Note 1. Basis of Presentation and Background
These unaudited pro forma condensed consolidated financial statements and underlying pro forma adjustments are based upon currently available information and certain estimates and
assumptions made by management; therefore, actual results could materially differ from the pro forma information. However, management believes that the assumptions provide a reasonable basis for
presenting the significant effects of the transactions noted herein. Management believes the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the pro
forma information.
As described in the section of this proxy statement entitled "The Transactions and Transaction Documents," the Transactions include the issuance of 245,500,000 PAA Common Units, subject
to certain adjustments, and the assumption of AAP's outstanding debt (as of June 30, 2016, approximately $593 million) in exchange for the contribution by AAP of the IDRs and the
conversion of PAA GP's 2% general partner interest in PAA into a non-economic general partner interest in PAA. We refer to these transactions collectively as the "
PAA
Recapitalization
."
The
Transactions are between and among consolidated subsidiaries of PAGP that are considered entities under common control. These equity transactions did not result in a change in the
carrying value of the underlying assets and liabilities and the estimated costs incurred to complete the Transactions of approximately $15 million will be charged to partners' capital during
the year ending December 31, 2016 of which $2 million had been recognized as of June 30, 2016. In addition, the PAA Recapitalization will result in a modification in the net income
allocation by PAA to AAP and by AAP to PAGP resulting in a decrease in net income attributable to PAGP.
At
the closing of the Transactions, (i) AAP will effect a reverse split of the outstanding Class A units ("
AAP Units
") and
Class B Units of AAP, (ii) PAGP will effect a reverse split of the outstanding Class A shares and Class B shares, and (iii) PAGP GP will effect a reverse
split of company units in PAGP GP ("
PAGP GP Units
"), in each case, at a ratio of approximately 1-to-2.663, subject to certain adjustments.
These reverse equity splits are designed to ensure that the number of outstanding Class A Shares following the Closing of the Transactions will equal the number of AAP Units owned by PAGP, and
will also equal the number of PAA Common Units held by AAP immediately following the PAA Recapitalization that are attributable to PAGP's interest in AAP, along with the corresponding reverse splits
to the Class B shares and PAGP GP Units. Following the Closing of the Transactions, each split-adjusted Class A share will represent indirect ownership of one PAA Common Unit.
Note 2. Pro Forma Adjustments
The pro forma adjustments included in the unaudited pro forma condensed consolidated financial statements are as follows:
-
(a)
-
Reflects
the borrowing for and payment of the estimated transaction costs associated with completing the Transactions, including financial advisory, legal
and accounting expenses.
-
(b)
-
Reflects
the decrease in net income attributable to PAGP (and increase in net income attributable to noncontrolling interests) associated with the PAA
Recapitalization.
-
(c)
-
Reflects
the decrease in deferred income tax expense associated with the decrease in net income attributable to PAGP and was determined based on an
estimated statutory rate of approximately 37%.
-
(d)
-
Reflects
the decrease in the weighted average Class A Shares outstanding resulting from the reverse share split described above and a change in units
that have a dilutive effect on net income per Class A Share.
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Annex A
Execution Version
SIMPLIFICATION AGREEMENT
BY AND AMONG
PAA GP HOLDINGS LLC,
PLAINS GP HOLDINGS, L.P.,
PLAINS ALL AMERICAN GP LLC,
PLAINS AAP,
L.P.,
PAA GP LLC
AND
PLAINS ALL AMERICAN PIPELINE, L.P.
DATED JULY 11, 2016
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EXHIBIT AND SCHEDULE INDEX
|
|
|
Exhibits
|
|
|
Exhibit A
|
|
Form of A&R PAA Partnership Agreement
|
Exhibit B
|
|
Form of A&R AAP Partnership Agreement
|
Exhibit C
|
|
Form of A&R PAGP Partnership Agreement
|
Exhibit D
|
|
Form of A&R GP LLC Agreement
|
Exhibit E
|
|
Form of A&R PAGP GP LLC Agreement
|
Exhibit F
|
|
Form of Registration Rights Agreement
|
Exhibit G
|
|
Form of Omnibus Agreement
|
Exhibit H
|
|
Form of A&R Administrative Agreement
|
Exhibit I
|
|
Tax Opinion Certificate
|
Schedules
|
|
|
Schedule 1.1(a)
|
|
Existing Owners
|
Schedule 4.9
|
|
Appointees to PAGP GP Board of Directors
|
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SIMPLIFICATION AGREEMENT
This Simplification Agreement (this "
Agreement
") is entered into as of July 11,
2016 by and among PAA GP Holdings LLC, a Delaware limited liability company ("
PAGP GP
"), Plains GP Holdings, L.P., a
Delaware limited partnership ("
PAGP
"), Plains All American GP LLC, a Delaware limited liability company
("
GP LLC
"), Plains AAP, L.P., a Delaware limited partnership ("
AAP
"),
PAA GP LLC, a Delaware limited liability company ("
PAA GP
"), and Plains All American Pipeline, L.P., a Delaware limited
partnership ("
PAA
"). Each of the parties hereto is sometimes individually referred to herein as a
"
Party
" and are collectively referred to herein as the "
Parties.
"
RECITALS:
A. PAA GP
is the general partner of PAA and holds a 2.0% General Partner Interest (as defined in the PAA Partnership Agreement) in PAA (the
"
PAA General Partner Interest
").
B. AAP
is the sole member of PAA GP and a limited partner of PAA and holds (i) 100% of the limited liability company interests in PAA GP (the
"
PAA GP Membership Interests
") and (ii) all of the outstanding Incentive Distribution Rights (as defined in the PAA Partnership Agreement)
in PAA (the "
PAA IDRs
").
C. GP LLC
is the general partner of AAP and holds a non-economic general partner interest in AAP (the "
AAP General Partner
Interest
").
D. PAGP
is the sole member of GP LLC, a limited partner of AAP and a member of PAGP GP and holds (i) 100% of the limited liability company
interests in GP LLC (the "
GP LLC Membership Interests
"), (ii) 267,032,219 Class A Units (as defined in the AAP
Partnership Agreement) representing limited partner interests in AAP and having the rights and obligations specified in the AAP Partnership Agreement ("
AAP Class A
Units
"), representing approximately 41.7% of the outstanding AAP Class A Units and (iii) 254,037,317 Company Units (as defined in the PAGP GP LLC
Agreement) representing limited liability company interests in PAGP GP and having the rights and obligations specified in the PAGP GP LLC Agreement
("
PAGP GP Company Units
"), representing approximately 41.9% of the outstanding PAGP GP Company Units.
E. PAGP GP
is the general partner of and holds a non-economic general partner interest in PAGP (the "
PAGP General Partner
Interest
").
F. The
Parties desire to enter into this Agreement to evidence their agreement to consummate a series of transactions that includes, among other related transactions, the
issuance by PAA of PAA Common Units to AAP and the assumption by PAA of the outstanding debt under the AAP Credit Agreement in exchange for (i) AAP's direct interest in the PAA IDRs and
(ii) AAP's indirect interest in the economic rights associated with the PAA General Partner Interest.
G. The GP LLC
Conflicts Committee (as defined below) has approved the Transactions on behalf of PAA pursuant to the terms of the PAA Partnership Agreement.
H. The
Board of Directors of GP LLC has approved the Transactions on behalf of GP LLC, AAP and PAA GP pursuant to the organizational
documents of such entities.
I. The
Board of Directors of PAGP GP (the "
PAGP GP Board
") has, subject to receipt of the Required Shareholder
Approval, approved the Transactions pursuant to the terms of the PAGP Partnership Agreement.
J. Concurrently
with the execution of this Agreement, Existing Owners holding a Share Majority (as such term is defined in the PAGP Partnership Agreement) have entered into
a Voting Agreement irrevocably obligating such Existing Owners to vote the PAGP Class A Shares and PAGP Class B
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Shares
held by them in favor of this Agreement and the Transactions, subject to the terms and conditions set forth therein (the "
Voting Agreement
").
AGREEMENT:
NOW, THEREFORE, for and in consideration of the premises and mutual covenants herein contained, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1
Definitions
. As used in this Agreement, the following terms
have the meanings specified or referred to in this
Section 1.1
.
"
A&R AAP Partnership Agreement
" is defined in
Section 2.6(b)
.
"
A&R Administrative Agreement
" is defined in
Section 2.9(a)(iii)
.
"
A&R GP LLC Agreement
" is defined in
Section 2.6(d)
.
"
A&R PAA Partnership Agreement
" is defined in
Section 2.5(c)
.
"
A&R PAGP GP LLC Agreement
" is defined in
Section 2.6(e)
.
"
A&R PAGP Partnership Agreement
" is defined in
Section 2.6(c)
.
"
AAP
" is defined in the Preamble.
"
AAP Assumed Debt"
means the AAP debt issued pursuant to the AAP Credit Agreement that is assumed by PAA pursuant to
Section 2.5(d)
.
"
AAP Class A Units
" is defined in the Recitals.
"
AAP Class B Units
" means Class B Units representing limited partner interests in AAP and having the rights and obligations
specified in the AAP Partnership Agreement.
"
AAP Credit Agreement
" means the Second Amended and Restated Credit Agreement dated as of September 26, 2013 among AAP, Citibank,
N.A. and the lenders party thereto.
"
AAP General Partner Interest
" is defined in the Recitals.
"
AAP Partnership Agreement
" means the Seventh Amended and Restated Limited Partnership Agreement of AAP, dated as of October 21,
2013, as amended by Amendment No. 1 thereto, dated as of December 31, 2013.
"
AAP Reverse Unit Split
" means a reverse split (a) of the outstanding AAP Class A Units such that each holder of outstanding
AAP Class A Units will hold following the completion of such reverse split (after taking into account any rounding mechanics utilized in such split), a number of outstanding AAP Class A
Units equal to the product of (i) the number of AAP Class A Units held by such holder immediately prior to the split and (ii) the Exchange Ratio, and (b) of the outstanding
AAP Class B Units such that each holder of outstanding AAP Class B Units will hold following the completion of such reverse split (after taking into account any rounding mechanics
utilized in such split), a number of outstanding AAP Class B Units equal to the product of (i) the number of AAP Class B Units held by such holder immediately prior to the split
and (ii) the Exchange Ratio.
"
AAP Revolving Credit Facility
" means the revolving credit facility under the AAP Credit Agreement.
"
AAP Term Loan
" means the term loan under the AAP Credit Agreement.
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"
Affiliate
" means, with respect to any Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under
common Control with, such specified Person through one or more intermediaries or otherwise.
"
Agreement
" is defined in the Preamble.
"
Barclays
" is defined in
Section 3.1(f)
.
"
Business Day
" means each day of the week except Saturdays, Sundays and days on which banking institutions are authorized or required to
close in the State of Texas.
"
Change in Recommendation
" is defined in
Section 4.1(c).
"
Closing
" is defined in
Section 2.1
.
"
Closing Date
" means the date on which Closing occurs.
"
Code
" means the Internal Revenue Code of 1986, as amended.
"
Commitments
" means (a) options, warrants, convertible securities, exchangeable securities, subscription rights, conversion rights,
exchange rights or other contracts or agreements that could require a Person to issue any of its Equity Interests or to sell any Equity Interests it owns in another Person; (b) any other
securities convertible into, exchangeable or exercisable for, or representing the right to subscribe for any Equity Interest of a Person or owned by a Person; (c) statutory pre-emptive rights
or pre-emptive rights granted under a Person's organizational documents; and (d) stock appreciation rights, phantom stock, profit participation or other similar rights with respect to a Person.
"Common Unit Fungibility"
is defined in
Section 2.10(c)
.
"
Contributed AAP Units
" is defined in
Section 2.3
.
"
Control
" means, where used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and the terms "Controlling" and "Controlled" have correlative
meanings.
"
Delaware LLC Act
" means the Delaware Limited Liability Company Act.
"
Delaware LP Act
" means the Delaware Revised Uniform Limited Partnership Act.
"
Encumbrance
" means any mortgage, pledge, lien, encumbrance, charge, or other security interest.
"
Equity Interests
" means (a) with respect to a corporation, any and all shares of capital stock and any Commitments with respect
thereto, (b) with respect to a partnership, limited liability company, trust or similar Person, any and all units, interests or other partnership/limited liability company interests, and
any Commitments with respect thereto, and (c) any other direct or indirect equity ownership or participation in a Person.
"
Exchange Act
" means the Securities Exchange Act of 1934.
"
Exchange Ratio
" means the quotient resulting from the division of (a) 245,500,000 by (b) 653,758,644 (as such figure may be
reduced prior to Closing to account for the forfeiture of any AAP Class B Units during the period between the date hereof and the Closing Date).
"
Existing Owners
" means the Persons identified on
Schedule 1.1(a)
.
"
Governmental Authority
" means any legislature, agency, bureau, branch, department, division, commission, court, tribunal, magistrate,
justice, multi-national organization, quasi-governmental body, or other similar recognized organization or body of any federal, state, county, municipal, local, or
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foreign
government or other similar recognized organization or body exercising similar powers or authority having competent jurisdiction.
"
GP LLC
" is defined in the Preamble.
"
GP LLC Agreement
" means the Sixth Amended and Restated Limited Liability Company Agreement of GP LLC, dated as of
October 21, 2013, as amended by Amendment No. 1 thereto, dated as of January 28, 2016.
"
GP LLC Conflicts Committee
" means a committee of the board of directors of GP LLC satisfying the requirements of a
"Conflicts Committee" set forth in the PAA Partnership Agreement and in the GP LLC Agreement.
"
GP LLC Membership Interests
" is defined in the Recitals.
"
IDR Redemption and Exchange
" is defined in
Section 2.5(b)
.
"
Indirect PAA GP Capacity
" means the capacity in which GP LLC is acting when it takes action as the general partner
of AAP, in AAP's capacity as the sole member of PAA GP, in PAA GP's capacity as the general partner of PAA.
"
Intended Tax Treatment
" is defined in
Section 2.10(a)
.
"
Jefferies
" is defined in
Section 3.5(f)
.
"
Law
" means any law (statutory, common, or otherwise), constitution, treaty, convention, ordinance, equitable principle, code, rule,
regulation, executive order, or other similar authority enacted, adopted, promulgated, or applied by any Governmental Authority, each as amended and now and hereinafter in effect.
