Filed by the
Registrant ☒ Filed by a Party other than the
Registrant ☐
We cordially invite
you to attend a special meeting of the holders of common units representing limited partner interests in Arc Logistics Partners LP, a Delaware limited partnership (MLP), to be held on December 18, 2017 at 11:00 a.m. (Eastern time),
at 666 Fifth Avenue, 26
th
Floor, New York, New York 10103.
On August 29,
2017, MLP entered into a Purchase Agreement and Plan of Merger (the Merger Agreement) with Zenith Energy U.S., L.P., a Delaware limited partnership (Parent), Zenith Energy U.S. GP, LLC, a Delaware limited liability company
and the general partner of Parent (Parent GP), Zenith Energy U.S. Logistics Holdings, LLC, a Delaware limited liability company and a wholly owned subsidiary of Parent (Holdings), Zenith Energy U.S. Logistics, LLC, a Delaware
limited liability company and a wholly owned subsidiary of Holdings (Merger Sub and, together with Parent, Parent GP and Holdings, the Parent Entities), Arc Logistics GP LLC, a Delaware limited liability company and the
general partner of MLP (MLP GP), Lightfoot Capital Partners, LP, a Delaware limited partnership (LCP LP), and Lightfoot Capital Partners GP LLC, a Delaware limited liability company and the general partner of LCP LP
(LCP GP and, together with LCP LP, the Lightfoot Entities). Pursuant to the Merger Agreement, Merger Sub will, upon the terms and subject to the conditions thereof, merge with and into MLP (the Merger), with MLP
surviving the Merger as a wholly owned subsidiary of Holdings, and LCP GP will transfer to Holdings 100% of the issued and outstanding membership interests in MLP GP, including all rights and obligations relating thereto and all economic and capital
interest therein (the GP Equity Transfer).
Upon the Merger and GP Equity Transfer becoming effective (the Effective
Time), (i) (a) each common unit representing a limited partner interest in MLP (Common Unit) issued and outstanding immediately prior to the Effective Time (other than those Common Units owned by LCP LP (the Sponsor
Units)) will be converted into the right to receive an amount in cash equal to $16.50 per Common Unit, no longer be outstanding, automatically be cancelled and cease to exist and (b) each Sponsor Unit issued and outstanding immediately
prior to the Effective Time will be converted into the right to receive an amount in cash equal to $14.50 per Common Unit, no longer be outstanding, automatically be cancelled and cease to exist, in each case, upon the terms and subject to the
conditions set forth in the Merger Agreement and (ii) Holdings will (or Parent will on Holdings behalf) pay to LCP GP $94,500,000 in cash in exchange for 100% of the membership interests in MLP GP in connection with the GP Equity
Transfer.
The acquisition by merger of MLP by Parent requires, prior to the
consummation thereof, approval of the holders of a majority of the outstanding Common Units of the Merger Agreement and the Merger in compliance with the Delaware Revised Uniform Limited Partnership Act, as amended, and the MLP Partnership
Agreement. You are being asked to consider and vote on a proposal to approve the Merger Agreement and the Merger (the Merger Proposal).
Concurrently with the execution of the Merger Agreement, the Lightfoot Entities, which (through
LCP LP) own approximately 26.8% of the outstanding Common Units, entered into a support agreement (the Lightfoot Support Agreement), and MTP Energy Master Fund Ltd., an affiliate of Magnetar Financial LLC (an affiliate of an investor in
the Lightfoot Entities) (Magnetar), which owns approximately 2.9% of the outstanding Common Units (the Magnetar Units), entered into a support agreement (the Magnetar Support Agreement), in each case with the
Parent Entities. Under the Lightfoot Support Agreement and the Magnetar Support Agreement, the Lightfoot Entities and Magnetar, respectively, have agreed, subject to the provisions thereof, to vote the Sponsor Units and the Magnetar Units,
respectively, for approval of the Merger Proposal.
If you have any questions or need
assistance voting your Common Units, please contact MacKenzie Partners, Inc., MLPs proxy solicitor, by calling toll-free at 1-800-322-2885.
Vincent T. Cubbage
This proxy statement is dated October 30, 2017 and is first being mailed to holders of Common Units on or about October 30, 2017.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Common Units as of October 20, 2017 held by MLP GP, by each person
known by MLP to own more than 5% of such units, by each director and named executive officer of MLP GP and by all directors and executive officers of MLP GP as a group. Unless otherwise noted, (i) the address for each beneficial owner listed
below is 725 Fifth Avenue, 19th Floor, New York, NY 10022 and (ii) the persons named in the table have sole voting and investment power with respect to all units beneficially owned by them.
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Name
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Common Units
Beneficially Owned
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Percentage of
Common Units
Beneficially Owned
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Arc Logistics GP LLC
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%
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Lightfoot(1)
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5,242,775
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26.8
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%
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Center Terminal Company-Cleveland(2)
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1,088,076
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5.6
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%
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Kayne Anderson Capital Advisors, L.P.(3)
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1,922,947
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9.8
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%
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Oppenheimer SteelPath MLP Income Fund(4)
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1,896,477
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9.7
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%
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Vincent T. Cubbage(5)
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74,310
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*
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John S. Blanchard(6)
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20,636
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*
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Bradley K. Oswald(6)
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19,546
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*
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John Pugh
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*
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Edward P. Russell(6)
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20,000
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*
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Eric J. Scheyer(6)
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20,000
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*
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Sidney L. Tassin(6)
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20,000
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*
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Gary G. White(6)
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13,333
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*
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Barry L. Zubrow(6)
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20,000
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*
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All directors and executive officers as a group (12 persons)
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234,040
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1.2
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%
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(1)
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Voting and investment determinations with regard to securities held by LCP LP are made by LCP GP through its board of managers consisting of Jonathan Cohen, Vincent Cubbage, Eric Scheyer, Joshua Tarnow, John Pugh and
Alec Litowitz.
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(2)
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Based solely on Schedule 13G/A filed with the SEC on February 13, 2017. The address for Center Terminal Company-Cleveland is 600 Mason Ridge Center Drive, 2nd Floor, St. Louis, Missouri 63141. Center Terminal
Company-Cleveland, G.P.& W., Inc. and Karman D. Parker have shared voting power and shared dispositive power with respect to the reported units shown above.
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(3)
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Based solely on Schedule 13G/A filed with the SEC on October 6, 2017. The address for Kayne Anderson Capital Advisors, L.P. is 1800 Avenue of the Stars, Third Floor, Los Angeles, CA 90067. Kayne Anderson Capital
Advisors, L.P. and Richard A. Kayne have shared voting power and shared dispositive power with respect to the reported units shown above.
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(4)
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Based solely on Schedule 13G/A filed with the SEC on January 26, 2017. OppenheimerFunds, Inc. is an investment adviser to Oppenheimer SteelPath MLP Income Fund. The address for Oppenheimer SteelPath MLP Income Fund is
6803 S. Tucson Way, Centennial, CO 80112. OppenheimerFunds, Inc. and Oppenheimer SteelPath MLP Income Fund have shared voting power and shared dispositive power with respect to the reported units shown above.
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(5)
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Vincent Cubbage may be deemed to be the beneficial owner of 30,680 common units of MLP that are held by LCP LP by virtue of his ownership interests in LCP GP. In addition, Vincent Cubbage has received 43,630 Common
Units that have vested as part of the Arc Logistics Long-Term Incentive Plan.
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(6)
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Represents the vested Common Units as a part of the Arc Logistics Long-Term Incentive Plan.
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118
COMMON UNITHOLDER PROPOSALS
Under applicable Delaware law and the MLP Partnership Agreement, MLP is not required to hold an annual meeting of its unitholders. Under the
MLP Partnership Agreement, a special meeting of the Limited Partners may be called by the general partner or by Limited Partners owning 20% or more of the outstanding units of the class or classes for which a meeting is proposed. Such Limited
Partners may call a special meeting by delivering to MLP GP one or more requests in writing stating that the signing Limited Partners wish to call a special meeting and indicating the specific purposes for which the special meeting is to be called
and the class or classes of units for which the meeting is proposed. No business may be brought by any Limited Partner before such special meeting except the business listed in the related request. However, Limited Partners are not allowed to 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 MLP so as to jeopardize the Limited Partners limited liability under Delaware law or the law of any
other state in which MLP is qualified to do business.
119
OTHER MATTERS
If any other matters are properly presented at the MLP Unitholder Meeting, or any adjournments of the MLP Unitholder Meeting, and are voted
upon, including matters incident to the conduct of the meeting, the enclosed proxy will confer discretionary authority on the individuals named as proxy to vote the Common Units represented by proxy as to any other matters so long as the MLP GP
Board is not aware of any such other matter a reasonable time before the MLP Unitholder Meeting. As of the date of this proxy statement, the MLP GP Board knows of no other matters that will be presented for consideration at the MLP Unitholder
Meeting other than as described in this proxy statement. It is intended that the persons named in the enclosed proxy and acting thereunder will vote in accordance with their best judgment on any such matter.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
MLP is incorporating by reference specified documents that it files with the SEC, which means that it can disclose important information to
you by referring you to those documents that are considered part of this proxy statement. Any later information filed by MLP with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished and
not filed with the SEC) up until the date of the MLP Unitholder Meeting will be deemed to be incorporated by reference into this proxy statement and will automatically update and supersede this information. MLP incorporates by reference into this
proxy statement the documents listed below (other than portions of these documents that are described in paragraphs (d)(1), (d)(2), (d)(3) or (e)(5) of Item 407 of Regulation S-K promulgated by the SEC).
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MLPs Annual Report on Form 10-K for the year ended December 31, 2016;
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MLPs Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017; and
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MLPs Current Reports on Form 8-K as filed with the SEC on May 3, 2017, June 2, 2017, June 26, 2017 and August 29, 2017 other than portions of a Current Report on Form 8-K that are
furnished under Item 2.02 or Item 7.01, including any exhibits included with such Items unless otherwise indicated therein)
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Any statement contained in a document incorporated by reference into this proxy statement will be deemed to be modified or superseded for
purposes of this proxy statement to the extent that a statement contained in this proxy statement or any other subsequently filed document that is incorporated by reference into this proxy statement modifies or supersedes the statement.
WHERE YOU CAN FIND MORE INFORMATION
MLP files annual, quarterly and current reports and other information with the SEC. These reports and other information contain additional
information about MLP. MLP will make these materials available for inspection and copying by any of its unitholders, or a representative of any unitholder who is so designated in writing, at its executive offices during regular business hours.
MLP also makes available on its website (http://www.arcxlp.com) under Investors the annual reports on Form 10-K, quarterly reports
on Form 10-Q and current reports on Form 8-K and amendments to those reports filed by MLP.
120
You can obtain any of these documents from the SEC through the SECs website at www.sec.gov,
or MLP will provide you with copies of these documents (not including exhibits to the information that is incorporated by reference unless such exhibits are specifically incorporated by reference into the information that this proxy statement
incorporates), without charge, upon written or oral request to:
Arc Logistics Partners LP
725 Fifth Avenue, 19
th
Floor
New York, New York 10022
Attention: General Counsel
(212)
993-1290
If you would like to request documents from us, please do so at least five business days before the date of the MLP Unitholder
Meeting in order to receive timely delivery of those documents prior to the MLP Unitholder Meeting.
This proxy statement does not
constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is not lawful to make any offer or solicitation in that jurisdiction. The
delivery of this proxy statement should not create an implication that there has been no change in the affairs of MLP since the date of this proxy statement or that the information herein is correct as of any later date regardless of the time of
delivery of this proxy statement.
The provisions of the Merger Agreement are extensive and not easily summarized. You should carefully
read the Merger Agreement in its entirety because it, and not this proxy statement, is the legal document that governs the Merger of MLP in which you own Common Units.
The Merger Agreement contains representations and warranties by each of the parties to the Merger Agreement. These representations and
warranties have been made solely for the benefit of the other parties to such Merger Agreement and:
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may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
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have been qualified by disclosures that were made to the other party in connection with the negotiation of the Merger, which disclosures are not reflected in the Merger Agreement;
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may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
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were made only as of the date of the Merger Agreement or such other date or dates as may be specified in the Merger Agreement and are subject to more recent developments.
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Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other
time.
You should rely only on the information contained in this proxy statement to vote your Common Units at the MLP Unitholder
Meeting. MLP has not authorized anyone to provide you with information that is different from what is contained in this proxy statement. This proxy statement is dated October 30, 2017. You should not assume that the information contained in this
proxy statement is accurate as of any date other than that date, or that the information contained in the Form 10-K, Form 10-Qs and Form 8-Ks incorporated by reference into this proxy statement is accurate as of the date that such form was filed.
Neither the mailing of the proxy statement to unitholders nor the issuance of the applicable Merger Consideration pursuant to the Merger will create any implication to the contrary.
121
Annex A
PURCHASE AGREEMENT AND PLAN OF MERGER
among
ARC LOGISTICS
PARTNERS LP,
ARC LOGISTICS GP LLC,
LIGHTFOOT CAPITAL PARTNERS GP LLC,
LIGHTFOOT CAPITAL PARTNERS, LP,
ZENITH ENERGY U.S., L.P.,
ZENITH ENERGY U.S. GP, LLC
ZENITH ENERGY U.S. LOGISTICS HOLDINGS, LLC
and
ZENITH ENERGY U.S.
LOGISTICS, LLC
Dated as of August 29, 2017
TABLE OF CONTENTS
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Page
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ARTICLE I THE MERGER; THE GP EQUITY TRANSFER
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A-2
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Section 1.1
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The Merger
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A-2
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Section 1.2
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The GP Equity Transfer
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A-2
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Section 1.3
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Closing
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A-2
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Section 1.4
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Effects of the Merger
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A-2
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Section 1.5
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Organizational Documents of the Surviving Entity
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A-3
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ARTICLE II EFFECT ON UNITS; TRANSFER OF GP EQUITY INTEREST
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A-3
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Section 2.1
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Effect of Merger
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A-3
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Section 2.2
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Exchange of Book-Entry Units
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A-4
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Section 2.3
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Treatment of Phantom Units and Incentive Distribution Rights
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A-5
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Section 2.4
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Distributions
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A-6
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Section 2.5
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Withholding Taxes
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A-6
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Section 2.6
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Adjustments
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A-6
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Section 2.7
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No Dissenters Rights
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A-6
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Section 2.8
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GP Equity Transfer Covenants
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A-6
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE MLP ENTITIES
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A-7
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Section 3.1
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Organization
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A-7
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Section 3.2
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Capitalization
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A-8
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Section 3.3
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Authorization
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A-9
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Section 3.4
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Noncontravention
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A-9
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Section 3.5
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Governmental Approvals
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A-9
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Section 3.6
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MLP SEC Documents; Undisclosed Liabilities
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A-10
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Section 3.7
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Absence of Certain Changes or Events
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A-12
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Section 3.8
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Legal Proceedings
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A-12
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Section 3.9
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Compliance with Laws; Permits
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A-12
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Section 3.10
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Prohibited Payments
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A-13
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Section 3.11
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Export Controls
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A-13
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Section 3.12
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Antitrust Laws
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A-14
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Section 3.13
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Tax Matters
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A-14
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Section 3.14
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Employee Benefits
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A-15
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Section 3.15
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Labor Matters
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A-17
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Section 3.16
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Environmental Matters
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A-18
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Section 3.17
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Contracts
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A-19
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Section 3.18
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Real Property and Personal Property
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A-20
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Section 3.19
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Intellectual Property
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A-21
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Section 3.20
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Insurance
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A-21
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Section 3.21
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Customers and Suppliers
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A-22
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Section 3.22
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Related Party Transactions
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A-22
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Section 3.23
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Regulatory Matters
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A-22
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Section 3.24
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Information Supplied
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A-23
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Section 3.25
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Takeover Laws
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A-23
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Section 3.26
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Opinion of MLP Committee Financial Advisor
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A-23
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Section 3.27
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Brokers
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A-23
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Section 3.28
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Acknowledgement by MLP and MLP GP
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A-23
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE LIGHTFOOT ENTITIES
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A-23
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Section 4.1
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Organization
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A-24
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Section 4.2
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Capitalization of MLP GP
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A-24
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A-i
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Section 4.3
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Authorization
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A-24
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Section 4.4
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Noncontravention
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A-25
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Section 4.5
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Governmental Approvals
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A-25
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Section 4.6
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MLP GP
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A-25
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Section 4.7
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Brokers
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A-25
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Section 4.8
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Acknowledgement by MLP Entities and the Lightfoot Entities
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A-26
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PARENT ENTITIES
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A-26
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Section 5.1
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Organization
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A-26
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Section 5.2
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Capitalization of Merger Sub
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A-26
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Section 5.3
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Authorization
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A-26
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Section 5.4
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Noncontravention
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A-27
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Section 5.5
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Governmental Filings
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A-27
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Section 5.6
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Legal Proceedings
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A-27
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Section 5.7
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Information Supplied
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A-27
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Section 5.8
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Financing
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A-27
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Section 5.9
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Brokers and Finders
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A-29
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Section 5.10
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Limited Guarantee
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A-29
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Section 5.11
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Acknowledgement by Parent
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A-29
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ARTICLE VI ADDITIONAL COVENANTS AND AGREEMENTS
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A-29
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Section 6.1
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Unitholder Meeting; Preparation of the Proxy Statement
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A-29
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Section 6.2
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Ordinary Course of Business
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A-30
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Section 6.3
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Interim Operations
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A-30
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Section 6.4
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No Solicitation or Withdrawal of Recommendation
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A-33
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Section 6.5
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Regulatory, Financing and Other Authorizations
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A-37
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Section 6.6
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Public Announcements
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A-42
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Section 6.7
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Access to Information; Confidentiality
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A-42
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Section 6.8
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Notification of Certain Matters
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A-43
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Section 6.9
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Indemnification and Insurance
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A-43
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Section 6.10
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Transaction Litigation
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A-45
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Section 6.11
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Cooperation Regarding MLP Debt
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A-45
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Section 6.12
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Fees and Expenses
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A-45
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Section 6.13
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Employee Benefits
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A-45
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Section 6.14
|
|
Termination of Trading and Deregistration
|
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|
A-46
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Section 6.15
|
|
Takeover Laws
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A-47
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|
Section 6.16
|
|
Section 16 Matters
|
|
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A-47
|
|
Section 6.17
|
|
FIRPTA Certificate
|
|
|
A-47
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Section 6.18
|
|
Tax Matters
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|
|
A-47
|
|
Section 6.19
|
|
Related Party Transactions
|
|
|
A-48
|
|
Section 6.20
|
|
GP Conflicts Committee
|
|
|
A-49
|
|
|
|
ARTICLE VII CONDITIONS PRECEDENT
|
|
|
A-49
|
|
Section 7.1
|
|
Conditions to Each Partys Obligation to Effect the Transactions
|
|
|
A-49
|
|
Section 7.2
|
|
Conditions to Obligations of Parent, Parent GP and Merger Sub to Effect the Transactions
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|
|
A-50
|
|
Section 7.3
|
|
Conditions to Obligations of the MLP Entities and the Lightfoot Entities to Effect the Transactions
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|
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A-51
|
|
Section 7.4
|
|
Frustration of Closing Conditions
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|
|
A-52
|
|
|
|
ARTICLE VIII TERMINATION
|
|
|
A-52
|
|
Section 8.1
|
|
Termination
|
|
|
A-52
|
|
Section 8.2
|
|
Effect of Termination
|
|
|
A-54
|
|
A-ii
|
|
|
|
|
|
|
|
|
ARTICLE IX MISCELLANEOUS
|
|
|
A-57
|
|
Section 9.1
|
|
No Survival, Etc.
|
|
|
A-57
|
|
Section 9.2
|
|
Amendment or Modification
|
|
|
A-57
|
|
Section 9.3
|
|
Extension of Time, Waiver, Etc.
|
|
|
A-58
|
|
Section 9.4
|
|
Assignment
|
|
|
A-58
|
|
Section 9.5
|
|
Counterparts
|
|
|
A-58
|
|
Section 9.6
|
|
Entire Agreement
|
|
|
A-58
|
|
Section 9.7
|
|
No Third-Party Beneficiaries
|
|
|
A-58
|
|
Section 9.8
|
|
Governing Law; Jurisdiction; Waiver of Jury Trial
|
|
|
A-59
|
|
Section 9.9
|
|
Specific Enforcement
|
|
|
A-60
|
|
Section 9.10
|
|
Notices
|
|
|
A-61
|
|
Section 9.11
|
|
Severability
|
|
|
A-62
|
|
Section 9.12
|
|
Construction
|
|
|
A-62
|
|
Section 9.13
|
|
Non-Recourse
|
|
|
A-63
|
|
Section 9.14
|
|
Obligations of Parent and of MLP
|
|
|
A-64
|
|
Section 9.15
|
|
Tax Treatment
|
|
|
A-64
|
|
Section 9.16
|
|
Definitions
|
|
|
A-64
|
|
Exhibit A Form of Transfer Agreement
Exhibit B Form of Certification of
Non-Foreign
Status under Treasury Regulations
Section 1.1445-2(b)
Exhibit C Acknowledgement
Exhibit D Transition Services Agreement
A-iii
INDEX OF DEFINED TERMS
|
|
|
Defined Term
|
|
Reference
|
Affiliate
|
|
Section 9.16
|
Agreement
|
|
Preamble
|
Alternative Acquisition Agreement
|
|
Section 6.4(a)(i)(B)
|
Alternative Financing
|
|
Section 6.5(b)
|
Alternative Proposal
|
|
Section 9.16
|
Anti-corruption Laws
|
|
Section 9.16
|
Antitrust Consents
|
|
Section 3.5
|
Antitrust Laws
|
|
Section 9.16
|
Balance Sheet Date
|
|
Section 3.6(e)(i)
|
Bankruptcy and Equity Exception
|
|
Section 3.3(a)
|
BDO
|
|
Section 6.18(h)
|
Board Recommendation
|
|
Section 6.1(a)
|
Bona Fide Alternative Proposal
|
|
Section 9.16
|
Book-Entry Units
|
|
Section 2.2(a)
|
Business Day
|
|
Section 9.16
|
Certificate of Merger
|
|
Section 1.4
|
Change of Control Agreements
|
|
Section 3.14
|
Closing
|
|
Section 1.3
|
Closing Date
|
|
Section 1.3
|
Closing Failure Notice
|
|
Section 8.1(d)(iii)
|
Code
|
|
Section 2.5
|
Commitment Letters
|
|
Section 5.8(a)
|
Common Unit
|
|
Section 9.16
|
Confidentiality Agreement
|
|
Section 9.16
|
Consents
|
|
Section 9.16
|
Contract
|
|
Section 9.16
|
Criminal Penalty
|
|
Section 9.16
|
Debt Commitment Letter
|
|
Section 5.8(a)
|
Debt Financing
|
|
Section 5.8(a)
|
Debt Financing Sources
|
|
Section 5.8(a)
|
Derivative Transaction
|
|
Section 9.16
|
Divestiture Condition
|
|
Section 9.16
|
Divestiture Request
|
|
Section 9.16
|
DLLCA
|
|
Section 9.16
|
DRULPA
|
|
Section 9.16
|
DTC
|
|
Section 2.2(a)
|
Effective Time
|
|
Section 1.4
|
Environment
|
|
Section 9.16
|
Environmental Laws
|
|
Section 9.16
|
Environmental Permits
|
|
Section 9.16
|
Equity Commitment Letter
|
|
Section 5.8(a)
|
Equity Financing
|
|
Section 5.8(a)
|
Equity Financing Sources
|
|
Section 5.8(a)
|
Equity Interest
|
|
Section 9.16
|
Equity Security
|
|
Section 9.16
|
ERISA
|
|
Section 9.16
|
ERISA Affiliate
|
|
Section 9.16
|
Exchange Act
|
|
Section 9.16
|
Exchange Fund
|
|
Section 2.2(b)
|
A-iv
|
|
|
Defined Term
|
|
Reference
|
Excluded Matter
|
|
Section 9.16
|
Existing MLP Credit Facility
|
|
Section 9.16
|
FCPA
|
|
Section 3.10(a)
|
Fee Letter
|
|
Section 5.8(a)
|
Financing
|
|
Section 5.8(a)
|
Financing Sources
|
|
Section 5.8(a)
|
GAAP
|
|
Section 9.16
|
GE EFS
|
|
Recitals
|
General Partner Interest
|
|
Section 9.16
|
Government Official
|
|
Section 9.16
|
Governmental Authority
|
|
Section 9.16
|
GP Conflicts Committee
|
|
Section 9.16
|
GP Equity Interest
|
|
Recitals
|
GP Equity Transfer
|
|
Section 1.2
|
GP Purchase Price
|
|
Section 9.16
|
Guarantor
|
|
Section 5.10
|
Gulf LNG
|
|
Recitals
|
Gulf LNG Interest
|
|
Section 3.2
|
Gulf LNG Purchase
|
|
Recitals
|
Gulf LNG Purchase Agreement
|
|
Recitals
|
Hazardous Materials
|
|
Section 9.16
|
Holdings
|
|
Preamble
|
HSR Act
|
|
Section 9.16
|
Incentive Distribution Rights
|
|
Section 9.16
|
Indebtedness
|
|
Section 9.16
|
Indemnified Person
|
|
Section 9.16
|
Insurance Policies
|
|
Section 3.20
|
Intellectual Property
|
|
Section 9.16
|
Intervening Event
|
|
Section 9.16
|
Intervening Event Negotiation Period
|
|
Section 6.4(d)(ii)
|
Intervening Event Notice
|
|
Section 6.4(d)(ii)
|
Joliet
|
|
Recitals
|
Joliet Interests
|
|
Recitals
|
Joliet Purchase
|
|
Recitals
|
Joliet Purchase Agreement
|
|
Recitals
|
Knowledge
|
|
Section 9.16
|
Laws
|
|
Section 9.16
|
LCP GP
|
|
Preamble
|
LCP GP LLC Agreement
|
|
Section 9.16
|
LCP LNG
|
|
Recitals
|
Leased Real Property
|
|
Section 3.18(b)
|
Letter of Transmittal
|
|
Section 2.2(a)
|
Lien
|
|
Section 9.16
|
Lightfoot Entities
|
|
Preamble
|
Limited Guarantee
|
|
Section 5.10
|
Limited Partner
|
|
Section 9.16
|
Limited Partner Interest
|
|
Section 9.16
|
Marketing Period
|
|
Section 9.16
|
Material Leased Real Property
|
|
Section 9.16
|
Merger
|
|
Section 1.1
|
Merger Consideration
|
|
Section 9.16
|
A-v
|
|
|
Defined Term
|
|
Reference
|
Merger Consideration Allocation
|
|
Section 6.18(h)
|
Merger Sub
|
|
Preamble
|
MLP
|
|
Preamble
|
MLP Benefit Plans
|
|
Section 9.16
|
MLP Budget
|
|
Section 6.3(m)
|
MLP Charter Documents
|
|
Section 3.1(c)
|
MLP Disclosure Letter
|
|
Article III
|
MLP Entities
|
|
Preamble
|
MLP Equity Plans
|
|
Section 9.16
|
MLP Expense Reimbursement
|
|
Section 8.2(d)
|
MLP Fairness Opinion
|
|
Section 3.26
|
MLP Committee Financial Advisor
|
|
Section 3.26
|
MLP Financial Advisor
|
|
Section 3.27
|
MLP General Partner Interest
|
|
Section 4.6(b)
|
MLP GP
|
|
Preamble
|
MLP GP Board
|
|
Section 9.16
|
MLP GP LLC Agreement
|
|
Section 4.6(a)
|
MLP Group Entities
|
|
Section 9.16
|
MLP Group Intellectual Property
|
|
Section 3.19
|
MLP Income Tax Returns
|
|
Section 9.16
|
MLP LTIP
|
|
Section 9.16
|
MLP Material Adverse Effect
|
|
Section 9.16
|
MLP Material Contract
|
|
Section 3.17(a)
|
MLP
Non-Solicit
Parties
|
|
Section 6.4(a)(i)
|
MLP Partnership Agreement
|
|
Section 9.16
|
MLP Related Parties
|
|
Section 8.2(f)(i)
|
MLP SEC Documents
|
|
Section 9.16
|
MLP Termination Fee
|
|
Section 8.2(b)(i)
|
MLP Unitholder Approval
|
|
Section 3.3(a)
|
MLP Unitholder Meeting
|
|
Section 6.1(a)
|
Negotiation Period
|
|
Section 6.4(d)(i)
|
NYSE
|
|
Section 9.16
|
Orders
|
|
Section 9.16
|
Other Governmental Consents
|
|
Section 3.5
|
Other Reimbursable Expenses
|
|
Section 6.21
|
Outside Date
|
|
Section 9.16
|
Owned Real Property
|
|
Section 3.18(a)
|
Parent
|
|
Preamble
|
Parent Entities
|
|
Preamble
|
Parent GP
|
|
Preamble
|
Parent Liability Limitation
|
|
Section 8.2(f)(i)
|
Parent Material Adverse Effect
|
|
Section 9.16
|
Parent Related Parties
|
|
Section 8.2(f)(i)
|
Parent Termination Fee
|
|
Section 8.2(c)
|
Partnership Interest
|
|
Section 9.16
|
Party
|
|
Preamble
|
Paying Agent
|
|
Section 2.2(a)
|
Permits
|
|
Section 9.16
|
Permitted Liens
|
|
Section 9.16
|
Person
|
|
Section 9.16
|
Personal Property
|
|
Section 3.18(c)
|
A-vi
|
|
|
Defined Term
|
|
Reference
|
Phantom Unit
|
|
Section 9.16
|
Phantom Unit Consideration
|
|
Section 9.16
|
Phantom Unitholder Acknowledgement
|
|
Section 2.3(a)
|
Principal Officers
|
|
Section 3.6(c)
|
Proceeding
|
|
Section 9.16
|
Proscribed Recipient
|
|
Section 3.10(a)
|
Proxy Statement
|
|
Section 6.1(b)
|
Public Merger Consideration
|
|
Section 9.16
|
Public Unitholders
|
|
Section 9.16
|
Registration Rights Agreement
|
|
Section 9.16
|
Release
|
|
Section 9.16
|
Representatives
|
|
Section 9.16
|
Required Financial Information
|
|
Section 9.16
|
Resolution Period
|
|
Section 6.18(h)
|
Restraints
|
|
Section 7.1(c)
|
Rights
|
|
Section 9.16
|
Rights-of-Way
|
|
Section 3.18(d)
|
SEC
|
|
Section 9.16
|
Securities Act
|
|
Section 9.16
|
Significant Customer
|
|
Section 3.21(a)
|
Significant Supplier
|
|
Section 3.21(b)
|
Sponsor Merger Consideration
|
|
Section 9.16
|
Subsidiary
|
|
Section 9.16
|
Superior Proposal
|
|
Section 9.16
|
Superior Proposal Notice
|
|
Section 6.4(d)(i)
|
Support Agreements
|
|
Recitals
|
Surviving Entity
|
|
Section 1.1
|
Takeover Laws
|
|
Section 9.16
|
Tax or Taxes
|
|
Section 9.16
|
Tax Return
|
|
Section 9.16
|
Transaction Filings
|
|
Section 3.24
|
Transaction Litigation
|
|
Section 6.10
|
Transactions
|
|
Section 9.16
|
Transfer Agreement
|
|
Section 2.8
|
Unit Majority
|
|
Section 9.16
|
Unitholder
|
|
Section 9.16
|
Unvested Phantom Unit
|
|
Section 9.16
|
Vested Phantom Unit
|
|
Section 9.16
|
Withdrawal of Recommendation
|
|
Section 6.4(b)(vi)
|
A-vii
PURCHASE AGREEMENT
AND
PLAN OF MERGER
This PURCHASE AGREEMENT AND PLAN OF MERGER, dated as of August 29, 2017 (this
Agreement
), is by and among Arc
Logistics Partners LP, a Delaware limited partnership (
MLP
), Arc Logistics GP LLC, a Delaware limited liability company and the general partner of MLP (
MLP GP
and, together with MLP, the
MLP
Entities
), Lightfoot Capital Partners, LP, a Delaware limited partnership (
LCP LP
), Lightfoot Capital Partners GP LLC, a Delaware limited liability company and the general partner of LCP LP (
LCP GP
and, together with LCP LP, the
Lightfoot Entities
), Zenith Energy U.S., L.P., a Delaware limited partnership (
Parent
), Zenith Energy U.S. GP, LLC, a Delaware limited liability company and the general partner of
Parent (
Parent GP
), Zenith Energy U.S. Logistics Holdings, LLC, a Delaware limited liability company and a Subsidiary of Parent (
Holdings
), and Zenith Energy U.S. Logistics, LLC, a Delaware limited liability
company and a Subsidiary of Holdings (
Merger Sub
and, together with Parent, Parent GP and Holdings, the
Parent Entities
). The MLP Entities, the Lightfoot Entities and the Parent Entities are sometimes referred
to in this Agreement individually as a
Party
and collectively as the
Parties
.
RECITALS
WHEREAS, the MLP Entities, the Lightfoot Entities and the Parent Entities desire to merge MLP and Merger Sub on the terms and conditions set
forth in this Agreement.
WHEREAS, LCP GP desires to sell and otherwise transfer to Holdings, and Holdings desires to purchase and accept,
100% of the issued and outstanding membership interests in MLP GP, including all rights and obligations relating thereto and all economic and capital interest therein (the
GP Equity Interest
).
WHEREAS, the GP Conflicts Committee has unanimously (i) determined that it is in the best interests of MLP and the Public Unitholders to
enter into this Agreement and consummate the Merger, (ii) approved this Agreement and the Merger by Special Approval (as defined in the MLP Partnership Agreement), (iii) recommended approval of this Agreement and the Merger by the MLP GP Board
and (iv) determined to recommend that the Limited Partners approve this Agreement and the Merger.
WHEREAS, the MLP GP Board has
unanimously (i) determined that it is in the best interests of the MLP and the MLP Unitholders, and declared it advisable, for the MLP Entities to enter into this Agreement and consummate the Merger, (ii) authorized and directed MLP GP, in
its capacity as the general partner of MLP, to approve this Agreement and the Merger, (iii) authorized and directed MLP GP to execute and deliver this Agreement both (A) in its individual capacity, on its own behalf, and (B) in its
capacity as the general partner of MLP, on behalf of MLP, (iv) authorized and directed MLP GP, in its capacity as the general partner of MLP, to direct this Agreement to be submitted to a vote of Limited Partners at a meeting in accordance with
the MLP Partnership Agreement and (v) determined to recommend that the Limited Partners approve this Agreement and the Merger, and MLP GP, in its capacity as the general partner of MLP, has approved this Agreement and the Merger.
WHEREAS, the board of managers of LCP GP has unanimously approved this Agreement and the Transactions and authorized and directed LCP GP to
execute and deliver this Agreement in its individual capacity on its own behalf and in its capacity as the general partner of LCP LP, and the MLP GP Board has received a written instruction from LCP GP, in its capacity as the managing member of MLP
GP, evidencing its approval of this Agreement and the Transactions.
WHEREAS, Parent GP, in its capacity as the general partner of Parent,
and Parent, in its capacity as the managing member of Merger Sub, have each approved and declared advisable this Agreement and the Transactions.
A-1
WHEREAS, concurrently with the execution and delivery of this Agreement, Parent, certain equity
owners of the Lightfoot Entities and EFS Midstream Holdings LLC, a Delaware limited liability company (
GE EFS
), will enter into a Purchase Agreement (as amended or modified from time to time, the
Joliet Purchase
Agreement
), pursuant to which Parent and certain equity owners of the Lightfoot Entities, or an Affiliate of such Person designated by such Person, will each purchase certain of the interests in Arc Terminals Joliet Holdings, LLC, a
Delaware limited liability company (
Joliet
), held by GE EFS (the
Joliet Interests
), upon the terms and subject to the conditions set forth therein (the
Joliet Purchase
).
WHEREAS, concurrently with the execution and delivery of this Agreement, Parent, LCP LNG Holdings, LLC, a Delaware limited liability company
(
LCP LNG
), LCP LP and LCP GP will enter into a Purchase Agreement (as amended or modified from time to time, the
Gulf LNG Purchase Agreement
), pursuant to which Parent or an Affiliate of Parent designated by
Parent will purchase, on a partially conditional basis, a 9.678% interest in Gulf LNG Holdings Group, LLC, a Delaware limited liability company (
Gulf LNG
), from LCP LNG upon the terms and subject to the conditions set forth
therein (the
Gulf LNG Purchase
).
WHEREAS, it is anticipated that, following the execution and delivery of this
Agreement, LCP GP, LCP LP and MTP Energy Master Fund Ltd. will execute and deliver to Parent and Merger Sub support agreements (the
Support Agreements
), pursuant to which, among other things, LCP GP, LCP LP and MTP Energy Master
Fund Ltd. will agree to approve this Agreement and the Merger at the Unitholder Meeting.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound, the Parties agree as follows:
ARTICLE I
THE
MERGER; THE GP EQUITY TRANSFER
Section 1.1
The Merger
. Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the DRULPA and the DLLCA, at the Effective Time, Merger Sub will be merged with and into MLP (the
Merger
), the separate limited liability company existence of Merger Sub will cease, and MLP will
continue its existence as a limited partnership under the Laws of the State of Delaware as the surviving entity in the Merger (the
Surviving Entity
).
Section 1.2
The GP Equity Transfer
. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance
with the DRULPA and the DLLCA, at the Effective Time, LCP GP will transfer and deliver to Holdings in exchange for payment of the GP Purchase Price, and Holdings will accept the transfer and delivery from LCP GP of the GP Equity Interest, free and
clear of all Liens, except for any transfer restrictions under any applicable securities Laws (the
GP Equity Transfer
).
Section 1.3
Closing
. Subject to the provisions of
Article VII
, unless otherwise agreed by Parent GP and MLP GP in writing,
the closing of the Transactions (the
Closing
) will take place at the offices of Kirkland & Ellis LLP, 600 Travis Street, Suite 3300, Houston, Texas 77002 at 9:30 A.M., Houston, Texas time, on the second Business Day after
the satisfaction or waiver of the conditions set forth in
Article VII
(other than conditions as, by their nature, are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), but in no event earlier than
November 30, 2017, unless otherwise mutually agreed by the Parties;
provided
, that, if the Marketing Period has not ended at the time that the Closing would otherwise have occurred pursuant to this
Section
1.3
,
the Closing shall occur instead on the earlier to occur of (a) any Business Day after such date during the Marketing Period to be specified by Parent to MLP on no less than two Business Days written notice to MLP and (b) the first
Business Day following the last day of the Marketing Period. The date on which the Closing actually occurs is referred to as the
Closing Date
.
Section 1.4
Effects of the Merger
. Subject to the provisions of this Agreement, at the Closing, MLP GP will cause a certificate of
merger, executed in accordance with the relevant provisions of the DRULPA and the
A-2
DLLCA (the
Certificate of Merger
), to be duly filed with the Secretary of State of the State of Delaware. The Merger will become effective at such time as the Certificate of
Merger has been duly filed with the Secretary of State of the State of Delaware or at such later date or time as may be agreed by MLP and Parent in writing and specified in the Certificate of Merger (the effective time of the Merger and the GP
Equity Transfer is referred to as the
Effective Time
). If the Secretary of State of the State of Delaware requires any changes in the Certificate of Merger as a condition to filing or issuing a certificate that the Merger is
effective, the Parties shall execute any necessary revisions incorporating such changes;
provided
that such changes are not inconsistent with this Agreement.
Section 1.5
Organizational Documents of the Surviving Entity
. At the Effective Time:
(a)
Certificate of Limited Partnership
. The certificate of limited partnership of MLP as in effect immediately prior to
the Effective Time will remain unchanged and will be the certificate of limited partnership of the Surviving Entity from and after the Effective Time, and thereafter may be amended as provided therein or by Law.
(b)
MLP Partnership Agreement
. The MLP Partnership Agreement as in effect immediately prior to the Effective Time will
remain unchanged and will be the partnership agreement of the Surviving Entity from and after the Effective Time, and thereafter may be amended as provided therein or by Law.
ARTICLE II
EFFECT ON
UNITS; TRANSFER OF GP EQUITY INTEREST
Section 2.1
Effect of Merger
. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of the MLP Entities, the Parent Entities, the Lightfoot Entities or the holder of any securities of any of them:
(a)
Conversion of Common Units (Other Than the Sponsor Units)
. Each issued and outstanding Common Unit (other than the
Sponsor Units) as of immediately prior to the Effective Time will (i) be converted into the right to receive the Public Merger Consideration, (ii) no longer be outstanding, (iii) automatically be cancelled and (iv) cease to
exist.
(b)
Conversion of Common Units Owned by LCP LP
. Each issued and outstanding Common Unit that is owned by LCP
LP as of immediately prior to the Effective Time will (i) be converted into the right to receive the Sponsor Merger Consideration, (ii) no longer be outstanding, (iii) automatically be cancelled and (iv) cease to exist.
(c)
Limited Partner Interests of the Surviving Entity
. The limited liability company interests in Merger Sub issued and
outstanding immediately prior to the Effective Time will be converted into the number of Common Units canceled pursuant to
Section
2.1(a)
and
Section
2.1(b)
. At the Effective Time, the books and
records of the Surviving Entity will be revised to reflect the admission of Parent as the sole Limited Partner of the Surviving Entity and the simultaneous cancellation of all other limited partner interests in MLP (as the Surviving Entity).
(d)
Cancellation of
MLP-Owned
Units and Parent-Owned Units
. Any Partnership
Interests that are owned immediately prior to the Effective Time by MLP or any Subsidiary of MLP, and any Partnership Interests owned immediately prior to the Effective Time by Parent or any Affiliate of Parent will be automatically cancelled and
will cease to exist. No consideration will be delivered in exchange for such cancelled Partnership Interests.
(e)
General Partner Interest Unaffected
. The General Partner Interest issued and outstanding as of immediately prior to the Effective Time will be unaffected by the Merger and will remain outstanding;
provided
,
however
, that, upon
the GP Equity Transfer, the General Partner Interest will be owned directly by Holdings.
A-3
Section 2.2
Exchange of Book-Entry Units
.
(a)
Paying Agent
. At or prior to the Closing Date, Parent shall appoint a paying agent reasonably acceptable to MLP (the
Paying Agent
) for the purpose of exchanging Common Units held of record in book-entry form (
Book-Entry Units
) for the Merger Consideration. Subject to
Section
2.2(c)
, as soon as
reasonably practicable after the Effective Time, Parent will send, or will cause the Paying Agent to send, to each holder of Book-Entry Units (other than The Depository Trust Company (the
DTC
)) as of the Effective Time (and, to
the extent commercially practicable, Parent will, or will cause the Paying Agent to, make available for collection by hand, during customary business hours commencing immediately after the Effective Time, if so elected by a holder of Book-Entry
Units), a letter of transmittal in form and substance reasonably satisfactory to each of the Parties (each such letter, a
Letter of Transmittal
) to be used for surrender of Book-Entry Units pursuant to this
Article II
.
(b)
Deposit
. At or prior to the Closing, Parent will deposit or cause to be deposited with the Paying Agent, for the
benefit of the Unitholders, an amount of cash in U.S. dollars equal to the sum of the aggregate Public Merger Consideration to be paid pursuant to
Section
2.1(a)
plus
the aggregate Sponsor Merger Consideration to be
paid pursuant to
Section
2.1(b)
, payable upon due surrender of the Book-Entry Units pursuant to the provisions of this
Article II
. All cash deposited with the Paying Agent is referred to as the
Exchange
Fund
. The Paying Agent will, pursuant to irrevocable instructions delivered by Parent at or prior to the Effective Time, deliver the Merger Consideration contemplated to be paid pursuant to this
Article II
out of the Exchange Fund.
The Paying Agent will invest the Exchange Fund as directed by Parent;
provided
that no such investment or losses thereon will affect the Merger Consideration payable to Unitholders entitled to receive such Merger Consideration and Parent will
promptly cause to be provided additional funds to the Paying Agent for the benefit of Unitholders entitled to receive such Merger Consideration in the amount of any such losses. Any interest and other income resulting from such investment will be
the sole and exclusive property of Parent or an Affiliate of Parent designated by Parent, and no part of such earnings will accrue to the benefit of Unitholders.
(c)
Exchange
.
(i) Each holder of Book-Entry Units other than DTC, upon surrender thereof by delivery of a Letter of Transmittal, duly
executed and completed in accordance with the terms of such Letter of Transmittal, and such other documents as may reasonably be required by the Paying Agent, will be entitled to receive in exchange for each surrendered Book-Entry Unit a cash amount
equal to the Merger Consideration (after giving effect to any required Tax withholdings as provided in
Section
2.5
). DTC, upon surrender of its Book-Entry Units in accordance with the customary surrender procedures of DTC
and the Paying Agent, will be entitled to receive in exchange for each surrendered Book-Entry Unit a cash amount equal to the Merger Consideration. Each Book-Entry Unit surrendered pursuant to this
Section
2.2(c)
will be
cancelled.
(ii) The Merger Consideration will be paid to (A) the holders of Book-Entry Units other than DTC, as
promptly as practicable after receipt by the Paying Agent of the Letter of Transmittal in respect thereof, by mail or wire transfer of immediately available funds and (B) DTC, as promptly as practicable after the Effective Time, by wire
transfer of immediately available funds.
(iii) Payment of the Merger Consideration with respect to Book-Entry Units will
only be made to the Person in whose name such Book-Entry Units are registered. No interest will be paid or accrued on any amount payable upon due surrender of Book-Entry Units. Until surrendered and paid as contemplated hereby, each Book-Entry Unit
will be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration in cash as contemplated by this Agreement. The Merger Consideration paid upon surrender of such Book-Entry Units will be deemed to
have been paid in full satisfaction of all rights pertaining to such Book-Entry Units.
(iv) No Person beneficially owning
Common Units through DTC will be required to deliver a Letter of Transmittal to receive the Merger Consideration that such holder is entitled to receive through
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DTC. Any such Person will receive its Merger Consideration in accordance with the customary payment procedures of DTC following the Effective Time.
(d)
No Further Transfers
. From and after the Effective Time, there will be no further registration on the books of MLP
of transfers of Common Units. From and after the Effective Time, the Unitholders as of immediately prior to the Effective Time will cease to have any rights with respect to such Common Units, except as otherwise provided in this Agreement.
(e)
Termination of Exchange Fund
. Any portion of the Exchange Fund that remains unclaimed by the Unitholders on the
first anniversary of the Effective Time will be returned to Parent or an Affiliate of Parent designated by Parent, upon demand, and any such holder who has not exchanged its Common Units for the Merger Consideration in accordance with this
Section
2.2
prior to that time will thereafter look only to Parent for delivery of the Merger Consideration in respect of such holders Common Units. Any Merger Consideration remaining unclaimed by Unitholders
immediately prior to such time as such amounts would otherwise escheat to, or become property of, any Governmental Authority will, to the extent permitted by applicable Law, become the property of Parent or an Affiliate of Parent designated by
Parent, free and clear of any claims or interest of any Person previously entitled thereto. Notwithstanding the foregoing, none of Parent, Merger Sub, MLP, MLP GP or any of their respective Affiliates will be liable to any Unitholder for any Merger
Consideration duly delivered to a public official pursuant to applicable abandoned property Laws.
Section 2.3
Treatment of
Phantom Units
and Incentive Distribution Rights
.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time, each Vested Phantom Unit that is outstanding as of immediately prior to the Effective Time shall (i) be canceled and converted into the right to receive from Parent (through MLP GP) the Phantom Unit
Consideration, (ii) no longer be outstanding and (iii) cease to exist. As a condition to the receipt of the Phantom Unit Consideration, each holder of Vested Phantom Units will be required to execute and deliver to MLP GP an
acknowledgement in the form attached hereto as
Exhibit C
(a
Phantom Unitholder Acknowledgement
) on or prior to the Closing.
(b) Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, each Unvested Phantom Unit
that is outstanding as of immediately prior to the Effective Time shall be amended and converted into the right to receive the following: (i) the regular vesting schedule of each Phantom Unit shall be amended to provide that 50% of such
Unvested Phantom Units vest on the six (6) month anniversary of the Closing, with the remaining 50% of such Unvested Phantom Units vesting on the twelve (12) month anniversary of the Closing, with each such Unvested Phantom Unit subject to
the same forfeiture and acceleration provisions in effect prior to such amendment, and (ii) on the date such Unvested Phantom Unit would vest and be settled in accordance with the applicable terms and conditions of each Unvested Phantom Unit
(as amended pursuant to (i) above), each Unvested Phantom Unit shall be paid the Phantom Unit Consideration;
provided
that such amendment and payment does not trigger Taxes under Section 409A of the Code. Following the payment of
the Phantom Unit Consideration with respect to any Unvested Phantom Unit, such Unvested Phantom Unit shall no longer be outstanding and shall cease to exist. As a condition to the receipt of the Phantom Unit Consideration, each holder of Unvested
Phantom Units will be required to execute and deliver the Phantom Unitholder Acknowledgement on or within five Business Days of the vesting of such Unvested Phantom Unit.
(c) Parent will cause MLP GP to pay the Phantom Unit Consideration (i) to any holder of Vested Phantom Units who executes
and delivers to MLP GP a Phantom Unitholder Acknowledgement on or prior to the Closing, as promptly as practicable (but in no event later than three Business Days) following the Closing Date and (ii) to any holder of Unvested Phantom Units who
executes and delivers to MLP GP a Phantom Unitholder Acknowledgement in accordance with
Section
2.3(b)
after the Closing, in accordance with the applicable terms and conditions of such Unvested Phantom Units. No interest
will be paid or accrued on any Phantom Unit Consideration. The Phantom Unit Consideration paid will be paid in full satisfaction of all rights pertaining to the Phantom Units formerly outstanding.
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(d) Prior to the Effective Time, MLP and MLP GP, including the MLP GP Board and
any committee thereof, shall take all action necessary, if any, under the MLP Equity Plans to permit and effect the cancellation and conversion of Vested Phantom Units as contemplated by
Section
2.3(a)
and the amendment and
conversion of Unvested Phantom Units as contemplated by
Section
2.3(b)
.
(e) The Incentive
Distribution Rights issued and outstanding as of immediately prior to the Effective Time, which are owned by MLP GP, shall be automatically cancelled at the Closing and shall cease to exist, and no consideration shall be delivered in respect
thereof.
Section 2.4
Distributions
.
(a) The MLP Entities, including the MLP GP Board and any applicable committee thereof, have adopted and approved the
incorporation of
Annex I
of the MLP Disclosure Letter into MLPs distribution policy. The MLP Entities shall not take any action, including any amendment or modification of MLPs distribution policy, that prohibits or restricts, or
limits the ability of, any MLP Entity from complying with the terms and conditions of
Annex I
of the MLP Disclosure Letter.
(b) From the date of this Agreement until the Effective Time, the MLP Entities and the Lightfoot Entities will declare and make
any distribution permitted under
Section
6.3(d)
in accordance with and subject to the limitations of
Annex I
of the MLP Disclosure Letter.
Section 2.5
Withholding Taxes
. Each of Parent, MLP, MLP GP, Merger Sub, any Affiliate of Parent that has been designated by Parent
pursuant to this
Article II
, and the Paying Agent will be entitled to deduct and withhold from the consideration payable pursuant to this Agreement, including to a Unitholder or a holder of Phantom Units, such amounts as are required to be
deducted and withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the
Code
), and the Treasury Regulations promulgated thereunder, or under any provision of applicable state,
local or
non-U.S.
Tax Law. The MLP Entities shall cooperate with Parent in coordinating the deduction and withholding of any Taxes required to be deducted and withheld by any MLP Group Entity under applicable
Tax Law, including payroll Taxes relating to payments made in respect of Phantom Units. To the extent amounts are so withheld and paid over to the appropriate Tax authority, such withheld amounts will be treated for the purposes of this Agreement as
having been paid to the Person, including the former Unitholder or former holder of Phantom Units, as applicable, in respect of whom such withholding was made.
Section 2.6
Adjustments
. Notwithstanding any provision of this
Article II
to the contrary (but without in any way limiting
the covenants in
Section
6.2
and
6.3
or other applicable prohibitions in this Agreement), if between the date of this Agreement and the Effective Time the number of outstanding Common Units have been changed into a
different number of units or a different class by reason of the occurrence or record date of any unit dividend, subdivision, reclassification, recapitalization, split,
split-up,
unit distribution, combination,
exchange of units or similar transaction, the Merger Consideration will be equitably adjusted to proportionately reflect the effect of such unit dividend, subdivision, reclassification, recapitalization, split,
split-up,
unit distribution, combination, exchange of units or similar transaction and to provide the Unitholders and holders of Phantom Units the same economic effect as contemplated by this Agreement prior
to such event.
Section 2.7
No Dissenters
Rights
. No dissenters or appraisal rights are or will be
available with respect to the Transactions.
Section 2.8
GP Equity Transfer Covenants
. At the Effective Time, (a) LCP GP
and Holdings will each execute and deliver to one another the transfer agreement substantially in the form attached hereto as
Exhibit A
(the
Transfer Agreement
) and Holdings will (or Parent will, on Holdings behalf)
pay to LCP GP (by wire transfer of immediately available funds) the GP Purchase Price, (b) MLP GP will (i) register the GP Equity Transfer in its books and records and (ii) update its records to reflect Holdings as the member of and
registered
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owner of the GP Equity Interest and (c) LCP GP will deliver to Holdings the resignations of such managers, officers and directors of MLP GP and any of its Subsidiaries as are requested by
Parent prior to the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE MLP ENTITIES
Except as disclosed in (a) the MLP SEC Documents filed or furnished with the SEC on or after December 31, 2016 and publicly
available at least 24 hours prior to the date of this Agreement and only as and to the extent disclosed therein (other than any forward-looking disclosures set forth in any risk factor section, any disclosures in any section relating to
forward-looking statements and any other disclosures included therein to the extent they are primarily predictive or forward looking in nature) other than for purposes of
Section
3.1
,
Section
3.2
or
Section
3.3
, or (b) the corresponding sections of the disclosure letter delivered by MLP to Parent (the
MLP Disclosure Letter
) prior to the execution of this Agreement (or disclosed in any other
section, subsection or clause of the MLP Disclosure Letter if it is reasonably apparent from the face of such disclosure that such disclosure will be deemed to be disclosed with respect to any other section, subsection or clause of this Agreement)
(it being agreed that (i) the inclusion of any item in the MLP Disclosure Letter that qualifies or limits, or discloses information with respect to, any representation or warranty made by MLP or MLP GP (or both of them) shall not constitute or
be deemed to constitute an admission by MLP or MLP GP that such item is a fact, event, circumstance or condition required to be disclosed in the MLP Disclosure Letter in order to render true, accurate and complete such representation or warranty and
(ii) the express reference to any Section of the MLP Disclosure Letter in any sentence of any representation or warranty made in this
Article III
shall not imply that the MLP Disclosure Letter does not contain any fact, event,
circumstance or condition that qualifies or limits, or discloses information with respect to, any representation or warranty made in this
Article III
that does not contain an express reference to any Section of the MLP Disclosure Letter), MLP
and MLP GP jointly and severally represent and warrant to the Parent Entities as follows:
Section 3.1
Organization
.
(a) Each of the MLP Group Entities is a legal entity duly formed or organized (as applicable), validly existing and in good
standing under the Laws of the jurisdiction in which it is incorporated, formed or organized, as applicable. Each of the MLP Group Entities has all requisite partnership, corporate, limited liability company power or other applicable power, as
applicable, and authority necessary to own or lease all of its properties and assets and to carry on its business as currently conducted, except where the failure to have such power or authority would not, and would not reasonably be expected to,
individually or in the aggregate, result in an MLP Material Adverse Effect.
(b) Each of the MLP Group Entities is duly
licensed or qualified to do business and is in good standing (with respect to jurisdictions that recognize that concept) in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, an
MLP Material Adverse Effect.
(c) MLP has made available to Parent true and complete copies of its certificate of limited
partnership and the MLP Partnership Agreement (the
MLP Charter
Documents
), and true and complete copies of the comparable organizational documents of each of its Subsidiaries and MLP GP and of Gulf LNG, in each case as
amended to the date of this Agreement. MLP is in compliance with the terms of the MLP Charter Documents and each of its Subsidiaries and MLP GP is in compliance with its respective organizational or governing documents and the Subsidiary of the MLP
that owns the Gulf LNG Interest is not in violation of any of the provisions of the organizational documents of Gulf LNG.
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Section 3.2
Capitalization
.
(a) As of the date of this Agreement, (i) there are no Partnership Interests or other Equity Securities in MLP issued and
outstanding, other than (A) 19,545,944 Common Units, (B) 981,658 Phantom Units, (C) the MLP General Partner Interest and (D) the Incentive Distribution Rights and (ii) there are no Partnership Interests or other Equity Securities in
MLP reserved for issuance, other than 968,333 Common Units reserved for issuance pursuant to the settlement of outstanding Phantom Unit awards and 599,446 Common Units reserved for future awards under the MLP LTIP. All outstanding Common Units and
Phantom Units have been duly authorized and all Common Units are validly issued and are fully paid, nonassessable (except as such
non-assessibility
may be affected by Sections
17-303,
17-607
and
17-804
of DRULPA) and free of preemptive rights (except for any preemptive rights provided for in the MLP
Partnership Agreement). No Common Units, Phantom Units or other Equity Securities in MLP are held by a Subsidiary of MLP. There are no certificates representing any Partnership Interests, and no such certificates have been issued.
(b)
Section
3.2(b)(i)
of the MLP Disclosure Letter sets forth, for each Phantom Unit outstanding as
of the date hereof, (i) the number of Common Units issuable upon the vesting thereof, (ii) the grant date thereof, (iii) the vesting schedule with respect thereto and (iv) the amount vested and outstanding. All of the outstanding
Phantom Units have been issued pursuant to the MLP LTIP. No outstanding Partnership Interests are subject to vesting restrictions or other risk of forfeiture to MLP under the MLP Equity Plans or otherwise. All Phantom Units are evidenced by award
agreements, in each case, in the applicable form made available to Parent or filed by MLP with the SEC. Each such Phantom Unit award agreement provides that the MLP LTIP controls in the event of any conflict and no such agreement contains any terms
that are materially different from the form applicable thereto. Each Phantom Unit may be treated, by its terms, as set forth in
Section
2.3
. From the Balance Sheet Date through the date of this Agreement, none of the MLP
Group Entities has issued any Equity Securities, other than Phantom Units issued pursuant to the MLP LTIP and any Common Units issued upon the vesting of any Phantom Unit awards.
(c) Except for this Agreement, the MLP Partnership Agreement, the Registration Rights Agreements, the Joliet LLC Agreement, the
Gulf LNG LLC Agreement, the MLP LTIP and any awards or award agreements issued pursuant thereto, there are no outstanding Contracts or obligations binding on any of MLP or its Subsidiaries with respect to any of their respective Equity Securities,
including any Contract (i) restricting the transfer of, (ii) affecting the voting rights of, (iii) requiring the repurchase, redemption or disposition of, or containing any right of first refusal with respect to, (iv) requiring
any registration for sale of, or (v) granting any preemptive or anti-dilutive rights with respect to, any such Equity Security. All sales, issuances or other transfers of the Equity Securities of the MLP Group Entities prior to the date hereof
were at all times registered under the Securities Act and applicable foreign and state securities Laws or were exempt from the registration requirements of the Securities Act and applicable foreign and state securities Laws, or if such Equity
Securities were not so registered or exempt, any private rights of action for rescission or damages arising from the failure to register any such Equity Securities are time barred by applicable statutes of limitations or equitable principles,
including laches.
(d)
Section
3.2(d)
of the MLP Disclosure Letter sets forth a complete list of
the Subsidiaries of MLP. All the outstanding Equity Interests of each Subsidiary of MLP have been duly authorized and validly issued and are fully paid and nonassessable (except to the extent provided by applicable Law) and are owned and held by MLP
free and clear of all Liens other than Liens under the Existing MLP Credit Facility and transfer restrictions under applicable securities Laws. Except for MLPs ownership of the Subsidiaries listed in
Section
3.2(d)
of
the MLP Disclosure Letter, MLP and its Subsidiaries do not directly or indirectly, beneficially or of record, own any Equity Securities of any other Person, or have any obligations or have made any Contract to acquire any Equity Securities of, or to
make any investment (in the form of a loan, capital contribution or otherwise) in, any Person, other than the MLPs indirect 10.322% limited liability company interest in Gulf LNG (the
Gulf LNG Interest
). The MLP is the
indirect record and beneficial owner of the Gulf LNG Interest, free and clear of all Liens other than Liens under the Existing MLP Credit Facility and transfer restrictions under applicable securities Laws.
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Section 3.3
Authorization
.
(a) Each of the MLP Entities has all necessary limited liability company or limited partnership power and authority and has
taken all action necessary in order to execute and deliver this Agreement and to consummate the Transactions, subject to, only in the case of consummating the Merger, obtaining the consent of the holders of a Unit Majority approving this Agreement
and the Merger in compliance with the DRULPA and the MLP Partnership Agreement (the
MLP Unitholder Approval
). Subject to obtaining the MLP Unitholder Approval, the execution, delivery and performance by the MLP Entities of this
Agreement, and the consummation by the MLP Entities of the Transactions, have been duly authorized and approved by the MLP GP Board. Except for obtaining the MLP Unitholder Approval for the adoption of this Agreement and consummation of the Merger,
no other entity action on the part of the MLP Entities is necessary to authorize the execution, delivery and performance by the MLP Entities of this Agreement and the consummation of the Transactions other than such actions that have been taken as
of the date hereof. This Agreement has been duly executed and delivered by the MLP Entities and, assuming due authorization, execution and delivery of this Agreement by the other Parties, constitutes a legal, valid and binding obligation of each of
the MLP Entities, enforceable against each of them in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors
rights and to general equity principles (the
Bankruptcy and Equity Exception
).
(b) MLP Unitholder
Approval is the only vote or approval of the holders of any class or series of Partnership Interests or other Equity Interests of any of the MLP Group Entities that remains necessary to approve this Agreement.
Section 3.4
Noncontravention
. Neither the execution and delivery of this Agreement by the MLP Entities nor the consummation by the
MLP Entities of the Transactions, nor compliance by the MLP Entities with any of the terms or provisions of this Agreement, will (a) assuming that the MLP Unitholder Approval is obtained, conflict with or violate any provision of the MLP
Charter Documents or any of the comparable organizational documents of the other MLP Group Entities, (b) assuming that the Consents referred to in
Section
3.5
and the third party consents or approvals listed in
Section
3.4
of the MLP Disclosure Letter and the MLP Unitholder Approval are obtained and the filings referred to in
Section
3.5
are made, (i) violate, in any material respect, any Law or
Order applicable to the MLP Group Entities or by which they or any of their respective properties or assets may be bound or affected, (ii) violate or conflict with, in any material respect, or result in the loss of any material benefit under,
constitute a material default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or
result in the creation of any material Lien upon any of the respective properties or assets of, the MLP Group Entities under any Permit (including any Environmental Permit) to which any of the MLP Group Entities is a party or by which they or any of
their respective properties or assets may be bound or affected, (iii) violate or conflict with, or result in the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of, the MLP Group Entities
under any Contract to which any of the MLP Group Entities is a party or by which they or any of their respective properties or assets may be bound or affected, except for any such breach, violation, termination, modification, cancellation, creation,
acceleration, loss or default that, individually or in the aggregate, would not reasonably be expected to have an MLP Material Adverse Effect or (iv) result in the exercisability of any right to purchase or acquire any material asset of the MLP
Group Entities.
Section 3.5
Governmental Approvals
. Other than (a) the filing of the Proxy Statement to be sent to the
Unitholders pursuant to
Section
6.1
with the SEC, (b) (i) the filing of a Notification and Report Form by MLP pursuant to the HSR Act and the termination or expiration of the waiting period required thereunder,
(ii) such filings set forth in
Section
3.5
of the MLP Disclosure Letter that MLP has determined in good faith, after consultation with Parent and outside counsel, are necessary to obtain the receipt, termination or
expiration, as
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applicable, of approvals or waiting periods required under all other applicable Antitrust Laws of any jurisdiction and (iii) any other filings in connection with the Transactions required
under the HSR Act (
clauses (i)
,
(ii)
and
(iii)
above, collectively, the
Antitrust Consents
), (c) filings required by the applicable requirements of the Securities Act and the Exchange Act, (d) the
filing of the Certificate of Merger with the Secretary of State of the State of Delaware and (e) any notice pursuant to the rules and regulations of the NYSE (collectively,
clauses (c)
,
(d)
and
(e)
, the
Other
Governmental Consents
), and assuming the accuracy of the representations and warranties of the Parent Entities in
Section
5.5
, no Consents of or with any Governmental Authority are necessary in connection with the
execution, delivery and performance of this Agreement by the MLP Entities and the consummation by the MLP Entities of the Transactions, except for any such Consents that, if not obtained, made or given, would not, and would not reasonably be
expected to, individually or in the aggregate, result in an MLP Material Adverse Effect.
Section 3.6
MLP SEC Documents;
Undisclosed Liabilities
.
(a) Since July 29, 2013, all MLP SEC Documents (except for the Proxy Statement, which is
addressed in
Section
6.1(b)
) have been timely filed or furnished to the SEC in accordance with the Securities Act, the Exchange Act and the Sarbanes-Oxley Act. All MLP SEC Documents (i) complied in all material
respects with the requirements of the Exchange Act, the Securities Act and the Sarbanes-Oxley Act, as the case may be, and the rules and regulations of the NYSE and (ii) as of its filing date in the case of any Exchange Act report and as of its
effective date in the case of any Securities Act filing, or if amended, supplemented or superseded, as finally amended, supplemented or superseded prior to the date of this Agreement, did not contain any 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. MLP has made available to Parent true and complete copies of
all material correspondence between the SEC, on the one hand, and any MLP Group Entity, on the other hand, occurring since July 29, 2013, other than any thereof that is publicly available on the SECs website. There are no outstanding or
unresolved comments received from the SEC staff with respect to the MLP SEC Documents. To the Knowledge of the MLP, no MLP SEC Document is the subject of ongoing SEC review or investigation. None of MLPs Subsidiaries or MLP GP is required to
file periodic reports with the SEC pursuant to the Exchange Act.
(b) The historical consolidated financial statements of
MLP included in the MLP SEC Documents as of their respective dates (if amended, as of the date of the last such amendment) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with GAAP (except, in the case of unaudited quarterly statements, as indicated in the notes thereto) applied on a consistent basis during the periods involved (except as may be indicated
in the notes thereto) and fairly present in all material respects the consolidated financial position of MLP and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations, cash flows and changes in
partners capital for the periods then ended (subject, in the case of unaudited quarterly statements, to normal and immaterial
year-end
audit adjustments).
(c) MLP has established and maintains internal controls over financial reporting and disclosure controls and procedures (as
such terms are defined in Rule
13a-15
and Rule
15d-15
under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information
relating to MLP and its consolidated Subsidiaries required to be disclosed by MLP in the MLP SEC Documents under the Exchange Act is accumulated and communicated to the MLP GPs principal executive officer and its principal financial officer
(the
Principal Officers
) to allow timely decisions regarding required disclosure. Such disclosure controls and procedures are effective to ensure that information required to be disclosed by MLP in the MLP SEC Documents under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. The Principal Officers have disclosed, based on their most recent evaluation, to MLPs auditors and the audit committee of
the MLP GP Board (i) all significant deficiencies in the design or operation of internal controls which could adversely affect MLPs
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ability to record, process, summarize and report financial data and have identified for MLPs auditors any material weaknesses in internal controls and (ii) any fraud, whether or not
material, that involves management or other employees who have a significant role in MLPs internal controls. The Principal Officers have made all certifications required by the Sarbanes-Oxley Act and the Exchange Act with respect to the MLP
SEC Documents, and the statements contained in such certifications were complete and correct when made. The management of the MLP has completed its assessment of the effectiveness of MLPs internal control over financial reporting in compliance
with the requirements of Section 404 of the Sarbanes-Oxley Act for the year ended December 31, 2016, and such assessment concluded that such controls were effective. To the Knowledge of the MLP Entities, as of the date of this Agreement
there are no facts or circumstances that would prevent the Principal Officers from giving the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act, without
qualification, when next due. MLP is in compliance in all material respects with all effective provisions of the Sarbanes-Oxley Act and, to the Knowledge of the MLP Entities, no employee of the MLP Group Entities has provided or is providing
information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any applicable legal requirements of the type described in Section 806 of the Sarbanes-Oxley Act by
any MLP Group Entity. No MLP Group Entity nor, to the Knowledge of the MLP Entities, any of their respective Representatives has received any substantive complaint, allegation, assertion or claim, whether written or oral, that an MLP Group Entity
has engaged in questionable accounting or auditing practices. No current or former attorney representing any MLP Group Entity has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by the MLP
Group Entities or any of their respective managers, officers, directors, employees or agents, to the current MLP GP Board or any committee thereof or to any current manager, director or executive officer of the MLP Entities.
(d) Without limiting the generality of
Sections 3.6(a)
through
3.6(c)
, (i) PricewaterhouseCoopers LLP has
not resigned or been dismissed as independent public accountant of MLP as a result of or in connection with any disagreement with MLP on a matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure,
(ii) no executive officer of MLP GP has failed in any respect to make, without qualification, the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act with respect to any form, report or schedule filed
by MLP with the SEC since July 29, 2013 and (iii) no enforcement action has been initiated or, to the Knowledge of the MLP Entities, threatened in writing against MLP by the SEC relating to disclosures contained in any MLP SEC Document.
(e) Except (i) as reflected or otherwise reserved against on the consolidated balance sheet of MLP and its
Subsidiaries as of December 31, 2016 (the
Balance Sheet Date
) (including the notes thereto) included in the MLP SEC Documents filed by MLP and publicly available prior to the date of this Agreement, and as updated on the
consolidated balance sheet of MLP and its Subsidiaries as of the most recent quarter (including the notes thereto) included in the MLP SEC Documents filed by MLP and publicly available prior to the date of this Agreement, (ii) for liabilities
and obligations incurred since the Balance Sheet Date in the ordinary course of business (x) that have been paid, or are not yet due and payable or are being contested in good faith, in each case for which adequate reserves have been
established in accordance with GAAP or (y) that are described in
Section
3.6(e)
of the MLP Disclosure Letter and (iii) for liabilities and obligations incurred under or in accordance with this Agreement or in
connection with the Transactions, neither MLP nor any of its Subsidiaries has any liabilities or obligations of any nature (whether or not accrued or contingent), that would be required to be reflected or reserved against on a consolidated balance
sheet of MLP prepared in accordance with GAAP or the notes thereto in order for such balance sheet to fairly and completely present MLPs financial position in all material respects.
(f) Neither MLP nor any of its Subsidiaries is a party to, or has any Contract to become a party to, any joint venture,
off-balance
sheet partnership or any similar Contract (including any Contract relating to any transaction or relationship between or among MLP and any of its Subsidiaries, on the one hand, and any unconsolidated
Affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand, or any
off-balance
sheet arrangements (as defined in Item 303(a) of
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Regulation S-K
of the SEC)), where the purpose of such Contract is to avoid disclosure of any material transaction involving, or material liabilities
of, MLP in MLPs published financial statements or any MLP SEC Documents.
Section 3.7
Absence of Certain Changes or
Events
.
(a) Since the Balance Sheet Date and except to the extent arising out of or resulting from any change, event,
effect, occurrence, state of facts or developments that may arise after the date hereof and that are listed in
Section
3.7(a)
of the MLP Disclosure Letter, there have not been any changes, events, effects, occurrences,
states of facts or developments that, individually or in the aggregate with all other changes, events, effects, occurrences, states of facts or developments, have had or would reasonably be expected to have an MLP Material Adverse Effect.
(b) From the Balance Sheet Date through the date of this Agreement, (i) except for this Agreement and the Transactions,
the MLP Group Entities have carried on and operated their respective businesses in all material respects in the ordinary course of business consistent with past practice and (ii) no MLP Group Entity has taken any action that, if taken after the
date of this Agreement and prior to the Effective Time without the prior written consent of Parent, would constitute a breach of
Sections 6.3(a)
,
(c)
,
(d)
,
(h)
,
(i)
,
(k)
,
(l)
,
(m)
,
(n)
or
(o)
.
Section 3.8
Legal Proceedings
. No Proceeding is pending or, to the Knowledge of the MLP Entities, is
threatened, against or affecting any MLP Group Entity or their respective assets (including by virtue of indemnification or otherwise), or any director, manager, officer or employee (in his or her capacity as such) of any MLP Group Entity that
(a) would, individually or in the aggregate, reasonably be expected to result in an MLP Material Adverse Effect or (b) as of the date of this Agreement, challenges the validity or propriety of any of the Transactions or otherwise seeks to
prevent or materially delay consummation of any of the Transactions or performance by the MLP Entities of any of their respective material obligations under this Agreement. None of the MLP Group Entities is a party to, and none of the MLP Group
Entities or their respective assets are subject to the provisions of, any Orders of, or promulgated or issued by or with (or settlement or consent Contract subject to), any Governmental Authority that, individually or in the aggregate, (i) has
resulted, or would reasonably be expected to result, in an MLP Material Adverse Effect or (ii) challenges the validity or propriety of the Transactions or otherwise seeks to prevent or materially delay consummation of the Transactions or
performance by the MLP Entities of any of their respective material obligations under this Agreement.
Section 3.9
Compliance with
Laws; Permits
.
(a)
Compliance with Laws
. None of the MLP Group Entities has been, or is, in conflict with, in
default under or in violation of any Law applicable to any MLP Group Entity or by which any property or asset of the MLP Group Entities is bound or affected, in each case, that would reasonably be expected, individually or in the aggregate, to
result in an MLP Material Adverse Effect. Since the date of formation of MLP, no written notice, written charge, written allegation or written assertion has been received by the MLP Group Entities or, to the Knowledge of the MLP Entities, threatened
against any MLP Group Entity alleging any actual or potential violation of or
non-compliance
with any of the foregoing other than any thereof, individually or in the aggregate, that has not had or would not
reasonably be expected to have an MLP Material Adverse Effect.
(b)
Permits
. The MLP Group Entities are in
possession of all Permits necessary for the MLP Group Entities to own, lease and operate their properties and assets or to lawfully carry on their businesses as they are now being conducted, except where the failure to be in possession of such
Permits would not, and would not reasonably be expected to, individually or in the aggregate, result in an MLP Material Adverse Effect. All such Permits are in full force and effect, except where the failure to be in full force and effect would not
have, individually or in the aggregate, an MLP Material Adverse Effect. Each of the MLP Group Entities is not, and since the date of formation of MLP have not been, in violation or breach of, or default under, any such Permit, except where such
violation, breach or default would not have, individually or in the aggregate,
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an MLP Material Adverse Effect. No suspension, modification, revocation or cancellation of any of such Permits is pending or, to the Knowledge of the MLP Entities, threatened, nor, to the
Knowledge of the MLP Entities, do reasonable grounds exist for any such action, except for any such suspension, modification, revocation or cancellation that would not reasonably be expected, individually or in the aggregate, to result in an MLP
Material Adverse Effect.
Section 3.10
Prohibited Payments
.
(a) None of the MLP Group Entities, directly or indirectly through its Representatives or any other Person acting on its behalf
(including any distributor, agent, sales intermediary or other third party), has, since the date of formation of MLP, (i) taken any action in violation of any applicable Anti-corruption Laws or (ii) paid, offered, promised to pay, or
authorized the payment of, or will, directly or indirectly, pay, offer or promise to pay, or authorize payment of, any monies or any other thing of value to any Government Official (including employees of government-owned or controlled entities),
any political Party or candidate for political office or to any other Person (collectively, a
Proscribed Recipient
): (A) for the purpose of (1) influencing any act or decision of such Proscribed Recipient, (2) inducing
such Proscribed Recipient to do or omit to do any act in violation of the lawful duty of such Proscribed Recipient, or to use his, her or its influence with a Governmental Authority to affect or influence any act or decision of such Governmental
Authority, (3) assisting the MLP Group Entities or any of their respective Representatives in obtaining or retaining business for or with, or directing business to, any Person, (4) securing any improper advantage or (5) inducing such
Proscribed Recipient to influence or affect any act or decision of any Governmental Authority or (B) in a manner which would constitute or have the purpose or effect of public or commercial bribery, acceptance of, or acquiescence in extortion,
kickbacks or other unlawful or improper means of obtaining business or any improper advantage. The MLP Group Entities have at all times been in compliance in all material respects with the Foreign Corrupt Practices Act of 1977, as amended (the
FCPA
). No MLP Group Entity has received any communication from a Governmental Authority that alleges that any MLP Group Entity, or any Representative (as defined below) thereof, is or may be in material violation of, or has, or
may have, any unresolved material liability under, any Anti-corruption Laws.
(b) Neither the MLP Group Entities nor, to
the Knowledge of the MLP Entities, any of their respective employees (in the context of their employment) has been convicted of violating any Anti-corruption Laws or subjected to any Proceeding by a Governmental Authority for potential corruption,
fraud or violation of any applicable Anti-corruption Laws.
Section 3.11
Export Controls
.
(a) No MLP Group Entity, nor, to the Knowledge of the MLP Entities, any of their respective Representatives (in each case,
acting in their capacities as such), has had any reasonable basis for believing that, since the date of formation of MLP, any of the foregoing Persons has violated any applicable export or import control Laws, trade or economic sanctions Laws, or
anti-boycott Laws, of the United States or any other jurisdiction, including: The Arms Export Control Act (22 U.S.C. § 2278), the Export Administration Act (50 U.S.C. App. §§ 2401-2420), the International Traffic in Arms Regulations
(22 C.F.R.
120-130),
the Export Administration Regulations (15 C.F.R. 730 et seq.), the Office of Foreign Assets Control Regulations (31 C.F.R. Chapter V), the Customs Laws of the United States (19 U.S.C.
§ 1 et seq.), the International Emergency Economic Powers Act (50 U.S.C. § 1701-1706), the U.S. Commerce Department antiboycott regulations (15 C.F.R. 560), the U.S. Treasury Department antiboycott requirements (26 U.S.C. § 999), any
other export control regulations issued by the agencies listed in Part 730 of the Export Administration Regulations, or any applicable
non-U.S.
Laws of a similar nature. There are no Contracts between any MLP
Group Entity and any Person engaged in international trade or export on behalf of the MLP Group Entities (including any Person identified on the U.S. Department of the Treasurys Specially Designated Nationals List). No export or import
Permits, license exceptions or other Consents are required to operate the business of the MLP Group Entities as currently conducted.
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(b) In addition, the MLP Group Entities are not engaged in any activities to
establish, support or maintain any business relationships with, or contracted to sell, supply, distribute or otherwise provide any goods or services to, any Governmental Authority within, and any Person organized or domiciled in or that is a citizen
of, Cuba, Iran, the Republic of North Korea, the Republic of the Sudan, Syria, the Crimea Region of the Ukraine or any other country or territory against which the United States maintains comprehensive trade sanctions and/or economic embargoes.
Section 3.12
Antitrust Laws
. None of the MLP Group Entities is, or since the date of formation of MLP has been, in conflict with,
default under or violation of, or is being or, since the date of formation of MLP has been, charged by any Governmental Authority with, or to the Knowledge of the MLP Entities, investigated for, a violation of any Antitrust Law applicable to any MLP
Group Entity. To the Knowledge of the MLP Entities, no investigation or review by any Governmental Authority under any Antitrust Law with respect to any MLP Group Entity is pending or threatened, nor has any Governmental Authority indicated an
intention to conduct any such investigation or review, except in connection with the transactions provided for herein.
Section 3.13
Tax Matters
.
(a) All material Tax Returns that were required to be filed by or with respect to the MLP Group
Entities have been duly and timely filed (taking into account any extension of time within which to file) and all such Tax Returns are true, correct and complete in all material respects.
(b) All material amounts of Taxes owed by the MLP Group Entities that are or have become due (whether or not shown on any Tax
Returns) have been timely paid in full or an adequate reserve for the payment of such Taxes has been established and maintained in accordance with GAAP in MLPs financial statements included in the MLP SEC Documents;
(c) All Tax withholding and deposit requirements imposed on or with respect to the MLP Group Entities have been satisfied in
all material respects.
(d) The MLP Group Entities have complied in all material respects with applicable Law (including
any record-keeping and documentation requirements related to sales Tax and escheat and unclaimed property) related to withholding and payment of Taxes, including Taxes required to be withheld and timely paid to the appropriate authorities with
respect to amounts paid to any third party (including income, social security and employment Tax withholding for all types of compensation).
(e) There are no material Liens for Taxes (other than statutory Liens for Taxes not yet due and payable or that are being
contested in good faith by appropriate Proceedings and for which adequate reserves have been established in accordance with GAAP in MLPs financial statements included in the MLP SEC Documents) on any of the assets of the MLP Group Entities.
(f) There are no material audits, examinations, investigations or other Proceedings pending or threatened in writing in
respect of Taxes or Tax matters of any MLP Group Entity (including any audits, examinations, investigations or other Proceedings involving any of their respective Affiliates if related to Taxes or Tax matters for which any MLP Group Entity may have
liability or responsibility).
(g) There is no written claim against any MLP Group Entity for any Taxes, and no assessment,
deficiency or adjustment has been asserted, proposed, or threatened in writing with respect to any Tax Return of or with respect to any MLP Group Entity, except for such claims, assessments, deficiencies or adjustments that would not reasonably be
expected to, individually or in the aggregate, exceed $1,000,000.
(h) There is not in force any extension of time with
respect to the due date for the filing of any Tax Return of or with respect to any MLP Group Entity or any waiver or Contract for any extension of time for the assessment or payment of any Tax of or with respect to any of the MLP Group Entities.
(i) None of the MLP Group Entities will be required to include any material item of income in, or exclude any item of
deduction from, taxable income for any period (or any portion thereof) ending after the
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Closing Date, as a result of any (i) change in method of accounting for a taxable period (or portion thereof) ending on or before the Closing Date, including under Section 481(a) of the
Code or any similar provision of state, local, or
non-U.S.
Law, (ii) installment sale or other open transaction disposition made on or prior to the Closing Date, (iii) prepaid amount received on or
prior to the Closing Date, (iv) closing agreement described in Section 7121 of the Code or any similar Contract or provision of state, local or
non-U.S.
Law executed on or prior to the Closing Date,
(v) intercompany transactions or any excess loss account described in Treasury Regulations promulgated under Section 1502 of the Code (or any corresponding or similar provision of state, local, or
non-U.S.
income Tax law) or (vi) indebtedness discharged in connection with any election under Section 108(i) of the Code or any similar provision of state, local or
non-U.S.
Law.
(j) None of the MLP Group Entities is a party to a Tax allocation or
sharing Contract, and no payments are due or will become due by any MLP Group Entity pursuant to any such Contract or any Tax indemnification Contract.
(k) None of the MLP Group Entities has been a member of an affiliated group filing a consolidated federal income Tax Return or
has any liability for the Taxes of any Person (other than MLP or any of its Subsidiaries) under Treasury Regulations
Section 1.1502-6
(or any similar provision of state, local, or
non-U.S.
Law), as a transferee or successor, by Contract or otherwise.
(l) MLP is and at
all times since its formation has been properly classified as a partnership for U.S. federal income Tax purposes, and not as an association taxable as a corporation, including under Section 7704 of the Code.
(m) For each taxable year of MLP ending after its initial public offering, at least 90% of the gross income of MLP has been
from sources that are treated as qualifying income within the meaning of Section 7704(d) of the Code.
(n)
Each MLP Group Entity (other than MLP and Joliet, which are classified for U.S. federal income Tax purposes as domestic partnerships) is and has been since its formation properly classified as a disregarded entity for U.S. federal income Tax
purposes.
(o) No MLP Group Entity has obtained or requested a private letter ruling from the United States
Internal Revenue Service.
(p) No Contract or other document related to any MLP Group Entity prohibits any of the
Transactions because they will or could cause a termination of any MLP Group Entity for purposes of Section 708 of the Code.
(q) No written claim or inquiry has ever been made by a Governmental Authority in a jurisdiction where any MLP Group Entity
does not file Tax Returns that such MLP Group Entity is or may be subject to taxation by that jurisdiction.
(r) To the
Knowledge of the MLP Entities, the Transactions (and the resulting termination of the MLP for federal income Tax purposes) will not terminate any material Tax incentive, holiday, abatement, or special appraisal method used by any MLP Group Entity.
(s) The MLP Group Entities have not participated in any listed transaction within the meaning of Treasury Regulation
Section 1.6011-4.
(t) MLP has made available to Parent true and correct copies of
all material income Tax Returns of each MLP Group Entity filed with federal Governmental Authorities in the United States and any other foreign countries in which such a Tax Return has been filed since January 1, 2013.
Section 3.14
Employee Benefits
.
(a)
Section
3.14(a)
of the MLP Disclosure Letter is a true, correct and complete list of all material
MLP Benefit Plans.
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(b) Correct and complete copies of the following materials have been made
available to Parent, to the extent applicable: (i) all plan documents for each MLP Benefit Plan or, in the case of an unwritten MLP Benefit Plan, a written description thereof, and all amendments thereto, (ii) all determination letters
from the IRS with respect to any of the MLP Benefit Plans, (iii) all summary plan descriptions, summaries of material modifications, annual reports, and summary annual reports with respect to any of the MLP Benefit Plans and (iv) all trust
Contracts, insurance Contracts, and other documents relating to the funding or payment of benefits under any MLP Benefit Plan.
(c) No MLP Group Entity nor any of their respective ERISA Affiliates currently has, and at no time in the past six years has
had, an obligation to contribute to a defined benefit plan as defined in Section 3(35) of ERISA subject to Title IV of ERISA or the minimum funding standards of Section 302 of ERISA or Section 412 of the Code, a
multiemployer plan as defined in Section 4001(a) of ERISA or a multiple employer plan within the meaning of Section 210(a) of ERISA or Section 413(c) of the Code.
(d) No dispute, arbitration or other Proceeding is pending or, to the Knowledge of the MLP Entities, threatened (i) with
respect to any MLP Benefit Plan other than claims for benefits in the ordinary course, (ii) alleging any breach of the terms of any MLP Benefit Plan or any fiduciary duties with respect thereto or (iii) with respect to any violation of any
applicable Law with respect to such MLP Benefit Plan, in each case except as would not, individually or in the aggregate, reasonably be expected to result in an MLP Material Adverse Effect, nor to the Knowledge of the MLP Entities, in the case of
clauses (i)
,
(ii)
and
(iii)
, is there any basis for one.
(e) Each MLP Benefit Plan has been
maintained, funded and administered in compliance with its terms and any related documents or Contracts and in compliance with applicable Law, including ERISA and the Code, except for any noncompliance which would not, individually or in the
aggregate, reasonably be expected to result in an MLP Material Adverse Effect. Any MLP Benefit Plan intended to be qualified under Section 401 of the Code has received (or made a timely filing for) a favorable determination or opinion letter
from the United States Internal Revenue Service that has not been revoked, and each trust created thereunder has been determined by the United States Internal Revenue Service to be exempt from Tax under the provisions of Section 501(a) of the
Code, and to the Knowledge of the MLP Entities, no fact or event has occurred since the date of any such determination that would reasonably be expected to result in an MLP Material Adverse Effect. To the Knowledge of the MLP Entities, no MLP Group
Entity, nor any of their respective ERISA Affiliates has engaged in a transaction with respect to any MLP Benefit Plan for which they would reasonably be expected to be subject (either directly or indirectly) to a material liability for either a
civil penalty assessed pursuant to Section 502(i) of ERISA or a Tax imposed by Section 4975 of the Code. No MLP Group Entity maintains or contributes to or is required to contribute to any plan or Contract which provides post-termination
or post-retirement health or life insurance benefits or coverage to any Person, except as required by applicable Law.
(f)
All contributions, premiums and other payments due from any MLP Group Entity required by applicable Law or any MLP Benefit Plan have been made or properly accrued in all material respects under any such plan to any fund, trust or account established
thereunder or in connection therewith by the due date thereof.
(g) The consummation of the Transactions will not, either
alone or in combination with another event, (i) entitle any current or former employee, individual, consultant or officer of an MLP Group Entity to any severance pay, retention bonuses or any similar payment other than pursuant to the change of
control agreements listed in
Section
3.14(g)
of the MLP Disclosure Letter (the
Change of Control Agreements
), (ii) accelerate the time of payment, vesting, or funding, or increase the amount of any
compensation due any such employee, individual, consultant or officer other than the accelerated vesting of the outstanding Phantom Units issued pursuant to the MLP LTIP and (iii) result in any forgiveness of indebtedness or obligation to fund
benefits with respect to any such employee, individual, consultant or officer. No amount that could be received (whether in cash or property or the vesting of property) as a result of any of the Transactions by any employee, manager, officer or
director of any MLP Group Entity or any of its Affiliates
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who is a disqualified individual (as such term is defined in Treasury Regulation
Section 1.280G-1)
under any employment, severance or
termination Contract, other compensation Contract or MLP Benefit Plan currently in effect would reasonably be expected to be characterized as an excess parachute payment (as such term is defined in Section 280G(b)(1) of the Code).
No manager, director, officer, employee or other service provider of any MLP Group Entity is entitled to a gross up, make whole or other similar payment as a result of the imposition of Taxes under Section 280G, Section 4999 or
Section 409A of the Code pursuant to any Contract with any MLP Group Entity.
(h) Each MLP Benefit Plan that is a
nonqualified deferred compensation plan within the meaning of Section 409A(d)(1) of the Code and any award thereunder, in each case, that is nonqualified deferred compensation subject to Section 409A of the Code, complies in
form and operation with Section 409A such that no additional tax would be due in respect of any such arrangement, except as would not reasonably be expected to result in an MLP Material Adverse Effect.
(i) No MLP Benefit Plan is subject to the Laws of any Governmental Authority other than those of the United States.
(j) With respect to each group health plan benefiting any current or former employee of an MLP Entity or any ERISA Affiliate
that is subject to Section 4980B of the Code, each MLP Entity and each ERISA Affiliate has complied with the continuation coverage requirements of Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA, except for any
noncompliance which would not reasonably be expected to result in an MLP Material Adverse Effect.
(k) No MLP Benefit Plan
is or at any time was funded through a welfare benefit fund as defined in Section 419(e) of the Code, and no benefits under any MLP Benefit Plan are or at any time have been provided through a voluntary employees beneficiary
association (within the meaning of subsection 501(c)(9) of the Code) or a supplemental unemployment benefit plan (within the meaning of Section 501(c)(17) of the Code).
