Exhibit 1.1
NUSTAR ENERGY L.P.
7.625% Series B
Fixed-to-Floating
Rate Cumulative Redeemable
Perpetual Preferred Units
Representing Limited Partner Interests
UNDERWRITING AGREEMENT
April 25,
2017
W
ELLS
F
ARGO
S
ECURITIES
, LLC
M
ERRILL
L
YNCH
, P
IERCE
, F
ENNER
& S
MITH
I
NCORPORATED
M
ORGAN
S
TANLEY
& C
O
. LLC
UBS S
ECURITIES
LLC
As Representatives of the
several
Underwriters named in Schedule I attached hereto
c/o Wells Fargo Securities, LLC
550 South Tryon Street, 5th
Floor
Charlotte, North Carolina 28202
c/o Merrill Lynch,
Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, New York 10036
c/o Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
c/o UBS Securities LLC
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
NuStar Energy L.P., a
Delaware limited partnership (the “
Partnership
”), proposes to issue and sell to the underwriters named in
Schedule I
hereto (the “
Underwriters
”), for whom Wells Fargo Securities, LLC, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and UBS Securities LLC are acting as representatives (the “
Representatives
”), an aggregate of 14,000,000 (the “
Firm Units
”) of its 7.625%
Series B
Fixed-to-Floating
Rate Cumulative Redeemable Perpetual Preferred Units representing limited partner interests (the “
Preferred Units
”) of the
Partnership. In addition, the Partnership proposes to grant to the Underwriters the option to purchase from the Partnership up to an additional 1,400,000 Preferred Units (the “
Option Units
”). The Firm Units and the Option Units are
hereinafter collectively sometimes referred to as the “
Offered Units
.” The Offered Units are described in the Prospectus which is referred to below.
This is to confirm the agreement among the Partnership, Riverwalk Logistics, L.P., a Delaware
limited partnership and the general partner of the Partnership (the “
General Partner
”), NuStar GP, LLC, a Delaware limited liability company and the general partner of the General Partner (“
NuStar GP
”), and the
Underwriters concerning the purchase of the Offered Units from the Partnership by the Underwriters. The Partnership, the General Partner and NuStar GP are collectively referred to herein as the “
Partnership Parties
.”
On the Initial Delivery Date (as defined in
Section
3
), the General Partner will amend and restate the Fourth
Amended and Restated Agreement of Limited Partnership of the Partnership (as amended to the date hereof, the “
Original Partnership Agreement
”) to be the Fifth Amended and Restated Agreement of Limited Partnership of the Partnership
(the “
Amended and Restated Partnership Agreement
”) to authorize and establish the terms of the Preferred Units. References herein to the “
Partnership Agreement
” for periods prior to the Initial Delivery Date mean
the Original Partnership Agreement and for periods on or after the Initial Delivery Date mean the Amended and Restated Partnership Agreement.
The Partnership has prepared and filed, in accordance with the provisions of the Securities Act of 1933, as amended (the “
Securities
Act
”), and the rules and regulations promulgated thereunder (the “
Rules and Regulations
”), with the Securities and Exchange Commission (the “
Commission
”) a registration statement on Form
S-3
(File
No. 333-212338)
including a prospectus, which registration statement incorporates by reference documents that the Partnership has filed, or will file, in
accordance with the provisions of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”). Amendments to such registration statement, if necessary or appropriate, have been similarly prepared and filed with the
Commission in accordance with the Securities Act. Such registration statement, as so amended, has become effective under the Securities Act.
The Partnership Parties wish to confirm as follows their agreement with you in connection with the purchase of the Offered Units from the
Partnership by the Underwriters.
1.
Representations, Warranties and Agreements of the Partnership Parties.
Each of the Partnership Parties represents, warrants and agrees with the Underwriters that:
(a)
Registration;
Definitions; No Stop Order
. A registration statement (Registration
No. 333-212338)
on Form
S-3
relating to the Offered Units has (i) been prepared by the
Partnership in conformity with the requirements of the Securities Act and the Rules and Regulations; (ii) been filed with the Commission under the Securities Act; and (iii) become effective under the Securities Act. Copies of such
registration statement and any amendment thereto have been delivered or otherwise made available by the Partnership to you as the Representatives. As used in this Agreement:
(i) “
Applicable Time
” means 3:20 p.m. (New York City time) on the date of this
Agreement;
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(ii) “
Effective Date
” means any date as
of which any part of such registration statement relating to the Offered Units became, or is deemed to have become, effective under the Securities Act in accordance with the Rules and Regulations;
(iii) “
Issuer Free Writing Prospectus
” means each “free writing prospectus”
(as defined in Rule 405 of the Rules and Regulations) prepared by or on behalf of the Partnership or used or referred to by the Partnership in connection with the offering of the Offered Units;
(iv) “
Preliminary Prospectus
” means any preliminary prospectus relating to the Offered
Units, including any preliminary prospectus supplement thereto relating to the Offered Units, as filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations, including any documents incorporated or deemed to be incorporated by
reference therein;
(v) “
Pricing Disclosure Package
” means the most recent
Preliminary Prospectus, together with each Issuer Free Writing Prospectus set forth on
Schedule II
hereto and the information set forth on
Schedule III
hereto;
(vi) “
Prospectus
” means the final prospectus relating to the Offered Units, including
any prospectus supplement thereto relating to the Offered Units, as filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations, including any documents incorporated or deemed to be incorporated by reference therein; and
(vii) “
Registration Statement
” means, collectively, the various parts of such
registration statement, including any documents incorporated or deemed to be incorporated by reference therein, each as amended as of the Effective Date for such part, including any Preliminary Prospectus or the Prospectus and all exhibits to such
registration statement and any information deemed to be part of the registration statement at such Effective Date pursuant to Rule 430B of the Rules and Regulations.
(viii) Any reference to financial statements and schedules and other information which is
“contained,” “included” or “stated” (or other references of like import) in the Registration Statement, the Pricing Disclosure Package or the Prospectus shall be deemed to refer to and include any such financial
statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement, the Pricing Disclosure Package or the Prospectus, as the case may be, prior to the Applicable Time.
Any reference to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein pursuant to Form
S-3
under the Securities Act and the Rules and Regulations. Any reference to the “
most recent Preliminary Prospectus
” shall be
deemed to refer to the latest Preliminary Prospectus filed pursuant to Rule 424(b) on or prior to the date hereof. Any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
any document filed under the Exchange Act, after the date of such Preliminary Prospectus or the Prospectus, as the case may be, and incorporated by reference
3
in such Preliminary Prospectus or the Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to include, for so long as the delivery of a
prospectus is required in connection with the offering or sale of the Offered Units, any reports of the Partnership filed (but not furnished) with the Commission pursuant to Sections 13(a), 13(c) or 15(d) of the Exchange Act after the Effective Date
that are incorporated by reference in the Registration Statement. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending the effectiveness of the Registration Statement,
and no proceeding or examination for such purpose has been instituted or, to the knowledge of the Partnership Parties (as defined herein), threatened by the Commission. The Commission has not notified the Partnership of any objection to the use of
the Registration Statement.
(b)
Partnership Status as “Well-Known Seasoned Issuer.”
The
Partnership has been since the time of initial filing of the Registration Statement and continues to be a “well-known seasoned issuer” (as defined in Rule 405) eligible to use Form
S-3
for the
offering of the Offered Units, including not having been an “ineligible issuer” (as defined in Rule 405) at any such time or date. The Registration Statement is an “automatic shelf registration statement” (as defined in Rule 405)
and was filed not earlier than the date that is three years prior to the applicable Delivery Date (as defined in
Section
3
).
(c)
Registration Statement and Prospectus Conform to the Requirements of the Securities Act
. The Registration
Statement conformed when filed and on the most recent Effective Date and will conform on each Delivery Date, in all material respects, and any amendment to the Registration Statement filed after the date hereof will conform in all material respects
when filed, to the requirements of the Securities Act and the Rules and Regulations. The Preliminary Prospectus conformed, and the Prospectus will conform, in all material respects when filed with the Commission pursuant to Rule 424(b) and on each
Delivery Date, to the requirements of the Securities Act and the Rules and Regulations. The documents incorporated by reference in any Preliminary Prospectus or the Prospectus conformed, and any further documents so incorporated will conform, when
filed with the Commission, in all material respects to the requirements of the Exchange Act or the Securities Act, as applicable, and the rules and regulations of the Commission thereunder.
(d)
No Material Misstatements or Omissions in Registration Statement
. As of each Effective Date and on each
Delivery Date, the Registration Statement did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;
provided
that
no representation or warranty is made as to information contained in or omitted from the Registration Statement in reliance upon and in conformity with written information furnished to the Partnership through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein, which information is specified in
Section
7(e)
.
(e)
No Material Misstatements or Omissions in Prospectus
. The Prospectus will not, as of its date and on each
Delivery Date, include an 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 that
no
representation or warranty is made as to information contained in or omitted from the Prospectus in reliance
4
upon and in conformity with written information furnished to the Partnership through the Representatives by or on behalf of any Underwriter specifically for inclusion therein, which information
is specified in
Section
7(e)
.
(f)
No Material Misstatements or Omissions in Pricing
Disclosure Package
. The Pricing Disclosure Package did not, as of the Applicable Time, include an 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
that
no representation or warranty is made as to information contained in or omitted from the Pricing Disclosure Package in reliance upon and in conformity with written
information furnished to the Partnership through the Representatives by or on behalf of any Underwriter specifically for inclusion therein, which information is specified in
Section
7(e)
.
(g)
No Material Misstatements or Omissions in Issuer Free Writing Prospectuses
. Each Issuer Free Writing
Prospectus (including, without limitation, any road show that constitutes a free writing prospectus under Rule 433), when considered together with the Pricing Disclosure Package as of the Applicable Time, did not include an untrue statement of a
material fact or omit to state a 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;
provided that
no representation
or warranty is made as to information contained in or omitted from any Issuer Free Writing Prospectus in reliance upon and in conformity with written information furnished to the Partnership through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein, which information is specified in
Section
7(e)
. Each Issuer Free Writing Prospectus did not conflict with the information then contained in the Registration Statement.
(h)
Issuer Free Writing Prospectuses Conform to the Requirements of the Securities Act
. Each Issuer Free Writing
Prospectus conformed or will conform in all material respects to the requirements of the Securities Act and the Rules and Regulations on the date of first use, and the Partnership has complied, and will comply, with all prospectus delivery
requirements and any filing and record keeping requirements applicable to such Issuer Free Writing Prospectus pursuant to the Rules and Regulations. The Partnership has not made any offer relating to the Offered Units that would constitute an Issuer
Free Writing Prospectus without the prior consent of the Representatives. The Partnership has retained in accordance with the Rules and Regulations all Issuer Free Writing Prospectuses that were not required to be filed pursuant to the Rules and
Regulations. The Partnership has taken all actions necessary so that any “road show” (as defined in Rule 433 of the Rules and Regulations) in connection with the offering of the Offered Units will not be required to be filed pursuant to
the Rules and Regulations.
(i)
Proceedings Under the Securities Act.
The Registration Statement is not the
subject of a pending proceeding or examination under Section 8(d) or 8(e) of the Securities Act and the Partnership is not the subject of a pending proceeding under Section 8A of the Securities Act in connection with the offering of the Offered
Units.
(j)
Formation and Qualification
. Each of the Partnership Parties and the Partnership’s
“significant subsidiaries,” as defined in Rule
1-02(w)
of Regulation
S-X
under the
5
Exchange Act (each, a “
Principal Subsidiary
,” and collectively, the “
Principal Subsidiaries
”), has been duly organized and is validly existing and in good
standing as a limited partnership, limited liability company or corporation, as applicable, under the laws of its jurisdiction of organization and is duly qualified to do business and in good standing as a foreign limited partnership, foreign
limited liability company or foreign corporation, as applicable, in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified or in good
standing would not, and except where the failure of the Partnership Parties and the Principal Subsidiaries to be so duly organized would not, in the aggregate, reasonably be expected to have a material adverse effect on the financial condition,
results of operations, unitholders’ or stockholders’ equity, properties, business or prospects of the Partnership and its 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 Registration Statement, the Pricing Disclosure Package and the Prospectus (a “
Material Adverse Effect
”); and each of the Partnership Parties and the subsidiaries of the Partnership has all power
and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged in all material respects as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(k)
Ownership of NuStar GP by NuStar Holdings
. NuStar GP Holdings, LLC, a Delaware limited liability company
(“
NuStar Holdings
”), is the sole member of NuStar GP and owns 100% of the issued and outstanding membership interests in NuStar GP; such membership interests have been duly authorized and validly issued in accordance with the
limited liability company agreement of NuStar GP (the “
NuStar GP LLC Agreement
”), and are fully paid (to the extent required under the NuStar GP LLC Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in Sections
18-607
and
18-804
of the Delaware Limited Liability Company Act (the “
Delaware LLC Act
”)); and NuStar Holdings owns such
membership interests free and clear of all liens, encumbrances, security interests, charges or claims (collectively, “
Liens
”).
(l)
Ownership of the General Partner Interest in the General Partner
. NuStar GP is the sole general partner of
the General Partner with a 0.1% general partner interest in the General Partner; such general partner interest has been duly authorized and validly issued in accordance with the limited partnership agreement of the General Partner (the “
GP
Partnership Agreement
”); and NuStar GP owns such general partner interest free and clear of all Liens.
(m)
Ownership of the Limited Partner Interests in the General Partner
. Riverwalk Holdings, LLC, a Delaware
limited liability company (“
Riverwalk Holdings
”), is the sole limited partner of the General Partner with a 99.9% limited partner interest in the General Partner; such limited partner interest has been duly authorized and validly
issued in accordance with the GP Partnership Agreement and is fully paid (to the extent required under the GP Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in Sections
17-303,
17-607
and
17-804
of the Delaware Revised Uniform Limited Partnership Act (the “
Delaware LP Act
”)); and
Riverwalk Holdings owns such limited partner interest free and clear of all Liens.
(n)
Ownership of the General
Partner Interest and Incentive Distribution Rights in the Partnership
. The General Partner is the sole general partner of the Partnership with
6
a 2% general partner interest and 100% of the Incentive Distribution Rights (as defined in the Partnership Agreement) in the Partnership; such general partner interest and Incentive Distribution
Rights have been duly authorized and validly issued in accordance with the Partnership Agreement and, in the case of the Incentive Distribution Rights, are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except
as such nonassessability may be affected by matters described in Sections
17-303,
17-607
and
17-804
of the Delaware LP Act); and
the General Partner owns such general partner interest and Incentive Distribution Rights, in each case, free and clear of all Liens.
(o)
Ownership of the Partnership’s Common Units by NuStar Holdings.
As of the date hereof,
(i) Riverwalk Holdings and NuStar GP, each a direct wholly owned subsidiary of NuStar Holdings, own 10,213,894 and 732 common units representing limited partner interests of the Partnership (“
Common Units
”), respectively; and
(ii) Riverwalk Holdings and NuStar GP own such limited partner interests free and clear of all Liens, except for Liens arising under or in connection with that certain Revolving Credit Agreement, dated as of June 28, 2013, among NuStar
Holdings, Riverwalk Holdings and the lenders party thereto, as amended.
(p)
Ownership of the Principal
Subsidiaries
. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Partnership owns directly or indirectly 100% of the outstanding capital stock, membership interests, partnership interests or
other equity interests, as the case may be, in each of the Principal Subsidiaries; such stock, membership interests, partnership interests or other equity interests have been duly authorized and validly issued in accordance with the applicable
certificate of incorporation and bylaws, certificate of formation and limited liability company agreement, certificate of limited partnership and partnership agreement or other organizational documents of each applicable Principal Subsidiary, as the
case may be (collectively, the “
Principal Subsidiaries Operative Documents
” and, as to each individual Principal Subsidiary, the “
Principal Subsidiary Operative Document
”), except where the failure of such stock,
membership interests, partnership interests or other equity interests to be so duly authorized and validly issued would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and, except in the case of the
general partner interests, are fully paid (to the extent required under the applicable Principal Subsidiary Operative Document) and nonassessable (except as such nonassessability may be affected by matters described in Sections
18-607
and
18-804
of the Delaware LLC Act or Sections
17-303,
17-607
and
17-804
of the Delaware LP Act, as the case may be); and the Partnership and the direct owner, if applicable, owns all such stock, membership interests, partnership interests or other equity interests, as the case
may be, free and clear of all Liens.
(q)
Capitalization
. As of April 24, 2017, the issued and
outstanding limited partner interests of the Partnership consist of 93,030,825 Common Units, the Incentive Distribution Rights and 9,060,000 Series A
Fixed-to-Floating
Rate Cumulative Redeemable Perpetual Preferred Units (the “
Series A Preferred Units
”). All outstanding Common Units, Series A Preferred Units and Incentive Distribution Rights and the limited partner interests represented thereby
have been duly authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections
17-303,
17-607
and
17-804
of the Delaware LP Act and as otherwise disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus).
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(r)
Valid Issuance of Offered Units
. Upon execution of the Amended
and Restated Partnership Agreement and at each Delivery Date, the Firm Units or the Option Units, as the case may be, and the limited partner interests represented thereby will be duly authorized and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms hereof, will be validly issued, fully paid (to the extent required under the Amended and Restated Partnership Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in Sections
17-303,
17-607
and
17-804
of the Delaware LP Act and as otherwise disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus).
(s)
No Preemptive Rights, Registration Rights or
Options
. Except as identified in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no (i) preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any equity securities of the Partnership Parties, or (ii) outstanding options or warrants to purchase any securities of the Partnership Parties, in each case other than with respect to awards granted pursuant to an equity incentive
plan approved by the board of directors of NuStar GP. Neither the filing of the Registration Statement nor the offering or sale of the Offered Units as contemplated by this Agreement gives rise to any rights for or relating to the registration of
any Preferred Units or other securities of the Partnership Parties.
(t)
Authority and Authorization
. At
each Delivery Date, all partnership and limited liability company action, as the case may be, required to be taken by any of the Partnership Parties or any of their respective unitholders, members or partners for the authorization, issuance, sale
and delivery of the Offered Units and the consummation of the transactions contemplated by this Agreement and the Membership Interest Purchase and Sale Agreement, dated as of April 11, 2017, by and between FR Navigator Holdings, LLC and NuStar
Logistics, L.P. (the “
Acquisition Agreement
”), shall have been validly taken.
(u)
Authorization, Execution and Delivery of this Agreement
. This Agreement has been duly authorized and validly
executed and delivered by each of the Partnership Parties party hereto.
(v)
Authorization, Execution, Delivery
and Enforceability of Certain Agreements.
The organizational documents of each of the Partnership Parties, Riverwalk Holdings and each of the Principal Subsidiaries (collectively, the “
Organizational Documents
”) and the
Acquisition Agreement have been, and, on the Initial Delivery Date, the Amended and Restated Partnership Agreement will be, duly authorized, executed and delivered by the Partnership Parties, Riverwalk Holdings and the Principal Subsidiaries, as
applicable, and, assuming the due authorization, valid execution and delivery by the other parties thereto (other than the Partnership Parties, Riverwalk Holdings and the Partnership’s subsidiaries), each will be a valid and legally binding
agreement of the Partnership Parties, Riverwalk Holdings and the Principal Subsidiaries, as applicable, enforceable against such parties in accordance with its terms (in the case of the Acquisition Agreement, assuming the due authorization,
execution and delivery by the other parties thereto); provided that, with respect to each agreement described in this
Section 1(v)
, 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
8
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.
(w)
No Conflicts
. None of the offering and sale by the Partnership of the Offered
Units, the execution, delivery and performance of this Agreement or the Acquisition Agreement by the Partnership Parties party thereto or the consummation of any other transactions contemplated by this Agreement or the Acquisition Agreement,
including the execution and delivery of the Amended and Restated Partnership Agreement, (i) conflicts with or will conflict with, or constitutes or will constitute a violation of, the certificate of limited partnership or agreement of limited
partnership, certificate of formation or limited liability company agreement, the charter or bylaws, or any other organizational documents of any of the Partnership Parties or Principal Subsidiaries, (ii) conflicts with or will conflict with,
or constitutes or will constitute a breach or violation of, or a default (or an event that, with notice or lapse of time or both, would constitute such a default) under, any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to which any of the Partnership Parties or Principal Subsidiaries is a party or by which any of them are bound or to which any of their respective properties is subject,
(iii) violates or will violate any statute, law, rule or regulation, or any judgment, order or decrees of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over any of the
Partnership Parties or Principal Subsidiaries or any of their properties or assets, or (iv) will result in the creation or imposition of any Lien upon any property or assets of any of the Partnership Parties or Principal Subsidiaries, except,
in the case of clauses (ii), (iii) and (iv), for such conflicts, breaches, violations, defaults or Liens as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or materially impair the ability of any
of the Partnership Parties to perform their respective obligations under this Agreement or consummate the transactions contemplated hereby and by the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(x)
No Consents
. No permit, consent, approval, authorization, order, registration, filing or qualification of or
with any court, governmental agency or body is required in connection with the offering and sale by the Partnership of the Offered Units, the execution, delivery and performance of this Agreement or the Acquisition Agreement by the Partnership
Parties party thereto or the consummation of any other transactions contemplated by this Agreement or the Acquisition Agreement, including the execution and delivery of the Amended and Restated Partnership Agreement, except for (i) such
permits, consents, approvals and similar authorizations required under the Securities Act, the Exchange Act and state securities or “Blue Sky” laws in connection with the purchase and distribution of the Offered Units by the Underwriters,
(ii) such consents that have been, or prior to the Initial Delivery Date will be, obtained, (iii) such consents that, if not obtained, would not reasonably be expected to have a Material Adverse Effect or materially impair the ability of
any of the Partnership Parties to perform their respective obligations under this Agreement or consummate the transactions contemplated hereby and by the Pricing Disclosure Package and the Prospectus, (iv) as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus or (v) with respect to the Acquisition Agreement, approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
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(y)
No Defaults
. None of the Partnership Parties or the Principal
Subsidiaries is in (i) violation of its agreement of limited partnership, limited liability company agreement, certificate of incorporation or bylaws or other organizational documents, or of any law, statute, ordinance, administrative or
governmental rule or regulation applicable to it or of any decree of any court or governmental agency or body having jurisdiction over it or (ii) breach or default (or an event which, with notice or lapse of time or both, would constitute such
an event) in the performance of any term, covenant or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any agreement, indenture, lease or other instrument to which it is a party or by which it or any of
its properties is subject, which breach, default or violation, individually or in the aggregate, has had, or would, if continued, reasonably be expected to have, a Material Adverse Effect or materially impair the ability of any of the Partnership
Parties to perform their respective obligations under this Agreement.
(z)
Conformity to Description in the
Pricing Disclosure Package and the Prospectus
. The Offered Units when issued and delivered against payment therefor, as provided herein, will conform in all material respects to the description thereof contained in the Pricing Disclosure Package
and the Prospectus.
(aa)
No Integration
. None of the Partnership Parties has sold or issued any securities
that would be integrated with the offering of the Offered Units contemplated by this Agreement pursuant to the Securities Act, the Rules and Regulations or the interpretations thereof by the Commission.
(bb)
No Material Adverse Change
. Except as disclosed in the Pricing Disclosure Package and the Prospectus, the
Partnership and its subsidiaries, on a consolidated basis, have not sustained, since the date of the latest audited financial statements included in the Pricing Disclosure Package and the Prospectus, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, and since such date, there has not been any change in the capitalization or long-term debt of
the Partnership and its subsidiaries or any adverse change, or any development involving a prospective adverse change, in or affecting the financial condition, results of operations, unitholders’ or stockholders’ equity, properties,
management, business or prospects of the Partnership and its subsidiaries taken as a whole, in each case except as would not, in the aggregate, reasonably be expected to have a Material Adverse Effect. Since the date of the latest audited financial
statements included in the Pricing Disclosure Package and the Prospectus, the Partnership and its subsidiaries, on a consolidated basis, have not incurred any liability or obligation, direct, indirect or contingent, or entered into any transactions
not in the ordinary course of business, that, individually or in the aggregate, is material to the Partnership and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Pricing Disclosure Package and the Prospectus.
(cc)
Conduct of Business
. Except as disclosed in the Pricing Disclosure Package and the Prospectus, since
the date as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, none of the Partnership Parties or the subsidiaries of the Partnership have (i) incurred any liability or obligation,
direct or contingent, other than liabilities and obligations that were incurred in the ordinary course of business, (ii) entered into any material transaction not in the ordinary course of business or (iii) declared, paid or made any
dividend or distribution on any class of security, except in the ordinary course consistent with past practice.
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(dd)
Financial Statements
. The historical financial statements
(including the related notes) included in the Registration Statement, the Pricing Disclosure Package and the Prospectus (and any amendment or supplement thereto), other than those contained under the heading “First Quarter Earnings”
referenced below, comply as to form in all material respects with the applicable requirements of Regulation
S-X
under the Securities Act and present fairly in all material respects the financial condition,
results of operations and cash flows of the entities purported to be shown thereby on the basis stated therein at the respective dates and for the respective periods indicated and have been prepared in conformity with accounting principles generally
accepted in the United States applied on a consistent basis throughout the periods involved, except to the extent disclosed therein. The summary historical and financial data included in the Registration Statement, the Pricing Disclosure Package and
the Prospectus (and any amendment or supplement thereto) under the captions “Ratio of Earnings to Fixed Charges,” “Capitalization,” “Selected Financial Data,” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” are accurately presented in all material respects and prepared on a basis consistent with the audited and unaudited historical consolidated financial statements from which such data has been
derived. The historical financial data included in the Pricing Disclosure Package and the Prospectus under the heading “Summary—Recent Developments—First Quarter Earnings” have been derived from the accounting records of the
Partnership and its subsidiaries and present fairly in all material respects the information shown thereby. No other financial statements or schedules of the Partnership are required by the Securities Act or the Exchange Act to be included in the
Registration Statement, the Pricing Disclosure Package or the Prospectus.
(ee)
Statistical and Market-Related
Data
. The financial, statistical and market-related data included under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business, Risk
Factors and Properties” (or comparable wording) in the Registration Statement, the Pricing Disclosure Package and the Prospectus and the consolidated financial statements of the Partnership included in the Pricing Disclosure Package and the
Prospectus are based on or derived from sources that the Partnership believes to be reliable and accurate in all material respects and the Partnership has obtained the written consent to the use of such data from such sources to the extent required.
(ff)
Independent Registered Public Accounting Firm
. KPMG LLP, who has audited certain financial statements
of the Partnership and its consolidated subsidiaries, whose reports are incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent registered public accounting firm as required by
the Securities Act, the Rules and Regulations and the Public Company Accounting Oversight Board (United States) (the “
PCAOB
”) and was an independent registered public accounting firm as required by the Securities Act, the Rules and
Regulations and the PCAOB during the periods covered by the financial statements on which they reported incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(gg)
Title to Properties
. Each of the Partnership Parties and the subsidiaries of the Partnership has good and
indefeasible title to all real property and good and marketable title
11
to all personal property described in the Registration Statement, the Pricing Disclosure Package and the Prospectus as being owned by them, in each case free and clear of all liens, encumbrances
and defects, except (i) such as are described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (ii) such as do not materially interfere with the use of such properties taken as a whole as they have been
used in the past and are proposed to be used in the future as described, and subject to the limitations contained, in the Registration Statement, the Pricing Disclosure Package and the Prospectus and (iii) such as would not reasonably be
expected to have a Material Adverse Effect; all real property and buildings held under lease or license by the Partnership Parties and the subsidiaries of the Partnership are held by them under valid and subsisting and enforceable leases or licenses
with such exceptions as do not materially interfere with the use of such properties taken as a whole as they have been used in the past and are expected to be used in the future as described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. For purposes of this Agreement, the phrase “good and indefeasible title” to all real property shall mean, with respect to any real property interest, and subject to the terms, conditions, and provisions
contained in the realty deeds and leases creating such real property interest, that the ownership, rights, possession and title in the jurisdiction and locale where the real property interest is located, is in each case legally sufficient in all
material respects to conduct the business and operations of the Partnership Parties and the subsidiaries of the Partnership as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, as such business and
operations relate to the location of such real property interest, and is free and clear of all Liens excepting (in each case) permitted encumbrances, such title defects, and imperfections, limitations, correlative rights, or appurtenant rights or
obligations contained in, arising from or created by the instrument under which any of the Partnership Parties and the subsidiaries of the Partnership hold title to such real property interest or contained in its chain of title thereto, which do not
materially and adversely affect current or intended use or operation of the subject real property interest or which are capable of being routinely addressed, cured, avoided or assumed in the ordinary course of business and land management of the
Partnership Parties and the subsidiaries of the Partnership.
(hh)
Rights-of
Way
. Each of the Partnership Parties and the subsidiaries
of the Partnership will have such consents, easements,
rights-of-way
or licenses from any person (“
rights-of-way
”) as are necessary to conduct their business in the manner described in the Registration Statement, the Pricing Disclosure Package and the Prospectus subject to such qualifications as
may be set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and except for such
rights-of-way
which, if not obtained, would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; each of the Partnership Parties and the subsidiaries of the Partnership has fulfilled and performed all its material obligations with respect to such
rights-of-way
and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the
rights of the holder of any such
rights-of-way,
except for such revocations, terminations and impairments that would not reasonably be expected to have a Material
Adverse Effect; and, except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, none of such
rights-of-way
contains any
restriction that is materially burdensome to the Partnership Parties and the subsidiaries of the Partnership considered as a whole.
12
(ii)
Insurance
. The Partnership Parties and the subsidiaries of the
Partnership maintain insurance covering their properties, operations, personnel and businesses against such losses and risks as are reasonably adequate to protect them and their businesses in a manner consistent with other businesses similarly
situated. None of the Partnership Parties and the subsidiaries of the Partnership has received notice from any insurer or agent of such insurer that material capital improvements or other material expenditures will have to be made in order to
continue such insurance, and all such insurance is outstanding and duly in force.
(jj)
Investment Company
.
None of the Partnership Parties nor the subsidiaries of the Partnership is, and as of each Settlement Date and, immediately after giving effect to the offer and sale of the Offered Units and the application of the proceeds therefrom as described
under “Use of Proceeds” in the Pricing Disclosure Package and the Prospectus, none of them will be, an “investment company” or a company “controlled by” an “investment company” within the meaning of such term
under the Investment Company Act of 1940, as amended.
(kk)
Litigation
. Except as described in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no legal or governmental proceedings pending to which any of the Partnership Parties and the subsidiaries of the Partnership is a party or of which any property or
assets of any of the Partnership Parties and the subsidiaries of the Partnership are subject that, individually or in the aggregate, (i) has had, or would reasonably be expected to have, a Material Adverse Effect or (ii) could reasonably
be expected to materially impair the ability of any of the Partnership Parties to perform their respective obligations under this Agreement or consummate the transactions contemplated hereby and by the Pricing Disclosure Package and the Prospectus,
and, to the Partnership’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or others.
(ll)
Legal Proceedings or Contracts to be Described or Filed
. There are no legal or governmental proceedings or
contracts or other documents of a character required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, or, in the case of documents, to be filed as exhibits to the Registration Statement, that are not
described and filed as required; and the statements made in the Pricing Disclosure Package and the Prospectus under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” “Business, Risk Factors and Properties” and “Legal Proceedings” (or comparable wording), insofar as such statements purport to constitute summaries of the terms of statutes, rules or regulations, legal or
governmental proceedings or contracts and other documents, constitute accurate summaries of the terms of such statutes, rules and regulations, legal and governmental proceedings and contracts and other documents in all material respects.
(mm)
Certain Relationships and Related Transactions
. No relationship, direct or indirect, exists between or
among the Partnership Parties and the subsidiaries of the Partnership, on the one hand, and the directors, officers, equityholders, customers or suppliers of any of the Partnership Parties, on the other hand, that is required to be described in the
Registration Statement, the Pricing Disclosure Package and the Prospectus that is not so described.
(nn)
No
Labor Dispute
. No labor dispute by the employees that are engaged in the business of any of the Partnership Parties and the subsidiaries of the Partnership exists or, to the knowledge of the Partnership, is imminent that, individually or in the
aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect.
13
(oo)
ERISA
. (i) Each “employee benefit plan” (within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“
ERISA
”)) for which any of the Partnership Parties or the subsidiaries of the Partnership or any member of the “Controlled
Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “
Code
”)) of any of the Partnership Parties
or the subsidiaries of the Partnership would have any liability (each a “
Plan
”) has been maintained in all material respects in compliance with its terms and with the material requirements of all applicable statutes, rules and
regulations including ERISA and the Code; (ii) with respect to each Plan subject to Title IV of ERISA (a) no “reportable event” (within the meaning of Section 4043(c) of ERISA and for which the
30-day
reporting requirement has not been waived) has occurred or is reasonably expected to occur, (b) no “accumulated funding deficiency” (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, has occurred or is reasonably expected to occur, (c) the fair market value of the assets under each Plan exceeds the present value of all benefits accrued under such Plan (determined on an
ongoing basis based on those assumptions used to fund such Plan) and (d) none of the Partnership Parties or the subsidiaries of the Partnership or any member of the Controlled Group of any of the Partnership Parties or the subsidiaries of the
Partnership has incurred, or reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the United States Pension Benefit Guaranty Corporation in the ordinary course and without default)
in respect of a Plan (including a “multiemployer plan,” within the meaning of Section 4001(c)(3) of ERISA), in each case that, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect;
and (iii) each Plan that is intended to be qualified under Section 401(a) of the Code and that is an individually designed plan has been determined by the Internal Revenue Service to be so qualified and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.
(pp)
Tax Returns
. Each of the
Partnership Parties and the subsidiaries of the Partnership has filed all federal, state, local and foreign income and franchise tax returns required to be filed through the date hereof, subject to permitted extensions, and have paid all taxes due
thereon, and no tax deficiency has been determined adversely to any of the Partnership Parties or the subsidiaries of the Partnership, nor do any of the Partnership Parties have any knowledge of any tax deficiencies that, individually or in the
aggregate, have had, or would reasonably be expected to have, a Material Adverse Effect and except for taxes that are being contested in good faith by appropriate proceedings and for which the Partnership Parties or the subsidiaries of the
Partnership have set aside on its books adequate reserves.
(qq)
Books and Records; Accounting Controls
.
Each of the Partnership Parties and the subsidiaries of the Partnership (i) makes and keeps books, records and accounts, which, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets and (ii) maintains
a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with accounting principles generally accepted in the United States and
14
to maintain accountability for its assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(rr)
Disclosure Controls and Procedures
. (i) The Partnership has established and maintains disclosure
controls and procedures (as such term is defined in Rule
13a-15(e)
and
15d-15(e)
under the Exchange Act), (ii) such disclosure controls and procedures are designed to
ensure that the information required to be disclosed by the Partnership in the reports it files or will file or submit under the Exchange Act is accumulated and communicated to management of the Partnership, including its respective principal
executive officers and principal financial officers, as appropriate, to allow such officers to make timely decisions regarding required disclosure, and (iii) such disclosure controls and procedures are effective in all material respects to
perform the functions for which they were established.
(ss)
No Deficiency in Internal Controls
. Except as
disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, based on the evaluation of its internal controls and procedures conducted in connection with the preparation and filing of the Partnership’s Annual
Report on Form
10-K
for the fiscal period ended December 31, 2016, none of the Partnership Parties is aware of (i) any significant deficiencies or material weaknesses in the design or operation of
its internal controls over financial reporting (as defined in Rule
13a-15(f)
and
15d-15(f)
under the Exchange Act) that are likely to adversely affect the
Partnership’s ability to record, process, summarize and report financial data; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Partnership’s internal controls
over financial reporting.
(tt)
No Changes in Internal Controls.
Since the date of the most recent
evaluation of the disclosure controls and procedures described in
Section 1(rr)
, there have been no significant changes in the Partnership’s internal controls that materially affected or are reasonably likely to materially affect the
Partnership’s internal controls over financial reporting.
(uu)
Sarbanes-Oxley Act of 2002
. There is
and has been no failure on the part of NuStar GP or any of NuStar GP’s directors or officers, in their capacities as such, to comply in all material respects with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith.
(vv)
Permits
. Each of the Partnership Parties and the subsidiaries of
the Partnership has such permits, consents, licenses, franchises, certificates and authorizations of governmental or regulatory authorities (“
Permits
”) as are necessary to own its properties and to conduct its businesses in the
manner described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, subject to such qualifications as may be set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus and except for
such permits which, if not obtained, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; each of the Partnership Parties has fulfilled and performed all its material obligations with respect to the
Permits which are due to have been fulfilled and performed by such date, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any other
15
impairment of the rights of the holder of any such Permits, except for any of the foregoing that would not reasonably be expected to have a Material Adverse Effect; and, except as described in
the Registration Statement, the Pricing Disclosure Package and the Prospectus, none of the Permits contain any restriction that is materially burdensome to the Partnership Parties and the subsidiaries of the Partnership considered as a whole.
(ww)
Environmental Compliance
. Each of the Partnership Parties and the subsidiaries of the Partnership
(i) is in compliance with any and all applicable federal, state and local laws and regulations relating to the protection of human health and safety and the environment or imposing liability or standards of conduct concerning any Hazardous
Materials (as defined below) (“
Environmental Laws
”), (ii) has received all permits, licenses or other approvals required of such entity under applicable Environmental Laws to conduct its businesses, (iii) is in compliance with
all terms and conditions of any such permits, licenses or approvals and (iv) does not have any liability in connection with the release into the environment of any Hazardous Material, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or approvals, failure to comply with the terms and conditions of such permits, licenses or approvals or liability in connection with such releases would not, individually or in the aggregate, reasonably
be expected to have, a Material Adverse Effect. The term “Hazardous Material” means (A) any “hazardous substance” as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
(B) any “hazardous waste” as defined in the Resource Conservation and Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any other Environmental Law.
(xx)
No Restrictions on Distributions
. None of the Principal Subsidiaries is currently prohibited, directly or
indirectly, from paying any dividends or other distributions, as applicable, to the Partnership, from repaying to the Partnership any loans or advances to such Principal Subsidiary from the Partnership or from transferring any of such Principal
Subsidiary’s property or assets to the Partnership or any other Principal Subsidiary of the Partnership, except as described in or contemplated by (A) the Registration Statement, the Pricing Disclosure Package and the Prospectus or
(B) the organizational documents of the Principal Subsidiaries.
(yy)
No Distribution of Other Offering
Materials
. None of the Partnership Parties has distributed or will distribute any offering material in connection with the offering and sale of the Offered Units other than any Preliminary Prospectus, the Prospectus, any Issuer Free Writing
Prospectus to which the Representatives have consented in accordance with
Section 1(h)
or
4(a)(vi)
or as set forth on
Schedule II
, and any other materials, if any, permitted by the Securities Act, including Rule 134 promulgated
thereunder.
(zz)
Market Stabilization
. The Partnership has not taken and will not take, directly or
indirectly, any action designed to or that has constituted or that would reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Partnership to facilitate the sale or resale of the Offered
Units.
(aaa)
Fees.
Except (i) as described in the Registration Statement, the Preliminary Prospectus
and the Prospectus, (ii) in connection with the Acquisition and (iii) for
16
fees related to the Project Mayflower Commitment Letter, dated March 31, 2017, between Mizuho Bank, Ltd. and NuStar Logistics, there is no broker, finder or other party that is entitled to
receive from the Partnership any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement.
(bbb)
Money Laundering
. The operations of the Partnership Parties and the subsidiaries of the Partnership are
and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements and the money laundering statutes of jurisdictions where the Partnership Parties and the subsidiaries of
the Partnership conduct business and rules and regulations thereunder 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 any of the Partnership Parties or any of the subsidiaries of the Partnership with respect to the Money
Laundering Laws is pending or, to the best knowledge of the Partnership, threatened.
(ccc)
FCPA
. None of
the Partnership Parties or any subsidiary of the Partnership, nor any director or officer, nor to the knowledge of the Partnership, any agent, employee or affiliate of any of the Partnership Parties or any subsidiary of the Partnership is aware of
or has taken any action, directly or indirectly, that would result in a violation by such persons of (i) 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; (ii) the Bribery Act 2010 of the United Kingdom; or (iii) any similar law of any other relevant jurisdiction, or the rules or regulations thereunder; and the Partnership Parties and the subsidiaries of the Partnership have conducted
their businesses in compliance with applicable anti-corruption laws to which they may be subject; and the Partnership Parties, the subsidiaries of the Partnership and, to the knowledge of the Partnership, their affiliates have instituted and
maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(ddd)
OFAC
. None of the Partnership Parties or any subsidiary of the Partnership, nor any director or officer,
nor to the knowledge of the Partnership, any agent, employee or affiliate of any Partnership Parties or any subsidiary of the Partnership, is the subject of any sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “
Sanctions
”) nor is the Partnership or any subsidiary of the Partnership
controlled by an individual or entity that is currently the subject or target of any Sanctions; and the Partnership will not directly or indirectly use the proceeds of the sale of the Offered Units, 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 the activities of any person or entity, or in any country or territory, that at the time of such financing is the subject of any
Sanctions.
17
(eee)
XBRL
. The interactive data in eXtensible Business Reporting
Language included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the
Commission’s rules and guidelines applicable thereto.
Any certificate signed by any officer on behalf of any of the Partnership
Parties and delivered to the Representatives or counsel for the Underwriters in connection with the offering of the Offered Units shall be deemed a representation and warranty by such Partnership Party as to matters covered thereby, to each
Underwriter.
2.
Purchase of the Offered Units by the Underwriters
. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this Agreement, the Partnership agrees to issue and sell the Firm Units to the several Underwriters, and each of the Underwriters, severally and not jointly, agrees to purchase the
number of Firm Units set forth opposite that Underwriter’s name in
Schedule I
hereto.
In addition, the Partnership hereby
grants to the Underwriters an option to purchase up to 1,400,000 Option Units. Such option is exercisable in the event that the Underwriters sell more Offered Units than the number of Firm Units in the offering and as set forth in
Section
3
. Each Underwriter agrees, severally and not jointly, to purchase the number of Option Units (subject to such adjustments to eliminate fractional Offered Units as the Representatives may determine) that bears the
same proportion to the total number of Option Units to be sold on such Delivery Date as the number of Firm Units set forth in
Schedule I
hereto opposite the name of such Underwriter bears to the total number of Firm Units.
The price of both the Firm Units and any Option Units purchased by the Underwriters shall be $24.2125 per Offered Unit.
The Partnership shall not be obligated to deliver any of the Firm Units or the Option Units to be delivered on the applicable Delivery Date,
except upon payment for all such Offered Units to be purchased on such Delivery Date as provided herein.
3.
Delivery of and Payment for the Offered Units
. Delivery of and payment for the Firm Units shall be made at
10:00 a.m., New York City time, on April 28, 2017 or at such other date or place as shall be determined by agreement between the Representatives and the Partnership (such date and time are sometimes referred to as the “
Initial Delivery
Date
”). Delivery of the Firm Units shall be made to the Representatives for the account of each Underwriter against payment by the several Underwriters through the Representatives and of the respective aggregate purchase prices of the Firm
Units being sold by the Partnership to or upon the order of the Partnership of the purchase price by wire transfer in immediately available funds to the accounts specified by the Partnership. Time shall be of the essence, and delivery at the time
and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. The Partnership shall deliver the Firm Units through the facilities of the Depository Trust Company (“
DTC
”)
unless the Representatives shall otherwise instruct.
The option granted in
Section
2
will expire at 5:00 p.m.,
New York City time, on the 30th day after the date of this Agreement and may be exercised in whole or from time to time in part
18
by written notice being given to the Partnership by the Representatives;
provided that
if such date falls on a day that is not a business day, the option granted in
Section
2
will expire on the next succeeding business day. Such notice shall set forth the aggregate number of Option Units as to which the option is being exercised, the names in which the Option Units are to be
registered, the denominations in which the Option Units are to be issued and the date and time, as determined by the Representatives, when the Option Units are to be delivered;
provided, however
, that this date and time shall not be earlier
than the Initial Delivery Date, and if the option is exercised after the Initial Delivery Date, not earlier than the third business day after the date on which the option shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. Each date and time the Option Units are delivered is sometimes referred to as an “
Option Unit Delivery Date
,” and the Initial Delivery Date and any Option Unit Delivery Date are
sometimes each referred to as a “
Delivery Date
.”
Delivery of the Option Units by the Partnership and payment for the
Option Units by the several Underwriters through the Representatives shall be made at 10:00 a.m., New York City time, on the date specified in the corresponding notice described in the preceding paragraph or at such other date or place as shall be
determined by agreement between the Representatives and the Partnership. On the Option Unit Delivery Date, the Partnership shall deliver or cause to be delivered the Option Units to the Representatives for the account of each Underwriter against
payment by the several Underwriters through the Representatives and of the respective aggregate purchase prices of the Option Units being sold by the Partnership to or upon the order of the Partnership of the purchase price by wire transfer in
immediately available funds to the account specified by the Partnership. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder.
The Partnership shall deliver the Option Units through the facilities of Depository Trust Company unless the Representatives shall otherwise instruct.
The documents required to be delivered by
Section
6
shall be delivered at the offices of Andrews Kurth Kenyon LLP,
counsel for the Partnership Parties, at 600 Travis Street, Suite 4200, Houston, Texas 77002, or electronically if agreed to by the parties, on each such date as provided in this Agreement.
The Partnership is advised by the Representatives that the Underwriters propose to make a public offering of their respective portions of the
Offered Units as soon after this Agreement has become effective as in the Representatives’ judgment is advisable. The Partnership is further advised by the Representatives that the Offered Units are to be offered to the public on the terms set
forth in the Prospectus.
4.
Further Agreements of the Partnership Parties.
(a) Each of the Partnership Parties agrees:
(i)
Preparation of Prospectus and Registration Statement
. To prepare the Prospectus in a form
approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement; to
make no further amendment or any supplement to the Registration
19
Statement or the Prospectus prior to the last Delivery Date except as provided herein; to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment or
supplement to the Registration Statement or the Prospectus has been filed and to furnish or make available to the Representatives copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by
each of the Partnership Parties with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the
offering or sale of the Offered Units; to advise the Representatives, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Prospectus or any Issuer
Free Writing Prospectus, of the suspension of the qualification of the Offered Units for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding or examination for any such purpose, of any notice from the Commission
objecting to the use of the Registration Statement or any post-effective amendment thereto or of any request by the Commission for the amending or supplementing of the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus or
for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Prospectus or any Issuer Free Writing Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(ii)
Payment of Filing Fees
. To pay the applicable
Commission filing fees relating to the Preferred Units within the time required by Rule 456(b)(1) without regard to the proviso therein;
(iii)
Signed Copies of Registration Statement
. To furnish promptly to the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement as originally filed with the Commission, and each amendment thereto filed with the Commission, including all consents and exhibits filed therewith;
(iv)
Copies of Documents to Underwriters
. To deliver promptly to the Representatives such number
of the following documents as the Representatives shall reasonably request: (A) conformed copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits other than this
Agreement and the computation of per unit earnings), (B) each Preliminary Prospectus, the Prospectus and any amended or supplemented Prospectus, (C) each Issuer Free Writing Prospectus and (D) any document incorporated by reference in
any Preliminary Prospectus or the Prospectus; and, if the delivery of a prospectus is required at any time after the date hereof in connection with the offering or sale of the Offered Units or any other securities relating thereto and if at such
time any events shall have occurred as a result of which the Prospectus as then amended or supplemented would include an 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 when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary to amend or supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify the Representatives and,
20
upon their request, to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Prospectus that will correct such statement or omission or effect such compliance;
(v)
Filing of Amendment or Supplement
. To file promptly with the Commission any amendment or
supplement to the Registration Statement or the Prospectus or any new, replacement registration statement that may, in the judgment of the Partnership or, for so long as the delivery of a prospectus is required in connection with the offering or
sale of the Offered Units, the Representatives, be required by the Securities Act or requested by the Commission; prior to filing with the Commission any amendment or supplement to the Registration Statement or to the Prospectus or any new,
replacement registration statement, any document incorporated by reference in the Prospectus or any amendment to any document incorporated by reference in the Prospectus, to furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the filing for so long as the delivery of a prospectus is required in connection with the offering or sale of the Offered Units, and not to file any such amendment, supplement or document
to which the Representatives reasonably object unless the Partnership is required by law to make such filing; and to furnish to the Underwriters such number of copies of such new registration statement, amendment or supplement as the Underwriters
may reasonably request, use its commercially reasonable efforts to cause such new registration statement or amendment to be declared effective as soon as practicable and, in any such case, to promptly notify the Representatives of such filings and
effectiveness;
(vi)
Term Sheet
. To prepare a final term sheet (the “
Final Term
Sheet
”) containing only a description of the final terms of the Offered Units and their offering, in a form approved by the Representatives and attached as
Schedule III
hereto, which Final Term Sheet shall be an Issuer Free Writing
Prospectus and shall comply with the related obligations set forth in
Section 4(a)(vii)
, and to furnish to each Underwriter, without charge, copies of the Final Term Sheet promptly upon its completion;
(vii)
Issuer Free Writing Prospectus
. Not to make any offer relating to the Offered Units that
would constitute an Issuer Free Writing Prospectus without the prior written consent of the Representatives (provided that the Representatives will be deemed to have consented to the Issuer Free Writing Prospectuses listed on
Schedule II
hereto); to retain in accordance with the Rules and Regulations all Issuer Free Writing Prospectuses not required to be filed pursuant to the Rules and Regulations; and if at any time after the date hereof any events shall have occurred as a result
of which any Issuer Free Writing Prospectus, as then amended or supplemented, would conflict with the information in the Registration Statement, the most recent Preliminary Prospectus or the Prospectus or would include an 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, or, if for any other reason it shall be necessary to amend or
supplement any Issuer Free Writing Prospectus, to notify the Representatives and, upon their request, to file such document and to prepare and furnish without charge to each Underwriter as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Issuer Free Writing Prospectus that will correct such conflict, statement or omission or effect such compliance;
21
(viii)
Reports to Security Holders
. As soon as
practicable the Partnership shall make generally available to its security holders 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
Securities Act and Rule 158 of the Rules and Regulations;
(ix)
Qualifications
. Promptly from
time to time to take such action as the Representatives may reasonably request to qualify the Offered Units for offering and sale under the securities laws of such jurisdictions as the Representatives may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Offered Units; provided that in connection therewith the Partnership shall not be required to
(i) qualify as a foreign limited partnership in any jurisdiction in which it would not otherwise be required to so qualify, (ii) file a general consent to service of process in any such jurisdiction or (iii) subject itself to taxation
in any jurisdiction in which it would not otherwise be subject;
(x)
Lock-Up
Period
. For a period commencing on the date hereof and ending on the 45th day after the date of the Prospectus, not to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose
of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any Preferred Units or securities convertible into or exchangeable for Preferred Units,
or in either case, any securities that are substantially similar to the Preferred Units (other than the Offered Units), or sell or grant options, rights or warrants with respect to any Preferred Units or securities convertible into or exchangeable
for Preferred Units, or in either case, any securities that are substantially similar to the Preferred Units, (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits
or risks of ownership of such Preferred Units, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Preferred Units or other securities, in cash or otherwise, (3) file or cause to be filed a
registration statement, including any amendments, with respect to the registration of any Preferred Units or other substantially similar securities or any securities convertible, exercisable or exchangeable into Preferred Units or other
substantially similar securities or (4) publicly disclose the intention to do any of the foregoing, in each case without the prior written consent of the Representatives on behalf of the Underwriters;
(xi)
Use of Proceeds
. To apply the net proceeds from the sale of the Offered Units being sold by
the Partnership as set forth in the Pricing Disclosure Package and the Prospectus;
22
(xii)
DTC
. To use its commercially reasonable
efforts to cause the Offered Units to be eligible for clearance, settlement and trading through the facilities of DTC;
(xiii)
NYSE Listing
. To prepare and file any proper notifications regarding the listing of the
Offered Units on the New York Stock Exchange (the “
NYSE
”) within 30 days after the Initial Delivery Date and, upon such listing, use commercially reasonable efforts to maintain such listing and satisfy the requirements for such
continued listing; and
(xiv)
Exchange Act Registration Statement.