"
Non-Contribution Revolver Borrowings
" means amounts included in the AAP Assumed Debt that are attributable to the outstanding balance of
the AAP Revolving Credit Facility to the extent not attributable under Temporary Treasury Regulations Section 1.163-8T solely to capital contributions to PAA to satisfy PAA GP's
contribution obligations under the PAA Partnership Agreement.
"
Non-Economic PAA General Partner Interest
" is defined in
Section 2.5(c)
.
"
NYSE
" means the New York Stock Exchange.
"
Omnibus Agreement
" is defined in
Section 2.9(a)(ii)
.
"
Order
" means any order, writ, injunction, decree, ruling, compliance or consent order or decree, settlement agreement, schedule and
similar binding legal agreement issued by or entered into with a Governmental Authority.
"
Outside Date
" is defined in
Section 6.1(b)(i)
.
"
PAA
" is defined in the Preamble.
"
PAA Common Unit
" means a common unit representing a limited partner interest in PAA and having the rights and obligations specified in
the PAA Partnership Agreement.
"
PAA Common Unit Consideration
" is defined in
Section 2.5(a)
.
"
PAA General Partner Interest
" is defined in the Recitals.
"
PAA General Partner Interest Recapitalization
" is defined in
Section 2.5(c)
.
"
PAA GP
" is defined in the Preamble.
"
PAA GP LLC Agreement
" means the Limited Liability Company Agreement of PAA GP, dated as of December 28, 2007.
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"
PAA GP Membership Interests
" is defined in the Recitals.
"
PAA IDRs
" is defined in the Recitals.
"
PAA Partnership Agreement
" means the Fifth Amended and Restated Agreement of Limited Partnership of PAA dated as of January 28,
2016, as amended by Amendment No. 1 thereto, dated as of July 10, 2016.
"
PAA SEC Reports
" means the forms, reports, schedules, registration statements and other documents filed with or furnished to the SEC by
PAA and PAGP on or after January 1, 2015 and prior to the date of this Agreement.
"
PAA Series A PIK Units
" has the meaning given to the term "Series A PIK Units" in the PAA Partnership Agreement.
"PAA Series A Preferred Unit
" means a Series A Preferred Unit representing a limited partner interest in PAA and having the
rights and obligations specified in the PAA Partnership Agreement.
"
PAA/AAP Interest Restructuring
" means collectively the PAA General Partner Interest Recapitalization, the IDR Redemption and Exchange and
the assumption of the AAP Assumed Debt pursuant to
Section 2.5(d)
.
"
PAGP
" is defined in the Preamble.
"
PAGP Class A Shares
" means Class A Shares representing limited partner interests in PAGP and having the rights and
obligations specified in the PAGP Partnership Agreement.
"
PAGP Class B Shares
" means Class B Shares representing limited partner interests in PAGP and having the rights and
obligations specified in the PAGP Partnership Agreement.
"
PAGP Class C Share Issuance
" is defined in
Section 2.8
.
"
PAGP Class C Shares
" is defined in
Section 2.8
.
"
PAGP General Partner Interest
" is defined in the Recitals.
"
PAGP GP
" is defined in the Preamble.
"
PAGP GP Board
" is defined in the Recitals.
"
PAGP GP Board Recommendation
" is defined in
Section 4.1(c).
"
PAGP GP Company Units
" is defined in the Recitals.
"
PAGP GP LLC Agreement
" means the Amended and Restated Limited Liability Company Agreement of PAGP GP, dated as of
October 21, 2013, as amended by Amendment No. 1 thereto, dated as of December 31, 2013.
"
PAGP GP Reverse Unit Split
" means a reverse split of the outstanding PAGP GP Company Units at a ratio such that, to the
greatest extent possible, following the completion of such reverse split (after taking into account any rounding mechanics utilized in such split), the number of outstanding PAGP GP Company
Units held by each holder of such units shall equal the product of (i) the number of PAGP GP Company Units held by such holder immediately prior to the split and (ii) the Exchange
Ratio.
"
PAGP Partnership Agreement
" means the Amended and Restated Agreement of Limited Partnership of PAGP, dated as of October 21, 2013.
"
PAGP Reverse Stock Split
" means a reverse split of the outstanding PAGP Class A Shares and PAGP Class B Shares at a ratio
such that, to the greatest extent possible, following the completion of such reverse split (after taking into account any rounding mechanics utilized in such split), the number
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of
outstanding PAGP Class A Shares or PAGP Class B Shares, as applicable, held by each holder of such partnership interests shall equal the product of (i) the number of PAGP
Class A Shares or PAGP Class B Shares, as applicable, held by such holder immediately prior to the split and (ii) the Exchange Ratio.
"
PAGP Reverse Stock Split Effective Time
" is defined in Section 2.7(a).
"
Party
" and "
Parties
" is defined in the Preamble.
"
Person
" means any individual or entity, including any firm, corporation, partnership (general or limited), limited liability company,
trust, joint venture, Governmental Authority or other entity.
"
Proxy Statement
" is defined in
Section 4.1(a)
.
"
Q3 Distribution Record Date
" is defined in
Section 4.10(a)
.
"
Q3 Distribution True-Up Amount
" is defined in
Section 4.10(a)
.
"
Registration Rights Agreement
" is defined in
Section 2.9(a)(i)
.
"
Representative
" shall mean with respect to a Person, its directors, officers, employees, agents and representatives, including any
investment banker, financial advisor, attorney, accountant or other advisor, agent or representative.
"
Required Shareholder Approval
" means the affirmative vote of holders of a Share Majority (as such term is defined in the PAGP Partnership
Agreement) in favor of the Shareholder Proposal.
"
Rights
" shall mean, with respect to any Person, securities or obligations convertible into or exchangeable for, or giving any person any
right to subscribe for or acquire, or any options, calls or commitments relating to, Equity Interests of such Person.
"
SEC
" means the United States Securities and Exchange Commission.
"
Securities Act
" means the Securities Act of 1933.
"
Series A Conversion Rate
" has the meaning given such term in the PAA Partnership Agreement.
"
Shareholder Meeting
" is defined in
Section 4.1(b)
.
"
Shareholder Proposal
" is defined in
Section 4.1(b)
.
"
Subsidiary
" means, with respect to any Person, any corporation, limited liability company, partnership, association or other business
entity of which a majority of the Voting Interests are at the time owned or Controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"Tax Opinion"
is defined in
Section 2.10(b)
.
"Tax Opinion Certificate"
is defined in
Section 2.10(b)
.
"
Transaction Documents
" means this Agreement, the Omnibus Agreement, the Registration Rights Agreement, the A&R PAA Partnership Agreement,
the A&R AAP Partnership Agreement, the A&R GP LLC Agreement, the A&R PAGP Partnership Agreement, the A&R PAGP GP LLC Agreement, the A&R Administrative Agreement, the Voting
Agreement, and each of the other documents and agreements to be delivered by the Parties in connection with the consummation of the Transactions.
"
Transactions
" means the transactions contemplated by this Agreement and the other Transaction Documents, including each of the
Transactions contemplated by
Section 2.3
through
Section 2.8
.
"
Tudor Pickering
" is defined in
Section 3.1(f)
.
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"
Voting Agreement
" is defined in the Recitals.
"
Voting Interests
" of any Person as of any date means (i) the equity interests of such Person pursuant to which the holders thereof
have the general voting power under ordinary circumstances and are entitled to vote in the election of at least a majority of the board of directors, managers or trustees of such Person (regardless of
whether, at the time, equity interests of any other class or classes shall have, or might have, voting power by reason of the occurrence of any contingency) or (ii) with respect to a
partnership (whether general or limited), any general partner interest in such partnership.
1.2
Certain Interpretive Matters
. In this Agreement:
(a) Any
reference to a statute, regulation or Law will be deemed also to refer to any amendment thereto and all rules and regulations promulgated thereunder, in each case as
of the date of such reference but not thereafter, unless the context expressly requires otherwise;
(b) Any
reference to an agreement, instrument or document will be deemed to refer to that agreement, instrument or document as amended, restated, supplemented and otherwise
modified from time to time, unless the context expressly requires otherwise;
(c) The
words "include," "includes," and "including" will be deemed to be followed by "without limitation";
(d) Examples
will not be construed to limit, expressly or by implication, the matter they illustrate;
(e) Any
pronoun will include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs will include the plural and vice
versa, unless the context otherwise expressly requires;
(f) 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;
(g) The
term "cost" includes expense and the term "expense" includes cost;
(h) The
headings and titles herein are for convenience only and will have no significance in the interpretation hereof;
(i) Currency
amounts referenced herein are in U.S. Dollars;
(j) Unless
the context otherwise requires, all references to time mean time in Houston, Texas;
(k) Whenever
this Agreement refers to a number of days, such number refers to calendar days unless Business Days are specified; and
(l) If
a term is defined as one part of speech (such as a noun), it has a corresponding meaning when used as another part of speech (such as a verb).
ARTICLE II
THE CLOSING; CLOSING TRANSACTIONS
2.1
The Closing
. Upon the terms and subject to the conditions of
this Agreement, the closing of the Transactions (the "
Closing
") shall take place at 8:30 a.m., Houston, Texas time, on the first Business Day
after satisfaction (or waiver in accordance with this Agreement) of the last to occur of the conditions set forth in
Article V
(other than any
such conditions which by their nature cannot be satisfied until the Closing Date, which shall be required to be so satisfied or (to the extent permitted by applicable law and this Agreement) waived on
the Closing Date), at the offices of Vinson & Elkins L.L.P., in Houston, Texas, unless another date or place is agreed to in writing by the Parties.
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2.2
Closing Transactions; Order of Closing
Transactions
. At the Closing, upon the terms and subject to the conditions of this Agreement, the Transactions shall be consummated as set forth in this
Article II
. The Transactions provided for in this
Article II
shall be completed in the
order set forth below, with each Transaction in
Section 2.3
through
Section 2.8
occurring
immediately following and conditioned upon the consummation of the prior Transaction (except in the case of the adoption of the governance documents pursuant to
Section 2.6
, which shall be deemed
to have occurred at such time, if any, as is necessary to consummate any earlier Transaction), and the
deliveries set forth in
Section 2.9
occurring immediately thereafter or, to the extent necessary to consummate any earlier Transaction
contemplated by
Section 2.3
through
Section 2.8
, at the time of such earlier Transaction.
2.3
Contribution of AAP Class A Units from PAGP
to GP LLC
. PAGP shall, and effective as of and contingent upon the Closing, hereby does, contribute and assign to GP LLC a number of
AAP Class A Units representing 1.0% of all of the AAP Class A Units then held by PAGP (the "
Contributed AAP
Units
"). GP LLC shall, and effective as of and contingent upon the Closing, hereby (a) accepts such Contributed AAP Units as a contribution to the capital
of GP LLC, (b) agrees to be bound by the AAP Partnership Agreement as a limited partner of AAP and (c) is admitted as a limited partner of AAP with respect to the
Contributed AAP Units.
2.4
Election to Treat GP LLC as a Corporation for U.S. Federal Income Tax
Purposes
. GP LLC shall file a valid election on Internal Revenue Service Form 8832 for GP LLC to be treated for U.S. federal
income tax purposes as an entity that is regarded as separate from its owner, to be effective on the Closing Date or as promptly as practicable thereafter.
2.5
Redemption of PAA IDRs by PAA in Exchange for PAA Common Units; Recapitalization of PAA General
Partner Interest
.
(a) As
consideration for the IDR Redemption and Exchange contemplated by Section 2.5(b), the PAA General Partner Interest Recapitalization contemplated by
Section 2.5(c) and the performance by the other Parties hereto of their respective obligations hereunder and under the various Transaction Documents, PAA agrees to (i) perform its
obligations hereunder and under the various Transaction Documents to which it is a party and (ii) issue to AAP a total of up to 245,500,000 PAA Common Units (the "
PAA
Common Unit Consideration
"). Effective as of and contingent upon the Closing, PAA shall issue to AAP a number of PAA Common Units equal to the PAA Common Unit Consideration
less a number of PAA Common Units equal to the number of PAA Common Units that are issuable pursuant to Section 4.2(c)(i) of the Omnibus Agreement (assuming that each AAP Class B Unit
issued and outstanding as of the Closing Date that is not an AAP Earned Unit (as defined in the Omnibus Agreement) as of the Closing Date becomes an AAP Earned Unit after the Closing Date).
(b) PAA
shall, and effective as of and contingent upon the Closing, and concurrently with the issuance of the PAA Common Unit Consideration, hereby does, exchange the PAA
IDRs for PAA Common Units by redeeming all of AAP's right, title and interest in and to the PAA IDRs, free and clear of all liens in exchange for the issuance and delivery by PAA of the PAA Common
Unit Consideration (together, the "
IDR Redemption and Exchange
"). Upon the consummation of the IDR Redemption and Exchange, the PAA IDRs shall be
automatically and permanently cancelled without any further action by any Party.
(c) The
PAA General Partner Interest shall, effective as of and contingent upon the Closing, and concurrently with the IDR Redemption and Exchange, be automatically
converted into a non-economic general partner interest in PAA (the "
Non-Economic PAA General Partner Interest
"), as set forth in the Sixth Amended and
Restated Agreement of Limited Partnership of PAA (in substantially the form
attached as
Exhibit A
hereto, the "
A&R PAA Partnership Agreement
") in exchange for the issuance
and delivery by PAA of the PAA Common Unit Consideration as
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contemplated
in
Section 2.5(a)
(such conversion and issuance, together, the "
PAA General Partner Interest
Recapitalization
").
(d) Concurrently
with the other transactions contemplated by this
Section 2.5
, (i) AAP shall, after
establishing such reserves as may be necessary to satisfy any expenses payable by AAP, PAGP or PAGP GP in connection with the Transactions, apply any remaining cash balances towards the balance
then due and payable under the AAP Credit Agreement, and (ii) PAA shall assume all remaining outstanding indebtedness, obligations and liabilities under the AAP Credit Agreement and any related
collateral or other agreements and shall cause to be terminated and released all applicable obligations and liabilities of AAP related to the AAP Credit Agreement and such other agreements.