(l) No MLP Group Entity has agreed or committed (i) to institute any plan, program or other agreement for the benefit of
employees or former employees of an MLP Group Entity, which, if in effect on the date of this Agreement would be an MLP Benefit Plan, other than the MLP Benefit Plans in effect on the date of this Agreement, or (ii) except as required by the
terms of the MLP Benefit Plans or applicable Law, to make any amendments to any of the MLP Benefit Plans.
Section 3.15
Labor
Matters
.
(a) Except as set forth in
Section
3.15
of the MLP Disclosure Letter, none of the
employees of any MLP Group Entity is represented in his or her capacity as an employee of any MLP Group Entity by any labor organization. Except as set forth in
Section
3.15
of the MLP Disclosure Letter, no MLP Group Entity
has recognized any labor organization, nor has any labor organization been elected as the collective bargaining agent of any employees of an MLP Group Entity, nor has an MLP Group Entity entered into any collective bargaining agreement or union
Contract recognizing any labor organization as the bargaining agent of any employees of an MLP Group Entity.
(b) No MLP
Group Entity has received written notice during the past two years of the intent of any Governmental Authority responsible for the enforcement of labor, employment, occupational health and safety or workplace safety and insurance/workers
compensation Laws to conduct an investigation of any MLP Group Entity with respect to such matters and, to the Knowledge of the MLP Entities, no such investigation is in progress. There is no (and, during the
two-year
period preceding the date of this Agreement, has not been any) (i) strike or lockout with respect to any employees of any MLP Group Entity, (ii) to the Knowledge of the MLP Entities, union
organizing effort pending or threatened against any MLP Group Entity, (iii) except as would not reasonably be expected to result in an MLP Material Adverse Effect, unfair labor practice or labor dispute with respect to any employees of any MLP
Group Entity, (iv) labor Proceeding pending or, to the Knowledge of the MLP Entities, threatened against any MLP Group Entity or
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(v) slowdown, or work stoppage in effect or, to the Knowledge of the MLP Entities, threatened with respect to any employees of any MLP Group Entity. No MLP Group Entity has any liabilities
under the Worker Adjustment and Retraining Act of 1988 as a result of any action taken by any MLP Group Entity which remains outstanding and unsatisfied. Each MLP Group Entity is, and during the
two-year
period preceding the date of this Agreement has been, in compliance with all applicable Laws in respect of employment and employment practices, terms and conditions of employment, wages and hours and occupational safety and health (including
classifications of service providers as employees and/or independent contractors), except for any noncompliance which would not, individually or in the aggregate, reasonably be expected to result in an MLP Material Adverse Effect.
Section 3.16
Environmental Matters
.
(a) (i) The MLP Group Entities are now and have been since the date of formation of MLP in compliance in all material
respects with all applicable Environmental Laws; and (ii) each MLP Group Entity has obtained, maintained, and been in compliance in all material respects with all Environmental Permits necessary for the conduct and operation of the business and
the ownership, occupation or use of the Owned Real Property and the Leased Real Property.
(b) No Release has occurred on,
under or emanating from any property currently or, to the Knowledge of the MLP Entities, formerly owned, leased or operated by any MLP Group Entity, and none of the MLP Group Entities has manufactured, distributed, treated, stored, disposed of,
handled, Released, transported or arranged for the transport of Hazardous Materials, including to any
off-site
location, or exposed any Person to Hazardous Materials, in each case so as to give rise to any
current or future liabilities of any MLP Group Entity under Environmental Laws or Environmental Permits other than any liability that has not had, or would not reasonably be expected to have, individually or in the aggregate, an MLP Material Adverse
Effect.
(c) None of the MLP Group Entities have entered into or agreed to any consent order, decree or Contract, or are
subject to or have received any notice of violation, claim, settlement, Contract or Order, in each case relating to liability under any Environmental Law other than any thereof that has not had, or would not reasonably expected to have, individually
or in the aggregate, an MLP Material Adverse Effect.
(d) The current limitations and restrictions under the Environmental
Permits of the MLP Group Entities authorize operation of the MLP Group Entities facilities and conducting the business as currently conducted, except where the failure to have such authorization has not had, or would not have, individually or
in the aggregate, an MLP Material Adverse Effect.
(e) Except as listed on
Section
3.16(e)
of the
MLP Disclosure Letter, there are no Liens, notices or Proceedings pending or, to the Knowledge of the MLP Entities, threatened regarding any actual or potential liability under, violation of, or non-compliance with, any Environmental Law or
Environmental Permit other than any liability, violation or
non-compliance
that has not had, and would not reasonably expected to have, individually or in the aggregate, an MLP Material Adverse Effect.
(f) The MLP Group Entities have made available copies of all Phase I and Phase II environmental site assessments
prepared since the date of formation of MLP and in possession or control of or reasonably available to the MLP Group Entities pertaining to any property currently or formerly owned or leased by the MLP Group Entities.
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Section 3.17
Contracts
.
(a)
Section
3.17(a)
of the MLP Disclosure Letter contains a true and complete list of all Contracts
to which any of the MLP Group Entities is a party in effect on the date of this Agreement and which falls within any of the categories listed below (each Contract that is described in this
Section
3.17(a)
, and each Contract
entered into after the date of this Agreement that, if existing on the date of this Agreement would be of a type described in this
Section
3.17
, being an
MLP Material Contract
):
(i) any Contract that (A) limits or purports to limit, curtail or restrict, in any material respect, the freedom of any
MLP Group Entity or any of their respective current or future Affiliates (including Parent and its Affiliates after the Effective Time) to engage in any line of business, compete with any Person or purchase, sell, supply or distribute any product or
service, in each case, in any geographic area, or to hire any individual or group of individuals, (B) includes take or pay, requirements or other similar provisions obligating a Person to provide the quantity of goods or
services required by another Person (other than any terminal services Contract to which any MLP Group Entity is a party that includes any obligation on the part of any customer thereunder to pay for any throughput, storage or other service
thereunder whether or not such customer uses such service) or (C) includes pricing or margin provisions that provide most favored nation, rebates, refunds, or volume discounts or similar provisions with respect to pricing (other
than any terminal services Contract that has been entered into by any MLP Group Entity in the ordinary course of business and whose pricing structure changes based on the level of storage or throughput or other similar activities of the customer
party thereto) that would be applicable to Parent and its Affiliates (including the MLP Entities) after the Effective Time, except for any Contract that may be cancelled without penalty or termination payments by any MLP Group Entity upon notice of
60 days or less;
(ii) any joint venture, partnership, strategic alliance partnership, limited liability or other similar
Contract related to the formation, creation, operation, management or control of any partnership or joint venture in which any MLP Group Entity owns any interest;
(iii) any Contract (other than any Contract with a Significant Customer or Significant Supplier) that involves aggregate
expenditures or receipts in excess of $5,000,000, except for any Contract that may be cancelled without penalty or termination payments by the applicable MLP Group Entity upon notice of 60 days or less;
(iv) any Contract that grants any right of first refusal or right of first offer or similar right or that limits or purports to
limit the ability of any MLP Group Entity to sell, transfer, pledge or otherwise dispose of any material assets or businesses;
(v) any Contract for any acquisition or sale of a Person or any division thereof (whether of equity or of assets or
liabilities) (A) with a purchase price in excess of
$5,000,000, if such Contract was entered into on or after December 31, 2015, (B) that contains ongoing
earn-out
or other
contingent payment obligations or (C) that contains ongoing indemnification obligations with respect to any material covenants that, in the MLPs reasonable judgment, remain unperformed or with respect to material representations
(excluding title, authority and other fundamental representations) the express survival period as to which has not expired;
(vi) any Contract relating to indebtedness for borrowed money or any financial guaranty (including any guaranty by any MLP
Group Entity of any obligations of any third party) (A) in excess of $1,000,000 individually or (B) relating to the creation of any Lien, other than Permitted Liens, with respect to any material asset of any MLP Group Entity;
(vii) each lease, sublease or license for each Material Leased Real Property;
(viii) any Contract (A) with any Significant Customer, other than Contracts with sales revenues of less than $250,000 for
the twelve month period ended December 31, 2016, or (B) with any Significant Supplier;
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(ix) any Contract with any Governmental Authority (for the avoidance of doubt,
not including: (A) Permits; and (B) whether or not a Permit, any spill prevention control and countermeasure plan, facility security plan, facility response plan, dock operations manual or similar type of operations plan to the extent, in
each case, entered into or adopted by the MLP or any Subsidiary thereof in the ordinary course of business and consistent with past practices);
(x) any Contract with respect to Intellectual Property that is material to the conduct of the MLP Group Entities business
as currently conducted, except Contracts for
off-the-shelf
or shrink-wrap software licensed to any MLP Group Entity;
(xi) any Contract related to a Derivative Transaction;
(xii) any employment, retirement, consulting, management, severance, change of control, retention, termination, indemnification
or similar compensation or benefits Contract with any director, officer, manager, employee, consultant or independent contractor which Contract provides for aggregate compensation from any MLP Group Entity in excess of $200,000; or
(xiii) any Contract that is a material contract (as such term is defined in Item 601(b)(10) of Regulation
S-K).
(b) Except for matters that, individually or in the aggregate, would not
reasonably be expected to have an MLP Material Adverse Effect, each of the MLP Material Contracts is a valid, binding and enforceable obligation of the MLP Group Entities and, subject to the Bankruptcy and Equity Exception, in accordance with its
terms and is in full force and effect, and each of the MLP Group Entities (and, to the Knowledge of the MLP Entities, each other Party thereto), has performed in all material respects all obligations required to be performed by it under each MLP
Material Contract. Except for matters that, individually or in the aggregate, would not reasonably be expected to result in an MLP Material Adverse Effect, (i) none of the MLP Group Entities is (with or without notice, lapse of time or both) in
breach or default under any MLP Material Contract, (ii) to the Knowledge of the MLP Entities, no other party to any such MLP Material Contract is (with or without notice, lapse of time or both) in breach or default in any material respect
thereunder and (iii) except as described in
Section
3.17(b)
of the MLP Disclosure Letter, none of the MLP Group Entities has received written notice from any other party to any MLP Material Contract of any intention to
cancel or terminate such MLP Material Contract.
Section 3.18
Real Property and Personal Property
.
(a) MLP or its applicable Subsidiary has good, valid and indefeasible fee simple title to each material parcel of real
property, including any improvements, buildings or other structures thereon, owned by MLP or any of its Subsidiaries (collectively, the
Owned Real Property
), free and clear of all Liens, other than (i) Permitted Liens and
(ii) Liens that, individually or in the aggregate, would not reasonably be expected to, individually or in the aggregate, have an MLP Material Adverse Effect.
Section
3.18(a)
of the MLP Disclosure Letter sets forth a
true and complete list of all Owned Real Property.
(b) MLP or its applicable Subsidiary has good and valid leasehold or
subleasehold, as applicable, in each material parcel of real property leased, subleased or otherwise occupied by any MLP Group Entity (other than Owned Real Property and
Rights-of-Way),
including any improvements, buildings or other structures thereon (collectively, the
Leased Real Property
), free and clear of any
Liens, other than (i) Permitted Liens and (ii) Liens that, individually or in the aggregate, would not reasonably be expected to have an MLP Material Adverse Effect. There is no Leased Real Property other than Material Leased Real
Property, the leases, subleases or licenses for which are listed in
Section
3.17(a)(vii)
of the MLP Disclosure Letter, and such other leased real property that does not constitute Material Leased Property.
(c) Except as, individually or in the aggregate, has not had and would not reasonably be expected to have an MLP Material
Adverse Effect, MLP or one of its Subsidiaries owns or leases all of the personal property reflected in the most recent consolidated balance sheet of MLP filed or incorporated by reference in the MLP SEC Documents prior to the date of this
Agreement, other than personal property sold or
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otherwise disposed of in the ordinary course of business since December 31, 2016 (collectively, the
Personal Property
). MLP or one of its Subsidiaries has, and immediately
following the Effective Time will continue to have, good and valid title to all material owned Personal Property, and good and valid leasehold interests in all material leased or subleased Personal Property, in each case, free and clear of any
Liens, other than (w) as otherwise disclosed in
Section
3.18(c)
of the MLP Disclosure Letter, (x) Permitted Liens, (y) Liens created as a result of actions or omissions by any of the Parent Entities after the
date of this Agreement and (z) Liens that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
(d) Each of the MLP Group Entities owns or has the right to use (free and clear of any Liens, other than Permitted Liens) such
consents, easements,
rights-of-way,
licenses or similar interests in real property (collectively,
Rights-of-Way
) as are necessary to conduct its business in the manner described in the MLP SEC Documents, except for such
Rights-of-Way
the absence of which would not, individually or in the aggregate, result in an MLP Material Adverse Effect. Each such
Right-of-Way
is valid and enforceable, except to the extent that enforceability thereof may be limited by the Bankruptcy and Equity Exception, and grants the rights purported to be granted thereby and all
rights necessary thereunder for the current operation of the businesses of the MLP Group Entities, except where the failure of any such
Right-of-Way
to be valid or
enforceable or to grant the rights purported to be granted thereby or necessary thereunder would not, individually or in the aggregate, result in an MLP Material Adverse Effect. Each of the MLP Group Entities has fulfilled and performed all its
material obligations with respect to such
Rights-of-Way
and, to the Knowledge of the MLP Entities, no event has occurred that 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 any failure to fulfill
or perform or any such revocations, terminations and impairments that would not, individually or in the aggregate, result in an MLP Material Adverse Effect, and no such
Rights-of-Way
contain any restriction that materially prevents the operation of the businesses of the MLP Group Entities, taken as a whole, and as currently conducted.
(e) Except as would not reasonably be expected to have, individually or in the aggregate, an MLP Material Adverse Effect,
(i) no MLP Group Entity has received written notice of any Proceedings in eminent domain, condemnation or other similar Proceedings that are pending, and, to the Knowledge of the MLP Entities, there are no such Proceedings threatened, affecting
any portion of the Owned Real Property, Leased Real Property or
Rights-of-Way
and (ii) no MLP Group Entity has received written notice of the existence of any
pending Proceeding, and, to the Knowledge of the MLP Entities, there is no such Proceeding threatened, relating to the ownership, license, use, occupancy or operation by any MLP Group Entity of the Owned Real Property, Leased Real Property or
Rights-of-Way.
Section 3.19
Intellectual Property
.
The MLP Group Entities own or have the right to use all Intellectual Property necessary for the operation of the businesses of the MLP Group Entities as presently conducted (collectively, the
MLP Group Intellectual Property
) free
and clear of all Liens except for Permitted Liens and except where the failure to own or have the right to use such Intellectual Property would not, individually or in the aggregate, reasonably be expected to have an MLP Material Adverse Effect. To
the Knowledge of the MLP Entities, the use of the MLP Group Intellectual Property by the MLP Group Entities in the operation of the business of the MLP Group Entities as presently conducted does not infringe upon or misappropriate any Intellectual
Property of any other Person, except for such matters that would not, individually or in the aggregate, reasonably be expected to have an MLP Material Adverse Effect.
Section 3.20
Insurance
. The MLP Group Entities maintain, or are entitled to the benefits of, insurance covering their properties,
operations, personnel and businesses in amounts as the MLP Group Entities reasonably believe to be customary for the businesses in which they operate.
Section
3.20
of the MLP Disclosure Letter lists the current annual
premiums paid by the MLP Group Entities for directors and officers liability insurance policies. Except as would not have, individually or in the aggregate, an MLP Material Adverse Effect, (a) all insurance policies maintained by the MLP Group
Entities (collectively,
Insurance Policies
) are in full force and effect and all premiums due and payable thereon have been paid, (b) no MLP Group Entity is in breach or default
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of any of the Insurance Policies, and no MLP Group Entity has taken any action or failed to take any action which (with or without notice or the lapse of time or both) would constitute such a
breach or default or permit termination or modification of any of the Insurance Policies, (c) the MLP Group Entities have not received any notice of termination or cancellation with respect to any Insurance Policy or, since
January 1, 2014, denial of coverage with respect to any material claim made thereunder and (d) none of the MLP Group Entities has received notice from any insurer or agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance, and all such insurance is outstanding and duly in force.
Section 3.21
Customers and Suppliers
.
(a)
Section
3.21(a)
of the MLP Disclosure Letter sets forth a list showing each customer of MLP and
its Subsidiaries to which sales by MLP and its Subsidiaries, taken as a whole, were in excess of $1,000,000 during the twelve month period ending on December 31, 2016 (each, a
Significant Customer
). Since March 31, 2017
and except as set forth in
Section
3.21(a)
of the MLP Disclosure Letter, to the Knowledge of the MLP Entities, no Significant Customer has indicated an intention to (i) terminate its relationship with, or otherwise
stop purchasing products from, MLP or its Subsidiaries or (ii) change, materially and adversely, the terms and conditions on which it purchases products from MLP or its Subsidiaries.
(b)
Section
3.21(b)
of the MLP Disclosure Letter sets forth a list showing each supplier of MLP and
its Subsidiaries that had sales to MLP and its Subsidiaries, taken as a whole, in excess of $5,000,000 during the twelve month period ending on December 31, 2016 (each, a
Significant Supplier
). Since March 31, 2017 and
except as set forth in
Section
3.21(b)
of the MLP Disclosure Letter, to the Knowledge of the MLP Entities, no Significant Supplier has indicated an intention to (i) terminate its relationship with, or otherwise stop
supplying, MLP or its Subsidiaries or (ii) change, materially and adversely, the terms and conditions on which it is prepared to supply MLP or its Subsidiaries.
Section 3.22
Related Party Transactions
. There are no Contracts between or among any MLP Group Entities, on the one hand, and any
Affiliate of any MLP Group Entity or other Persons, on the other hand, that would be required to be disclosed under Item 404 of Regulation
S-K
promulgated by the SEC other than those that have been disclosed
in the MLP SEC Documents and the Transaction Documents. None of the MLP Group Entities is party to any Contract or other transaction with any holder of 5% or more of any of the Common Units, Phantom Units or other Partnership Interests or other
Equity Securities of any of the MLP Group Entities, respectively, or any director, manager, officer, employee or Affiliate of the MLP Group Entities, or to any familial relative of any of the foregoing, except (w) as described in
Section
3.22
of the MLP Disclosure Letter, (x) as described in the MLP SEC Documents, (y) for employment or compensation Contracts (including any award pursuant to any MLP Benefit Plan and the Change of Control
Agreements) with directors, managers, officers and employees made in the ordinary course of business consistent with past practice and (z) the Transactions. Solely for purposes of this
Section
3.22
, MLP shall not be
deemed to be an Affiliate of any wholly owned Subsidiary of MLP, or Joliet and its wholly owned Subsidiaries, and no wholly owned Subsidiary of MLP, or Joliet and its wholly owned Subsidiaries, shall be deemed to be an Affiliate of MLP or any other
wholly owned Subsidiary of MLP or Joliet or its wholly owned Subsidiaries.
Section 3.23
Regulatory Matters
. None of MLP Group
Entities is (a) an investment company or a company controlled by an investment company within the meaning of the U.S. Investment Company Act of 1940, as amended, and the rules and regulations promulgated
thereunder or (b) a holding company, a subsidiary company of a holding company, an Affiliate of a holding company, a public utility or a public-utility company, as each
such term is defined in the U.S. Public Utility Holding Company Act of 2005. Except as described in
Section
3.23
of the MLP Disclosure Letter, none of the MLP Group Entities owns or holds any refined petroleum product,
crude oil, natural gas, liquefied natural gas, natural gas liquid and other pipelines, lateral lines, pumps, pump stations, storage facilities, terminals, processing plants and other related operations, assets, machinery or equipment that are
subject to (a) regulation by the U.S. Federal Energy Regulatory
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Commission under the Natural Gas Act of 1938, as amended, or (b) rate regulation or comprehensive nondiscriminatory access regulation under the Laws of any state or other local jurisdiction.
Section 3.24
Information Supplied
. Subject to the accuracy of the representations and warranties of the Parent Entities set
forth in
Section
5.7
, none of the information supplied or to be supplied by the MLP Entities in writing specifically for inclusion or incorporation by reference in the Proxy Statement or any other filings made by, or
required to be made by MLP with the SEC in connection with the Transactions (collectively, and together with the Proxy Statement, and any amendments thereof or supplements thereto, the
Transaction Filings
) will, when filed with
the SEC or when distributed or disseminated to the Unitholders, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, the MLP Entities make no representation or warranty with respect to any information provided by or on behalf of any of the Parent
Entities or their respective Representatives in writing specifically for inclusion or incorporation by reference in the Transaction Filings.
Section 3.25
Takeover Laws
. Assuming the accuracy of the representation and warranty contained in
Section
5.3(c)
, the action of the MLP GP Board in approving this Agreement and the Transactions is sufficient to render inapplicable to this Agreement and the Transactions any Takeover Laws and any similar provision of the
MLP Charter Documents. There is no unitholder rights plan, poison pill or similar Contract in effect to which MLP is a party or otherwise bound.
Section 3.26
Opinion of MLP Committee Financial Advisor
. The GP Conflicts Committee has received the opinion of Tudor Pickering
Holt & Co. Advisors LP (the
MLP Committee Financial Advisor
), dated August 29, 2017, to the effect that, as of the date of such opinion, and subject to the assumptions and qualifications set forth therein, the Public
Merger Consideration to be paid to the Public Unitholders (as defined in such opinion), other than the Excluded Holders (as defined in such opinion), pursuant to this Agreement, is fair from a financial point of view, to such holders (the
MLP Fairness Opinion
). MLP has been authorized by the MLP Financial Advisor to permit the inclusion of the MLP Fairness Opinion in the Proxy Statement.
Section 3.27
Brokers
. Except for the MLP Committee Financial Advisor, the fees and expenses of which will be paid by MLP, no MLP
Group Entity or Parent Entity will have any liability for, and no broker, investment banker or financial advisor is entitled to, any brokers, finders or financial advisors fee or commission, or the reimbursement of expenses, in
connection with the Transactions based on Contracts made by or on behalf of any MLP Group Entity (including, for the avoidance of doubt, with respect to Citigroup Global Markets Inc., in its capacity as financial advisor to the MLP Entities
(
MLP Financial Advisor
) or to the Lightfoot Entities, the fees and expenses of which will be paid by the Lightfoot Entities.
Section 3.28
Acknowledgement by MLP and MLP GP
. Except for (a) the representations and warranties made in this Agreement and
(b) the representations and warranties made (i) in any Letter of Transmittal, (ii) in connection with any payment of Merger Consideration through DTC, (iii) in any Phantom Unitholder Acknowledgement, (iv) in the Support
Agreements or (v) in any certificate required to be delivered under
Section
6.17
, none of the Parent Entities or any other Person, is making or has made, and neither MLP nor MLP GP is relying on, or has relied on, any
other representations or warranties, either express or implied, with respect to the Transactions, any of the Parent Entities, or on the accuracy or completeness of any information regarding any of the Parent Entities or any other material furnished
or provided to MLP or MLP GP or made available to MLP or MLP GP in any form, in expectation of, or in connection with, this Agreement or the Transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE LIGHTFOOT ENTITIES
Except as disclosed in the corresponding sections of the MLP Disclosure Letter prior to the execution of this Agreement (or disclosed in any
other section, subsection or clause of the MLP Disclosure Letter if it is reasonably
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apparent from the face of such disclosure that such disclosure will be deemed to be disclosed with respect to any other section, subsection or clause of this Agreement) (it being agreed that
(i) the inclusion of any item in the MLP Disclosure Letter that qualifies or limits, or discloses information with respect to, any representation or warranty made by a Lightfoot Entity (or both of them) shall not constitute or be deemed to
constitute an admission by a Lightfoot Entity that such item is a fact, event, circumstance or condition required to be disclosed in the MLP Disclosure Letter in order to render true, accurate and complete such representation or warranty and
(ii) the express reference to any Section of the MLP Disclosure Letter in any sentence of any representation or warranty made in this
Article IV
shall not imply that the MLP Disclosure Letter does not contain any fact, event,
circumstance or condition that qualifies or limits, or discloses information with respect to, any representation or warranty made in this
Article IV
that does not contain an express reference to any Section of the MLP Disclosure Letter), the
Lightfoot Entities, severally, hereby represent and warrant to the Parent Entities as follows:
Section 4.1
Organization
. Each
of LCP GP and LCP LP is a limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the Laws of the State of Delaware and has all requisite limited liability company or limited
partnership, as applicable, power to own, lease and operate all of its properties and assets, including the GP Equity Interest in the case of LCP GP, and to carry on its business as currently conducted, except where the failure to have such power or
authority would not, and would not reasonably be expected to, individually or in the aggregate, result in an MLP Material Adverse Effect. There are no dissolution or bankruptcy Proceedings pending with respect to or contemplated by LCP GP or LCP LP.
Section 4.2
Capitalization of MLP GP
.
(a) The GP Equity Interest constitutes all of the issued and outstanding Equity Securities of or in MLP GP. LCP GP holds record
and beneficial ownership of 100% of the GP Equity Interest, free and clear of any and all Liens (except transfer restrictions under applicable securities Laws). Upon transfer of the GP Equity Interest to Parent, Parent will hold record and
beneficial ownership of 100% of the GP Equity Interest free and clear of all Liens (except transfer restrictions under applicable securities Laws). The GP Equity Interest was duly authorized and validly issued, and is fully paid and
non-assessable.
No Equity Security (other than the GP Equity Interest) of or in MLP GP has ever been issued.
(b) Except for this Agreement, the MLP GP LLC Agreement and the LCP GP LLC Agreement, there are no outstanding Contracts or
obligations binding on MLP GP or any security holders of MLP GP with respect to the Equity Securities of or in MLP GP, including any Contract (i) restricting the transfer of, (ii) affecting the voting rights of, (iii) requiring the
repurchase, redemption or disposition of, or containing any right of first refusal with respect to, (iv) requiring any registration for sale of or (v) granting any preemptive or anti-dilutive rights with respect to, any such Equity
Security.
Section 4.3
Authorization
. Each of the Lightfoot Entities has all requisite power and authority and has taken all
necessary action in order to execute and deliver this Agreement and the other agreements contemplated hereby to which it is or will be a party and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement by
the Lightfoot Entities and the performance of the Transactions by the Lightfoot Entities has been duly authorized and approved by all necessary limited liability company or limited partnership action, as applicable, of the Lightfoot Entities. LCP
GP, in its capacity as the sole member of MLP GP, has approved this Agreement and the transactions contemplated hereby in accordance with the MLP GP LLC Agreement. This Agreement has been duly executed and delivered by the Lightfoot Entities and
constitutes the legal, valid and binding obligation of the Lightfoot Entities, enforceable against the Lightfoot Entities in accordance with its terms, subject to the Bankruptcy and Equity Exception. At the Closing, all documents required hereunder
to be executed and delivered by the Lightfoot Entities will have been duly authorized, executed and delivered by the Lightfoot Entities and, assuming due authorization, execution and delivery of such documents by any other parties thereto, will
constitute legal, valid and binding obligations of the Lightfoot Entities, enforceable against the Lightfoot Entities in accordance with their terms, subject to the Bankruptcy and Equity Exception.
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Section 4.4
Noncontravention
. The execution and delivery by the Lightfoot Entities of
this Agreement or any other documents required hereunder to be executed and delivered by the Lightfoot Entities pursuant to this Agreement, and the consummation by the Lightfoot Entities of the Transactions, will not (a) conflict with, violate
or result in a default under the certificate of formation of the Lightfoot Entities or MLP GP or the limited partnership agreement or limited liability company agreement of the Lightfoot Entities or the MLP GP LLC Agreement, or entitle any Person to
exercise any preferential purchase right, option to purchase or similar right with respect to the GP Equity Interest, (b) conflict with or result in a breach, default or violation of, or require a Consent under, any Law, Order, Contract,
document or Permit to which the Lightfoot Entities or MLP GP is a party or to which the Lightfoot Entities or MLP GP or their respective assets, including the GP Equity Interest, are subject, (c) result in the creation of any Lien upon the GP
Equity Interest or (d) except as set forth in
Section
4.4
of the MLP Disclosure Letter, require the Lightfoot Entities or the MLP Entities to obtain or make any Consent from or with any Person (other than any
Governmental Authority, as to which the provisions of
Section
4.5
apply).
Section 4.5
Governmental
Approvals
. Other than (a) the filing of the Proxy Statement to be sent to the Unitholders pursuant to
Section
6.1
with the SEC, (b) the Antitrust Consents and (c) the applicable Other Governmental
Consents, and assuming the accuracy of the representations and warranties of the Parent Entities in
Section
5.5
, no Consents of or with any Governmental Authority are necessary in connection with the execution, delivery and
performance of this Agreement by the Lightfoot Entities and the consummation by the Lightfoot Entities of the Transactions.
Section 4.6
MLP GP
.
(a) The Lightfoot Entities have made available to Parent a complete and correct copy of the certificate of formation of MLP GP
(together with all amendments thereto, if any) and the First Amended and Restated Limited Liability Company Agreement of MLP GP, dated November 12, 2013, together with all amendments thereto (the
MLP GP LLC Agreement
). MLP GP
has not taken any action in violation of its certificate of formation or the MLP GP LLC Agreement. As of the date hereof, the Lightfoot Entities have not received any written communication from, or given any written communication to, any other party
indicating that MLP GP, the Lightfoot Entities or such other party, as the case may be, is in violation of MLP GPs certificate of formation or the MLP GP LLC Agreement.
(b) MLP GP is (i) the sole general partner of MLP, (ii) the holder of the only issued and outstanding General Partner
Interest (the
MLP General Partner Interest
) and the holder of 100% of the Incentive Distribution Rights. MLP GP is the sole record and beneficial owner of the MLP General Partner Interest and the Incentive Distribution Rights,
which MLP General Partner Interest has been duly authorized and validly issued in accordance with applicable Law and the MLP Charter Documents. MLP GP owns the MLP General Partner Interest and the Incentive Distribution Rights free and clear of any
Liens.
(c) None of the Lightfoot Entities, MLP GP or any of their respective Affiliates has entered into any Contract
obligating MLP GP to issue, sell or dispose of any Equity Security of any Person, except for (x) in the case of the Lightfoot Entities, this Agreement and (y) in the case of MLP GP, the MLP LTIP and any award agreement entered into in
accordance therewith.
(d) MLP GP does not own record or beneficial title to any assets, including Equity Securities, other
than (i) the MLP General Partner Interest and (ii) the Incentive Distribution Rights.
(e) MLP GP has no
liabilities or obligations, including debts, losses, costs and expenses, absolute or contingent, known or unknown, due or to become due, liquidated or unliquidated, other than those set forth in
Section
4.6(e)
of the MLP
Disclosure Letter, all of which were incurred for the benefit of MLP.
Section 4.7
Brokers
. No MLP Group Entity or Parent
Entity will have any liability for, and no broker, investment banker or financial advisor is entitled to any brokers, finders or financial advisors fee or commission, or the reimbursement of expenses, in connection with, the
Transactions based on Contracts made by or on behalf of any Lightfoot Entity.
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Section 4.8
Acknowledgement by the
Lightfoot Entities
. Except for (a) the
representations and warranties made in this Agreement and (b) the representations and warranties made (i) in any Letter of Transmittal, (ii) in connection with any payment of Merger Consideration through DTC, (iii) in any Phantom
Unitholder Acknowledgement, (iv) in the Support Agreements or (v) in any certificate required to be delivered under
Section
6.17
, none of the Parent Entities, or any other Person, is making or has made, and none
of the Lightfoot Entities is relying on, or has relied on, any other representations or warranties, either express or implied, with respect to the Transactions, any of the Parent Entities, or on the accuracy or completeness of any information
regarding any of the Parent Entities or any other material furnished or provided to any Lightfoot Entity or made available to any Lightfoot Entity in any form, in expectation of, or in connection with, this Agreement or the Transactions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PARENT ENTITIES
Each of the Parent Entities, jointly and severally, hereby represent and warrant to the MLP Entities and the Lightfoot Entities as follows:
Section 5.1
Organization
. Each of the Parent Entities is a legal entity duly organized, validly existing and in good standing
under the Laws of the State of Delaware. Each of the Parent Entities has all requisite corporate or similar power and authority to own, lease or otherwise hold, use and operate its properties, rights and other assets and to carry on its business as
currently conducted, except where the failure to have such power or authority, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect. Each of the Parent Entities is duly qualified or licensed to
do business and is in good standing (with respect to jurisdictions that recognize that concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its assets, properties or the conduct of its business
makes such qualification, licensing or good standing necessary, other than where the failure to be so qualified, licensed or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Parent
Material Adverse Effect.
Section 5.2
Capitalization of Merger Sub
and Holdings
. All of the issued and outstanding
Equity Securities of each of Merger Sub and Holdings are, and immediately prior to the Effective Time will be, owned by Parent or one or more Affiliates of Parent. Each of Merger Sub and Holdings was formed solely for the purpose of engaging in the
Transactions, has not conducted any business prior to the date of this Agreement and has no, and prior to the Effective Time will have no, assets, liabilities or obligations of any nature other than those incident to its formation and capitalization
pursuant to this Agreement and the Transactions.
Section 5.3
Authorization
.
(a) Each of the Parent Entities has all requisite limited liability company or limited partnership power and authority and has
taken all limited liability company or limited partnership action (including by obtaining the votes or consents referenced in clauses (b) and (c) of this
Section
5.3
) necessary in order to execute, deliver and perform
its obligations under this Agreement and to consummate the Transactions. This Agreement has been, and any other agreements contemplated hereby, when executed, will be, duly executed and delivered by each of the Parent Entities and constitutes a
valid and binding agreement of the Parent Entities enforceable against each of the Parent Entities in accordance with its terms, subject to the Bankruptcy and Equity Exception.
(b) The vote or consent of Parent GP as the general partner of the sole member of Holdings, which is the sole member of Merger
Sub is the only vote or consent of the members of Merger Sub necessary to adopt this Agreement and approve the Transactions.
(c) The vote or consent of Parent GP as the general partner of the sole member of Holdings is the only vote or consent of the
members of Holdings necessary to adopt this Agreement and approve the Transactions.
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(d) None of the Parent Entities or any of their Subsidiaries holds any Equity
Securities of MLP or any of its Subsidiaries.
Section 5.4
Noncontravention
. The execution, delivery and performance of this
Agreement by any of the Parent Entities do not, and the consummation by any of the Parent Entities of the Transactions will not (with or without notice or lapse of time, or both), constitute or result in (i) a breach or violation of, or a
default under, or conflict with the certificate of formation, limited liability company agreement or limited partnership agreement or other comparable organizational documents of any of the Parent Entities (ii) with or without notice or lapse
of time, or both, a breach or violation of, a termination (or right of termination), modification, cancellation, creation or acceleration of any obligation, loss of a benefit under, default under, or the creation of a Lien, other than a Permitted
Lien, on any of the assets of any of the Parent Entities or any of their respective Subsidiaries pursuant to any Contract or Permit to which any of the Parent Entities or any of their respective Subsidiaries is a party or by which they or any of
their respective properties or assets may be bound or affected or (iii) assuming compliance with the matters referred to in
Section
5.5
, a violation or conflict under any Law to which any of the Parent Entities or any
of their respective Subsidiaries, or any of their respective properties or assets, is subject, except, in the case of
clauses (ii)
or
(iii)
above, for any such breach, violation, termination, modification, cancellation, creation,
acceleration, loss or default that, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect.
Section 5.5
Governmental Filings
. Other than (a) the filing of a Notification and Report Form by Parent GP on behalf of
Parent pursuant to the HSR Act and the termination or expiration of the waiting period required thereunder, (b) such filings as may be necessary to obtain the receipt, termination or expiration, as applicable, of approvals or waiting periods
required under all other applicable Antitrust Laws, (c) filings required by the applicable requirements of the Securities Act, the Exchange Act and state securities, takeover and blue sky Laws and (d) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware, and assuming the accuracy of the representations and warranties of the MLP Entities in
Section
3.5
, no Consents of or with any Governmental
Authority are necessary in connection with the execution, delivery and performance of this Agreement by any of the Parent Entities and the consummation by the Parent Entities of the Transactions, except for any such Consents that, if not obtained,
made or given, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect.
Section 5.6
Legal Proceedings
. There are no Proceedings pending or, to the Knowledge of Parent, threatened against or affecting
any of the Parent Entities or any of their respective Subsidiaries (including by virtue of indemnification or otherwise), or any director, manager, officer or employee (in his or her capacity as such) of the Parent Entities or their respective
Subsidiaries, except for those that, individually or in the aggregate, if determined adversely to a Parent Entity would not reasonably be expected to result in a Parent Material Adverse Effect. As of the date of this Agreement, none of the Parent
Entities is a party to or subject to the provisions of any Order that, individually or in the aggregate, has resulted, or would reasonably be expected to result in a Parent Material Adverse Effect.
Section 5.7
Information Supplied
. None of the information supplied or to be supplied by any of the Parent Entities in writing
specifically for inclusion or incorporation by reference in the Transaction Filings will, when filed with the SEC or when distributed or disseminated to the Unitholders, as applicable, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, none of the Parent Entities makes any
representation or warranty with respect to any information provided by or on behalf of the MLP Group Entities, the Lightfoot Entities or their respective Representatives in writing specifically for incorporation by reference in the Transaction
Filings.
Section 5.8
F
inancing
.
(a) Each of the Parent Entities acknowledges and agrees that it is not a condition to the Closing or to any of its other
obligations under this Agreement that Parent obtain financing for, or related to, any of the
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Transactions. Parent has delivered to MLP a true and complete copy of (i) a fully executed debt commitment letter (together with any term sheet relating thereto) dated as of the date of this
Agreement (as amended or replaced, the
Debt Commitment Letter
), pursuant to which the financial institutions party thereto (together with any other agents or entities that have committed to provide or arrange or otherwise entered
into agreements in connection with the Debt Financing or other financings in connection with the Transactions and the parties to any joinder agreements, indentures or credit agreements entered pursuant thereto or related thereto, and together with
their respective Affiliates and their and their respective Affiliates Representatives and their respective successors and assigns, but excluding Parent, Parent GP, Holdings, Merger Sub, the Equity Financing Sources and the Guarantors,
collectively, the
Debt Financing Sources
and each, a
Debt Financing Source
) have committed, subject to the terms and conditions set forth therein, to lend the amounts set forth therein for the purposes set forth
therein (the
Debt Financing
), and (ii) a fully executed equity commitment letter, dated as of the date of this Agreement (as amended or replaced, the
Equity Commitment Letter
and together with the Debt
Commitment Letter, the
Commitment Letters
), providing for equity financing for the transactions contemplated hereby (the
Equity Financing
and together with the Debt Financing, the
Financing
)
by the counterparties named therein (the
Equity Financing Sources
and together with the Debt Financing Sources, the
Financing Sources
). Parent has also delivered to MLP true and complete copies of any fee letter
entered into in connection with the Debt Commitment Letter (any such fee letter, a
Fee Letter
), except that the numerical fees, pricing and other commercially sensitive numbers and provisions specified in any such Fee Letter
(including any provisions relating to flex terms or similar concepts) that would not adversely affect the aggregate amount, availability or conditionality of the Debt Financing may have been redacted.
(b) Assuming the conditions to the obligation of the Parent Entities to consummate the Merger have been satisfied or waived and
the Financing is funded in accordance with the Commitment Letters, at the Effective Time, Holdings and Merger Sub will have available to them sources of immediately available funds to consummate the Transactions and to pay all amounts required to be
paid in connection with the transactions contemplated by this Agreement, including the Merger Consideration, any Debt that must be repaid in connection with the Merger and all required financing fees and expenses and other expenses, in each case,
that are required to be paid at Closing.
(c) As of the date hereof, each Commitment Letter is in full force and effect and
has not been withdrawn, rescinded or terminated or otherwise amended, supplemented or modified in any respect (including by any reduction of the commitments of the Financing Sources thereunder), and, as of the date hereof, none of the Financing
Sources has notified any of the Parent Entities of its intention to rescind, terminate or reduce the commitments under a Commitment Letter or not to provide the Financing on the Closing Date. Each Commitment Letter, in the form delivered to MLP
prior to the execution of this Agreement, is a valid and binding obligation of Parent and enforceable against it in accordance with its terms, and, to the Knowledge of Parent as of the date of this Agreement, is a valid and binding obligation
against each Financing Source and enforceable against each Financing Source in accordance with its terms. As of the date of this Agreement, no event has occurred which, with or without notice, lapse of time or both, could constitute a default or
breach on the part of any of the Parent Entities or, to the Knowledge of Parent, any Financing Source under any term of any Commitment Letter or otherwise result in the failure of any condition to the Financing or any portion of the Financing
contemplated thereby to be unavailable at the Closing. Assuming the conditions to the obligation of the Parent Entities to consummate the Merger have been satisfied or waived, none of the Parent Entities has reason to believe that it or any
Financing Source would be unable to satisfy on a timely basis any term or condition of any Commitment Letter required to be satisfied by such Person. Each of the Parent Entities has fully paid any and all commitment fees or other fees required by
the Commitment Letters to be paid on or before the date of this Agreement. Parent acknowledges and agrees that there are no conditions precedent or other contingencies related to the funding of the full amount of the Financing immediately prior to
the Closing, other than as expressly set forth in the Commitment Letters, and, other than the Fee Letters, there are no side letters, understandings or other agreements that affect the amount, conditionality or availability of the Financing.
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Section 5.9
Brokers and Finders
. Except for Barclays Bank PLC and Credit Suisse AG,
the fees and expenses of which will be borne by Parent, none of the Parent Entities or any of their respective Subsidiaries, has employed any broker or finder, or incurred any liability for any brokerage fees, commissions or finders fees
payable by any of the Parent Entities or any of their respective Subsidiaries in connection with the Transactions based on Contracts made by or on behalf of any Parent Entity.
Section 5.10
Limited Guarantee
. Concurrently with the execution of this Agreement, Parent has delivered to the MLP Entities and
the Lightfoot Entities a limited guarantee, dated the date hereof, of Warburg Pincus Private Equity (E&P)
XI-A,
L.P. and Warburg Pincus Energy
(E&P)-A,
L.P.
(each, a
Guarantor
), guaranteeing certain of Parents obligations hereunder, subject to the terms and conditions set forth therein (the
Limited Guarantee
). The Limited Guarantee is valid and in full force
and effect and constitutes the valid and binding obligation of each of the Guarantors, enforceable in accordance with its terms, except as such enforceability may be limited by the Bankruptcy and Equity Exception.
Section 5.11
Acknowledgement by Parent
. Except for (a) the representations and warranties made in this Agreement and
(b) the representations and warranties made (i) in any Letter of Transmittal, (ii) in connection with any payment of Merger Consideration through DTC, (iii) in any Phantom Unitholder Acknowledgement, (iv) in the Support
Agreement or (v) in any certificate required to be delivered under
Section
6.17
, none of the MLP Entities, the Lightfoot Entities or any other Person is making or has made, and none of the Parent Entities is relying
on, or has relied on, any other representations or warranties, either express or implied, with respect to the Transactions or MLP Entities and the Lightfoot Entities or their respective businesses, operations, assets, liabilities, financial
condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects),
or on the accuracy or completeness of any information regarding the MLP Entities or the Lightfoot Entities or their respective Subsidiaries or any other material furnished or provided to the Parent Entities or made available to the Parent Entities
in any data rooms, virtual data rooms, management presentations or in any other form, in expectation of, or in connection with, this Agreement or the Transactions.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
Section 6.1
Unitholder Meeting; Preparation of the
Proxy Statement
.
(a) MLP shall, in accordance with the MLP Charter Documents and with the cooperation of the Parent Entities, as promptly as
practicable following the date of this Agreement, establish a record date for, duly call, give notice of, convene and hold a special meeting of the Unitholders (including any postponements, adjournments or recesses thereof, the
MLP
Unitholder Meeting
) for the purpose of obtaining the MLP Unitholder Approval. Subject to
Section
6.4
, MLP shall, through the GP Conflicts Committee and the MLP GP Board, recommend to the Unitholders approval of
this Agreement and the Merger (the
Board Recommendation
) and use reasonable best efforts to obtain from the Unitholders the MLP Unitholder Approval. Without limiting the generality of the foregoing, but subject to
Section
6.4
, MLPs obligations pursuant to the first sentence of this
Section
6.1(a)
shall not be affected by the withdrawal or modification by the GP Conflicts Committee of the Board
Recommendation or the MLP GP Boards approval of this Agreement or the Transactions. Notwithstanding anything in this Agreement to the contrary, MLP may postpone or adjourn, with approval of the GP Conflicts Committee and the MLP GP Board, the
MLP Unitholder Meeting (i) to solicit additional proxies for the purpose of obtaining the MLP Unitholder Approval, (ii) for the absence of quorum, (iii) to allow reasonable additional time for the filing and/or mailing of any
supplemental or amended disclosure that the GP Conflicts Committee and the MLP GP Board have determined after consultation with outside legal counsel is necessary under applicable Law and for such supplemental or amended disclosure to be
disseminated and reviewed by the Unitholders prior to
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the MLP Unitholder Meeting and (iv) if MLP has delivered any notice contemplated by
Section
6.4
and the time periods contemplated by
Section
6.4
have not expired;
provided
,
however
, that in each case, MLP shall not be permitted to postpone or adjourn the MLP Unitholder Meeting to a date after the date that is two Business Days prior to the
Outside Date. Unless this Agreement is validly terminated in accordance with
Article VIII
, MLP, with the cooperation of the Parent Entities, shall submit this Agreement to the Unitholders for approval at the MLP Unitholder Meeting even if the
GP Conflicts Committee shall have effected a Withdrawal of Recommendation.
(b) As soon as reasonably practicable following
the date of this Agreement, MLP shall prepare and file with the SEC (i) a Form
8-K
containing this Agreement and (ii) a preliminary proxy statement (the
Proxy
Statement
);
provided
,
however
, that Parent GP and its counsel shall be given a reasonable opportunity to review and comment on the Proxy Statement before it is filed. Subject to
Section
6.4
, the Proxy Statement shall
include the Board Recommendation. Each of the MLP Entities and the Parent Entities shall cooperate with one another in connection with the preparation of the Proxy Statement. Parent GP and its counsel shall be given a reasonable opportunity to
review and comment on any amendment to the Proxy Statement each time before it is filed with the SEC. MLP shall provide Parent GP and its counsel with (1) any comments or other communications, whether written or oral, that MLP or its counsel
may receive from time to time from the SEC or its staff with respect to the Proxy Statement promptly after receipt of those comments or other communications and (2) a reasonable opportunity to participate in MLPs response to those
comments and to provide comments on that response, including by participating with the MLP or its counsel in any discussions or meetings with the SEC. Each of MLP and Parent shall use its reasonable best efforts to respond as promptly as practicable
to any comments of the SEC with respect to the Proxy Statement, and MLP shall use its reasonable best efforts to cause the definitive Proxy Statement to be mailed to the Unitholders as promptly as practicable after the SEC indicates that it has no
further comments on the Proxy Statement. Except as contemplated by
Section
6.4
, no amendment or supplement to the Proxy Statement shall be filed without the approval of the MLP GP Board, the GP Conflicts Committee and
Parent GP, which approval shall not be unreasonably withheld, conditioned or delayed. If, at any time prior to the Effective Time, any information relating to any of the MLP Entities or any of the Parent Entities or any of their respective
Affiliates, officers or directors is discovered by MLP, Parent or Parent GP that should be set forth in an amendment or supplement to the Proxy Statement so that such documents would not include any misstatement of a material fact or omit to state
any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party hereto that discovers such information shall promptly notify the other parties hereto and an appropriate
amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by Applicable Law, disseminated to the Unitholders.
Section 6.2
Ordinary Course of Business
. From the date of this Agreement until the Effective Time, each of the MLP Entities and
the Lightfoot Entities will and the MLP Entities and the Lightfoot Entities will cause each of their respective Subsidiaries to (a) conduct its business only in the ordinary course of business consistent with past practice and (b) use its
reasonable best efforts to preserve intact its business organization and legal structure, keep available the services of its current officers, employees and consultants and preserve the goodwill and current relationships with its customers,
suppliers and other Persons with which any MLP Group Entity has significant business relations, except (i) as otherwise expressly contemplated by this Agreement, including
Section
6.3
and
Section
6.3
of the MLP Disclosure Letter, (ii) as expressly required by applicable Law or (iii) as Parent GP may approve in writing (which approval shall not be unreasonably withheld, delayed or conditioned).
Section 6.3
Interim Operations
. In furtherance of, and without limiting, the foregoing
Section
6.2
, from
the date of this Agreement until the Effective Time, except (w) as otherwise expressly contemplated by this Agreement, (x) as expressly required by applicable Law, (y) as Parent GP may approve in writing (which approval shall not be
unreasonably withheld, delayed or conditioned) or (z) as set forth in
Section
6.3
of the MLP Disclosure Letter, each of the MLP Entities (and with respect to
Section
6.3(a)
below, the
Lightfoot Entities) will
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not and will cause all of the MLPs Subsidiaries not to, and the Lightfoot Entities will cause all of the MLP Group Entities not to, directly or indirectly:
(a) (i) issue (including issuing any certificate in connection therewith), grant, sell or otherwise permit to become
outstanding, or authorize the creation of, any additional Equity Interests (whether phantom or otherwise, including any additional Phantom Units) or any additional Rights, including transactions between or among the MLP Group Entities,
except that Joliet may issue common units of Joliet to Arc Terminals Holdings LLC and GE EFS in respect of capital contributions made by them to Joliet provided that, after giving effect to the issuance of any such common units, Arc Terminals
Holdings LLC and GE EFS continue to own 60% and 40%, respectively, of all issued and outstanding Equity Securities of Joliet, or (ii) certificate any existing Partnership Interests;
(b) (i) split, combine or reclassify any of its Equity Interests or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for its Equity Interests, (ii) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase, redeem or otherwise acquire any membership, partnership or
other Equity Securities or (iii) enter into any Contract with respect to the voting of its Partnership Interests or other Equity Securities;
(c) (i) sell, transfer, lease, or otherwise dispose of, or encumber all or any portion of its assets, business or
properties, except for (A) sales, transfers and dispositions of obsolete or worthless equipment, (B) sales, transfers and dispositions of inventory in the ordinary course of business or (C) sales, transfers, assignments, conveyances,
abandonment, allowances to lapse, licenses, sublicenses, covenants not to assert or other disposals of MLP Group Intellectual Property in the ordinary course of business consistent with past practice, (ii) acquire, by merger or otherwise, or
lease any assets or securities or all or any portion of the business or property of any other Person, other than acquisitions of goods and services and the lease of equipment in the ordinary course of business consistent with past practice,
(iii) merge, consolidate or enter into any other business combination transaction with any Person or (iv) convert from any one form of business entity to any other form of business entity;
(d) make or declare dividends or distributions to the Unitholders or holders of Phantom Units (whether in cash, assets, stock
or other securities of any MLP Group Entity or of any other Person), other than regular quarterly cash distributions to the Unitholders and holders of Phantom Units declared and made in accordance with and subject to the limitations of
Annex
I
of the MLP Disclosure Letter;
(e) amend any MLP Charter Document, the MLP GP LLC Agreement or any similar governing
document of any of the MLP Group Entities;
(f) (i) enter into any Contract that would have been an MLP Material
Contract if in effect on the date of this Agreement (other than any Contract of the type contemplated by clause (o) of this
Section
6.3
, as to which the provisions of
clause (o)
shall apply), (ii) amend any
Contract in existence on the date hereof that is not a Material Contract on the date hereof if, after giving effect to such amendment, it would be an MLP Material Contract (unless such Contract is of the type contemplated by
clause
(o)
of
Section
6.3
and, after giving effect to such amendment, would constitute a Contract of the type contemplated by
clause (o)
of this
Section
6.3
, in which case the
provisions of
clause
(o)
shall apply regardless of whether the Contract is a new agreement) or (iii) establish or adopt any collective bargaining, union, labor or similar Contract;
(g) materially modify or amend, or waive or assign any material rights under, or terminate or assign, any MLP Material
Contract;
(h) waive, release, settle or assign its rights with respect to any Proceeding in which any of the MLP Group
Entities, Gulf LNG or a counterparty are seeking (A) monetary damages if the amount to be paid, waived, released or assigned by the MLP Group Entities, exclusive of amounts covered by insurance, exceeds as to any such Proceeding $250,000 or
(B) injunction or other equitable relief that would restrict or limit in any respect, other than a
de minimis
respect, the operations or ability to operate the business of the MLP Group Entities as conducted on the date hereof;
provided
, that nothing in this
Section
6.3(h)
shall be construed to restrict the ability of a Person that is not a Party or a Subsidiary of a Party or a Representative of a Party to take any action that would
otherwise be prohibited by this
Section
6.3(h)
;
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(i) (i) implement or adopt any change in its GAAP accounting principles,
practices or methods, other than as may be required by GAAP or SEC rules and regulations or (ii) write up, write down or write off the book value of any assets, except in accordance with GAAP consistently applied;
(j) fail in any material respect to use reasonable best efforts to maintain, with financially responsible insurance companies,
insurance in such amounts and against such risks and losses as is maintained by it on the date of this Agreement;
(k) (i) make, change or revoke any of its express or deemed elections relating to Taxes, including elections for any and
all Subsidiaries or other investments where it has the capacity to make such binding election, (ii) settle or compromise any material Proceeding relating to Taxes, (iii) file any amended Tax Return, (iv) surrender any right to claim
any material refund of Taxes, (v) consent to any extension or waiver of the limitation period applicable to any Taxes (other than as a result of any extensions of time to file Tax Returns obtained in the ordinary course of business consistent
with past practices) or (vi) change in any material respect any of its methods of reporting income or deductions for federal income Tax purposes from those employed in the preparation of its federal income Tax Return for the most recent taxable
year for which a return has been filed;
(l) except as expressly required by the terms of any MLP Benefit Plan, including
any form thereof, as in effect on the date hereof that has been made available to Parent on or prior to the date hereof, (i) increase or accelerate the payment or vesting of the compensation, benefits or rights payable to or accrued for, or to
become payable to or accrued for, any current or former employee, officer, individual manager or director of any MLP Group Entity or any of their beneficiaries, (ii) grant any severance or termination pay to any employee, officer, individual
manager or director of any MLP Group Entity, (iii) establish, adopt, enter into, amend or terminate any MLP Benefit Plan, (iv) grant, pay, award or accelerate the vesting of, or commit to grant, pay, award or accelerate the vesting of, any
bonuses or incentive compensation, any equity-based awards (including phantom equity awards) or any other compensation, (v) fund any rabbi trust or similar Contract, (vi) other than in the ordinary course of business consistent with past
practice, terminate the employment or services of any officer or other employee whose target annual base compensation is greater than $200,000, other than for cause, (vii) forgive any loans of any current or former employee, manager, officer,
director or consultant of any MLP Group Entity or the Lightfoot Entities, (viii) hire any officer, employee, independent contractor or consultant whose target annual base compensation is greater than $200,000 or (ix) enter into or modify
or amend any indemnification or similar Contract with any current or former employee, individual manager, officer or director of any MLP Entity;
(m) (i) (A) incur, assume, guarantee or otherwise become liable, directly, contingently or otherwise, for any Indebtedness
for borrowed money (other than any borrowings or draws or letters of credit under the Existing MLP Credit Facility in the ordinary course of business consistent with past practice) or (B) redeem, prepay or repurchase any Indebtedness prior to
the stated maturity thereof (other than repayment of revolving credit borrowings under the Existing MLP Credit Facility in the ordinary course of cash management practices of the MLP), (ii) enter into any material lease (whether operating or
capital), (iii) create any Lien (other than Permitted Liens) on its property or the property of its Subsidiaries in connection with any
pre-existing
Indebtedness, new Indebtedness or lease except with
regard to the Existing MLP Credit Facility, (iv) make or commit to make any capital expenditures, other than such capital expenditures as are contemplated by the MLPs annual budget as approved by the MLP GP Board and in effect on the date
hereof (a copy of which has been made available to Parent GP) (the
MLP Budget
) or as otherwise required on an emergency basis or for the safety of individuals, assets or the environment and MLP GP promptly notifies Parent GP of
the same, (v) issue or sell any debt securities or warrants or other rights to acquire any debt security of any MLP Group Entity, (vi) enter into any material keep well or other Contract to maintain any financial statement
condition of another Person or (vii) enter into any Contract having the economic effect of any of the foregoing;
(n)
make any loans, advances or capital contributions to, or investments in, any Person, other than (i) travel, relocation expenses and similar expenses or advances to its employees in the ordinary course of
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business consistent with past practice, (ii) trade credit granted in the ordinary course of business consistent with past practice, (iii) capital contributions to, or investments in,
any Subsidiary of the MLP by the MLP or any Subsidiary of the MLP, in each case solely to the extent described on
Section
6.3(n)
of the MLP Disclosure Letter, (iv) capital contributions to Gulf LNG with respect to the
Gulf LNG Interest in the ordinary course of business consistent with past practices, (v) capital contributions to Joliet with respect to the Equity Securities in Joliet owned by Arc Terminals Holdings LLC in the ordinary course of business
consistent with past practices; and (vi) capital contributions as are contemplated by the MLP Budget;
(o) enter into
any new Contract with respect to the terminaling, transport, throughput, storage, heating, blending, mixing or sale of petroleum products, other hydrocarbons or other substances other than in the ordinary course of business consistent with past
practice;
(p) implement or otherwise enter into any derivative security with respect to hydrocarbon production or
marketing or enter into any Derivative Transaction other than in the ordinary course of business consistent with past practice;
(q) take any action that is intended or would reasonably be expected to result in any of the conditions set forth in
Article
VII
not being satisfied;
(r) enter into any transactions or Contracts with any Affiliate or other Person that would be
required to be disclosed by MLP under Item 404 of Regulation
S-K
of the SEC other than, for the avoidance of doubt, reimbursements made by the MLP to MLP GP pursuant to
Section
7.5
of
the MLP Partnership Agreement and to any Lightfoot Entity pursuant to the Services Agreement, dated November 12, 2013, entered into by the MLP, MLP GP and LCP GP in connection with the MLPs initial public offering;
provided
that
solely for purposes of this
Section
6.3(r)
, MLP shall not be deemed to be an Affiliate of any wholly owned Subsidiary of MLP, and no wholly owned Subsidiary of MLP shall be deemed to be an Affiliate of MLP or any other
wholly owned Subsidiary of MLP;
(s) conduct the businesses of any MLP Group Entity in a manner that would cause any MLP
Group Entity to become an investment company subject to registration under the Investment Company Act;
(t)
fail to (i) make or cause to be made any capital call contemplated by
Section
6.3(n)
of the MLP Disclosure Letter (solely to the extent relating to Joliet Bulk, Barge & Rail LLC, as expressly set forth
therein), or (ii) fund or cause to be funded any capital contributions requested to be funded by MLP or its Subsidiaries to Gulf LNG or Joliet pursuant to the terms of the Gulf LNG LLC Agreement or the Joliet LLC Agreement, respectively, or
that is contemplated by
Section
6.3(n)
of the MLP Disclosure Letter (solely to the extent relating to Joliet Bulk, Barge & Rail LLC, as expressly set forth therein); or
(u) agree or commit to do anything prohibited by
clauses (a)
through
(s)
of this
Section
6.3
.
Section 6.4
No Solicitation or Withdrawal of Recommendation
.
(a)
No Solicitation
.
(i) Except as set forth in
Sections 6.4(a)(ii)
and
6.4(a)(iii)
, the MLP Entities and the Lightfoot Entities agree
for themselves that neither they nor any of their Subsidiaries, nor any of their respective officers, managers or directors (including the MLP GP Board) shall, and that they shall instruct and cause their respective controlled Affiliates, and use
their reasonable best efforts to cause their respective
non-controlled
Affiliates and Representatives (collectively, the
MLP
Non-Solicit
Parties
), not
to, directly or indirectly:
(A) initiate, solicit, knowingly facilitate or knowingly encourage any inquiries or
discussions regarding, or the making or submission of, any proposal, request or offer that constitutes, or could reasonably be expected to lead to, any Alternative Proposal;
(B) approve, endorse, recommend or enter into any Contract or agreement in principle, whether written or oral, with any Person
(other than Parent and Merger Sub) concerning an Alternative Proposal (other than negotiating and entering into a confidentiality and standstill agreement as described in
Section
6.4(a)(iii)
) (an
Alternative
Acquisition Agreement
);
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(C) terminate, amend, release, modify, or fail to enforce any provision of, or
grant any permission, waiver or request under, any standstill, confidentiality or similar Contract entered into by one or more of the MLP Group Entities in respect of or in contemplation of an Alternative Proposal (other than to the extent the GP
Conflicts Committee determines in good faith, after consultation with its outside financial and legal advisors, that failure to take any such actions under this
Section
6.4(a)(i)(C)
would constitute a breach of its duties
under the MLP Partnership Agreement, including any duty to act in the best interests of MLP or the Public Unitholders thereunder);
(D) conduct, engage in, continue or otherwise participate in any discussions or negotiations regarding any Alternative
Proposal;
(E) furnish any
non-public
information relating to any of the MLP Group
Entities, or afford access to the books or records or Representatives of any of the MLP Group Entities, to any third party that, to the Knowledge of the MLP Entities, after consultation with its Representatives, is reasonably likely to make, or has
made, an Alternative Proposal;
(F) take any action to make the provisions of any Takeover Laws inapplicable to any
transactions contemplated by any Alternative Proposal; or
(G) resolve or publicly propose or announce to do any of the
foregoing.
(ii) Notwithstanding anything to the contrary in this Agreement and subject to the conditions in
Section
6.4(a)(iii)
and solely in response to a Bona Fide Alternative Proposal made on or after the date of this Agreement and prior to obtaining MLP Unitholder Approval, the MLP
Non-Solicit
Parties may, with respect to the Person that has made such Bona Fide Alternative Proposal:
(A) in response to a request therefor by such Person, provide information or afford access to the books and records or
Representatives of any of the MLP Group Entities; and
(B) engage or participate in any discussions or negotiations with
such Person (and its Representatives) with respect to such Bona Fide Alternative Proposal. For the avoidance of doubt, the discussions and negotiations with such Person (or its Representatives) shall include discussions and negotiations of all of
the Transactions (i.e., not only the Merger or GP Equity Transfer), and the appropriate MLP
Non-Solicit
Parties shall be entitled to participate in such discussions or negotiations.
(iii) The MLP Entities may not take the actions described in
Section
6.4(a)(ii)
unless, prior to
taking any such action:
(A) the MLP Entities have (1) received from such Person an executed confidentiality and
standstill agreement on terms that are no less restrictive than those contained in the Confidentiality Agreement (and compliant with the last sentence of
Section
6.4(g)
) and (2) disclosed to Parent GP (and, if
applicable, substantially contemporaneously provided copies of) any
non-public
information to be provided to such Person and any books or records to which such Person will be afforded access, in each case, to
the extent not previously provided to Parent GP;
(B) the MLP Entities have delivered to Parent GP written notice prior to
taking any such action (1) stating that the MLP GP Board intends to take such action, (2) stating that the GP Conflicts Committee has made the determination set forth in
Section
6.4(a)(iii)(C)
and
(3) including an unredacted copy of such Bona Fide Alternative Proposal (including any materials relating to such Persons proposed equity and debt financing, if any) and an executed copy of the confidentiality agreement described in
Section
6.4(a)(iii)(A)
; and
(C) the GP Conflicts Committee has determined in good faith, after
consultation with its outside financial and legal advisors, that such Bona Fide Alternative Proposal either constitutes a Superior Proposal or is reasonably likely to result in a Superior Proposal and that failure to take
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such action would constitute a breach of its duties under the MLP Partnership Agreement, including any duty to act in the best interests of MLP or the Public Unitholders thereunder.
(b)
No Withdrawal of Recommendation
. Except as set forth in
Section
6.4(c)
, no MLP
Non-Solicit
Party shall:
(i) withdraw, qualify or modify, in a manner adverse to Parent,
Parent GP or Merger Sub, the Board Recommendation;
(ii) fail to announce publicly, within 10 Business Days after a tender
offer or exchange offer relating to any securities of MLP has been commenced, that the MLP GP Board recommends rejection of such tender or exchange offer;
(iii) fail to include the Board Recommendation in the Proxy Statement distributed to the Unitholders in connection with the
Transactions;
(iv) make any other public statement that is inconsistent with the Board Recommendation;
(v) approve, adopt or recommend any Alternative Proposal; or
(vi) resolve or publicly propose to do any of the foregoing (any such prohibited action described in
clause 6.4(b)(i)
through this
clause 6.4(b)(vi)
being referred to as a
Withdrawal of Recommendation
);
provided
that the
making of any determination of the MLP GP Board (or any committee thereof) to provide, or the provision of, a Superior Proposal Notice or an Intervening Event Notice in compliance with the terms of this Agreement shall not, in and of itself, be
deemed a Withdrawal of Recommendation.
(c)
Certain Permitted Withdrawals of Recommendation
. Subject to
Section
6.4(d)
, at any time prior to obtaining MLP Unitholder Approval, the GP Conflicts Committee may effect, or cause the MLP Entities to effect, as the case may be, a Withdrawal of Recommendation if: (i) the GP
Conflicts Committee determines that (A) after complying with
Section
6.4(d)(i)
, a Bona Fide Alternative Proposal constitutes a Superior Proposal or (B) after complying with
Section
6.4(d)(ii)
, an Intervening Event has occurred and is continuing and (ii) the GP Conflicts Committee determines in good faith, after consultation with its outside financial and legal advisors, that approving the
Merger would constitute a breach of its duties under the MLP Partnership Agreement, including any duty to act in the best interests of MLP or the Public Unitholders thereunder.
(d)
Procedure Prior to Withdrawal of Recommendation
.
(i)
Superior Proposal
. The GP Conflicts Committee shall be entitled to effect, or cause the MLP Entities to effect, a
Withdrawal of Recommendation in connection with a Superior Proposal (to the extent permitted under
Section
6.4(c)
), only if (A) the GP Conflicts Committee shall have delivered to Parent GP a written notice (a
Superior Proposal Notice
) (1) stating that the GP Conflicts Committee intends to take such actions pursuant to
Section
6.4(c)
, (2) stating that the GP Conflicts Committee has made the
determinations set forth in
Sections 6.4(c)(i)(A)
and
6.4(c)(ii)
and (3) including an unredacted copy of such Superior Proposal and proposed an unredacted form of any Alternative Acquisition Agreement related to such Superior
Proposal (including any materials relating to such Persons proposed equity and debt financing, if any) and (B) the Negotiation Period shall have expired and the Superior Proposal remains a Superior Proposal at the end of the Negotiation
Period. During the four Business Day period commencing on the date of Parent GPs receipt of such Superior Proposal Notice (such period, as may be extended pursuant to this
Section
6.4(d)(i)
, the
Negotiation
Period
), the MLP Entities shall engage, and shall cause their Representatives to be available for the purpose of engaging, in good faith negotiations with Parent GP (to the extent Parent GP desires to negotiate) regarding an amendment of
this Agreement so that the Alternative Proposal that is the subject of the Superior Proposal Notice ceases to be a Superior Proposal. Each time the financial or other material terms or
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conditions of such Bona Fide Alternative Proposal (or terms or conditions related thereto, such as the proposed equity and debt financing) are amended or modified, the MLP Entities shall be
required to deliver to Parent GP a new Superior Proposal Notice (including, as attachments thereto, amended forms of the written Alternative Acquisition Agreements relating to such Bona Fide Alternative Proposal) and the Negotiation Period shall be
extended by an additional two Business Days from the date of Parents receipt of such new Superior Proposal Notice.
(ii)
Intervening Event
. The GP Conflicts Committee shall be entitled to effect, or cause the MLP Entities to effect, a
Withdrawal of Recommendation in connection with, an Intervening Event (to the extent permitted under
Section
6.4(c)
), only if (A) the GP Conflicts Committee shall have delivered to Parent GP prior to obtaining MLP
Unitholder Approval a written notice (an
Intervening Event Notice
) (1) stating that the GP Conflicts Committee intends to take such actions pursuant to
Section
6.4(c)
, (2) stating that the GP Conflicts
Committee has made the determinations set forth in
Sections 6.4(c)(i)(B)
and
6.4(c)(ii)
and (3) including a summary, in all material respects, of the Intervening Event and (B) the Intervening Event Negotiation Period shall
have expired. During the four Business Day period commencing on the date of Parents receipt of such Intervening Event Notice (such period, as may be extended pursuant to this
Section
6.4(d)(ii)
, the
Intervening Event Negotiation Period
), the MLP Entities shall engage, and shall cause their Representatives to be available for the purpose of engaging, in good faith negotiations with Parent GP (to the extent Parent GP desires to
negotiate) regarding an amendment of this Agreement so that the GP Conflicts Committee would no longer be permitted to take such actions pursuant to
Section
6.4(c)
. Each time there is a material change to the facts or
circumstances relating to the Intervening Event, the MLP Entities shall be required to deliver to Parent GP a new Intervening Event Notice (including, as attachments thereto, a summary of the changes to the facts and circumstances relating to the
Intervening Event) and the Intervening Event Negotiation Period shall be extended by an additional two Business Days from the date of Parents receipt of such new Intervening Event Notice.
(e)
Certain Permitted Disclosure
. Nothing contained in this
Section
6.4
shall be deemed to
prohibit the MLP Entities from complying with their required disclosure obligations under applicable Law with regard to an Alternative Proposal or an Intervening Event;
provided
,
however
, that none of MLP, MLP GP or the MLP GP Board
(or any committee thereof) shall effect any Withdrawal of Recommendation, except in accordance with
Section
6.4(c)
and
Section
6.4(d)
; and
provided
,
further
, that in no event shall
any
(i) Stop-Look-and-Listen
communication contemplated by Rule
14d-9(f)
under the Exchange Act or
(ii) public announcement or other public disclosure regarding any Alternative Proposal or Intervening Event that is required by applicable Law or the rules of any stock exchange on which the Common Units are then listed, and which does not
expressly effect a Withdrawal of Recommendation, be deemed to be a Withdrawal of Recommendation or to violate this
Section
6.4
. Disclosure of the type described in this
Section
6.4(e)
(other than
the type described in the second proviso of the foregoing sentence) that is not an express rejection of any Alternative Proposal or an express confirmation that the Board Recommendation remains in effect shall be deemed to be a Withdrawal of
Recommendation.
(f)
Existing Discussions
. The MLP Entities and the Lightfoot Entities shall instruct, and shall
cause their respective controlled Affiliates, Subsidiaries and their respective officers, managers and directors, and shall use their reasonable best efforts to instruct and cause their respective
non-controlled
Affiliates and Representatives and their respective officers, managers and directors, to immediately cease and cause to be terminated any discussions or negotiations with, or any solicitation or
intentional assistance or encouragement of, any Person with respect to any Alternative Proposal (or that could reasonably be expected to lead to or result in an Alternative Proposal) which are ongoing as of the date of this Agreement and request
that any such Person promptly return and destroy (and confirm destruction of) all confidential information concerning the MLP Group Entities. The MLP Entities and the Lightfoot Entities shall take the necessary steps to promptly inform, on the date
of this Agreement, the individuals or entities referred to in the preceding sentence of this
Section
6.4(f)
.
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(g)
Notice
. Without limiting anything in this
Section
6.4
, the MLP Entities shall promptly (and, in any event, within 36 hours) notify Parent GP orally and in writing if any inquiries, proposals or offers with respect to an Alternative Proposal or requests for
non-public
information relating to any of the MLP Group Entities (other than requests for information in the ordinary course of business consistent with past practice and unrelated to an Alternative Proposal) are
received by, or any discussions or negotiations with respect to an Alternative Proposal are sought to be initiated or continued with, any of the MLP Group Entities or the Lightfoot Entities or any of their respective Representatives, indicating, in
connection with such notice, the name of such Person and the material terms and conditions of such discussions, proposals, offers or requests, and including in the written version of such notice, an unredacted copy of any written (including via
electronic transmission) proposals, offers or requests, in each case, including any amendments or modifications thereto. The MLP Entities shall promptly (and, in any event, within 36 hours after any amendment or modification of, or development with
respect to, any such, proposal, offer, request or Alternative Proposal, or at the reasonable request of Parent GP) notify Parent GP orally and in writing of the status of any such inquiries, proposals, offers or requests, including any material
developments, notifications, amendments or modifications thereto and furnish to Parent GP copies of any written inquiries, correspondence and draft documentation in connection with such discussions, proposals, offers or requests. The MLP Entities
and the Lightfoot Entities shall not, and shall cause their respective Subsidiaries and Representatives not to, enter into any Contract that would prohibit them from providing the information required to be provided to Parent GP pursuant to this
Section
6.4(g)
.
Section 6.5
Regulatory, Financing and Other Authorizations
.
(a)
Cooperation
. Subject to the terms and conditions of this Agreement, the Parent Entities, the MLP Entities and the
Lightfoot Entities will cooperate with each other and use (and will cause their respective Subsidiaries to use) their respective reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary,
proper or advisable under this Agreement and applicable Laws to consummate and make effective the Transactions as soon as practicable, including by (i) filing the Notification and Report Forms pursuant to the HSR Act within 10 Business Days
after the date of this Agreement, (ii) using their respective reasonable best efforts (including complying with its obligations under
Section
6.5(f)
) to obtain as promptly as practicable all Antitrust Consents and
Other Governmental Consents, and the termination or expiration, as applicable, of approvals or waiting periods required under all applicable Antitrust Laws in order to consummate the Transactions, (iii) cooperating with each other in connection
with any review of, inquiry into, investigation of, or challenge to the Transactions under any Antitrust Law by a Governmental Authority and all activities with respect to any requests that may be made by, or any actions, Consents or undertakings
that may be sought by or from, any Governmental Authority in respect of Antitrust Consents and Other Governmental Consents, including determining the manner in which to contest or otherwise respond, by litigation or otherwise, to objections to, or
Proceedings challenging, the consummation of the Transactions and (iv) offering, accepting or agreeing, or committing to agree to a Divestiture Condition with respect to any businesses or assets acquired after the date hereof in order to obtain
any Antitrust Consent or Other Governmental Consent, in each case with such Divestiture Condition contingent upon the occurrence of the Closing;
provided
that nothing in this Agreement will require any of the Parent Entities, the MLP
Entities, the Lightfoot Entities or any of their respective Affiliates to offer, accept or agree, or commit to agree, to, a Divestiture Condition with respect to any businesses or assets owned as of the date hereof in order to obtain any Antitrust
Consent or Other Governmental Consent; and
provided
,
further
, that none of the MLP Entities or the Lightfoot Entities will, without Parent GPs prior written consent, offer, accept or agree, or commit to agree, to, any Divestiture
Condition. Nothing in this
Section
6.5
will limit any applicable rights a Party may have to terminate this Agreement pursuant to
Section
8.1
in a case where
Section
8.1
permits such termination. In exercising the foregoing rights, each of the Parties will act reasonably and as promptly as practicable. Notwithstanding anything in this Agreement to the contrary, the Parent Entities will have the absolute right (but
not the obligation) to contest, at their cost and expense, any challenge to this Agreement by any Governmental Authority, including contesting through a Proceeding initiated by the U.S. Department of Justice or the
A-37
Federal Trade Commission to enjoin any of the Transactions,
provided
that (i) such actions do not prevent the Closing from occurring on or before the Outside Date and (ii) the
Parent Entities afford the MLP Entities, the Lightfoot Entities and their respective Representatives an opportunity to participate in all associated Proceedings,
provided
that the Parent Entities will retain final discretion and authority
with respect to such litigation.
(b)
Financing
.
(i) Parent shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done all
things necessary to arrange, obtain and consummate the Financing on the terms and conditions described in the Commitment Letters (including the exercise of
so-called
flex provisions in the related
fee letter) as promptly as practicable (taking into account the timing of the Marketing Period), including using reasonable best efforts to (i) maintain in full force and effect the Commitment Letters until consummation of the Transactions
(except that Parent may agree to any modification or amendment of the Commitment Letters solely as permitted pursuant to
Section
6.5(b)(iii)
) and to negotiate and execute definitive agreements with respect to the Financing
on the terms contained in the Commitment Letters (including any flex provisions applicable thereto) or on terms that are no less favorable, in any material respect, to Parent than the terms contained in the Commitment Letters (including
any flex provisions applicable thereto), in each case which terms shall not in any adverse respect change, expand or impose new conditions to the funding of the Financing at the Closing or reduce the aggregate amount of the Financing
available to be funded on the Closing Date or materially affect the timing of the Closing Date (the
Financing Agreements
), (ii) satisfy on a timely basis (taking into account the timing of the Marketing Period) all conditions in
the Commitment Letters and such Financing Agreements which are in their control and to consummate the Financing at or prior to the Closing, (iii) enforce their rights under the Commitment Letters and the Financing Agreements including by taking
enforcement action to cause the Financing Sources, lenders and other Persons committing to provide the Financing to comply with their obligations under the Commitment Letters and the Financing Agreements and to fund such Financing at Closing;
provided
,
however
, that Parent shall not be required to take any such enforcement action unless all conditions precedent set forth in
Section
7.1
and
Section
7.2
have been satisfied
(other than those conditions that, by their nature, are to be satisfied at the Closing) and (iv) comply with their obligations in all material respects under the Commitment Letters and the Financing Agreements. Parent shall keep the MLP
Entities and the Lightfoot Entities reasonably informed with respect to any material developments concerning the status of the Financing. Parent shall provide the MLP Entities and the Lightfoot Entities, upon reasonable request, with copies of any
primary material Financing Agreements and such other material information and documentation regarding the Financing as shall be reasonably necessary to allow the MLP Entities and the Lightfoot Entities to monitor the progress of such financing
activities.
(ii) Parent shall promptly (and in any event no later than three (3) Business Days after becoming aware
thereof) notify the MLP Entities and the Lightfoot Entities in writing (i) of any material breach or default (or any event or circumstance that, with or without notice, lapse of time or both, could reasonably be expected to give rise to any
material breach or default) by any party to the Commitment Letters or Financing Agreements of which the Parent Entities become aware, (ii) of the receipt by the Parent Entities or any of their controlled Affiliates or Representatives of any
written notice or other written communication from any Financing Source, any lender or any other Person with respect to any (A) actual, threatened or alleged breach, default, termination or repudiation by any party to the Commitment Letters or
any Financing Agreement (including any proposal by any Financing Source, lender or other Person to withdraw, terminate or reduce the amount of the Financing below the amount contemplated by the Commitment Letters) or (B) material dispute or
disagreement between or among any parties to the Commitment Letters or any Financing Agreement (other than ordinary course negotiations), (iii) if for any reason Parent believe in good faith that it will not be able to obtain all or any portion of
the Financing on the terms contemplated by the Commitment Letters or the Financing
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Agreements and (iv) of the termination or expiration of the Commitment Letters or any Financing Agreement. As soon as reasonably practicable, after the MLP Entities or the Lightfoot Entities
deliver to Parent a written request, Parent shall provide any information reasonably requested by the MLP Entities or the Lightfoot Entities relating to any of the circumstances referred to in this
Section
6.5(b)(ii)
.
(iii) Parent shall not permit or consent to any amendment, supplement, modification or waiver to be made to the Commitment
Letters if such amendment, supplement, modification or waiver would (A) change, expand or impose new conditions precedent to the funding of the Financing from those set forth therein on the date hereof, (B) materially delay the funding of
the Financing thereunder or reasonably be expected to materially impair, delay or prevent the availability of all or a portion of the Financing or the consummation of the Transaction, (C) reduce the aggregate amount of the Financing (including
by changing the amount of fees to be paid or original issue discount of the Financing (except as set forth in any flex provisions existing on the date hereof)) unless additional sources are then made available to finance such increase in fees or
original issue discount or (D) otherwise adversely affect the ability of the Parent Entities to consummate the Transactions or materially delay the timing of the Closing (collectively, the
Restricted Commitment Letter
Amendments
) (except that subject to the limitations set forth in this
Section
6.5(b)(iii)
, Parent may replace, modify, supplement or amend the Commitment Letters to add lenders, lead arrangers, bookrunners,
syndication agents or similar entities that have not executed the Commitment Letters as of the date hereof, so long as such replacement, modification, supplement or amendment would not result in the occurrence of a Restricted Commitment Letter
Amendment). For purposes of this Agreement, references to the
Commitment Letters
shall include such documents as permitted or required by this
Section
6.5(b)(iii)
to be amended, modified or waived, in
each case from and after such amendment, modification or waiver.
(c)
Alternative Financing
.
(i) In the event that any portion of the aggregate amount of the Debt Financing becomes unavailable on the terms and conditions
contemplated by the Debt Commitment Letter, other than as a result of a termination of this Agreement in accordance with its terms, Parent shall (i) promptly notify the MLP Entities and the Lightfoot Entities of such unavailability and, to the
knowledge of Parent, the reason therefor and (ii) use its reasonable best efforts to obtain, as promptly as practicable following the occurrence of such event, any alternative financing arrangement, including from alternative sources, on terms
no less favorable to Parent than the terms of the Debt Commitment Letter and in an amount sufficient to enable the Transactions to be consummated (such arrangement, an
Alternative Financing
; in such event, the terms Debt
Commitment Letter and Commitment Letters shall be deemed to refer to such new commitment letters entered into in connection with such Alternative Financing and the terms Debt Financing and Financing shall be
deemed to refer to the Alternative Financing contemplated thereby).
(ii) Notwithstanding anything to the contrary
contained in this Agreement, nothing contained in this
Section
6.5
shall require, and in no event shall the reasonable best efforts of Parent be deemed or construed to require Parent to pay fees or interest rates (taken as
a whole) applicable to the Debt Financing in excess, other than by a de minimis amount, of those contemplated by the Debt Financing Commitment Letter (including the market flex provisions), or agree to market flex terms (taken as a whole) less
favorable, other than in a de minimis respect, to Parent or the Company than such corresponding market flex term contained in or contemplated by the Debt Financing Commitment Letter (in either case, whether to secure waiver of any conditions
contained therein or otherwise).
(iii) In the event the Debt Commitment Letter is replaced in accordance with
clause
(i)
above, Parent shall provide the MLP Entities and the Lightfoot Entities executed copies of the material documentation relating to any replacement commitment (including any fee letter with respect thereto, redacted in customary form).
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(d)
Financing Cooperation
. Prior to the Closing, the MLP Entities shall,
and shall cause their respective officers, employees, advisors and other representatives to use their reasonable best efforts to, cooperate, at Parents expense, with Parent, Parent GP, Holdings and their advisors in connection with the
arrangement of the Debt Financing or Alternative Financing as may be reasonably requested by Parent, Parent GP or Holdings, including using reasonable best efforts in (i) participating in a reasonable number of meetings, drafting sessions,
presentations, road shows, rating agency and due diligence sessions, sessions with prospective Debt Financing Sources and investors; (ii) furnishing Parent, Parent GP, Holdings and the Debt Financing Sources as promptly as practicable with the
Required Financial Information, and other customary documents (in the case of such other documents, to the extent reasonably requested by Parent GP), to consummate the Debt Financing or the Alternative Financing at the time the Debt Financing or the
Alternative Financing is to be consummated; (iii) reasonably assisting Parent, Parent GP, Holdings and the Debt Financing Sources in the preparation prior to commencement of the Marketing Period of (A) offering documents, private placement
memoranda, bank information memoranda, prospectuses and similar documents required in connection with the Debt Financing or the Alternative Financing and (B) materials for rating agency presentations; (iv) reasonably cooperating with, and
providing access to the Parent Entities counsel to, MLPs legal counsel in connection with any legal opinions that such legal counsel may be required to deliver in connection with the Debt Financing or Alternative Financing;
(v) assisting in the preparation of and executing and delivering any necessary pledge and security documents (including all schedules thereto and any customary perfection certificates reasonably requested by Parent GP) and otherwise reasonably
cooperating with Parent, Parent GP and Holdings in facilitating the granting of a security interest (and perfection thereof) in collateral, guarantees, mortgages, other definitive financing documents or other certificates or documents as may be
reasonably requested by Parent GP; (vi) obtaining customary authorization letters of a member of MLP GPs management with respect to the bank information memoranda and using reasonable best efforts to obtain consents of accountants for use
of their reports in any materials relating to the Debt Financing or Alternative Financing; (vii) taking all corporate actions, subject to the occurrence of the Closing, reasonably requested by Parent GP necessary to permit the consummation of
such Debt Financing or Alternative Financing; (viii) providing unaudited consolidated quarterly financial statements of MLP and its Subsidiaries (excluding footnotes) for each quarter ended at least 45 days before the Closing, consisting of a
balance sheet, income statement and statement of cash flows; (ix) assisting Parent and Parent GP in obtaining legal opinions, surveys and title insurance as reasonably requested by Parent GP; and (x) providing Parent, Parent GP and
Holdings with all documentation and other information with respect to MLP and its Subsidiaries as shall have been reasonably requested in writing by Parent GP at least eight Business Days prior to the Closing Date and that is required in connection
with the Debt Financing and Alternative Financing by regulatory authorities under applicable know your customer and anti-money laundering rules and regulations, including the Patriot Act, in each case no later than three Business Days
prior to the Closing Date. Notwithstanding the foregoing, the MLP Entities shall not be required to provide any cooperation or assistance under this
Section
6.5
to the extent doing so would (i) unreasonably interfere
with the ongoing business or operations of MLP or any of its Subsidiaries, (ii) require MLP or any of its Subsidiaries to take any action that would conflict with or violate any law or subject any director, manager, officer or employee of MLP
or any of its Subsidiaries to any actual personal liability, (iii) require providing access to or disclose information that MLP reasonably determines could jeopardize any attorney client privilege of, or conflict with any confidentiality
requirements (not created in contemplation hereof) applicable to, MLP or any of its Subsidiaries, (iv) require any of the MLP Group Entities to take any action that would reasonably be expected to result in a breach of any Contract or subject
it to actual or potential liability, to bear any cost or expense or to pay any commitment or other similar fee or make any other payment (other than reasonable
out-of-pocket
costs that are reimbursed by Parent) or incur any other liability of any kind or provide or agree to provide any indemnity, (v) other than in
connection with the customary authorization letter referred to in
clause (vii)
above, require any of the MLP Group Entities to execute prior to the Closing any definitive financing documents, including any credit or other agreements,
pledge or security documents, or other certificates, legal opinions or documents or (vi) require MLP GP Board in place prior to Closing to enter into any resolutions or take similar action. MLP hereby consents to the use of its logos and logos
of its Subsidiaries
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in connection with the Debt Financing or Alternative Financing. Parent shall indemnify, defend and hold harmless the MLP Entities and their respective Representatives from and against any and all
liabilities, losses, damages, claims, costs, expenses (including attorneys fees), interest, awards, judgments, penalties suffered or incurred and amounts paid by any of them in connection with the Debt Financing or Alternative Financing,
including any action taken in accordance with this
Section
6.5(d)
and any information utilized in connection therewith (other than historical financial information relating to the MLP and its Subsidiaries provided in
writing by the MLP or its Subsidiaries expressly for use in connection with the Debt Financing or Alternative Financing) or except to the extent such losses result from actual fraud of any of the MLP Entities or their respective Representatives.
Parent shall, promptly upon request by MLP, reimburse the MLP Entities for all reasonable and documented
out-of-pocket
costs (including reasonable attorneys fees)
incurred by the MLP Entities in connection with this
Section
6.5(d)
.
(e)
Information
.
Subject to applicable Law, each Party will, upon request by the any other Party, furnish the other with all information concerning itself, its Subsidiaries, directors, officers, members, managers, general partners and stockholders and such other
matters as may be necessary or advisable in connection with any statement, filing, notice or application made by or on behalf of any Party to any Governmental Authority or other Person in connection with the Parties respective obligations
under
Section
6.5(a)
.
(f)
Fees and Other Costs of Governmental Consents
. Each of the
Parties will be responsible for its own respective fees, costs and expenses, including costs and expenses of any necessary experts or consultants, incurred by such Party, as applicable, in connection with any review of, inquiry into, investigation
of, or challenge to any of the Transactions;
provided
that Parent will be responsible for paying the filing fee under the HSR Act and any filing fee associated with any other applicable Antitrust Laws.
(g)
Notification Requirements
. Each Party will promptly notify the other Parties of any communication it or any of its
Affiliates receives from any Governmental Authority relating to the matters that are the subject of this Agreement;
provided
that such notice must be delivered within 36 hours if the communication is a Divestiture Request. The Parties will
coordinate and cooperate fully with each other in exchanging such information and providing such assistance as the other Party may reasonably request in connection with the foregoing. The Parties will provide each other with copies of all filings
and all material correspondence or communications between them or any of their Representatives, on the one hand, and any Governmental Authority or members of its staff, on the other hand, with respect to this Agreement and the Transactions. The
Parties will use reasonable best efforts to share information protected from disclosure under the attorney-client privilege, work product doctrine, joint defense privilege or any other privilege pursuant to this section so as to preserve any
applicable privilege.
(h)
Third Party Approvals
. Subject to the terms and conditions of this Agreement (including
Section
6.5(f)
), each of the Parties will cooperate and use their respective commercially reasonable efforts to prepare all documentation, to effect all filings, to obtain all permits, consents, approvals and authorizations
of all Governmental Authorities and third parties necessary to consummate the Transactions and to comply with the terms and conditions of all material permits, consents, approvals and authorizations and to cause the Transactions to be consummated as
expeditiously as practicable. Each of the Parties has the right to review in advance, and to the extent practicable each will consult with the other Parties, in each case subject to applicable Laws relating to the exchange of information, with
respect to, all material written information submitted to any third party or any Governmental Authorities in connection with the transactions contemplated by this Agreement. In exercising the foregoing right, each of the Parties hereto agrees to act
reasonably and promptly. Each Party hereto agrees that it will consult with the other Parties with respect to the obtaining of all material permits, consents, approvals and authorizations of all third parties and Governmental Authorities necessary
or advisable to consummate the transactions contemplated by this Agreement, and each Party will keep the other Parties apprised of the status of material matters relating to completion of the transactions contemplated hereby.