To prepare and file, in
accordance with Section 12 of the Exchange Act, a registration statement (as amended, the “
Exchange Act Registration Statement
”) on Form
8-A
to register the class of securities consisting
of the Preferred Units under the Exchange Act.
(b)
Use of “Issuer Information” in “Free Writing
Prospectus
.
”
Each Underwriter severally agrees that such Underwriter shall not include any “issuer information” (as defined in Rule 433) in any “free writing prospectus” (as defined in Rule 405) used or referred
to by such Underwriter without the prior consent of the Partnership (any such issuer information with respect to whose use the Partnership has given its consent, “
Permitted Issuer Information
”);
provided that
(i) no such
consent shall be required with respect to any such issuer information contained in any document filed by the Partnership with the Commission prior to the use of such free writing prospectus and (ii) “issuer information,” as used in
this
Section
4
, shall not be deemed to include information prepared by or on behalf of such Underwriter on the basis of or derived from issuer information.
5.
Expenses
. The Partnership agrees, whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, that it will pay or cause to be paid all costs, expenses, fees and taxes incident to and in connection with (a) the authorization, issuance, sale and delivery of the Offered Units and the performance
of the Partnership Parties’ obligations hereunder, including the fees of the Partnership Parties’ counsel and accountants, and any stamp duties or other taxes payable in that connection, and the preparation and printing of certificates for
the Offered Units; (b) the preparation, printing and filing under the Securities Act of the Registration Statement (including any exhibits thereto), any Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any
amendment or supplement thereto; (c) the distribution of the Registration Statement (including any exhibits thereto), any Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment or supplement thereto, or any
document incorporated by reference therein, all as provided in this Agreement; (d) the preparation, printing, authentication, issuance and delivery of certificates for the Offered Units, including any stamp or transfer taxes in connection with
the sale of the Offered Units; (e) services provided by the transfer agent or registrar; (f) the production and distribution of this Agreement, any supplemental agreement among Underwriters, and any other related documents in connection
with the offering, purchase, sale and delivery of the Offered Units; (g) any review by Financial Industry Regulatory Authority of the terms of sale of the Offered Units (including related fees and expenses of counsel to the Underwriters);
(h) the listing of the Offered Units on the NYSE or any other exchange; (i) any transfer fees or taxes relating to the transfer of the Offered Units to the Underwriters; (j) the
23
qualification of the Offered Units under the securities laws of the several jurisdictions as provided in
Section 4(a)(ix)
; (k) the investor presentations on any “road show”
undertaken in connection with the marketing of the Offered Units, including, without limitation, expenses associated with any electronic road show and travel and lodging expenses of the Representatives and officers of the Partnership; and
(l) all other costs and expenses incident to the performance of the obligations of the Partnership Parties under this Agreement;
provided that
, except as provided in this
Section
5
and in
Section
10
, the Underwriters shall pay their own costs and expenses, including the costs and expenses of their counsel and the expenses of advertising any offering of the Offered Units made by the Underwriters.
6.
Conditions of Underwriters’ Obligations
. The respective obligations of the Underwriters hereunder to
purchase the Firm Units and the Option Units, as the case may be, are subject to the accuracy, when made and on the applicable Delivery Date, of the representations and warranties of the Partnership Parties contained herein, to the accuracy of the
statements of the Partnership Parties and the officers of NuStar GP, on behalf of the Partnership, made in any certificates delivered pursuant hereto, to the performance by the Partnership Parties of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with
Section
4(a)(i)
; no stop order suspending the effectiveness of the Registration Statement or preventing or suspending the use of the Prospectus or any Issuer Free Writing Prospectus shall have
been issued and no proceeding or examination for such purpose shall have been initiated or threatened by the Commission; any request of the Commission for inclusion of additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with; and the Commission shall not have notified the Partnership of any objection to use of the Registration Statement.
(b) No Underwriter shall have discovered and disclosed to the Partnership on or prior to such Delivery Date that the
Registration Statement, the Prospectus or the Pricing Disclosure Package, or any amendment or supplement thereto, contains an untrue statement of a fact which, in the opinion of Baker Botts L.L.P., counsel for the Underwriters, is material or omits
to state a fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading.
(c) All corporate, partnership and limited liability company proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Offered Units, the Registration Statement, the Prospectus and any Issuer Free Writing Prospectus, and all other legal matters relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Partnership Parties shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon
such matters.
(d) Andrews Kurth Kenyon LLP shall have furnished to the Representatives its written opinion, as
counsel to the Partnership Parties, addressed to the Underwriters and dated such Delivery Date, in form and substance reasonably satisfactory to the Representatives, substantially in the form attached hereto as
Exhibit
A
-1
.
24
(e) Amy L. Perry, Senior Vice President, General Counsel—Corporate
and Commercial Law and Corporate Secretary of NuStar GP, shall have furnished to the Representatives a written opinion addressed to the Underwriters and dated such Delivery Date, in form and substance reasonably satisfactory to the Representatives,
substantially in the form attached hereto as
Exhibit
A
-2
.
(f) The Representatives shall have received from Baker Botts L.L.P., counsel for the Underwriters, such opinion or
opinions, dated such Delivery Date, with respect to the sale of the Offered Units, the Registration Statement, the Prospectus and the Pricing Disclosure Package and other related matters as the Representatives may reasonably require, and the
Partnership Parties shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the Representatives shall have received from KPMG LLP a letter or
letters, in form and substance satisfactory to the Representatives, addressed to the Underwriters and dated the date hereof (i) confirming that it is an independent registered public accounting firm within the meaning of the Securities Act and
is in compliance with the applicable requirements relating to the qualification of accountants under Rule
2-01
of
Regulation S-X
of the Commission, and
(ii) stating, as of the date hereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the most recent Preliminary Prospectus, as of a date not more
than three days prior to the date hereof), the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with
registered public offerings.
(h) With respect to the letters of KPMG LLP referred to in the preceding paragraph
and delivered to the Representatives concurrently with the execution of this Agreement (the “
initial letter
”), the Partnership shall have furnished to the Representatives a letter (the “
bring-down letter
”) of such
accountant, addressed to the Underwriters and dated such Delivery Date (i) confirming that it is an independent registered public accounting firm within the meaning of the Securities Act and is in compliance with the applicable requirements
relating to the qualification of accountants under Rule
2-01
of Regulation
S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than three days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial information and other matters covered by the initial letter and (iii) confirming in all material respects the conclusions and findings set forth in the initial letter.
(i) The Partnership shall have furnished to the Representatives a certificate, dated such Delivery Date, signed on
behalf of the Partnership by (1) either the President and Chief Executive Officer or the Senior Vice President, General Counsel—Corporate and Commercial Law and Corporate Secretary, in each case of NuStar GP, and (2) either the
25
Executive Vice President and Chief Financial Officer or the Senior Vice President and Controller, in each case of NuStar GP, stating that:
(i) The representations, warranties and agreements of the Partnership Parties in
Section
1
are true and correct on and as of such Delivery Date; and that each of the Partnership Parties has complied with all of its respective agreements contained herein and satisfied all of the respective conditions on
its part to be performed or satisfied hereunder at or prior to such Delivery Date;
(ii) No stop
order suspending the effectiveness of the Registration Statement has been issued; and no proceedings or examination for that purpose have been instituted or, to the knowledge of such officers, threatened; and the Commission has not notified the
Partnership of any objection to the use of the Registration Statement or any post-effective amendment thereto; and
(iii) They have carefully examined the Registration Statement, the Prospectus and the Pricing Disclosure
Package, and nothing has come to their attention that would lead them to believe that, (A) (1) the Registration Statement, as of the most recent Effective Date, (2) the Prospectus, as of its date and on the applicable Delivery Date, or
(3) the Pricing Disclosure Package, as of the Applicable Time, did or do contain any untrue statement of a material fact and did or do omit to state a material fact required to be stated therein or necessary to make the statements therein
(except in the case of the Registration Statement, in the light of the circumstances under which they were made) not misleading or (B) since the date of the most recent financial statements included or incorporated by reference in the Pricing
Disclosure Package and the Prospectus, an event has occurred that should have been set forth in a supplement or amendment to the Registration Statement, the Prospectus, any Preliminary Prospectus or any Issuer Free Writing Prospectus that has not
been so set forth;
(j) Except as described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus, (i) none of the Partnership Parties or the subsidiaries of the Partnership shall have sustained, since the date of the latest audited financial statements included in the Pricing Disclosure Package and the Prospectus, any loss or
interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree or (ii) since such date there shall not have been any
change in the capitalization or long-term debt of any of the Partnership Parties and the subsidiaries of the Partnership or any change, or any development involving a prospective change, in or affecting the financial condition, results of
operations, equity, properties, management, business or prospects of the Partnership and the subsidiaries of the Partnership, taken as a whole, whether or not arising from transactions in the ordinary course of business, the effect of which, in the
case referred to in clause (i) or (ii) above, is, in the judgment of the Representatives, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Offered Units being
delivered on such Delivery Date on the terms and in the manner contemplated in the Pricing Disclosure Package and the Prospectus.
(k) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any governmental agency or body which would, as of such Delivery Date, prevent the issuance or sale of the Preferred Units; and no injunction, restraining order or order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of such Delivery Date which would prevent the issuance or sale of the Preferred Units.
26
(l) Subsequent to the execution and delivery of this Agreement there shall
not have occurred any of the following: (i) trading in securities generally on the NYSE, the Nasdaq Stock Market or the NYSE MKT LLC or in the
over-the-counter
market, or trading in any securities of the Partnership on any exchange or in the
over-the-counter
market, shall have been suspended or materially limited or the
settlement of such trading generally shall have been materially disrupted or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared by federal or state authorities, (iii) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or war by the United States or (iv) there shall have occurred such a material adverse change in general economic, political or financial conditions, including, without
limitation, as a result of terrorist activities after the date hereof, the effect of which on the financial markets in the United States shall be such as to make it, in the judgment of the Representatives, impracticable or inadvisable to proceed
with the public offering or delivery of the Offered Units being delivered on such Delivery Date on the terms and in the manner contemplated in the Prospectus.
(m) Subsequent to the execution and delivery of this Agreement, there shall not have occurred any of the following:
(i) any decrease in the rating of any debt or preferred equity securities of any of the Partnership Parties (including the Preferred Units) by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.
(“
S&P
”), or Fitch Ratings, Inc. or Fitch Ratings, Ltd. (collectively, “
Fitch
”), (ii) any notice given by S&P or Fitch of any intended or potential downgrading in the rating accorded such debt or preferred
equity securities (including the Preferred Units), (iii) any public announcement by S&P or Fitch that it has under surveillance or review, with possible negative implications, its rating of any debt or preferred equity securities (including the
Preferred Units) of any of the Partnership Parties or (iv) any decrease in the rating of any senior notes of any of the Partnership Parties by Moody’s Investor Service, Inc. (“
Moody
’
s
”) to
“Ba3” or lower or in the rating of any preferred equity of any of the Partnership Parties (including the Preferred Units) by Moody’s to “B2” or lower.
(n) The Partnership Parties shall have made commercially reasonable efforts to effect listing of the Offered Units on
the NYSE within 30 days of the Initial Delivery Date.
(o) On the Initial Delivery Date, the General Partner, on
its own behalf and on behalf of the limited partners of the Partnership, shall have executed and delivered the Amended and Restated Partnership Agreement in form and substance reasonably satisfactory to the Underwriters.
(p) The Partnership shall have furnished to the Underwriters such further information, certificates and documents as
the Representatives may reasonably request.
27
All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters.
7.
Indemnification and Contribution.
(a) Each of the Partnership Parties, jointly and severally, shall indemnify and hold harmless each Underwriter, its
directors, officers, employees and agents and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and any affiliates (as defined in Rule 405) of any
Underwriter who have, or who are alleged to have, participated in the distribution of the Offered Units as underwriters, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action relating to purchases and sales of the Offered Units), to which that Underwriter, director, officer, employee, agent or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in (A) any Preliminary Prospectus, the Registration
Statement, the Prospectus or in any amendment or supplement thereto, (B) any Issuer Free Writing Prospectus or in any amendment or supplement thereto or (C) any Permitted Issuer Information used or referred to in any “free writing
prospectus” (as defined in Rule 405) used or referred to by any Underwriter or (D) any “road show” (as defined in Rule 433) not constituting an Issuer Free Writing Prospectus (a
“
Non-Prospectus
Road Show
”) or (ii) the omission or alleged omission to state in any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing Prospectus
or in any amendment or supplement thereto or in any Permitted Issuer Information or any
Non-Prospectus
Road Show, any material fact required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Underwriter and each such director, officer, employee, agent or controlling person promptly upon demand for any legal or other expenses reasonably incurred by that Underwriter, director, officer, employee, agent
or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred;
provided, however
, that no Partnership Party shall be liable
in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any such amendment or supplement thereto or in any Permitted Issuer Information or in any
Non-Prospectus
Road Show, in reliance
upon and in conformity with written information concerning such Underwriter furnished to the Partnership through the Representatives by or on behalf of any Underwriter specifically for inclusion therein, which information consists solely of the
information specified in
Section
7(e)
. The foregoing indemnity agreement is in addition to any liability which the Partnership Parties may otherwise have to any Underwriter or to any director, officer, employee, agent or
controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless each of the Partnership Parties, their respective directors, managers, officers and employees, and each person, if any, who controls any of the Partnership Parties within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against
28
any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which such person may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free
Writing Prospectus or in any amendment or supplement thereto or in any
Non-Prospectus
Road Show, or (ii) the omission or alleged omission to state in any Preliminary Prospectus, the Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto or in any
Non-Prospectus
Road Show, any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Partnership through the Representatives by or on behalf of that Underwriter specifically for inclusion therein, which information is limited to the information set forth in
Section
7(e)
. The
foregoing indemnity agreement is in addition to any liability that any Underwriter may otherwise have to any of the Partnership Parties or any such director, manager, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section
7
of notice of any
claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this
Section
7
, notify the indemnifying party in writing of the claim or
the commencement of that action;
provided, however
, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under
Section
7(a)
or
7(b)
except to the extent
it has been materially prejudiced by such failure and,
provided, further
, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under
Section
7(a)
or 7
(b)
. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein
and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this
Section
7
for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable costs of investigation;
provided, however
, that the Representatives shall have the right to employ counsel to represent jointly the Representatives and those other
Underwriters and their respective directors, officers, employees, agents and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Underwriters against any of the Partnership
Parties under this
Section
7
if (i) the Partnership Parties and the Underwriters shall have so mutually agreed; (ii) the Partnership Parties have failed within a reasonable time to retain counsel reasonably
satisfactory to the Underwriters; (iii) the Underwriters and their respective directors, officers, employees, agents and controlling persons shall have reasonably concluded that there may be legal defenses available to them that are different
from or in addition to those available to the Partnership Parties; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Underwriters or their respective directors, officers, employees, agents or
controlling persons, on the one hand, and the Partnership Parties, on the other hand, and representation of both sets of parties by the
29
same counsel would be inappropriate due to actual or potential differing interests between them, and in any such event the fees and expenses of such separate counsel shall be paid by the
Partnership Parties. No indemnifying party shall (i) 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 includes an
unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and does not include any findings of fact or admissions of fault or culpability as to the indemnified party, or (ii) be
liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this
Section
7
shall for any reason be unavailable
to or insufficient to hold harmless an indemnified party under
Section
7(a)
or 7
(b)
in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall
be appropriate to reflect the relative benefits received by the Partnership, on the one hand, and the Underwriters, on the other hand, from the sale of the Offered Units or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Partnership, on the one hand, and the Underwriters, on the other
hand, with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Partnership, on the
one hand, and the Underwriters, on the other hand, with respect to such sale shall be deemed to be in the same proportion as the total net proceeds from the sale of the Offered Units purchased under this Agreement (before deducting expenses)
received by the Partnership, as set forth in the table on the cover page of the Prospectus, on the one hand, and the total underwriting discounts and commissions received by the Underwriters with respect to the Offered Units purchased under this
Agreement, as set forth in the table on the cover page of the Prospectus, on the other hand. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Partnership Parties or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The
Partnership Parties and the Underwriters agree that it would not be just and equitable if contributions pursuant to this
Section
7(d)
were to be determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section
7(d)
shall be deemed to include, for purposes of this
Section
7(d)
, any legal or other expenses reasonably incurred by
such indemnified party in
30
connection with investigating or defending any such action or claim. Notwithstanding the provisions of this
Section
7(d)
, no Underwriter shall be required to contribute
any amount in excess of the amount by which the net proceeds from the sale of the Offered Units underwritten by it exceeds the amount of any damages that such Underwriter has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters’ obligations to contribute as provided in this
Section
7(d)
are several in proportion to their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and each of the Partnership Parties acknowledges and agrees that the statements
regarding delivery of Offered Units by the Underwriters set forth on the cover page of, the sentence related to concession and reallowance figures appearing under the caption “Underwriting” and the statements relating to stabilization,
short positions and penalty bids by the Underwriters appearing under the caption “Underwriting” in, the most recent Preliminary Prospectus and the Prospectus are correct and constitute the only information concerning such Underwriters
furnished in writing to the Partnership by or on behalf of the Underwriters specifically for inclusion in any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement
thereto or in any road show.
8.
Defaulting Underwriters
. If, on any Delivery Date, any Underwriter defaults
in the performance of its obligations under this Agreement, the remaining
non-defaulting
Underwriters shall be obligated to purchase the Offered Units that the defaulting Underwriter agreed but failed to
purchase on such Delivery Date in the respective proportions which the number of Firm Units set forth opposite the name of each remaining
non-defaulting
Underwriter in
Schedule I
hereto bears to the
total number of Firm Units set forth opposite the names of all the remaining
non-defaulting
Underwriters in
Schedule I
hereto;
provided, however
, that the remaining
non-defaulting
Underwriters shall not be obligated to purchase any of the Offered Units on such Delivery Date if the total number of Offered Units that the defaulting Underwriter or Underwriters agreed but
failed to purchase on such date exceeds 10% of the total number of Offered Units to be purchased on such Delivery Date, and any remaining
non-defaulting
Underwriter shall not be obligated to purchase more than
110% of the number of Offered Units that it agreed to purchase on such Delivery Date pursuant to the terms of
Section
2
. If the foregoing maximums are exceeded, the remaining
non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives who so agree, shall have the right, but shall not be obligated, to purchase, in such proportion as may be agreed
upon among them, all the Offered Units to be purchased on such Delivery Date. If the remaining Underwriters or other underwriters satisfactory to the Representatives do not elect to purchase the Offered Units that the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, and arrangements satisfactory to the Representatives and the Partnership for the purchase of such Offered Units are not made within 36 hours after such default, this Agreement (or,
with respect to any Option Unit Delivery Date, the obligation of the Underwriters to purchase, and of the Partnership to sell, the Option Units) shall terminate without liability on the part of any
non-defaulting
Underwriter or the Partnership Parties, except that the Partnership will continue to be liable for the payment of expenses to the extent set forth in
Sections
5
and
10
. As used in this
31
Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context requires otherwise, any party not listed in
Schedule I
hereto that, pursuant to
this
Section
8
, purchases Offered Units that a defaulting Underwriter agreed but failed to purchase.
Nothing
contained herein shall relieve a defaulting Underwriter of any liability it may have to the Partnership Parties for damages caused by its default. If other Underwriters are obligated or agree to purchase the Offered Units of a defaulting or
withdrawing Underwriter, either the Representatives or the Partnership may postpone the Delivery Date for up to seven full business days in order to effect any changes that in the opinion of counsel for the Partnership or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or in any other document or arrangement.
9.
Termination
. The obligations of the Underwriters hereunder may be terminated by the Representatives by notice
given to and received by the Partnership prior to delivery of and payment for the Firm Units if, prior to that time, any of the events described in
Sections
6(j)6(j)
,
6(k),
6(l)
or
6(m)
shall have
occurred or if the Underwriters shall decline to purchase the Offered Units for any reason permitted under this Agreement.
10.
Reimbursement of Underwriters
’
Expenses
. If (a) the Partnership shall fail to tender
the Offered Units for delivery to the Underwriters by reason of any failure, refusal or inability on the part of any Partnership Party to perform any agreement on their part to be performed, or because any other condition to the Underwriters’
obligations hereunder required to be fulfilled by the Partnership Parties is not fulfilled for any reason or (b) the Underwriters shall decline to purchase the Offered Units for any reason permitted under this Agreement, the Partnership will
reimburse the Underwriters for all reasonable
out-of-pocket
expenses (including fees and disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Offered Units, and upon demand the Partnership shall pay the full amount thereof to the Representatives. If this Agreement is terminated pursuant to
Section
8
by reason of the
default of one or more Underwriters, the Partnership shall not be obligated to reimburse any defaulting Underwriter on account of those expenses.
11.
Research Analyst Independence
. The Partnership acknowledges that the Underwriters’ research analysts
and research departments are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriters’ research analysts may hold views and make
statements or investment recommendations or publish research reports with respect to the Partnership and/or the offering of the Offered Units that differ from the views of their respective investment banking divisions. The Partnership hereby waives
and releases, to the fullest extent permitted by law, any claims that the Partnership may have against the Underwriters with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research
analysts and research departments may be different from or inconsistent with the views or advice communicated to the Partnership by such Underwriters’ investment banking divisions. The Partnership acknowledges that each of the Underwriters is a
full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity securities of the
companies that may be the subject of the transactions contemplated by this Agreement.
32
12.
No Fiduciary Duty
. The Partnership Parties acknowledge and
agree that in connection with this offering, sale of the Offered Units or any other services the Underwriters may be deemed to be providing hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between the parties or any
oral representations or assurances previously or subsequently made by the Underwriters: (i) no fiduciary or agency relationship between the Partnership Parties and any other person, on the one hand, and the Underwriters, on the other hand,
exists; (ii) the Underwriters are not acting as advisors, expert or otherwise, to any of the Partnership Parties, including, without limitation, with respect to the determination of the public offering price of the Offered Units, and such
relationship between the Partnership Parties, on the one hand, and the Underwriters, on the other hand, is entirely and solely commercial, based on arms-length negotiations; (iii) any duties and obligations that the Underwriters may have to the
Partnership Parties shall be limited to those duties and obligations specifically stated herein; and (iv) the Underwriters and their respective affiliates may have interests that differ from those of the Partnership Parties. The Partnership
Parties hereby waive any claims that the Partnership Parties may have against the Underwriters with respect to any breach of fiduciary duty in connection with this offering of Offered Units.
13.
Notices, Etc
. All statements, requests, notices and agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or facsimile transmission to
(i) Wells Fargo Securities, LLC, 550 South Tryon Street, 5th Floor, Charlotte, North Carolina 28202, Attention: Transaction Management (Fax: (704)
410-0326),
(ii) Merrill Lynch, Pierce, Fenner &
Smith Incorporated, 50 Rockefeller Plaza,
NY1-050-12-01,
New York, New York 10020, Attention: High Grade Transaction
Management/Legal (Fax: (646)
855-5958),
(iii) Morgan Stanley & Co. LLC, 1585 Broadway, 29th Floor, New York, New York 10036, Attention: Investment Banking Division (Fax: (212)
507-8999),
and (iv) UBS Securities LLC, 1285 Avenue of the Americas, New York, New York 10019, Attention: Fixed Income Syndicate (Fax: (203)
719-0495);
and
(b) if to any of the Partnership Parties, shall be delivered or sent by mail or facsimile transmission to NuStar Energy
L.P., 19003
IH-10
West, San Antonio, Texas 78257, Attention: Amy L. Perry, Senior Vice President, General Counsel—Corporate and Commercial Law and Corporate Secretary (Fax: (210)
918-5469).
Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof. The
Partnership Parties shall be entitled to act and rely upon any request, consent, notice or agreement given or made on behalf of the Underwriters by the Representatives.
14.
Persons Entitled to Benefit of Agreement
. This Agreement shall inure to the benefit of and be binding upon
the Underwriters, the Partnership Parties and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (a) the representations, warranties, indemnities and
agreements of the Partnership Parties contained in this Agreement shall also be deemed to be for the benefit of the directors, officers, agents and employees of the Underwriters and each person or persons, if any, who control any Underwriter within
the meaning of Section 15 of the Securities Act and (b) the
33
indemnity agreement of the Underwriters contained in
Section
7(b)
shall be deemed to be for the benefit of the directors and managers of the Partnership, the officers of
the Partnership who have signed the Registration Statement and any person controlling the Partnership within the meaning of Section 15 of the Securities Act. Nothing in this Agreement is intended or shall be construed to give any person, other
than the persons referred to in this
Section
14
, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.
15.
Survival
. The respective indemnities, representations, warranties and agreements of the Partnership Parties
and the Underwriters contained in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Offered Units and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any of them.
16.
Definition of the
Terms “Business Day” and “Subsidiary.”
For purposes of this Agreement, (a) “
business day
” means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close and (b) “
subsidiary
” has the meaning set forth in Rule 405.
17.
PATRIOT Act Disclosure.
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.
18.
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of
New York.
19.
Waiver of Jury Trial
. The Partnership Parties 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.
20.
Venue
. Each of the Partnership Parties hereby irrevocably (i) agrees that any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in any court within the Borough of Manhattan of New York City and (ii) waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such proceeding.
21.
Entire
Agreement
. This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the Offered Units, represents the entire agreement
among the Partnership Parties and the Underwriters with respect to the preparation of any Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus, the conduct of the offering and the purchase and sale of the Offered Units.
22.
Counterparts
. This Agreement may be executed in one or more counterparts and, if executed in more than one
counterpart, the executed counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument.
34
23.
Headings
. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
[Signature pages
follow.]
35
If the foregoing correctly sets forth the agreement among the Partnership Parties and the
Underwriters, please indicate your acceptance in the space provided for that purpose below.
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Very truly yours,
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NUSTAR ENERGY L.P.
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By:
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RIVERWALK LOGISTICS, L.P.,
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its general partner
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By:
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NUSTAR GP, LLC,
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its general partner
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By:
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/s/ Thomas R. Shoaf
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Name:
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Thomas R. Shoaf
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Title:
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Executive Vice President and Chief Financial Officer
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NUSTAR GP, LLC
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By:
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/s/ Thomas R. Shoaf
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Name:
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Thomas R. Shoaf
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Title:
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Executive Vice President and Chief Financial Officer
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Signature Page to
Underwriting Agreement
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Accepted:
WELLS FARGO SECURITIES, LLC
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. LLC
UBS SECURITIES, LLC
For themselves and as Representatives
of the several Underwriters named
in Schedule I hereto
WELLS FARGO SECURITIES,
LLC
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By:
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/s/ Carolyn Hurley
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Name:
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Carolyn Hurley
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Title:
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Director
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MERRILL LYNCH, PIERCE, FENNER & SMITH
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INCORPORATED
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By:
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/s/ Kevin Wehler
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Name:
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Kevin Wehler
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Title:
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Managing Director
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MORGAN STANLEY & CO. LLC
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By:
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/s/ Yurij Slyz
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Name:
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Yurij Slyz
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Title:
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Executive Director
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UBS SECURITIES, LLC
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By:
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/s/ Mark Spadaccini
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Name:
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Mark Spadaccini
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Title:
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Exeutive Director
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By:
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/s/ Prath Reddy
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Name:
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Prath Reddy
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Title:
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Associate Director
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Signature Page to
Underwriting Agreement
SCHEDULE I
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Underwriters
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Firm Units
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Wells Fargo Securities, LLC
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3,237,500
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Merrill Lynch, Pierce, Fenner & Smith
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Incorporated
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3,237,500
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Morgan Stanley & Co. LLC
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3,237,500
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UBS Securities LLC
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3,237,500
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BB&T Capital Markets, a division of BB&T Securities, LLC
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210,000
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BBVA Securities Inc.
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210,000
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Citigroup Global Markets Inc.
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210,000
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DNB Markets, Inc.
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210,000
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U.S. Bancorp Investments, Inc.
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210,000
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Total
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14,000,000
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Schedule I
SCHEDULE II
Issuer Free Writing Prospectuses Included in
Pricing Disclosure Package
Final Term
Sheet substantially in the form set forth in
Schedule III
.
Schedule II
SCHEDULE III
Pricing Term Sheet
NUSTAR ENERGY L.P.
7.625% Series B
Fixed-to-Floating
Rate Cumulative Redeemable
Perpetual Preferred Units
(Liquidation Preference $25.00 per unit)
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Issuer
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NuStar Energy L.P.
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Trade Date
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April 25, 2017.
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Settlement Date
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April 28, 2017 (T + 3).
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Title of Securities
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7.625% Series B
Fixed-to-Floating
Rate Cumulative Redeemable Perpetual Preferred Units (the “units”).
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Number of Units
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14,000,000 units.
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Number of Option Units
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1,400,000 units.
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Public Offering Price
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$25.00 per unit; $350,000,000 total (assuming no exercise of the option to purchase additional units).
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Underwriting Discounts
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$0.7875 per unit; $11,025,000 total (assuming no exercise of the option to purchase additional units).
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Net Proceeds
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$338,275,000 (assuming no exercise of the option to purchase additional units and after deducting underwriting discounts and commissions and estimated offering expenses).
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Maturity Date
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Perpetual (unless redeemed by the issuer on or after June 15, 2022 or in connection with a Rating Event or a Change of Control).
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Liquidation Preference
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$25.00 plus accumulated and unpaid distributions.
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Distribution Payment Dates and Record Dates
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Quarterly in arrears on the 15th day of March, June, September and December of each year (each, a “Distribution Payment Date”), commencing September 15, 2017, to holders of record as of the close of business on the
first business day of the month of the applicable Distribution Payment Date.
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Distribution Rate
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The initial distribution rate for the units from and including the date of original issue to, but not including, June 15, 2022 will be 7.625% per annum of the $25.00 liquidation preference per unit (equal to $1.90625 per
unit per annum). On and after June 15, 2022, distributions on the units will accumulate at a percentage of the $25.00 liquidation preference equal to an annual floating rate of the three-month LIBOR plus a spread of 5.643%.
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Optional Redemption
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At any time within 120 days after the conclusion of any review or appeal process instituted by us following the occurrence of a Rating
Event, the issuer may, at its option, redeem the units in whole, but not in part, at a redemption price in cash per unit equal to $25.50 (102% of the liquidation preference of $25.00) plus an amount equal to all accumulated and unpaid distributions
thereon to, but not including, the date fixed for redemption, whether or not declared.
At any time on or after June 15, 2022, the issuer may redeem, in whole or in part, the units at a redemption price of $25.00 per unit plus an amount equal
to all accumulated and unpaid distributions thereon to, but not including, the date of redemption, whether or not declared.
Upon the occurrence of a Change of Control, the issuer may, at its option, redeem the units in whole or in part within 120 days after the first date on which
such Change of Control occurred, by paying $25.00 per unit, plus all accumulated and unpaid distributions to, but not including, the date of redemption, whether or not declared.
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Change of Control Conversion Right Unit Cap
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1.04297
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CUSIP/ISIN
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67058H 300 / US67058H3003
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Schedule III
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Joint Book-Running Managers
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Wells Fargo Securities, LLC
Merrill Lynch,
Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. LLC
UBS Securities
LLC
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Co-Managers
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BB&T Capital Markets, a division of BB&T Securities, LLC
BBVA Securities Inc.
DNB Markets, Inc.
Citigroup Global Markets Inc.
U.S. Bancorp Investments,
Inc.
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Listing
|
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The Issuer intends to file an application to list the units on the New York Stock Exchange (“NYSE”) under the symbol “NSprB”. If the application is approved, trading of the units on the NYSE is expected to
commence within 30 days after their original issue date.
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All information (including financial information) presented in the Preliminary Prospectus Supplement is deemed to have changed
to the extent affected by the changes described herein.
This communication is intended for the sole use of the person to whom it is provided by us. This
communication does not constitute an offer to sell the units and is not soliciting an offer to buy the units in any jurisdiction where the offer or sale is not permitted.
The issuer has filed a registration statement (including a prospectus) and a prospectus supplement with the U.S. Securities and Exchange Commission (SEC) for
the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and the prospectus supplement and any other documents the issuer has filed with the SEC for more complete information
about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the
prospectus and prospectus supplement if you request it by contacting: Wells Fargo Securities, LLC at
1-800-645-3751,
Merrill
Lynch, Pierce, Fenner & Smith Incorporated at
1-800-294-1322,
Morgan Stanley & Co. LLC at
1-866-718-1649
and UBS Securities LLC at
1-888-827-7275.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS
COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
Schedule III
EXHIBIT
A-1
FORM OF OPINION OF ANDREWS KURTH KENYON LLP
1. Each of the Partnership Parties has been duly formed under the laws of the State of Delaware. Each of the
Partnership Entities is validly existing as a limited partnership, limited liability company or corporation, as applicable, and in good standing under the laws of the State of Delaware. Each of the Partnership Entities has the power and authority
under the laws of the State of Delaware to carry on its business and own or lease its properties as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2. NuStar Holdings is the sole member of NuStar GP, with a 100% membership interest in NuStar GP, such membership
interest has been duly authorized and validly issued in accordance with the NuStar GP LLC Agreement and is fully paid (to the extent required by the NuStar GP LLC Agreement) and is nonassessable (except as such nonassessability may be affected by
Section 18-607
and
18-804
of the Delaware Limited Liability Company Act (the “
Delaware LLC Act
”)); and NuStar Holdings owns such membership interest free
and clear of all liens in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming NuStar Holdings as debtor is on file in the office of the Secretary of State of the State of Delaware as of [●],
2017.
3. NuStar GP is the sole general partner of the General Partner with a 0.1% general partner interest in the
General Partner; such general partner interest has been duly authorized and validly issued in accordance with the General Partner Partnership Agreement; and NuStar GP owns such general partner interest free and clear of all liens in respect of
which a financing statement under the Uniform Commercial Code of the State of Delaware naming NuStar GP as debtor is on file in the office of the Secretary of State of the State of Delaware as of [●], 2017.
4. Riverwalk Holdings is the sole limited partner of the General Partner with a 99.9% limited partner interest in the
General Partner; such limited partner interest has been duly authorized and validly issued in accordance with the General Partner Partnership Agreement and is fully paid (to the extent required under the General Partner Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by matters described in
Sections 17-303,
17-607
and
17-804
of
the Delaware Revised Uniform Limited Partnership Act (the “
Delaware LP Act
”)); and Riverwalk Holdings owns such limited partner interest free and clear of all liens in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming Riverwalk Holdings as debtor is on file in the office of the Secretary of State of the State of Delaware as of [●], 2017.
5. The General Partner is the sole general partner of the Partnership with a 2% general partner interest and 100% of
the Incentive Distribution Rights in the Partnership; such general partner interest and Incentive Distribution Rights have been duly authorized and validly issued in accordance with the NuStar L.P. Partnership Agreement and, in the case of the
Incentive Distribution Rights, are fully paid (to the extent required under the NuStar L.P. Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in
Sections 17-303,
17-607
and
17-804
of the Delaware LP Act); and the General Partner owns such general partner interest and
Incentive Distribution Rights, in each
Exhibit A-1-1
case, free and clear of all liens 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 as of [●], 2017.
6. Riverwalk Holdings and NuStar
GP own 10,213,894 and 732 Common Units, respectively, as of the date hereof; and Riverwalk Holdings and NuStar GP own such Common Units free and clear of all liens in respect of which a financing statement under the Uniform Commercial Code of the
State of Delaware naming either Riverwalk Holdings or NuStar GP as debtor is on file in the office of the Secretary of State of the State of Delaware as of [●], 2017, other than, with respect to Riverwalk Holdings, those created in connection
with the Revolving Credit Agreement, dated as of June 28, 2013, among NuStar Holdings, Riverwalk Holdings and the lenders party thereto, as amended.
7. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (i) there
are no options, warrants or other rights to purchase, or any restrictions upon the voting or transfer of, agreements or other obligations to issue or rights to convert any securities into or exchange any securities for any equity interest of any
Partnership Entity under any Organizational Document of such Partnership Entity or any Applicable Agreement, (ii) there are no preemptive rights or other similar rights to subscribe for or purchase any equity interest of any Partnership Entity
under any Organizational Document of such Partnership Entity or any Applicable Agreement and (iii) no Person has the right, which has not been waived, under any Organizational Document or any Applicable Agreement to require the registration
under the Securities Act of any sale of securities issued by the Partnership, by reason of the filing or effectiveness of the Registration Statement or the issuance and sale of the Offered Units as contemplated in the Underwriting Agreement.
8. Each of the issuance and sale of the Offered Units and the execution and delivery of the Underwriting Agreement has
been duly authorized by all necessary limited liability company action of NuStar GP, acting in its capacity as the general partner of the General Partner, acting in its capacity as the general partner of the Partnership.
9. The Underwriting Agreement has been duly authorized, executed and delivered by each of the Partnership Parties party
thereto. The Offered Units to be purchased by the Underwriters from the Partnership have been duly authorized for issuance and sale to the Underwriters pursuant to the Underwriting Agreement, and the limited partner interests represented thereby,
have been duly authorized in accordance with the NuStar L.P. Partnership Agreement and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms of the Underwriting Agreement, will be validly issued, fully
paid (to the extent required by the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections
17-303,
17-607
and
17-804
of the Delaware LP Act).
10. The NuStar GP LLC Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding agreement of the sole member of NuStar GP and is enforceable against the sole member of NuStar GP in accordance with its terms.
Exhibit A-1-2
11. The General Partner Partnership Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of the signatories thereto and is enforceable against the signatories thereto in accordance with its terms.
12. The Fifth Amended and Restated NuStar L.P. Partnership Agreement has been duly authorized, executed and delivered
by, and constitutes a valid and binding agreement of the General Partner and is enforceable against the General Partner in accordance with its terms.
13. The Acquisition Agreement has been duly authorized, executed and delivered by NuStar Logistics, L.P. and the
Partnership.
14. The Acquisition Agreement constitutes a valid and binding agreement of NuStar Logistics, L.P. and
the Partnership and, assuming the due authorization, execution and delivery by the other parties thereto, is enforceable against NuStar Logistics, L.P. and the Partnership in accordance with its terms.
15. Neither of (i) the execution and delivery of the Underwriting Agreement and the Acquisition Agreement by each
of the Partnership Parties party thereto or (ii) the consummation by the Partnership of the issuance and sale of the Offered Units pursuant to the Underwriting Agreement or the consummation of the transactions contemplated by the Acquisition
Agreement (A) constituted, constitutes or will constitute a violation of the Organizational Documents of any of the Partnership Entities, (B) constituted, constitutes or will constitute a breach or violation of, or a default (or an event
which, with notice or lapse of time or both, would constitute such a default) under, any Applicable Agreement, (C) resulted, results or will result in the creation of any security interest in, or lien upon, any of the property or assets of any
Partnership Entity pursuant to any Applicable Agreement, (D) resulted, results or will result in any violation of (i) applicable laws of the State of New York, (ii) applicable laws of the United States of America, (iii) the
Delaware General Corporation Law (“
DGCL
”), (iv) the Delaware LP Act, (v) the Delaware LLC Act or (vi) applicable laws of the State of Texas.
16. No Governmental Approval or Filing which has not been obtained or made and is not in full force and effect, is
required to authorize, or is required for, (i) the execution and delivery of the Underwriting Agreement or the Acquisition Agreement by Partnership Parties party thereto, or (ii) the consummation by the Partnership of the issuance and sale
of the Offered Units pursuant to the Underwriting Agreement, or the incurrence or performance of its obligations thereunder. As used in this paragraph, “
Governmental Approval or Filing
” means any consent, approval, license,
authorization or validation of, or filing, recording or registration with, any executive, legislative, judicial, administrative or regulatory body of the State of New York, the State of Delaware, the State of Texas or the United States of America,
pursuant to (i) applicable laws of the State of New York, (ii) the DGCL, (iii) the Delaware LP Act, (iv) the Delaware LLC Act, (v) applicable laws of the United States of America or (vi) applicable laws of the State of
Texas.
17. The statements made in the Registration Statement, the Pricing Disclosure Package and the Prospectus
under the captions “Description of NuStar Energy Common Units,” “Description of NuStar Energy Preferred Units,” “Description of Series B Preferred Units,” “Cash Distributions,” “Conflicts of Interest and
Fiduciary Responsibilities,” “The Partnership
Exhibit A-1-3
Agreement” and “Investment in NuStar Energy by Employee Benefit Plans,” insofar as such statements purport to summarize certain provisions of documents and legal matters referred
to therein and reviewed by us as described above, fairly summarize such provisions and legal matters in all material respects, subject to the qualifications and assumptions stated therein.
18. The statements made in the Registration Statement, the Pricing Disclosure Package and the Prospectus under the
captions “Material Tax Consequences” and “Material Tax Considerations,” insofar as they refer to statements of law or legal conclusions, fairly summarize the matters referred to therein in all material respects, subject to the
qualifications and assumptions stated therein.
19. Our opinion that is filed as Exhibit 8.1 to the Form
8-K
filed on
[
●
]
, 2017 is confirmed, and the Underwriters may rely upon such opinion as if it were addressed to them.
20. None of the Partnership Entities is, and immediately after giving effect to the issuance and sale of the Offered
Units and the application of the proceeds therefrom as described in the Pricing Disclosure Package and the Prospectus under the caption “Use of Proceeds” none of them will be, an “investment company” within the meaning of such
term as used in the Investment Company Act of 1940, as amended.
In addition, we have participated in conferences with officers and other
representatives of the Partnership Parties, the independent registered public accounting firm for the Partnership, your counsel and your representatives at which the contents of the Registration Statement, the Pricing Disclosure Package and the
Prospectus (in each case, including the Incorporated Documents) and related matters were discussed and, although we have not independently verified and are not passing upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus (except as and to the extent set forth in paragraphs 17 and 18 above), on the basis of the foregoing
(relying with respect to factual matters to the extent we deem appropriate upon statements by officers and other representatives of the Partnership Parties), (a) we confirm to you that, in our opinion, each of the Registration Statement, as of its
most recent effective date, the Pricing Disclosure Package, as of 3:20 p.m. on April 25, 2017 (the “
Applicable Time
”), and the Prospectus, as of its date, appeared on its face to be appropriately responsive in all material
respects to the requirements of the Securities Act and the Rules and Regulations (except that we express no statement or belief as to Regulation
S-T),
(b) we have not become aware of any documents that are
required to be filed as exhibits to the Registration Statement or any of the Incorporated Documents and are not so filed or of any documents that are required to be summarized in the Registration Statement, the Pricing Disclosure Package, the
Prospectus or any of the Incorporated Documents and are not so summarized and (c) furthermore, no facts have come to our attention that have led us to believe that (i) the Registration Statement (including the Incorporated Documents), at
the time it became effective and as of its most recent effective date, contained an untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading,
(ii) the Pricing Disclosure Package (including the Incorporated Documents), as of the Applicable Time, included an untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
Exhibit A-1-4
misleading, or (iii) the Prospectus (including the Incorporated Documents), as of its date and as of the date hereof, included or includes an untrue statement of a material fact or omitted
or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, it being understood that we did not participate in the preparation of the Incorporated
Documents and that we express no opinion, statement or belief in this letter with respect to (i) the historical financial statements and related schedules, including the notes and schedules thereto and the auditor’s reports thereon,
(ii) any other financial or accounting data, included or incorporated or deemed incorporated by reference in, or excluded from, the Registration Statement, the Pricing Disclosure Package or the Prospectus, and (iii) representations and
warranties and other statements of fact included in the exhibits to the Registration Statement or the Incorporated Documents.
Exhibit A-1-5
EXHIBIT
A-2
FORM OF OPINION OF AMY L. PERRY
1.
Qualification of Certain Entities
. Each of the entities listed on Annex 1 to this opinion is duly qualified
or registered to do business and is in good standing as a limited partnership, limited liability company or corporation, as applicable, in each jurisdiction set forth opposite its name on Annex 1 to this opinion.
2.
Ownership of NuStar Logistics
. The Partnership owns directly or indirectly 100% of the outstanding
partnership interests in NuStar Logistics; such partnership interests have been duly authorized and validly issued in accordance with the applicable Principal Subsidiary Operative Documents; and the Partnership and the direct owner, if applicable,
of such partnership interests owns such partnership interests free and clear of all liens in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming the Partnership or NuStar GP, Inc., as applicable,
as debtor is on file as of [●], 2017.
3.
Outstanding Common Units
. The Common Units and the limited
partner interests represented thereby outstanding as of the date hereof have been duly authorized and validly issued in accordance with the Partnership Agreement, and are fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by matters described in the Prospectus under the caption “The Partnership Agreement—Limited Liability”).
Such counsel may state that the opinions set forth in paragraph 1 with respect to the due qualification and registration and good standing of
the entities listed on Annex 1 to this opinion are based solely upon her review of certificates and other communications from the appropriate public officials of the applicable jurisdictions of qualification or registration.
In rendering such opinion, such counsel may (i) rely in respect of matters of fact upon representations of the Partnership Parties set
forth in this Agreement and upon certificates of officers and employees of the Partnership Parties and upon information obtained from public officials, (ii) assume that all documents submitted to her as originals are authentic, that all copies
submitted to her conform to the originals thereof, and that the signatures on all documents examined by her are genuine, (iii) state that her opinion is limited to matters governed by the federal laws of the United States of America, the
Delaware LP Act, the Delaware LLC Act, the DGCL and the laws of the State of Texas.
In addition, such counsel shall state that she has,
or lawyers under her supervision have, participated in conferences with officers and other representatives of the Partnership Parties, the independent registered public accounting firm of the Partnership, your counsel and your representatives at
which the contents of the Registration Statement, the Pricing Disclosure Package and the Prospectus (in each case, including the documents incorporated by reference therein) and related matters were discussed and, although such counsel has not
independently verified and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained or incorporated by reference in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, on the basis of the
Exhibit A-2-1
foregoing (relying with respect to factual matters to the extent such counsel deems appropriate upon statements by officers and other representatives of the Partnership Parties), (a) such counsel
is not aware of any legal or governmental proceedings pending or threatened to which the Partnership or any of its subsidiaries is a party or to which any of their respective properties is subject that are required to be described in the
Registration Statement, the Pricing Disclosure Package, the Prospectus or any of the documents incorporated by reference therein and are not so described and (b) no facts have come to such counsel’s attention that led such counsel to
believe that (A) the Registration Statement (including the documents incorporated by reference therein), as of the date it became effective and the latest Effective Time, contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements therein not misleading, (B) the Pricing Disclosure Package (including the documents incorporated by reference therein), as of 3:20 p.m. on April 25, 2017,
included an untrue statement of a material fact or omitted 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 (C) the Prospectus (including the
documents incorporated by reference therein), as of its date and the date hereof, included or includes an untrue statement of a material fact or omitted or omits 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, it being understood that such counsel expresses no opinion, statement or belief in such letter with respect to (i) the historical financial statements and related schedules,
including the notes and schedules thereto and the auditor’s report thereon, (ii) any other financial or accounting data, included or incorporated by reference in, or excluded from, the Registration Statement, the Pricing Disclosure Package
or the Prospectus, and (iii) representations and warranties and other statements of fact included in the exhibits to the Registration Statement or to the documents incorporated by reference therein.
Exhibit A-2-2
Annex 1
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Entity
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Jurisdiction
of
Formation
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Foreign Qualifications
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NuStar Pipeline Operating Partnership L.P. f/k/a Kaneb Pipe Line Operating Partnership, L.P.
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Delaware
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Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Minnesota, Missouri, Nebraska, North Dakota, New Jersey, Oregon, South Dakota, Texas, Washington, Wyoming
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NuStar Logistics, L.P. f/k/a
Valero Logistics
Operations, L.P.
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Delaware
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California, Colorado, Kansas, Louisiana, New Jersey, New Mexico, North Carolina,
Oklahoma, Texas
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Annex 1
Exhibit 3.1
FIFTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
NUSTAR ENERGY L.P.