2.6
Adoption of Amended and Restated Governance
Documents
. Effective as of and contingent upon the Closing:
(a) PAA GP,
as the general partner of PAA, shall execute and deliver, and together with GP LLC, AAP, PAGP and PAGP GP, shall cause to be adopted,
the A&R PAA Partnership Agreement, which shall reflect and give effect to, among other things, the PAA General Partner Interest Recapitalization and the cancellation of the PAA IDRs in accordance with
Section 2.5
.
(b) GP LLC,
as the general partner of AAP, shall execute and deliver and cause to be adopted the Eighth Amended and Restated Limited Partnership Agreement of AAP, in
substantially the form attached hereto as
Exhibit B
(the "
A&R AAP Partnership Agreement
").
(c) PAGP GP,
as the general partner of PAGP, shall execute and deliver and cause to be adopted the Second Amended and Restated Agreement of Limited Partnership of
PAGP, in substantially the form attached hereto as
Exhibit C
(the "
A&R PAGP Partnership
Agreement
").
(d) PAGP,
as the sole member of GP LLC, shall execute and deliver and cause to be adopted the Seventh Amended and Restated Limited Liability Company Agreement
of GP LLC, in substantially the form attached as
Exhibit D
hereto (the "
A&R GP LLC
Agreement
").
(e) PAGP GP
shall execute and deliver and cause to be adopted the Second Amended and Restated Limited Liability Company Agreement of PAGP GP, in substantially
the form attached hereto as
Exhibit E
(the "
A&R PAGP GP LLC Agreement
").
2.7
Reverse Unit/Stock Splits
. Effective as of and contingent
upon the Closing:
(a) PAGP GP
and PAGP shall take all actions necessary to complete the PAGP Reverse Stock Split, to be effective upon the opening of trading of the PAGP Class A
Shares on the NYSE on the Closing Date or as promptly as practicable thereafter (the "
PAGP Reverse Stock Split Effective Time
").
(b) GP LLC
and AAP shall take all actions necessary to complete the AAP Reverse Unit Split to be effective at the PAGP Reverse Stock Split Effective Time.
(c) The
Board of Directors of PAGP GP and PAGP GP shall take all actions necessary to complete the PAGP GP Reverse Unit Split, to be effective at the
PAGP Reverse Stock Split Effective Time.
2.8
Issuance of PAGP Class C Shares
. PAGP shall, and
effective as of and contingent upon the Closing hereby does, issue to PAA newly created Class C shares representing limited partner interests in PAGP, having the rights and preferences of
"Class C Shares" as contemplated by the A&R PAGP Partnership Agreement (the "
PAGP Class C Shares
"). The number of PAGP Class C
Shares issued at Closing pursuant to this
Section 2.8
shall equal the sum of (a) the number of outstanding PAA Common Units at such time
(excluding any PAA Common Units constituting part of the PAA Common Unit Consideration) and (b) the number of PAA Common Units issuable as of such time assuming the
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conversion
of all outstanding PAA Series A Preferred Units at the then applicable Series A Conversion Rate (such issuance, the "
PAGP Class C Share
Issuance
"). PAGP GP shall, as the registrar with respect to such PAGP Class C Shares, cause the issuance thereof and the admission of PAA as a limited partner of
PAGP with respect to such PAGP Class C Shares to be recorded in the books and records of PAGP and PAGP GP.
2.9
Closing Deliverables
. At or prior to the Closing, the
applicable Parties will deliver or cause to be delivered, the documents as set forth herein.
(a) PAA
shall deliver:
(i) to
the other parties thereto, a counterpart of the Registration Rights Agreement, in substantially the form attached as
Exhibit F
hereto (the "
Registration Rights
Agreement
"), duly executed by PAA;
(ii) to
the other parties thereto, a counterpart of the Omnibus Agreement, in substantially the form attached as
Exhibit G
hereto (the "
Omnibus Agreement
") duly executed by PAA;
(iii) to
the other parties thereto, a counterpart of the Amended and Restated Administrative Agreement, in substantially the form attached as
Exhibit H
hereto (the "
A&R
Administrative Agreement
"), duly executed by PAA;
(iv) to
AAP, evidence reasonably satisfactory to AAP of the book-entry issuance of the portion of the PAA Common Unit Consideration to be issued and delivered at Closing,
which book-entry issuances may reflect customary legends or similar notations that such PAA Common Units are subject to trading restrictions under applicable Law;
(v) to
AAP, evidence reasonably satisfactory to AAP that PAA has assumed AAP's obligations under the AAP Credit Agreement and that AAP's obligations thereunder have been
terminated, in each case in accordance with
Section 2.5(d)
; and
(vi) to
the other Parties, an officer's certificate, dated the Closing Date, to the effect that (i) the representations and warranties of PAA set forth in this
Agreement are true and correct in all material respects on the Closing Date as though made at and as of the Closing Date (unless expressly made as of an earlier date, in which case, as of such earlier
date) and (ii) PAA has complied in all material respects with each of the covenants in this Agreement required to be complied with by such Party prior to the Closing.
(b) PAA GP
shall deliver:
(i) to
the other parties thereto, a counterpart of the Omnibus Agreement, duly executed by PAA GP;
(ii) to
the other parties thereto, a counterpart of the A&R Administrative Agreement, duly executed by PAA GP;
(iii) the
A&R PAA Partnership Agreement, duly executed by PAA GP (in its capacity as the general partner of PAA and on behalf of the limited partners of PAA pursuant
to powers of attorney granted to PAA GP); and
(iv) to
the other Parties, an officer's certificate, dated the Closing Date, to the effect that (i) the representations and warranties of PAA GP set forth in
this Agreement are true and correct in all material respects on the Closing Date as though made at and as of the Closing Date (unless expressly made as of an earlier date, in which case, as of such
earlier date) and (ii) PAA GP has complied in all material respects with each of the covenants in this Agreement required to be complied with by such Party prior to the Closing.
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(c) AAP
shall deliver:
(i) to
the other parties thereto, a counterpart of the Registration Rights Agreement, duly executed by AAP;
(ii) to
the other parties thereto, a counterpart of the Omnibus Agreement, duly executed by AAP;
(iii) to
the other parties thereto, a counterpart of the A&R Administrative Agreement, duly executed by AAP;
(iv) to
PAA, evidence reasonably satisfactory to PAA that AAP has applied any cash balances towards the repayment of the amount owed by AAP under the AAP Credit Agreement as
contemplated by Section 2.5(d) and that, except as disclosed in
Section 3.3(f)
or as incurred in accordance with
Section 4.4(b)
, there are
no outstanding indebtedness, obligations and liabilities under the AAP Credit Agreement; and
(v) to
the other Parties, an officer's certificate, dated the Closing Date, to the effect that (i) the representations and warranties of AAP set forth in this
Agreement are true and correct in all material respects on the Closing Date as though made at and as of the Closing Date (unless expressly made as of an earlier date, in which case, as of such earlier
date), (ii) AAP has complied in all material respects with each of the covenants in this Agreement required to be complied with by such Party prior to the Closing and (iii) all of the
approvals required under the AAP Credit Agreement in order to consummate the Transactions have been obtained.
(d) GP LLC
shall deliver:
(i) to
the other parties thereto, a counterpart of the Omnibus Agreement, duly executed by GP LLC;
(ii) to
the other parties thereto, a counterpart of the A&R Administrative Agreement, duly executed by GP LLC;
(iii) to
the other parties thereto, the A&R AAP Partnership Agreement, duly executed by GP LLC; and
(iv) to
the other Parties, an officer's certificate, dated the Closing Date, to the effect that (i) the representations and warranties of GP LLC set
forth in this Agreement are true and correct in all material respects on the Closing Date as though made at and as of the Closing Date (unless expressly made as of an earlier date, in which case, as
of such earlier date) and (ii) GP LLC has complied in all material respects with each of the covenants in this Agreement required to be complied with by such Party prior to the Closing.
(e) PAGP
shall deliver:
(i) to
the other parties thereto, a counterpart of the Omnibus Agreement, duly executed by PAGP;
(ii) to
the other parties thereto, a counterpart of the A&R Administrative Agreement, duly executed by PAGP;
(iii) the
A&R GP LLC Agreement, duly executed by PAGP;
(iv) to
PAA, evidence reasonably satisfactory to PAA of the book-entry issuance to PAA of the PAGP Class C Shares issuable in the PAGP Class C Share Issuance;
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(v) to GP LLC,
documentation reasonably satisfactory to GP LLC necessary to reflect the contribution of the Contributed AAP Units
to GP LLC in accordance with
Section 2.3
; and
(vi) to
the other Parties, an officer's certificate, dated the Closing Date, to the effect that (i) the representations and warranties of PAGP set forth in this
Agreement are true and correct in all material respects on the Closing Date as though made at and as of the Closing Date (unless expressly made as of an earlier date, in which case, as of such earlier
date) and (ii) PAGP has complied in all material respects with each of the covenants in this Agreement required to be complied with by such Party prior to the Closing.
(f) PAGP GP
shall deliver:
(i) to
the other parties thereto, a counterpart of the Omnibus Agreement, duly executed by PAGP GP;
(ii) to
the other parties thereto, a counterpart of the A&R Administrative Agreement, duly executed by PAGP GP;
(iii) the
A&R PAGP GP LLC Agreement, duly executed by PAGP;
(iv) the
A&R PAGP Partnership Agreement, duly executed by PAGP GP (in its capacity as the general partner of PAGP); and
(v) to
the other Parties, an officer's certificate, dated the Closing Date, to the effect that (i) the representations and warranties of PAGP GP set forth in
this Agreement are true and correct in all material respects on the Closing Date as though made at and as of the Closing Date (unless expressly made as of an earlier date, in which case, as of such
earlier date) and (ii) PAGP GP has complied in all material respects with each of the covenants in this Agreement required to be complied with by such Party prior to the Closing.
2.10
Intended Tax Treatment, Tax Opinion and Common Unit
Fungibility
.
(a) The
Parties intend that the PAA/AAP Interest Restructuring will be treated for U.S. federal income tax purposes as set forth below in this
Section 2.10(a)
(the
"Intended Tax
Treatment"
). Each Party shall, and shall cause its controlled
Affiliates to, file all tax returns and other reports consistent with the Intended Tax Treatment, unless required by Law to do otherwise.
(i) The
PAA/AAP Interest Restructuring will be treated as either (A) a transaction described in Section 721 of the Code in a manner consistent with Revenue
Ruling 84-52, 1984-1 C.B. 157, and the AAP Assumed Debt will be treated as "qualified liabilities" under Treas. Reg. § 1.707-5(a)(6), or (B) a readjustment of partnership
items among existing partners of a partnership not involving a sale or exchange. As a result, no gain or loss will be recognized by PAA or its partners except (A) in the case of the existing
owners of PAA Common Units, to the extent any gain is recognized as a result of the PAA/AAP Interest Restructuring causing a decrease in their share of PAA liabilities under Section 752 of the
Code and (B) in the case of AAP, to the extent (1) any gain results from the assumption of the Non-Contribution Revolver Borrowings, or (2) the AAP Assumed Debt exceeds AAP's
basis in its PAA Common Units received in the PAA/AAP Interest Restructuring after taking into account any adjustments resulting from the PAA/AAP Interest Restructuring in its share of PAA liabilities
under Section 752 outstanding after the completion of all of the Transactions.
(ii) The
PAA/AAP Interest Restructuring will result in an adjustment to the capital accounts of PAA's partners and the carrying values of PAA's properties in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv)(f).
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(iii) Following
the Transactions, AAP's aggregate basis in its PAA Common Units and non-economic PAA general partner interest received in the PAA/AAP Interest Restructuring
will equal its aggregate basis in the PAA General Partner Interest and PAA IDRs immediately prior to Closing, decreased by the AAP Assumed Debt, increased by its share of PAA liabilities under
Section 752 (after taking into account any adjustments resulting from the Transactions), and increased by gain, if any, recognized by AAP as a result of the PAA/AAP Interest Restructuring.
(b) PAA
and PAGP have received the opinion of Vinson & Elkins LLP dated as of the date hereof (the "
Tax
Opinion
") that the PAA/AAP Interest Restructuring should receive the Intended Tax Treatment. Such opinion is based upon, among other things, the representations set forth in
the
"Tax Opinion Certificate"
attached as
Exhibit I
hereto.
(c) Upon
a subsequent transfer in a fully taxable transaction to a transferee that is unrelated to the transferor, it is contemplated that each PAA Common Unit issued
pursuant to the PAA/AAP Interest Restructuring should in the hands of such transferee have, as a substantive matter, like intrinsic economic and federal income tax characteristics, in all material
respects, to the intrinsic economic and federal income tax characteristics of any other PAA Common Unit the transferee otherwise may have acquired at the same time and at the same price
("Common Unit
Fungibility"
) and PAA GP (i) will exercise its authority and discretion to the maximum extent permitted under the PAA
Partnership Agreement in order to ensure Common Unit Fungibility and (ii) upon a subsequent transfer in a fully taxable transaction will treat each PAA Common Unit issued pursuant to the
PAA/AAP Interest Restructuring acquired by such transferee as having, as a substantive matter, like intrinsic economic and federal income tax characteristics, in all material respects, to the
intrinsic economic and federal income tax characteristics of any other PAA Common Unit the transferee otherwise may have acquired at the same time and at the same price.
(d) Each
Party represents that neither it nor any of its Subsidiaries is aware of any fact that is in existence on the date hereof or may reasonably be expected to occur on
or prior to the Closing, or has taken or agreed to take any action, that would reasonably be expected to prevent or impede (i) the PAA/AAP Interest Restructuring from qualifying for the
Intended Tax Treatment, (ii) the representation in the Tax Opinion Certificate from being true and correct on the date hereof or on the Closing Date, or (iii) the achievement of Common
Unit Fungibility.
(e) Each
Party agrees to use its reasonable best efforts to cause the representations in the Tax Opinion Certificate to continue to be true and correct at Closing, including
by not taking or failing to take any action which action or failure to act such party knows is reasonably likely to prevent the representations in the Tax Opinion Certificate to continue to be true
and correct at Closing.
(f) Each
Party agrees to use its reasonable best efforts to (i) cause the PAA/AAP Interest Restructuring to qualify for the Intended Tax Treatment, and
(ii) cause the achievement of Common Unit Fungibility, including by not taking or failing to take any action which action or failure to act such party knows is reasonably likely to prevent such
qualification or achievement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of PAA
. PAA hereby represents
and warrants to the other Parties hereto as follows:
(a)
Organization, Standing and Authority.