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Section 6.6
Public Announcements
. The initial press release with respect to the
execution of this Agreement shall be a joint press release to be reasonably agreed upon by Parent GP and MLP GP. Parent GP and MLP GP will not, and each of the foregoing will cause its Representatives not to, issue any public announcements or make
other public disclosures regarding this Agreement or the Transactions, without the prior written approval of the Parties;
provided
,
however
, that a Party or its Representatives may issue a public announcement or other public
disclosures required by Law or the rules of any stock exchange upon which such Partys or its parent entitys capital stock is traded,
provided
such Party affords the other Parties a reasonable opportunity to first
review the content of the proposed disclosure and provide reasonable and timely comment regarding same;
provided
,
however
, that this
Section
6.6
shall not be deemed to restrict in any manner
MLPs ability to communicate with its employees and that MLP shall not be required by this
Section
6.6
to consult with any other Party with respect to a public announcement in connection with the receipt and existence
of a Bona Fide Alternative Proposal and matters related thereto or a Withdrawal of Recommendation, subject to the obligations set forth in
Section
6.4
.
Section 6.7
Access to Information; Confidentiality
.
(a) Upon reasonable notice and subject to applicable Laws relating to the exchange of information, each of the MLP Entities and
the Lightfoot Entities will (i) afford Parent GP and its Representatives reasonable access (and, with respect to books and records, the right to copy), during normal business hours, to their respective officers, employees, agents, properties,
assets, books, offices, facilities, Contracts, Tax Returns, Permits and records and other information reasonably requested by Parent (in each case, whether in physical or electronic form), (ii) furnish promptly during normal business hours such
information concerning the business, properties, offices, facilities, Contracts, Tax Returns, Permits, assets and liabilities of the MLP Group Entities as Parent GP or its Representatives reasonably request, (iii) reasonably cooperate with
Parent GP and its Representatives to organize and facilitate meetings among Parent GP and its Representatives and the MLP Entities and their respective Representatives to be located at the offices and facilities of the MLP Group Entities at such
times as Parent GP may reasonably request, (iv) use reasonable best efforts to furnish or produce information related to the financial or Tax records of the MLP Group Entities if reasonably requested by Parent GP (which, for purposes of this
Section
6.7
, will be deemed to be furnished or produced upon MLP entering into an engagement with its regular external advisors to furnish such information to Parent GP) and (v) reasonably cooperate with Parent GP and
its Representatives with respect to communications to, and to organize and facilitate meetings with, customers, suppliers and other key business relations of the MLP Group Entities as Parent GP may reasonably request;
provided, however
, that
such access shall be provided on a basis that minimizes the disruption to the operations of the MLP Entities and in no event shall include invasive sampling or testing of the Environment; and
provided further
, that the foregoing will not
require the MLP Entities (i) to permit any inspection, or to disclose any information, that in the reasonable judgement of the MLP Entities (after consultation with its outside legal counsel) would (A) result in the disclosure of any trade
secrets of third parties or violate any of its obligations with respect to confidentiality if the MLP Entities have used reasonable best efforts to obtain the Consent of such third party to such inspection or disclosure or (B) result in a
violation of any Antitrust Laws, (ii) to disclose any privileged information of the MLP Group Entities to the extent such disclosure would result in the loss of such privilege (in each case, it being agreed that the MLP Entities shall give
notice to Parent of the fact that it is withholding such access or information and thereafter the MLP Entities shall use their respective reasonable best efforts to cause such access or information, as applicable, to be provided, or made available,
in a manner that would not reasonably be expected to cause such a disclosure, violation or waiver) or (iii) to disclose any information relating to the MLP Entities consideration of the Transactions, including the minutes of the GP
Conflicts Committee.
(b) The MLP Entities and the Lightfoot Entities will furnish promptly to the Parent Entities, and the
Parent Entities will furnish promptly to the MLP Entities and the Lightfoot Entities (i) a copy of each report, schedule and other document filed or submitted by any of them pursuant to the requirements of federal or state securities Laws and a
copy of any communication (including comment letters) received by any of them from the SEC concerning compliance with securities Laws and (ii) all other information concerning
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their and their respective Subsidiaries business, properties and personnel as the Parent Entities or the MLP Entities and the Lightfoot Entities, as the case may be, may reasonably request;
provided
,
however
, that, notwithstanding anything to the contrary herein and notwithstanding any right to information under Law (to the extent such right under Law can be waived), except as specifically provided in
Section
6.18(d)
, none of the MLP Group Entities, the Lightfoot Entities or their respective Affiliates or holders of their Equity Interests shall have the right at any time to examine the Tax Returns, Tax work papers,
financial statements or books and records of the Parent, Merger Sub or their respective Affiliates for any purpose.
(c)
Except for disclosures permitted by the terms of the Confidentiality Agreement, Parent GP and its Representatives will hold all information received from the MLP Entities pursuant to this
Section
6.7
in confidence in
accordance with the terms of the Confidentiality Agreement.
(d) Prior to and after the Closing, the Lightfoot Entities and
their Affiliates shall provide Parent and Parent GP access to the personnel, books, work papers and records of the Lightfoot Entities and their Affiliates relating to any of the MLP Group Entities to the extent reasonably necessary to enable Parent
and Parent GP to prepare financial statements of the MLP Group Entities in such form and covering such periods as may be required by any applicable securities Laws to be filed with the SEC. Furthermore, the Lightfoot Entities and their Affiliates
shall use their commercially reasonable efforts to cause the independent public accountants of the MLP Group Entities to provide any consent necessary to the filing of such financial statements with the SEC and to provide such customary
representation letters as are necessary in connection therewith. All of the financial statements, reports, opinions and related activities to be prepared, provided, delivered, made available or undertaken pursuant to this
Section
6.7(d)
shall be prepared, provided, delivered, made available and undertaken at the sole cost and expense of Parent.
(e) For a period of three years following the Closing, the Lightfoot Entities and their Affiliates shall retain all books,
records, information and documents in possession of the Lightfoot Entities and their Affiliates that are necessary to prepare and audit financial statements with respect to the assets and liabilities of, or otherwise relating to, the MLP Group
Entities, except to the extent originals or copies thereof are transferred to Parent and Parent GP in connection with Closing.
(f) No investigation, or information received, pursuant to this
Section
6.7
will modify any of the
representations and warranties of the Parties.
Section 6.8
Notification of Certain Matters
. The MLP Entities and the
Lightfoot Entities will give prompt notice to Parent GP, and Parent GP will give prompt notice to the MLP Entities and the Lightfoot Entities, of (a) any notice or other communication received by such Party (or its Subsidiaries, Affiliates or
Representatives) from any Governmental Authority in connection with the Transactions or from any Person alleging that the obtaining or making of Consent from or with such Person is or may be required in connection with the Transactions, if the
subject matter of such communication or the failure of such Party to obtain such Consent is reasonably likely to be material to any of the Parties, (b) the discovery of any fact or circumstance that, or the occurrence or
non-occurrence
of any event the occurrence or
non-occurrence
of which, would result in the failure to be satisfied of any of the conditions to the Closing in
Article
VII
and (c) any material failure of such Party to comply with or satisfy any covenant or agreement to be complied with or satisfied by it hereby which would result in the failure to be satisfied of any of the conditions to the Closing in
Article VII
;
provided
,
however
, that the delivery of any notice pursuant to this
Section
6.8
shall not cure any breach of representation, warranty, covenant or agreement contained in this Agreement or
otherwise limit or affect the remedies available hereunder to the Party receiving such notice;
provided
,
further
, that in the case of
clauses (b)
and
(c)
, the failure to comply with this
Section
6.8
shall not result in the failure to be satisfied of any of the conditions to the Closing in
Article VII
, or give rise to any right to terminate this Agreement under
Article VIII
, if the
underlying fact, circumstance, event or failure would not in and of itself give rise to such failure or right.
Section 6.9
Indemnification and Insurance
.
(a) From and after the Effective Time, Parent and the Surviving Entity shall
indemnify, defend and hold harmless to the fullest extent permitted under Applicable Law each Indemnified Person against all
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liabilities, losses, damages, claims, costs, expenses (including attorneys fees), interest, awards, judgments, fines, penalties suffered or incurred and amounts paid in settlement in
connection with any claim, action, suit, proceeding or investigation arising out of or pertaining to acts or omissions, or alleged acts or omissions, by any Indemnified Person in such Indemnified Persons capacity as such, whether commenced,
asserted or claimed before or after the Effective Time to the extent such Indemnified Person would be entitled to be indemnified in respect of liabilities for such acts or omissions under the MLP GP LLC Agreement or the MLP Partnership Agreement (or
in the comparable governing documents of any Subsidiary of MLP) or under applicable Law. In the event of any Proceeding in respect of any act or omission by an Indemnified Person that is subject to indemnification pursuant to the immediately
preceding sentence, (i) Parent and the Surviving Entity shall pay, as incurred, the fees and expenses of counsel selected by the Indemnified Person, which counsel shall be reasonably acceptable to Parent and the Surviving Entity, in advance of
the final disposition of any such Proceeding to the fullest extent permitted by Applicable Law and, if required, upon receipt of any undertaking required by Applicable Law to repay the amounts so advanced to the extent it is ultimately determined
that such Indemnified Party is not entitled to indemnification, and (ii) Parent and the Surviving Entity will cooperate in the defense of any such matter; provided, however, Parent and the Surviving Entity shall not be liable for any settlement
effected without their written consent (which consent shall not be unreasonably withheld or delayed), and provided further, that Parent and the Surviving Entity shall not be obligated pursuant to this
Section
6.9(a)
to pay
the fees and disbursements of more than one counsel for all Indemnified Persons in any single Proceeding, unless, in the good faith judgment of any of the Indemnified Persons, there is or may be a conflict of interests between two or more of such
Indemnified Persons, in which case there may be separate counsel for each similarly situated group.
(b) All rights to
indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time now existing in favor of any Indemnified Person as provided in the MLP GP LLC Agreement, the MLP Partnership
Agreement (or in the comparable governing documents of any Subsidiary of MLP) or under applicable Law, shall continue in full force and effect in accordance with their terms from and after the Effective Time, irrespective of any subsequent
amendment, modification or revocation thereof.
(c) Prior to the Effective Time, the MLP Entities will purchase a
single-premium
pre-paid
tail policy for a period of six years from the Closing Date with respect to acts or omissions occurring or alleged to have occurred prior to the Effective Time that were
committed or alleged to have been committed by Indemnified Persons in their capacity as such and having coverage terms, benefits, levels of coverage (including limits, self-insured retentions and deductibles) and other terms and conditions which are
in the aggregate not less advantageous to the Indemnified Persons as those in effect under the director and officer insurance policies of the MLP Group Entities on the date of this Agreement;
provided
that neither the Parent Entities nor any
MLP Entity shall be required to expend in the aggregate for such six year period more than 300% of the last annual premiums paid prior to the date of this Agreement to maintain or procure such director and officer insurance policies of the MLP Group
Entities and will purchase the maximum amount of coverage that can be obtained for that amount if the coverage described in this
Section
6.9(c)
would cost in excess of that amount.
(d) The rights of any Indemnified Person under this
Section
6.9
will be in addition to any other
rights such Indemnified Person may have under the MLP Charter Documents or the DRULPA. The provisions of this
Section
6.9
will survive the Closing Date for a period of six years and are expressly intended to benefit each of
the Indemnified Persons and their respective heirs, successors, assigns, executors and administrators;
provided
,
however
, that in the event that any claim or claims for indemnification set forth in this
Section
6.9
are asserted or made within such
six-year
period, all rights to indemnification in respect of any such claim or claims will continue until disposition of all such claims.
If Parent, Parent GP, the Surviving Entity or any of their respective successors or assigns (i) consolidates with or merges into any other Person or (ii) transfers or conveys all or substantially all of their businesses or assets to any
other Person, then, in each such case, to the extent necessary, a proper provision shall be made so that the
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successors and assigns of Parent, Parent GP or the Surviving Entity, as the case may be, shall assume the obligations of Parent, Parent GP and the Surviving Entity set forth in this
Section
6.9
.
Section 6.10
Transaction Litigation
. The MLP Entities and the Lightfoot Entities will
give the Parent Entities prompt notice of any Proceeding commenced or, to the Knowledge of the MLP Entities, threatened, against any of them or their respective directors, officers, managers, partners or Affiliates relating to this Agreement or the
Transactions (collectively,
Transaction Litigation
) and shall keep the Parent Entities informed on a substantially current basis with respect to the status thereof (including by promptly furnishing to Parent GP and its
Representatives such information relating to such Proceeding as may be reasonably requested). The MLP Entities and the Lightfoot Entities shall consult with the Parent Entities regarding the defense or settlement of any Transaction Litigation and
shall not compromise, settle, come to an arrangement regarding or agree to compromise, settle or come to an arrangement regarding any Transaction Litigation or consent to the same, without the prior written consent of Parent GP (which consent shall
not be unreasonably withheld, conditioned or delayed). In connection with any Transaction Litigation and the Parties performance of their obligations under this
Section
6.10
, the Parties shall enter into a customary
common interest or joint defense agreement or implement such other techniques as reasonably required to preserve any attorney-client privilege or other applicable legal privilege;
provided
,
however
, that the MLP Entities shall not be
required to provide information if doing so, in the opinion of such MLP Entitys legal counsel, would cause the loss of any attorney-client privilege or other applicable legal privilege;
provided
, that, if any information is withheld
pursuant to the foregoing proviso, the MLP Entities shall inform Parent GP as to the general nature of what is being withheld and the Parties shall use reasonable best efforts to enable the MLP Entities to provide such information without causing
the loss of any attorney-client or other applicable legal privilege.
Section 6.11
Cooperation Regarding MLP Debt
. If
requested by Parent GP at any time after the date hereof, the MLP Entities shall, and shall cause MLPs Subsidiaries to, reasonably cooperate with, and use commercially reasonable efforts to assist, the Parent Entities in taking all actions
necessary to, contemporaneously with the Closing and on behalf of MLP and its Subsidiaries, (a) repay or cause to be repaid all Indebtedness, liabilities and other obligations outstanding under the Existing MLP Credit Facility or secured by the
collateral therefor with the proceeds of the Financing, (b) terminate or cause to be terminated all commitments of the lenders to lend under the Existing MLP Credit Facility and (c) terminate or release or cause to be terminated and
released any and all guarantees of, and Liens securing, such Indebtedness, liabilities and obligations, in each case, including obtaining customary payoff letters and causing the filing of any
UCC-3
termination statements, mortgage releases or similar documents evidencing termination or release of such Liens. The Parties shall, and the MLP Entities shall cause the other MLP Group Entities to, reasonably cooperate with the other Parties in the
preparation, execution, delivery and filing of the necessary and appropriate documentation in connection with any actions reasonably requested by Parent GP pursuant to this
Section
6.11
.
Section 6.12
Fees and Expenses
. Parent or its designee shall pay all charges and expenses of the Paying Agent in connection with
the provisions set forth in
Article II
. Subject to
Section
6.3(d)
of the MLP Disclosure Letter, all fees and expenses incurred in connection with the Transactions including all legal, accounting, financial advisory,
consulting and all other fees and expenses of third Parties incurred by a Party in connection with the negotiation and effectuation of the terms and conditions of this Agreement and the Transactions, will be the obligation of the respective Party
incurring such fees and expenses.
Section 6.13
Employee Benefits
.
(a)
Compensation; Benefit Plans
.
(i) For a period of 12 months following the Closing Date (or until April 30, 2019, with respect to those Employees covered
by a collective bargaining agreement with the Petroleum Trades Employees Union, an affiliate of Atlantic Independent Union, affiliated with teamsters Local #312), Parent GP shall (or shall cause one of its Affiliates to) (A) provide to each
employee of the Surviving Entity, its Subsidiaries and MLP GP (collectively, the
Employees
) a base salary or hourly wage that is no less
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than the base salary or hourly wage provided to such Employee as of immediately prior to the Closing Date and (B) continue in effect the hourly pay practices that are applicable to the
Employees as of the Closing Date and are set forth on
Section
6.13(a)(i)
of the MLP Disclosure Letter.
(ii) For a period of 12 months following the Closing Date (or until April 30, 2019, with respect to those Employees
covered by a collective bargaining agreement with the Petroleum Trades Employees Union, an affiliate of Atlantic Independent Union, affiliated with teamsters Local #312), Parent GP shall (or shall cause one of its Affiliates to) provide each
Employee with employee benefits (including, health, welfare and retirement benefits, but expressly excluding fringe benefits, equity-based incentives, defined benefit pension plan benefits, retiree medical benefits and nonqualified deferred
compensation plan benefits) that are no less favorable, in the aggregate, to those provided to such Employees immediately prior to the Effective Time.
(b)
Continuation of Benefit Plans
. For purposes of eligibility, participation, benefit accruals and vesting (but not
benefit accruals under defined benefit pension plans) under Parent Benefit Plans providing employee benefits to Employees after the Closing Date, each Employee shall be credited with his or her years of service with the MLP Group Entities (and their
predecessors) prior to the Closing Date to the same extent as such Employee was entitled, before the Closing Date, to credit for such service under MLP Benefit Plans, except to the extent providing such credit would result in any duplication of
benefits. In addition, Parent GP shall (or shall cause an Affiliate of Parent GP to) use commercially reasonable efforts to cause (i) each Employee to be immediately eligible to participate, without any waiting time, in any and all Parent
Benefit Plans to the extent such Employee would have been then-eligible to participate in a comparable MLP Benefit Plan; (ii) each Parent Benefit Plan providing medical, dental, hospital, pharmaceutical or vision benefits to any employee, to
waive all
pre-existing
condition exclusions and actively at work requirements (to the extent permissible under any applicable insurance contracts) of such Parent Benefit Plan for such Employee and his or her
covered dependents (except to the extent that such exclusions or requirements applied to the Employee under comparable MLP Benefit Plans); and (iii) any deductibles and other eligible expenses (including
co-payments)
incurred by such Employee and/or his or her covered dependents during the plan year ending on the Closing Date to be credited for purposes of satisfying all deductible, coinsurance and maximum
out-of-pocket
requirements applicable to such Employee and his or her covered dependents for the applicable plan year of each comparable Parent Benefit Plan (to the extent
such credit would have been given under comparable MLP Benefit Plans prior to the Effective Time).
(c)
Vacation
.
For purposes of determining the number of vacation days and other paid time off to which each Employee is entitled during the calendar year in which the Effective Time occurs, Parent will assume and honor all vacation and other paid time off days
accrued or earned but not yet taken by such Employee as of the Effective Time.
(d)
No Employee Third Party
Beneficiaries
. Without limiting the generality of
Section
9.7
, the provisions of this
Section
6.13
are for the sole benefit of the Parties to this Agreement and nothing herein, expressed or
implied, is intended or will be construed to confer upon or give to any Person (including any current or former employee of any MLP Entity or any of their respective Affiliates) other than the Parties and their respective permitted successors and
assigns, any legal or equitable or other rights or remedies (including with respect to the matters provided for in this
Section
6.13
) under or by reason of any provision of this Agreement. Nothing in this
Section
6.13
amends, or will be deemed to amend (or prevent the amendment or termination of) any MLP Benefit Plan or any employee benefit plans sponsored, maintained or contributed to by Parent. Parent has no obligation to
continue to employ or retain the services of any Employee for any period of time following the Effective Time and, except as specifically provided in this
Section
6.13
, Parent will be entitled to modify any compensation or
benefits provided to, and any other terms or conditions of employment of, any such Employees in its absolute discretion.
Section 6.14
Termination of Trading and Deregistration
. The MLP Entities and the Lightfoot Entities will cooperate with the Parent
Entities and use reasonable best efforts to take, or cause to be taken, all actions and all things reasonably necessary, proper or advisable on its part under applicable Laws and rules and policies of the
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NYSE to cause (a) the delisting of the Common Units from the NYSE and the termination of trading of the Common Units on the Closing Date and prior to the Effective Time and (b) the
deregistration of the Common Units under the Exchange Act as promptly as practicable after the Effective Time, and in any event no more than 10 days after the Closing Date.
Section 6.15
Takeover Laws
. If any Takeover Law is or may become applicable to the Transactions, the MLP Entities and their
respective boards of directors or managers and/or the Parent Entities and their respective boards of directors or managers, as applicable, will grant such approvals and take such actions as are necessary so that the Transactions may be consummated
as promptly as practicable on the terms contemplated by this Agreement and the Parties will otherwise act to eliminate or minimize the effects of such Takeover Law on the Merger.
Section 6.16
Section
16 Matters
. Prior to the Effective Time, to the extent reasonably necessary, the MLP
Entities will take all such steps as may be necessary or appropriate to cause any dispositions of Common Units and Phantom Units resulting from the Transactions by each individual who is subject to the reporting requirements of Section 16(a) of
the Exchange Act with respect to the MLP Entities to be exempt under Rule
16b-3
promulgated under the Exchange Act.
Section 6.17
FIRPTA Certificate
. At the Closing, each Lightfoot Entity shall deliver to Parent a certificate, dated as of the
Closing Date, which satisfies the requirements set forth in Treasury Regulation
Section 1.1445-2(b)(2).
Section 6.18
Tax Matters
.
(a) Unitholders will be allocated all items of income, gain, loss, deduction and credit of MLP for income Tax purposes through
and including the Closing Date.
(b) MLP will be responsible for (i) the preparation, filing and delivery of all MLP
Income Tax Returns required to be filed or delivered on or prior to the Closing Date and (ii) the filing of all MLP Income Tax Returns required to be filed on or after the Closing Date.
(c) The Lightfoot Entities will be responsible for the preparation of all MLP Income Tax Returns with respect to all taxable
periods ending on or before the Closing Date that are required to be filed or delivered after the Closing Date, which MLP Income Tax Returns shall be prepared in a manner consistent with the past practices of the MLP unless otherwise required by
applicable Law;
provided
, that any
out-of-pocket,
third party costs, fees or expenses incurred with respect to the foregoing shall be borne by MLP. The Lightfoot
Entities will provide to Parent GP copies of all such MLP Income Tax Returns at least 30 days prior to the date on which such MLP Income Tax Return is required to be filed or delivered for Parents review and comment, and any reasonable
comments of Parent shall be considered in good faith for incorporation into such MLP Income Tax Return by the Lightfoot Entities prior to filing by MLP or delivery by the Lightfoot Entities, as applicable.
(d) Following the Closing, the Parties shall, and shall cause their respective Affiliates (and their respective officers,
directors, employees or agents) to, cooperate with the other Parties regarding the preparation and filing of all MLP Income Tax Returns, including providing the other Parties with reasonable access, during normal business hours, to their respective
offices, employees, outside accountants, books, records and Tax Returns, subject to the proviso in
Section
6.7(b)
.
(e) The Lightfoot Entities shall cause all MLP Income Tax Returns prepared by it to reflect properly for Tax purposes any
transactions undertaken by the Parent Entities or any Unitholder, whether at or prior to the Closing.
(f) Following the
Closing, Parent GP shall not, and shall cause its Affiliates (including MLP) not to, amend, refile or otherwise modify any MLP Income Tax Returns filed prior to the Closing Date, except with the consent of the Lightfoot Entities (which consent shall
not be unreasonably withheld, conditioned or delayed) or as required by applicable Law.
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(g) The Parties shall cause MLP and each other MLP Group Entity that is treated
as a partnership for U.S. federal income tax purposes to have a valid election in effect under Section 754 of the Code for any taxable period which includes the Closing Date and shall not revoke such election without the consent of Parent GP.
(h) The Parties agree that the GP Purchase Price and the Merger Consideration (plus any applicable liabilities for federal
income tax purposes) will be allocated among the underlying assets of MLP (and, to the extent applicable, the Subsidiaries of MLP) for purposes of Sections 1060 and 751 of the Code and the statements required to be filed under Treasury Regulations
Section 1.751-1(a)(3)
(and any similar provision of state, local or foreign Legal Requirement, as applicable) (the
Merger Consideration Allocation
). Within 45 days after the Closing Date,
Parent GP shall provide the Lightfoot Entities with a proposed Merger Consideration Allocation. Within 30 days after the date of the delivery of such proposed allocation to the Lightfoot Entities, the Lightfoot Entities (on behalf of the
Unitholders) shall propose to Parent GP any changes to such allocation in writing or otherwise shall be deemed to have agreed with such allocation upon the expiration of such 30 day period. The Lightfoot Entities and Parent GP shall cooperate in
good faith to mutually agree to such allocation and shall reduce such agreement to writing. In the event the Lightfoot Entities and Parent GP are unable to agree as to the Merger Consideration Allocation, the Lightfoot Entities and Parent GP shall,
within 30 calendar days following the delivery of any changes to the Merger Consideration Allocation to Parent GP by the Lightfoot Entities (the
Resolution Period
), use commercially reasonably efforts to attempt to resolve in
writing their differences with respect to the Merger Consideration Allocation, and any such resolution shall be final, conclusive and binding on the Lightfoot Entities and Parent GP. If, at the conclusion of the Resolution Period, the Merger
Consideration Allocation remains in dispute, then the Lightfoot Entities and Parent GP shall submit all items remaining in dispute to BDO USA, LLP (
BDO
) for resolution by delivering within 10 calendar days after the expiration of
the Resolution Period to BDO their written position with respect to such items remaining in dispute. The fees and expenses of BDO pursuant to this
Section
6.18(h)
shall be divided equally between the Lightfoot Entities and
Parent. BDO shall determine, based solely on the submissions by the Lightfoot Entities and Parent GP, and not by independent review, only those issues related to the determination of the Merger Consideration Allocation that remains in dispute. The
Lightfoot Entities and Parent GP shall request that BDO make a decision with respect to all disputed items within 30 calendar days after the submissions of the Lightfoot Entities and Parent GP, as provided above, and in any event as promptly as
practicable. The final determination of the Merger Consideration Allocation shall be set forth in a written statement by BDO delivered to the Lightfoot Entities and Parent GP and shall be final, conclusive and binding on the Lightfoot Entities and
Parent GP. The Lightfoot Entities and Parent GP shall promptly execute any reasonable engagement letter requested by BDO and shall each cooperate fully with BDO, including, without limitation, by providing the information, data and work papers used
by the Lightfoot Parties or Parent, as applicable, to prepare and/or calculate the Merger Consideration Allocation, making its personnel and accountants available to explain any such information, data or work papers, so as to enable BDO to make such
determination as quickly and as accurately as practicable. The Parties shall file timely any forms and statements required under U.S. federal or state income Laws with respect to Taxes consistent with such Merger Consideration Allocation as finally
determined in accordance with this
Section
6.18(h)
. The Parties shall not file any Tax Return or otherwise take any position with respect to Taxes which is inconsistent with such Merger Consideration Allocation, except as
required by a final determination within the meaning of Section 1313 of the Code or any similar state Law.
Section 6.19
Related Party Transactions
. Prior to the Closing, each MLP Entity and the Lightfoot Entities will, and will cause the
MLP Group Entities to, take such actions as are necessary or required to (i) terminate, effective at or prior to the Closing at no additional cost or liability to any MLP Group Entity, (A) each Contract that is listed in
Section
6.19
of the MLP Disclosure Letter or (B) at Parents request, any Contract that is not disclosed in
Section
3.22
of the MLP Disclosure Letter where the failure of such Contract to
be so disclosed would cause the representations and warranties contained in
Section
3.22
not to be true and correct and
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(ii) ensure that the MLP Group Entities have no further liabilities or obligations thereunder from and after the Closing.
Section 6.20
GP Conflicts Committee
. Prior to the earlier of the Closing and the termination of this Agreement in accordance with
its terms, none of the MLP Entities shall, and the Lightfoot Entities shall not permit any MLP Entities to, without the consent of the GP Conflicts Committee, eliminate the GP Conflicts Committee, revoke or diminish the authority of the GP Conflicts
Committee or remove or cause the removal of any director of the MLP GP Board that is a member of the GP Conflicts Committee either as a member of such board or member of such committee without the affirmative vote of the members of the MLP GP Board,
including the affirmative vote of each of the other members of the GP Conflicts Committee. For the avoidance of doubt, this
Section
6.20
shall not apply to the filling in accordance with the provisions of the applicable
governing documents of the MLP GP of any vacancies caused by the death, incapacity or resignation of any such director.
Section 6.21
Change of Control Bonuses
. Prior to or contemporaneously with the Closing, the Lightfoot Entities shall contribute or pay, or cause to be contributed or paid, to the MLP cash in an amount equal $185,000 for each month (or, for any partial
month, a
pro-rated
amount thereof), commencing on January 1, 2017 and ending on the Effective Time; provided, however, that the aggregate amount to be contributed or paid by the Lightfoot Entities to the
MLP pursuant to this
Section
6.21
shall be reduced,
dollar-for-dollar,
by (i) any outstanding amounts owed to the Lightfoot Entities for
the monthly overhead allocation (which, for the avoidance of doubt, does not include the Other Reimbursable Expenses, as defined below) charged by the Lightfoot Entities to the MLP pursuant to the terms and conditions of the Services Agreement,
dated November 12, 2013, between LCP GP, the MLP and MLP GP, and (ii) the total amount of bonuses actually paid by the Lightfoot Entities on behalf of any of the MLP Entities in accordance with any change of control agreement to which any
of the MLP Entities is a party on the date hereof (without giving effect to any amendments thereto entered into after the date hereof) at any time prior to the Effective Time to any officer of employee of LCP GP or MLP GP (solely to the extent such
bonuses relate to the services performed by such officer or employee for the period from and after January 1, 2017). For purposes of this
Section
6.21
,
Other Reimbursable Expenses
means expenses
incurred by the Lightfoot Entities in accordance with past practices for the benefit, or in connection with the activities, of the MLP Entities in respect of travel, meals and entertainment, professional and advisory services, industry conferences,
customer appreciation events, and other direct expenses of the MLP Entities relating its operations and business activities that are paid, initially, by the Lightfoot Entities on behalf of the MLP Entities.
Section 6.22
MLP Financial Advisor
. The Lightfoot Entities shall indemnify, defend and hold harmless the Parent Entities and their
respective Representatives from and against any and all liabilities, losses, damages, claims, costs, expenses (including attorneys fees), interest, awards, judgments, penalties suffered or incurred and amounts paid or payable by MLP in
connection with any fees or expenses owed by MLP or any other MLP Entity or Lightfoot Entity to the MLP Financial Advisor.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1
Conditions to Each Party
s Obligation to Effect the Transactions
. The respective obligations of
each Party hereto to effect the Transactions will be subject to the satisfaction (or waiver by all Parties, if permissible under applicable Law) on or prior to the Closing Date of the following conditions:
(a)
MLP Approvals
. The MLP Unitholder Approval shall have been obtained in accordance with applicable Law and the MLP
Charter Documents.
(b)
Regulatory Approval
. (i) Any waiting period (and any extensions thereof) under the HSR
Act applicable to the Transactions shall have expired or been terminated and (ii) the other Antitrust Consents set
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forth in
Section
7.1(b)(ii)
of the MLP Disclosure Letter, and any other Consent of any Governmental Authority pertaining to an asset or right, the absence of which or
imposition of a limitation upon could reasonably be expected to materially impair the operation of the MLP Group Entities facilities or the business of the MLP Group Entities as currently conducted or Parents control thereof, shall have
been obtained and shall be in effect and, if applicable, the waiting period (and any extension thereof) or mandated filings thereunder shall have expired, been terminated or been made, as applicable.
(c)
No Injunctions or Restraints
. No Law or Order enacted, promulgated, issued, entered, amended or enforced by any
Governmental Authority (collectively,
Restraints
) shall be pending or in effect enjoining, restraining, preventing or prohibiting consummation of any of the Transactions or making the consummation of any of the Transactions
illegal.
(d)
Sale and Purchase of Joliet
. The Joliet Purchase shall have been consummated or shall be,
contemporaneously with effecting the Transactions, consummated, in either case, in accordance with the terms of the Joliet Purchase Agreement (including the satisfaction or, if permissible under applicable Law, by each applicable Person entitled to
waive such conditions, waiver of all conditions set forth in the Joliet Purchase Agreement).
(e)
Sale and Purchase of
Gulf LNG Interest
. The First Closing (as defined in the Gulf LNG Purchase Agreement) whether in a Separate Closing or as part of a Dual Closing (each as defined in the Gulf LNG Purchase Agreement), shall have been consummated or shall be,
contemporaneously with effecting the Transactions, consummated, in either case, in accordance with the terms of the Gulf LNG Purchase Agreement (including the satisfaction or, if permissible under applicable Law, by each applicable Person entitled
to waive such conditions, waiver of all conditions to such First Closing set forth in the Gulf LNG Purchase Agreement).
Section 7.2
Conditions to Obligations of the Parent Entities to Effect the Transactions
. The obligations of the Parent Entities to effect the Transactions are further subject to the satisfaction (or waiver by Parent GP, if permissible under applicable
Law) on or prior to the Closing Date of the following conditions (it being agreed that for purposes of determining whether any condition set forth in this
Section
7.2
has been satisfied, the provisions of
Section
9.12(b)
shall be given effect):
(a)
Representations and Warranties
.
(i) The representations and warranties (A) of the MLP Entities contained in
Section
3.1
(Organization),
Section
3.2
(Capitalization),
Section
3.3
(Authorization) and
Section
3.4
(Noncontravention) and (B) of the Lightfoot Entities contained in
Article
IV
(Representations and Warranties of the Lightfoot Entities) are true and correct as of the date of this Agreement and as of the Closing Date, as if made as of such time (except to the extent expressly made as of an earlier date, in which case
as of such date), except for any de minimis inaccuracies.
(ii) The representations and warranties of the MLP Entities
contained in
Section
3.25
(Takeover Laws) and
Section
3.27
(Brokers) are true and correct in all material respects as of the date of this Agreement and as of the Closing Date, as if made as of such
time.
(iii) The representations and warranties of the MLP Entities contained in
Section
3.10
(Prohibited Payments),
Section
3.11
(Export Controls) and
Section
3.12
(Antitrust Laws) (A) are true and correct, to the Knowledge of the MLP Entities, in all respects as of the date of this
Agreement and (B) are true and correct in all respects as of the Closing Date, as if made as of such time, except, in the case of this
clause (B)
, as has not resulted in, and would not reasonably be expected to result in, (x) a
Criminal Penalty or (y) an MLP Material Adverse Effect (without giving effect to any limitation as to materiality or MLP Material Adverse Effect set forth in any individual such representation or warranty).
(iv) The other representations and warranties of the MLP Entities and the Lightfoot Entities contained in this Agreement are
true and correct as of the date of this Agreement and as of the Closing
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Date, as if made as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failure of such representations and warranties to be
so true and correct (without giving effect to any limitation as to materiality or MLP Material Adverse Effect set forth in any individual such representation or warranty) would not reasonably be expected to have, individually
or in the aggregate, an MLP Material Adverse Effect.
(b)
Performance of Obligations of the MLP Entities and the
Lightfoot Entities
. The MLP Entities and the Lightfoot Entities shall have performed all obligations that are required to be performed by them under this Agreement at or prior to the Closing Date (i) in all respects for obligations with
respect to which performance of them is qualified by materiality and (ii) in all material respects for all other obligations.
(c)
No MLP Material Adverse Effect
. Since the date of this Agreement and except to the extent arising out of any of the
events, changes, effects, occurrences or state of facts described in
Section
3.7(a)
of the MLP Disclosure Letter, there shall not have occurred, arisen, come into existence or become known any event, change, effect,
occurrence or state of facts that, individually or in the aggregate with all other events, changes, effects, occurrences or states of facts, has had, or would reasonably be expected to have, an MLP Material Adverse Effect.
(d)
Certificates
. The Parent Entities shall have received at the Closing (i) a certificate signed on behalf of the
MLP Entities by a senior executive officer of each MLP Entity to the effect that the conditions set forth in
Sections 7.2(a)
through
Section
7.2(c)
(inclusive), to the extent applicable to the MLP Entities, have been
satisfied and (ii) a certificate signed on behalf of the Lightfoot Entities by an authorized representative of the Lightfoot Entities to the effect that the conditions set forth in
Sections 7.2(a)
and
7.2(b)
(inclusive), to the
extent applicable to the Lightfoot Entities, have been satisfied.
(e)
Certain Orders
. There shall not be any Order
that would reasonably be expected, individually or in the aggregate, to result, directly or indirectly, in (i) the consummation of any of the Transactions being made illegal, restrained, prohibited or materially limited, (ii) as a result
of or in connection with any of the Transactions, the ownership or operation by (A) Parent, MLP or any of their respective Subsidiaries of all or any material portion of the business or assets of Parent, MLP or any of their respective
Subsidiaries or (B) Holdings or MLP GP of all or any material portion of the business or assets of MLP GP, in each case, being made illegal, restrained, prohibited or materially limited, (iii) the ability of the Parent Entities, as
applicable, to effectively acquire, hold or exercise full rights of ownership of the Common Units or the GP Equity Interest being made illegal, restrained, prohibited or having material limitations placed on any such ability or (iv) an MLP
Material Adverse Effect.
(f)
Tax Opinion
. MLP shall have received (with a copy to Parent) an opinion of
Vinson & Elkins L.L.P. (or another nationally recognized tax counsel reasonably acceptable to Parent GP), dated as of the Closing Date, to the effect that for U.S. federal income Tax purposes at least 90% of the gross income of MLP for the
most recent full calendar year and for the complete calendar quarters ending before the Closing Date for which audited financial statements are available should be treated as income that is qualifying income within the meaning of
Section 7704(d) of the Code. In rendering such opinion, such counsel shall be entitled to receive and rely upon representations of officers of MLP and any of their respective Affiliates as to such matters as such counsel may reasonably request.
(g)
Resignations
. Holdings shall have received the written resignation of each member of the MLP GP Board and each
officer of MLP GP, dated to be effective as of the Effective Time.
(h)
Amendment of Joliet LLC Agreement
. The
Joliet LLC Agreement shall have been amended in substantially the form attached as an exhibit to the Joliet Purchase Agreement.
(i)
Transition Services Agreement
. Parent GP shall have received at the Closing the Transition Services Agreement, duly
executed by Lightfoot GP.
Section 7.3
Conditions to Obligations of the MLP Entities and the Lightfoot Entities to Effect the
Transactions
. The obligation of each of the MLP Entities and the Lightfoot Entities to effect the Transactions is
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further subject to the satisfaction (or waiver by each of MLP GP and LCP GP, if permissible under applicable Law) on or prior to the Closing Date of the following conditions:
(a)
Representations and Warranties
. (i) The representations and warranties of the Parent Entities contained in
Sections 5.1
and
5.2
are true and correct, except for any de minimis inaccuracies and (ii) the other representations and warranties of Parent and Merger Sub contained in this Agreement are true and correct, in each of
clauses
(i)
and
(ii)
, as of the date of this Agreement and as of the Closing Date, as if made as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of
clause
(ii)
, where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to materiality or Parent Material Adverse Effect set forth in any individual such
representation or warranty) would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b)
Performance of Obligations of the Parent Entities
. The Parent Entities shall have performed all obligations that are
required to be performed by them under this Agreement at or prior to the Closing Date (i) in all respects for obligations with respect to which performance of them is qualified by materiality and (ii) in all material respects
for all other obligations.
(c)
Certificate
. MLP shall have received at the Closing a certificate signed on behalf
of Parent by a senior executive officer of Parent to the effect that the conditions set forth in
Sections 7.3(a)
and
7.3(b)
have been satisfied.
Section 7.4
Frustration of Closing Conditions
. No Party may rely on the failure of any condition set forth in
Sections 7.1
,
7.2
or
7.3
, as the case may be, to be satisfied, if such Partys failure to perform any material obligation required pursuant to this Agreement to be performed by it has been the primary cause of, or primarily results in, such
failure.
ARTICLE VIII
TERMINATION
Section 8.1
Termination
. This Agreement may be terminated and the Transactions abandoned at any time prior to the Effective Time:
(a) by the mutual written consent of MLP GP and Parent GP duly authorized by each of the MLP GP Board and Parent GP,
respectively.
(b) by either of MLP GP or Parent GP:
(i) by written notice to the other Party at any time after the Outside Date, if the Closing has not been consummated on or
before the Outside Date;
provided
that, if on the Outside Date the conditions to Closing set forth in
Sections 7.1(b)
(Regulatory Approval) or
Section
7.1(c)
(No Injunctions or Restraints) (but for purposes of
Section
7.1(c)
, only if such Restraint is attributable to Antitrust Laws) have not been satisfied, but all other conditions to Closing in
Article VII
have been satisfied or are capable of being satisfied, then the
Outside Date may be extended on one or more occasions to a date not later than March 1, 2018 at the option of Parent GP by providing written notice to the other Parties at or before 11:59 p.m. Houston, Texas time on the Outside Date; and
provided
,
further
, that the right to terminate this Agreement under this
Section
8.1(b)(i)
will not be available (x) to a Party if the inability to satisfy such conditions was due primarily to the failure
of such Party to perform any of its obligations under this Agreement or (y) to a Party if the other Party has filed (and is then pursuing) an action seeking specific performance as permitted by
Section
9.9
;
(ii) if any Restraint having the effect set forth in
Section
7.1(c)
(No Injunctions or Restraints) is
in effect and has become final and nonappealable;
provided
,
however
, that the right to terminate this
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Agreement pursuant to this
Section
8.1(b)(ii)
will not be available to a Party if such Restraint was enacted primarily due to the failure of such Party or its Affiliates
to perform any of its obligations under this Agreement; or
(iii) if, after the final adjournment of the MLP Unitholder
Meeting at which a vote of the Unitholders has been taken in accordance with this Agreement, the MLP Unitholder Approval has not been obtained.
(c) by Parent GP:
(i) if any MLP Entity or any Lightfoot Entity has breached
any of its respective obligations under
Section
6.4
(No Solicitation or Withdrawal of Recommendation), excluding any such breaches that do not adversely affect the Parent Entities or the Transactions in any material respect;
(ii) if any MLP Entity or any Lightfoot Entity has breached any of its respective representations or warranties set forth in
this Agreement (or if any such representations or warranties fail to be true) or any MLP Entity or any Lightfoot Entity has failed to perform any of its respective covenants or agreements set forth in this Agreement, which breach or failure
(A) would (if it occurred or was continuing as of the Closing Date) give rise to the failure of a condition set forth in
Section
7.2(a)
or
7.2(b)
and (B) is incapable of being cured, or is not cured by the
applicable MLP Entity or Lightfoot Entity by the earlier of (x) the Outside Date and (y) 30 days following receipt of written notice from Parent of such breach or failure; or
(iii) if the GP Conflicts Committee has made a Withdrawal of Recommendation (whether or not in compliance with
Section
6.4(c)
(Certain Permitted Withdrawals of Recommendation));
provided,
that Parent GP may only terminate the Agreement pursuant to this
clause (iii)
prior to the final adjournment of the MLP
Unitholder Meeting at which a vote of the Unitholders is taken in accordance with this Agreement.
(d) by MLP GP:
(i) if any Parent Entity has breached any of its respective representations or warranties set forth in this Agreement (or if
any such representations or warranties fail to be true) or any Parent Entity has failed to perform its respective covenants or agreements set forth in this Agreement, which breach or failure (A) would (if it occurred or was continuing as of the
Closing Date) give rise to the failure of a condition set forth in
Section
7.3(a)
or
7.3(b)
and (B) is incapable of being cured, or is not cured, by the Parent Entities by the earlier of (1) the Outside
Date and (2) 30 days following receipt of written notice from MLP of such breach or failure;
provided
that MLP GP will not have the right to terminate this Agreement pursuant to this
Section
8.1(d)
if any of the MLP
Entities or Lightfoot Entities are then in breach of
Section
6.4
(No Solicitation or Withdrawal of Recommendation), excluding any such breaches that do not adversely affect the Parent Entities or the Transactions in any
material respect;
(ii) if the GP Conflicts Committee has made a Withdrawal of Recommendation with respect to a Superior
Proposal in compliance with
Section
6.4(c)
and
Section
6.4(d)
and the MLP GP Board authorizes the MLP Entities, to the extent permitted by and subject to complying with the terms of
Section
6.4(c)
and
Section
6.4(d)
, to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal and, concurrently with the termination of this Agreement, the MLP Entities,
subject to complying with the terms of
Section
6.4(c)
and
Section
6.4(d)
, enter into an Alternative Acquisition Agreement providing for a Superior Proposal;
provided
that prior to, and as a
condition of, any termination of this Agreement by MLP GP pursuant to this
Section
8.1(d)(ii)
, MLP shall have paid the MLP Termination Fee to Parent pursuant to
Section
8.2(b)
; or
(iii) if (A) all of the conditions set forth in
Section
7.1
and
Section
7.2
have been and continue to be satisfied (other than such conditions as, by their nature, are to be satisfied by the delivery of documents or the taking of any other action at the Closing, but subject to the
satisfaction (or waiver) of such conditions at the Closing) and the Closing has not occurred by the time required under
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Section
1.3
, (B) MLP GP has confirmed by irrevocable written notice delivered to Parent GP that (x) all conditions set forth in
Section
7.3
have been and remain satisfied (other than such conditions as, by their nature, are to be satisfied by the delivery of documents or the taking of any other action at the Closing, but subject to the satisfaction
(or waiver) of such conditions at the Closing) or that it has irrevocably waived any unsatisfied conditions in
Section
7.3
and (y) each of the MLP Entities stands ready, willing and able to consummate the transactions
contemplated hereby (including the Closing) on the date of such notice and at all times during the five Business Day period immediately thereafter (such notice, a
Closing Failure Notice
), and (C) the Parent Entities fail to
consummate the transactions contemplated hereby (including the Closing) within such five Business Day period after the date of the delivery of Closing Failure Notice.
Section 8.2
Effect of Termination
.
(a)
Generally
. In the event of the termination of this Agreement as provided in
Section
8.1
,
written notice thereof will be given to the other Party or Parties, specifying the provision of this Agreement pursuant to which such termination is made, and this Agreement will become null and void (other than the provisions in
Section
6.12
(Fees and Expenses), this
Section
8.2
and
Section
6.7(c)
(Confidentiality), and the provisions in
Article IX
(Miscellaneous), all of which will survive
termination of this Agreement). Upon termination pursuant to this
Article VIII
, there will be no liability on the part of any Party or their respective directors, managers, officers and Affiliates;
provided
that, upon the termination
of this Agreement and except as provided in
Section
8.2(f)
, nothing will be deemed to release any Party from any liability to any other Party for any breach by such Party of this Agreement prior to such termination;
provided further
, that, in no event shall any Party or any of its Affiliates seek or be entitled to any consequential, indirect, punitive or incidental damages or damages based on a multiple of earnings or similar valuation, including in the
case of a willful and material breach, for, or with respect to, this Agreement, the Commitment Letters or the Limited Guarantee or the transactions contemplated hereby and thereby (including for any breach by any of the Parent Entities, the
Financing Sources or the Guarantors), the termination of this Agreement, the failure to consummate the transactions contemplated by this Agreement or any Proceeding under applicable Laws arising out of any such breach, termination or failure.
(b)
MLP Termination Fee
.
(i) In the event that this Agreement is terminated by Parent GP pursuant to
Section
8.1(c)(i)
or
Section
8.1(c)(iii)
, then MLP shall pay to Parent a termination fee of $11,487,696 (the
MLP Termination Fee
) promptly (but in no event later than two Business Days) after such termination, by wire
transfer of immediately available funds.
(ii) In the event that this Agreement is terminated by MLP GP pursuant to
Section
8.1(d)(ii)
, then MLP shall pay Parent the MLP Termination Fee prior to, and as a condition of, such termination.
(iii) In the event that this Agreement is terminated (A) (1) by Parent GP pursuant to
Section
8.1(c)(ii)
, if due to any Lightfoot Entity or any MLP Entitys failure to perform any covenant or agreement set forth in this Agreement or the failure of any of the representations and warranties set forth in
this Agreement made by any Lightfoot Entity or any MLP Entity to be true and correct as of the date of this Agreement, (2) by Parent GP or MLP GP pursuant to
Section
8.1(b)(i)
at a time when this Agreement was
terminable by Parent GP pursuant to
Section
8.1(c)(ii)
, if due to any MLP Entitys or any Lightfoot Entitys failure to perform any covenant or agreement set forth in this Agreement or the failure of any of the
representations and warranties set forth in this Agreement made by any Lightfoot Entity or MLP Entity to be true and correct as of the date of this Agreement or (3) by MLP GP or Parent GP pursuant to
Section
8.1(b)(iii)
, and (B) within 12 months after any such termination (1) any MLP Group Entity or any Lightfoot Entity or any of their respective Affiliates shall have entered into an Alternative Acquisition
Agreement with respect to, or shall have approved or recommended to MLPs Limited Partners or otherwise not opposed, any Alternative Proposal or (2) there shall have been consummated an Alternative Proposal, then MLP shall pay the MLP
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Termination Fee to Parent upon the earlier of (x) the consummation of such Alternative Proposal and (y) entry into such Alternative Acquisition Agreement, by wire transfer of
immediately available funds;
provided
that the MLP Termination Fee payable pursuant to this
Section
8.2(b)(iii)
shall be reduced by the Parent Expense Reimbursement, if any, actually paid to Parent pursuant to
Section
8.2(d)(i)
and for purposes of this
Section
8.2(b)(iii)
, the references to 20% or more in the definition of Alternative Proposal shall be deemed to be references to
more than 30%.
(iv) In no event shall MLP be required to pay the MLP Termination Fee on more than one
occasion.
(c)
Parent Termination Fee
. In the event that this Agreement is terminated by MLP GP pursuant to
Section
8.1(d)(iii)
, then Parent shall pay to MLP a termination fee of $24,616,491 (the
Parent Termination Fee
) promptly (but in no event later than two Business Days) after such termination, by wire
transfer of immediately available funds;
provided
, that the Parent Termination Fee payable pursuant to this
Section
8.2(c)
shall be reduced by the MLP Expense Reimbursement, if any, actually paid to MLP pursuant to
Section
8.2(d)(ii)
. In no event shall Parent be required to pay the Parent Termination Fee on more than one occasion.
(d)
Expense Reimbursement
.
(i) In the event that this Agreement is terminated, (i) by Parent GP pursuant to
Section
8.1(c)(ii)
due to any MLP Entitys or any Lightfoot Entitys failure to perform any covenant or agreement set forth in this Agreement, or (ii) by Parent GP or MLP GP pursuant to
Section
8.1(b)(i)
at a time when this Agreement was terminable by Parent GP pursuant to
Section
8.1(c)(ii)
due to any MLP Entitys or any Lightfoot Entitys failure to perform any
covenant or agreement set forth in this Agreement or the failure of any of the representations and warranties set forth in this Agreement made by any Lightfoot Entity or MLP Entity to be true and correct as of the date of this Agreement, then MLP
shall pay to Parent its and its Affiliates reasonable
out-of-pocket
costs, fees and expenses incurred in connection with their investigation, consideration,
documentation, diligence and negotiation of this Agreement and the Transactions, including all fees and expenses of such Partys and its Affiliates Representatives (the
Parent Expense Reimbursement
), by wire transfer of
immediately available funds;
provided
that the Parent Expense Reimbursement shall not exceed $1,500,000. For the avoidance of doubt, the Parent Expense Reimbursement shall not be the sole and exclusive remedy of the Parent Entities against
the MLP Entities or the Lightfoot Entities.
(ii) In the event that this Agreement is terminated, (i) by MLP GP
pursuant to
Section
8.1(d)(i)
due to any Parent Entitys failure to perform any covenant or agreement set forth in this Agreement, or (ii) by Parent GP or MLP GP pursuant to
Section
8.1(b)(i)
at a time when this Agreement was terminable by MLP GP pursuant to
Section
8.1(d)(i)
due to any Parent Entitys failure to perform any covenant or agreement set forth in this
Agreement or the failure of any of the representations and warranties set forth in this Agreement made by any Parent Entity to be true and correct as of the date of this Agreement, then Parent shall pay to MLP its and its Affiliates reasonable
out-of-pocket
costs, fees and expenses incurred in connection with their investigation, consideration, documentation, diligence and negotiation of this Agreement and the
Transactions, including all fees and expenses of such Partys and its Affiliates Representatives (the
MLP Expense Reimbursement
), by wire transfer of immediately available funds;
provided
that the MLP Expense
Reimbursement shall not exceed $1,500,000. For the avoidance of doubt, the MLP Expense Reimbursement shall not be the sole and exclusive remedy of the MLP Entities against the Parent Entities.
(e)
Collection Fees and Expenses
. Each Party acknowledges that the agreements contained in this
Section
8.2
are an integral part of the Merger and the other Transactions, and that, without these agreements, no Party would enter into this Agreement. Accordingly, if MLP or Parent, as applicable, fails to promptly pay
any amount due under this
Section
8.2
, and, in order to obtain such payment, the payee Party commences a Proceeding that results in an Order against the payor Party, the payor Party shall pay to the payee Party the costs
and expenses (including attorneys fees and expenses) in connection with such
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Proceeding and shall pay interest on the amount payable pursuant to such Order, compounded quarterly, at the prime lending rate prevailing during such period as published in
The Wall Street
Journal,
calculated on a daily basis from the date such amounts were required to be paid (but for such Proceeding) until the date of actual payment.
(f)
Limitation of Liability
.
(i) For the avoidance of doubt, (A) under no circumstances shall the aggregate amount of damages payable by any of the
Parent Entities or any of their Affiliates, in respect of breaches under this Agreement (including pursuant to the Limited Guarantee) exceed $24,616,491 for all such breaches in the aggregate (the
Parent Liability Limitation
) and
(B) while MLP GP may pursue specific performance in accordance with, and subject to the terms and conditions of,
Section
9.9
, under no circumstances shall the MLP Entities be permitted or entitled to receive both
specific performance of the type contemplated by
Section
9.9
and the Parent Termination Fee (or other money damages). In no event shall the MLP Group Entities and any of their respective former, current or future officers,
directors, partners, equityholders, managers, members or Affiliates (collectively,
MLP Related Parties
) seek or obtain, nor shall they permit any of their respective Representatives or any other Person on their behalf to seek or
obtain, nor shall any Person be entitled to seek or obtain, any monetary recovery or award in excess of the Parent Liability Limitation against any of the Parent Entities, the Financing Sources or any of their respective former, current or future
general or limited partners, shareholders, financing sources, managers, members, employees, agents, directors, officers or Affiliates (collectively, the
Parent Related Parties
), including consequential, indirect, punitive or
incidental damages or damages based on a multiple of earnings or similar valuation for, or with respect to, any breach of this Agreement, the Commitment Letters or the Limited Guarantee or the transactions contemplated hereby and thereby (including
for any breach by any of the Parent Entities, the Financing Sources or the Guarantors), the termination of this Agreement, the failure to consummate the transactions contemplated by this Agreement or any Proceeding under applicable Laws arising out
of any such breach, termination or failure.
(ii) Notwithstanding anything to the contrary in this Agreement, (A) in
no event shall any Parent Related Party (which excludes, for the avoidance of doubt, each of the Parent Entities) have any liability for monetary damages to any of the MLP Group Entities or any of the MLP Related Parties relating to or arising out
of this Agreement or the transactions contemplated hereby, other than such Persons obligations, if any, under the Limited Guarantee or the Commitment Letters and other than the obligations of the Parent Entities to the extent expressly
provided herein and (B) under no circumstances shall the MLP Related Parties (which excludes, for the avoidance of doubt, the MLP Entities) have any liability to any Parent Related Party for monetary damages to any of the Parent Related Parties
relating or arising out of this Agreement or the transactions contemplated hereby, other than such Persons obligations to the extent expressly provided herein or in the other Transaction Documents. In no event shall MLP GP or any of the MLP
Group Entities or MLP Related Parties seek or obtain, nor shall they permit any of their respective Representatives to seek or obtain, nor shall any Person be entitled to seek or obtain, any monetary recovery or monetary award against any Parent
Related Party with respect to this Agreement, the Commitment Letters or the Limited Guarantee or the transactions contemplated hereby and thereby (including any breach by any of the Parent Entities or the Financing Sources), the termination of this
Agreement, the failure to consummate the transactions contemplated hereby or any claims or actions under applicable Laws arising out of any such breach, termination or failure, other than from any of the Parent Entities to the extent expressly
provided for in this Agreement and from the applicable Parent Related Party to the extent expressly provided for in the Limited Guarantee or the Commitment Letters, as applicable.
(iii) For the avoidance of doubt, (A) under no circumstances shall the aggregate amount of damages payable by the MLP
Entities or their officers or directors in respect of breaches under this Agreement or any claim arising out of or related to this Agreement exceed the $24,616,491 (the
MLP
Liability Limitation
) and (B) while the
Parent Entities may pursue specific performance in accordance
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with, and subject to the terms and conditions of,
Section
9.9
, under no circumstances shall the Parent Entities be permitted or entitled to receive both specific
performance of the type contemplated by
Section
9.9
and the MLP Termination Fee (or other money damages). In no event shall the Parent Related Parties seek or obtain, nor shall they permit any of their respective
Representatives or any other Person on their behalf to seek or obtain, nor shall any Person be entitled to seek or obtain, any monetary recovery or award in excess of the MLP Liability Limitation against any of the MLP Related Parties, including
consequential, indirect, punitive or incidental damages or damages based on a multiple of earnings or similar valuation for, or with respect to, any breach of this Agreement or the transactions contemplated hereby and thereby (including for any
breach by any of the MLP Entities), the termination of this Agreement, the failure to consummate the transactions contemplated by this Agreement or any Proceeding under applicable Laws arising out of any such breach, termination or failure.
(iv) In the event that Parent or its designee receives the MLP Termination Fee pursuant to
Section
8.2(b)
, the Parent Expense Reimbursement pursuant to
Section
8.2(d)
and/or the expenses referred to in
Section
8.2(e)
, such amounts shall be deemed to be
liquidated damages for any and all losses or damages suffered or incurred by the Parent Entities and their respective Affiliates in connection with this Agreement (and the termination hereof), the transactions contemplated hereby (and the
abandonment thereof) or any matter forming the basis for such termination, and none of the Parent Entities or their respective Affiliates shall be entitled to bring or maintain any Proceeding against the MLP Entities or any of their respective
Affiliates with respect to the foregoing. In the event that MLP receives the Parent Termination Fee pursuant to
Section
8.2(c)
and/or the expenses referred to in
Section
8.2(e)
, such amounts shall
be deemed to be liquidated damages for any and all losses or damages suffered or incurred by the MLP Group Entities and their respective Affiliates in connection with this Agreement, the Commitment Letters or the Limited Guarantee (and the
termination hereof), the transactions contemplated hereby and thereby (and the abandonment or termination hereof) or any matter forming the basis for such termination, and none of the MLP Group Entities or MLP Related Parties or any of their
respective Representatives shall be entitled to bring or maintain any Proceeding against any Parent Entity or any other Parent Related Party with respect to the foregoing. Nothing in this
Section
8.2(f)(iii)
shall limit
(x) the rights of any party hereto under
Section
9.9
(subject to the limitations and conditions set forth therein) prior to the termination of this Agreement or (y) the rights of the Parent Entities under the
Support Agreements.
ARTICLE IX
MISCELLANEOUS
Section 9.1
No Survival, Etc.
Except as otherwise provided in this Agreement, the representations, warranties and agreements of
each Party hereto will remain operative and in full force and effect regardless of any investigation made by or on behalf of any other Party hereto, whether prior to or after the execution of this Agreement. The representations, warranties and
agreements in this Agreement will terminate at the Effective Time or, except as otherwise provided in
Section
8.2
, upon the termination of this Agreement pursuant to
Section
8.1
, as the case may
be, except that (x) the agreements set forth in
Articles II
and
IX
and
Sections 6.9
,
6.12
,
Section
6.13
,
Section
6.14
and
6.18
and any other agreement in
this Agreement that contemplates performance after the Effective Time will survive the Effective Time and (y) those set forth in
Sections 6.7(c)
,
6.12
and
8.2
, and this
Article IX
will survive termination of this
Agreement. The Confidentiality Agreement will (i) survive termination of this Agreement in accordance with its terms and (ii) terminate as of the Effective Time.
Section 9.2
Amendment or Modification
. At any time prior to the Effective Time, this Agreement may be amended or modified in any
and all respects, whether before or after receipt of the MLP Unitholder Approval, only by written agreement of the Parties, by action taken or authorized by the MLP GP Board, the GP Conflicts Committee and Parent GP;
provided
,
however
,
that following approval of the Merger by the Unitholders, there
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will be no amendment or change to the provisions of this Agreement which by Law would require further approval by the Unitholders without such approval;
provided
,
further
, that this
Section
9.2
,
Section
9.7
,
Section
9.8
and
Section
9.13
(and any other provision of this Agreement to the extent an amendment, supplement, waiver
or other modification of such provision would modify the substance of such Sections) will not be amended in a manner adverse to any Debt Financing Source without the prior written consent of such Debt Financing Source. Furthermore, no other
Transaction Document shall be materially amended or modified without authorization by the MLP GP Board and the GP Conflicts Committee.
Section 9.3
Extension of Time, Waiver, Etc.
At any time prior to the Effective Time, any Party may, subject to applicable Law,
(a) waive any inaccuracies in the representations and warranties of any other Party hereto, (b) extend the time for the performance of any of the obligations or acts of any other Party hereto or (c) waive compliance by the other Party
with any of the agreements contained herein or, except as otherwise provided herein, waive any of such Partys conditions. Notwithstanding the foregoing, no failure or delay by any MLP Entity or any Parent Entity in exercising any right
hereunder will operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. Any agreement on the part of a Party hereto to any such extension
or waiver will be valid only if set forth in an instrument in writing signed on behalf of such Party. Notwithstanding the foregoing, in addition to any approvals required by MLP or MLP GPs governing documents or under this Agreement or any
Transaction Document, any determination, discussion, approval, consent or agreement of any MLP Entity or the MLP GP Board required to be made pursuant to this Agreement or any Transaction Document (including with respect to
Section
1.3
), and any decision or determination by any MLP Entity or the MLP GP Board to (x) terminate this Agreement pursuant to
Section
8.1
or (y) enforce this Agreement (including
pursuant to
Section
9.9
), must be made or approved, as applicable, by both the MLP GP Board and the GP Conflicts Committee, and such action shall not require approval of the Unitholders.
Section 9.4
Assignment
. Neither this Agreement nor any of the rights, interests or obligations hereunder will be assigned, in
whole or in part, by operation of Law or otherwise, by any of the Parties without the prior written consent of the other Parties, except that (a) Parent, Parent GP, Holdings and Merger Sub may assign, in their respective sole discretion, any or
all of their respective rights, interests and obligations under this Agreement (i) to one or more Affiliates of such Party, or (ii) to any of their financing sources as collateral security, but no such assignment will relieve Parent,
Parent GP, Holdings or Merger Sub of any of its obligations hereunder, and (b) MLP may assign, in its sole discretion, its right to receive the Parent Termination Fee pursuant to
Section
8.2(c)
to one or more of its
Subsidiaries, but no such assignment will relieve MLP of any of its obligations hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective
successors and permitted assigns. Any purported assignment not permitted under this
Section
9.4
will be null and void.
Section 9.5
Counterparts
. This Agreement may be executed in counterparts (each of which will be deemed to be an original but all
of which taken together will constitute one and the same agreement) and will become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties.
Section 9.6
Entire Agreement
. This Agreement, the Joliet Purchase Agreement, the Gulf LNG Purchase Agreement, the MLP Disclosure
Letter, the Transition Services Agreement and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior Contracts, both written and oral, among the Parties with respect to the subject matter of this Agreement and
thereof. In the event of a conflict between the terms of this Agreement and the Confidentiality Agreement, the terms of this Agreement will control.
Section 9.7
No Third-Party Beneficiaries
. Except for (a)
Section
6.9
and
Section
9.13
, which will inure to the benefit of the Persons benefiting therefrom, who are expressly intended to be third party beneficiaries thereof, (b) if the Closing occurs, the right of Unitholders to receive the
Merger Consideration and (c) if the Closing occurs, the right of holders of Phantom Units to receive the Phantom Unit Consideration, this Agreement is not
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intended to, and does not, confer upon any Person other than the Parties any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein.
Notwithstanding the foregoing and anything in this Agreement to the contrary,
Section
9.1
,
Section
9.2
,
Section
9.7
,
Section
9.8
and
Section
9.13
are intended for the benefit of, and shall be enforceable by, the Debt Financing Sources. The representations and warranties in this Agreement are the product of negotiations among the Parties and are for the
sole benefit of the Parties. Any inaccuracies in such representations and warranties are subject to waiver by the Parties without notice or liability to any other Person. In some instances, the representations and warranties in this Agreement may
represent an allocation among the Parties of risks associated with particular matters regardless of the Knowledge of any of the Parties, and consequently, may not accurately characterize actual facts or circumstances.
Section 9.8
Governing Law; Jurisdiction; Waiver of Jury Trial
.
(a) This Agreement and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon, arise
out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this
Agreement or as an inducement to enter into this Agreement) will be governed by, and construed in accordance with, the Laws of the State of Delaware applicable to Contracts executed in and to be performed entirely within that State.
(b) By execution and delivery of this Agreement, each Party irrevocably agrees that any Proceeding with respect to this
Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or
assigns, will be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular
matter, any state or federal court within the State of Delaware). Each of the Parties hereby irrevocably submits with regard to any such Proceeding for itself and in respect of its property, generally and unconditionally, to the personal
jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the Transactions in any court other than the aforesaid courts. Each of the Parties hereby irrevocably waives, and agrees not to
assert as a defense, counterclaim or otherwise, in any Proceeding with respect to this Agreement or the Transactions, (i) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the
failure to serve in accordance with this
Section
9.8
, (ii) any claim that it or its property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by the applicable Law, any claim that (x) the Proceeding in
such court is brought in an inconvenient forum, (y) the venue of such Proceeding is improper or (z) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Notwithstanding anything in this Agreement to the
contrary, each of the Parties (on behalf of themselves and, with respect to MLP, on behalf of the MLP Related Parties) agrees: (a) that it will not bring or support any action, cause of action, claim, cross-claim or third-party claim of any
kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against the Debt Financing Sources in any way relating to this Agreement or any of the Transactions, including the Merger and the Debt Financing,
including any dispute arising out of or relating in any way to the Debt Commitment Letter or the performance thereof, in any forum other than federal and New York state courts located in the Borough of Manhattan within the City of New York; and
(b) that, except as specifically set forth in the Debt Commitment Letter, all claims or causes of action (whether at law, in equity, in contract, in tort or otherwise) against any of the Debt Financing Sources in any way relating to the Debt
Commitment Letter or the performance thereof or the financings contemplated thereby, shall be exclusively governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to principles or rules of
conflict of laws to the extent such principles or rules would require or permit the application of laws of another jurisdiction.
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(c) EACH PARTY (INCLUDING EACH MLP RELATED PARTY) ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING ANY ACTION, PROCEEDING OR COUNTERCLAIM AGAINST ANY DEBT FINANCING
SOURCE. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH
WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS
SECTION 9.8(c)
.
Section 9.9
Specific Enforcement
.
(a) The Parties agree that irreparable damage would occur and that the Parties would not have any adequate remedy at law in the
event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and it is accordingly agreed that the Parties will be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, in accordance with this
Section
9.9
in the Delaware Court of Chancery or any federal court sitting in the
State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity. Each of the Parties agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief as
provided herein on the basis that (x) any Party has an adequate remedy at law or (y) an award of specific performance is not an appropriate remedy for any reason at law or equity. Each Party further agrees that no Party will be required to
obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this
Section
9.9
, and each Party irrevocably waives any right it may have to require the
obtaining, furnishing or posting of any such bond or similar instrument. For the avoidance of doubt, under no circumstances shall the Parent Entities, on the one hand, and the MLP Group Entities and the Lightfoot Entities, on the other hand, be
permitted or entitled to receive both a grant of specific performance in accordance with this
Section
9.9
and the MLP Termination Fee or the Parent Termination Fee, as applicable, in respect of the same underlying claim.
(b) Notwithstanding anything to the contrary in this Agreement, and without limiting the generality of
Section
9.9(a)
with respect to obligations not specifically addressed in this
Section
9(b)
, it is explicitly agreed that MLP and MLP GP shall be entitled to seek specific performance of the Parent
Entities obligation to cause the Equity Financing to be funded and to consummate the Merger and the other transactions contemplated by this Agreement, including to effect the Closing in accordance with
Section
1.3
, on
the terms and subject to the conditions in this Agreement, if, and only if, (i) all conditions in
Section
7.1
and
Section
7.2
(other than such conditions as, by their nature, are to be
satisfied by the delivery of documents or the taking of any other action at the Closing, but subject to the satisfaction (or waiver) of such conditions at the Closing) have been satisfied at the time when the Closing would have occurred but for the
failure of the Equity Financing to be funded, (ii) Parent fails to complete the Closing by the date the Closing is required to have occurred pursuant to
Section
1.3
, (iii) the Debt Financing Sources have confirmed in
writing that the Debt Financing has been funded or will be funded at the Closing on the terms, and subject to the conditions, set forth in the Debt Commitment Letter if the Equity Financing is funded at the Closing, (iv) MLP has irrevocably
confirmed in a written notice to Parent GP that if specific performance or other equitable remedies are granted and the Equity Financing and Debt Financing are funded (on the terms set forth therein), then the Closing will occur on the terms
contemplated by this Agreement, and (v) MLP GP
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shall have delivered to Parent GP a Closing Failure Notice and the five Business Day period following the delivery of such Closing Failure Notice shall have expired. For the avoidance of doubt,
under no circumstances will MLP GP (collectively with all of its Affiliates) be entitled to both a grant of specific performance or other equitable remedies of the sort described in the preceding sentence and any monetary damages, including all or
any portion of Parent Termination Fee, the Parent Expense Reimbursement pursuant to
Section
8.2(d)
and/or the expenses referred to in
Section
8.2(e)
.
Section 9.10
Notices
. All notices, requests, permissions, waivers and other communications hereunder will be in writing and will
be deemed to have been duly given (a) when sent, if sent by facsimile (which is confirmed) or electronic mail (provided that no electronic notice of
non-delivery
is received by the sender), (b) when
delivered, if delivered personally to the intended recipient and (c) one Business Day following sending by overnight delivery via an international courier service and, in each case, addressed to a Party at the following address for such Party:
If to Parent, Parent GP, Holdings or Merger Sub, to:
c/o Zenith Energy U.S., L.P.
3900 Essex Lane, Suite 950
Houston, Texas 77027
Attn:
General Counsel
with a copy (which will not constitute notice) to:
Kirkland & Ellis LLP
609 Main Street, Suite 4700
Houston, Texas 77002
Attn: Adam Larson, P.C.
Kim Hicks
If to the Lightfoot Entities:
c/o Lightfoot Capital Partners, LP
725 Fifth Avenue, 19
th
Floor
New York, New York
Facsimile:
(212)
993-1299
Attn: Vince Cubbage
Steven Schnitzer
with a copy (which will not constitute notice) to:
Vinson & Elkins L.L.P.
666 Fifth Avenue, 26
th
Floor
New York, New York 10103
Facsimile: (917)
849-5367
Attn: Michael Swidler
Brenda Lenahan
If to MLP or MLP GP:
c/o Arc
Logistics Partners LP
725 Fifth Avenue, 19
th
Floor
New York, New York
Facsimile:
(212)
993-1299
Attn: Vince Cubbage
Steven Schnitzer
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with a copy (which will not constitute notice) to:
Vinson & Elkins L.L.P.
666 Fifth Avenue, 26
th
Floor
New York, New York 10103
Facsimile: (917)
849-5367
Attn: Michael Swidler
Brenda Lenahan
Baker Botts L.L.P.
910 Louisiana
Street
Houston, Texas 77002
Facsimile: (713)
229-2727
Attn: Joshua Davidson
Jeremy Moore
or to such
other address as will be furnished in writing by any such Party to the other Party in accordance with the provisions of this
Section
9.10
.
Section 9.11
Severability
. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any
provision will not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application of such provision to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision will be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of
such provision to other Persons or circumstances will not be affected by such invalidity or unenforceability, nor will such invalidity or unenforceability affect the validity or enforceability of such provision, or the application of such provision,
in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that Transactions are fulfilled to the extent possible.
Section 9.12
Construction
.
(a)
Generally.
The descriptive headings herein are inserted for convenience of reference only and are not intended to be
a substantive part of or to affect the meaning or interpretation of this Agreement. Whenever required by the context, any pronoun used in this Agreement or the MLP Disclosure Letter will include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns, pronouns, and verbs will include the plural and vice versa. Reference to any Contract, document, or instrument means such Contract, document, or instrument as amended or otherwise modified from time to time in
accordance with the terms thereof, and if applicable hereof. The use of the words include or including in this Agreement or the MLP Disclosure Letter will be deemed to be followed by the words without limitation.
The use of the word covenant will mean covenant and agreement. The use of the words or, either or any will not be exclusive. Days means calendar days unless specific as Business Days.
References in this Agreement to specific Laws or to specific provisions of Laws will include all rules and regulations promulgated thereunder, and any statute defined or referred to herein will mean such statute as from time to time amended,
modified or supplemented, including by succession of comparable successor statutes. All terms defined in this Agreement will have the defined meanings set forth herein when used in any certificate or other document made or delivered by a Party
pursuant hereto unless otherwise defined therein. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as
if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Except as otherwise expressly provided elsewhere in this
Agreement or any Ancillary Agreement, any provision herein which contemplates the agreement,
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approval or consent of, or exercise of any right of, a Party, such Party may give or withhold such agreement, approval or consent, or exercise such right, in its sole and absolute discretion, the
Parties hereby expressly disclaiming any implied duty of good faith and fair dealing or similar concept. The phrase made available shall mean that the documents or information referred to have been posted prior to the date of this
Agreement to the electronic data site hosted by Citrix Sharefile and established by MLP for the purpose of providing due diligence materials and information to Parent and its Representatives.
(b)
Certain Matters Relating to Gulf LNG Arbitration
. The Parties agree that in no event shall the arbitration
panels decision in (or the settlement of) the Gulf LNG Arbitration or the impact of such decision (or such settlement) upon Gulf LNG or its business, assets, liabilities or condition (financial or otherwise), or any of the other matters
described in
clause (ix)
of the term Excluded Matter included in the definition of MLP Material Adverse Effect (including, for the avoidance of doubt, the resulting impact of such decision (or settlement) upon the MLP or its
business, assets, liabilities or condition (financial or otherwise)) (i) be given effect to or taken into account, directly or indirectly, for purposes of determining whether (A) any MLP Entity or a Lightfoot Entity has satisfied any condition
precedent to the obligations of the Parent Entities to consummate the Transactions as set forth in
Section
7.2
or (B) any Parent Entity has any obligation to pay any termination fee pursuant to
Section
8.2
hereof or (ii) afford any Party the right to terminate this Agreement pursuant to
Article
VIII
hereof.
Section 9.13
Non-Recourse
. Except for any claim or cause of action arising under or
related to any Support Agreement, Letter of Transmittal, Phantom Unitholder Acknowledgement or documentation delivered in connection with payment of Merger Consideration through DTC, any claim or cause of action based upon, arising out of, or
related to this Agreement may only be brought against Persons that are expressly named as Parties, and then only with respect to the specific obligations set forth herein. Except for any liability or obligation arising under or related to any
Support Agreement, Letter of Transmittal, Phantom Unitholder Acknowledgement or documentation delivered in connection with payment of Merger Consideration through DTC, no former, current or future direct or indirect equityholders, controlling
Persons, stockholders, directors, officers, employees, members, managers, agents, trustees, Affiliates, general or limited partners or assignees of the Parties (except permitted assignees under
Section
9.4
) or of any
former, current or future direct or indirect equityholder, controlling Person, stockholder, director, officer, employee, member, manager, agent, trustee, Affiliate, general or limited partner or assignee of any of the foregoing (collectively, but
for the avoidance of doubt excluding the Parties) will have any liability or obligation for any of the representations, warranties, covenants, agreements, obligations or liabilities of any Party under this Agreement or for any Proceeding based on,
in respect of, or by reason of, the Transactions (including the breach, termination or failure to consummate any of the Transactions), in each case whether based on contract, tort or strict liability, by the enforcement of any assessment, by any
legal or equitable Proceeding, by virtue of any statute, regulation or applicable Law or otherwise and whether by or through attempted piercing of the corporate or partnership veil, by or through a claim by or on behalf of a Party hereto or another
Person or otherwise. Notwithstanding anything to the contrary contained herein, none of MLP GP, or any of the MLP Group Entities or MLP Related Parties shall have any rights or claims against any Debt Financing Source in connection with this
Agreement, the Debt Financing or the transactions contemplated hereby or thereby, and no Debt Financing Source shall have any rights or claims against MLP GP, or any of the MLP Group Entities or MLP Related Parties in connection with this Agreement,
the Debt Financing or the transactions contemplated hereby or thereby, whether at law or equity, in contract, in tort or otherwise; provided that, following consummation of the Merger, the foregoing will not limit the rights of the parties to the
Debt Financing under any commitment letter related thereto. Notwithstanding any other provision herein, no Debt Financing Source nor any Affiliate of any Debt Financing Source, nor any officer, director, employee, agent, controlling person, advisor
or other representative of the foregoing or any successor or permitted assign of any of the foregoing shall be liable for any indirect, special, punitive or consequential damages (including, without limitation, any loss of profits, business or
anticipated savings) in connection with the Financing, the Transactions, or with respect to any activities related to the Financing, including the preparation of the Commitment Letters and the Fee Letters.
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Section 9.14
Obligations of Parent and of MLP
. Whenever this Agreement requires a
Subsidiary of Parent to take any action, such requirement will be deemed to include an undertaking on the part of Parent to cause such Subsidiary to take such action. Whenever this Agreement requires a Subsidiary of MLP to take any action, such
requirement will be deemed to include an undertaking on the part of MLP to cause such Subsidiary to take such action and, after the Effective Time, on the part of the Surviving Entity to cause such Subsidiary to take such action. Whenever this
Agreement requires MLP to take any action, such requirement will be deemed to include an undertaking on the part of the Lightfoot Entities and MLP GP to cause MLP to take such action. All restrictions imposed by this Agreement on MLP or its actions
will be deemed to include any actions that may be taken directly by MLP or otherwise effected directly or indirectly by the Lightfoot Entities or MLP GP. Whenever this Agreement requires Parent to take any action, such requirement will be deemed to
include an undertaking on the part of Parent GP to cause Parent to take such action. All restrictions imposed by this Agreement on Parent or its actions will be deemed to include any actions that may be taken directly by Parent or otherwise effected
directly or indirectly by Parent GP.
Section 9.15
Tax Treatment
. The Parties agree that (a) the Transactions will cause
a termination of MLP pursuant to Section 708(b)(1)(A) of the Code as of Closing and (b) the GP Equity Transfer constitutes an acquisition of all of the outstanding General Partner Interest for U.S. federal income tax purposes
and the Merger constitutes an acquisition by Parent of all the outstanding Common Units in MLP, and the tax treatment of such acquisitions is governed by Revenue Ruling
99-6,
1999-1
C.B.432.
Section 9.16
Definitions
. As used in this Agreement, the following
terms have the meanings ascribed thereto below:
Affiliate
means, as to any Person, any other Person that, directly or
indirectly, controls, or is controlled by, or is under common control with, such Person. For this purpose, control (including, with its correlative meanings, controlled by and under common control with) means the
possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.
Alternative Proposal
means any proposal or offer made by a Person or group (as defined in Section 13(d) of
the Exchange Act) other than Parent, Parent GP, Holdings or Merger Sub relating to or concerning any (a) direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, of (i) 20% or more of the
consolidated total assets of the MLP Group Entities, taken as a whole, or (ii) 20% or more of any class of outstanding Equity Interests of the MLP Entities, (b) tender offer or exchange offer that if consummated would result in any Person
beneficially owning, directly or indirectly, 20% or more of any class of outstanding Equity Interests of the MLP Entities, (c) merger, consolidation, exclusive license, business combination, joint venture, partnership, share exchange,
recapitalization, liquidation, dissolution or other transaction involving the MLP Entities pursuant to which any Person or its holders of Equity Interests would beneficially own, directly or indirectly, 20% or more of any class of outstanding Equity
Interests of the MLP Entities or the surviving entity resulting, directly or indirectly, from any such transaction, in each case, other than the Transactions (including the Joliet Purchase and the Gulf LNG Purchase).
Anti-corruption Laws
means Laws relating to anti-bribery or anti-corruption (governmental or commercial) which apply to the
MLP Group Entities, including the FCPA and all other Laws that prohibit the corrupt payment, offer, promise or authorization of the payment or transfer of anything of value (including gifts or entertainment), directly or indirectly, to any foreign
Government Official, foreign government employee or commercial entity to obtain a business advantage.
Antitrust Laws
means the Sherman Antitrust Act, the Clayton Antitrust Act, the HSR Act, the Federal Trade Commission Act of 1914, Council Regulation (EC) No. 139/2004 of 20th January 2004 on the control of concentrations between undertakings, and all other
supranational, national, federal, state, county, provincial, municipal, local, foreign statutes and other statutes, rules, regulations, Orders, decrees, administrative and
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judicial doctrines and all other Laws designed or intended to require advance notification or approval of, or otherwise prohibit, restrict or regulate, a merger or other transaction that may be
deemed to have the purpose or effect of monopolizing or restraining trade or lessening competition through merger or acquisition.
Bona Fide Alternative Proposal
means an unsolicited written bona fide Alternative Proposal that was not received or
obtained in material violation of
Section
6.4
.
Business Day
means a day except a Saturday, a
Sunday or other day on which the SEC or banks in the City of New York, New York are authorized or required by Law to be closed.
Common Unit
means an equity interest in MLP representing limited partner interests of MLP and having the rights and
obligations specified with respect to Common Units in the MLP Partnership Agreement.
Confidentiality Agreement
means
that certain
Non-Disclosure
Agreement, dated as of May 9, 2017, by and between Zenith Energy, L.P. and MLP.
Consents
means notices, reports, declarations, submissions or other filings that are required to be made with, or any
waivers required to be obtained from any Governmental Authority or third party or any applications required to be submitted to any Governmental Authority or third party.
Contract
means any agreement, commitment, understanding, contract, lease (whether for real or personal property), power of
attorney, note, bond, mortgage, indenture, deed of trust, loan, evidence of indebtedness, settlement agreement, franchise agreement, undertaking, covenant not to compete, license, instrument or other legally binding arrangement, whether oral or
written.
Criminal Penalty
means any criminal penalty, criminal fine or other criminal liability, in each case, imposed
upon, or that would reasonably be expected to be imposed upon, any MLP Group Entity or any of their respective directors, managers, officers or employees (in his or her capacity as such) involving (a) a criminal offense where the maximum
statutory fine is $10,000,000 or more per occurrence or series of related occurrences, (b) a felony criminal jail sentence, where the statutory maximum sentence of imprisonment is five years or more per occurrence or series of related
occurrences as to matters over which the United States has jurisdiction or (c) a criminal jail sentence where the statutory maximum sentence of imprisonment is five years or more per occurrence, or series of related occurrences, as to matters
over which jurisdiction is wholly outside of the United States.
Derivative Transaction
means any forward, future,
hedge, swap, collar, put, call, floor, cap, option or other Contract that is intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in interest rates, basis risk or the price of commodities, including hydrocarbons and
produced hydrocarbons, that binds any MLP Group Entity or any of their respective assets.
Divestiture Condition
means
(a) any restriction, prohibition or limitation of ownership or operation by any of the Parent Entities or their respective Affiliates of all or any portion of the businesses or assets of the MLP Group Entities in any manner in any part of the
world, (b) any requirement that any of the Parent Entities or any of their respective Affiliates or any MLP Group Entity sell, divest, hold separate or otherwise dispose of, or enter into a voting trust, proxy or hold separate
Contract or similar Contract with respect to, all or any portion of their respective businesses or assets or (c) any restriction, prohibition or limitation on the ability of any of the Parent Entities or any of their respective Affiliates or
any MLP Group Entity to conduct their respective businesses, enter into any new line of business or own or operate any of their respective assets, in each case, in any manner in any part of the world.
Divestiture Request
means any request or requirement, whether or not in writing (including electronic communication), by a
representative of the Antitrust Division of the Department of Justice, the Bureau of
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Competition of the Federal Trade Commission or a representative of any comparable
non-U.S.
Governmental Authority that any Parent Entity, any MLP Group
Entity or any Lightfoot Entity (or any of their respective Affiliates) offer, accept or agree, or commit to agree, to a Divestiture Condition with respect to one or more specific assets, Contracts, businesses or lines of business as a condition to
the clearance or approval of, or consent or waiver with respect to, the Transactions under Antitrust Laws.
DLLCA
means
the Delaware Limited Liability Company Act, as amended.
DRULPA
means the Delaware Revised Uniform Limited Partnership
Act, as amended.
Environment
means soil, water (including navigable waters, oceans, streams, ponds, reservoirs,
wetlands, surface waters, ground waters, drinking waters and water vapor), land, stream sediments, surface or subsurface strata, ambient air, indoor air, noise, plant life, animal life and all other environmental media or natural resources,
including any physical structure.
Environmental Laws
means any Laws, Permits, or Orders which regulate, impose
liability or responsibility for or otherwise relate to (a) pollution, the protection, preservation, clean up or restoration of the Environment, (b) the registration, generation, labeling, manufacture, handling, use, treatment, placing on
the market, storage, transportation, transboundary movement, presence, collection, disposal, Release or threatened Release of any Hazardous Materials, or (c) public or worker health or safety.
Environmental Permits
means any Permits required under any Environmental Law.
Equity Interest
means any share, capital stock, partnership, limited liability company, membership or similar interest in
any Person.
Equity Security
means any (a) Equity Interest or (b) Right.
ERISA
means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated
thereunder.
ERISA Affiliate
means, with respect to any Person, any trade or business, whether or not incorporated,
that together with such Person is a single employer for purpose of Section 414(b), (c), (m) or (o) of the Code.
Exchange Act
means the Securities Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Existing MLP Credit Facility
means that certain Second Amended and Restated Revolving Credit Agreement, dated
November 12, 2013, by and among MLP, Arc Logistics LLC, Arc Terminals, as Borrower, the Lenders thereto and SunTrust Bank, as Administrative Agent.
GAAP
means generally accepted accounting principles in the United States.
General Partner Interest
means the General Partner Interest (as defined in the MLP Partnership Agreement).
Government Official
means (a) any official, officer, employee or representative of, or any Person acting in an
official capacity for or on behalf of, any Governmental Authority, (b) any political party or party official or candidate for political office or (c) any Person owned, in whole or in part, or controlled by any Person described in the
foregoing
clauses (a)
or
(b)
of this definition.
Governmental Authority
means any government,
court, arbitrator, regulatory or administrative agency, commission or authority or other governmental instrumentality, federal, state or local, domestic, foreign or multinational.
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GP Conflicts Committee
means the conflicts committee of the MLP GP Board.
GP Purchase Price
means an amount of cash equal to $94,500,000.
Gulf LNG Arbitration
means that certain International Chamber of Commerce arbitration between Gulf LNG Energy, LLC and Gulf
LNG Pipeline, LLC, on the one hand, and Eni USA Gas Marketing L.L.C., which commenced on or about March 1, 2016 and referenced in the MLP SEC Documents.
Hazardous Materials
means (a) petroleum, petroleum products and
by-products,
asbestos and asbestos-containing materials, urea formaldehyde foam insulation, electronic, medical or infectious wastes, polychlorinated biphenyls, radon gas, mold, greenhouse gasses, radioactive substances, chlorofluorocarbons and all other
ozone-depleting
substances and (b) any other chemical, material, substance or waste that is regulated by or for which liability or standards of conduct may be imposed pursuant to Environmental Laws.
HSR Act
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder.
Incentive Distribution Rights
means the Incentive Distribution Rights (as defined
in the MLP Partnership Agreement).
Indebtedness
of any Person means:
(a) indebtedness created, issued or incurred by such Person for borrowed money (whether by loan or the issuance and sale of
debt securities or the sale of property of such Person to another Person subject to a Contract, contingent or otherwise, to repurchase such property);
(b) obligations of such Person to pay the deferred purchase or acquisition price for any property of such Person;
(c) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other
financial institutions for the account of such Person;
(d) obligations of such Person to pay rent or other amounts under a
lease of (or other Contract conveying the right to use) any property to such Person to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP; or
(e) indebtedness of others as described in
clauses (a)
through
(d)
above in any manner guaranteed by such
Person or for which it is or may become contingently liable; but
Indebtedness
does not include (i) accounts payable to trade creditors, or accrued expenses, arising in the ordinary course of business consistent with past
practice, in each case, that are not yet due and payable, or are being disputed in good faith or (ii) the endorsement of negotiable instruments for collection in the ordinary course of business.
Indemnified Person
means any individual who is now, or has been or becomes at any time prior to the Effective Time, an
officer, director or manager of any MLP Group Entity.
Intellectual Property
means all intellectual property and
similar proprietary rights, including (a) trademarks, service marks, trade dress, logos, slogans, trade names and corporate names, and other indicia of origin, all applications and registrations for the foregoing, and all goodwill associated
therewith and symbolized thereby, including all renewals of same, (b) intellectual property rights in all inventions (whether or not patentable), patents and patent applications, including divisions, continuations,
continuations-in-part
and renewal applications, and including renewals, extensions, reexaminations and reissues, (c) intellectual property rights in confidential
information, trade secrets and
know-how,
(d) intellectual property rights in copyrightable works of authorship (including intellectual property rights in databases and other compilations of information),
copyrights, industrial designs and other design rights, and registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof, (e) intellectual property rights in databases and other compilations of
information and (f) intellectual property rights in computer software.
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Intervening Event
means any material event, development, or change in
circumstances that first occurs, arises or becomes known to the MLP Entities or the MLP GP Board after the date of this Agreement, to the extent that such event, development or change in circumstances was not reasonably foreseeable as of or prior to
the date of this Agreement, which event, development, or change in circumstances becomes known to the MLP GP Board prior to receipt of the MLP Unitholder Approval;
provided
,
however
, that in no event shall the following events,
developments or changes in circumstances constitute an Intervening Event: (a) the receipt, existence or terms of an Alternative Proposal or any matter relating thereto or consequence thereof, (b) any event, development or change
(i) generally affecting United States or global exchange rates, interest rates or currency rates or (ii) in oil, natural gas, condensate or natural gas liquids prices or the prices of other commodities, including changes in price
differentials, (c) the entry into, or announcement of, this Agreement and the Transactions, (d) (i) any change in the market price or trading volume of the Common Units or (ii) any MLP Group Entity meeting or exceeding internal or
published projections, forecasts or revenue or earnings predictions for any period and (e) any outcome in the Gulf LNG Arbitration.