TABLE OF CONTENTS
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ARTICLE I
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DEFINITIONS
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SECTION 1.1
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Definitions
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3
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SECTION 1.2
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Construction
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28
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ARTICLE II
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ORGANIZATION
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SECTION 2.1
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Formation
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28
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SECTION 2.2
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Name
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29
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SECTION 2.3
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Registered Office; Registered Agent; Principal Office; Other Offices
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29
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SECTION 2.4
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Purpose and Business
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29
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SECTION 2.5
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Powers
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30
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SECTION 2.6
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Power of Attorney
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30
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SECTION 2.7
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Term
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31
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SECTION 2.8
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Title to Partnership Assets
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31
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ARTICLE III
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RIGHTS OF LIMITED PARTNERS
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SECTION 3.1
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Limitation of Liability
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32
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SECTION 3.2
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Management of Business
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32
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SECTION 3.3
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Outside Activities of the Limited Partners
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32
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SECTION 3.4
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Rights of Limited Partners
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32
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ARTICLE IV
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CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP
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INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS
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SECTION 4.1
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Certificates
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33
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SECTION 4.2
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Mutilated, Destroyed, Lost or Stolen Certificates
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34
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SECTION 4.3
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Record Holders
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35
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SECTION 4.4
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Transfer Generally
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35
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SECTION 4.5
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Registration and Transfer of Limited Partner Interests
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35
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SECTION 4.6
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Transfer of the General Partner’s General Partner Interest
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36
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SECTION 4.7
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Transfer of Incentive Distribution Rights
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37
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SECTION 4.8
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Restrictions on Transfers
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37
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SECTION 4.9
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Citizenship Certificates;
Non-citizen
Assignees
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38
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SECTION 4.10
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Redemption of Partnership Interests of
Non-citizen
Assignees
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39
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ARTICLE V
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CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
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SECTION 5.1
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Contributions by the General Partner and its Affiliates
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40
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SECTION 5.2
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Contributions by Limited Partners
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40
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SECTION 5.3
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Interest and Withdrawal
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40
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SECTION 5.4
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Capital Accounts
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40
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SECTION 5.5
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Issuances of Additional Partnership Securities
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44
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-i-
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SECTION 5.6
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No Fractional Units
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45
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SECTION 5.7
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Limited Preemptive Right
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45
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SECTION 5.8
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Splits and Combinations
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45
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SECTION 5.9
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Fully Paid and
Non-Assessable
Nature of Limited Partner
Interests
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46
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ARTICLE VI
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ALLOCATIONS AND DISTRIBUTIONS
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SECTION 6.1
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Allocations for Capital Account Purposes
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46
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SECTION 6.2
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Allocations for Tax Purposes
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53
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SECTION 6.3
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Requirement and Characterization of Distributions; Distributions to Record Holders
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55
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SECTION 6.4
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Distributions of Available Cash from Operating Surplus
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56
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SECTION 6.5
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Distributions of Available Cash from Capital Surplus
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57
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SECTION 6.6
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Adjustment of Minimum Quarterly Distribution and Target Distribution Levels
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57
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SECTION 6.7
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Reserved
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58
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SECTION 6.8
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Special Provisions Relating to the Holders of Incentive Distribution Rights
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58
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SECTION 6.9
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Entity-Level Taxation
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58
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ARTICLE VII
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MANAGEMENT AND OPERATION OF BUSINESS
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SECTION 7.1
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Management
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58
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SECTION 7.2
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Certificate of Limited Partnership
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61
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SECTION 7.3
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Restrictions on General Partner’s Authority
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61
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SECTION 7.4
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Reimbursement of the General Partner
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62
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SECTION 7.5
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Outside Activities
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63
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SECTION 7.6
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Loans from the General Partner; Loans or Contributions from the Partnership; Contracts with
Affiliates; Certain Restrictions on the General Partner
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64
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SECTION 7.7
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Indemnification
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65
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SECTION 7.8
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Liability of Indemnitees
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67
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SECTION 7.9
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Resolution of Conflicts of Interest
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67
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SECTION 7.10
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Other Matters Concerning the General Partner
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69
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SECTION 7.11
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Purchase or Sale of Partnership Securities
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69
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SECTION 7.12
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Registration Rights of the General Partner and its Affiliates
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70
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SECTION 7.13
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Reliance by Third Parties
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72
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ARTICLE VIII
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BOOKS, RECORDS, ACCOUNTING AND REPORTS
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SECTION 8.1
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Records and Accounting
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72
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SECTION 8.2
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Fiscal Year
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73
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SECTION 8.3
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Reports
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73
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-ii-
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ARTICLE IX
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TAX MATTERS
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SECTION 9.1
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Tax Returns and Information
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73
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SECTION 9.2
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Tax Elections
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73
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SECTION 9.3
|
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Tax Controversies
|
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|
74
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SECTION 9.4
|
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Withholding
|
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74
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ARTICLE X
|
|
|
ADMISSION OF PARTNERS
|
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|
|
|
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|
SECTION 10.1
|
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Admission of Limited Partners
|
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|
75
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SECTION 10.2
|
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Admission of Substituted Limited Partner
|
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|
75
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SECTION 10.3
|
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Admission of Successor General Partner
|
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75
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SECTION 10.4
|
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Admission of Additional Limited Partners
|
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76
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SECTION 10.5
|
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Amendment of Agreement and Certificate of Limited Partnership
|
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76
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ARTICLE XI
|
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|
WITHDRAWAL OR REMOVAL OF PARTNERS
|
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|
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SECTION 11.1
|
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Withdrawal of the General Partner
|
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76
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SECTION 11.2
|
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Removal of the General Partner
|
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78
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SECTION 11.3
|
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Interest of Departing Partner and Successor General Partner
|
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78
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SECTION 11.4
|
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Withdrawal of Limited Partners
|
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|
79
|
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ARTICLE XII
|
|
|
DISSOLUTION AND LIQUIDATION
|
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|
|
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SECTION 12.1
|
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Dissolution
|
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|
80
|
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SECTION 12.2
|
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Continuation of the Business of the Partnership After Dissolution
|
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80
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SECTION 12.3
|
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Liquidator
|
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81
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SECTION 12.4
|
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Liquidation
|
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81
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SECTION 12.5
|
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Cancellation of Certificate of Limited Partnership
|
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82
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SECTION 12.6
|
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Return of Contributions
|
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82
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SECTION 12.7
|
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Waiver of Partition
|
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83
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SECTION 12.8
|
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Capital Account Restoration
|
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83
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ARTICLE XIII
|
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|
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS;
|
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RECORD DATE
|
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SECTION 13.1
|
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Amendment to be Adopted Solely by the General Partner
|
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83
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SECTION 13.2
|
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Amendment Procedures
|
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84
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SECTION 13.3
|
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Amendment Requirements
|
|
|
85
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SECTION 13.4
|
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Special Meetings
|
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|
85
|
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SECTION 13.5
|
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Notice of a Meeting
|
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|
86
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SECTION 13.6
|
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Record Date
|
|
|
86
|
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SECTION 13.7
|
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Adjournment
|
|
|
86
|
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SECTION 13.8
|
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Waiver of Notice; Approval of Meeting; Approval of Minutes
|
|
|
87
|
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SECTION 13.9
|
|
Quorum
|
|
|
87
|
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SECTION 13.10
|
|
Conduct of a Meeting
|
|
|
87
|
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SECTION 13.11
|
|
Action Without a Meeting
|
|
|
88
|
|
|
SECTION 13.12
|
|
Voting and Other Rights
|
|
|
88
|
|
-iii-
|
|
|
|
|
|
|
|
|
ARTICLE XIV
|
|
|
MERGER
|
|
|
|
|
|
|
SECTION 14.1
|
|
Authority
|
|
|
89
|
|
|
SECTION 14.2
|
|
Procedure for Merger or Consolidation
|
|
|
89
|
|
|
SECTION 14.3
|
|
Approval by Limited Partners of Merger or Consolidation
|
|
|
90
|
|
|
SECTION 14.4
|
|
Certificate of Merger
|
|
|
91
|
|
|
SECTION 14.5
|
|
Effect of Merger
|
|
|
91
|
|
|
|
|
ARTICLE XV
|
|
|
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS
|
|
|
|
|
|
|
SECTION 15.1
|
|
Right to Acquire Limited Partner Interests
|
|
|
92
|
|
|
|
|
ARTICLE XVI
|
|
|
SERIES A
FIXED-TO-FLOATING
RATE CUMULATIVE REDEEMABLE PERPETUAL
PREFERRED UNITS
|
|
|
|
|
|
|
SECTION 16.1
|
|
Designations
|
|
|
94
|
|
|
SECTION 16.2
|
|
Series A Preferred Units
|
|
|
94
|
|
|
SECTION 16.3
|
|
Distributions
|
|
|
94
|
|
|
SECTION 16.4
|
|
Voting Rights
|
|
|
97
|
|
|
SECTION 16.5
|
|
Optional Redemption; Series A Rating Event
|
|
|
97
|
|
|
SECTION 16.6
|
|
Rank
|
|
|
99
|
|
|
SECTION 16.7
|
|
No Sinking Fund
|
|
|
100
|
|
|
SECTION 16.8
|
|
Record Holders
|
|
|
100
|
|
|
SECTION 16.9
|
|
Notices
|
|
|
100
|
|
|
SECTION 16.10
|
|
Other Rights; Fiduciary Duties
|
|
|
100
|
|
|
SECTION 16.11
|
|
Change of Control
|
|
|
100
|
|
|
|
|
ARTICLE XVII
|
|
|
SERIES B
FIXED-TO-FLOATING
RATE CUMULATIVE REDEEMABLE PERPETUAL
PREFERRED UNITS
|
|
|
|
|
|
|
SECTION 17.1
|
|
Designations
|
|
|
103
|
|
|
SECTION 17.2
|
|
Series B Preferred Units
|
|
|
103
|
|
|
SECTION 17.3
|
|
Distributions
|
|
|
104
|
|
|
SECTION 17.4
|
|
Voting Rights
|
|
|
106
|
|
|
SECTION 17.5
|
|
Optional Redemption; Series B Rating Event
|
|
|
107
|
|
|
SECTION 17.6
|
|
Rank
|
|
|
109
|
|
|
SECTION 17.7
|
|
No Sinking Fund
|
|
|
109
|
|
|
SECTION 17.8
|
|
Record Holders
|
|
|
109
|
|
|
SECTION 17.9
|
|
Notices
|
|
|
109
|
|
|
SECTION 17.10
|
|
Other Rights; Fiduciary Duties
|
|
|
110
|
|
|
SECTION 17.11
|
|
Change of Control
|
|
|
110
|
|
-iv-
|
|
|
|
|
|
|
|
|
ARTICLE XVIII
|
|
|
GENERAL PROVISIONS
|
|
|
|
|
|
|
SECTION 18.1
|
|
Addresses and Notices
|
|
|
112
|
|
|
SECTION 18.2
|
|
Further Action
|
|
|
113
|
|
|
SECTION 18.3
|
|
Binding Effect
|
|
|
113
|
|
|
SECTION 18.4
|
|
Integration
|
|
|
113
|
|
|
SECTION 18.5
|
|
Creditors
|
|
|
113
|
|
|
SECTION 18.6
|
|
Waiver
|
|
|
113
|
|
|
SECTION 18.7
|
|
Counterparts
|
|
|
114
|
|
|
SECTION 18.8
|
|
Applicable Law
|
|
|
114
|
|
|
SECTION 18.9
|
|
Invalidity of Provisions
|
|
|
114
|
|
|
SECTION 18.10
|
|
Consent of Partners
|
|
|
114
|
|
-v-
FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
NUSTAR ENERGY L.P.
THIS FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF NUSTAR ENERGY L.P. (the “
Partnership
”) dated as
of April 28, 2017, is entered into by and among Riverwalk Logistics, L.P., a Delaware limited partnership, as the General Partner, and the Limited Partners (as defined herein) as of the date hereof, together with any other Persons (as defined
herein) who become Partners (as defined herein) 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:
WHEREAS, the General Partner and the Limited Partners entered into that Fourth Amended and Restated Agreement of Limited Partnership of the
Partnership dated as of November 25, 2016 (the “
Fourth Amended and Restated Agreement
”);
WHEREAS, Section 5.5(a) of
the Fourth Amended and Restated Agreement provides that the Partnership is authorized to issue additional Partnership Securities 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;
WHEREAS, Section 5.5(b) of the
Fourth Amended and Restated Agreement provides that additional Partnership Securities (as defined herein) authorized to be issued by the Partnership pursuant to Section 5.5(a) of the Fourth Amended and Restated Agreement 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 Securities), as shall be fixed by the General Partner in the
exercise of its sole discretion, including (i) the right to share in Partnership profits and losses or items thereof; (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 redeem the Partnership Security; (v) whether such Partnership Security 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 Security will be issued, evidenced by certificates and assigned or transferred; and (vii) the right, if any, of each such Partnership
Security to vote on Partnership matters, including matters relating to the relative rights, preferences and privileges of such Partnership Security;
WHEREAS, Section 5.5(c) of the Fourth Amended and Restated Agreement provides that the General Partner is authorized and directed to take all
actions that it determines necessary or appropriate in connection with each issuance of Partnership Securities pursuant to Section 5.5 of the Fourth Amended and Restated Agreement and shall do all things it determines necessary or advisable in
connection with any future issuance of Partnership Securities pursuant to the Fourth Amended and Restated Agreement, including compliance with any statute, rule, regulation or guideline of any federal, state or other governmental agency or any
National Securities Exchange (as defined herein) on which the Units (as defined herein) or other Partnership Securities are listed or admitted to trading;
WHEREAS, Section 13.1(d)(i) of the Fourth Amended and Restated Agreement provides that, subject
to Section 16.4 of the Fourth Amended and Restated Agreement, the General Partner, without the approval of any Partner or Assignee (as defined herein), may amend any provision of the Fourth Amended and Restated Agreement and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in connection therewith, to reflect a change that, in the discretion of the General Partner, does not adversely affect the Limited Partners (including any particular class of
Partnership Interests (as defined in the Fourth Amended and Restated Agreement) as compared to other classes of Partnership Interests) in any material respect;
WHEREAS, Section 13.1(d)(ii) of the Fourth Amended and Restated Agreement provides that each Partner agrees that the General Partner, without
the approval of any Partner or Assignee, may amend any provision of the Fourth Amended and Restated Agreement and execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith, to reflect a
change that in the discretion of the General Partner is necessary or advisable to 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;
WHEREAS, Section 13.1(g) of the Fourth Amended and Restated Agreement provides
that, subject to the terms of Section 16.4 and Section 5.6 of the Fourth Amended and Restated Agreement, the General Partner, without the approval of any Partner or Assignee, may amend any provision of the Fourth Amended and Restated
Agreement to reflect an amendment that, in the discretion of the General Partner, is necessary or advisable in connection with the authorization of issuance of any class or series of Partnership Securities pursuant to Section 5.5 of the Fourth
Amended and Restated Agreement;
WHEREAS, pursuant to Section 13.1(j) of the Fourth Amended and Restated Agreement, the General Partner,
without the approval of any Partner or Assignee, may amend any provision of the Fourth Amended and Restated Agreement to reflect an amendment that, in the discretion of the General Partner, is necessary or advisable to reflect, account for and deal
with appropriately the formation by the Partnership of, or investment by the Partnership in, any corporation, partnership, joint venture, limited liability company or other entity;
WHEREAS, Section 16.4(b) of the Fourth Amended and Restated Agreement provides that the affirmative vote or consent of the holders of at least
66
2
⁄
3
% of the Outstanding Series A Preferred Units (as defined herein), voting as a separate class, is required for the General Partner to adopt any amendment
to the Fourth Amended and Restated Agreement that would have a material adverse effect on the powers, preferences, duties or special rights of the Series A Preferred Units;
provided, however
, that so long as cumulative distributions on Series
A Preferred Units are not in arrears and such amendment does not create or issue any Senior Securities (as defined in the Fourth Amended and Restated Agreement), the issuance of additional Partnership Securities (as defined in the Fourth Amended and
Restated Agreement) is not deemed to constitute a material adverse effect;
WHEREAS, the General Partner has determined that the
amendments to the Fourth Amended and Restated Agreement contemplated hereby (i) are necessary or appropriate in
-2-
connection with the authorization of issuance of the Series B Preferred Units (as defined herein), (ii) do 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, and/or (iii) are necessary or advisable to 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;
WHEREAS, cumulative
distributions payable on the Series A Preferred Units are not in arrears and the amendments to the Fourth Amended and Restated Agreement contemplated hereby do not issue any Senior Securities; and
WHEREAS, prior to the date hereof, the holder of the Incentive Distribution Rights consented to the adoption of the provisions of this
Agreement affecting the holder of the Incentive Distribution Rights;
NOW, THEREFORE, the General Partner does hereby amend and restate
the Fourth Amended and Restated Agreement to provide, in its entirety, 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.
“
Acquisition
” means any transaction in which any Group Member acquires (through an asset
acquisition, merger, stock acquisition or other form of investment) control over all or a portion of the assets, properties or business of another Person for the purpose of increasing the operating capacity or revenues of the Partnership Group from
the operating capacity or revenues of the Partnership Group existing immediately prior to such transaction.
“
Acquisition Waiver Period
” means the period of ten consecutive Quarters that commences with the Quarter with
respect to which the first Record Date for the payment of the distributions in accordance with
Section
6.4
occurs after the Navigator Acquisition Closing;
provided
that the Acquisition Waiver Period shall not
commence earlier than the day immediately preceding the Record Date for the payment of distributions in accordance with
Section
6.4
with respect to the Quarter ending June 30, 2017.
“
Additional Book Basis
” means the portion of any remaining Carrying Value of an Adjusted Property that is
attributable to positive adjustments made to such Carrying Value as a result of
Book-Up
Events. For purposes of determining the extent that Carrying Value constitutes Additional Book Basis:
(i) 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.
-3-
(ii) If Carrying Value that constitutes Additional Book
Basis is reduced as a result of a Book-Down Event and the Carrying Value of other property is increased as a result of such Book-Down Event, an allocable portion of any such increase in Carrying Value shall be treated as Additional Book Basis;
provided
that the amount treated as Additional Book Basis pursuant hereto as a result of such Book-Down Event shall not exceed the amount by which the Aggregate Remaining Net Positive Adjustments after such Book-Down Event exceeds 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 (ii) 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 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.
“
Additional Limited Partner
” means a Person admitted to the Partnership as a Limited Partner pursuant to
Section
10.4
and who is shown as such on the books and records of the Partnership.
“
Adjusted Capital Account
” means the Capital Account maintained for each Partner as of the end of each fiscal
year of the Partnership, (a) increased by any amounts that such Partner is obligated to restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury Regulation Sections
1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the amount of all losses and deductions that, as of the end of such fiscal year, are reasonably expected to be allocated to such Partner in subsequent years under Sections 704(e)(2)
and 706(d) of the Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such fiscal year, are reasonably expected to be made to such Partner in subsequent years in accordance
with the terms of this Agreement or otherwise to the extent they exceed offsetting increases to such Partner’s Capital Account that are reasonably expected to occur during (or prior to) the year in which such distributions are reasonably
expected to be made (other than increases as a result of a minimum gain chargeback pursuant to
Section 6.1(d)(i)
or
6.1(d)(ii)
). 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 a General Partner Interest, a Common Unit, an Incentive Distribution Right or any
other specified Partnership Interest shall be the amount which such Adjusted Capital Account would be
-4-
if such General Partner Interest, Common Unit, Incentive Distribution Right or other Partnership Interest were the only Partnership Interest held by a Partner from and after the date on which
such General Partner Interest, Common Unit, Incentive Distribution Right or other Partnership Interest was first issued.
“
Adjusted Operating Surplus
” means, with respect to any period, Operating Surplus generated during such period
(a) less (i) any net increase in Working Capital Borrowings with respect to such period and (ii) any net reduction in cash reserves for Operating Expenditures with respect to such period not relating to an Operating Expenditure made with
respect to such period, and (b) plus (i) any net decrease in Working Capital Borrowings with respect to such period and (ii) any net increase in cash reserves for Operating Expenditures with respect to such period required (A) by any
debt instrument for the repayment of principal, interest or premium or (B) for any Series A Payments. Adjusted Operating Surplus does not include that portion of Operating Surplus included in clause (a)(i) of the definition of Operating
Surplus.
“
Adjusted Property
” means any property the Carrying Value of which has been adjusted pursuant to
Section 5.4(d)(i)
or
5.4(d)(ii)
.
“
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 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, without limitation, a Curative Allocation (if appropriate to the context in which the term
“
Agreed Allocation
” is used).
“
Agreed Value
” of any Contributed Property means the fair
market value of such property or other consideration at the time of contribution as determined by the General Partner using such reasonable method of valuation as it may adopt. The General Partner shall, in its discretion, use such method as it
deems reasonable and appropriate to allocate the aggregate Agreed Value of Contributed Properties contributed to the Partnership in a single or integrated transaction among each separate property on a basis proportional to the fair market value of
each Contributed Property.
“
Agreement
” means this Fifth Amended and Restated Agreement of Limited
Partnership of NuStar Energy L.P., as it may be amended, supplemented or restated from time to time.
“
Arrears
” means, with respect to Preferred Distributions on any series of Preferred Units for any Quarter (or,
with respect to the initial Preferred Distribution, for
-5-
the initial Preferred Distribution Period with respect to such series), that the full cumulative Preferred Distributions through the most recent Preferred Distribution Payment Date have not been
paid on all Outstanding Preferred Units of such series.
“
Assignee
” means a
Non-citizen
Assignee or a Person to whom one or more Limited Partner Interests have been transferred in a manner permitted under this Agreement and who has executed and delivered a Transfer Application as
required by this Agreement, but who has not been admitted as a Substituted Limited Partner.
“
Associate
”
means, when used to indicate a relationship with any Person, (a) any corporation or organization of which such Person is a director, officer or partner 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.
“
Available
Cash
” means, with respect to any Quarter ending prior to the Liquidation Date, and without duplication:
(a) the sum of (i) all cash and cash equivalents of the Partnership Group on hand at the end of
such Quarter, and (ii) all additional cash and cash equivalents of the Partnership Group on hand on the date of determination of Available Cash with respect to such Quarter resulting from Working Capital Borrowings made subsequent to the end of
such Quarter, less
(b) the amount of any cash reserves that are necessary or appropriate in the
reasonable discretion of the General Partner to (i) provide for the proper conduct of the business of the Partnership Group (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership Group)
subsequent to such Quarter, (ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which any Group Member is a party or by which it is bound or its assets are
subject, (iii) provide funds for Series A Payments or Series B Payments, or (iv) provide funds for distributions under
Section
6.4
or
6.5
in respect of any one or more of the next four Quarters;
provided
,
however
, that the General Partner may not establish cash reserves pursuant to (iv) above if the effect of such reserves would be that the Partnership is unable to distribute the Minimum Quarterly Distribution on all
Common Units with respect to such Quarter; and,
provided
further
, that disbursements made by a Group Member or cash reserves established, increased or reduced after the end of such Quarter but on or before the date of determination of
Available Cash with respect to such Quarter shall be deemed to have been made, established, increased or reduced, for purposes of determining Available Cash, within such Quarter if the General Partner so determines.
Notwithstanding the foregoing, “
Available Cash
” with respect to the Quarter in which the Liquidation Date
occurs and any subsequent Quarter shall equal zero.
-6-
“
Beneficial Owner
” has the meaning assigned to such term in Rule
13d-3
and Rule
13d-5
under the Exchange Act, except that, in calculating the beneficial ownership of any particular “person” (as that term is used in Section
13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only after the passage of time.
“
Book Basis Derivative Items
” means any
item of income, deduction, gain or loss included in the determination of Net Income or Net 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 triggers a negative adjustment to the Capital
Accounts of the Partners pursuant to
Section 5.4(d)
.
“
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 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
5.4
and the hypothetical balance of such Partner’s Capital Account computed as if it had been maintained strictly in
accordance with federal income tax accounting principles.
“
Book-Up
Event
” means a Revaluation Event that triggers a positive adjustment to the Capital Accounts of the Partners pursuant to
Section 5.4(d)
.
“
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 states of New York or Texas shall not be regarded as a Business Day.
“
Calculation Agent
” means Wells Fargo Bank, National Association, acting in its capacity as calculation agent
for the Preferred Units, and its successors and assigns or any other calculation agent appointed by the General Partner.
“
Capital Account
” means the capital account maintained for a Partner pursuant to
Section
5.4
. The “
Capital Account
” of a Partner in respect of a General Partner Interest, a Common Unit, an Incentive Distribution Right or any other Partnership Interest shall be the amount which such
Capital Account would be if such General Partner Interest, Common Unit, Incentive Distribution Right or other Partnership Interest were the only interest in the Partnership held by a Partner from and after the date on which such General Partner
Interest, Common Unit, Incentive Distribution Right or other Partnership Interest was first issued.
“
Capital
Contribution
” means any cash, cash equivalents or the Net Agreed Value of Contributed Property that a Partner has contributed or contributes to the Partnership pursuant to this Agreement or the Contribution Agreement.
-7-
“
Capital Improvement
” means any (a) addition or improvement
to the capital assets owned by any Group Member or (b) acquisition of existing, or the construction of new, capital assets (including, without limitation, pipeline systems, terminalling and storage facilities and related assets), in each case
made to increase the operating capacity or revenues of the Partnership Group from the operating capacity or revenues of the Partnership Group existing immediately prior to such addition, improvement, acquisition or construction.
“
Capital Surplus
” has the meaning assigned to such term in
Section 6.3(a)
.
“
Carrying Value
” means (a) with respect to a Contributed Property, the Agreed Value of such property
reduced (but not below zero) by all depreciation, amortization and cost recovery deductions charged to the Partners’ and Assignees’ Capital Accounts in respect of such Contributed Property, and (b) with respect to any other
Partnership property, the adjusted basis of such property for 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
Sections 5.4(d)(i)
and
5.4(d)(ii)
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 liable for actual fraud, gross negligence or willful or wanton misconduct in its capacity as general partner of the Partnership.
“
Certificate
” means a certificate (i) substantially in the form of
EXHIBIT A
to this Agreement
with respect to the Common Units,
EXHIBIT B
to this Agreement with respect to the Series A Preferred Units, or
EXHIBIT C
to this Agreement with respect to Series B Preferred Units, (ii) issued in global form in accordance with the
rules and regulations of the Depositary or (iii) in such other form as may be adopted by the General Partner in its discretion, issued by the Partnership evidencing ownership of one or more Common Units or a certificate, in such form as may be
adopted by the General Partner in its discretion, issued by the Partnership evidencing ownership of one or more other Partnership Securities.
“
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 such Certificate of Limited Partnership has previously been amended and may further be amended, supplemented or restated from time to time.
“
Change of Control
” means the occurrence of either of the following:
(a) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of
merger, consolidation or business combination), in one or a series of related transactions, of all or substantially all of the properties or assets of the Partnership and its subsidiaries taken as a whole to any “person” (as that term is
used in Section 13(d)(3) of the Exchange Act) and following such occurrence neither the Partnership nor such person has a class of common equity securities listed or admitted to trading on any National Securities Exchange; or
-8-
(b) the consummation of any transaction (including,
without limitation, any merger, consolidation or business combination), the result of which is that any person (as defined above), other than NuStar GP Holdings, LLC and its subsidiaries, becomes the Beneficial Owner, directly or indirectly, of more
than 50% of the voting interests in the General Partner, measured by voting power rather than percentage of interests, and following such occurrence neither the Partnership nor such person has a class of common equity securities listed or admitted
to trading on any National Securities Exchange.
“
Citizenship Certification
” means a properly completed
certificate in such form as may be specified by the General Partner by which an Assignee or a Limited Partner certifies that he (and if he is a nominee holding for the account of another Person, that to the best of his knowledge such other Person)
is an Eligible Citizen.
“
Claim
” has the meaning assigned to such term in
Section 7.12(c)
.
“
Closing Date
” means the first date on which Common Units were sold by the Partnership to the Underwriters
pursuant to the provisions of the Underwriting Agreement.
“
Closing Price
” has the meaning assigned to
such term in
Section 15.1(a)
.
“
Code
” means the 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 successor law.
“
Combined Interest
” has the meaning assigned to such term in
Section 11.3(a)
.
“
Commission
” means the United States Securities and Exchange Commission.
“
Common Unit
” means a Partnership Security representing a fractional part of the Partnership Interests of all
Limited Partners and Assignees and of the General Partner and having the rights and obligations specified with respect to Common Units in this Agreement. The term “
Common Unit
” does not refer to or include a Preferred Unit prior to
its conversion into a Common Unit pursuant to the terms hereof.
“
Common Unit Price
” means (i) the
amount of cash consideration per Common Unit, if the consideration to be received in the Change of Control by the holders of Common Units is solely cash; and (ii) the average of the closing prices for Common Units on the NYSE (or other National
Securities Exchange on which the Common Units are then trading) for the ten consecutive trading days immediately preceding, but not including, the Series A Change of Control Conversion Date or the Series B Change of Control Conversion Date, as
applicable, if the consideration to be received in the Change of Control by the holders of Common Units is other than solely cash.
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“
Conflicts Committee
” means a committee of the board of
directors of NuStar GP composed entirely of three or more directors who are not (i) security holders, officers or employees of the General Partner, (ii) officers or employees of any Affiliate of the General Partner, (iii) directors of
any Affiliate (other than NuStar GP) of the General Partner or (iv) holders of any ownership interest in the Partnership or any of its Affiliates other than Common Units or Preferred Units who also meet the independence standards required to
serve on an audit committee of a board of directors by the National Securities Exchange on which the Common Units are listed for trading.
“
Contributed Property
” means each property or other asset, 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 5.4(d)
, such property shall no longer constitute a Contributed Property, but shall be deemed an
Adjusted Property.
“
Contribution Agreement
” means that certain Contribution Agreement, dated as of the
Closing Date, among the General Partner, the Partnership, the Operating Partnership and certain other parties, together with the additional conveyance documents and instruments contemplated or referenced thereunder.
“
Curative Allocation
” means any allocation of an item of income, gain, deduction, loss or credit pursuant to
the provisions of
Section 6.1(d)(x)
.
“
Current Market Price
” has the meaning assigned to such term
in
Section 15.1(a)
.
“
Delaware Act
” means the Delaware Revised Uniform Limited Partnership Act, 6
Del. C. §17-101, et seq., as amended, supplemented or restated from time to time, and any successor to such statute.
“
Departing 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
.
“
Depositary
” means, with respect to any Partnership Securities issued in global form, The Depository Trust
Company and its successors and permitted assigns.
“
Disposed of Adjusted Property
” has the meaning
assigned to such term in
Section 6.1(d)(xi)(B)
.
“
Economic Risk of Loss
” has the meaning set forth
in Treasury Regulation Section 1.752-2(a).
“
Eligible Citizen
” means a Person qualified to own interests
in real property in jurisdictions in which any Group Member does business or proposes to do business from time to time, and whose status as a Limited Partner or Assignee does not or would not subject such Group Member to a significant risk of
cancellation or forfeiture of any of its properties or any interest therein.
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“
Exchange Act
” means the Securities Exchange Act of 1934, as
amended, supplemented or restated from time to time, and any successor to such statute.
“
Event of
Withdrawal
” has the meaning assigned to such term in
Section 11.1(a)
.
“
First Liquidation Target
Amount
” has the meaning assigned to such term in
Section 6.1(c)(i)(D)
.
“
First Target
Distribution
” means $0.66 per Unit per Quarter, subject to adjustment in accordance with
Sections 6.6
and
6.9
.
“
General Partner
” means Riverwalk Logistics, L.P. and its successors and permitted assigns as general partner
of the Partnership.
“
General Partner Interest
” means the ownership interest of the General Partner in the
Partnership (in its capacity as a general partner without reference to any Limited Partner Interest held by it) which may be evidenced by Partnership Securities or a combination thereof or interest therein, and includes any and all 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.
“
Group
” means a Person that with or through any of its Affiliates or Associates has any agreement, arrangement
or understanding 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) or disposing of any Partnership
Securities with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, Partnership Securities.
“
Group Member
” means a member of the Partnership Group.
“
Holder
” as used in
Section
7.12
, has the meaning assigned to such term in
Section 7.12(a)
.
“
Incentive Distribution Right
” means a
non-voting
Limited Partner Interest issued to the General Partner in connection with the transfer of substantially all of its general partner interest in the Operating Partnership to the Partnership, which
Partnership Interest confers upon the holder thereof only the rights and obligations specifically provided in this Agreement with respect to Incentive Distribution Rights (and no other rights otherwise available to or other obligations of a holder
of a Partnership Interest). Notwithstanding anything in this Agreement to the contrary, the holder of an Incentive Distribution Right shall not be entitled to vote such Incentive Distribution Right on any Partnership matter except as may otherwise
be required by law.
“
Incentive Distributions
” means any amount of cash distributed to the holders of the
Incentive Distribution Rights pursuant to
Section
6.4
.
“
Indemnified Persons
”
has the meaning assigned to such term in
Section 7.12(c)
.
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“
Indemnitee
” means (a) the General Partner, (b) any
Departing Partner, (c) any Person who is or was an Affiliate of the General Partner or any Departing Partner, (d) any Person who is or was a member, partner, officer, director, employee, agent or trustee of any Group Member, the General
Partner or any Departing Partner or any Affiliate of any Group Member, the General Partner or any Departing Partner, and (e) any Person who is or was serving at the request of the General Partner or any Departing Partner or any Affiliate of the
General Partner or any Departing Partner as an officer, director, employee, member, partner, agent, fiduciary or trustee of another Person;
provided
, that a Person shall not be an Indemnitee by reason of providing, on a
fee-for-services
basis, trustee, fiduciary or custodial services.
“
Initial Common Units
” means the Common Units sold in the Initial Offering.
“
Initial Offering
” means the initial offering and sale of Common Units to the public, as described in the
Registration Statement.
“
Initial Unit Price
” means (a) with respect to the Common Units, the initial
public offering price per Common Unit at which the Underwriters 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 and sales of debt securities (other than Working Capital Borrowings and other than for items purchased on open account in the ordinary course of business) by any Group Member;
(b) sales of equity interests by any Group Member (including the Common Units sold to the Underwriters pursuant to the exercise of their over-allotment option); and (c) sales or other voluntary or involuntary 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.
“
Junior Securities
” means (i) the Common Units and (ii) any other class or series
of Partnership Interests established after November 25, 2016 by the General Partner, the terms of which class or series do not expressly provide that it is made senior to or on parity with the Series A Preferred Units and Series B Preferred
Units as to the right to distributions of cash or property or distributions upon any dissolution or liquidation pursuant to
Article XII
.
“
Limited Partner
” means, unless the context otherwise requires, (a) each Person that is or becomes a
Limited Partner pursuant to the terms of this Agreement, including each Substituted Limited Partner, each Additional Limited Partner and any Partner upon
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the change of its status from General Partner to Limited Partner pursuant to
Section
11.3
or (b) solely for purposes of
Articles V
,
VI
,
VII
and
IX
and
Sections 12.3
and
12.4
, each Assignee;
provided, however
, that when the term “
Limited Partner
” is (i) used herein in the context of
Section 5.1(b)
, such term shall not, solely for such
purpose, include any Preferred Holder with respect to a Preferred Unit, (ii) used herein in the context of any vote or other approval, including without limitation
Articles XIII
and
XIV
, such term shall not, solely for such
purpose, include any holder of an Incentive Distribution Right with respect to such Incentive Distribution Right except as may otherwise be required by law and (iii) used herein in the context of any vote or other approval, including without
limitation
Articles XIII
(other than
Sections 13.3(c)
,
13.4
,
13.5
,
13.6
,
13.8
,
13.9
,
13.10
,
13.11
,
13.12(b)
,
13.12(c)
and
13.12(d)
) and
XIV
, such term shall
not, solely for such purpose, include a Preferred Holder with respect to its Preferred Units.
“
Limited Partner
Interest
” means the ownership interest of a Limited Partner or Assignee in the Partnership, which may be evidenced by Common Units, Preferred Units, Incentive Distribution Rights or other Partnership Securities or a combination thereof or
interest therein, and includes any and all benefits to which such Limited Partner or Assignee is entitled as provided in this Agreement, together with all obligations of such Limited Partner or Assignee to comply with the terms and provisions of
this Agreement;
provided
,
however
, that when the term “
Limited Partner Interest
” is (i) used herein in the context of
Section 5.1(b)
, such term shall not, solely for such purpose, include any Preferred
Unit, (ii) used herein in the context of any vote or other approval, including without limitation
Articles XIII
and
XIV
, such term shall not, solely for such purpose, include any Incentive Distribution Right except as may
otherwise be required by law and (iii)
used herein in the context of any vote or other approval, including without limitation
Articles XIII
(other than
Sections 13.3(c)
,
13.4
,
13.5
,
13.6
,
13.8
,
13.9
,
13.10
,
13.11
,
13.12(b)
,
13.12(c)
and
13.12(d)
) and
XIV
, such term shall not, solely for such purpose, include Preferred Units.
“
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 reconstitute the
Partnership and continue its business 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
12.3
as liquidating trustee of the Partnership within the meaning of the Delaware Act.
“
London Business Day
” means any day on which dealings in deposits in U.S. dollars are transacted in the London
interbank market.
“
Merger Agreement
” has the meaning assigned to such term in
Section
14.1
.
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“
Minimum Quarterly Distribution
” means $0.60 per Unit per
Quarter, subject to adjustment in accordance with
Sections 6.6
and
6.9
.
“
Navigator Acquisition
Closing
” means the consummation of the acquisition contemplated by the Navigator Agreement by the Operating Partnership or one of its Affiliates.
“
Navigator Agreement
” means that Membership Interest Purchase and Sale Agreement, dated as of April 11, 2017,
between the Partnership, the Operating Partnership and FR Navigator Holdings LLC, as the same may be amended in accordance with its terms.
“
National Securities Exchange
” means an exchange registered with the Commission under Section 6(a) of the
Securities Exchange Act of 1934, as amended, supplemented or restated from time to time, and any successor to such statute.
“
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 or Assignee by the Partnership, the
Partnership’s Carrying Value of such property (as adjusted pursuant to
Section 5.4(d)(ii)
) at the time such property is distributed, reduced by any indebtedness either assumed by such Partner or Assignee upon such distribution or to
which such property is subject at the time of distribution, in either case, as determined under Section 752 of the Code.
“
Net Income
” means, for any taxable year, 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 year 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 year. The items included in the calculation of Net Income shall be determined in accordance with
Section 5.4(b)
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 as if
Section 6.1(d)(xi)
were not in this Agreement.
“
Net Loss
” means, for any taxable year, 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 year 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 year. The items included in the calculation of Net Loss shall be determined in accordance with
Section 5.4(b)
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 as if
Section 6.1(d)(xi)
were not in this Agreement.
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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 year, the sum, if positive, of all items of income, gain, loss
or deduction recognized by the Partnership (a) after the Liquidation Date or (b) upon the sale, exchange or other disposition of all or substantially all of the assets of the Partnership Group, taken as a whole, in a single transaction or
a series of related transactions (excluding any disposition to a member of the Partnership Group). The items included in the determination of Net Termination Gain shall be determined in accordance with
Section 5.4(b)
and shall not include any
items of income, gain or loss specially allocated under
Section 6.1(d)
.
“
Net Termination Loss
”
means, for any taxable year, the sum, if negative, of all items of income, gain, loss or deduction recognized by the Partnership (a) after the Liquidation Date or (b) upon the sale, exchange or other disposition of all or substantially all
of the assets of the Partnership Group, taken as a whole, in a single transaction or a series of related transactions (excluding any disposition to a member of the Partnership Group). The items included in the determination of Net Termination Loss
shall be determined in accordance with
Section 5.4(b)
and shall not include any items of income, gain or loss specially allocated under
Section 6.1(d)
.
“
Non-citizen
Assignee
” means a Person whom the General Partner has
determined in its discretion does not constitute an Eligible Citizen and as to whose Partnership Interest the General Partner has become the Substituted Limited Partner, pursuant to
Section
4.9
.
“
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
Sections 6.2(b)(i)(A)
,
6.2(b)(ii)(A)
and
6.2(b)(iii)
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 expenditures (including, without
limitation, any expenditures 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
” has the meaning assigned to such term in
Section 15.1(b)
.
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“
NuStar GP
” means NuStar GP, LLC, a Delaware limited liability
company and the general partner of the General Partner.
“
NYSE
” means the New York Stock Exchange.
“
Operating Expenditures
” means all Partnership Group expenditures, including, but not limited to, taxes,
reimbursements of the General Partner, repayment of Working Capital Borrowings, debt service payments, and capital expenditures, subject to the following:
(a) Payments (including prepayments) of principal and premium on indebtedness other than Working Capital
Borrowings shall not constitute Operating Expenditures; and
(b) Operating Expenditures shall not
include (i) capital expenditures made for Acquisitions or Capital Improvements, (ii) payment of transaction expenses relating to Interim Capital Transactions, (iii) Series A Redemption Payments, (iv) Series B Redemption Payments,
(v) payments made to Preferred Holders to purchase or otherwise acquire Preferred Units, and (vi) distributions to Partners. Where capital expenditures are made in part for Acquisitions or for Capital Improvements and in part for other
purposes, the General Partner’s good faith allocation between the amounts paid for each shall be conclusive.
“
Operating General Partner
” means NuStar GP, Inc., a Delaware corporation and wholly owned subsidiary of the
Partnership, and any successors and permitted assigns as the general partner of the NuStar Logistics, L.P.
“
Operating Partnership
” means NuStar Logistics, L.P., a Delaware limited partnership, and such other Persons
that are treated as partnerships for federal income tax purposes that are majority-owned by the Partnership and controlled by the Partnership (whether by direct or indirect ownership of the general partner of such Person or otherwise) and
established or acquired for the purpose of conducting the business of the Partnership.
“
Operating Partnership
Agreement
” means the agreement of limited partnership of any Operating Partnership that is a limited partnership, or any limited liability company agreement of any Operating Partnership that is a limited liability company that is treated as
a partnership for federal income tax purposes, as such may be amended, supplemented or restated from time to time.
“
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) $10 million plus all cash and cash
equivalents of the Partnership Group on hand as of the close of business on the Closing Date, (ii) all cash receipts of the Partnership Group for the period beginning on the Closing Date and ending with the last day of such period, other than
cash receipts from Interim Capital Transactions (except to the extent specified in
Section
6.5
) and (iii) all cash receipts of
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the Partnership Group after the end of such period but on or before the date of determination of Operating Surplus with respect to such period resulting from Working Capital Borrowings, less
(b) the sum of (i) Operating Expenditures for the period beginning on the Closing Date and ending
with the last day of such period and (ii) the amount of cash reserves that is necessary or advisable in the reasonable discretion of the General Partner to provide funds for future Operating Expenditures;
provided
,
however
, that
disbursements made (including contributions to a Group Member or disbursements on behalf of a Group Member) or cash reserves established, increased or reduced after the end of such period but on or before the date of determination of Available Cash
with respect to such period shall be deemed to have been made, established, increased or reduced, for purposes of determining Operating Surplus, within such period if the General Partner so determines.
Notwithstanding the foregoing, “
Operating Surplus
” with respect to the Quarter in which the Liquidation Date
occurs and any subsequent Quarter shall equal zero.
“
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 in its reasonable discretion.
“
Outstanding
” means, with respect to Partnership Securities, all Partnership Securities 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 any Outstanding Partnership Securities of any class then Outstanding, all Partnership Securities owned by such Person or Group shall not be voted on any matter and shall not 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;
provided
,
further
, that the foregoing limitation shall not apply (i) to any Person or Group who acquired 20% or more of any Outstanding Partnership Securities of any class then Outstanding directly from the General Partner or its Affiliates or
(ii) to any Person or Group who acquired 20% or more of any Outstanding Partnership Securities of any class then Outstanding 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.
“
Over-Allotment
Option
” means the over-allotment option granted to the Underwriters by the Partnership pursuant to the Underwriting Agreement.
“
Parity Securities
” means the Series A Preferred Units, the Series B Preferred Units and any other class or
series of Partnership Interests established after November 25, 2016 by the General Partner, the terms of which class or series expressly provide that it ranks on parity with the Series A Preferred Units and the Series B Preferred Units as to
distributions and amounts payable upon a dissolution or liquidation pursuant to
Article XII
.
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“
Parity Units
” means Common Units and all other Units of any
other class or series that have the right to (i) receive distributions of Available Cash from Operating Surplus pro rata with distributions of the Minimum Quarterly Distribution on the Common Units and (ii) receive allocations of Net
Termination Gain pro rata with allocations of Net Termination Gain to the Common Units pursuant to
Section 6.1(c)(i)(B)
, in each case regardless of whether the amounts or value so distributed or allocated on each Parity Unit equals the amount
or value so distributed or allocated on each Common Unit. Units whose participation in such (i) distributions of Available Cash from Operating Surplus and (ii) allocations of Net Termination Gain are subordinate in order of priority to
such distributions and allocations on Common Units shall not constitute Parity Units even if such Units are convertible under certain circumstances into Common Units or Parity Units.
“
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, without limitation, 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 NuStar Energy L.P., a Delaware limited partnership, and any successors thereto.
“
Partnership Group
” means the Partnership, the Operating Partnership and any Subsidiary of any such entity,
treated as a single consolidated entity.
“
Partnership Interest
” means an interest in the Partnership,
which shall include the General Partner Interest and Limited Partner Interests.
“
Partnership Minimum
Gain
” means that amount determined in accordance with the principles of Treasury Regulation Section 1.704-2(d).
“
Partnership Security
” means any class or series of equity interest in the Partnership (but excluding any
options, rights, warrants and appreciation rights relating to an equity interest in the Partnership), including without limitation, Common Units, Incentive Distribution Rights, and Preferred Units.
“
Paying Agent
” means the Transfer Agent, acting in its capacity as paying agent for the Preferred Units, and
its respective successors and assigns or any other paying agent appointed by the General Partner;
provided, however
, that if no Paying Agent is specifically designated for any series of Preferred Units, the General Partner shall act in such
capacity.
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“
Percentage Interest
” means as of any date of determination
(a) as to the General Partner (with respect to its General Partner Interest), 2% and (b) as to any Unitholder or Assignee holding Units, the product obtained by multiplying (i) 98% less the percentage applicable to paragraph (c) by
(ii) the quotient obtained by dividing (A) the number of Units held by such Unitholder or Assignee by (B) the total number of all Outstanding Units, and (c) as to holders of additional Partnership Securities issued by the Partnership
in accordance with
Section
5.5
, the percentage established as a part of such issuance. The Percentage Interest with respect to an Incentive Distribution Right, a Series A Preferred Unit and a Series B Preferred Unit shall
at all times be zero.
“
Person
” means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.
“
Preferred Holder
” means, with respect to a series of Preferred Units, a Record Holder of such series of
Preferred Units.
“
Preferred Distributions
” means Series A Distributions or Series B Distributions, as
applicable.
“
Preferred Distribution Payment Date
” means the Series A Distribution Payment Date or Series
B Distribution Payment Date, as applicable.
“
Preferred Distribution Period
” means the Series A
Distribution Period or Series B Distribution Period, as applicable.
“
Preferred Units
” means a Partnership
Interest designated as a “Preferred Unit,” including the Series A Preferred Units and Series B Preferred Units, which entitles the holder thereof to a preference with respect to distributions over Junior Securities.
“
Pro Rata
” means (a) when modifying Units or any class thereof, apportioned equally among all designated
Units in accordance with their relative Percentage Interests, (b) when modifying Partners and Assignees, apportioned among all Partners and Assignees in accordance with their relative Percentage Interests, (c) when modifying holders of
Incentive Distribution Rights, apportioned equally among all holders of Incentive Distribution Rights in accordance with the relative number of Incentive Distribution Rights held by each such holder, and (d) when used with respect to Preferred
Units or any class or series thereof, apportioned among all such Preferred Units in accordance with the relative number or percentage of such Preferred Units.
“
Purchase Date
” means the date determined by the General Partner as the date for purchase of all Outstanding
Units of a certain class (other than Units owned by the General Partner and its Affiliates) pursuant to
Article XV
.
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“
Quarter
” means, unless the context requires otherwise, a fiscal
quarter of the Partnership.
“
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.
“
Rating Agency
” means any nationally
recognized statistical rating organization (within the meaning of Section 3(a)(62) of the Exchange Act) that publishes a rating for the Partnership.
“
Record Date
” means the date established by the General Partner 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 the Person in whose name a Common Unit is registered on the books of the Transfer Agent
as of the opening of business on a particular Business Day, or with respect to other Partnership Securities, the Person in whose name any such other Partnership Security is registered on the books which the General Partner has caused to be kept as
of the opening of business on such Business Day.
“
Redeemable Interests
” means any Partnership Interests
for which a redemption notice has been given, and has not been withdrawn, pursuant to
Section
4.10
.
“
Registration Statement
” means the Registration Statement on Form S-1 (Registration
No. 333-43668)
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, (i) with respect to the Unitholders holding Common Units, the excess of (a) the Net Positive Adjustments of the Unitholders holding Common Units as of the end of such period over (b) the sum of those Partners’ Share of
Additional Book Basis Derivative Items for each prior taxable period, (ii) with respect to the General Partner (as holder of the General Partner Interest), the excess of (a) the Net Positive Adjustments of the General Partner as of the end
of such period over (b) the sum of the General Partner’s Share of Additional Book Basis Derivative Items with respect to the General Partner Interest for each prior taxable period, and (iii) with respect to the holders of Incentive
Distribution Rights, the excess of (a) the Net Positive Adjustments of the holders of Incentive Distribution Rights as of the end of such period over (b) the sum of the Share of Additional Book Basis Derivative Items of the holders of the
Incentive Distribution Rights for each prior taxable period.
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“
Required Allocations
” means (a) any limitation imposed on
any allocation of Net Losses or Net Termination Losses under
Section 6.1(b)
or
6.1(c)(ii)
and (b) any allocation of an item of income, gain, loss or deduction pursuant to
Section 6.1(d)(i)
,
6.1(d)(ii)
,
6.1(d)(iv)
,
6.1(d)(vii)
or
6.1(d)(ix)
.