PAA (i) is a limited partnership duly formed, validly existing
and in good standing under the laws of the State of Delaware and has all requisite entity power and authority to own, operate and lease its properties and to carry on its business as
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now
conducted, (ii) is duly qualified to do business, and is in good standing, in each of the jurisdictions where its ownership or leasing of property or the conduct of its business requires it
to be so qualified and (iii) has in effect all federal, state, local and foreign governmental authorizations and permits necessary for it to own or lease its properties and assets and to carry
on its business as it is now conducted; except, in the instance of clauses (ii) through (iii) above, where the failure to be so qualified or in good standing, or to have in effect all
such governmental authorizations and permits would not, individually or in the aggregate, be material to PAA and its Subsidiaries, taken as a whole.
(b)
Capitalization.
As of the date hereof, there are 397,736,728 PAA Common Units (excluding 2,769,764 unvested
phantom units issued under PAA's long-term incentive plan), 61,888,566 PAA Series A
Preferred Units, the PAA IDRs, and the PAA General Partner Interest issued and outstanding, which collectively constitute all of the issued and outstanding Equity Interests of PAA. The limited partner
interests represented by the PAA Common Units and the PAA Series A Preferred Units have been duly authorized and validly issued in accordance with the PAA Partnership Agreement and are fully
paid (to the extent required under the PAA Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303, 17-607, and 17-804 of the
Delaware LP Act). The general partner interest represented by the PAA General Partner Interest has been duly authorized and validly issued in accordance with the PAA Partnership Agreement.
Except as expressly contemplated by this Agreement, otherwise disclosed in the PAA SEC Reports or pursuant to PAA's long-term incentive plan, employee benefit plans, qualified stock option plans or
employee compensation plans, there are no issued or outstanding Commitments of PAA GP or PAA with respect to any equity securities of PAA and neither PAA GP nor PAA has any commitment to
authorize, issue or sell any such equity securities or Commitments.
(c)
Subsidiaries.
Each of PAA's Subsidiaries has the entity power and authority to carry on its business as it
is now being conducted and to own all its properties and assets, except as would not (individually or in the aggregate) reasonably be expected to be material to PAA and its Subsidiaries, taken as a
whole.
(d)
Authority.
Assuming the accuracy of the representations and warranties set forth in
Section 3.2(d)
,
Section 3.3(d)
,
Section 3.4(d)
,
Section 3.5(d)
and
Section 3.6(d)
, this Agreement and the matters contemplated hereby, including, to the extent applicable, the Transactions and the Transaction
Documents, have been authorized by all necessary limited partnership action by PAA, and this Agreement has been, and each other Transaction Document to be executed or delivered by PAA will be at the
time it is delivered, duly executed and delivered and is or, when delivered will be, a legal, valid and binding agreement of PAA, enforceable in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors' rights
or by general equity principles).
(e)
No Defaults.
Subject to required filings under federal and state securities Laws and compliance with the
rules and regulations of the NYSE, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the entrance by PAA into the
Transaction Documents to which it is a party, do not and will not (i) constitute a breach or violation of, or result in a default (or an event that, with notice or lapse of time or both, would
become a default) under, or result in the termination or in a right of termination or cancellation of, or accelerate the performance required by, any note, bond, mortgage, indenture, deed of trust,
license, franchise, lease, contract, agreement, joint venture or other instrument or obligation to which PAA or any of its Subsidiaries is a party or by which PAA or any of its Subsidiaries or
properties is subject or bound that is material to PAA and its Subsidiaries, taken as a whole, (ii) constitute a breach or violation of, or a default under the PAA Partnership Agreement,
(iii) contravene or conflict with or constitute a violation of any provision of any Law or Order binding upon or applicable to PAA or any of its Subsidiaries, or (iv) result in the
creation of any Encumbrance on any of PAA's (or any of its Subsidiaries') assets.
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(f)
No Brokers.
Except for the fees payable by PAA to Tudor Pickering Holt &
Co LLC ("
Tudor Pickering
") and to Barclays Capital Inc. ("
Barclays
"), no action has been
taken by or on behalf of PAA that would give rise to any valid claim against any party hereto for a brokerage commission, finder's fee or other like payment with respect to the matters contemplated
hereby.
(g)
Regulatory Approvals.
There are no material approvals of any Governmental Authority required to be obtained
by PAA to consummate the matters contemplated by this Agreement (other than filings with and approvals by the SEC and the NYSE).
(h)
Issuances of Common Units.
All PAA Common Units issued pursuant to this Agreement, including the PAA Common
Unit Consideration, when so issued as provided in this Agreement or the Omnibus Agreement, will be duly authorized, validly issued, fully paid (to the extent required by the PAA Partnership Agreement
or, upon its adoption, the A&R PAA Partnership Agreement, as applicable) and non-assessable (except as such non-assessability may be affected by Sections 17-303, 17-607, and 17-804 of the
Delaware LP Act) and free of preemptive rights (except as provided in Section 5.9 of the PAA Partnership Agreement or, upon its adoption, the A&R PAA Partnership Agreement, as
applicable) and will entitle such recipient thereof to all of the rights of a holder of PAA Common Units
in accordance with the PAA Partnership Agreement (and, upon its adoption, the A&R PAA Partnership Agreement) and the Delaware LP Act.
3.2
Representations and Warranties of
PAA GP
. PAA GP hereby represents and warrants to the other Parties hereto as follows:
(a)
Organization, Standing and Authority.
PAA GP (i) is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware and has all requisite entity power and authority to own, operate and lease its properties and to carry on its business as
now conducted, (ii) is duly qualified to do business, and is in good standing, in each of the jurisdictions where its ownership or leasing of property or the conduct of its business requires it
to be so qualified and (iii) has in effect all federal, state, local and foreign governmental authorizations and permits necessary for it to own or lease its properties and assets and to carry
on its business as it is now conducted; except, in the instance of clauses (ii) through (iii) above, where the failure to be so qualified or in good standing, or to have in effect all
such governmental authorizations and permits would not, individually or in the aggregate, be material to PAA GP.
(b)
Capitalization.
The only Equity Interests of PAA GP issued and outstanding are the PAA GP
Membership Interests. There are no issued or outstanding Commitments of PAA GP with respect to any equity securities of PAA GP and PAA GP does not have any commitment to
authorize, issue or sell any such equity securities or Commitments. The limited liability company interests represented by the PAA GP Membership Interests have been duly authorized and validly
issued in accordance with the PAA GP LLC Agreement and are fully paid (to the extent required under the PAA GP LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act).
(c)
Ownership.
PAA GP owns beneficially and of record the PAA General Partner Interest, free and clear of
all Encumbrances. Upon the consummation of the PAA General Partner Interest Recapitalization in accordance with the terms of this Agreement, PAA GP will own beneficially and of record the
Non-Economic PAA General Partner Interest free and clear of all Encumbrances.
(d)
Authority.
Assuming the accuracy of the representations and warranties set forth in Section 3.1(d),
Section 3.3(d)
,
Section 3.4(d)
,
Section 3.5(d)
and
Section 3.6(d)
, this Agreement and the matters
contemplated hereby,
including, to the extent applicable, the Transactions and the Transaction Documents, have been authorized by all necessary limited liability company action by
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PAA GP,
and this Agreement has been, and each other Transaction Document to be executed or delivered by PAA GP will be at the time it is delivered, duly executed and delivered and is or,
when delivered, will be a legal, valid and binding agreement of PAA GP, enforceable in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors' rights or by general equity principles).
(e)
No Defaults.
Subject to required filings under federal and state securities Laws and compliance with the
rules and regulations of the NYSE, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the entrance by PAA GP into
the Transaction Documents to which it is a party, do not and will not (i) constitute a breach or violation of, or result in a default (or an event that, with notice or lapse of time or both,
would become a default) under, or result in the termination or in a right of termination or cancellation of, or accelerate the performance required by, any note, bond, mortgage, indenture, deed of
trust, license, franchise, lease, contract, agreement, joint venture or other instrument or obligation to which PAA GP is a party or by which PAA GP is subject or bound that is material
to PAA GP, (ii) constitute a breach or violation of, or a default under the PAA GP LLC Agreement, (iii) contravene or conflict with or constitute a violation of any
provision of any Law or Order binding upon or applicable to PAA or PAA GP or any of their respective Subsidiaries, or (iv) result in the creation of any Encumbrance on any of
PAA GP's assets.
(f)
No Brokers.
Excluding fees payable by any of the other Parties, no action has been taken by or on behalf of
PAA GP that would give rise to any valid claim against any party hereto for a brokerage commission, finder's fee or other like payment with respect to the matters contemplated hereby.
(g)
Regulatory Approvals.
There are no material approvals of any Governmental Authority required to be obtained
by PAA GP to consummate the matters contemplated by this Agreement (other than filings with and approvals by the SEC and the NYSE).
(h)
Private Placement.
PAA GP is an "accredited investor," as such term is defined in Regulation D
promulgated under the Securities Act. PAA has made available and PAA GP has reviewed such information as PAA GP considers necessary or appropriate to evaluate the risks and merits of an
investment in PAA Common Units or other securities of PAA and the consummation of the Transactions. Any securities of PAA acquired by PAA GP pursuant to the Transactions are, except as
contemplated by the Transactions, being acquired for PAA GP's own account, not as a nominee or agent, and with no intention of distributing such securities or any part thereof, and
PAA GP has no present intention of selling or granting any participation in or otherwise distributing the same in any transaction in violation of the securities laws of the United States or any
State.
3.3
Representations and Warranties of AAP
. AAP hereby represents
and warrants to the other Parties hereto as follows:
(a)
Organization, Standing and Authority.
AAP (i) is a limited partnership duly formed, validly existing
and in good standing under the laws of the State of Delaware and has all requisite entity power and authority to own, operate and lease its properties and to carry on its business as now conducted,
(ii) is duly qualified to do business, and is in good standing, in each of the jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so
qualified and (iii) has in effect all federal, state, local and foreign governmental authorizations and permits necessary for it to own or lease its properties and assets and to carry on its
business as it is now conducted; except, in the instance of clauses (ii) through (iii) above,
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where
the failure to be so qualified or in good standing, or to have in effect all such governmental authorizations and permits would not, individually or in the aggregate, be material to AAP.
(b)
Capitalization.
The only Equity Interests of AAP issued and outstanding are 640,730,181 AAP Class A
Units, 13,840,461 AAP Class B Units and the AAP General Partner Interest, which collectively constitute all of the issued and outstanding Equity Interests of AAP. The limited partner interests
represented by the AAP Class A Units and the AAP Class B Units have been duly authorized and validly issued in accordance with the AAP Partnership Agreement and are fully paid (to the
extent required under the AAP Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303, 17-607, and 17-804 of the Delaware LP Act).
The general partner interest represented by the AAP General Partner Interest has been duly authorized and validly issued in accordance with the AAP Partnership Agreement. Except as expressly
contemplated by this Agreement, otherwise disclosed in the PAA SEC Reports or pursuant to employee benefit plans, qualified stock option plans or employee compensation plans, there are no issued or
outstanding Commitments of AAP with respect to any equity securities of AAP and AAP has no commitment to authorize, issue or sell any equity securities or Commitments.
(c)
Ownership.
AAP owns beneficially and of record all of the PAA IDRs, free and clear of all Encumbrances,
other than Encumbrances under the AAP Credit Agreement which shall be eliminated
immediately prior to Closing and Encumbrances provided for under the PAA Partnership Agreement. AAP owns beneficially and of record all of the PAA GP Membership Interests, free and clear of all
Encumbrances, other than Encumbrances under the AAP Credit Agreement which shall be eliminated at Closing and Encumbrances provided for under the PAA GP LLC Agreement. Upon the
consummation of the IDR Redemption and Exchange and the PAA General Partner Interest Recapitalization in accordance with the terms of this Agreement, AAP will own beneficially and of record the
portion of the PAA Common Unit Consideration to be issued and delivered to AAP at Closing, free and clear of all Encumbrances (other than Encumbrances provided for under the PAA Partnership
Agreement).
(d)
Authority.
Assuming the accuracy of the representations and warranties set forth in
Section 3.1(d)
,
Section 3.2(d)
,
Section 3.4(d)
,
Section 3.5(d)
and
Section 3.6(d)
, this Agreement and the matters contemplated hereby, including, to the extent applicable, the Transactions and the Transaction
Documents, have been authorized by all necessary limited partnership action by AAP, and this Agreement has been, and each other Transaction Document to be executed or delivered by AAP will be at the
time it is delivered, duly executed and delivered and is or, when delivered, will be a legal, valid and binding agreement of AAP, enforceable in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors' rights
or by general equity principles). To the extent required in connection with the consummation of the Transactions, all approvals required to be obtained from the limited partners of AAP have been
obtained.
(e)
No Defaults.
Subject to required filings under federal and state securities Laws, required approvals under
the AAP Credit Agreement and compliance with the rules and regulations of the NYSE, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated
hereby, including the entrance by AAP into the Transaction Documents to which it is a party, do not and will not (i) constitute a breach or violation of, or result in a default (or an event
that, with notice or lapse of time or both, would become a default) under, or result in the termination or in a right of termination or cancellation of, or accelerate the performance required by, any
note, bond, mortgage, indenture, deed of trust, license, franchise, lease, contract, agreement, joint venture or other instrument or obligation to which AAP is a party or by which AAP or its
properties is subject or bound that is material to AAP, (ii) constitute a
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breach
or violation of, or a default under the AAP Partnership Agreement, (iii) contravene or conflict with or constitute a violation of any provision of any Law or Order binding upon or
applicable to AAP, or (iv) result in the creation of any Encumbrance on any of AAP's assets.
(f)
AAP Credit Agreement.
As of the date of this Agreement, the amount of indebtedness outstanding under the AAP
Term Loan is $550 million and the AAP Revolving Credit Facility is $43 million. Except as set forth in the previous sentence and with respect to any indebtedness incurred in accordance
with
Section 4.4(b)
or
Section 4.10
, AAP is not liable for any other indebtedness,
obligations or liabilities under the AAP Credit Agreement or any related collateral or other agreements.
(g)
No Brokers.
Excluding fees payable by any of the other Parties, no action has been taken by or on behalf of
AAP that would give rise to any valid claim against any party hereto for a brokerage commission, finder's fee or other like payment with respect to the matters contemplated hereby.