Joliet LLC Agreement
means the Amended and Restated Limited Liability Company Agreement of Joliet, dated as of May 14,
2015, as amended from time to time.
Knowledge
(a) when used with respect to any MLP Entity or any Lightfoot Entity,
means the actual knowledge, after reasonable inquiry, of the individuals listed on
Section
9.16(a)
of the MLP Disclosure Letter and (b) when used with respect to any Parent Entity, means the actual knowledge, after
reasonable inquiry, of the individuals listed on
Section
9.16(b)
of the MLP Disclosure Letter.
Laws
means any supranational, national, federal, state, county, provincial, municipal, local, foreign or common law,
statute, treaty, ordinance, judgment, decree, injunction, writ, regulation, arbitration award or finding, ordinance or other requirements promulgated, adopted or entered into by or with, any Governmental Authority (excluding Permits).
LCP GP LLC Agreement
means the First Amended and Restated Limited Liability Company Agreement of LCP GP, dated as of
November 12, 2013, as in effect on the date hereof.
Lien
means any lien, mortgage, pledge, encumbrance, charge,
option, right of first refusal, easement, deed of trust,
right-of-way,
encroachment or security interest of any nature, whether voluntarily incurred or arising by
operation of Law, including any restriction on the voting of any security and any restriction on the transfer of any security or other asset.
Limited Partner
has the meaning set forth in the MLP Partnership Agreement.
Limited Partner Interest
means a Limited Partnership Interest as defined in the MLP Partnership Agreement.
Marketing Period
means (i) the first period of 20 consecutive Business Days (provided that (x) such
20 consecutive business day period will commence no earlier than September 5, 2017, (y) any day from and including November 22, 2017 through and including November 24, 2017 shall be excluded as Business Days for purposes of this
definition and (z) if such 20 consecutive Business Day period has not ended either on or prior to December 20, 2017, then such 20 consecutive business day period will commence no earlier than January 2, 2018) after the date of this
Agreement throughout which (a) MLP shall have delivered the Required Financial Information to Parent and (b) the conditions set forth in
Article VII
have been satisfied (other than
Section
7.1(a)
and
(b)
and those conditions as, by their nature, are to be satisfied at the Closing) or waived, (ii) the Marketing Period shall not be deemed to have commenced if after the date of this Agreement and prior to the completion of such 20
consecutive Business Day period, (A) PricewaterhouseCoopers LLP shall have withdrawn its audit opinion with respect to any of the financial statements of the MLP and its Subsidiaries contained in the Required Financial Information, in which
case the Marketing Period shall not be deemed to commence unless and until a
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new unqualified audit opinion is issued with respect to such financial statements by MLPs auditors or another independent accounting firm reasonably acceptable to Parent, or (B) MLP or
any of its Subsidiaries (or the board of directors or general partners thereof, as applicable) shall have publicly announced (x) any intention to restate any historical financial statements included in the Required Financial Information or
(y) that any such restatement is under consideration or may be a reasonable possibility, in which cases the Marketing Period shall not be deemed to commence unless and until such restatement has been completed and the applicable Required
Financial Information has been amended or MLP or any of its Subsidiaries (or the board of directors or general partners thereof, as applicable) has publicly announced that it has concluded no such restatement shall be required; provided that if the
MLP shall in good faith reasonably believe that it has provided the Required Financial Information, it may deliver to Parent a written notice to that effect (stating the date upon which it believes it completed such delivery to the Required
Financial Information), in which case MLP shall be deemed to have complied with such obligation to deliver the Required Financial Information to Parent, and such 20 consecutive Business Day period shall be deemed to have commenced on the date
specified in the notice, unless Parent in good faith reasonably believes MLP has not completed delivery of the Required Financial Information to Parent or that
clause
(b)
of this of this definition has not been satisfied
and, within five Business Days after the giving of such notice by MLP, gives a written notice to MLP to that effect (stating with specificity any elements of noncompliance and/or nonsatisfaction) and (iii) in all circumstances, the Marketing
Period shall end on any earlier date that is the date on which the proceeds of the Debt Financing are received by Parent.
Material Leased Real Property
means any real property with respect to which an MLP Group Entity is a party to a Contract
for the lease or
sub-lease
of such real property involving annual payments of more than $100,000.
Merger Consideration
means the Public Merger Consideration, the Sponsor Merger Consideration and/or the Phantom Unit
Consideration, as applicable.
MLP Benefit Plans
means (a) all employee benefit plans (within the
meaning of Section 3(3) of ERISA) and (b) all other compensation or employee benefit plans, programs and other agreements, whether or not subject to ERISA, including cash or equity or equity-based, employment, retention, change of control,
health, medical, dental, disability, accident, life insurance, vacation, severance, retirement, pension, savings, termination and other employee benefit plans, programs or other agreements, including the MLP Equity Plans, in each case of
clauses
(a)
and
(b)
that are sponsored, maintained, contributed to or required to be contributed to by any MLP Group Entity for the benefit of current or former employees, individual managers, directors, individual independent contractors or
individual consultants of an MLP Group Entity, or with respect to which an MLP Group Entity has any current or contingent liability.
MLP Equity Plans
means any plans of MLP or MLP GP providing for the compensatory grant of awards of Common Units or awards
denominated, in whole or in part, in Common Units, including the MLP LTIP, in each case as in effect on the date hereof.
MLP GP
Board
means the board of directors of MLP GP.
MLP Group Entities
means the MLP Entities and the Subsidiaries
of MLP.
MLP Income Tax Returns
means any Tax Returns of MLP (including Schedule
K-1s)
with respect to any period ending on or prior to the Closing Date for Taxes that are measured by net income or total gross receipts.
MLP LTIP
means the Arc Logistics Long-Term Incentive Plan, originally adopted on November 5, 2013 and as amended or
amended and restated through the date of this Agreement.
MLP Material Adverse Effect
means any change, event, effect,
occurrence, state of facts or development that, individually or in the aggregate, (a) has had or would reasonably be expected to have a material adverse
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effect on the business, results of operations, assets, liabilities or financial condition of the MLP Group Entities, taken as a whole, or (b) has a material adverse effect on the ability of
either MLP Entity or the Lightfoot Entities to consummate the Transactions or perform its obligations under this Agreement, except, in the case of
subsection (a)
, to the extent an Excluded Matter.
Excluded Matter
means any:
(i) changes, events, effects, occurrences, states of facts or developments generally affecting the United States or global economy or the financial, credit, debt, securities or other capital markets in the United States or any other
jurisdiction, including changes in interest rates, (ii) changes in GAAP or the interpretation thereof or changes in Laws, the interpretation thereof or political, legislative or regulatory conditions (A) applicable to any MLP Group Entity
or any of their respective properties or assets or (B) generally affecting the industries in which the MLP Group Entities operate, (iii) changes in currency exchange rates, (iv) acts of war or terrorism (or the escalation of the
foregoing) or natural or weather-related disasters or other force majeure events (including hurricanes, floods or earthquakes), (v) changes in the market price or trading volume of the Common Units or any failure to meet internal or published
projections, forecasts or revenue or earnings predictions for any period, except that the underlying causes of such change or failure will not be excluded by this
clause (v)
, (vi) other than with respect to
Section
3.4
and
Section
3.5
, any changes, events, effects, occurrences, states of facts or developments related to the entry into, and public announcement of, this Agreement and the Transactions,
(vii) changes, events, effects, occurrences, states of facts or developments generally affecting the prices of oil, gas, natural gas, natural gas liquids, propane or other commodities, (viii) any acts or omissions of any MLP Group Entity
or the Lightfoot Entities taken pursuant to the express requirements of this Agreement, other than with respect to the obligations regarding the conduct of the MLP Group Entities in accordance with
Section
6.3
, at the
written request of Parent or with prior written consent of Parent after the date of this Agreement, or (ix) any changes in or effect upon the business, assets, liabilities or condition (financial or otherwise) of the MLP Group Entities
(including, for the avoidance of doubt, changes in distributions made by the MLP (or changes or expected changes in the MLPs ability to make distributions) to Unitholders or noncompliance or reasonably expected noncompliance by an MLP Group
Entity with any financial ratio or other covenant or provision of or under the Existing MLP Credit Facility Agreement), in each case of this clause (ix) that results from or arises out of (A) any reduction or anticipated reduction in the
distributions from Gulf LNG in respect of the Gulf LNG Interest, (B) any diminution in value of the Gulf LNG Interest or (C) any other adverse consequences upon or affecting Gulf LNG or its direct or indirect equityholders that, in each
case of
clause (A)
,
(B)
or
(C)
, results from or is due or otherwise attributable to the arbitration panels decision in (or the settlement of) the Gulf LNG Arbitration or the impact of such decision (or such settlement)
upon Gulf LNG or its business, assets, liabilities or condition (financial or otherwise), except, in the case of
clauses (i)
,
(ii)
,
(iii)
and
(vii)
to the extent disproportionately affecting any MLP Group Entity or
the Lightfoot Entities when compared to other Persons operating in the same industries.
MLP Partnership Agreement
means the First Amended and Restated Agreement of Limited Partnership of MLP, dated as of November 12, 2013, as in effect on the date hereof.
MLP SEC Documents
means the Annual Reports on Form
10-K,
the Quarterly Reports on
Form
10-Q
and the Current Reports on Form
8-K,
forms schedules, certifications, prospectuses, registration statements and other documents required to be filed or
furnished by MLP with or to the SEC, as applicable, pursuant to the Exchange Act or the Securities Act.
NYSE
means the
New York Stock Exchange.
Orders
means any judgment, order, decision, writ, injunction, decree, stipulation, award,
ruling, determination or other finding or agency requirement of a Governmental Authority, or arbitration award.
Outside
Date
means February 7, 2018, or, if extended to a later date pursuant to and in accordance with
Section
8.1(b)(i)
, any such later date.
Parent Benefit Plan
means (a) all employee benefit plans (within the meaning of Section 3(3) of
ERISA) and (b) all other compensation or employee benefit plans, programs and other agreements, whether or
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not subject to ERISA, including cash or equity or equity-based, employment, retention, change of control, health, medical, dental, disability, accident, life insurance, vacation, severance,
retirement, pension, savings, termination and other employee benefit plans, programs or other agreements, in each case of
clauses (a)
and
(b)
that are sponsored, maintained, contributed to or required to be contributed to by any
Parent Entity or their respective Affiliates for the benefit of current or former employees, individual managers, directors, individual independent contractors or individual consultants of a Parent Entity.
Parent Material Adverse Effect
means any change, event, development, condition, occurrence or effect that has a material
adverse effect on the ability of any of Parent, Parent GP, Holdings or Merger Sub to consummate the Transactions or perform their respective obligations under this Agreement.
Partnership Interest
means an interest in MLP, which will include the General Partner Interest and Limited Partner
Interests.
Permits
means all franchises, authorizations, licenses, registrations, clearances, permits, variances,
exceptions, exemptions, consents, certificates and approvals of any Governmental Authority.
Permitted Liens
means
(a) Liens for Taxes not yet due and payable or that are being contested in good faith by appropriate Proceedings and for which adequate reserves have been established in accordance with GAAP in MLPs financial statements included in the
MLP SEC Documents, (b) Liens in favor of carriers, warehousemen, repairmen, mechanics, workmen, materialmen, construction or similar liens or encumbrances arising by operation of Law in the ordinary course of business, (c) Liens in respect
of any liabilities and obligations reflected in the financial statements of MLP and its Subsidiaries included in or incorporated by reference into the MLP SEC Documents, (d) Liens under the Existing MLP Credit Facility, (e) any easements,
rights-of-way,
restrictions, restrictive covenants, rights, leases and other encumbrances on title to any real or personal property asset of any MLP Group Entity,
(f) statutory Liens for obligations that are highway, zoning, and building laws, ordinances and regulations on any asset of any MLP Group Entity and (g) any other Liens with respect to any asset of the MLP Group Entities, which, in the
case of
clauses (e)
,
(f)
and
(g)
would not, on any such asset, materially interfere with the current occupancy or use of such asset by the MLP Group Entities or the conduct of the MLP Group Entities respective
businesses thereon, (h) Liens imposed or promulgated by applicable Law or any Governmental Authority with respect to the real property, including zoning, building or similar restrictions, (i) all Liens of whatsoever nature affecting the
title of the lessor under any lease of real property and/or affecting the title of the grantor of any easement and (j) the Liens or exceptions set forth on
Section
9.16(c)
of the MLP Disclosure Letter.
Person
means an individual, corporation (including
not-for-profit),
general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity
or group (as such term is used in Section 13 of the Exchange Act) of any kind or nature.
Phantom Unit
means the
Vested Phantom Units and the Unvested Phantom Units, collectively.
Phantom Unit Consideration
means an amount in cash
equal to Public Merger Consideration for each Phantom Unit that is issued and outstanding as of immediately prior to the Effective Time.
Proceeding
means any (a) action, claim, suit, investigation, charge, complaint, review, litigation, audit, inquiry or
other hearing or proceeding by or before any Governmental Authority, whether civil, criminal, administrative, investigative or otherwise and whether or not such proceeding results in a formal civil or criminal litigation or regulatory action,
(b) arbitration or (c) mediation.
Public Merger Consideration
means an amount in cash equal to $16.50, for
each Common Unit (other than the Sponsor Units) that is issued and outstanding as of immediately prior to the Effective Time.
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Public Unitholders
means all Unitholders other than the Lightfoot Entities and
any Affiliate of the Lightfoot Entities.
Registration Rights Agreements
means (i) the Registration Rights
Agreement, dated as of November 12, 2013, by and among MLP and LCP LP, (ii) the Registration Rights Agreement, dated as of May 14, 2015, by and among MLP and the purchasers named on Schedule A thereto, and (iii) the Registration
Rights Agreement, dated as of July 14, 2015, by and among MLP, United Energy Trading, LLC and Hawkeye Midstream, LLC.
Release
means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing into the Environment.
Representatives
means employees, investment bankers, attorneys,
accountants, and other advisors and representatives.
Required Financial Information
means the financial and other
pertinent information regarding MLP and its Subsidiaries (including its assets, liabilities, business and operations) as may be reasonably requested by Parent or the Debt Financing Sources, including (a) the financial statements and other
information which are necessary to satisfy the conditions set forth in the Debt Commitment Letter; (b) such other financial information regarding MLP and its Subsidiaries (including its assets, liabilities, business and operations) as Parent
shall reasonably request from MLP, to the extent necessary to allow Parent to prepare pro forma financial statements of MLP customary for the type of Debt Financing contemplated by the Debt Commitment Letter; and (c) a customary authorization
letter of a member of MLP GPs management (including customary representations with respect to accuracy of information and material
non-public
information) for inclusion in any information materials that
authorize the distribution of information provided under
clauses
(a)
and
(b)
above to prospective lenders and investors.
Rights
means, with respect to any Person, (a) options, warrants, preemptive rights, subscriptions, calls or other
rights, convertible securities, exchangeable securities or Contracts of any character obligating such Person (or the general partner of such Person) to issue, transfer or sell any Equity Interest of such Person or any of its Subsidiaries or any
securities convertible into or exchangeable for such Equity Interests or (b) contractual obligations of such Person (or the general partner of such Person) to repurchase, redeem or otherwise acquire any Equity Interests in such Person or any of
its Subsidiaries or any such securities or Contracts listed in
clause (a)
of this definition.
SEC
means
the Securities and Exchange Commission.
Securities Act
means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Sponsor Merger Consideration
means an amount in cash equal to $14.50 for each
Sponsor Unit that is issued and outstanding as of immediately prior to the Effective Time.
Sponsor Units
means the
5,242,775
Common Units held by LCP LP as of the date hereof.
Subsidiary
means, with respect to any Person, any
other Person of which at least a majority of the Equity Interests having by their terms ordinary voting power to elect a majority of the board of directors or managers or other individual performing similar functions is directly or indirectly owned
or controlled by such Person (either alone or through or together with any other Subsidiary), or that would otherwise be deemed a subsidiary under Rule
12b-2
promulgated under the Exchange Act of
such Person.
Superior Proposal
means a Bona Fide Alternative Proposal that the GP Conflicts Committee has determined
in good faith, after consultation with its outside financial and legal advisors (taking into account the
A-72
various legal, financial, regulatory and other aspects of such Bona Fide Alternative Proposal, including the financing terms thereof, any proposed modifications to any of the Transactions
contemplated by such Bona Fide Alternative Proposal, the nature of the consideration offered, the provisions permitting the payment of distributions by MLP, the expected timing and risk and likelihood of consummation (including as a consequence of
the impacts of any Antitrust Law on such Bona Fide Alternative Proposal)), (a) is reasonably likely to be consummated in accordance with its terms (including the likelihood of obtaining any requisite vote or consent of the Unitholders that may be
required to effect such Bona Fide Alternative Proposal, but not taking into account that such vote or consent has not yet been obtained) and (b) if consummated, would result in a transaction more favorable to the Public Unitholders in the
aggregate from a financial point of view than the Merger (after taking into account any revisions to the terms of the Merger proposed by Parent, whether pursuant to
Section
6.4(d)
or otherwise);
provided
,
however
, that for purposes of the definition of Superior Proposal, the references to 20% or more in the definition of Alternative Proposal shall be deemed to be references to more than 50%.
Takeover Laws
means any state takeover Law or other state Law that purports to limit or restrict business combinations or
the ability to acquire or vote Common Units or other Partnership Interests, including any business combination, control share acquisition, fair price, moratorium or other similar anti-takeover Law.
Tax
or
Taxes
means any and all federal, state, local or foreign or provincial taxes, charges,
duties, imposts, levies or other assessments, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security,
unemployment, excise, severance, stamp, occupation, withholding, property and estimated taxes, customs duties, escheat or unclaimed property obligations, and other governmental charges, including any and all interest, penalties, fines, additions to
tax or additional amounts imposed by any Governmental Authority in connection therewith or in lieu thereof, and any item for which liability arises under Treasury Regulation
Section 1.1502-6
(or any
similar provision of state, local, or foreign Law), as a transferee or successor, by Contract or otherwise.
Tax Return
means any return, report, election or similar filing (including any attached schedules, supplements and additional or supporting material) filed or required to be filed with respect to Taxes, including any information return, claim for refund,
amended return or declaration of estimated Taxes (and including any amendments with respect thereto).
Transaction
Document
means this Agreement, the Joliet Purchase Agreement, the Gulf Purchase Agreement, the MLP Disclosure Letter, the Confidentiality Agreement, the Limited Guarantee, the Transfer Agreement, any ancillary agreement thereto and any
schedules and exhibits thereto.
Transactions
means the Merger, the GP Equity Transfer, the Joliet Purchase, the Gulf
LNG Purchase and the other transactions contemplated by this Agreement.
Transition Services Agreement
means that
certain Transition Services Agreement, to be entered into by and between MLP and Lightfoot GP as of the Closing Date, in substantially the form attached hereto as
Exhibit D
.
Unit Majority
has the meaning set forth in the MLP Partnership Agreement.
Unitholder
means a holder of the Common Units.
Unvested Phantom Unit
means a Phantom Unit (as defined in the MLP LTIP) granted under the MLP LTIP that (i) is listed
on Annex II of the MLP Disclosure Letter and (ii) is outstanding immediately prior to the Effective Time and (iii) remains unvested as of the Effective Time (after taking account any vesting occurring as a result of the transactions
contemplated by this Agreement).
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Vested Phantom Unit
means a Phantom Unit (as defined in the MLP LTIP) granted
under the MLP LTIP that is outstanding immediately prior to the Effective Time and is vested as of the Effective Time (after taking account any vesting occurring as a result of the transactions contemplated by this Agreement).
[
Signatures on Following Pages.
]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered as
of the date first above written.
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PARENT:
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ZENITH ENERGY U.S., L.P.
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By:
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Zenith Energy U.S. GP, LLC,
its general
partner
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/s/ Jeffrey R. Armstrong
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Name: Jeffrey R. Armstrong
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Title: Chief Executive Officer
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PARENT GP
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ZENITH ENERGY U.S. GP, LLC
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/s/ Jeffrey R. Armstrong
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Name: Jeffrey R. Armstrong
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Title: Chief Executive Officer
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[SIGNATURE PAGE TO PURCHASE AGREEMENT AND PLAN OF MERGER]
A-75
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HOLDINGS:
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ZENITH ENERGY U.S. LOGISTICS HOLDINGS, LLC
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/s/ Jeffrey R. Armstrong
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Name: Jeffrey R. Armstrong
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Title: Chief Executive Officer
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MERGER SUB:
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ZENITH ENERGY U.S. LOGISTICS, LLC
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/s/ Jeffrey R. Armstrong
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Name: Jeffrey R. Armstrong
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Title: Chief Executive Officer
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[SIGNATURE PAGE TO PURCHASE AGREEMENT AND PLAN OF MERGER]
A-76
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MLP:
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ARC LOGISTICS PARTNERS LP
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By:
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Arc Logistics GP LLC,
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its general partner
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/s/ Vincent T. Cubbage
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Name: Vincent T. Cubbage
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Title: Chief Executive Officer
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[SIGNATURE PAGE TO PURCHASE AGREEMENT AND PLAN OF MERGER]
A-77
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MLP GP:
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ARC LOGISTICS GP LLC
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/s/ Vincent T. Cubbage
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Name: Vincent T. Cubbage
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Title: Chief Executive Officer
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[SIGNATURE PAGE TO PURCHASE AGREEMENT AND PLAN OF MERGER]
A-78
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LCP GP:
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LIGHTFOOT CAPITAL PARTNERS GP LLC
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/s/ Vincent T. Cubbage
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Name: Vincent T. Cubbage
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Title: Chief Executive Officer
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LCP LP:
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LIGHTFOOT CAPITAL PARTNERS, LP
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By:
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Lightfoot Capital Partners GP LLC,
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its general partner
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/s/ Vincent T. Cubbage
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Name: Vincent Cubbage
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Title: Chief Executive Officer
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[SIGNATURE PAGE TO PURCHASE AGREEMENT AND PLAN OF MERGER]
A-79
EXHIBIT A
FORM OF
TRANSFER
AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this
Agreement
), is made by and between Lightfoot Capital Partners GP LLC, a
Delaware limited liability company (
Assignor
), and Zenith Energy U.S. Logistics Holdings, LLC, a Delaware limited liability company (
Assignee
), effective as of [●] (the
Effective Date
).
WHEREAS, Assignor is the owner of 100% of the membership interests in Arc Logistics GP LLC, a Delaware limited liability company (the
Company
) pursuant to the First Amended and Restated Limited Liability Company Agreement of the Company, effective as of November 12, 2013 (as the same may be amended from time to time, the
LLC Agreement
);
WHEREAS, Assignor and Assignee are parties to that certain Purchase Agreement and Plan of Merger by and among Arc Logistics Partners LP,
the Company, Assignor, Lightfoot Capital Partners, LP, Assignee, Zenith Energy U.S., L.P., Zenith Energy U.S. GP, LLC, and Zenith Energy U.S. Logistics dated as of August 29, 2017 (the
Merger Agreement
), pursuant to which
Assignee is purchasing the Assigned Interests (as defined below) from Assignor; and
WHEREAS, in connection with the Closing (as such term
is defined in the Merger Agreement), Assignor wishes to transfer to Assignee, and Assignee wishes to accept from Assignor, membership interests in the Company equal to 100% of the membership interests in the Company outstanding as of the Effective
Date (the
Assigned Interests
), on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in
consideration of mutual promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1.
Assignment
. Assignor does hereby transfer, assign, convey
and
deliver to Assignee all of the Assigned Interests
including, without limitation (a) the Assignors rights to receive profits, compensation, and other distributions from the Company attributable to the Assigned Interests which accrue after the date hereof, and (b) each, every and all
of the rights, titles, interests and benefits of whatsoever kind or character now or thereafter accruing to the Assigned Interests (collectively, the
Assignment
).
2.
Assumption
. Assignee accepts such Assignment and agrees to be bound by the terms of the LLC Agreement in place of Assignor, and
Assignee hereby assumes all of the past, present and future liabilities, duties and obligations of Assignor under or allocable to the Assigned Interests, subject to the terms of the Merger Agreement.
3.
Representations and Warranties
. Assignor represents and warrants to Assignee that as of the date hereof, Assignor is the sole legal
and equitable owner of the entirety of the Assigned Interests and the Assigned Interests transferred hereby to Assignee are free and clear of all liens, encumbrances, or security interests (in each case other than transfer restrictions under
applicable securities laws), subject to the terms and conditions of the LLC Agreement and the Merger Agreement.
4.
Consent to
Assignment
. The Assignor, as a Member of the Company on the Effective Date, hereby approves and consents to the Assignment and consents to the Assignee becoming a Member of the Company in the place and stead of Assignor with respect to the
Assigned Interests as of the Effective Date for all purposes.
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5.
Amendment
. This Agreement may be amended, modified or supplemented only by written
agreement of the parties hereto. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give any person, other than the parties, and their successors and permitted assigns, any right or remedies under or by reason of this Agreement.
6.
Governing Law
. This Agreement and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon,
arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement will be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to principles of conflicts of
law thereof which may require the application of the law of another jurisdiction.
7.
Entire Agreement
. This Agreement, the LLC
Agreement, the Merger Agreement and the other documents and instruments referred to herein and therein, embody the entire agreement and understanding of the parties in respect of the subject matter contained herein. This Agreement supersedes all
other prior agreements and understandings between the parties with respect to such subject matter.
8.
Further Assurances
. The
parties agree to take all such further actions and execute, acknowledge and deliver all such further documents that are necessary or useful in carrying out the purposes of this Agreement. Without limitation of the foregoing, Assignor agrees to
execute, acknowledge and deliver to the Assignee all such other additional instruments, notices, and other documents and to do all to more fully and effectively grant, convey and assign to the Assignee the Assigned Interests conveyed hereby and
intended so to be.
9.
Counterparts
. This Agreement may be executed in counterparts (each of which will be deemed to be an original
but all of which taken together will constitute one and the same agreement) and will become effective when one or more counterparts have been signed by each of the parties hereto and delivered (including delivery by email) to the other party.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the Effective Date.
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Assignor
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LIGHTFOOT CAPITAL PARTNERS GP LLC
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By:
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Name:
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Title:
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Assignee
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ZENITH ENERGY U.S. LOGISTICS HOLDINGS, LLC
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By:
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Name:
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Title:
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A-82
EXHIBIT B
FORM OF
CERTIFICATION
OF
NON-FOREIGN
STATUS UNDER
TREASURY REGULATIONS SECTION
1.1445-2(b)
This Certificate of
Non-Foreign
Status is
being delivered pursuant to
Section
6.17
of that certain Purchase Agreement and Plan of Merger, dated as of August 29, 2017, among [Zenith Energy U.S., L.P., a Delaware limited partnership] [Zenith Energy U.S.
Logistics Holdings, LLC, a Delaware limited liability company] (
Transferee
), [Lightfoot Capital Partners, LP, a Delaware limited partnership] [Lightfoot Capital Partners GP LLC, a Delaware limited liability company]
(
Transferor
), and the other parties listed on the signature pages thereto. Section 1445 of the Internal Revenue Code of 1986, as amended (the
Code
), provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign person. For U.S. tax purposes (including Section 1445 of the Code), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the
transferor of the property and not the disregarded entity. To inform Transferee that withholding of tax is not required upon the disposition to Transferee of a U.S. real property interest, the undersigned hereby certifies the following on behalf of
Transferor:
1. Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined
in the Code and the Treasury Regulations promulgated thereunder);
2. Transferor is not a disregarded entity as defined in Treasury
Regulations
Section 1.1445-2(b)(2)(iii);
3. Transferors U.S. federal employer
identification number is
; and
4. Transferors office address is:
.
Transferor understands that this Certificate of
Non-Foreign
Status may be
disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury, the undersigned declares that the undersigned has examined this Certificate of
Non-Foreign
Status and, to the best of the undersigneds knowledge and belief, it is true, correct, and complete, and the undersigned further declares that he/she has authority to sign this Certificate of
Non-Foreign
Status on behalf of Transferor.
[
Signature Page Follows
]
A-83
IN WITNESS WHEREOF, I, the undersigned, have executed this Certificate of
Non-Foreign
Status as of the date first above written.
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[________________________________________],
a[_______________________________________]
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By:
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Name:
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Title:
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Dated: ________________________, 2017
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A-84
EXHIBIT C
ACKNOWLEDGEMENT
To
Receive Cash
in respect of
Phantom Units Previously Awarded
under the
Long Term
Incentive Plan
of
ARC LOGISTICS PARTNERS LP
In
connection with the merger (the
Merger
) contemplated by the Purchase Agreement and Plan of Merger, dated as of August 29, 2017 (the
Merger Agreement
), by and among Arc Logistics Partners LP
(
MLP
), Arc Logistics GP LLC (
MLP GP
and, together with MLP, the
MLP Entities
), Lightfoot Capital Partners, LP (
LCP LP
), Lightfoot Capital Partners GP LLC (
LCP
GP
and, together with LCP LP, the
Lightfoot Entities
), Zenith Energy U.S., L.P. (
Parent
), Zenith Energy U.S. GP, LLC (
Parent GP
), Zenith Energy U.S. Logistics Holdings, LLC
(
Holdings
) and Zenith Energy U.S. Logistics, LLC (
Merger Sub
and, together with Parent, Parent GP and Holdings, the
Parent Entities
).
Capitalized terms used in this Acknowledgement without definition have the meanings ascribed to such terms in the Merger Agreement.
D
ESCRIPTION
OF
P
HANTOM
U
NITS
O
WNED
BY
THE
U
NDERSIGNED
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Name and Address
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Number of Phantom Units
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Name
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Street Address
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City, State and Zip Code
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PLEASE SIGN BELOW
1.
Effects of the Merger
. The undersigned acknowledges that, in accordance with the terms of the Merger Agreement:
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a.
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Each Vested Phantom Unit that is outstanding as of immediately prior to the Effective Time shall (i) be canceled and converted into the right to receive from Parent (through MLP GP) the Phantom Unit Consideration,
less applicable taxes and withholding, (ii) no longer be outstanding and (iii) cease to exist. As a condition to the receipt of the Phantom Unit Consideration, each holder of Vested Phantom Units will be required to execute and deliver to
MLP GP this Acknowledgement on or prior to the Closing.
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b.
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Each Unvested Phantom Unit that is outstanding as of immediately prior to the Effective Time shall be amended and
converted into the right to receive the following: (i) the regular vesting schedule of each Phantom Unit shall be amended to provide that 50% of such Unvested Phantom Units vest on the six (6) month anniversary of the Closing, with
the remaining 50% of such Unvested Phantom Units vesting on the twelve (12) month anniversary of the Closing, with each such Unvested Phantom Unit
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A-85
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subject to the same forfeiture and acceleration provisions in effect prior to such amendment, and (ii) on the date such Unvested Phantom Unit would vest and be settled in accordance with the
applicable terms and conditions of each Unvested Phantom Unit (as amended pursuant to (i) above), each Unvested Phantom Unit shall be paid the Phantom Unit Consideration, less applicable taxes and withholding;
provided
that such
amendment and payment does not trigger Taxes under Section 409A of the Code. Following the payment of the Phantom Unit Consideration with respect to any Unvested Phantom Unit, such Unvested Phantom Unit shall no longer be outstanding and shall
cease to exist. As a condition to the receipt of the Phantom Unit Consideration, each holder of Unvested Phantom Units will be required to execute and deliver this Acknowledgment on or within five Business Days of the vesting of such Unvested
Phantom Unit (as amended as described in the immediately preceding sentence).
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2.
Ownership of Phantom Units;
Satisfaction of all Rights
. The undersigned represents and warrants that (i) he or she owned the Phantom Units described above immediately prior to the effective time of the Merger on [●], 201[●] and (ii) either (A) such
Phantom Units qualified as Vested Phantom Units immediately prior to the effective time of the Merger or (B) such Phantom Units qualified as Unvested Phantom Units immediately prior to the effective time of the Merger and on [●],
201[●], such Phantom Units vested in accordance with the applicable terms and conditions of such Phantom Units, as amended in accordance with the Merger Agreement and this Acknowledgment. The undersigned, on behalf of himself or herself and
any other person who may act or claim on his or her behalf, hereby acknowledges and agrees that his or her receipt of the Phantom Unit Consideration for each Phantom Unit described above, less any applicable deductions (e.g. tax withholding),
satisfies in full all obligations owing to, and releases any claims of, the undersigned that in any way arise from or are related to such Phantom Units, the LTIP or any award agreements thereunder, any equity based compensation awards with respect
to the MLP or the Merger Agreement.
3.
Delivery of Phantom Unit Consideration
. If the undersigned delivers a properly completed
and duly executed copy of this Acknowledgment to MLP GP at the closing of the Merger, with respect to Vested Phantom Units, or within five Business Days of vesting (as amended as described in
Section
1(b)
above), with
respect to Unvested Phantom Units, the Phantom Unit Consideration will be paid to the undersigned, with respect to Vested Phantom Units, as promptly as practicable (but no later than three business days) following the date on which such closing
occurs or, with respect to Unvested Phantom Units, in accordance with the applicable terms and conditions of such Unvested Phantom Units. No interest will be paid or accrued on any Phantom Unit Consideration.
4.
Taxes
. MLP GP (or any of its affiliates) may withhold from the Phantom Unit Consideration all federal, state, city, or other taxes
as MLP GP (or any of its affiliates) is required to withhold pursuant to any applicable law, regulation or ruling. Notwithstanding any other provision of any award agreement, the LTIP, the Merger Agreement or this Acknowledgement, MLP GP will not be
obligated to guarantee any particular tax result for the undersigned with respect to any payment provided to the undersigned hereunder, and the undersigned will be responsible for any taxes imposed on the undersigned with respect to any such
payment.
5.
Severability
. Should any term or provision of this Acknowledgement be declared or be determined by any court to be
invalid, the validity of the remaining terms or provisions will not be affected thereby, and such invalid term or provision will be deemed not to be part of this Acknowledgement.
6.
Voluntary Execution
. The undersigned acknowledges that he or she is executing this Acknowledgement voluntarily and of his or her own
free will and that he or she fully understands and intends to be bound by the terms of this Acknowledgement. Further, the undersigned acknowledges that he or she has had an opportunity to carefully review this Acknowledgement with his or her
attorney prior to executing it or warrants that he or she chose not to have his or her attorney review this Acknowledgement.
A-86
7.
Governing Law
. This Acknowledgement will in all respects be interpreted, construed and
governed by and in accordance with the internal substantive laws of the State of Delaware.
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IMPORTANT PLEASE SIGN AND DATE HERE
X
Signature
Date:
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A-87
EXHIBIT D
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT
(this
Agreement
) is made as of [] (the
Effective
Date
), by and between Arc Logistics Partners LP, a Delaware limited partnership (the
Partnership
), and Lightfoot Capital Partners GP LLC, a Delaware limited liability company
(
Provider
). The Partnership and Provider are each referred to herein individually as
Party
and collectively as the
Parties
. Capitalized terms used but not otherwise
defined herein shall have the respective meanings assigned to such terms in the Merger Agreement (as defined below).
RECITALS
WHEREAS, pursuant to that certain Purchase Agreement and Plan of Merger, dated as of August 29, 2017, by and among the Partnership,
Provider, Zenith Energy U.S. Logistics Holdings, LLC, a Delaware limited liability company (
Holdings
), Zenith Energy U.S., L.P., a Delaware limited partnership, and the other parties thereto (as amended or supplemented, the
Merger Agreement
): (a) Holdings acquired 100% of the membership interests of Arc Logistics GP LLC, a Delaware limited liability company and the general partner of the Partnership, from Provider; and (b) the Partnership
merged with and into a wholly owned subsidiary of Holdings, with the Partnership surviving, so that the Partnership became a wholly owned subsidiary of Holdings (collectively, the
Transactions
); and
WHEREAS, to assist with the Partnerships operations for a specified period of time following consummation of the Transactions, the
Parties desire to enter into this Agreement, pursuant to which, from and after the Effective Date, Provider will endeavor to make available to the Partnership and its affiliates the Transition Services (as defined below), subject to the terms and
conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the premises, agreements and covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are acknowledged and in reliance upon the mutual representations and warranties contained in this Agreement, the Parties agree as follows:
1.
Transition Services.
Commencing on the Effective Date until the expiration of the Term (as defined below), and subject to the terms
and conditions of this Agreement (including earlier termination of such Transition Service in accordance with
Section
2
below), Provider will endeavor to make available to the Partnership and its affiliates the services
described in
Schedule A
of this Agreement (each such service being referred to individually as a
Transition Service
, and all such services being referred to collectively as the
Transition
Services
);
provided
,
however
, that any individual who is an employee of Provider or any of its affiliates as of the date hereof (each, a
Current Employee
) may, at his or her choice, leave the
employment of the Provider, in which case the Provider shall be under no obligation to replace such Current Employee or to induce any such Current Employee to remain in the employment of the Provider (it being understood that no affiliate of
Provider shall induce any Employee to leave the employment of the Provider prior to the expiration of the Term (as defined below)). At the end of the Term, the Partnership shall assume each Transition Service and Providers obligations
hereunder shall terminate without notice to, or action by, any Party.
2.
Term;
Termination of Transition Services.
The term
of this Agreement will commence on the Effective Date and, subject to earlier termination as provided in this
Section
2
, will continue until April 30, 2018 (the
Initial
Term
);
provided
, that the Partnership shall have the right to elect to extend the term of this Agreement for up to three consecutive additional
30-day
periods (each, a
Renewal Term
and collectively, the
Renewal Terms
) by providing written notice of such election to Provider not less than five days prior to the expiration of the Initial Term or such Renewal Term, as applicable. The Initial Term and the
Renewal Term(s) (if any) are collectively referred to as the
Term
. The Partnership may terminate any one or more of the specific
A-88
Transition Services (in part or in its entirety) contemplated hereby by giving Provider at least three days prior written notice to that effect in the manner provided in this Agreement (and such
termination shall not affect any other remaining Transition Services to the Partnership). Notwithstanding anything to the contrary in this Agreement, the termination or expiration of this Agreement will not affect either Partys respective
rights or obligations that are vested pursuant to this Agreement as of the effective date of such termination or expiration (including rights or obligations with respect to payment and remedies for breach of this Agreement). In addition, the
following provisions of this Agreement will survive any termination or expiration of this Agreement:
Sections
1
and
3
through
1
7
.
3.
Standard of Performance
. In providing the Transition Services to the Partnership, Provider will perform the Transition Services as
contemplated hereby in a good, workmanlike and professional manner with at least the same priority as Provider accords its own operations. Furthermore, Provider, in providing Transition Services, will comply with all applicable Laws.
4.
Compensation; Invoicing.
a. During the Term, the Partnership shall (i) pay Provider a fee of (A) $31,000 per month during the Initial Term
(pro-rated
for any partial months),
provided
that, effective as of the date that either the Financial Provider or Accounting Provider is no longer employed by Provider, such fee shall be reduced to $15,500
per month
(pro-rated
for any partial months);
provided
further
, that effective as of the date that neither the Financial Provider nor the Accounting Provider is employed by Provider, such fee
shall be reduced to $0, and (B) $81,000 during each Renewal Term (if applicable)
(pro-rated
for any partial months),
provided
that, effective as of the date that either the Financial Provider or
Accounting Provider is no longer employed by Provider, such fee shall be reduced to $40,500 per month
(pro-rated
for any partial months);
provided
further
, that effective as of the date that
neither the Financial Provider nor the Accounting Provider is employed by Provider, such fee shall be reduced to $0 (each of (A) or (B), a
Monthly Fee
), plus (ii) reimburse Provider for any and all reasonable,
documented,
out-of-pocket
costs, fees and expenses incurred in connection with the provision of the Transition Services in accordance with this Agreement (the
Expense Reimbursement
);
provided
,
however
, Provider shall not be entitled to any reimbursement for any costs, fees and expenses incurred by Provider for the employment of personnel by Provider and any other
overhead costs incurred by Provider (including any salary, benefits, bonuses or other compensation related thereto) in respect of the provision of the Transition Services. Promptly following the end of each calendar month, Provider will invoice the
Partnership for the Expense Reimbursement and the applicable Monthly Fee. All invoices for the Expense Reimbursement shall contain a description of, and documentation supporting the incurrence of, the costs, fees and expenses included therein, a
calculation of the amounts due and such other information and supporting documentation reasonably required by the Partnership in order to substantiate the Expense Reimbursement. The Partnership shall pay all undisputed amounts set forth on any such
invoice with respect to the Expense Reimbursement and the Monthly Fee within thirty days following the date of receipt of such invoice.
i. From the Effective Date until one year after the expiration of the Term or termination of this Agreement, whichever occurs earlier, the
Partnership or its designee, upon prior written notice to Provider, shall have the right, at the Partnerships sole cost and expense, to conduct not more than one audit of the books and records of Provider or its affiliates insofar as they
pertain to the Expense Reimbursement in respect of the Transition Services for the purpose of determining the accuracy of Providers invoices provided to the Partnership, to object to the amounts set forth therein, and to an adjustment of those
amounts if an error is finally determined to have occurred.
ii. If the Partnership, in good faith, disputes any portion of any amount
payable by it to Provider in respect of the Expense Reimbursement pursuant to this Agreement, then the Partnership shall notify Provider of such dispute on or before the due date for the applicable invoice and may withhold payment for the disputed
portion until the dispute is resolved. Any dispute that is not resolved after good faith discussions between the Parties with respect thereto shall be subject to
Section
s 8
and
9
.
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b. The amounts set forth in this
Section
4
constitute the entire cost
to the Partnership for the Transition Services rendered by Provider under this Agreement.
5.
Independent Contractor Status
.
Notwithstanding anything to the contrary contained in this Agreement, for all purposes of this Agreement, Provider will be and act as an independent contractor of the Partnership. Nothing contained in this Agreement will be construed to imply or
constitute a partnership, joint venture, principal-agent or employer-employee relationship between Provider and the Partnership. Provider will not, and will have no power to, create any obligation, express or implied, on behalf of the Partnership.
The Partnership is contracting with Provider for the Transition Services and Provider reserves the right to determine the method, manner and means by which the Transition Services will be performed consistent with the requirements of this Agreement;
provided
that with respect to any Transition Services that are similar to services that were provided by Providers employees or Current Employee prior to the Effective Date, Provider shall cause such Transition Services to be provided
by such Current Employees so long as they remain employed by Provider and shall not engage any third parties to provide such Transition Services without the prior written consent of the Partnership (such consent not to be unreasonably withheld,
conditioned or delayed). Except as otherwise expressly agreed in writing by the Partnership, Provider will furnish all labor, materials, equipment, insurance, supplies, training and/or other goods and services necessary for the performance of
Providers obligations under this Agreement. Provider agrees to pay all applicable taxes on the Expense Reimbursement paid to it pursuant to
Section
4
. Provider agrees that Provider (including, without limitation, its
personnel) will not be, and will not claim to be, eligible to participate in, or receive benefits under, any employee benefit plans, arrangements or policies of the Partnership including, but not limited to, any plan, arrangement or policy providing
bonus, vacation, stock options, stock purchase, sick leave, disability, health or life insurance, 401(k), retirement, profit sharing or similar benefits for the Partnerships employees (collectively,
Benefit Plans
). If
Provider or any of its personnel is later determined to have been a
common-law
employee or employee of the Partnership for any purpose, Provider and its personnel nevertheless will not be entitled to
participate or receive benefits under any Benefit Plan. Provider acknowledges that no insurance whatsoever, including workers compensation insurance, has been or will be obtained by the Partnership on Providers behalf.
6.
Confidentiality
.
a.
For purposes of this Agreement, the term
Confidential Information
means, with respect to the Partnership, all information or materials obtained or received by Provider from, through, by or on behalf of the Partnership or
its affiliates in connection with this Agreement. Provider agrees that the Confidential Information is confidential trade secret information of the Partnership or of third parties, and following the receipt of any Confidential Information, Provider
will maintain the Confidential Information in strict confidence and not use or disclose any Confidential Information, except as expressly set forth in this
Section
6
.
b. Provider may use the Confidential Information only to the limited extent necessary to perform the Transition Services under this Agreement
for the benefit of the Partnership and for no other purpose, commercial or otherwise. Provider may not disclose the Confidential Information to any third party without the prior written consent of the Partnership;
provided
, that Provider may
disclose the Confidential Information to its personnel, who need to know such information in order to assist Provider in the performance of the Transition Services for the benefit of the Partnership, each of whom must be bound by confidentiality
obligations no less restrictive than those set forth in this Agreement with respect to the Confidential Information. Provider agrees to use the same degree of care to prevent any unauthorized use or disclosure of the Confidential Information as it
uses to protect its own confidential information of like importance, but in no event will Provider use less than reasonable care.
c. The
foregoing obligations of confidentiality and nonuse will not apply to any information or materials to the extent such information or materials (i) are or subsequently become generally and readily available to the public without breach of this
Agreement; (ii) were or subsequently are rightfully obtained by Provider from a third party who had the right to disclose the same without obligations of confidentiality or nonuse; or (iii) were independently developed by Provider. The
foregoing obligations of confidentiality will not
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prohibit Provider from disclosing any information or materials to the extent that Provider is required to do so by governmental or judicial order,
provided
, that, to the extent legally
permissible and reasonably practicable, Provider gives the Partnership prior written notice of such order and the opportunity to limit such disclosure and complies with any protective order (or equivalent) imposed on such disclosure.
d. Provider will immediately notify the Partnership of any unauthorized use or disclosure of Confidential Information by its personnel of
which it becomes aware. Provider agrees to return to the Partnership, or to destroy (and, if requested by the Partnership, to confirm such destruction in writing to the Partnership), all materials containing or embodying any Confidential
Information, regardless of the media and regardless of by whom prepared, within five days after demand therefor by the Partnership or, in any event, within five days after termination or expiration of this Agreement.
e. The obligations under this
Section
6
shall terminate two years after the date of the termination of this
Agreement;
provided
,
however
, that no termination of this Agreement shall release any obligations, liabilities, rights and remedies of the Parties arising out of a breach of, or failure to comply with this Agreement by such Party
occurring prior to such termination.
7.
Indemnity
.
a. The Partnership assumes sole responsibility for and hereby agrees to indemnify, defend and hold harmless Provider, its affiliates and its
and their respective directors, officers, owners, employees, agents, representatives, contractors, subcontractors, successors and assigns (collectively,
Provider Indemnified Persons
) from and against any and all claims,
causes of action, losses, demands, costs, expenses, penalties or liabilities, including reasonable attorneys fees (collectively,
Losses
) arising out of or resulting from the performance of (or failure to perform) the
Transition Services pursuant to this Agreement, including, without limitation, for (i) the gross negligence or the intentional or willful misconduct of any of the Partnership Indemnified Persons (as defined below), (ii) personal injury, death
or bodily harm or damage or destruction of physical property of any kind of any of the Partnership Indemnified Persons or (iii) the intentional breach of this Agreement by the Partnership Indemnified Persons, in each case, REGARDLESS OF WHETHER
SUCH LOSSES ARE THE RESULT OF OR CAUSED BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ANY OF PROVIDER INDEMNIFIED PERSONS,
EXCEPT
TO THE EXTENT SUCH LOSSES RESULT FROM (X) THE GROSS NEGLIGENCE OR THE
INTENTIONAL OR WILLFUL MISCONDUCT OF ANY OF PROVIDER INDEMNIFIED PERSONS OR (Y) THE INTENTIONAL BREACH OF THIS AGREEMENT BY ANY PROVIDER INDEMNIFIED PERSON. Notwithstanding the foregoing, any Provider Indemnified Person entitled to receive
indemnification under this
Section
7(a)
shall act in good faith and use its reasonable efforts to mitigate the amount of any Losses for which it seeks indemnification, including making a good faith effort to recover from
insurers under applicable insurance policies and from other Persons who may be liable so as to reduce the amount of any Losses hereunder. If the amount of any Losses at any time subsequent to the making of an indemnity payment in respect thereof, is
reduced by recovery, settlement or otherwise under or pursuant to any insurance coverage, or pursuant to any claim, recovery, settlement or payment by or against any other Person, the amount of such reduction, less any costs, or expenses incurred in
connection therewith, will promptly be repaid by the Provider Indemnified Persons to the Partnership.
b. Subject to
Section
8
, Provider assumes sole responsibility for and hereby agrees to indemnify, defend and hold harmless each of the Partnership, its affiliates, and its and their respective directors, officers, owners, employees,
controlling persons, agents, representatives, contractors, subcontractors, successors and assigns (collectively,
Partnership Indemnified Persons
) from and against any and all Losses arising out of or resulting from
(i) the gross negligence or the intentional or willful misconduct of any of Provider Indemnified Persons or (ii) the intentional breach of this Agreement by Provider Indemnified Persons, in each case, arising out of, resulting from or in
any way incident to or in connection with the performance of (or failure to perform) the Transition Services pursuant to this Agreement, REGARDLESS OF WHETHER SUCH LOSSES ARE THE
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RESULT OF OR CAUSED BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ANY OF PARTNERSHIP INDEMNIFIED PERSONS, EXCEPT TO THE EXTENT SUCH LOSSES RESULT FROM THE GROSS
NEGLIGENCE OR THE INTENTIONAL OR WILLFUL MISCONDUCT OF ANY OF PARTNERSHIP INDEMNIFIED PERSONS.
8.
Limitations on Liability
.
Notwithstanding anything to the contrary herein, in no event shall Providers aggregate liability under this Agreement as of any date exceed the aggregate amount of all Expense Reimbursement plus each Monthly Fee received by Provider as of such
date (collectively, the
Received Amounts
);
provided
,
however
, that for the purposes of this
Section
8
, the aggregate amount of Received Amounts as of any such date shall at all times
be deemed to be an amount not less than $100,000. EXCEPT WITH RESPECT TO CLAIMS BY A THIRD PARTY, IN NO EVENT WILL A PARTY BE LIABLE TO ANY OTHER PARTY WITH RESPECT TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, UNDER ANY EQUITY, COMMON
LAW, TORT, CONTRACT, ESTOPPEL, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY, FOR ANY CONSEQUENTIAL, SPECIAL, PUNITIVE OR INDIRECT DAMAGES (INCLUDING ANY DAMAGES RESULTING FROM LOSS OF SALES, BUSINESS, PROFITS, USE, DATA, OPPORTUNITY, ECONOMIC
ADVANTAGE OR GOODWILL), EVEN IF THE REMEDIES PROVIDED FOR IN THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE AND EVEN IF THE HARMING PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF ANY OF THE FOREGOING DAMAGES.
9.
Governing Law; Waiver of Jury Trial
a. This Agreement and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon, arise out of or relate
to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an
inducement to enter into this Agreement) will be governed by, and construed in accordance with, the Laws of the State of Delaware applicable to Contracts executed in and to be performed entirely within that State.
b. By execution and delivery of this Agreement, each Party irrevocably agrees that any Proceeding with respect to this Agreement and the
rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or assigns, will be
brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or
federal court within the State of Delaware). Each of the Parties hereby irrevocably submits with regard to any such Proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid
courts and agrees that it will not bring any action relating to this Agreement in any court other than the aforesaid courts. Each of the Parties hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any
Proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this
Section
9(b)
, (ii) any claim that it or its property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by the applicable Law, any claim that (x) the Proceeding in such court is brought in an inconvenient forum,
(y) the venue of such Proceeding is improper or (z) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
c. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
A-92
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH
WAIVERS VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9(C)
.
10.
Severability.
The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision
will not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application of such provision to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision will be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances will not be affected by such invalidity or unenforceability, nor will such invalidity or unenforceability affect the validity or enforceability of such provision, or the application of such provision, in
any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the transactions contemplated by this Agreement are fulfilled to the extent possible.
11.
Delays
.
Any delay or inability of a Party in complying with the terms hereof (other than the Partnerships payment
obligations under
Section
4(a)
) arising from unforeseeable causes beyond the control and without the fault or negligence of that Party, including but not restricted to, acts of God, acts of public enemy, acts of the
government in either sovereign or contractual capacity, fires, floods, or strikes (but not including delays of subcontractors or suppliers), shall excuse any delay in the performance of that Party;
provided
,
however
, that the Party
failing to perform uses all reasonable diligence to remedy such failure as promptly as practicable and gives immediate written notice to the other of any delay, whether excusable as set forth above or otherwise, and shall fully inform the other
Party of the nature of the delay and the expected duration and consequences thereof.
12.
Headings.
The headings of the sections of
this Agreement have been inserted for convenience and reference only and shall not be construed or interpreted to restrict or modify any of the terms of provisions hereof.
13.
Notice.
All notices and other communications hereunder will be in writing and will be deemed given if delivered personally, sent by
facsimile or
e-mail
with confirmation of transmission by the transmitting equipment, mailed by registered or certified mail (return receipt requested) or sent by overnight courier to the Parties at the
following addresses (or at such other address for a Party as will be specified by like notice):
|
a.
|
If to the Partnership:
|
c/o Zenith Energy U.S., L.P.
3900 Essex Lane, Suite 950
Houston, Texas 77027
Attn:
General Counsel
Email: dana.love@zenithem.com
A-93
with a copy to (which copy shall not constitute notice):
Kirkland & Ellis LLP
609 Main Street, Suite 4700
Houston, Texas 77002
Attn:
Adam Larson, P.C.
Kim Hicks
Email: adam.larson@kirkland.com
kim.hicks@kirkland.com
c/o Lightfoot Capital Partners, LP
725 Fifth Avenue, 19th Floor
New York, New York
Facsimile:
(212)
993-1299
Attn: Vince Cubbage
Steven Schnitzer
with a copy (which will not constitute notice) to:
Vinson & Elkins L.L.P.
666 Fifth Avenue, 26th Floor
New York, New York 10103
Facsimile: (917)
849-5367
Attn: Michael Swidler
Brenda Lenahan
Any of the above addresses may be changed at any time by notice given as provided above;
provided
,
however
, that any such notice
of change of address will be effective only upon receipt. All notices, requests or instructions given in accordance herewith will be deemed given (a) on the date of delivery, if hand delivered, (b) on the date of receipt, if sent by
facsimile or
e-mail
prior to 5:00 p.m. Central Time on a business day, otherwise on the next business day following such date of receipt, (c) three business days after the date of mailing, if mailed by
registered or certified mail, return receipt requested, and (d) one business day after the date of sending, if sent by Federal Express or other recognized overnight courier.
14.
Entire Agreement;
Amendments and Waivers
.
This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof and supersede all prior written and oral agreements and understandings between the Parties with respect to the subject matter hereof. This Agreement may not be amended except by a written agreement executed by
the Party to be charged with the amendment. The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach.
No failure on the part of any Party to exercise, and no delay in exercising, any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power, or remedy by such Party preclude any
other or further exercise thereof or the exercise of any other right, power, or remedy, and (by way of example but not of limitation) the grant of any injunctive relief shall not preclude or limit the right to any monetary relief.
15.
Binding Effect; Assignment; Third-Party Beneficiaries
.
Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned, in whole or in part, by operation of Law or otherwise, by any of the Parties without the prior written consent of the other Party. Subject to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns. Any purported assignment not permitted under this
Section
15
will be null and void. Except as provided in
Section
7
with respect to Persons entitled to indemnification thereunder, nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person.
A-94
16.
Counterpart Execution.
This Agreement may be executed in counterparts (each of which
will be deemed to be an original but all of which taken together will constitute one and the same agreement) and will become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.
17.
Non-Recourse
.
Any claim or cause of action based upon, arising out of, or related to
this Agreement may only be brought against Persons that are expressly named as Parties, and then only with respect to the specific obligations set forth herein. No former, current or future direct or indirect equityholders, controlling Persons,
stockholders, directors, officers, employees, members, managers, agents, trustees, affiliates, general or limited partners or assignees of the Parties (except permitted assignees under
Section
15
) or of any former, current
or future direct or indirect equityholder, controlling Person, stockholder, director, officer, employee, member, manager, agent, trustee, affiliate, general or limited partner or assignee of any of the foregoing (collectively, but for the avoidance
of doubt excluding the Parties) will have any liability or obligation for any of the representations, warranties, covenants, agreements, obligations or liabilities of any Party under this Agreement or for any Proceeding based on, in respect of, or
by reason of, the transactions contemplated hereunder (including the breach, termination or failure to consummate any of the transactions contemplated hereunder), in each case whether based on contract, tort or strict liability, by the enforcement
of any assessment, by any legal or equitable Proceeding, by virtue of any statute, regulation or applicable Law or otherwise and whether by or through attempted piercing of the corporate or partnership veil, by or through a claim by or on behalf of
a Party hereto or another Person or otherwise.
[INTENTIONALLY BLANK SPACE;
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF,
the Parties have executed this Agreement on the day and year first
above written.
|
|
|
PROVIDER:
|
|
LIGHTFOOT CAPITAL PARTNERS GP LLC
|
|
|
By:
|
|
|
Name:
|
|
Vince Cubbage
|
Title:
|
|
Chief Executive Officer
|
|
PARTNERSHIP:
|
|
ARC LOGISTICS PARTNERS LP
|
|
By: Arc Logistics GP LLC, its general partner
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
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T
RANSITION
S
ERVICES
A
GREEMENT
S
IGNATURE
P
AGE
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SCHEDULE A
Transition Services
|
1.
|
Financial and accounting administrative services currently being provided to the Partnership by Provider at the New York office prior to the Effective Date with regards to customary services at a similar level to that
currently provided, by the Partnerships current Chief Financial Officer (
Financial Provider
) and current Chief Accounting Officer (
Accounting Provider
).
|
|
2.
|
Budget reconciliation, financial reporting, project expenditure approvals (as requested by the Partnership), certain accounting functions, monthly consolidation and preparation of financial statements, check writing,
cash flow forecast, cash/treasury management, payroll, benefits and employee matters, each, as directed by the Partnership.
|
|
3.
|
Reasonable assistance in promptly transitioning such services and functions to the Partnerships personnel or to its new service providers and/or vendors, as applicable.
|
|
4.
|
Financial and accounting services necessary to complete the audit of the Partnerships and its Subsidiaries financial statements for the fiscal year ended December 31, 2017 currently provided by the
Financial Provider and Accounting Provider. For the avoidance of doubt, such services shall initially include the services of the Partnerships previous chief financial officer and chief accounting officer, but not the cost or services of the
Partnerships outside accounting, auditing, tax or compliance service providers.
|
|
5.
|
All services necessary with respect to the Partnerships and its Subsidiaries preparation and filing of current federal, state and local tax requirements for the fiscal year ended December 31, 2017,
including the financial and accounting support of the preparation of Schedule
K-1s
for the Partnerships partners for taxable periods ending on or before such date.
|
|
6.
|
Provider will make available its existing New York office space to the Financial Provider, Accounting Provider, and John Blanchard during the Term.
|
Schedule A Page 1
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Annex B
August 29, 2017
Conflicts Committee of the Board of Directors of Arc Logistics GP LLC
c/o Arc Logistics Partners LP
725 Fifth Avenue, 19th
Floor
New York, NY 10022
Dear Members of the
Conflicts Committee:
You have requested our opinion as to the fairness, from a financial point of view, to the holders of the outstanding
common units (the Common Units, and such holders the Public Unitholders) of Arc Logistics Partners LP (Arc Logistics), other than the Common Units held by Arc Logistics GP LLC (Arc Logistics GP),
Zenith Energy U.S., L.P. (Zenith), Lightfoot Capital Partners, LP (Lightfoot LP) and Lightfoot Capital Partners GP LLC, the general partner of Lightfoot LP (Lightfoot GP), and their respective equityholders and
affiliates or any subsidiary of Arc Logistics (the Excluded Holders), of the Merger Consideration (as defined below) to be paid to such holders pursuant to the Purchase Agreement and Plan of Merger (the Agreement), by and
among Zenith, Zenith Energy U.S. GP, LLC, the general partner of Zenith (Zenith GP), Zenith Energy U.S. Logistics Holdings, LLC (Zenith Holdings), Zenith Energy U.S. Logistics, LLC, a wholly owned subsidiary of Zenith
Holdings (Merger Sub), Lightfoot GP, Lightfoot LP, Arc Logistics GP and Arc Logistics (together with Zenith, Zenith GP, Zenith Holdings, Merger Sub, Lightfoot GP, Lightfoot LP and Arc Logistics GP, the Parties). The Agreement
provides for, among other things, the merger of Merger Sub with and into Arc Logistics (the Merger), pursuant to which Arc Logistics will be the surviving entity, and each issued and outstanding Common Unit (other than the Sponsor Units
(as defined in the Agreement)) will be converted into the right to receive $16.50 in cash (the Merger Consideration). The transactions contemplated by the Agreement are referred to herein as the Transactions.
In connection with the Merger, we understand that Arc Logistics and Arc Logistics GP intend to enter into a series of transactions with, among
other parties, Zenith, Zenith GP, Zenith Holdings, Lightfoot LP and Lightfoot GP, pursuant to which, among other things, (i) Zenith Holdings would acquire Lightfoot LPs and Lightfoot GPs interests in Arc Logistics and Arc Logistics
GP for a purchase price of (a) in the case of the purchase of Arc Logistics GP, $94,500,000, and (b) in the case of the Common Units owned by Lightfoot LP, $14.50 per Common Unit; (ii) Zenith Holdings would purchase 57% of Lightfoot
LPs 9.678% interest (the Gulf LNG Interest) in Gulf LNG Holdings Group, LLC (Gulf LNG) in exchange for $36,229,200 (subject to adjustment as provided in the definitive documentation for such purchase), and, subject to a
defined favorable outcome in the arbitration dispute involving Gulf LNG, Zenith Holdings would purchase the remaining 43% of Lightfoot LPs Gulf LNG Interest for $27,330,800 (subject to adjustment as provided in the definitive
documentation for such purchase), and (iii) Lightfoot LP and Lightfoot GP would purchase a 7.5% net ownership interest (without giving effect to specified time-based adjustments) in Arc Terminals Joliet Holdings LLC (ATJH) from EFS
Midstream Holdings LLC (EFS) for net consideration to EFS of $14,062,500 and Zenith Holdings would purchase a 2.5% interest (without giving effect to specified time-based adjustments) in ATJH from EFS for net consideration to EFS of
$4,687,500 (the transactions described in clauses (i) through (iii) being referred to as the Related Transactions).
Heritage Plaza | 1111 Bagby, Suite 5100 | Houston, Texas 77002 | www.tphco.com
Tudor Pickering Holt & Co Advisors LP | Members FINRA/SIPC
B-1
Tudor Pickering Holt & Co Advisors LP (TPH) and its affiliates, including
Perella Weinberg Partners, as part of their investment banking business, are regularly engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings,
competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions as well as for estate, corporate and other purposes. TPH and its affiliates also engage in securities trading and brokerage,
private equity activities, investment management activities, equity research and other financial services, and in the ordinary course of these activities, TPH and its affiliates may from time to time acquire, hold or sell, for their own accounts and
for the accounts of their customers, (i) equity, debt and other securities (including derivative securities) and financial instruments (including bank loans and other obligations) of Arc Logistics, any of the other Parties and any of their
respective affiliates and (ii) any currency or commodity that may be material to the Parties or otherwise involved in the Transactions and the other matters contemplated by the Agreement. In addition, TPH and its affiliates and certain of its and
their employees, including members of the team performing services in connection with the Transactions, as well as certain private equity funds and investment management funds associated or affiliated with TPH in which they may have financial
interests, may from time to time acquire, hold or make direct or indirect investments in or otherwise finance a wide variety of companies, including the Parties, other potential purchasers or Transaction or Related Transaction participants or their
respective affiliates. We have acted as financial advisor to the Conflicts Committee (the Committee) of the Board of Directors (the Board) of Arc Logistics GP in connection with, and have participated in certain negotiations
leading to, the Merger. We expect to receive fees for our services, a portion of which is contingent upon the consummation of the Merger, and Arc Logistics has agreed to reimburse certain of our expenses and indemnify us and certain related parties
against certain liabilities arising out of our engagement. We have previously provided financial advisory services to the Committee on an unrelated matter, and have provided services to certain equityholders and affiliates of the Parties as
previously disclosed to you, and we may in the future provide investment banking or other financial services to the Parties or any of the other Parties or their respective security holders, affiliates or portfolio companies in the future. In
connection with such investment banking or other financial services, we may receive compensation.
In connection with this opinion, we
have reviewed, among other things, (i) the draft of the Agreement provided to us on August 28, 2017; (ii) the draft of the Support Agreement, by and among Lightfoot LP, Lightfoot GP, Zenith, Zenith GP, Zenith Holdings and Merger Sub
provided to us on August 28, 2017; (iii) annual reports to unitholders and Annual Reports on Form 10-K of Arc Logistics for each of the years ended December 31, 2013, 2014, 2015 and 2016; (iv) certain Quarterly Reports on Form
10-Q of Arc Logistics; (v) certain other communications from Arc Logistics to its unitholders; (vi) certain internal financial information and forecasts for Arc Logistics, two sensitivity cases reflecting differing projected operating,
strategic and capital assumptions prepared by management of Arc Logistics GP and a third illustrative sensitivity case prepared in conjunction with, and based on parameters determined by, the Committee (the information, forecasts and sensitivity
cases described in this clause (vi) collectively, the Forecasts); and (vii) certain publicly available research analyst reports with respect to the future financial performance of Arc Logistics, which we discussed with the
senior management of Arc Logistics GP. As you are aware, no single projections case for Arc Logistics was determinative of TPHs opinion. Rather, our analyses with respect to all projections and sensitivity cases were considered collectively in
conjunction with the views of Arc Logistics GP senior management and the Committee in reaching the conclusion set forth in this letter. The Forecasts reflect certain assumptions regarding the oil and gas industry and the outcome of the arbitration
involving Gulf LNG that are subject to significant uncertainty and that, if different than assumed, could have a material impact on our analysis and this opinion. We also have held discussions with members of the senior management of Arc Logistics
GP regarding their
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assessment of the strategic rationale for, and the potential benefits of, the Transactions and the past and current business operations, financial condition and future prospects of Arc Logistics.
In addition, we have reviewed the reported price and trading activity for the Common Units, compared certain financial and stock market information for Arc Logistics with similar information for certain other companies the securities of which are
publicly traded, reviewed the financial terms of certain recent business combinations in the midstream liquids terminals and storage sector specifically and in other industries generally and reviewed such other documents, performed such other
studies and analyses, and considered such other factors, as we considered appropriate. As you are also aware, senior management of Arc Logistics GP may have differing beneficial or other pecuniary interests in the equity securities and future
financial performance of Gulf LNG, ATJH, Lightfoot LP, Lightfoot GP, Arc Logistics and Arc Logistics GP.
For purposes of our opinion, we
have assumed and relied upon, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, accounting, legal, tax, regulatory and other information provided to, discussed with or reviewed
by or for us, or publicly available. In that regard, we have assumed with your consent that (i) the Forecasts have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of Arc Logistics senior management
and the Committee, and (ii) that the Forecasts provide a reasonable basis upon which to evaluate the Merger. We express no view or opinion with respect to the Forecasts or the assumptions on which they are based and we have further assumed,
among other things, that (i) the executed Agreement (together with any exhibits and schedules thereto) will not differ in any respect material to our analyses or opinion from the draft version we have examined, referenced above, (ii) the
representations and warranties of all Parties to the Agreement and all other related documents and instruments that are referred to therein are true and correct in all material respects, (iii) each Party to the Agreement and such other related
documents and instruments will fully and timely perform all of the covenants and agreements required to be performed by such Party in all material respects, (iv) all conditions to the consummation of the Transactions will be satisfied without
material amendment or waiver thereof, (v) the Transactions will be consummated in a timely manner in accordance with the terms described in the Agreement and such other related documents and instruments, without any material amendments or
modifications thereto and (vi) all governmental, regulatory or other consents or approvals necessary for the consummation of the Transactions will be obtained without, in the case of each of the forgoing clauses (i) (vi), any
adverse effect on the Parties or the holders of Common Units or the expected benefits of the Transactions in any way meaningful to our analysis. In addition, we have not made an independent evaluation or appraisal of the assets and liabilities
(including any contingent, derivative or off-balance-sheet assets and liabilities) of Arc Logistics or any of its subsidiaries and we have not been furnished with any such evaluation or appraisal. Our opinion does not address any legal, regulatory,
tax or accounting matters.
Our opinion does not address the underlying business decision of the Committee, the Board, Arc Logistics or
Arc Logistics GP or any other party to engage in the Transactions, or the relative merits of the Transactions as compared to any other alternative transaction that might be available to the Parties. This opinion addresses only the fairness from a
financial point of view, as of the date hereof, to the Public Unitholders, other than the Excluded Holders, of the Merger Consideration to be paid to such holders pursuant to the Agreement. We do not express any view on, and, except for assuming the
consummation of the Related Transactions, our opinion does not address, any other term, aspect or implication of the Agreement or the Transactions, including, without limitation, any Related Transaction, the fairness of the Transactions to, or any
consideration paid or received in connection therewith by, creditors or other constituencies of the Parties; nor as to the fairness of the amount or nature of any consideration or compensation to be paid or payable to any of the officers, directors
or employees
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of the Parties, or any class of such persons, or any Excluded Holder, in connection with the Transactions or any Related Transaction, whether relative to the Merger Consideration pursuant to the
Agreement or otherwise. We are not expressing any opinion as to the price at which the Common Units will trade at any time. Our opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made
available to us as of, the date hereof. We assume no obligation to update, revise or reaffirm our opinion and expressly disclaim any responsibility to do so based on circumstances, developments or events occurring or of which we become aware after
the date hereof. Our advisory services and the opinion expressed herein are provided for the information and assistance of the Committee in connection with its consideration of the Merger, and such opinion does not constitute a recommendation as to
how any holder of interests in Arc Logistics should vote with respect to the Merger or any other matter. This opinion has been reviewed and approved by TPHs fairness opinion committee.
Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Merger Consideration to be paid to the Public
Unitholders, other than the Excluded Holders, pursuant to the Agreement is fair, from a financial point of view, to such holders.
Very truly yours,
/s/ Tudor Pickering Holt & Co Advisors LP
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| 1111 Bagby, Suite 5100 | Houston, Texas 77002 | www.tphco.com
Tudor Pickering Holt & Co Advisors LP | Members FINRA/SIPC
B-4
September 25, 2017
Conflicts Committee of the Board of Directors of Arc Logistics GP LLC
c/o Arc Logistics Partners LP
725 Fifth Avenue, 19th
Floor
New York, NY 10022
Dear Members of the
Conflicts Committee:
Reference is made to our opinion letter (the Opinion) dated August 29, 2017, stating that, based
upon and subject to the assumptions, limitations and qualifications set forth in the opinion and based on other matters as we considered relevant, it was our opinion that, as of August 29, 2017, the Merger Consideration to be paid to the Public
Unitholders, other than the Excluded Holders, pursuant to the Agreement was fair, from a financial point of view, to such holders. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Opinion.
As you know, in connection with the Opinion, we reviewed, among other things, the Forecasts, and we assumed with your consent that the
Forecasts had been reasonably prepared on a basis reflecting the best currently available estimates and judgments of Arc Logistics senior management and the Committee, and that the Forecasts provided a reasonable basis upon which to evaluate the
Merger. For purposes of the Opinion, we assumed and relied upon, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, accounting, legal, tax, regulatory and other information
provided to, discussed with or reviewed by or for us, or publicly available. We expressed no view or opinion with respect to the Forecasts or the assumptions on which they were based. You have requested that we confirm that the conclusion expressed
in the Opinion would not have been different as of the date of the Opinion if, rather than reviewing and relying on the Forecasts, we had reviewed and relied on certain revised internal financial information and forecasts for Arc Logistics, two
revised sensitivity cases reflecting differing projected operating, strategic and capital assumptions prepared by management of Arc Logistics GP and a third revised illustrative sensitivity case prepared in conjunction with, and based on parameters
determined by, the Committee (such revised information, forecasts and sensitivity cases collectively, the Revised Forecasts).
This letter is subject to each assumption, limitation and qualification applicable to the Opinion as set forth therein (assuming, for purposes
of this letter, that each reference therein to the Forecasts were a reference to the Revised Forecasts). The conclusion expressed in this letter is based on economic, monetary, market and other conditions as in effect on, and the information made
available to us as of, the date of the Opinion, other than solely with respect to the Revised Forecasts, which were made available to us only after the date of the Opinion. At the Committees direction, we have not taken into account any
circumstances, developments or events occurring or of which we became aware after the date of the Opinion. We have not been asked to, and do not, express any opinion as to the fairness of the Merger Consideration as of any date after the date of the
Opinion. We assume no obligation to update, revise or reaffirm the conclusion expressed in this letter and expressly disclaim any responsibility to do so based on circumstances, developments or events occurring or of which we become aware after the
date of the Opinion, other than solely with respect to the Revised Forecasts, which were made available to us only after the date of the Opinion. Our advisory services and the conclusion expressed herein are provided for the information and
assistance of the Committee in connection with its consideration of the Merger, and such conclusion does not constitute a recommendation as to how any holder of interests in Arc
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B-5
Logistics should vote with respect to the Merger or any other matter. This letter has been reviewed and approved by TPHs fairness opinion committee.
Based upon and subject to the foregoing and the assumptions, limitations and qualifications set forth in the Opinion, we confirm that the
conclusion expressed in the Opinion would not have been different as of the date of the Opinion if, rather than reviewing and relying on the Forecasts, we had reviewed and relied on the Revised Forecasts.
Very truly yours,
/s/ Tudor Pickering Holt & Co Advisors LP
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| 1111 Bagby, Suite 5100 | Houston, Texas 77002 | www.tphco.com
Tudor Pickering Holt & Co Advisors LP | Members FINRA/SIPC
B-6
Annex C
Purchase Agreement
among
EFS Midstream
Holdings, LLC,
as Seller,
and
Lightfoot Capital
Partners, LP,
Lightfoot Capital Partners GP LLC
and
Zenith Energy U.S.
Logistics Holdings, LLC,
as Buyers
August 29, 2017
Table of Contents
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Page
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ARTICLE I
DEFINITIONS AND CONSTRUCTION
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C-1
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Section 1.01
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Definitions
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C-1
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Section 1.02
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Rules of Construction
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C-5
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ARTICLE II
PURCHASE AND SALE
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C-6
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Section 2.01
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Purchase and Sale
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C-6
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Section 2.02
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Purchase Price
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C-7
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Section 2.03
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Transactions to be Effected at the Closing
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C-7
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Section 2.04
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Closing
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C-8
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Section 2.05
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Purchase Price Allocation
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C-8
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ARTICLE III
SELLERS REPRESENTATIONS AND WARRANTIES
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C-9
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Section 3.01
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Organization; Good Standing
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C-9
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Section 3.02
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Authority
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C-9
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Section 3.03
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The Interests
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C-9
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Section 3.04
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Noncontravention
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C-10
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Section 3.05
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Governmental Approvals
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C-10
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Section 3.06
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Brokers and Finders
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C-10
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Section 3.07
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Legal Proceedings
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C-10
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Section 3.08
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Tax
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C-10
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Section 3.09
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Acknowledgement by Seller
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C-10
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ARTICLE IV
BUYERS REPRESENTATIONS AND WARRANTIES
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C-10
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Section 4.01
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Organization
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C-10
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Section 4.02
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Authority
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C-11
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Section 4.03
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Noncontravention
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C-11
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Section 4.04
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Governmental Filings
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C-11
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Section 4.05
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Consents and Approvals
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C-11
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Section 4.06
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Legal Proceedings
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C-12
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Section 4.07
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Acquisition as Investment
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C-12
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Section 4.08
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Sufficiency of Funds
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C-12
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Section 4.09
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Source of Funds
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C-12
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Section 4.10
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Opportunity for Independent Investigation
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C-12
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Section 4.11
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Brokers and Finders
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C-13
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Section 4.12
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Acknowledgement by the Buyer Parties
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C-13
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ARTICLE V
COVENANTS
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C-13
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Section 5.01
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Equity Interests in the Company
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C-13
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Section 5.02
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Conduct of Business
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C-13
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Section 5.03
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Tax Matters
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C-13
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Section 5.04
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Confidentiality; Public Announcements
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C-14
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Section 5.05
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Governmental Approvals
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C-15
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Section 5.06
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Closing Conditions
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C-15
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Section 5.07
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Further Assurances
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C-15
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ARTICLE VI
CONDITIONS TO CLOSING
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C-15
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Section 6.01
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Conditions to Obligations of All Parties
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C-15
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Section 6.02
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Conditions to Obligations of Each Buyer
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C-16
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Section 6.03
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Conditions to Obligations of Seller
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C-16
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C-i
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ARTICLE VII
TERMINATION
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C-16
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Section 7.01
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Termination
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C-16
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Section 7.02
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Effect of Termination
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C-17
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ARTICLE VIII
INDEMNIFICATION
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C-17
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Section 8.01
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Survival
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C-17
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Section 8.02
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Indemnification by Seller
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C-17
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Section 8.03
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Indemnification by Each Buyer
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C-17
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Section 8.04
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Certain Limitations
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C-17
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Section 8.05
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Indemnification Procedures
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C-18
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Section 8.06
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Tax Treatment of Indemnification Payments
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C-19
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Section 8.07
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Exclusive Remedies
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C-19
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ARTICLE IX
MISCELLANEOUS
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C-20
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Section 9.01
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Notices
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C-20
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Section 9.02
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Waiver of Other Representations
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C-21
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Section 9.03
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Entire Agreement
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C-22
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Section 9.04
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Expenses
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C-22
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Section 9.05
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Waiver
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C-22
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Section 9.06
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Amendment
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C-22
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Section 9.07
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No Third Party Beneficiary
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C-22
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Section 9.08
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Assignment; Binding Effect
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C-22
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Section 9.09
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Invalid Provisions
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C-22
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Section 9.10
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Counterparts
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C-23
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Section 9.11
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Governing Law; Submission to Jurisdiction; Jury Trial Waiver
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C-23
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Section 9.12
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Specific Enforcement
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C-24
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Section 9.13
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Non-Recourse
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C-24
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Exhibit A
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Form of Assignment
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Exhibit B
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Form of Amended LLC Agreement
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C-ii
PURCHASE AGREEMENT
This Purchase Agreement, dated as of August 29, 2017 (this
Agreement
), is entered into by and among EFS Midstream
Holdings, LLC, a Delaware limited liability company (
Seller
), Lightfoot Capital Partners, LP, a Delaware limited partnership (
Lightfoot LP
), Lightfoot Capital Partners GP LLC, a Delaware limited liability
company (
Lightfoot GP
), Zenith Energy U.S. Logistics Holdings, LLC, a Delaware limited liability company
(
Zenith
, and together with Lightfoot LP and Lightfoot GP,
Buyers
), and, for the
limited purposes specifically set forth herein, Arc Logistics Partners LP (
Arc
).
RECITALS
WHEREAS, as of the date hereof, Seller owns 4,000 issued and outstanding common unit Equity Interests (as defined below) of Arc Terminals
Joliet Holdings LLC, a Delaware limited liability company (the
Company
), which represent 40% of the Equity Interests of the Company;
WHEREAS, Seller desires to sell to Buyers, and Buyers desire to purchase from Seller, the number of common unit Equity Interests of the
Company set forth herein (the
Purchased Interests
), on the terms set forth herein;
WHEREAS, immediately following the
Closing, each of Lightfoot LP and Lightfoot GP will distribute their respective Purchased Interests to their equity holders; and
WHEREAS,
immediately following the Closing, Zenith will transfer its Purchased Interests to Arc Terminals Holdings LLC.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section
1.01
Definitions
. As used in this Agreement, the following capitalized terms have the respective
meanings set forth below:
Affiliate
of a Person means any other Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, such Person. The term control (including the terms controlled by and under common control with) means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by Contract or otherwise.
Agreement
has the meaning given to it in the preamble.
Amended LLC Agreement
means the Second Amended and Restated Limited Liability Company Agreement of Arc Terminals Joliet
Holdings LLC in substantially the form attached hereto as
Exhibit B
.
Antitrust Consents
has the meaning
assigned to such term in the Merger Agreement.
Antitrust Laws
has the meaning assigned to such term in the Merger
Agreement.
Arc
has the meaning given to it in the preamble.
C-1
Assignment
means an assumption agreement in substantially the form attached
hereto as
Exhibit
A
.
Business Day
means a day other than Saturday, Sunday or any day on
which banks located in the State of Delaware are authorized or obligated to close.
Buyers
has the meaning given to it
in the preamble.
Closing
has the meaning given to it in
Section
2.04
.
Closing Date
has the meaning given to it in
Section
2.04
.
Code
means the United States Internal Revenue Code of 1986.
Commitment Letters
has the meaning given to it in the Merger Agremeent.
Company
has the meaning given to it in the recitals.
Confidentiality Agreements
means (a) that certain Confidentiality Agreement, dated as of April 8, 2017, between
Lightfoot GP and Zenith Energy L.P., as amended, and (b) that certain
Non-Disclosure
Agreement, dated as of April 26, 2017, between EFS LF Holdings, LLC and Zenith Energy Management, LLC.
Consent
means any notice, report, declaration, submission or other filing that is required to be made with, or any waiver
required to be obtained from any Governmental Authority or third party or any applications required to be submitted to any Governmental Authority or third party.
Contract
means any written contract, lease, license, evidence of indebtedness, mortgage, indenture, purchase order, binding
bid, letter of credit, security agreement or arrangement.
Debt Commitment Letter
has the meaning given to it in the
Merger Agreement.
Debt Financing
has the meaning given to it in the Merger Agreement.
Debt Financing Sources
has the meaning given to it in the Merger Agreement.
Direct Claim
has the meaning given to it in
Section
8.05(c)
.
Equity Interests
means capital stock, partnership or membership interests or units (whether general or limited), and any
other interest or participation that confers on a Person the right to (a) receive a share of the profits and losses of, or distribution of assets of, the issuing entity, (b) vote with respect to any action of the issuing entity or
(c) manage or control the issuing entity, or vote with respect to any action of the issuing entity.
GAAP
means
generally accepted accounting principles in the United States.
GLNG Purchase Agreement
means that certain Partially
Conditioned Purchase Agreement, dated as of the date hereof, by and among Zenith, Zenith LP, Zenith Energy U.S. GP, LLC, LCP LNG Holdings, LLC, Lightfoot LP and Lightfoot GP.
Governmental Authority
means any applicable federal, state or local governmental authority, agency, board, commission,
court or official in the United States.
Fee Letters
has the meaning given to it in the Merger Agreement.
Financing
has the meaning given to it in the Merger Agreement.
C-2
HSR Act
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
Indemnified Party
has the meaning given to it in
Section
8.04
.
Indemnifying Party
has the meaning given to it in
Section
8.04
.
Joliet Group Member
means any of the Company or its respective Subsidiaries.
Knowledge
means: (a) with respect to Seller, the actual knowledge of John Pugh and Robert Strickland after
reasonable inquiry, (b) with respect to Lightfoot GP or Lightfoot LP, the actual knowledge of any of Vince Cubbage, Steven Schnitzer or Bradley Oswald after reasonable inquiry, and (c) with respect to Zenith, the actual knowledge of any of
Jeffrey R. Armstrong, Carlos Ruiz or Dana Love after reasonable inquiry.
Law
means any and all laws, statutes, rules,
regulations, ordinances, court orders and other pronouncements having the effect of law of any Governmental Authority.
Lien
means any lien, mortgage, pledge, encumbrance, charge, option, right of first refusal, easement, deed of trust,
right-of-way,
encroachment, or security interest of any nature, whether voluntarily incurred or arising by operation of Law, including any restriction on the voting of any
security and any restriction on the transfer of any security or other asset.
Lightfoot GP
has the meaning given to it
in the preamble.
Lightfoot GP Purchase Price
has the meaning set forth in
Section
2.02(b)
.
Lightfoot GP Purchased Interests
means a number of common unit Equity Interests of the Company (rounded to the nearest
whole number) equal to (a) the Lightfoot GP Purchase Price,
divided by
(b) the
Per-Unit
Price.
Lightfoot LP
has the meaning given to it in the preamble.
Lightfoot LP Purchase Price
has the meaning set forth in
Section
2.02(a)
.
Lightfoot LP Purchased Interests
means a number of common unit Equity Interests of the Company (rounded to the nearest
whole number) equal to (a) the Lightfoot LP Purchase Price,
divided by
(b) the
Per-Unit
Price.
LLC Agreement
means the Amended and Restated Limited Liability Company Agreement of Arc Terminals Joliet Holdings LLC,
dated May 14, 2015.
Losses
means actual
out-of-pocket
losses, damages, liabilities, costs or expenses, including reasonable attorneys fees.
Material Adverse Effect
means, with respect to any Person, any change, event, effect, occurrence, state of facts or
development that, individually or in the aggregate, (a) has had or would reasonably be expected to have a material adverse effect on the business, results of operations, assets, liabilities or financial condition of such Person, taken as a
whole, or (b) has a material adverse effect on the ability of such Person to consummate the transactions contemplated by this Agreement or perform its obligations under this Agreement, except, in the case of subsection (a), to the extent an
Excluded Matter. Excluded Matter means any: (i) changes, events, effects, occurrences, states of facts or developments generally affecting the United States or global economy or the financial, credit, debt, securities or other
capital markets in the United States or any other jurisdiction,
C-3
including changes in interest rates, (ii) changes in GAAP or the interpretation thereof or changes in Laws, the interpretation thereof or political, legislative or regulatory conditions
(A) applicable to the relevant Person or any of their respective properties or assets or (B) generally affecting the industries in which the relevant Person operates, (iii) changes in currency exchange rates, (iv) acts of war or
terrorism (or the escalation of the foregoing) or natural or weather-related disasters or other force majeure events (including hurricanes, floods or earthquakes), (v) any failure to meet internal or published projections, forecasts or revenue or
earnings predictions for any period, except that the underlying causes of such change or failure will not be excluded by this
clause (v)
, (vi) other than with respect to
Section
3.04
, any changes, events, effects,
occurrences, states of facts or developments related to the entry into, and public announcement of, this Agreement and the transactions contemplated by this Agreement, (vii) changes, events, effects, occurrences, states of facts or developments
generally affecting the prices of oil, gas, natural gas, natural gas liquids, propane or other commodities, (viii) any changes in or effect upon the business, assets, liabilities or condition (financial or otherwise) of the Company,
(ix) any acts or omissions of any Person taken pursuant to the express requirements of this Agreement, except, in the case of
clauses (i)
,
(ii)
,
(iii)
, and
(vii)
to the extent disproportionately affecting the
relevant Person when compared to other Persons operating in the same industries.
Merger
has the meaning given to it in
the Merger Agreement.
Merger Agreement
means that certain Purchase Agreement and Plan of Merger, dated as of the date
hereof, by and among Zenith, Zenith LP, Lightfoot LP, Lightfoot GP, Arc and the other parties thereto.
MLP Disclosure
Letter
means the disclosure letter delivered by Arc to Zenith LP pursuant to the Merger Agreement.
Non-Recourse
Person
has the meaning given to it in
Section
9.13
.
OFAC
has the meaning given to it in
Section
4.09
.
Order
means any judgment, order, decision, writ, injunction, decree, stipulation, award, ruling, determination or other
finding or agency requirement of a Governmental Authority, or arbitration award.
Organizational Documents
means, with
respect to any Person that is not a natural person, the articles of incorporation or organization, memorandum of association, articles of association and
by-laws,
limited partnership agreement, partnership
agreement or limited liability company agreement or such other organizational documents of such Person which establish the legal personality of such Person.
Parties
means Buyers and Seller.
Per-Unit
Price
means an amount equal to (a) $18,750,
plus
(b) the
product of (i) the number of days between June 1, 2017 and the Closing Date and (ii) $7.12,
minus
(c) the
per-unit
amount of distributions made by the Company in respect of its common
unit Equity Interests between July 1, 2017 and the Closing Date.
Permits
means all franchises, authorizations,
licenses, registrations, clearances, permits, variances, exceptions, exemptions, consents, certificates and approvals of any Governmental Authority.
Permitted Lien
means (a) a lien for Taxes that are not yet due and payable, (b) a lien imposed by applicable Law
and incurred in the ordinary course of business for obligations not yet due and payable to landlords, carriers, warehousemen, laborers, repairmen, materialmen and the like.
Person
means any natural person, corporation, general partnership, limited partnership, limited liability company,
unlimited liability corporation, proprietorship, other business organization, trust, union, association or Governmental Authority.
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Proceeding
means any complaint, lawsuit, action, suit or other proceeding at
Law or in equity or order or ruling, in each case by or before any Governmental Authority or arbitral tribunal.
Purchase
Price
has the meaning given to it in
Section
2.02(d)
.
Purchase Price Allocation
has the meaning given to it in
Section
2.05
.
Purchased Interests
has the meaning given to it
in the recitals.
Representatives
means, as to any Person, its officers, directors, employees, managers, members,
partners, limited partners, investors, shareholders, owners, counsel, accountants, financial advisers and consultants.
Seller
has the meaning given to it in the preamble.
Seller Related Parties
means Seller and any of its respective former, current or future officers, directors, partners,
equityholders, managers, members or Affiliates.
Subsidiary
means, with respect to a referenced Person, any Person in
whom such referenced Person has a direct or indirect Equity Interest.
Tax
means any federal, state, local or foreign
net income, gross income, gross receipts, alternative minimum, windfall profit, severance, property, production, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or
add-on
minimum, unclaimed property or escheat, capital stock, social security, unemployment, disability, ad valorem, value-added, transfer or stamp tax, or any other tax, custom, duty, governmental fee or other assessment or charge in the nature of a tax
of any kind whatsoever imposed by any Governmental Authority, including any interest, penalties or additions to tax or additional amounts in respect of the foregoing, whether disputed or not and including any obligations to indemnify or otherwise
assume or succeed to the Tax liability of any other Person.
Tax Return
means any return, declaration, report, claim
for refund, information return or other documents (including any related or supporting schedules, statements or information and any amendment thereof) filed or required to be filed in connection with the determination, assessment or collection of
any Taxes, or the administration of any Laws or administrative requirements relating to any Taxes.
Third-Party Claim
has the meaning given to it in
Section
8.05(a)
.
Zenith
has the meaning given to it in the
preamble.
Zenith LP
means Zenith Energy U.S., L.P., a Delaware limited partnership.
Zenith Purchased Interests
means a number of common unit Equity Interests of the Company (rounded to the nearest whole
number) equal to (a) the Zenith Purchase Price,
divided by
(b) the
Per-Unit
Price.
Zenith Purchase Price
has the meaning set forth in
Section
2.02(c)
.
