(ii), as applicable, the Capital Account in respect of each Common Unit does not equal the amount such Capital
Account would have been if Section 6.1(c)(iii) had not been part of this Agreement and all prior allocations of Net Termination Gain and Net Termination Loss had been made pursuant to Section 6.1(c)(i) or Section 6.1(c)(ii), as
applicable, then items of income, gain, loss and deduction included in such Net Termination Gain or Net Termination Loss, as applicable, shall be specially allocated to the General Partner and all Unitholders in a manner that will, to the maximum
extent possible, cause the Capital Account in respect of each Common Unit to equal the amount such Capital Account would have been if all allocations of Net Termination Gain and Net Termination Loss had been made pursuant to Section 6.1(c)(i)
or Section 6.1(c)(ii), as applicable.
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(d)
Special Allocations
. Notwithstanding any other provision of this Section 6.1, the
following special allocations shall be made for each taxable period in the following order:
(i)
Partnership Minimum
Gain Chargeback
. Notwithstanding any other provision of this Section 6.1, 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 Treasury 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 6.1(d), 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 6.1(d) with respect to
such taxable period (other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii)). This Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain chargeback requirement in Treasury 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 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury 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 Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), 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 6.1(d), other than Section 6.1(d)(i) and other than an
allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii), with respect to such taxable period. This Section 6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(iii)
Priority Allocations
.
(A) If the amount of cash or the Net Agreed Value of any property distributed (except cash or property distributed pursuant to
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Section 12.4) with respect to a Unit for a taxable period exceeds the amount of cash or the Net Agreed Value of property distributed with respect to another Unit for the same taxable period
(the amount of the excess, an “
Excess Distribution
” and the Unit with respect to which the greater distribution is paid, an “
Excess Distribution Unit
”), then there shall be allocated gross income and
gain to each Unitholder receiving an Excess Distribution with respect to the Excess Distribution Unit until the aggregate amount of such items allocated with respect to such Excess Distribution Unit pursuant to this Section 6.1(d)(iii)(A) for
the current taxable period and all previous taxable periods is equal to the amount of the Excess Distribution.
(B) After
the application of Section 6.1(d)(iii)(A), the remaining items of Partnership gross income or gain for the taxable period, if any, shall be allocated to the holders of Incentive Distribution Rights, Pro Rata, until the aggregate amount of such
items allocated to the holders of Incentive Distribution Rights pursuant to this Section 6.1(d)(iii)(B) for the current taxable period and all previous taxable periods is equal to the cumulative amount of all Incentive Distributions made to the
holders of Incentive Distribution Rights from the Closing Date to a date 45 days after the end of the current taxable period.
(iv)
Qualified Income Offset
. In the event any Partner unexpectedly receives any adjustments, allocations or
distributions described in Treasury 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 gross income and gain shall be specially allocated to such Partner in an amount and
manner sufficient to eliminate, to the extent required by the Treasury Regulations promulgated under Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or
distributions as quickly as possible;
provided
, that an allocation pursuant to this Section 6.1(d)(iv) shall be made only if and to the extent that such Partner would have a deficit balance in its Adjusted Capital Account after all other
allocations provided for in this Section 6.1 have been tentatively made as if this Section 6.1(d)(iv) were not in this Agreement.
(v)
Gross Income Allocation
. In the event any Partner has a deficit balance in its Capital Account at the end of any
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 Treasury 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 6.1(d)(v) shall be made only if and to the extent that such Partner would have a deficit balance in its Capital Account
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after all other allocations provided for in this Section 6.1 have been tentatively made as if Section 6.1(d)(iv) and this Section 6.1(d)(v) were not in this Agreement.
(vi)
Nonrecourse Deductions
. Nonrecourse Deductions for any taxable period shall be allocated to the Partners Pro Rata.
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 Treasury Regulations promulgated under Section 704(b) of the Code, the
General Partner is authorized to revise the prescribed ratio to the numerically closest ratio that does satisfy such requirements.
(vii)
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 Treasury Regulation Section 1.704-2(i). If more than one Partner
bears the Economic Risk of Loss with respect to a Partner Nonrecourse Debt, the 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.
(viii)
Nonrecourse Liabilities
. For purposes of Treasury 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 Pro Rata.
(ix)
Code Section 754 Adjustments
. To the extent an adjustment to the adjusted tax basis of any Partnership asset
pursuant to Section 734(b) of the Code (including pursuant to Treasury Regulation Section 1.734-2(b)(1)) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital
Accounts as a result of a distribution to a Partner in complete liquidation of such Partner’s interest in the Partnership, 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) taken into account pursuant to Section 5.5, 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 Treasury Regulations.
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(x)
Economic Uniformity; Changes in Law
.
(A) At the election of the General Partner with respect to any taxable period ending upon, or after, the termination of the
Subordination Period, all or a portion of the remaining items of Partnership gross income or gain for such taxable period, after taking into account allocations pursuant to Section 6.1(d)(iii), shall be allocated 100% to each Partner holding
Subordinated Units that are Outstanding as of the termination of the Subordination Period (“
Final Subordinated Units
”) in the proportion of the number of Final Subordinated Units held by such Partner to the total number of
Final Subordinated Units then Outstanding, until each such Partner has been allocated an amount of gross income or gain that increases the Capital Account maintained with respect to such Final Subordinated Units to an amount that after taking into
account the other allocations of income, gain, loss and deduction to be made with respect to such taxable period will equal the product of (1) the number of Final Subordinated Units held by such Partner and (2) the Per Unit Capital Amount
for a Common Unit. The purpose of this allocation is to establish uniformity between the Capital Accounts underlying Final Subordinated Units and the Capital Accounts underlying Common Units held by Persons other than the General Partner and its
Affiliates immediately prior to the conversion of such Final Subordinated Units into Common Units. This allocation method for establishing such economic uniformity will be available to the General Partner only if the method for allocating the
Capital Account maintained with respect to the Subordinated Units between the transferred and retained Subordinated Units pursuant to Section 5.5(c)(ii) does not otherwise provide such economic uniformity to the Final Subordinated Units.
(B) With respect to an event triggering an adjustment to the Carrying Value of Partnership property pursuant to
Section 5.5(d) during any taxable period of the Partnership ending upon, or after, the issuance of IDR Reset Common Units pursuant to Section 5.11, after the application of Section 6.1(d)(x)(A), any Unrealized Gains and Unrealized
Losses shall be allocated among the Partners in a manner that to the nearest extent possible results in the Capital Accounts maintained with respect to such IDR Reset Common Units issued pursuant to Section 5.11 equaling the product of
(1) the Aggregate Quantity of IDR Reset Common Units and (2) the Per Unit Capital Amount for an Initial Common Unit.
(C) With respect to any taxable period during which an IDR Reset Common Unit is transferred to any Person who is not an
Affiliate of the transferor, all or a portion of the remaining items of Partnership gross income or gain for such taxable period shall be allocated 100% to the
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transferor Partner of such transferred IDR Reset Common Unit until such transferor Partner has been allocated an amount of gross income or gain that increases the Capital Account maintained with
respect to such transferred IDR Reset Common Unit to an amount equal to the Per Unit Capital Amount for an Initial Common Unit.
(D) For the proper administration of the Partnership and for the preservation of uniformity of the Limited Partner Interests
(or any class or classes thereof), the General Partner shall (1) adopt such conventions as it deems appropriate in determining the amount of depreciation, amortization and cost recovery deductions; (2) make special allocations of income,
gain, loss, deduction, Unrealized Gain or Unrealized Loss; and (3) amend the provisions of this Agreement as appropriate (x) to reflect the proposal or promulgation of Treasury Regulations under Section 704(b) or Section 704(c)
of the Code or (y) otherwise to preserve or achieve uniformity of the Limited Partner Interests (or any class or classes thereof). The General Partner may adopt such conventions, make such allocations and make such amendments to this Agreement
as provided in this Section 6.1(d)(x)(D) only if such conventions, allocations or amendments would not have a material adverse effect on the Partners, the holders of any class or classes of Outstanding Limited Partner Interests or the
Partnership.
(xi)
Curative Allocation
.
(A) Notwithstanding any other provision of this Section 6.1, other than the Required Allocations, the Required
Allocations shall be taken into account in making the Agreed Allocations so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Partner pursuant to the Required Allocations and the Agreed
Allocations, together, shall be equal to the net amount of such items that would have been allocated to each such Partner under the Agreed Allocations had the Required Allocations and the related Curative Allocation not otherwise been provided in
this Section 6.1. In exercising its discretion under this Section 6.1(d)(xi)(A), the General Partner may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously
made. Allocations pursuant to this Section 6.1(d)(xi)(A) shall only be made with respect to Required Allocations to the extent the General Partner determines that such allocations will otherwise be inconsistent with the economic agreement among
the Partners.
(B) The General Partner shall, with respect to each taxable period, (1) apply the provisions of
Section 6.1(d)(xi)(A) in whatever order
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is most likely to minimize the economic distortions that might otherwise result from the Required Allocations, and (2) divide all allocations pursuant to Section 6.1(d)(xi)(A) among the
Partners in a manner that is likely to minimize such economic distortions.
(xii)
Equalization of Capital Accounts With
Respect to Privately Placed Units
. Net Termination Gain or Net Termination Loss deemed recognized as a result of a Revaluation Event shall be allocated to the (A) Unitholders holding Privately Placed Units, Pro Rata, or (B) Unitholders
holding Common Units, Pro Rata, as applicable, to the extent necessary to cause the Capital Account in respect of each Privately Placed Unit then Outstanding to equal the Capital Account in respect of each Common Unit (other than Privately Placed
Units) then Outstanding.
(xiii)
Corrective and Other Allocations
. In the event of any allocation of Additional Book
Basis Derivative Items or a Net Termination Loss, the following rules shall apply:
(A) The General Partner shall allocate
Additional Book Basis Derivative Items consisting of depreciation, amortization, depletion or any other form of cost recovery (other than Additional Book Basis Derivative Items included in Net Termination Gain or Net Termination Loss) with respect
to any Adjusted Property to the Unitholders, Pro Rata, the holders of Incentive Distribution Rights and the General Partner, all in the same proportion as the Net Termination Gain or Net Termination Loss resulting from the Revaluation Event that
gave rise to such Additional Book Basis Derivative Items was allocated to them pursuant to Section 6.1(c).
(B) If a
sale or other taxable disposition of an Adjusted Property, including, for this purpose, inventory (“
Disposed of Adjusted Property
”) occurs other than in connection with an event giving rise to Net Termination Gain or Net
Termination Loss, the General Partner shall allocate (1) items of gross income and gain (x) away from the holders of Incentive Distribution Rights and the General Partner and (y) to the Unitholders, or (2) items of deduction and
loss (x) away from the Unitholders and (y) to the holders of Incentive Distribution Rights and the General Partner, to the extent that the Additional Book Basis Derivative Items with respect to the Disposed of Adjusted Property (determined
in accordance with the last sentence of the definition of Additional Book Basis Derivative Items) treated as having been allocated to the Unitholders pursuant to this Section 6.1(d)(xiii)(B) exceed their Share of Additional Book Basis
Derivative Items with respect to such Disposed of Adjusted Property. For purposes of this Section 6.1(d)(xiii)(B), the Unitholders shall be treated as having been allocated Additional Book Basis Derivative
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Items to the extent that such Additional Book Basis Derivative Items have reduced the amount of income that would otherwise have been allocated to the Unitholders under the Partnership Agreement
(e.g., Additional Book Basis Derivative Items taken into account in computing cost of goods sold would reduce the amount of book income otherwise available for allocation among the Partners). Any allocation made pursuant to this
Section 6.1(d)(xiii)(B) shall be made after all of the other Agreed Allocations have been made as if this Section 6.1(d)(xiii) were not in this Agreement and, to the extent necessary, shall require the reallocation of items that have been
allocated pursuant to such other Agreed Allocations.
(C) Net Termination Loss in an amount equal to the lesser of
(1) such Net Termination Loss and (2) the Aggregate Remaining Net Positive Adjustments shall be allocated in such manner as is determined by the General Partner that to the extent possible, the Capital Account balances of the Partners will
equal the amount they would have been had no prior Book-Up Events occurred, and any remaining Net Termination Loss shall be allocated pursuant to Section 6.1(c) hereof. In allocating Net Termination Loss pursuant to this
Section 6.1(d)(xiii)(C), the General Partner shall attempt, to the extent possible, to cause the Capital Accounts of the Unitholders, on the one hand, and holders of the Incentive Distribution Rights, on the other hand, to equal the amount they
would equal if (i) the Carrying Values of the Partnership’s property had not been previously adjusted in connection with any prior Book-Up Events, (ii) Unrealized Gain and Unrealized Loss (or, in the case of a liquidation, actual gain
or loss) with respect to such Partnership Property were determined with respect to such unadjusted Carrying Values, and (iii) any resulting Net Termination Gain had been allocated pursuant to Section 6.1(c)(i) (including, for the avoidance
of doubt, taking into account the provisions set forth in the last sentence of Section 6.1(c)(i)).
(D) In making the
allocations required under this Section 6.1(d)(xiii)(D), the General Partner may apply whatever conventions or other methodology it determines will satisfy the purpose of this Section 6.1(d)(xiii)(D). Without limiting the foregoing, if an
Adjusted Property is contributed by the Partnership to another entity classified as a partnership for U.S. federal income tax purposes (the “
lower tier partnership
”), the General Partner may make allocations similar to those
described in Section 6.1(d)(xiii)(A), (B) and (C) to the extent the General Partner determines such allocations are necessary to account for the Partnership’s allocable share of income, gain, loss and deduction of the lower tier
partnership that relate to the contributed Adjusted Property in a manner that is consistent with the purpose of this Section 6.1(d)(xiii)(D).
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(xiv)
Special Curative Allocation in Event of Liquidation Prior to Conversion
of the Last Outstanding Subordinated Unit
. Notwithstanding any other provision of this Section 6.1 (other than the Required Allocations), if (A) the Liquidation Date occurs prior to the conversion of the last Outstanding Subordinated
Unit and (B) after having made all other allocations provided for in this Section 6.1 for the taxable period in which the Liquidation Date occurs, the Capital Account in respect of each Common Unit does not equal the amount such Capital
Account would have been if Section 6.1(c)(iii) and Section 6.1(c)(iv) had not been part of this Agreement and all prior allocations of Net Termination Gain and Net Termination Loss had been made pursuant to Section 6.1(c)(i) or
Section 6.1(c)(ii), as applicable, then items of income, gain, loss and deduction for such taxable period shall be reallocated among the General Partner and all Unitholders in a manner determined appropriate by the General Partner so as to
cause, to the maximum extent possible, the Capital Account in respect of each Common Unit to equal the amount such Capital Account would have been if all prior allocations of Net Termination Gain and Net Termination Loss had been made pursuant to
Section 6.1(c)(i) or Section 6.1(c)(ii), as applicable. For the avoidance of doubt, the reallocation of items set forth in the immediately preceding sentence provides that, to the extent necessary to achieve the Capital Account balances
described above, (x) items of income and gain that would otherwise be included in Net Income or Net Loss, as the case may be, for the taxable period in which the Liquidation Date occurs shall be reallocated from the General Partner and
Unitholders holding Subordinated Units to Unitholders holding Common Units and (y) items of deduction and loss that would otherwise be included in Net Income or Net Loss, as the case may be, for the taxable period in which the Liquidation Date
occurs shall be reallocated from Unitholders holding Common Units to the General Partner and Unitholders holding Subordinated Units. In the event that (1) the Liquidation Date occurs on or before the date (not including any extension of time
prescribed by law) for the filing of the Partnership’s federal income tax return for the taxable period immediately prior to the taxable period in which the Liquidation Date occurs and (2) the reallocation of items for the taxable period
in which the Liquidation Date occurs as set forth above in this Section 6.1(d)(xiv) fails to achieve the Capital Account balances described above, items of income, gain, loss and deduction that would otherwise be included in the Net Income or
Net Loss, as the case may be, for such prior taxable period shall be reallocated among the General Partner and all Unitholders in a manner that will, to the maximum extent possible and after taking into account all other allocations made pursuant to
this Section 6.1(d)(xiv), cause the Capital Account in respect of each Common Unit to equal the amount such Capital Account would have been if all prior allocations of Net Termination Gain and Net Termination Loss had been made pursuant to
Section 6.1(c)(i) or Section 6.1(c)(ii), as applicable.