“
Residual Gain
” or “
Residual
Loss
” means any item of gain or loss, as the case may be, of the Partnership recognized for federal income tax purposes resulting from a sale, exchange or other disposition of a Contributed Property or Adjusted Property, to the extent such
item of gain or loss is not allocated pursuant to
Section 6.2(b)(i)
(A) or
6.2(b)(ii)
(A), respectively, to eliminate
Book-Tax
Disparities.
“
Reuters Page LIBOR01
” means the display so designated on the Reuters 3000 Xtra (or such other page as may
replace the LIBOR01 page on that service, or such other service as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits).
“
Revaluation Event
” means an event that results in adjustment of the Carrying Value of each Partnership
property pursuant to
Section 5.4(d)
.
“
Securities Act
” means the Securities Act of 1933, as
amended, supplemented or restated from time to time and any successor to such statute.
“
Senior
Securities
” means any class or series of Partnership Interests established after November 25, 2016 by the General Partner, the terms of which class or series expressly provide that it ranks senior to the Series A Preferred Units and
Series B Preferred Units as to the right to distributions of cash or property or distributions upon any dissolution or liquidation pursuant to
Article XII
.
“
Series A Alternative Conversion Consideration
” has the meaning given such term in
Section 16.11(d)
.
“
Series A
Change of Control Conversion Date
” has the meaning assigned to such term in
Section
16.11(a)
.
“
Series A Change of Control Conversion Right
” has the meaning given such term in
Section
16.11(a)
.
“
Series A
Common Unit Conversion Consideration
” has the meaning given such term in
Section 16.11(a)
.
“
Series A
Conversion Common Units
” means Common Units issued upon
conversion of the Series A Preferred Units pursuant to
Section 16.11(a)
.
“
Series A Conversion
Ratio
” has the meaning given such term in
Section 16.11(c)
.
“
Series A Current Criteria
”
means the equity credit criteria of a Rating Agency for securities such as the Series A Preferred Units, as such criteria are in effect as of the Series A Original Issue Date.
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“
Series A Distribution Payment Date
” means the 15th day of
March, June, September and December of each year, commencing on March 15, 2017;
provided, however,
that if any Series A Distribution Payment Date would otherwise occur on a day that is not a Business Day, such Series A Distribution
Payment Date shall instead be on the immediately succeeding Business Day.
“
Series A Distribution Period
”
means a period of time from and including the preceding Series A Distribution Payment Date (other than the initial Series A Distribution Period, which shall commence on and include the Series A Original Issue Date), to but excluding the next Series
A Distribution Payment Date for such Series A Distribution Period.
“
Series A Distribution Rate
” means an
annual rate equal to (i) during the Series A Fixed Rate Period, 8.50% of the Series A Liquidation Preference and (ii) during the Series A Floating Rate Period, a percentage of the Series A Liquidation Preference equal to the sum of
(a) the Series A Three-Month LIBOR, as calculated on each applicable Series A LIBOR Determination Date, and (b) 6.766%.
“
Series A Distribution Record Date
” has the meaning given such term in
Section 16.3(b)
.
“
Series A Distributions
” means distributions with respect to Series A Preferred Units pursuant to
Section
16.3
.
“
Series A Fixed Rate Period
” means the period from and including
the Series A Original Issue Date to, but not including, December 15, 2021.
“
Series A Floating Rate
Period
” means the period from and including December 15, 2021 and thereafter until such time as all of the Outstanding Series A Preferred Units are redeemed in accordance with
Section
16.5
or are converted in
accordance with
Section
16.11
.
“
Series A Holder
” means a Record Holder of
Series A Preferred Units.
“
Series A LIBOR Determination Date
” means the London Business Day immediately
preceding the first date of each relevant Series A Distribution Period.
“
Series A Liquidation Preference
”
means a liquidation preference for each Series A Preferred Unit initially equal to $25.00 per unit, which liquidation preference shall be subject to increase by the per Series A Preferred Unit amount of any accumulated and unpaid Series A
Distributions (whether or not such distributions shall have been declared).
“
Series A Original Issue
Date
” means November 25, 2016.
“
Series A Payments
” means, collectively, Series A
Distributions and Series A Redemption Payments.
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“
Series A Preferred Unit
” means a Preferred Unit having the
designations, preferences, rights, powers and duties set forth in
Article XVI
.
“
Series A Rating
Event
” means a change by any Rating Agency to the Series A Current Criteria, which change results in (i) any shortening of the length of time for which the Series A Current Criteria are scheduled to be in effect with respect to the
Series A Preferred Units, or (ii) a lower equity credit being given to the Series A Preferred Units than the equity credit that would have been assigned to the Series A Preferred Units by such Rating Agency pursuant to its Series A Current
Criteria.
“
Series A Redemption Date
” has the meaning given such term in
Section 16.5(a)
.
“
Series A Redemption Notice
” has the meaning given such term in
Section 16.5(b)
.
“
Series A Redemption Payments
” means payments to be made to the holders of Series A Preferred Units to redeem
Series A Preferred Units in accordance with
Section
16.5
.
“
Series A Redemption
Price
” has the meaning given such term in
Section 16.5(a)
.
“
Series A Three-Month LIBOR
”
has the meaning set forth in
Section 16.3(c)
.
“
Series A
Unit Cap
” has the meaning given
such term in
Section 16.11(c)
.
“
Series B Alternative Conversion Consideration
” has the meaning
given such term in
Section 17.11(d)
.
“
Series B
Change of Control Conversion Date
” has the
meaning assigned to such term in
Section 17.11(a)
.
“
Series B Change of Control Conversion Right
”
has the meaning given such term in
Section 17.11(a)
.
“
Series B
Common Unit Conversion
Consideration
” has the meaning given such term in
Section 17.11(a)
.
“
Series B
Conversion
Common Units
” means Common Units issued upon conversion of the Series B Preferred Units pursuant to
Section 17.11(a)
.
“
Series B Conversion Ratio
” has the meaning given such term in
Section 17.11(c)
.
“
Series B Current Criteria
” means the equity credit criteria of a Rating Agency for securities such as the
Series B Preferred Units, as such criteria are in effect as of the Series B Original Issue Date.
“
Series B
Distribution Payment Date
” means the 15th day of March, June, September and December of each year, commencing on September 15, 2017;
provided,
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however,
that if any Series B Distribution Payment Date would otherwise occur on a day that is not a Business Day, such Series B Distribution Payment Date shall instead be on the
immediately succeeding Business Day.
“
Series B Distribution Period
” means a period of time from and
including the preceding Series B Distribution Payment Date (other than the initial Series B Distribution Period, which shall commence on and include the Series B Original Issue Date), to but excluding the next Series B Distribution Payment Date for
such Series B Distribution Period.
“
Series B Distribution Rate
” means an annual rate equal to
(i) during the Series B Fixed Rate Period, 7.625% of the Series B Liquidation Preference and (ii) during the Series B Floating Rate Period, a percentage of the Series B Liquidation Preference equal to the sum of (a) the Series B
Three-Month LIBOR, as calculated on each applicable Series B LIBOR Determination Date, and (b) 5.643%.
“
Series B
Distribution Record Date
” has the meaning given such term in
Section 17.3(b)
.
“
Series B
Distributions
” means distributions with respect to Series B Preferred Units pursuant to
Section
17.3
.
“
Series B Fixed Rate Period
” means the period from and including the Series B Original Issue Date to, but not
including, June 15, 2022.
“
Series B Floating Rate Period
” means the period from and including
June 15, 2022 and thereafter until such time as all of the Outstanding Series B Preferred Units are redeemed in accordance with
Section
17.5
or are converted in accordance with
Section
17.11
.
“
Series B Holder
” means a Record Holder of Series B Preferred Units.
“
Series B LIBOR Determination Date
” means the London Business Day immediately preceding the first date of each
relevant Series B Distribution Period.
“
Series B Liquidation Preference
” means a liquidation preference
for each Series B Preferred Unit initially equal to $25.00 per unit, which liquidation preference shall be subject to increase by the per Series B Preferred Unit amount of any accumulated and unpaid Series B Distributions (whether or not such
distributions shall have been declared).
“
Series B Original Issue Date
” means April 28, 2017.
“
Series B Payments
” means, collectively, Series B Distributions and Series B Redemption Payments.
“
Series B Preferred Unit
” means a Preferred Unit having the designations, preferences, rights, powers and
duties set forth in
Article XVII
.
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“
Series B Rating Event
” means a change by any Rating Agency to
the Series B Current Criteria, which change results in (i) any shortening of the length of time for which the Series B Current Criteria are scheduled to be in effect with respect to the Series B Preferred Units, or (ii) a lower equity
credit being given to the Series B Preferred Units than the equity credit that would have been assigned to the Series B Preferred Units by such Rating Agency pursuant to its Series B Current Criteria.
“
Series B Redemption Date
” has the meaning given such term in
Section 17.5(a)
.
“
Series B Redemption Notice
” has the meaning given such term in
Section 17.5(b)
.
“
Series B Redemption Payments
” means payments to be made to the holders of Series B Preferred Units to redeem
Series B Preferred Units in accordance with
Section
17.5
.
“
Series B Redemption
Price
” has the meaning given such term in
Section 17.5(a)
.
“
Series B Three-Month LIBOR
”
has the meaning set forth in
Section 17.3(c)
.
“
Series B
Unit Cap
” has the meaning given
such term in
Section 17.11(c)
.
“
Services Agreement
” means that Amended and Restated Services
Agreement, effective as of March 1, 2016 by and between the Partnership, NuStar GP Holdings, LLC, NuStar GP and NuStar Services Company LLC.
“
Share of Additional Book Basis Derivative Items
” means in connection with any allocation of Additional Book
Basis Derivative Items for any taxable period, (i) with respect to the Unitholders holding Common Units, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Unitholders’ Remaining Net Positive
Adjustments as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time, (ii) with respect to the General Partner (as holder of the General Partner Interest), the amount that bears the same ratio to
such additional Book Basis Derivative Items as the General Partner’s Remaining Net Positive Adjustments as of the end of such period bears to the Aggregate Remaining Net Positive Adjustment as of that time, and (iii) with respect to the
Partners holding Incentive Distribution Rights, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Remaining Net Positive Adjustments of the Partners holding the Incentive Distribution Rights as of the end of
such period bears to the Aggregate Remaining Net Positive Adjustments as of that time.
“
Special Approval
”
means approval by a majority of the members of the Conflicts Committee,
provided
that at the time of such approval all of the material facts known to the General Partner or any of its Affiliates regarding the proposed transaction in respect
of which such approval is given were fully disclosed to or otherwise known by the Conflicts Committee.
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“
Stated Liquidation Preference
” means the Stated Series A
Liquidation Preference or the Stated Series B Liquidation Preference, as applicable.
“
Stated Series A Liquidation
Preference
” means an amount equal to $25.00 per Series A Preferred Unit.
“
Stated Series B Liquidation
Preference
” means an amount equal to $25.00 per Series B Preferred Unit.
“
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 or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class)
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, or (c) any other Person (other than a corporation or a partnership) 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) at least 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.
“
Substituted Limited Partner
” means a Person who is
admitted as a Limited Partner to the Partnership pursuant to
Section
10.2
in place of and with all the rights of a Limited Partner and who is shown as a Limited Partner on the books and records of the Partnership.
“
Surviving Business Entity
” has the meaning assigned to such term in
Section 14.2(b)
.
“
Trading Day
” has the meaning assigned to such term in
Section 15.1(a)
.
“
Transfer
” has the meaning assigned to such term 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 shall be appointed from time to time by the Partnership to act as registrar and transfer agent for the Common Units;
provided
that if no Transfer Agent is specifically designated for any other Partnership Securities, the
General Partner shall act in such capacity.
“
Transfer Application
” means an application and agreement for
transfer of Units in the form set forth on the back of a Certificate or in a form substantially to the same effect in a separate instrument.
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“
Underwriter
” means each Person named as an underwriter in
Schedule I to the Underwriting Agreement who purchased Common Units pursuant thereto.
“
Underwriting
Agreement
” means the Underwriting Agreement dated April 9, 2001 among the Underwriters, the Partnership and certain other parties, providing for the purchase of Common Units by such Underwriters.
“
Unit
” means a Partnership Security that is designated as a “
Unit
” and shall include Common
Units, but shall not include (i) a General Partner Interest, (ii) Incentive Distribution Rights, (iii) Series A Preferred Units or (iv) Series B Preferred Units.
“
Unitholders
” means the holders of Common Units.
“
Unit Majority
” means at least a majority of the Outstanding Common Units.
“
Unpaid MQD
” has the meaning assigned to such term 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 5.4(d)
) over (b) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to
Section 5.4(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 5.4(d)
as of such date) over (b) the fair market
value of such property as of such date (as determined under
Section 5.4(d)
).
“
Unrecovered Capital
”
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.
“
U.S. GAAP
” means United States Generally Accepted Accounting
Principles consistently applied.
“
Waiver Period Units
” means, collectively, any Common Units issued by
the Partnership for cash from the date of the Navigator Agreement through the end of the Acquisition Waiver Period other than Common Units issued under any long-term incentive plan, equity compensation plan or similar plan implemented by the
Partnership, NuStar GP Holdings, LLC or their respective Affiliates.
“
Withdrawal Opinion of Counsel
”
means an Opinion of Counsel that the withdrawal of the General Partner in accordance with the terms of this Agreement
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(following the selection of the successor General Partner) would not result in the loss of the limited liability of any Limited Partner or of a limited partner of the Operating Partnership or
cause the Partnership or the Operating Partnership 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 previously treated as such).
“
Working Capital Borrowings
” means borrowings used solely for working capital purposes or to pay distributions
to partners made pursuant to a credit facility or other arrangement requiring all such borrowings thereunder to be reduced to a relatively small amount each year for an economically meaningful period of time.
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, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; and (c) the term “
include
”
or “
includes
” means includes, without limitation, and “
including
” means including, without limitation.
ARTICLE II
ORGANIZATION
SECTION 2.1
Formation.
The Partnership had been previously formed as a limited partnership pursuant to the provisions of the Delaware Act. The General Partner and the
other Partners hereby amend and restate the Fourth Amended and Restated Agreement in its entirety. 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. All Partnership Interests shall constitute personal property of the owner thereof for all purposes and a Partner has no interest
in specific Partnership property.
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SECTION 2.2
Name.
The name of the Partnership shall be “
NuStar Energy L.P.
” The Partnership’s business may be conducted under any other
name or names deemed necessary or appropriate by the General Partner in its sole discretion, 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 in its discretion 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.
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
Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801, and the registered agent for service of process on the Partnership in the State of Delaware at such registered office shall be The Corporation Trust Company. The principal office of
the Partnership shall be located at 19003
IH-10
West, San Antonio, Texas 78257 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 deems necessary or appropriate. The address of the General Partner shall be 19003
IH-10
West, San
Antonio, Texas 78257 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) serve as a partner of the Operating Partnership
and, in connection therewith, to exercise all the rights and powers conferred upon the Partnership as a partner of an Operating Partnership pursuant to the Operating Partnership Agreement for such Operating Partnership or otherwise, (b) engage
directly in, or enter into or form any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any business activity that the Operating Partnership is permitted to engage in by the Operating
Partnership Agreement 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, (c) engage directly in, or enter into or form 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 and which 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;
provided
,
however
, that the General
Partner reasonably determines, as of the date of the acquisition or commencement of such activity, that such activity (i) generates “
qualifying income
” (as such term is defined pursuant to Section 7704 of the Code) or
(ii) enhances the operations of an activity of the Operating Partnership or a Partnership activity that generates qualifying income, and (d) do anything necessary or appropriate to the foregoing, including the making of capital
contributions or loans to a Group Member. The General Partner has no obligation or duty to the Partnership, the Limited Partners or the Assignees to propose or approve, and in its discretion may decline to propose or approve, the conduct by the
Partnership of any business.
-29-
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
Power of Attorney.
(a) Each Limited Partner and each Assignee hereby constitutes and appoints the General Partner and, if a Liquidator
shall have been selected pursuant to
Section
12.3
, the Liquidator (and any successor to the Liquidator by merger, transfer, assignment, election or otherwise) and each of their authorized officers and
attorneys-in-fact,
as the case may be, with full power of substitution, as his true and lawful agent and
attorney-in-fact,
with full power and authority in his name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices
(A) all certificates, documents and other instruments (including this Agreement and the Certificate of Limited Partnership and all amendments or restatements hereof or thereof) that the General Partner or the Liquidator deems necessary or
appropriate to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware and in all other jurisdictions in
which the Partnership may conduct business or own property; (B) all certificates, documents and other instruments that the General Partner or the Liquidator deems necessary or appropriate to reflect, in accordance with its terms, any amendment,
change, modification or restatement of this Agreement; (C) all certificates, documents and other instruments (including conveyances and a certificate of cancellation) that the General Partner or the Liquidator deems necessary or appropriate to
reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement; (D) all certificates, documents and other instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to,
or other events described in,
Article IV
,
X
,
XI
or
XII
; (E) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of any class or series of
Partnership Securities issued pursuant to
Section
5.5
; and (F) all certificates, documents and other instruments (including agreements and a certificate of merger) relating to a merger or consolidation of the
Partnership pursuant to
Article XIV
; and
(ii) execute, swear to, acknowledge, deliver, file
and record all ballots, consents, approvals, waivers, certificates, documents and other instruments necessary or appropriate, in the discretion of the General Partner or the Liquidator, to make, evidence, give, confirm or ratify any vote, consent,
approval, agreement or other action that is made or given by the Partners hereunder or is consistent with the terms of this Agreement or is necessary or appropriate, in the discretion of the General Partner or the Liquidator, to
-30-
effectuate the terms or intent of this Agreement;
provided
, that when required by
Section
13.3
or any other provision of this Agreement that establishes a
percentage of the Limited Partners or of the Limited Partners of any class or series required to take any action, the General Partner and the Liquidator may exercise the power of attorney made in this
Section 2.6(a)(ii)
only after the
necessary vote, consent or approval of the Limited Partners or of the Limited Partners of such class or series, as applicable.
Nothing
contained in this
Section 2.6(a)
shall be construed as authorizing the General Partner to amend this Agreement except in accordance with
Article XIII
,
Article XVI
and
Article XVII
or as may be otherwise expressly provided
for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable and a power
coupled with an interest, and it shall survive and, to the maximum extent permitted by law, not be affected by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or termination of any Limited Partner or Assignee and
the transfer of all or any portion of such Limited Partner’s or Assignee’s Partnership Interest and shall extend to such Limited Partner’s or Assignee’s heirs, successors, assigns and personal representatives. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or the Liquidator acting in good faith pursuant to such power of attorney; and each such Limited Partner or Assignee, to the maximum extent permitted by
law, hereby waives any and all defenses that may be available to contest, negate or disaffirm the action of the General Partner or the Liquidator taken in good faith under such power of attorney. Each Limited Partner or Assignee shall execute and
deliver to the General Partner or the Liquidator, within 15 days after receipt of the request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator deems necessary to effectuate this
Agreement and the purposes of the Partnership.
SECTION 2.7
Term.
The term of the Partnership commenced upon the filing of the initial Certificate of Limited Partnership in accordance with the Delaware Act and
shall be perpetual unless the Partnership is dissolved 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.
SECTION 2.8
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 or Assignee, 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
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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 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 and the Assignees 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 or Assignee, 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. Any action taken by any Affiliate of the General Partner or any
officer, director, employee, member, general partner, agent or trustee of the General Partner or any of its Affiliates, or any officer, director, employee, member, general partner, agent or trustee of a Group Member, in its capacity as such, shall
not be deemed to be participation 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) and shall not affect, impair or eliminate the limitations on
the liability of the Limited Partners or Assignees under this Agreement.
SECTION 3.3
Outside Activities of the Limited
Partners.
Subject to the provisions of
Section
7.5
, which shall continue to be applicable to the Persons
referred to therein, regardless of whether such Persons shall also be Limited Partners or Assignees, any Limited Partner or Assignee 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 or Assignees shall have any rights by virtue of this Agreement in any business
ventures of any Limited Partner or Assignee.
SECTION 3.4
Rights of Limited Partners.
(a) In addition to other rights provided by this Agreement or by applicable law, and except as limited by
Section
3.4(b)
, each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a limited partner in the Partnership, upon reasonable written demand and at such Limited Partner’s own expense:
(i) to obtain true and full information regarding the status of the business and financial
condition of the Partnership;
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(ii) promptly after becoming available, to obtain a copy
of the Partnership’s federal, state and local income tax returns for each year;
(iii) to have
furnished to him a current list of the name and last known business, residence or mailing address of each Partner;
(iv) to have furnished to him a copy of this Agreement and the Certificate of Limited Partnership and
all amendments thereto, together with a copy 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;
(v) to obtain true and full information regarding the amount of cash and a description and statement of
the Net Agreed Value of any other Capital Contribution by each Partner and which each Partner has agreed to contribute in the future, and the date on which each became a Partner; and
(vi) to obtain such other information regarding the affairs of the Partnership as is just and
reasonable.
(b) The General Partner may keep confidential from the Limited Partners and Assignees, 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 in good faith
believes (A) is not in the best interests of the Partnership Group, (B) could damage the Partnership Group or (C) that any Group Member is required by law or by agreement with any third party to keep confidential (other than
agreements with Affiliates of the Partnership the primary purpose of which is to circumvent the obligations set forth in this
Section
3.4
).
ARTICLE IV
CERTIFICATES; RECORD
HOLDERS; TRANSFER OF PARTNERSHIP
INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS
SECTION 4.1
Certificates.
Subject in each case to
Section 16.2(b)
with respect to Series A Preferred Units and
Section 17.2(b)
with respect to Series B
Preferred Units, upon the Partnership’s issuance of Partnership Securities to any Person, the Partnership shall issue one or more Certificates in the name of such Person evidencing the number of such Partnership Securities being so issued. In
addition, upon the General Partner’s request, the Partnership shall issue to it one or more Certificates in the name of the General Partner evidencing its interests in the Partnership. Certificates 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 Secretary or any Assistant Secretary of NuStar GP. No Certificate shall be valid for any purpose until it has been countersigned by the Transfer Agent;
provided
,
however
, that if the General Partner elects to issue Partnership Securities in global form, the Certificates shall be valid upon receipt of a
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certificate from the Transfer Agent certifying that such Partnership Securities have been duly registered in accordance with the directions of the Partnership. Partners holding Certificates
evidencing Series A Preferred Units may exchange such Certificates for Certificates evidencing Common Units on or after the date on which such Series A Preferred Units are converted into Common Units pursuant to the terms of
Section
16.11
. Partners holding Certificates evidencing Series B Preferred Units may exchange such Certificates for Certificates evidencing Common Units on or after the date on which such Series B Preferred Units are
converted into Common Units pursuant to the terms of
Section
17.11
.
SECTION 4.2
Mutilated,
Destroyed, Lost or Stolen Certificates.
(a) If any mutilated Certificate is surrendered to the Transfer Agent,
the appropriate officers of NuStar GP 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 Securities as the
Certificate so surrendered.
(b) The appropriate officers of NuStar GP 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 Partnership, that a previously
issued Certificate has been lost, destroyed or stolen;
(ii) requests the issuance of a new
Certificate before the Partnership has notice that the Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim;
(iii) if requested by the Partnership, delivers to the Partnership a bond, in form and substance
satisfactory to the Partnership, with surety or sureties and with fixed or open penalty as the Partnership may reasonably direct, in its sole discretion, 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 Partnership.
If a Limited Partner or Assignee fails to notify the Partnership within a reasonable time after he 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 or Assignee 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
Partnership 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.
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SECTION 4.3
Record Holders.
The Partnership shall be entitled to recognize the Record Holder as the Partner or Assignee 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 for 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 (a) shall be the Partner or Assignee (as the case may be) of record and beneficially, (b) must execute and deliver a Transfer Application and
(c) shall be bound by this Agreement and shall have the rights and obligations of a Partner or Assignee (as the case may be) hereunder and as, and to the extent, provided for herein.
SECTION 4.4
Transfer Generally.
(a) The term “
transfer
,” when used in this Agreement with respect to a Partnership Interest, shall be
deemed to refer to a transaction by which the General Partner assigns its General Partner Interest to another Person who becomes the General Partner, by which the holder of a Limited Partner Interest assigns such Limited Partner Interest to another
Person who is or becomes a Limited Partner or an Assignee, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise.
(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 null and void.
(c) Nothing contained in this Agreement shall be construed to prevent (i) a disposition by any limited partner of
the General Partner of any or all of the issued and outstanding limited partner interests of the General Partner or (ii) a disposition by any general partner of the General Partner of any or all of the issued and outstanding capital stock or
other equity interests of such general partner.
SECTION 4.5
Registration and Transfer of Limited Partner Interests.
(a) The Partnership 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 Partnership Securities. The Transfer Agent is hereby appointed registrar and
transfer agent for the purpose of registering Partnership Securities and transfers of such Partnership Securities as herein provided. The Partnership shall not recognize transfers of Certificates evidencing Limited Partner Interests unless such
transfers are effected in the manner described in this
Section
4.5
.
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Upon surrender of a Certificate for registration of transfer of any Limited Partner Interests evidenced by a Certificate, and subject to the provisions of
Section 4.5(b)
, the appropriate
officers of NuStar GP on behalf of the Partnership shall execute and deliver, and in the case of Common Units and Preferred Units, 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 and
Section
4.1
, one or more new Certificates evidencing the same aggregate number and type of Limited Partner Interests as was evidenced by the
Certificate so surrendered.
(b) Except as otherwise provided in
Section
4.9
, the
Partnership shall not recognize any transfer of Limited Partner Interests until the Certificates evidencing such Limited Partner Interests are surrendered for registration of transfer and such Certificates are accompanied by a Transfer Application
duly executed by the transferee (or the transferee’s
attorney-in-fact
duly authorized in writing). No charge shall be imposed by the Partnership for such transfer;
provided
, that as a condition to the issuance of any new Certificate under this
Section
4.5
, the Partnership may require the payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed with respect thereto.
(c) Limited Partner Interests may be transferred only in the manner described in
this
Section
4.5
. The transfer of any Limited Partner Interests and the admission of any new Limited Partner shall not constitute an amendment to this Agreement.
(d) Until admitted as a Substituted Limited Partner pursuant to
Section
10.2
, the Record
Holder of a Limited Partner Interest shall be an Assignee in respect of such Limited Partner Interest. Limited Partners may include custodians, nominees or any other individual or entity in its own or any representative capacity.
(e) A transferee of a Limited Partner Interest who has completed and delivered a Transfer Application shall be deemed
to have (i) requested admission as a Substituted Limited Partner, (ii) agreed to comply with and be bound by and to have executed this Agreement, (iii) represented and warranted that such transferee has the right, power and authority
and, if an individual, the capacity to enter into this Agreement, (iv) granted the powers of attorney set forth in this Agreement and (v) given the consents and approvals and made the waivers contained in this Agreement.
(f) The General Partner and its Affiliates shall have the right at any time to transfer their Common Units to one or
more Persons.
SECTION 4.6
Transfer of the General Partner
’
s General Partner Interest.
(a) Subject to
Section 4.6(b)
below, the General Partner may transfer all or any of its General Partner Interest
without Unitholder approval.
(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 of any
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Limited Partner or of any limited partner of the Operating Partnership or cause the Partnership or the Operating Partnership 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) and (iii) such transferee also agrees to purchase all (or the appropriate portion thereof, if applicable) of the partnership interest of
the General Partner as the general partner 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
10.3
, be admitted to the Partnership as a General Partner immediately prior to the transfer of the Partnership Interest, and the business of the Partnership shall continue without
dissolution.
SECTION 4.7
Transfer of Incentive Distribution Rights.
The General Partner or any other holder of Incentive Distribution Rights may transfer any or all of its Incentive Distribution Rights without
Unitholder approval. Notwithstanding anything herein to the contrary, no transfer of Incentive Distribution Rights to another Person shall be permitted unless the transferee agrees to be bound by the provisions of this Agreement. The General Partner
shall have the authority (but shall not be required) to adopt such reasonable restrictions on the transfer of Incentive Distribution Rights and requirements for registering the transfer of Incentive Distribution Rights as the General Partner, in its
sole discretion, shall determine are necessary or appropriate.
SECTION 4.8
Restrictions on Transfers.
(a) Except as provided in
Section 4.8(c)
below, but 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 or the Operating Partnership under the laws of the jurisdiction of its formation, or (iii) cause the Partnership
or the Operating Partnership 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).
(b) The General Partner may impose restrictions on the transfer of Partnership Interests if a subsequent Opinion of
Counsel determines that such restrictions are necessary to avoid a significant risk of the Partnership becoming taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes. The restrictions may be imposed by making
such amendments to this Agreement as the General Partner may determine to be necessary or appropriate to impose such restrictions;
provided
,
however
, that any amendment that the General Partner believes, in the exercise of its
reasonable discretion, could 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 Partner Interests is then traded must be approved,
prior to such amendment being effected, by the holders of at least a majority of the Outstanding Limited Partner Interests of such class.
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(c) Nothing contained in this
Article IV
, or elsewhere in this
Agreement, 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 for trading.
SECTION 4.9
Citizenship Certificates;
Non-citizen
Assignees.
(a) If any Group Member is or becomes subject to any federal, state or local law or regulation that, in the reasonable
determination of the General Partner, creates 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 Assignee,
the General Partner may request any Limited Partner or Assignee to furnish to the General Partner, within 30 days after receipt of such request, an executed Citizenship Certification or such other information concerning his nationality, citizenship
or other related status (or, if the Limited Partner or Assignee is a nominee holding for the account of another Person, the nationality, citizenship or other related status of such Person) as the General Partner may request. If a Limited Partner or
Assignee fails to furnish to the General Partner within the aforementioned 30-day period such Citizenship Certification or other requested information or if upon receipt of such Citizenship Certification or other requested information the General
Partner determines, with the advice of counsel, that a Limited Partner or Assignee is not an Eligible Citizen, the Partnership Interests owned by such Limited Partner or Assignee shall be subject to redemption in accordance with the provisions of
Section
4.10
. In addition, the General Partner may require that the status of any such Partner or Assignee be changed to that of a
Non-citizen
Assignee and, thereupon, the General
Partner shall be substituted for such
Non-citizen
Assignee as the Limited Partner in respect of his Limited Partner Interests.
(b) The General Partner shall, in exercising voting rights in respect of Limited Partner Interests held by it on behalf
of
Non-citizen
Assignees, distribute the votes in the same ratios as the votes of Partners (including without limitation the General Partner) in respect of Limited Partner Interests other than those of
Non-citizen
Assignees are cast, either for, against or abstaining as to the matter.
(c) Upon dissolution of the Partnership, a
Non-citizen
Assignee 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
Non-citizen
Assignee’s share of the distribution in kind. Such payment and assignment shall be treated for Partnership purposes as a purchase by the Partnership from the
Non-citizen
Assignee of his Limited Partner Interest (representing his right to receive his share of such distribution in kind).
(d) At any time after he can and does certify that he has become an Eligible Citizen, a
Non-citizen
Assignee may, upon application to the General Partner, request admission as a Substituted Limited Partner with respect to any Limited Partner Interests of such
Non-citizen
Assignee not redeemed pursuant to
Section
4.10
, and upon his admission pursuant to
Section
10.2
, the General Partner shall cease to be deemed to
be the Limited Partner in respect of the
Non-citizen
Assignee’s Limited Partner Interests.
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SECTION 4.10
Redemption of Partnership Interests of
Non-citizen
Assignees.
(a) If at any time a Limited Partner or Assignee
fails to furnish a Citizenship Certification or other information requested within the 30-day period specified in
Section 4.9(a)
, or if upon receipt of such Citizenship Certification or other information the General Partner determines, with
the advice of counsel, that a Limited Partner or Assignee is not an Eligible Citizen, the Partnership may, unless the Limited Partner or Assignee establishes to the satisfaction of the General Partner that such Limited Partner or Assignee is an
Eligible Citizen or has transferred his Partnership Interests to a Person who is an Eligible Citizen and who furnishes a Citizenship Certification to the General Partner prior to the date fixed for redemption as provided below, redeem the
Partnership Interest of such Limited Partner or Assignee 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 Limited Partner or Assignee, at his last address designated on the records of the Partnership or the Transfer Agent, by registered or certified mail,
postage prepaid. The notice shall be deemed to have been given when so mailed. The notice shall specify the Redeemable Interests, the date fixed for redemption, the place of payment, that payment of the redemption price will be made 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 Limited Partner or Assignee 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 Limited Partner Interests of the class to be so redeemed multiplied by the number of Limited Partner Interests of
each such class included among the Redeemable Interests. The redemption price shall be paid, in the discretion of 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 10% annually and payable in three equal annual installments of principal together with accrued interest, commencing one year after the redemption date.
(iii) Upon surrender by or on behalf of the Limited Partner or Assignee, 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, the Limited Partner or Assignee or his duly authorized representative shall be entitled to
receive the payment therefor.
(iv) After the redemption date, Redeemable Interests shall no longer
constitute issued and Outstanding Limited Partner Interests.
(b) The provisions of this
Section
4.10
shall also be applicable to Limited Partner Interests held by a Limited Partner or Assignee as nominee of a Person determined to be other than an Eligible Citizen.
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(c) Nothing in this
Section
4.10
shall prevent
the recipient of a notice of redemption from transferring his Limited Partner 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 Limited Partner Interest certifies to the satisfaction of the General Partner in a Citizenship Certification delivered in connection with the Transfer Application that he is
an Eligible Citizen. If the transferee fails to make such certification, such redemption shall be effected from the transferee on the original redemption date.
ARTICLE V
CAPITAL CONTRIBUTIONS
AND ISSUANCE OF PARTNERSHIP INTERESTS
SECTION 5.1
Contributions by the General Partner and its Affiliates.
(a) The General Partner has contributed to the Partnership the cash or other property (if any) as set forth in the books
and records of the Partnership.
(b) Upon the issuance of any additional Limited Partner Interests by the
Partnership, the General Partner shall be required to make additional Capital Contributions equal to 2/98th of any amount contributed to the Partnership by the Limited Partners in exchange for such additional Limited Partner Interests. Except as set
forth in the immediately preceding sentence and
Article XII
, the General Partner shall not be obligated to make any additional Capital Contributions to the Partnership.
SECTION 5.2
Contributions by Limited Partners
.
Each Limited Partner has contributed to the Partnership the cash or other property (if any) as set forth in the books and records of the
Partnership.
SECTION 5.3
Interest and Withdrawal.
No interest shall be paid by the Partnership on Capital Contributions. No Partner or Assignee 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 dissolution 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 or Assignee shall have priority over any other Partner or Assignee either as to the return of Capital Contributions or as to profits, losses or distributions. Any such return shall be a
compromise to which all Partners and Assignees agree within the meaning of Section 17-502(b) of the Delaware Act.
SECTION 5.4
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 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 in its sole discretion) owning a Partnership Interest a
separate Capital Account with respect to such Partnership Interest in accordance with
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the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). The initial Capital Account attributable to a Preferred Unit shall be the Stated Liquidation Preference for such Preferred Unit,
irrespective of the amount paid by such holder for such Preferred Unit. Capital Accounts shall be increased by (i) the amount of all Capital Contributions made to the Partnership with respect to such Partnership Interest (other than a Preferred
Unit) pursuant to this Agreement and (ii) all items of Partnership income and gain (including, without limitation, income and gain exempt from tax) computed in accordance with
Section 5.4(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 with respect to such Partnership Interest pursuant to this
Agreement;
provided
that the Capital Account of a holder of Series A Preferred Units shall not be reduced by the amount of Series A Distributions it receives and the Capital Account of a holder of Series B Preferred Units shall not be reduced
by the amount of Series B Distributions it receives and (y) all items of Partnership deduction and loss computed in accordance with
Section 5.4(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 which 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 federal income tax purposes (including, without limitation, any method of depreciation, cost recovery or amortization used for that purpose),
provided
, that:
(i) Solely for purposes of this
Section
5.4
, the Partnership shall be treated
as owning directly its proportionate share (as determined by the General Partner based upon the provisions of the Operating Partnership Agreement) of all property owned by the Operating Partnership or any other Subsidiary that is classified as a
partnership for federal income tax purposes.
(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) Except as otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m), the computation
of all items of income, gain, loss and deduction shall be made without regard to any election under Section 754 of the Code which may be made by the Partnership and, 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 federal income tax purposes. To the extent an adjustment to the adjusted tax basis of any Partnership asset
pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to 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.
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(iv) 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 Partnership’s Carrying Value with respect to such property as of such date.
(v) In accordance with the requirements of Section 704(b) of the Code, any deductions for depreciation,
cost recovery or amortization attributable to any Contributed Property shall be determined as if the adjusted basis of such property on the date it was acquired by the Partnership were equal to the Agreed Value of such property. Upon an adjustment
pursuant to
Section 5.4(d)
to the Carrying Value of any Partnership property subject to depreciation, cost recovery or amortization, any further deductions for such depreciation, cost recovery or amortization attributable to such
property shall be determined (A) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment and (B) using a rate of depreciation, cost recovery or amortization derived
from the same method and useful life (or, if applicable, the remaining useful life) as is applied for federal income tax purposes;
provided
,
however
, that, if the asset has a zero adjusted basis for federal income tax purposes,
depreciation, cost recovery or amortization deductions shall be determined using any reasonable method that the General Partner may adopt.
(vi) If the Partnership’s adjusted basis in a depreciable or cost recovery property is reduced for
federal income tax purposes pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount of such reduction shall, solely for purposes hereof, be deemed to be an additional depreciation or cost recovery deduction in the year such property is
placed in service and shall be allocated among the Partners pursuant to
Section
6.1
. Any restoration of such basis pursuant to Section 48(q)(2) of the Code shall, to the extent possible, be allocated in the same manner to
the Partners to whom such deemed deduction was allocated.
(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.
(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance of
additional Partnership Interests for cash or Contributed Property, the issuance of Partnership Interests as consideration for the provision of services or the conversion of the General Partner’s Combined Interest to Common Units pursuant to
Section 11.3(b)
or the issuance of a Noncompensatory Option (including the conversion of a Series A Preferred Unit in accordance with
Section
16.11
and including the conversion of a Series B Preferred Unit in
accordance with
Section
17.11
), the Capital Accounts of all Partners and the Carrying Value of each Partnership property immediately prior to such issuance shall be adjusted upward or downward to reflect any Unrealized Gain
or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property immediately prior to such issuance for an amount equal to its fair market value
and had been allocated to the Partners at such time pursuant to
Section 6.1(c)
in the same manner as any item of gain or loss actually recognized following an event giving rise to the dissolution of the Partnership would have been allocated;
provided, however
, that in
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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, however
, 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, 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. If, upon
the occurrence of a Revaluation Event described in this
Section 5.4(d)
, a Noncompensatory Option of the Partnership is outstanding, the Partnership shall adjust the Carrying Value of each Partnership property in accordance with Treasury
Regulation Sections
1.704-1(b)(2)(iv)(f)(1)
and
1.704-1(b)(2)(iv)(h)(2).
In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair
market value of all Partnership assets (including, without limitation, cash or cash equivalents) immediately prior to the issuance of additional 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 if required pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(s)(1))
shall be determined by the General Partner using such reasonable method of valuation as it may adopt;
provided, however,
that the General Partner, in arriving at such valuation,
must take fully into account the fair market value of the Partnership Interests of all Partners at such time. The General Partner shall allocate such aggregate value among the assets of the Partnership (in such manner as it determines in its
discretion to be reasonable) to arrive at a fair market value for individual properties.
(ii) In
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed distribution to a Partner of any Partnership property (other than a distribution of cash that is not in redemption or retirement of a
Partnership Interest), the Capital Accounts of all Partners and the Carrying Value of all Partnership property shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if
such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property immediately prior to such distribution for an amount equal to its fair market value, and had been allocated to the Partners, at such time, pursuant
to
Section 6.1(c)
in the same manner as any item of gain or loss actually recognized following an event giving rise to the dissolution of the Partnership would have been allocated. In determining such Unrealized Gain or Unrealized Loss
the aggregate cash amount and fair market value of all Partnership assets (including, without limitation, cash or cash equivalents) immediately prior to a distribution shall (A) in the case of an actual distribution which is not made pursuant
to
Section
12.4
or in the case of a deemed distribution, be determined and allocated in the same manner as that provided in
Section 5.4(d)(i)
or (B) in the case of a liquidating distribution pursuant to
Section
12.4
, be determined and allocated by the Liquidator using such reasonable method of valuation as it may adopt.
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SECTION 5.5
Issuances of Additional Partnership Securities.
(a) Subject to
Section
5.6
and subject to any approvals required by Series A Holders pursuant
to
Section 16.4(b)
and
Section 16.4(c)
and any approvals required by Series B Holders pursuant to
Section 17.4(b)
and
Section 17.4(c)
, the Partnership may issue additional Partnership Securities and options, rights,
warrants and appreciation rights relating to the Partnership Securities 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 shall be established by the General
Partner in its sole discretion, all without the approval of any Limited Partners.
(b) Each additional Partnership
Security authorized to be issued by the Partnership pursuant to
Section 5.5(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 Securities), as shall be fixed by the General Partner in the exercise of its sole discretion, including (i) the right to share Partnership profits and losses or items thereof; (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 redeem the Partnership Security; (v) whether
such Partnership Security 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 Security will be issued, evidenced
by certificates and assigned or transferred; and (vii) the right, if any, of each such Partnership Security to vote on Partnership matters, including matters relating to the relative rights, preferences and privileges of such Partnership
Security.
(c) The General Partner is hereby authorized and directed to take all actions that it deems necessary or
appropriate in connection with (i) each issuance of Partnership Securities and options, rights, warrants and appreciation rights relating to Partnership Securities pursuant to this
Section
5.5
, (ii) the conversion of
the General Partner Interest, Incentive Distribution Rights and Preferred Units into Units pursuant to the terms of this Agreement, (iii) the admission of Additional Limited Partners and (iv) all additional issuances of Partnership
Securities. The General Partner is further authorized and directed to specify the relative rights, powers and duties of the holders of the Units or other Partnership Securities 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 it deems to be necessary or advisable in connection with any future issuance of Partnership Securities or in connection with the conversion of the General Partner Interest,
Incentive Distribution Rights and Preferred Units 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 Securities are listed for trading.
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SECTION 5.6
No Fractional Units
. No fractional Units shall be issued by the
Partnership.
SECTION 5.7
Limited Preemptive Right.
Except as provided in this
Section
5.7
and in
Section
5.1
, no Person shall have any
preemptive, preferential or other similar right with respect to the issuance of any Partnership Security, 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 Securities from the Partnership whenever, and on the same terms that, the Partnership issues Partnership Securities 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 Securities.
SECTION 5.8
Splits and Combinations.
(a) Subject to
Sections 5.8(d)
,
6.6
and
6.9
(dealing with adjustments of distribution levels), the
Partnership may make a Pro Rata distribution of Partnership Securities (other than Preferred Units) to all Record Holders or may effect a subdivision or combination of Partnership Securities so long as, after any such event, each Partner shall have
the same Percentage Interest in the Partnership as before such event, and any amounts calculated on a per unit basis (including those based on the Stated Liquidation Preference) or stated as a number of Partnership Securities (including the number
of additional Parity Units that may be issued pursuant to
Section
5.5
without a Limited Partner vote) are proportionately adjusted retroactive to the beginning of the Partnership.
(b) Whenever such a distribution, subdivision or combination of Partnership Securities 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. The General Partner also may cause a firm of independent public accountants selected by it to calculate the number of Partnership Securities to be held by each Record Holder after giving effect to such distribution, subdivision
or combination. The General Partner shall be entitled to rely on any certificate provided by such firm as conclusive evidence of the accuracy of such calculation.
(c) Promptly following any such distribution, subdivision or combination, the Partnership may issue Certificates to the
Record Holders of Partnership Securities as of the applicable Record Date representing the new number of Partnership Securities held by such Record Holders, or the General Partner may adopt such other procedures as it may deem appropriate to reflect
such changes. If any such combination results in a smaller total number of Partnership Securities 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
Partnership Securities upon any distribution, subdivision, combination, or conversion of any such Partnership Security. If a
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distribution, subdivision, combination or conversion of a Partnership Security would result in the issuance of fractional Partnership Securities but for the provisions of this
Section
5.8(d)
, each fractional Partnership Security shall be rounded to the nearest whole Partnership Security (and a 0.5 Partnership Security shall be rounded to the next higher Partnership Security).
SECTION 5.9
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
,
Article XVI
or
Article XVII
shall be fully paid and
non-assessable
Limited Partner Interests in the Partnership, except as such
non-assessability
may be affected by Sections
17-303(a),
17-607 and
17-804
of the Delaware Act.
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 5.4(b)
) shall be allocated among the Partners in each taxable year (or portion thereof) as provided herein below. For purposes of making allocations under this
Section
6.1
, a Person shall be considered as the holder solely of the class of Partnership Interests to which such allocation relates.
(a)
Net Income
. After giving effect to the special allocations set forth in
Section 6.1(d)
, Net Income
for each taxable year and all items of income, gain, loss and deduction taken into account in computing Net Income for such taxable year shall be allocated as follows:
(i) First, 100% to the General Partner in an amount equal to the aggregate Net Losses allocated to the
General Partner pursuant to
Section 6.1(b)(iv)
for all previous taxable years until the aggregate Net Income allocated to the General Partner pursuant to this
Section 6.1(a)(i)
for the current taxable year and all previous taxable
years is equal to the aggregate Net Losses allocated to the General Partner pursuant to
Section 6.1(b)(iv)
for all previous taxable years;
(ii) Second, to all Preferred Holders, in proportion to, and to the extent of the Net Loss allocated to
such Preferred Holders pursuant to
Section 6.1(b)(iii)
for all previous taxable periods, until the aggregate amount of Net Income allocated to such Preferred Holders pursuant to this
Section 6.1(a)(ii)
for the current and all previous
taxable periods is equal to the aggregate amount of Net Loss allocated to such Preferred Holders pursuant to
Section 6.1(b)(iii)
for all previous taxable periods;
provided
that in no event shall Net Income be allocated to any such
Preferred Holder to cause its Capital Account in respect of a Preferred Unit to exceed the Stated Liquidation Preference for such Preferred Unit;
(iii) Third, 2% to the General Partner in an amount equal to the aggregate Net Losses allocated to the
General Partner pursuant to
Section 6.1(b)(ii)
for all previous taxable years and 98% to the Unitholders, until the aggregate Net Income
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allocated to such Partners pursuant to this
Section 6.1(a)(iii)
for the current taxable year and all previous taxable years is equal to the aggregate Net Losses allocated to such Partners
pursuant to
Section 6.1(b)(ii)
for all previous taxable years; and
(iv) Fourth, the balance,
if any, 2% to the General Partner and 98% to the Unitholders in accordance with their respective Percentage Interests.
(b)
Net Losses
. After giving effect to the special allocations set forth in
Section 6.1(d)
, Net Losses
for each taxable period and all items of income, gain, loss and deduction taken into account in computing Net Losses for such taxable period shall be allocated as follows:
(i) First, 2% to the General Partner and 98% to the Unitholders, Pro Rata, until the aggregate Net
Losses allocated pursuant to this
Section 6.1(b)(i)
for the current taxable year and all previous taxable years is equal to the aggregate Net Income allocated to such Partners pursuant to
Section 6.1(a)(iv)
for all previous taxable
years,
provided
that the Net Losses 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 year (or increase any existing deficit balance in its Adjusted Capital Account);
(ii) Second, 2% to the General Partner and 98% to the Unitholders, Pro Rata;
provided
, that Net
Losses shall not be allocated pursuant to this
Section 6.1(b)(ii)
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 year (or increase any
existing deficit balance in its Adjusted Capital Account);
(iii) Third, to all Preferred Holders,
in proportion to their respective positive Adjusted Capital Account balances, until the Adjusted Capital Account in respect of each Preferred Unit then Outstanding has been reduced to zero; and
(iv) Fourth, the balance, if any, 100% to the General Partner.
(c)
Net Termination Gains and Losses
. After giving effect to the special allocations set forth in
Section
6.1(d)
, all items of income, gain, loss and deduction taken into account in computing Net Termination Gain or Net Termination Loss for such taxable period shall be allocated in the same manner as such Net Termination Gain or Net Termination Loss
is allocated hereunder. 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 Available Cash provided under
Sections 6.4
and
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) If a Net Termination Gain is recognized (or deemed
recognized pursuant to
Section 5.4(d)
), such Net Termination Gain shall be allocated among the General Partner and the Limited Partners in the following manner (and the Capital Accounts of the Partners shall be increased by the amount so
allocated in each of the
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following subclauses, in the order listed, before an allocation is made pursuant to the next succeeding subclause):
(A) First, to each Partner having a deficit balance in its Capital Account, in the proportion that such
deficit balance bears to the total deficit balances in the Capital Accounts of all Partners, until each such Partner has been allocated Net Termination Gain equal to any such deficit balance in its Capital Account;
(B) Second, 98% to all Unitholders holding Common Units, Pro Rata, and 2% to the General Partner until
the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Capital plus (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)
with respect to such Common Unit for such Quarter (the amount determined pursuant to this clause (2) is hereinafter defined as the “
Unpaid MQD
”);
(C) [reserved];
(D) Third, 90% to all Unitholders, Pro Rata, 8% to the holders of the Incentive Distribution Rights, Pro
Rata, and 2% to the General Partner until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Capital, plus (2) the Unpaid MQD, plus (3) the excess of (aa) the First Target
Distribution less the Minimum Quarterly Distribution for each Quarter of the Partnership’s existence over (bb) the cumulative per Unit amount of any distributions of Operating Surplus that was distributed pursuant to
Section 6.4(a)(ii)
(the sum of (1) plus (2) plus (3) is hereinafter defined as the “
First Liquidation Target Amount
”); and
(E) Finally, any remaining amount 75% to all Unitholders, Pro Rata, 23% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner.