Section
1.02
Rules of Construction
.
(a) The Schedules and Exhibits attached to this Agreement constitute a part of this Agreement and are incorporated herein for all purposes. All
Article, Section, Schedule and Exhibit references used in this Agreement are to Articles, Sections, Schedules and Exhibits to this Agreement unless otherwise specified.
(b) The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
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(c) If a term is defined as one part of speech (such as a noun), it shall have a corresponding
meaning when used as another part of speech (such as a verb). Unless the context of this Agreement clearly requires otherwise, words importing the masculine gender shall include the feminine and neutral genders and vice versa. The words
includes or including shall mean including without limitation, the words hereof, hereby, herein, hereunder and similar terms in this Agreement shall refer to this
Agreement as a whole and not any particular Section or Article in which such words appear. All currency amounts referenced herein are in United States Dollars unless otherwise specified. The singular shall include the plural and the plural shall
include the singular wherever and as often as may be appropriate.
(d) Whenever this Agreement refers to a number of days, such number
shall refer to calendar days unless Business Days are specified. Whenever any action must be taken hereunder on or by a day that is not a Business Day, then such action may be validly taken on or by the next day that is a Business Day.
(e) All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP and shall be calculated
in a manner consistent with that used in preparing the financial statements of the Company to the extent that such financial statements are prepared in accordance with GAAP.
(f) Any reference herein to any Law shall be construed as referring to such Law as amended, modified, codified or reenacted, in whole or in
part, and in effect from time to time, and references to particular provisions of a Law include a reference to the corresponding provisions of any prior or succeeding Law.
(g) Except as otherwise expressly provided herein, any reference herein to any Contract shall be construed as referring to such Contract as
amended, modified, restated or supplemented.
(h) Each Party acknowledges that it and its attorneys have been given an equal opportunity
to negotiate the terms and conditions of this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party or any similar rule operating against the drafter of an agreement shall not be
applicable to the construction or interpretation of this Agreement.
ARTICLE II
PURCHASE AND SALE
Section
2.01
Purchase and Sale
.
(a) On the terms set forth in this Agreement, at the Closing, Lightfoot LP shall purchase and accept from Seller, and Seller shall sell,
transfer and convey to Lightfoot LP, all of Sellers right, title and interest to the Lightfoot LP Purchased Interests, free and clear of all Liens other than those under state or federal securities Laws or under the Organizational Documents of
the Company.
(b) On the terms set forth in this Agreement, at the Closing, Lightfoot GP shall purchase and accept from Seller, and Seller
shall sell, transfer and convey to Lightfoot GP, all of Sellers right, title and interest to the Lightfoot GP Purchased Interests, free and clear of all Liens other than those under state or federal securities Laws or under the Organizational
Documents of the Company.
(c) On the terms set forth in this Agreement, at the Closing, Zenith shall purchase and accept from Seller, and
Seller shall sell, transfer and convey to Zenith, all of Sellers right, title and interest to the Zenith Purchased Interests, free and clear of all Liens other than those under state or federal securities Laws or under the Organizational
Documents of the Company.
(d) Each Buyer agrees to be a member of the Company and to be bound by all of the provisions of the
Companys governing documents including the LLC Agreement at the Closing.
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Section
2.02
Purchase Price
.
(a) On the terms and conditions in this Agreement and as consideration for the Lightfoot LP Purchased Interests, at the Closing, Lightfoot LP
shall pay or cause to be paid to Seller an amount equal to $15,079,191 (the
Lightfoot LP
Purchase Price
), in cash by wire transfer of immediately available funds to one or more accounts specified by Seller at least two
Business Days before Closing.
(b) On the terms and conditions in this Agreement and as consideration for the Lightfoot GP Purchased
Interests, at the Closing, Lightfoot GP shall pay or cause to be paid to Seller an amount equal to $10,209,784 (the
Lightfoot GP
Purchase Price
), in cash by wire transfer of immediately available funds to one or more
accounts specified by Seller at least two Business Days before Closing.
(c) On the terms and conditions in this Agreement and as
consideration for the Zenith Purchased Interests, at the Closing, Zenith shall pay or cause to be paid to Seller an amount equal to $4,687,500 (the
Zenith
Purchase Price
), in cash by wire transfer of immediately available
funds to one or more accounts specified by Seller at least two Business Days before Closing.
(d) The
Purchase Price
shall be the sum of the Lightfoot LP Purchase Price, the Lightfoot GP Purchase Price and the Zenith Purchase Price.
(e) Concurrent with
the consummation of the transactions contemplated by the Merger Agreement (and contingent thereon), each of Lightfoot LP and Lightfoot GP will pay the Lightfoot LP Purchase Price and Lightfoot GP Purchase Price, respectively, from the proceeds each
such Person receives pursuant to the Merger Agreement and agrees to direct, and hereby authorizes, Zenith to pay such amounts to Seller directly on its behalf out of amounts otherwise due to Lightfoot LP or Lightfoot GP under the Merger Agreement
upon the consummation of the transactions contemplated thereby.
(f) At least three Business Days before the Closing, Seller shall prepare
and deliver to Buyers a statement setting forth the
Per-Unit
Price.
Section
2.03
Transactions to be
Effected
at the Closing
.
(a) At the Closing, Lightfoot LP shall deliver to Seller:
(i) a wire transfer of immediately available funds (to such account or accounts of Seller as Seller notified Lightfoot LP) in
an amount in the aggregate equal to the Lightfoot LP Purchase Price;
(ii) an assumption of the Lightfoot LP Purchased
Interests in the form of an Assignment, duly executed by Lightfoot LP;
(iii) a certificate signed by a duly authorized
officer of Lightfoot GP on behalf of Lightfoot LP, dated as of the Closing Date, certifying that the applicable conditions set forth in
Section
6.02(a)
and
Section
6.02(b)
have been satisfied with
respect to Lightfoot LP; and
(iv) the Amended LLC Agreement, duly executed by either Lightfoot LP or Lightfoot LPs
equity holders.
(b) At the Closing, Lightfoot GP shall deliver to Seller:
(i) a wire transfer of immediately available funds (to such account or accounts of Seller as Seller notified Lightfoot GP) in
an amount in the aggregate equal to the Lightfoot GP Purchase Price;
(ii) an assumption of the Lightfoot GP Purchased
Interests in the form of an Assignment, duly executed by Lightfoot GP;
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(iii) a certificate signed by a duly authorized officer of Lightfoot GP, dated as
of the Closing Date, certifying that the applicable conditions set forth in
Section
6.02(a)
and
Section
6.02(b)
have been satisfied with respect to Lightfoot GP; and
(iv) the Amended LLC Agreement, duly executed by either Lightfoot GP or Lightfoot GPs equity holders.
(c) At the Closing, Zenith shall deliver to Seller:
(i) a wire transfer of immediately available funds (to such account or accounts of Seller as Seller notified Zenith) in an
amount in the aggregate equal to the Zenith Purchase Price;
(ii) an assumption of the Zenith Purchased Interests in the
form of an Assignment, duly executed by Zenith;
(iii) a certificate signed by a duly authorized officer of Zenith dated as
of the Closing Date, certifying that the applicable conditions set forth in
Section
6.02(a)
and
Section
6.02(b)
have been satisfied with respect to Zenith; and
(iv) the Amended LLC Agreement, duly executed by either Zenith or Arc Terminal Holdings LLC.
(d) At the Closing, Seller shall deliver to Buyers:
(i) a certification of
non-foreign
status for purposes of Sections 897 and 1445 of the
Code consistent with the requirements of
Section 1.1445-2(b)(2)
of the Treasury Regulations promulgated under the Code;
(ii) assignments of the Purchased Interests in the form of the Assignment, duly executed by Seller;
(iii) a certificate signed by a duly authorized officer of Seller, dated as of the Closing Date, certifying that the applicable
conditions set forth in
Section
6.03(a)
and
Section
6.03(b)
have been satisfied; and
(iv) the Amended LLC Agreement, duly executed by Seller.
(e) At the Closing, Arc shall deliver to Seller and Buyers the Amended LLC Agreement, duly executed by Arc.
Section
2.04
Closing
. Subject to the terms and conditions of this Agreement, the purchase and sale of the
Purchased Interests contemplated hereby shall take place at a closing (the
Closing
) to be held at 10 a.m., Central Time, no later than three Business Days after the last of the conditions to Closing set forth in
Article VI
have been satisfied or waived (other than conditions which by their nature, are to be satisfied on the Closing Date), at the offices of Sidley Austin LLP, 1000 Louisiana Street, Suite 6000, Houston, Texas 77002, or at such time or on such other date
or at such other place as Seller and Buyers may mutually agree upon in writing (the day on which the Closing takes place being the
Closing Date
).
Section
2.05
Purchase Price Allocation
.
Buyers and Seller agree that the Purchase Price and any
other amounts treated as consideration for U.S. federal income tax purposes will be set forth in a separate schedule jointly prepared by Zenith and Seller within 30 days after the Closing (the
Purchase Price Allocation
); provided
that if Zenith and Seller are unable to reach agreement with respect to any aspect of such Purchase Price Allocation during such
30-day
period, Zenith and Seller shall submit any unresolved items to a mutually
agreed, nationally recognized independent accounting firm for resolution, which resolution shall be binding on the Parties. All fees and expenses of such the accounting firm pursuant to this
Section
2.05
shall be
divided equally between Zenith and Seller. Buyers and Seller agree that (a) the Purchase Price Allocation, as may be subsequently adjusted jointly by Zenith and Seller to take into account any further adjustments to the amounts treated as
consideration under this Agreement or any further adjustments in accordance with the principles of Section 743 and 755 of the Code and the Treasury Regulations promulgated thereunder, shall be used by Seller and Buyers as the basis for
reporting asset values and other items for all Tax purposes and (b) no Party will take any position inconsistent with such Purchase Price Allocation in filing Tax Returns, notices to Governmental
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Authorities, audit or other proceedings with respect to Taxes or in other documents or notices relating to the transactions contemplated by this Agreement, except as otherwise required by
applicable Laws following a final determination by the relevant Governmental Authority.
ARTICLE III
SELLERS REPRESENTATIONS AND WARRANTIES
As of the date of this Agreement and the Closing Date, Seller hereby represents and warrants to Buyers as follows:
Section
3.01
Organization; Good Standing
. Seller is a limited liability company duly organized, validly
existing and in good standing under the Laws of the State of Delaware and has all requisite limited liability company power to own, lease and operate all of its properties and assets and to carry on its business as currently conducted, except where
the failure to have such power or authority would not, and would not reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect. There are no dissolution or bankruptcy Proceedings pending with respect to or
contemplated by Seller.
Section
3.02
Authority
. Seller has all requisite limited liability company power
and authority and has taken all necessary limited liability company action in order to execute and deliver this Agreement and the other agreements contemplated hereby to which it is or will be a party and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement by Seller and the performance of its obligations hereunder have been duly authorized and approved by all necessary limited liability company action of Seller. This Agreement has been duly
executed and delivered by Seller and constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar Laws of general applicability relating to or affecting creditors rights and to general equity principles (the
Bankruptcy and Equity Exception
). At the Closing, all documents required hereunder to be executed and
delivered by Seller will have been duly authorized, executed and delivered by Seller and, assuming due authorization, execution and delivery of such documents by any other parties thereto, will constitute legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms, subject to the Bankruptcy and Equity Exception.
Section
3.03
The
Interests
.
(a) As of the date of this Agreement and as of (but without giving effect to) the Closing, Seller owns all of the Purchased Interests free and
clear of any and all Liens (except transfer restrictions under applicable securities Laws). As of the date hereof, Seller does not own, beneficially or of record, any Equity Interests or any warrant, option, call, conversion right, preemptive right,
subscription right or other right or obligation to acquire any Equity Interests in any Joliet Group Member other than 4,000 common unit Equity Interests of the Company. Upon transfer of the Purchased Interests in accordance with this Agreement to
the Buyers, (i) Lightfoot GP will hold record and beneficial ownership of the Lightfoot GP Purchased Interests, (ii) Lightfoot LP will hold record and beneficial ownership of the Lightfoot LP Purchased Interests and (iii) Zenith will
hold record and beneficial ownership of the Zenith Purchased Interests, in each case free and clear of all Liens (except transfer restrictions under applicable securities Laws).
(b) Except for this Agreement, the LLC Agreement and the other common unit Equity Interests of the Company acquired by Seller in accordance
with
Section
5.01
, there are no outstanding Contracts or obligations binding on Seller with respect to the Purchased Interests, including any Contract (i) restricting the transfer of, (ii) affecting the voting
rights of, (iii) requiring the repurchase, redemption or disposition of, or containing any right of first refusal with respect to, (iv) requiring any registration for sale of or (v) granting any preemptive or anti-dilutive rights with
respect to, any portion of the Purchased Interests.
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Section
3.04
No
ncontravention
. The execution and delivery
by Seller of this Agreement or any other documents required hereunder to be executed and delivered by Seller pursuant to this Agreement, and the consummation by Seller of the transactions contemplated hereunder, will not (a) conflict with,
violate or result in a default under the certificate of formation of Seller or the limited liability company agreement of Seller, or entitle any Person to exercise any preferential purchase right, option to purchase or similar right with respect to
the Purchased Interests, (b) to the Knowledge of Seller, conflict with or result in a breach, default or violation of, or require a Consent under, any Law, Order, Contract (other than the LLC Agreement), document or Permit to which Seller is a
party or to which Seller or its assets, including the Purchased Interests, are subject, (c) result in the creation of any Lien upon the Purchased Interests (except transfer restrictions under applicable securities Laws) or (d) require
Seller to obtain or make any Consent from or with any Person, except in the case of
clauses (b)
,
(c)
or
(d)
above, for any such breach, default, violation, or Consent that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
Section
3.05
Governmental Approvals
. Other
than (a) such filings (if any) as may be necessary to obtain all applicable Antitrust Consents and (b) such filings (if any) required by the applicable requirements of the Securities Act, the Exchange Act and state securities, takeover and
blue sky Laws, and assuming the accuracy of the representations and warranties of each Buyer in
Section
4.04
, no Consents of or with any Governmental Authority are necessary in connection with the
execution, delivery and performance of this Agreement by Seller and the consummation by Seller of the transactions contemplated by this Agreement, except for any such Consents that, if not obtained, made or given, would not, and would not reasonably
be expected to, individually or in the aggregate, result in a Material Adverse Effect.
Section
3.06
Brokers
and Finders
. Neither any Buyer nor any of their respective Subsidiaries will have any liability for any brokerage fees, financial advisors fees, commissions or finders fees in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of Seller.
Section
3.07
Legal
Proceedings
. There are no Proceedings pending or, to the Knowledge of Seller, threatened against or affecting Seller, or any director, manager, officer or employee (in his or her capacity as such) of Seller, except for those that, individually
or in the aggregate, if determined adversely against Seller would not reasonably be expected to result in a Material Adverse Effect. As of the date of this Agreement, Seller is not a party to or subject to the provisions of any Order that,
individually or in the aggregate, has resulted, or would reasonably be expected to result in a Material Adverse Effect.
Section
3.08
Tax
. Seller has paid all Taxes due and payable by Seller (whether or not shown on any Tax
Return) with respect to or arising from its ownership of the Purchased Interests.
Section
3.09
Acknowledgement by Seller
. Except for (a) the representations and warranties made by each Buyer in this Agreement and (b) the representations and warranties made by any Buyer in any certificate required to be delivered under
Sections 2.03(a)(iii)
,
(b)(iii)
or
(c)(iii)
, no Buyer, nor any other Person, is making or has made, and Seller is not relying on, and has not relied on, any other representations or warranties, either express or implied, with
respect to the transactions contemplated by this Agreement, the Buyers, or on the accuracy or completeness of any information regarding the Buyers or any other material furnished or provided to Seller, or made available to Seller in any form, in
expectation of, or in connection with, this Agreement or the transactions contemplated by this Agreement.
ARTICLE IV
BUYERS REPRESENTATIONS AND WARRANTIES
As of the date of this Agreement and the Closing Date, each Buyer, solely as to itself, hereby represents and warrants to Seller as follows:
Section
4.01
Organization
.
In the case of Lightfoot LP, such Buyer is a limited partnership duly
organized, validly existing and in good standing under the Laws of the State of Delaware. In the case of Zenith and
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Lightfoot GP, such Buyer is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware. Such Buyer has all requisite limited
liability company or limited partnership, as applicable, power and authority to own, lease or otherwise hold, use and operate its properties, rights and other assets and to carry on its business as currently conducted, except where the failure to
have such power or authority, individually or in the aggregate, would not, and would not reasonably be expected to result in a Material Adverse Effect. Such Buyer is duly qualified or licensed to do business and is in good standing (with respect to
jurisdictions that recognize that concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its assets, properties or the conduct of its business makes such qualification, licensing or good standing
necessary, other than where the failure to be so qualified, licensed or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.
Section
4.02
Authority
. Such Buyer has all requisite limited liability company or limited partnership power
and authority and has taken all necessary limited liability company or limited partnership action in order to execute and deliver this Agreement and the other agreements contemplated hereby to which it is or will be a party and to perform its
obligations hereunder and thereunder. The execution and delivery of this Agreement by such Buyer and the performance of their respective obligations hereunder has been duly authorized and approved by all necessary limited liability company or
limited partnership action, as applicable, of such Buyer. This Agreement has been and any other agreements contemplated hereby, when executed, will be duly executed and delivered by such Buyer and constitutes a valid and binding agreement of such
Buyer, enforceable against such Buyer in accordance with its terms, subject to the Bankruptcy and Equity Exception.
Section
4.03
Noncontravention
. The execution, delivery and performance of this Agreement by such Buyer does
not, and the consummation by such Buyer of the transactions contemplated hereunder will not (with or without notice or lapse of time, or both), constitute or result in (a) a breach or violation of, or a default under, or conflict with the
certificate of formation, limited liability company agreement or limited partnership agreement or other comparable organizational documents of such Buyer (b) with or without notice or lapse of time, or both, a breach or violation of, a
termination (or right of termination), modification, cancellation, creation or acceleration of any obligation, loss of a benefit under, default under, or the creation of a Lien, other than a Permitted Lien, on any of the assets of such Buyer or any
of its Subsidiaries pursuant to any Contract or Permit to which such Buyer or any of its Subsidiaries is a party or by which they or any of their respective properties or assets may be bound or affected or (c) a violation or conflict under any
Law to which such Buyer or any of its Subsidiaries, or any of their respective properties or assets, is subject, except, in the case of
clauses
(b)
or
(c)
above, for any such breach, violation, termination,
modification, cancellation, creation, acceleration, loss or default that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
Section
4.04
Governmental Filings
. Other than (a) filings required pursuant to the HSR Act in connection
with the transactions contemplated by the Merger Agreement and the termination or expiration of the waiting period required thereunder, (b) such filings as may be necessary to obtain the receipt, termination or expiration, as applicable, of
approvals or waiting periods required under all other applicable Antitrust Laws, (c) filings required by the applicable requirements of the Securities Act, the Exchange Act and state securities, takeover and blue sky Laws, and
assuming the accuracy of the representations and warranties in
Section
3.05
, no Consents of or with any Governmental Authority are necessary in connection with the execution, delivery and performance of this Agreement by
such Buyer and the consummation by such Buyer of the transactions contemplated by this Agreement, except for any such Consents that, if not obtained, made or given, individually or in the aggregate, would not, or would not reasonably be expected to
have, a Material Adverse Effect.
Section
4.05
Consents and Approvals
. Except as (a) have been
waived or obtained as of the Closing Date or (b) would not reasonably be expected to prevent or materially delay the consummation of the transactions contemplated by this Agreement, neither such Buyers execution and delivery of this
Agreement or any other documents required hereunder to be executed and delivered by such Buyer pursuant to this Agreement, nor such
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Buyers performance of its obligations hereunder or thereunder, requires the consent, approval, waiver or authorization of, or filing, registration or qualification with, any Governmental
Authority or any other Person.
Section
4.06
Legal Proceedings
. There are no Proceedings pending or, to
the Knowledge of such Buyer, threatened against or affecting such Buyer or any of its Subsidiaries (including by virtue of indemnification or otherwise), or any director, manager, officer or employee (in his or her capacity as such) of such Buyer or
any of its Subsidiaries, except for those that, individually or in the aggregate, if determined adversely to such Buyer would not reasonably be expected to result in a Material Adverse Effect. As of the date of this Agreement, such Buyer is not a
party to or subject to the provisions of any Order that, individually or in the aggregate, has resulted, or would reasonably be expected to result in a Material Adverse Effect.
Section
4.07
Acquisition as Investment
. Such Buyer is acquiring its Purchased Interests for its own account
as an investment without the present intent to sell, transfer or otherwise distribute the same to any other Person in violation of any state or federal securities Laws. Such Buyer has made, independently and without reliance on Seller (except to the
extent that such Buyer has relied on the representations and warranties in this Agreement), its own analysis of the Purchased Interests, the Joliet Group Members and their respective assets for the purposes of acquiring the Purchased Interests, and
such Buyer has had access to documents, other information and materials as it considers appropriate to make its evaluations. Such Buyer acknowledges that the Purchased Interests are not registered pursuant to the Securities Act and that none of the
Purchased Interests may be transferred, except pursuant to an effective registration statement or an applicable exemption from registration under the Securities Act. Such Buyer is an accredited investor as defined under Rule 501
promulgated under the Securities Act.
Section
4.08
Sufficiency of Funds
. In the case of Lightfoot LP, at
the Closing such Buyer will have sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Lightfoot LP Purchase Price and consummate the transactions contemplated by this Agreement. In the case of
Lightfoot GP, at the Closing such Buyer will have sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Lightfoot GP Purchase Price and consummate the transactions contemplated by this Agreement.
Section
4.09
Source of Funds
. Neither such Buyer nor any of its beneficial owners appears on the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets and Control of the United States Department of the Treasury (
OFAC
), or is otherwise a party with which Seller or the Company is prohibited
from dealing by Law. Such Buyer further represents and warrants that the monies used to fund the acquisition of the Purchased Interests are not derived from, invested for the benefit of, or related in any way to, the governments of, or Persons
within, any country (a) under a U.S. embargo enforced by OFAC, (b) that has been designated as a
non-cooperative
country or territory by the Financial Action Task Force on Money
Laundering or (c) that has been designated by the U.S. Secretary of the Treasury as a primary money laundering concern. Such Buyer further represents and warrants that such Buyer does not know or have any reason to suspect that
(A) the monies used to fund such Buyers acquisition of the Purchased Interests have been or will be derived from or related to any illegal activities, including money laundering activities, and (B) the proceeds from such Buyers
investment in the Purchased Interests will be used to finance any illegal activities.
Section
4.10
Opportunity for Independent Investigation
. Such Buyer is an experienced and knowledgeable investor in the United States. Such Buyer has conducted its own independent review and analysis of the Purchased Interests. In entering into this
Agreement, such Buyer has relied solely upon the representations, warranties and covenants contained herein and upon its own investigation and analysis of the Purchased Interests, and such Buyer acknowledges and agrees that it has not been induced
by and has not relied upon any due diligence information, representations, warranties or statements, whether oral or written, express or implied, made by Seller, any Joliet Group Member or any of their respective Representatives, Affiliates or
agents, except for the representations and warranties expressly set forth in this Agreement.
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Section
4.11
Brokers and Finders
. Except for Barclays Bank PLC
and Credit Suisse AG, the fees and expenses of which will be paid by Zenith, neither such Buyer or any of its Subsidiaries has employed any broker or finder, or incurred any liability for any brokerage fees, commissions or finders fees payable
by Seller or any of its Subsidiaries in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any Buyer.
Section
4.12
Acknowledgement by the Buyer Parties
. Except for (a) the representations and warranties
made by Seller in this Agreement and (b) the representations and warranties made by Seller in any certificate required to be delivered under
Section
2.03(d)
, neither Seller nor any other Person is making or has made,
and such Buyer is not relying on, or has relied on, any other representations or warranties, either express or implied, with respect to the transactions contemplated by this Agreement, Seller, or the Company or their businesses, operations, assets,
liabilities, financial condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts,
plans or prospects), or on the accuracy or completeness of any information regarding Seller or the Company or any other material furnished or provided to such Buyer or made available to such Buyer in any form, in expectation of, or in connection
with, this Agreement or the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS
Section
5.01
Equity Interests in the Company
. Arc and Seller hereby agree that, between the date hereof and
the Closing Date, to the extent that the Company accepts capital contributions from Arc or Seller, Arc and Seller shall cause the Company to issue common unit Equity Interests of the Company with respect thereto at a
per-unit
purchase price of $18,750 in capital contributions.
Section
5.02
Conduct of Business
. Except as expressly set forth in this Agreement or with the prior written
consent of each of the Buyers, during the period from the date of this Agreement to the earlier of the Closing Date and the date on which this Agreement is terminated in accordance with its terms (the
Pre-Closing
Period
), Seller, in its capacity as a member of the Company, shall fund all capital contributions requested by the Company from Seller that Seller has agreed to make prior to the
date hereof and that are related to the capital contributions required of Arc set forth in Section 6.3(n) of the MLP Disclosure Letter (solely to the extent relating to Joliet Bulk, Barge & Rail LLC, as expressly set forth therein)
delivered by Arc pursuant to the Merger Agreement.
Section
5.03
Tax Matte
rs
.
(a) Each Buyer shall be severally liable for and pay any real property transfer or gains Tax, sales Tax, use Tax, stamp Tax, stock transfer
Tax, or other similar Tax imposed on or with respect to the sale of such Buyers portion of the Purchased Interests as contemplated by this Agreement.
(b) Zenith and Arc shall cooperate in good faith to cause the Company to provide to Seller such Tax information as Seller may reasonably
request for the purposes of (i) completing any Tax filings required to be completed by Seller or its direct or indirect owners in connection with Sellers prior ownership or sale of the Purchased Interests and (ii) making any Tax
payments due from Seller or its direct or indirect owners. Zenith and Arc shall cooperate in good faith to cause the Company to use commercially reasonable efforts to provide such Tax information within five Business Days of the receipt of any such
request and shall cooperate in good faith to cause the Company to take into account any reasonable comments received from Seller with respect to such information.
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(c) Zenith and Arc shall cooperate in good faith to cause the Company to take any actions
reasonably requested for the purpose of preparing and filing the final U.S. federal income Tax Return with respect to the Companys taxable year ending on the Closing Date.
(d) Each Buyer shall notify Seller upon receipt of any notice regarding a material audit or Tax examination related to the Company for the
taxable year that includes the date hereof (or any prior years) and upon any request for material information by United States federal, state, local or other Tax authorities. Each Buyer shall promptly provide Seller with copies of any documents it
receives from the Company or any Tax authority relating to an audit or Tax examination related to the Company for the taxable year that includes the date hereof (or any prior years). Each Buyer and Seller shall cooperate fully, as and to the extent
reasonably requested by the other Parties, in connection with the filing of all Tax Returns and any audit, litigation or other Proceeding with respect to Taxes relating to the Company or the Purchased Interests. Such cooperation shall include the
retention and (upon any other Partys request) the provision of records and information that are reasonably relevant to any such audit, Tax Return or other action and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
(e) Pursuant to Section 7.01(d)(iii) of the LLC
Agreement, no member of the Company may transfer any interest in the Company if such transfer would cause the Company to be terminated as a partnership under Section 708(b)(1)(B) of the Code unless such transferring member agrees to indemnify
each
non-transferring
member of the Company on an
after-tax
basis from any adverse income tax consequences resulting from such termination. Each of Seller and Buyers
hereby acknowledge and agree that the transactions contemplated by this Agreement do not result in a termination of the partnership under Section 708(b)(1)(B) of the Code and that no indemnification shall be made by Seller to Buyers or by
Seller to the Company with respect to any adverse income tax consequences resulting from the transactions contemplated by this Agreement.
(f) Each of the Buyers, Seller and Arc acknowledge and agree that the transactions contemplated by the Merger Agreement will cause the Company
to be terminated as a partnership under Section 708(b)(1)(B) of the Code. Each of the Buyers and Seller acknowledge and agree that, notwithstanding anything to the contrary contained in the LLC Agreement, neither Arc nor any Buyer shall, and no
such Person shall be required to, make any indemnification payment of any nature to Seller or any other Person in connection with the transactions contemplated by this Agreement or the Merger Agreement pursuant to Section 7.01(d)(iii) of the
LLC Agreement or otherwise.
Section
5.04
Confidentiality; Public Announcements
. The Parties will
maintain the confidentiality of this Agreement and its terms except that any Party or such Partys Affiliates may disclose this Agreement or any of its terms (a) to the extent required by Law or rules of any stock exchange, as required in
connection with any Proceeding, or as requested or required by any Governmental Authority; or (b) to any of the following, provided that any such Person to whom any such information is disclosed is obligated to, except as otherwise required by
application of Law or regulation, maintain such information in confidence: (i) any direct and indirect holders of Equity Interests in such Party or any Affiliate of such, (ii) its Representatives, and (iii) any lender or potential
lender to such Party. No Party shall make any public announcement or issue any public communication, disclosure, publication or press release regarding this Agreement or the transactions contemplated hereby without first obtaining the prior written
consent of the other Party, except if such announcement or other communication is required by applicable Law or rules of any stock exchange (and then only to the extent and including such information as is required by applicable Law or such rules).
No press release issued in accordance with this
Section
5.04
may contain the names General Electric Company, GE, GE EFS, or any similar name, but may contain the name of the Seller. If a
Party or any of its Affiliates or their respective Representatives are compelled to disclose any confidential information by judicial or administrative process or by other requirements of Law, such Party shall (to the extent permitted by Law)
promptly notify the other Parties in writing and shall disclose only that portion of such information which such Party is advised by its counsel is required to be disclosed; provided, however, that such disclosing Party shall use commercially
reasonable efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.
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Section
5.05
Governmental Approvals
.
(a) Each Party, as promptly as possible, shall use its reasonable best efforts to obtain, or cause to be obtained, all consents,
authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement. Each Party shall cooperate
fully with the other Parties and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals. The Parties shall not willfully take any action that will have the effect of delaying, impairing or impeding the
receipt of any required consents, authorizations, orders and approvals.
(b) All analyses, appearances, meetings, discussions,
presentations, memoranda, briefs, filings, arguments, and proposals made by or on behalf of any Party before any Governmental Authority or the staff or regulators of any Governmental Authority, in connection with the transactions contemplated
hereunder (but, for the avoidance of doubt, not including any interactions between Seller or the Company with Governmental Authorities in the ordinary course of business, any disclosure which is not permitted by Law or any disclosure containing
confidential information) shall be disclosed to any other Party in advance of any filing, submission or attendance, it being the intent that the Parties will consult and cooperate with one another, and consider in good faith the views of one
another, in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals. Each Party shall give notice to the other Parties with respect to any meeting, discussion,
appearance or contact with any Governmental Authority or the staff or regulators of any Governmental Authority, with such notice being sufficient to provide the other Parties with the opportunity to attend and participate in such meeting,
discussion, appearance or contact.
Section
5.06
Closing Conditions
.
From the date hereof until
the Closing, each Party hereto shall use reasonable best efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in
Article VI
hereof.
Section
5.07
Further Assurances
.
The Parties agree to take all such further actions and execute,
acknowledge and deliver all such further documents that are necessary or useful in carrying out the purposes of this Agreement.
ARTICLE
VI
CONDITIONS TO CLOSING
Section
6.01
Conditions to Obligations of All Parties
. The obligations of each Party to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:
(a) No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Order that is in effect and has the effect of
making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.
(b) The Closing of the transactions under the Merger Agreement and the First Closing of the transactions under the
GLNG Purchase Agreement, in each case, in accordance with the terms of each such agreement shall each have occurred, or shall occur contemporaneously with, the consummation of the transactions contemplated by this Agreement.
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Section
6.02
Conditions to Obligations of Each Buyer
. The
obligations of each Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment (or waiver by such Buyer), at or prior to the Closing, of each of the following conditions:
(a) (i) The representations and warranties of Seller contained in
Section
3.01
,
Section
3.02
,
Section
3.03
, clause (a) of
Section
3.04
and
Section
3.06
are true and correct, except for any
de minimis
inaccuracies,
and (ii) the other representations and warranties of Seller contained in
Article III
are true and correct, in each of
clauses (i)
and
(ii)
, as of the date of this Agreement and as of the Closing Date, as if made as of
such time (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of
clause (ii)
, where the failure of such representations and warranties to be so true and correct (without giving
effect to any limitation as to materiality or Material Adverse Effect set forth in any individual such representation or warranty) would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect.
(b) Seller shall have performed all obligations that are required to be performed by it under this Agreement at or prior to the
Closing Date, in all material respects.
(c) Seller shall have delivered or caused to be delivered (or be ready, willing and able to
deliver at the Closing) to Buyers the documents and other items required to be delivered by Seller under
Section
2.03(d)
.
Section
6.03
Conditions to Obligations of Seller
. The obligations of Seller to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment (or waiver by Seller), at or prior to the Closing, of each of the following conditions:
(a) (i) The representations and warranties of each Buyer contained in
Section
4.01
,
Section
4.02
, clause (a) of
Section
4.03
,
Section
4.04
and
Section
4.11
are true and correct, except for any
de minimis
inaccuracies, and (ii) the other representations and warranties of each Buyer contained in
Article IV
are true and correct, in each of
clauses (i)
and
(ii)
, as of the date of this Agreement and as of the Closing Date,
as if made as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of
clause (ii)
, where the failure of such representations and warranties to be so true and correct
(without giving effect to any limitation as to materiality or Material Adverse Effect set forth in any individual such representation or warranty) would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(b) Each Buyer shall have performed all obligations that are required to be performed by it under this Agreement
at or prior to the Closing Date, in all material respects.
(c) Each Buyer shall have delivered or caused to be delivered (or be ready,
willing and able to deliver at the Closing) to Seller the documents and other items required to be delivered by such Buyer under
Section
2.03(a)
,
Section
2.03(b)
, or
Section
2.03(c)
, as applicable.
ARTICLE VII
TERMINATION
Section
7.01
Termination
. This Agreement may be terminated at any time prior to the Closing:
(a) by the mutual written consent of the Parties (other than Arc); or
(b) automatically without any further action by any Party if the Merger Agreement is validly terminated pursuant to its terms.
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Section
7.02
Effect of Termination
. In the event of the
termination of this Agreement as provided in
Section
7.01
, this Agreement will become null and void (other than the provisions in this
Section
7.02
and in
Section
5.04
(Confidentiality; Public Announcements), and the provisions in
Article IX
(Miscellaneous), all of which will survive termination of this Agreement). Upon termination pursuant to this
Article VII
, there will be no liability on the part
of any Party or their respective directors, managers, officers and Affiliates;
provided
,
however
, the foregoing will not relieve any Party for any liability for a breach of this Agreement occurring prior to such termination or for
actual fraud arising out of or relating to this Agreement.
ARTICLE VIII
INDEMNIFICATION
Section
8.01
Survival
. Subject to the limitations and other provisions of this Agreement, the representations
and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is (a) with respect to the representations and warranties contained in
Section
3.01
,
Section
3.02
,
Section
3.03
, clause (a) of
Section
3.04
,
Section
3.06
,
Section
4.01
,
Section
4.02
, clause (a) of
Section
4.03
,
Section
4.04
and
Section
4.11
, the dates of the expiration of the applicable statute of
limitations following the Closing Date, and (b) with respect to all other representations and warranties contained in
Article III
and
Article IV
, 12 months from the Closing Date. None of the covenants or other agreements contained
in this Agreement shall survive the Closing Date other than those which by their terms expressly contemplate performance after the Closing Date, and each such surviving covenant and agreement shall survive the Closing for the period contemplated by
its terms. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the
non-breaching
party to the breaching
party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of such survival period and such claims shall survive until finally resolved.
Section
8.02
Indemnification by Seller
. Subject to the other terms and conditions of this
Article
VIII
, Seller shall indemnify each Buyer against, and shall hold such Buyer harmless from and against, any and all Losses incurred or sustained by, or imposed upon, such Buyer based upon, arising out of, with respect to or by reason of:
(a) any inaccuracy in or breach of any of the representations or warranties of Seller contained in
Article III
or the certificate
delivered to Buyers pursuant to
Section
2.03(d)(iii)
; or
(b) any breach or
non-fulfillment
of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement.
Section
8.03
Indemnification by Each Buyer
. Subject to the other terms and conditions of this
Article
VIII
, each Buyer shall indemnify Seller against, and shall hold Seller harmless from and against, any and all Losses incurred or sustained by, or imposed upon, Seller based upon, arising out of, with respect to or by reason of:
(a) any inaccuracy in or breach of any of the representations or warranties of such Buyer contained in
Article IV
or the certificate
delivered to Seller by such Buyer pursuant to
Section
2.03(a)(iii)
,
Section
2.03(b)(iii)
or
Section
2.03(c)(iii)
, as applicable; or
(b) any breach or
non-fulfillment
of any covenant, agreement or obligation to be performed by such
Buyer pursuant to this Agreement.
Section
8.04
Certain Limitations
. The party making a claim under this
Article VIII
is referred to as the
Indemnified Party
, and the party against whom such claims are asserted under this
Article VIII
is referred to as the
Indemnifying Party
. The indemnification
provided for in
Section
8.02
and
Section
8.03
shall be subject to the following limitations:
(a) Subject to
Section
8.04(b)
, the aggregate amount of all Losses for which an Indemnifying Party shall be liable
pursuant to
Section
8.02(a)
or
Section
8.03(a)
as the case may be, shall not exceed the Purchase Price.
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(b) In the event that a Buyer is the Indemnifying Party, such Buyer shall not be liable for any
Losses in excess of such Buyers
pro rata
portion of the Purchase Price.
(c) The amount of Losses payable by an Indemnifying
Party pursuant to
Section
8.02
shall be net of any amounts recovered by the Indemnified Party under any insurance policy or any indemnity, contribution or other similar payment received by the Indemnified Party in respect
of any such claim. If the Indemnified Party receives any amounts under an applicable insurance policy or from any other Person responsible for any Losses subsequent to an indemnification payment by the Indemnifying Party and such amounts would
result in a duplicative recovery, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment, up to the
amount received by the Indemnified Party, net of any expenses incurred by such Indemnified Party in collecting such amount.
(d) In no
event shall any Indemnifying Party be liable to any Indemnified Party for any punitive, consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or
alleged breach of this Agreement.
(e) Each Indemnified Party shall take, and cause its Affiliates to take, all reasonable steps to
mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss.
Section
8.05
Indemnification Procedures
.
(a)
Third-Party Claims
. If any Indemnified Party receives notice of the assertion or commencement of any action, suit, claim or other
legal proceeding made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a Representative of the foregoing (a
Third-Party Claim
) against such Indemnified Party with
respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not,
however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the
Third-Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The
Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third-Party Claim at the Indemnifying Partys expense and by the Indemnifying Partys own
counsel, and the Indemnified Party shall cooperate in good faith in such defense. In the event that the Indemnifying Party assumes the defense of any Third-Party Claim, subject to
Section
8.05(b)
, it shall have the right to
take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third-Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right, at its own cost
and expense, to participate in the defense of any Third-Party Claim with counsel selected by it subject to the Indemnifying Partys right to control the defense thereof. If the Indemnifying Party elects not to compromise or defend such
Third-Party Claim or fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, the Indemnified Party may,
Section
8.05(b)
, pay, compromise, defend such Third-Party
Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third-Party Claim. Seller and Buyers shall cooperate with one other in all reasonable respects in connection with the defense of any Third-Party
Claim, including making available (subject to the provisions of
Section
5.04
) records relating to such Third-Party Claim and furnishing, without expense (other than reimbursement of actual
out-of-pocket
expenses) to the defending party, management employees of the
non-defending
party as may be reasonably necessary for the preparation of the defense of
such Third-Party Claim.
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(b)
Settlement of Third-Party Claims
. Notwithstanding any other provision of this
Agreement, the Indemnifying Party shall not enter into settlement of any Third-Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, delayed or conditioned), except as provided in
this
Section
8.05(b)
. If a firm offer is made to settle a Third-Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary
form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third-Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give
written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within ten days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third-Party Claim and
in such event, the maximum liability of the Indemnifying Party as to such Third-Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such
Third-Party Claim, the Indemnifying Party may settle the Third-Party Claim upon the terms set forth in such firm offer to settle such Third-Party Claim. If the Indemnified Party has assumed the defense pursuant to
Section
8.05(a)
, it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, delayed or conditioned).
(c)
Direct Claims
. Any claim by an Indemnified Party on account of a Loss which does not result from a Third-Party Claim (a
Direct Claim
) shall be asserted by the Indemnified Party giving the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its
indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include
copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have 30 days after its receipt
of such notice to respond in writing to such Direct Claim. During such
30-day
period, the Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or
circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Partys investigation by giving such information
and assistance (including access to the Companys premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the
Indemnifying Party does not so respond within such
30-day
period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies
as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.
Section
8.06
Tax Treatment of Indemnification Payments
. All indemnification payments made under this
Agreement shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.
Section
8.07
Exclusive Remedies
. Subject to
Section
9.12
, the parties acknowledge
and agree that their sole and exclusive remedy with respect to any and all claims for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement after
the Closing, shall be pursuant to the indemnification provisions set forth in this
Article VIII
. In furtherance of the foregoing, each Party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of
action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other Party and its Affiliates and each of their
respective Representatives after the Closing arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this
Article VIII
. Nothing in this
Section
8.07
shall limit any
Persons right to seek and obtain any equitable relief to which any Person shall be entitled pursuant to
Section
9.12
.
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ARTICLE IX
MISCELLANEOUS
Section
9.01
Notices
.
(a) Unless this Agreement specifically requires otherwise, any notice, demand or request provided for in this Agreement, or served, given or
made in connection with it, shall be in writing and shall be deemed properly served, given or made if delivered in person or sent by electronic delivery (including delivery of a document in Portable Document Format), by registered or certified mail,
postage prepaid or by a nationally recognized overnight courier service that provides a receipt of delivery, in each case, to the Parties at the addresses specified below:
If to Seller, to:
EFS Midstream
Holdings, LLC
800 Long Ridge Road
Stamford, CT 06927
Attn: John
Pugh
Email: John.Pugh@ge.com
With a copy (which shall not constitute notice) to:
Sidley Austin LLP
1000 Louisiana
Street, Suite 6000
Houston, TX 77002
Attn: Tim Chandler
Email:
Tim.Chandler@sidley.com
If to Lightfoot LP or Lightfoot GP, to:
c/o Lightfoot Capital Partners, LP
725 Fifth Avenue, 19
th
Floor
New York, New York
Facsimile:
(212)
993-1299
Attn: Vince Cubbage
Steven Schnitzer
Email: vince.cubbage@lightfootcapital.com
steven.schnitzer@lightfootcapital.com
With a copy (which shall not constitute notice) to:
Vinson & Elkins L.L.P.
666 Fifth Avenue, 26
th
Floor
New York, New York 10103
Facsimile: (917)
849-5367
Attn: Michael Swidler
Brenda Lenahan
Email: mswidler@velaw.com
blenahan@velaw.com
If to Zenith, to:
c/o Zenith
Energy U.S., L.P.
3900 Essex Lane, Suite 950
Houston, Texas 77027
Attn:
General Counsel
Email: dana.love@zenithem.com
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With a copy (which shall not constitute notice) to:
Kirkland & Ellis LLP
609 Main Street, Suite 4700
Houston, Texas 77002
Facsimile:
(713)
836-3600
Attn: Adam D. Larson, P.C.
Kim Hicks
Email: adam.larson@kirkland.com
kim.hicks@kirkland.com
If to Arc, to:
c/o Arc Logistics
Partners LP
725 Fifth Avenue, 19
th
Floor
New York, New York
Facsimile:
(212)
993-1299
Attn: Vince Cubbage
Steven Schnitzer
Email: vince.cubbage@lightfootcapital.com
steven.schnitzer@lightfootcapital.com
With a copy (which shall not constitute notice) to:
Vinson & Elkins L.L.P.
666 Fifth Avenue, 26
th
Floor
New York, New York 10103
Facsimile: (917)
849-5367
Attn: Michael Swidler
Brenda Lenahan
Email: mswidler@velaw.com
blenahan@velaw.com
Baker Botts L.L.P.
910 Louisiana
Street
Houston, Texas 77002
Facsimile: (713)
229-2727
Attn: Joshua Davidson
Jeremy Moore
Email: joshua.davidson@bakerbotts.com
jeremy.moore@bakerbotts.com
(b) Notice given by personal delivery, mail or overnight courier pursuant to this
Section
9.01
shall be effective
upon physical receipt. Notice given by electronic transmission pursuant to this
Section
9.01
shall be effective as of the date of an affirmative acknowledgment of delivery by the recipient thereof (except that automatic
confirmations shall not be deemed to be confirmed delivery) if delivered before 5:00 P.M. Central Time on any Business Day at the place of receipt or the next succeeding Business Day if affirmative acknowledgment of delivery by the recipient
thereof (except that automatic confirmations shall not be deemed to be confirmed delivery) is after 5:00 P.M. Central Time on any Business Day or during any non-Business Day at the place of receipt.
Section
9.02
Waiver of Other Representations
. EXCEPT THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY CONTAINED
IN
ARTICLE III
, THE PURCHASED INTERESTS ARE BEING SOLD AS IS, WHERE IS, WITH ALL FAULTS, AND SELLER AND ITS AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES EXPRESSLY DISCLAIM ANY REPRESENTATIONS OR
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WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THE JOLIET GROUP MEMBERS AND THEIR RESPECTIVE ASSETS OR THE PROSPECTS (FINANCIAL OR OTHERWISE),
RISKS AND OTHER INCIDENTS OF THE JOLIET GROUP MEMBERS AND THEIR RESPECTIVE ASSETS.
Section
9.03
Entire
Agreement
. This Agreement, the GLNG Purchase Agreement, the Merger Agreement, the MLP Disclosure Letter and the Confidentiality Agreements constitute the entire agreement, and supersede all other prior Contracts, both written and oral, among the
Parties with respect to the subject matter of this Agreement and the GNLG Purchase Agreement, the Merger Agreement, the MLP Disclosure Letter and the Confidentiality Agreements. In the event of a conflict between the terms of this Agreement and
either Confidentiality Agreement, the terms of this Agreement will control.
Section
9.04
Expenses
.
Except as otherwise expressly provided in this Agreement, each Party shall pay all costs and expenses it has incurred or will incur in anticipation of, relating to or in connection with the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby.
Section
9.05
Waiver
. Any term or condition of this
Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition;
provided
,
however
, that this
Section
9.05
,
Section
9.06
,
Section
9.07
,
Section
9.08
,
Section
9.11
and
Section
9.13
(and any other provision of this Agreement to the extent waiver of such provision would modify the substance of such Sections) will not be waived in a manner that is adverse to any Debt Financing Source without
the prior written consent of such Debt Financing Source.. No waiver by any Party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of
this Agreement on any future occasion.
Section
9.06
Amendment
. This Agreement may be amended or modified
in any and all respects by written agreement of the Parties;
provided
,
however
, that this
Section
9.06
,
Section
9.05
,
Section
9.07
,
Section
9.08
,
Section
9.11
and
Section
9.13
(and any other provision of this Agreement to the extent an amendment or other modification of such provision would modify the
substance of such Sections) will not be amended in a manner that is adverse to any Debt Financing Source without the prior written consent of such Debt Financing Source.
Section
9.07
No Third
Party Beneficiary
. Except for the provisions of
Article VII
and
Section
9.13
, the terms and provisions of this Agreement are intended solely for the benefit of the Parties and their respective successors or permitted assigns, and it is not the intention of the Parties to confer third
party beneficiary rights upon any other Person. Notwithstanding the foregoing and anything in this Agreement to the contrary, this
Section
9.07
,
Section
9.05
,
Section
9.06
,
Section
9.08
,
Section
9.11
and
Section
9.13
are intended for the benefit of, and shall be enforceable by, the Debt Financing
Sources.
Section
9.08
Assignment; Binding Effect
. Neither this Agreement nor any of the rights,
interests or obligations hereunder will be assigned, in whole or in part, by operation of Law or otherwise, by any of the Parties without the prior written consent of the other Parties, except that Zenith may assign, in its sole discretion, any or
all of its rights, interests and obligations under this Agreement to (i) one or more Affiliates of Zenith or (ii) to any of its financing sources as collateral security, but no such assignment will relieve Zenith of any of its obligations
or liability hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns. Any purported assignment not permitted
under this
Section
9.08
will be null and void.
Section
9.09
Invalid
Provisions
. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any Party under this Agreement will not be materially and adversely affected
thereby, such provision shall be fully severable, this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part
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hereof, the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom
and in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may
be possible.
Section
9.10
Counterparts
. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by
e-mail
or other means of electronic transmission shall be
deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
Section
9.11
Governing
Law
; Submission to Jurisdiction; Jury Trial Waiver
.
(a) This Agreement and all claims or causes of action
(whether in contract, tort or otherwise) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to
any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement) will be governed by, and construed in accordance with, the Laws of the State of Delaware applicable to Contracts executed
in and to be performed entirely within that State.
(b) By execution and delivery of this Agreement, each Party irrevocably agrees that
any Proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by any other
Party hereto or its successors or assigns, will be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept
jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each of the Parties hereby irrevocably submits with regard to any such Proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated hereunder in any court other than the aforesaid courts. Each of the
Parties hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any Proceeding with respect to this Agreement or the transactions contemplated hereunder, (i) any claim that it is not personally subject to
the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this
Section
9.11
, (ii) any claim that it or its property is exempt or immune from the jurisdiction of any such
court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted
by the applicable Law, any claim that (A) the Proceeding in such court is brought in an inconvenient forum, (B) the venue of such Proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by
such courts. Notwithstanding anything in this Agreement to the contrary, each of the Parties (on behalf of themselves and, with respect to Seller, on behalf of the Seller Related Parties) agrees: (a) that it will not bring or support any
action, cause of action, claim, cross-claim or third-party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against the Debt Financing Sources in any way relating to this Agreement,
including the Merger and the Debt Financing, including any dispute arising out of or relating in any way to the Debt Commitment Letter or the performance thereof, in any forum other than federal and New York state courts located in the Borough of
Manhattan within the City of New York; and (b) that, except as specifically set forth in the Debt Commitment Letter, all claims or causes of action (whether at law, in equity, in contract, in tort or otherwise) against any of the Debt Financing
Sources in any way relating to the Debt Commitment Letter or the performance thereof or the financings contemplated thereby, shall be exclusively governed by, and construed in accordance with, the internal laws of the State of New York, without
giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of laws of another jurisdiction.
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(c) EACH PARTY (INCLUDING EACH SELLER RELATED PARTY) ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING IN ANY ACTION, PROCEEDING OR COUNTERCLAIM AGAINST ANY DEBT FINANCING SOURCE. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS,
(II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS
SECTION 9.11
.
Section
9.12
Specific
Enforcement
.
(a) The Parties agree that irreparable damage, for which monetary damages would not be an adequate remedy, would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached by the Parties. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions, or any other
appropriate form of specific performance or equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction, in each case in accordance with this
Section
9.12
, this being in addition to any other remedy to which they are entitled under the terms of this Agreement at Law or in equity. Each Party accordingly agrees not to raise any objections to the availability of the
equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of such Party under this Agreement all in accordance with the terms of this
Section
9.12
. Each Party further agrees that no other party or any other Person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy
referred to in this
Section
9.12
, and each Party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.
(b) Notwithstanding anything to the contrary in this Agreement, it is explicitly agreed that Seller shall be entitled to seek specific
performance, acting jointly and unanimously with Arc Logistics GP LLC and Lightfoot GP in accordance with the Equity Commitment Letter (as defined in the Merger Agreement), of Zeniths obligation to cause the Equity Financing (as defined in the
Merger Agreement) to be funded and to consummate the transactions contemplated by this Agreement, including to effect the Closing in accordance with
Section
2.01
on the terms and subject to the conditions in this Agreement,
if, and only if, Arc Logistics GP LLC is entitled to and is actively seeking specific performance in accordance with Section 9.9 of the Merger Agreement.
Section
9.13
Non-Recourse
. Any claim or cause of action based upon,
arising out of, or related to this Agreement may only be brought against Persons that are expressly named as Parties, and then only with respect to the specific obligations set forth herein. No former, current or future direct or indirect
equityholders, controlling Persons, stockholders, directors, officers, employees, members, managers, agents, trustees, Affiliates, general or limited partners or assignees of the Parties (except permitted assignees under
Section
9.08
) or of any former, current or future direct or indirect equityholder, controlling Person, stockholder, director, officer, employee, member, manager, agent, trustee, Affiliate, general or limited partner or
assignee of any of the foregoing (collectively, but for the avoidance of doubt excluding the Parties) will have any liability or obligation for any of the representations, warranties, covenants, agreements, obligations or liabilities of any Party
under this Agreement or for any Proceeding based on, in respect of, or by reason of, the transactions contemplated hereunder (including the breach, termination or failure to consummate any of the transactions contemplated
C-24
hereunder), in each case whether based on contract, tort or strict liability, by the enforcement of any assessment, by any legal or equitable Proceeding, by virtue of any statute, regulation or
applicable Law or otherwise and whether by or through attempted piercing of the corporate or partnership veil, by or through a claim by or on behalf of a Party hereto or another Person or otherwise. Notwithstanding anything to the contrary contained
herein, none of Seller Related Parties shall have any rights or claims against any Debt Financing Source in connection with this Agreement, the Merger Agreement, the Debt Financing or the transactions contemplated hereby or thereby, and no Debt
Financing Source shall have any rights or claims against any Party in connection with this Agreement, the Merger Agreement, the Debt Financing or the transactions contemplated hereby or thereby, whether at law or equity, in contract, in tort or
otherwise; provided that, following consummation of the Merger (as defined in the Merger Agreement), the foregoing will not limit the rights of the parties to the Debt Financing under any commitment letter related thereto. Notwithstanding any other
provision herein, no Debt Financing Source nor any Affiliate of any Debt Financing Source, nor any officer, director, employee, agent, controlling person, advisor or other representative of the foregoing or any successor or permitted assign of any
of the foregoing shall be liable for any indirect, special, punitive or consequential damages (including, without limitation, any loss of profits, business or anticipated savings) in connection with the Financing, the Transactions, or with respect
to any activities related to the Financing, including the preparation of the Commitment Letters and the Fee Letters.
[Signature Pages
Follow]
C-25
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by a duly authorized
person of each Party as of the date first above written.
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SELLER:
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EFS Midstream Holdings, LLC
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By: Aircraft Services Corporation, its sole member
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By:
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/s/ John E. Pugh
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Name:
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John E. Pugh
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Title:
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Vice President
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Signature Page
Purchase Agreement
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LIGHTFOOT:
|
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Lightfoot Capital Partners, LP
|
By: Lightfoot Capital Partners GP LLC, its general partner
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By:
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/s/ Vincent T. Cubbage
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Name:
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Vincent T. Cubbage
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Title:
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Chief Executive Officer
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Lightfoot Capital Partners GP LLC
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By:
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/s/ Vincent T. Cubbage
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Name:
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Vincent T. Cubbage
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Title:
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Chief Executive Officer
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Signature Page
Purchase Agreement
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ZENITH:
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Zenith Energy U.S. Logistics Holdings, LLC
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By:
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/s/ Jeffrey R. Armstrong
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Name:
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Jeffrey R. Armstrong
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Title:
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Chief Executive Officer
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Signature Page
Purchase Agreement
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ARC:
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Arc Logistics Partners LP
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By: Arc Logistics GP LLC, its general partner
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By:
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/s/ Vincent T. Cubbage
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Name:
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Vincent T. Cubbage
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Title:
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Chief Executive Officer
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Signature Page
Purchase Agreement
C-29
EXHIBIT A
FORM OF ASSIGNMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this
Agreement
), is made by and between EFS Midstream Holdings, LLC, a Delaware
limited liability company (
Assignor
), and [Zenith Energy U.S. Logistics Holdings, LLC, a Delaware limited liability company] [Lightfoot Capital partners, LP, a Delaware limited partnership] [Lightfoot Capital Partners GP, LLC, a
Delaware limited liability company] (
Assignee
), effective as of [●] (the
Effective Date
).
WHEREAS, Assignor is the owner of certain of the membership interests in Arc Terminals Joliet Holdings LLC, a Delaware limited liability
company (the
Company
) pursuant to the Limited Liability Company Agreement of the Company, effective as of February 19, 2015 (as the same may be amended from time to time, the
LLC Agreement
);
WHEREAS, Assignor and Assignee are parties to that certain Purchase Agreement by and among Assignor, Assignee and the other parties thereto,
dated as of August 29, 2017 (the
Purchase Agreement
), pursuant to which Assignee is purchasing the Assigned Interests (as defined below) from Assignor; and
WHEREAS, in connection with the Closing (as such term is defined in the Merger Agreement), Assignor wishes to transfer to Assignee, and
Assignee wishes to accept from Assignor, membership interests in the Company equal to [●]% of the membership interests in the Company outstanding as of the Effective Date (the
Assigned Interests
), on the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of mutual promises contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1.
Assignment
. Assignor does hereby transfer, assign, convey
and
deliver to Assignee all of the Assigned Interests including, without limitation (a) the Assignors rights to receive profits, compensation, and other
distributions from the Company attributable to the Assigned Interests which accrue after the date hereof, and (b) each, every and all of the rights, titles, interests and benefits of whatsoever kind or character now or thereafter accruing to
the Assigned Interests (collectively, the
Assignment
).
2.
Assumption
. Assignee accepts such Assignment and
agrees to be bound by the terms of the LLC Agreement in place of Assignor, and Assignee hereby assumes all of the past, present and future liabilities, duties and obligations of Assignor under or allocable to the Assigned Interests, subject to the
terms of the Purchase Agreement.
3.
Representations and Warranties
. Assignor represents and warrants to Assignee that as of the
date hereof, Assignor is the sole legal and equitable owner of the entirety of the Assigned Interests and the Assigned Interests transferred hereby to Assignee are free and clear of all liens, encumbrances, or security interests (in each case other
than transfer restrictions under applicable securities laws), subject to the terms and conditions of the LLC Agreement and the Purchase Agreement.
4.
Consent to Assignment
. The Assignor, as a Member of the Company on the Effective Date, hereby approves and consents to the
Assignment and consents to the Assignee becoming a Member of the Company in the place and stead of Assignor with respect to the Assigned Interests as of the Effective Date for all purposes.
5.
Amendment
. This Agreement may be amended, modified or supplemented only by written agreement of the parties hereto. This Agreement
and all of the provisions hereof shall be binding upon and inure to the benefit
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of the parties hereto and their respective successors and permitted assigns. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any person,
other than the parties, and their successors and permitted assigns, any right or remedies under or by reason of this Agreement.
6.
Governing Law
. This Agreement and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement will be
governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to principles of conflicts of law thereof which may require the application of the law of another jurisdiction.
7.
Entire Agreement
. This Agreement, the LLC Agreement, the Purchase Agreement and the other documents and instruments referred to
herein and therein, embody the entire agreement and understanding of the parties in respect of the subject matter contained herein. This Agreement supersedes all other prior agreements and understandings between the parties with respect to such
subject matter.
8.
Further Assurances
. The parties agree to take all such further actions and execute, acknowledge and deliver all
such further documents that are necessary or useful in carrying out the purposes of this Agreement. Without limitation of the foregoing, Assignor agrees to execute, acknowledge and deliver to the Assignee all such other additional instruments,
notices, and other documents and to do all to more fully and effectively grant, convey and assign to the Assignee the Assigned Interests conveyed hereby and intended so to be.
9.
Counterparts
. This Agreement may be executed in counterparts (each of which will be deemed to be an original but all of which taken
together will constitute one and the same agreement) and will become effective when one or more counterparts have been signed by each of the parties hereto and delivered (including delivery by email) to the other party.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the Effective Date.
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Assignor
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EFS MIDSTREAM HOLDINGS, LLC
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By:
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Name:
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Title:
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Assignee
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[●]
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By:
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Name:
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Title:
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C-32
EXHIBIT B
FORM OF AMENDED LLC AGREEMENT
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
ARC TERMINALS
JOLIET HOLDINGS LLC
a Delaware Limited Liability Company
Dated as of [
●
], 2017
Limited liability company interests in Arc Terminals Joliet Holdings LLC, a Delaware limited liability company, have not been registered with or qualified by
the Securities and Exchange Commission or any securities regulatory authority of any state. The interests are being sold in reliance upon exemptions from such registration or qualification requirements. The interests cannot be sold, transferred,
assigned or otherwise disposed of except in compliance with the restrictions on transferability contained in this Amended and Restated Limited Liability Company Agreement of Arc Terminals Joliet Holdings LLC, as such may be amended or restated from
time to time, and applicable federal and state securities laws.
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TABLE OF CONTENTS
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Page
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ARTICLE I
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DEFINITIONS
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1.01
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Certain Definitions
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C-38
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1.02
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Construction
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C-46
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ARTICLE II
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ORGANIZATION
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2.01
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Continuation of the Company
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C-46
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2.02
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Name
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C-46
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2.03
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Registered Office; Registered Agent
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C-46
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2.04
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Principal Office
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C-47
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2.05
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Purpose; Powers
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C-47
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2.06
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Fiscal Year; Tax Year
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C-47
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2.07
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Foreign Qualification Governmental Filings
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C-47
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2.08
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Term
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C-47
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2.09
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No State Law Partnership
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C-47
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ARTICLE III
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MEMBERS
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3.01
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Members
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C-47
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3.02
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Additional Members
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C-48
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3.03
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Withdrawing Member
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C-48
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3.04
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Representations and Warranties
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C-48
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3.05
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Liability to Third Parties
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C-49
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ARTICLE IV
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INTERESTS; PREEMPTIVE RIGHTS
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4.01
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Interests
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C-49
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4.02
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Withdrawal or Return of Capital
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C-50
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4.03
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Regulatory Approval
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C-50
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4.04
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Company-Held Interests
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C-50
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ARTICLE V
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DISTRIBUTIONS AND ALLOCATIONS
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5.01
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Distributions
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C-51
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5.02
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Allocations
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C-51
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5.03
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Amounts Withheld
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C-53
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ARTICLE VI
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MANAGEMENT
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6.01
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Authority of the Managing Member
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C-53
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6.02
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Actions Requiring Consent of both EFS and the Managing Member
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C-54
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6.03
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Action Requiring Consent of the Managing Member and EFS if EFS Owns the Threshold
Ownership
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C-56
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6.04
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Actions Requiring Consultation with EFS
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C-57
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6.05
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Affiliate Contracts
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C-57
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6.06
|
|
Subsidiary Governance
|
|
|
C-57
|
|
6.07
|
|
Other Projects and Businesses
|
|
|
C-58
|
|
C-34
|
|
|
|
|
|
|
6.08
|
|
Indemnification; Limitation of Liability
|
|
|
C-59
|
|
6.09
|
|
No Recourse Against Nonparty Affiliates
|
|
|
C-60
|
|
|
ARTICLE VII
|
|
TRANSFERS
|
|
|
|
|
7.01
|
|
Limitations on Transfer
|
|
|
C-60
|
|
7.02
|
|
Right of First Offer
|
|
|
C-62
|
|
7.03
|
|
Direct
Tag-Along
Right
|
|
|
C-63
|
|
7.04
|
|
Indirect
Tag-Along
Right
|
|
|
C-63
|
|
7.05
|
|
Drag-Along Right
|
|
|
C-64
|
|
7.06
|
|
Potential Purchaser Access
|
|
|
C-65
|
|
7.07
|
|
Effect of Impermissible Transfer
|
|
|
C-65
|
|
|
ARTICLE VIII
|
|
RIGHTS OF MEMBERS; CONFIDENTIALITY
|
|
|
|
|
8.01
|
|
Access to Information
|
|
|
C-65
|
|
8.02
|
|
Budget
|
|
|
C-66
|
|
8.03
|
|
Financial Reports
|
|
|
C-66
|
|
8.04
|
|
Audits
|
|
|
C-67
|
|
8.05
|
|
Confidentiality
|
|
|
C-67
|
|
8.06
|
|
Press Releases
|
|
|
C-68
|
|
|
ARTICLE IX
|
|
TAXES
|
|
|
|
|
9.01
|
|
Tax Returns
|
|
|
C-68
|
|
9.02
|
|
Tax Elections
|
|
|
C-68
|
|
9.03
|
|
Tax Audits
|
|
|
C-68
|
|
|
ARTICLE X
|
|
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
|
|
|
|
|
10.01
|
|
Maintenance of Books and Records
|
|
|
C-69
|
|
10.02
|
|
Reports
|
|
|
C-69
|
|
10.03
|
|
Bank Accounts
|
|
|
C-69
|
|
|
ARTICLE XI
|
|
DISSOLUTION, LIQUIDATION AND TERMINATION
|
|
|
|
|
11.01
|
|
Dissolution
|
|
|
C-69
|
|
11.02
|
|
Liquidation and Termination
|
|
|
C-69
|
|
11.03
|
|
Cancellation of Filing
|
|
|
C-70
|
|
|
ARTICLE XII
|
|
GENERAL PROVISIONS
|
|
|
|
|
12.01
|
|
Notices
|
|
|
C-70
|
|
12.02
|
|
Entire Agreement; Supersedure
|
|
|
C-70
|
|
12.03
|
|
Effect of Waiver or Consent
|
|
|
C-70
|
|
12.04
|
|
Amendment or Modification
|
|
|
C-70
|
|
12.05
|
|
Survivability of Terms
|
|
|
C-71
|
|
12.06
|
|
Binding Effect
|
|
|
C-71
|
|
12.07
|
|
Governing Law; Severability
|
|
|
C-71
|
|
12.08
|
|
Consent to Jurisdiction; Waiver of Jury Trial
|
|
|
C-71
|
|
12.09
|
|
Further Assurances
|
|
|
C-71
|
|
12.10
|
|
Title to Company Property
|
|
|
C-71
|
|
C-35
|
|
|
|
|
|
|
12.11
|
|
Waiver of Action for Partition
|
|
|
C-72
|
|
12.12
|
|
Counterparts
|
|
|
C-72
|
|
12.13
|
|
Electronic Transmissions
|
|
|
C-72
|
|
Exhibit A Members, Classes, Capital Contributions and Units
Exhibit B Valuation Disagreement Procedure
C-36
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
ARC TERMINALS JOLIET
HOLDINGS LLC
This Second Amended and Restated Limited Liability Company Agreement (this
Agreement
), dated as of
[●], 2017 (the
Effective Date
), of Arc Terminals Joliet Holdings LLC, a Delaware limited liability company (the
Company
), is made and entered into by and between EFS Midstream Holdings LLC, a Delaware
limited liability company (or any Transferee of Common Units from EFS or a Transferee, in accordance with
Section
7.01(b)
, of Common Units from EFS and the consent, voting and other similar rights attributable to EFS
ownership of Common Units set forth in this Agreement, as applicable,
EFS
), Arc Terminals Holdings LLC, a Delaware limited liability company (
Arc
), the Company and the other members party hereto (the
Lightfoot Members
).
RECITALS
WHEREAS, the Company was organized as a Delaware limited liability company by the filing of the Certificate of Formation of the Company (the
Certificate
) in the office of the Secretary of State of the State of Delaware pursuant to the Act on February 9, 2015;
WHEREAS, the Company and Arc (in its capacity as service provider and, as such, the
Services Provider
), entered into that
certain Management Services Agreement, dated as of May 14, 2015 (the
Management Services Agreement
), pursuant to which the Services Provider manages certain
day-to-day
operations of the Company as set forth in the Management Services Agreement;
WHEREAS, on May 14, 2015, EFS and Arc entered into that certain Amended and Restated Limited Liability Company Agreement of the Company
(the
Existing A&R LLC Agreement
);
WHEREAS, on August 29, 2017, Lightfoot Capital Partners LP (
Lightfoot
LP
), Lightfoot Capital Partners GP LLC (
Lightfoot GP
), Zenith Energy U.S. Logistics Holdings, LLC (
Zenith Purchaser
) and EFS entered into that certain Purchase Agreement (the
Joliet
PA
) whereby Lightfoot LP, Lightfoot GP and Zenith Purchaser agreed to purchase from EFS certain of the outstanding Interests (as defined below) as set forth in the Joliet PA on the terms and subject to the conditions set forth in the
Joliet PA;
WHEREAS, on the Effective Date, (i) Lightfoot LP, Lightfoot GP and Zenith Purchaser acquired the Interests as
contemplated by the Joliet PA, (ii) Lightfoot LP and Lightfoot GP distributed their respective Interests to their respective equity holders, which are EFS and the Lightfoot Members, and (iii) Zenith Purchaser transferred the Interests that
it acquired to Arc; and
WHEREAS, as contemplated by the Joliet PA, the Members desire to amend and restate the Existing A&R LLC
Agreement in its entirety to add the Lightfoot Members as Members and to amend certain other provisions thereof, as set forth specifically herein.
C-37
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Members and the Company hereby amend and restate the Existing A&R LLC Agreement in its entirety and adopt the following as the limited liability company agreement (as
defined in the Act) of the Company:
ARTICLE I
DEFINITIONS
1.01
Certain Definitions
.
As used in this Agreement, the following terms have the following meanings:
Accelerated Drag
Right
has the meaning set forth in
Exhibit B
.
Accelerated Funding Right
has the meaning set forth in
Exhibit B
.
Act
means the Delaware Limited Liability Company Act.
Adjusted Capital Account
means, with respect to any Member, the balance, if any, in such Members Capital Account as
of the end of the relevant accounting period, after giving effect to the following adjustments:
(a) adding to such Capital Account any
amounts which such Member is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore to the Company pursuant to Treasury Regulations
Section 1.704-1(b)(2)(ii)(c)
or the
penultimate sentence of each of Treasury Regulations Sections
1.704-2(g)(1)
and
1.704-2(i)(5);
and
(b) subtracting from such Capital Account such Members share of the items described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4),
(5) and (6).
The foregoing definition is intended to comply with the provisions of Treasury
Regulations
Section 1.704-1(b)(2)(ii)(d)
and will be interpreted consistently therewith.
Affiliate
means, with respect to a Person, any other Person directly or indirectly Controlling or Controlled by or under
direct or indirect common Control with the first Person. Notwithstanding the foregoing, (i) no Member shall be deemed to be an Affiliate of any Member solely by virtue of the Members respective ownership of equity interests in the Company
and (ii) the Company shall not be deemed to an Affiliate of any Subsidiary, and a Subsidiary shall not be deemed to be an Affiliate of the Company or any Subsidiary.
Agreement
has the meaning set forth in the introductory paragraph hereof.
Appraisers
has the meaning set forth in
Exhibit B
.
Approved Budget
means a budget described in, and approved pursuant to,
Section
8.02
.
Arc
has the meaning set forth in the introductory paragraph hereof.
Available Cash
means, with respect to any Fiscal Quarter: (a) the sum of all cash and cash equivalents of the Company
and its Subsidiaries on hand at the end of such Fiscal Quarter, less (b) subject to
Section
6.03(a)
, the amount of any cash reserves established by the Managing Member to provide for the proper conduct of the business
of the Company and its Subsidiaries. Notwithstanding the foregoing, Available Cash with respect to the Fiscal Quarter in which the Company is dissolved and its liquidation commences and any subsequent Fiscal Quarter shall equal zero.
C-38
Book Value
means, with respect to any asset, the assets adjusted basis
for federal income tax purposes, except as follows:
(a) the Book Value of any asset contributed by a Member to the Company is the gross
fair market value of such asset as jointly determined by the Managing Member and EFS at the time of contribution;
(b) the Book Value of
all Company assets shall be adjusted to equal their respective gross fair market values, as reasonably determined by the Managing Member (unless such adjustment disproportionately affects the current and expected future income tax allocations to EFS
under
Article V
, in which case such determination shall be made jointly by the Managing Member and EFS) taking into account the provisions of Treasury Regulations
Section 1.704-1(b)(2)(iv)(h)(2),
as of the following times: (i) immediately before the acquisition of any interest in the Company by any new or existing Member in exchange for more than a
de minimis
capital contribution to the Company; (ii) immediately before the
distribution by the Company to the Member of more than a
de minimis
amount of property as consideration for an interest in the Company; and (iii) immediately before the liquidation of the Company within the meaning of Treasury
Regulations
Section 1.704-1(b)(2)(ii)(g);
provided
,
however
, that the adjustments pursuant to
clauses (i)
and
(ii)
shall be made only if the Managing Member reasonably
determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company;
(c) the Book Value of any
non-cash
Company asset distributed to any Member shall be adjusted to equal
the gross fair market value of such asset on the date of distribution as determined jointly by the Managing Member and EFS; and
(d) the
Book Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent that such adjustments are
taken into account in determining Capital Accounts pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m);
provided
,
however
, that Book Values shall not be adjusted pursuant to this
clause (d)
to the extent the Managing Member determines that an adjustment pursuant to
clause (b)
above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant
to this
clause (d)
.
If the Book Value of a Company asset has been determined or adjusted pursuant to
clause (a)
,
(b)
or
(d)
above, such Book Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of maintaining Capital Accounts. For purposes of clause (b), the Managing Member shall timely provide
all information reasonably requested by EFS to determine whether any proposed adjustment described in clause (b) disproportionately affects the current and expected future income tax allocations to EFS. EFS shall have fifteen (15) business
days from the date the Managing Member provides EFS with the information requested to determine whether such proposed adjustment disproportionately affects the current and expected future income tax allocations to EFS and, if so, to notify the
Managing Member of such determination. If EFS provides notice to the Managing Member setting forth any disproportionate affect of the proposed adjustment to EFS prior to the expiration of such fifteen
(15)-day
period, the gross fair market values of any assets impacted by such adjustment will be jointly determined by the Managing Member and EFS. No Tax Return shall be filed reflecting any adjustment under clause (b) unless and until the procedures
described in this paragraph have been complied with in full.
Business
means the development, construction, ownership
and operation of the JBBR Terminal, and such other business as may be approved from time to time by the Members in accordance with
6.02(o)
.
Business Day
means any day other than a Saturday, Sunday or legal holiday on which banks in New York City, New York, are
authorized or obligated by law to close.
Capital
means the amount of cash and the fair market value, as jointly
determined by the Managing Member and EFS, of any property (net of any liabilities assumed by the Company or which are secured by any
C-39
property contributed by such Member to the Company) contributed to the Company by the Members pursuant to the terms of this Agreement.
Capital Account
means the Capital Account maintained for each Member on the Companys books and records in accordance
with the following provisions:
(a) To each Members Capital Account there will be added (i) the amount of cash and the fair
market value of any other asset contributed by such Member to the Company pursuant to any provision of this Agreement, (ii) such Members allocable share of any items of Company income or gain, and (iii) the amount of any Company
liabilities assumed by such Member or which are secured by any property distributed to such Member.
(b) From each Members Capital
Account there will be subtracted (i) the amount of cash and the fair market value of any other Company assets distributed to such Member pursuant to any provision of this Agreement, (ii) such Members allocable share of any items of
Company deduction or loss, and (iii) the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company.
In the event any Interest is Transferred (other than by pledge of, or grant of a security interest in, such Interest) in accordance with the terms of this
Agreement, the Transferee will succeed to the Capital Account of the Transferor to the extent it relates to the Interest that is Transferred.
Capital Contribution
means any amount of Capital contributed to the Company by a Member pursuant to the terms of this
Agreement. Any reference to the Capital Contributions of a Member will include the Capital Contributions made by a predecessor holder of the Units of such Member.
Certificate
has the meaning set forth in the recitals hereof.
Code
means the Internal Revenue Code of 1986.
Common Units
means the Common Units issued to the Members as set forth on
Exhibit
A
as of the
Effective Date and any other Units issued after the Effective Date that are designated as Common Units.
Company
has
the meaning set forth in the introductory paragraph hereof.
Company Minimum Gain
has the meaning set forth in Treasury
Regulations Sections
1.704-2(b)(2)
and
1.704-2(d)(1)
for the phrase partnership minimum gain.
Contracting Parties
has the meaning set forth in
Section
6.09
.
Control
means (a) as to any Entity, the possession, directly or indirectly, through one or more intermediaries,
of the right to more than 50% of the distributions therefrom (including liquidating distributions), or (b) as to any Person (including Entities), the power or authority, through ownership of voting securities, by contract or otherwise, to
direct the management, activities or policies of such Entity by contract or otherwise.
Depreciation
shall mean, for
each applicable accounting period, an amount equal to the depreciation or other cost recovery deduction allowable under United States federal income tax principles with respect to Company property for such period, except that (A) with respect
to any property the Book Value of which differs from its adjusted tax basis for United States federal income tax purposes and which difference is being eliminated by use of the remedial method defined by Treasury Regulations
Section 1.704-3(d),
Depreciation for such period shall be the amount of such Book Value recovered for such period under the rules prescribed by Treasury Regulations
Section 1.704-3(d)(2),
and (B) with respect to any other property the Book Value of which
C-40
differs from its adjusted tax basis at the beginning of such period, Depreciation shall be an amount that bears the same ratio to such beginning Book Value as the United States
federal income tax depreciation, amortization, or other cost recovery deduction for such period bears to such beginning tax basis;
provided
,
however
, that if the adjusted tax basis of any property at the beginning of such period is
zero, Depreciation with respect to such property shall be determined with reference to such beginning Book Value using any reasonable method selected by the Managing Member.
Direct
Tag-Along
Members
has the meaning set forth in
Section
7.03(a)
.
Direct
Tag-Along
Offer
has the
meaning set forth in
Section
7.03(a)
.
Direct
Tag-Along
Right
has the meaning set forth in
Section
7.03(a)
.
Direct
Tag-Along
Transfer
has the meaning set forth in
Section
7.03(a)
.
Direct
Tag-Along
Transferor
has the meaning set forth in
Section
7.03(a)
.
Drag-Along Interest
has the meaning set forth in
Section
7.05(a)
.
Drag-Along Members
has the meaning set forth in
Section
7.05(a)
.
Drag-Along Rights
has the meaning set forth in
Section
7.05(a)
.
Drag-Along Threshold
has the meaning set forth in
Section
7.05(a)
.
Drag-Along Transaction
has the meaning set forth in
Section
7.05(b)
.
Drag-Along Transferee
has the meaning set forth in
Section
7.05(a)
.
Drag-Along Transferor
has the meaning set forth in
Section
7.05(a)
.
EBITDA
means net earnings without deduction of interest expenses, taxes,
depreciation and amortization, as calculated in accordance with U.S. GAAP, but excluding extraordinary items.
Effective
Date
has the meaning set forth in the introductory paragraph hereof.
Effective Date Disputes
means
JBBRs disputes with Ragnar Benson Construction LLC, Wilson & Company, Inc., Engineers & Architects, and CenterPoint Properties Trust regarding certain contractual obligations and operational issues, including with respect to
the steam and condensate system and thermal fluid system at the JBBR Terminal.
EFS
has the meaning set forth in the
introductory paragraph hereof.
Entity
means any estate, corporation, limited liability company, general partnership,
limited partnership, venture, trust, business trust, unincorporated association or other entity.
Escrow Amount
has the
meaning set forth in
Exhibit B
.
Existing A&R LLC Agreement
has the meaning set forth in the recitals
hereof.
Final
Per-Unit
Price
has the meaning set forth in
Exhibit B
.
First Appraiser
has the meaning set forth in
Exhibit B
.
C-41
First
Per-Unit
Price
has the meaning
set forth in
Exhibit B
.
Fiscal Quarter
means each three-calendar-month period ending on March 31,
June 30, September 30 or December 31 of any calendar year, except as otherwise agreed in accordance with
Section
6.02(c)
.
Fiscal Year
has the meaning set forth in
Section
2.06
.
Growth Project
means any capital asset expansion or capital asset enhancement, or series of related capital asset
expansions and capital asset enhancements, that is intended to: (a) increase the long-term commercial operating capacity of the Companys or its Subsidiaries operations as in place at the Effective Date; (b) diversify the
commercial activities at the JBBR Terminal; or (c) increase or diversify the revenue sources attributable to activities at the JBBR Terminal.
HSR Act
has the meaning set forth in
Section
4.03
.
Indemnified Losses
has the meaning set forth in
Section
6.08(c)
.
Indemnitee
has the meaning set forth in
Section
6.08(c)
.
Initial Budget
has the meaning set forth in
Section
8.02(a)
.
Interest
means the limited liability company interest of a Member in the Company at any particular time, as evidenced
initially by the Units.
JBBR LLC
means Joliet Bulk, Barge & Rail LLC, a Delaware limited liability company.
JBBR LLC Interests
means any equity interests in JBBR LLC.
JBBR Terminal
means the hydrocarbon terminal facility, barge terminal, and pipeline assets, and assets related to each of
the foregoing, owned by JBBR LLC and its Subsidiaries.
Joliet PA
has the meaning set forth in the recitals hereof.
Lightfoot GP
has the meaning set forth in the recitals hereof.
Lightfoot LP
has the meaning set forth in the recitals hereof.
Lightfoot Members
has the meaning set forth in the introductory paragraph hereof.
Lookback Period
has the meaning set forth in
Section
6.02(p)
.
Look Forward Period
has the meaning set forth in
Section
6.02(p)
.
Major Breach
means, with respect to any Member: (a) a material breach by such Member of any provision of this
Agreement which shall not have been cured in all material respects within 30 days (or, as to payment defaults, 15 days) after written notice thereof from a
non-breaching
Member;
provided
that the
foregoing cure period as to any such material breach (other than a payment default) shall be extended for an additional 30 days so long as the breaching Member shall have be diligently proceeding to cure in all material respects such breach and such
breach is reasonably capable of being cured in all material respects prior to the expiration of such additional
30-day
period; (b) in the case of any Member that is an Affiliate of the Services Provider,
(i) any termination of the Management Services Agreement by the Company on account of a Manager Event of Default (as defined therein) pursuant to Section 10.1(a)(iii) thereof or (ii) the Services Provider ceases to be directly or
C-42
indirectly owned 100% by the Partnership; (c) such Member becomes insolvent, generally does not pay its debts as they become due, admits in writing its inability to pay its debts, makes an
assignment for the benefit of creditors or commences insolvency, receivership, reorganization or bankruptcy or similar proceedings; (d) insolvency, receivership, reorganization or bankruptcy or similar proceedings are commenced against such
Member and such proceedings remain undismissed or unstayed for an aggregate period of 90 days; (e) any trustee, receiver, conservator or liquidator of such Member or of all or any substantial part its properties is appointed with or without the
consent of or acquiescence of such Member and such appointment remains unvacated and unstayed for an aggregate period of 90 days or (f) a Transfer by such Member in violation of this Agreement.
Major Breaching Member
means any Member that has committed a Major Breach and any other Member that is an Affiliate of such
Member.
Management Services Agreement
has the meaning set forth in the recitals hereof.
Managing Member
has the meaning set forth in
Section
6.01(a)
.
Material Competitor
means, at any time, any Person operating a hydrocarbon rail terminal with unit-train capability that is
located within a 50 mile radius of the JBBR Terminal.
Material Customer
means, as of any date, any customer from whom
the Company and its Subsidiaries derived in excess of 5% of their combined gross revenues during the four completed calendar quarters immediately preceding such date.
Member
means any Person who (a) owns Interests and is executing this Agreement on the Effective Date, (b) is a
direct Transferee of Interests from a Member and has been admitted as a Member in accordance with the provisions of this Agreement or (c) is issued Interests after the Effective Date by the Company in accordance with this Agreement and who
executes a counterpart signature to this Agreement in accordance with
Section
3.02
, but in each case does not include any Person who has ceased to hold any Interests.
Member Indemnitors
has the meaning set forth in
Section
6.08(f)
.
Member Minimum Gain
means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that
would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulations
Section 1.704-2(i)
with respect to partner minimum
gain.
Member Nonrecourse Debt
has the meaning set forth in Treasury Regulations
Section 1.704-2(b)(4)
for the phrase partner nonrecourse debt.
Member
Nonrecourse Deductions
has the meaning set forth in Treasury Regulations
Section 1.704-2(i)
for the phrase partner nonrecourse deductions.
Modified Appraisers
has the meaning set forth in
Exhibit B
.
Modified Final
Per-Unit
Price
has the meaning set forth in
Exhibit B
.
Modified First Appraiser
has the meaning set forth in
Exhibit B
.
Modified First
Per-Unit
Price
has the meaning set forth in
Exhibit B
.
Modified Second Appraiser
has the meaning set forth in
Exhibit B
.
C-43
Modified Second
Per-Unit
Price
has the
meaning set forth in
Exhibit B
.
Modified Third
Per-Unit
Price
has the
meaning set forth in
Exhibit B
.
Nonparty Affiliates
has the meaning set forth in
Section
6.09
.
Nonrecourse Deductions
has the meaning set forth in Treasury Regulations
Sections 1.704-2(b)(1)
and
1.704-2(c).
Nonrecourse Liability
has the meaning set forth in Treasury Regulations
Sections 1.704-2(b)(3)
and
1.752-1(a)(2).
Offered Units
has the meaning set forth in
Section
7.02(a)
.
Offering Notice
has the meaning set forth in
Section
7.02(b)
.
Partnership
means Arc Logistics Partners LP, a Delaware limited partnership.
Permitted Transferee
means, with respect to a Person that is not a natural person, an Affiliate that is a wholly owned
subsidiary of the transferring Member or the transferring Members parent entity (including a subsidiary wholly owned by one or more Members).
Person
means any individual or Entity.
Required Valuations
has the meaning set forth in
Exhibit B
.
ROFO Closing Date
has the meaning set forth in
Section
7.02(c)
.
ROFO Notice Period
has the meaning set forth in
Section
7.02(b)
.
ROFO Offer
has the meaning set forth in
Section
7.02(c)
.
ROFO Transfer Period
has the meaning set forth in
Section
7.02(d)
.
Second Appraiser
has the meaning set forth in
Exhibit B
.
Second
Per-Unit
Price
has the meaning set forth in
Exhibit B
.
Securities Act
means the Securities Act of 1933.
Services Provider
has the meaning set forth in the recitals hereof.
Subject Drag Interests
has the meaning set forth in
Section
7.05(a)
.
Subject Tag Interests
has the meaning set forth in
Section
7.03(a)
.
Subsidiary
means, with respect to any specified Entity, any corporation, association, partnership or other business entity
(a) that is Controlled by such Entity or (b) the outstanding equity securities entitled to more than 50% of the distributions therefrom are held, directly or indirectly, by such Entity. Unless otherwise specified, references to
Subsidiary or Subsidiaries herein shall refer to a Subsidiary or the Subsidiaries of the Company.
Tax
Year
has the meaning set forth in
Section
2.06
.
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Third Appraiser
has the meaning set forth in
Exhibit B
.
Third Party
means any Person other than a Member or an Affiliate of a Member.
Threshold Ownership
means that the Capital Contributions of EFS and its Affiliates represent at least 15% of the aggregate
Capital Contributions made to the Company.
Transfer
means, with respect to a Person, a direct or indirect disposition,
sale, assignment, transfer, gift, surrender for cancellation, exchange or pledge, or the direct or indirect grant or transfer of any economic interest, security interest, voting power or other encumbrance, or any other direct or indirect transfer of
beneficial interest, whether voluntary or involuntary, by operation of law or judicial decree and including the direct or indirect disposition, sale, assignment, transfer, gift, surrender for cancellation, exchange or pledge, or the direct or
indirect grant or transfer of any economic interest, security interest, voting interest or other encumbrance or any other direct or indirect transfer of beneficial interest in such Person by a Controlling Person, including in each such case
(a) as part of any liquidation of assets, (b) in connection with any merger, consolidation, exchange, recapitalization, reorganization, conversion, cancellation, redemption or repurchase transaction whether by plan, contract or right
contained in a security, (c) in connection with a change of Control or (d) as a part of any reorganization pursuant to federal or state bankruptcy laws or similar debtor relief laws. Notwithstanding the foregoing, (x) changes in the
direct or indirect ownership of Arcs Interests will not be deemed to be a Transfer so long as such changes do not result in a Warburg Change of Control; (y) changes in the direct or indirect ownership of General Electric Company will not
be deemed to be a Transfer and (z) the direct or indirect incurrence of any security interest, lien or other encumbrance on any of the Interests in connection with any financing arrangement for borrowed money will not be deemed a Transfer.
Transferring Member
has the meaning set forth in
Section
7.02(a)
.
Treasury Regulations
means temporary and final Treasury Regulations promulgated under the Code.
Unit Sharing Percentage
means, with respect to any Member, a fraction (expressed as a percentage), the numerator of which
is the total number of Common Units held by such Member at the time of calculation and the denominator of which is the total number of Common Units held by all Members at the time of calculation.
Units
means the Interests and includes the Common Units and any other class of units or other equity securities of the
Company issued after the Effective Date.
U.S. GAAP
has the meaning set forth in
Section
8.03(a)
.
Warburg Change of Control
means a Transfer that results in Warburg Fund
Entities either: (a) ceasing to collectively, beneficially own, directly or indirectly, a greater percentage of the equity securities entitled to distributions (including liquidating distributions) from either Arc (or its successors, as
applicable) or the Company (except if such Transfer is subject to
Section
7.03
), in each case than any other Person or (b) having Transferred, since the Effective Date, in the aggregate and other than to Permitted
Transferees, equity securities in Zenith LP (or its successors, as applicable) that were issued by Zenith LP (or its successors, as applicable) to Warburg Fund Entities in exchange for more than 50% of the aggregate capital contributions funded to
Zenith LP by Warburg Fund Entities in connection with the closing of the transactions contemplated by the Merger Agreement or from time to time thereafter, but prior to the date of the relevant Transfer.
Warburg Fund Entity
means any private equity fund or investment vehicle advised or managed by Warburg Pincus LLC or an
Affiliate of Warburg Pincus LLC.
Zenith LP
means Zenith Energy U.S., L.P., a Delaware limited partnership.
Zenith Purchaser
has the meaning set forth in the recitals hereof.
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1.02 Construction.