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Section 6.2
Allocations for Tax Purposes
.
(a) Except as otherwise provided herein, for U.S. federal income tax purposes, each item of income, gain, loss and deduction shall be
allocated among the Partners in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 6.1.
(b) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be allocated for U.S. federal income tax purposes among the Partners in the manner provided under Section 704(c) of the Code, and the Treasury Regulations promulgated under
Section 704(b) and 704(c) of the Code, as determined appropriate by the General Partner (taking into account the General Partner’s discretion under Section 6.1(d)(x)(D));
provided
, that in all events the General Partner shall
apply the “remedial allocation method” in accordance with the principles of Treasury Regulation Section 1.704-3(d).
(c)
The General Partner may determine to depreciate or amortize the portion of an adjustment under Section 743(b) of the Code attributable to unrealized appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax Disparity)
using a predetermined rate derived from the depreciation or amortization method and useful life applied to the unamortized Book-Tax Disparity of such property, despite any inconsistency of such approach with Treasury Regulation
Section 1.167(c)-l(a)(6) or any successor regulations thereto. If the General Partner determines that such reporting position cannot reasonably be taken, the General Partner may adopt depreciation and amortization conventions under which all
purchasers acquiring Limited Partner Interests in the same month would receive depreciation and amortization deductions, based upon the same applicable rate as if they had purchased a direct interest in the Partnership’s property. If the
General Partner chooses not to utilize such aggregate method, the General Partner may use any other depreciation and amortization conventions to preserve the uniformity of the intrinsic tax characteristics of any Limited Partner Interests, so long
as such conventions would not have a material adverse effect on the Limited Partners or the Record Holders of any class or classes of Limited Partner Interests.
(d) In accordance with Treasury Regulation Sections 1.1245-1(e) and 1.1250-1(f), any gain allocated to the Partners upon the sale or
other taxable disposition of any Partnership asset shall, to the extent possible, after taking into account other required allocations of gain pursuant to this Section 6.2, be characterized as Recapture Income in the same proportions and to the
same extent as such Partners (or their predecessors in interest) have been allocated any deductions directly or indirectly giving rise to the treatment of such gains as Recapture Income.
(e) All items of income, gain, loss, deduction and credit recognized by the Partnership for U.S. federal income tax purposes and allocated to
the Partners in accordance with the provisions hereof shall be determined without regard to any election under Section 754 of the Code that may be made by the Partnership;
provided
,
however
, that such allocations, once made, shall
be adjusted (in the manner determined by the General Partner) to take into account those adjustments permitted or required by Sections 734 and 743 of the Code.
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(f) Each item of Partnership income, gain, loss and deduction shall, for U.S. federal income tax
purposes, be determined for each taxable period and prorated on a monthly basis and shall be allocated to the Partners as of the opening of the National Securities Exchange on which Partnership Interests are listed or admitted to trading on the
first Business Day of each month;
provided
,
however
, such items for the period beginning on the Closing Date and ending on the last day of the month in which the Closing Date occurs shall be allocated to the Partners (including all
Partners who acquire Units pursuant to the Contribution Agreement) as of the closing of the National Securities Exchange on which Partnership Interests are listed or admitted to trading on the last Business Day of the next succeeding month; and
provided
,
further
, that gain or loss on a sale or other disposition of any assets of the Partnership or any other extraordinary item of income, gain, loss or deduction as determined by the General Partner, shall be allocated to the
Partners as of the opening of the National Securities Exchange on which Partnership Interests are listed or admitted to trading on the first Business Day of the month in which such item is recognized for federal income tax purposes. The General
Partner may revise, alter or otherwise modify such methods of allocation to the extent permitted or required by Section 706 of the Code and the regulations or rulings promulgated thereunder.
(g) Allocations that would otherwise be made to a Limited Partner under the provisions of this Article VI shall instead be made to the
beneficial owner of Limited Partner Interests held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or any other method determined by the
General Partner.
(h) If, as a result of an exercise of a Noncompensatory Option, a Capital Account reallocation is required under
Treasury Regulation Section 1.704-1(b)(2)(iv)(s)(3), the General Partner shall make corrective allocations pursuant to Treasury Regulation Section 1.704-1(b)(4)(x).
Section 6.3
Distributions; Characterization of Distributions; Distributions to Record Holders
.
(a) The General Partner may adopt a cash distribution policy, which it may change from time to time without amendment to this Agreement.
Distributions will be made as and when declared by the General Partner.
(b) All amounts of cash and cash equivalents distributed by the
Partnership on any date from any source shall be deemed to be Operating Surplus until the sum of all amounts of cash and cash equivalents theretofore distributed by the Partnership to the Partners pursuant to Section 6.4 equals the Operating
Surplus from the Closing Date through the close of the immediately preceding Quarter. Any remaining amounts of cash and cash equivalents distributed by the Partnership on such date shall, except as otherwise provided in Section 6.5, be
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deemed to be “Capital Surplus.” All distributions required to be made under this Agreement or otherwise made by the Partnership shall be made subject to Sections 17-607 and 17-804
of the Delaware Act.
(c) Notwithstanding Section 6.3(b), in the event of the dissolution and liquidation of the Partnership, all
Partnership assets shall be applied and distributed solely in accordance with, and subject to the terms and conditions of, Section 12.4.
(d) Each distribution in respect of a Partnership Interest shall be paid by the Partnership, directly or through any Transfer Agent or through
any other Person or agent, only to the Record Holder of such Partnership Interest as of the Record Date set for such distribution. Such payment shall constitute full payment and satisfaction of the Partnership’s liability in respect of such
payment, regardless of any claim of any Person who may have an interest in such payment by reason of an assignment or otherwise.
Section 6.4
Distributions from Operating Surplus
.
(a)
During Subordination Period
. Cash and cash equivalents distributed in respect of any Quarter wholly within the Subordination Period
that is deemed to be Operating Surplus pursuant to the provisions of Section 6.3 or 6.5 shall be distributed as follows:
(i) First, to all Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit
then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;
(ii) Second, to all Unitholders
holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage existing with respect to such Quarter;
(iii) Third, to all Unitholders holding Subordinated Units, Pro Rata, until there has been distributed in respect of each
Subordinated Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;
(iv) Fourth, to
all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;
(v) Fifth, (A) 15% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 85% to all Unitholders, Pro
Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution over the First Target Distribution for such Quarter;
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(vi) Sixth, (A) 25% to the holders of the Incentive Distribution Rights, Pro
Rata; and (B) 75% to all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution over the Second Target Distribution for such Quarter; and
(vii) Thereafter, (A) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 50% to all
Unitholders, Pro Rata;
provided
,
however
, if the Target Distributions have been reduced to zero pursuant to the second sentence of
Section 6.6(a), the distribution of cash and cash equivalents that are deemed to be Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.4(a)(vii).
(b)
After Subordination Period
. Cash and cash equivalents distributed in respect of any Quarter ending after the Subordination Period
has ended that is deemed to be Operating Surplus pursuant to the provisions of Section 6.3 or 6.5 shall be distributed as follows:
(i) First, to all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount
equal to the Minimum Quarterly Distribution for such Quarter;
(ii) Second, to all Unitholders, Pro Rata, until there has
been distributed in respect of each Unit then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;
(iii) Third, (A) 15% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 85% to all Unitholders,
Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution over the First Target Distribution for such Quarter;
(iv) Fourth, (A) 25% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 75% to all Unitholders,
Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution over the Second Target Distribution for such Quarter; and
(v) Thereafter, (A) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 50% to all
Unitholders, Pro Rata;
provided
,
however
, if the Target Distributions have been reduced to zero pursuant to the second sentence of
Section 6.6(a), the distribution of cash or cash equivalents that are deemed to be Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.4(b)(v).
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Section 6.5
Distributions from Capital Surplus
. Cash and cash equivalents that are
distributed and deemed to be Capital Surplus pursuant to the provisions of Section 6.3(b) shall be distributed, unless the provisions of Section 6.3 require otherwise:
(a) First, 100% to the Unitholders, Pro Rata, until the Minimum Quarterly Distribution has been reduced to zero pursuant to the second
sentence of Section 6.6(a);
(b) Second, 100% to all Unitholders holding Common Units, Pro Rata, until there has been distributed in
respect of each Common Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage; and
(c) Thereafter, all cash and
cash equivalents that are distributed shall be distributed as if it were Operating Surplus and shall be distributed in accordance with Section 6.4.
Section 6.6
Adjustment of Target Distribution Levels
.
(a) The Target Distributions, Common Unit Arrearages and Cumulative Common Unit Arrearages shall be proportionately adjusted in the event of
any distribution, combination or subdivision (whether effected by a distribution payable in Units or otherwise) of Units or other Partnership Interests. In the event of a distribution of cash or cash equivalents that is deemed to be from Capital
Surplus, the then applicable Target Distributions shall be reduced in the same proportion that the distribution had to the fair market value of the Common Units immediately prior to the announcement of the distribution. If the Common Units are
publicly traded on a National Securities Exchange, the fair market value will be the Current Market Price before the ex-dividend date. If the Common Units are not publicly traded, the fair market value will be determined by the Board of Directors.
(b) The Target Distributions shall also be subject to adjustment pursuant to Section 5.11 and Section 6.9.
Section 6.7
Special Provisions Relating to the Holders of Subordinated Units
.
(a) Except with respect to the right to vote on or approve matters requiring the vote or approval of a percentage of the holders of
Outstanding Common Units and the right to participate in allocations of income, gain, loss and deduction and distributions made with respect to Common Units, the holder of a Subordinated Unit shall have all of the rights and obligations of a
Unitholder holding Common Units hereunder;
provided
,
however
, that immediately upon the conversion of Subordinated Units into Common Units pursuant to Section 5.7, the Unitholder holding Subordinated Units shall possess all of the
rights and obligations of a Unitholder holding Common Units hereunder with respect to such converted Subordinated Units, including the right to vote as a Common Unitholder and the right to participate in allocations of income, gain, loss
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and deduction and distributions made with respect to Common Units;
provided
,
however
, that such converted Subordinated Units shall remain subject to the provisions of
Sections 5.5(c)(ii), 6.1(d)(x), and 6.7(b) and (c).
(b) A Unitholder shall not be permitted to transfer a Subordinated Unit or a
Subordinated Unit that has converted into a Common Unit pursuant to Section 5.7 (other than a transfer to an Affiliate) if the remaining balance in the transferring Unitholder’s Capital Account with respect to the retained Subordinated
Units or retained converted Subordinated Units would be negative after giving effect to the allocation under Section 5.5(c)(ii)(B).
(c) The Unitholder holding a Common Unit that has resulted from the conversion of a Subordinated Unit pursuant to Section 5.7 shall not
be permitted to transfer such Common Unit to a Person that is not an Affiliate of the holder until such time as the General Partner determines, based on advice of counsel, that each such Common Unit should have, as a substantive matter, like
intrinsic economic and federal income tax characteristics, in all material respects, to the intrinsic economic and federal income tax characteristics of an Initial Common Unit. In connection with the condition imposed by this Section 6.7(c),
the General Partner may take whatever steps are required to provide economic uniformity to such Common Units in preparation for a transfer of such Common Units, including the application of Sections 5.5(c)(ii) and 6.1(d)(x);
provided
,
however
, that no such steps may be taken that would have a material adverse effect on the Unitholders holding Common Units.
Section 6.8
Special Provisions Relating to the Holders of IDR Reset Common Units
.
(a) A Unitholder shall not be permitted to transfer an IDR Reset Common Unit (other than a transfer to an Affiliate) if the remaining balance
in the transferring Unitholder’s Capital Account with respect to the retained IDR Reset Common Units would be negative after giving effect to the allocation under Section 5.5(c)(iii).
(b) A Unitholder holding an IDR Reset Common Unit shall not be permitted to transfer such Common Unit to a Person that is not an Affiliate of
the holder until such time as the General Partner determines, based on advice of counsel, that upon transfer each such Common Unit should have, as a substantive matter, like intrinsic economic and U.S. federal income tax characteristics to the
transferee, in all material respects, to the intrinsic economic and U.S. federal income tax characteristics of an Initial Common Unit to such transferee. In connection with the condition imposed by this Section 6.8(b), the General Partner may
apply Sections 5.5(c)(iii), 6.1(d)(x) and 6.8(a) or, to the extent not resulting in a material adverse effect on the Unitholders holding Common Units, take whatever steps are required to provide economic uniformity to such Common Units in
preparation for a transfer of such IDR Reset Common Units.
Section 6.9
Entity-Level Taxation
. If legislation is enacted or
the official interpretation of existing legislation is modified by a governmental authority, which after giving effect to such enactment or modification, results in a Group Member becoming subject to
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federal, state or local or non-U.S. income or withholding taxes in excess of the amount of such taxes due from the Group Member prior to such enactment or modification (including, for the
avoidance of doubt, any increase in the rate of such taxation applicable to the Group Member), then the General Partner may, in its sole discretion, reduce the Target Distributions by the amount of income or withholding taxes that are payable by
reason of any such new legislation or interpretation (the “
Incremental Income Taxes
”), or any portion thereof selected by the General Partner, in the manner provided in this Section 6.9. If the General Partner elects to
reduce the Target Distributions for any Quarter with respect to all or a portion of any Incremental Income Taxes, the General Partner shall estimate for such Quarter the Partnership Group’s aggregate liability (the “
Estimated
Incremental Quarterly Tax Amount
”) for all (or the relevant portion of) such Incremental Income Taxes;
provided
that any difference between such estimate and the actual liability for Incremental Income Taxes (or the relevant
portion thereof) for such Quarter may, to the extent determined by the General Partner, be taken into account in determining the Estimated Incremental Quarterly Tax Amount with respect to each Quarter in which any such difference can be determined.
For each such Quarter, the Target Distributions, shall be the product obtained by multiplying (a) the amounts therefor that are set out herein prior to the application of this Section 6.9 times (b) the quotient obtained by dividing
(i) cash and cash equivalents with respect to such Quarter by (ii) the sum of cash and cash equivalents with respect to such Quarter and the Estimated Incremental Quarterly Tax Amount for such Quarter, as determined by the General Partner.
For purposes of the foregoing, cash and cash equivalents with respect to a Quarter will be deemed reduced by the Estimated Incremental Quarterly Tax Amount for that Quarter.
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1
Management
.