(ii) If a Net Termination Loss is
recognized (or deemed recognized pursuant to
Section 5.4(d)
), such Net Termination Loss shall be allocated among the Partners in the following manner:
(A) [reserved];
(B) First, 98% to all Unitholders holding Common Units, Pro Rata, and 2% to the General Partner until
the Adjusted Capital Account in respect of each Common Unit then Outstanding has been reduced to zero;
(C) Second, to all Preferred Holders, in proportion to their Adjusted Capital Account balances, until
the Adjusted Capital Account in respect of each Preferred Unit then Outstanding has been reduced to zero; and
(D) Third, the balance, if any, 100% to the General Partner.
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(d)
Special Allocations
. Notwithstanding any other provision of
this
Section
6.1
, the following special allocations shall be made for such taxable period:
(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
Sections 6.1(d)(vi)
and
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
Sections
6.1(d)(vi)
and
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
Section
12.4
) to any Unitholder with respect to its Units for a taxable year is greater (on a per Unit basis) than the amount of cash or the Net Agreed Value of property distributed to the other
Unitholders with respect to their Units (on a per Unit basis), then (1) each Unitholder receiving such greater cash or property distribution shall be allocated gross income in an amount equal to the product of (aa) the amount by which the
distribution (on a per Unit basis) to such Unitholder exceeds the distribution (on a per Unit basis) to the Unitholders receiving the smallest distribution and (bb) the number of Units owned by the Unitholder receiving the greater distribution; and
(2) the General Partner shall be allocated gross income in an aggregate amount equal to 2/98th of the sum of the amounts allocated in clause (1) above.
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(B) After the application of
Section
6.1(d)(iii)(A)
, all or any portion of the remaining items of Partnership gross income or gain for the taxable period, if any, shall be allocated 100% 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 year and all previous taxable years 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 year.
(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 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 unless such deficit balance is otherwise eliminated pursuant to
Section 6.1(d)(i)
or
(ii)
.
(v) Gross Income Allocations. In the event any Partner has a deficit balance in its Capital Account at
the end of any Partnership taxable period in excess of the sum of (A) the amount such Partner is required to restore pursuant to the provisions of this Agreement and (B) the amount such Partner is deemed obligated to restore pursuant to
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 as adjusted after all other allocations provided for in this
Section
6.1
have been tentatively made as if 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 in accordance with their respective Percentage Interests. If the General Partner determines in its good faith discretion that the Partnership’s Nonrecourse Deductions must 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, upon notice to the other Partners, 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, such Partner Nonrecourse Deductions attributable thereto shall be allocated between or among such Partners in accordance with the ratios in which
they share such Economic Risk of Loss.
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(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 in accordance with their respective Percentage Interests.
(ix) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Section 734(b) or 743(c) of the Code 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 to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Partners in a manner consistent
with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(x) 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 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
. Notwithstanding the preceding sentence, Required Allocations relating to (1) Nonrecourse Deductions shall not be taken into account except to the extent that
there has been a decrease in Partnership Minimum Gain and (2) Partner Nonrecourse Deductions shall not be taken into account except to the extent that there has been a decrease in Partner Nonrecourse Debt Minimum Gain. Allocations pursuant to
this
Section 6.1(d)(x)(A)
shall only be made with respect to Required Allocations to the extent the General Partner reasonably determines that such allocations will otherwise be inconsistent with the economic agreement among the Partners.
Further, allocations pursuant to this
Section 6.1(d)(x)(A)
shall be deferred with respect to allocations pursuant to clauses (1) and (2) hereof to the extent the General Partner reasonably determines that such allocations are likely to
be offset by subsequent Required Allocations.
(B) The General Partner shall have reasonable
discretion, with respect to each taxable period, to (1) apply the provisions of
Section 6.1(d)(x)(A)
in whatever order 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)(x)(A)
among the Partners in a manner that is likely to minimize such economic distortions.
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(xi)
Corrective and Other Allocations.
In the event
of any allocation of Additional Book Basis Derivative Items or any Book-Down Event or any recognition of a Net Termination Loss, the following rules shall apply:
(A) Except as provided in
Section 6.1(d)(xi)(B)
, in the case of any allocation of Additional Book
Basis Derivative Items (other than an allocation of Unrealized Gain or Unrealized Loss under
Section 5.4(d)
hereof) with respect to any Partnership property, the General Partner shall allocate such Additional Book Basis Derivative Items
(1) to (aa) the holders of Incentive Distribution Rights and (bb) the General Partner in the same manner that the Unrealized Gain or Unrealized Loss attributable to such property is allocated pursuant to
Section 5.4(d)(i)
or
Section
5.4(d)(ii)
and (2) to all Unitholders, Pro Rata, to the extent that the Unrealized Gain or Unrealized Loss attributable to such property is allocated to any Unitholders pursuant to
Section 5.4(d)(i)
or
Section 5.4(d)(ii)
.
(B) In the case of any allocation of Additional Book Basis Derivative Items (other than an allocation of
Unrealized Gain or Unrealized Loss under
Section 5.4(d)
hereof or an allocation of Net Termination Gain or Net Termination Loss pursuant to
Section 6.1(c)
hereof) as a result of a sale or other taxable disposition of any Partnership
asset that is an Adjusted Property (“
Disposed of Adjusted Property
”), the General Partner shall allocate (1) additional items of income and gain (aa) away from the holders of Incentive Distribution Rights and the General
Partner and (bb) to the Unitholders, or (2) additional items of deduction and loss (aa) away from the Unitholders and (bb) to the holders of Incentive Distribution Rights and the General Partner, to the extent that the Additional Book Basis
Derivative Items allocated to the Unitholders exceed their Share of Additional Book Basis Derivative Items with respect to such Disposed of Adjusted Property. For this purpose, the Unitholders shall be treated as being allocated Additional Book
Basis Derivative Items to the extent that such Additional Book Basis Derivative Items have reduced the amount of income that would otherwise have been allocated to the Partners under this Agreement (e.g., Additional Book Basis Derivative Items taken
into account in computing cost of goods sold would reduce the amount of book income otherwise available for allocation among the Partners). Any allocation made pursuant to this
Section 6.1(d)(xi)(B)
shall be made after all of the other Agreed
Allocations have been made as if this
Section 6.1(d)(xi)
were not in this Agreement and, to the extent necessary, shall require the reallocation of items that have been allocated pursuant to such other Agreed Allocations.
(C) In the case of any negative adjustments to the Capital Accounts of the Partners resulting from a
Book-Down Event or from the recognition of a Net Termination Loss, such negative adjustment (1) shall first be allocated, to the extent of the Aggregate Remaining Net Positive Adjustments, in such a manner, as reasonably determined by the
General Partner, that to the extent possible the
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aggregate Capital Accounts of the Partners will equal the amount which would have been the Capital Account balance of the Partners if no prior
Book-Up
Events had occurred, and (2) any negative adjustment in excess of the Aggregate Remaining Net Positive Adjustments shall be allocated pursuant to
Section 6.1(c)
hereof.
(D) In making the allocations required under this
Section 6.1(d)(xi)
, the General Partner, in its
sole discretion, may apply whatever conventions or other methodology it deems reasonable to satisfy the purpose of this
Section 6.1(d)(xi)
.
(xii) Preferred Unit Allocations
.
(A) Income of the Partnership attributable to the issuance by the Partnership of a Preferred Unit for an
amount in excess of the Stated Liquidation Preference for such Preferred Unit shall be allocated to the Partners (other than Preferred Holders) in accordance with their respective Percentage Interests.
(B) Net Termination Gain, if any, for the taxable period (or, to the extent necessary, items of income
and gain for the taxable period) shall be allocated to each Preferred Holder in proportion to, and to the extent of, an amount equal to the excess, if any, of (x) the Stated Liquidation Preference with respect to such holder’s Preferred
Units, over (y) such holder’s existing Capital Account balance in respect of its Preferred Units, until the Capital Account balance of each such holder in respect of its Preferred Units is equal to the Stated Liquidation Preference in
respect of such Preferred Units.
SECTION 6.2
Allocations for Tax Purposes.
(a) Except as otherwise provided herein, for 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 federal income tax purposes among the Partners as follows:
(i) (A) In the case of a Contributed Property, such items attributable thereto shall be allocated among
the Partners in the manner provided under Section 704(c) of the Code that takes into account the variation between the Agreed Value of such property and its adjusted basis at the time of contribution; and (B) any item of Residual Gain or
Residual Loss attributable to a Contributed Property shall be allocated among the Partners in the same manner as its correlative item of “
book
” gain or loss is allocated pursuant to
Section
6.1
.
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(ii) (A) In the case of an Adjusted Property, such items
shall (1) first, be allocated among the Partners in a manner consistent with the principles of Section 704(c) of the Code to take into account the Unrealized Gain or Unrealized Loss attributable to such property and the allocations thereof
pursuant to
Section 5.4(d)(i)
or
5.4(d)(ii)
, and (2) second, in the event such property was originally a Contributed Property, be allocated among the Partners in a manner consistent with
Section 6.2(b)(i)(A)
; and
(B) any item of Residual Gain or Residual Loss attributable to an Adjusted Property shall be allocated among the Partners in the same manner as its correlative item of “
book
” gain or loss is allocated pursuant to
Section
6.1
.
(iii) The General Partner shall apply the principles of
Treasury Regulation Section 1.704-3(d) to eliminate
Book-Tax
Disparities.
(c) 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 have sole discretion to (i) adopt such conventions as it deems appropriate in determining the amount of depreciation, amortization and cost recovery deductions;
(ii) make special allocations for federal income tax purposes of income (including, without limitation, gross income) or deductions; and (iii) 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 6.2(c)
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 Limited Partner Interests issued and Outstanding or the Partnership, and if such allocations are consistent with the principles of Section 704 of the Code.
(d) The General Partner in its discretion 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 Partnership’s common basis 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 reasonable depreciation and amortization conventions to preserve the uniformity of the intrinsic tax characteristics of any Limited Partner Interests that would not have a material adverse effect on the Limited Partners or the Record
Holders of any class or classes of Limited Partner Interests.
(e) 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.
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(f) All items of income, gain, loss, deduction and credit recognized by
the Partnership for 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 which may be made by the Partnership;
provided
,
however
, that such allocations, once made, shall be adjusted as necessary or appropriate to take into account those adjustments permitted or required by Sections 734 and 743 of the Code.
(g) Each item of Partnership income, gain, loss and deduction attributable to a transferred Partnership Interest, shall
for federal income tax purposes, be determined on an annual basis and prorated on a monthly basis and shall be allocated to the Partners as of the opening of the New York Stock Exchange on the first Business Day of each month;
provided
,
however
, that (i) such items for the period beginning on the Closing Date and ending on the last day of the month in which the Option Closing Date or the expiration of the Over-allotment Option occurs shall be allocated to the Partners
as of the opening of the New York Stock Exchange on the first 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 other than in the
ordinary course of business shall be allocated to the Partners as of the opening of the New York Stock Exchange on the first Business Day of the month in which such gain or loss is recognized for federal income tax purposes. The General Partner may
revise, alter or otherwise modify such methods of allocation as it determines necessary, to the extent permitted or required by Section 706 of the Code and the regulations or rulings promulgated thereunder.
(h) 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
acceptable to the General Partner in its sole discretion.
(i) 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
Requirement and Characterization of Distributions;
Distributions to Record Holders.
(a) Within 45 days following the end of each Quarter, an amount equal to 100%
of Available Cash with respect to such Quarter shall, subject to Section 17-607 of the Delaware Act, be distributed in accordance with this
Article VI
by the Partnership to the Partners as of the Record Date selected by the General
Partner in its reasonable discretion. All amounts of Available Cash distributed by the Partnership on any date from any source shall be deemed to be Operating Surplus until the sum of all amounts of Available Cash theretofore distributed by the
Partnership to the Partners pursuant to
Section
6.4
equals the amount of Operating Surplus as
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calculated with respect to the Quarter in respect of which such distribution of Available Cash is to be made through the close of the Quarter. Any remaining amounts of Available Cash distributed
by the Partnership on such date shall, except as otherwise provided in
Section
6.5
, be deemed to be “
Capital Surplus
.” All distributions required to be made under this Agreement shall be made subject to
Section 17-607 of the Delaware Act. This
Section 6.3(a)
(except for the second to the last sentence of this
Section 6.3(a)
) shall not apply to Preferred Units.
(b) Notwithstanding
Section 6.3(a)
, in the event of the dissolution and liquidation of the Partnership, all
receipts received during or after the Quarter in which the Liquidation Date occurs, other than from borrowings described in (a)(ii) of the definition of Available Cash, shall be applied and distributed solely in accordance with, and subject to the
terms and conditions of,
Section
12.4
.
(c) The General Partner shall have the discretion
to treat taxes paid by the Partnership on behalf of, or amounts withheld with respect to, all or less than all of the Partners, as a distribution of Available Cash to such Partners.
(d) Each distribution in respect of a Partnership Interest shall be paid by the Partnership, directly or through the
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 of Available Cash from Operating Surplus.
(a) Available Cash with respect to any Quarter that is deemed to be Operating Surplus pursuant to the provisions of
Section
6.3
or
6.5
, subject to
Section 17-607
of the Delaware Act, shall be distributed as follows, subject to
Section
16.3
in respect of Series
A Preferred Units described therein and
Section
17.3
in respect of Series B Preferred Units described therein and except as otherwise required by (i)
Section 5.5(b)
in respect of additional Partnership
Securities issued pursuant thereto or (ii)
Section 6.4(b)
in respect of Incentive Distribution Rights during the Acquisition Waiver Period:
(i) First, 98% to all Unitholders, Pro Rata, and 2% to the General Partner 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, 90% to all Unitholders, Pro Rata, 8% to the holders of Incentive Distribution Rights, Pro
Rata, and 2% to the General Partner until there has been distributed in respect of each such Unit then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter; and
(iii) Thereafter, 75% to all Unitholders, Pro Rata, 23% to the holders of Incentive Distribution Rights,
Pro Rata, and 2% to the General Partner;
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provided
,
however
, if the Minimum Quarterly Distribution and the First Target
Distribution have been reduced to zero pursuant to the second sentence of
Section 6.6(a)
, the distribution of Available Cash that is deemed to be Operating Surplus with respect to any Quarter will be made solely in accordance with
Section
6.4(a)(iii)
. No distributions shall be made with respect to Preferred Units pursuant to this
Section
6.4
and shall instead be made in accordance with
Sections 16.3
and
17.3
.
(b) Notwithstanding any other provision of this Agreement, distributions of Available Cash, if any, to the holder of
the Incentive Distribution Rights pursuant to
Section 6.4(a)
with respect to each Quarter within the Acquisition Waiver Period shall be reduced by the amount that would have been distributed to the holder of the Incentive Distribution Rights
in respect of the Waiver Period Units for such Quarter;
provided, however
, that the aggregate reduction in distributions to the holder of the Incentive Distribution Rights pursuant to this
Section 6.4(b)
shall not exceed
$22 million.
SECTION 6.5
Distributions of Available Cash from Capital Surplus.
Available Cash that is deemed to be Capital Surplus pursuant to the provisions of
Section 6.3(a)
shall, subject to
Section
16.3
and
Section
17.3
in respect of Preferred Units and subject to Section 17-607 of the Delaware Act, be distributed, unless the provisions of
Section
6.3
require otherwise, 98% to all Unitholders, Pro Rata, and 2% to the General Partner until a hypothetical holder of a Common Unit acquired on the Closing Date has received with respect to such Common Unit, during the period since the Closing Date
through such date, distributions of Available Cash that are deemed to be Capital Surplus in an aggregate amount equal to the Initial Unit Price. Thereafter, all Available Cash shall be distributed as if it were Operating Surplus and shall be
distributed in accordance with
Section
6.4
.
SECTION 6.6
Adjustment of Minimum Quarterly
Distribution and Target Distribution Levels.
(a) The Minimum Quarterly Distribution and First Target
Distribution 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 Securities in accordance with
Section
5.8
. In the event of a distribution of Available Cash that is deemed to be from Capital Surplus, the then applicable Minimum Quarterly Distribution and First Target Distribution shall be adjusted proportionately
downward to equal the product obtained by multiplying the otherwise applicable Minimum Quarterly Distribution and First Target Distribution, as the case may be, by a fraction of which the numerator is the Unrecovered Capital of the Common Units
immediately after giving effect to such distribution and of which the denominator is the Unrecovered Capital of the Common Units immediately prior to giving effect to such distribution.
(b) The Minimum Quarterly Distribution and First Target Distribution shall also be subject to adjustment pursuant to
Section
6.9
.
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SECTION 6.7
Reserved.
SECTION 6.8
Special Provisions Relating to the Holders of Incentive Distribution Rights.
Notwithstanding anything to the contrary set forth in this Agreement, the holders of the Incentive Distribution Rights (a) shall (i)
possess the rights and obligations provided in this Agreement with respect to a Limited Partner pursuant to
Articles III
and
VII
and (ii) have a Capital Account as a Partner pursuant to
Section
5.4
and
all other provisions related thereto and (b) shall not (i) be entitled to vote on any matters requiring the approval or vote of the holders of Outstanding Units, (ii) be entitled to any distributions other than as provided in
Sections
6.4(a)(ii)
,
6.4(a)(iii)
,
6.4(b)
and
12.4
or (iii) be allocated items of income, gain, loss or deduction other than as specified in this
Article VI
.
SECTION 6.9
Entity-Level Taxation.
If legislation is enacted or the interpretation of existing language is modified by the relevant governmental authority which causes the
Partnership or the Operating Partnership to be treated as an association taxable as a corporation or otherwise subjects the Partnership or the Operating Partnership to entity-level taxation for federal, state or local income tax purposes, the then
applicable Minimum Quarterly Distribution and First Target Distribution shall be adjusted to equal the product obtained by multiplying (a) the amount thereof by (b) one minus the sum of (i) the highest marginal federal corporate (or
other entity, as applicable) income tax rate of the Partnership or the Operating Partnership for the taxable year of the Partnership or the Operating Partnership in which such Quarter occurs (expressed as a percentage) plus (ii) the effective
overall state and local income tax rate (expressed as a percentage) applicable to the Partnership or the Operating Partnership for the calendar year next preceding the calendar year in which such Quarter occurs (after taking into account the benefit
of any deduction allowable for federal income tax purposes with respect to the payment of state and local income taxes), but only to the extent of the increase in such rates resulting from such legislation or interpretation. Such effective overall
state and local income tax rate shall be determined for the taxable year next preceding the first taxable year during which the Partnership or the Operating Partnership is taxable for federal income tax purposes as an association taxable as a
corporation or is otherwise subject to entity-level taxation by determining such rate as if the Partnership or the Operating Partnership had been subject to such state and local taxes during such preceding taxable year.
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, all management powers over the business and affairs of the Partnership shall be exclusively vested in the General Partner, and no Limited Partner or Assignee shall have any management power over the business and
affairs of the Partnership. In addition to the powers now or hereafter granted a general partner of a limited partnership under applicable law or which are granted to the General Partner under any other provision of this Agreement, the General
Partner, subject to
Section
7.3
, shall have full
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power and authority to do all things and on such terms as it, in its sole discretion, may deem 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 into Partnership Securities, and the incurring of any other obligations;
(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
7.3
);
(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; subject to
Section 7.6(a)
, the lending of funds to other Persons (including the
Operating Partnership); the repayment of obligations of the Partnership Group and the making of capital contributions to any member of the Partnership Group;
(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 same results in the terms of the transaction being less favorable to the Partnership than would otherwise be the case);
(vi) the distribution of Partnership cash;
(vii) the selection and dismissal of employees (including employees having titles such as
“
president
,” “
vice president
,” “
secretary
” and “
treasurer
”) and agents, outside attorneys, accountants, consultants and contractors and the determination of their compensation and
other terms of employment or hiring;
(viii) the maintenance of such insurance for the benefit of
the Partnership Group and the Partners as it deems necessary or appropriate;
(ix) the formation of,
or acquisition of an interest in, and the contribution of property and the making of loans to, any further limited or general partnerships, joint ventures, corporations or other relationships (including the acquisition of interests in, and the
contributions of property to, the Operating Partnership from time to time) subject to the restrictions set forth in
Section
2.4
;
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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 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 of 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 (subject to any prior approval that may be required under
Section
4.8
);
(xiii) unless restricted or prohibited by
Section
5.5
, the purchase, sale or
other acquisition or disposition of Partnership Securities, or the issuance of additional options, rights, warrants and appreciation rights relating to Partnership Securities; and
(xiv) the undertaking of any action in connection with the Partnership’s ownership or operation of
any Group Member, including exercising, on behalf and for the benefit of the Partnership, the Partnership’s rights as the sole stockholder of the Operating General Partner.
(b) Notwithstanding any other provision of this Agreement, the Operating Partnership Agreement, the Delaware Act or any
applicable law, rule or regulation, each of the Partners and the Assignees and each other Person who may acquire an interest in Partnership Securities hereby (i) approves, ratifies and confirms the execution, delivery and performance by the
parties thereto of the Operating Partnership 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; (ii) agrees that the General Partner (on its own or through any officer 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 Assignees or the other Persons who may
acquire an interest in Partnership Securities; 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 Limited Partners or any other Persons under this Agreement (or any other agreements) or of any duty stated or implied by law or equity.
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SECTION 7.2
Certificate of Limited Partnership.
NuStar GP caused the initial Certificate of Limited Partnership of the Partnership and the General Partner has caused the Certificate of
Amendment to the Certificate of Limited Partnership and the Amended and Restated Certificate of Limited Partnership of the Partnership and each amendment thereto to be filed with the Secretary of State of the State of Delaware in accordance with the
Delaware Act and the General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents as may be determined by the General Partner in its sole discretion to be reasonable and 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 that such action is determined by the General Partner in its sole discretion to be reasonable and 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 or restatement thereof to any Limited Partner.
SECTION 7.3
Restrictions on
General Partner
’
s Authority.
(a) The General Partner may not, without written approval of
the specific act by holders of all of the Outstanding Limited Partner Interests or by other written instrument executed and delivered by holders of all of the Outstanding Limited Partner Interests subsequent to the date of this Agreement, take any
action in contravention of this Agreement, including, except as otherwise provided in this Agreement, (i) committing any act that would make it impossible to carry on the ordinary business of the Partnership; (ii) possessing Partnership
property, or assigning any rights in specific Partnership property, for other than a Partnership purpose; (iii) admitting a Person as a Partner; (iv) amending this Agreement in any manner; or (v) transferring its interest as general
partner of the Partnership.
(b) Except as provided in
Articles XII
and
XIV
, the General Partner may
not sell, exchange or otherwise dispose of all or substantially all of the Partnership’s assets in a single transaction or a series of related transactions (including by way of merger, consolidation or other combination) or approve on behalf of
the Partnership the sale, exchange or other disposition of all or substantially all of the assets of the Operating Partnership, taken as a whole, without the approval of holders 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 or the Operating Partnership and shall not apply to
any forced sale of any or all of the assets of the Partnership or the Operating Partnership pursuant to the foreclosure of, or other realization upon, any such encumbrance. Without the approval of holders of a Unit Majority, the General Partner
shall not, on behalf of the Partnership, (i) consent to any amendment to the Operating Partnership Agreement or, except as expressly permitted by
Section 7.9(d)
, take any action permitted to be taken by a partner of the Operating
Partnership, in either case, that would have a material adverse effect on the
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Partnership as a partner of the Operating Partnership or the holders of Common Units (other than the General Partner and its Affiliates) or (ii) except as permitted under
Sections
4.6
,
11.1
and
11.2
, elect or cause the Partnership to elect a successor general partner.
SECTION 7.4
Reimbursement of the General Partner.
(a) Except as provided in this
Section
7.4
and elsewhere in this Agreement or in the Operating
Partnership Agreement, the General Partner shall not be compensated for its services as general partner of any Group Member.
(b) Subject to the provisions of the Services Agreement, the General Partner shall be reimbursed on a monthly basis, or
such other reasonable basis as the General Partner may determine in its sole discretion, for (i) all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership (including salary, bonus, incentive compensation and
other amounts paid to any Person including Affiliates of the General Partner to perform services for the Partnership or for the General Partner in the discharge of its duties to the Partnership), and (ii) all other necessary or appropriate
expenses allocable to the Partnership or otherwise reasonably incurred by the General Partner in connection with operating the Partnership’s business (including expenses allocated to the General Partner by its Affiliates). The General Partner
shall determine the expenses that are allocable to the Partnership in any reasonable manner determined by the General Partner in its sole discretion. Reimbursements pursuant to this
Section
7.4
shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section
7.7
.
(c) Subject to
Section
5.5
, the General Partner, in its sole discretion and 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 employee benefit plans, employee programs and employee practices (including plans, programs and practices
involving the issuance of Partnership Securities or options to purchase Partnership Securities), or cause the Partnership to issue Partnership Securities in connection with, or pursuant to, any employee benefit plan, employee program or employee
practice maintained or sponsored by the General Partner or any of its Affiliates, in each case for the benefit of employees of the General Partner, any Group Member or any Affiliate, or any of them, 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 Securities that the General Partner or such Affiliate is obligated to provide to any
employees pursuant to any such employee benefit plans, employee programs or employee 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
Affiliate of Partnership Securities purchased by the General Partner or such Affiliate from the Partnership to fulfill options or awards under such plans, programs and practices) shall be reimbursed in accordance with
Section 7.4(b)
. Any and
all obligations of the General Partner under any employee benefit plans, employee programs or employee practices adopted by the General Partner as permitted by this
Section 7.4(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
11.2
or the transferee of or successor to all of the General Partner’s General Partner Interest pursuant to
Section
4.6
.
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SECTION 7.5
Outside Activities.
(a) After the Closing Date, the General Partner, for so long as it is the General Partner of the Partnership
(i) agrees that its sole business will be to act as the general partner of the Partnership and any other partnership or limited liability company of which the Partnership is, directly or indirectly, a partner and to undertake activities that
are ancillary or related thereto (including being a limited partner in the Partnership) and (ii) shall not engage in any business or activity or incur any debts or liabilities except in connection with or incidental to (A) its performance
as general partner of one or more Group Members or as described in or contemplated by the Registration Statement or (B) the acquiring, owning or disposing of debt or equity securities in any Group Member.
(b) Except as specifically restricted by
Section 7.5(a)
, each Indemnitee (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, and none of the same shall constitute a breach of
this Agreement or any duty express or implied by law to any Group Member or any Partner or Assignee. Neither any Group Member, any Limited Partner nor any other Person shall have any rights by virtue of this Agreement, the Operating Partnership
Agreement or the partnership relationship established hereby or thereby in any business ventures of any Indemnitee.
(c) Subject to the terms of
Section 7.5(a)
and
Section 7.5(b)
, but otherwise notwithstanding anything to
the contrary in this Agreement, (i) the engaging in competitive activities by any Indemnitees (other than the General Partner) in accordance with the provisions of this
Section
7.5
is hereby approved by the Partnership
and all Partners, (ii) it shall be deemed not to be a breach of the General Partner’s fiduciary duty or any other obligation of any type whatsoever of the General Partner for the Indemnitees (other than the General Partner) to engage in
such business interests and activities in preference to or to the exclusion of the Partnership and (iii) the General Partner and the Indemnitees shall have no obligation to present business opportunities to the Partnership.
(d) The General Partner and any of its Affiliates may acquire Units or other Partnership Securities in addition to
those acquired on the Closing Date and, except as otherwise provided in this Agreement, shall be entitled to exercise all rights of the General Partner or Limited Partner, as applicable, relating to such Units or Partnership Securities.
(e) The term “
Affiliates
” when used in
Section 7.5(d)
with respect to the General Partner shall
not include any Group Member or any Subsidiary of any Group Member.
(f) Anything in this Agreement to the contrary
notwithstanding, to the extent that provisions of
Sections 7.7
,
7.8
,
7.9
,
7.10
or other Sections of this Agreement purport or are interpreted to have the effect of restricting the fiduciary duties that might otherwise, as
a result of Delaware or other applicable law, be owed by the General Partner to the Partnership and its Limited Partners, or to constitute a waiver or consent by the Limited Partners to any such
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restriction, such provisions shall be inapplicable and have no effect in determining whether the General Partner has complied with its fiduciary duties in connection with determinations made by
it under this
Section
7.5
.
SECTION 7.6
Loans from the General Partner; Loans or Contributions
from the Partnership; Contracts with Affiliates; Certain Restrictions on the General Partner.
(a) The General
Partner or its Affiliates may lend to any Group Member, and any Group Member may borrow from the General Partner or any of its Affiliates, funds needed or desired by the Group Member for such periods of time and in such amounts as the General
Partner may determine;
provided
,
however
, that in any such case the lending party may not charge the borrowing party interest at a rate greater than the rate that would be charged the borrowing party or impose terms less favorable to
the borrowing party than would be charged or imposed on the borrowing party by unrelated lenders on comparable loans made on an
arm’s-length
basis (without reference to the lending party’s financial
abilities or guarantees). The borrowing party shall reimburse the lending party for any costs (other than any additional interest costs) incurred by the lending party in connection with the borrowing of such funds. For purposes of this
Section
7.6(a)
and
Section 7.6(b)
, the term “
Group Member
” shall include any Affiliate of a Group Member that is controlled by the Group Member. No Group Member may lend funds to the General Partner or any of its Affiliates
(other than another Group Member).
(b) The Partnership may lend or contribute to any Group Member, and any Group
Member may borrow from the Partnership, funds on terms and conditions established in the sole discretion of the General Partner;
provided
,
however
, that the Partnership may not charge the Group Member interest at a rate less than the
rate that would be charged to the Group Member (without reference to the General Partner’s financial abilities or guarantees) by unrelated lenders on comparable loans. The foregoing authority shall be exercised by the General Partner in its
sole discretion and shall not create any right or benefit in favor of any Group Member or any other Person.
(c) The General Partner may itself, or may enter into an agreement with any of its Affiliates to, render services to a
Group Member or to the General Partner in the discharge of its duties as general partner of the Partnership. Any services rendered to a Group Member by the General Partner or any of its Affiliates shall be on terms that are fair and reasonable to
the Partnership;
provided
,
however
, that the requirements of this
Section 7.6(c)
shall be deemed satisfied as to (i) any transaction approved by Special Approval, (ii) any transaction, the terms of which are no less
favorable to the Partnership Group than those generally being provided to or available from unrelated third parties or (iii) any transaction that, taking into account the totality of the relationships between the parties involved (including
other transactions that may be particularly favorable or advantageous to the Partnership Group), is equitable to the Partnership Group. The provisions of
Section
7.4
shall apply to the rendering of services described in
this
Section 7.6(c)
.
(d) The Partnership Group may transfer assets to joint ventures, other
partnerships, corporations, limited liability companies or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions as are consistent with this Agreement and applicable law.
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(e) Neither the General Partner nor any of its Affiliates shall sell,
transfer or convey any property to, or purchase any property from, the Partnership, directly or indirectly, except pursuant to transactions that are fair and reasonable to the Partnership;
provided
,
however
, that the requirements of
this
Section 7.6(e)
shall be deemed to be satisfied as to (i) the transactions effected pursuant to
Sections 5.1
and
5.2
, the Contribution Agreement and any other transactions described in or contemplated by the
Registration Statement, (ii) any transaction approved by Special Approval, (iii) any transaction, the terms of which are no less favorable to the Partnership than those generally being provided to or available from unrelated third parties,
or (iv) any transaction that, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership), is equitable to the
Partnership. With respect to any contribution of assets to the Partnership in exchange for Partnership Securities, the Conflicts Committee, in determining whether the appropriate number of Partnership Securities are being issued, may take into
account, among other things, the fair market value of the assets, the liquidated and contingent liabilities assumed, the tax basis in the assets, the extent to which
tax-only
allocations to the transferor will
protect the existing partners of the Partnership against a low tax basis, and such other factors as the Conflicts Committee deems relevant under the circumstances.
(f) The General Partner and its Affiliates will have no obligation to 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, nor shall there be any obligation on the part of the General Partner or its Affiliates to
enter into such contracts.
(g) Without limitation of
Sections 7.6(a)
through
7.6(f)
, and
notwithstanding anything to the contrary in this Agreement, the existence of the conflicts of interest described in the Registration Statement are hereby approved by all Partners.
SECTION 7.7
Indemnification.
(a) To the fullest extent permitted by law but subject to the limitations expressly provided in this Agreement, 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 claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, 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;
provided
, that in each case the Indemnitee acted in good faith and in a manner that such Indemnitee reasonably believed to be in, or (in the case of a Person other than the General Partner)
not opposed to, the best interests of the Partnership and, with respect to any criminal proceeding, had no reasonable cause to believe its conduct was unlawful;
provided
,
further
, no indemnification pursuant to this
Section
7.7
shall be available to the General Partner with respect to its obligations incurred pursuant to the Underwriting Agreement or the Contribution Agreement (other than obligations incurred by the General Partner on
behalf of the Partnership or the Operating Partnership). The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the
Indemnitee acted in a manner contrary to that specified above. Any
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indemnification pursuant to this
Section
7.7
shall be 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 defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in 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 or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee
and as to actions in any other capacity (including any capacity under the Underwriting Agreement), 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 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 it with respect to any employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, 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.
(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.
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(h) The provisions of this
Section
7.7
are for
the benefit of the Indemnitees, their heirs, successors, assigns 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, no Indemnitee shall be liable for monetary
damages to the Partnership, the Limited Partners, the Assignees or any other Persons who have acquired interests in the Partnership Securities, for losses sustained or liabilities incurred as a result of any act or omission if such Indemnitee acted
in good faith.
(b) Subject to its obligations and duties as General Partner set forth in
Section 7.1(a)
,
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 in good 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 or to the Partners, the General Partner and any other Indemnitee acting in connection with the
Partnership’s business or affairs shall not be liable to the Partnership or to any Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or otherwise modify
the duties and liabilities of an Indemnitee otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of such Indemnitee.
(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 to the Partnership, the Limited Partners, the General Partner, and the Partnership’s and General Partner’s and the Operating General Partner’s
directors, officers and employees 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.
(a) Unless otherwise expressly provided in this Agreement or the Operating Partnership Agreement, 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, the Operating Partnership, any Partner or any Assignee, on the other, any resolution or course of action by the
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General Partner or its Affiliates in respect of such conflict of interest shall be permitted and deemed approved by all Partners, and shall not constitute a breach of this Agreement, of the
Operating Partnership Agreement, of any agreement contemplated herein or therein, or of any duty stated or implied by law or equity, if the resolution or course of action is, or by operation of this Agreement is deemed to be, fair and reasonable to
the Partnership. The General Partner shall be authorized but not required in connection with its resolution of such conflict of interest to seek Special Approval of such resolution. Any conflict of interest and any resolution of such conflict of
interest shall be conclusively deemed fair and reasonable to the Partnership if such conflict of interest or resolution is (i) approved by Special Approval, (ii) on terms no less favorable to the Partnership than those generally being
provided to or available from unrelated third parties or (iii) fair to the Partnership, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or
advantageous to the Partnership). The General Partner may also adopt a resolution or course of action that has not received Special Approval. The General Partner (including the Conflicts Committee in connection with Special Approval) shall be
authorized in connection with its determination of what is “
fair and reasonable
” to the Partnership and in connection with its resolution of any conflict of interest to consider (A) the relative interests of any party to such
conflict, agreement, transaction or situation and the benefits and burdens relating to such interest; (B) any customary or accepted industry practices and any customary or historical dealings with a particular Person; (C) any applicable
generally accepted accounting practices or principles; and (D) such additional factors as the General Partner (including the Conflicts Committee) determines in its sole discretion to be relevant, reasonable or appropriate under the
circumstances. Nothing contained in this Agreement, however, is intended to nor shall it be construed to require the General Partner (including the Conflicts Committee) to consider the interests of any Person other than the Partnership. In the
absence of bad faith by the General Partner, the resolution, action or terms so made, taken or provided by the General Partner with respect to such matter shall not constitute a breach of this Agreement or any other agreement contemplated herein or
a breach of any standard of care or duty imposed herein or therein or, to the extent permitted by law, under the Delaware Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated hereby provides that the General Partner or any of its
Affiliates is permitted or required to make a decision (i) in its “
sole discretion
” or “
discretion
,” that it deems “
necessary or appropriate
” or “
necessary or advisable
” or
under a grant of similar authority or latitude, except as otherwise provided herein, the General Partner or such Affiliate shall be entitled to consider only such interests and factors as it desires and shall have no duty or obligation to give any
consideration to any interest of, or factors affecting, the Partnership, the Operating Partnership, any Limited Partner or any Assignee, (ii) it may make such decision in its sole discretion (regardless of whether there is a reference to
“
sole discretion
” or “
discretion
”) unless another express standard is provided for, or (iii) in “
good faith
” or under another express standard, the General Partner or such Affiliate shall act
under such express standard and shall not be subject to any other or different standards imposed by this Agreement, the Operating Partnership Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or
regulation. In addition, any actions taken by the General Partner or such Affiliate consistent with the standards of “
reasonable discretion
” set forth in the definitions of Available Cash or Operating Surplus shall not constitute a
breach of any duty of the General Partner to the Partnership or the Limited Partners. The General Partner shall have no duty, express or implied, to sell or
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otherwise dispose of any asset of the Partnership Group other than in the ordinary course of business. No borrowing by any Group Member or the approval thereof by the General Partner shall be
deemed to constitute a breach of any duty of the General Partner to the Partnership or the Limited Partners by reason of the fact that the purpose or effect of such borrowing is directly or indirectly to enable distributions to the General Partner
or its Affiliates (including in their capacities as Limited Partners) to exceed 2% of the total amount distributed to all Partners.
(c) Whenever a particular transaction, arrangement or resolution of a conflict of interest is required under this
Agreement to be “
fair and reasonable
” to any Person, the fair and reasonable nature of such transaction, arrangement or resolution shall be considered in the context of all similar or related transactions.
(d) The Limited Partners hereby authorize the General Partner, on behalf of the Partnership as a partner of a Group
Member, to approve of actions by the general partner of such Group Member similar to those actions permitted to be taken by the General Partner pursuant to this
Section
7.9
.
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 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 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 duly authorized officers, a duly appointed attorney or
attorneys-in-fact
or the duly authorized officers of the Partnership.
(d) Any standard of care and duty imposed by this Agreement or under the Delaware Act or any applicable law, rule or
regulation shall be modified, waived or limited, to the extent permitted by law, as required to permit the General Partner to act under this Agreement or any other agreement contemplated by this Agreement and to make any decision pursuant to the
authority prescribed in this Agreement, so long as such action is reasonably believed by the General Partner to be in, or not inconsistent with, the best interests of the Partnership.
SECTION 7.11
Purchase or Sale of Partnership Securities.
Subject to
Section
16.5 and Section
17.5
, the General Partner may cause the Partnership to
purchase or otherwise acquire Partnership Securities. As long as Partnership Securities are held by any Group Member, such Partnership Securities shall not be considered Outstanding for
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any purpose, except as otherwise provided herein. The General Partner or any Affiliate of the General Partner may also purchase or otherwise acquire and sell or otherwise dispose of Partnership
Securities for its own account, subject to the provisions of
Articles IV
,
X,
XVI
and
XVII
.
SECTION 7.12
Registration Rights of the General Partner and its Affiliates.
(a) If (i) the General Partner or any Affiliate of the General Partner (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 Partnership Securities 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 Securities (the “
Holder
”) to dispose of the
number of Partnership Securities it desires to sell at the time it desires to do so without registration under the Securities Act, then upon the request of the General Partner or any of its Affiliates, the Partnership shall file with the Commission
as promptly as practicable after receiving such request, and use all 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 Securities 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 Securities specified by the Holder;
provided
,
however
, that the Partnership shall not be required to effect more than three registrations pursuant to this
Section 7.12(a)
; and
provided
further
,
however
, that if the Conflicts Committee
determines in its good faith judgment that a postponement of the requested registration for up to six months 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 promptly prepare and file
(x) 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 (y) such documents as may be necessary to apply for listing or to list the Partnership Securities subject to such registration on such National Securities Exchange as the Holder
shall reasonably request, and do any and all other acts and things that may reasonably be necessary or advisable to enable the Holder to consummate a public sale of such Partnership Securities 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 equity securities of the Partnership for cash (other than an offering relating solely to an employee benefit plan), the Partnership shall use all reasonable efforts to include such number or amount of securities held by the Holder in
such registration statement as the Holder shall request. 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
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underwriters of such offering advise the Partnership and the Holder in writing that in their opinion the inclusion of all or some of the Holder’s Partnership Securities would adversely and
materially affect the success of the offering, the Partnership shall include in such offering only that number or amount, if any, of securities held by the Holder which, 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
”) against any losses, claims, demands, actions, causes of action, assessments,
damages, liabilities (joint or several), costs and expenses (including interest, penalties and reasonable attorneys’ fees and disbursements), resulting to, imposed upon, or incurred by the Indemnified Persons, directly or indirectly, 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 Securities 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 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 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
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 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 Securities 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 Securities 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) Any request to register Partnership Securities pursuant to this
Section
7.12
shall (i) specify the Partnership Securities intended to be offered and sold by the Person making the request, (ii) express such Person’s present intent to offer such shares for distribution,
(iii) describe the nature or method of the proposed offer and sale of Partnership Securities, 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 Securities.
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 NuStar GP authorized by NuStar GP 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 hereby waives any and all defenses or other remedies that may be available against such Person 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 the 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.
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 and Assignees of Units or other Partnership Securities, books of account and records of Partnership proceedings, may be kept on, or be in the form of, computer disks,
hard drives, punch cards, 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.
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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 120 days after the close of each fiscal year of the Partnership,
the General Partner shall cause to be mailed or furnished to each Record Holder of a Partnership Interest as of a date selected by the General Partner in its discretion, 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.
(b) As soon as practicable, but in no event later than 90 days after the close of each
Quarter except the last Quarter of each fiscal year, the General Partner shall cause to be mailed or furnished to each Record Holder of a Partnership Interest, as of a date selected by the General Partner in its discretion, 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 Partnership Interests are listed for trading, or as the General
Partner determines to be necessary or appropriate.
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 a taxable year ending on December 31. The tax information reasonably required by Record Holders for federal and state income tax reporting purposes with respect to a taxable year shall be furnished to them within 90
days of the close of the calendar year in which the Partnership’s taxable year ends. The classification, realization and recognition of income, gain, losses and deductions and other items shall be on the accrual method of accounting for 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 quoted closing price of the Limited Partner Interests on any National Securities Exchange on which such Limited Partner Interests are traded during the calendar month in which such transfer is deemed to occur pursuant to
Section 6.2(g)
without regard to the actual price paid by such transferee.
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(b) The Partnership shall elect to deduct expenses incurred in organizing
the Partnership ratably over a sixty-month period as provided in Section 709 of the Code.
(c) 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.
With respect to tax returns filed for taxable years beginning on or after December 31, 2017, the General Partner (or
its designee) will be designated as the “partnership representative” in accordance with the rules prescribed pursuant to Section 6223 of the Code and shall have the sole authority to act on behalf of the Partnership 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. The General Partner (or its
designee) shall exercise, in its sole discretion, any and all authority of the “partnership representative” under the Code, including, without limitation, (i) binding the Partnership and its Partners with respect to tax matters and
(ii) determining whether to make any available election under Section 6226 of the Code.
SECTION 9.4
Withholding.
Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines in its
discretion to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law including, without limitation, 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 to any Partner or Assignee (including, without
limitation, by reason of Section 1446 of the Code), the amount withheld may at the discretion of the General Partner be treated by the Partnership as a distribution of cash pursuant to
Section
6.3,
Section
16.3 or Section
17.3
in the amount of such withholding from such Partner.
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ARTICLE X
ADMISSION OF PARTNERS
SECTION 10.1
Admission of Limited Partners.
Each Limited Partner admitted to the Partnership immediately prior to the adoption of this Agreement hereby continues as a Limited Partner upon
the adoption of this Agreement.
SECTION 10.2
Admission of Substituted Limited Partner.
By transfer of a Limited Partner Interest in accordance with
Article IV
, the transferor shall be deemed to have given the transferee the
right to seek admission as a Substituted Limited Partner subject to the conditions of, and in the manner permitted under, this Agreement. A transferor of a Certificate representing a Limited Partner Interest shall, however, only have the authority
to convey to a purchaser or other transferee who does not execute and deliver a Transfer Application (a) the right to negotiate such Certificate to a purchaser or other transferee and (b) the right to transfer the right to request
admission as a Substituted Limited Partner to such purchaser or other transferee in respect of the transferred Limited Partner Interests. Each transferee of a Limited Partner Interest (including any nominee holder or an agent acquiring such Limited
Partner Interest for the account of another Person) who executes and delivers a Transfer Application shall, by virtue of such execution and delivery, be an Assignee and be deemed to have applied to become a Substituted Limited Partner with respect
to the Limited Partner Interests so transferred to such Person. Such Assignee shall become a Substituted Limited Partner (x) at such time as the General Partner consents thereto, which consent may be given or withheld in the General
Partner’s discretion, and (y) when any such admission is shown on the books and records of the Partnership. If such consent is withheld, such transferee shall be an Assignee. An Assignee shall have an interest in the Partnership equivalent
to that of a Limited Partner with respect to allocations and distributions, including liquidating distributions, of the Partnership. With respect to voting rights attributable to Limited Partner Interests that are held by Assignees, the General
Partner shall be deemed to be the Limited Partner with respect thereto and shall, in exercising the voting rights in respect of such Limited Partner Interests on any matter, vote such Limited Partner Interests at the written direction of the
Assignee who is the Record Holder of such Limited Partner Interests. If no such written direction is received, such Limited Partner Interests will not be voted. An Assignee shall have no other rights of a Limited Partner.
SECTION 10.3
Admission of Successor General Partner.
A successor General Partner approved pursuant to
Section
11.1
or
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.
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SECTION 10.4
Admission of Additional Limited Partners.
(a) A Person (other than the General Partner or a Substituted Limited Partner) who makes a Capital Contribution to the
Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner (i) evidence of acceptance in form satisfactory to the General Partner of all of the
terms and conditions of this Agreement, including the power of attorney granted in
Section
2.6
, and (ii) such other documents or instruments as may be required in the discretion of the General Partner to effect such
Person’s admission as an Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this
Section
10.4
, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner, which consent may be given or withheld in the General Partner’s discretion. The admission of any
Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded as such in the books and records of the Partnership, following the consent of the General Partner to such admission.
SECTION 10.5
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 and 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, and the General Partner may for this purpose, among others, exercise the power of attorney granted pursuant to
Section
2.6
.
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 notice to the other
Partners;
(ii) The General Partner transfers all of its rights as General Partner 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
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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) in the event 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) in the event
the General Partner is a partnership or a limited liability company, the dissolution and commencement of winding up of the General Partner; (C) in the event the General Partner is acting in such capacity by virtue of being a trustee of a trust,
the termination of the trust; (D) in the event the General Partner is a natural person, his death or adjudication of incompetency; and (E) otherwise in the event of 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 that 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; or (ii) 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
. 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 of the other Group Members. If the General Partner gives a notice of withdrawal pursuant to
Section 11.1(a)(i)
, the holders of 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 of the other Group Members of which the General Partner is a general partner. If, prior to the effective date of the General Partner’s withdrawal, 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
. Any successor General Partner elected in accordance with the terms of this
Section
11.1
shall be subject to the provisions of
Section
10.3
.
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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 a Unit Majority (excluding Units held by the
General Partner and its Affiliates). 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 Unit Majority (excluding 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
10.3
. The removal of the General Partner shall also automatically
constitute the removal of the General Partner as general partner of the other Group Members of which the General Partner is a general partner, if any. 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
10.3
, automatically become a successor general partner of the other Group Members of which the General Partner is a general
partner. The right of the holders of Outstanding Units to remove the General Partner shall not exist or be 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
10.3
.
SECTION 11.3
Interest of Departing 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 a successor General Partner is elected in accordance with the terms of
Section
11.1
or
11.2
, the Departing Partner shall have the option exercisable prior to the effective date of the departure of such Departing Partner to require its successor to purchase its General Partner Interest
and its general partner interest (or equivalent interest) in the other Group Members, if any, and all of its 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 departure. 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
11.2
, such successor shall have the option,
exercisable prior to the effective date of the departure of such Departing Partner, to purchase the Combined Interest for such fair market value of such Combined Interest of the Departing Partner. In either event, the Departing Partner shall be
entitled to receive all reimbursements due such Departing Partner pursuant to
Section
7.4
, including any employee-related liabilities (including severance liabilities), incurred in connection with the termination of any
employees employed by the Departing Partner for the benefit of the Partnership or the other Group Members.
For purposes of this
Section 11.3(a)
, the fair market value of a Departing Partner’s Combined Interest shall be determined by agreement between the Departing Partner and its successor or, failing agreement within 30 days after the effective date of such
Departing Partner’s departure, by an independent investment banking firm or other independent expert selected by the Departing 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
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agree upon one independent investment banking firm or other independent expert within 45 days after the effective date of such departure, then the Departing Partner shall designate an independent
investment banking firm or other independent expert, the Departing 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 firm or other independent expert shall determine the fair market value of the Combined Interest of the Departing Partner. In making its determination, such
third independent investment banking firm or other independent expert may consider the then current trading price of Units on any National Securities Exchange on which Units are then listed, the value of the Partnership’s assets, the rights and
obligations of the Departing Partner 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 Partner (or its transferee) shall become a Limited Partner and its 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 Partner (or its transferee) as to all debts and liabilities of the Partnership arising on or after the date on which the Departing Partner (or its transferee) becomes a Limited Partner. For purposes of this Agreement,
conversion of the Combined Interest of the Departing Partner to Common Units will be characterized as if the Departing Partner (or its transferee) contributed its 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
11.2
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 2/98th of 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 the
Percentage Interest of all Partnership allocations and distributions to which the Departing Partner was entitled. 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 distributions and allocations shall be 2% with respect to such Partnership Securities with respect to which any General Partner would be required to make capital
contributions pursuant to
Section 5.1(b)
in order to maintain such 2% interest.
SECTION 11.4
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.
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ARTICLE XII
DISSOLUTION AND LIQUIDATION
SECTION 12.1
Dissolution.