(a) Whenever the context requires, the gender of all words used in this Agreement includes the masculine, feminine and neuter. If a term is
defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). Derivative forms of defined terms will have correlative meanings. The words includes or
including shall mean including, without limitation,. All references to Articles and Sections refer to articles and sections of this Agreement unless otherwise specified, and all references to Exhibits are to exhibits attached
hereto, each of which is made a part hereof for all purposes. All accounting terms used herein and not otherwise defined herein will have the meanings accorded them in accordance with U.S. GAAP and, except as expressly provided herein, all
accounting determinations will be made in accordance with such accounting principles in effect from time to time. Titles appearing at the beginning of any subdivision of this Agreement are for convenience only and shall not constitute part of such
subdivisions and shall be disregarded in construing the language contained in such subdivisions. The words this Agreement, herein, hereof, hereby, hereunder and words of similar import
refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. When any provision of this Agreement authorizes a Member to make a determination or to use its discretion, except as expressly set forth herein
such authorization includes the authority of such Member to make a determination or exercise discretion in its respective sole and absolute judgment. Any reference to any contract or agreement (including exhibits and other attachments thereto),
including this Agreement, will be deemed also to refer to such agreement, as amended, restated or otherwise modified, unless the context requires otherwise. Any reference to a law will include all rules and regulations promulgated thereunder
(including amendments thereto), and references to a law will be construed as including any legal and statutory provisions consolidating, amending, succeeding or replacing such law.
(b) References to a Person include such Persons permitted direct Transferees. Any Person admitted to the Company as a Member following
the permissible Transfer of Interests from a Member shall succeed to all of the rights, duties and obligations of its Transferor with respect to such Interests under this Agreement, except that any control, consent, voting or similar rights of a
Member set forth in this Agreement shall be controlled by the Member designated by such Members Transferees holding the majority of the Interests held by such Member as of the Effective Date.
(c) Each Member acknowledges that it and its attorneys and advisers have been given an equal opportunity to negotiate the terms and conditions
of this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party or any similar rule operating against the drafter of an agreement shall not be applicable to the construction or
interpretation of this Agreement.
ARTICLE II
ORGANIZATION
2.01
Continuation of the Company
.
This Agreement amends and restates in its entirety the Existing A&R Agreement. For the avoidance of doubt, the Members waive any breach of Article VII of the Existing A&R Agreement arising from the
transactions described in the recitals hereof. The Members desire to continue the Company for the purposes and upon the terms and conditions hereinafter set forth. Except as provided herein, the rights, duties and liabilities of each Member shall be
as provided in the Act.
2.02 Name
.
The name of the Company is Arc Terminals Joliet Holdings LLC. Company business will be
conducted in such name or such other names that comply with applicable law as the Managing Member may select from time to time. The Managing Member shall cause the Company to file such assumed or fictitious name certificates or similar instruments
as may from time to time be required by law.
2.03 Registered Office; Registered Agent
.
The registered office of the Company
in the State of Delaware will be the initial registered office designated in the Certificate or such other office (which need not be a place of
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business of the Company) as the Managing Member may designate from time to time in the manner provided by law. The registered agent of the Company in the State of Delaware will be the initial
registered agent designated in the Certificate or such other Person or Persons as the Managing Member may designate from time to time in the manner provided by law.
2.04 Principal Office
.
The principal office of the Company will be at 725 Fifth Avenue, 19th Floor, New York, New York or such
other location as the Managing Member may designate from time to time, which need not be in the State of Delaware. The Company may have such other offices as the Managing Member may determine appropriate.
2.05 Purpose; Powers.
The Company is organized for the purpose of (a) engaging in the Business through the Companys
ownership of the JBBR LLC Interests and (b) subject to
Section
6.02(o)
, engaging in any other lawful act or activity for which limited liability companies may be formed under the Act. The Company will have all powers
permitted to be exercised by a limited liability company organized in the State of Delaware.
2.06 Fiscal Year; Tax Year.
Except as
otherwise agreed in accordance with
Section
6.02(c)
, the fiscal year of the Company (the
Fiscal Year
) for financial statement purposes will end on December 31. The tax year of the Company (the
Tax Year
) for any applicable income or franchise tax purposes will end on December 31 unless otherwise required under applicable law.
2.07 Foreign Qualification Governmental Filings.
Prior to the Companys conducting business in any jurisdiction other than the
State of Delaware, the Managing Member will cause the Company to comply, to the extent procedures are available, with all requirements necessary to qualify the Company as a foreign limited liability company in such jurisdiction. The Managing Member
is authorized, on behalf of the Company, to execute, acknowledge, swear to and deliver all certificates and other instruments as may be necessary or appropriate in connection with such qualifications. Further, each Member will execute, acknowledge,
swear to and deliver all certificates and other instruments that are necessary or appropriate to qualify, or, as appropriate, to continue or terminate such qualification of, the Company as a foreign limited liability company in all such
jurisdictions in which the Company may conduct business.
2.08 Term.
The Company commenced on the date the Certificate was filed
with the Secretary of State of the State of Delaware and will continue in existence until terminated pursuant to this Agreement.
2.09
No State Law Partnership.
No provision of this Agreement shall be interpreted so as to deem or construe the Company as a partnership (including a limited partnership) or joint venture or any Member as a partner or joint venturer of any other
Member for any purposes other than federal and state tax purposes.
ARTICLE III
MEMBERS
3.01
Members.
As of the Effective Date, Arc, EFS and the Lightfoot Members are the sole Members of the Company. The names, addresses, deemed initial Capital Contributions and number and class of Units of the Members are set forth on
Exhibit
A
. The Managing Member is hereby authorized and directed to complete or amend
Exhibit
A
to reflect the admission of an additional Member, the withdrawal of a Member, the change of address
of a Member, the additional Capital Contribution of a Member, the failure of a Member to make a required Capital Contribution, the number and classes of Units of a Member and other information called for by
Exhibit
A
.
Notwithstanding the foregoing, any failure by the Managing Member to make any such completion or amendment shall not affect the effectiveness of any such change. As set forth in
Section
6.01
, Members shall not have any
right to act on behalf of or with respect to the Company except to the extent expressly authorized to do so by the provisions hereof.
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3.02 Additional Members.
In connection with any Transfer or issuance of Interests
permitted hereunder, additional Persons may be admitted to the Company as Members and Interests may be created and issued to such Persons, which may include making Capital Contributions. As a condition to being admitted as a Member of the Company,
any Person must agree to be bound by the terms of this Agreement by executing and delivering a counterpart signature page to this Agreement.
3.03 Withdrawing Member.
Upon the direct Transfer of all of the Interests held by a Member, the Transferor Member will cease to be a
Member and to have the rights and powers afforded to a Member under this Agreement, and the Transferor Member will be released from all obligations under this Agreement arising from such Persons status as a Member except (a) those
obligations that by their express terms survive the termination of a Persons status as a Member as set forth in
Section
12.05
, (b) those obligations or liabilities of the Transferor Member arising out of a breach of
this Agreement and (c) those obligations or liabilities of the Transferor Member based on events occurring, arising or maturing prior to the date of Transfer.
3.04 Representations and Warranties.
Each Member hereby represents and warrants to the Company and each other Member, on the Effective
Date, on the date that such Member becomes a Member pursuant to the provisions of this Agreement and on each date such Member makes a Capital Contribution or purchases Interests, that:
(a) such Member has full power and authority to enter into this Agreement and to perform its obligations hereunder;
(b) the execution, delivery and performance of this Agreement do not conflict with any other agreement or arrangement to which such Member is
a party or by which it is or its assets are bound;
(c) all property contributed to the Company by such Member is duly and lawfully
acquired and is contributed to the Company without any liens or encumbrances;
(d) such Member alone or together with such Members
representatives possesses such expertise, knowledge and sophistication in financial and business matters generally, and in the type of transactions in which the Company proposes to engage in particular, that such Member is capable of evaluating the
merits and economic risks of acquiring and holding an Interest and that such Member is able to bear all such economic risks now and in the future;
(e) such Member has had access to all of the information with respect to such Members Interest that such Member deems necessary to make
a complete evaluation thereof;
(f) such Members decision to acquire an Interest for investment has been based solely upon the
evaluation made by such Member;
(g) such Member is aware that such Member must bear the economic risk of such Members investment in
the Company for an indefinite period of time because the Interests have not been registered under the Securities Act or under the securities laws of any state, and, therefore, the Interests cannot be sold unless they are subsequently registered
under the Securities Act and any applicable state securities laws or an exemption from registration is available;
(h) such Member is
aware that only the Company can take action to register the Interests and that the Company is under no such obligation to do so;
(i) such
Member is aware that this Agreement provides restrictions on the ability of a Member to Transfer Interests, and such Member will not seek to effect any Transfer other than in accordance with such restrictions;
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(j) such Member is and will be acquiring its Interests for investment purposes only for its own
account and not with a view to the distribution, reoffer, resale, or other disposition not in compliance with the Securities Act and applicable state securities laws; and
(k) such Member is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act (but
excluding for such purpose Rule 501(a)(4)).
3.05 Liability to Third Parties.
No Member will have any personal liability for any
obligations or liabilities of the Company, whether such liabilities arise in contract, tort or otherwise, except to the extent that any such liabilities or obligations are expressly assumed in writing by such Member.
ARTICLE IV
INTERESTS;
PREEMPTIVE RIGHTS
4.01 Interests.
(a)
General
. Each Members Interests will be represented by its Capital Account and by Units issued by the Company to such Member.
The initial class of authorized Units is the Common Units. Except as expressly set forth herein, the Units have no voting rights and do not confer the right to vote on matters related to the Company or otherwise. The obligations of each Member
hereunder shall be several and not joint.
(b)
Initial Capital Contributions
.
(i) Each Members deemed Capital Contributions as of the Effective Date are set forth opposite such Members name on
Exhibit A
.
(ii) Each Members deemed Capital Account balance as of the Effective Date is set forth opposite
such Members name on
Exhibit
A
.
(c)
Additional Capital Contributions; Preemptive Rights
.
(i) No further Capital Contributions nor Interest purchases will be required from any Member without such Members prior
written consent, and no Member shall have any obligation to restore any deficit balance in such Members Capital Account.
(ii) If at any time the Managing Member, on behalf of the Company, requests additional Capital Contributions or issues
Interests other than Common Units other than requests for Capital Contributions from Third Parties pursuant to
Section
4.01(c)(iv)(C)(1)
, then each Member (other than any Major Breaching Member) will have the option, but
will not be obligated, to contribute a portion of any such requested additional Capital Contributions or to purchase a portion of such Interests, as applicable, in an amount equal to such Members Unit Sharing Percentage (calculated by
disregarding all Common Units held by Major Breaching Members) and shall receive as consideration therefor (A) in the case of additional Capital Contributions, the number of Common Units as set forth in this
Section
4.01(c)
, and (B) in the case of other Interests, the type and number of Interests as set forth in this
Section
4.01(c)
. If any Members do not contribute all or any part of their
portion (including as set forth in this sentence) of any such requested additional Capital Contributions or Interests, the other Members (other than any Major Breaching Members) may, but will not be obligated to, contribute or purchase such
Members noncontributed portion pro rata based on their respective Unit Sharing Percentages (calculated by disregarding all Common Units held by Major Breaching Members) and receive the applicable consideration in respect therefor. Common Units
and Interests will be issued or sold for the amounts set forth in this
Section
4.01(c)
.
(iii) If
at any time the Managing Member, on behalf of the Company, desires to request additional Capital Contributions (in exchange for Common Units) or issues Interests other than Common Units, the
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Company shall deliver to the Members a notice specifying (A) the aggregate amount of the Capital Contributions requested or the aggregate purchase price for the Interests to be issued, as
applicable, (B) the price per Common Unit or Interest, as applicable (the price being determined as set forth in this
Section
4.01(c)
), (C) the terms and conditions applicable to such Interests, if applicable,
(D) each Members share thereof (determined in accordance with
Section
4.01(c)(i)
), (E) the date by which such Capital Contribution or purchase of Interests is required to be funded, which shall, unless waived by
a Member, be not less than 20 Business Days after such notice is given to the Members, and (F) wiring instructions for the bank account to which such Capital Contribution or purchase price shall be transferred. Any Member desiring to
participate in such Capital Contribution or purchase of Interests must provide notice thereof, including the amount of Capital Contributions or Interests it desires to purchase (including overallotments) at least 10 Business Days prior to the date
of funding set forth in the Companys notice. Any such notice from a Member shall be irrevocable and binding upon such Member.
(iv) Common Units and other Interests shall only be issued in exchange for the following amounts of Capital Contributions or
purchase price, respectively:
(A) each Common Unit may be issued for $18,750 in Capital Contributions;
(B) each Common Unit or other Interest may be issued for such Capital Contributions or purchase price, respectively, as
mutually agreed to by the Managing Member and EFS; or
(C) if the Managing Member desires to cause the Company to request
Capital Contributions, the Managing Member does not desire that the amount of Capital Contributions per Common Unit in connection with such request be as set forth in
Section
4.01(c)(iv)(A)
and, following 30 days of good
faith negotiations, the Managing Member and EFS are unable to mutually agree to an amount of Capital Contributions per Common Unit in connection with such request pursuant to
Section
4.01(c)(iv)(B)
, then each Common Unit
may be issued for:
(1) in a request for Capital Contributions solely to Third Parties (
provided
that, for the avoidance of doubt,
no Member shall be entitled to exercise such Members rights pursuant to
Section
4.01(c
)(
ii)
in connection with any such request), for such amount of Capital Contributions that such Third Parties agree to
pay for such Common Units in a bona fide, arms-length negotiated transaction; or
(2) for such amount of Capital Contributions as is
determined pursuant to the procedures set forth on
Exhibit B
.
4.02 Withdrawal or Return of Capital.
Except as provided in
this Agreement, no Member is entitled to the return of or has the right to withdraw any part of its Capital Contribution from the Company prior to its liquidation and termination pursuant to
Article XI
. No Member is entitled to be paid
interest in respect of either its Capital Account or its Capital Contributions. Any unrepaid Capital Contribution is not a liability of the Company or of the other Members. A Member is not required to contribute or to lend any cash or property to
the Company to enable the Company to return any other Members Capital Contributions.
4.03 Regulatory Approval.
If any
regulatory approval, including the filing and the expiration of any waiting period under the Hart Scott-Rodino Antitrust Improvements Act of 1976 (the
HSR Act
), is required prior to the issuance of any Interests, the Company will
not issue such Interests, and no contribution will be required or permitted in respect thereof, until such approval has been obtained (or in the case of the HSR Act, such filing has been completed and such waiting period has expired). The Company
and the Members will use their respective commercially reasonable efforts to comply promptly with all applicable regulatory requirements. The Company will bear all documented and reasonable third party fees and expenses, including all filing fees,
incurred by it or the Members in connection with such compliance.
4.04 Company-Held Interests.
Any Interests held by the Company
will not entitle or bind any Person to any rights or obligations under this Agreement with respect to such Interests and will be deemed not issued and not outstanding for all purposes.
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ARTICLE V
DISTRIBUTIONS AND ALLOCATIONS
5.01 Distributions.
(a)
Distributions of Available Cash
. Subject to applicable law, the Company will make quarterly distributions as soon as reasonably practicable (but in any event not later than 45 days) following the end of each Fiscal Quarter to the Members, pro
rata in accordance with their Unit Sharing Percentages, in an aggregate amount equal to the Available Cash, if any, at such time.
(b)
Distributions in Cash
. All distributions must be made in cash or cash equivalents except distributions pursuant to
Section
11.02
.
(c)
Distributions in Error
. Any distributions pursuant to this
Section
5.01
made in error or in violation of
Section 18-607(a)
of the Act, will, upon good faith demand by the Managing Member (or EFS, if such distribution in error was received by the Managing Member), be returned to the Company.
5.02 Allocations.
(a)
In General
. Except as provided in
Section
5.02(b)
, for purposes of maintaining Capital Accounts, items of Company income, gain, loss and deduction for each applicable accounting period shall be allocated among the
Members in a manner that will, as nearly as possible, cause the Capital Account balance of each Member at the end of such period to equal the amount (which may be negative) determined for such Member by subtracting
item (ii)
from
item
(i)
below:
(i) the amount that would be distributed to such Member (other than any amounts treated as a
guaranteed payment under Section 707(c) of the Code) if: (A) all Company assets were sold for cash equal to their Book Values; (B) all Company obligations were satisfied in cash according to their terms (limited, with respect to each
Nonrecourse Liability or Member Nonrecourse Debt, to the Book Values of the assets securing or subject to such liability); and (C) the net proceeds thereof (after satisfaction of such liabilities) were distributed in full pursuant to
Section
11.02(c)
; over
(ii) the sum of: (A) such Members share of the Company Minimum
Gain determined pursuant to Treasury Regulations
Section 1.704-2(g)
computed immediately prior to the hypothetical sale described above, (B) such Members share of Member Minimum Gain determined
pursuant to Treasury Regulations
Section 1.704-2(i)(5),
computed immediately prior to the hypothetical sale described above and (C) the amount, if any, that such Member is obligated to contribute to
the capital of the Company computed after the hypothetical events described in
Section
5.02(a)(i)
;
provided
,
however
, notwithstanding anything to the contrary in this
Section
5.02(a)
, the amount of items of Company deduction and loss allocated to any Member pursuant to this
Section
5.02(a)
shall
not exceed the maximum amount of such items that can be so allocated without causing such Member to have a deficit balance in its Adjusted Capital Account at the end of any applicable accounting period. Items of deduction and loss in excess of such
limitation shall be allocated to the Members who do not have deficit balances in their Adjusted Capital Accounts,
pro rata
, in proportion to the amounts that may be so allocated to them without causing them to have such deficit balances.
(b)
Regulatory Allocations
. Notwithstanding the foregoing provisions of
Section
5.02(a)
, the following
special allocations will be made in the following order of priority:
(i)
Minimum Gain Chargeback
. If there is a net
decrease in Company Minimum Gain during an applicable accounting period, then each Member will be allocated items of Company income and gain for such period (and, if necessary, for subsequent periods) in an amount equal to such Members share
of the
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net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations
Section 1.704-2(g)(2).
This
Section
5.02(b
)(
i
)
is intended to comply with the minimum gain chargeback requirement of Treasury Regulations
Section 1.704-2(f)
and will be interpreted
consistently therewith.
(ii)
Member Minimum Gain Chargeback
. If there is a net decrease in Member Minimum Gain
attributable to a Member Nonrecourse Debt during any applicable accounting period, each Member who has a share of the Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations
Section 1.704-2(i)(5)
will be specially allocated items of Company income and gain for such period (and, if necessary, subsequent periods) in an amount equal to such Members share of the net decrease in
Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in a manner consistent with the provisions of Treasury Regulations
Section 1.704-2(g)(2)
and (j)(2)(ii). This
Section
5.02(b)(ii)
is intended to comply with the partner nonrecourse debt minimum gain chargeback requirement of Treasury Regulations
Section 1.704-2(i)(4)
and will be
interpreted consistently therewith.
(iii)
Qualified Income Offset
. If any Member unexpectedly receives an
adjustment, allocation, or distribution of the type contemplated by Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4),
(5) or (6), items of income and gain will be allocated to such Member in an amount
and manner sufficient to eliminate any resulting deficit balance in such Members Adjusted Capital Account as quickly as possible, provided that an allocation pursuant to this
Section
5.02(b)(iii)
shall be made if and
only to the extent that such Member would have an Adjusted Capital Account deficit after all other allocations provided for in this
Article V
have been tentatively made as if this
Section
5.02(b)(iii)
were not in
this Agreement. It is intended that this
Section
5.02(b
)(
iii)
qualify and be construed as a qualified income offset within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(d).
(iv)
Gross
Income Allocation
. In
the event any Member has a deficit balance in its Capital Account at the end of any applicable accounting period that is in excess of the sum of (i) the amount such Member is obligated to restore pursuant to the terms of this Agreement and
(ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections
1.704-2(g)(1)
and
1.704-2(i)(5),
each such Member shall be specially allocated items of income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this
Section
5.02(b)(iv)
shall be made if and only to the extent that such Partner would have a Capital Account deficit in excess of such sum after all other allocations provided for in this
Article V
have been
tentatively made as if
Section
5.02(b)(iii)
and this
Section
5.02(b)(iv)
were not in this Agreement.
(v)
Certain Additional Adjustments
. To the extent that an adjustment to the adjusted tax basis of any Company asset
pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)(2)
or Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)(4),
to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of its Interest, the amount of such adjustment
to the Capital Accounts will 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 gain or loss will be specially allocated to the Members in accordance with
their Interests in the event that Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)(2)
applies, or to the Members to whom such distribution was made in the event that Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)(4)
applies.
(vi)
Nonrecourse Deductions
. The
Nonrecourse Deductions for each applicable accounting period will be allocated to holders of Common Units in proportion to the relative number of Common Units held.
(vii)
Member Nonrecourse Deductions
. Member Nonrecourse Deductions will be allocated to the Members that bear the
economic risk of loss (within the meaning of Treasury Regulations
Section 1.752-2)
for the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable.
(viii)
Curative Allocations
. The allocations contained in the foregoing provisions of this
Section
5.02(b)
, and any allocations required following the proviso in
Section
5.02(a)
, are intended to
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comply with certain requirements of the Treasury Regulations promulgated under Code Section 704. It is the intent of the Members and the Company that, to the extent possible, all such
allocations shall be offset either with other such allocations or with special allocations of other items of income, gain, loss or deduction pursuant to this
Section
5.02(b)(viii)
, so that after such offsetting allocations
are made, each Members Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if no such allocations had been made and all items were allocated pursuant to
Section
5.02(a)
(not including the allocations required following the proviso in
Section
5.02(a)
).
(c)
Tax Allocations
.
(i) Except as provided in
Sections 5.02(c)(ii)
, to the maximum extent possible, for U.S. federal income tax purposes
(and for purposes of any state or local income or franchise tax that follows the federal treatment), each item of Company income, gain, loss or deduction will be allocated among the Members in the same manner as the correlative item of income, gain,
loss or deduction is allocated for purposes of maintaining Capital Accounts pursuant to this
Article V
.
(ii) Tax
items with respect to any Company asset that has a Book Value that differs from its adjusted tax basis will be allocated among the Members for federal income tax purposes in a manner consistent with the Treasury Regulations promulgated under Code
Sections 704(b) and 704(c) so as to take into account such difference as determined appropriate in the reasonable discretion of the Managing Member;
provided, however,
that the Managing Member shall elect to use the remedial allocation
method described in Treasury Regulations
Section 1.704-3(c)
with respect to any asset of Company owned as of the Effective Date.
(d)
Compliance with Subchapter K
. Notwithstanding anything to the contrary in this Agreement, in the discretion of the Managing Member,
with the consent of EFS, the Company may diverge from the allocations described herein as may be necessary or appropriate to comply with the provisions of subchapter K of the Code and the Treasury Regulations promulgated thereunder.
5.03 Amounts Withheld.
All amounts withheld pursuant to the Code or any provision of any state, local or foreign tax law with respect
to any payment, distribution or allocation to the Company or the Members will be treated as amounts paid or distributed, as the case may be, to the Members with respect to which such amount was withheld pursuant to this
Section
5.03
for all purposes under this Agreement. The Company is authorized to withhold from payments and distributions, or with respect to allocations to the Members, and to pay over to any federal, state and local
government or any foreign government, any amounts required to be so withheld pursuant to the Code or any applicable provisions of any other federal, state or local law or any foreign law, and will allocate any such amounts to the Members with
respect to which such amount was withheld.
ARTICLE VI
MANAGEMENT
6.01
Authority of the Managing Member.
(a) Except as otherwise provided in this Agreement (including as provided in
Section
6.02
or by applicable law), the power and authority to manage, direct and control the Company will be vested in Arc as the managing member (the
Managing Member
), and the Managing Member will have
full, complete and exclusive authority to manage, direct and control the business, affairs and properties of the Company. The Managing Member will not be entitled to any fee or other payment from the Company for its services in such capacity.
(b) If the Managing Member is a Major Breaching Member, Members holding the majority of the Units (not taking into account Units held by the
Managing Member or its Affiliates) shall have the right, by notice to such Managing Member, to remove such Managing Member as Managing Member and appoint another Member as the Managing Member.
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(c) The Managing Member shall meet with the Members (other than any Major Breaching Member), in
person at the Managing Members offices or by teleconference, from time to time upon the reasonable request of any Member (other than any Major Breaching Member) (it being agreed that quarterly or monthly meetings, or meetings at such other
intervals as the circumstances may warrant based on changes in the business or business plans of the Company and its Subsidiaries, are deemed by the Managing Member to be reasonable) to discuss the business and affairs (including financial condition
and present or future operations) of the Company and its Subsidiaries. For the avoidance of doubt, none of the foregoing, by itself, shall satisfy the requirements of
Section
6.02
.
(d) The Company will not have any officers or employees. The
day-to-day
management of the Company will be performed (i) by the Services Provider pursuant to the terms of the Management Services Agreement for so long as the
Management Services Agreement remains in effect, (ii) if the Management Services Agreement is terminated by the Company on account of a Manager Event of Default (as defined therein) pursuant to Section 10.1(a)(iii) thereof, pursuant to a
replacement agreement or arrangement as EFS may cause the Company to enter into (for the avoidance of doubt, the Company shall enter into such agreement or arrangement regardless of the applicability of
Section
6.02
), or
(iii) in all other cases, pursuant to a replacement agreement or arrangement as the Managing Member and EFS may jointly agree (and, in the absence of any such replacement agreement or arrangement, by the Managing Member in accordance with the
terms hereof).
6.02 Actions Requiring Consent of both EFS and the Managing Member.
Notwithstanding anything herein or in the
Management Services Agreement to the contrary, neither the Company nor any of its Subsidiaries will take, and neither the Managing Member nor any other Member will take any action so as to cause or permit the Company or any of its Subsidiaries to
take, any of the following actions without the consent of the Managing Member and EFS (unless the Managing Member or EFS, as applicable, is a Major Breaching Member):
(a) the liquidation, dissolution, recapitalization or reorganization of the Company in any form of transaction;
(b) the filing of a voluntary bankruptcy or similar proceeding by the Company or any Subsidiary or the election not to contest any bankruptcy
or similar proceeding filed against the Company or any Subsidiary;
(c) any material change in the Company or any Subsidiarys Fiscal
Quarter, Fiscal Year or other accounting policies;
(d) any material amendment to the Companys or any Subsidiarys
organizational documents other than this Agreement (which is instead covered by
Section
12.04)
;
(e) the merger
or consolidation of the Company or any Subsidiary with or into any other Person, other than a merger or consolidation (i) between the Company and a wholly owned Subsidiary or between wholly owned Subsidiaries or (ii) pursuant to
Section
7.05
;
(f) the conversion of the Company from a limited liability company into any other form of Entity,
other than pursuant to
Section
7.05
;
(g) issue or otherwise sell or repurchase, redeem, convert, exchange or
otherwise acquire any Interests or equity interests of any Subsidiary, or amend the terms of any such Interests or equity interests, other than (i) issuances of equity interests of any Subsidiary wholly owned by the Company to the Company or
another Subsidiary wholly owned by the Company or (ii) issuances of Common Units in exchange for Capital Contributions in compliance with
Section
4.01(c)
;
(h) request or permit Capital Contributions, other than in compliance with
Section
4.01(c)
;
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(i) the authorization or issuance of any convertible security, phantom equity instrument or
similar right, or the amendment of the terms of any such security, instrument or right;
(j) the direct or indirect acquisition or
ownership of equity interests in any Person other than a wholly owned Subsidiary;
(k) the sale, lease, pledge or other disposition of all
or substantially all of the assets of the Company and its Subsidiaries, other than pursuant to
Section
7.05
;
(l) entering into, terminating, amending or waiving any provision of any arrangement, contract or agreement with any Member or any of its
Affiliates, other than (i) on arms length terms that are no less favorable to the Company than those available from unrelated third parties, (ii) as otherwise contemplated by the Management Services Agreement or (iii) issuances
of Common Units or Interests to any Member or any of its Affiliates, or the receipt of Capital Contributions therefrom, in each case in compliance with
Section
4.01(c)
;
(m) the incurrence of any operating or maintenance expense, other than (i) pursuant to an Approved Budget or an interim budget pursuant
to
Section
8.02(d)
, (ii) for emergency operational purposes that the Managing Member determines in good faith are necessary or (iii) any other operating and maintenance expenses not to exceed $500,000 in the aggregate
annually;
(n) entering into any unincorporated joint venture or other similar partnership;
(o) the entry into any line of business, other than (i) the Business and (ii) any Growth Project permitted to be undertaken in
accordance with this Agreement;
(p) the incurrence of any indebtedness for borrowed money (including the guarantee of the obligations of
any other Person) that results in aggregate outstanding indebtedness of the Company and its Subsidiaries in excess of the greater of (i) $10,000,000 or (ii) an amount of indebtedness that would result in the ratio of pro forma indebtedness of
the Company and its Subsidiaries to pro forma consolidated EBITDA of the Company and its Subsidiaries for the period of the four fiscal quarters most recently ended prior to the time of the incurrence of such indebtedness (the
Lookback
Period
) exceeding 4.0 to 1.0 (in making the foregoing calculations on
pro-forma
basis: (A) all indebtedness (other than revolving indebtedness, except to the extent that the same is incurred to
refinance other outstanding indebtedness) incurred or issued after the first day of the relevant Lookback Period shall be deemed to have been incurred (and the proceeds thereof applied) on the first day of such Lookback Period and remain outstanding
through the date of determination; (B) all indebtedness assumed to be outstanding pursuant to preceding
clause (A)
shall be deemed to have borne interest at (1) the rate applicable thereto, in the case of fixed rate
indebtedness, or (2) the rates which would have been applicable thereto during the respective period when the same was deemed outstanding, in the case of floating rate indebtedness (although interest expense with respect to any indebtedness for
periods while the same was actually outstanding during the respective period shall be calculated using the actual rates applicable thereto while the same was actually outstanding); (C) in making any determination of consolidated EBITDA of the
Company and its Subsidiaries, pro forma effect shall be given to any acquisition, Growth Project or other investment that was consummated or completed during the relevant Lookback Period as if the same had occurred and begun to generate EBITDA on
the first day of such period; and (D) in making any determination of consolidated EBITDA of the Company and its Subsidiaries, pro forma effect shall be given to any acquisition, Growth Project or other investment that is expected to be
consummated or completed after the end of the relevant Lookback Period and that is projected to generate EBITDA during the four fiscal quarter period following the consummation or completion such acquisition, Growth Project or other investment (the
Look Forward Period
) as if the EBITDA projected to be generated during the Look Forward Period had been generated on the first day of the relevant Lookback Period;
(q) the incurrence of any material liens except in respect of indebtedness permitted by
Section
6.03(b)
;
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(r) the election of, or any change in, (A) the manner in which either the Company is treated
for tax purposes or any material item of income or expense of the Company is treated for tax purposes or (B) material tax policies of the Company;
(s) remove or replace the Companys auditors; and
(t) the amendment or waiver of any provision of the Certificate.
6.03 Action Requiring Consent of the Managing Member and EFS if EFS Owns the Threshold Ownership.
Notwithstanding anything herein or in
the Management Services Agreement to the contrary, neither the Company nor any of its Subsidiaries will take, and neither the Managing Member nor any other Member will take any action so as to cause or permit the Company or any of its Subsidiaries
to take, any of the following actions without the consent of the Managing Member and, if EFS has the Threshold Ownership, EFS (unless the Managing Member or EFS, as applicable, is a Major Breaching Member):
(a) any determination by the Managing Member to include in cash reserves for the purpose of the definition of Available Cash any
reserves for growth capital expenditures;
(b) the incurrence of any indebtedness for borrowed money (including the guarantee of the
obligations of any other Person) that results in aggregate outstanding indebtedness of the Company and its Subsidiaries in excess of the greater of (i) $10,000,000 or (ii) an amount of indebtedness that would result in the ratio of pro forma
indebtedness of the Company and its Subsidiaries to pro forma consolidated EBITDA of the Company and its Subsidiaries for the Lookback Period exceeding 2.5 to 1.0 (in making the foregoing calculations on
pro-forma
basis: (A) all indebtedness (other than revolving indebtedness, except to the extent that the same is incurred to refinance other outstanding indebtedness) incurred or issued after the first day
of the relevant Lookback Period shall be deemed to have been incurred (and the proceeds thereof applied) on the first day of such Lookback Period and remain outstanding through the date of determination; (B) all indebtedness assumed to be
outstanding pursuant to preceding
clause (A)
shall be deemed to have borne interest at (1) the rate applicable thereto, in the case of fixed rate indebtedness, or (2) the rates which would have been applicable thereto during
the respective period when the same was deemed outstanding, in the case of floating rate indebtedness (although interest expense with respect to any indebtedness for periods while the same was actually outstanding during the respective period shall
be calculated using the actual rates applicable thereto while the same was actually outstanding); (C) in making any determination of consolidated EBITDA of the Company and its Subsidiaries, pro forma effect shall be given to any acquisition, Growth
Project or other investment that was consummated or completed during the relevant Lookback Period as if the same had occurred and begun to generate EBITDA on the first day of such period; and (D) in making any determination of consolidated
EBITDA of the Company and its Subsidiaries, pro forma effect shall be given to any acquisition, Growth Project or other investment that is expected to be consummated or completed after the end of the relevant Lookback Period and that is projected to
generate EBITDA during the Look Forward Period as if the EBITDA projected to be generated during the Look Forward Period had been generated on the first day of the relevant Lookback Period;
provided
that the Company and its Subsidiaries may
use the proceeds received in respect of indebtedness incurred pursuant to
clause (i)
of this
Section
6.03(b)
for any purposes, but may use only up to the amount of proceeds received in respect of indebtedness
incurred pursuant to
clause (ii)
of this
Section
6.03(b)
minus
the amount of indebtedness incurred pursuant to
clause (i)
of this
Section
6.03(b)
to fund Growth
Projects;
(c) the incurrence of any growth capital expenditures (including in respect of Growth Projects) that are either (i) not
funded through additional Capital Contributions or issuances of Interests or (ii) not on the existing site of the JBBR Terminal;
(d)
any approval of any Growth Project or the incurrence of any growth capital expenditures in connection therewith, other than any Growth Project (i) with reasonably contemplated growth capital expenditures of no greater than $10,000,000, or
(ii) with reasonably contemplated growth capital expenditures of
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no greater than $25,000,000 if such Growth Project has, at the time of approval of such Growth Project by the Managing Member,
fee-based
contracts with
Third Party customers with projected EBITDA to the Company and its Subsidiaries thereunder and with respect to such Growth Project (within the term of such contracts) that would equal or exceed 50% of the reasonably contemplated growth capital
expenditures of such Growth Project;
(e) entering into, extending or renewing, or terminating, amending or waiving, any provision of any
contract or agreement (i) that has (or after such extension, renewal, amendment or waiver will have) expected revenues to the Company and its Subsidiaries (on a consolidated basis) in excess of $10,000,000 per year or (ii) that grants a
Third Party exclusive use of an entire mode of transportation in and out of the JBBR Terminal;
provided
,
however
that the consent of EFS shall not be required with respect to contracts that would otherwise require the consent of EFS
pursuant to
clause (ii)
of this
Section
6.03(e)
if such contracts relate to pipeline projects approved by the Managing Member after the Effective Date;
(f) terminating, amending or waiving any provision of (i) the Terminal Services Agreement, dated as of May 28, 2014, by and between
JBBR Pipeline LLC and ExxonMobil Oil Corporation or (ii) the Crude Oil Throughput and Deficiency Agreement, dated as of May 28, 2014, by and between JBBR Pipeline LLC and ExxonMobil Oil Corporation, in each case as amended, extended or
renewed through the Effective Date;
(g) undertaking an initial public offering of equity securities of the Company or any Subsidiary;
(h) any cancellation or material reduction in coverage or limits of any insurance program (including environmental insurance) of the
Company or any of its Subsidiaries, other than in respect of any Growth Project permitted to be undertaken in accordance with this Agreement; or
(i) the commencement or settlement of any material tax contest, environmental dispute or insurance claim or any material dispute, arbitration,
litigation, mediation or other proceeding, in each case relating to the Company or any Subsidiary, other than settlement of disputes involving amounts in dispute of up to $10,000,000 (not including the Effective Date Disputes).
6.04 Actions Requiring Consultation with EFS.
The Company must consult with EFS (with no obligation to reflect the views or responses
of EFS) upon commencement of and during the continuation of any review of material accounting matters, including potential impairments, fair value measurements and annual audits.
6.05 Affiliate Contracts.
(a) Subject to the other provisions of this Agreement, if the Company or any Subsidiary enters into, terminates, amends or waives any
provision of any arrangement, contract or agreement (including the Master Services Agreement) with any Member or any of its Affiliates, the Company will promptly provide copies of such agreement, termination, amendment or waiver to all Members.
(b) Notwithstanding anything to the contrary herein, EFS shall have the exclusive power and authority under this Agreement to act for and on
behalf of the Company in connection with all Company action (or inaction) or determinations: (i) to terminate, amend or waive any provision of the Management Services Agreement,
(ii) to enforce the terms of the Management Services
Agreement or (iii) relating to any agreement entered into pursuant to
Section
6.02(l)
to which the Company or any of its Subsidiaries, on the one hand, and Arc or any Affiliate of Arc, on the other hand, is party.
Notwithstanding anything to the contrary herein, Arc shall, for so long as it is a Member, have the exclusive power and authority under this Agreement to act for and on behalf of the Company in connection with all Company action (or inaction) or
determinations relating to any agreement entered into pursuant to
Section
6.02(l)
to which the Company or any of its Subsidiaries, on the one hand, and EFS or any Affiliate of EFS, on the other hand, is party.
6.06 Subsidiary Governance.
The Company and each Member acknowledge that the Company may from time to time form or acquire
Subsidiaries. If such a Subsidiary is a limited liability company, it is the intent of the
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Members that such limited liability company be member-managed so that the Company can direct the business and affairs of, and make decisions for, such Subsidiary.
6.07 Other Projects and Businesses.
(a) Each of the Company and the Members acknowledges and agrees that the Members and their respective Affiliates (i) have made, prior to
the date hereof, and are expected to make, on and after the date hereof, investments (by way of capital contributions, loans or otherwise), and (ii) have engaged, prior to the date hereof, and are expected to engage, on and after the date
hereof, in other transactions with and with respect to, in each case, Persons engaged in businesses that directly or indirectly compete with the Business as conducted from time to time or as may be conducted from time to time. Subject to
Section
8.05
, neither this Agreement nor any activity undertaken pursuant hereto will prevent any Member or its Nonparty Affiliates from engaging in whatever activities they choose, including activities competitive with the
Business, and any such activities may be undertaken without having or incurring any obligation to communicate or offer any interest in such activities to the Company or any Member, or requiring the Company or any other Member or its Nonparty
Affiliates to be permitted to participate in any such activities, and as a material part of the consideration for the execution of this Agreement by each Member and the Company, each Member and the Company hereby waive, relinquish and renounce any
such right or claim of participation.
(b) Each of the Company and the Members hereby agrees that any claims against, actions, rights to
sue, other remedies or other recourse to or against the Members or their respective Nonparty Affiliates for or in connection with any such investment activity or other transaction activity or other matters described in
Section
6.07(a)
, whether arising in common law or equity or created by rule of law or contract (including this Agreement) or otherwise, are expressly released and waived by the Company and each Member, in each case to the
fullest extent permitted by law;
provided
,
however
, that this
Section
6.07(b)
will not constitute a release or waiver by the Company of any violation of
Section
8.05
or the
express provisions of the Management Services Agreement.
(c) Notwithstanding anything in this Agreement, each of the Company and the
Members acknowledges and agrees that each of the Members and their respective Nonparty Affiliates have obtained, prior to the date hereof, and are expected to obtain, on and after the date hereof, confidential information from other companies in
connection with the activities and transactions described in
6.07(a)
or otherwise. Subject to the Management Services Agreement, each of the Company and the Members hereby agrees that (i) none of the Members and their Nonparty Affiliates
has any obligation to use any such confidential information in connection with the Business, operations, management or other activities of the Company or to furnish to the Company or any Member any such confidential information, and (ii) any
claims against, actions, rights to sue, other remedies or other recourse to or against any such Person for or in connection with any such failure to use or to furnish such confidential information, whether arising in common law or equity or created
by rule of law, contract (including this Agreement) or otherwise, are expressly released and waived by the Company and each Member, to the fullest extent permitted by law;
provided
that clauses (i) and (ii) will not include or pertain to
any confidential information of Arc or any of its Affiliates relating to the Business that is required to be kept confidential or furnished to the Company pursuant to the terms of the Management Services Agreement.
(d) The rights of each Member (and its Nonparty Affiliates) described in this
Section
6.07
do not require notice to,
approval from, or other sharing with, any of the other Members or the Company, and, notwithstanding anything herein to the contrary, the legal doctrines of corporate opportunity, business opportunity and similar doctrines
will not be applied to any such competitive venture or activity of a Member (and its Nonparty Affiliates), including any Member serving as the Managing Member, and are hereby disclaimed by the Company and the Members.
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6.08 Indemnification; Limitation of Liability.
(a) Subject to
Section
6.08(b)
, (i) a Member, in its capacity as such, shall have no fiduciary or other duty to the
Company, any other Member or any other Person that is a party to or is otherwise bound by this Agreement other than the implied contractual covenant of good faith and fair dealing and (ii) such Member shall not be liable in damages to the
Company, any other Member or any other Person that is a party to or is otherwise bound by this Agreement by reason of, or arising from or relating to the operations, business or affairs of, or any action taken or failure to act on behalf of, the
Company, except to the extent that it is determined by a final,
non-appealable
order of a court of competent jurisdiction that any of the foregoing was caused by (x) a breach or violation of the implied
contractual covenant of good faith and fair dealing or the duties imposed by
Section
6.08(b)
, (y) willful breach of the express provisions of this Agreement or (z) with respect to any criminal action or proceeding,
conduct of a Member that such Member had reasonable cause to believe was unlawful.
(b) Except with respect to the Managing Members
right to compete as set forth in
Section
6.07
and the fiduciary duties related thereto, which duties are hereby expressly disclaimed, the Managing Member shall have fiduciary duties of loyalty and care to the Company
similar to that of directors and officers of
for-profit
corporations organized under the General Corporation Law of the State of Delaware.
(c) To the maximum extent permitted by applicable law, but subject to the provisions of this
Section
6.08
, the
Members and the Managing Member and their respective officers, employees, members, managers, agents and other representatives (each an
Indemnitee
), each as provided below, will not be liable for, and will be indemnified and held
harmless by the Company against, any and all claims, actions, demands, losses, damages, liabilities, costs or expenses, including attorneys fees, court costs, and costs of investigation, actually and reasonably incurred by any such Indemnitee
(collectively,
Indemnified Losses
) arising from any civil, criminal or administrative proceedings in which such Indemnitee may be involved, as a party or otherwise, by reason of its being a Member or the Managing Member or their
respective officers, employees, members, managers, agents and other representatives, whether or not it continues to be such at the time any such Indemnified Loss is paid or incurred, except to the extent that any of the foregoing is determined by a
final,
non-appealable
order of a court of competent jurisdiction (i) with respect to the Managing Member, to have been caused by any breach of the duties imposed by
Section
6.08(b)
, (ii) with respect to all Indemnitees, to have been caused by a willful breach of the express provisions of this Agreement, or (iii) with respect to criminal matters, to have occurred in connection with
activity that an Indemnitee had reason to believe was unlawful. IT IS THE EXPRESS INTENT OF THE COMPANY THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ANY LOSS THAT HAS RESULTED FROM OR IS ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR
THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF THE INDEMNITEE.
(d) To the maximum extent permitted by applicable law, expenses
incurred by an Indemnitee in defending any proceeding (except a proceeding by or in the right of the Company or brought by any of the Members against such Indemnitee), will be paid by the Company in advance of the final disposition of the
proceeding, upon receipt of a written undertaking by or on behalf of such Indemnitee to repay such amount if such Indemnitee is determined pursuant to this
Section
6.08
or adjudicated to be ineligible for indemnification,
which undertaking will be an unlimited general obligation of the Indemnitee but need not be secured unless so determined by the Managing Member.
(e) Any indemnification pursuant to this
Section
6.08
will be made only out of the assets of the Company and will in
no event cause any Member to incur any personal liability nor shall it result in any liability of the Members to any third party.
(f) The
rights of indemnification provided in this
Section
6.08
are in addition to any rights to which an Indemnitee may otherwise be entitled by contract (including advancement of expenses) or as a matter of law. The Company and
the Members hereby acknowledge that the Indemnitees may have certain rights to indemnification,
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advancement of expenses and/or insurance provided by the Members and certain of their Affiliates (collectively, the
Member
Indemnitors
). The Company and the Members
hereby agree that (a) the Company is the indemnitor of first resort for matters covered by this
Section
6.08
(i.e., its obligations to the Indemnitees under this
Section
6.08
are primary and
any obligation of the Member Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the Indemnitees are secondary), (b) the Company will be required to advance the full amount of expenses
incurred by the Indemnitees and will be liable for all expenses, liabilities, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this
Section
6.08
(or
any other agreement between the Company and the Indemnitees), without regard to any rights the Indemnitees may have against the Member Indemnitors, and (c) the Company irrevocably waives, relinquishes and releases the Member Indemnitors from
any and all claims against the Member Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company and the Members further agree that no advancement or payment by the Member Indemnitors on behalf of an
Indemnitee with respect to any claim for which the Indemnitee has sought indemnification from the Company pursuant to this
Section
6.08
will affect the foregoing, and the Member Indemnitors will have a right of contribution
and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnitee against the Company.
6.09 No Recourse Against Nonparty Affiliates
. All claims, obligations, liabilities or causes of action (whether in contract or in tort,
in law or in equity, or granted by statue) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement, or the negotiation, execution, or performance of this Agreement
(including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), may be made only against (and are those solely of) the entities that are expressly identified as parties in the preamble to this
Agreement or their Transferees (
Contracting Parties
). No Person who is not a Contracting Party, including any director, officer, employee, incorporator, member, partner, manager, stockholder, affiliate, agent, attorney, or
representative of, and any financial advisor or lender to, any Contracting Party, or any director, officer, employee, incorporator, member, partner, manager, stockholder, affiliate, agent, attorney, or representative of, and any financial advisor or
lender to any, of the foregoing (
Nonparty Affiliates
), shall have any liability (whether in contract or in tort, in law or in equity, or granted by statue) for any claims, causes of action, obligations, or liabilities arising
under, out of, in connection with, or related in any manner to this Agreement or based on, in respect of, or by reason of this Agreement or its negotiation, execution, performance, or breach, and, to the maximum extent permitted by law, each
Contracting Party hereby waives and releases all such liabilities, claims, causes of action, and obligations against any such Nonparty Affiliates. Without limiting the foregoing, to the maximum extent permitted by law, (a) each Contracting
Party hereby waives and releases any and all rights, claims, demands, or causes of action that may otherwise be available at law or in equity, or granted by statute, to avoid or disregard the entity form of a Contracting Party or otherwise impose
liability of a Contracting Party on any Nonparty Affiliate, whether granted by statute or based on theories of equity, agency, control, instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil, unfairness,
undercapitalization, or otherwise; and (b) each Contracting Party disclaims any reliance upon any Nonparty Affiliates with respect to the performance of this Agreement or any representation or warranty made in, in connection with, or as an
inducement to this Agreement.
ARTICLE VII
TRANSFERS
7.01
Limitations on Transfer
.
Each Member is freely permitted to Transfer its Interests, subject to compliance with the other provisions of this
Article VII
and the following:
(a) No Transfer by EFS or any Lightfoot Member is permitted to a Person that is a Material Competitor or Material Customer.
(b) In connection with a Transfer by EFS, EFS may designate in writing to the Company that the Transferee thereof shall also receive an
assignment of the consent, voting and other similar rights attributable to
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EFS ownership of Common Units set forth in this Agreement, but only one Person (whether it be EFS or such a Transferee) shall be entitled to exercise such rights at any time and such Person
must be a Member of the Company in order to exercise such rights.
(c) Any Transfer (or Transfer by any transferee or successive
transferee thereof) must comply with the procedures set forth in
Sections 7.02
,
7.03
and
7.05
, if applicable.
(d)
Notwithstanding any other provision herein, no Transfer (without taking into account the last sentence of the definition of Transfer) of Interests is permitted unless such Transfer is in compliance with the Securities Act and all applicable state
securities laws, and, if requested by another Member, the Transferring Member has delivered to the Company an opinion of counsel, in form and substance reasonably satisfactory to the Company, to the effect that such Transfer is either exempt from
the requirements of the Securities Act and the applicable securities laws of any state or that such registration requirements have been complied with. Furthermore, if another Member so requests, (i) a Transferee of Interests must agree in
writing to take and accept such Interests subject to all of the restrictions, terms and conditions contained in the Certificate and this Agreement, the same as if it were a signatory party hereto, and (ii) the Company will not be required to
recognize any permitted Transfer of Interests until the instrument Transferring such Interests and assuming all obligations under this Agreement has been delivered to the Company and is satisfactory to the Members in their reasonable discretion.
(e) Notwithstanding anything to the contrary contained in this
Article VII
, each Lightfoot Member shall have the right, without
the consent of any other Member but subject to compliance with the provisions of
clauses
(a)
,
(d)
and
(f)
of this
Section
7.01
, to distribute its Interests to the limited partners,
general partner and members, as the case may be, of such Lightfoot Member as of the Effective Date substantially pro rata in accordance with such limited partners, general partners or members, as the case may be, ownership
interests in such Lightfoot Member immediately prior to such distributions, it being understood and agreed that any further Transfer by such Transferee of the Interests so acquired by such Transferee in connection with such distribution shall be
subject to all of the provisions of this
Article VII
(including
clause (c)
of this
Section
7.01
).
(f) Except following the consummation of a public offering, no such Transfer (without taking into account the last sentence of the definition
of Transfer) will be permitted if it would:
(i) cause the Company or any Subsidiary, in the opinion of counsel to the
Company, to be considered a publicly traded partnership under Section 7704(b) of the Code within the meaning of Treasury Regulation
Section 1.7704-1(h)(1)(ii),
including the look-through
rule in Treasury Regulation
Section 1.7704-1(h)(3),
or would otherwise cause the Company, in the opinion of counsel to the Company, to be treated as an association taxable as a corporation for federal or
state income tax purposes;
(ii) affect the Companys existence or qualification as a limited liability company under
the Act;
(iii) cause the Company, in the opinion of counsel to the Company, to be terminated as a partnership
under Section 708(b)(1)(B) of the Code or to be terminated as a partnership for state income tax purposes, unless either (A) the transferor or the transferee shall agree to indemnify the
non-transferring
Members, in form and substance reasonably satisfactory to such Members, on an
after-tax
basis from any adverse income tax consequences resulting from
such termination, or (B) the Transfer is made in a transaction or series of transactions in which the other Members also dispose of their entire interest in the Company (
provided
that, for purposes of this
Section
7.01(e)(iii)
, a Transfer shall include the conversion of a Member (or, if applicable, any upper-tier entity) from a corporation, partnership or disregarded entity for federal income tax purposes into one
of the other forms (corporate, partnership or disregarded entity) and any other direct or indirect transfer of an Interest that would be treated as a sale or exchange for purposes of Section 708 of the Code (including transfers to
Affiliates));
(iv) cause the Company or any Subsidiary to be required to register as an investment company under the
Investment Company Act of 1940, as amended;
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(v) cause the assets of the Company or any Subsidiary to be deemed Plan
Assets as defined under the Employee Retirement Income Security Act of 1974 or its accompanying regulations or result in any prohibited transaction thereunder involving the Company or any Subsidiary; or
(vi) cause any portion of the Project to be classified as
tax-exempt
use
property within the meaning of Section 168 or Section 470 of the Code.
7.02 Right of First Offer.
(a) If EFS or any Lightfoot Member (a
Transferring Member
) seeks to sell or Transfer any Units (including in connection
with a foreclosure or settlement of a security interest, lien or other encumbrance) (the
Offered Units
) other than to an Affiliate, then the Transferring Member must first make an offering of the Offered Units to Arc (unless Arc
is a Major Breaching Member) in accordance with the following provisions of this
Section
7.02
.
(b) A
Transferring Member will give written notice (the
Offering Notice
) to Arc (unless Arc is a Major Breaching Member) stating its bona fide intention to Transfer the Offered Units and specifying the number of Offered Units that the
Transferring Member proposes to Transfer. The Offering Notice will constitute such Transferring Members offer to review bids for the Transfer of the Offered Units to Arc (unless Arc is a Major Breaching Member), which offer will remain
outstanding for a period of 30 days (the
ROFO Notice Period
).
(c) Upon receipt of the Offering Notice, Arc (unless Arc
is a Major Breaching Member) will have until the end of the ROFO Notice Period to offer to purchase all (but not less than all) of the Offered Units by delivering a written notice (a
ROFO Offer
) to the Transferring Member that it
offers to purchase such Offered Units at a price specified in such ROFO Offer. Any ROFO Offer so delivered will be irrevocable and binding upon delivery, by the delivering Member and, if within 30 days of receiving the ROFO Offer the Transferring
Member provides written notice to Arc that it elects to sell the Offered Units to Arc (which election will be irrevocable), will obligate Arc to purchase (and the Transferring Member to sell) the Offered Units at the price set forth in the
applicable ROFO Offer within 60 days after Arc receives the Transferring Members notice (the
ROFO Closing Date
).
(d) If (x) the Transferring Member does not elect to accept a ROFO Offer in accordance with
Section
7.02(c)
,
(y) Arc does not deliver a ROFO Offer or (z) the Transferring Member receives a ROFO Offer but (A) the Transferring Member does not receive payment in full of the purchase price for all of the Offered Units on the ROFO Closing Date or
(B) the Transfer of all of the Offered Units is not consummated for any reason, including the failure to obtain any governmental approvals required in connection with the Transfer of the Offered Units by the ROFO Closing Date, but other than
due to a breach by the Transferring Member of its obligation to consummate the sale of the Offered Units, then the Transferring Member may, during the
180-day
period following the expiration of the ROFO Notice
Period (which period may be extended for a reasonable time not to exceed an additional 45 days to the extent reasonably necessary to obtain any required government approvals) (the
ROFO Transfer Period
), Transfer all of the Offered
Units to any Person (subject to, for the avoidance of doubt,
Section
7.01(a)
):
(i) in the event
the Transferring Member received a ROFO Offer but did not accept the ROFO Offer, subject to terms and conditions (including price) in the aggregate no more favorable to the transferee than those set forth in the ROFO Offer; and
(ii) in all other cases, subject to any terms and conditions (including price).
(e) If the Transferring Member does not Transfer the Offered Units within the ROFO Transfer Period, the rights provided hereunder will be
deemed to be revived and the Offered Units will not be offered to any Person unless first
re-offered
to Arc in accordance with this
Section
7.02
. For the avoidance of doubt, if Arc is
a Major Breaching Member, then the Transferring Member will not be required to comply with this
Section
7.02
.
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(f) The provisions of this
Section
7.02
shall apply
mutatis
mutandis
to Transfers of Units proposed to be made by any Person that is a direct or indirect Transferee of the Transferring Member or any of its Affiliates.
(g) The Members will take all actions as may be reasonably necessary to consummate the sale contemplated by this
Section
7.02
, including entering into agreements and delivering certificates and instruments and consents as may be deemed necessary or appropriate.
7.03 Direct
Tag-Along
Right.
(a) If Arc (the
Direct
Tag-Along
Transferor
) desires to directly Transfer any of
its Common Units to a Third Party transferee (the
Subject Tag Interests
), other than through a Transfer pursuant to the exercise of Drag-Along Rights under
Section
7.05
, then (A) the other Members
(the
Direct
Tag-Along
Members
) shall have the right (but not the obligation) (the
Direct
Tag-Along
Right
) to participate in the
proposed Transfer (the
Direct
Tag-Along
Transfer
) and (B) the Direct
Tag-Along
Transferor shall make an offer (a
Direct
Tag-Along
Offer
) by an irrevocable written notice to the Direct
Tag-Along
Member(s), to include in the Direct
Tag-Along
Transfer, on terms and conditions set forth in such notice (which must be at least as favorable to the Direct
Tag-Along
Member(s) as to the Direct
Tag-Along
Transferor),
a number of each Direct
Tag-Along
Members Units in accordance with the provisions of this
Section
7.03
.
(b) Each of the Direct
Tag-Along
Members shall have the right to Transfer in a Direct
Tag-Along
Transfer all of its pro rata share (based on the relative percentage interests of Common Units held by the Direct
Tag-Along
Members) of the Common Units then owned
by such Direct Tag Along Member. If the Direct
Tag-Along
Transferor is unable to cause the transferee to purchase all of the Common Units proposed to be Transferred by the Direct
Tag-Along
Transferor and all of the electing Direct
Tag-Along
Members, then the Direct
Tag-Along
Transferor and each electing
Direct
Tag-Along
Member shall reduce, on a pro rata basis, the amount of such Common Units that each otherwise would have sold so as to permit the Direct
Tag-Along
Transferor and the electing Direct
Tag-Along
Members to sell the number of Common Units (determined in accordance with such pro rata basis) that the proposed transferee is willing to purchase.
(c) The Direct
Tag-Along
Offer may be accepted by any Direct
Tag-Along
Member at any time within 15 days after the Direct
Tag-Along
Members receipt of the Direct
Tag-Along
Offer, which
acceptance must be made by delivery of a written notice indicating such acceptance to the Direct
Tag-Along
Transferor. The electing Direct
Tag-Along
Members Common
Units shall be purchased on substantially the same terms and conditions as the Subject Tag Interests;
provided
that any representations and warranties relating specifically to any Member shall be made only by such Member.
(d) If for any reason the Direct
Tag-Along
Transferor elects to terminate or otherwise not to sell any
of its Common Units in the Direct
Tag-Along
Transfer or such Direct
Tag-Along
Transfer should fail to close, each Direct
Tag-Along
Transferor must comply with the provisions set forth in this
Section
7.03
, to the extent applicable, prior to making any subsequent Transfer of all or any portion of its
Common Units.
7.04 Indirect
Tag-Along
Right.
(a) Following a good faith determination by Arc that a Warburg Change of Control is reasonably likely to occur, and only if the transaction
pursuant to which such Warburg Change of Control is expected to occur would include assets other than Common Units (a
Change of Control Determination
), Arc shall provide written notice of such Change of Control Determination to
the other Members (the
Indirect
Tag-Along
Members
), and Arc and EFS shall engage in good faith negotiations for a period of 10 days after the delivery of such written notice from Arc (the
Negotiation Period
) to determine the value allocable to each Common Unit (the
Per-Unit
Price
) in connection with the proposed Transfer pursuant to which the Warburg Change
of Control is expected to occur (the
Indirect
Tag-Along
Transfer
). If Arc and EFS are unable to agree on the
Per-Unit
Price during the Negotiation
Period, then, at the end of the Negotiation Period, Arc shall submit a final, written, proposal of the
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Per-Unit
Price given in good faith (such proposed
Per-Unit
Price, the
Arc
Per-Unit
Price
) to EFS. The
Per-Unit
Price shall then be determined pursuant to the procedures set forth on
Exhibit B
.
(b) If (i) Arc and EFS agree to the
Per-Unit
Price during the Negotiation Period or (ii) Arc
and EFS are unable to agree to the
Per-Unit
Price, then following determination of the Required Valuations, and, in each case if Arc has not exercised its Drag-Along Rights under
Section
7.05
, then (A) the Indirect
Tag-Along
Members shall have the right (but not the obligation), solely if the transaction pursuant to which such Warburg Change of Control is
expected to occur actually includes the Common Units (the
Indirect
Tag-Along
Right
), to participate in the proposed Indirect
Tag-Along
Transfer and
(B) Arc shall make an offer (an
Indirect
Tag-Along
Offer
) by an irrevocable written notice to the Indirect
Tag-Along
Member(s), to include in the
Indirect
Tag-Along
Transfer, solely if the transaction pursuant to which such Warburg Change of Control is expected to occur actually includes the Common Units, on terms and conditions set forth in such notice
(which must be at least as favorable to the Indirect
Tag-Along
Member(s) as to Arc, provided that any representations and warranties relating specifically to any Member shall be made only by such Member), all
of each Indirect
Tag-Along
Members Common Units at the Modified Final
Per-Unit
Price determined in accordance with the provisions of this
Section
7.04
and
Exhibit B
.
(c) Upon exercise of the Indirect
Tag-Along
Right, each of the electing Indirect
Tag-Along
Members shall have the right to Transfer in the applicable Indirect
Tag-Along
Transfer all of the Common Units then owned by such Indirect Tag Along Member.
(d) An
Indirect
Tag-Along
Offer may be accepted by any Indirect
Tag-Along
Member at any time within 15 days after the Indirect
Tag-Along
Members receipt of the Indirect
Tag-Along
Offer, which acceptance must be made by delivery of a written notice indicating such acceptance to Arc.
(e) If for any reason Arc elects to terminate or otherwise not to sell any of its Common Units in the Indirect
Tag-Along
Transfer or such Indirect
Tag-Along
Transfer should fail to close within 180 days after a Change of Control Determination, Arc must comply again with the
provisions set forth in this
Section
7.04
, to the extent applicable, prior to making any subsequent Transfer of all or any portion of its Common Units in connection with a Warburg Change of Control.
(f) For the avoidance of doubt, at any time prior to the consummation of a Warburg Change of Control, whether or not Arc has delivered a
Change of Control Determination or an Indirect
Tag-Along
Offer, a sale of Zenith LP or any Person that Controls Zenith LP, or the respective assets of Zenith LP or any such Person, may be structured so that
such sale does not include a Transfer of the Common Units held by Arc to a Third Party (a
Non-Joliet
Sale
). In the event of a
Non-Joliet
Sale, no
Member shall be entitled to any Direct
Tag-Along
Rights pursuant to
Section
7.03
or to any Indirect
Tag-Along
Rights pursuant to this
Section
7.04
;
provided
,
however
, that following the consummation of such
Non-Joliet
Sale, the rights of the Members set forth in
Section
7.03
,
this
Section
7.04
and
Section
7.05
shall apply to any subsequent Transfers of Arcs (or its successors) Common Units.
7.05 Drag-Along Right.
(a) If Arc and its Affiliates (the
Drag-Along Transferor
) desire to directly or indirectly Transfer all (but not less than
all) of their Common Units (the
Subject Drag Interests
) to a Third Party transferee, then such Drag-Along Transferor shall have the right (but not the obligation) (the
Drag-Along Rights
) to require the other
Members (the
Drag-Along Members
) to Transfer all of the Drag-Along Members Common Units (the
Drag-Along Interest
) to the proposed transferee identified in the Drag-Along Notice (the
Drag-Along
Transferee
) by following the procedures set forth in this
Section
7.05
;
provided
,
however
, that if the Drag-Along Rights are exercised hereunder before the
30-month
anniversary of the Effective Date, the total consideration payable to the Members in connection with a Drag-Along Transaction shall be at least $18,750 per Unit in cash (the
Drag-Along
Threshold
) (it being understood that in the event the consideration in a proposed Transfer
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before the
30-month
anniversary of the Effective Date would not cause the Drag-Along Threshold to be satisfied for the Drag-Along Members, the condition
will be satisfied if the Drag-Along Transferor makes a
per-unit
cash payment to each Drag-Along Member in an amount that, when taken together with such consideration, would cause the Drag-Along Threshold to be
satisfied for each such Drag-Along Member).
(b) If a Drag-Along Transferor desires to exercise its rights under this
Section
7.05
and cause the Companys issued and outstanding Units to be sold to a Third Party transferee (a
Drag-Along Transaction
), then it must send notice (the
Drag-Along
Notice
) to the Drag-Along Members of such desire and the Drag-Along Notice must include (A) the name of the proposed transferee(s), (B) the proposed date on which such proposed Transfer will take place, which may not be less than 15
days after the date on which such Drag-Along Notice is delivered, and (C) the material terms and conditions of the agreement regarding such Drag-Along Transaction, as well as a copy of such agreement and any related agreements in the possession
of the Drag-Along Transferor.
(c) The Drag-Along Interests shall be purchased on substantially the same terms and conditions described in
the Drag-Along Notice;
provided
that any representations and warranties relating specifically to any Member shall be made only by such Member, and any indemnification provided by a Member (other than in respect of representations and
warranties relating to any Members title to or ownership of the Units being sold by such Member and such Members authority, power and right to enter into and consummate such transaction without violating any other agreement or legal
requirement) shall be based on, and shall not exceed, the proceeds to be received by such Member, either on a several, and not joint, basis or solely with recourse to an escrow established for the benefit of the transferee(s).
(d) To the extent a Drag-Along Transaction includes assets other than Units, then the Drag-Along Transferor and the Drag-Along Members shall
engage in good faith negotiations for a period of 10 days to determine the value allocable to the Company in connection therewith. If after such period the Drag-Along Transferor and the Drag-Along Members are unable to agree to such value, then the
value allocable to the Company in connection therewith shall be determined pursuant to the procedures set forth on
Exhibit B
. Each of the Drag-Along Transferor and the Drag-Along Members shall receive the same
per-Unit
consideration in connection with the exercise of a Drag-Along Right.
7.06 Potential
Purchaser Access
.
Prior to the consummation of a public offering and subject to
Section
8.05
, upon any Members request, the Company will provide to a potential purchaser of such Members Interests such
information about the Company as such Member may reasonably request, subject to applicable law, including reasonable access to the Services Provider and its personnel.
7.07 Effect of Impermissible Transfer
.
Any attempted Transfer of Interests other than in accordance with this
Article VII
is void, and the Company will not recognize or be bound by any such purported Transfer and will not effect any such purported Transfer on the books of the Company or Capital Accounts of the Members.
ARTICLE VIII
RIGHTS OF
MEMBERS; CONFIDENTIALITY
8.01 Access to Information
.
In addition to the other rights specifically set forth in this
Agreement, the Members will have access to all information to which a Member is entitled to have access pursuant to the Act. The Company shall also:
(a) provide to EFS copies of such documents, agreements, data and information relating to the business, affairs, finances and accounts of the
Company and its Subsidiaries (including copies of customer agreements, business plans and projected financial information) as EFS may reasonable request; and
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(b) permit EFS to send representatives to visit and inspect any of the properties of the Company,
including its books of account and other records (and make copies of and take extracts from such books and records), and to discuss all aspects of the Companys business, affairs, finances, and accounts with the Companys officers and its
independent public accountants, all at such reasonable times during the Companys usual business hours and as often as EFS may reasonably request and to consult with and advise management of the Company, upon reasonable notice at reasonable
times from time to time, on all matters relating to the operation of the Company.
8.02 Budget.
(a) The Members have approved the initial operating and general and administrative budget in the form attached to that certain letter executed
by the Members and dated on or prior to the Effective Date (the
Initial Budget
). The Initial Budget will be the Approved Budget of the Company for the Fiscal Year ending December 31, 2017.
(b) At least 45 days prior to the end of each Fiscal Year, the Company shall furnish to the Members a proposed revised budget estimating the
revenues, general and administrative expenses, maintenance capital expenditures, growth capital expenditures and additional Capital Contributions (if any) anticipated to be required in connection with the Companys operations during the next
succeeding Fiscal Year.
(c) The Members shall discuss the proposed budget and approve, reject or make revisions thereto as the Managing
Member and EFS (other than any Major Breaching Member) may agree to be necessary and proper. If the proposed budget, as may be revised by the Managing Member and EFS (other than any Major Breaching Member), is approved by the Managing Member and EFS
(other than any Major Breaching Member), then such proposed budget shall be deemed thereafter to constitute the Approved Budget for all purposes hereof, subject to amendment from time to time by the approval of the Managing Member and EFS (other
than any Major Breaching Member). Each Approved Budget shall supersede all prior Approved Budgets.
(d) If a budget fails to be approved
for any Fiscal Year after at least 10 days of good faith discussions between the Managing Member and EFS (other than any Major Breaching Member), the following portions of the Approved Budget most recently approved by the Managing Member and EFS
(other than any Major Breaching Member) shall be adopted as the interim budget for such Fiscal Year until such time as there is an Approved Budget: (i) ordinary recurring operating or maintenance expenses items (
Operating and
Maintenance Expenditures
) from such Approved Budget shall be part of the interim budget after being increased by 10% for each such item, (ii) reasonable operating and maintenance expenses in connection with approved Growth Projects
and each other item from such approved budget that is not an Operating and Maintenance Expenditure covered by
clause (
i
)
of this
Section
8.02(d)
or a growth capital expenditure covered by
clause
(iii)
of this
Section
8.02(d)
, shall be part of the interim budget in the amounts reasonably determined by the Managing Member and (iii) any growth capital expenditures that were previously approved pursuant
to
Sections 6.03(c)
and
6.03(d)
(or requiring no such approval) for such Fiscal Year shall be part of the interim budget in the amounts for which such growth capital expenditures were previously approved.
8.03 Financial Reports
.
The Company shall furnish the following to the Members:
(a) within (i) in the case of the last calendar month of each Fiscal Year, 30 days after the end of such calendar month, (ii) in the
case of the last calendar month of each Fiscal Quarter, 25 days after the end of such calendar month, and (iii) in the case of each other calendar month, 20 days after the end of such calendar month, in each case a monthly report containing key
operating and financial metrics and any variances to the Approved Budget or any interim budget pursuant to
Section
8.02(d)
;
(b) as soon as available, but not later than 50 days after the end of each Fiscal Quarter, unaudited consolidated financial statements of the
Company, including quarterly and
year-to-date
balance sheets, income
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statements, cash flow statements, statements of members equity and a general ledger prepared in accordance with U.S. generally accepted accounting principles (
U.S. GAAP
)
applied on a consistent basis;
(c) as soon as available, but not later than 80 days after the end of each Fiscal Year, audited
consolidated financial statements of the Company, including balance sheets, income statements, cash flow statements, statements of members equity and a general ledger prepared in accordance with U.S. GAAP applied on a consistent basis,
including notices and reasonable detail;
(d) promptly (but in no event later than two days) after the occurrence of any event that has,
or could reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, results of operations, condition, assets, liabilities, employees, prospects, financial condition or capitalization of the Company
or any Subsidiary, notice of such event together with a summary describing the nature of the event and its impact on the Company or Subsidiary;
(e) within 15 days of the formation of any subsidiary company or joint venture in which the Company has Control, notice of such formation or
acquisition and an updated organizational diagram; and
(f) tax information necessary for the Members to comply with their tax reporting
obligations.
8.04 Audits
.
Each Member (other than any Major Breaching Member) shall have the right to conduct, or cause to
be conducted, audits of the books and records of the Company, the results of which shall be shared with all other Members. The expenses of such audits shall be borne by the Company, unless more than one such audit is required by a Member in a
12-month
period, in which case such expenses shall be borne by the requiring Member.
8.05
Confidentiality
.
No Member will divulge to any Person any confidential information, paper or document relating to the assets, liabilities, operations, business affairs or any other such information about the Company or any of its
Subsidiaries that is not already publicly available or that has not been publicly disclosed pursuant to authorization by the Members, except (a) as required by law (including securities laws), the regulations of any securities exchange on which
the securities of any Affiliate of such Member are listed, or under the terms of a subpoena or order issued by a court of competent jurisdiction or by any applicable governmental body, (b) as requested by a court of competent jurisdiction or by
any applicable governmental body or (c) to an Affiliate;
provided
that, any Member disclosing any such information to an Affiliate will (i) inform such Affiliate of the obligations of this
Section
8.05
and
(ii) be responsible for any breach of this
Section
8.05
by any such Affiliate. The right to maintain the confidentiality of the affairs of the Company in connection with the Companys business may be enforced by
the Company by way of an injunction issued out of any court of competent jurisdiction, and such right will not restrict or take the place of the Companys rights to money damages, actual and exemplary, for a violation of the provisions of this
Section
8.05
. Notwithstanding anything to the contrary in this
Section
8.05
, a Member may disclose information about the Company or any of its Subsidiaries to potential Transferees of Interests;
provided
,
however
, such potential Transferee must execute a confidentiality agreement in customary form prior to such disclosure which (A) requires the recipient to keep the information confidential and (B) prohibits the
recipient from using the information for any purpose other than evaluating the potential Transfer. The confidentiality obligations of the Members will survive any termination of the membership of any Member in the Company. Notwithstanding the
foregoing or anything else herein to the contrary, the Members (and each Affiliate and Person acting on behalf of any Member) agree that each Member (and each employee, representative and other agent of such Member) may disclose to any and all
Persons, without limitation of any kind, the transactions tax treatment and tax structure (as such terms are used in Sections 6011 and 6112 of the Code and the Treasury Regulations promulgated thereunder) contemplated by this Agreement and all
materials of any kind (including opinions or other tax analyses) provided to such Member or such Person relating to such tax treatment and tax structure, except to the extent necessary to comply with any applicable federal or state securities laws.
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8.06 Press Releases
.
Neither the Company nor any Member or affiliate of any Member
shall issue, or authorize to be issued, any press release, interview, article or other media release (including an internet posting, web blog or other electronic publication) that makes reference to this Agreement or the transactions contemplated
herein, without the prior written consent of the Managing Member and EFS, except as required by law (including securities laws) or the regulations of any securities exchange on which the securities of any Affiliate of such Member are listed;
provided
,
however
, that nothing contained in this
Section
8.06
shall prohibit the Company or any Member or any Affiliate thereof from disclosing in any press release, interview, article or other media release
(including any internet posting, web blog or other publication and, for the avoidance of doubt, any earnings call or investors conference) this Agreement, the existence or terms hereof or the transactions contemplated hereby to the extent any such
information has been disclosed publicly by the Company or any Member or any Affiliate thereof in accordance with the provisions hereof.
ARTICLE IX
TAXES
9.01 Tax Returns
.
The Managing Member will cause to be prepared and filed all necessary federal, state and local tax
returns for the Company, and the Managing Member will select an appropriate accounting firm to prepare such tax returns. The Company shall furnish to each Member an estimated IRS Form 1065,
Schedule K-1,
and any similar forms or schedules prepared with respect to state or local taxes that may be due from such Member (or its direct or indirect owners) as a result of its ownership of an Interest no later than February 15th following each Tax Year and
a final Schedule
K-1
(and applicable state or local tax forms) with respect to such Member no later than April 15th following each Tax Year. Upon the request of EFS, the Company will furnish to EFS copies of
any and all returns that are actually filed, promptly after their filing.
9.02 Tax Elections.
(a)
Elections by the Company
. Subject to
Sections
6.02(q)
and
9.02(b)
, the Managing Member will
determine the elections to be made by the Company for tax purposes;
provided, however,
that the Managing Member shall depreciate all assets of the Company held as of the Effective Date using any method or methods permitted by law that result
in the most accelerated depreciation available and shall not make any election to extend or defer any depreciation deductions otherwise allowable with respect to any asset.
(b)
Entity Classification Election
. Neither the Company nor any Member may make an election for the Company to be treated as an
association taxable as a corporation for U.S. federal income tax purposes, and no provision of this Agreement will be construed to sanction or approve such an election.
9.03 Tax Audits
.
In the event of an audit or inquiry by any taxing authority of tax matters relating to the Company, the
Managing Member shall represent the Company as the tax matters partner within the meaning of Section 6231(a)(7) of the Code, in the event it is determined that the partnership audit procedures set forth in subtitle A, chapter 63C of the Code
are applicable, or in a similar capacity under other applicable law;
provided
that
, in all events, the Managing Member shall consult with EFS on a regular basis regarding any such audit or inquiry, EFS shall be entitled to attend any
meetings or conferences with the Internal Revenue Service (with counsel of its own choosing) relating to the Company or the U.S. federal income tax treatment of any items relating to the Company, and all filings, responses and other correspondence
with the Internal Revenue Service on behalf of the Company or relating to the U.S. federal income tax treatment of any items relating to the Company shall be jointly approved by the Managing Member and EFS. Expenses incurred by the Members with
respect to the matters described in this
Section
9.03
shall be borne by the Company.
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ARTICLE X
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
10.01 Maintenance of Books and Records
.
The books of account for the Company and other records of the Company will be located at
the principal office of the Company or such other place as Managing Member may deem appropriate, and will be maintained on an accrual basis in accordance with the terms of this Agreement, except that the Capital Accounts of the Members will be
maintained in accordance with the definition of Capital Account in this Agreement.
10.02 Reports
.
The Company
will cause to be prepared or delivered such reports as the Managing Member may require and as are required to be prepared and delivered to the Members pursuant to
Section
8.03
. The Company will bear the costs of such
reports.
10.03 Bank Accounts
.
The Managing Member will cause the Company to establish and maintain one or more separate
bank or investment accounts for Company funds in the Company name with such financial institutions and firms as the Managing Member may select and with such signatories thereon as the Managing Member may designate.
ARTICLE XI
DISSOLUTION,
LIQUIDATION AND TERMINATION
11.01 Dissolution
.
The Company will dissolve and its affairs will be wound up upon the
first to occur of any of the following:
(a) subject to
Section
6.02(a)
, the determination of the Managing
Member to dissolve the Company; and
(b) the occurrence of any other event causing dissolution of the Company under the Act;
provided
,
however
, that upon dissolution pursuant to
clause (b)
of this
Section
11.01
, any or all of the
remaining Members may elect to continue the business of the Company within 90 days of the occurrence of the event causing such dissolution. The death, resignation, withdrawal, bankruptcy, insolvency or expulsion of any Member will not dissolve the
Company.
11.02 Liquidation and Termination
.
On dissolution of the Company, the Managing Member may appoint one or more
Persons as liquidator(s), which Person or Persons shall be reasonably approved by EFS. The liquidator will proceed diligently to wind up the affairs of the Company and make final distributions as provided herein. The costs of liquidation will be
borne as a Company expense. Until final distribution, the liquidator will continue to operate the Company properties with all of the power and authority of the Members. The steps to be accomplished by the liquidator are as follows:
(a) as promptly as possible after dissolution and again after final liquidation, the liquidator will cause a proper accounting to be made by a
recognized firm of certified public accountants of the Companys assets, liabilities, and operations through the last day of the calendar month in which the dissolution occurs or the final liquidation is completed, as applicable;
(b) the liquidator will pay from Company funds all of the debts and liabilities of the Company (including, without limitation, all expenses
incurred in liquidation) or otherwise make adequate provision therefor (including, without limitation, the establishment of a cash escrow fund for contingent liabilities in such amount and for such term as the liquidator may reasonably determine);
and
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(c) the Company will dispose of all remaining assets as follows:
(i) the liquidator may sell any or all Company property, and any resulting gain or loss from each sale will be computed and
allocated to the Members pursuant to
Section
5.02
; and
(ii) the liquidator will promptly
distribute any and all remaining Company property (including cash) among the Members in accordance with
Section
5.01(a)
.
(d) All distributions in kind to the Members will be made subject to the liability of each distributee for its allocable share of costs,
expenses and liabilities theretofore incurred or for which the Company has committed prior to the date of termination and those costs, expenses and liabilities will be allocated to the distributee pursuant to this
Section
11.02
.
11.03 Cancellation of Filing
.
On completion of the distribution of Company assets
as provided herein, the Company will be terminated, and the Managing Member (or such other Person or Persons as may be required) will cause the cancellation of any other filings previously made on behalf of the Company and will take such other
actions as may be necessary to terminate the Company.
ARTICLE XII
GENERAL PROVISIONS
12.01 Notices
.
All notices, requests or consents provided for or permitted to be given under this Agreement will be in writing
(except as otherwise provided in
Section
12.13
) and will be given (a) by depositing such writing in the United States mail, addressed to the recipient, postage paid and certified with return receipt requested,
(b) by depositing such writing with a reputable overnight courier for next day delivery, (c) by delivering such writing to the recipient in person, by courier or (d) email transmission. A notice, request or consent given under this
Agreement will be effective on receipt by the Person to receive it. All notices, requests and consents to be sent to a party hereto will be sent to or made at the addresses given for such party on the list attached hereto as
Exhibit
A
or such other address as such party may specify by notice to the other parties hereto. Any notice, request or consent to the Company also will be given to the Members.
12.02 Entire Agreement; Supersedure
.
This Agreement, together with its Exhibits, constitutes the entire agreement of the Members
(and their Affiliates) relating to the Company and supersedes all prior contracts or agreements with respect to the internal governance and affairs of the Company (including the Existing A&R LLC Agreement), whether oral or written. Nothing in
this Agreement, express or implied, is intended to confer upon any Person other than the parties hereto and their respective successors, personal representatives and permitted assigns, any rights or remedies under or by reason of this Agreement;
provided
,
however
, that (a) Member Indemnitors are intended to be third-party beneficiaries with rights to enforce the provisions of
Section
6.08
related to them as though a party to this Agreement and
(b) Nonparty Affiliates are intended to be third-party beneficiaries with rights to enforce the provisions of
Section
6.09
related to them as though a party to this Agreement.
12.03 Effect of Waiver or Consent
.
A waiver or consent, express or implied, to or of any breach or default by any Person in the
performance by that Person of its obligations with respect to the Company will not constitute a consent or waiver to or of any other breach or default in the performance by that Person of the same or any other obligations of that Person with respect
to the Company. Failure on the part of a Person to complain of any act of any Person or to determine any Person to be in default with respect to the Company, irrespective of how long such failure continues, will not constitute a waiver by that
Person of its rights with respect to that default until the applicable limitations period has expired.
12.04 Amendment or
Modification.
(a) Except for any amendments to
Exhibit
A
made in accordance with
Section
3.01
, this Agreement may be amended or modified from time to time only (i) in all cases, with the consent of the Managing Member
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and EFS, unless permitted without such consent under
Section
12.04(b)
and (ii) with respect to any amendment or modification that would disproportionately and
adversely affect any Lightfoot Member in a material way in its capacity as a holder of Common Units as compared to Arc, EFS and the other Lightfoot Members, with the consent of the Managing Member, EFS and such disproportionately and adversely
affected Lightfoot Member.
(b) Notwithstanding anything to the contrary in
clause (
i
)
of
Section
12.04(a)
, but subject to compliance with
clause (ii)
of
Section
12.04(a)
, any amendment or modification of this Agreement that relates to the creation or issuance of Common
Units or Interests, where such issuance is made in compliance with
Section
4.01(c)
, shall require only the consent of the Managing Member and no other Persons.
12.05 Survivability of Terms
.
The terms and provisions of the obligations or agreements of the Members under Sections
3.03
,
3.05
,
6.07
,
6.08
,
6.09
,
8.05
and
8.06
and this
Article XII
shall survive any termination of this Agreement and will be construed as agreements independent of any other provisions of this
Agreement.
12.06 Binding Effect
.
Subject to the restrictions on Transfer set forth in this Agreement, this Agreement will
be binding on and inure to the benefit of the Members and their respective legal representatives, trustees, successors, and assigns.
12.07 Governing Law; Severability
.
This Agreement is governed by and will be construed in accordance with the laws of the State
of Delaware, excluding any
conflict-of-laws
rule or principle (whether under the laws of Delaware or any other jurisdiction) that might refer the governance or the
construction of this Agreement to the law of another jurisdiction. If any provision of this Agreement or its application to any Person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other Persons or circumstances will not be affected thereby, and such provision will be enforced to the greatest extent permitted by law.
12.08 Consent to Jurisdiction; Waiver of Jury Trial.
(a) THE PARTIES HERETO VOLUNTARILY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE STATE COURTS OF NEW YORK AND THE FEDERAL COURTS OF THE
UNITED STATES OF AMERICA LOCATED IN NEW YORK, NEW YORK, OVER ANY DISPUTE BETWEEN OR AMONG THE PARTIES ARISING OUT OF THIS AGREEMENT, AND THE COMPANY AND EACH PARTY HERETO IRREVOCABLY AGREES THAT ALL SUCH CLAIMS IN RESPECT OF SUCH DISPUTE SHALL BE
HEARD AND DETERMINED IN SUCH COURTS. THE COMPANY AND THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH DISPUTE ARISING OUT OF THIS
AGREEMENT BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE. THE COMPANY AND EACH PARTY HERETO AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW.
(b) EACH OF THE PARTIES HERETO HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
DISPUTE OR OTHER PROCEEDING RELATED THERETO BROUGHT IN CONNECTION WITH THIS AGREEMENT.
12.09 Further Assurances
.
In
connection with this Agreement and the transactions contemplated thereby, each Member will execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform
the provisions of this Agreement and such transactions.
12.10 Title to Company Property
.
All assets shall be deemed to be
owned by the Company as an entity, and no Member, individually, shall have any ownership of such property.
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12.11 Waiver of Action for Partition
.
Each of the Members irrevocably waives during
the term of the Company any right that such Member may have to maintain an action for partition with respect to the property of the Company.
12.12 Counterparts
.
This Agreement may be executed in any number of counterparts with the same effect as if all signatories had
signed the same document. All counterparts will be construed together and constitute the same instrument.
12.13 Electronic
Transmissions
.
Each of the parties hereto agrees that (a) any signed consent or signed document transmitted by electronic transmission shall be treated in all manner and respects as an original written document, (b) any such
consent or document shall be considered to have the same binding and legal effect as an original document and (c) at the request of any party hereto, any such consent or document shall be
re-delivered
or
re-executed,
as appropriate, by the relevant party or parties in its original form. Each of the parties hereto further agrees that they will not raise the transmission of a consent or document by electronic
transmission as a defense in any proceeding or action in which the validity of such consent or document is at issue and hereby forever waives such defense. For purposes of this Agreement, the term electronic transmission means any form
of communication not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an
automated process.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the undersigned Members have executed this Agreement effective as of the
Effective Date.
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ARC:
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ARC TERMINALS HOLDINGS LLC
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By:
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Name:
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Title:
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EFS:
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EFS MIDSTREAM HOLDINGS LLC
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By: Aircraft Services Corporation, its sole member
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By:
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Name:
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Title:
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The Company:
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ARC TERMINALS JOLIET HOLDINGS LLC
By: Arc Terminals Holdings LLC, its managing member
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By:
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Name:
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Title:
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Lightfoot Members:
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[___________________]
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By:
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Name:
|
Title:
|
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[___________________]
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By:
|
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Name:
|
Title:
|
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[___________________]
|
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By:
|
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Name:
|
Title:
|
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[___________________]
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By:
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Name:
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Title:
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[___________________]
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By:
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Name:
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Title:
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C-74
Exhibit A
Members, Classes, Capital Contributions and Units
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Member
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Deemed Initial
Capital
Contribution
|
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Additional
Capital
Contributions
|
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Common
Units
|
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Capital Account
Balance
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EFS Midstream Holdings, LLC
Notices to:
EFS Midstream Holdings, LLC
800 Long Ridge Road
Stamford, CT 06927
Attn: John Pugh
Email: John.Pugh@ge.com
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[●]
1
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$0
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[●]
2
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[●]
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Arc Terminals Holdings LLC
Notices to:
Arc Terminals Holdings LLC
c/o Arc Logistics Partners LP
[●]
Attn: [John Blanchard]
Email: [jblanchard@arcxlp.com]
Tel:
[212-993-1285]
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[●]
3
|
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$0
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[●]
4
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[●]
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[Lightfoot Members]
Notices to:
[_______________]
Attn: [____________]
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[●]
5
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$0
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[●]
6
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[●]
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1
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To be an amount equal to all Capital Contributions of EFS under the Existing A&R LLC Agreement as of the closing date, less the product of the number of Common Units transferred by EFS on the closing date and
$18,750.
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2
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To be the number of Common Units owned by EFS under the Existing A&R LLC Agreement as of the closing date, less the number of Common Units transferred by EFS on the closing date.
|
3
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To be an amount equal to all Capital Contributions of Arc under the Existing A&R LLC Agreement as of the closing date, plus the product of the number of Common Units acquired by Zenith (and transferred to Arc) on
the closing date and $18,750.
|
4
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To be the number of Common Units owned by Arc under the Existing A&R LLC Agreement as of the closing date, plus the number of Common Units acquired by Zenith (and transferred to Arc) on the closing date.
|
5
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To be an amount equal to the product of the number of Common Units acquired by the applicable Lightfoot Member on the closing date and $18,750.
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6
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To be the number of Common Units acquired by the applicable Lightfoot Member on the closing date.
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C-75
The Companys notice information:
Arc Terminals Joliet Holdings LLC
c/o Arc Logistics Partners LP
[●]
[●]
Attn: [John Blanchard]
Email:
[jblanchard@arcxlp.com]
C-76
Exhibit B
Valuation Disagreement Procedure
Section
4.01(c)(iv)(C)(2)
:
If the Managing Member desires to cause the Company to request Capital Contributions pursuant to
Section
4.01(c)
in
exchange for Common Units issued at the price contemplated by
Section
4.01(c)(iv)(C)(2)
(following compliance with the prerequisites thereto set forth in Section
4.01(c)(iv)(C)
), then the following shall apply:
(a) In lieu of complying with
Section
4.01(c)(iii)
, the Company shall deliver to the Members a
notice specifying (i) the aggregate amount of the Capital Contributions requested, (ii) that the Managing Member has invoked
Section
4.01(c)(iv)(C)(2)
to determine the amount of Capital Contributions required to
be made per Common Unit in connection with such request and (iii) that the Managing Member has complied with the prerequisites thereto set forth in
Section
4.01(c)(iv)(C)
. Following receipt of such notice, the Managing
Member, EFS and the Company shall comply with the procedures set forth under the Valuation Determination heading below to determine the Final
Per-Unit
Price.
(b) At any time following receipt of a notice pursuant to
clause (a)
under this heading but prior to determination
of the Final
Per-Unit
Price as set forth below, the Managing Member shall have the right (the
Accelerated Funding Right
) to fund, or permit any of its Affiliate to fund, up to the entirety
of such requested Capital Contributions and receive in exchange therefor one Common Unit per each $18,750 of Capital Contributions contributed to the Company.
(c) If the Managing Member does not exercise the Accelerated Funding Right, then following determination of the Final
Per-Unit
Price, the Company shall comply with
Section
4.01(c)(iii)
using the Final
Per-Unit
Price to allow the Members to exercise their rights
pursuant to
Section
4.01(c)(ii)
.
(d) If the Managing Member does exercise the Accelerated
Funding Right, then following determination of the Final
Per-Unit
Price, (i) the number of Common Units received by the Managing Member, or the applicable Affiliate(s) thereof, pursuant to
clause
(b)
under this heading shall automatically be adjusted to such number of Common Units that the Managing Member, or the applicable Affiliate(s) thereof, would have received had one Common Unit been issued per Final
Per-Unit
Price and (ii) the Company shall comply with
Section
4.01(c)(iii)
using the Final
Per-Unit
Price to allow the Members to exercise their
rights pursuant to
Section
4.01(c)(ii)
, except that any payment thereunder to be paid to the Company shall, if elected by the Managing Member and permitted by
Sections 7.01(d)
and
7.01(e)
, to the extent such
compliance would result in the Company receiving more than the aggregate amount of Capital Contributions requested in the notice described in
clause (a)
under this heading, instead be paid to the Managing Member, or the applicable
Affiliate(s) thereof, and an equivalent number of Common Units to be issued thereunder to a Member by the Company shall instead be Transferred from the Managing Member to such Member free and clear of all security interests, liens and other
encumbrances (for the avoidance of doubt, without having to comply with
Sections 7.02
or
7.03
).