(a) The General Partner shall conduct, direct and manage all activities of the Partnership. Except as otherwise expressly provided in this
Agreement, but without limitation on the ability of the General Partner to delegate its rights and power to other Persons, all management powers over the business and affairs of the Partnership shall be exclusively vested in the General Partner, and
no other Partner shall have any management power over the business and affairs of the Partnership. In addition to the powers now or hereafter granted to a general partner of a limited partnership under applicable law or that are granted to the
General Partner under any other provision of this Agreement, the General Partner, subject to Section 7.4, shall have full power and authority to do all things and on such terms as it determines to be necessary or appropriate to conduct the
business of the Partnership, to exercise all powers set forth in Section 2.5 and to effectuate the purposes set forth in Section 2.4, including the following:
(i) the making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting
for, indebtedness and other liabilities, the issuance of evidences of indebtedness, including indebtedness that is convertible or exchangeable into Partnership Interests, and the incurring of any other obligations;
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(ii) the making of tax, regulatory and other filings, or rendering of periodic or
other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership;
(iii)
the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of the assets of the Partnership or the merger or other combination of the Partnership with or into another Person (the matters described in this
clause (iii) being subject, however, to any prior approval that may be required by Section 7.4 or Article XIV);
(iv) the use of the assets of the Partnership (including cash on hand) for any purpose consistent with the terms of this
Agreement, including the financing of the conduct of the operations of the Partnership Group; the lending of funds to other Persons (including other Group Members); the repayment or guarantee of obligations of any Group Member; and the making of
capital contributions to any Group Member;
(v) the negotiation, execution and performance of any contracts, conveyances or
other instruments (including instruments that limit the liability of the Partnership under contractual arrangements to all or particular assets of the Partnership, with the other party to the contract to have no recourse against the General Partner
or its assets other than its interest in the Partnership, even if the same results in the terms of the transaction being less favorable to the Partnership than would otherwise be the case);
(vi) the distribution of cash or cash equivalents by the Partnership;
(vii) the selection, employment, retention and dismissal of employees (including employees having titles such as
“president,” “vice president,” “secretary” and “treasurer”) and agents, outside attorneys, accountants, consultants and contractors of the General Partner or the Partnership Group and the determination of
their compensation and other terms of employment or hiring;
(viii) the maintenance of insurance for the benefit of the
Partnership Group, the Partners and Indemnitees;
(ix) the formation of, or acquisition of an interest in, and the
contribution of property and the making of loans to, any limited or general partnerships, joint ventures, corporations, limited liability companies or other Persons (including the acquisition of interests in, and the contributions of property to,
any Group Member from time to time);
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(x) the control of any matters affecting the rights and obligations of the
Partnership, including the bringing and defending of actions at law or in equity and otherwise engaging in the conduct of litigation, arbitration or mediation and the incurring of legal expense and the settlement of claims and litigation;
(xi) the indemnification of any Person against liabilities and contingencies to the extent permitted by law;
(xii) the entering into listing agreements with any National Securities Exchange and the delisting of some or all of the
Limited Partner Interests from, or requesting that trading be suspended on, any such exchange;
(xiii) the purchase, sale
or other acquisition or disposition of Partnership Interests, or the issuance of Derivative Instruments;
(xiv) the
undertaking of any action in connection with the Partnership’s participation in the management of any Group Member; and
(xv) the entering into agreements with any of its Affiliates, including agreements to render services to a Group Member or to
itself in the discharge of its duties as General Partner of the Partnership.
(b) Notwithstanding any other provision of this Agreement,
any Group Member Agreement, the Delaware Act or any applicable law, rule or regulation, each of the Partners, each other Person who acquires an interest in a Partnership Interest and each other Person bound by this Agreement hereby
(i) approves, ratifies and confirms the execution, delivery and performance by the parties thereto of this Agreement, the Underwriting Agreement, the Contribution Agreement and the other agreements described in or filed as exhibits to the
Registration Statement that are related to the transactions contemplated by the Registration Statement (in the case of each agreement other than this Agreement, without giving effect to any amendments, supplements or restatements after the date
hereof); (ii) agrees that the General Partner (on its own behalf or on behalf of the Partnership) is authorized to execute, deliver and perform the agreements referred to in clause (i) of this sentence and the other agreements, acts,
transactions and matters described in or contemplated by the Registration Statement on behalf of the Partnership without any further act, approval or vote of the Partners, or the other Persons who may acquire an interest in Partnership Interests or
are otherwise bound by this Agreement; and (iii) agrees that the execution, delivery or performance by the General Partner, any Group Member or any Affiliate of any of them of this Agreement or any agreement authorized or permitted under this
Agreement (including the exercise by the General Partner or any Affiliate of the General Partner of the rights accorded pursuant to Article XV) shall not constitute a breach by the General Partner of any duty that the General Partner may owe the
Partnership or the Partners or any other Persons under this Agreement (or any other agreements) or of any duty existing at law, in equity or otherwise.
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Section 7.2
Replacement of Fiduciary Duties
. Notwithstanding any other provision of
this Agreement, to the extent that, at law or in equity, the General Partner or any other Indemnitee would have duties (including fiduciary duties) to the Partnership, to another Partner, to any Person who acquires an interest in a Partnership
Interest or to any other Person bound by this Agreement, all such duties (including fiduciary duties) are hereby eliminated, to the fullest extent permitted by law, and replaced with the duties expressly set forth herein. The elimination of duties
(including fiduciary duties) and replacement thereof with the duties expressly set forth herein are approved by the Partnership, each of the Partners, each other Person who acquires an interest in a Partnership Interest and each other Person bound
by this Agreement.
Section 7.3
Certificate of Limited Partnership
. The General Partner has caused the Certificate of Limited
Partnership to be filed with the Secretary of State of the State of Delaware as required by the Delaware Act. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents that the General Partner
determines to be necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware or any other state in
which the Partnership may elect to do business or own property. To the extent the General Partner determines such action to be necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate of Limited
Partnership and do all things to maintain the Partnership as a limited partnership (or a partnership or other entity in which the limited partners have limited liability) under the laws of the State of Delaware or of any other state in which the
Partnership may elect to do business or own property. Subject to the terms of Section 3.4(a), the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Limited Partnership, any
qualification document or any amendment thereto to any Partner.
Section 7.4
Restrictions on the General Partner’s
Authority
. Except as provided in Article XII and Article XIV, the General Partner may not sell, exchange or otherwise dispose of all or substantially all of the assets of the Partnership Group, taken as a whole, in a single transaction or a
series of related transactions without the approval of a Unit Majority;
provided
, however, that this provision shall not preclude or limit the General Partner’s ability to mortgage, pledge, hypothecate or grant a security interest in all
or substantially all of the assets of the Partnership Group and shall not apply to any sale of any or all of the assets of the Partnership Group pursuant to the foreclosure of, or other realization upon, any such encumbrance.
Section 7.5
Reimbursement of the General Partner
.
(a) The General Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine, for (i) all
direct and indirect expenses it incurs or payments it makes on behalf of the Partnership Group (including salary, bonus, incentive compensation and other amounts paid to any Person (including Affiliates of the General Partner) to perform services
for the Partnership Group or for the General Partner in the discharge of its duties to the Partnership Group), and (ii) all other expenses allocable to the Partnership Group or otherwise incurred by the General Partner in connection with
operating the Partnership Group’s
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business (including expenses allocated to the General Partner by its Affiliates). The General Partner shall determine the expenses that are allocable to the Partnership Group. Reimbursements
pursuant to this Section 7.5 shall be in addition to any reimbursement to the General Partner as a result of indemnification pursuant to Section 7.7.
(b) The General Partner and its Affiliates may charge any member of the Partnership Group a management fee to the extent necessary to allow
the Partnership Group to reduce the amount of any state franchise or income tax or any tax based upon the revenues or gross margin of any member of the Partnership Group if the tax benefit produced by the payment for such management fee of such
management fee or fees exceeds the amount of such fee or fees.
(c) The General Partner, without the approval of the Limited Partners (who
shall have no right to vote in respect thereof), may propose and adopt on behalf of the Partnership benefit plans, programs and practices (including plans, programs and practices involving the issuance of Partnership Interests), or cause the
Partnership to issue Partnership Interests in connection with, or pursuant to, any benefit plan, program or practice maintained or sponsored by the General Partner or any of its Affiliates, any Group Member or their Affiliates, or any of them, in
each case for the benefit of employees, officers, consultants and directors of the General Partner or its Affiliates, in respect of services performed, directly or indirectly, for the benefit of the Partnership Group. The Partnership agrees to issue
and sell to the General Partner or any of its Affiliates any Partnership Interests that the General Partner or such Affiliates are obligated to provide to any employees, officers, consultants and directors pursuant to any such benefit plans,
programs or practices. Expenses incurred by the General Partner in connection with any such plans, programs and practices (including the net cost to the General Partner or such Affiliates of Partnership Interests purchased by the General Partner or
such Affiliates, from the Partnership or otherwise, to fulfill awards under such plans, programs and practices) shall be reimbursed in accordance with Section 7.5(a). Any and all obligations of the General Partner under any benefit plans,
programs or practices adopted by the General Partner as permitted by this Section 7.5(c) shall constitute obligations of the General Partner hereunder and shall be assumed by any successor General Partner approved pursuant to Section 11.1
or Section 11.2 or the transferee of or successor to all of the General Partner’s General Partner Interest pursuant to Section 4.6.
Section 7.6
Outside Activities
.
(a) The General Partner, for so long as it is the General Partner of the Partnership, shall not engage in any business or activity or incur
any debts or liabilities except in connection with or incidental to (i) its performance as general partner or managing member, if any, of one or more Group Members or as described in or contemplated by the Registration Statement, (ii) the
acquiring, owning or disposing of debt securities or equity interests in any Group Member or (iii) the direct or indirect provision of management, advisory, and administrative services to its Affiliates or to other Persons.
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(b) Each Unrestricted Person (other than the General Partner) shall have the right to engage in
businesses of every type and description and other activities for profit and to engage in and possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by
any Group Member, independently or with others, including business interests and activities in direct competition with the business and activities of any Group Member. No such business interest or activity shall constitute a breach of this
Agreement, any fiduciary or other duty existing at law, in equity or otherwise, or obligation of any type whatsoever to the Partnership or other Group Member, to another Partner, to any Person who acquires an interest in a Partnership Interest or to
any other Person bound by this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement, the doctrine of corporate
opportunity, or any analogous doctrine, shall not apply to any Unrestricted Person (including the General Partner). No Unrestricted Person (including the General Partner) who acquires knowledge of a potential transaction, agreement, arrangement or
other matter that may be an opportunity for the Partnership, shall have any duty to communicate or offer such opportunity to any Group Member, and such Unrestricted Person (including the General Partner) shall not be liable to the Partnership or
other Group Member, to another Partner, to any Person who acquires an interest in a Partnership Interest or to any other Person bound by this Agreement for breach of any fiduciary or other duty existing at law, in equity or otherwise by reason of
the fact that such Unrestricted Person (including the General Partner) pursues or acquires such opportunity for itself, directs such opportunity to another Person or does not communicate such opportunity or information to any Group Member.
(d) The General Partner and each of its Affiliates may acquire Units or other Partnership Interests in addition to those acquired on the
Closing Date and, except as otherwise expressly provided in Section 7.11, shall be entitled to exercise, at their option, all rights relating to all Units or other Partnership Interests acquired by them.
Section 7.7
Indemnification
.
(a) To the fullest extent permitted by law, all Indemnitees shall be indemnified and held harmless by the Partnership from and against any and
all losses, claims, damages, liabilities (joint or several), expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all threatened pending or completed claims, demands,
actions, suits or proceedings, whether civil, criminal, administrative or investigative, and whether formal or informal and including appeals, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by
reason of its status as an Indemnitee and acting (or refraining to act) in such capacity;
provided
, that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of
competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Agreement, the Indemnitee acted in Bad Faith or, in the case of a criminal matter, acted with knowledge that the
Indemnitee’s conduct was unlawful. Any indemnification pursuant to this Section 7.7 shall be
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made only out of the assets of the Partnership, it being agreed that the General Partner shall not be personally liable for such indemnification and shall have no obligation to contribute or loan
any monies or property to the Partnership to enable it to effectuate such indemnification.
(b) To the fullest extent permitted by law,
expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to Section 7.7(a) in appearing at, participating in or defending any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Partnership prior to a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 7.7,
the Indemnitee is not entitled to be indemnified upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be ultimately determined that the Indemnitee is not entitled to be indemnified as
authorized by this Section 7.7.
(c) The indemnification provided by this Section 7.7 shall be in addition to any other rights
to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the holders of Outstanding Limited Partner Interests, as a matter of law, in equity or otherwise, both as to actions in the Indemnitee’s capacity as an
Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.
(d) The Partnership may purchase and maintain (or reimburse the General Partner or its Affiliates for the cost of) insurance, on behalf of the
General Partner, its Affiliates, the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against, or expense that may be incurred by, such Person in connection with the
Partnership’s activities or such Person’s activities on behalf of the Partnership, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 7.7, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an
employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with
respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of Section 7.7(a); and action taken or omitted by an Indemnitee with respect to any employee benefit plan in the performance of
its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in the best interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in
this Agreement.
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(g) An Indemnitee shall not be denied indemnification in whole or in part under this
Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 7.7 are for the benefit of the Indemnitees and their heirs, successors, assigns, executors and
administrators and shall not be deemed to create any rights for the benefit of any other Persons.
(i) No amendment, modification or
repeal of this Section 7.7 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Partnership, nor the obligations of the Partnership to indemnify any
such Indemnitee under and in accordance with the provisions of this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.8
Liability
of Indemnitees
.
(a) Notwithstanding anything to the contrary set forth in this Agreement, any Group Member Agreement, or under the
Delaware Act or any other law, rule or regulation or at equity, no Indemnitee shall be liable for monetary damages or otherwise to the Partnership, to another Partner, to any other Person who acquires an interest in a Partnership Interest or to any
other Person bound by this Agreement, for losses sustained or liabilities incurred, of any kind or character, as a result of its or any of any other Indemnitee’s determinations, act(s) or omission(s) in their capacities as Indemnitees;
provided
,
however
, that an Indemnitee shall be liable for losses or liabilities sustained or incurred by the Partnership, the other Partners, any other Persons who acquire an interest in a Partnership Interest or any other Person bound
by this Agreement, if it is determined by a final and non-appealable judgment entered by a court of competent jurisdiction that such losses or liabilities were the result of the conduct of that Indemnitee engaged in by it in Bad Faith or with
respect to any criminal conduct, with the knowledge that its conduct was unlawful.
(b) The General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents, and the General Partner shall not be responsible for any misconduct or negligence on the part of any such agent
appointed by the General Partner if such appointment was not made in Bad Faith.
(c) To the extent that, at law or in equity, an
Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Partnership, to the Partners, to any Person who acquires an interest in a Partnership Interest or to any other Person bound by this Agreement, the General
Partner and any other Indemnitee acting in connection with the Partnership’s business or affairs shall not be liable to the Partnership, to any Partner, to any Person who acquires an interest in a Partnership Interest or to any other Person
bound by this Agreement for its reliance on the provisions of this Agreement.
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(d) Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall
be prospective only and shall not in any way affect the limitations on the liability of the Indemnitees under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.9
Resolution of Conflicts of Interest; Standards of Conduct and Modification of Duties
.
(a) Whenever the General Partner, acting in its capacity as the general partner of the Partnership, or the Board of Directors or any committee
of the Board of Directors (including the Conflicts Committee) or any Affiliates of the General Partner cause the General Partner to make a determination or take or omit to take any action in such capacity, whether or not under this Agreement, any
Group Member Agreement or any other agreement contemplated hereby, then, unless another lesser standard is provided for in this Agreement, the General Partner, the Board of Directors, such committee or such Affiliates, shall not make such
determination, or take or omit to take such action, in Bad Faith. The foregoing and other lesser standards provided for in this Agreement are the sole and exclusive standards governing any such determinations, actions and omissions of the General
Partner, the Board of Directors, any committee of the Board of Directors (including the Conflicts Committee) and any Affiliate of the General Partner and no such Person shall be subject to any fiduciary duty or other duty or obligation, or any
other, different or higher standard (all of which duties, obligations and standards are hereby waived and disclaimed), under this Agreement any Group Member Agreement or any other agreement contemplated hereby, or under the Delaware Act or any other
law, rule or regulation or at equity. Any such determination, action or omission by the General Partner, the Board of Directors of the General Partner or any committee thereof (including the Conflicts Committee) or of any Affiliates of the General
Partner, will for all purposes be presumed to have been in Good Faith. In any proceeding brought by or on behalf of the Partnership, any Limited Partner, or any other Person who acquires an interest in a Partnership Interest or any other Person who
is bound by this Agreement, challenging such determination, act or omission, the Person bringing or prosecuting such proceeding shall have the burden of proving that such determination, action or omission was not in Good Faith.