The Partnership shall not be dissolved by the admission of Substituted Limited Partners or 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
or
11.2
, the
Partnership shall not be dissolved and such successor General Partner shall continue the business of the Partnership. The Partnership shall dissolve, and (subject to
Section
12.2
) its affairs shall be wound up, upon:
(a) the expiration of its term as provided in
Section
2.7
;
(b) 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 an Opinion of Counsel is received as provided in
Section 11.1(b)
or
11.2
and such successor is admitted to the Partnership pursuant to
Section
10.3
;
(c) an election to dissolve the Partnership by the General Partner that is approved by the holders of a Unit Majority;
(d) the entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Delaware
Act; or
(e) the sale of all or substantially all of the assets and properties of the Partnership Group.
SECTION 12.2
Continuation of the Business of the Partnership After Dissolution.
Upon (a) dissolution of the Partnership following 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 Partner pursuant to
Section
11.1
or
11.2
, then within 90 days thereafter, or
(b) dissolution of the Partnership upon 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, the holders of a Unit Majority
may elect to reconstitute the Partnership and continue its business on the same terms and conditions set forth in this Agreement by forming a new limited partnership on terms identical to those set forth in this Agreement and having as the successor
general partner a Person approved by the holders of 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:
(a) the reconstituted Partnership shall continue until dissolved in accordance with
this
Article XII
;
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(b) 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
(c) all necessary steps shall be taken to cancel this Agreement and the Certificate of Limited Partnership and to enter
into and, as necessary, to file a new partnership agreement and certificate of limited partnership, and the successor general partner may for this purpose exercise the powers of attorney granted the General Partner pursuant to
Section
2.6
;
provided
, that the right of the holders of a Unit Majority to approve a successor General Partner and to reconstitute 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 of any Limited Partner and (y) neither the Partnership, the reconstituted limited
partnership nor the Operating Partnership would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of such right to continue.
SECTION 12.3
Liquidator.
Upon dissolution of the Partnership, unless the Partnership is continued under an election to reconstitute and continue the Partnership
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 at least a majority of the Outstanding Common Units. 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 at least a majority of the Outstanding Common Units. 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 at least a majority of the Outstanding Common Units. 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 7.3(b)
) to the extent necessary or desirable in the good faith judgment of the Liquidator to carry out the duties and functions of the Liquidator
hereunder for and during such period of time as shall be reasonably required in the good faith judgment of the Liquidator to complete the winding up and liquidation of the Partnership as provided for herein.
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 the
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Liquidator determines to be in the best interest of the Partners, subject to Section 17-804 of the Delaware Act and the following:
(a)
Disposition of Assets
. 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, in its absolute discretion, 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, in its absolute discretion, 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)
Discharge of Liabilities
. 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 owed to Partners other 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)
Liquidation Distributions
. 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 year 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 year (or, if later, within 90 days after said date of such occurrence);
provided
that the Stated Liquidation Preference and any
accumulated and unpaid Series A Distributions and Series B Distributions shall be paid prior to making any distributions pursuant to this
Section 12.4(c)
.
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 Partnership shall be terminated and 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.
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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.
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 year 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
Amendment to be Adopted Solely by the General Partner.
Each Partner agrees that the General Partner, without the approval of any Partner or Assignee, 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, in the sole discretion of
the General Partner, is necessary or advisable 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 Partnership and the Operating Partnership will not be treated as an association taxable as a corporation or otherwise taxed as an entity for federal income tax purposes;
(d) subject to
Section
16.4 and Section
17.4
, a change that, in the
discretion of the General Partner, (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) is
necessary or advisable 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 Limited Partner Interests (including the division of any class, classes or series of Outstanding Limited Partner Interests into different classes to facilitate uniformity of tax
consequences within such classes or series of Limited Partner Interests) or comply with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Limited Partner Interests are or will be listed for trading,
compliance with any of which the General Partner determines in its discretion to be in the best interests of the Partnership and the
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Limited Partners, (iii) is necessary or advisable in connection with action taken by the General Partner pursuant to
Section
5.8
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 year of the Partnership and any changes that, in the discretion of the
General Partner, are necessary or advisable as a result of a change in the fiscal year or taxable year of the Partnership including, if the General Partner shall so determine, a change in the definition of “
Quarter
” and the dates on
which distributions (other than Preferred Distributions) are to be made by the Partnership;
(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) subject to the terms of
Section
16.4, Section
17.4
and
Section
5.6
, an amendment that, in the discretion of the General Partner, is necessary or advisable in connection with the authorization of
issuance of any class or series of Partnership Securities pursuant to
Section
5.5
;
(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, in the discretion of the General Partner, is
necessary or advisable to reflect, account for and deal with appropriately 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
;
(k) a merger or conveyance pursuant to
Section 14.3(d)
; or
(l) any other amendments substantially similar to the foregoing.
SECTION 13.2
Amendment Procedures.
Except as provided in
Sections 13.1
and
13.3
,
Article XVI
and
Article XVII
, all amendments to this Agreement shall
be made in accordance with the following requirements. Amendments to this Agreement may be proposed only by or with the consent of the General Partner, which consent may be given or withheld in its sole discretion. A proposed amendment shall be
effective upon its approval by the holders of a Unit Majority, unless a greater or different percentage is required under this Agreement or by Delaware law. Each proposed amendment
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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 such proposed amendments.
SECTION 13.3
Amendment Requirements.
(a) Notwithstanding the provisions of
Sections 13.1
and
13.2
, no provision of this Agreement that
establishes a percentage of Outstanding Units (including Units deemed owned by the General Partner) required to take any action shall be amended, altered, changed, repealed or rescinded in any respect that would have the effect of reducing such
voting 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.
(b) Notwithstanding the provisions of
Sections 13.1
and
13.2
, no amendment to this Agreement may
(i) enlarge the obligations of 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)
, (ii) enlarge the obligations of, restrict 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 in its sole discretion,
(iii) change
Section 12.1(a)
or
12.1(c)
, or (iv) change the term of the Partnership or, except as set forth in
Section 12.1(c)
, give any Person the right to dissolve the Partnership.
(c) Except as otherwise provided and without limitation of the General Partner’s authority to adopt amendments to
this Agreement without the approval of any Partners or Assignees as contemplated in
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.
(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 Outstanding Common Units 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 law.
(e) Except as provided in
Section
13.1
, this
Section
13.3
shall
only be amended with the approval of the holders of at least 90% of the Outstanding Units.
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 Limited
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Partner Interests 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 general or specific purposes for which the special meeting is to be called. 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 mailing of notice of the meeting. 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
Limited Partner Interests for which a meeting is proposed in writing by mail or other means of written communication in accordance with
Section
18.1
. 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 Limited Partner Interests are listed for trading, in which case the rule, regulation, guideline or requirement of such exchange 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.
SECTION 13.7
Adjournment.
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
.
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SECTION 13.8
Waiver of Notice; Approval of Meeting; Approval of Minutes.
The transactions of 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, and if, either before or after the meeting, Limited Partners representing such quorum who were present in person or by proxy and entitled to
vote, sign a written waiver of notice or an approval of the holding of the meeting or an approval of the minutes thereof. All waivers and approvals shall be filed with the Partnership records or made a part of the minutes of the meeting. Attendance
of a Limited Partner at a meeting shall constitute a waiver of notice of the meeting, except when the Limited Partner does not approve, at the beginning of the meeting, of 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.
The holders of a majority of the Outstanding Limited Partner Interests of the class, classes or series for which a meeting has been called
(including Limited Partner Interests deemed owned by the General Partner) represented in person or by proxy shall constitute a quorum at a meeting of Limited Partners of such class, classes or series unless any such action by the Limited Partners
requires approval by holders of a greater percentage of such Limited Partner Interests, in which case the quorum shall be such greater percentage. At any meeting of the Limited Partners duly called and held in accordance with this Agreement at which
a quorum is present, the act of Limited Partners holding Outstanding Limited Partner Interests that in the aggregate represent a majority of the Outstanding Limited Partner Interests entitled to vote and be present in person or by proxy at such
meeting shall be deemed to constitute the act of all Limited Partners, unless a greater or different percentage is required with respect to such action under the provisions of this Agreement, in which case the act of the Limited Partners holding
Outstanding Limited Partner Interests that in the aggregate represent at least such greater or different percentage shall be required. The Limited 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 Limited Partners to leave less than a quorum, if any action taken (other than adjournment) is approved by the required percentage of Outstanding Limited Partner Interests
specified in this Agreement (including Limited Partner Interests deemed owned by the General Partner). In the absence of a quorum any meeting of Limited Partners may be adjourned from time to time by the affirmative vote of holders of at least a
majority of the Outstanding Limited Partner Interests entitled to vote at such meeting (including Limited Partner Interests deemed owned by the General Partner) represented either in person or by proxy, but no other business may be transacted,
except as provided in
Section
13.7
.
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
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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 if an
approval in writing setting forth the action so taken is signed by Limited Partners owning not less than the minimum percentage of the Outstanding Limited Partner Interests (including Limited Partner Interests deemed owned by the General Partner)
that would be necessary to authorize or take such action at a meeting at which all the Limited Partners were present and voted (unless such provision conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange
on which the Limited Partner Interests are listed for trading, in which case the rule, regulation, guideline or requirement of such 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 Limited Partner Interests held by the Limited Partners the Partnership shall be deemed to have failed to receive
a ballot for the Limited Partner Interests 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 and until (a) they are deposited with the Partnership in care of the General Partner, (b) approvals sufficient to take the action proposed are dated as of a date not more than 90 days prior to the date sufficient
approvals are deposited with the Partnership and (c) 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.
SECTION 13.12
Voting and Other Rights.
(a) Only those Record Holders of the Limited Partner Interests on the Record Date set pursuant to
Section
13.6
(and also subject to the limitations contained in the definition of “
Outstanding
”) shall be entitled to notice of, and to vote at, a meeting of Unitholders or to act with respect to matters as
to which the holders of the Outstanding Limited Partner Interests 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 Limited Partner Interests shall be deemed to be
references to the votes or acts of the Record Holders of such Outstanding Limited Partner Interests.
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(b) Only those Record Holders of the Series A Preferred Units on the
Record Date set pursuant to
Section
13.6
(and subject to the limitations contained in the definition of “
Outstanding
” and the limitations set forth in
Section
16.4
) shall be
entitled to notice of, and to vote at, a meeting of Limited Partners holding Series A Preferred Units or to act with respect to matters as to which the holders of the Outstanding Series A Preferred 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 Series A Preferred Units shall be deemed to be references to the votes or acts of the Record Holders of such Outstanding Series A Preferred Units.
(c) Only those Record Holders of the Series B Preferred Units on the Record Date set pursuant to
Section
13.6
(and subject to the limitations contained in the definition of “
Outstanding
” and the limitations set forth in
Section
17.4
) shall be entitled to notice of, and to vote
at, a meeting of Limited Partners holding Series B Preferred Units or to act with respect to matters as to which the holders of the Outstanding Series B Preferred 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 Series B Preferred Units shall be deemed to be references to the votes or acts of the Record Holders of such Outstanding Series B Preferred Units.
(d) With respect to Limited Partner Interests 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 Limited Partner Interests are registered, such other Person shall, in exercising the voting rights in respect of such Limited
Partner Interests on any matter, and unless the arrangement between such Persons provides otherwise, vote such Limited Partner Interests 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(d)
(as well as all other provisions of this Agreement) are subject to the provisions of
Section
4.3
.
ARTICLE XIV
MERGER
SECTION 14.1
Authority.
The Partnership may merge or consolidate with one or more corporations, limited liability companies, business trusts or associations, real
estate investment trusts, common law trusts or unincorporated businesses, including a general partnership or limited partnership, formed under the laws of the State of Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation (“
Merger Agreement
”) in accordance with this
Article XIV
.
SECTION 14.2
Procedure for Merger or Consolidation.
Merger or consolidation of the Partnership pursuant to this
Article XIV
requires the prior approval of the General Partner. If the
General Partner shall determine, in the exercise of its
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discretion, to consent to the merger or consolidation, the General Partner shall approve the Merger Agreement, which shall set forth:
(a) The names and jurisdictions of formation or organization of each of the business entities proposing to merge or
consolidate;
(b) 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
”);
(c) The terms and
conditions of the proposed merger or consolidation;
(d) The manner and basis of exchanging or converting the
equity securities of each constituent business entity for, or into, cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity; and (i) if any general or limited partner interests,
securities or rights of any constituent business entity are not to be exchanged or converted solely for, or into, cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity, the cash,
property or general or limited partner interests, rights, securities or obligations of any limited partnership, corporation, trust or other entity (other than the Surviving Business Entity) which the holders of such general or limited partner
interests, securities or rights are to receive in exchange for, or upon conversion of their general or limited partner interests, securities or rights, and (ii) in the case of securities represented by certificates, upon the surrender of such
certificates, which cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity or any general or limited partnership, corporation, trust or other entity (other than the Surviving
Business Entity), or evidences thereof, are to be delivered;
(e) 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 or other similar charter or governing document) of the
Surviving Business Entity to be effected by such merger or consolidation;
(f) 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 the certificate of merger, the effective time shall be fixed no later than the time of the filing of the certificate of merger and stated therein); and
(g) Such other provisions with respect to the proposed merger or consolidation as are deemed necessary or appropriate
by the General Partner.
SECTION 14.3
Approval by Limited Partners of Merger or Consolidation.
(a) Except as provided in
Section 14.3(d)
, the General Partner, upon its approval of the Merger Agreement, shall
direct that the Merger Agreement be submitted to a vote of Unitholders, 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 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
Section 14.3(d)
, 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 Limited Partner Interests 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
Section 14.3(d)
, 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, in its discretion, without Limited Partner approval, to merge the Partnership or any Group Member into, or convey all of the Partnership’s assets to, another limited liability entity which shall be newly formed
and shall have no assets, liabilities or operations at the time of such Merger 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 of any Limited Partner or any partner in the Operating Partnership or cause the Partnership or Operating Partnership 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 previously 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 the same rights and obligations as are herein contained.
SECTION 14.4
Certificate of Merger.
Upon the required approval pursuant to
Sections 14.2
and
14.3(b)
of a Merger Agreement, subject to
Section 14.3(c)
, 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.
(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;
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(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.
(b) A merger or consolidation effected pursuant to this Article shall not be deemed to result in a transfer or
assignment of assets or liabilities from one entity to another.
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 (but subject to
Section 15.1(d)
), if at any time not
more than 20% of the total Limited Partner Interests of any class then Outstanding is held by Persons other than the General Partner and its Affiliates, 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. As used in this Agreement, (i) “
Current
Market Price
” as of any date of any class of Limited Partner Interests listed or admitted to trading on any National Securities Exchange means the average of the daily Closing Prices (as hereinafter defined) per Limited Partner Interest of
such class for the 20 consecutive Trading Days (as hereinafter defined) immediately prior to such date; (ii) “
Closing Price
” for any day means the last sale price on such day, regular way, or in case no such sale takes place 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 for trading on the principal National
Securities Exchange (other than the Nasdaq Stock Market) on which such Limited Partner Interests of such class are listed or admitted to trading or, if such Limited Partner Interests of such class are not listed or admitted to trading on any
National Securities Exchange (other than the Nasdaq Stock Market), 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 Nasdaq Stock Market or such other system then in use, 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
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market in such Limited Partner Interests of such class, the fair value of such Limited Partner Interests on such day as determined reasonably and in good faith by the General Partner; and (iii)
“
Trading Day
” means a day on which the principal National Securities Exchange on which such Limited Partner Interests of any class are listed or admitted to trading is open for the transaction of business or, if Limited Partner
Interests of a class 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.
(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 published for a period of at least three consecutive days in at least two daily newspapers of general circulation printed in the English language and published in the Borough of Manhattan, New
York. 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 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 Partner Interests (including any rights pursuant to
Articles IV
,
V
,
VI
, and
XII
) 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, 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 (including all rights as owner of such Limited Partner
Interests pursuant to
Articles IV
,
V
,
VI
and
XII
).
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(c) 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.
(d) Notwithstanding anything in this
Article XV
to the contrary, the repurchase right described in this
Article XV
shall not apply to Preferred Units.
ARTICLE
XVI
SERIES A
FIXED-TO-FLOATING
RATE CUMULATIVE REDEEMABLE
PERPETUAL PREFERRED UNITS
SECTION 16.1
Designation
s.
A series of Preferred Units designated as “8.50% Series A
Fixed-to-Floating
Rate Cumulative Redeemable Perpetual Preferred Units” is hereby designated and created, and the preferences, rights, powers and duties of the
holders of the Series A Preferred Units are set forth herein, including this
Article XVI
. Each Series A Preferred Unit shall be identical in all respects to every other Series A Preferred Unit, except as to the respective
dates from which the Series A Liquidation Preference shall increase or from which Series A Distributions may begin accruing, to the extent such dates may differ. The Series A Preferred Units represent perpetual equity interests in the
Partnership and, except as set forth in
Sections 16.5
and
16.11
, shall not give rise to a claim by the Partnership or a Series A Holder for redemption or the conversion thereof, as applicable, at a particular date.
SECTION 16.2
Series A Preferred Units
.
(a) The authorized number of Series A Preferred Units shall be unlimited. Series A Preferred Units that are
purchased or otherwise acquired by the Partnership shall be cancelled.
(b) The Series A Preferred Units
shall be represented by one or more global Certificates registered in the name of the Depositary or its nominee, and no Series A Holder shall be entitled to receive a definitive Certificate evidencing its Series A Preferred Units, unless
otherwise required by law or the Depositary gives notice of its intention to resign or is no longer eligible to act as such with respect to the Series A Preferred Units and the Partnership shall have not selected a substitute Depositary within 60
calendar days thereafter. So long as the Depositary shall have been appointed and is serving with respect to the Series A Preferred Units, payments and communications made by the Partnership to Series A Holders shall be made by making payments
to, and communicating with, the Depositary.
SECTION 16.3
Distributions
.
(a) Distributions on each Series A Preferred Unit shall be cumulative and shall accumulate at the applicable
Series A Distribution Rate from and including the Series A Original Issue Date (or, for any subsequently issued and newly Outstanding Series A Preferred Units, from and including the Series A Distribution Payment Date immediately
preceding the issue date
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of such Series A Preferred Units) until such time as the Partnership pays the Series A Distribution or redeems such Series A Preferred Unit in accordance with
Section
16.5
or such Series A Preferred Unit is converted in accordance with
Section 16.11
, whether or not such Series A Distributions shall have been declared. Series A Holders shall be entitled to receive Series A
Distributions from time to time out of any assets of the Partnership legally available for the payment of distributions at the Series A Distribution Rate per Series A Preferred Unit when, as, and if declared by the General Partner.
Distributions, to the extent declared by the General Partner to be paid by the Partnership in accordance with this
Section 16.3
, shall be paid quarterly on each Series A Distribution Payment Date. Distributions shall accumulate in
each Series A Distribution Period from and including the preceding Series A Distribution Payment Date (other than the initial Series A Distribution Period, which shall commence on and include the Series A Original Issue Date), to
but excluding the next Series A Distribution Payment Date for such Series A Distribution Period;
provided
that distributions shall accrue on accumulated but unpaid Series A Distributions at the Series A Distribution Rate.
If any Series A Distribution Payment Date otherwise would occur on a date that is not a Business Day, declared Series A Distributions shall be paid on the immediately succeeding Business Day without the accumulation of additional
distributions. Series A Distributions shall be payable based on a
360-day
year consisting of four
90-day
quarters. All Series A Distributions payable by the
Partnership pursuant to this
Section 16.3
shall be payable without regard to income of the Partnership and shall be treated for federal income tax purposes as guaranteed payments for the use of capital under
Section 707(c) of the Code.
(b) Not later than 5:00 p.m., New York City time, on each Series A
Distribution Payment Date, the Partnership shall pay those Series A Distributions, if any, that shall have been declared by the General Partner to Series A Holders on the Record Date for the applicable Series A Distribution. The
Record Date (the “
Series
A Distribution Record Date
”) for the payment of any Series A Distributions shall be as of the close of business on the first Business Day of the month of the applicable Series A
Distribution Payment Date, except that in the case of payments of Series A Distributions in Arrears, the Series A Distribution Record Date with respect to a Series A Distribution Payment Date shall be such date as may be designated by
the General Partner in accordance with this
Article XVI
. So long as any Series A Preferred Units are Outstanding, no distribution shall be declared or paid or set aside for payment on any Junior Securities (other than a distribution
payable solely in Junior Securities) unless full cumulative Series A Distributions have been or contemporaneously are being paid or set aside for payment on all Outstanding Series A Preferred Units (and distributions on any other Parity
Securities) through the most recent respective Series A Distribution Payment Date (and distribution payment date with respect to such Parity Securities, if any). Accumulated Series A Distributions in Arrears for any past Series A
Distribution Period may be declared by the General Partner and paid on any date fixed by the General Partner, whether or not a Series A Distribution Payment Date, to Series A Holders on the Record Date for such payment, which may not be
less than 10 days before such payment date. Subject to the next succeeding sentence, if all accumulated Series A Distributions in Arrears on all Outstanding Series A Preferred Units and any other Parity Securities shall not have been
declared and paid, or if sufficient funds for the payment thereof shall not have been set aside, payment of accumulated distributions in Arrears on the Series A Preferred Units and any such Parity Securities shall be made in order of their
respective distribution payment dates, commencing with the earliest. If less than all distributions payable with respect to all Series A Preferred Units and any other Parity Securities are paid, any partial
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payment shall be made Pro Rata with respect to the Series A Preferred Units and any such other Parity Securities entitled to a distribution payment at such time in proportion to the
aggregate distribution amounts remaining due in respect of such Series A Preferred Units and such other Parity Securities at such time. Subject to
Sections
12.4
and
16.5
, Series A Holders shall
not be entitled to any distribution, whether payable in cash, property or Partnership Securities, in excess of full cumulative Series A Distributions. Except insofar as distributions accrue on the amount of any accumulated and unpaid
Series A Distributions as described in
Section 16.3(a)
, no interest or sum of money in lieu of interest shall be payable in respect of any distribution payment which may be in Arrears on the Series A Preferred Units. So long as
the Series A Preferred Units are held of record by the Depositary or its nominee, declared Series A Distributions shall be paid to the Depositary in
same-day
funds on each Series A Distribution
Payment Date or other distribution payment date in the case of payments for Series A Distributions in Arrears.
(c) The “
Series A Three-Month LIBOR
” for each Series A Distribution Period during the Series A
Floating Rate Period shall be determined by the Calculation Agent, as of the applicable Series A LIBOR Determination Date, in accordance with the following provisions:
(i) The Series A Three-Month LIBOR shall be the rate (expressed as a percentage per year) for deposits
in U.S. dollars for a three-month period commencing on the first day of such Series A Distribution Period that appears on Reuters Page LIBOR01 as of 11:00 a.m. (London time) on the Series A LIBOR Determination Date.
(ii) If the Series A Three-Month LIBOR cannot be determined as described in
Section 16.3(c)(i)
,
the Partnership shall select four major banks in the London interbank market and request that the principal London offices of those four selected banks provide their offered quotations for deposits in U.S. dollars for a period of three months,
commencing on the first day of the applicable Series A Distribution Period, to prime banks in the London interbank market at approximately 11:00 a.m. (London time) on the Series A LIBOR Determination Date for such Series A Distribution Period.
Offered quotations must be based on a principal amount equal to an amount that, in the Partnership’s judgment, is representative of a single transaction in U.S. dollars in the London interbank market at the time. If two or more quotations are
provided, the Series A Three-Month LIBOR for such Series A Distribution Period will be the arithmetic mean of the quotations. If fewer than two quotations are provided, the Series A Three-Month LIBOR for such Series A Distribution Period will be the
arithmetic mean of the rates quoted on the Series A LIBOR Determination Date for such Series A Distribution Period by three major banks in New York City selected by the Partnership, for loans in U.S. dollars to leading European banks for a
three-month period commencing on the first day of such Series A Distribution Period. The rates quoted must be based on an amount that, in the Partnership’s judgment, is representative of a single transaction in U.S. dollars in that market at
the time. If fewer than three New York City banks selected by the Partnership are quoting rates in the manner described above, the Series A Three-Month LIBOR for the applicable Series A Distribution Period will be the same as for the immediately
preceding Series A Distribution Period or, if the immediately preceding Series A Distribution Period was within the Series A Fixed Rate Period, the same as for the most recent quarter for which the Series A Three-Month LIBOR can be determined;
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(iii) All percentages resulting from any of the above
calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five
one-millionths
of a percentage point rounded upwards and all dollar amounts used in or
resulting from such calculations will be rounded to the nearest cent (with
one-half
cent being rounded upwards).
SECTION 16.4
Voting Rights
.
(a) Notwithstanding anything to the contrary in this Agreement, the Series A Preferred Units shall not have any
voting rights except as set forth in
Section 13.3(c)
, this
Section 16.4
or as otherwise required by the Delaware Act.
(b) Without the affirmative vote or consent of the holders of at least 66 2/3% of the Outstanding Series A
Preferred Units, voting as a separate class, the General Partner shall not adopt any amendment to this Agreement that would have a material adverse effect on the powers, preferences, duties or special rights of the Series A Preferred Units;
provided, however
, that (i) subject to
Section 16.4(c)
, the issuance of additional Partnership Securities shall not be deemed to constitute such a material adverse effect for purposes of this
Section 16.4(b)
and
(ii) for purposes of this
Section 16.4(b)
, no amendment of this Agreement in connection with a merger or other transaction in which the Partnership is the surviving entity and the Series A Preferred Units remain Outstanding with the
terms thereof materially unchanged in any respect adverse to the Series A Holders shall be deemed to materially and adversely affect the powers, preferences, duties or special rights of the Series A Preferred Units.
(c) Without the affirmative vote or consent of the holders of at least 66 2/3% of the Outstanding Series A
Preferred Units voting as a class together with holders of any other Parity Securities upon which like voting rights have been conferred and are exercisable, the Partnership shall not (x) create or issue any Parity Securities if the
cumulative distributions payable on Series A Preferred Units or any Parity Securities are in Arrears or (y) create or issue any Senior Securities.
(d) For any matter described in this
Section 16.4
in which the Series A Holders are
entitled to vote as a class (whether separately or together with the holders of any Parity Securities), such Series A Holders shall be entitled to one vote per Series A Preferred Unit. Any Series A Preferred Units held by the
Partnership or any of its Subsidiaries or their controlled Affiliates shall not be entitled to vote.
(e) Notwithstanding
Sections 16.4(b)
and
16.4(c)
, no vote of the Series A Holders shall be required if,
at or prior to the time when such action is to take effect, provision is made for the redemption of all Series A Preferred Units at the time Outstanding.
SECTION 16.5
Optional Redemption
; Series A Rating Event
(a) The Partnership shall have the right (i) at any time, and from time to time, on or after December 15, 2021
or (ii) at any time within 120 days after the conclusion of any review or appeal process instituted by the Partnership following the occurrence of a Series A Rating Event or (iii) at any time within 120 days after the first date on which a
Change of Control occurs, in each case, to redeem the Series A Preferred Units, which redemption may be in whole
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or in part (except with respect to a redemption pursuant to clause
(ii)
of this
Section 16.5(a)
which shall be in whole but not in part), using any source of funds legally
available for such purpose. Any such redemption shall occur on a date set by the General Partner (the “
Series
A Redemption Date
”). The Partnership shall effect any such redemption by paying cash for each
Series A Preferred Unit to be redeemed equal to the Series A Liquidation Preference for such Series A Preferred Unit on such Series A Redemption Date plus an amount equal to all unpaid distributions thereon from the Series A
Original Issue Date to, but not including, the Series A Redemption Date (whether or not such distributions shall have been declared) (the “
Series
A Redemption Price
”);
provided
that in connection with
a redemption in accordance with clause
(ii)
of this
Section 16.5(a)
, the Series A Liquidation Preference per Series A Preferred Unit shall be deemed to be equal to $25.50. So long as the Series A Preferred Units to be
redeemed are held of record by the nominee of the Depositary, the Series A Redemption Price shall be paid by the Paying Agent to the Depositary on the Series A Redemption Date.
(b) The Partnership shall give notice of any redemption by mail, postage prepaid, not less than 30 days and not more
than 60 days before the scheduled Series A Redemption Date to the Series A Holders (as of 5:00 p.m. New York City time on the Business Day next preceding the day on which notice is given) of any Series A Preferred Units to
be redeemed as such Series A Holders’ names appear on the books of the Transfer Agent and at the address of such Series A Holders shown therein. Such notice (the “
Series
A Redemption Notice
”)
shall state, as applicable: (1) the Series A Redemption Date, (2) the number of Series A Preferred Units to be redeemed and, if less than all Outstanding Series A Preferred Units are to be redeemed, the number (and the
identification) of Series A Preferred Units to be redeemed from such Series A Holder, (3) the Series A Redemption Price, (4) the place where any Series A Preferred Units in certificated form are to be redeemed and shall be
presented and surrendered for payment of the Series A Redemption Price therefor and (5) that distributions on the Series A Preferred Units to be redeemed shall cease to accumulate from and after such Series A Redemption Date. For
the avoidance of doubt, the Partnership may give the Series A Redemption Notice in advance of a Change of Control if a definitive agreement is in place for the Change of Control at the time of giving the Series A Redemption Notice.
(c) If the Partnership elects to redeem less than all of the Outstanding Series A Preferred Units, the
number of Series A Preferred Units to be redeemed shall be determined by the General Partner, and such Series A Preferred Units shall be redeemed by such method of selection as the Depositary shall determine, either Pro Rata or by lot,
with adjustments to avoid redemption of fractional Series A Preferred Units. The aggregate Series A Redemption Price for any such partial redemption of the Outstanding Series A Preferred Units shall be allocated correspondingly among
the redeemed Series A Preferred Units. The Series A Preferred Units not redeemed shall remain Outstanding and entitled to all the rights and preferences provided in this
Article XVI
.
(d) If the Partnership gives or causes to be given a Series A Redemption Notice, the Partnership shall
deposit with the Paying Agent funds sufficient to redeem the Series A Preferred Units as to which such Series A Redemption Notice shall have been given, no later than 10:00 a.m. New York City time on the Series A Redemption Date,
and shall give the Paying Agent irrevocable instructions and authority to pay the Series A Redemption Price to the Series A Holders whose Series A Preferred Units are to be redeemed upon surrender or deemed
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surrender (which shall occur automatically if the Certificate representing such Series A Preferred Units is issued in the name of the Depositary or its nominee) of the Certificates therefor
as set forth in the Series A Redemption Notice. If the Series A Redemption Notice shall have been given, from and after the Series A Redemption Date, unless the Partnership defaults in providing funds sufficient for such redemption at
the time and place specified for payment pursuant to the Series A Redemption Notice, all Series A Distributions on such Series A Preferred Units to be redeemed shall cease to accumulate and all rights of holders of such Series A
Preferred Units as Limited Partners with respect to such Series A Preferred Units to be redeemed shall cease, except the right to receive the Series A Redemption Price, and such Series A Preferred Units shall not thereafter be
transferred on the books of the Transfer Agent or be deemed to be Outstanding for any purpose whatsoever. The Series A Holders shall have no claim to the interest income, if any, earned on such funds deposited with the Paying Agent. Any funds
deposited with the Paying Agent hereunder by the Partnership for any reason, including redemption of Series A Preferred Units, that remain unclaimed or unpaid after two years after the applicable Series A Redemption Date or other payment
date, as applicable, shall be, to the extent permitted by law, repaid to the Partnership upon its written request, after which repayment the Series A Holders entitled to such redemption or other payment shall have recourse only to the
Partnership. Notwithstanding any Series A Redemption Notice, there shall be no redemption of any Series A Preferred Units called for redemption until funds sufficient to pay the full Series A Redemption Price of such Series A
Preferred Units shall have been deposited by the Partnership with the Paying Agent.
(e) Any Series A
Preferred Units that are redeemed or otherwise acquired by the Partnership shall be cancelled. If only a portion of the Series A Preferred Units represented by a Certificate shall have been called for redemption, upon surrender of the
Certificate to the Paying Agent (which shall occur automatically if the Certificate representing such Series A Preferred Units is registered in the name of the Depositary or its nominee), the Partnership shall issue and the Paying Agent shall
deliver to the Series A Holders a new Certificate (or adjust the applicable book-entry account) representing the number of Series A Preferred Units represented by the surrendered Certificate that have not been called for redemption.
(f) Notwithstanding anything to the contrary in this
Article XVI
, in the event that full cumulative
distributions on the Series A Preferred Units and any Parity Securities shall not have been paid or declared and set aside for payment, the Partnership shall not be permitted to repurchase, redeem or otherwise acquire, in whole or in part, any
Series A Preferred Units or Parity Securities except pursuant to a purchase or exchange offer made on the same relative terms to all Series A Holders and holders of any Parity Securities. Subject to
Section
4.10
,
so long as any Series A Preferred Units are Outstanding, the Partnership shall not be permitted to redeem, repurchase or otherwise acquire any Common Units or any other Junior Securities unless full cumulative distributions on the Series A
Preferred Units and any Parity Securities for all prior and the then-ending Series A Distribution Periods shall have been paid or declared and set aside for payment.
SECTION 16.6
Rank
.
The Series A Preferred Units shall each be deemed to rank:
(a) senior to any Junior Securities;
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(b) on a parity with any Parity Securities;
(c) junior to any Senior Securities; and
(d) junior to all existing and future indebtedness of the Partnership and other liabilities with respect to assets
available to satisfy claims against the Partnership.
The Partnership may issue Junior Securities and, subject to any approvals required
pursuant to
Section 16.4(c)
and
Section 17.4(c)
, Parity Securities from time to time in one or more classes or series without the consent of the Series A Holders. Pursuant to
Section
5.5
, the General
Partner has the authority to determine the designations, preferences, rights, powers and duties of any such class or series before the issuance of any Partnership Interests of such class or series.
SECTION 16.7
No Sinking Fund
.
The Series A Preferred Units shall not have the benefit of any sinking fund.
SECTION 16.8
Record Holders
.
To the fullest extent permitted by applicable law, the General Partner, the Partnership, the Transfer Agent and the Paying Agent may deem and
treat any Series A Holder as the true, lawful and absolute owner of the applicable Series A Preferred Units for all purposes, and neither the General Partner, the Partnership nor the Transfer Agent or the Paying Agent shall be affected by
any notice to the contrary, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any National Securities Exchange on which the Series A Preferred Units are listed or admitted to trading.
SECTION 16.9
Notices
.
All notices or communications in respect of the Series A Preferred Units shall be sufficiently given if given in writing and delivered in
person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this
Article XVI
, this Agreement or by applicable law.
SECTION 16.10
Other Rights; Fiduciary Duties
.
The Series A Preferred Units and the Series A Holders shall not have any designations, preferences, rights, powers or duties, other than
as set forth in this Agreement or as provided by applicable law. Notwithstanding anything to the contrary in this Agreement or any duty existing at law, in equity or otherwise, to the fullest extent permitted by applicable law, neither the
General Partner nor any other Indemnitee shall owe any duties or have any liabilities to Series A Holders, other than the implied contractual covenant of good faith and fair dealing.
SECTION 16.11
Change of Control
.
(a) Upon the occurrence of a Change of Control that occurs after the Series A Original Issue Date, each
Series A Holder shall have the right (“
Series
A
Change of Control
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Conversion Right
”) to convert some or all of the Series A Preferred Units held by such Series A Holder on the Series A Change of Control Conversion Date into a number of
Common Units per Series A Preferred Unit that is an amount equal to the Series A Conversion Ratio (such number of Common Units, the “
Series A Common Unit Conversion Consideration
”), unless the Partnership provides notice
of its election to redeem Series A Preferred Units prior to the expiration of the Partnership’s redemption right contained in
Section 16.5(a)(iii)
. The “
Series A Change of Control Conversion Date
” shall be
the date fixed by the General Partner, in its sole discretion, as the date the Series A Preferred Units are entitled to be converted to Series A Conversion Common Units as provided in this
Section 16.11
. Such Series A Change of
Control Conversion Date shall be a Business Day that is no fewer than 20 days nor more than 35 days from the date on which the Partnership provides the notice to Series A Holders of the Series A Change of Control Conversion Right
under
Section 16.11(b)
.
(b) No later than five days following the expiration of the Partnership’s
redemption right contained in
Section 16.5(a)(iii)
or, if earlier waived, the date of the Partnership’s waiver of such right, the Partnership will provide written notice to the Series A Holders that describes the
Series A Change of Control Conversion Right and states: (i) the events constituting the Change of Control; (ii) the date of the Change of Control; (iii) the date on which the Partnership’s right to redeem the Outstanding
Series A Preferred Units pursuant to
Section 16.5(a)(iii)
expired or was waived; (iv) the Series A Change of Control Conversion Date; (v) the last date on which the Series A Holders may exercise their
Series A Change of Control Conversion Right; (vi) the method and period for calculating the Common Unit Price with respect to the Series A Preferred Units; (vii) if applicable, the type and amount of Series A Alternative Conversion
Consideration entitled to be received per Series A Preferred Unit; (viii) the name and address of the Paying Agent; and (ix) the procedures that the Series A Holders must follow to exercise the Series A Change of Control
Conversion Right.
(c) Subject to
Section 5.8
, the “
Series
A Conversion
Ratio
” shall be calculated as the lesser of: (i) the quotient obtained by dividing (x) the Series A Liquidation Preference as of the Series A Change of Control Conversion Date (unless the Series A Change of Control Conversion
Date is after a Series A Distribution Record Date and prior to the corresponding Series A Distribution Payment Date, in which case any accumulated and unpaid distribution will be excluded from this amount) by (y) the Common Unit Price
with respect to the Series A Preferred Units, and (ii) 1.0915 (the “
Series A
Unit Cap
”). The General Partner shall make such adjustments to the Common Unit Price with respect to the Series A Preferred Units and the
Series A Unit Cap as it determines to be equitable in view of any splits, combinations or distributions in the form of equity issuances or the payment of any Series A Alternative Conversion Consideration to the holders of the Common Units in
connection with the Change of Control.
(d) In the case of a Change of Control pursuant to which Common Units will
be converted into cash, securities or other property or assets (including any combination thereof) (“
Series A
Alternative Conversion Consideration
”), each Series A Holder electing to exercise its Series A Change of
Control Conversion Right will receive upon conversion of the Series A Preferred Units elected by such holder the kind and amount of such Series A Alternative Conversion Consideration on a per Series A Preferred Unit basis that such
Series A Holder would have owned or been entitled to receive upon the Change of Control had such Series A
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Holder held a number of Common Units equal to the Series A Common Unit Conversion Consideration immediately prior to the effective time of the Change of
Control;
provided
,
that
, if the holders of Common Units have the opportunity to elect the form of consideration to be received in such Change of Control, the consideration that the Series A Holders electing to exercise
their Series A Change of Control Conversion Right will receive will be the form and proportion of the aggregate consideration elected by the holders of Common Units who participate in the determination (based on the weighted average of
elections) and will be subject to any limitations to which all holders of Common Units are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in the Change of Control. No fractional
Common Units will be issued upon the conversion of the Series A Preferred Units. Instead, the Partnership shall pay the cash value of such fractional Common Units.
(e) Notwithstanding anything to the contrary in this Agreement, if prior to the expiration of the Partnership’s
redemption right contained in
Section 16.5(a)(iii)
, the Partnership provides notice of its election to redeem Series A Preferred Units pursuant to
Section 16.5
, Series A Holders shall not have any right to convert
the Series A Preferred Units that the Partnership has elected to redeem, and any Series A Preferred Units subsequently selected for redemption that have been tendered for conversion shall be redeemed on the Series A Redemption Date
instead of converted on the Series A Change of Control Conversion Date.
(f) The Partnership shall issue a press
release for publication through a news or press organization as is reasonably expected to broadly disseminate the relevant information to the public, or post notice on the website of the Partnership, in any event prior to the opening of business on
the first Business Day following any date on which the Partnership (or a third party with its prior written consent) provides the notice described in
Section 16.11(b)
to the Series A Holders.
(g) Each Series A Holder electing to exercise its Series A Change of Control Conversion Right will be
required prior to the close of business on the third Business Day preceding the Series A Change of Control Conversion Date, to notify the Partnership of the number of Series A Preferred Units to be converted pursuant to the Series A Change
of Control Conversion Right and otherwise to comply with any applicable procedures contained in the notice described in
Section 16.11(b)
or otherwise required by the Depositary for effecting the conversion.
(h) Upon conversion, the rights of such participating Series A Holder as a holder of the Series A
Preferred Units shall cease with respect to such converted Series A Preferred Units, and such Person shall continue to be a Partner and have the rights of a holder of Common Units under this Agreement. Each Series A Preferred Unit shall,
upon its Series A Change of Control Conversion Date, be deemed to be transferred to, and cancelled by, the Partnership in exchange for the issuance of the Series A Conversion Common Units.
(i) The Partnership shall pay any documentary, stamp or similar issue or transfer taxes or duties relating to the
issuance or delivery of Series A Conversion Common Units. However, the participating Series A Holder shall pay any tax or duty that may be payable relating to any transfer involving the issuance or delivery of Series A Conversion Common Units
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in a name other than such Series A Holder’s name. The Transfer Agent may refuse to reflect the notation of book entry (or the issuance of a Certificate) for Common Units being issued in
a name other than the Series A Holder’s name until the Transfer Agent receives a sum sufficient to pay any tax or duties that will be due because the Common Units are to be issued in a name other than the Series A Holder’s name.
Nothing herein shall preclude any tax withholding required by law or regulation.
(j) The Partnership shall comply
with all applicable securities laws regulating the offer and delivery of any Series A Conversion Common Units and, if the Common Units are then listed or quoted on a National Securities Exchange or other market, shall list or cause to have quoted
and keep listed and quoted the Series A Conversion Common Units to the extent permitted or required by the rules of such exchange or market.
(k) Notwithstanding anything herein to the contrary, nothing herein shall give to any Series A Holder any rights
as a creditor in respect of its right to conversion of Series A Preferred Units.
ARTICLE XVII
SERIES B
FIXED-TO-FLOATING
RATE CUMULATIVE REDEEMABLE PERPETUAL
PREFERRED UNITS
SECTION 17.1
Designation
s.
A series of Preferred Units designated as “7.625% Series B
Fixed-to-Floating
Rate Cumulative Redeemable Perpetual Preferred Units” is hereby designated and created, and the preferences, rights, powers and duties of the
holders of the Series B Preferred Units are set forth herein, including this
Article XVII
. Each Series B Preferred Unit shall be identical in all respects to every other Series B Preferred Unit, except as to the respective dates from
which the Series B Liquidation Preference shall increase or from which Series B Distributions may begin accruing, to the extent such dates may differ. The Series B Preferred Units represent perpetual equity interests in the Partnership and, except
as set forth in
Sections 17.5
and
17.11
, shall not give rise to a claim by the Partnership or a Series B Holder for redemption or the conversion thereof, as applicable, at a particular date.
SECTION 17.2
Series B Preferred Units
.
(a) The authorized number of Series B Preferred Units shall be unlimited. Series B Preferred Units that are purchased or
otherwise acquired by the Partnership shall be cancelled.
(b) The Series B Preferred Units shall be
represented by one or more global Certificates registered in the name of the Depositary or its nominee, and no Series B Holder shall be entitled to receive a definitive Certificate evidencing its Series B Preferred Units, unless otherwise required
by law or the Depositary gives notice of its intention to resign or is no longer eligible to act as such with respect to the Series B Preferred Units and the Partnership shall have not selected a substitute Depositary within 60 calendar days
thereafter. So long as the Depositary shall have been appointed and is serving with respect to the Series B Preferred Units, payments and communications made by the Partnership to Series B Holders shall be made by making payments to, and
communicating with, the Depositary.
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SECTION 17.3
Distributions
.
(a) Distributions on each Series B Preferred Unit shall be cumulative and shall accumulate at the applicable Series B
Distribution Rate from and including the Series B Original Issue Date (or, for any subsequently issued and newly Outstanding Series B Preferred Units, from and including the Series B Distribution Payment Date immediately preceding the issue date of
such Series B Preferred Units) until such time as the Partnership pays the Series B Distribution or redeems such Series B Preferred Unit in accordance with
Section 17.5
or such Series B Preferred Unit is converted in accordance
with
Section 17.11
, whether or not such Series B Distributions shall have been declared. Series B Holders shall be entitled to receive Series B Distributions from time to time out of any assets of the Partnership legally available for
the payment of distributions at the Series B Distribution Rate per Series B Preferred Unit when, as, and if declared by the General Partner. Distributions, to the extent declared by the General Partner to be paid by the Partnership in accordance
with this
Section 17.3
, shall be paid quarterly on each Series B Distribution Payment Date. Distributions shall accumulate in each Series B Distribution Period from and including the preceding Series B Distribution Payment Date (other
than the initial Series B Distribution Period, which shall commence on and include the Series B Original Issue Date), to but excluding the next Series B Distribution Payment Date for such Series B Distribution Period;
provided
that
distributions shall accrue on accumulated but unpaid Series B Distributions at the Series B Distribution Rate. If any Series B Distribution Payment Date otherwise would occur on a date that is not a Business Day, declared Series B Distributions
shall be paid on the immediately succeeding Business Day without the accumulation of additional distributions. Series B Distributions shall be payable based on a
360-day
year consisting of four
90-day
quarters. All Series B Distributions payable by the Partnership pursuant to this
Section 17.3
shall be payable without regard to income of the Partnership and shall be treated for federal
income tax purposes as guaranteed payments for the use of capital under Section 707(c) of the Code.
(b) Not later than 5:00 p.m., New York City time, on each Series B Distribution Payment Date, the Partnership shall pay
those Series B Distributions, if any, that shall have been declared by the General Partner to Series B Holders on the Record Date for the applicable Series B Distribution. The Record Date (the “
Series B Distribution Record Date
”)
for the payment of any Series B Distributions shall be as of the close of business on the first Business Day of the month of the applicable Series B Distribution Payment Date, except that in the case of payments of Series B Distributions in Arrears,
the Series B Distribution Record Date with respect to a Series B Distribution Payment Date shall be such date as may be designated by the General Partner in accordance with this
Article XVII
. So long as any Series B Preferred Units
are Outstanding, no distribution shall be declared or paid or set aside for payment on any Junior Securities (other than a distribution payable solely in Junior Securities) unless full cumulative Series B Distributions have been or contemporaneously
are being paid or set aside for payment on all Outstanding Series B Preferred Units (and distributions on any other Parity Securities) through the most recent respective Series B Distribution Payment Date (and distribution payment date with respect
to such Parity Securities, if any). Accumulated Series B Distributions in Arrears for any past Series B Distribution Period may be declared by the General Partner and
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paid on any date fixed by the General Partner, whether or not a Series B Distribution Payment Date, to Series B Holders on the Record Date for such payment, which may not be less than 10 days
before such payment date. Subject to the next succeeding sentence, if all accumulated Series B Distributions in Arrears on all Outstanding Series B Preferred Units and any other Parity Securities shall not have been declared and paid, or if
sufficient funds for the payment thereof shall not have been set aside, payment of accumulated distributions in Arrears on the Series B Preferred Units and any such Parity Securities shall be made in order of their respective distribution payment
dates, commencing with the earliest. If less than all distributions payable with respect to all Series B Preferred Units and any other Parity Securities are paid, any partial payment shall be made Pro Rata with respect to the Series B Preferred
Units and any such other Parity Securities entitled to a distribution payment at such time in proportion to the aggregate distribution amounts remaining due in respect of such Series B Preferred Units and such other Parity Securities at such time.
Subject to
Sections
12.4
and
17.5
, Series B Holders shall not be entitled to any distribution, whether payable in cash, property or Partnership Securities, in excess of full cumulative Series B Distributions.
Except insofar as distributions accrue on the amount of any accumulated and unpaid Series B Distributions as described in
Section 17.3(a)
, no interest or sum of money in lieu of interest shall be payable in respect of any distribution
payment which may be in Arrears on the Series B Preferred Units. So long as the Series B Preferred Units are held of record by the Depositary or its nominee, declared Series B Distributions shall be paid to the Depositary in
same-day
funds on each Series B Distribution Payment Date or other distribution payment date in the case of payments for Series B Distributions in Arrears.
(c) The “
Series B Three-Month LIBOR
” for each Series B Distribution Period during the Series B
Floating Rate Period shall be determined by the Calculation Agent, as of the applicable Series B LIBOR Determination Date, in accordance with the following provisions:
(i) The Series B Three-Month LIBOR shall be the rate (expressed as a percentage per year) for deposits
in U.S. dollars for a three-month period commencing on the first day of such Series B Distribution Period that appears on Reuters Page LIBOR01 as of 11:00 a.m. (London time) on the Series B LIBOR Determination Date.
(ii) If the Series B Three-Month LIBOR cannot be determined as described in
Section 17.3(c)(i)
,
the Partnership shall select four major banks in the London interbank market and request that the principal London offices of those four selected banks provide their offered quotations for deposits in U.S. dollars for a period of three months,
commencing on the first day of the applicable Series B Distribution Period, to prime banks in the London interbank market at approximately 11:00 a.m. (London time) on the Series B LIBOR Determination Date for such Series B Distribution Period.
Offered quotations must be based on a principal amount equal to an amount that, in the Partnership’s judgment, is representative of a single transaction in U.S. dollars in the London interbank market at the time. If two or more quotations are
provided, the Series B Three-Month LIBOR for such Series B Distribution Period will be the arithmetic mean of the quotations. If fewer than two quotations are provided, the Series B Three-Month LIBOR for such Series B Distribution Period will be the
arithmetic mean of the rates quoted on the Series B LIBOR Determination Date for such Series B Distribution Period by three major banks in New York City selected by the Partnership, for loans in U.S. dollars to leading European banks for a
three-month period commencing on the first day
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of such Series B Distribution Period. The rates quoted must be based on an amount that, in the Partnership’s judgment, is representative of a single transaction in U.S. dollars in that
market at the time. If fewer than three New York City banks selected by the Partnership are quoting rates in the manner described above, the Series B Three-Month LIBOR for the applicable Series B Distribution Period will be the same as for the
immediately preceding Series B Distribution Period or, if the immediately preceding Series B Distribution Period was within the Series B Fixed Rate Period, the same as for the most recent quarter for which the Series B Three-Month LIBOR can be
determined;
(iii) All percentages resulting from any of the above calculations will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with five
one-millionths
of a percentage point rounded upwards and all dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with
one-half
cent being rounded upwards).