Section
7.04(a)
:
If the third sentence of
Section
7.04(a)
applies to an Indirect
Tag-Along
Transfer, then following compliance with the prerequisites thereto set forth in the first and second sentence of
Section
7.04(a)
, the following shall apply:
(a) The Managing Member shall deliver to the Members a notice that (i) the third sentence of
Section
7.04(a)
applies to such Indirect
Tag-Along
Transfer to determine the consideration per Common Unit in connection with such Indirect
Tag-Along
Transfer and (ii) that the Managing Member has complied with the prerequisites thereto set forth in the first and second sentence of
Section
7.04(a)
. Following such
notice, the Managing Member, EFS and the Company shall comply with the procedures set forth under the Modified Valuation Determination heading below to determine the Final
Per-Unit
Price.
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(b) Following determination of the Required Valuations, the Managing Member shall
comply with
Sections 7.04
using the Final
Per-Unit
Price to allow the Members to exercise their rights thereunder.
Section
7.05(d)
:
If
the second sentence of
Section
7.05(d)
applies to a Drag-Along Transaction, then following compliance with the prerequisites thereto set forth in the first sentence of
Section
7.05(d)
, the
following shall apply:
(a) The Managing Member shall deliver to the Drag-Along Members a notice that (i) the second
sentence of
Section
7.04(d)
applies to such Drag-Along Transaction to determine the consideration payable per Common Unit in connection with such Drag-Along Transaction and (ii) that the Managing Member has complied
with the prerequisites thereto set forth in the first sentence of
Section
7.04(d)
. Following such notice, the Managing Member, EFS and the Company shall comply with the procedures set forth under the Valuation
Determination heading below to determine the Final
Per-Unit
Price.
(b) At
any time following notice pursuant to
clause (a)
under this heading but prior to determination of the Final
Per-Unit
Price as set forth below, the Managing Member shall have the right to complete
the Drag-Along Transaction (the
Accelerated Drag Right
) using a
per-Common
Unit price payable to each Drag-Along Member as determined by the Managing Member in respect of each Common Unit
included in such Drag-Along Transaction;
provided
, that the Managing Member shall deliver into escrow at the time of the completion of such Drag-Along Transaction an aggregate amount equal to $18,750
multiplied
by the number of Common
Units held by the Drag-Along Members (the
Escrow Amount
) for distribution in accordance with
clause (d)
below.
(c) If the Managing Member does not exercise the Accelerated Drag Right, then following determination of the Final
Per-Unit
Price, the Managing Member shall have the right to exercise its rights pursuant to
Section
7.05(a)
by complying with
Section
7.05
using the Final
Per-Unit
Price.
(d) If the Managing Member does exercise the Accelerated Drag Right,
then following determination of the Final
Per-Unit
Price, (i) if the Final
Per-Unit
Price exceeds $18,750, (A) $18,750 of the Escrow Amount shall be released to
each Drag-Along Member in respect of each Common Unit held by such Drag-Along Member, and (B) the Managing Member shall pay or cause to be paid to each Drag-Along Member an amount equal to the amount by which the Final
Per-Unit
Price exceeds $18,750 in respect of each Common Unit held by such Drag-Along Member, and (ii) if the Final
Per-Unit
Price is less than $18,750, a portion of the
Escrow Amount equal to such
Final-Per
Unit Price shall be released to each Drag-Along Member in respect of each Common Unit held by such Drag-Along Member, and all remaining portions of the Escrow Amount shall
be released to the Managing Member.
Valuation Determination
(a) Following receipt of a notice pursuant to
clause (a)
of any of the
sub-headings
above in which the Valuation Determination applies, EFS shall select, and, within five days after the delivery of such notice, engage on behalf of the Company, a nationally recognized independent
third-party appraiser (the
First Appraiser
) to determine the fair market value (on an
amount-per-Common-Unit
basis) of the applicable Common Units
(the
First
Per-Unit
Price
). The First Appraiser shall make a determination as soon as practicable and in any event within 20 days after its engagement and shall simultaneously deliver notice
of such determination to EFS, the Managing Member and the Company.
(b) At any time prior to the date that is five days
after the Managing Member receives notice of the First
Per-Unit
Price from the First Appraiser pursuant to
clause
(a)
under this heading, Arc shall have the option to select (and, if
EFS fails to select an appraiser pursuant to
clause (a)
under this heading, Arc shall be required to select), and promptly engage on behalf of the Company, a different nationally recognized independent third-party appraiser (the
Second Appraiser
) to determine the fair market value (on an
amount-per-Common-Unit
basis) of the applicable Common Units (the
Second
Per-Unit
Price
). The
C-78
Second Appraiser shall make a determination as soon as practicable and in any event within 20 days after its engagement and shall simultaneously deliver notice of such determination to EFS, the
Managing Member and the Company.
(c) Following completion of the processes described in
clauses (a)
and
(b)
under this heading, as applicable, the final and binding fair market value (on an
amount-per-Common-Unit
basis) of the applicable Common Units in connection
with the event triggering application of this heading (the
Final
Per-Unit
Price
) shall be determined as follows (unless the Managing Member and EFS otherwise agree, at any time):
(i) If EFS fails to timely select and engage an appraiser pursuant to
clause (a)
under this heading, then the Final
Per-Unit
Price shall be the Second
Per-Unit
Price.
(ii) If the Managing Member fails to timely select and engage (or elects, in a notice delivered to EFS, not to select and
engage) an appraiser pursuant to
clause (b)
under this heading, then the Final
Per-Unit
Price shall be the First
Per-Unit
Price.
(iii) If the processes described in
clauses (a)
and
(b)
under this heading are both completed and the Second
Per-Unit
Price is greater than 90% but less than 110% of the First
Per-Unit
Price, then the Final
Per-Unit
Price shall be the
First
Per-Unit
Price.
(iv) If the the processes described in
clauses
(a)
and
(b)
under this heading are both completed and the Second
Per-Unit
Price is less than or equal to 90% or greater than or equal to 110% of the First
Per-Unit
Price, then the Managing Member and EFS shall require the First Appraiser and the Second Appraiser, by notice thereto, delivered within two days of the delivery of the determination of the Second
Per-Unit
Price, to jointly identify a different nationally recognized independent third-party appraiser (the
Third Appraiser
, and together with the First Appraiser and the Second Appraiser, the
Appraisers
) within two days of the delivery of such notice, which the Managing Member shall promptly cause the Company to engage, and in any event within five days of the identification of the Third Appraiser. The Third Appraiser
shall review the work of the First Appraiser and the Second Appraiser and shall select (as the Final
Per-Unit
Price) whichever of the First
Per-Unit
Price or the Second
Per-Unit
Price that it determines most closely represents the fair market value (on an
amount-per-Common-Unit
basis) of the applicable
Common Units. The Third Appraiser shall make a determination as soon as practicable and in any event within 20 days after its engagement. Upon making such determination, the Third Appraiser shall simultaneously deliver notice of such determination
to EFS, the Managing Member and the Company.
(d) In addition, the Managing Member, EFS and the Company shall promptly
provide to each of the Appraisers such information as is reasonably pertinent to the determination of fair market value, including marketing and modeling materials provided to third parties in connection with any event triggering application of this
heading. The fees and expenses of each Appraiser shall be paid by the Company. In connection with the appraisals, each of the Managing Member, EFS and the Company, as applicable, shall cause the Appraisers to agree in writing to comply with the
procedures set forth under this heading.
Modified Valuation Determination
(a) Following receipt of a notice pursuant to
clause (a)
of any of the
sub-headings
above in which the Modified Valuation Determination applies, EFS shall have the right, but not the obligation, to select, and, within five days after the delivery of such notice, engage on behalf
of the Company, a nationally recognized independent third-party appraiser (the
Modified First Appraiser
) to determine the fair market value (on an
amount-per-Common-Unit
basis) of the applicable Common Units (the
Modified First
Per-Unit
Price
). The Modified
First Appraiser shall make a determination as soon as practicable and in any event within 20 days after its engagement, and shall simultaneously deliver notice of such determination to EFS, Arc and the Company.
(b) The Arc
Per-Unit
Price, as proposed by Arc pursuant to
Section
7.04(a)
, shall constitute the
Modified Second
Per-Unit
Price
under these Modified Valuation Determination procedures without the need to engage any
appraiser.
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(c) Following completion of the processes described in
clauses
(a)
and
(b)
under this heading, as applicable, the final and binding fair market value (on an
amount-per-Common-Unit
basis) of the applicable Common
Units in connection with the event triggering application of this heading (the
Modified Final
Per-Unit
Price
) shall be determined as follows (unless the Managing Member and EFS otherwise
agree, at any time):
(i) If EFS fails to timely select and engage an appraiser pursuant to
clause (a)
under
this heading, then the Modified Final
Per-Unit
Price shall be the Modified Second
Per-Unit
Price.
(ii) If the processes described in
clause (a)
and
(b)
under this heading are both completed and the Modified
First
Per-Unit
Price (as determined by the Modified First Appraiser) is greater than 90% but less than 110% of the Modified
Second-Per
Unit Price, then the Modified
Final
Per-Unit
Price shall be the Modified Second
Per-Unit
Price.
(iii) If the processes described in
clauses (a)
and
(b)
under this heading are both completed and the
Modified Second
Per-Unit
Price is less than or equal to 90% or greater than or equal to 110% of the Modified First
Per-Unit
Price, Arc and the Modified First Appraiser
shall jointly select, and, within five days after receiving notice of the determination of the Modified First
Per-Unit
Price by the Modified First Appraiser (
provided
that
clause (b)(ii)
above
does not apply following such determination), engage on behalf of the Company, a nationally recognized independent third-party appraiser (the
Modified Second Appraiser
and together with the Modified First Appraiser, the
Modified Appraisers
). The Modified Second Appraiser shall review the work of the Modified First Appraiser and Arc and shall select whichever of the Modified First
Per-Unit
Price or the
Modified Second
Per-Unit
Price that it determines most closely represents the fair market value (on an
amount-per-Common-Unit
basis) of the applicable Common Units (as determined by the Modified Second Appraiser, the
Modified Third
Per-Unit
Price
). The Modified Second Appraiser shall make a determination as soon as
practicable and in any event within 20 days after its engagement. Upon making such determination, the Modified Second Appraiser shall simultaneously deliver notice of such determination to EFS, Arc and the Company. If the Modified Third
Per-Unit
Price is equal to (x) the Modified Second
Per-Unit
Price, then the Modified Final
Per-Unit
Price shall be a
per-Common
Unit price equal to 95% of the Modified Second
Per-Unit
Price, or (y) the Modified First
Per-Unit
Price, then the
Modified Final
Per-Unit
Price shall be the Modified First
Per-Unit
Price.
(d) In addition, the Managing Member, EFS and the Company shall promptly provide to each of the Modified Appraisers such
information as is reasonably pertinent to the determination of fair market value, including marketing and modeling materials provided to third parties in connection with any event triggering application of this heading. The fees and expenses of each
Modified Appraiser shall be paid by the Company. In connection with the appraisals, each of the Managing Member, EFS and the Company, as applicable, shall cause the Modified Appraisers to agree in writing to comply with the procedures set forth
under this heading.
(e) Notwithstanding the foregoing, following the determination of the Modified First
Per-Unit
Price and the Modified Second
Per-Unit
Price (the
Required Valuations
), Arc shall be permitted to consummate any Indirect
Tag-Along
Transfer prior to the time at which the Modified Valuation Determination procedures set forth above are completed so long as Arc, and, if applicable, the acquirer in such Indirect
Tag-Along
Transfer, pay to the electing Indirect
Tag-Along
Members 95% of the Modified Second
Per-Unit
Price at the time of
consummation thereof and agree to pay to the electing Indirect
Tag-Along
Members the positive difference, if any, between the Modified Final
Per-Unit
Price implied for
their respective Common Units determined by the Modified Valuation Determination procedures upon its completion and 95% of the Modified Second
Per-Unit
Price.
C-80
Annex D
PARTIALLY CONDITIONAL PURCHASE AGREEMENT
among
LCP LNG
HOLDINGS, LLC,
LIGHTFOOT CAPITAL PARTNERS GP LLC,
LIGHTFOOT CAPITAL PARTNERS, LP
ZENITH ENERGY U.S., L.P.
ZENITH ENERGY U.S. GP, LLC
ZENITH ENERGY U.S. LOGISTICS HOLDINGS, LLC
and (solely for the purposes of Section 1.1(d)), ARC LOGISTICS PARTNERS LP
Dated as of August 29, 2017
TABLE OF CONTENTS
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Page
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ARTICLE I SALE AND PURCHASE
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D-1
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Section 1.1
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Agreement to Sell and to Purchase
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D-1
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Section 1.2
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Deliveries at Closing
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D-2
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Section 1.3
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Payment of Initial Purchase Price and Secondary Purchase Price
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D-3
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ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER AND THE LIGHTFOOT
ENTITIES
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D-5
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Section 2.1
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Organization
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D-5
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Section 2.2
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Capitalization of the Company
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D-5
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Section 2.3
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Authorization
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D-6
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Section 2.4
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Noncontravention
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D-6
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Section 2.5
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Governmental Approvals
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D-6
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Section 2.6
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Brokers
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D-7
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Section 2.7
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Legal Proceedings
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D-7
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Section 2.8
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Acknowledgement by Seller
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D-7
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE LIGHTFOOT ENTITIES
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D-7
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Section 3.1
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Organization
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D-7
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Section 3.2
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Ownership
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D-8
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Section 3.3
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Authorization
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D-8
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Section 3.4
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Noncontravention
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D-8
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Section 3.5
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Gulf LNG Arbitration Status
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D-8
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Section 3.6
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Brokers and Finders
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D-8
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Section 3.7
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Acknowledgement by the Lightfoot Entities
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D-9
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES
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D-9
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Section 4.1
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Organization
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D-9
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Section 4.2
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Authorization
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D-9
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Section 4.3
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Noncontravention
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D-9
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Section 4.4
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Governmental Filings
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D-10
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Section 4.5
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Consents and Approvals
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D-10
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Section 4.6
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Brokers and Finders
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D-10
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Section 4.7
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Investment Intent; Investment Experience; Restricted Securities
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D-10
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Section 4.8
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Legal Proceedings
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D-10
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Section 4.9
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Acknowledgement by the Buyer Parties
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D-11
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ARTICLE V COVENANTS
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D-11
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Section 5.1
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Further Assurances
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D-11
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Section 5.2
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Press Releases
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D-11
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Section 5.3
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Access to Information; Confidentiality
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D-11
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Section 5.4
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Tax Matters
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D-12
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Section 5.5
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Releases
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D-12
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Section 5.6
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Fees and Expenses
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D-12
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Section 5.7
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Gulf LNG Outcome
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D-12
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Section 5.8
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Gulf LNG Distributions
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D-12
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Section 5.9
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Lightfoot Wind-Down Costs
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D-13
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ARTICLE VI CONDITIONS PRECEDENT
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D-13
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Section 6.1
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Conditions To Each Partys Obligation to Effect the First Closing and the Second
Closing
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D-13
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Section 6.2
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Conditions to Obligations of the Buyer Parties
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D-13
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Section 6.3
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Conditions Precedent to Obligations of Seller and the Lightfoot Entities
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D-15
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D-i
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ARTICLE VII TERMINATION, AMENDMENT AND WAIVER
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D-15
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Section 7.1
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Termination
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D-15
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Section 7.2
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Effect of Termination
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D-15
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ARTICLE VIII SURVIVAL; INDEMNIFICATION
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D-16
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Section 8.1
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Survival
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D-16
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Section 8.2
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Indemnification
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D-16
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Section 8.3
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Claims
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D-17
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Section 8.4
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Exclusive Remedy
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D-18
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Section 8.5
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Tax Treatment of Indemnity Payments
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D-18
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ARTICLE IX MISCELLANEOUS PROVISIONS
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D-18
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Section 9.1
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Amendment or Modification
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D-18
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Section 9.2
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Assignment
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D-18
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Section 9.3
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Counterparts
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D-18
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Section 9.4
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Entire Agreement
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D-19
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Section 9.5
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No Third-Party Beneficiaries
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D-19
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Section 9.6
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Governing Law; Jurisdiction; Waiver of Jury Trial
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D-19
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Section 9.7
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Specific Enforcement
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D-20
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Section 9.8
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Notices
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D-21
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Section 9.9
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Severability
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D-21
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Section 9.10
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Construction
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D-22
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Section 9.11
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Non-Recourse
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D-22
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Section 9.12
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Definitions
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D-23
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Exhibit A Membership Interest
Assignment
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D-ii
PARTIALLY CONDITIONAL PURCHASE AGREEMENT
THIS PARTIALLY CONDITIONAL PURCHASE AGREEMENT (this
Agreement
), dated as of August 29, 2017, is by and among Zenith
Energy U.S., L.P., a Delaware limited partnership (
Buyer Parent
), Zenith Energy U.S. GP, LLC, a Delaware limited liability company and the general partner of Buyer (
Buyer Parent GP
), Zenith Energy U.S. Logistics
Holdings, LLC, a Delaware limited liability company (
Buyer
and, together with Buyer Parent and Buyer Parent GP, the
Buyer Parties
), LCP LNG Holdings, LLC, a Delaware limited liability company
(
Seller
), Lightfoot Capital Partners, LP, a Delaware limited partnership (
LCP LP
), Lightfoot Capital Partners GP LLC, a Delaware limited liability company and the general partner of LCP LP (
LCP
GP
and together with LCP LP, the
Lightfoot Entities
), and solely for the purposes of
Section
1.1(d)
, Arc Logistics Partners LP (
Arc
). The Buyer Parties, Seller and the
Lightfoot Entities are sometimes referred to in this Agreement individually as a
Party
and collectively as the
Parties
.
WITNESSETH:
WHEREAS,
Seller owns a 9.678% membership interest in Gulf LNG Holdings Group, LLC, a Delaware limited liability company (the
Company
);
WHEREAS, Buyer desires to purchase membership interests in the Company equal to 5.51646% of the membership interests in the Company
outstanding as of the date of this Agreement (the
Unconditioned Interest
) from Seller, and Seller desires to sell the Unconditioned Interest to Buyer, subject to the terms and conditions set forth in this Agreement (the
Unconditioned Purchase
);
WHEREAS, subject to the satisfaction of the GLNG Arbitration Condition in accordance with
this Agreement, Buyer desires to purchase membership interests in the Company equal to 4.16154% of the membership interests in the Company outstanding as of the date of this Agreement (the
Conditioned Interest
) from Seller, and
Seller desires to sell the Conditioned Interest to Buyer, subject to the terms and conditions set forth in this Agreement (the
Conditioned Purchase
);
WHEREAS, the First Closing and the Second Closing may occur on different days, provided that the Second Closing shall not occur unless either
(i) the First Closing has previously occurred (
Separate Closings
), or (ii) the First Closing occurs concurrently with the Second Closing (a
Dual Closing
); and
WHEREAS, the Unconditioned Purchase and the Conditioned Purchase are each conditioned upon the consummation of the transactions contemplated
by that certain Purchase Agreement and Plan of Merger, dated as of even date herewith, by and among Seller, the Lightfoot Entities, Arc Logistics Partners LP, a Delaware limited partnership (
MLP
), and the other parties thereto
(the
Merger Agreement
).
NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set
forth herein, the Parties hereby agree as follows:
ARTICLE I
SALE AND PURCHASE
Section 1.1
Agreement to Sell and to Purchase
.
(a) At the First Closing (whether in a Separate Closing or as part of a Dual Closing) and upon the terms and subject to the conditions set
forth in this Agreement, in consideration of the Initial Purchase Price, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase and accept from Seller, the Unconditioned Interest free and clear of any Liens except
transfer restrictions arising under applicable securities Laws.
D-1
(b) At the Second Closing (whether in a Separate Closing or as part of a Dual Closing), as
applicable, and upon the terms and subject to the conditions set forth in this Agreement, including the satisfaction, or waiver by the Buyer Parties (such waiver to be within their sole discretion), of the GLNG Arbitration Condition, not later than
twelve months after the First Closing Date, in consideration of the Secondary Purchase Price, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase and accept from Seller, the Conditioned Interest free and clear
of any Liens except transfer restrictions under applicable securities Laws.
(c) The closing of the sale and purchase set forth in
Section
1.1(a)
(the
First Closing
) will, subject to the satisfaction or waiver of the applicable conditions set forth in
Article VI
(other than conditions that by their nature are to be satisfied
at the First Closing, but subject to the satisfaction or waiver of those conditions at the First Closing), take place at the offices of Kirkland & Ellis LLP, 609 Main Street, Suite 4700, Houston, Texas 77002 at 9:30 A.M.,
Houston, Texas time, on the Merger Agreement Closing Date (such date and time being herein called the
First Closing Date
).
(d) If the GLNG Arbitration Condition is satisfied or waived by the Buyer Parties (such waiver to be within their sole discretion), within
twelve months of the First Closing Date, then the closing of the sale and purchase set forth in
Section
1.1(b)
(the
Second Closing
) will, subject to the satisfaction or waiver of the applicable conditions
set forth in
Article VI
(other than conditions that by their nature are to be satisfied at the Second Closing, but subject to the satisfaction or waiver of those conditions at the Second Closing) take place at the offices of
Kirkland & Ellis LLP, 609 Main Street, Suite 4700, Houston, Texas 77002 at 9:30 A.M., Houston, Texas time, on (i) if the Second Closing is a Separate Closing, the second Business Day after the satisfaction or waiver by
the Buyer Parties (such waiver to be within their sole discretion), of the GLNG Arbitration Condition or (ii) if the Second Closing is a Dual Closing, on the First Closing Date and simultaneously with the First Closing (such date and time in
the case of
clause (i)
or
(ii)
and as changed pursuant to any mutual written agreement between Seller and the Buyer Parties, being herein called the
Second Closing Date
). Effective from and after and the First
Closing, Arc hereby guarantees the full and timely payment of and collection by Seller of the Secondary Purchase Price at the Second Closing (if any) in accordance with the terms and conditions of this Agreement, and the liability of Arc for the
Secondary Purchase Price shall be primary and not secondary to the liability of Buyer (the
Guaranty
). The Guaranty is absolute, continuing and independent of, and in addition to, any and all rights and remedies of Seller under
this Agreement, and shall not in any way be discharged, impaired or otherwise affected by any of the following, each of which is hereby waived by Arc: (w) any release or waiver of, or delay in, the enforcement of any rights of Seller,
(x) any release or waiver of, or amendment to, or consent to any such release, waiver or amendment, of this Agreement or the Merger Agreement, (y) any illegality, invalidity or unenforceability of any provision of this Agreement or the
Merger Agreement or (z) any requirements for promptness, diligence, notice of acceptance, presentment, demand for performance, notice of
non-performance,
default, acceleration, protest or dishonor or any
other notice or similar requirement.
Section 1.2
Deliveries at Closing
.
(a) At the First Closing (whether in a Separate Closing or as part of a Dual Closing), Seller or LCP LP, as applicable, shall make the
following deliveries to the Buyer Parties and take the following further actions:
(i)
Transfer of Unconditioned
Interest
. Seller shall deliver to Buyer a duly executed Membership Interest Assignment in the form attached as
Exhibit
A
hereto (the
Membership Interest Assignment
) and such other appropriate
instruments of transfer with respect to the Unconditioned Interest and any other documents, if any, reasonably necessary or appropriate to sell, assign, transfer and convey to Buyer all right, title and interest in and to the Unconditioned Interest
free and clear of any Liens except transfer restrictions arising under applicable securities Laws.
(ii)
FIRPTA
Certificate
. Seller or LCP LP, as applicable, shall deliver to Buyer a certificate, dated as of the First Closing Date, that satisfies the requirements set forth in Treasury Regulation
Section 1.1445-2(b)(2).
D-2
(iii)
Officer
s Certificate
. Seller shall deliver to
the Buyer Parties a certificate signed by a duly authorized officer of Seller, dated as of the First Closing Date, certifying that the applicable conditions set forth in
Section
6.2(a)
,
Section
6.2(b)
and
Section
6.2(c)
have been satisfied.
(iv)
Gulf
LNG LLC Agreement Consent
. Seller shall deliver to the Buyer Parties a written consent of a Majority in Interest (a
Gulf LNG Consent
) authorizing the Unconditioned Purchase in accordance with Section 9.1(b) of the Gulf
LNG LLC Agreement.
(b) At the First Closing (whether in a Separate Closing or as part of a Dual Closing), Buyer shall make the following
deliveries to Seller and take the following further actions:
(i)
Initial Purchase Price
. Buyer shall make payment
to Seller of the Initial Purchase Price, as provided in
Section
1.3
.
(ii)
Officer
s Certificate
. Buyer Parent GP shall deliver to Seller a certificate signed by a duly authorized officer of Buyer Parent GP, dated as of the First Closing Date, certifying that the applicable conditions set forth in
Section
6.3(a)
and
Section
6.3(b)
have been satisfied.
(c) At the Second Closing
(whether in a Separate Closing or as part of a Dual Closing), if any, Seller shall make the following deliveries to the Buyer Parties and take the following further actions:
(i)
Transfer of Conditioned Interest
. Seller shall deliver to Buyer a duly executed Membership Interest Assignment and
such other appropriate instruments of transfer with respect to the Conditioned Interest and any other documents, if any, reasonably necessary or appropriate to sell, assign, transfer and convey to Buyer all right, title and interest in and to the
Conditioned Interest, free and clear of any Liens except transfer restrictions arising under applicable securities Laws.
(ii)
Gulf LNG LLC Agreement Consent
. Seller shall deliver to the Buyer Parties a Gulf LNG Consent authorizing the
Conditioned Purchase in accordance with Section 9.1(b) of the Gulf LNG LLC Agreement, except to the extent such consent is not required pursuant to the express provisions of the Gulf LNG LLC Agreement or was included as part of the consent
delivered by Seller pursuant to
Section
1.2(a)(iv)
hereof.
(iii)
Satisfaction of GLNG
Arbitration Condition
. Seller shall delivered to the Buyer Parties written evidence reasonably satisfactory to the Buyer Parties certifying that the GLNG Arbitration Condition has been satisfied (which, for the avoidance of doubt, may be
delivered following the date that is twelve months after the First Closing).
(d) At the Second Closing (whether in a Separate Closing or
as part of a Dual Closing), if any, Buyer shall make payment to Seller of the Secondary Purchase Price, as provided in
Section
1.3
.
(e) At the Second Closing, if any, that is a Separate Closing, Seller or LCP LP, as applicable, shall make the following deliveries to the
Buyer Parties and take the following further actions:
(i)
FIRPTA Certificate
. Seller or LCP LP, as applicable,
shall deliver to Buyer a certificate, dated as of the Second Closing Date, which satisfies the requirements set forth in Treasury Regulation
Section 1.1445-2(b)(2).
(ii)
Officer
s Certificate
. Seller shall deliver to the Buyer Parties a certificate signed by a duly
authorized officer of Seller, dated as of the Second Closing Date, certifying that the applicable conditions set forth in
Section
6.2(a)
,
Section
6.2(b)
and
Section
6.2(c)
have been satisfied.
(f) At the Second Closing, if any, that is a Separate Closing, Buyer Parent GP shall deliver to Seller a certificate
signed by a duly authorized officer of Buyer Parent GP, as applicable, dated as of the Second Closing Date, certifying that the applicable conditions set forth in
Section
6.3(a)
and
Section
6.3(b)
have been satisfied.
Section 1.3
Payment of Initial Purchase Price and Secondary Purchase Price
. The
Initial
Purchase Price
, if at any time such amount is payable pursuant to this Agreement, will be an amount equal to $36,229,200, less any
D-3
Unconditioned Interest Extraordinary Distribution Amounts and as adjusted pursuant to the remainder of this
Section
1.3
, as applicable. The
Secondary Purchase
Price,
if at any time such amount is payable pursuant to this Agreement, will be an amount equal to $27,330,800, less any Conditioned Interest Extraordinary Distribution Amounts and as adjusted pursuant to the remainder of this
Section
1.3
, as applicable;
provided
,
however
, the Secondary Purchase Price (as adjusted pursuant to this
Section
1.3
) shall not be less than $0. In the event (i) the aggregate
Unconditioned Interest Extraordinary Distribution Amounts exceeds the Initial Purchase Price, Seller shall pay to Buyer, by wire transfer in immediately available funds, an amount equal to such excess at the First Closing, and (ii) in the event
the aggregate Conditioned Interest Extraordinary Distribution Amounts exceeds the Secondary Purchase Price, no amount shall be payable pursuant to the Secondary Purchase Price at the Second Closing, and, in each case, Buyer shall have no obligation
to pay any portion of the Initial Purchase Price or the Secondary Purchase Price, as applicable, but the transactions contemplated at such Closing will still be consummated.
(a) The Initial Purchase Price and the Secondary Purchase Price, if any, as applicable, shall be payable as follows, subject to the
adjustments set forth in the remainder of this
Section
1.3
:
(i) At the First Closing (whether in
a Separate Closing or as part of a Dual Closing), Buyer shall deliver to Seller, by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer, an amount equal to the Initial Purchase Price.
(ii) At the Second Closing (whether in a Separate Closing or as part of a Dual Closing), if any, Buyer shall deliver to Seller,
by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer, an amount equal to the Secondary Purchase Price.
(b) The Initial Purchase Price shall be increased, on a
dollar-for-dollar
basis, by an amount equal to the aggregate capital contributions (
Gulf LNG Capital Contributions
), if any, made by Seller to the
Company in respect of the Unconditioned Interest pursuant to the terms of the Gulf LNG LLC Agreement between the date of this Agreement and the First Closing Date. No later than three Business Days prior to the First Closing Date, Seller shall
deliver to Buyer written evidence reasonably satisfactory to Buyer setting forth the date and amount of each Gulf LNG Capital Contribution actually made by Seller to the Company between the date of this Agreement and the First Closing Date.
(c) The Secondary Purchase Price shall be increased, on a
dollar-for-dollar
basis, by an amount equal to the aggregate Gulf LNG Capital Contributions, if any, made by Seller to the Company in respect of the Conditioned Interest
pursuant to the terms of the Gulf LNG LLC Agreement between the date of this Agreement and the Second Closing Date. No later than three Business Days prior to the Second Closing Date (if any), Seller shall deliver to Buyer written evidence
reasonably satisfactory to Buyer setting forth the date and amount of each Gulf LNG Capital Contribution actually made by Seller to the Company between the date of this Agreement and the Second Closing Date.
(d) If, at any time prior to the First Closing or the Second Closing (if any), as applicable, Seller has not made the applicable Gulf LNG
Capital Contribution that it is entitled to make in respect of the Unconditioned Interest or the Conditioned Interest within five Business Days of the date by which Seller is required to make such contribution in accordance with the Gulf LNG LLC
Agreement (the
Contribution Deadline
), then Buyer will have the right, but not the obligation, to advance an amount of funds equal to the entire amount of the unpaid portion of such contribution to Seller for purposes of making
such contribution (any such advanced amount, a
Buyer Advance
) and such right shall be exercisable by delivering written notice of such exercise no later than five days following the Contribution Deadline. If Seller does not
receive such written notice from Buyer during such five day period, then Buyer shall be deemed for all purposes to have elected not to exercise such right, and the below provisions shall not be applicable with respect to the applicable Gulf LNG
Capital Contribution. If Buyer duly elects to make a Buyer Advance in accordance with the foregoing, then, subject to Buyers actual funding of such Buyer Advance, Buyer shall be entitled to receive the aggregate amount of such Buyer Advance,
plus quarterly, compounding interest accruing on such amount from and after the date of such funding at a rate
D-4
equal to 6%, payable out of, and recourse to, any and all Ordinary Course Distributions that would otherwise be payable to Seller (i) between the date of this Agreement and the First Closing
Date (with respect to Gulf LNG Capital Contributions required to be made by Seller to the Company in respect of the Unconditioned Interest pursuant to
Section
1.3(b)
) or (ii) between the date of this Agreement and
(A) if the Second Closing occurs, the Second Closing Date (with respect to Gulf LNG Capital Contributions required to be made by Seller to the Company in respect of the Conditioned Interest pursuant to
Section
1.3(c)
),
or (B) if the Second Closing does not occur, the date on which all such amounts and interest accrued thereon are repaid. In the event Buyer is entitled to all or any portion of any Ordinary Course Distribution paid to Seller pursuant to this
Section
1.3(d)
in respect of a Buyer Advance, Seller shall deliver such amounts to Buyer no later than three Business Days after such Ordinary Course Distributions are received by Seller. Notwithstanding anything to the
contrary in this Agreement, the Merger Agreement or any other document or instrument relating to the Transactions, if, with respect to any Gulf LNG Capital Contribution that Seller is entitled to make in respect of the Unconditioned Interest or the
Conditioned Interest before the First Closing or the Second Closing (if any), Buyer does not make a Buyer Advance in respect of such contribution, then Seller shall have no obligation to make such contribution.
(e) In the event the conditions set forth in
Article VI
are satisfied (or waived) with respect to the Second Closing and the Parties
are ready, willing and able to consummate the Second Closing, and the aggregate net amount of damages awarded to Eni by the arbitration tribunal in the Gulf LNG Arbitration is greater than $10,000,000 but less than $25,000,000, the Secondary
Purchase Price will be decreased, on a
dollar-for-dollar
basis, by an amount equal to the aggregate net amount of damages awarded to Eni with respect to the Gulf LNG
Arbitration
minus
$10,000,000,
multiplied
by 4.16154%. In the event the aggregate net amount of damages awarded to Eni with respect to the Gulf LNG Arbitration is equal to or less than $10,000,000, there shall be no adjustment to the
Secondary Purchase Price pursuant to this
Section
1.3(e)
.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE LIGHTFOOT ENTITIES
As of (a) the date of this Agreement, (b) the First Closing Date and (c) the Second Closing Date, if any, as applicable, Seller
and the Lightfoot Entities hereby jointly and severally represent and warrant to the Buyer Parties as follows:
Section 2.1
Organization
. Each of Seller, and as of the date of this Agreement and the First Closing Date and to the Knowledge of Seller, the Company, is a limited liability company duly organized, validly existing and in good standing under the Laws of
the State of Delaware and has all requisite limited liability company power to own, lease and operate all of its properties and assets and to carry on its business as currently conducted, except where the failure to have such power or authority
would not, and would not reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect. There are no dissolution or bankruptcy Proceedings pending with respect to or contemplated by Seller or, as of the date of
this Agreement and the First Closing Date and to the Knowledge of Seller, the Company.
Section 2.2
Capitalization of the
Company
.
(a) As of the date of this Agreement and as of (but without giving effect to) the First Closing, Seller owns a 9.678%
membership interest in the Company, which is composed of the Unconditioned Interest and the Conditioned Interest, free and clear of any and all Liens (except transfer restrictions under applicable securities Laws). Upon transfer of the Unconditioned
Interest and the Conditioned Interest, as applicable, in accordance with this Agreement, to Buyer, Buyer will hold record and beneficial ownership of the Unconditioned Interest and the Conditioned Interest, respectively, free and clear of all Liens
(except transfer restrictions under applicable securities Laws).
(b) Except for this Agreement and the Gulf LNG LLC Agreement, there are
no outstanding Contracts or obligations binding on Seller, any of the Lightfoot Entities or, to the Knowledge of Seller, the Company, with
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respect to the Unconditioned Interest or the Conditioned Interest, including any Contract (i) restricting the transfer of, (ii) affecting the voting rights of, (iii) requiring the
repurchase, redemption or disposition of, or containing any right of first refusal with respect to, (iv) requiring any registration for sale of or (v) granting any preemptive or anti-dilutive rights with respect to, any portion of the
Unconditioned Interest or the Conditioned Interest.
(c) Seller and the Lightfoot Entities have delivered a true and correct copy of the
Gulf LNG LLC Agreement.
Section 2.3
Authorization
. Seller has all requisite limited liability company power and authority and
has taken all necessary limited liability company action in order to execute and deliver this Agreement and the other agreements contemplated hereby to which it is or will be a party and to perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement by Seller and the performance of its obligations hereunder have been duly authorized and approved by all necessary limited liability company action of Seller. This Agreement has been duly executed and
delivered by Seller and constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of
general applicability relating to or affecting creditors rights and to general equity principles (the
Bankruptcy and Equity Exception
). At the First Closing and the Second Closing, if any, as applicable, all documents
required hereunder to be executed and delivered by Seller will have been duly authorized, executed and delivered by Seller and, assuming due authorization, execution and delivery of such documents by any other parties thereto, will constitute legal,
valid and binding obligations of Seller, enforceable against Seller in accordance with their terms, subject to the Bankruptcy and Equity Exception.
Section 2.4
No
ncontravention
. The execution and delivery by Seller of this Agreement or any other documents required
hereunder to be executed and delivered by Seller pursuant to this Agreement, and the consummation by Seller of the transactions contemplated hereunder, will not (a) conflict with, violate or result in a default under the certificate of
formation of Seller or the Company or the limited liability company agreement of Seller or the Gulf LNG LLC Agreement, or, subject to procurement of the consent contemplated by
Section
1.2(a)(iv)
and, if required in
connection with the sale of the Conditioned Interest,
Section
1.2(c)(ii)
, entitle any Person to exercise any preferential purchase right, option to purchase or similar right with respect to the Unconditioned Interest or the
Conditioned Interest, (b) (i) to the Knowledge of Seller, conflict with or result in a breach, default or violation of, or require a Consent under, any Law, Order, Contract (other than the Gulf LNG LLC Agreement), document or Permit to which
Seller is a party or to which Seller or its assets, including the Unconditioned Interest and the Conditioned Interest, are subject, and (ii) to the Knowledge of Seller (which for this purpose shall not include any obligation to make any inquiry
of any Person), conflict with or result in a breach, default or violation of, or require a Consent under, any Law, Order, Contract (other than the Gulf LNG LLC Agreement), document or Permit to which the Company is a party or to which the Company or
its assets are subject, (c) result in the creation of any Lien upon the Unconditioned Interest or the Conditioned Interest (except transfer restrictions under applicable securities Laws) or (d) require Seller or, to the Knowledge of Seller
(which for this purpose shall not include any obligation to make any inquiry of any Person), the Company, to obtain or make any Consent from or with any Person, other than the Gulf LNG Consent, except in the case of clauses (b), (c) or
(d) above, for any such breach, default, violation, or Consent that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
Section 2.5
Governmental Approvals
. Other than (a) such filings (if any) as may be necessary to obtain all applicable
Antitrust Consents and (b) such filings (if any) required by the applicable requirements of the Securities Act, the Exchange Act and state securities, takeover and blue sky Laws, and assuming the accuracy of the representations and
warranties of the Buyer Parties in
Section
4.4
, no Consents of or with any Governmental Authority are necessary in connection with the execution, delivery and performance of this Agreement by Seller and the Lightfoot
Entities and the consummation by Seller and the Lightfoot Entities of the transactions contemplated by this Agreement, except for any such Consents that, if not obtained, made or given,
D-6
would not, and would not reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect.
Section 2.6
Brokers
and Finders
. None of the Buyer Parties or any of their Subsidiaries will have any liability for any
brokerage fees, financial advisors fees, commissions or finders fees in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.
Section 2.7
No Material Adverse Effect
. Since December 31, 2016, to the Knowledge of Seller, there have not been any changes,
events, effects, occurrences, states of facts or developments that, individually or in the aggregate with all other changes, events, effects, occurrences, states of facts or developments, have had or would reasonably be expected to have an Material
Adverse Effect with respect to the Company.
Section 2.8
Legal Proceedings
. Other than the Gulf LNG Arbitration, there are no
Proceedings pending or, to the Knowledge of Seller, threatened against or affecting Seller or, to the Knowledge of Seller (which for this purpose shall not include any obligation to make any inquiry of any Person), pending or threatened or affecting
the Company or any of its Subsidiaries (including by virtue of indemnification or otherwise), or any director, manager, officer or employee (in his or her capacity as such) of Seller or, to the Knowledge of Seller (which for this purpose shall not
include any obligation to make any inquiry of any Person), of the Company or any of its Subsidiaries except for those that, individually or in the aggregate, if determined adversely against Seller or the Company and its Subsidiaries, taken as a
whole, would not reasonably be expected to result in a Material Adverse Effect. As of the date of this Agreement, neither Seller nor, to the Knowledge of Seller (which for this purpose shall not include any obligation to make any inquiry of any
Person), the Company, is a party to or subject to the provisions of any Order that, individually or in the aggregate, has resulted, or would reasonably be expected to result in a Material Adverse Effect.
Section 2.9
Acknowledgement by Seller
. Except for (a) the representations and warranties made by the Buyer Parties in this
Agreement, (b) the representations and warranties made by the Buyer Parties in any certificate required to be delivered under
Section
1.2(b)(ii)
and
Section
1.2(f)
and (c) the
representations made by the Buyer Parties in the Merger Agreement, neither Buyer Party, nor any other Person, is making or has made, and Seller is not relying on, and has not relied on, any other representations or warranties, either express or
implied, with respect to the transactions contemplated by this Agreement, the Buyer Parties, or on the accuracy or completeness of any information regarding the Buyer Parties or any other material furnished or provided to Seller, or made available
to Seller in any form, in expectation of, or in connection with, this Agreement or the transactions contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE LIGHTFOOT ENTITIES
Except as disclosed in any MLP SEC Documents filed by MLP with the SEC on or prior to the date of this Agreement (excluding any forward
looking disclosures set forth in any risk factor section, any disclosures in any section related to forward looking statements and any other disclosures included therein to the extent they are predictive or forward looking in nature), as of the date
of this Agreement, the First Closing Date and the Second Closing Date, if any, as applicable, the Lightfoot Entities jointly and severally hereby represent and warrant to the Buyer Parties as follows:
Section 3.1
Organization
. Each of LCP GP and LCP LP is a limited liability company or limited partnership, as applicable, duly
organized, validly existing and in good standing under the Laws of the State of Delaware and has all requisite limited liability company or limited partnership, as applicable, power to own, lease and operate all of its properties and assets and to
carry on its business as currently conducted, except where the failure to have such power or authority would not, and would not reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect. There are no
dissolution or bankruptcy Proceedings pending with respect to or contemplated by LCP GP or LCP LP.
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Section 3.2
Ownership
.
(a) LCP LP owns 100% of the limited liability company interests of Seller (the
Seller Interests
), free and clear of any and
all Liens (except transfer restrictions under applicable securities Laws).
(b) There are no outstanding Contracts or obligations binding
on LCP LP or any security holders of LCP LP with respect to the Seller Interests, including any Contract (i) restricting the transfer of, (ii) affecting the voting rights of, (iii) requiring the repurchase, redemption or disposition
of, or containing any right of first refusal with respect to, (iv) requiring any registration for sale of or (v) granting any preemptive or anti-dilutive rights with respect to, any portion of the Seller Interests.
Section 3.3
Authorization
. Each of the Lightfoot Entities has all requisite limited liability company or limited partnership power
and authority and has taken all necessary limited liability company or limited partnership action in order to execute and deliver this Agreement and the other agreements contemplated hereby to which it is or will be a party and to perform its
obligations hereunder and thereunder. The execution and delivery of this Agreement by the Lightfoot Entities and the performance of their respective obligations hereunder have been duly authorized and approved by all necessary limited liability
company or limited partnership action, as applicable, of the Lightfoot Entities. This Agreement has been duly executed and delivered by the Lightfoot Entities and constitutes the legal, valid and binding obligation of the Lightfoot Entities,
enforceable against the Lightfoot Entities in accordance with its terms, subject to the Bankruptcy and Equity Exception. At the First Closing and the Second Closing, as applicable, all documents required hereunder to be executed and delivered by the
Lightfoot Entities will have been duly authorized, executed and delivered by the Lightfoot Entities and, assuming due authorization, execution and delivery of such documents by any other parties thereto, will constitute legal, valid and binding
obligations of the Lightfoot Entities, enforceable against the Lightfoot Entities in accordance with their terms, subject to the Bankruptcy and Equity Exception.
Section 3.4
Noncontravention
. The execution and delivery by the Lightfoot Entities of this Agreement or any other documents
required hereunder to be executed and delivered by the Lightfoot Entities pursuant to this Agreement, and the consummation by the Lightfoot Entities of the transactions contemplated hereunder, will not (a) conflict with, violate or result in a
default under the certificate of formation or limited partnership of any of the Lightfoot Entities or the limited partnership agreement or limited liability company agreement of any of the Lightfoot Entities, or entitle any Person to exercise any
preferential purchase right, option to purchase or similar right with respect to the Unconditioned Interest or, subject to
Section
5.7
, the Conditioned Interest, (b) conflict with or result in a breach, default or
violation of, or require a Consent under, any Law, Order, Contract, document or Permit to which the Lightfoot Entities or Seller is a party or to which any of the Lightfoot Entities or Seller or their respective assets, including the Unconditioned
Interest and the Conditioned Interest, are subject, (c) result in the creation of any Lien (other than a Permitted Lien) upon the Unconditioned Interest or the Conditioned Interest (except transfer restrictions under applicable securities Laws)
or (d) require the Lightfoot Entities or Seller to obtain or make any Consent from or with any Person, other than the Gulf LNG Consent.
Section 3.5
Gulf LNG Arbitration Status
. As of the date of this Agreement and to the Knowledge of Seller, no award has been
rendered in the Gulf LNG Arbitration. As of the date of this Agreement, neither the Seller nor the Lightfoot Entities are aware of information that would give them a reasonable basis to believe that the disclosures set forth in the MLP SEC Documents
with respect to the Gulf LNG Arbitration are no longer true. None of Seller, the Lightfoot Entities, any of their respective Affiliates or, to the Knowledge of Seller (which for this purpose shall not include any obligation to make any inquiry of
any Person), the Company, have taken any action that would materially defer or delay a determination of an outcome with respect to the Gulf LNG Arbitration, and none of Seller, the Lightfoot Entities or any of their Affiliates will take any action
that would have such effect prior to the determination of an outcome with respect to the Gulf LNG Arbitration.
Section 3.6
Brokers and Finders
. As of the date of this Agreement, none of the Lightfoot Entities or any of their respective Affiliates has employed any broker or finder other than the Seller Financial Advisor, or incurred
D-8
any liability for any brokerage fees, commissions or finders fees payable by the Company, the Buyer Parties or any of their Subsidiaries in connection with the transactions contemplated by
this Agreement other than fees payable to the Seller Financial Advisor.
Section 3.7
Acknowledgement by the Lightfoot
Entities
. Except for (a) the representations and warranties made by the Buyer Parties in this Agreement, (b) the representations and warranties made by the Buyer Parties in any certificate required to be delivered under
Section
1.2(b)(ii)
and
Section
1.2(f)
and (c) the representations made by the Buyer Parties in the Merger Agreement, neither Buyer Party, nor any other Person, is making or has made, and none
of the Lightfoot Entities is relying on, or has relied on, any other representations or warranties, either express or implied, with respect to the transactions contemplated by this Agreement, the Buyer Parties, or on the accuracy or completeness of
any information regarding the Buyer Parties or any other material furnished or provided to the Lightfoot Entities, or made available to the Lightfoot Entities in any form, in expectation of, or in connection with, this Agreement or the transactions
contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES
As of the date of this Agreement, the First Closing Date and the Second Closing Date, if any, as applicable, the Buyer Parties jointly and
severally hereby represent and warrant to Seller as follows:
Section 4.1
Organization
. Each of the Buyer Parties is a limited
liability company or limited partnership duly organized, validly existing and in good standing under the Laws of the State of Delaware. Each of the Buyer Parties has all requisite limited liability company or limited partnership, as applicable,
power and authority to own, lease or otherwise hold, use and operate its properties, rights and other assets and to carry on its business as currently conducted, except where the failure to have such power or authority, individually or in the
aggregate, would not, and would not reasonably be expected to result in a Material Adverse Effect. Each of the Buyer Parties is duly qualified or licensed to do business and is in good standing (with respect to jurisdictions that recognize that
concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its assets, properties or the conduct of its business makes such qualification, licensing or good standing necessary, other than where the
failure to be so qualified, licensed or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.
Section 4.2
Authorization
. Each of the Buyer Parties has all requisite limited liability company or limited partnership power and
authority and has taken all necessary limited liability company or limited partnership action in order to execute and deliver this Agreement and the other agreements contemplated hereby to which it is or will be a party and to perform its
obligations hereunder and thereunder. The execution and delivery of this Agreement by the Buyer Parties and the performance of their respective obligations hereunder has been duly authorized and approved by all necessary limited liability company or
limited partnership action, as applicable, of the Buyer Parties. This Agreement has been and any other agreements contemplated hereby, when executed, will be duly executed and delivered by each of the Buyer Parties and constitutes a valid and
binding agreement of the Buyer Parties, enforceable against each of the Buyer Parties in accordance with its terms, subject to the Bankruptcy and Equity Exception.
Section 4.3
Noncontravention
. The execution, delivery and performance of this Agreement by any of the Buyer Parties does not, and
the consummation by any of the Buyer Parties of the transactions contemplated hereunder will not (with or without notice or lapse of time, or both), constitute or result in (a) a breach or violation of, or a default under, or conflict with the
certificate of formation, limited liability company agreement or limited partnership agreement or other comparable organizational documents of any of the Buyer Parties (b) with or without notice or lapse of time, or both, a breach or violation
of, a termination (or right of termination), modification, cancellation, creation or acceleration of any obligation, loss of a benefit under, default under, or the creation of a Lien, other than a Permitted Lien, on any of the assets of any of the
Buyer
D-9
Parties or any of their respective Subsidiaries pursuant to any Contract or Permit to which any of the Buyer Parties or any of their Subsidiaries is a party or by which they or any of their
respective properties or assets may be bound or affected or (c) a violation or conflict under any Law to which any of the Buyer Parties or any of their Subsidiaries, or any of their respective properties or assets, is subject, except, in the
case of
clauses
(b)
or
(c)
above, for any such breach, violation, termination, modification, cancellation, creation, acceleration, loss or default that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
Section 4.4
Governmental Filings
. Other than (a) filings required pursuant
to the HSR Act in connection with the transactions contemplated by the Merger Agreement and the termination or expiration of the waiting period required thereunder, (b) such filings as may be necessary to obtain the receipt, termination or
expiration, as applicable, of approvals or waiting periods required under all other applicable Antitrust Laws, (c) filings required by the applicable requirements of the Securities Act, the Exchange Act and state securities, takeover and
blue sky Laws, and assuming the accuracy of the representations and warranties in
Section
2.5
, no Consents of or with any Governmental Authority are necessary in connection with the execution, delivery and
performance of this Agreement by the Buyer Parties and the consummation by the Buyer Parties of the transactions contemplated by this Agreement, except for any such Consents that, if not obtained, made or given, individually or in the aggregate,
would not, or would not reasonably be expected to have, a Material Adverse Effect.
Section 4.5
Consents and Approvals
. Except
(a) as have been waived or obtained as of the First Closing Date and the Second Closing Date (if any), as applicable, or (b) would not reasonably be expected to prevent or materially delay the consummation of the transactions contemplated
by this Agreement, neither the Buyer Parties execution and delivery of this Agreement or any other documents required hereunder to be executed and delivered by either of the Buyer Parties pursuant to this Agreement, nor the Buyer Parties
performance of their obligations hereunder or thereunder, requires the consent, approval, waiver or authorization of, or filing, registration or qualification with, any Governmental Authority or any other Person.
Section 4.6
Brokers and Finders
. Except for Barclays Bank PLC and Credit Suisse AG, the fees and expenses of each of which will be
paid by the Buyer Parties, none of the Buyer Parties or any of their Subsidiaries has employed any broker or finder, or incurred any liability for any brokerage fees, commissions or finders fees payable by the Lightfoot Entities, Seller or any
of their respective Subsidiaries in connection with the transactions contemplated by this Agreement based on Contracts made by or on behalf of any Buyer Party.
Section 4.7
Investment Intent; Investment Experience; Restricted Securities
. Each of the Buyer Parties acknowledges that it can
bear the economic risk of its investment in the Unconditioned Interest and the Conditioned Interest (if acquired pursuant to this Agreement), as applicable, and has such knowledge and experience in financial and business matters that it is capable
of evaluating the merits and risks of an investment in the Unconditioned Interest and the Conditioned Interest, as applicable. Each of the Buyer Parties is an accredited investor as such term is defined in Regulation D under the
Securities Act. Each of the Buyer Parties understands that neither the Unconditioned Interest nor the Conditioned Interest will have been registered pursuant to the Securities Act or any applicable state securities Laws, that the Unconditioned
Interest and the Conditioned Interest may be characterized as restricted securities under federal securities Laws and that under such Laws and applicable regulations the Unconditioned Interest and the Conditioned Interest may not be
permitted to be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom.
Section 4.8
Legal Proceedings
. There are no Proceedings pending or, to the Knowledge of the Buyer Parties, threatened against or affecting the Buyer Parties or any of their Subsidiaries (including by virtue of indemnification or otherwise), or any
director, manager, officer or employee (in his or her capacity as such) of the Buyer Parties or any of their Subsidiaries, except for those that, individually or in the aggregate, if determined adversely to the Buyer Parties would not reasonably be
expected to result in a Material Adverse Effect. As of the date of this Agreement, each of the Buyer Parties is not a party to or subject to the provisions of
D-10
any Order that, individually or in the aggregate, has resulted, or would reasonably be expected to result in a Material Adverse Effect.
Section 4.9
Acknowledgement by the Buyer Parties
. Except for (a) the representations and warranties made by Seller or the
Lightfoot Entities in this Agreement, (b) the representations and warranties made by Seller or the Lightfoot Entities in any certificate required to be delivered under
Section
1.2(a)(ii)
,
Section
1.2(a)(iii)
,
Section
1.2(e)(i)
and
Section
1.2(e)(ii)
and (c) the representations made by the Lightfoot Entities in Article IV of the Merger Agreement,
neither Seller nor the Lightfoot Entities, or any other Person is making or has made, and neither of the Buyer Parties is relying on, or has relied on, any other representations or warranties, either express or implied, with respect to the
transactions contemplated by this Agreement, Seller, the Lightfoot Entities, or the Company or their businesses, operations, assets, liabilities, financial condition, results of operations, future operating or financial results, estimates,
projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects), or on the accuracy or completeness of any information regarding Seller, the Lightfoot
Entities or the Company or any other material furnished or provided to the Buyer Parties or made available to the Buyer Parties in any form, in expectation of, or in connection with, this Agreement or the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS
Section 5.1
Further Assurances
. Upon the request of any Party at any time on or after the First Closing Date or the Second Closing
Date, if any, as applicable, the other Parties will promptly execute and deliver such further instruments of assignment, transfer, conveyance, endorsement, direction or authorization and other documents as the requesting Party or its counsel may
reasonably request in order to perfect title of Buyer and its successors and assigns to the Unconditioned Interest and/or the Conditioned Interest (if acquired pursuant to this Agreement), as applicable, or otherwise to effectuate the purposes of
this Agreement.
Section 5.2
Press Releases
. Each Party will not, and will cause its Representatives not to, issue any public
announcements or make other public disclosures regarding this Agreement, without the prior written approval of each of the Parties;
provided
,
however
, that a Party or its Representatives or, in the case of Seller and the Lightfoot
Entities, Arc Logistics Partners LP, may issue a public announcement or other public disclosures required by Law or the rules of any stock exchange upon which such Partys or its parent entitys capital stock is traded or upon which
Arc Logistics Partners LPs units are traded,
provided
such Party (including the Lightfoot Entities, in the case of disclosures by Arc Logistics Partners LP) uses reasonable best efforts to afford the other Parties an
opportunity to first review the content of the proposed disclosure and provide reasonable comment regarding the same.
Section 5.3
Access to Information; Confidentiality
.
(a) Upon reasonable notice and subject to applicable Laws relating to the exchange of
information, each of Seller and the Lightfoot Entities will (i) afford the Buyer Parties and their Representatives reasonable access (and, with respect to books and records, the right to copy), during normal business hours, to their respective
officers, employees, agents, books, offices, Contracts, Tax Returns, Permits and records and other information reasonably requested by either Buyer Party relating to the Unconditioned Interest or the Conditioned Interest (in each case, whether in
physical or electronic form), (ii) furnish promptly during normal business hours such information concerning the business, properties, offices, facilities, Contracts, Tax Returns, Permits, assets and liabilities of the Company (to the extent in the
possession of Seller or the Lightfoot Entities or reasonably obtainable by Seller or the Lightfoot Entities) that relate to the Unconditioned Interest or the Conditioned Interest as the Buyer Parties or their Representatives reasonably request and
(iii) use reasonable best efforts to furnish or produce information related to the financial or Tax records of the Company or Seller (to the extent in the possession of Seller or the Lightfoot Entities or reasonably obtainable by Seller or the
Lightfoot Entities) relating
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to the Unconditioned Interest or the Conditioned Interest if reasonably requested by either Buyer Party (which, for purposes of this Section 5.3, will be deemed to be furnished or produced
upon Seller and the Lightfoot Entities entering into an engagement with their regular external advisors to furnish such information to such Buyer Party);
provided, however
, that the foregoing will not require the Lightfoot Entities or Seller
(i) to permit any inspection, or to disclose any information, that in the reasonable judgement of the Lightfoot Entities (after consultation with its outside legal counsel) would (A) result in the disclosure of any trade secrets of third
parties or violate any of its obligations with respect to confidentiality or (B) result in a violation of any Antitrust Laws, (ii) to disclose any privileged information of the Lightfoot Entities, Seller or the Company to the extent such
disclosure would result in the loss of such privilege (in each case, it being agreed that the Lightfoot Entities shall give notice to Buyer of the fact that it is withholding such access or information) or (iii) to disclose any information of
the Company that is not permitted under the Gulf LNG LLC Agreement or any other agreement to which it or any Subsidiary thereof is a party.
(b) Except for disclosures permitted by the terms of the Confidentiality Agreement, the Buyer Parties and their Representatives will hold all
information received from Seller or the Lightfoot Entities pursuant to this
Section
5.3
in confidence in accordance with the terms of the Confidentiality Agreement.
Section 5.4
Tax Matters
. The Parties shall use commercially reasonable efforts to cause the Company to have a valid election in
effect under Section 754 of the Code for any taxable period of the Company that includes the dates of the First Closing and the Second Closing (if the Second Closing occurs pursuant to this Agreement).
Section 5.5
Releases
. Effective as of the Second Closing (unless this Agreement terminates by its terms without the Second Closing
having occurred, in which case effective as of the First Closing), Seller and the Lightfoot Entities, on each of their own behalf and on behalf of their respective Affiliates and their respective successors and assigns (the
Seller Releasing
Parties
), hereby unconditionally and irrevocably releases and waives any claims that such Seller Releasing Party has or may in the future have, in its capacity as an equity holder, member, manager, director, officer, employee or similar
capacity, against the Company or any of its directors, managers, officers, employees or equity holders, in each case, arising out of, resulting from or relating to actions, omissions, facts or circumstances occurring, arising or existing at or prior
to the First Closing or the Second Closing, if any, as applicable;
provided
,
however
, that nothing in this
Section
5.5
shall limit or otherwise affect the right of the Buyer Parties or any of their respective
Affiliates to make any claims with respect to the Unconditioned Interest (from and after the First Closing) or the Conditioned Interest (from and after the Second Closing), whether or not such claim arose prior to, at or after the First Closing or
Second Closing, as applicable.
Section 5.6
Fees and Expenses
. All fees and expenses incurred in connection with the
transactions contemplated by this Agreement, including all legal, accounting, financial advisory, consulting and all other fees and expenses of third parties incurred by a Party in connection with the negotiation and effectuation of the terms and
conditions of this Agreement and the transactions contemplated hereunder, will be the obligation of the respective Party incurring such fees and expenses.
Section 5.7
Gulf LNG Outcome
. Notwithstanding anything in this Agreement to the contrary, in the event that the GLNG Arbitration
Condition becomes not capable of being satisfied in accordance with the terms of this Agreement, Buyer shall have a period of 30 days following the date of such
non-satisfaction
to elect to proceed with the
Second Closing by delivering an irrevocable waiver to Seller and the Lightfoot Entities of GLNG Arbitration Condition. During such
30-day
period, if Buyer (i) does not deliver a waiver to Seller and the
Lightfoot Entities of the GLNG Arbitration Condition or (ii) notifies Seller or the Lightfoot Entities that it does not wish to proceed with the Second Closing, Seller and the Lightfoot Entities shall have no further obligation under this
Agreement with respect to the Conditioned Interest or to consummate the Second Closing (and for the avoidance of doubt, shall be free to sell, assign, transfer, convey or otherwise dispose of the Conditioned Interest to any Person in its or their
sole discretion).
Section 5.8
Gulf LNG Distributions
. Subject to Buyers right to receive all or a portion of any
Ordinary Course Distributions in accordance with
Section
1.3(d)
, all Ordinary Course Distributions made or to be made by
D-12
the Company in respect of (a) the Unconditioned Interest to the extent attributable to (i) any quarter that ends prior to the First Closing Date and (ii) the pro rata portion
(based on the number of days in the relevant quarter prior to the First Closing Date) of the quarter in which the First Closing Date occurs and (b) the Conditioned Interest to the extent attributable to (i) any quarter that ends prior to
the Second Closing Date (if any) and (ii) the pro rata portion (based on the number of days in the relevant quarter prior to the Second Closing Date (if any)) of the quarter in which the Second Closing Date occurs, shall accrue for the benefit
of, and are hereby allocated to, Seller, and, if received by Buyer after the applicable Closing, then Buyer shall pay and deliver to Seller, by wire transfer of immediately available funds to an account specified by Seller, all amounts so received
by Buyer in respect of the distributions so allocated to Seller pursuant to this
Section
5.8
not later than three Business Days following receipt of any such funds by Buyer.
Section 5.9
Gulf LNG LLC Agreement
. None of Seller or any of the Lightfoot Entities will consent to any amendment or modification
of the Gulf LNG LLC Agreement during the period beginning on the date hereof and ending on the later of (i) the First Closing Date and (ii) the first date on which the conditions to the respective obligations of the Parties to effect the
Second Closing are not capable of being satisfied in accordance with the terms of this Agreement or, if a Second Closing occurs, the Second Closing Date.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1
Conditions To Each Party
s Obligation to Effect the First Closing and the Second Closing
. The
respective obligations of each Party hereto to effect the First Closing and the Second Closing (if any), respectively, will be subject to the satisfaction (or waiver by all Parties, if permissible under applicable Law) on or prior to the First
Closing Date (whether in a Separate Closing or as part of a Dual Closing), and, as applicable, the Second Closing Date, if any, respectively, of the following conditions:
(a) No Law or Order enacted, promulgated, issued, entered, amended or enforced by any Governmental Authority (collectively,
Restraints
) shall be pending or in effect enjoining, restraining, preventing or prohibiting consummation of any of the transactions contemplated by this Agreement or making the consummation of any of the transactions contemplated
by this Agreement illegal.
(b) The Closing (as defined in the Merger Agreement) of the transactions contemplated by the
Merger Agreement shall have occurred, or shall occur simultaneously with the First Closing (whether in a Separate Closing or as part of a Dual Closing).
Section 6.2
Conditions to Obligations of the Buyer Parties
. The obligations of the Buyer Parties to consummate the First Closing
and the Second Closing, respectively, are further subject to the satisfaction or waiver by the Buyer Parties (such waiver to be within their sole discretion), if permissible under applicable Law, on or prior to the First Closing Date (whether in a
Separate Closing or as part of a Dual Closing), and, as applicable, the Second Closing Date, if any, respectively, of the following conditions:
(a) (i) The representations and warranties of Seller and the Lightfoot Entities contained in
Section
2.1
(Organization),
Section
2.2(a)
and Section 2.2(c) (Capitalization of the Company),
Section
2.3
(Authorization),
clause (a)
of
Section
2.4
(Noncontravention),
Section
2.6
(Brokers and Finders),
Section
3.1
(Organization),
Section
3.2
(Ownership),
Section
3.3
(Authorization),
clause
(a)
of
Section
3.4
(Noncontravention) and
Section
3.6
(Brokers and Finders) are true and correct, except for any
de minimis
inaccuracies and (ii) the
other representations and warranties of Seller and the Lightfoot Entities contained in Article II (Representations and Warranties of Seller and the Lightfoot Entities) and of the Lightfoot Entities contained in Article III (Representations and
Warranties of the Lightfoot Entities) are true and correct, in each of
clauses (i)
and
(ii)
, as of the date of this Agreement and as of the First Closing Date and the Second Closing Date (if any) (provided that the representations
and warranties set forth in
Section
2.7
(No Material Adverse Effect),
Section
2.8
(Legal Proceedings), and
Section
3.5
(Gulf LNG Arbitration Status) need only be true and
correct, in each case as
D-13
qualified by the remainder of this
Section
6.2(a)
, as of the date of this Agreement and as of the First Closing), as applicable, as if made as of such time (except to
the extent expressly made as of an earlier date, in which case as of such date), except, in the case of
clause
(ii)
, where the failure of such representations and warranties to be so true and correct (without giving effect
to any limitation as to materiality or Material Adverse Effect set forth in any individual such representation or warranty) would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect.
(b) Seller and the Lightfoot Entities shall have performed all obligations that are required to be performed by them under this
Agreement at or prior to the First Closing Date and the Second Closing Date, if any, as applicable, in all material respects.
(c) Seller
and the Lightfoot Entities shall have delivered or caused to be delivered (or be ready, willing and able to deliver at the First Closing and the Second Closing, if any, as applicable) to the Buyer Parties the documents and other items required to be
delivered by Seller under
Section
1.2(a)
,
Section
1.2(c)
and
Section
1.2(e)
, as applicable.
(d) Solely with respect to the Second Closing (if any), unless waived by the Buyer Parties, one of the following conditions shall have been
satisfied not later than twelve months after the First Closing (collectively, the
GLNG Arbitration Condition
):
(i) the Company shall have obtained a Gulf LNG Outcome that is a Successful Outcome as a result of a mutually agreed settlement
by the parties involved in the Gulf LNG Arbitration;
(ii) (x) the Company shall have obtained a Gulf LNG Outcome that
is a Successful Outcome as a result of a final award by the arbitration tribunal in the Gulf LNG Arbitration and (y) during the
90-day
period following the date such final award was issued, there shall
not have been duly filed with a court of competent jurisdiction a motion to vacate the award constituting the Successful Outcome; or
(iii) (x) the Company shall have obtained a Gulf LNG Outcome that is a Successful Outcome as a result of a final award by
the arbitration tribunal in the Gulf LNG Arbitration and (y) as of the date that is twelve months after the First Closing, none of the following has occurred as a result of an arbitration award or court order that is part of, or results from,
the Gulf LNG Arbitration (or any settlement thereof by the parties thereto):
(A) any amendments to the Eni Contract that
are adverse to the Company;
(B) the Eni Contracts ceasing to remain in effect as it exists prior to the Successful
Outcome (except for such amendments that do not adversely affect the Company); or
(C) the payment, or award, of aggregate
damages to ENI by or from the Company of $25,000,000 or greater.
The condition set forth in
Section
6.2(d)(iii)
shall be deemed to be satisfied on the first date that it can be determined that no event set forth in
clause
(A)
,
(B)
or
(C)
can occur on or prior to the date that is twelve months after the First
Closing as a result of an arbitration award or judicial proceeding that is part of, or results from, the Gulf LNG Arbitration (or any settlement thereof by the parties thereto). Notwithstanding the foregoing provisions of this
clause (iii)
,
if a motion to vacate such arbitration award is granted by a court of competent jurisdiction on or prior to the date that is twelve months after the First Closing, then the GLNG Arbitration Condition shall be satisfied pursuant to this
clause
(iii)
only if (x) the court order granting such motion to vacate has been overturned on appeal on or prior to the date that is twelve months after the First Closing or (y) a subsequent arbitration award is issued that satisfies the requirements
of Successful Outcome on or prior to the date that is twelve months after the First Closing and, in either case, such appeal or subsequent arbitration award has itself not been superseded by another arbitration award or court order that
results in the occurrence of an event described in
clause (A)
,
(B)
or
(C)
of the immediately preceding sentence on or prior to the date that is twelve months after the First Closing.
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Section 6.3
Conditions Precedent to Obligations of Seller and the Lightfoot Entities
.
The obligations of Seller and the Lightfoot Entities to consummate the First Closing and the Second Closing (if any), respectively, are further subject to the satisfaction or waiver by Seller and LCP GP (such waiver to be within their sole
discretion), if permissible under applicable Law, on or prior to the First Closing Date (whether in a Separate Closing or as part of a Dual Closing), and, as applicable, the Second Closing Date, if any, respectively, of the following conditions:
(a) (i) The representations and warranties of the Buyer Parties contained in
Section
4.1
(Organization),
Section
4.2
(Authorization),
Section
4.3
(Noncontravention) and
Section
4.6
(Brokers and Finders) are true and correct, except for any
de minimis
inaccuracies and
(ii) the other representations and warranties of the Buyer Parties contained in
Article IV
(Representations and Warranties of the Buyer Parties) are true and correct, in each of
clauses
(i)
and
(ii)
, as
of the date of this Agreement and as of the First Closing Date and the Second Closing Date (if any), as applicable, as if made as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the
case of
clause
(ii)
, where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth
in any individual such representation or warranty) would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) The Buyer Parties shall have performed all obligations that are required to be performed by them under this Agreement at or prior to the
First Closing Date and the Second Closing Date, if any, as applicable, in all material respects.
(c) The Buyer Parties shall have
delivered or caused to be delivered (or be ready, willing and able to deliver at the First Closing and the Second Closing, if any, as applicable) to Seller the documents and other items required to be delivered by Buyer under
Section
1.2(b)
,
Section
1.2(d)
and
Section
1.2(f)
, as applicable.
(d) (i) With respect to the First Closing, the Buyer Parties shall have delivered or caused to be delivered an instrument, in form and
substance reasonably acceptable to Seller, assuming Sellers obligations and liabilities as a guarantor solely with respect to the ownership of the Unconditioned Interest under the FEED Guarantee and indemnifying Seller for any liabilities
thereunder attributable to the ownership of the Unconditioned Interest, and (ii) with respect to the Second Closing (if any), the Buyer Parties shall have delivered or caused to be delivered an instrument, in form and substance reasonably
acceptable to Seller, assuming Sellers obligations and liabilities as a guarantor solely with respect to the ownership of the Conditioned Interest under the FEED Guarantee and indemnifying Seller for any liabilities thereunder attributable to
the ownership of the Conditioned Interest.
ARTICLE VII
Termination, Amendment and Waiver
Section 7.1
Termination
. This Agreement may be terminated and the transactions contemplated hereby abandoned (the date of any
permitted termination of this Agreement under this
Section
7.1
, the
Termination Date
) at any time prior to the First Closing in the following manner:
(a) automatically without any further action by any Party if the Merger Agreement is validly terminated pursuant to its terms; or
(b) by the mutual prior written consent of Buyer and Seller.
Section 7.2
Effect of Termination
. In the event of the termination of this Agreement as provided in
Section
7.1
, written notice thereof will be given to the other Party or Parties, specifying the provision of this Agreement pursuant to which such termination is made, and this Agreement will become null and void (other
than the provisions in
Section
5.6
(Fees and Expenses) and this
Section
7.2
and in
Section
5.3(b)
(Confidentiality), and the provisions in
D-15
Article IX
(Miscellaneous), all of which will survive termination of this Agreement). Upon termination pursuant to this
Article VII
, there will be no liability on the part of any
Party or their respective directors, managers, officers and Affiliates;
provided
,
however
, the foregoing will not relieve any Party for any liability for a breach of this Agreement occurring prior to such termination or for actual
fraud arising out of or relating to this Agreement.
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
Section 8.1
Survival
. The respective representations and warranties of the Parties contained in this Agreement shall survive the
First Closing Date until the later of (i) the date that is twelve (12) months following the First Closing Date and (ii) in the event that the Second Closing is consummated, the date that is twelve (12) months following the Second
Closing Date, except that the representations and warranties contained in
Section
2.1
(Organization),
Section
2.2(a)
and
Section
2.2(c)
(Capitalization of the Company),
Section
2.3
(Authorization), clause (a) of
Section
2.4
(Noncontravention),
Section
2.6
(Brokers and Finders),
Section
3.1
(Organization),
Section
3.2
(Ownership),
Section
3.3
(Authorization), clause (a) of
Section
3.4
(Noncontravention),
Section
3.6
(Brokers and Finders),
Section
4.1
(Organization),
Section
4.2
(Authorization),
Section
4.3
(Noncontravention) and
Section
4.6
(Brokers and Finders) shall survive until
the expiration of the applicable statute of limitations following the First Closing Date or the Second Closing Date, as applicable. Subject to
Section
5.7
, all of the covenants and other agreements of the Parties contained
in this Agreement that must be performed (a) between the date of this Agreement and the First Closing or the Second Closing, if any, as applicable, shall survive until the first anniversary of the First Closing or the Second Closing, if any, as
applicable, or (b) after the First Closing or the Second Closing, if any, as applicable, shall survive in accordance with their terms and until fully performed or otherwise waived. Notwithstanding the foregoing, any representation, warranty or
covenant in respect of which indemnity may be sought under
Section
8.2
, and the indemnity with respect thereto, shall survive the time at which it would otherwise terminate pursuant to this
Section
8.1
if notice of the misrepresentation or breach thereof giving rise to such right or alleged right of indemnity shall have been given to the Party against whom such indemnity may be sought prior to such time.
Section 8.2
Indemnification
.
(a) From and after the First Closing and the Second Closing, as applicable, each Buyer Indemnified Party shall be jointly and severally
indemnified and held harmless by Seller and the Lightfoot Entities for any Damages that a Buyer Indemnified Party incurs by reason of or arising in connection with:
(i) any misrepresentation or breach of any representation or warranty set forth in
Article II
or
Article III
of
this Agreement or in the certificate delivered pursuant to
Section
1.2(a)(ii)
,
Section
1.2(a)(iii)
,
Section
1.2(e)(i)
or
Section
1.2(e)(ii)
, as
applicable; or
(ii) any breach or
non-fulfillment
of any covenant or agreement of
Seller or the Lightfoot Entities under this Agreement.
(b) From and after the First Closing and the Second Closing, if any, as
applicable, each Seller Indemnified Party shall be indemnified and held harmless by the Buyer Parties for any Damages that a Seller Indemnified Party incurs by reason of or arising in connection with:
(i) any misrepresentation or breach of any representation or warranty set forth in
Article IV
of this Agreement or in
the certificate delivered pursuant to
Section
1.2(b)(ii)
or
Section
1.2(f)
, as applicable; or
(ii) any breach or
non-fulfillment
of any covenant or agreement of any of the Buyer
Parties under this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement, none of the Buyer Parties, Seller, or the
Lightfoot Entities shall be liable for any claim for indemnification pursuant to
Section
8.2(a)(i)
or
Section
8.2(b)(i),
D-16
as applicable, unless and until the aggregate amount of Damages which may be recovered from the Buyer Parties, Seller, or Lightfoot Entities, as applicable, equals or exceeds an amount equal to
one percent (1%) multiplied by the sum of (i) the Initial Purchase Price plus (ii) if previously paid by Buyer, the Secondary Purchase Price (the
Deductible
), in which case the Buyer Parties, Seller, or the Lightfoot
Entities, as applicable, shall only be liable for the aggregate amount of Damages in excess of the Deductible; provided, that the maximum aggregate amount of indemnifiable Damages which may be recovered for indemnification pursuant to
Section
8.2(a)(i)
or
Section
8.2(b)(i)
, as applicable, shall be an amount equal to ten percent (10%) multiplied by the sum of (i) the Initial Purchase Price plus (ii) if previously paid
by Buyer, the Secondary Purchase Price (the
Cap
). Notwithstanding anything herein to the contrary, the limitations set forth in this
Section
8.2
shall not apply to any Damages incurred by any Buyer
Indemnified Party or Seller Indemnified Party, as applicable, (i) in connection with or arising from any breach of any representation or warranty in
Section
2.1
(Organization),
Section
2.2(a)
and
Section
2.2(c)
(Capitalization of the Company),
Section
2.3
(Authorization), clause (a) of
Section
2.4
(Noncontravention),
Section
2.6
(Brokers and Finders),
Section
3.1
(Organization),
Section
3.2
(Ownership),
Section
3.3
(Authorization), clause (a) of
Section
3.4
(Noncontravention),
Section
3.6
(Brokers and Finders),
Section
4.1
(Organization),
Section
4.2
(Authorization),
Section
4.3
(Noncontravention) or
Section
4.6
(Brokers and Finders), or (ii) to the extent attributable to actual fraud by Seller, which indemnifiable Damages shall be limited to the amount of the Initial Purchase Price plus, if
previously paid by Buyer, the Secondary Purchase Price;
provided
,
however
, no Party shall be liable for, in any form or amount, punitive, exemplary, consequential, indirect or special damages in connection with this Agreement except,
in each case, that this
Section
8.2(c)
shall not limit any Indemnitees rights to recovery under this
Article VIII
for any direct damages or any damages owed to third parties in connection with a matter with
respect to which such Indemnitee is otherwise entitled to indemnification under this
Article VIII
.
Section 8.3
Claims
.
(a) Any Buyer Indemnified Party or Seller Indemnified Party making a claim for indemnification under this
Article VIII
(an
Indemnitee
) shall notify the indemnifying party (an
Indemnitor
) of the claim in writing after receiving written notice of any Proceeding or other claim against it (if by a third party), describing in reasonable
detail the claim, the amount thereof (if known and quantifiable), and the basis thereof;
provided
, that the failure to so notify an Indemnitor shall not relieve an Indemnitor of its obligations hereunder, except to the extent that an
Indemnitors forfeit rights or defenses are actually prejudiced thereby. The Indemnitor shall have 30 calendar days from the date upon which the Indemnitor received the claim notice within which to notify the Indemnitee that the Indemnitor
desires to assume the defense or prosecution of and any litigation resulting from such Proceeding or other claim giving rise to the Indemnitees claim for indemnification with counsel reasonably acceptable to the Indemnitee and at the
Indemnitors expense;
provided
, that (i) the Indemnitee shall be entitled to participate in the defense of such claim and to employ counsel of its choice for such purpose;
provided
further
that the fees and expenses of
such separate counsel shall be borne entirely by the Indemnitee; (ii) the Indemnitor shall not be entitled to assume control of such defense if (A) the claim for indemnification relates to or arises in connection with any criminal
proceeding, (B) the claim primarily seeks an injunction or other equitable relief against an Indemnitee or (C) an adverse determination with respect to such Proceeding or other claim would be materially detrimental to or materially injure
the reputation or future business prospects of an Indemnitee; and (iii) if the Indemnitor shall control the defense or prosecution of any such Proceeding or other claim, such Indemnitor shall obtain the prior written consent of the Indemnitee
(which shall not be unreasonably withheld, conditioned or delayed) before entering into any settlement of a claim;
provided
,
however
, an Indemnitor may settle or consent to the entry of judgment in respect of such claim without the
consent of the Indemnitee, if such settlement or judgment is solely for money damages, includes an unconditional release of the Indemnitee from any further liability in respect of such Proceeding or other claim and does not contain any admission of
wrongdoing on the part of the Indemnitee. If the Indemnitor does not assume the defense of such Proceeding or other claim within 30 days of receipt of the Indemnitees notice thereof, the Indemnitee will be entitled to assume such defense, at
its sole cost and expense (or, if the Indemnitee incurs Damages with respect to the matter in question for which the Indemnitee is entitled to indemnification pursuant to this
Article VIII
, at the expense of
D-17
the Indemnitor), upon delivery of notice to such effect to the Indemnitor;
provided
,
however
, that the Indemnitor shall have the right to participate in the defense of the
Proceeding or other claim at its sole cost and expense.
(b) Any amounts owing under this
Article VIII
shall be made (without
interest) by wire transfer of immediately available funds within three Business Days after the earlier of (i) the agreement of the Buyer Parties, on the one hand, and Seller and the Lightfoot Entities, on the other hand, that such amounts are
due and owing by such Party as an Indemnitor in respect thereof or (ii) the final, binding determination that such amounts are due and owing by such Party as an Indemnitor in respect thereof by a court of competent jurisdiction.
Section 8.4
Exclusive Remedy
. After the First Closing, with respect to any indemnifiable matters arising in connection with the
First Closing, and after the Second Closing (if any), with respect to all indemnifiable matters, in each case except in the case of actual fraud, each Party acknowledges that the indemnification obligations of the Parties set forth in
Article
VIII
are the sole and exclusive remedy of the Buyer Parties and their respective Affiliates against Seller and the Lightfoot Entities, on the one hand, and of Seller, the Lightfoot Entities and their respective Affiliates against the Buyer
Parties, on the other hand, with respect to this Agreement and the transactions contemplated hereby, whether asserted against Seller, the Lightfoot Entities or any of the Buyer Parties, as applicable, or their respective former, current and future
holders of any equity, partnership or limited liability company interest, controlling persons, directors, officers, employees, agents, attorneys, Affiliates, members, managers, general or limited partners, stockholders or assignees. In furtherance
of the foregoing, each of Seller, the Lightfoot Entities and the Buyer Parties hereby waives, from and after the First Closing and the Second Closing, as applicable, to the fullest extent permitted under applicable Law, any and all rights, claims
and causes of action it may have relating to the subject matter of this Agreement based upon predecessor or successor liability, contribution, tort, strict liability or any Law or otherwise, in each case except in the case of actual fraud.
Section 8.5
Tax Treatment of Indemnity Payments
. Each Party, to the extent permitted by applicable Law, agrees to treat any
payments made pursuant to this
Article VIII
as adjustments to the Initial Purchase Price, the Secondary Purchase Price or both, as applicable, in each case for all federal and state income and franchise Tax purposes.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1
Amendment or Modification
. This Agreement may be amended or modified in any and all respects by written agreement of
the Parties;
provided
,
however
, that this
Section
9.1
,
Section
9.2
,
Section
9.5
,
Section
9.6
, and
Section
9.11
(and any other provision of this Agreement to the extent an amendment, supplement, waiver or other modification of such provision would modify the substance of such Sections) will not be amended in a manner
that is adverse to any Debt Financing Source without the prior written consent of such Debt Financing Source.
Section 9.2
Assignment
. Neither this Agreement nor any of the rights, interests or obligations hereunder will be assigned, in whole or in part, by operation of Law or otherwise, by any of the Parties without the prior written consent of the other
Parties, except that each of the Buyer Parties may assign, in their respective sole discretion, any or all of their respective rights, interests and obligations under this Agreement to (i) one or more Affiliates of such Party or (ii) to
any of their financing sources as collateral security, but no such assignment will relieve any Buyer Party of any of its obligations or liability hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the Parties and their respective successors and permitted assigns. Any purported assignment not permitted under this
Section
9.2
will be null and void.
Section 9.3
Counterparts
. This Agreement may be executed in counterparts (each of which will be deemed to be an original but all
of which taken together will constitute one and the same agreement) and will become effective when one or more counterparts have been signed by each of the Parties and delivered (including delivery by email) to the other Parties.
D-18
Section 9.4
Entire Agreement
. This Agreement, the Joliet Purchase Agreement, the
Merger Agreement, the MLP Disclosure Letter contemplated by the Merger Agreement and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior Contracts, both written and oral, among the Parties with respect to the
subject matter of this Agreement and the Joliet Purchase Agreement, the Merger Agreement, the MLP Disclosure Letter contemplated by the Merger Agreement and the Confidentiality Agreement. In the event of a conflict between the terms of this
Agreement and the Confidentiality Agreement, the terms of this Agreement will control.
Section 9.5
No Third-Party
Beneficiaries
. Except for
Article VIII
, which will inure to the benefit of the Persons benefiting therefrom, who are expressly intended to be third party beneficiaries thereof, this Agreement is not intended to, and does not, confer upon
any Person other than the Parties any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein. Notwithstanding the foregoing and anything in this Agreement to the contrary,
Section
9.1
,
Section
9.2
,
Section
9.5
,
Section
9.6
and
Section
9.11
are intended for the benefit of, and shall be
enforceable by, the Debt Financing Sources. The representations and warranties in this Agreement are the product of negotiations among the Parties and are for the sole benefit of the Parties. Any inaccuracies in such representations and warranties
are subject to waiver by the Parties without notice or liability to any other Person. In some instances, the representations and warranties in this Agreement may represent an allocation among the Parties of risks associated with particular matters
regardless of the Knowledge of any of the Parties, and consequently, may not accurately characterize actual facts or circumstances.
Section 9.6
Governing Law; Jurisdiction; Waiver of Jury Trial
.
(a) This Agreement and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon, arise
out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this
Agreement or as an inducement to enter into this Agreement) will be governed by, and construed in accordance with, the Laws of the State of Delaware applicable to Contracts executed in and to be performed entirely within that State.
(b) By execution and delivery of this Agreement, each Party irrevocably agrees that any Proceeding with respect to this
Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or
assigns, will be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular
matter, any state or federal court within the State of Delaware). Each of the Parties hereby irrevocably submits with regard to any such Proceeding for itself and in respect of its property, generally and unconditionally, to the personal
jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated hereunder in any court other than the aforesaid courts. Each of the Parties hereby irrevocably
waives, and agrees not to assert as a defense, counterclaim or otherwise, in any Proceeding with respect to this Agreement or the transactions contemplated hereunder, (i) any claim that it is not personally subject to the jurisdiction of the
above named courts for any reason other than the failure to serve in accordance with this
Section
9.6
, (ii) any claim that it or its property is exempt or immune from the jurisdiction of any such court or from any legal
process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by the applicable Law,
any claim that (A) the Proceeding in such court is brought in an inconvenient forum, (B) the venue of such Proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
Notwithstanding anything in this Agreement to the contrary, each of the Parties (on behalf of themselves and, with respect to Seller, on behalf of the Seller Related Parties) agrees: (a) that it will not bring or support any action, cause of
action, claim, cross-claim or third-party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against the Debt Financing Sources in any way
D-19
relating to this Agreement, including the Merger and the Debt Financing, including any dispute arising out of or relating in any way to the Debt Commitment Letter or the performance thereof, in
any forum other than federal and New York state courts located in the Borough of Manhattan within the City of New York; and (b) that, except as specifically set forth in the Debt Commitment Letter, all claims or causes of action (whether at
law, in equity, in contract, in tort or otherwise) against any of the Debt Financing Sources in any way relating to the Debt Commitment Letter or the performance thereof or the financings contemplated thereby, shall be exclusively governed by, and
construed in accordance with, the internal laws of the State of New York, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of laws of another
jurisdiction.
(c) EACH PARTY (INCLUDING EACH SELLER RELATED PARTY) ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING IN ANY ACTION, PROCEEDING OR COUNTERCLAIM AGAINST ANY DEBT FINANCING SOURCE. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS,
(II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS
SECTION 9.6(C)
.
Section 9.7
Specific Enforcement
.
(a) The Parties agree that irreparable damage would occur and that the Parties would not have any adequate remedy at law in the
event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and it is accordingly agreed that the Parties will be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, in accordance with this
Section
9.7
in the Delaware Court of Chancery or any federal court sitting in the
State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity. Each of the Parties agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief as
provided herein on the basis that (i) either Party has an adequate remedy at law or (ii) an award of specific performance is not an appropriate remedy for any reason at law or equity. Each Party further agrees that no Party will be
required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this
Section
9.7
, and each Party irrevocably waives any right it may have to
require the obtaining, furnishing or posting of any such bond or similar instrument.
(b) Notwithstanding anything to the
contrary in this Agreement, it is explicitly agreed that LCP GP shall be entitled to seek specific performance, acting jointly and unanimously with MLP GP and GE EFS in accordance with the Equity Commitment Letter, of Buyers obligation to
cause the Equity Financing to be funded and to consummate the transactions contemplated by this Agreement, including to effect the First Closing, in accordance with
Section
1.1
and the Second Closing (provided that the GLNG
Arbitration Condition has been satisfied or waived) on the terms and subject to the conditions in this Agreement, if, and only if, MLP GP is entitled to and is actively seeking specific performance in accordance with Section 9.9 of the Merger
Agreement.
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Section 9.8
Notices
. All notices, requests, permissions, waivers and other
communications hereunder will be in writing and will be deemed to have been duly given (a) when sent, if sent by facsimile (which is confirmed) or electronic mail (provided that no electronic notice of
non-delivery
is received by the sender), (b) when delivered, if delivered personally to the intended recipient and (c) one Business Day following sending by overnight delivery via an international courier
service and, in each case, addressed to a Party at the following address for such Party:
If to the Buyer Parties, to:
c/o Zenith Energy U.S., L.P.
3900 Essex Lane, Suite 950
Houston, Texas 77027
Attn:
General Counsel
with a copy (which will not constitute notice) to:
Kirkland & Ellis LLP
609 Main Street, Suite 4700
Houston, Texas 77002
Facsimile:
(713)
836-3600
|
Attn:
|
Adam D. Larson, P.C.
|
Kim Hicks
If to Seller or the Lightfoot Entities:
c/o Lightfoot Capital Partners, LP
725 Fifth Avenue, 19
th
Floor
New York, New York
Facsimile:
(212)
993-1299
Steven Schnitzer
with a copy (which will not constitute notice) to:
Vinson & Elkins L.L.P.
666 Fifth Avenue, 26
th
Floor
New York, New York 10103
Facsimile: (917)
849-5367
Brenda Lenahan
or to such other address as will be furnished in writing by any such Party to the other Party in accordance with the provisions of this
Section
9.8
.
Section 9.9
Severability
. The provisions of this Agreement will be deemed severable
and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application of such provision to any Person or any circumstance, is
invalid or unenforceable, (a) a suitable and equitable provision will be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other Persons or circumstances will not be affected by such invalidity or unenforceability, nor will such invalidity or unenforceability affect the validity or enforceability of
such provision, or the application of such provision, in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated by this Agreement are fulfilled to the extent possible.