(b) Whenever the General Partner makes a determination or takes or omits to take any action, or any of its Affiliates causes it to do so, not
acting in its capacity as the general partner of the Partnership, whether or not under this Agreement, any Group Member Agreement or any other agreement contemplated hereby, then the General Partner, or such Affiliates causing it to do so, are
entitled, to the fullest extent permitted by law, to make such determination or to take or omit to take such action free of any fiduciary duty or duty of Good Faith, or other duty or obligation existing at law, in equity or otherwise whatsoever to
the Partnership, to another
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Partner, to any Person who acquires an interest in a Partnership Interest or to any other Person bound by this Agreement, and the General Partner, or such Affiliates causing it to do so, shall
not, to the fullest extent permitted by law, be required to act in Good Faith or pursuant to any fiduciary or other duty or standard imposed by this Agreement, any Group Member Agreement or any other agreement contemplated hereby or under the
Delaware Act or any other law, rule or regulation or at equity.
(c) For purposes of Sections 7.9(a) and (b) of this Agreement,
“acting in its capacity as the general partner of the Partnership” means and is solely limited to, the General Partner exercising its authority as a general partner under this Agreement, other than when it is “acting in its individual
capacity.” For purposes of this Agreement, “acting in its individual capacity” means: (i) any action by the General Partner or its Affiliates other than through the exercise of the General Partner of its authority as a general
partner under this Agreement; and (ii) any action or inaction by the General Partner by the exercise (or failure to exercise) of its rights, powers or authority under this Agreement that are modified by: (A) the phrase “at the option
of the General Partner,” (B) the phrase “in its sole discretion” or “in its discretion” or (iii) some variation of the phrases set forth in clauses (i) and (ii). For the avoidance of doubt, whenever the
General Partner votes, acquires Partnership Interests or transfers its Partnership Interests, or refrains from voting or transferring its Partnership Interests, it shall be and be deemed to be “acting in its individual capacity.”
(d) Whenever a potential conflict of interest exists or arises between the General Partner or any of its Affiliates, on the one hand, and the
Partnership, any Group Member or any Partner, any other Person who acquires an interest in a Partnership Interest or any other Person who is bound by this Agreement on the other hand, the General Partner may in its discretion submit any resolution,
course of action with respect to or causing such conflict of interest or transaction (i) for Special Approval or (ii) for approval by the vote of a majority of the Common Units (excluding Common Units owned by the General Partner or its
Affiliates). If any resolution, course of action or transaction: (A) receives Special Approval; or (B) receives approval of a majority of the Common Units (excluding Common Units owned by the General Partner or its Affiliates), then such
resolution, course of action or transaction shall be conclusively deemed to be approved by the Partnership, all the Partners, each Person who acquires an interest in a Partnership Interest and each other Person who is bound by this Agreement, and
shall not constitute a breach of this Agreement, of any Group Member Agreement, of any agreement contemplated herein or therein, or of any fiduciary or other duty or obligation existing at law, in equity or otherwise or obligation of any type
whatsoever.
(e) Notwithstanding anything to the contrary in this Agreement, the General Partner and its Affiliates or any other
Indemnitee shall have no duty or obligation, express or implied, to (i) sell or otherwise dispose of any asset of the Partnership Group or (ii) permit any Group Member to use any facilities or assets of the General Partner and its
Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use. Any determination by the General Partner or any of its Affiliates to enter into such contracts or transactions shall be in its sole
discretion.
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(f) The Partners and each Person who acquires an interest in a Partnership Interest or is
otherwise bound by this Agreement hereby authorize the General Partner, on behalf of the Partnership as a partner or member of a Group Member, to approve actions by the general partner or managing member of such Group Member similar to those actions
permitted to be taken by the General Partner pursuant to this Section 7.9.
(g) For the avoidance of doubt, whenever the Board of
Directors, any committee of the Board of Directors (including the Conflicts Committee), the officers of the General Partner or any Affiliates of the General Partner make a determination on behalf of the General Partner, or cause the General Partner
to take or omit to take any action, whether in the General Partner’s capacity as the General Partner or in its individual capacity, the standards of care applicable to the General Partner shall apply to such Persons, and such Persons shall be
entitled to all benefits and rights of the General Partner hereunder, including waivers and modifications of duties, protections and presumptions, as if such Persons were the General Partner hereunder.
Section 7.10
Other Matters Concerning the General Partner
.
(a) The General Partner may rely, and shall be protected in acting or refraining from acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
(b) The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the advice or opinion (including an Opinion of Counsel) of such Persons as to matters that the General Partner reasonably believes to be within such
Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in Good Faith and in accordance with such advice or opinion.
(c) The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its or the
Partnership’s duly authorized officers, a duly appointed attorney or attorneys-in-fact.
Section 7.11
Purchase or Sale of
Partnership Interests
. The General Partner may cause the Partnership to purchase or otherwise acquire Partnership Interests. As long as any Partnership Interests are held by any Group Member, such Partnership Interests shall not be entitled to
any vote and shall not be considered to be Outstanding.
Section 7.12
Registration Rights of the General Partner and its
Affiliates
.
(a) If (i) the General Partner or any of its Affiliates (including for purposes of this Section 7.12, any
Person that is an Affiliate of the General Partner at the date hereof notwithstanding that it may later cease to be an Affiliate of the General Partner) holds
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Partnership Interests that it desires to sell and (ii) Rule 144 of the Securities Act (or any successor rule or regulation to Rule 144) or another exemption from registration is not
available to enable such holder of Partnership Interests (the “
Holder
”) to dispose of the number of Partnership Interests it desires to sell at the time it desires to do so without registration under the Securities Act, then
at the option and upon the request of the Holder, the Partnership shall file with the Commission as promptly as practicable after receiving such request, and use all commercially reasonable efforts to cause to become effective and remain effective
for a period of not less than six months following its effective date or such shorter period as shall terminate when all Partnership Interests covered by such registration statement have been sold, a registration statement under the Securities Act
registering the offering and sale of the number of Partnership Interests specified by the Holder;
provided
,
however
, that the Partnership shall not be required to effect more than two registrations pursuant to this Section 7.12(a)
in any twelve-month period; and
provided further
,
however
, that if the General Partner determines that a postponement of the requested registration would be in the best interests of the Partnership and its Partners due to a pending
transaction, investigation or other event, the filing of such registration statement or the effectiveness thereof may be deferred for up to six months, but not thereafter. In connection with any registration pursuant to the immediately preceding
sentence, the Partnership shall (i) promptly prepare and file (A) such documents as may be necessary to register or qualify the securities subject to such registration under the securities laws of such states as the Holder shall reasonably
request;
provided
,
however
, that no such qualification shall be required in any jurisdiction where, as a result thereof, the Partnership would become subject to general service of process or to taxation or qualification to do
business as a foreign corporation or partnership doing business in such jurisdiction solely as a result of such registration, and (B) such documents as may be necessary to apply for listing or to list the Partnership Interests subject to such
registration on such National Securities Exchange as the Holder shall reasonably request, and (ii) do any and all other acts and things that may be necessary or appropriate to enable the Holder to consummate a public sale of such Partnership
Interests in such states. Except as set forth in Section 7.12(c), all costs and expenses of any such registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by
the Holder.
(b) If the Partnership shall at any time propose to file a registration statement under the Securities Act for an offering of
Partnership Interests for cash (other than an offering relating solely to a benefit plan), the Partnership shall use all commercially reasonable efforts to include such number or amount of Partnership Interests held by any Holder in such
registration statement as the Holder shall request;
provided
, that the Partnership is not required to make any effort or take any action to so include the Partnership Interests of the Holder once the registration statement becomes or is
declared effective by the Commission, including any registration statement providing for the offering from time to time of Partnership Interests pursuant to Rule 415 of the Securities Act. If the proposed offering pursuant to this
Section 7.12(b) shall be an underwritten offering, then, in the event that the managing underwriter or managing underwriters of such offering advise the Partnership and the Holder that in their opinion the inclusion of all or some of the
Holder’s Partnership Interests would adversely and materially affect the timing or success of the offering, the Partnership shall include in such offering only that number or
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amount, if any, of Partnership Interests held by the Holder that, in the opinion of the managing underwriter or managing underwriters, will not so adversely and materially affect the offering.
Except as set forth in Section 7.12(c), all costs and expenses of any such registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by the Holder.
(c) If underwriters are engaged in connection with any registration referred to in this Section 7.12, the Partnership shall provide
indemnification, representations, covenants, opinions and other assurance to the underwriters in form and substance reasonably satisfactory to such underwriters. Further, in addition to and not in limitation of the Partnership’s obligation
under Section 7.7, the Partnership shall, to the fullest extent permitted by law, indemnify and hold harmless the Holder, its officers, directors and each Person who controls the Holder (within the meaning of the Securities Act) and any agent
thereof (collectively, “
Indemnified Persons
”) from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest,
settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnified Person may be involved, or is threatened to be involved, as a
party or otherwise, under the Securities Act or otherwise (hereinafter referred to in this Section 7.12(c) as a “
claim
” and in the plural as “
claims
”) based upon, arising out of or resulting from
any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which any Partnership Interests were registered under the Securities Act or any state securities or Blue Sky laws, in any preliminary
prospectus (if used prior to the effective date of such registration statement), or in any summary or final prospectus or issuer free writing prospectus or in any amendment or supplement thereto (if used during the period the Partnership is required
to keep the registration statement current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not
misleading;
provided
,
however
, that the Partnership shall not be liable to any Indemnified Person to the extent that any such claim arises out of, is based upon or results from an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, such preliminary, summary or final prospectus or free writing prospectus or such amendment or supplement, in reliance upon and in conformity with written information furnished to the
Partnership by or on behalf of such Indemnified Person specifically for use in the preparation thereof.
(d) The provisions of
Section 7.12(a) and Section 7.12(b) shall continue to be applicable with respect to the General Partner (and any of the General Partner’s Affiliates) after it ceases to be a general partner of the Partnership, during a period of two
years subsequent to the effective date of such cessation and for so long thereafter as is required for the Holder to sell all of the Partnership Interests with respect to which it has requested during such two-year period inclusion in a registration
statement otherwise filed or that a registration statement be filed;
provided
,
however
, that the Partnership shall not be required to file successive registration statements covering the same Partnership Interests for which
registration was demanded during such two-year period. The provisions of Section 7.12(c) shall continue in effect thereafter.
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(e) The rights to cause the Partnership to register Partnership Interests pursuant to this
Section 7.12 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such Partnership Interests,
provided
(i) the Partnership is, within a reasonable time after such transfer, furnished
with written notice of the name and address of such transferee or assignee and the Partnership Interests with respect to which such registration rights are being assigned; and (ii) such transferee or assignee agrees in writing to be bound by
and subject to the terms set forth in this Section 7.12.
(f) Any request to register Partnership Interests pursuant to this
Section 7.12 shall (i) specify the Partnership Interests intended to be offered and sold by the Person making the request, (ii) express such Person’s present intent to offer such Partnership Interests for distribution,
(iii) describe the nature or method of the proposed offer and sale of Partnership Interests, and (iv) contain the undertaking of such Person to provide all such information and materials and take all action as may be required in order to
permit the Partnership to comply with all applicable requirements in connection with the registration of such Partnership Interests.
Section 7.13
Reliance by Third Parties
. Notwithstanding anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner and any officer of the General Partner authorized by the General Partner to act on behalf of and in the name of the Partnership has full power and authority to encumber, sell or
otherwise use in any manner any and all assets of the Partnership and to enter into any authorized contracts on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner or any such officer as if it were the
Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner, each other Person who acquires an interest in a Partnership Interest and each other Person bound by this Agreement hereby waives, to the fullest extent
permitted by law, any and all defenses or other remedies that may be available to such Person or Partner to contest, negate or disaffirm any action of the General Partner or any such officer in connection with any such dealing. In no event shall any
Person dealing with the General Partner or any such officer or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General
Partner or any such officer or its representatives. Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every
Person relying thereon or claiming thereunder that (a) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (b) the Person executing and delivering such
certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership and (c) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of
this Agreement and is binding upon the Partnership.
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ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 8.1
Records and Accounting
. The General Partner shall keep or cause to be kept at the principal office of the Partnership
appropriate books and records with respect to the Partnership’s business, including all books and records necessary to provide to the Limited Partners any information required to be provided pursuant to Section 3.4(a). Any books and
records maintained by or on behalf of the Partnership in the regular course of its business, including the record of the Record Holders of Units or other Partnership Interests, books of account and records of Partnership proceedings, may be kept on,
or be in the form of, computer disks, hard drives, magnetic tape, photographs, micrographics or any other information storage device;
provided
, that the books and records so maintained are convertible into clearly legible written form within
a reasonable period of time. The books of the Partnership shall be maintained, for financial reporting purposes, on an accrual basis in accordance with U.S. GAAP. The Partnership shall not be required to keep books maintained on a cash basis and the
General Partner shall be permitted to calculate cash-based measures, including Operating Surplus and Adjusted Operating Surplus, by making such adjustments to its accrual basis books to account for non-cash items and other adjustments as the General
Partner determines to be necessary or appropriate.
Section 8.2
Fiscal Year
. The fiscal year of the Partnership shall be a
fiscal year ending December 31.
Section 8.3
Reports
.
(a) As soon as practicable, but in no event later than 105 days after the close of each fiscal year of the Partnership, the General Partner
shall cause to be mailed or made available, by any reasonable means, to each Record Holder of a Unit or other Partnership Interest as of a date selected by the General Partner, an annual report containing financial statements of the Partnership for
such fiscal year of the Partnership, presented in accordance with U.S. GAAP, including a balance sheet and statements of operations, Partnership equity and cash flows, such statements to be audited by a firm of independent public accountants
selected by the General Partner, and such other information as may be required by applicable law, regulation or rule of any National Securities Exchange on which the Units are listed or admitted to trading, or as the General Partner determines to be
necessary or appropriate.
(b) As soon as practicable, but in no event later than 50 days after the close of each Quarter except the last
Quarter of each fiscal year, the General Partner shall cause to be mailed or made available, by any reasonable means to each Record Holder of a Unit or other Partnership Interest, as of a date selected by the General Partner, a report containing
unaudited financial statements of the Partnership and such other information as may be required by applicable law, regulation or rule of any National Securities Exchange on which the Units are listed or admitted to trading, or as the General Partner
determines to be necessary or appropriate.
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(c) The General Partner shall be deemed to have made a report available to each Record Holder as
required by this Section 8.3 if it has either (i) filed such report with the Commission via its Electronic Data Gathering, Analysis and Retrieval system and such report is publicly available on such system or (ii) made such report
available on any publicly available website maintained by the Partnership.
ARTICLE IX
TAX MATTERS
Section 9.1
Tax Returns and Information
. The Partnership shall timely file all returns of the Partnership that are required for
federal, state and local income tax purposes on the basis of the accrual method and the taxable period or year that it is required by law to adopt, from time to time, as determined by the General Partner. If the Partnership is required to use a
taxable period other than a year ending on December 31, the General Partner shall use reasonable efforts to change the taxable period of the Partnership to a year ending on December 31. The tax information reasonably required by Record
Holders for federal, state and local income tax reporting purposes with respect to a taxable period shall be furnished to them within 90 days of the close of the calendar year in which the Partnership’s taxable period ends. The classification,
realization and recognition of income, gain, losses and deductions and other items shall be on the accrual method of accounting for U.S. federal income tax purposes.
Section 9.2
Tax Elections
.
(a) The Partnership shall make the election under Section 754 of the Code in accordance with applicable regulations thereunder, subject
to the reservation of the right to seek to revoke any such election upon the General Partner’s determination that such revocation is in the best interests of the Limited Partners. Notwithstanding any other provision herein contained, for the
purposes of computing the adjustments under Section 743(b) of the Code, the General Partner shall be authorized (but not required) to adopt a convention whereby the price paid by a transferee of a Limited Partner Interest will be deemed to be
the lowest Closing Price of the Limited Partner Interests on any National Securities Exchange on which such Limited Partner Interests are listed or admitted to trading during the calendar month in which such transfer is deemed to occur pursuant to
Section 6.2(f) without regard to the actual price paid by such transferee.
(b) Except as otherwise provided herein, the General
Partner shall determine whether the Partnership should make any other elections permitted by the Code.