SECTION 17.4
Voting Rights
.
(a) Notwithstanding anything to the contrary in this Agreement, the Series B Preferred Units shall not have any voting
rights except as set forth in
Section 13.3(c)
, this
Section 17.4
or as otherwise required by the Delaware Act.
(b) Without the affirmative vote or consent of the holders of at least 66 2/3% of the Outstanding Series B Preferred
Units, voting as a separate class, the General Partner shall not adopt any amendment to this Agreement that would have a material adverse effect on the powers, preferences, duties or special rights of the Series B Preferred Units;
provided,
however
, that (i) subject to
Section 17.4(c)
, the issuance of additional Partnership Securities shall not be deemed to constitute such a material adverse effect for purposes of this
Section 17.4(b)
and (ii) for purposes
of this
Section 17.4(b)
, no amendment of this Agreement in connection with a merger or other transaction in which the Partnership is the surviving entity and the Series B Preferred Units remain Outstanding with the terms thereof materially
unchanged in any respect adverse to the Series B Holders shall be deemed to materially and adversely affect the powers, preferences, duties or special rights of the Series B Preferred Units.
(c) Without the affirmative vote or consent of the holders of at least 66 2/3% of the Outstanding Series B
Preferred Units voting as a class together with holders of any other Parity Securities upon which like voting rights have been conferred and are exercisable, the Partnership shall not (x) create or issue any Parity Securities if the
cumulative distributions payable on Series B Preferred Units or any Parity Securities are in Arrears or (y) create or issue any Senior Securities.
(d) For any matter described in this
Section 17.4
in which the Series B Holders are entitled to
vote as a class (whether separately or together with the holders of any Parity Securities), such Series B Holders shall be entitled to one vote per Series B Preferred Unit. Any Series B Preferred Units held by the Partnership or any of its
Subsidiaries or their controlled Affiliates shall not be entitled to vote.
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(e) Notwithstanding
Sections 17.4(b)
and
17.4(c)
, no vote of
the Series B Holders shall be required if, at or prior to the time when such action is to take effect, provision is made for the redemption of all Series B Preferred Units at the time Outstanding.
SECTION 17.5
Optional Redemption
; Series B Rating Event
(a) The Partnership shall have the right (i) at any time, and from time to time, on or after June 15, 2022 or
(ii) at any time within 120 days after the conclusion of any review or appeal process instituted by the Partnership following the occurrence of a Series B Rating Event or (iii) at any time within 120 days after the first date on which a
Change of Control occurs, in each case, to redeem the Series B Preferred Units, which redemption may be in whole or in part (except with respect to a redemption pursuant to clause
(ii)
of this
Section 17.5(a)
which shall be
in whole but not in part), using any source of funds legally available for such purpose. Any such redemption shall occur on a date set by the General Partner (the “
Series B Redemption Date
”). The Partnership shall effect any
such redemption by paying cash for each Series B Preferred Unit to be redeemed equal to the Series B Liquidation Preference for such Series B Preferred Unit on such Series B Redemption Date plus an amount equal to all unpaid distributions thereon
from the Series B Original Issue Date to, but not including, the Series B Redemption Date (whether or not such distributions shall have been declared) (the “
Series B Redemption Price
”);
provided
that in connection with a
redemption in accordance with clause
(ii)
of this
Section 17.5(a)
, the Series B Liquidation Preference per Series B Preferred Unit shall be deemed to be equal to $25.50. So long as the Series B Preferred Units to be redeemed
are held of record by the nominee of the Depositary, the Series B Redemption Price shall be paid by the Paying Agent to the Depositary on the Series B Redemption Date.
(b) The Partnership shall give notice of any redemption by mail, postage prepaid, not less than 30 days and not more
than 60 days before the scheduled Series B Redemption Date to the Series B Holders (as of 5:00 p.m. New York City time on the Business Day next preceding the day on which notice is given) of any Series B Preferred Units to be redeemed as
such Series B Holders’ names appear on the books of the Transfer Agent and at the address of such Series B Holders shown therein. Such notice (the “
Series B Redemption Notice
”) shall state, as applicable: (1) the
Series B Redemption Date, (2) the number of Series B Preferred Units to be redeemed and, if less than all Outstanding Series B Preferred Units are to be redeemed, the number (and the identification) of Series B Preferred Units to be redeemed
from such Series B Holder, (3) the Series B Redemption Price, (4) the place where any Series B Preferred Units in certificated form are to be redeemed and shall be presented and surrendered for payment of the Series B Redemption Price
therefor and (5) that distributions on the Series B Preferred Units to be redeemed shall cease to accumulate from and after such Series B Redemption Date. For the avoidance of doubt, the Partnership may give the Series B Redemption Notice in
advance of a Change of Control if a definitive agreement is in place for the Change of Control at the time of giving the Series B Redemption Notice.
(c) If the Partnership elects to redeem less than all of the Outstanding Series B Preferred Units, the number of
Series B Preferred Units to be redeemed shall be determined by the General Partner, and such Series B Preferred Units shall be redeemed by such method of selection as the Depositary shall determine, either Pro Rata or by lot, with adjustments to
avoid redemption of fractional Series B Preferred Units. The aggregate Series B Redemption Price for
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any such partial redemption of the Outstanding Series B Preferred Units shall be allocated correspondingly among the redeemed Series B Preferred Units. The Series B Preferred Units not redeemed
shall remain Outstanding and entitled to all the rights and preferences provided in this
Article XVII
.
(d) If the Partnership gives or causes to be given a Series B Redemption Notice, the Partnership shall deposit
with the Paying Agent funds sufficient to redeem the Series B Preferred Units as to which such Series B Redemption Notice shall have been given, no later than 10:00 a.m. New York City time on the Series B Redemption Date, and shall give the
Paying Agent irrevocable instructions and authority to pay the Series B Redemption Price to the Series B Holders whose Series B Preferred Units are to be redeemed upon surrender or deemed surrender (which shall occur automatically if the Certificate
representing such Series B Preferred Units is issued in the name of the Depositary or its nominee) of the Certificates therefor as set forth in the Series B Redemption Notice. If the Series B Redemption Notice shall have been given, from and after
the Series B Redemption Date, unless the Partnership defaults in providing funds sufficient for such redemption at the time and place specified for payment pursuant to the Series B Redemption Notice, all Series B Distributions on such Series B
Preferred Units to be redeemed shall cease to accumulate and all rights of holders of such Series B Preferred Units as Limited Partners with respect to such Series B Preferred Units to be redeemed shall cease, except the right to receive the Series
B Redemption Price, and such Series B Preferred Units shall not thereafter be transferred on the books of the Transfer Agent or be deemed to be Outstanding for any purpose whatsoever. The Series B Holders shall have no claim to the interest income,
if any, earned on such funds deposited with the Paying Agent. Any funds deposited with the Paying Agent hereunder by the Partnership for any reason, including redemption of Series B Preferred Units, that remain unclaimed or unpaid after two years
after the applicable Series B Redemption Date or other payment date, as applicable, shall be, to the extent permitted by law, repaid to the Partnership upon its written request, after which repayment the Series B Holders entitled to such redemption
or other payment shall have recourse only to the Partnership. Notwithstanding any Series B Redemption Notice, there shall be no redemption of any Series B Preferred Units called for redemption until funds sufficient to pay the full Series B
Redemption Price of such Series B Preferred Units shall have been deposited by the Partnership with the Paying Agent.
(e) Any Series B Preferred Units that are redeemed or otherwise acquired by the Partnership shall be cancelled. If only
a portion of the Series B Preferred Units represented by a Certificate shall have been called for redemption, upon surrender of the Certificate to the Paying Agent (which shall occur automatically if the Certificate representing such Series B
Preferred Units is registered in the name of the Depositary or its nominee), the Partnership shall issue and the Paying Agent shall deliver to the Series B Holders a new Certificate (or adjust the applicable book-entry account) representing the
number of Series B Preferred Units represented by the surrendered Certificate that have not been called for redemption.
(f) Notwithstanding anything to the contrary in this
Article XVII
, in the event that full cumulative
distributions on the Series B Preferred Units and any Parity Securities shall not have been paid or declared and set aside for payment, the Partnership shall not be permitted to repurchase, redeem or otherwise acquire, in whole or in part, any
Series B Preferred Units or Parity Securities except pursuant to a purchase or exchange offer made on the same relative terms to all Series B Holders and holders of any Parity Securities. Subject to
Section
4.10
, so
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long as any Series B Preferred Units are Outstanding, the Partnership shall not be permitted to redeem, repurchase or otherwise acquire any Common Units or any other Junior Securities unless full
cumulative distributions on the Series B Preferred Units and any Parity Securities for all prior and the then-ending Series B Distribution Periods shall have been paid or declared and set aside for payment.
SECTION 17.6
Rank
.
The Series B Preferred Units shall each be deemed to rank:
(a) senior to any Junior Securities;
(b) on a parity with any Parity Securities;
(c) junior to any Senior Securities; and
(d) junior to all existing and future indebtedness of the Partnership and other liabilities with respect to
assets available to satisfy claims against the Partnership.
The Partnership may issue Junior Securities and, subject to any approvals
required pursuant to
Section 16.4(c)
and
Section 17.4(c)
, Parity Securities from time to time in one or more classes or series without the consent of the Series B Holders. Pursuant to
Section
5.5
,
the General Partner has the authority to determine the designations, preferences, rights, powers and duties of any such class or series before the issuance of any Partnership Interests of such class or series.
SECTION 17.7
No Sinking Fund
.
The Series B Preferred Units shall not have the benefit of any sinking fund.
SECTION 17.8
Record Holders
.
To the fullest extent permitted by applicable law, the General Partner, the Partnership, the Transfer Agent and the Paying Agent may deem and
treat any Series B Holder as the true, lawful and absolute owner of the applicable Series B Preferred Units for all purposes, and neither the General Partner, the Partnership nor the Transfer Agent or the Paying Agent shall be affected by any notice
to the contrary, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any National Securities Exchange on which the Series B Preferred Units are listed or admitted to trading.
SECTION 17.9
Notices
.
All notices or communications in respect of the Series B Preferred Units shall be sufficiently given if given in writing and delivered in
person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this
Article XVII
, this Agreement or by applicable law.
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SECTION 17.10
Other Rights; Fiduciary
Duties
.
The Series B Preferred Units and the Series B Holders shall not have any designations, preferences,
rights, powers or duties, other than as set forth in this Agreement or as provided by applicable law. Notwithstanding anything to the contrary in this Agreement or any duty existing at law, in equity or otherwise, to the fullest extent
permitted by applicable law, neither the General Partner nor any other Indemnitee shall owe any duties or have any liabilities to Series B Holders, other than the implied contractual covenant of good faith and fair dealing.
SECTION 17.11
Change of Control
.
(a) Upon the occurrence of a Change of Control that occurs after the Series B Original Issue Date, each Series B Holder
shall have the right (“
Series B
Change of Control Conversion Right
”) to convert some or all of the Series B Preferred Units held by such Series B Holder on the Series B Change of Control Conversion Date into a
number of Common Units per Series B Preferred Unit that is an amount equal to the Series B Conversion Ratio (such number of Common Units, the “
Series B
Common Unit Conversion Consideration
”), unless the Partnership provides
notice of its election to redeem Series B Preferred Units prior to the expiration of the Partnership’s redemption right contained in
Section 17.5(a)(iii)
. The “
Series B
Change of Control Conversion Date
”
shall be the date fixed by the General Partner, in its sole discretion, as the date the Series B Preferred Units are entitled to be converted to Series B Conversion Common Units as provided in this
Section 17.11
. Such Series B Change of
Control Conversion Date shall be a Business Day that is no fewer than 20 days nor more than 35 days from the date on which the Partnership provides the notice to Series B Holders of the Series B Change of Control Conversion Right
under
Section 17.11(b)
.
(b) No later than five days following the expiration of the Partnership’s
redemption right contained in
Section 17.5(a)(iii)
or, if earlier waived, the date of the Partnership’s waiver of such right, the Partnership will provide written notice to the Series B Holders that describes the Series B
Change of Control Conversion Right and states: (i) the events constituting the Change of Control; (ii) the date of the Change of Control; (iii) the date on which the Partnership’s right to redeem the Outstanding Series B
Preferred Units pursuant to
Section 17.5(a)(iii)
expired or was waived; (iv) the Series B Change of Control Conversion Date; (v) the last date on which the Series B Holders may exercise their Series B Change of Control
Conversion Right; (vi) the method and period for calculating the Common Unit Price with respect to the Series B Preferred Units; (vii) if applicable, the type and amount of Series B Alternative Conversion Consideration entitled to be
received per Series B Preferred Unit; (viii) the name and address of the Paying Agent; and (ix) the procedures that the Series B Holders must follow to exercise the Series B Change of Control Conversion Right.
(c) Subject to
Section 5.8
, the “
Series B Conversion Ratio
” shall be calculated as the
lesser of: (i) the quotient obtained by dividing (x) the Series B Liquidation Preference as of the Series B Change of Control Conversion Date (unless the Series B Change of Control Conversion Date is after a Series B Distribution Record
Date and prior to the corresponding Series B Distribution Payment Date, in which case any accumulated and unpaid distribution will be excluded from this amount) by (y) the Common Unit Price with respect to the Series B Preferred Units, and
(ii) 1.04297 (the “
Series B
Unit Cap
”). The General Partner shall make such
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adjustments to the Common Unit Price with respect to the Series B Preferred Units and the Series B Unit Cap as it determines to be equitable in view of any splits, combinations or distributions
in the form of equity issuances or the payment of any Series B Alternative Conversion Consideration to the holders of the Common Units in connection with the Change of Control.
(d) In the case of a Change of Control pursuant to which Common Units will be converted into cash, securities or other
property or assets (including any combination thereof) (“
Series B
Alternative Conversion Consideration
”), each Series B Holder electing to exercise its Series B Change of Control Conversion Right will receive upon conversion
of the Series B Preferred Units elected by such holder the kind and amount of such Series B Alternative Conversion Consideration on a per Series B Preferred Unit basis that such Series B Holder would have owned or been entitled to receive upon the
Change of Control had such Series B Holder held a number of Common Units equal to the Series B Common Unit Conversion Consideration immediately prior to the effective time of the Change of Control;
provided
,
that
, if the
holders of Common Units have the opportunity to elect the form of consideration to be received in such Change of Control, the consideration that the Series B Holders electing to exercise their Series B Change of Control Conversion Right will receive
will be the form and proportion of the aggregate consideration elected by the holders of Common Units who participate in the determination (based on the weighted average of elections) and will be subject to any limitations to which all holders of
Common Units are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in the Change of Control. No fractional Common Units will be issued upon the conversion of the Series B Preferred
Units. Instead, the Partnership shall pay the cash value of such fractional Common Units.
(e) Notwithstanding
anything to the contrary in this Agreement, if prior to the expiration of the Partnership’s redemption right contained in
Section 17.5(a)(iii)
, the Partnership provides notice of its election to redeem Series B Preferred Units
pursuant to
Section 17.5
, Series B Holders shall not have any right to convert the Series B Preferred Units that the Partnership has elected to redeem, and any Series B Preferred Units subsequently selected for redemption that have been
tendered for conversion shall be redeemed on the Series B Redemption Date instead of converted on the Series B Change of Control Conversion Date.
(f) The Partnership shall issue a press release for publication through a news or press organization as is reasonably
expected to broadly disseminate the relevant information to the public, or post notice on the website of the Partnership, in any event prior to the opening of business on the first Business Day following any date on which the Partnership (or a third
party with its prior written consent) provides the notice described in
Section 17.11(b)
to the Series B Holders.
(g) Each Series B Holder electing to exercise its Series B Change of Control Conversion Right will be required prior to
the close of business on the third Business Day preceding the Series B Change of Control Conversion Date, to notify the Partnership of the number of Series B Preferred Units to be converted pursuant to the Series B Change of Control Conversion Right
and otherwise to comply with any applicable procedures contained in the notice described in
Section 17.11(b)
or otherwise required by the Depositary for effecting the conversion.
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(h) Upon conversion, the rights of such participating Series B Holder as a
holder of the Series B Preferred Units shall cease with respect to such converted Series B Preferred Units, and such Person shall continue to be a Partner and have the rights of a holder of Common Units under this Agreement. Each Series B Preferred
Unit shall, upon its Series B Change of Control Conversion Date, be deemed to be transferred to, and cancelled by, the Partnership in exchange for the issuance of the Series B Conversion Common Units.
(i) The Partnership shall pay any documentary, stamp or similar issue or transfer taxes or duties relating to the
issuance or delivery of Series B Conversion Common Units. However, the participating Series B Holder shall pay any tax or duty that may be payable relating to any transfer involving the issuance or delivery of Series B Conversion Common Units in a
name other than such Series B Holder’s name. The Transfer Agent may refuse to reflect the notation of book entry (or the issuance of a Certificate) for Common Units being issued in a name other than the Series B Holder’s name until the
Transfer Agent receives a sum sufficient to pay any tax or duties that will be due because the Common Units are to be issued in a name other than the Series B Holder’s name. Nothing herein shall preclude any tax withholding required by law or
regulation.
(j) The Partnership shall comply with all applicable securities laws regulating the offer and delivery
of any Series B Conversion Common Units and, if the Common Units are then listed or quoted on a National Securities Exchange or other market, shall list or cause to have quoted and keep listed and quoted the Series B Conversion Common Units to the
extent permitted or required by the rules of such exchange or market.
(k) Notwithstanding anything herein to
the contrary, nothing herein shall give to any Series B Holder any rights as a creditor in respect of its right to conversion of Series B Preferred Units.
ARTICLE XVIII
GENERAL PROVISIONS
SECTION 18.1
Addresses and Notices.
Except as otherwise provided in
Section
16.9
and
Section
17.9
in relation to the Preferred
Units, any notice, demand, request, report or proxy materials required or permitted to be given or made to a Partner or Assignee 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 or Assignee at the address described below. Any notice, payment or report to be given or made to a Partner or Assignee 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
Securities 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
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Partnership Securities by reason of any assignment or otherwise. An affidavit or certificate of making of any notice, payment or report in accordance with the provisions of this
Section
18.1
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
addressed to a Record Holder at the address of such Record Holder appearing on the books and records of the Transfer Agent or the Partnership is returned by the United States Postal Service marked to indicate that the United States Postal Service is
unable to deliver it, such notice, payment or report and any subsequent 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) if they are available for the Partner or Assignee 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 and Assignees. 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, Assignee or other Person if believed by it to be genuine.
SECTION 18.2
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 18.3
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 18.4
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 18.5
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 18.6
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.
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SECTION 18.7
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 Unit, upon
accepting the certificate evidencing such Unit or executing and delivering a Transfer Application as herein described, independently of the signature of any other party.
SECTION 18.8
Applicable Law.
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.
SECTION 18.9
Invalidity of Provisions.
If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not be affected thereby.
SECTION 18.10
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.
[Rest of Page Intentionally Left Blank]
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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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RIVERWALK LOGISTICS, L.P.
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By:
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NUSTAR GP, LLC, its General Partner
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By:
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/s/ Thomas R. Shoaf
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Name:
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Thomas R. Shoaf
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Title:
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Executive Vice President and Chief Financial Officer
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LIMITED PARTNERS:
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All Limited Partners now and hereafter admitted as Limited Partners of the Partnership, pursuant to powers of attorney now and hereafter executed in favor of, and granted and delivered to the General Partner.
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RIVERWALK LOGISTICS, L.P.
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By:
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NUSTAR GP, LLC, its General Partner
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By:
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/s/ Thomas R. Shoaf
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Name:
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Thomas R. Shoaf
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Title:
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Executive Vice President and Chief Financial Officer
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EXHIBIT A
to the Fifth Amended and
Restated Agreement of Limited Partnership of
NuStar Energy L.P.
Certificate Evidencing Common Units
Representing Limited Partner Interests in
NuStar Energy L.P.
In accordance with Section 4.1 of the Fifth Amended and Restated Agreement of Limited Partnership of NuStar
Energy L.P., as amended, supplemented or restated from time to time (the “
Partnership Agreement
”), NuStar Energy L.P., 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 and accompanied by a properly executed application for transfer of the Common Units represented by this Certificate. 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 19003
IH-10
West, San
Antonio, Texas 78257. Capitalized terms used herein but not defined shall have the meanings given them in the Partnership Agreement.
The
Holder, by accepting this Certificate, is deemed to have (i) requested admission as, and agreed to become, a Limited Partner and to have agreed to comply with and be bound by and to have executed the Partnership Agreement, (ii) represented
and warranted that the Holder has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (iii) granted the powers of attorney provided for in the Partnership Agreement and
(iv) made the waivers and given the consents and approvals contained in the Partnership Agreement.
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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NuStar Energy L.P.
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By:
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Riverwalk Logistics, L.P., its
General Partner
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Countersigned and Registered by:
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By: NuStar GP, LLC,
its General Partner
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By:
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as Transfer Agent and Registrar
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Name:
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By:
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By:
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Authorized Signature
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Secretary
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A-1
[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 –
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as tenants in common
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UNIF GIFT/TRANSFERS MIN ACT
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TEN ENT –
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as tenants by the entireties
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Custodian
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(Cust)
(Minor)
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JT TEN –
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as joint tenants with right of survivorship and not as tenants in common
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under Uniform Gifts/Transfers to Minors Act
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(State)
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Additional abbreviations, though not in the above list, may also be used.
A-2
ASSIGNMENT OF COMMON UNITS
in
NUSTAR ENERGY L.P.
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FOR VALUE RECEIVED
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hereby assigns, conveys, sells and transfers unto
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(Please print or typewrite name
identifying and address of Assignee)
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(Please insert Social Security or other
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 NuStar Energy L.P.
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Date:
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NOTE:
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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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SIGNATURE(S) MUST BE GUARANTEED BY A MEMBER FIRM OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK OR TRUST COMPANY
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(Signature)
(Signature)
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SIGNATURE(S) GUARANTEED
No transfer of the Common Units evidenced hereby will be registered on the books of the Partnership, unless the Certificate evidencing the
Common Units to be transferred is surrendered for registration or transfer and an Application for Transfer of Common Units has been executed by a transferee either (a) on the form set forth below or (b) on a separate application that the
Partnership will furnish on request without charge. A transferor of the Common Units shall have no duty to the transferee with respect to execution of the transfer application in order for such transferee to obtain registration of the transfer of
the Common Units.
A-3
APPLICATION FOR TRANSFER OF COMMON UNITS
The undersigned (“
Assignee
”) hereby applies for transfer to the name of the Assignee of the Common Units evidenced hereby.
The Assignee (a) requests admission as a Substituted Limited Partner and agrees to comply with and be bound by, and hereby executes,
the Fifth Amended and Restated Agreement of Limited Partnership of NuStar Energy L.P. (the “
Partnership
”), as amended, supplemented or restated to the date hereof (the “
Partnership Agreement
”), (b) represents and
warrants that the Assignee has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (c) appoints the General Partner of the Partnership and, if a Liquidator shall be appointed,
the Liquidator of the Partnership as the Assignee’s
attorney-in-fact
to execute, swear to, acknowledge and file any document, including, without limitation, the
Partnership Agreement and any amendment thereto and the Certificate of Limited Partnership of the Partnership and any amendment thereto, necessary or appropriate for the Assignee’s admission as a Substituted Limited Partner and as a party to
the Partnership Agreement, (d) gives the powers of attorney provided for in the Partnership Agreement, and (e) makes the waivers and gives the consents and approvals contained in the Partnership Agreement. Capitalized terms not defined
herein have the meanings assigned to such terms in the Partnership Agreement.
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Date:
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Signature of Assignee
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Social Security or other identifying number of Assignee
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Name and Address of Assignee
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Purchase Price including commissions, if any
Type of Entity (check one):
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☐ Individual
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☐ Partnership
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☐ Corporation
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☐ Trust
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☐ Other (specify)
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Nationality (check one):
☐ U.S. Citizen, Resident or Domestic Entity
☐ Foreign Corporation ☐
Non-resident
Alien
If the U.S. Citizen, Resident or Domestic Entity box is checked, the following certification must be completed.
Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the “
Code
”), the Partnership must withhold tax with
respect to certain transfers of property if a holder of an interest in the Partnership is a foreign person. To inform the Partnership that no withholding is required with respect to the undersigned interestholder’s interest in it, the
undersigned hereby certifies the following (or, if applicable, certifies the following on behalf of the interestholder).
A-4
Complete Either A or B:
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A.
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Individual Interestholder
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1.
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I am not a
non-resident
alien for purposes of U.S. income taxation.
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2.
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My U.S. taxpayer identification number (Social Security Number) is .
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B.
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Partnership, Corporation or Other Interestholder
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1.
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is not a foreign corporation, foreign partnership, foreign
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(Name of Interestholder)
trust or foreign estate (as those terms are defined in the Code and Treasury Regulations).
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2.
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The interestholder’s U.S. employer identification number is .
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3.
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The interestholder’s office address and place of incorporation (if applicable) is .
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The interestholder agrees to notify the Partnership within sixty (60) days of the date the interestholder becomes a
foreign person.
The interestholder understands that this certificate may be disclosed to the Internal Revenue Service by the Partnership
and that any false statement contained herein could be punishable by fine, imprisonment or both.
Under penalties of perjury, I declare
that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete and, if applicable, I further declare that I have authority to sign this document on behalf of:
Name of Interestholder
Signature
and Date
Title (if applicable)
Note: If the Assignee is a broker, dealer, bank, trust company, clearing corporation, other nominee holder or an agent of any of the
foregoing, and is holding for the account of any other person, this application should be completed by an officer thereof or, in the case of a broker or dealer, by a registered representative who is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc., or, in the case of any other nominee holder, a person performing a similar function. If the Assignee is a broker, dealer, bank, trust company, clearing corporation, other
nominee owner or an agent of any of the foregoing, the above certification as to any person for whom the Assignee will hold the Common Units shall be made to the best of the Assignee’s knowledge.
A-5
EXHIBIT B
to the Fifth Amended and
Restated Agreement of Limited Partnership of
NuStar Energy L.P.
Certificate Evidencing 8.50% Series A
Fixed-to-Floating
Rate
Cumulative Redeemable Perpetual
Preferred Units
Representing Limited Partner Interests in
NuStar Energy L.P.
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No.
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Series A Preferred Units
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In accordance with Sections 4.1 and 16.2(b) of the Fifth Amended and Restated Agreement of Limited Partnership
of NuStar Energy L.P., as amended, supplemented or restated from time to time (the “Partnership Agreement”), NuStar Energy L.P., a Delaware limited partnership (the “Partnership”), hereby certifies that
(the “Holder”) is the registered owner of 8.50% Series A
Fixed-to-Floating
Rate Cumulative Redeemable Perpetual Preferred Units representing limited partner interests in the Partnership (the “Series A Preferred 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 Series A Preferred Units are set forth in, and this Certificate and the Series A Preferred 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 19003
IH-10
West, San Antonio, Texas 78257. 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 NUSTAR ENERGY L.P. THAT THIS SECURITY MAY NOT BE
TRANSFERRED IF SUCH TRANSFER (AS DEFINED IN THE PARTNERSHIP AGREEMENT) 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 NUSTAR ENERGY L.P. UNDER THE LAWS OF THE STATE OF DELAWARE, OR (C) CAUSE NUSTAR ENERGY L.P. 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). THE GENERAL PARTNER (AS DEFINED IN THE PARTNERSHIP AGREEMENT) MAY IMPOSE ADDITIONAL
RESTRICTIONS ON THE TRANSFER OF THIS SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE NECESSARY TO AVOID A SIGNIFICANT RISK OF NUSTAR ENERGY L.P. BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY
FOR FEDERAL INCOME TAX PURPOSES. THIS SECURITY MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON ITS TRANSFER PROVIDED IN THE PARTNERSHIP AGREEMENT. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS SECURITY TO THE SECRETARY OF THE GENERAL PARTNER AT THE PRINCIPAL EXECUTIVE OFFICES OF THE PARTNERSHIP. THE RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED INTO THROUGH THE
FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED OR ADMITTED TO TRADING.
B-1
The Holder, by accepting this Certificate, is deemed to have (i) requested admission as, and
agreed to become, a Limited Partner and to have agreed to comply with and be bound by and to have executed the Partnership Agreement and accepted all of its terms and conditions, (ii) represented and warranted that the Holder has all right,
power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (iii) granted the power of attorney set forth in Section 2.6 of the Partnership Agreement and (iv) made the waivers and given
the consents and approvals contained in the Partnership Agreement.
This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent. This Certificate shall be governed by and construed in accordance with the laws of the State of Delaware.
B-2
EXHIBIT C
to the Fifth Amended and
Restated Agreement of Limited Partnership of
NuStar Energy L.P.
Certificate Evidencing 7.625% Series B
Fixed-to-Floating
Rate Cumulative Redeemable Perpetual
Preferred Units
Representing Limited Partner Interests in
NuStar Energy L.P.
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No.
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Series B Preferred Units
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In accordance with Sections 4.1 and 17.2(b) of the Fifth Amended and Restated Agreement of Limited Partnership
of NuStar Energy L.P., as amended, supplemented or restated from time to time (the “Partnership Agreement”), NuStar Energy L.P., a Delaware limited partnership (the “Partnership”), hereby certifies that
(the “Holder”) is the registered owner of 7.625% Series B
Fixed-to-Floating
Rate Cumulative Redeemable Perpetual Preferred Units representing limited partner interests in the Partnership (the “Series B Preferred 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 Series B Preferred Units are set forth in, and this Certificate and the Series B Preferred 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 19003
IH-10
West, San Antonio, Texas 78257. 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 NUSTAR ENERGY L.P. THAT THIS SECURITY MAY NOT BE
TRANSFERRED IF SUCH TRANSFER (AS DEFINED IN THE PARTNERSHIP AGREEMENT) 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 NUSTAR ENERGY L.P. UNDER THE LAWS OF THE STATE OF DELAWARE, OR (C) CAUSE NUSTAR ENERGY L.P. 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). THE GENERAL PARTNER (AS DEFINED IN THE PARTNERSHIP AGREEMENT) MAY IMPOSE ADDITIONAL
RESTRICTIONS ON THE TRANSFER OF THIS SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE NECESSARY TO AVOID A SIGNIFICANT RISK OF NUSTAR ENERGY L.P. BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY
FOR FEDERAL INCOME TAX PURPOSES. THIS SECURITY MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON ITS TRANSFER PROVIDED IN THE PARTNERSHIP AGREEMENT. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS SECURITY TO THE SECRETARY OF THE GENERAL PARTNER AT THE PRINCIPAL EXECUTIVE OFFICES OF THE PARTNERSHIP. THE RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED INTO THROUGH THE
FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED OR ADMITTED TO TRADING.
C-1
The Holder, by accepting this Certificate, is deemed to have (i) requested admission as, and
agreed to become, a Limited Partner and to have agreed to comply with and be bound by and to have executed the Partnership Agreement and accepted all of its terms and conditions, (ii) represented and warranted that the Holder has all right,
power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (iii) granted the power of attorney set forth in Section 2.6 of the Partnership Agreement and (iv) made the waivers and given
the consents and approvals contained in the Partnership Agreement.
This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent. This Certificate shall be governed by and construed in accordance with the laws of the State of Delaware.
C-2
Exhibit 4.4
NUSTAR LOGISTICS, L.P.,
Issuer
NUSTAR ENERGY L.P.,
Guarantor
NUSTAR PIPELINE
OPERATING PARTNERSHIP L.P.,
Affiliate Guarantor
and
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
Successor Trustee
EIGHTH SUPPLEMENTAL INDENTURE
Dated as of April 28, 2017
to
INDENTURE
Dated as of July 15, 2002
5.625% Senior Notes due 2027
TABLE OF CONTENTS
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ARTICLE I 5.625% SENIOR NOTES DUE 2027
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2
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Section 1.1
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Designation of the Notes; Establishment of Form
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2
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Section 1.2
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Amount
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2
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Section 1.3
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Interest Rate
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2
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Section 1.4
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Redemption
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2
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Section 1.5
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Conversion
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3
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Section 1.6
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Maturity
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3
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Section 1.7
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Place of Payment
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3
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Section 1.8
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Other Terms of the Notes due 2027
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3
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ARTICLE II AMENDMENTS TO THE INDENTURE
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3
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Section 2.1
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Definitions
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3
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Section 2.2
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Consolidation, Merger, Conveyance, Transfer or Lease
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6
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Section 2.3
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Covenants
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7
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Section 2.4
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Events of Default
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9
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ARTICLE III MISCELLANEOUS
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10
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Section 3.1
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Execution as Supplemental Indenture
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10
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Section 3.2
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Responsibility for Recitals, Etc
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10
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Section 3.3
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Provisions Binding on Partnership’s and Guarantor’s Successors
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10
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Section 3.4
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Governing Law
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10
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Section 3.5
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Execution and Counterparts
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11
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Section 3.6
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Capitalized Terms
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Exhibit A
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Form of 5.625% Senior Note due 2027
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Exhibit B
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Form of Supplemental Indenture
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i
EIGHTH SUPPLEMENTAL INDENTURE, dated as of April 28, 2017 (the “
Eighth Supplemental
Indenture
”), among NuStar Logistics, L.P. (formerly known as Valero Logistics Operations, L.P.), a Delaware limited partnership having its principal office at 19003
IH-10
West, San Antonio, Texas
78257 (the “
Partnership
”), NuStar Energy L.P. (formerly known as Valero L.P.), a Delaware limited partnership (the “
Guarantor
”), NuStar Pipeline Operating Partnership L.P. (formerly known as Kaneb Pipe Line
Operating Partnership, L.P.), a Delaware limited partnership and an Affiliate of the Partnership (the “
Affiliate Guarantor
”), and Wells Fargo Bank, National Association, a national banking association organized and existing under
the laws of the United States of America, as successor trustee (the “
Trustee
”) to The Bank of New York Trust Company, N.A., which was successor trustee to The Bank of New York, a New York banking corporation, as trustee. This Eighth
Supplemental Indenture amends and supplements the Original Indenture (as defined below), as previously amended and supplemented by the Third Supplemental Indenture (as defined below). The Original Indenture, as amended and supplemented by the Third
Supplemental Indenture and as further amended and supplemented pursuant to this Eighth Supplemental Indenture, is referred to herein as the “
Indenture
”.
RECITALS OF THE PARTNERSHIP
The
Partnership, the Guarantor and the Trustee have heretofore executed and delivered the Indenture dated as of July 15, 2002 (the “
Original Indenture
”), providing for the issuance from time to time of one or more series of the
Partnership’s Securities (as defined in the Original Indenture), each to be guaranteed by the Guarantor and the terms of which are to be determined as set forth in Section 301 of the Original Indenture.
The Partnership, the Guarantor, the Affiliate Guarantor and the Trustee have heretofore executed and delivered the Third Supplemental
Indenture dated July 1, 2005 (the “
Third Supplemental Indenture
”), amending and supplementing the Original Indenture and providing for an unconditional guarantee by the Affiliate Guarantor of the due and punctual payment of the
principal of, and premium, if any, and interest on the Securities and all other amounts due and payable under the Original Indenture and the Securities by the Partnership.
Section 901 of the Indenture provides, among other things, that the Partnership, the Guarantor, the Affiliate Guarantor and the Trustee
may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of establishing the form or terms of Securities of any series as permitted by Sections 201 and 301 of the Original Indenture.
Section 901 of the Original Indenture also permits the execution of supplemental indentures without the consent of any Holders to, among
other things, (i) add to the covenants of the Partnership such further covenants, restrictions, conditions or provisions as the Partnership shall consider to be appropriate for the benefit of the Holders of all or any series of Securities,
(ii) add any additional Defaults or Events of Default in respect of, all or any series of Securities, and (iii) change or eliminate any of the provisions of the Indenture, provided that, any such change or elimination shall become
effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefits of such provision.
The Partnership desires to create a series of the Securities, which series shall be designated the “5.625% Senior Notes due
2027” (the “
Notes due 2027
”), and all action on the part of the Partnership necessary to authorize the issuance of the Notes due 2027 under the Indenture has been duly taken.
The Partnership, pursuant to the foregoing authority, proposes in and by this Eighth Supplemental Indenture to supplement and amend the
Original Indenture (as previously amended by the Third Supplemental Indenture), insofar as it will apply only to the Notes due 2027.
All
acts and things necessary to make the Notes due 2027, when duly issued by the Partnership and when executed on behalf of the Partnership and completed, authenticated and delivered by the Trustee as provided in the Original Indenture and this Eighth
Supplemental Indenture, the valid and binding obligations of the Partnership and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed.
1
Now, Therefore, This Eighth Supplemental Indenture Witnesseth:
That in consideration of the premises and the issuance of the Notes due 2027, the Partnership, the Guarantor, the Affiliate Guarantor and the
Trustee mutually covenant and agree, for the equal and proportionate benefit of all Holders of the Notes due 2027, as follows:
ARTICLE
I
5.625% SENIOR NOTES DUE 2027
Section 1.1
Designation of the Notes; Establishment of Form
.
A series of Securities designated “5.625% Senior Notes due 2027” is established hereby, and the form thereof (including the notation
of the Guarantee and the notation of the Affiliate Guarantee) shall be substantially as set forth in
Exhibit A
hereto, which is incorporated into and shall be deemed a part of this Eighth Supplemental Indenture, in each case with such
appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as the
Partnership may deem appropriate or as may be required or appropriate to comply with any laws or with any rules made pursuant thereto or with the rules of any securities exchange or automated quotation system on which the Notes due 2027 may be
listed or traded, or to conform to general usage, or as may, consistently with the Indenture, be determined by the officers executing such Notes due 2027, as evidenced by their execution thereof.
The Notes due 2027 will initially be issued in permanent global form, substantially in the form set forth in
Exhibit A
hereto, as a
Global Security, registered in the name of the Depositary or its nominee. The Depositary Trust Company (“
DTC
”) shall be the Depositary for such Global Securities.
The Partnership initially appoints the Trustee to act as paying agent and Security Registrar with respect to the Notes due 2027.
Section 1.2
Amount
.
The Trustee shall authenticate and deliver the Notes due 2027 for original issue in an initial aggregate principal amount of up to $550,000,000
upon Partnership Order for the authentication and delivery of such aggregate principal amount of the Notes due 2027. The authorized aggregate principal amount of the Notes due 2027 may be increased at any time hereafter and the series comprised
thereby may be reopened for issuances of additional Notes due 2027, without the consent of any Holder. The Notes due 2027 issued on the date hereof and any such additional Notes due 2027 that may be issued hereafter shall be part of the same series
of Securities referred to herein as the “Notes due 2027.”
Section 1.3
Interest Rate
.
The Notes due 2027 shall bear interest as provided in the form thereof set forth in
Exhibit A
hereto and as provided in the Indenture.
Section 1.4
Redemption
.
(a) Except for any repurchase offers required to be made pursuant to Section 1013 of the Indenture
or as set forth in Section 1.4(c) below, there shall be no sinking fund for the retirement of the Notes due 2027 or other mandatory redemption obligation in respect thereof.
(b) The Partnership, at its option, may redeem the Notes due 2027 at any time and from time to time, in
accordance with the provisions of the Notes due 2027 and Article XI of the Indenture.
(c) If a
Mandatory Redemption Event occurs, then on the Special Redemption Date, the Partnership shall redeem all and not less than all of the Notes due 2027 then outstanding, at a redemption price (the “
Special Redemption Price
”) equal to
101% of the aggregate principal amount of the Notes due 2027 plus accrued and unpaid interest to, but not including, the Special Redemption Date (such redemption being referred to herein as a “
Special Mandatory Redemption
”). In
addition, if at any time the Partnership determines that a Mandatory Redemption Event is reasonably likely to occur, then the Partnership may, at its option, redeem all and not less than all of the Notes due 2027 then outstanding on the Special
2
Redemption Date, at a redemption price equal to the Special Redemption Price. (such redemption being referred to herein as a “
Special Optional Redemption
”). Upon a Special
Redemption, the Partnership shall redeem all and not less than all of the Notes due 2027 in accordance with the terms set forth in the form of Note due 2027 attached hereto as
Exhibit A
and in accordance with Article XI of the Indenture. If a
Mandatory Redemption Event occurs, all Notes due 2027 shall become due and payable on the Special Redemption Date at the Special Redemption Price, regardless of whether previously called for redemption. Upon the consummation of the Acquisition, this
Section 1.4(c). shall cease to apply.
Section 1.5
Conversion
.
The Notes due 2027 shall not be convertible into any other securities.
Section 1.6
Maturity
.
The Stated Maturity of the Notes due 2027 shall be April 28, 2027.
Section 1.7
Place of Payment
.
Any Notes due 2027 that may be issued in certificated,
non-global
form shall be payable at the
corporate trust office of the Trustee, which office, on the date of this Eighth Supplemental Indenture, is located at 750 N. Saint Paul Place, Suite 1750, Dallas, Texas 75201, Attention: Corporate, Municipal & Escrow Services. Notices and
demands to or upon the Partnership, the Guarantor and the Affiliate Guarantor in respect of the Notes due 2027 may be served at such office.
Section 1.8
Other Terms of the Notes due 2027
.
Without limiting the foregoing provisions of this Article I, the terms of the Notes due 2027 shall be as provided in the form thereof set forth
in
Exhibit A
hereto and as provided in the Indenture.
ARTICLE II
AMENDMENTS TO THE INDENTURE
The amendments and supplements contained in this Article II shall apply to the Notes due 2027 only and (except as and to the extent expressly
so provided at the time the form and terms of such other series are established as provided in Sections 201 and 301 of the Original Indenture) not to any other series of Securities issued under the Original Indenture, and (except as aforesaid) any
covenants, guarantees and other agreements provided herein are expressly being included solely for the benefit of (i) the Notes due 2027 and the Holders thereof and (ii) any Securities of any other series to which such amendment and
supplements have been made applicable and the Holders thereof. These amendments and supplements shall be effective only for so long as there remain Outstanding any Notes due 2027 or any Securities of any other series to which such amendments and
supplements have been made applicable, as the case may be.
Section 2.1
Definitions
.
Section 101 of the Original Indenture is amended by deleting the defined term “
Board of Directors
” in its entirety and
replacing it with the following corresponding term:
“
Board of Directors
” means, with respect to the Partnership or the
Guarantor, the Board of Directors of the General Partner or of the Guarantor’s general partner, as the case may be, or any authorized committee of such Board of Directors.
Section 101 of the Original Indenture is amended by inserting in their appropriate alphabetical position, the following definitions:
“
Acquisition
” means the purchase of all of the issued and outstanding limited liability company interests in Navigator Energy
Services, LLC on substantially the terms described in the Partnership’s prospectus supplement dated April 20, 2017 relating to the Notes due 2027 and filed with the Commission on April 21, 2017.
3
“
Acquisition Agreement
” means the Membership Interest Purchase and Sale
Agreement, dated April 11, 2017, by and among the Guarantor, the Partnership and FR Navigator Holdings LLC.
“
Beneficial
Owner
” has the meaning assigned to such term in Rule
13d-3
and Rule
13d-5
under the Exchange Act, except that in calculating the beneficial ownership of any
particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion
or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned” have correlative meanings.
For purposes of this definition, a Person shall be deemed not to Beneficially Own securities that are the subject of a stock purchase agreement, merger agreement, amalgamation agreement, arrangement agreement or similar agreement until consummation
of the transactions or, as applicable, series of related transactions contemplated thereby.
“
Change of Control
” means
the occurrence of any of the following:
(a) the direct or indirect lease, sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series of related transactions, of (i) all or substantially all of the assets of the Partnership and its Subsidiaries taken as a whole or (ii) all of the assets of
Guarantor and its Subsidiaries taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), which disposition is followed by a Ratings Decline within 60 days thereafter;
(b) the adoption of a plan relating to the liquidation or dissolution of the Partnership or the Guarantor, or the
removal of (i) the General Partner by the limited partners of the Partnership, (ii) the general partner of the Guarantor by the limited partners of the Guarantor or (iii) the general partner of the Guarantor’s general partner by
the limited partners of the Guarantor’s general partner; or
(c) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the NuStar Group, becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the Voting Stock of the Partnership, the General Partner, the Guarantor, the Guarantor’s general partner or the general partner of the Guarantor’s general partner, in each case, measured by voting power
rather than number of shares, units or the like, which occurrence is followed by a Ratings Decline within 60 days thereafter.
Notwithstanding the preceding, a conversion of the Partnership or the Guarantor from a limited partnership to a corporation, limited liability
company or other form of entity or an exchange of all of the outstanding limited partnership interests for capital stock in a corporation, for member interests in a limited liability company or for Equity Interests in such other form of entity shall
not constitute a Change of Control, so long as following such conversion or exchange the NuStar Group Beneficially Owns, directly or indirectly, in the aggregate more than 50% of the Voting Stock of such entity, or continues to Beneficially Own a
sufficient percentage of Voting Stock of such entity to elect a majority of its directors, managers, trustees or other persons serving in a similar capacity for such entity.
“
Eighth Supplemental Indenture
” means the Eighth Supplemental Indenture dated as of April 28, 2017, among the
Partnership, the Guarantor, the Affiliate Guarantor and the Trustee, which supplemental indenture amends and supplements this Indenture (as amended and supplemented by the Third Supplemental Indenture dated July 1, 2005, among the Partnership,
the Guarantor, the Affiliate Guarantor and the Trustee) in connection with the establishment of a series of Securities designated as “
5.625% Senior Notes due 2027
”.
“
Equity Interests
” means:
(a) in the case of a corporation, corporate stock;
(b) in the case of an association or business entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock;
(c) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited);
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(d) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of assets of, the issuer; and
(e) all warrants,
options or other rights to acquire any of the interests described in clauses (a) through (d) above (but excluding any debt security that is convertible into, or exchangeable for, any of the interests described in clauses (a) through (d)
above).
“
Funded Debt
” means all Debt maturing one year or more from the date of the creation thereof, all Debt directly
or indirectly renewable or extendable, at the option of the debtor, by its terms or by the terms of any instrument or agreement relating thereto, to a date one year or more from the date of the creation thereof, and all Debt under a revolving credit
or similar agreement obligating the lender or lenders to extend credit over a period of one year or more.
“
Investment Grade
Rating
” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s or
BBB-
(or the equivalent) by Standard & Poor’s.
“
Mandatory Redemption Event
” means the first occurrence of either (a) the termination of the Acquisition Agreement prior
to the consummation of the Acquisition or (b) the failure to consummate the Acquisition on or before August 31, 2017.
“
Moody’s
” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.
“
Notes due 2027
” means the 5.625% Senior Notes due 2027 of the Partnership, established pursuant to the Eighth Supplemental
Indenture.
“
NuStar Group
” means, collectively, NuStar GP Holdings, LLC, the Guarantor and each direct or indirect
Subsidiaries of either of them.
“
Other Affected Series
” means any series of Securities (other than the Notes due 2027)
to which the amendments of the Original Indenture set forth in
Article II
of the Eighth Supplemental Indenture shall have been made applicable.
“
Rating Agency
” means each of Standard & Poor’s and Moody’s, or if Standard & Poor’s or
Moody’s or both shall not make a rating on the Notes due 2027 publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Partnership (as certified by a resolution of the Board of
Directors of the General Partner) which shall be substituted for Standard & Poor’s or Moody’s, or both, as the case may be.
“
Rating Category
” means:
(a) with respect to S&P, any of the following categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent
successor categories); and
(b) with respect to Moody’s, any of the following categories: Aaa, Aa, A, Baa, Ba,
B, Caa, Ca, C and D (or equivalent successor categories).
“
Ratings Decline
” means a decrease in the rating of the Notes
due 2027 by both Moody’s and S&P by one or more gradations (including gradations within Rating Categories as well as between Rating Categories). In determining whether the rating of the Notes due 2027 has decreased by one or more
gradations, gradations within Rating Categories, namely + or - for S&P, and 1, 2, and 3 for Moody’s, will be taken into account; for example, in the case of S&P, a ratings decline either from BB+ to BB– or BB to B+ will constitute
a decrease of one gradation.
“
Special Mandatory Redemption
” has the meaning given to such term in Section 1.4(c) of the
Eighth Supplemental Indenture.
“
Special Optional Redemption
” has the meaning given to such term in Section 1.4(c) of the
Eighth Supplemental Indenture.
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“
Special Redemption
” means either a Special Mandatory Redemption or a Special
Optional Redemption.
“
Special Redemption Date
” means the earlier of (a) the last Business Day that is on or before
the 15th day after a Mandatory Redemption Event or (b) any other Business Day selected by the Partnership and set forth in the notice of redemption, with respect to a Special Redemption, given in accordance with the provisions of the Indenture
(which redemption date will be no earlier than 15 days and no later than 30 days from the date the notice related to such Special Redemption is sent to Holders).
“
Special Redemption Price
” has the meaning given to such term in Section 1.4(c) of the Eighth Supplemental Indenture.
“
Standard
& Poor’s
” or “
S&P
” means Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.
“
Subsidiary
Guarantor
” means, as at any date, any Subsidiary that has become and then is obligated as a guarantor as provided in Section 1011, not having been released pursuant to Section 1012.
“
Voting Stock
” of any Person as of any date means the Equity Interests of such Person pursuant to which the holders thereof
have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers, general partners or trustees of such Person (regardless of whether, at the time, Equity Interests of any other class or
classes shall have, or might have, voting power by reason of the occurrence of any contingency) or, with respect to a partnership (whether general or limited), any general partner interest in such partnership.
Section 2.2
Consolidation, Merger, Conveyance, Transfer or Lease
.
Article VIII of the Original Indenture is amended by restating Sections 801 and 802 in their entirety:
“SECTION 801.
Partnership and Subsidiary Guarantors May Consolidate, Etc., Only on Certain Terms
.