(h)
Regulatory Approvals.
There are no material approvals of any Governmental Authority required to be obtained
by AAP to consummate the matters contemplated by this Agreement (other than filings with and approvals by the SEC and the NYSE).
(i)
Private Placement.
AAP is an "accredited investor," as such term is defined in Regulation D
promulgated under the Securities Act. PAA has made available and AAP has reviewed such information as AAP considers necessary or appropriate to evaluate the risks and merits of an investment in PAA
Common Units or other securities of PAA and the consummation of the Transactions. Any securities of PAA acquired by AAP pursuant to the Transactions are, except as contemplated by the Transactions,
being acquired for AAP's own account, not as a nominee or agent, and with no intention of distributing such securities or any part thereof, and AAP has no present intention of selling or granting any
participation in or otherwise distributing the same in any transaction in violation of the securities laws of the United States or any State.
3.4
Representations and Warranties
of GP LLC
. GP LLC hereby represents and warrants to the other Parties hereto as follows:
(a)
Organization, Standing and Authority.
GP LLC (i) is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware and has all requisite entity power and authority to own, operate and lease its properties and to carry on its business as
now conducted, (ii) is duly qualified to do business, and is in good standing, in each of the jurisdictions where its ownership or leasing of property or the conduct of its business requires it
to be so qualified and (iii) has in effect all federal, state, local and foreign governmental authorizations and permits necessary for it to own or lease its properties and assets and to carry
on its business as it is now conducted; except, in the instance of clauses (ii) through (iii) above, where the failure to be so qualified or in good standing, or to have in effect all
such governmental authorizations and permits would not, individually or in the aggregate, be material to GP LLC.
(b)
Capitalization.
The only Equity Interests of GP LLC issued and outstanding are
the GP LLC Membership Interests. Except as expressly contemplated by this Agreement, otherwise disclosed in the PAA SEC Reports or pursuant to employee benefit plans, qualified stock
option plans or employee compensation plans, there are no issued or outstanding Commitments of GP LLC with respect to any equity securities of GP LLC
and GP LLC does not have any commitment to authorize, issue or sell any equity securities or Commitments. The limited liability company interests represented by the GP LLC
Membership Interests have been duly authorized and validly issued in accordance with the GP LLC Agreement and are fully paid (to the extent required under the GP LLC
Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act).
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(c)
Ownership.
GP LLC owns beneficially and of record the AAP General Partner Interest, free and clear of
all Encumbrances (other than Encumbrances provided for under the AAP Partnership Agreement). Upon the consummation of the Transaction set forth in
Section 2.3
, GP LLC will own
beneficially and of record the Contributed AAP Units, free and clear of all Encumbrances (other than
Encumbrances provided for under the AAP Partnership Agreement).
(d)
Authority.
Assuming the accuracy of the representations and warranties set forth in
Section 3.1(d)
,
Section 3.2(d)
,
Section 3.3(d)
,
Section 3.5(d)
and
Section 3.6(d)
, this Agreement and the matters contemplated hereby, including, to the extent applicable, the Transactions and the Transaction
Documents, have been authorized by all necessary limited liability company action by GP LLC (including, to the extent applicable, in its capacity as the general partner of AAP and in its
Indirect PAA GP Capacity), and this Agreement has been, and each other Transaction Document to be executed or delivered by GP LLC will be at the time it is delivered, duly
executed and delivered and is or, when delivered, will be a legal, valid and binding agreement of GP LLC, enforceable in accordance with its terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors' rights or by general equity
principles).
(e)
No Defaults.
Subject to required filings under federal and state securities Laws and compliance with the
rules and regulations of the NYSE, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the entrance
by GP LLC into the Transaction Documents to which it is a party, do not and will not (i) constitute a breach or violation of, or result in a default (or an event that, with notice
or lapse of time or both, would become a default) under, or result in the termination or in a right of termination or cancellation of, or accelerate the performance required by, any note, bond,
mortgage, indenture, deed of trust, license, franchise, lease, contract, agreement, joint venture or other instrument or obligation to which GP LLC is a party or by
which GP LLC or its properties is subject or bound that is material to GP LLC, (ii) constitute a breach or violation of, or a default under the GP LLC
Agreement, (iii) contravene or conflict with or constitute a violation of any provision of any Law or Order binding upon or applicable to GP LLC, or (iv) result in the
creation of any Encumbrance on any of GP LLC's assets.
(f)
No Brokers.
Other than the fees owed by PAA or GP LLC to Tudor Pickering, as advisor to
the GP LLC Conflicts Committee, and to Barclays, no action has been taken by or on behalf of GP LLC that would give rise to any valid claim against any party hereto for a
brokerage commission, finder's fee or other like payment with respect to the matters contemplated hereby.
(g)
Regulatory Approvals.
There are no material approvals of any Governmental Authority required to be obtained
by GP LLC to consummate the matters contemplated by this Agreement (other than filings with and approvals by the SEC and the NYSE).
3.5
Representations and Warranties of PAGP
. PAGP hereby
represents and warrants to the other Parties hereto as follows:
(a)
Organization, Standing and Authority.
PAGP (i) is a limited partnership duly formed, validly existing
and in good standing under the laws of the State of Delaware and has all requisite entity power and authority to own, operate and lease its properties and to carry on its business as now conducted,
(ii) is duly qualified to do business, and is in good standing, in each of the jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so
qualified and (iii) has in effect all federal, state, local and foreign governmental authorizations and permits necessary for it to own or lease its properties and assets and to carry on its
business as it is now conducted; except, in the instance of clauses (ii) through (iii) above,
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where
the failure to be so qualified or in good standing, or to have in effect all such governmental authorizations and permits would not, individually or in the aggregate, be material to PAGP.
(b)
Capitalization.
As of the date hereof, the only Equity Interests of PAGP issued and outstanding are
267,032,219 PAGP Class A Shares (excluding 83,200 PAGP unvested phantom Class A Shares issued under PAGP's long-term incentive plan), 373,697,962 PAGP Class B Shares and the PAGP
General Partner Interest, which collectively constitute all of the issued and outstanding Equity Interests of PAGP. The limited partner interests represented by the PAGP Class A Shares and the
PAGP Class B
Shares have been duly authorized and validly issued in accordance with the PAGP Partnership Agreement and are fully paid (to the extent required under the PAGP Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Sections 17-303, 17-607, and 17-804 of the Delaware LP Act). The general partner interest represented by the PAGP General Partner
Interest has been duly authorized and validly issued in accordance with the PAGP Partnership Agreement. Except as expressly contemplated by this Agreement, otherwise disclosed in the PAA SEC Reports
or pursuant to PAGP's long-term incentive plan, employee benefit plans, qualified stock option plans or employee compensation plans, there are no issued or outstanding Commitments of PAGP with respect
to any equity securities PAGP and PAGP has no commitment to authorize, issue or sell any equity securities or Commitments.
(c)
Ownership.
PAGP owns beneficially and of record 267,032,219 AAP Class A Units, free and clear of all
Encumbrances (other than Encumbrances provided for under the AAP Partnership Agreement). PAGP owns beneficially and of record 254,037,317 PAGP GP Company Units, free and clear of all
Encumbrances (other than Encumbrances provided for under the PAGP GP LLC Agreement). PAGP owns beneficially and of record all of the GP LLC Membership Interests, free and
clear of all Encumbrances (other than Encumbrances provided for under the GP LLC Agreement).
(d)
Authority.
Assuming the accuracy of the representations and warranties set forth in
Section 3.1(d)
,
Section 3.2(d)
,
Section 3.3(d)
,
Section 3.4(d)
and
Section 3.6(d)
, this Agreement and the matters contemplated hereby, including, to the extent applicable, the Transactions and the Transaction
Documents have, subject to receipt of the Required Shareholder Approval, been authorized by all necessary limited partnership action by PAGP, and this Agreement has been, and each other Transaction
Document to be executed or delivered by PAGP will be at the time it is delivered, duly executed and delivered and is or, when delivered, will be a legal, valid and binding agreement of PAGP,
enforceable in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general
applicability relating to or affecting creditors' rights or by general equity principles). Prior to the execution of this Agreement, limited partners of PAGP holding, in the aggregate, interests
constituting a Share Majority (as such term is defined in the PAGP Partnership Agreement), have executed and delivered the Voting Agreement with respect to this Agreement and the Transactions.
(e)
No Defaults.
Subject to required filings under federal and state securities Laws and compliance with the
rules and regulations of the NYSE, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the entrance by PAGP into the
Transaction Documents to which it is a party, do not and will not (i) constitute a breach or violation of, or result in a default (or an event that, with notice or lapse of time or both, would
become a default) under, or result in the termination or in a right of termination or cancellation of, or accelerate the performance required by, any note, bond, mortgage, indenture, deed of trust,
license, franchise, lease, contract, agreement, joint venture or other instrument or obligation to which PAGP is a party or by which PAGP or its properties is subject or bound that is material to
PAGP, (ii) constitute a breach or violation of, or a default
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under
the PAGP Partnership Agreement, (iii) contravene or conflict with or constitute a violation of any provision of any Law or Order binding upon or applicable to PAGP, or (iv) result
in the creation of any Encumbrance on any of PAGP's assets.
(f)
No Brokers.
Except for the fees payable to Jefferies LLC
("
Jefferies
") and Barclays, no action has been taken by or on behalf of PAGP that would give rise to any valid claim against any party hereto for a
brokerage commission, finder's fee or other like payment with respect to the matters contemplated hereby.
(g)
Regulatory Approvals.
There are no material approvals of any Governmental Authority required to be obtained
by PAGP to consummate the matters contemplated by this Agreement (other than filings with and approvals by the SEC and the NYSE).
(h)
Private Placement.
PAGP is an "accredited investor," as such term is defined in Regulation D
promulgated under the Securities Act. PAA has made available and PAGP has reviewed such information as PAGP considers necessary or appropriate to evaluate the risks and merits of an investment in PAA
Common Units or other securities of PAA and the consummation of the Transactions. Any securities of PAA acquired by PAGP pursuant to the Transactions are, except as contemplated by the Transactions,
being acquired for PAGP's own account, not as a nominee or agent, and with no intention of distributing such securities or any part thereof, and PAGP has no present intention of selling or granting
any participation in or otherwise distributing the same in any transaction in violation of the securities laws of the United States or any State.
(i)
Issuances of Class C Shares.
The PAGP Class C Shares issued pursuant to this Agreement, when
so issued as provided in this Agreement, will be duly authorized, validly issued, fully paid (to the extent required by the PAGP Partnership Agreement or, upon its adoption, the A&R PAGP Partnership
Agreement, as applicable) and non-assessable (except as such non-assessability may be affected by Sections 17-303, 17-607, and 17-804 of the Delaware LP Act) and free of preemptive
rights and will entitle such recipient thereof to all of the rights of a holder of PAGP Class C Shares in accordance with the PAGP Partnership Agreement (or, upon its adoption, the A&R PAGP
Partnership Agreement) and the Delaware LP Act.
(j)
Proxy Statement.
The Proxy Statement will, when definitively filed, comply as to form in all material
respects with the applicable requirements of the Exchange Act. At the time the Proxy Statement and any amendments or supplements thereto are first mailed to the holders of PAGP Class A Shares
and
PAGP Class B Shares and at the time the Shareholder Proposal is submitted to such holders, the Proxy Statement, as supplemented or amended, if applicable, will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not
misleading. The representations and warranties contained in this Section 3.5(j) will not apply to statements or omissions included or incorporated by reference in the Proxy Statement based upon
information supplied by the other Parties or any of their respective representatives or advisors specifically for use or incorporation by reference therein.
3.6
Representations and Warranties of
PAGP GP
. PAGP GP hereby represents and warrants to the other Parties hereto as follows:
(a)
Organization, Standing and Authority.
PAGP GP (i) is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware and has all requisite entity power and authority to own, operate and lease its properties and to carry on its business as
now conducted, (ii) is duly qualified to do business, and is in good standing, in each of the jurisdictions where its ownership or leasing of property or the conduct of its business requires it
to be so qualified and (iii) has in effect all federal, state, local and foreign governmental authorizations and permits necessary for it to own or lease its properties and assets and to carry
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on
its business as it is now conducted; except, in the instance of clauses (ii) through (iii) above, where the failure to be so qualified or in good standing, or to have in effect all
such governmental authorizations and permits would not, individually or in the aggregate, be material to PAGP GP.
(b)
Capitalization.
The only Equity Interests of PAGP GP issued and outstanding are 605,845,150
PAGP GP Company Units. Except as expressly contemplated by this Agreement, otherwise disclosed in the PAA SEC Reports or pursuant to employee benefit plans, qualified stock option plans or
employee compensation plans, there are no issued or outstanding Commitments of PAGP GP with respect to any equity securities of PAGP GP and PAGP GP does not have any commitment to
authorize, issue or sell any equity securities or Commitments. The limited liability company interests represented by the PAGP GP Company Units have been duly authorized and validly issued in
accordance with the PAGP GP LLC Agreement and are fully paid (to the extent required under the PAGP GP LLC
Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act).
(c)
Ownership.
PAGP GP owns beneficially and of record the PAGP General Partner Interest, free and clear
of all Encumbrances (other than Encumbrances provided for under the PAGP Partnership Agreement).
(d)
Authority.
Assuming the accuracy of the representations and warranties set forth in
Section 3.1(d)
,
Section 3.2(d)
,
Section 3.3(d)
,
Section 3.4(d)
and
Section 3.5(d)
, this Agreement and the matters contemplated hereby, including, to the extent applicable, the Transactions and the Transaction
Documents, have been authorized by all necessary limited liability company action by PAGP GP (including, to the extent applicable, in its capacity as the general partner of PAGP), and this
Agreement has been, and each other Transaction Document to be executed or delivered by PAGP GP will be at the time it is delivered, duly executed and delivered and is or, when delivered, will
be a legal, valid and binding agreement of PAGP GP, enforceable in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors' rights or by general equity principles). The amendments to the provisions of
PAGP GP LLC Agreement set forth in Article IV thereof contemplated by the A&R PAGP GP LLC Agreement have been approved by a majority of the Independent Directors (as
such term is defined in the PAGP GP LLC Agreement) of PAGP GP. To the extent required in connection with the consummation of the Transactions, all approvals required to be
obtained from the members of PAGP GP have been obtained.