Section 9.3
Tax
Controversies
. Subject to the provisions hereof, the General Partner is designated as the Tax Matters Partner (as defined in the Code) and is authorized and required to represent the Partnership (at the Partnership’s expense) in connection
with all examinations of the Partnership’s affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Partnership funds for professional services and costs associated therewith. Each Partner agrees to
cooperate with the General Partner and to do or refrain from doing any or all things reasonably required by the General Partner to conduct such proceedings.
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Section 9.4
Withholding; Tax Payments
.
(a) The General Partner may treat taxes paid by the Partnership on behalf of, all or less than all of the Partners, either as a distribution
of cash to such Partners or as a general expense of the Partnership, as determined appropriate under the circumstances by the General Partner.
(b) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that may be required to cause
the Partnership and other Group Members to comply with any withholding requirements established under the Code or any other federal, state or local law including pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that the
Partnership is required or elects to withhold and pay over to any taxing authority any amount resulting from the allocation or distribution of income or from a distribution to any Partner (including by reason of Section 1446 of the Code), the
General Partner may treat the amount withheld as a distribution of cash pursuant to Section 6.3 in the amount of such withholding from such Partner.
ARTICLE X
ADMISSION OF PARTNERS
Section 10.1
Admission of Limited Partners
.
(a) By acceptance of the transfer of any Limited Partner Interests in accordance with Article IV or the acceptance of any Limited Partner
Interests issued pursuant to Article V or pursuant to a merger or consolidation or conversion pursuant to Article XIV, and except as provided in Section 4.8, each transferee of, or other such Person acquiring, a Limited Partner Interest
(including any nominee holder or an agent or representative acquiring such Limited Partner Interests for the account of another Person) (i) shall be admitted to the Partnership as a Limited Partner with respect to the Limited Partner Interests
so transferred or issued to such Person when any such transfer or issuance is reflected in the books and records of the Partnership and such Limited Partner becomes the Record Holder of the Limited Partner Interests so transferred or issued,
(ii) shall become bound, and shall be deemed to have agreed to be bound, by the terms of this Agreement, (iii) represents that the transferee or other recipient has the capacity, power and authority to enter into this Agreement and
(iv) makes the consents, acknowledgements and waivers contained in this Agreement, all with or without execution of this Agreement by such Person. The transfer of any Limited Partner Interests and the admission of any new Limited Partner shall
not constitute an amendment to this Agreement. A Person may become a Limited Partner or Record Holder of a Limited Partner Interest without the consent or approval of any of the Partners. A Person may not become a Limited Partner without acquiring a
Limited Partner Interest and until such Person is reflected in the books and records of the Partnership as the Record Holder of such Limited Partner Interest. The rights and obligations of a Person who is an Ineligible Holder shall be determined in
accordance with Section 4.8.
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(b) The name and mailing address of each Record Holder shall be listed on the books and records
of the Partnership maintained for such purpose by the Partnership or the Transfer Agent. The General Partner shall update the books and records of the Partnership from time to time as necessary to reflect accurately the information therein (or shall
cause the Transfer Agent to do so, as applicable).
(c) Any transfer of a Limited Partner Interest shall not entitle the transferee to
share in the profits and losses, to receive distributions, to receive allocations of income, gain, loss, deduction or credit or any similar item or to any other rights to which the transferor was entitled until the transferee becomes a Limited
Partner pursuant to Section 10.1(a).
Section 10.2
Admission of Successor General Partner
. A successor General Partner
approved pursuant to Section 11.1 or Section 11.2 or the transferee of or successor to all of the General Partner Interest pursuant to Section 4.6 who is proposed to be admitted as a successor General Partner shall be admitted to the
Partnership as the General Partner, effective immediately prior to the withdrawal or removal of the predecessor or transferring General Partner, pursuant to Section 11.1 or 11.2 or the transfer of the General Partner Interest pursuant to
Section 4.6,
provided
,
however
, that no such successor shall be admitted to the Partnership until compliance with the terms of Section 4.6 has occurred and such successor has executed and delivered such other documents or
instruments as may be required to effect such admission. Any such successor shall, subject to the terms hereof, carry on the business of the members of the Partnership Group without dissolution.
Section 10.3
Amendment of Agreement and Certificate of Limited Partnership
. To effect the admission to the Partnership of
any Partner, the General Partner shall take all steps necessary or appropriate under the Delaware Act to amend the records of the Partnership to reflect such admission and, if necessary, to prepare as soon as practicable an amendment to this
Agreement and, if required by law, the General Partner shall prepare and file an amendment to the Certificate of Limited Partnership.
ARTICLE XI
WITHDRAWAL OR REMOVAL OF PARTNERS
Section 11.1
Withdrawal of the General Partner
.
(a) The General Partner shall be deemed to have withdrawn from the Partnership upon the occurrence of any one of the following events (each
such event herein referred to as an “
Event of Withdrawal
”);
(i) The General Partner voluntarily
withdraws from the Partnership by giving written notice to the other Partners;
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(ii) The General Partner transfers all of its General Partner Interest pursuant
to Section 4.6;
(iii) The General Partner is removed pursuant to Section 11.2;
(iv) The General Partner (A) makes a general assignment for the benefit of creditors; (B) files a voluntary
bankruptcy petition for relief under Chapter 7 of the United States Bankruptcy Code; (C) files a petition or answer seeking for itself a liquidation, dissolution or similar relief (but not a reorganization) under any law; (D) files an
answer or other pleading admitting or failing to contest the material allegations of a petition filed against the General Partner in a proceeding of the type described in clauses (A)-(C) of this Section 11.1(a)(iv); or (E) seeks,
consents to or acquiesces in the appointment of a trustee (but not a debtor-in-possession), receiver or liquidator of the General Partner or of all or any substantial part of its properties;
(v) A final and non-appealable order of relief under Chapter 7 of the United States Bankruptcy Code is entered by a court with
appropriate jurisdiction pursuant to a voluntary or involuntary petition by or against the General Partner; or
(vi)
(A) if the General Partner is a corporation, a certificate of dissolution or its equivalent is filed for the General Partner, or 90 days expire after the date of notice to the General Partner of revocation of its charter without a reinstatement
of its charter, under the laws of its state of incorporation; (B) if the General Partner is a partnership or a limited liability company, the dissolution and commencement of winding up of the General Partner; (C) if the General Partner is
acting in such capacity by virtue of being a trustee of a trust, the termination of the trust; (D) if the General Partner is a natural person, his death or adjudication of incompetency; and (E) otherwise upon the termination of the General
Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or (vi)(A), (B), (C) or (E) occurs, the
withdrawing General Partner shall give notice to the Limited Partners within 30 days after such occurrence. The Partners hereby agree that only the Events of Withdrawal described in this Section 11.1 shall result in the withdrawal of the
General Partner from the Partnership.
(b) Withdrawal of the General Partner from the Partnership upon the occurrence of an Event of
Withdrawal shall not constitute a breach of this Agreement under the following circumstances: (i) at any time during the period beginning on the Closing Date and ending at 11:59 pm, prevailing Central Time, on March 31, 2024, the General
Partner voluntarily withdraws by giving at least 90 days’ advance notice of its intention to withdraw to the Limited Partners;
provided
, that prior to the effective date of such withdrawal, the withdrawal is approved by Unitholders
holding a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) and the General Partner delivers to the Partnership
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an Opinion of Counsel (“
Withdrawal Opinion of Counsel
”) that such withdrawal (following the selection of the successor General Partner) would not result in the loss of the
limited liability under the Delaware Act of any Limited Partner or cause any Group Member to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for U.S. federal income tax purposes (to the extent not already
so treated or taxed); (ii) at any time after 11:59 pm, prevailing Central Time, on March 31, 2024, the General Partner voluntarily withdraws by giving at least 90 days’ advance notice to the Unitholders, such withdrawal to take effect
on the date specified in such notice; (iii) at any time that the General Partner ceases to be the General Partner pursuant to Section 11.1(a)(ii) or is removed pursuant to Section 11.2; or (iv) notwithstanding clause (i) of
this sentence, at any time that the General Partner voluntarily withdraws by giving at least 90 days’ advance notice of its intention to withdraw to the Limited Partners, such withdrawal to take effect on the date specified in the notice, if at
the time such notice is given one Person and its Affiliates (other than the General Partner and its Affiliates) own beneficially or of record or control at least 50% of the Outstanding Units. The withdrawal of the General Partner from the
Partnership upon the occurrence of an Event of Withdrawal shall also constitute the withdrawal of the General Partner as general partner or managing member, if any, to the extent applicable, of the other Group Members. If the General Partner gives a
notice of withdrawal pursuant to Section 11.1(a)(i), a Unit Majority may, prior to the effective date of such withdrawal, elect a successor General Partner. The Person so elected as successor General Partner shall automatically become the
successor general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. If, prior to the effective date of the General Partner’s withdrawal
pursuant to Section 11.1(a)(i), a successor is not selected by the Unitholders as provided herein or the Partnership does not receive a Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance with Section 12.1
unless the business of the Partnership is continued pursuant to Section 12.2. Any successor General Partner elected in accordance with the terms of this Section 11.1 shall be subject to the provisions of Section 10.2.
Section 11.2
Removal of the General Partner
. The General Partner may be removed if such removal is approved by the Unitholders
holding at least 66 2/3% of the Outstanding Units (including Units held by the General Partner and its Affiliates) voting as a single class. Any such action by such holders for removal of the General Partner must also provide for the election of a
successor General Partner by the Unitholders holding a majority of the Outstanding Common Units, voting as a class, and a majority of the Outstanding Subordinated Units, voting as a class (including, in each case, Units held by the General Partner
and its Affiliates). Such removal shall be effective immediately following the admission of a successor General Partner pursuant to Section 10.2. The removal of the General Partner shall also automatically constitute the removal of the General
Partner as general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. If a Person is elected as a successor General Partner in accordance with the
terms of this Section 11.2, such Person shall, upon admission pursuant to Section 10.2, automatically become a successor general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner
is a general partner or a managing member. The right of the holders of Outstanding Units to remove the General Partner shall not exist or be
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exercised unless the Partnership has received an opinion opining as to the matters covered by a Withdrawal Opinion of Counsel. Any successor General Partner elected in accordance with the terms
of this Section 11.2 shall be subject to the provisions of Section 10.2.
Section 11.3
Interest of Departing General
Partner and Successor General Partner
.
(a) In the event of (i) withdrawal of the General Partner under circumstances where such
withdrawal does not violate this Agreement or (ii) removal of the General Partner by the holders of Outstanding Units under circumstances where Cause does not exist, if the successor General Partner is elected in accordance with the terms of
Section 11.1 or Section 11.2, the Departing General Partner shall have the option, exercisable prior to the effective date of the withdrawal or removal of such Departing General Partner, to require its successor to purchase its General
Partner Interest and its or its Affiliates’ general partner interest (or equivalent interest), if any, in the other Group Members and all of its or its Affiliates’ Incentive Distribution Rights (collectively, the “
Combined
Interest
”) in exchange for an amount in cash equal to the fair market value of such Combined Interest, such amount to be determined and payable as of the effective date of its withdrawal or removal. If the General Partner is removed by
the Unitholders under circumstances where Cause exists or if the General Partner withdraws under circumstances where such withdrawal violates this Agreement, and if a successor General Partner is elected in accordance with the terms of
Section 11.1 or Section 11.2 (or if the business of the Partnership is continued pursuant to Section 12.2 and the successor General Partner is not the former General Partner), such successor shall have the option, exercisable prior to
the effective date of the withdrawal or removal of such Departing General Partner (or, in the event the business of the Partnership is continued, prior to the date the business of the Partnership is continued), to purchase the Combined Interest for
such fair market value of such Combined Interest. In either event, the Departing General Partner shall be entitled to receive all reimbursements due such Departing General Partner pursuant to Section 7.5, including any employee-related
liabilities (including severance liabilities), incurred in connection with the termination of any employees employed by the Departing General Partner or its Affiliates (other than any Group Member) for the benefit of the Partnership or the other
Group Members.
For purposes of this Section 11.3(a), the fair market value of the Combined Interest shall be determined by agreement
between the Departing General Partner and its successor or, failing agreement within 30 days after the effective date of such Departing General Partner’s withdrawal or removal, by an independent investment banking firm or other independent
expert selected by the Departing General Partner and its successor, which, in turn, may rely on other experts, and the determination of which shall be conclusive as to such matter. If such parties cannot agree upon one independent investment banking
firm or other independent expert within 45 days after the effective date of such withdrawal or removal, then the Departing General Partner shall designate an independent investment banking firm or other independent expert, the Departing General
Partner’s successor shall designate an independent investment banking firm or other independent expert, and such firms or experts shall mutually select a third independent investment banking firm or independent expert, which third independent
investment banking
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firm or other independent expert shall determine the fair market value of the Combined Interest. In making its determination, such third independent investment banking firm or other independent
expert may consider the value of the Units, including the then current trading price of Units on any National Securities Exchange on which Units are then listed or admitted to trading, the value of the Partnership’s assets, the rights and
obligations of the Departing General Partner, the value of the Incentive Distribution Rights and the General Partner Interest and other factors it may deem relevant.
(b) If the Combined Interest is not purchased in the manner set forth in Section 11.3(a), the Departing General Partner (and its
Affiliates, if applicable) shall become a Limited Partner and the Combined Interest shall be converted into Common Units pursuant to a valuation made by an investment banking firm or other independent expert selected pursuant to
Section 11.3(a), without reduction in such Partnership Interest (but subject to proportionate dilution by reason of the admission of its successor). Any successor General Partner shall indemnify the Departing General Partner as to all debts and
liabilities of the Partnership arising on or after the date on which the Departing General Partner becomes a Limited Partner. For purposes of this Agreement, conversion of the Combined Interest to Common Units will be characterized as if the
Departing General Partner (and its Affiliates, if applicable) contributed the Combined Interest to the Partnership in exchange for the newly issued Common Units.
(c) If a successor General Partner is elected in accordance with the terms of Section 11.1 or Section 11.2 (or if the business of
the Partnership is continued pursuant to Section 12.2 and the successor General Partner is not the former General Partner) and the option described in Section 11.3(a) is not exercised by the party entitled to do so, the successor General
Partner shall, at the effective date of its admission to the Partnership, contribute to the Partnership cash in the amount equal to the product of (x) the quotient obtained by dividing (A) the Percentage Interest of the General Partner
Interest of the Departing General Partner by (B) a percentage equal to 100% less the Percentage Interest of the General Partner Interest of the Departing General Partner and (y) the Net Agreed Value of the Partnership’s assets on such
date. In such event, such successor General Partner shall, subject to the following sentence, be entitled to its Percentage Interest of all Partnership allocations and distributions to which the Departing General Partner was entitled. In addition,
the successor General Partner shall cause this Agreement to be amended to reflect that, from and after the date of such successor General Partner’s admission, the successor General Partner’s interest in all Partnership distributions and
allocations shall be its Percentage Interest.
Section 11.4
Conversion of Subordinated Units
. Notwithstanding any provision of
this Agreement, if the General Partner is removed as general partner of the Partnership under circumstances where Cause does not exist, the Subordinated Units held by any Person will immediately and automatically convert into Common Units on a
one-for-one basis, provided (i) neither such Person nor any of its Affiliates voted any of its Units in favor of the removal and (ii) such Person is not an Affiliate of the successor General Partner;
provided
,
however
, that
such converted Subordinated Units shall remain subject to the provisions of Section 5.5(c)(ii), Section 6.1(d)(x), Section 6.7(b) and Section 6.7(c).
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Section 11.5
Withdrawal of Limited Partners
. No Limited Partner shall have any right
to withdraw from the Partnership;
provided
,
however
, that when a transferee of a Limited Partner’s Limited Partner Interest becomes a Record Holder of the Limited Partner Interest so transferred, such transferring Limited Partner
shall cease to be a Limited Partner with respect to the Limited Partner Interest so transferred.