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Section 9.10
Construction
. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be a substantive part of or to affect the meaning or interpretation of this Agreement. Whenever required by the context, any pronoun used in this Agreement will include the corresponding
masculine, feminine or neuter forms, and the singular forms of nouns, pronouns, and verbs will include the plural and vice versa. Reference to any Contract, document, or instrument means such Contract, document, or instrument as amended or otherwise
modified from time to time in accordance with the terms thereof, and if applicable hereof. The use of the words include or including in this Agreement will be deemed to be followed by the words without limitation.
The use of the word covenant will mean covenant and agreement. The use of the words or, either or any will not be exclusive. Days means calendar days unless specific as Business Days.
References in this Agreement to specific Laws or to specific provisions of Laws will include all rules and regulations promulgated thereunder, and any statute defined or referred to herein will mean such statute as from time to time amended,
modified or supplemented, including by succession of comparable successor statutes. All terms defined in this Agreement will have the defined meanings set forth herein when used in any certificate or other document made or delivered by a Party
pursuant hereto unless otherwise defined therein. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as
if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Except as otherwise expressly provided elsewhere in this
Agreement, any provision herein which contemplates the agreement, approval or consent of, or exercise of any right of, a Party, such Party may give or withhold such agreement, approval or consent, or exercise such right, in its sole and absolute
discretion, the Parties hereby expressly disclaiming any implied duty of good faith and fair dealing or similar concept. For the purpose of
Section
4.9
, the phrase made available shall mean that the documents or
information referred to have been posted prior to the date of this Agreement to the electronic data site hosted by Citrix ShareFile and established by the Lightfoot Entities for the purpose of providing due diligence materials and information to the
Buyer Parties and their Representatives.
Section 9.11
Non-Recourse
. Any claim or
cause of action based upon, arising out of, or related to this Agreement may only be brought against Persons that are expressly named as Parties, and then only with respect to the specific obligations set forth herein. No former, current or future
direct or indirect equityholders, controlling Persons, stockholders, directors, officers, employees, members, managers, agents, trustees, Affiliates, general or limited partners or assignees of the Parties (except permitted assignees under
Section
9.2
) or of any former, current or future direct or indirect equityholder, controlling Person, stockholder, director, officer, employee, member, manager, agent, trustee, Affiliate, general or limited partner or
assignee of any of the foregoing (collectively, but for the avoidance of doubt excluding the Parties) will have any liability or obligation for any of the representations, warranties, covenants, agreements, obligations or liabilities of any Party
under this Agreement or for any Proceeding based on, in respect of, or by reason of, the transactions contemplated hereunder (including the breach, termination or failure to consummate any of the transactions contemplated hereunder), in each case
whether based on contract, tort or strict liability, by the enforcement of any assessment, by any legal or equitable Proceeding, by virtue of any statute, regulation or applicable Law or otherwise and whether by or through attempted piercing of the
corporate or partnership veil, by or through a claim by or on behalf of a Party hereto or another Person or otherwise. Notwithstanding anything to the contrary contained herein, none of the Seller Related Parties shall have any rights or claims
against any Debt Financing Source in connection with this Agreement, the Merger Agreement, the Debt Financing or the transactions contemplated hereby or thereby, and no Debt Financing Source shall have any rights or claims against any Party in
connection with this Agreement, the Merger Agreement, the Debt Financing or the transactions contemplated hereby or thereby, whether at law or equity, in contract, in tort or otherwise; provided that, following consummation of the Merger (as defined
in the Merger Agreement), the foregoing will not limit the rights of the parties to the Debt Financing under any commitment letter related thereto. Notwithstanding any other provision herein, no Debt Financing Source nor any Affiliate of any Debt
Financing Source, nor any officer, director, employee, agent, controlling person, advisor or other representative of the foregoing or any successor or permitted assign of any of the foregoing shall be liable for any indirect, special, punitive or
consequential damages (including, without limitation, any loss of profits, business or anticipated savings) in connection with the Financing, the
D-22
Transactions, or with respect to any activities related to the Financing, including the preparation of the Commitment Letters and the Fee Letters.
Section 9.12
Definitions
. For purposes of this Agreement, capitalized terms in this Agreement shall have the following meanings:
Affiliate
means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is
under common control with, such Person. For this purpose, control (including, with its correlative meanings, controlled by and under common control with) means the possession, directly or indirectly, of the power
to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.
Agreement
has the meaning assigned to such term in the Preamble.
Antitrust Consents
has the meaning assigned to such term in the Merger Agreement.
Antitrust Laws
has the meaning assigned to such term in the Merger Agreement.
Arc
has the meaning assigned to such term in the Preamble.
Bankruptcy and Equity Exception
has the meaning assigned to such term in
Section
2.3
.
Business Day
means a day, except a Saturday, a Sunday or other day on which the SEC or banks in the City of New York, New
York are authorized or required by Law to be closed.
Buyer
has the meaning assigned to such term in the Preamble.
Buyer Advance
has the meaning set forth in
Section
1.3(d)
.
Buyer Parent
has the meaning assigned to such term in the Preamble.
Buyer Parent GP
has the meaning assigned to such term in the Preamble.
Buyer Parties
has the meaning assigned to such term in the Preamble.
Buyer Indemnified Party
means each of the Buyer Parties and the former and current holders of any equity, partnership or
limited liability company interest, controlling persons, directors, officers, employees, agents, attorneys, Affiliates, members, managers, general or limited partners, stockholders, assignees of either Buyer Party.
Cap
has the meaning assigned to such term in
Section
8.2(c)
.
Closing
has the meaning assigned to such term in
Section
6.1(b)
.
Code
means the Internal Revenue Code of 1986, as amended.
Commitment Letter
has the meaning assigned to such term in the Merger Agreement.
Company
has the meaning assigned to such term in the Recitals.
Conditioned Interest
has the meaning assigned to such term in the Recitals.
D-23
Conditioned Interest Extraordinary Distribution Amount
means an amount equal
to any portion of a distribution declared or paid by the Company in respect of the Conditioned Interest between the date of this Agreement and the Second Closing Date that is not an ordinary course quarterly distribution made by the Company in
accordance with the Gulf LNG LLC Agreement and consistent with the Companys past distribution practices, including, without limitation, any distribution related to the arbitration tribunals award, if any, in (or any settlement of) the
Gulf LNG Arbitration (other than Sellers pro rata portion of any reimbursement of fees, expenses or costs incurred by the Company).
Conditioned Purchase
has the meaning assigned to such term in the Recitals.
Confidentiality Agreement
means that certain Confidentiality Agreement, dated as of April 8, 2017, between LCP GP and
Zenith Energy L.P., as amended.
Consent
means any notice, report, declaration, submission or other filing that is
required to be made with, or any waiver required to be obtained from any Governmental Authority or third party or any applications required to be submitted to any Governmental Authority or third party.
Contract
means any agreement, commitment, understanding, contract, lease (whether for real or personal property), power of
attorney, note, bond, mortgage, indenture, deed of trust, loan, evidence of indebtedness, settlement agreement, franchise agreement, undertaking, covenant not to compete, license, instrument or other legally binding arrangement, whether oral or
written.
Contribution Deadline
has the meaning assigned to such term in
Section
1.3(d)
.
Damage
means, as to any specified Person, any loss, cost, damages, amounts paid in settlement, expense (including
reasonable fees of and actual disbursements by attorneys, consultants, experts or other representatives, including litigation costs), fine of, penalty on, or liability of any other nature of that Person.
Debt Commitment Letter
has the meaning assigned to such term in the Merger Agreement.
Debt Financing
has the meaning assigned to such term in the Merger Agreement.
Debt Financing Sources
has the meaning assigned to such term in the Merger Agreement.
Deductible
has the meaning assigned to such term in
Section
8.2(c)
.
Dual Closing
has the meaning assigned to such term in the Recitals.
Eni
means Eni USA Gas Marketing L.L.C., a Delaware limited liability company.
Equity Commitment Letter
has the meaning assigned to such term in the Merger Agreement.
Equity Financing
has the meaning assigned to such term in the Merger Agreement.
Equity Interest
means any share, capital stock, partnership, limited liability company, membership or similar interest in
any Person.
Exchange Act
means the Securities Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
Fee Letter
has the meaning assigned to such term in the Merger Agreement.
D-24
FEED Guarantee
means that certain Sponsor Guarantee between Seller and New
Standard China Limited, guaranteeing certain contingent funding obligations of Seller pursuant to the FEED Study Funding Agreement.
FEED Study Funding Agreement
means that certain FEED Study Funding Agreement between New Standard China Limited and Gulf
LNG Liquefaction Company, LLC.
Financing
has the meaning assigned to such term in the Merger Agreement.
First Closing
has the meaning assigned to such term in
Section
1.1(c)
.
First Closing Date
has the meaning assigned to such term in
Section
1.1(c)
.
GAAP
means generally accepted accounting principles in the United States.
GE EFS
has the meaning assigned to such term in the Equity Commitment Letter.
GLNG Arbitration Condition
has the meaning assigned to such term in
Section
6.2(d)
.
Governmental Authority
means any government, court, arbitrator, regulatory or administrative agency, commission or
authority or other governmental instrumentality, federal, state or local, domestic, foreign or multinational.
Guaranty
has the meaning assigned to such term in
Section
1.1(d)
.
Gulf LNG Arbitration
means that
certain International Centre for Dispute Arbitration arbitration between Gulf LNG Energy, LLC and Gulf LNG Pipeline, LLC, on the one hand, and Eni, on the other hand, which commenced on or about March 1, 2016 and referenced in the MLP SEC
Documents.
Gulf LNG Capital Contributions
has the meaning set forth in
Section
1.3(b)
.
Gulf LNG Consent
has the meaning assigned to such term in
Section
1.2(a)(iv)
.
Gulf LNG LLC Agreement
means that certain Amended and Restated Limited Liability Company Agreement of the Company, dated as
of February 7, 2008, as amended from time to time.
Gulf LNG Outcome
means a final award by the arbitration
tribunal in the Gulf LNG Arbitration or a settlement mutually agreed to by the parties involved in the Gulf LNG Arbitration.
HSR
Act
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
Indemnitee
has the meaning assigned to such term in
Section
8.3(a)
.
Indemnitor
has the meaning assigned to such term in
Section
8.3(a)
.
Initial Purchase Price
has the meaning assigned to such term in
Section
1.3
.
Joliet Purchase Agreement
means that certain Purchase Agreement, dated as of the date hereof (as amended or modified from
time to time), entered into by and among Buyer, certain equity owners of the Lightfoot Entities, and EFS Midstream Holdings LLC.
D-25
Knowledge
means: (a) with respect to Seller or the Lightfoot Entities,
the actual knowledge of any of Vince Cubbage, Steven Schnitzer or Bradley Oswald after reasonable inquiry (which shall not include an obligation to make any inquiries with Kinder Morgan, Inc. or its Representatives) and (b) with respect to
Buyer, the actual knowledge of any of Jeffrey R. Armstrong, Carlos Ruiz or Dana Love after reasonable inquiry.
Law
means any supranational, national, federal, state, county, provincial, municipal, local, foreign or common law, statute, treaty, ordinance, judgment, decree, injunction, writ, regulation, arbitration award or finding, ordinance or other requirements
promulgated, adopted or entered into by or with, any Governmental Authority (excluding Permits).
LCP GP
has the
meaning assigned to such term in the Preamble.
LCP LP
has the meaning assigned to such term in the Preamble.
Lien
means any lien, mortgage, pledge, encumbrance, charge, option, right of first refusal, easement, deed of trust,
right-of-way,
encroachment, or security interest of any nature, whether voluntarily incurred or arising by operation of Law, including any restriction on the voting of any
security and any restriction on the transfer of any security or other asset.
Lightfoot Entities
has the meaning
assigned to such term in the Preamble.
Majority in Interest
has the meaning assigned to such term in the Gulf LNG LLC
Agreement.
Material Adverse Effect
means any change, event, effect, occurrence, state of facts or development that,
individually or in the aggregate, (a) has had or would reasonably be expected to have a material adverse effect on the business, results of operations, assets, liabilities or financial condition of a Party, taken as a whole, or (b) has a
material adverse effect on the ability of a Party to consummate the transactions contemplated by this Agreement or perform its obligations under this Agreement, except, in the case of
subsection (a)
, to the extent an Excluded Matter.
Excluded Matter
means any: (i) changes, events, effects, occurrences, states of facts or developments generally affecting the United States or global economy or the financial, credit, debt, securities or other capital markets
in the United States or any other jurisdiction, including changes in interest rates, (ii) changes in GAAP or the interpretation thereof or changes in Laws, the interpretation thereof or political, legislative or regulatory conditions
(A) applicable to the relevant Party or any of their respective properties or assets or (B) generally affecting the industries in which the relevant Party operates, (iii) changes in currency exchange rates, (iv) acts of war or
terrorism (or the escalation of the foregoing) or natural or weather-related disasters or other force majeure events (including hurricanes, floods or earthquakes), (v) any failure to meet internal or published projections, forecasts or revenue or
earnings predictions for any period, except that the underlying causes of such change or failure will not be excluded by this
clause (v)
, (vi) other than with respect to
Section
3.4
, any changes, events, effects,
occurrences, states of facts or developments related to the entry into, and public announcement of, this Agreement and the transactions contemplated by this Agreement, (vii) changes, events, effects, occurrences, states of facts or developments
generally affecting the prices of oil, gas, natural gas, natural gas liquids, propane or other commodities, (viii) any changes in or effect upon the business, assets, liabilities or condition (financial or otherwise) of the Company, in each
case of this
clause
(viii)
that results from or arises out of (A) any reduction or anticipated reduction in the distributions from the Company in respect of the Unconditioned Interest or the Conditioned Interest,
(B) any diminution in value of the Unconditioned Interest or the Conditioned Interest or (C) any other adverse consequences upon or affecting the Company, Seller, or any of the Lightfoot Entities, each in the cases of the preceding
clauses (A)
-
(C)
, that results from or is due or otherwise attributable to the arbitration panels decision in (or the settlement of) the Gulf LNG Arbitration or the impact of such decision (or such settlement) upon the Company or
its business, assets, liabilities or condition (financial or otherwise), (ix) any acts or omissions of any Party taken pursuant to the express requirements of this Agreement, except, in the case of
clauses
(i)
,
(ii)
,
(iii)
, and
(vii)
to the extent disproportionately affecting the relevant Party when compared to other Persons operating in the same industries.
D-26
Membership Interest Assignment
has the meaning assigned to such term in
Section
1.2(a)(i)
.
Merger Agreement
has the meaning assigned to such term in the Recitals.
Merger Agreement Closing Date
means the Closing Date, as defined in the Merger Agreement.
MLP
has the meaning assigned to such term in the Recitals.
MLP Disclosure Letter
means the disclosure letter delivered by MLP to Buyer.
MLP GP
means Arc Logistics GP LLC, a Delaware limited liability company and the general partner of MLP.
MLP SEC Documents
means the Annual Reports on Form
10-K,
the Quarterly Reports on
Form
10-Q
and the Current Reports on Form
8-K,
forms schedules, certifications, prospectuses, registration statements and other documents required to be filed or
furnished by MLP with or to the SEC, as applicable, pursuant to the Exchange Act or the Securities Act.
Orders
means
any judgment, order, decision, writ, injunction, decree, stipulation, award, ruling, determination or other finding or agency requirement of a Governmental Authority, or arbitration award.
Ordinary Course Distributions
means the portion of any and all distributions (which may include the reimbursement of
Sellers pro rata portion of fees, expenses or costs incurred the Company that are included in any distribution related to the arbitration tribunals award, if any, in (or any settlement of) the Gulf LNG Arbitration, but in no event will
include any damages that are not in respect of the reimbursement of fees, expenses or costs) made by the Company pursuant to the terms of the Gulf LNG LLC Agreement that are not Unconditioned Interest Extraordinary Distribution Amounts or
Conditioned Interest Extraordinary Distribution Amounts.
Parties
or
Party
has the meaning assigned
to such term in the Preamble.
Permits
means all franchises, authorizations, licenses, registrations, clearances,
permits, variances, exceptions, exemptions, consents, certificates and approvals of any Governmental Authority.
Permitted
Liens
means (a) Liens for Taxes that are not yet due and payable, (b) Liens imposed by applicable Law and incurred in the ordinary course of business for obligations not yet due and payable to landlords, carriers, warehousemen,
laborers, repairmen, materialmen and the like.
Person
means an individual, corporation (including
not-for-profit),
general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Authority or other entity or
group (as such term is used in Section 13 of the Exchange Act) of any kind or nature.
Proceeding
means any
(a) action, claim, suit, investigation, charge, complaint, review, litigation, audit, inquiry or other hearing or proceeding by or before any Governmental Authority, whether civil, criminal, administrative, investigative or otherwise and
whether or not such proceeding results in a formal civil or criminal litigation or regulatory action, (b) arbitration or (c) mediation.
Representatives
means employees, investment bankers, attorneys, accountants, consultants, and other advisors and
representatives.
Restraints
has the meaning assigned to such term in
Section
6.1(a)
.
SEC
means the Securities and Exchange Commission.
D-27
Secondary Purchase Price
has the meaning assigned to such term in
Section
1.3
.
Second Closing
has the meaning assigned to such term in
Section
1.1(d)
.
Second Closing Date
has the meaning assigned to such term in
Section
1.1(d)
.
Securities Act
means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
Seller
has the meaning assigned to such term in the Preamble.
Seller Financial Advisor
means Citigroup Global Markets Inc.
Seller Indemnified Party
means Seller and the Lightfoot Entities and the former and current holders of any equity,
partnership or limited liability company interest, controlling persons, directors, officers, employees, agents, attorneys, Affiliates, members, managers, general or limited partners, stockholders, assignees of Seller or the Lightfoot Entities.
Seller Interests
has the meaning assigned to such term in
Section
3.2(a)
.
Seller Related Party
means the Seller and the Lightfoot Entities and each of their respective affiliates and their
respective affiliates stockholders, partners, members, officers, directors, employees, controlling persons, agents and representatives.
Seller Releasing Parties
has the meaning assigned to such term in
Section
5.5
.
Separate Closings
has the meaning assigned to such term in the Recitals.
Subsidiary
means, with respect to any Person, any other Person of which at least a majority of the Equity Interests having
by their terms ordinary voting power to elect a majority of the board of directors or managers or other individual performing similar functions is directly or indirectly owned or controlled by such Person (either alone or through or together with
any other Subsidiary), or that would otherwise be deemed a subsidiary under Rule
12b-2
promulgated under the Exchange Act of such Person.
Successful Outcome
means that, (i) in its final award, (A) the arbitration tribunal in the Gulf LNG Arbitration
makes no amendments to the Eni Contract that are adverse to the Company, (B) the Eni Contract remains in effect as it exists prior to such award (except for such amendments that do not adversely affect the Company) and (C) awards, in the
aggregate, less than $25,000,000 of damages to Eni or (ii) in the case of a settlement of the Gulf LNG Arbitration, (A) no amendments are made to the Eni Contract that are adverse to the Company, (B) the Eni Contract remains in effect
as it exists prior to such settlement (except for such amendments that do not adversely affect the Company) and (C) such settlement includes, in the aggregate, the payment of less than $25,000,000 of damages to Eni.
Tax Returns
means any return, report, election or similar filing (including any attached schedules, supplements and
additional or supporting material) filed or required to be filed with respect to Taxes, including any information return, claim for refund, amended return or declaration of estimated Taxes (and including any amendments with respect thereto).
Tax
or
Taxes
means any and all federal, state, local or foreign or provincial taxes, charges, duties,
imposts, levies or other assessments, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security,
unemployment, excise, severance, stamp, occupation, withholding, property and estimated taxes,
D-28
customs duties, escheat or unclaimed property obligations, and other governmental charges, including any and all interest, penalties, fines, additions to tax or additional amounts imposed by any
Governmental Authority in connection therewith or in lieu thereof, and any item for which liability arises under Treasury Regulation
Section 1.1502-6
(or any similar provision of state, local, or foreign
Law), as a transferee or successor, by Contract or otherwise.
Termination Date
has the meaning assigned to such term
in
Section
7.1
.
Transactions
has the meaning assigned to such term in the Merger Agreement.
Treasury Regulations
means the final, temporary and proposed income tax regulations promulgated by U.S. Department of
Treasury under the Code, including any amendments thereto.
Unconditioned Interest
has the meaning assigned to such
term in the Recitals.
Unconditioned Interest Extraordinary Distribution Amount
means an amount equal to any portion of
a distribution declared or paid by the Company to Seller in respect of the Unconditioned Interest between the date of this Agreement and the First Closing Date that is not an ordinary course quarterly distribution made by the Company in accordance
with the Gulf LNG LLC Agreement and consistent with the Companys past distribution practices, including, without limitation, any distribution related to the arbitration tribunals award, if any, in (or any settlement of) the Gulf LNG
Arbitration (other than any reimbursement of Sellers pro rata portion of fees, expenses or costs incurred by the Company).
Unconditioned Purchase
has the meaning assigned to such term in the Recitals.
[
Signature Pages Follow
]
D-29
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above
written.
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BUYER PARENT
:
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ZENITH ENERGY U.S., L.P.
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By:
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Zenith Energy U.S. GP, LLC,
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its general partner
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/s/ Jeffrey R. Armstrong
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Name:
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Jeffrey R. Armstrong
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Title:
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Chief Executive Officer
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BUYER PARENT GP
:
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ZENITH ENERGY U.S. GP, LLC
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/s/ Jeffrey R. Armstrong
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Name:
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Jeffrey R. Armstrong
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Title:
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Chief Executive Officer
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BUYER
:
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ZENITH ENERGY U.S. LOGISTICS HOLDINGS, LLC
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/s/ Jeffrey R. Armstrong
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Name:
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Jeffrey R. Armstrong
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Title:
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Chief Executive Officer
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Signature Page to Partially
Conditional Purchase Agreement
D-30
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LCP GP
:
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LIGHTFOOT CAPITAL PARTNERS GP LLC
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/s/ Vincent T. Cubbage
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Name:
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Vincent T. Cubbage
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Title:
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Chief Executive Officer
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LCP LP
:
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LIGHTFOOT CAPITAL PARTNERS, LP
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By:
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Lightfoot Capital Partners GP LLC, its general partner
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/s/ Vincent T. Cubbage
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Name:
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Vincent T. Cubbage
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Title:
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Chief Executive Officer
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Signature Page to Partially Conditional Purchase Agreement
D-31
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SELLER
:
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LCP LNG HOLDINGS, LLC
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By:
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Lightfoot Capital Partners, LP, its sole member
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By:
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Lightfoot Capital Partners GP LLC, its general partner
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/s/ Vincent T. Cubbage
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Name:
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Vincent T. Cubbage
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Title:
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Chief Executive Officer
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(Solely for the purposes of Section
1.1(d)
):
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ARC
:
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ARC LOGISTICS PARTNERS LP
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By:
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Arc Logistics GP LLC, its general partner
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/s/ Vincent T. Cubbage
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Name:
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Vincent T. Cubbage
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Title:
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Chief Executive Officer
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Signature Page to Partially Conditional Purchase Agreement
D-32
EXHIBIT A
MEMBERSHIP INTEREST ASSIGNMENT
FORM OF
ASSIGNMENT AND
ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this
Agreement
), is made by and between LCP LNG
Holdings, LLC, a Delaware limited liability company (
Assignor
), and Zenith Energy U.S. Logistics Holdings, LLC, a Delaware limited liability company (
Assignee
), effective as of [●] (the
Effective
Date
).
WHEREAS, Assignor is the owner of membership interests in Gulf LNG Holdings Group, LLC, a Delaware limited liability
company (the
Company
) pursuant to the Amended and Restated Limited Liability Company Agreement of the Company, effective as of February 7, 2008 (as the same may be amended from time to time, the
LLC
Agreement
);
WHEREAS, Assignor and Assignee are parties to the Partially Conditional Purchase Agreement among Assignor,
Lightfoot Capital Partners GP, LLC, Lightfoot Capital Partners, LP, Assignee, Zenith Energy U.S., L.P. and Zenith Energy U.S. GP, LLC, dated as of August 29, 2017 (the
GLNG Purchase Agreement
), pursuant to which Assignee is
purchasing the Assigned Interests (as defined below) from Assignor; and
WHEREAS, in connection with the [First Closing] [Second Closing]
(as such term is defined in the GLNG Purchase Agreement), Assignor wishes to transfer to Assignee, and Assignee wishes to accept from Assignor, membership interests in the Company equal to [●]% of the membership interests in the Company
outstanding as of the Effective Date (the
Assigned Interests
), on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of mutual promises contained in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1.
Assignment
. Assignor does hereby
transfer, assign, convey
and
deliver to Assignee all of the Assigned Interests including, without limitation (a) the Assignors rights to receive profits, compensation, and other distributions from the Company attributable to
the Assigned Interests which accrue after the date hereof, and (b) each, every and all of the rights, titles, interests and benefits of whatsoever kind or character now or thereafter accruing to the Assigned Interests (collectively, the
Assignment
).
2.
Assumption
. Assignee accepts such Assignment and agrees to be bound by the terms of the LLC
Agreement in place of Assignor, and Assignee hereby assumes all of the past, present and future liabilities, duties and obligations of Assignor under or allocable to the Assigned Interests, subject to the terms of the GLNG Purchase Agreement.
3.
Representations and Warranties
. Assignor represents and warrants to Assignee that as of the date hereof, Assignor is the sole legal
and equitable owner of the entirety of the Assigned Interests and the Assigned Interests transferred hereby to Assignee are free and clear of all liens, encumbrances, or security interests (in each case other than transfer restrictions under
applicable securities laws), subject to the terms and conditions of the LLC Agreement and the GLNG Purchase Agreement.
4.
Consent to
Assignment
. The Assignor, as a Member of the Company on the Effective Date, hereby approves and consents to the Assignment and consents to the Assignee becoming a Member of the Company in the place and stead of Assignor with respect to the
Assigned Interests as of the Effective Date for all purposes.
Exhibit A to Partially Conditional Purchase Agreement
D-33
5.
Amendment
. This Agreement may be amended, modified or supplemented only by written
agreement of the parties hereto. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give any person, other than the parties, and their successors and permitted assigns, any right or remedies under or by reason of this Agreement.
6.
Governing Law
. This Agreement and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon,
arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement will be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to principles of conflicts of
law thereof which may require the application of the law of another jurisdiction.
7.
Entire Agreement
. This Agreement, the LLC
Agreement, the GLNG Purchase Agreement and the other documents and instruments referred to herein and therein, embody the entire agreement and understanding of the parties in respect of the subject matter contained herein. This Agreement supersedes
all other prior agreements and understandings between the parties with respect to such subject matter.
8.
Further Assurances
. The
parties agree to take all such further actions and execute, acknowledge and deliver all such further documents that are necessary or useful in carrying out the purposes of this Agreement. Without limitation of the foregoing, Assignor agrees to
execute, acknowledge and deliver to the Assignee all such other additional instruments, notices, and other documents and to do all to more fully and effectively grant, convey and assign to the Assignee the Assigned Interests conveyed hereby and
intended so to be.
9.
Counterparts
. This Agreement may be executed in counterparts (each of which will be deemed to be an original
but all of which taken together will constitute one and the same agreement) and will become effective when one or more counterparts have been signed by each of the parties hereto and delivered (including delivery by email) to the other party.
* * * * *
Exhibit A to
Partially Conditional Purchase Agreement
D-34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the Effective Date.
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Assignor
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LCP LNG HOLDINGS, LLC
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By:
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Name:
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Title:
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Assignee
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ZENITH ENERGY U.S. LOGISTICS HOLDINGS, LLC
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By:
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Name:
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Title:
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Exhibit A to Partially Conditional Purchase Agreement
D-35
Annex E
SUPPORT AGREEMENT
This
SUPPORT AGREEMENT (this
Agreement
), dated as of August 29, 2017, is entered into by and among Lightfoot Capital Partners, LP, a Delaware limited partnership (
LCP LP
), Lightfoot Capital Partners GP LLC, a
Delaware limited liability company and the general partner of LCP LP (
LCP GP
and, together with LCP LP, the
Lightfoot Entities
), Zenith Energy U.S., L.P., a Delaware limited partnership
(
Parent
), Zenith Energy U.S. GP, LLC, a Delaware limited liability company and the general partner of Parent (
Parent GP
), Zenith Energy U.S. Logistics Holdings, LLC, a Delaware limited liability company and a
Subsidiary of Parent (
Holdings
), and Zenith Energy U.S. Logistics, LLC, a Delaware limited liability company and a Subsidiary of Holdings (
Merger Sub
and, together with Parent, Parent GP and Holdings, the
Parent Entities
). The Lightfoot Entities and the Parent Entities are sometimes referred to individually as a
Party
and collectively as the
Parties
.
RECITALS
A. The
Lightfoot Entities, the Parent Entities, Arc Logistics Partners LP, a Delaware limited partnership (
MLP
), and Arc Logistics GP LLC, a Delaware limited liability company and the general partner of MLP (
MLP GP
)
have entered into a Purchase Agreement and Plan of Merger, dated as of the date hereof (as the same may be amended or otherwise modified from time to time by any amendment or modification thereto that is not an Adverse Amendment (as defined below),
the
Merger Agreement
), providing, among other things, for the merger of Merger Sub with and into MLP and the transfer by LCP GP to Holdings of 100% of the membership interests of MLP GP.
B. On the date of this Agreement, LCP LP is the record and beneficial owner of 5,242,775 Common Units (the
Disclosed Owned
Units
), constituting 26.82% of the outstanding Common Units as of the date hereof.
NOW, THEREFORE, in consideration of the
foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and in the Merger Agreement, and intending to be legally bound hereby, the Parties agree as follows:
1.
Voting; Proxy
.
(a)
Voting
. Each Lightfoot Entity agrees that, except as otherwise contemplated by this Agreement or the Merger Agreement, (i) such Lightfoot Entity shall not (A) call, or cause MLP, MLP GP, the MLP GP Board or the GP Conflicts
Committee to call, any special meeting of the Limited Partners (as defined in the Merger Agreement) or (B) take action by written consent inconsistent with this Agreement and (ii) at any meeting of the Limited Partners, however called, or
at any adjournment thereof, or in any circumstance in which the vote, consent or other approval of the Limited Partners is sought, such Lightfoot Entity, if it is entitled to do so, shall appear at each such meeting or otherwise cause all of its
Common Units to be counted as present at any such meeting for purposes of calculating a quorum and shall vote its Common Units, or cause its Common Units to be voted, (A) for approval of the Merger Agreement and any related proposal necessary
or desirable for the consummation of the Transactions (including the Merger, and including any proposal relating to an amendment of the Merger Agreement contemplated by Section 9.2 thereof but excluding any Adverse Amendment) and
(B) against: (1) any Alternative Proposal, including any Superior Proposal; (2) any action that would reasonably be expected to result in (x) a breach of or failure to perform any representation, warranty, covenant or agreement of any
MLP Entity under the Merger Agreement or (y) any of the conditions set forth in Article VII of the Merger Agreement not being satisfied; (3) any change in the business or management of MLP or MLP GP or membership of the MLP GP Board or the
GP Conflicts Committee (other than with respect to the transactions contemplated in the Merger Agreement); (4) any action that would prevent or materially delay, or would reasonably be expected to prevent or materially delay, the consummation of the
Merger or the GP Equity Transfer; or (5) except as contemplated by the Merger Agreement, change in any manner the distribution policy
or capitalization of, including the voting rights of any partners of, MLP. No Lightfoot Entity shall take or agree to take any action which it has agreed not to take in this
Section
1(a)
.
(b)
Irrevocable Proxy
.
(i) LCP GP, in its capacity as the general partner of LCP LP, effective immediately upon LCP GPs execution (in its capacity as the
general partner of LCP LP) and delivery of this Agreement and without the need for any further action by LCP GP or LCP LP, (A) irrevocably grants to, and appoints, Parent, Parent GP and any Person designated in writing by Parent GP, and each of
them individually, LCP LPs proxy and
attorney-in-fact
(with full power of substitution), for and in the name, place and stead of LCP LP, to vote all of the Covered
Units (as defined in
Section
7(s)
below) for grant a consent or approval in respect of the Covered Units, in accordance with the terms of
Section
1(a)
and (B) revokes any and all proxies given
in respect of the Covered Units prior to the date of this Agreement.
(ii) The
attorneys-in-fact
and proxies named above are authorized and empowered by LCP GP, in its capacity as the general partner of LCP LP, at any time during the Term (as defined in
Section
6(a)
below) to act as LCP LPs
attorney-in-fact
and proxy to vote the Covered Units, and to exercise all voting, consent and
similar rights of LCP LP with respect to the Covered Units (including the power to execute and deliver written consents) solely with respect to matters set forth in
Section
1(a)
at every meeting of the Limited Partners and
in every written consent in lieu of such a meeting in accordance with the terms of
Section
1(a)
.
(iii) LCP LP
represents to the Parent Entities that any proxies given in respect of the Covered Units prior to the date of this Agreement are not irrevocable and that any such proxies are hereby revoked, and LCP GP, in its capacity as the general partner of LCP
LP, agrees to promptly notify MLP of such revocation. LCP LP affirms that the irrevocable proxy granted herein is given in connection with the execution of the Merger Agreement and that such irrevocable proxy is given to secure the performance of
the duties of LCP GP, on behalf of itself and in its capacity as the general partner of LCP LP, under this Agreement. LCP LP further affirms that the irrevocable proxy granted herein is coupled with an interest and may under no circumstances be
revoked. LCP LP ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done by virtue hereof.
(iv) The
irrevocable proxy granted in this
Section
1(b)
shall automatically terminate upon termination of this Agreement in accordance with
Section
6
.
(c)
Adverse Amendment
. Notwithstanding anything to the contrary herein:
(i)
Section 1(a)
shall not apply with respect to any vote, consent or other approval of the Limited Partners in order to effect an
amendment to the Merger Agreement that (A) reduces the amount, changes the form or imposes any material restrictions or additional conditions on the receipt of consideration payable in respect of Common Units owned by LCP LP in the Merger or
(B) is otherwise materially adverse to LCP LP in its capacity as an owner of Common Units (an
Adverse Amendment
); and
(ii) Each of Parent GP and Parent agrees that it will not, and will cause any other Person designated by Parent GP as LCP LPs proxy and
attorney-in-fact
pursuant to
Section
1(b)
not to, vote the Covered Units, or grant a consent or approval in respect of the Covered Units, for any
Adverse Amendment.
2.
No Disposition or Adverse Act
. Each Lightfoot Entity agrees that, except as contemplated by this Agreement
and the Merger Agreement, such Lightfoot Entity shall not, without the prior written consent of Parent GP, (i) offer to Transfer (as defined in
Section
7(s)
below), Transfer or consent to any Transfer of any or all of
the Covered Units or any interest therein, (ii) enter into any Contract, including any option, with respect to any Transfer of any or all of the Covered Units or any interest therein, (iii) grant any proxy,
power-of-attorney
or other authorization or consent or execute any written consent in or with respect to any or all of the Covered Units
E-2
(other than any proxy,
power-of-attorney
or other authorization that is (x) revocable and (y) directs the
holder or grantee thereof to vote the Covered Units in accordance with this Agreement), with any such proxy,
power-of-attorney
or authorization purported to be granted
by any Lightfoot Entity being void
ab
initio,
or (iv) deposit any or all of the Covered Units into a voting trust or enter into a voting agreement or arrangement with respect to any or all of the Covered Units. Any attempted
Transfer of Covered Units or any interest therein in violation of this
Section
2
shall be null and void.
3.
Additional Agreements
.
(a)
Certain Events
. In the event of any unit dividend, subdivision, reclassification,
recapitalization, split,
split-up,
unit distribution, combination, exchange of units or similar transaction or other change in the capital structure of MLP affecting the Covered Units or the acquisition of
Additional Owned Units (as defined in
Section
7(s)
below) by a Lightfoot Entity, (i) the type and number of Covered Units shall be adjusted appropriately to reflect the effect of such occurrence, and (ii) this
Agreement and the obligations hereunder shall automatically attach to any additional Covered Units issued to or acquired by such Lightfoot Entity.
(b)
Stop Transfer
. In furtherance of this Agreement, each Lightfoot Entity authorizes and instructs MLP (including through MLPs
transfer agent) to enter a stop transfer order with respect to all of the Covered Units. LCP GP, in its capacity as the general partner of LCP LP, agrees that it will request MLP, as promptly as practicable after the date of this Agreement, to make
a notation on its records and give instructions to the transfer agent for the Covered Units not to permit, so long as a restriction on Transfer under
Section
2
remains in effect, any Transfer of the Covered Units other than
as expressly contemplated by this Agreement.
(c)
Commencement or Participation in Actions
. Each Lightfoot Entity agrees not to
commence or participate in, and to take all actions necessary and effective to opt out of any class in any class action with respect to, any Transaction Litigation, including any claim (i) challenging the validity of, or seeking to enjoin the
operation of, any provision of this Agreement or the Merger Agreement or (ii) alleging a breach of any duty of MLP GP, in its capacity as general partner of MLP, the MLP GP Board or the GP Conflicts Committee in connection with this Agreement
or the Merger Agreement or the transactions contemplated hereby or thereby. If, notwithstanding compliance with the immediately preceding sentence, any Lightfoot Entity is unable to opt out of a class with respect to any Transaction Litigation (as
defined in the Merger Agreement) and receives any consideration from any Person in connection with or as a result of such Transaction Litigation, such Lightfoot Entity will pay all of such consideration to Parent by wire transfer of immediately
available funds promptly (and, in any event, within five Business Days) following the later to occur of (A) the Closing Date and (B) the date on which such Lightfoot Entity receives such consideration.
(d)
Communications
. Each Lightfoot Entity shall not, and shall cause its Representatives (excluding any Excepted Party) not to, make
any press release, public announcement or other public communication with respect to the business or affairs of MLP, MLP GP or the Parent Entities, including this Agreement and the Merger Agreement and the transactions contemplated hereby and
thereby, without the prior written consent of Parent GP (such consent not to be unreasonably withheld or delayed);
provided
that such consent shall not be required for (i) any disclosure required by applicable Law (including the filing
of this Agreement) and (ii) disclosure of the existence of this Agreement and the Merger Agreement or any other facts already publicly disclosed regarding the transactions contemplated hereunder and thereunder. Each Lightfoot Entity
(i) consents to and authorizes the publication and disclosure by Parent GP of such Lightfoot Entitys identity and holding of Covered Units, and the nature of such Lightfoot Entitys commitments, arrangements and understandings under
this Agreement, and any other information that Parent GP reasonably determines to be required by applicable Law in any press release or any other disclosure document in connection with the Merger, the GP Equity Transfer or any other transactions
contemplated by the Merger Agreement and (ii) agrees as promptly as practicable to notify Parent GP of any required corrections with respect to any written information supplied by such Lightfoot Entity specifically for use in any such
disclosure document.
E-3
(e)
Additional Owned Units
. Each Lightfoot Entity agrees to notify Parent GP promptly in
writing of the number and description of any Additional Owned Units.
4.
Representations and Warranties of the Lightfoot Entities
.
The Lightfoot Entities, severally, represent and warrant to the Parent Entities as follows:
(a)
Title
. On the date hereof,
(i) LCP LP is the sole record and beneficial owner of the Disclosed Owned Units, (ii) the Disclosed Owned Units constitute all of the Equity Securities in MLP owned of record or beneficially by either of the Lightfoot Entities or their
respective Affiliates and (iii) LCP GP, in its capacity as the general partner of LCP LP, has sole voting power, sole power of disposition and sole power to issue instructions with respect to the matters set forth in
Sections
2
and
3
hereof and all other matters set forth in this Agreement, in each case with respect to all of the Covered Units with no limitations, qualifications or restrictions on such rights, subject to
applicable Laws and the terms of this Agreement, the MLP Partnership Agreement, the LCP GP LLC Agreement and the Agreement of Limited Partnership of LCP LP dated as of February 14, 2007, as amended (the
LCP LP Agreement
).
Except as permitted or required by this Agreement or the Merger Agreement, the Covered Units are now, and at all times during the Term will be, held by LCP LP, free and clear of any and all Liens whatsoever on title, or restrictions on transfer or
exercise of any rights of a Unitholder (other than under applicable Laws and as created by this Agreement, the MLP Partnership Agreement and the LCP GP LLC Agreement).
(b)
Organization
. Each of LCP GP and LCP LP is a limited liability company or limited partnership, as applicable, duly organized,
validly existing and in good standing under the Laws of the State of Delaware and has all requisite limited liability company or limited partnership, as applicable, power to own, lease and operate all of its properties and assets, and to carry on
its business as currently conducted, except where the failure to have such power or authority would not, and would not reasonably be expected to, individually or in the aggregate, result in an MLP Material Adverse Effect. There are no dissolution or
bankruptcy Proceedings pending with respect to or contemplated by either of the Lightfoot Entities.
(c)
Authority
. Each of the
Lightfoot Entities has all requisite limited liability company or limited partnership power and authority and has taken all necessary limited liability company or limited partnership action in order to execute and deliver this Agreement and the
other agreements contemplated hereby to which it is or will be a party and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement by each of the Lightfoot Entities and the performance of the transactions
contemplated hereunder by each of the Lightfoot Entities has been duly authorized and approved by all necessary limited liability company or limited partnership action, as applicable, of the Lightfoot Entities. This Agreement has been duly executed
and delivered by each of the Lightfoot Entities and constitutes the legal, valid and binding obligation of each of the Lightfoot Entities, enforceable against each of the Lightfoot Entities in accordance with its terms, subject to the Bankruptcy and
Equity Exception.
(d)
Noncontravention
. The execution and delivery by each of the Lightfoot Entities of this Agreement or any
other documents required hereunder to be executed and delivered by the Lightfoot Entities pursuant to this Agreement, and the consummation by each of the Lightfoot Entities of the transactions contemplated hereunder, will not (a) conflict with,
violate or result in a default under the certificate of formation or certificate of limited partnership of any of the Lightfoot Entities or the limited partnership agreement or limited liability company agreement of either of the Lightfoot Entities,
(b) conflict with or result in a breach, default or violation of, or require a Consent under, any Law, Order, Contract, document or Permit to which either of the Lightfoot Entities is a party or to which either of the Lightfoot Entities or
their respective assets are subject, (c) result in the creation of any Lien upon the Equity Securities of either of the Lightfoot Entities or (d), require either of the Lightfoot Entities to obtain or make any Consent from or with any Person,
other than as may be required by applicable Laws and the LCP GP LLC Agreement and the LCP LP Agreement (which Consents required by the LCP GP LLC Agreement and the LCP LP Agreement, if any, have been obtained prior to the execution and deliver of
this Agreement).
E-4
(e)
No Litigation
. As of the date hereof, there is no Proceeding pending or, to the
knowledge of either Lightfoot Entity, threatened, against or affecting either Lightfoot Entity that would reasonably be expected to impair the ability of either Lightfoot Entity to perform its obligations hereunder or consummate the transactions
contemplated hereby.
(f)
No Fees
. No MLP Group Entity or Parent Entity will have any liability for, and no broker, investment
banker or financial advisor is entitled to any brokers, finders or financial advisors fee or commission, or the reimbursement of expenses, in connection with, the transactions contemplated hereby based on Contracts made by or on
behalf of either Lightfoot Entity.
5.
Representations and Warranties of the Parent Entities
. The Parent Entities jointly and
severally represent and warrant to the Lightfoot Entities as follows:
(a)
Organization and Qualification
. Each of the Parent
Entities is a legal entity duly organized, validly existing and in good standing under the Laws of the State of Delaware. Each of the Parent Entities has all requisite limited liability company or limited partnership power and authority to own,
lease or otherwise hold, use and operate its properties, rights and other assets and to carry on its business as currently conducted, except where the failure to have such power or authority, individually or in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect. Each of the Parent Entities is duly qualified or licensed to do business and is in good standing (with respect to jurisdictions that recognize that concept) in each jurisdiction in which the nature
of its business or the ownership, leasing or operation of its assets, properties or the conduct of its business makes such qualification, licensing or good standing necessary, other than where the failure to be so qualified, licensed or in good
standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect.
(b)
Authority
. Each of the Parent Entities has all requisite limited liability company or limited partnership power and authority and
has taken all necessary limited liability company or limited partnership action necessary in order to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereunder. This Agreement has
been, and any other agreements contemplated hereby, when executed, will be, duly executed and delivered by each of the Parent Entities and constitutes a valid and binding agreement of each of the Parent Entities enforceable against each of the
Parent Entities in accordance with its terms, subject to the Bankruptcy and Equity Exception.
(c)
Noncontravention
. The execution,
delivery and performance of this Agreement by any of the Parent Entities do not, and the consummation by any of the Parent Entities of the transactions contemplated hereunder will not (with or without notice or lapse of time, or both), constitute or
result in (i) a breach or violation of, or a default under, or conflict with the certificate of formation, certificate of limited partnership, limited liability company agreement or limited partnership agreement or other comparable
organizational documents of any of the Parent Entities, (ii) with or without notice or lapse of time, or both, a breach or violation of, a termination (or right of termination), modification, cancellation, creation or acceleration of any
obligation, loss of a benefit under, default under, or the creation of a Lien, other than a Permitted Lien, on any of the assets of any of the Parent Entities or any of their Subsidiaries pursuant to any Contract or Permit to which any of the Parent
Entities or any of their respective Subsidiaries is a party or by which they or any of their respective properties or assets may be bound or affected or (iii) a violation or conflict under any Law to which any of the Parent Entities or any of
their respective Subsidiaries, or any of their respective properties or assets, is subject, except, in the case of
clauses (ii)
or
(iii)
above, for any such breach, violation, termination, modification, cancellation, creation,
acceleration, loss or default that, individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect.
(d)
No Litigation
. As of the date hereof, there is no Proceeding pending or, to the Knowledge of the Parent Entities, threatened,
against or affecting any of the Parent Entities that would reasonably be expected to result in a Parent Material Adverse Effect.
E-5
(e)
No Fees
. No broker, investment banker or financial advisor is entitled to any
brokers, finders or financial advisors fee or commission, or the reimbursement of expenses, in connection with the transactions contemplated hereby based on Contracts made by or on behalf of any of the Parent Entities.
6.
Termination
.
(a)
Term
. The term (the
Term
) of this Agreement shall commence on the date hereof and shall terminate upon the earliest of (i) the mutual agreement of the Parties, (ii) the consummation of the Closing and
(iii) the termination of the Merger Agreement in accordance with its terms;
provided
that nothing herein shall relieve any Party from liability for any breach of this Agreement prior to its termination.
(b)
Survival of Certain Provisions
.
Section
3(c)
, this
Section
6
and
Section
7
shall survive any termination of this Agreement.
7.
Miscellaneous
.
(a)
Entire Agreement
. This Agreement (together with
Schedule I
), and the Merger Agreement, constitutes the entire agreement, and
supersedes all other prior Contracts, both written and oral, among the Parties with respect to the subject matter of this Agreement.
(b)
Reasonable Efforts
. Subject to the terms and conditions of this Agreement, each Party agrees to use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary or desirable under
applicable Laws to consummate and make effective the arrangements contemplated hereby. Upon Parent GPs request and without further consideration, each Lightfoot Entity shall execute and deliver such additional documents and take all such
further lawful action as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the arrangements contemplated hereby. Without limiting the foregoing, the Lightfoot Entities shall execute and
deliver to Parent GP and any of its designees any additional consents or proxies, including with respect to Additional Owned Units, reasonably requested by Parent GP in furtherance of this Agreement.
(c)
No Assignment
. This Agreement shall not be assignable by operation of law or otherwise;
provided, however
, that each of the
Parent Entities may, without the consent of any of the Lightfoot Entities, assign this Agreement and any of their respective rights and obligations hereunder to one or more Affiliates of the Parent Entities to which rights, interests and obligations
under the Merger Agreement are assigned in accordance with the Merger Agreement. Any purported assignment in violation of this Agreement is void.
(d)
Binding Successors
. Without limiting any other rights any of the Parent Entities may have hereunder in respect of any Transfer of
the Covered Units, each Lightfoot Entity agrees that this Agreement and the obligations hereunder shall attach to the Covered Units beneficially owned by such Lightfoot Entity and shall be binding upon any Person to which legal or beneficial
ownership of such Covered Units shall pass, whether by operation of law or otherwise.
(e)
Modification or Amendments
. Subject to
the provisions of applicable Law, the Parties may modify or amend this Agreement only by written agreement executed and delivered by duly authorized officers of each of the respective Parties.
(f)
Notices
. All notices, requests, permissions, waivers and other communications hereunder will be in writing and will be deemed to
have been duly given (a) when sent, if sent by facsimile or electronic mail (.pdf), (b) when delivered, if delivered personally to the intended recipient and (c) one Business Day following sending by overnight delivery via an international
courier service and, in each case, addressed to a Party at the following
E-6
address for such Party (or to such other address as will be furnished in writing by any such Party to the other Parties in accordance with the provisions of this
Section
7(f))
:
If to the Parent Entities, to:
c/o Zenith Energy U.S., L.P.
3900 Essex Lane, Suite 950
Houston, Texas 77027
Attn:
General Counsel
with a copy (which will not constitute notice) to:
Kirkland & Ellis LLP
609 Main Street, Suite 4700
Houston, Texas 77002
Facsimile:
(713)
836-3600
Attn: Adam D. Larson, P.C.
Kim Hicks
If to Seller or the Lightfoot Entities:
c/o Lightfoot Capital Partners, LP
725 Fifth Avenue, 19
th
Floor
New York, New York
Facsimile:
(212)
993-1299
Attn: Vince Cubbage
Steven Schnitzer
with a copy (which will not constitute notice) to:
Vinson & Elkins L.L.P.
666 Fifth Avenue, 26
th
Floor
New York, New York 10103
Facsimile: (917)
849-5367
Attn: Michael Swidler
Brenda Lenahan
(g)
Severability
. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision
will not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application of such provision to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision will be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances will not be affected by such invalidity or unenforceability, nor will such invalidity or unenforceability affect the validity or enforceability of such provision, or the application of such provision, in
any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
(h)
Specific Performance
. The Parties agree that irreparable damage would occur and that the Parties would not have any adequate remedy
at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and it is accordingly agreed that the Parties will be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, in accordance with this
Section
7(h)
in the Delaware Court of Chancery or any federal court sitting in
the State of Delaware, this being in addition to any
E-7
other remedy to which they are entitled at law or in equity. Each of the Parties agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief as
provided herein on the basis that (a) either Party has an adequate remedy at law or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity. Each Party further agrees that no Party will be required
to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this
Section
7(h)
, and each Party irrevocably waives any right it may have to require the
obtaining, furnishing or posting of any such bond or similar instrument.
(i)
No Waiver
. The failure of or delay by any Party in
exercising any right hereunder will not operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. Any agreement on the part of a Party to
any such extension or waiver will be valid only if set forth in an instrument in writing signed on behalf of such Party.
(j)
No Third
Party Beneficiaries
. This Agreement is not intended to, and does not, confer upon any Person other than the Parties any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein. The
representations and warranties in this Agreement are the product of negotiations among the Parties and are for the sole benefit of the Parties. Any inaccuracies in such representations and warranties are subject to waiver by the Parties without
notice or liability to any other Person. In some instances, the representations and warranties in this Agreement may represent an allocation among the Parties of risks associated with particular matters regardless of the knowledge of any of the
Parties. Consequently, Persons other than the Parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.
(k)
Governing Law
. This Agreement and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon,
arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with
this Agreement or as an inducement to enter into this Agreement) will be governed by, and construed in accordance with, the Laws of the State of Delaware applicable to Contracts executed in and to be performed entirely within that State.
(l)
Submission to Jurisdiction
. By execution and delivery of this Agreement, each Party irrevocably agrees that any Proceeding with
respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its
successors or assigns, will be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a
particular matter, any state or federal court within the State of Delaware). Each of the Parties irrevocably submits with regard to any such Proceeding for itself and in respect of its property, generally and unconditionally, to the personal
jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated hereby in any court other than the aforesaid courts. Each of the Parties irrevocably waives, and
agrees not to assert as a defense, counterclaim or otherwise, in any Proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure
to serve in accordance with this
Section
7(l)
, (ii) any claim that it or its property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service
of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by the applicable Law, any claim that (x) the Proceeding in such court is
brought in an inconvenient forum, (y) the venue of such Proceeding is improper or (z) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
(m)
Waiver of Jury Trial.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
E-8
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION
7(m)
.
(n)
Construction
. The descriptive headings herein are inserted for convenience of reference only and are not intended to be a
substantive part of or to affect the meaning or interpretation of this Agreement. Whenever required by the context, any pronoun used in this Agreement will include the corresponding masculine, feminine or neuter forms, and the singular forms of
nouns, pronouns, and verbs will include the plural and vice versa. Reference to any Contract, document, or instrument means such Contract, document, or instrument as amended or otherwise modified from time to time in accordance with the terms
thereof. The use of the words include or including in this Agreement will be deemed to be followed by the words without limitation. The use of the word covenant will mean covenant and
agreement. The use of the words or, either or any will not be exclusive. Days mean calendar days unless specified as Business Days. The Parties have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by
virtue of the authorship of any of the provisions of this Agreement. Except as otherwise expressly provided elsewhere in this Agreement, any provision herein which contemplates the agreement, approval or consent of, or exercise of any right of, a
Party, such Party may give or withhold such agreement, approval or consent, or exercise such right, in its sole and absolute discretion, the Parties hereby expressly disclaiming any implied duty of good faith and fair dealing or similar concept.
(o)
Counterparts
. This Agreement may be executed in counterparts (each of which will be deemed to be an original but all of which
taken together will constitute one and the same agreement) and will become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties.
(p)
Expenses
. Except as otherwise provided herein, each Party shall pay such Partys own expenses incurred in connection with this
Agreement.
(q)
No Ownership Interest
. Nothing contained in this Agreement shall be deemed, upon execution, to vest in any of the
Parent Entities any direct or indirect ownership or incidence of ownership of or with respect to any Covered Units. All rights, ownership and economic benefits of and relating to the Covered Units shall remain vested in and belong to the Lightfoot
Entities, and none of the Parent Entities shall have authority to manage, direct, superintend, restrict, regulate, govern or administer any of the policies or operations of MLP or exercise any power or authority to direct the Lightfoot Entities in
the voting of any of the Covered Units, except as otherwise provided herein.
(r)
Non-Recourse
. Any claim or cause of action based upon or arising out of this Agreement may only be brought against Persons that are expressly named as Parties, and then only with respect to the specific
obligations set forth herein. No former, current or future direct or indirect equityholders, controlling Persons, stockholders, directors, officers, employees, members, managers, agents, trustees, Affiliates, general or limited partners or assignees
of the Parties (except permitted transferees hereunder) or of any former, current or future direct or indirect equityholder, controlling Person, stockholder, director, officer, employee, member, manager, agent, trustee, Affiliate, general or limited
partner or assignee of any of the foregoing (collectively, but for the avoidance of doubt excluding the Parties,
Non-Party
Affiliates
) will have any liability or obligation for any of
E-9
the representations, warranties, covenants, agreements, obligations or liabilities of any Party under this Agreement or for any Proceeding based upon or arising out of this Agreement, in each
case whether based on contract, tort or strict liability, by the enforcement of any assessment, by any legal or equitable Proceeding, by virtue of any statute, regulation or applicable Law or otherwise and whether by or through attempted piercing of
the corporate or partnership veil, by or through a claim by or on behalf of a Party hereto or another Person or otherwise.
(s)
Certain
Definitions
. For the purposes of this Agreement, capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Merger Agreement. Certain other terms have the meanings ascribed to them below or
elsewhere in this Agreement.
Additional Owned Units
means all Common Units that are owned of record and beneficially
by either of the Lightfoot Entities and acquired after the date hereof.
Affiliate
has the meaning set forth in the
Merger Agreement;
provided
,
however
, that for purposes of this Agreement, none of the MLP Group Entities shall constitute an Affiliate of any Lightfoot Entity.
beneficial
ownership
(and related terms such as beneficially owned or beneficial owner) has
the meaning set forth in Rule
13d-3
under the Exchange Act.
Covered Units
means the Disclosed Owned Units and Additional Owned Units.
Excepted Parties
means the MLP Group Entities and their
respective Subsidiaries and controlled Affiliates, and their respective officers, managers, directors (including the MLP GP Board) and Representatives.
Transfer
means, with respect to a Covered Unit, the transfer, pledge, hypothecation, encumbrance, assignment or other
disposition (whether by sale, merger, consolidation, liquidation, dissolution, dividend, distribution or otherwise) of such Covered Unit or the beneficial ownership thereof, the offer to make such a transfer or other disposition, and each Contract,
including any option, whether or not in writing, to effect any of the foregoing. As a verb,
Transfer
shall have a correlative meaning.
[S
IGNATURES
ON
F
OLLOWING
P
AGES
.]
E-10
IN
WITNESS WHEREOF, the Parent Entities and the Lightfoot Entities have caused this
Agreement to be duly executed as of the day and year first above written.
|
|
|
PARENT GP:
|
|
ZENITH ENERGY U.S. GP LLC
|
|
|
By:
|
|
/s/ Jeffrey R. Armstrong
|
Name:
|
|
Jeffrey R. Armstrong
|
Title:
|
|
Chief Executive Officer
|
|
PARENT:
|
|
ZENITH ENERGY U.S., L.P.
|
|
By: Zenith Energy U.S. GP, LLC, its general partner
|
|
|
By:
|
|
/s/ Jeffrey R. Armstrong
|
Name:
|
|
Jeffrey R. Armstrong
|
Title:
|
|
Chief Executive Officer
|
|
HOLDINGS:
|
|
ZENITH ENERGY U.S. LOGISTICS HOLDINGS, LLC
|
|
|
By:
|
|
/s/ Jeffrey R. Armstrong
|
Name:
|
|
Jeffrey R. Armstrong
|
Title:
|
|
Chief Executive Officer
|
|
MERGER SUB:
|
|
ZENITH ENERGY U.S. LOGISTICS, LLC
|
|
|
By:
|
|
/s/ Jeffrey R. Armstrong
|
Name:
|
|
Jeffrey R. Armstrong
|
Title:
|
|
Chief Executive Officer
|
[Signature Page to Support Agreement]
E-11
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|
LCP GP:
|
|
LIGHTFOOT CAPITAL PARTNERS GP LLC
|
|
|
By:
|
|
/s/ Vincent T. Cubbage
|
Name:
|
|
Vincent T. Cubbage
|
Title:
|
|
Chief Executive Officer
|
|
LCP LP:
|
|
LIGHTFOOT CAPITAL PARTNERS, LP
|
|
By: Lightfoot Capital Partners GP LLC, its general partner
|
|
|
By:
|
|
/s/ Vincent T. Cubbage
|
Name:
|
|
Vincent T. Cubbage
|
Title:
|
|
Chief Executive Officer
|
[Signature Page to Support Agreement]
E-12
Annex F
Execution Version
SUPPORT AGREEMENT
This
SUPPORT AGREEMENT (this
Agreement
), dated as of August 29, 2017, is entered into by and among MTP Energy Master Fund Ltd., a Cayman Islands company (
Magnetar
), Zenith Energy U.S., L.P., a Delaware limited
partnership (
Parent
), Zenith Energy U.S. GP, LLC, a Delaware limited liability company and the general partner of Parent (
Parent GP
), Zenith Energy U.S. Logistics Holdings, LLC, a Delaware limited liability
company and a Subsidiary of Parent (
Holdings
), and Zenith Energy U.S. Logistics, LLC, a Delaware limited liability company and a Subsidiary of Holdings (
Merger Sub
and, together with Parent, Parent GP and
Holdings, the
Parent Entities
). Magnetar and the Parent Entities are sometimes referred to individually as a
Party
and collectively as the
Parties
.
RECITALS
A. Lightfoot
Capital Partners, LP, a Delaware limited partnership (
LCP LP
), Lightfoot Capital Partners GP LLC, a Delaware limited liability company and the general partner of LCP LP (
LCP GP
), the Parent Entities, Arc
Logistics Partners LP, a Delaware limited partnership (
MLP
), and Arc Logistics GP LLC, a Delaware limited liability company and the general partner of MLP (
MLP GP
) have entered into a Purchase Agreement and Plan
of Merger, dated as of the date hereof (as the same may be amended or otherwise modified from time to time by any amendment or modification thereto that is not an Adverse Amendment (as defined below), the
Merger Agreement
),
providing, among other things, for the merger of Merger Sub with and into MLP and the transfer by LCP GP to Holdings of 100% of the membership interests of MLP GP.
B. On the date of this Agreement, Magnetar is the record and beneficial owner of 572,635 Common Units (the
Disclosed Owned
Units
), constituting approximately 2.9% of the outstanding Common Units as of the date hereof.
NOW, THEREFORE, in consideration
of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and in the Merger Agreement, and intending to be legally bound hereby, the Parties agree as follows:
1.
Voting; Proxy
.
(a)
Voting
. Magnetar agrees that, except as otherwise contemplated by this Agreement, (i) Magnetar shall not (A) call, or cause MLP or MLP GP to call, any special meeting of the Limited Partners (as defined in the Merger Agreement) or
(B) take action by written consent inconsistent with this Agreement and (ii) at any meeting of the Limited Partners, however called, or at any adjournment thereof, or in any circumstance in which the vote, consent or other approval of the
Limited Partners is sought, Magnetar, if it is entitled to do so, shall appear at each such meeting or otherwise cause all of its Common Units to be counted as present at any such meeting for purposes of calculating a quorum and shall vote its
Common Units, or cause its Common Units to be voted, (A) for approval of the Merger Agreement and any related proposal necessary or desirable for the consummation of the Transactions (including the Merger, and including any proposal relating to
an amendment of the Merger Agreement contemplated by Section 9.2 thereof but excluding any Adverse Amendment) and (B) against: (1) any Alternative Proposal, including any Superior Proposal; (2) any action that would reasonably be
expected to result in (x) a breach of or failure to perform any representation, warranty, covenant or agreement of any MLP Entity under the Merger Agreement or (y) any of the conditions set forth in Article VII of the Merger Agreement not
being satisfied; (3) any change in the business or management of MLP or MLP GP or membership of the MLP GP Board or the GP Conflicts Committee (other than with respect to the transactions contemplated in the Merger Agreement); (4) any
action that would prevent or materially delay, or would
reasonably be expected to prevent or materially delay, the consummation of the Merger or the GP Equity Transfer; or (5) except as contemplated by the Merger Agreement, change in any manner
the distribution policy or capitalization of, including the voting rights of any partners of, MLP. Magnetar shall not take or agree to take any action which it has agreed not to take in this
Section 1(a)
.
(b)
No Proxy
. Magnetar represents to the Parent Entities that no proxies have been given by Magnetar in respect of the Covered Units
prior to the date of this Agreement and covenants that no such proxies shall be given in respect of the Covered Units at any time during the Term without the prior written consent of the Parent Entities.
(c)
Adverse Amendment
. Notwithstanding anything to the contrary herein,
Section 1(a)
shall not apply with respect to any
vote, consent or other approval of the Limited Partners in order to effect an amendment to the Merger Agreement that (A) reduces the amount, changes the form or imposes any material restrictions or additional conditions on the receipt of
consideration payable in respect of Common Units owned by Magnetar in the Merger or (B) is otherwise materially adverse to Magnetar in its capacity as an owner of Common Units (an
Adverse Amendment
).
2.
No Disposition or Solicitation
.
(a)
No Disposition or Adverse Act
. Magnetar agrees that, except as contemplated by this Agreement, Magnetar shall not, without the
prior written consent of Parent GP, (i) offer to Transfer (as defined in
Section 7(s)
below), Transfer or consent to any Transfer of any or all of the Covered Units or any interest therein, (ii) enter into any Contract,
including any option, with respect to any Transfer of any or all of the Covered Units or any interest therein, (iii) grant any proxy, power-of-attorney or other authorization or consent or execute any written consent in or with respect to any
or all of the Covered Units (other than any proxy, power-of-attorney or other authorization that is (x) revocable and (y) directs the holder or grantee thereof to vote the Covered Units in accordance with this Agreement), with any such
proxy, power-of-attorney or authorization purported to be granted by Magnetar being void
ab initio,
or (iv) deposit any or all of the Covered Units into a voting trust or enter into a voting agreement or arrangement with respect to any
or all of the Covered Units. Any attempted Transfer of Covered Units or any interest therein in violation of this
Section 2(a)
shall be null and void.
(b)
No Solicitation. Discussion or Negotiation
. Subject to
Section 2(c)
, Magnetar agrees that Magnetar shall not, and shall
instruct and cause its Representatives and Affiliates that are subject to its control not to, directly or indirectly:
(i) initiate,
solicit, knowingly facilitate or knowingly encourage any inquiries or discussions regarding, or the making or submission of, any proposal, request or offer that constitutes, or could reasonably be expected to lead to, any Alternative Proposal;
(ii) approve, endorse, recommend or enter into any Contract or agreement in principle, whether written or oral, with any Person (other than
the Parent Entities) concerning an Alternative Proposal;
(iii) terminate, amend, release, modify, or fail to enforce any provision of, or
grant any permission, waiver or request under, any standstill, confidentiality or similar Contract entered into by Magnetar in respect of or in contemplation of an Alternative Proposal;
(iv) conduct, engage in, continue or otherwise participate in any discussions or negotiations regarding any Alternative Proposal;
(v) furnish any non-public information relating to any of the MLP Group Entities, or afford access to the books or records or Representatives
of any of the MLP Group Entities, to any third party that, to the knowledge of Magnetar, after consultation with their Representatives, is reasonably likely to make, or has made, an Alternative Proposal;
F-2
(vi) take any action to make the provisions of any Takeover Laws inapplicable to any transactions
contemplated by any Alternative Proposal; or
(vii) resolve or publicly propose or announce to do any of the foregoing.
(c)
Exceptions
.
Section 2(b)
shall not (i) apply to any Excepted Party, (ii) require Magnetar to instruct or
cause any Excepted Party to take or refrain from taking any action or (iii) prohibit Magnetar or any of its Representatives or Affiliates from taking any action at the request of any Excepted Party if (A) at the time of such request, such
Excepted Party is taking actions in reliance on Section 6.4(a)(ii) of the Merger Agreement and (B) the action taken by Magnetar or any of its Representatives or Affiliates in response to such request is consistent with and in furtherance
of such actions being taken by the Excepted Party.
3.
Additional Agreements
.
(a)
Certain Events
. In the event of any unit dividend, subdivision, reclassification, recapitalization, split, split-up, unit
distribution, combination, exchange of units or similar transaction or other change in the capital structure of MLP affecting the Covered Units or the acquisition of Additional Owned Units (as defined in
Section 7(s)
below) by Magnetar,
(i) the type and number of Covered Units shall be adjusted appropriately to reflect the effect of such occurrence, and (ii) this Agreement and the obligations hereunder shall automatically attach to any additional Covered Units issued to
or acquired by Magnetar.
(b)
Stop Transfer
. In furtherance of this Agreement, Magnetar authorizes and instructs MLP (including
through MLPs transfer agent) to enter a stop transfer order with respect to all of the Covered Units. Magnetar agrees that it will request MLP, as promptly as practicable after the date of this Agreement, to make a notation on its records and
give instructions to the transfer agent for the Covered Units not to permit, so long as a restriction on Transfer under
Section 2(a)
remains in effect, any Transfer of the Covered Units other than as expressly contemplated by this
Agreement.
(c)
Commencement or Participation in Actions
. Magnetar agrees not to commence or participate in, and to take all
actions necessary and effective to opt out of any class in any class action with respect to, any Transaction Litigation, including any claim (i) challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement
or the Merger Agreement or (ii) alleging a breach of any duty of MLP GP, in its capacity as general partner of MLP, the MLP GP Board or the GP Conflicts Committee in connection with this Agreement or the Merger Agreement or the transactions
contemplated hereby or thereby. If, notwithstanding compliance with the immediately preceding sentence, Magnetar is unable to opt out of a class with respect to any Transaction Litigation (as defined in the Merger Agreement) and receives any
consideration from any Person in connection with or as a result of such Transaction Litigation, Magnetar will (but only with respect to claims specified above in which Magnetar has agreed not to commence or participate) pay all of such consideration
to Parent by wire transfer of immediately available funds promptly (and, in any event, within five Business Days) following the later to occur of (A) the Closing Date and (B) the date on which Magnetar receives such consideration.
(d)
Communications
. Magnetar shall not, and shall cause its Representatives (solely in their capacity as such and excluding any
Excepted Party) not to, make any press release, public announcement or other public communication with respect to the business or affairs of MLP, MLP GP or the Parent Entities, including this Agreement and the Merger Agreement and the transactions
contemplated hereby and thereby, without the prior written consent of Parent GP (such consent not to be unreasonably withheld or delayed);
provided
that such consent shall not be required for (i) any disclosure required by applicable Law
(including the filing of this Agreement) and (ii) disclosure of the existence of this Agreement and the Merger Agreement or any other facts already publicly disclosed regarding the transactions contemplated hereunder and thereunder. Magnetar
(i) consents to and authorizes the publication and disclosure by Parent GP of Magnetars identity and holding of Covered Units, and the nature of Magnetars commitments, arrangements and understandings under this Agreement, and any
other information that Parent GP reasonably determines to be required by applicable Law in
F-3
any press release or any other disclosure document in connection with the Merger, the GP Equity Transfer or any other transactions contemplated by the Merger Agreement and (ii) agrees as
promptly as practicable to notify Parent GP of any required corrections with respect to any written information supplied by Magnetar specifically for use in any such disclosure document.
(e)
Additional Owned Units
. Magnetar agrees to notify Parent GP promptly in writing of the number and description of any Additional
Owned Units.
4.
Representations and Warranties of Magnetar
. Magnetar represents and warrants to the Parent Entities as follows:
(a)
Title
. On the date hereof, (i) Magnetar is the sole record and beneficial owner of the Disclosed Owned Units,
(ii) the Disclosed Owned Units constitute all of the Equity Securities in MLP owned of record or beneficially by Magnetar and (iii) Magnetar has sole voting power, sole power of disposition and sole power to issue instructions with respect
to the matters set forth in
Sections 1
,
2
and
3
hereof and all other matters set forth in this Agreement, in each case with respect to all of the Covered Units with no limitations, qualifications or restrictions on such
rights, subject to applicable Laws and the terms of this Agreement and the MLP Partnership Agreement. Except as permitted or required by this Agreement or the Merger Agreement, the Covered Units are now, and at all times during the Term will be,
held by Magnetar, free and clear of any and all Liens whatsoever on title, or restrictions on transfer or exercise of any rights of a Unitholder (other than under applicable Laws and as created by this Agreement and the MLP Partnership Agreement).
(b)
Organization
. Magnetar is a company, duly organized, validly existing and in good standing under the Laws of the Cayman
Islands and has all requisite company power to own, lease and operate all of its properties and assets, and to carry on its business as currently conducted, except where the failure to have such power or authority would not, and would not reasonably
be expected to, individually or in the aggregate, result in an MLP Material Adverse Effect. There are no dissolution or bankruptcy Proceedings pending with respect to or contemplated by Magnetar.
(c)
Authority
. Magnetar has all requisite company power and authority and has taken all necessary company action in order to execute
and deliver this Agreement and the other agreements contemplated hereby to which it is or will be a party and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement by Magnetar and the performance of the
transactions contemplated hereunder by Magnetar has been duly authorized and approved by all necessary company action. This Agreement has been duly executed and delivered by Magnetar and constitutes the legal, valid and binding obligation of
Magnetar, enforceable against Magnetar in accordance with its terms, subject to the Bankruptcy and Equity Exception.
(d)
Noncontravention
. The execution and delivery by Magnetar of this Agreement or any other documents required hereunder to be executed and delivered by Magnetar pursuant to this Agreement, and the consummation by Magnetar of the transactions
contemplated hereunder, will not (a) conflict with, violate or result in a default under the certificate of formation of Magnetar, (b) conflict with or result in a breach, default or violation of, or require a Consent under, any Law,
Order, Contract, document or Permit to which Magnetar is a party or to which Magnetar or its assets are subject, (c) result in the creation of any Lien upon the Equity Securities of Magnetar or (d), require Magnetar to obtain or make any
Consent from or with any Person, other than as may be required by applicable Laws (which Consents, if any, have been obtained prior to the execution and delivery of this Agreement).
(e)
No Litigation
. As of the date hereof, there is no Proceeding pending or, to the knowledge of Magnetar, threatened, against or
affecting Magnetar that would reasonably be expected to impair the ability of Magnetar to perform its obligations hereunder or consummate the transactions contemplated hereby.
F-4
(f)
No Fees
. No MLP Group Entity or Parent Entity will have any liability for, and no
broker, investment banker or financial advisor is entitled to any brokers, finders or financial advisors fee or commission, or the reimbursement of expenses, in connection with, the transactions contemplated hereby based on any
Contract made by or on behalf of Magnetar.
5.
Representations and Warranties of the Parent Entities
. The Parent Entities jointly
and severally represent and warrant to Magnetar as follows:
(a)
Organization and Qualification
. Each of the Parent Entities is a
legal entity duly organized, validly existing and in good standing under the Laws of the State of Delaware. Each of the Parent Entities has all requisite limited liability company or limited partnership power and authority to own, lease or otherwise
hold, use and operate its properties, rights and other assets and to carry on its business as currently conducted, except where the failure to have such power or authority, individually or in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect. Each of the Parent Entities is duly qualified or licensed to do business and is in good standing (with respect to jurisdictions that recognize that concept) in each jurisdiction in which the nature of its business or
the ownership, leasing or operation of its assets, properties or the conduct of its business makes such qualification, licensing or good standing necessary, other than where the failure to be so qualified, licensed or in good standing, individually
or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect.
(b)
Authority
.
Each of the Parent Entities has all requisite limited liability company or limited partnership power and authority and has taken all necessary limited liability company or limited partnership action necessary in order to execute, deliver and perform
its obligations under this Agreement and to consummate the transactions contemplated hereunder. This Agreement has been, and any other agreements contemplated hereby, when executed, will be, duly executed and delivered by each of the Parent Entities
and constitutes a valid and binding agreement of each of the Parent Entities enforceable against each of the Parent Entities in accordance with its terms, subject to the Bankruptcy and Equity Exception.
(c)
Noncontravention
. The execution, delivery and performance of this Agreement by any of the Parent Entities do not, and the
consummation by any of the Parent Entities of the transactions contemplated hereunder will not (with or without notice or lapse of time, or both), constitute or result in (i) a breach or violation of, or a default under, or conflict with the
certificate of formation, certificate of limited partnership, limited liability company agreement or limited partnership agreement or other comparable organizational documents of any of the Parent Entities, (ii) with or without notice or lapse
of time, or both, a breach or violation of, a termination (or right of termination), modification, cancellation, creation or acceleration of any obligation, loss of a benefit under, default under, or the creation of a Lien, other than a Permitted
Lien, on any of the assets of any of the Parent Entities or any of their Subsidiaries pursuant to any Contract or Permit to which any of the Parent Entities or any of their respective Subsidiaries is a party or by which they or any of their
respective properties or assets may be bound or affected or (iii) a violation or conflict under any Law to which any of the Parent Entities or any of their respective Subsidiaries, or any of their respective properties or assets, is subject,
except, in the case of
clauses (ii)
or
(iii)
above, for any such breach, violation, termination, modification, cancellation, creation, acceleration, loss or default that, individually or in the aggregate, would not reasonably
be expected to have a Parent Material Adverse Effect.
(d)
No Litigation
. As of the date hereof, there is no Proceeding pending or,
to the Knowledge of the Parent Entities, threatened, against or affecting any of the Parent Entities that would reasonably be expected to result in a Parent Material Adverse Effect.
(e)
No Fees
. Magnetar will have no liability for, and no broker, investment banker or financial advisor is entitled to any
brokers, finders or financial advisors fee or commission, or the reimbursement of expenses, in connection with the transactions contemplated hereby based on any Contract made by or on behalf of any of the Parent Entities.
F-5
6.
Termination
.
(a)
Term
. The term (the
Term
) of this Agreement shall commence on the date hereof and shall terminate upon the
earliest of (i) the mutual agreement of the Parties, (ii) the consummation of the Closing, (iii) the Outside Date (as such term is defined in the Merger Agreement as of the date hereof, without giving effect to any amendment or waiver
thereof) and (iv) the termination of the Merger Agreement in accordance with its terms;
provided
that nothing herein shall relieve any Party from liability for any breach of this Agreement prior to its termination.
(b)
Survival of Certain Provisions
.
Section 3(c)
, this
Section 6
and
Section 7
shall survive any
termination of this Agreement.
7.
Miscellaneous
.
(a)
Entire Agreement
. This Agreement constitutes the entire agreement, and supersedes all other prior Contracts, both written and oral,
among the Parties with respect to the subject matter of this Agreement.
(b)
Reasonable Efforts
. Subject to the terms and
conditions of this Agreement, each Party agrees to use all commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary or desirable under applicable Laws to consummate and make
effective the arrangements contemplated hereby. Upon Parent GPs request and without further consideration, Magnetar shall execute and deliver such additional documents and take all such further lawful action as may be necessary or desirable to
consummate and make effective, in the most expeditious manner practicable, the arrangements contemplated hereby.
(c)
No
Assignment
. This Agreement shall not be assignable by operation of law or otherwise;
provided
,
however
, that each of the Parent Entities may, without the consent of Magnetar, assign this Agreement and any of their respective rights
and obligations hereunder to one or more Affiliates of the Parent Entities to which rights, interests and obligations under the Merger Agreement are assigned in accordance with the Merger Agreement. Any purported assignment in violation of this
Agreement is void.
(d)
Binding Successors
. Without limiting any other rights any of the Parent Entities may have hereunder in
respect of any Transfer of the Covered Units, Magnetar agrees that this Agreement and the obligations hereunder shall attach to the Covered Units beneficially owned by Magnetar and shall be binding upon any Person to which legal or beneficial
ownership of such Covered Units shall pass, whether by operation of law or otherwise.
(e)
Modification or Amendments
. Subject to
the provisions of applicable Law, the Parties may modify or amend this Agreement only by written agreement executed and delivered by duly authorized officers of each of the respective Parties.
(f)
Notices
. All notices, requests, permissions, waivers and other communications hereunder will be in writing and will be deemed to
have been duly given (a) when sent, if sent by facsimile or electronic mail (.pdf), (b) when delivered, if delivered personally to the intended recipient and (c) one Business Day following sending by overnight delivery via an
international courier service and, in each case, addressed to a Party at the following address for such Party (or to such other address as will be furnished in writing by any such Party to the other Parties in accordance with the provisions of this
Section 7(f))
:
If to the Parent Entities, to:
c/o Zenith Energy U.S., L.P.
3900 Essex Lane, Suite 950
Houston, Texas 77027 Attn: General Counsel
F-6
with a copy (which will not constitute notice) to:
Kirkland & Ellis LLP
609 Main Street, Suite 4700
Houston, Texas 77002
Facsimile:
(713) 836-3600
Attn: Adam D. Larson, P.C.
Kim Hicks
If to Magnetar:
c/o MTP Energy Management LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Email:
MTP_Notices@magnetar.com
Attn: Chief Legal Officer
(g)
Severability
. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement,
or the application of such provision to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision will be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent
and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances will not be affected by such invalidity or unenforceability, nor will such
invalidity or unenforceability affect the validity or enforceability of such provision, or the application of such provision, in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of
being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled
to the extent possible.
(h)
Specific Performance
. The Parties agree that irreparable damage would occur and that the Parties would
not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and it is accordingly agreed that the Parties will be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, in accordance with this
Section 7(h)
in the Delaware Court of Chancery or any federal
court sitting in the State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity. Each of the Parties agrees that it will not oppose the granting of an injunction, specific performance or other
equitable relief as provided herein on the basis that (a) either Party has an adequate remedy at law or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity. Each Party further agrees that no
Party will be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this
Section 7(h)
, and each Party irrevocably waives any right it may have to
require the obtaining, furnishing or posting of any such bond or similar instrument.
(i)
No Waiver
. The failure of or delay by any
Party in exercising any right hereunder will not operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. Any agreement on the part of a
Party to any such extension or waiver will be valid only if set forth in an instrument in writing signed on behalf of such Party.
(j)
No Third Party Beneficiaries
. This Agreement is not intended to, and does not, confer upon any Person other than the Parties any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth
herein. The representations and warranties in this Agreement are the product of negotiations among the Parties and are for the sole benefit of the Parties. Any inaccuracies in such representations and
F-7
warranties are subject to waiver by the Parties without notice or liability to any other Person. In some instances, the representations and warranties in this Agreement may represent an
allocation among the Parties of risks associated with particular matters regardless of the knowledge of any of the Parties. Consequently, Persons other than the Parties may not rely upon the representations and warranties in this Agreement as
characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.
(k)
Governing Law
.
This Agreement and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause
of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement) will be governed by, and construed in accordance with, the Laws of the
State of Delaware applicable to Contracts executed in and to be performed entirely within that State.
(l)
Submission to
Jurisdiction
. By execution and delivery of this Agreement, each Party irrevocably agrees that any Proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in
respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or assigns, will be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court
therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each of the Parties irrevocably submits with regard to
any such Proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than the aforesaid courts. Each of the Parties irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any Proceeding with respect to this Agreement, (i) any claim that it
is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this
Section 7(l)
, (ii) any claim that it or its property is exempt or immune from the
jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the
fullest extent permitted by the applicable Law, any claim that (x) the Proceeding in such court is brought in an inconvenient forum, (y) the venue of such Proceeding is improper or (z) this Agreement, or the subject matter hereof, may
not be enforced in or by such courts.
(m)
Waiver of Jury Trial.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS
VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7(m)
.
(n)
Construction
. The descriptive headings herein are inserted for convenience of reference only and are not intended to be a
substantive part of or to affect the meaning or interpretation of this Agreement. Whenever required by the context, any pronoun used in this Agreement will include the corresponding masculine, feminine or neuter forms, and the singular forms of
nouns, pronouns, and verbs will include the plural and vice versa. Reference to any Contract, document, or instrument means such Contract, document, or instrument as amended
F-8
or otherwise modified from time to time in accordance with the terms thereof. The use of the words include or including in this Agreement will be deemed to be followed by
the words without limitation. The use of the word covenant will mean covenant and agreement. The use of the words or, either or any will not be exclusive. Days mean calendar
days unless specified as Business Days. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted
jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Except as otherwise expressly provided elsewhere in this Agreement,
any provision herein which contemplates the agreement, approval or consent of, or exercise of any right of, a Party, such Party may give or withhold such agreement, approval or consent, or exercise such right, in its sole and absolute discretion,
the Parties hereby expressly disclaiming any implied duty of good faith and fair dealing or similar concept.
(o)
Counterparts
.
This Agreement may be executed in counterparts (each of which will be deemed to be an original but all of which taken together will constitute one and the same agreement) and will become effective when one or more counterparts have been signed by
each of the Parties and delivered to the other Parties.
(p)
Expenses
. Except as otherwise provided herein, each Party shall pay
such Partys own expenses incurred in connection with this Agreement.
(q)
No Ownership Interest
. Nothing contained in this
Agreement shall be deemed, upon execution, to vest in any of the Parent Entities any direct or indirect ownership or incidence of ownership of or with respect to any Covered Units. All rights, ownership and economic benefits of and relating to the
Covered Units shall remain vested in and belong to Magnetar, and none of the Parent Entities shall have authority to manage, direct, superintend, restrict, regulate, govern or administer any of the policies or operations of MLP or exercise any power
or authority to direct Magnetar in the voting of any of the Covered Units, except as otherwise provided herein.
(r)
Non-Recourse
.
Any claim or cause of action based upon or arising out of this Agreement may only be brought against Persons that are expressly named as Parties, and then only with respect to the specific obligations set forth herein. No former, current or future
direct or indirect equityholders, controlling Persons, stockholders, directors, officers, employees, members, managers, agents, trustees, Affiliates, general or limited partners or assignees of the Parties (except permitted transferees hereunder) or
of any former, current or future direct or indirect equityholder, controlling Person, stockholder, director, officer, employee, member, manager, agent, trustee, Affiliate, general or limited partner or assignee of any of the foregoing (collectively,
but for the avoidance of doubt excluding the Parties,
Non-Party Affiliates
) will have any liability or obligation for any of the representations, warranties, covenants, agreements, obligations or liabilities of any Party under
this Agreement or for any Proceeding based upon or arising out of this Agreement, in each case whether based on contract, tort or strict liability, by the enforcement of any assessment, by any legal or equitable Proceeding, by virtue of any statute,
regulation or applicable Law or otherwise and whether by or through attempted piercing of the corporate or partnership veil, by or through a claim by or on behalf of a Party hereto or another Person or otherwise.
(s)
Certain Definitions
. For the purposes of this Agreement, capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Merger Agreement. Certain other terms have the meanings ascribed to them below or elsewhere in this Agreement.
Additional Owned Units
means all Common Units that are owned of record and beneficially by Magnetar and acquired after the
date hereof.
Affiliate
has the meaning set forth in the Merger Agreement;
provided
,
however
, that for
purposes of this Agreement, none of the MLP Group Entities shall constitute an Affiliate of Magnetar.
F-9
beneficial ownership
(and related terms such as beneficially owned
or beneficial owner) has the meaning set forth in Rule 13d-3 under the Exchange Act.
Covered Units
means
the Disclosed Owned Units and Additional Owned Units.
Excepted Parties
means the MLP Group Entities and their
respective Subsidiaries and controlled Affiliates, and their respective officers, managers, directors (including the MLP GP Board) and Representatives.
Transfer
means, with respect to a Covered Unit, the transfer, pledge, hypothecation, encumbrance, assignment or other
disposition (whether by sale, merger, consolidation (other than a sale, merger or consolidation of Magnetar in which the transferee or surviving entity agrees to assume all of Magnetars obligations under this Agreement), liquidation,
dissolution, dividend, distribution or otherwise) of such Covered Unit or the beneficial ownership thereof, the offer to make such a transfer or other disposition, and each Contract, including any option, whether or not in writing, to effect any of
the foregoing. As a verb,
Transfer
shall have a correlative meaning.
[S
IGNATURES
ON
F
OLLOWING
P
AGES
.]
F-10
IN WITNESS WHEREOF, the Parent Entities and Magnetar have caused this Agreement to be duly
executed as of the day and year first above written.
PARENT GP:
ZENITH ENERGY U.S. GP LLC
By:
/s/ Jeffrey R. Armstrong
Name: Jeffrey R. Armstrong
Title: Chief Executive Officer
PARENT:
ZENITH ENERGY U.S., L.P.
By: Zenith Energy U.S. GP, LLC, its general
partner
By:
/s/ Jeffrey R. Armstrong
Name: Jeffrey R. Armstrong
Title: Chief Executive Officer
HOLDINGS:
ZENITH ENERGY U.S. LOGISTICS
HOLDINGS, LLC
By:
/s/ Jeffrey R. Armstrong
Name: Jeffrey R. Armstrong
Title: Chief Executive Officer
[Signature Page to Support Agreement]
F-11
MERGER SUB:
ZENITH ENERGY U.S. LOGISTICS, LLC
By:
/s/ Jeffrey R. Armstrong
Name: Jeffrey R. Armstrong
Title: Chief Executive Officer
[Signature Page to Support Agreement]
F-12
MAGNETAR:
MTP ENERGY MASTER FUND LTD.
By:
/s/ William Walmsley
Name: William Walmsley
Title: Director
[Signature Page to Support Agreement]
F-13
L O G
I S T I C S P A R T N E R S VOTE BY MAIL VOTE BY TELEPHONE Mark, sign and date your proxy card Go to VOTE www. proxyvoting. BY INTERNET com/ARCX Call toll free (800) 730-8458 and return it in the postage-paid within the USA, US
territories & Canada envelope we have provided or Follow steps outlined on on a touch tone telephone return it to MacKenzie Partners, Inc., the secure website. Follow the instructions provided by 105 Madison Avenue, 17th
Floor, the recorded message New York, NY 10017. Proxies Submitted By the Internet or Telephone Must Be Received by 11:59 P.M., Eastern Time, on December 17, 2017. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY
CARD IS VALID ONLY WHEN SIGNED AND DATED To vote, mark blocks below in blue or black ink as follows: THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR PROPOSAL 1For Against Abstain 1. Approve the Purchase Agreement and Plan of Merger dated as of
August29, 2017, by and among Zenith Energy U.S., L.P., Zenith Energy U.S. GP, If you do not indicate how to vote your shares for Proposal 1, this proxy LLC, Zenith Energy U.S. Logistics Holdings, LLC, Zenith Energy U.S. Logis- card will be voted
FOR Proposal 1. tics, LLC, Arc Logistics Partners LP, Arc Logistics GP LLC, Lightfoot Capital Partners, LP and Lightfoot Capital Partners GP LLC, and the merger con-Yes No templated thereby. Please indicate if you plan to attend this
meeting For address change/comments, mark here. (see reverse for instructions) Dated: Signature Signature (Title) ciary, Please nership please sign name, exactly give by full authorized as title your as name(s) such. officer. Joint appear(s) owners
hereon. should each When sign signing personally. as attorney, All holders executor, must administrator, sign. If a corporation corporate or officer, partnership, trustee, please guardian, sign in custodian full corporate or other or part- fidu-
SEE VOTING INSTRUCTIONS ON REVERSE SIDE Arc Logistics Partners LP Special Meeting of Unitholders THIS PROXY IS SOLICITED
BY THE BOARD OF DIRECTORS OF ARC LOGISTICS GP LLC The undersigned(s) hereby appoint(s) Vincent T. Cubbage and Steven C. Schnitzer or either of them, as the true and lawful attorneys-in-fact, agents and proxies (each of them with full power of
substitution) to represent the undersigned(s) and to vote at the special meeting of unitholders of Arc Logistics Partners LP, to be held on December 18, 2017, at 11:00 a.m. (Eastern Time), at 666 Fifth Avenue, 26th Floor, New York, New York
10103, and any and all adjournments or other delays thereof (the unitholder meeting), in the manner directed on the reverse side of this form, with respect to all units of Arc Logistics Partners LP that the undersigned(s) is entitled to
vote and in the discretion of the proxies on such other matters as may properly come before the unitholder meeting. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF ARC LOGISTICS GP LLC AND WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS
INDICATED, WILL BE VOTED FOR PROPOSAL 1. Address Changes/Comments: (If you noted any Address Changes and/or Comments above, please mark the corresponding box on the reverse side.) Continued, and to be signed, on the reverse side