The Partnership shall not, and subject to Section 1012, shall not permit any Subsidiary Guarantor to, consolidate with or
merge into any other Person or sell, lease or transfer its properties and assets as, or substantially as, an entirety to, any Person, unless:
(1) (A) in the case of a merger, the Partnership or such Subsidiary Guarantor is the surviving entity, or (B) the Person
formed by such consolidation or into which the Partnership or such Subsidiary Guarantor is merged or the Person which acquires by sale or transfer, or which leases, the properties and assets of the Partnership or such Subsidiary Guarantor as, or
substantially as, an entirety expressly assumes, by an indenture supplemental hereto, or a supplement to the applicable Subsidiary Guarantee, as the case may be, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee,
all of the obligations of the Partnership or such Subsidiary Guarantor, as the case may be, under the Indenture and the Securities, or the applicable Subsidiary Guarantee, as the case may be;
(2) the surviving entity or successor Person is a Person organized and existing under the laws of the United States of America,
any state thereof or the District of Columbia;
(3) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(4) the Partnership has delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, sale, transfer or lease and such supplemental indenture required, if any, comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
6
SECTION 802.
Successor Substituted
.
Upon any consolidation of the Partnership or any Subsidiary Guarantor with, or merger of the Partnership or any Subsidiary
Guarantor into, any other Person or any sale, transfer or lease of the properties and assets of the Partnership or any Subsidiary Guarantor as, or substantially as, an entirety in accordance with Section 801, the successor Person formed by such
consolidation or into which the Partnership or such Subsidiary Guarantor is merged or to which such sale, transfer or lease is made shall (and, in the case of any Subsidiary Guarantor, its Subsidiary Guarantee will provide that it shall) succeed to,
and be substituted for, and may exercise every right and power of, the Partnership or such Subsidiary Guarantor under this Indenture and the Securities, or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be with the same
effect as if such successor Person had been named originally as the Partnership or such Subsidiary Guarantor herein or therein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities or such Subsidiary Guarantee, as the case may be.”
Section 2.3
Covenants
.
Article X of the Original Indenture is amended by inserting the following new sections in their entirety:
“SECTION 1011
Future Subsidiary Guarantors
.
The Partnership shall cause each Subsidiary of the Partnership that guarantees or becomes a
co-obligor
in respect of any Funded Debt of the Partnership (including, without limitation, following any release of such Subsidiary pursuant to Section 1012 from any guarantee previously provided by it
under this Section 1011) to (A) cause the Notes due 2027 to be equally and ratably guaranteed by such Subsidiary, but only to the extent that the Notes due 2027 are not already guaranteed by such Subsidiary on reasonably comparable terms
and (B) promptly execute and deliver to the Trustee a supplemental indenture in substantially the form attached as
Exhibit B
to the Eighth Supplemental Indenture pursuant to which such Subsidiary will guarantee payment of the Notes due
2027 and any Securities of any Other Affected Series.
SECTION 1012
Release of Guaranty
.
Notwithstanding anything to the contrary in Section 1011, in the event that any Subsidiary that has guaranteed the Notes
due 2027 and/or the Securities of such Other Affected Series pursuant to Section 1011 shall no longer be a guarantor of any Funded Debt of the Partnership other than the Notes due 2027 and/or the Securities of such Other Affected Series, and so
long as no Default or Event of Default with respect to the Notes due 2027 shall have occurred or be continuing, such Subsidiary, upon giving written notice to the Trustee to the foregoing effect, shall be deemed to be released from all of its
obligations in respect of the Notes due 2027 and/or the Securities of such Other Affected Series, and its guarantee thereof and this Indenture without further act or deed and such guarantee of such Subsidiary shall be terminated and of no further
force or effect. Following the receipt by the Trustee of any such notice, the Partnership shall cause this Indenture to be amended as provided in Section 901 to evidence such release and termination; provided, however, that the failure to so
amend this Indenture shall not affect the validity of the release and termination of such guarantee of such Subsidiary.”
SECTION 1013
Change of Control
.
(a) If a Change of Control occurs, each Holder of Notes due 2027 shall have the right to require the
Partnership to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes due 2027 pursuant to the offer described below (the “
Change of Control Offer
”). In the
Change of Control Offer, the Partnership shall offer a “
Change of Control Payment
” in cash equal to 101% of the aggregate principal amount of Notes due 2027 repurchased plus accrued and unpaid interest thereon, if any, to but not
including the date of purchase (the “
Change of Control Payment Date
”), subject to the rights of any Holder in whose name a Note due 2027 is registered on a record date occurring prior to the Change of Control Payment Date to receive
interest due on an Interest Payment Date that is on or prior to such Change of Control Payment Date. Within 30 days following any Change of Control, the Partnership shall mail (or otherwise deliver in accordance with the applicable procedures of the
Depositary) a notice to each Holder describing the transaction or transactions
7
that constitute the Change of Control and offering to repurchase Notes due 2027 on the Change of Control Payment Date specified in such notice, pursuant to the procedures required by the
Indenture and described in such notice. The Partnership shall comply with the requirements of Rule
14e-1
under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable in connection with the repurchase of the Notes due 2027 as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this
Section 1013, the Partnership shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under this Section 1013 by virtue of such compliance.
(b) Within 30 days following any Change of Control, the Partnership shall mail by first class mail, or
otherwise deliver in accordance with the applicable procedures of the Depositary, a notice to each Holder, with a copy of such notice to the Trustee. The notice, which shall govern the terms of the Change of Control Offer, shall state, among other
things:
(i) that a Change of Control has occurred and a Change of Control Offer is being made as
provided for herein, and that, although Holders are not required to tender their Notes due 2027, all Notes due 2027 that are validly tendered shall be accepted for payment;
(ii) the Change of Control Payment and the Change of Control Payment Date, which will be no earlier than
30 days and no later than 60 days after the date such notice is mailed or otherwise delivered in accordance with the applicable procedures of the Depositary;
(iii) that any Note due 2027 accepted for payment pursuant to the Change of Control Offer (and duly paid
for on the Change of Control Payment Date) shall cease to accrue interest after the Change of Control Payment Date;
(iv) that any Notes due 2027 (or portions thereof) not validly tendered shall continue to accrue
interest;
(v) that any Holder electing to have a Note due 2027 purchased pursuant to any Change of
Control Offer shall be required to surrender the Note due 2027, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note due 2027 completed, or transfer by book-entry transfer, to the Partnership, a
depositary, if appointed by the Partnership, or a Paying Agent at the address specified in the notice at least one (1) Business Day before the Change of Control Payment Date;
(vi) that Holders shall be entitled to withdraw their election if the Partnership, the depositary or the
Paying Agent, as the case may be, receives, not later than the expiration of the Change of Control Offer, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note due 2027 the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to have such Note due 2027 purchased; and
(vii) the instructions and any other information necessary to enable Holders to tender their Notes due
2027 (or portions thereof) and have such Notes due 2027 (or portions thereof) purchased pursuant to the Change of Control Offer.
(c) On or before the Change of Control Payment Date, the Partnership shall, to the extent lawful, accept
for payment all Notes due 2027 or portions thereof properly tendered and not withdrawn pursuant to the Change of Control Offer. Promptly after such acceptance, on the Change of Control Payment Date, the Partnership will:
(i) deposit by 11:00 a.m., New York City time, with the Paying Agent or depositary an amount equal to
the Change of Control Payment in respect of all Notes due 2027 or portions thereof so tendered; and
(ii) deliver or cause to be delivered to the Trustee for cancellation the Notes due 2027 so accepted
together with an Officers’ Certificate stating the aggregate principal amount of Notes due 2027 or portions thereof being purchased by the Partnership.
8
(d) On the Change of Control Payment Date, the Paying
Agent shall remit to each Holder of Notes due 2027 accepted for payment the Change of Control Payment for such Notes due 2027 (or, if all the Notes due 2027 are then in global form, make such payment in accordance with the applicable procedures of
the Depositary), and the Partnership shall promptly issue a new Note due 2027 (in each case, accompanied by a notation of the Guarantees duly endorsed by the Guarantor and the Affiliate Guarantor), and the Trustee shall promptly authenticate and
mail or otherwise deliver in accordance with the applicable procedures of the Depositary to each Holder such new Note due 2027 equal in principal amount to any unpurchased portion of the Notes due 2027 surrendered; provided that each such new Note
due 2027 shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Partnership shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(e) The provisions described in this Section 1013 that require the Partnership
to make a Change of Control Offer following a Change of Control shall be applicable regardless of whether or not any other provisions of the Indenture are applicable.
(f) Notwithstanding the other provisions of this Section 1013, the Partnership shall not be
required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a
Change of Control Offer made by the Partnership and purchases all Notes due 2027 validly tendered and not withdrawn under such Change of Control Offer, (2) notice of redemption of all outstanding Notes due 2027 has been given pursuant to the
Indenture, unless and until there is a default in payment of the applicable redemption price, or (3) in connection with or in contemplation of any Change of Control, the Partnership has made an offer to purchase (an “
Alternate
Offer
”) any and all Notes due 2027 validly tendered at a cash price equal to or higher than the Change of Control Payment and has purchased all Notes due 2027 properly tendered in accordance with the terms of such Alternate Offer.
(g) A Change of Control Offer or Alternate Offer may be made in advance of a Change of Control, and
conditioned upon the occurrence of the Change of Control, if a definitive agreement is in place for the Change of Control at the time of making the Change of Control Offer or Alternate Offer.
(h) In the event that Holders of not less than 90% of the aggregate principal amount of the outstanding
Notes due 2027 accept a Change of Control Offer or an Alternate Offer and the Partnership (or a third party making the Change of Control Offer or Alternate Offer as provided in Section 1013(f)) purchases all of the Notes due 2027 held by such
Holders, the Partnership will have the right, upon not less than 30 nor more than 60 days’ notice, given not more than 30 days following the purchase pursuant to the Change of Control Offer or Alternate Offer described above, as the case
may be, to redeem all of the Notes due 2027 that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment or Alternate Offer price, as applicable, plus, to the extent not included in the Change of
Control Payment or Alternate Offer price, as applicable, accrued and unpaid interest on the Notes due 2027 that remain outstanding, to the date of redemption (subject to the right of holders of record on the relevant record date to receive interest
due on an Interest Payment Date that is on or prior to the redemption date).
SECTION 1014
Termination of Covenants
.
If at any time (a) the Notes due 2027 have an Investment Grade Rating from either of the Rating Agencies, (b) no
Default has occurred and is continuing and (c) the Partnership has delivered to the Trustee an Officers’ Certificate certifying to (a) and (b) of this Section 1014, the Partnership and its Subsidiaries shall no longer be subject
to the provisions of Section 1013 of the Indenture. However, the Partnership and its Subsidiaries will remain subject to all of the other provisions of the Indenture.
Section 2.4
Events of Default
.
The period following clause (7) of Section 501 of the Original Indenture shall be replaced with “; or” and the following
additional Event of Default shall be added to those set forth in clauses (1)-(7) of Section 501 of the Original Indenture in relation only to the Notes due 2027 and the Securities of any Other Affected Series:
“(8) failure by the Partnership to comply for 90 days after notice with Section 1013 of the Indenture; or
9
(9) failure to pay any principal of, or premium or interest on, Debt of the
Partnership in excess of $50 million when due, whether at stated maturity (after the expiration of any applicable grace periods) or upon acceleration of the maturity thereof, if such indebtedness is not discharged, or such acceleration is not
annulled, within 10 days in each case after written notice is given by the Trustee to the Partnership, or the Trustee and the Partnership are given written notice by the Holders of at least 25% in outstanding principal amount of the Notes due 2027,
specifying such Default and requiring it to be remedied, and stating that such notice is a Notice of Default under this Indenture.”
Section 2.5
Additional Redemption Provisions
.
Article XI of the Original Indenture is amended by inserting the following new section in its entirety:
SECTION 1108
Special Redemption
.
(a)
Effect of Redemption
. Notwithstanding the preceding provisions of this Article XI or any
other provisions hereof or of the Securities to the contrary, if a Mandatory Redemption Event occurs, all Notes due 2027 shall become due and payable on the Special Redemption Date at the Special Redemption Price, regardless of whether previously
called for redemption.
(b)
Special Redemption Notice
. Upon the occurrence of a Mandatory
Redemption Event, the Partnership will deliver notice of a Special Mandatory Redemption to the Holders of the Notes due 2027, which notice shall state, among other matters prescribed in the Indenture, that the redemption is a Special Mandatory
Redemption, the Special Redemption Price and the Special Redemption Date. If the Partnership exercises the Special Optional Redemption right, the Partnership will provide notice to each Holder of the Notes due 2027, which notice shall state, among
other matters prescribed in the Indenture, that the redemption is a Special Optional Redemption, the Special Redemption Price and the Special Redemption Date, and which notice shall be sent to the Holders no earlier than 15 days and no later than 30
days from the date such notice is sent.
ARTICLE III
MISCELLANEOUS
Section 3.1
Execution as Supplemental Indenture
. This Eighth Supplemental Indenture is executed and shall
be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Eighth Supplemental Indenture forms a part thereof. Except as herein expressly otherwise defined, the use of the terms and
expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture.
Section 3.2
Responsibility for Recitals, Etc
. The statements herein and in the Notes due 2027 (except in
the Trustee’s certificate of authentication) shall be taken as the statements of the Partnership, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of
this Eighth Supplemental Indenture or of the Notes due 2027. The Trustee shall not be accountable for the use or application by the Partnership of the Notes due 2027 or of the proceeds thereof.
Section 3.3
Provisions Binding on Partnership’s and Guarantor’s Successors
. All the covenants,
stipulations, promises and agreements in this Eighth Supplemental Indenture contained by each of the Partnership, the Guarantor and the Affiliate Guarantor shall bind its respective successors and assigns regardless of whether so expressed.
Section 3.4
Governing Law
. THIS EIGHTH SUPPLEMENTAL INDENTURE AND EACH NOTE DUE 2027 SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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Section 3.5
Execution and Counterparts
. This Eighth
Supplemental Indenture may be executed with counterpart signature pages or in any number of counterparts, each of which shall be an original but such counterparts shall together constitute but one and the same instrument.
Section 3.6
Capitalized Terms
. Capitalized terms not otherwise defined in this Eighth Supplemental
Indenture shall have the respective meanings assigned to them in the Original Indenture.
Section 3.7
Waiver of Jury Trial
. THE PARTNERSHIP, THE GUARANTOR, THE AFFILIATE GUARANTOR AND THE TRUSTEE
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 EIGHTH SUPPLEMENTAL INDENTURE, THE NOTES DUE 2027, THE GUARANTEES THEREOF OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 3.8
U.S.A. PATRIOT Act
. The parties hereto acknowledge
that in accordance with Section 326 of the U.S.A. PATRIOT Act, the Trustee is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.
The parties to this Eighth Supplemental Indenture agree that they shall provide the Trustee with such information as it may reasonably request in order for the Trustee to satisfy the requirements of the U.S.A. PATRIOT Act.
(The remainder of this page is intentionally blank.)
11
IN WITNESS WHEREOF, the parties hereto have caused this Eighth Supplemental Indenture to be duly
executed, all as of the day and year first above written.
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Partnership:
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NUSTAR LOGISTICS, L.P.
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By:
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NUSTAR GP, INC.,
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its General Partner
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By:
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/s/ Thomas R. Shoaf
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Name:
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Thomas R. Shoaf
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Title:
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Executive Vice President and Chief Financial Officer
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Guarantor:
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NUSTAR ENERGY L.P.
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By:
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RIVERWALK LOGISTICS, L.P.
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its General Partner
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By:
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NUSTAR GP, LLC,
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its General Partner
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By:
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/s/ Thomas R. Shoaf
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Name:
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Thomas R. Shoaf
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Title:
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Executive Vice President and Chief Financial Officer
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Affiliate Guarantor:
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NUSTAR PIPELINE OPERATING PARTNERSHIP L.P.
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By:
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NUSTAR PIPELINE COMPANY, LLC,
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its General Partner
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By:
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/s/ Thomas R. Shoaf
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Name:
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Thomas R. Shoaf
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Title:
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Executive Vice President and Chief Financial Officer
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WELLS FARGO BANK, NATIONAL ASSOCIATION
, as trustee
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By:
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/s/ Yana Kislenko
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Name:
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Yana Kislenko
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Title:
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Vice President
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Eighth Supplemental
Indenture - Signature Page
Exhibit A
FORM OF 5.625% SENIOR NOTE DUE 2027
[FACE OF SECURITY]
[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OF, TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN
SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION, TO THE PARTNERSHIP OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
1
CUSIP No. 67059T AE5
NUSTAR
LOGISTICS, L.P.
5.625% SENIOR NOTE DUE 2027
NUSTAR LOGISTICS, L.P., (formerly known as VALERO LOGISTICS OPERATIONS, L.P.), a Delaware limited partnership
(herein called the “
Partnership
,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to
, or registered assigns, the principal sum of
United States Dollars on April 28, 2027, and to pay interest thereon from April 28, 2017, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, semi-annually on April 28 and October 28 in each year, commencing October 28, 2017 at the rate of 5.625% per annum, until the principal hereof is paid or made
available for payment. The amount of interest payable for any period shall be computed on the basis of twelve
30-day
months and a
360-day
year. The amount of interest
payable for any partial period shall be computed on the basis of a
360-day
year of twelve
30-day
months and the days elapsed in any partial month. In the event that any
date on which interest is payable on this Security is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of
any such delay) with the same force and effect as if made on the date the payment was originally payable. A “Business Day” shall mean, when used with respect to any Place of Payment, each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law, executive order or regulation to close. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the April 15 or
October 15 (regardless of whether a Business Day), as the case may be, next preceding such Interest Payment Date. Any such
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Exhibit A-1
interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Partnership, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to any Special Record Date, or be paid at such time in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Securities of this series may be
listed or traded, and upon such notice as may be required by such exchange or automated quotation system, all as more fully provided in such Indenture.
[Payment of the principal of (and premium, if any) and interest on this Security will be made by transfer of immediately available funds to a bank account in
the Borough of Manhattan, The City of New York designated by the Holder in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.]
2
[Payment of the principal of (and premium, if any) and interest on this Security will
be made at the office or agency of the Partnership maintained for that purpose in Dallas, Texas, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts;
provided,
however
, that payment of interest may be made at the option of the Partnership by United States Dollar check mailed to the addresses of the Persons entitled thereto as such addresses shall appear in the Security Register or by transfer to a
United States Dollar account maintained by the payee with a bank in Dallas, Texas (so long as the applicable Paying Agent has received proper transfer instructions in writing by the Record Date prior to the applicable Interest Payment Date).]
3
Reference is hereby made to the further provisions of this Security set forth on the
reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the
certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly executed.
Dated:
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NUSTAR LOGISTICS, L.P.
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By:
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NUSTAR GP, Inc.,
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its General Partner
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By:
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Name:
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Title:
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This is one of the Securities of the series designated therein referred to in the within-mentioned
Indenture.
Dated:
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WELLS FARGO BANK, NATIONAL
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ASSOCIATION, AS TRUSTEE
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By:
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Authorized Signatory
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Exhibit A-2
[FORM OF REVERSE OF SECURITY]
NUSTAR LOGISTICS, L.P.
5.625% SENIOR NOTE DUE 2027
This Security is one of a duly authorized issue of senior securities of the Partnership (herein called the “
Securities
”),
issued and to be issued in one or more series under an Indenture dated as of July 15, 2002 (the “
Original Indenture
”) among the Partnership, the Guarantor (defined below) and The Bank of New York, as trustee, as amended and
supplemented by the Third Supplemental Indenture thereto dated as of July 1, 2005 (the “
Third Supplemental Indenture
”) among the Partnership, the Guarantor, the Affiliate Guarantor (as defined below) and The Bank of New York
Trust Company, N.A., as successor trustee to The Bank of New York, as trustee. The Original Indenture, as amended and supplemented by the Third Supplemental Indenture and as further amended and supplemented pursuant to the Eighth Supplemental
Indenture thereto dated as of April 28, 2017, among the Partnership, the Guarantor, the Affiliate Guarantor and Wells Fargo Bank, National Association, as successor trustee, is referred to herein as the “
Indenture
.” The trustee
under the Indenture (including any successor trustee under the Indenture) is referred to herein as the “
Trustee
.”
Reference is made hereby to the Indenture (including all indentures supplemental thereto) for a statement of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the Partnership, the Guarantor, the Affiliate Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. As provided in the Indenture, the Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may be subject to different sinking, purchase or analogous funds, if any, may be subject to different covenants and Events of Default and may otherwise vary as in the
Indenture provided or permitted. This Security is one of the series designated on the face hereof.
This Security is the senior unsecured
obligation of the Partnership and is guaranteed pursuant to (i) a guarantee (the “
Guarantee
”) by NuStar Energy L.P. (formerly known as Valero L.P.), a Delaware limited partnership (the “
Guarantor
”) and
(ii) a guarantee (the “
Affiliate Guarantee
”) by NuStar Pipeline Operating Partnership L.P. (formerly known as Kaneb Pipe Line Operating Partnership, L.P.), a Delaware limited partnership and an Affiliate of the Partnership (the
“
Affiliate Guarantor
”). The Guarantee is the senior unsecured obligation of the Guarantor, and the Affiliate Guarantee is the senior unsecured obligation of the Affiliate Guarantor.
Except as set forth in the definition of Special Redemption Date, the Securities of this series are subject to redemption upon not less than
30 nor more than 60 days’ notice by mail (or otherwise delivered in accordance with the applicable procedures of the Depositary), at any time as a whole or from time to time in part, at the election of the Partnership. If we redeem the
Securities pursuant to this paragraph before the Par Call Date, the Securities will be redeemed at a Redemption Price equal to the greater of (1) 100% of the principal amount of this Security then Outstanding to be redeemed, or (2) the sum of
the present values of the remaining scheduled payments of principal and interest (exclusive of the payment of interest accrued to the Redemption Date) on the Securities to be redeemed that would be due if the Securities matured on the Par Call Date,
computed by discounting such payments from their respective scheduled dates of payment to the Redemption Date on a semiannual basis (assuming a
360-day
year consisting of twelve
30-day
months) at a rate equal to the sum of 50 basis points plus the Adjusted Treasury Rate on the third Business Day prior to the Redemption Date, as calculated by an Independent Investment Banker, plus
accrued and unpaid interest, up to, but not including, the Redemption Date. If we redeem the Securities pursuant to this paragraph on or after the Par Call Date, the redemption price will equal 100% of the principal amount of the Securities to be
redeemed plus accrued and unpaid interest to the Redemption Date. If the Independent Investment Banker is unwilling or unable to make the calculation, the Partnership will appoint an independent investment banking institution of national standing to
make the calculation.
For purposes of determining the Redemption Price, the following definitions are applicable:
“
Adjusted Treasury Rate
” means the yield, under the heading that represents the average for the week immediately preceding
the week of publication, appearing in the then most recently published statistical release designated “H.15(519)” or any successor publication that is published weekly or made available by the Board of
Exhibit A-3
Governors of the Federal Reserve System and which contains yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant
Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining term of this Security, yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue will be determined and the Adjusted Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or if such release (or any successor release) is not
published during the week including or immediately preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.
“
Comparable Treasury Issue
” means the U.S. Treasury security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of this Security that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the
remaining term of this Security, calculated as if the maturity date of the Security was the Par Call Date or, if, in the reasonable judgment of the Independent Investment Banker, there is no such security, then the Comparable Treasury Issue will
mean the U.S. Treasury security or securities selected by the Independent Investment Banker as having an actual or interpolated maturity or maturities comparable to the remaining term of this Security, calculated as if the maturity date of the
Security was the Par Call Date.
“
Comparable Treasury Price
” means (1) the average of five Reference Treasury Dealer
Quotations for the third Business Day prior to the applicable Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations.
“
Independent Investment Banker
” means any of Mizuho
Securities USA LLC, J.P. Morgan Securities LLC, and Barclays Capital Inc. and any successor firm selected by the Partnership, or if any such firm is unwilling or unable to serve as such, an independent investment banking institution of national
standing appointed by the Partnership.
“
Par Call Date
” means January 28, 2027.
“
Reference Treasury Dealer
” means each of up to five dealers to be selected by the Partnership;
provided
that if any
of the foregoing ceases to be, and has no affiliate that is, a primary U.S. governmental securities dealer (a “
Primary Treasury Dealer
”), the Partnership will substitute for it another Primary Treasury Dealer.
“
Reference Treasury Dealer Quotations
” means the average, as determined by the Reference Treasury Dealer, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker and the Trustee at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date.
In the case of any redemption of Securities, interest installments due on or prior to the Redemption Date
will be payable to the Holders of such Securities, or one or more predecessor Securities, of record at the close of business on the relevant record date referred to on the face hereof. Securities (or portions thereof) for whose redemption and
payment provision is made in accordance with the Indenture shall cease to bear interest from and after the Redemption Date.
Any notice to
the Holders of the Securities of a redemption will include the appropriate calculation of the Redemption Price, but need not include the Redemption Price itself. The actual Redemption Price, calculated as provided above, will be set forth in an
Officers’ Certificate, which shall also include the calculation of such Redemption Price in reasonable detail, delivered to the Trustee no later than two Business Days prior to the Redemption Date.
In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. In the event of any partial redemption, selection of the Securities for redemption will be made by the Trustee on a
pro rata
basis (or, in the case
of Securities issued in global form, based on a method as the Depositary may require that most nearly approximates a
pro rata
selection), by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and
appropriate.
Exhibit A-4
If a Mandatory Redemption Event occurs, then on the Special Redemption Date, the Partnership
shall redeem all and not less than all of the Notes due 2027 then outstanding, at a redemption price (the “Special Redemption Price”) equal to 101% of the aggregate principal amount of the Notes due 2027 plus accrued and unpaid interest
to, but not including, the Special Redemption Date (such redemption being referred to herein as a “Special Mandatory Redemption”). In addition, if at any time the Partnership determines that a Mandatory Redemption Event is reasonably
likely to occur, then the Partnership may, at its option, redeem all and not less than all of the Notes due 2027 then outstanding on the Special Redemption Date, at a redemption price equal to the Special Redemption Price. (such redemption being
referred to herein as a “Special Optional Redemption”). If a Mandatory Redemption Event occurs, all Notes due 2027 shall become due and payable on the Special Redemption Date at the Special Redemption Price, regardless of whether
previously called for redemption. Upon the consummation of the Acquisition, the foregoing provisions regarding Special Redemptions shall cease to apply.
If an Event of Default with respect to the Securities of this series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect provided in the Indenture.
Upon the occurrence of a Change of
Control, the Partnership will make an offer to purchase all or any part (equal to $2,000 or integral multiples of $1,000 in excess thereof) of each Holder’s Securities of this series (the “
Change of Control Offer
”) at a price
in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, thereon to the date of purchase. Within 30 days following any Change of Control, the Partnership will mail or otherwise deliver in accordance
with the applicable procedures of the Depositary a notice to each such Holder of Securities of this series setting forth the procedures governing the Change of Control Offer as required by the Indenture and information regarding such other matters
as is required under and as more fully provided in Section 1013 of the Indenture. As more fully provided in Section 1013 of the Indenture, the Holder of this Security may elect to have this Security or a portion hereof in an authorized
denomination purchased by completing the form entitled “Option of Holder to Elect Purchase” appearing below and tendering this Security pursuant to the Change of Control Offer.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Partnership, the Guarantor, the Affiliate Guarantor and any Subsidiary Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Partnership, the Guarantor, the Affiliate
Guarantor and any Subsidiary Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected (voting as one class). The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Partnership, the Guarantor
or the Affiliate Guarantor with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to
the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default
as Trustee and offered the Trustee reasonable security or indemnity satisfactory to it and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction
inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of security or indemnity. The foregoing shall not apply to any suit instituted by the Holder of this
Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.
Exhibit A-5
No reference herein to the Indenture and no provision of this Security or of the Indenture shall
alter or impair the obligation of the Partnership, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place(s) and rate, and in the coin or currency, herein prescribed.
[This Global Security or portion hereof may not be exchanged for Definitive Securities of this series except in the limited circumstances
provided in the Indenture.
The holders of beneficial interests in this Global Security will not be entitled to receive physical delivery
of Definitive Securities except as described in the Indenture and will not be considered the Holders hereof for any purpose under the Indenture.]
4
[As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in the
Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Partnership in Dallas, Texas, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Partnership
and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for a like aggregate principal
amount, will be issued to the designated transferee or transferees.]
5
The Securities
of this series are issuable only in registered form, without coupons, in minimum denominations of U.S. $2,000 and any integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth,
the Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Partnership may require payment of a sum sufficient
to cover any transfer tax or other similar governmental charge payable in connection therewith.
Prior to due presentment of this Security
for registration of transfer, the Partnership, the Trustee and any agent of the Partnership or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, regardless of whether this Security be
overdue, and neither the Partnership, the Trustee nor any such agent shall be affected by notice to the contrary.
Obligations of the
Partnership under the Indenture and the Securities thereunder, including this Security, are
non-recourse
to NuStar GP, Inc. (the “
General Partner
”) and the general partner of the Guarantor, as
applicable, and their Affiliates (other than the Partnership, the Guarantor and the Affiliate Guarantor), and payable only out of cash flow and assets of the Partnership, the Guarantor or the Affiliate Guarantor, as the case may be. The Trustee, and
each Holder of a Security by their respective acceptance hereof, will be deemed to have agreed in the Indenture that (1) neither the General Partner, the general partner of the Guarantor, the general partner of the Affiliate Guarantor nor their
respective assets (nor any of its Affiliates other than the Partnership, the Guarantor and the Affiliate Guarantor, nor their respective assets) shall be liable for any of the obligations of the Partnership, the Guarantor or the Affiliate Guarantor
under the Indenture or such Securities, including this Security, and (2) no director, officer, employee, stockholder or unitholder, as such, of the Partnership, the Guarantor, the Affiliate Guarantor, the Trustee, the General Partner, the
general partner of the Guarantor, the general partner of the Affiliate Guarantor or any Affiliate of any of the foregoing entities shall have any personal liability in respect of the obligations of the Partnership, the Guarantor or the Affiliate
Guarantor under the Indenture or such Securities by reason of his, her or its status.
The Indenture provides that the Partnership, the
Guarantor and the Affiliate Guarantor (a) will be discharged from any and all obligations in respect of the Securities (except for certain obligations described in the Indenture), or (b) need not comply with certain restrictive covenants
of the Indenture, in each case if the Partnership deposits, in trust, with the Trustee money or U.S.
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Exhibit A-6
Government Obligations (or a combination thereof) which through the payment of interest thereon
and principal thereof in accordance with their terms will provide money, in an amount sufficient to pay all the principal of and interest of the Securities, but such money need not be segregated from other funds except to the extent required by law.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
Exhibit A-7
[FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
(Please Print or Typewrite Name and Address of Assignee)
the within instrument of NUSTAR LOGISTICS, L.P. and does hereby irrevocably constitute and appoint Attorney to transfer said instrument on the books of the
within-named Partnership, with full power of substitution in the premises.
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Other Identifying Number of Assignee:
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Date:
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Your Signature:
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(Sign exactly as name appears on the other side of this Note)
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Signature Guarantee
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(Participant in a Recognized Signature
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Guaranty Medallion Program)
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NOTICE
:
The signature to this assignment must correspond with the name as written upon the face of the within
instrument in every particular, without alteration or enlargement or any change whatever.]
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Exhibit A-8
NOTATION OF GUARANTEE
The Guarantor (which term includes any successor Person in such capacity under the Indenture), has fully, unconditionally and absolutely
guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the Securities and all other amounts due and payable under
the Indenture and the Securities by the Partnership.
The obligations of the Guarantor to the Holders of Securities and to the Trustee
pursuant to the Guarantee and the Indenture are expressly set forth in Article XIV of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee.
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Guarantor:
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NUSTAR ENERGY L.P.
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By:
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RIVERWALK LOGISTICS, L.P.
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Its General Partner
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By:
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NUSTAR GP, LLC,
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Its General Partner
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By:
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Exhibit A-9
NOTATION OF AFFILIATE GUARANTEE
The Affiliate Guarantor (which term includes any successor Person in such capacity under the Indenture), has fully, unconditionally and
absolutely guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the Securities and all other amounts due and
payable under the Indenture and the Securities by the Partnership.
The obligations of the Affiliate Guarantor to the Holders of
Securities and to the Trustee pursuant to the Affiliate Guarantee and the Indenture are expressly set forth in Article XIV of the Indenture and reference is hereby made to the Indenture for the precise terms of the Affiliate Guarantee.
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NUSTAR PIPELINE OPERATING PARTNERSHIP L.P.
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By:
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NUSTAR PIPELINE COMPANY, LLC,
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its General Partner
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By:
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Exhibit A-10
Exhibit B
[FORM OF SUPPLEMENTAL INDENTURE]
SUPPLEMENTAL INDENTURE, dated as of
, (the “
Supplemental Indenture
”), among (i) NuStar Logistics, L.P. (formerly known as Valero Logistics Operations, L.P.), a Delaware limited partnership
(the “
Partnership
”), NuStar Energy L.P. (formerly known as Valero L.P.), a Delaware limited partnership (the “
Guarantor
”), (iii) NuStar Pipeline Operating Partnership L.P. (formerly known as Kaneb Pipe Line
Operating Partnership, L.P., a Delaware limited Partnership (the “
Affiliate Guarantor
”), (iv) [Name of Subsidiary Guarantor], a
and a subsidiary of the Partnership (the “
Subsidiary Guarantor
”) and (iv) [Name of Trustee], a
, as trustee (the “
Trustee
”).
RECITALS OF THE PARTNERSHIP
The
Partnership and the Guarantor have heretofore executed and delivered to the Trustee the Indenture dated as of July 15, 2002 (the “
Original Indenture
”), providing for the issuance from time to time of one or more series of the
Partnership’s unsecured senior debentures, notes or other evidences of indebtedness (the “
Securities
”), to be guaranteed by the Guarantor, and the terms of which are to be determined as set forth in Section 301 of the
Original Indenture.
The Partnership, the Guarantor, the Affiliate Guarantor and the Trustee have heretofore executed and delivered the
Third Supplemental Indenture dated July 1, 2005 (the “
Third Supplemental Indenture
”), amending and supplementing the Original Indenture and providing for an unconditional guarantee by the Affiliate Guarantor of the due and
punctual payment of the principal of, and premium, if any, and interest on the Securities (as defined in the Original Indenture) and all other amounts due and payable under the Original Indenture and the Securities by the Partnership.
Pursuant to the provisions of Sections 201, 301 and 901 of the Original Indenture, as the same has been and may from time to time hereafter be
amended and supplemented (as at any time so amended and supplemented, the “
Indenture
”), the Partnership has established one or more series of Securities (herein called “
Securities of the Affected Series
”) to which
the amendments of the Original Indenture contained in Article II of the Eighth Supplemental Indenture thereto dated April 28, 2017 (the “
Eighth Supplemental Indenture
”) have been made applicable, and Section 1011 of the
Indenture provides that under certain circumstances the Partnership is required to cause the Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the Subsidiary Guarantor shall guarantee the payment
of the Securities of the Affected Series pursuant to a guarantee on the terms and conditions set forth herein.
Pursuant to
Section 901 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.
Now, Therefore, This
Supplemental Indenture Witnesseth:
That in consideration of the premises and the issuance of the Securities of the Affected Series, the
Partnership, the Guarantor, the Affiliate Guarantor, the Subsidiary Guarantor and the Trustee mutually covenant and agree, for the equal and proportionate benefit of all Holders of the Securities of the Affected Series, as follows:
ARTICLE IV
AMENDMENTS TO THE
INDENTURE
The amendments and supplements contained herein shall apply to the Securities of the Affected Series only and
not to any other series of Securities issued under the Indenture, and any covenants provided herein are expressly being included solely for the benefit of the Securities of the Affected Series and the Holders thereof. These amendments and
supplements shall be effective only for so long as there remains any Securities of the Affected Series Outstanding.
Exhibit B-1
SECTION 4.01
Definition
s. Section 101 of the Indenture is amended and
supplemented by inserting in the appropriate alphabetical position, the following definition:
“
Securities of the
Affected Series
” means the Notes due 2027 and Securities of each other series to which the amendments of the Original Indenture contained in Article II of the Eighth Supplemental Indenture have been made applicable.
SECTION 4.02
Unconditional Guarantee
. Unless such amendment shall have been effected by a previous supplemental
indenture, the Indenture shall be amended and supplemented by inserting the following new Article XVI immediately after Article XV of the Indenture:
“ARTICLE XVI
SECTION 1601.
Unconditional Guarantee
.
For value received, each Subsidiary Guarantor hereby fully, irrevocably, unconditionally and absolutely guarantees to the
Holders and to the Trustee the due and punctual payment of the principal of, and premium, if any, and interest on the Securities of the Affected Series and all other amounts due and payable under this Indenture and the Securities of the Affected
Series by the Partnership (including, without limitation, all costs and expenses (including reasonable legal fees and disbursements) incurred by the Trustee or the Holders in connection with the enforcement of this Indenture and the Subsidiary
Guarantees) (collectively, the “
Indenture Obligations
”), when and as such principal, premium, if any, and interest and such other amounts shall become due and payable, whether at the Stated Maturity, upon redemption or by
declaration of acceleration or otherwise, according to the terms of the Securities of the Affected Series and this Indenture. The guarantees by the Subsidiary Guarantors set forth in this Article XVI are referred to herein as the “
Subsidiary
Guarantees
.” Without limiting the generality of the foregoing, the Subsidiary Guarantors’ liability shall extend to all amounts that constitute part of the Indenture Obligations and would be owed by the Partnership under this Indenture
and the Securities of the Affected Series but for the fact that they are unenforceable, reduced, limited, impaired, suspended or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Partnership.
Failing payment when due of any amount guaranteed pursuant to the Subsidiary Guarantees, for whatever reason, each Subsidiary
Guarantor will be obligated (to the fullest extent permitted by applicable law) to pay the same immediately to the Trustee, without
set-off
or counterclaim or other reduction whatsoever (whether for taxes,
withholding or otherwise). Each Subsidiary Guarantee hereunder is intended to be a general, unsecured, senior obligation of each Subsidiary Guarantor and will rank pari passu in right of payment with all indebtedness of such Subsidiary Guarantor
that is not, by its terms, expressly subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor. Each Subsidiary Guarantor hereby agrees that to the fullest extent permitted by applicable law, its obligations hereunder
shall be full, irrevocable, unconditional and absolute, irrespective of the validity, regularity or enforceability of the Securities of the Affected Series, the Subsidiary Guarantees or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder with respect to any provisions hereof or thereof, any release of any other Subsidiary Guarantor, the recovery of any judgment against the Partnership, any action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of such Subsidiary Guarantor. Each Subsidiary Guarantor hereby agrees that in the event of a default in payment of the principal of, or premium, if any, or interest on any
Securities of the Affected Series or any other amounts payable under this Indenture and the Securities of the Affected Series by the Partnership, whether at the Stated Maturity, upon redemption or by declaration of acceleration or otherwise, legal
proceedings may be instituted by the Trustee on behalf of the Holders or, subject to Section 507 hereof, by the Holders, on the terms and conditions set forth in this Indenture, directly against each Subsidiary Guarantor to enforce its
Subsidiary Guarantees without first proceeding against the Partnership.
To the fullest extent permitted by applicable law,
the obligations of each Subsidiary Guarantor under this Article XVII shall be as aforesaid full, irrevocable, unconditional and absolute and shall not be impaired, modified, discharged, released or limited by any occurrence or condition whatsoever,
including, without limitation, (i) any compromise, settlement, release, waiver, renewal, extension, indulgence or modification of, or any change in, any of the obligations and liabilities of the Partnership, the Guarantor, the Affiliate
Guarantor or any Subsidiary Guarantor contained in any of the Securities of the Affected Series or this Indenture, (ii) any impairment, modification, release or limitation of the liability of the
Exhibit B-2
Partnership, the Guarantor, the Affiliate Guarantor, any Subsidiary Guarantor or any of their estates in bankruptcy, or any remedy for the enforcement thereof, resulting from the operation of any
present or future provision of any applicable Bankruptcy Law, as amended, or other statute or from the decision of any court, (iii) the assertion or exercise by the Partnership, the Guarantor, the Affiliate Guarantor, any Subsidiary Guarantor
or the Trustee of any rights or remedies under any of the Securities or this Indenture or their delay in or failure to assert or exercise any such rights or remedies, (iv) the assignment or the purported assignment of any property as security
for any of the Securities, including all or any part of the rights of the Partnership, the Guarantor, the Affiliate Guarantor or any Subsidiary Guarantor under this Indenture, (v) the extension of the time for payment by the Partnership, the
Guarantor, the Affiliate Guarantor or any Subsidiary Guarantor of any payments or other sums or any part thereof owing or payable under any of the terms and provisions of any of the Securities or this Indenture or of the time for performance by the
Partnership, the Guarantor, the Affiliate Guarantor or any Subsidiary Guarantor of any other obligations under or arising out of any such terms and provisions or the extension or the renewal of any thereof, (vi) the modification or amendment
(whether material or otherwise) of any duty, agreement or obligation of the Partnership, the Guarantor, the Affiliate Guarantor or any Subsidiary Guarantor set forth in this Indenture, (vii) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all of the assets, marshaling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or
readjustment of, or other similar proceeding affecting, the Partnership, the Guarantor, the Affiliate Guarantor or any Subsidiary Guarantor or any of their respective assets, or the disaffirmance of any of the Securities, any of the Subsidiary
Guarantees, the Affiliate Guarantee, the Guarantee or this Indenture in any such proceeding, (viii) the release or discharge of the Partnership, the Guarantor, the Affiliate Guarantor or any Subsidiary Guarantor from the performance or
observance of any agreement, covenant, term or condition contained in any of such instruments by operation of law, (ix) the unenforceability of any of the Securities, the Subsidiary Guarantees, the Affiliate Guarantee, the Guarantee or this
Indenture, (x) any change in the name, business, capital structure, corporate existence, or ownership of the Partnership, the Guarantor, the Affiliate Guarantor or any Subsidiary Guarantor, or (xi) any other circumstance which might
otherwise constitute a defense available to, or a legal or equitable discharge of, a surety or any Subsidiary Guarantor.
To the fullest extent permitted by applicable law, each Subsidiary Guarantor hereby (i) waives diligence, presentment,
demand of payment, notice of acceptance, filing of claims with a court in the event of the merger, insolvency or bankruptcy of the Partnership, the Guarantor, the Affiliate Guarantor or any Subsidiary Guarantor, and all demands and notices
whatsoever, (ii) acknowledges that any agreement, instrument or document evidencing its Subsidiary Guarantee may be transferred and that the benefit of its obligations hereunder shall extend to each Holder of the Securities of the Affected
Series without notice to them and (iii) covenants that its Subsidiary Guarantee will not be discharged except by complete performance of the Subsidiary Guarantees. Each Subsidiary Guarantor further agrees that to the fullest extent permitted by
applicable law, if at any time all or any part of any payment theretofore applied by any Person to each Subsidiary Guarantee is, or must be, rescinded or returned for any reason whatsoever, including without limitation, the insolvency, bankruptcy or
reorganization of such Subsidiary Guarantor, such Subsidiary Guarantee shall, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence notwithstanding such application, and such Subsidiary
Guarantee shall continue to be effective or be reinstated, as the case may be, as though such application had not been made.
Each Subsidiary Guarantor shall be subrogated to all rights of the Holders and the Trustee against the Partnership in respect
of any amounts paid by the Subsidiary Guarantor pursuant to the provisions of this Indenture;
provided, however,
that such Subsidiary Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such
right of subrogation with respect to any of the Securities of the Affected Series until all of the Securities of the Affected Series and the Subsidiary Guarantees thereof shall have been indefeasibly paid in full or discharged.
A director, officer, employee or stockholder, as such, of a Subsidiary Guarantor shall not have any liability for any
obligations of such Subsidiary Guarantor under this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.
Exhibit B-3
No failure to exercise and no delay in exercising, on the part of the Trustee or
the Holders, any right, power, privilege or remedy under this Article XVI and the Subsidiary Guarantees shall operate as a waiver thereof, nor shall any single or partial exercise of any rights, power, privilege or remedy preclude any other or
further exercise thereof, or the exercise of any other rights, powers, privileges or remedies. The rights and remedies herein provided for are cumulative and not exclusive of any rights or remedies provided in law or equity. Nothing contained in
this Article XVI shall limit the right of the Trustee or the Holders to take any action to accelerate the maturity of the Securities of the Affected Series pursuant to Article V or to pursue any rights or remedies hereunder or under applicable law.
SECTION 1602.
Limitation of Subsidiary Guarantor’s Liability
.
Each Subsidiary Guarantor and, by its acceptance of any Securities of the Affected Series, each Holder, hereby confirms that it
is their intention that the Subsidiary Guarantee by such Subsidiary Guarantor not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law to the extent applicable to the Subsidiary Guarantees. To effectuate the foregoing intention, each such Person hereby irrevocably agrees that the obligation of such Subsidiary Guarantor under its Subsidiary Guarantee
shall be limited to the maximum amount as shall, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Subsidiary Guarantor that are relevant under such laws, and after giving effect to any rights to
contribution of such Subsidiary Guarantor pursuant to any agreement providing for an equitable contribution among such Subsidiary Guarantor and other Affiliates of the Partnership of payments made on account of guarantees by such parties, result in
the obligations of such Subsidiary Guarantor in respect of such maximum amount not constituting a fraudulent conveyance. Each Holder of Securities of the Affected Series, by accepting the benefits hereof, confirms its intention that, in the event of
bankruptcy, reorganization or other similar proceeding of either of the Partnership or any Subsidiary Guarantor in which concurrent claims are made upon such Subsidiary Guarantor hereunder, to the extent such claims shall not be fully satisfied,
each such claimant with a valid claim against the Partnership shall be entitled to a ratable share of all payments by such Subsidiary Guarantor in respect of such concurrent claims.
SECTION 1603.
Execution and Delivery of Notation of Subsidiary Guarantees
.
To further evidence the Subsidiary Guarantees, the Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guarantees in substantially the form set forth below in Section 1604 shall be endorsed on each of the Securities of the Affected Series authenticated and delivered by the Trustee and executed by either manual or facsimile signature of an
officer of the Subsidiary Guarantor;
provided
that failure to include such notation on any of the Securities of the Affected Series shall not affect the validity of the Subsidiary Guarantees.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each of the Securities of the Affected Series a notation relating to the Subsidiary Guarantee thereof.
If an officer of a Subsidiary Guarantor whose signature is on this Indenture or any of the Securities of the Affected Series no
longer holds that office at the time the Trustee authenticates such Security or at any time thereafter, the Subsidiary Guarantor’s Subsidiary Guarantee of such Security shall be valid nevertheless.
SECTION 1604.
Form Of Notation On Security Relating To Subsidiary Guarantee
.
FORM OF NOTATION ON SECURITY RELATING TO SUBSIDIARY GUARANTEE
The undersigned Subsidiary Guarantor (which term includes any successor Person in such capacity under the Indenture), has
fully, unconditionally and absolutely guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the Securities of this
series and all other amounts due and payable under the Indenture and the Securities of this series by the Partnership.
Exhibit B-4
The obligations of the Subsidiary Guarantor to the Holders of Securities of this
series and to the Trustee pursuant to the Subsidiary Guarantees and the Indenture are expressly set forth in Article XVI of the Indenture and reference is hereby made to the Indenture for the precise terms of the Subsidiary Guarantee.
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Subsidiary Guarantor:
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[NAME OF SUBSIDIARY GUARANTOR]
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ARTICLE V
MISCELLANEOUS
SECTION 5.01
Execution as Supplemental Indenture
. By its execution and delivery of this Supplemental Indenture, the
undersigned Subsidiary Guarantor agrees to be bound by the provisions of the Indenture, including those of Article XV thereof, as the same relate to the Notes due 2027 and all other Securities of the Affected Series. This Supplemental Indenture is
executed and shall be construed as an indenture supplemental to the Indenture and, as provided in the Indenture, this Supplemental Indenture forms a part thereof. Except as herein expressly otherwise defined, the use of the terms and expressions
herein is in accordance with the definitions, uses and constructions contained in the Indenture.
SECTION 5.02
Responsibility for Recitals, Etc
. The recitals herein and in the Securities of the Affected Series (except in the Trustee’s certificate of authentication) shall be taken as the statements of the Partnership, and the Trustee assumes no
responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture or of the Securities of the Affected Series. The Trustee shall not be accountable for the use or
application by the Partnership of the Securities of the Affected Series or of the proceeds thereof.
SECTION 5.03
Provisions Binding on Partnership’s, Guarantor’s and Subsidiary Guarantor’s Successors
. All the covenants, stipulations, promises and agreements in this Supplemental Indenture contained by the Partnership with the Guarantor,
the Affiliate Guarantor or the undersigned Subsidiary Guarantor shall bind its successors and assigns whether so expressed or not.
SECTION 5.04
Governing Law
. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
SECTION 5.05
Execution and Counterparts
. This Supplemental Indenture may be executed with
counterpart signature pages or in any number of counterparts, each of which shall be an original but such counterparts shall together constitute but one and the same instrument.
SECTION 5.06
Capitalized Terms
. Capitalized terms not otherwise defined in this Supplemental Indenture shall have the
respective meanings assigned to them in the Indenture.”
(
The remainder of this page is intentionally blank.
)
Exhibit B-5
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed and attested, all as of the date first above written.
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Partnership:
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NUSTAR LOGISTICS, L.P.
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By:
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NuStar GP, Inc.,
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Its General Partner
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By:
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Name:
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Title:
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Guarantor:
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NUSTAR ENERGY L.P.
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By:
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Riverwalk Logistics, L.P.,
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its General Partner
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By:
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NuStar GP, LLC,
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its General Partner
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Affiliate Guarantor:
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NUSTAR PIPELINE OPERATING
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PARTNERSHIP L.P.
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By:
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NUSTAR PIPELINE COMPANY, LLC,
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its General Partner
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Trustee:
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[NAME OF TRUSTEE]
, AS TRUSTEE
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Exhibit B-6