ARTICLE XII
DISSOLUTION AND LIQUIDATION
Section 12.1
Dissolution
. The Partnership shall not be dissolved by the admission of additional Limited Partners or by the
admission of a successor General Partner in accordance with the terms of this Agreement. Upon the removal or withdrawal of the General Partner, if a successor General Partner is elected pursuant to Section 11.1, Section 11.2 or
Section 12.2, the Partnership shall not be dissolved and such successor General Partner is hereby authorized to, and shall, continue the business of the Partnership. Subject to Section 12.2, the Partnership shall dissolve, and its affairs
shall be wound up, upon:
(a) an Event of Withdrawal of the General Partner as provided in Section 11.1(a) (other than
Section 11.1(a)(ii)), unless a successor is elected and such successor is admitted to the Partnership pursuant to this Agreement;
(b) an election to dissolve the Partnership by the General Partner that is approved by a Unit Majority;
(c) the entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Delaware Act; or
(d) at any time there are no Limited Partners, unless the Partnership is continued without dissolution in accordance with the Delaware Act.
Section 12.2
Continuation of the Business of the Partnership After Dissolution
. Upon (a) an Event of Withdrawal caused
by the withdrawal or removal of the General Partner as provided in Section 11.1(a)(i) or (iii) and the failure of the Partners to select a successor to such Departing General Partner pursuant to Section 11.1 or Section 11.2, then
within 90 days thereafter, or (b) an event constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v) or (vi), then, to the maximum extent permitted by law, within 180 days thereafter, a Unit Majority may elect to
continue the business of the Partnership on the same terms and conditions set forth in this Agreement by appointing as a successor General Partner a Person approved by a Unit Majority. Unless such an election is made within the applicable time
period as set forth above, the Partnership shall conduct only activities necessary to wind up its affairs. If such an election is so made, then:
(i) the Partnership shall continue without dissolution unless earlier dissolved in accordance with this Article XII;
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(ii) if the successor General Partner is not the former General Partner, then the
interest of the former General Partner shall be treated in the manner provided in Section 11.3; and
(iii) the
successor General Partner shall be admitted to the Partnership as General Partner, effective as of the Event of Withdrawal, by agreeing in writing to be bound by this Agreement;
provided
, that the right of a Unit Majority to approve a successor General Partner and to continue the business of the Partnership shall not exist and
may not be exercised unless the Partnership has received an Opinion of Counsel that (x) the exercise of the right would not result in the loss of limited liability under the Delaware Act of any Limited Partner and (y) neither the
Partnership nor any Group Member would be treated as an association taxable as a corporation or otherwise be taxable as an entity for U.S. federal income tax purposes upon the exercise of such right to continue (to the extent not already so treated
or taxed).
Section 12.3
Liquidator
. Upon dissolution of the Partnership, unless the business of the Partnership is continued
pursuant to Section 12.2, the General Partner shall select one or more Persons to act as Liquidator. The Liquidator (if other than the General Partner) shall be entitled to receive such compensation for its services as may be approved by
holders of a majority of the Outstanding Common Units and Subordinated Units, voting as a single class. The Liquidator (if other than the General Partner) shall agree not to resign at any time without 15 days’ prior notice and may be removed at
any time, with or without cause, by notice of removal approved by holders of a majority of the Outstanding Common Units and Subordinated Units, voting as a single class. Upon dissolution, removal or resignation of the Liquidator, a successor and
substitute Liquidator (who shall have and succeed to all rights, powers and duties of the original Liquidator) shall within 30 days thereafter be approved by holders of a majority of the Outstanding Common Units and Subordinated Units, voting as a
single class. The right to approve a successor or substitute Liquidator in the manner provided herein shall be deemed to refer also to any such successor or substitute Liquidator approved in the manner herein provided. Except as expressly provided
in this Article XII, the Liquidator approved in the manner provided herein shall have and may exercise, without further authorization or consent of any of the parties hereto, all of the powers conferred upon the General Partner under the terms
of this Agreement (but subject to all of the applicable limitations, contractual and otherwise, upon the exercise of such powers, other than the limitation on sale set forth in Section 7.4) necessary or appropriate to carry out the duties and
functions of the Liquidator hereunder for and during the period of time required to complete the winding up and liquidation of the Partnership as provided for herein.
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Section 12.4
Liquidation
. The Liquidator shall proceed to dispose of the assets of
the Partnership, discharge its liabilities, and otherwise wind up its affairs in such manner and over such period as determined by the Liquidator, subject to Section 17-804 of the Delaware Act and the following:
(a) The assets may be disposed of by public or private sale or by distribution in kind to one or more Partners on such terms as the Liquidator
and such Partner or Partners may agree. If any property is distributed in kind, the Partner receiving the property shall be deemed for purposes of Section 12.4(c) to have received cash equal to its fair market value; and contemporaneously
therewith, appropriate cash distributions must be made to the other Partners. The Liquidator may defer liquidation or distribution of the Partnership’s assets for a reasonable time if it determines that an immediate sale or distribution of all
or some of the Partnership’s assets would be impractical or would cause undue loss to the Partners. The Liquidator may distribute the Partnership’s assets, in whole or in part, in kind if it determines that a sale would be impractical or
would cause undue loss to the Partners.
(b) Liabilities of the Partnership include amounts owed to the Liquidator as compensation for
serving in such capacity (subject to the terms of Section 12.3) and amounts to Partners otherwise than in respect of their distribution rights under Article VI. With respect to any liability that is contingent, conditional or unmatured or is
otherwise not yet due and payable, the Liquidator shall either settle such claim for such amount as it thinks appropriate or establish a reserve of cash or other assets to provide for its payment. When paid, any unused portion of the reserve shall
be distributed as additional liquidation proceeds.
(c) All property and all cash in excess of that required to discharge liabilities as
provided in Section 12.4(b) shall be distributed to the Partners in accordance with, and to the extent of, the positive balances in their respective Capital Accounts, as determined after taking into account all Capital Account adjustments
(other than those made by reason of distributions pursuant to this Section 12.4(c)) for the taxable period of the Partnership during which the liquidation of the Partnership occurs (with such date of occurrence being determined pursuant to
Treasury Regulation Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such taxable period (or, if later, within 90 days after said date of such occurrence).
Section 12.5
Cancellation of Certificate of Limited Partnership
. Upon the completion of the distribution of Partnership cash and
property as provided in Section 12.4 in connection with the liquidation of the Partnership, the Certificate of Limited Partnership and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the State
of Delaware shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken.
Section 12.6
Return of Contributions
. The General Partner shall not be personally liable for, and shall have no obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate, the return of the Capital Contributions
of the Limited Partners or Unitholders, or any portion thereof, it being expressly understood that any such return shall be made solely from Partnership assets.
Section 12.7
Waiver of Partition
. To the maximum extent permitted by law, each Partner hereby waives any right to partition of the
Partnership property.
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Section 12.8
Capital Account Restoration
. No Limited Partner shall have any
obligation to restore any negative balance in its Capital Account upon liquidation of the Partnership. The General Partner shall be obligated to restore any negative balance in its Capital Account upon liquidation of its interest in the Partnership
by the end of the taxable period of the Partnership during which such liquidation occurs, or, if later, within 90 days after the date of such liquidation.
ARTICLE XIII
AMENDMENT
OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
Section 13.1
Amendments to be Adopted Solely by the General Partner
. Each
Partner agrees that the General Partner, without the approval of any Partner, may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith, to
reflect:
(a) a change in the name of the Partnership, the location of the principal place of business of the Partnership, the registered
agent of the Partnership or the registered office of the Partnership;
(b) admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;
(c) a change that the General Partner determines to be necessary or appropriate to qualify or continue
the qualification of the Partnership as a limited partnership or a partnership in which the Limited Partners have limited liability under the laws of any state or to ensure that the Group Members will not be treated as associations taxable as
corporations or otherwise taxed as entities for U.S. federal income tax purposes;
(d) a change that the General Partner determines
(i) does not adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to other classes of Partnership Interests) in any material respect, (ii) to be necessary or appropriate to
(A) satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state agency or judicial authority or contained in any federal or state statute (including the Delaware
Act) or (B) facilitate the trading of the Units (including the division of any class or classes of Outstanding Units into different classes to facilitate uniformity of tax consequences within such classes of Units) or comply with any rule,
regulation, guideline or requirement of any National Securities Exchange on which the Units are or will be listed or admitted to trading, (iii) to be necessary or appropriate in connection with action taken by the General Partner pursuant to
Section 5.9 or (iv) is required to effect the intent expressed in the Registration Statement or the intent of the provisions of this Agreement or is otherwise contemplated by this Agreement;
(e) a change in the fiscal year or taxable period of the Partnership and any other changes that the General Partner determines to be necessary
or appropriate as a result of a change in the fiscal year or taxable period of the Partnership including, if the General Partner shall so determine, a change in the definition of “Quarter” and the dates on which distributions are to be
made by the Partnership;
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(f) an amendment that is necessary, in the Opinion of Counsel, to prevent the Partnership, or the
General Partner or its directors, officers, trustees or agents from in any manner being subjected to the provisions of the Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940, as amended, or “plan asset”
regulations adopted under the Employee Retirement Income Security Act of 1974, as amended, regardless of whether such are substantially similar to plan asset regulations currently applied or proposed by the United States Department of Labor;
(g) an amendment that the General Partner determines to be necessary or appropriate in connection with the creation, authorization or issuance
of any class or series of Partnership Interests and Derivative Instruments pursuant to Section 5.6;
(h) any amendment expressly
permitted in this Agreement to be made by the General Partner acting alone;
(i) an amendment effected, necessitated or contemplated by a
Merger Agreement approved in accordance with Section 14.3;
(j) an amendment that the General Partner determines to be necessary or
appropriate to reflect and account for the formation by the Partnership of, or investment by the Partnership in, any corporation, partnership, joint venture, limited liability company or other entity, in connection with the conduct by the
Partnership of activities permitted by the terms of Section 2.4 or 7.1(a);
(k) a merger, conveyance or conversion pursuant to
Section 14.3(d); or
(l) any other amendments substantially similar to the foregoing.
Section 13.2
Amendment Procedures
. Amendments to this Agreement may be proposed only by the General Partner. To the fullest extent
permitted by law, the General Partner shall have no duty or obligation to propose or approve any amendment to this Agreement and may decline to do so in its sole discretion. An amendment shall be effective upon its approval by the General Partner
and, except as otherwise provided by Section 13.1 or 13.3, a Unit Majority, unless a greater or different percentage is required under this Agreement or by Delaware law. Each proposed amendment that requires the approval of the holders of a
specified percentage of Outstanding Units shall be set forth in a writing that contains the text of the proposed amendment. If such an amendment is proposed, the General Partner shall seek the written approval of the requisite percentage of
Outstanding Units or call a meeting of the Unitholders to consider and vote on such proposed amendment. The General Partner shall notify all Record Holders upon final adoption of any amendments. The General Partner shall be deemed to have notified
all Record Holders as required by this Section 13.2 if it has either (i) filed such amendment with the Commission via its Electronic Data Gathering, Analysis and Retrieval system and such amendment is publicly available on such system or
(ii) made such amendment available on any publicly available website maintained by the Partnership.
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Section 13.3
Amendment Requirements
.
(a) Notwithstanding the provisions of Section 13.1 (other than Section 13.1(d)(iv)) and Section 13.2, no provision of this
Agreement (other than Section 11.2 or Section 13.4) that establishes a percentage of Outstanding Units (including Units deemed owned by the General Partner) or requires a vote or approval of Partners (or a subset of Partners) holding a
specified Percentage Interest to take any action shall be amended, altered, changed, repealed or rescinded in any respect that would have the effect of reducing or increasing such percentage, unless such amendment is approved by the written consent
or the affirmative vote of holders of Outstanding Units whose aggregate Outstanding Units constitute not less than the voting requirement sought to be reduced or increased, as applicable, or the affirmative vote of Partners whose aggregate
Percentage Interests constitute not less than the voting requirement sought to be reduced or increased, as applicable.
(b)
Notwithstanding the provisions of Section 13.1 (other than Section 13.1(d)(iv)) and Section 13.2, no amendment to this Agreement may (i) enlarge the obligations of (including requiring any holder of a class of Partnership
Interests to make additional Capital Contributions to the Partnership) any Limited Partner without its consent, unless such shall be deemed to have occurred as a result of an amendment approved pursuant to Section 13.3(c), or (ii) enlarge
the obligations of, restrict, change or modify in any way any action by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable to, the General Partner or any of its Affiliates without its consent, which
consent may be given or withheld at its option.
(c) Except as provided in Section 14.3 or Section 13.1, any amendment that
would have a material adverse effect on the rights or preferences of any class of Partnership Interests in relation to other classes of Partnership Interests must be approved by the holders of not less than a majority of the Outstanding Partnership
Interests of the class affected. If the General Partner determines an amendment does not satisfy the requirements of Section 13.1(d)(i) because it adversely affects one or more classes of Partnership Interests, as compared to other classes of
Partnership Interests, in any material respect, such amendment shall only be required to be approved by the adversely affected class or classes.
(d) Notwithstanding any other provision of this Agreement, except for amendments pursuant to Section 13.1 and except as otherwise
provided by Section 14.3(b), no amendments shall become effective without the approval of the holders of at least 90% of the Percentage Interests of all Limited Partners voting as a single class unless the Partnership obtains an Opinion of
Counsel to the effect that such amendment will not affect the limited liability of any Limited Partner under applicable partnership law of the state under whose laws the Partnership is organized.
(e) Except as provided in Section 13.1, this Section 13.3 shall only be amended with the approval of Partners (including the General
Partner and its Affiliates) holding at least 90% of the Percentage Interests of all Limited Partners.
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Section 13.4
Special Meetings
. All acts of Limited Partners to be taken pursuant to
this Agreement shall be taken in the manner provided in this Article XIII. Special meetings of the Limited Partners may be called by the General Partner or by Limited Partners owning 20% or more of the Outstanding Units of the class or classes for
which a meeting is proposed. Limited Partners shall call a special meeting by delivering to the General Partner one or more requests in writing stating that the signing Limited Partners wish to call a special meeting and indicating the specific
purposes for which the special meeting is to be called and the class or classes of Units for which the meeting is proposed. No business may be brought by any Limited Partner before such special meeting except the business listed in the related
request. Within 60 days after receipt of such a call from Limited Partners or within such greater time as may be reasonably necessary for the Partnership to comply with any statutes, rules, regulations, listing agreements or similar requirements
governing the holding of a meeting or the solicitation of proxies for use at such a meeting, the General Partner shall send a notice of the meeting to the Limited Partners either directly or indirectly through the Transfer Agent. A meeting shall be
held at a time and place determined by the General Partner on a date not less than 10 days nor more than 60 days after the time notice of the meeting is given as provided in Section 16.1. Limited Partners shall not vote on matters that would
cause the Limited Partners to be deemed to be taking part in the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability under the Delaware Act or the law of any other
state in which the Partnership is qualified to do business.
Section 13.5
Notice of a Meeting
. Notice of a meeting called
pursuant to Section 13.4 shall be given to the Record Holders of the class or classes of Units for which a meeting is proposed in writing by mail or other means of written communication in accordance with Section 16.1. The notice shall be
deemed to have been given at the time when deposited in the mail or sent by other means of written communication.
Section 13.6
Record Date
. For purposes of determining the Limited Partners entitled to notice of or to vote at a meeting of the Limited Partners or to give approvals without a meeting as provided in Section 13.11 the General Partner may set a Record
Date, which shall not be less than 10 nor more than 60 days before (a) the date of the meeting (unless such requirement conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Units are
listed or admitted to trading or U.S. federal securities laws, in which case the rule, regulation, guideline or requirement of such National Securities Exchange or U.S. federal securities laws shall govern) or (b) in the event that approvals
are sought without a meeting, the date by which Limited Partners are requested in writing by the General Partner to give such approvals. If the General Partner does not set a Record Date, then (i) the Record Date for determining the Limited
Partners entitled to notice of or to vote at a meeting of the Limited Partners shall be the close of business on the day next preceding the day on which notice is given, and (ii) the Record Date for determining the Limited Partners entitled to
give approvals without a meeting shall be the date the first written approval is deposited with the Partnership in care of the General Partner in accordance with Section 13.11.