(e)
No Defaults.
Subject to required filings under federal and state securities Laws and compliance with the
rules and regulations of the NYSE, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the entrance by PAGP GP into
the Transaction Documents to which it is a party, do not and will not (i) constitute a breach or violation of, or result in a default (or an event that, with notice or lapse of time or both,
would become a default) under, or result in the termination or in a right of termination or cancellation of, or accelerate the performance required by, any note, bond, mortgage, indenture, deed of
trust, license, franchise, lease, contract, agreement, joint venture or other instrument or obligation to which PAGP GP is a party or by which PAGP GP or its properties is subject or
bound that is material to PAGP GP, (ii) constitute a breach or violation of, or a default under the PAGP GP LLC Agreement, (iii) contravene or conflict with or
constitute a violation of any provision of any Law or Order binding upon or applicable to PAGP GP, or (iv) result in the creation of any Encumbrance on any of PAGP GP's assets.
(f)
No Brokers.
Other than the fees owed by PAGP to Jefferies as advisor to the PAGP GP Board, and to
Barclays, no action has been taken by or on behalf of PAGP GP that would give rise to any valid claim against any party hereto for a brokerage commission, finder's fee or other like payment
with respect to the matters contemplated hereby.
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ARTICLE IV
COVENANTS AND AGREEMENTS
4.1
The Proxy Statement and the Shareholder Meeting
.
(a) As
promptly as reasonably practicable after the date hereof (and in any event within 20 Business Days after the date hereof), PAGP will prepare and file with the SEC a
proxy statement containing the information specified in Schedule 14A of the Exchange Act with respect to the Transactions (the "
Proxy Statement
")
in preliminary form. Unless the PAGP GP Board has made a Change of Recommendation in accordance with the provisions of this Agreement, the PAGP GP Board Recommendation shall be
included in the Proxy Statement. The Parties will cooperate with each other in the preparation of the Proxy Statement, including with respect to any additional proxy soliciting materials of PAGP;
without limiting the generality of the foregoing, the other Parties will furnish to PAGP the information relating to the other Parties required by the Exchange Act to be set forth in the Proxy
Statement and such other information concerning such Party as may be reasonably requested by PAGP in connection with the preparation, filing and distribution of the Proxy Statement, and such Parties
and their counsel will be given the opportunity to review and comment on the Proxy Statement (or any amendment or supplement thereto) prior to the filing thereof with the SEC. The Parties will each
use their reasonable best efforts, after consultation with the other Parties, to respond promptly to any comments made by the SEC with respect to the Proxy Statement, and PAGP (i) shall provide
the other Parties a reasonable opportunity to review and comment on such response and (ii) shall include in such response all comments reasonably proposed by the other Parties. PAGP will cause
the Proxy Statement to be transmitted to the holders of PAGP Class A Shares and PAGP Class B Shares as promptly as practicable following the date on which the SEC confirms it has no
further comments on the Proxy Statement.
(b) PAGP
will advise the other Parties promptly after it receives notice of any request by the SEC for amendment of the Proxy Statement or comments thereon and responses
thereto or requests by the SEC for additional information. If at any time prior to the date of the Shareholder Meeting, any information relating to the Parties, or any of their respective affiliates,
officers or directors, should be discovered by any Party that should be set forth in an amendment or supplement to the Proxy Statement, so that any of such documents would not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are
made, not misleading, the Party that discovers such information will promptly notify the other Parties and an appropriate amendment or supplement describing such information will be promptly filed
with the SEC and, to the extent required by Law, disseminated to the holders of PAGP Class A Shares and PAGP Class B Shares. PAGP will not mail any Proxy Statement, or any amendment or
supplement thereto, with respect to which any Party reasonably objects to disclosure therein specifically regarding such Party or any Representative of such Party. Once the Shareholder Meeting has
been called and noticed, PAGP will not postpone or adjourn the Shareholder Meeting without the consent of the other Parties, which consent will not be unreasonably withheld, conditioned or delayed,
other than (i) for the absence of a quorum, (ii) to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure that PAGP has determined in good
faith, after consultation with its outside legal advisors, is necessary under applicable Law and for such supplemental or amended disclosure to be disseminated to and reviewed by the holders of PAGP
Class A Shares and PAGP Class B Shares prior to the Shareholder Meeting, (iii) in the event PAGP has delivered any notice contemplated by Section 4.1(d) and the time
periods contemplated by Section 4.1(d) have not expired or (iv) an adjournment or postponement of up to 10 Business Days to solicit additional proxies from holders
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of
PAGP Class A Shares and PAGP Class B Shares;
provided
that in no event may the Shareholder Meeting be delayed to a date after the date
that is two Business Days prior to the Outside Date.
(c) PAGP GP,
as general partner of PAGP, will take, in accordance with applicable Law, NYSE rules and the PAGP Partnership Agreement, all action necessary to call,
hold and convene an appropriate meeting of the holders of PAGP Class A Shares and PAGP Class B Shares (including any adjournment or postponement, the "
Shareholder
Meeting
") to consider and vote upon a proposal to approve this Agreement and the Transactions and any other matters required to be approved by them for consummation of the
matters contemplated hereby or thereby (the "
Shareholder Proposal
") as promptly as reasonably practicable after the filing of the Proxy Statement in
definitive form with the SEC. Subject to any adjournment in accordance with
Section 4.1(b)
, PAGP will convene and hold the Shareholder Meeting
not later than 20 Business Days following the mailing of the Proxy Statement to the holders of PAGP Class A Shares and PAGP Class B Shares. Subject to
Section 4.1(d)
, PAGP will take all
reasonable lawful action to solicit approval of the Shareholder Proposal by the holders of PAGP Class A
Shares and PAGP Class B Shares.
(d) The
PAGP GP Board will recommend that the holders of PAGP Class A Shares and PAGP Class B Shares approve the Shareholder Proposal (the
"
PAGP GP Board Recommendation
"). Notwithstanding the foregoing, at any time prior to obtaining the Required Shareholder Approval at the
Shareholder Meeting, the PAGP GP Board may withdraw, modify or qualify in any manner adverse to PAA or any other Party the PAGP GP Board Recommendation (any such action a
"
Change in Recommendation
") if the PAGP GP Board shall have concluded in good faith, after consultation with its outside legal advisors and
financial advisors, that a Change in Recommendation is necessary to comply with its duties under the PAGP Partnership Agreement or that the failure to make a Change in Recommendation would otherwise
result in a material violation of applicable Law;
provided, however,
that the PAGP GP Board shall not be entitled to exercise its rights to make
a Change in Recommendation pursuant to this sentence unless PAGP has provided to PAA five Business Days' prior written notice advising PAA that the PAGP GP Board intends to take such action and
specifying the reasons therefor in reasonable detail. For the avoidance of doubt, any Change in Recommendation will not (i) change the approval of this Agreement and the Transactions or any
other approval of the PAGP GP Board or (ii) relieve PAGP GP or PAGP of any of its obligations under this Agreement (including under Section 4.1(a) or
Section 4.1(b)), including their respective obligations to hold the Shareholder Meeting.
4.2
Further Assurances
. Subject to the terms and conditions of
this Agreement, each Party will use commercially reasonable efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, desirable or
advisable under applicable Laws, so as to
enable consummation of the matters contemplated hereby, including obtaining any third party approval that is required to be obtained by the Party in connection with the Transactions and the other
matters contemplated by this Agreement and the Transaction Documents (including, without limitation, obtaining any required approvals under the AAP Credit Agreement), and using commercially reasonable
efforts to lift or rescind any injunction or restraining order or other order adversely affecting the ability of the Parties to consummate the matters contemplated hereby, and using commercially
reasonable efforts to defend any litigation seeking to enjoin, prevent or delay the consummation of the matters contemplated hereby or seeking material damages, and each Party will cooperate fully
with the other Parties to that end, and will furnish to the other Parties copies of all correspondence, filings and communications between it and its Affiliates, on the one hand, and any Governmental
Authority, on the other hand, with respect to the matters contemplated hereby.
4.3
Press Releases
. No Party will, without the prior approval of
the other Parties, issue any press release or written statement for general circulation relating to the matters contemplated hereby, except
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as
otherwise required by applicable Law or regulation or the rules of the NYSE, in which case it will consult with the other applicable Party before issuing any such press release or written
statement.
4.4
Certain Business Activities
. From the date hereof until the
Closing and except as contemplated by the Transactions or as required by applicable Law, without the prior written consent of the other Parties hereto, each of the Parties shall not, and shall not
take any action to cause any other Party to:
(a) take
any action that would be reasonably likely to result in a material adverse effect on its ability to perform any of its obligations under this Agreement, including,
without limitation, in the case of PAA GP, transferring the PAA General Partner Interest and, in the case of AAP, transferring the PAA GP Membership Interests or the PAA IDRs;
(b) in
the case of AAP, except (i) as provided by
Section 4.10
, (ii) to fund capital contributions by
PAA GP to PAA in accordance with Section 5.2(b) of the PAA Partnership Agreement, or (iii) to fund out-of-pocket fees and expenses incurred by or on behalf of AAP, PAGP GP
or PAGP in connection with the Transactions, incur any additional indebtedness, obligations or liabilities under the AAP Credit Agreement or any related collateral or other agreement;
provided
, however,
that any incurrence of
indebtedness under clause (iii) shall only be permitted to fund out-of-pocket fees and expenses that do not exceed $10 million (less any cash balances reserved for expenses payable by
AAP, PAGP or PAGP GP for Transaction expenses pursuant to
Section 2.5(d)
);
(c) in
the case of PAA, (i) issue, sell or otherwise permit to become outstanding, or authorize the creation of any additional Equity Interests, any appreciation
rights or any Rights or (ii) enter into any agreement with respect to the foregoing, without the prior written consent of PAGP, such consent not to be unreasonably withheld conditioned or
delayed;
provided
,
however
, that notwithstanding the restrictions set forth in (i) or (ii), PAA
may issue (A) up to $600 million of Equity Interests or Rights in PAA, (B) any PAA Series A PIK Units pursuant to the terms of the PAA Partnership Agreement or
(C) Equity Interests or Rights under PAA's long-term incentive plans;
(d) 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;
(e) repurchase,
redeem or otherwise acquire any of its Equity Interests (other than pursuant to employee benefit plans, qualified stock option plans or employee compensation
plans); or
(f) take
any action that would be reasonably likely to result in the material delay in or failure of any condition to Closing set forth herein to be satisfied.
4.5
Notification of Certain Matters
. Each Party will give prompt
notice to the other Parties of any fact, event or circumstance known to them that would, or is reasonably likely to, cause or constitute a material breach of any of their representations, warranties,
covenants or agreements contained herein.
4.6
Listing of PAA Common Units
. PAA GP and PAA shall use
their respective reasonable best efforts to cause the PAA Common Units to be issued in the Transactions to be admitted for listing on the NYSE as promptly as practicable after the Closing.
4.7
AAP Reverse Unit Split; PAGP Reverse Stock Split; PAGP GP Reverse Unit
Split
. It is the intention of the Parties that, immediately following the completion of the AAP Reverse Unit Split, the PAGP Reverse
Stock Split and the PAGP GP Reverse Unit Split, the number of outstanding PAGP Class A Shares shall equal the number of AAP Class A Units owned of record by PAGP, which shall also
equal the number of PAA Common Units owned by AAP that are attributable to PAGP's ownership interest in AAP, in each case, to the fullest extent reasonably possible. It is also the intention of the
Parties that, immediately following the completion of the AAP Reverse Unit Split, the PAGP
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Reverse
Stock Split and the PAGP GP Reverse Unit Split, (a) the number of outstanding PAGP GP Company Units shall equal the number of AAP Class A Units held by the Existing
Owners (excluding any Existing Owners who became holders of AAP Class A Units by virtue of the conversion of AAP Class B Units), which shall also equal the number of PAA Common Units
owned by AAP that are attributable to such Existing Owners and (b) the number of outstanding AAP Class A Units and PAGP Class B Shares held by the Existing Owners shall be equal
to the number of PAA Common Units owned by AAP that are attributable to the Existing Owners' ownership interest in AAP. The Parties shall use their respective reasonable best efforts to cooperate and
take all necessary actions to cause the AAP Reverse Unit Split, the PAGP Reverse Stock Split and the PAGP GP Reverse Unit Split to be completed at Closing in a manner consistent with the
foregoing. Consistent with the foregoing, in connection with the PAGP Reverse Stock Split, PAGP shall provide that holders of PAGP Class A Shares that would otherwise be entitled to fractional
PAGP Class A Shares as a result of the PAGP Reverse Stock Split will instead be entitled to cash in lieu of fractional shares. In addition, in connection with the PAGP Reverse Stock Split, the
AAP Reverse Unit Split and the PAGP GP Reverse Unit Split, fractional shares and/or units shall be handled in a manner that is consistent with the immediately preceding sentence and the
expressions of intent otherwise set forth in this Section 4.7.
4.8
Shelf Registration Statement
. Prior to the Closing Date, PAA
shall use its reasonable best efforts to prepare for filing the shelf registration statement contemplated to be filed by PAA as promptly as practicable following Closing in accordance with the
Registration Rights Agreement.
4.9
PAGP GP Board of Directors
. Prior to the Closing
Date, PAGP GP shall take all action necessary to cause the individuals set forth on Schedule 4.9 to be appointed to the Board of Directors of PAGP GP, effective as of the Closing.
4.10
Certain AAP Borrowings
. In the event that (a) the
Closing has not occurred prior to the record date for determining the holders of PAA Common Units entitled to receive distributions with respect to the quarter ending September 30, 2016 (the
"
Q3 Distribution Record Date
"), and (b) the distribution to be paid by PAA with respect to the PAA Common Units for such quarter is less than the
current quarterly distribution of $0.70 per Common Unit, AAP shall, as promptly as is reasonably practicable following the Q3 Distribution Record Date but in any event prior to the date that is the
earlier of the Closing and the date of such distribution, borrow an amount of cash equal to the Q3 Distribution True-Up Amount under the AAP Credit Agreement and distribute such proceeds to its
unitholders in accordance with the AAP Partnership Agreement. As used herein, "
Q3 Distribution True-Up Amount
" means an amount in cash equal to the
excess, if any, of (i) the product of (x) the distribution declared per PAA Common Unit with respect to the quarter ending September 30, 2016 and (y) the total number of
PAA Common Units to be issued by PAA to AAP at Closing pursuant to Section 2.5(a) over (ii) the aggregate amount of distributions to be paid by PAA to AAP and PAA GP for the
quarter ending September 30, 2016, with respect to the PAA IDRs and PAA General Partner Interest, respectively, as reduced by cash reserves as determined in the ordinary course and calculated
in a manner consistent with historical practice.