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Section 13.7
Postponement and Adjournment
. Prior to the date upon which any meeting
of Limited Partners is to be held, the General Partner may postpone such meeting one or more times for any reason by giving notice to each Limited Partner entitled to vote at the meeting so postponed of the place, date and hour at which such meeting
would be held. Such notice shall be given not fewer than two days before the date of such meeting and otherwise in accordance with this Article XIII. When a meeting is postponed, a new Record Date need not be fixed unless such postponement shall be
for more than 45 days. Any meeting of Limited Partners may be adjourned by the General Partner one or more times for any reason, including the failure of a quorum to be present at the meeting with respect to any proposal or the failure of any
proposal to receive sufficient votes for approval. No Limited Partner vote shall be required for any adjournment. A meeting of Limited Partners may be adjourned by the General Partner as to one or more proposals regardless of whether action has been
taken on other matters. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting and a new Record Date need not be fixed, if the time and place thereof are announced at the meeting at which the
adjournment is taken, unless such adjournment shall be for more than 45 days. At the adjourned meeting, the Partnership may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 45 days
or if a new Record Date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given in accordance with this Article XIII.
Section 13.8
Waiver of Notice; Approval of Meeting; Approval of Minutes
. The transaction of business at any meeting of Limited
Partners, however called and noticed, and whenever held, shall be as valid as if it had occurred at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy. Attendance of a Limited Partner at a meeting
shall constitute a waiver of notice of the meeting, except when the Limited Partner attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully
called or convened; and except that attendance at a meeting is not a waiver of any right to disapprove the consideration of matters required to be included in the notice of the meeting, but not so included, if the disapproval is expressly made at
the meeting.
Section 13.9
Quorum and Voting
. The holders of a majority, by Percentage Interest, of Partnership Interests of
the class or classes for which a meeting has been called (including Partnership Interests deemed owned by the General Partner) represented in person or by proxy shall constitute a quorum at a meeting of Partners of such class or classes unless any
such action by the Partners requires approval by holders of a greater Percentage Interest, in which case the quorum shall be such greater Percentage Interest. At any meeting of the Partners duly called and held in accordance with this Agreement at
which a quorum is present, the act of Partners holding Partnership Interests that, in the aggregate, represent a majority of the Percentage Interest of those present in person or by proxy at such meeting shall be deemed to constitute the act of all
Partners, unless a greater or different percentage is required with respect to such action under the
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provisions of this Agreement, in which case the act of the Partners holding Partnership Interests that in the aggregate represent at least such greater or different percentage shall be required;
provided
,
however
, that if, as a matter of law or provision of this Agreement, approval by plurality vote of Partners (or any class thereof) is required to approve any action, no minimum quorum shall be required. The Partners present
at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough Partners to leave less than a quorum, if any action taken (other than adjournment) is
approved by Partners holding the required Percentage Interest specified in this Agreement.
Section 13.10
Conduct of a
Meeting
. The General Partner shall have full power and authority concerning the manner of conducting any meeting of the Limited Partners or solicitation of approvals in writing, including the determination of Persons entitled to vote, the
existence of a quorum, the satisfaction of the requirements of Section 13.4, the conduct of voting, the validity and effect of any proxies and the determination of any controversies, votes or challenges arising in connection with or during the
meeting or voting. The General Partner shall designate a Person to serve as chairman of any meeting and shall further designate a Person to take the minutes of any meeting. All minutes shall be kept with the records of the Partnership maintained by
the General Partner. The General Partner may make such other regulations consistent with applicable law and this Agreement as it may deem advisable concerning the conduct of any meeting of the Limited Partners or solicitation of approvals in
writing, including regulations in regard to the appointment of proxies, the appointment and duties of inspectors of votes and approvals, the submission and examination of proxies and other evidence of the right to vote, and the revocation of
approvals in writing.
Section 13.11
Action Without a Meeting
. If authorized by the General Partner, any action that may be
taken at a meeting of the Limited Partners may be taken without a meeting, without a vote and without prior notice, if an approval in writing setting forth the action so taken is signed by Limited Partners owning not less than the minimum
percentage, by Percentage Interest, of the Partnership Interests of the class or classes for which a meeting has been called (including Partnership Interests deemed owned by the General Partner), as the case may be, that would be necessary to
authorize or take such action at a meeting at which all the Limited Partners entitled to vote at such meeting were present and voted (unless such provision conflicts with any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Units are listed or admitted to trading, in which case the rule, regulation, guideline or requirement of such National Securities Exchange shall govern). Prompt notice of the taking of action without a meeting shall be given to
the Limited Partners who have not approved in writing. The General Partner may specify that any written ballot submitted to Limited Partners for the purpose of taking any action without a meeting shall be returned to the Partnership within the time
period, which shall be not less than 20 days, specified by the General Partner. If a ballot returned to the Partnership does not vote all of the Units held by the Limited Partners, the Partnership shall be deemed to have failed to receive a ballot
for the Units that were not voted. If approval of the taking of any action by the Limited Partners is solicited by any Person other than by or on behalf of the General Partner, the written approvals shall have no force and effect unless
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and until (a) they are deposited with the Partnership in care of the General Partner and (b) an Opinion of Counsel is delivered to the General Partner to the effect that the exercise of
such right and the action proposed to be taken with respect to any particular matter (i) will not cause the Limited Partners to be deemed to be taking part in the management and control of the business and affairs of the Partnership so as to
jeopardize the Limited Partners’ limited liability, and (ii) is otherwise permissible under the state statutes then governing the rights, duties and liabilities of the Partnership and the Partners. Nothing contained in this
Section 13.11 shall be deemed to require the General Partner to solicit all Limited Partners in connection with a matter approved by the holders of the requisite percentage of Units acting by written consent without a meeting.
Section 13.12
Right to Vote and Related Matters
.
(a) Only those Record Holders of the Outstanding Units on the Record Date set pursuant to Section 13.6 shall be entitled to notice of,
and to vote at, a meeting of Limited Partners or to act with respect to matters as to which the holders of the Outstanding Units have the right to vote or to act. All references in this Agreement to votes of, or other acts that may be taken by, the
Outstanding Units shall be deemed to be references to the votes or acts of the Record Holders of such Outstanding Units.
(b) With respect
to Units that are held for a Person’s account by another Person (such as a broker, dealer, bank, trust company or clearing corporation, or an agent of any of the foregoing), in whose name such Units are registered, such other Person shall, in
exercising the voting rights in respect of such Units on any matter, and unless the arrangement between such Persons provides otherwise, vote such Units in favor of, and at the direction of, the Person who is the beneficial owner, and the
Partnership shall be entitled to assume it is so acting without further inquiry. The provisions of this Section 13.12(b) (as well as all other provisions of this Agreement) are subject to the provisions of Section 4.3.
Section 13.13
Voting of Incentive Distribution Rights
.
(a) For so long as a majority of the Incentive Distribution Rights are held by the General Partner and its Affiliates, the holders of the
Incentive Distribution Rights shall not be entitled to vote such Incentive Distribution Rights on any Partnership matter except as may otherwise be required by law and the holders of the Incentive Distribution Rights, in their capacity as such,
shall be deemed to have approved any matter approved by the General Partner.
(b) If less than a majority of the Incentive Distribution
Rights are held by the General Partner and its Affiliates, the Incentive Distribution Rights will be entitled to vote on all matters submitted to a vote of Unitholders, other than amendments and other matters that the General Partner determines do
not adversely affect the holders of the Incentive Distribution Rights as a whole in any material respect. On any matter in which the holders of Incentive Distribution Rights are entitled to vote, such holders will vote together with the Subordinated
Units, prior to the end of the Subordination Period, or together with the Common Units, thereafter, in either case as a single class except as otherwise required by Section 13.3(c), and
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such Incentive Distribution Rights shall be treated in all respects as Subordinated Units or Common Units, as applicable, when sending notices of a meeting of Limited Partners to vote on any
matter (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for other similar purposes under this Agreement. The relative voting power of the Incentive Distribution Rights and the Subordinated Units
or Common Units, as applicable, will be set in the same proportion as cumulative cash distributions, if any, in respect of the Incentive Distribution Rights for the four consecutive Quarters prior to the record date for the vote bears to the
cumulative cash distributions in respect of such class of Units for such four Quarters.
(c) In connection with any equity financing, or
anticipated equity financing, by the Partnership of an Expansion Capital Expenditure, the General Partner may, without the approval of the holders of the Incentive Distribution Rights, temporarily or permanently reduce the amount of Incentive
Distributions that would otherwise be distributed to such holders, provided that in the judgment of the General Partner, such reduction will be in the long-term best interest of such holders.
ARTICLE XIV
MERGER
OR CONSOLIDATION
Section 14.1
Authority
. The Partnership may merge or consolidate with or into one or more corporations,
limited liability companies, statutory trusts or associations, real estate investment trusts, common law trusts or unincorporated businesses, including a partnership (whether general or limited (including a limited liability partnership)) or convert
into any such entity, whether such entity is formed under the laws of the State of Delaware or any other state of the United States of America, pursuant to a written plan of merger or consolidation (“
Merger Agreement
”) in
accordance with this Article XIV.
Section 14.2
Procedure for Merger or Consolidation
.
(a) Merger or consolidation of the Partnership pursuant to this Article XIV requires the prior consent of the General Partner,
provided
,
however
, that, to the fullest extent permitted by law, the General Partner, in declining to consent to a merger or consolidation, may act in its sole discretion.
(b) If the General Partner shall determine to consent to the merger or consolidation, the General Partner shall approve the Merger Agreement,
which shall set forth:
(i) the name and jurisdiction of formation or organization of each of the business entities
proposing to merge or consolidate;
(ii) the name and jurisdiction of formation or organization of the business entity that
is to survive the proposed merger or consolidation (the “
Surviving Business Entity
”);
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(iii) the terms and conditions of the proposed merger or consolidation;
(iv) the manner and basis of exchanging or converting the equity interests of each constituent business entity for, or into,
cash, property or interests, rights, securities or obligations of the Surviving Business Entity; and (A) if any interests, securities or rights of any constituent business entity are not to be exchanged or converted solely for, or into, cash,
property or interests, rights, securities or obligations of the Surviving Business Entity, then the cash, property or interests, rights, securities or obligations of any general or limited partnership, corporation, trust, limited liability company,
unincorporated business or other entity (other than the Surviving Business Entity) which the holders of such interests, securities or rights are to receive in exchange for, or upon conversion of their interests, securities or rights, and (B) in
the case of equity interests represented by certificates, upon the surrender of such certificates, which cash, property or interests, rights, securities or obligations of the Surviving Business Entity or any general or limited partnership,
corporation, trust, limited liability company, unincorporated business or other entity (other than the Surviving Business Entity), or evidences thereof, are to be delivered;
(v) a statement of any changes in the constituent documents or the adoption of new constituent documents (the articles or
certificate of incorporation, articles of trust, declaration of trust, certificate or agreement of limited partnership, certificate of formation or limited liability company agreement or other similar charter or governing document) of the Surviving
Business Entity to be effected by such merger or consolidation;
(vi) the effective time of the merger, which may be the
date of the filing of the certificate of merger pursuant to Section 14.4 or a later date specified in or determinable in accordance with the Merger Agreement (
provided
, that if the effective time of the merger is to be later than the
date of the filing of such certificate of merger, the effective time shall be fixed at a date or time certain and stated in the certificate of merger); and
(vii) such other provisions with respect to the proposed merger or consolidation that the General Partner determines to be
necessary or appropriate.
Section 14.3
Approval by Limited Partners
.
(a) Except as provided in Section 14.3(d) and 14.3(e), the General Partner, upon its approval of the Merger Agreement shall direct that
the Merger Agreement and the merger or consolidation contemplated thereby, as applicable, be submitted to a vote of Limited Partners, whether at a special meeting or by written consent, in either case in accordance with the requirements of Article
XIII. A copy or a summary of the Merger Agreement, as the case may be, shall be included in or enclosed with the notice of a special meeting or the written consent.
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(b) Except as provided in Sections 14.3(d) and 14.3(e), the Merger Agreement shall be
approved upon receiving the affirmative vote or consent of the holders of a Unit Majority unless the Merger Agreement contains any provision that, if contained in an amendment to this Agreement, the provisions of this Agreement or the Delaware Act
would require for its approval the vote or consent of a greater percentage of the Outstanding Units or of any class of Limited Partners, in which case such greater percentage vote or consent shall be required for approval of the Merger Agreement.
(c) Except as provided in Sections 14.3(d) and 14.3(e), after such approval by vote or consent of the Limited Partners, and at any
time prior to the filing of the certificate of merger pursuant to Section 14.4, the merger or consolidation may be abandoned pursuant to provisions therefor, if any, set forth in the Merger Agreement.
(d) Notwithstanding anything else contained in this Article XIV or in this Agreement, the General Partner is permitted, without Limited
Partner approval, to convert the Partnership or any Group Member into a new limited liability entity, to merge the Partnership or any Group Member into, or convey all of the Partnership’s assets to, another limited liability entity that shall
be newly formed and shall have no assets, liabilities or operations at the time of such merger or conveyance other than those it receives from the Partnership or other Group Member if (i) the General Partner has received an Opinion of Counsel
that the merger or conveyance, as the case may be, would not result in the loss of the limited liability under the Delaware Act of any Limited Partner or cause the Partnership or any Group Member to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for U.S. federal income tax purposes (to the extent not already treated as such), (ii) the sole purpose of such merger, or conveyance is to effect a mere change in the legal form of the
Partnership into another limited liability entity and (iii) the governing instruments of the new entity provide the Limited Partners and the General Partner with substantially the same rights and obligations as are herein contained.
(e) Additionally, notwithstanding anything else contained in this Article XIV or in this Agreement, the General Partner is permitted,
without Limited Partner approval, to merge or consolidate the Partnership with or into another entity if (i) the General Partner has received an Opinion of Counsel that the merger or consolidation, as the case may be, would not result in the
loss of the limited liability under the Delaware Act of any Limited Partner or cause the Partnership or any Group Member to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for U.S. federal income tax
purposes (to the extent not already treated as such), (ii) the merger or consolidation would not result in an amendment to this Agreement, other than any amendments that could be adopted pursuant to Section 13.1, (iii) the Partnership
is the Surviving Business Entity in such merger or consolidation, (iv) each Partnership Interest outstanding immediately prior to the effective date of the merger or consolidation is to be an identical Partnership Interest of the Partnership
after the effective date of the merger or consolidation, and (v) the number of Partnership Interests to be issued by the Partnership in such merger or consolidation does not exceed 20% of the Partnership Interests (other than Incentive
Distribution Rights) Outstanding immediately prior to the effective date of such merger or consolidation.
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(f) Pursuant to Section 17-211(g) of the Delaware Act, an agreement of merger or
consolidation approved in accordance with this Article XIV may (i) effect any amendment to this Agreement or (ii) effect the adoption of a new partnership agreement for the Partnership if it is the Surviving Business Entity. Any such
amendment or adoption made pursuant to this Section 14.3 shall be effective at the effective time or date of the merger or consolidation.
Section 14.4
Certificate of Merger
. Upon the required approval by the General Partner and the Unitholders of a Merger Agreement, a
certificate of merger shall be executed and filed with the Secretary of State of the State of Delaware in conformity with the requirements of the Delaware Act.
Section 14.5
Effect of Merger or Consolidation
.
(a) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of each of the business entities that has merged or consolidated, and all
property, real, personal and mixed, and all debts due to any of those business entities and all other things and causes of action belonging to each of those business entities, shall be vested in the Surviving Business Entity and after the merger or
consolidation shall be the property of the Surviving Business Entity to the extent they were of each constituent business entity;
(ii) the title to any real property vested by deed or otherwise in any of those constituent business entities shall not revert
and is not in any way impaired because of the merger or consolidation;
(iii) all rights of creditors and all liens on or
security interests in property of any of those constituent business entities shall be preserved unimpaired; and
(iv) all
debts, liabilities and duties of those constituent business entities shall attach to the Surviving Business Entity and may be enforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.