4.11
Certain Consents
. By execution of this Agreement, each of
the Parties provides its irrevocable written consent to the entry into and performance of this Agreement and the Transactions by each other Party, in each case, to the fullest extent required by the
organizational documents of each such other Party.
ARTICLE V
CONDITIONS
5.1
Mutual Conditions
. The respective obligations of each Party
to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction on or prior to the Closing Date of
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each
of the following conditions (any or all of which may be waived by a Party on behalf of itself in writing, in whole or in part, to the extent permitted by applicable Law):
(a) the
Required Shareholder Approval shall have been obtained;
(b) the
Parties shall have taken all actions and obtained all approvals reasonably necessary such that the AAP Reverse Unit Split, the PAGP Reverse Share Split and the
PAGP GP Reverse Unit Split will be completed at the Closing (it being acknowledged by the Parties that no approvals of any member or limited partner of AAP, PAGP or PAGP GP that have not
already been obtained are necessary);
(c) no
Law shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Authority of competent jurisdiction that seeks to or does
temporarily, preliminarily or permanently restrain, preclude, enjoin or otherwise prohibit the consummation of the transactions contemplated by this Agreement, makes any of the Transactions illegal or
materially alters the conclusions in the Tax Opinion;
(d) (i)
in the case of PAA, each Party other than PAA and, to the extent it is acting in the Indirect PAA GP Capacity, GP LLC, shall have performed or
complied in all material respects with the covenants and agreements contained in this Agreement that are required to be performed and complied with by such Party on or prior to the Closing Date and
(ii) in the case of each Party other than PAA, each of PAA and, to the extent it is acting in the Indirect PAA GP Capacity, GP LLC, shall have performed or complied in all
material respects with the covenants and agreements contained in this Agreement that are required to be performed and complied with by such Party on or prior to the Closing Date;
(e) (i)
in the case of PAA, the representations and warranties of each other Party other than GP LLC, to the extent it is acting in the Indirect PAA GP
Capacity, set forth in this Agreement and the representations set forth in the Tax Opinion Certificate shall be true and correct in all material respects on the Closing Date as though made at and as
of the Closing Date (unless expressly made as of an earlier date, in which case, as of such earlier date) and (ii) in the case of each Party other than PAA, the representations and warranties
of PAA and GP LLC, to the extent it is acting in the Indirect PAA GP Capacity, set forth in this Agreement and the representations set forth in the Tax Opinion Certificate shall
be true and correct in all material respects on the Closing Date as though made at and as of the Closing Date (unless expressly made as of an earlier date, in which case, as of such earlier date); and
(f) each
other Party shall have delivered or caused to be delivered the closing deliverables set forth in
Section 2.9
.
5.2
Additional Conditions to Obligations of PAA and PAGP
. The
respective obligations of PAA and PAGP to consummate the transactions contemplated by this Agreement shall also be subject to the receipt by PAA and PAGP of an opinion of Vinson &
Elkins L.L.P. or another nationally recognized law firm experienced in Investment Company Act of 1940 matters, dated as of the Closing, and based on facts,
representations, assumptions and exclusions set forth or referred to in such opinion, to the effect that, after giving effect to the Transactions, none of PAGP, AAP or PAA will be an "investment
company" as such term is defined in the Investment Company Act of 1940. In rendering such opinion, Vinson & Elkins L.L.P. or such other nationally recognized law firm may require and
rely upon reasonable and customary representations, warranties and covenants, including those contained in certificates of officers of the Parties.
5.3
Additional Conditions to Obligations of AAP and PAGP
. The
respective obligations of AAP and PAGP to consummate the transactions contemplated by this Agreement shall also be subject to the PAA Common Units to be issued in the Transactions being approved for
listing on the NYSE, subject only to official notice of issuance thereof.
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ARTICLE VI
TERMINATION; SURVIVAL
6.1
Termination
. Notwithstanding anything herein to the
contrary, this Agreement may be terminated and the Transactions abandoned at any time prior to the Closing:
(a) By
the mutual consent of all of the Parties in a written instrument;
(b) By
any of the Parties, if:
(i) Closing
has not occurred by January 15, 2017 (the "
Outside Date
");
(ii) any
Governmental Authority has issued a Law or Order or regulation or taken any other action, in each case permanently restraining, enjoining or otherwise prohibiting
the consummation of any of the Transactions or making any of the Transactions illegal and such Law or Order or other action has become final and nonappealable; or
(iii) the
Required Shareholder Approval is not obtained after a vote thereon is taken at the Shareholder Meeting; provided that PAGP shall have no right to terminate this
Agreement pursuant to this
Section 6.1(b)(iii)
if PAGP or PAGP GP has materially breached any of its obligations under
Section 4.1
;
(c) by
PAA, if:
(i) there
has been a material breach of or any inaccuracy in any of the representations or warranties set forth in this Agreement on the part of another Party other
than GP LLC to the extent it is acting in the Indirect PAA GP Capacity, which breach is not cured within 30 days following receipt by the breaching party of written notice
of such breach from the terminating party, or which breach, by its nature, cannot be cured prior to the Outside Date (
provided
in any such case that the
terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained herein); or
(ii) there
has been a material breach of any of the covenants or agreements set forth in this Agreement on the part of any other Party other than GP LLC, to
the extent it is acting in the Indirect PAA GP Capacity, which breach has not been cured within 30 days following receipt by the breaching party of written notice of such breach from the
terminating party, or which breach, by its nature, cannot be cured prior to the Outside Date (
provided
in any such case that the terminating party is
not then in material breach of any representation, warranty, covenant or other agreement contained herein); or
(d) by
PAGP or AAP, if:
(i) there
has been a material breach of or any inaccuracy in any of the representations or warranties set forth in this Agreement on the part of PAA or, to the extent it is
acting in the Indirect PAA GP Capacity, GP LLC, which breach is not cured within 30 days following receipt by the breaching party of written notice of such breach from the
terminating party, or which breach, by its nature, cannot be cured prior to the Outside Date (
provided
in any such case that the terminating party is
not then in material breach of any representation, warranty, covenant or other agreement contained herein); or
(ii) there
has been a material breach of any of the covenants or agreements set forth in this Agreement on the part of PAA or, to the extent it is acting in the Indirect
PAA GP Capacity, GP LLC, which breach has not been cured within 30 days following receipt by the breaching party of written notice of such breach from the terminating
party, or which breach, by its nature, cannot be cured prior to the Outside
Date (
provided
in any such case that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement
contained herein).
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6.2
Effect of Termination
. If
this
Agreement is terminated as provided in
Section 6.1
, the terminating Party will promptly give written notice thereof to the other Parties
specifying the provision of this Agreement pursuant to which such termination is made, and this Agreement will be null and void and, except as provided in
Sections 6.2
and
7.1
or as otherwise expressly provided herein, no Party will have any rights or
obligations under this Agreement, except that no such termination will relieve any Party from liability for damages for any willful and material breach of any agreement or covenant contained herein.
6.3
Survival
. All representations and warranties contained in
this Agreement shall survive the execution, delivery and performance of this Agreement for one year after the Closing Date.
ARTICLE VII
MISCELLANEOUS
7.1
Fees and Expenses
. Whether or not any or all of the
Transactions are consummated, each Party shall bear its own costs and expenses incurred in connection with this Agreement and the Transactions contemplated hereby, including reasonable attorneys'
fees. This
Section 7.1
will survive any termination of this Agreement.
7.2
Entire Agreement; No Third Party Beneficiaries
. This
Agreement and the exhibits and schedules hereto and the certificates, documents, instruments and writings that are delivered pursuant hereto, constitutes the entire agreement and understanding of the
Parties in respect of its subject matters and supersedes all prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the
subject matter hereof or the transactions contemplated hereby. There are no third party beneficiaries having rights under or with respect to this Agreement.
7.3
Successors
. All of the terms, agreements, covenants,
representations, warranties, and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the Parties and their respective successors.
7.4
Assignments
. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written approval of all of the other Parties.
7.5
Notices
. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim or other communication hereunder will be deemed duly
given if (and then three Business Days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:
If
to PAA, to:
Plains
All American Pipeline, L.P.
c/o Plains All American GP LLC
333 Clay Street, Suite 1600
Houston, TX 77002
Facsimile: 713-646-4313
Attn:
General Counsel and Chairman, Conflicts Committee
With
a copy, that shall not constitute notice, to:
Vinson &
Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, TX 77002
Facsimile: 713-615-5861
Attn: David Oelman and Alan Beck
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Richards
Layton & Finger, P.A.
920 N. King Street
Wilmington, DE 19801
Facsimile: 302-498-7701
Attn: Srinivas Raju and Gregory Ladner
If
to PAA GP, to:
PAA GP LLC
c/o Plains All American GP LLC
333 Clay Street, Suite 1600
Houston, TX 77002
Facsimile: 713-646-4313
Attn: General Counsel
With
a copy, that shall not constitute notice, to:
Vinson &
Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, TX 77002
Facsimile: 713-615-5861
Attn: David Oelman and Alan Beck
If
to AAP, to:
Plains
AAP, L.P.
c/o Plains All American GP LLC
333 Clay Street, Suite 1600
Houston, TX 77002
Facsimile: 713-646-4313
Attn: General Counsel
With
a copy, that shall not constitute notice, to:
Vinson &
Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, TX 77002
Facsimile: 713-615-5861
Attn: David Oelman and Alan Beck
If
to GP LLC, to:
Plains
All American GP LLC
333 Clay Street, Suite 1600
Houston, TX 77002
Facsimile: 713-646-4313
Attn: General Counsel
With
a copy, that shall not constitute notice, to:
Vinson &
Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, TX 77002
Facsimile: 713-615-5861
Attn: David Oelman and Alan Beck
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If
to PAGP, to:
Plains GP
Holdings, L.P.
c/o PAA GP Holdings LLC
333 Clay Street, Suite 1600
Houston, TX 77002
Facsimile: 713-646-4313
Attn: General Counsel
With
a copy, that shall not constitute notice, to:
Vinson &
Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, TX 77002
Facsimile: 713-615-5861
Attn: David Oelman and Alan Beck
Baker
Botts L.L.P.
910 Louisiana Street
Houston, TX 77002
Facsimile: 713.229.2727
Attn: Joshua Davidson and Jason Rocha
If
to PAGP GP, to:
PAA GP
Holdings LLC
333 Clay Street, Suite 1600
Houston, TX 77002
Facsimile: 713-646-4313
Attn: General Counsel
With
a copy, that shall not constitute notice, to:
Vinson &
Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, TX 77002
Facsimile: 713-615-5861
Attn: David Oelman and Alan Beck
Baker
Botts L.L.P.
910 Louisiana Street
Houston, TX 77002
Facsimile: 713.229.2727
Attn: Joshua Davidson and Jason Rocha
Any
Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, facsimile, ordinary mail, or electronic mail). Any Party may change the address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.
7.6
Construction
. The Parties have participated jointly in the
negotiation and drafting of this Agreement. If 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 because of the authorship of any provision of this Agreement. The Parties intend that each representation, warranty, and covenant contained
herein will have independent
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significance.
If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to
the same subject matter (regardless of the relative levels of specificity) which the Party has not breached will not detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.
7.7
Time
. Time is of the essence in the performance of this
Agreement.
7.8
Counterparts
. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.
7.9
Amendments and Waivers
. No amendment, modification,
replacement, termination or cancellation of any provision of this Agreement will be valid, unless the same will be in writing and signed by all of the Parties. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, may be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising because of any prior or subsequent such occurrence. Notwithstanding the foregoing, (a) no amendment to this Agreement may be made
after the Shareholder Meeting, if such amendment would require further approval of the PAGP Shareholders (as defined in the PAGP Partnership Agreement) under applicable Law and (b) whenever a
determination, decision, approval or consent of PAA is required pursuant to this Agreement that could reasonably be expected to have a material effect on PAA or the holders of PAA Common Units, such
determination, decision, approval or consent must be authorized by the GP LLC Conflicts Committee.
7.10
Headings
. The article and section headings contained in
this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement.
7.11
Governing Law
. This Agreement and the performance of the
transactions contemplated hereby and obligations of the Parties hereunder will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of
Law principles. Each of the Parties agrees that this Agreement (i) involves at least $100,000.00 and (ii) has been entered into by the Parties in express reliance on
6 Del. C.
,
§ 2708. Each of the parties hereto irrevocably and unconditionally confirms and agrees that it is and shall continue to be
(a) subject to the jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the State of Delaware, and (b) subject to service of process in the State of
Delaware. Each party hereto hereby irrevocably and unconditionally (x) consents and submits to the exclusive personal jurisdiction and venue of the Delaware Court of Chancery (or, if the
Delaware Court of Chancery lacks jurisdiction, any federal or state court located in the State of Delaware) (the "Delaware Courts") for any actions, suits or proceedings arising out of or relating to
this Agreement or the transactions contemplated by this Agreement (and agrees not to commence any litigation relating thereto except in such courts), (y) waives any objection to the laying of
venue of any such litigation in the Delaware Courts and agrees not to plead or claim in any Delaware Court that such litigation brought therein has been brought in any inconvenient forum, and
(z) acknowledges and agrees that any controversy that may arise under this Agreement is likely to involve complicated and difficult issues, and therefore each such party hereby irrevocably and
unconditionally waives any right such party may have to a trial by jury in respect of any litigation directly or indirectly arising or relating to this Agreement or the transactions contemplated by
this Agreement. Each of the Parties hereby irrevocably and unconditionally agrees, to the extent such Party is not otherwise subject to service of process in the State of Delaware, to appoint and
maintain an agent in the State of Delaware as such Party's agent for acceptance of legal process and notify the other Parties of the name and address of such agent, and (1) that service of
process may, to the fullest extent permitted by law, also be made on such Party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting
evidence of valid service, and that service made pursuant to this Section 7.11 shall, to the fullest extent permitted by law,
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have
the same legal force and effect as if served upon such Party personally within the State of Delaware.