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ARTICLE XV
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS
Section 15.1
Right to Acquire Limited Partner Interests
.
(a) Notwithstanding any other provision of this Agreement, if at any time the General Partner and its Affiliates hold more than 80% of the
total Limited Partner Interests of any class then Outstanding, the General Partner shall then have the right, which right it may assign and transfer in whole or in part to the Partnership or any Affiliate of the General Partner, exercisable in its
sole discretion, to purchase all, but not less than all, of such Limited Partner Interests of such class then Outstanding held by Persons other than the General Partner and its Affiliates, at the greater of (x) the Current Market Price as of
the date three days prior to the date that the notice described in Section 15.1(b) is mailed and (y) the highest price paid by the General Partner or any of its Affiliates for any such Limited Partner Interest of such class purchased
during the 90-day period preceding the date that the notice described in Section 15.1(b) is mailed.
(b) If the General Partner, any
Affiliate of the General Partner or the Partnership elects to exercise the right to purchase Limited Partner Interests granted pursuant to Section 15.1(a), the General Partner shall deliver to the Transfer Agent notice of such election to
purchase (the “
Notice of Election to Purchase
”) and shall cause the Transfer Agent to mail a copy of such Notice of Election to Purchase to the Record Holders of Limited Partner Interests of such class (as of a Record Date
selected by the General Partner) at least 10, but not more than 60, days prior to the Purchase Date. Such Notice of Election to Purchase shall also be filed and distributed as may be required by the Commission or any National Securities Exchange on
which such Limited Partner Interests are listed. The Notice of Election to Purchase shall specify the Purchase Date and the price (determined in accordance with Section 15.1(a)) at which Limited Partner Interests will be purchased and state
that the General Partner, its Affiliate or the Partnership, as the case may be, elects to purchase such Limited Partner Interests, upon surrender of Certificates representing such Limited Partner Interests in the case of Limited Partner Interests
evidenced by Certificates, in exchange for payment, at such office or offices of the Transfer Agent as the Transfer Agent may specify, or as may be required by any National Securities Exchange on which such Limited Partner Interests are listed or
admitted to trading. Any such Notice of Election to Purchase mailed to a Record Holder of Limited Partner Interests at his address as reflected in the records of the Transfer Agent shall be conclusively presumed to have been given regardless of
whether the owner receives such notice. On or prior to the Purchase Date, the General Partner, its Affiliate or the Partnership, as the case may be, shall deposit with the Transfer Agent cash in an amount sufficient to pay the aggregate purchase
price of all of such Limited Partner Interests to be purchased in accordance with this Section 15.1. If the Notice of Election to Purchase shall have been duly given as aforesaid at least 10 days prior to the Purchase Date, and if on or prior
to the Purchase Date the deposit described in the preceding sentence has been made for the benefit of the holders of Limited Partner Interests subject to purchase as provided herein, then from and after the Purchase Date, notwithstanding that any
Certificate shall not have been surrendered for purchase, all rights of the holders of such Limited
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Partner Interests shall thereupon cease, except the right to receive the purchase price (determined in accordance with Section 15.1(a)) for Limited Partner Interests therefor, without
interest, upon surrender to the Transfer Agent of the Certificates representing such Limited Partner Interests in the case of Limited Partner Interests evidenced by Certificates, and such Limited Partner Interests shall thereupon be deemed to be
transferred to the General Partner, its Affiliate or the Partnership, as the case may be, on the record books of the Transfer Agent and the Partnership, and the General Partner or any Affiliate of the General Partner, or the Partnership, as the case
may be, shall be deemed to be the owner of all such Limited Partner Interests from and after the Purchase Date and shall have all rights as the owner of such Limited Partner Interests.
(c) In the case of Limited Partner Interests evidenced by Certificates, at any time from and after the Purchase Date, a holder of an
Outstanding Limited Partner Interest subject to purchase as provided in this Section 15.1 may surrender his Certificate evidencing such Limited Partner Interest to the Transfer Agent in exchange for payment of the amount described in
Section 15.1(a), therefor, without interest thereon.
ARTICLE XVI
GENERAL PROVISIONS
Section 16.1
Addresses and Notices; Written Communications.
(a) Any notice, demand, request, report or proxy materials required or permitted to be given or made to a Partner under this Agreement shall
be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or by other means of written communication to the Partner at the address described below. Any notice, payment or report to be
given or made to a Partner hereunder shall be deemed conclusively to have been given or made, and the obligation to give such notice or report or to make such payment shall be deemed conclusively to have been fully satisfied, upon sending of such
notice, payment or report to the Record Holder of such Partnership Interests at his address as shown on the records of the Transfer Agent or as otherwise shown on the records of the Partnership, regardless of any claim of any Person who may have an
interest in such Partnership Interests by reason of any assignment or otherwise. Notwithstanding the foregoing, if (i) a Partner shall consent to receiving notices, demands, requests, reports or proxy materials via electronic mail or by the
Internet or (ii) the rules of the Commission shall permit any report or proxy materials to be delivered electronically or made available via the Internet, any such notice, demand, request, report or proxy materials shall be deemed given or made
when delivered or made available via such mode of delivery. An affidavit or certificate of making of any notice, payment or report in accordance with the provisions of this Section 16.1 executed by the General Partner, the Transfer Agent or the
mailing organization shall be prima facie evidence of the giving or making of such notice, payment or report. If any notice, payment or report given or made in accordance with the provisions of this Section 16.1 is returned marked to indicate
that such notice, payment or report was unable to be delivered, such notice, payment or report and, in the case of notices, payments or reports returned by the United States Postal Service (or other physical mail delivery mail service outside the
United States of America), any subsequent
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notices, payments and reports shall be deemed to have been duly given or made without further mailing (until such time as such Record Holder or another Person notifies the Transfer Agent or the
Partnership of a change in his address) or other delivery if they are available for the Partner at the principal office of the Partnership for a period of one year from the date of the giving or making of such notice, payment or report to the other
Partners. Any notice to the Partnership shall be deemed given if received by the General Partner at the principal office of the Partnership designated pursuant to Section 2.3. The General Partner may rely and shall be protected in relying on
any notice or other document from a Partner or other Person if believed by it to be genuine.
(b) The terms “in writing”,
“written communications,” “written notice” and words of similar import shall be deemed satisfied under this Agreement by use of e-mail and other forms of electronic communication.
Section 16.2
Further Action
. The parties shall execute and deliver all documents, provide all information and take or refrain from
taking action as may be necessary or appropriate to achieve the purposes of this Agreement.
Section 16.3
Binding Effect
. This
Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.
Section 16.4
Integration
. This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject
matter hereof and supersedes all prior agreements and understandings pertaining thereto.
Section 16.5
Creditors
. None of the
provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.
Section 16.6
Waiver
. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such
breach of any other covenant, duty, agreement or condition.
Section 16.7
Third-Party Beneficiaries
. Each Partner agrees that
(a) any Indemnitee shall be entitled to assert rights and remedies hereunder as a third-party beneficiary hereto with respect to those provisions of this Agreement affording a right, benefit or privilege to such Indemnitee and (b) any
Unrestricted Person shall be entitled to assert rights and remedies hereunder as a third-party beneficiary hereto with respect to those provisions of this Agreement affording a right, benefit or privilege to such Unrestricted Person.
Section 16.8
Counterparts
. This Agreement may be executed in counterparts, all of which together shall constitute an agreement
binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto or, in the case of a
Person acquiring a Limited Partner Interest, pursuant to Section 10.1(a) without execution hereof.
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Section 16.9
Applicable Law; Forum, Venue and Jurisdiction; Waiver of Trial by
Jury
.
(a) This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without
regard to the principles of conflicts of law.
(b) Each of the Partners and each Person holding any beneficial interest in the Partnership
(whether through a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing or otherwise):
(i) irrevocably agrees that any claims, suits, actions or proceedings (A) arising out of or relating in any way to this
Agreement (including any claims, suits or actions to interpret, apply or enforce the provisions of this Agreement or the duties, obligations or liabilities among Partners or of Partners to the Partnership, or the rights or powers of, or restrictions
on, the Partners or the Partnership), (B) brought in a derivative manner on behalf of the Partnership, (C) asserting a claim of breach of a fiduciary or other duty owed by any director, officer, or other employee of the Partnership or the
General Partner, or owed by the General Partner, to the Partnership or the Partners, (D) asserting a claim arising pursuant to any provision of the Delaware Act or (E) asserting a claim governed by the internal affairs doctrine shall be
exclusively brought in the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction), in each case regardless
of whether such claims, suits, actions or proceedings sound in contract, tort, fraud or otherwise, are based on common law, statutory, equitable, legal or other grounds, or are derivative or direct claims;
(ii) irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if such court
does not have subject matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction) in connection with any such claim, suit, action or proceeding;
(iii) agrees not to, and waives any right to, assert in any such claim, suit, action or proceeding that (A) it is not
personally subject to the jurisdiction of the Court of Chancery of the State of Delaware or of any other court to which proceedings in the Court of Chancery of the State of Delaware may be appealed, (B) such claim, suit, action or proceeding is
brought in an inconvenient forum, or (C) the venue of such claim, suit, action or proceeding is improper;
(iv)
expressly waives any requirement for the posting of a bond by a party bringing such claim, suit, action or proceeding;
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(v) consents to process being served in any such claim, suit, action or
proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices hereunder, and agrees that such services shall constitute good and sufficient service of process and notice thereof;
provided
, nothing in this clause (v) shall affect or limit any right to serve process in any other manner permitted by law; and
(vi) IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY SUCH CLAIM, SUIT, ACTION OR PROCEEDING.
Section 16.10
Invalidity of Provisions
. If any provision or part of a provision of this Agreement is or becomes for any reason,
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions and/or parts thereof contained herein shall not be affected thereby and this Agreement shall, to the fullest extent permitted by
law, be reformed and construed as if such invalid, illegal or unenforceable provision, or part of a provision, had never been contained herein, and such provision or part reformed so that it would be valid, legal and enforceable to the maximum
extent possible.
Section 16.11
Consent of Partners
. Each Partner hereby expressly consents and agrees that, whenever in this
Agreement it is specified that an action may be taken upon the affirmative vote or consent of less than all of the Partners, such action may be so taken upon the concurrence of less than all of the Partners and each Partner shall be bound by the
results of such action.
Section 16.12
Facsimile Signatures
. The use of facsimile signatures affixed in the name and on behalf
of the transfer agent and registrar of the Partnership on Certificates representing Units is expressly permitted by this Agreement.
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L
IMITED
P
ARTNERSHIP
102
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written
above.
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GENERAL PARTNER:
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FORESIGHT ENERGY GP LLC
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By:
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/s/ Michael J. Beyer
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Name:
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Michael J. Beyer
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Title:
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President and Chief Executive Officer
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ORGANIZATIONAL LIMITED PARTNER:
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FORESIGHT RESERVES LP
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By:
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/s/ John Dickinson
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Name:
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John Dickinson
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Title:
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Authorized Person
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S
IGNATURE
P
AGE
F
ORESIGHT
E
NERGY
LP
F
IRST
A
MENDED
AND
R
ESTATED
A
GREEMENT
OF
L
IMITED
P
ARTNERSHIP
EXHIBIT A
to the First Amended and Restated
Agreement of Limited Partnership of
Foresight Energy LP
Certificate Evidencing Common Units
Representing Limited Partner Interests in
Foresight Energy LP
In accordance with Section 4.1 of the First Amended and Restated Agreement of Limited
Partnership of Foresight Energy LP, as amended, supplemented or restated from time to time (the “
Partnership Agreement
”), Foresight Energy LP, a Delaware limited partnership (the “
Partnership
”), hereby
certifies that (the “
Holder
”) is the registered owner of
Common Units representing limited partner interests in the Partnership (the “
Common Units
”) transferable on the books of the
Partnership, in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. The rights, preferences and limitations of the Common Units are set forth in, and this Certificate and the Common Units represented hereby
are issued and shall in all respects be subject to the terms and provisions of, the Partnership Agreement. Copies of the Partnership Agreement are on file at, and will be furnished without charge on delivery of written request to the Partnership at,
the principal office of the Partnership located at 211 North Broadway, Suite 2600, Saint Louis, MO 63102. Capitalized terms used herein but not defined shall have the meanings given them in the Partnership Agreement.
THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF FORESIGHT ENERGY LP THAT THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED IF SUCH TRANSFER WOULD (A) VIOLATE THE THEN APPLICABLE FEDERAL OR STATE SECURITIES LAWS OR RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER GOVERNMENTAL
AUTHORITY WITH JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR QUALIFICATION OF FORESIGHT ENERGY LP UNDER THE LAWS OF THE STATE OF DELAWARE, OR (C) CAUSE FORESIGHT ENERGY LP TO BE TREATED AS AN ASSOCIATION TAXABLE AS A
CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED). FORESIGHT ENERGY GP LLC, THE GENERAL PARTNER OF FORESIGHT ENERGY LP, MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE
TRANSFER OF THIS SECURITY IF IT DETERMINES, WITH THE ADVICE OF COUNSEL THAT SUCH RESTRICTIONS ARE NECESSARY OR ADVISABLE (i) TO AVOID A SIGNIFICANT RISK OF FORESIGHT ENERGY LP BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS
AN ENTITY FOR U.S. FEDERAL INCOME TAX PURPOSES OR (ii) TO PRESERVE THE ECONOMIC UNIFORMITY OF THE LIMITED PARTNER INTERESTS (OR ANY CLASS OR CLASSES THEREOF). THE RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF ANY
TRANSACTIONS INVOLVING THIS
A-1
SECURITY ENTERED INTO THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED OR ADMITTED TO TRADING.
The Holder, by accepting this Certificate, (i) shall be admitted to the Partnership as a Limited Partner with respect to the Limited
Partner Interests so transferred to such person when any such transfer or admission is reflected on the books and records of the Partnership and such Limited Partner becomes the Record Holder of the Limited Partner Interests so transferred,
(ii) shall become bound by the terms of the Partnership Agreement, (iii) represents that the transferee has the capacity, power and authority to enter into the Partnership Agreement and (iv) makes the consents, acknowledgements and
waivers contained in the Partnership Agreement, with or without the execution of the Partnership Agreement by the Holder.
This
Certificate shall not be valid for any purpose unless it has been countersigned and registered by the Transfer Agent and Registrar.
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Dated:
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Foresight Energy LP
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Countersigned and Registered by:
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By:
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Foresight Energy GP LLC
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American Stock Transfer and Trust Company, N.A., As Transfer Agent and Registrar
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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A-2
[Reverse of Certificate]
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as follows according to applicable laws or regulations:
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TEN COM - as tenants in common
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UNIF GIFT/TRANSFERS MIN ACT
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TEN ENT - as tenants by the entireties
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Custodian
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JT TEN - as joint tenants with right of survivorship and not as tenants in common
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(Cust)
(Minor)
Under Uniform Gifts/Transfers to CD Minors Act (State)
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Additional abbreviations, though not in the above list, may also be used.
ASSIGNMENT OF COMMON UNITS OF
FORESIGHT ENERGY LP
FOR
VALUE RECEIVED, hereby assigns, conveys, sells and transfers unto
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(Please print or typewrite name and address of assignee)
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(Please insert Social Security or other identifying number of assignee)
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Common Units representing limited partner interests evidenced by this Certificate, subject to the
Partnership Agreement, and does hereby irrevocably constitute and appoint as its attorney-in-fact with full power of
substitution to transfer the same on the books of Foresight Energy LP
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Date:
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NOTE: The signature to any endorsement hereon must correspond with the name as written upon the face of this Certificate in every particular. without alteration, enlargement or change.
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15
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(Signature)
(Signature)
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A-3