7.12
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 both the economic and legal substance of the
transactions contemplated by this Agreement are not affected in any manner adverse to any Party.
7.13
Incorporation of Exhibits
. The Exhibits identified in this
Agreement are incorporated herein by reference and made a part hereof.
7.14
Remedies
.
(a) Except
as expressly provided herein, the rights, obligations and remedies created by this Agreement are cumulative and in addition to any other rights, obligations, or
remedies otherwise available at Law or in equity. Nothing herein will be considered an election of remedies.
(b) The
Parties acknowledge and agree that the Parties would be damaged irreparably in the event that the obligations to consummate the transactions contemplated hereby are
not performed in accordance with their specific terms or this Agreement is otherwise breached, and that in addition to remedies, other than injunctive relief and specific performance, that the Parties
may have under law or equity, the Parties shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof.
(The remainder of this page is intentionally left blank; the next page is the signature page.)
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective duly authorized representatives effective as of the date first written
in the preamble to this Agreement.
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PARTIES:
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PAA GP HOLDINGS LLC
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By:
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/s/ AL SWANSON
Al Swanson
Executive Vice President and Chief Financial Officer
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PLAINS GP HOLDINGS, L.P.
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By:
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PAA GP Holdings LLC,
its general partner
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By:
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/s/ AL SWANSON
Al Swanson
Executive Vice President and Chief Financial Officer
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PLAINS ALL AMERICAN GP LLC
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By:
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/s/ RICHARD K. MCGEE
Richard K. McGee
Executive Vice President, General Counsel
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PLAINS AAP, L.P.
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By:
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Plains All American GP LLC,
its general partner
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By:
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/s/ RICHARD K. MCGEE
Richard K. McGee
Executive Vice President, General Counsel
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PAA GP LLC
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By:
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/s/ RICHARD K. MCGEE
Richard K. McGee
Executive Vice President, General Counsel
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Signature Page to Simplification Agreement
Table of Contents
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PLAINS ALL AMERICAN PIPELINE, L.P.
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By:
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PAA GP LLC,
its general partner
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By:
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Plains AAP, L.P.,
its sole member
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By:
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Plains All American GP LLC,
its general partner
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By:
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/s/ RICHARD K. MCGEE
Richard K. McGee
Executive Vice President, General Counsel
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Signature Page to Simplification Agreement
Table of Contents
Annex B
July 11,
2016
The
Board of Directors
PAA GP Holdings LLC
333 Clay Street, Suite 1600
Houston, Texas 77002
Members
of the Board of Directors:
We
understand that PAA GP Holdings LLC ("
PAGP GP
"), Plains GP Holdings, L.P.
("
PAGP
"), Plains All American GP LLC ("
GP LLC
"), Plains AAP, L.P.
("
AAP
"), PAA GP LLC ("
PAA GP
") and Plains All American Pipeline, L.P.
("
PAA
") propose to enter into a Simplification Agreement (the "
Simplification Agreement
") pursuant to
which, among other things, (i) the incentive distribution rights in PAA held by AAP (the "
IDRs
") will be redeemed by PAA and (ii) the 2.0%
economic general partner interest in PAA held by PAA GP will be converted into a non-economic general partner interest in PAA (the "
Converted GP
Interest
"), items (i) and (ii) being in consideration for, among other things, the issuance by PAA to AAP of a total of up to 245,500,000 PAA common units
representing limited partner interests in PAA (the "
PAA Common Consideration
" and such transactions, the
"
Simplification
"). The terms and conditions of the Simplification are more fully set forth in the Simplification Agreement. In connection with the
Simplification, (i) PAGP will contribute to GP LLC 1% of all of the AAP Class A Units then held by PAGP, (ii) GP LLC will file an election to be treated as a
corporation for U.S. federal income tax purposes, (iii) each of PAA, AAP, GP LLC, PAGP and PAGP GP will adopt certain amendments to their governing documents,
(iv) each of the holders of AAP Class A Units (other than PAGP) will receive (a) certain redemption rights pursuant to which such holders may, subject to certain limitations,
redeem such AAP Class A Units in exchange for PAA Common Units held by AAP and (b) certain registration rights in respect of the PAA Common Units that would be received pursuant to such
redemption rights, (v) PAGP, PAA and AAP will enter into an omnibus agreement to achieve certain economic alignments among the equityholders of such entities, and (vi) the governance of
PAGP and PAA will be aligned by (a) the implementation of a unified board structure whereby the PAGP GP board of directors will govern both PAGP and PAA and (b) the issuance by
PAGP to PAA of a certain number of voting shares that will have the effect of allowing holders of PAA's common units to vote for the election of PAGP GP's board of directors (the actions
described in the foregoing clauses (i) to (vi) of this sentence, the "
Ancillary Actions
"), and we express no opinion as to the Ancillary
Actions.
You
have asked for our opinion as to whether the PAA Common Consideration to be paid pursuant to the Simplification is fair, from a financial point of view, to each of PAGP, the holders
of PAGP Class A Shares other than PAGP GP and such holders who are also holders of PAGP Class B Shares (the "
PAGP Public Class A
Holders
") and the holders of AAP Class A Units (the "
AAP Class A Holders
").
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In
arriving at our opinion, we have, among other things:
-
(i)
-
reviewed
a draft dated July 11, 2016 of the Simplification Agreement;
-
(ii)
-
reviewed
a draft dated July 11, 2016 of the form Sixth Amended and Restated Agreement of Limited Partnership of PAA, to be entered into at the
closing of the Simplification (the "
Closing
");
-
(iii)
-
reviewed
a draft dated July 11, 2016 of the form Eighth Amended and Restated Limited Partnership Agreement of AAP, to be entered into at the
Closing;
-
(iv)
-
reviewed
a draft dated July 11, 2016 of the form Second Amended and Restated Agreement of Limited Partnership of PAGP, to be entered into at the
Closing;
-
(v)
-
reviewed
a draft dated July 11, 2016 of the form Seventh Amended and Restated Limited Liability Company Agreement of GP LLC, to be
entered into at the Closing;
-
(vi)
-
reviewed
a draft dated July 11, 2016 of the form Second Amended and Restated Limited Liability Company Agreement of PAGP GP, to be entered
into at the Closing;
-
(vii)
-
reviewed
a draft dated July 11, 2016 of the form Registration Rights Agreement, to be entered into at the Closing;
-
(viii)
-
reviewed
a draft dated July 11, 2016 of the form Omnibus Agreement, to be entered into at the Closing;
-
(ix)
-
reviewed
a draft dated July 11, 2016 of the form of Amended and Restated Administrative Agreement, to be entered into at the Closing;
-
(x)
-
reviewed
a draft dated July 11, 2016 of the Voting Agreement, to be entered into concurrently with the Simplification Agreement (the documents
referenced in the foregoing items (i) to (x), the "
Agreements
");
-
(xi)
-
reviewed
certain publicly available financial and other information relating to PAGP, PAA and AAP;
-
(xii)
-
reviewed
certain information furnished to us by the management of PAA and PAGP relating to the business, operations and prospects of PAGP, PAA and AAP;
-
(xiii)
-
held
discussions with members of senior management of PAA and PAGP and their financial advisors concerning the matters described in items (x) and
(xi);
-
(xiv)
-
reviewed
the relative trading performance of the listed equity securities of PAGP and PAA over time;
-
(xv)
-
reviewed
the share or unit (as applicable) trading price history and valuation multiples for certain other publicly traded companies that we deemed
relevant;
-
(xvi)
-
analyzed
the pro forma ownership of PAGP and PAA on a post-Simplification basis, and analyzed the relative contributions of PAGP and PAA;
-
(xvii)
-
analyzed
certain economic aspects of the PAA Common Consideration and the IDRs;
-
(xviii)
-
considered
the capital structure of PAGP and PAA on both a pre-Simplification and a post-Simplification basis, including the assumption of AAP debt by
PAA as part of the Simplification;
-
(xix)
-
analyzed
the discounted cash flows of PAGP and PAA under various cases;
-
(xx)
-
compared
the proposed financial terms of the Simplification Agreement with the financial terms of certain other transactions that we deemed relevant;
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-
(xxi)
-
considered
the potential pro forma impact to PAGP of the Simplification;
-
(xxii)
-
reviewed
financial forecasts prepared by various market analysts; and
-
(xxiii)
-
conducted
such other financial studies and analyses as we deemed appropriate.
In
our review and analysis and in rendering this opinion, we have assumed and relied upon, but have not assumed any responsibility to independently investigate or verify, the accuracy
and completeness of all financial and other information that was supplied or otherwise made available by PAGP management and PAA management and their financial advisors or that was publicly available
to us (including, without limitation, the information described above), or that was otherwise reviewed by us. We have relied on assurances of PAA management that they are not aware of any facts or
circumstances that would make such information inaccurate or misleading or of any relevant information that has been omitted or that remains undisclosed to us. In our review, we did not perform or
obtain any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of, nor did we conduct a physical inspection of any of the properties or facilities of,
PAGP, PAA or AAP, nor have we been furnished with any such evaluations or appraisals of such properties or facilities, nor do we assume any responsibility to obtain any such evaluations, appraisals or
physical inspections.
With
respect to the financial forecasts provided to and, at your direction, examined by us, we note that projecting future results of any business is inherently subject to uncertainty.
We have assumed that such financial forecasts were reasonably prepared on bases reflecting the best currently available estimates. We express no opinion as to these financial forecasts or the
assumptions on which they are made.
Our
opinion is based on economic, monetary, regulatory, market and other conditions existing and that can be evaluated as of the date hereof. We expressly disclaim any undertaking or
obligation to advise any person of any change in any fact or matter affecting our opinion of which we become aware after the date hereof.
We
have made no independent investigation of any legal, accounting or tax matters affecting the IDRs, the Converted GP Interest, the PAA Common Units, any class of PAGP equity
interests or any of the Ancillary Actions, and we have assumed the correctness in all respects material to our analysis of all legal, accounting and tax advice given to PAGP, including, without
limitation, advice as to the legal, accounting and tax consequences of the terms of, and transactions contemplated by, the Agreements to PAGP and the PAGP Public Class A Holders and the AAP
Class A Holders, and to the other participants in the Simplification. In addition, in preparing this opinion, we have not taken into account, and express no view with regards to, any tax
consequences of the transactions to any PAGP Public Class A Holders, any AAP Class A Holders or to other participants in the Simplification. We have assumed that the final form of the
Agreements will be substantially similar to the last drafts reviewed by us in all respects material to our analyses and opinion. We have assumed that the representations and warranties of each party
in the Simplification Agreement and in all related documents and instruments referred to in the Simplification Agreement are true and correct, and that each party to the Simplification Agreement and
all related documents will perform all of the covenants and agreements required to be performed by such party under such documents. We have also assumed that the Simplification will be consummated in
accordance with its terms or as otherwise described to us by representatives of PAGP and PAA without waiver, modification or amendment of any term, condition or agreement that would be material in any
respect to our analyses or opinion and that, in the course
of obtaining the necessary regulatory or third party approvals, consents and releases for the Simplification, no delay, limitation, restriction or condition will be imposed that would have an adverse
effect on PAGP, PAA or AAP or the contemplated benefits of the Simplification in any respect material to our opinion.
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It
is understood that our opinion is for the use and benefit of the Board of Directors of PAGP GP (the "
Board
") in its
consideration of the Simplification. Further, it is understood that our opinion does not address the relative merits of the transactions contemplated by the Agreements as compared to any alternative
transaction or opportunity that might be available to PAGP or PAA, nor does it address the underlying business decisions by PAGP and PAA to engage in the Simplification. It is understood that we were
not engaged by you to contact third parties regarding potential transactions alternative to the Simplification. In addition, you have not asked us to address, and this opinion does not address, the
fairness to, or any other consideration involving, the holders of any class of securities, creditors or other constituencies of PAGP or PAA, other than the PAGP Public Class A Holders and the
AAP Class A Holders as set forth herein. We express no opinion as to the price at which the equity interests of PAGP or PAA will trade at any time. Furthermore, we do not express any view or
opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation payable to, or to be received by, any officer, employer or director of any party to the Simplification,
or any class of such persons, in connection with the Simplification relative to the compensation to the PAGP Public Class A Holders or the AAP Class A Holders. Our opinion has been
authorized by the Fairness Committee of Jefferies LLC.
We
have been engaged by the Board to act as financial advisor to the Board in connection with the Simplification and will receive a fee for our services, a portion of which is payable
upon delivery of this opinion and a significant portion of which is payable contingent upon consummation of the Simplification. We also will be reimbursed for certain expenses reasonably incurred.
PAGP has agreed to indemnify us against certain liabilities arising out of or in connection with the services rendered and to be rendered by us under such engagement. In the past two years, we have
received compensation from PAA in connection with a transaction unrelated to the Simplification. We have from time to time in the past maintained a market in the securities of PAGP and PAA and may do
so in the future, and in the ordinary course of our business, we and our affiliates may trade or hold securities of PAGP and PAA for our own account and for the accounts of our customers and,
accordingly, may at any time hold long or short positions in those securities. In addition, in the future, we may seek to provide financial advisory and financing services to PAA,
PAA GP, GP LLC, AAP and PAGP GP, or entities that are affiliated therewith or with PAGP, for which we would expect to receive compensation.
Based
upon and subject to the foregoing, we are of the opinion that, as of the date hereof, the PAA Common Consideration to be paid pursuant to the Simplification is fair, from a
financial point of view, to each of PAGP, the PAGP Public Class A Holders and the AAP Class A Holders.
Very
truly yours,
/s/
JEFFERIES LLC
JEFFERIES LLC
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Annex C
Final Form
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
PAA GP HOLDINGS LLC
dated as of [
·
], 2016
Table of Contents
TABLE OF CONTENTS
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C-ii
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SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
PAA GP HOLDINGS LLC
THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this "
Agreement
")
of PAA GP Holdings LLC, a Delaware limited liability company (the "
Company
"), is made and entered into as of the
[
·
] day of
[
·
], 2016, by the Company and is binding on the Persons listed on
Schedule 2
attached hereto (such Persons together with such other Persons that may hereafter become members as provided herein, referred to
collectively as the "
Members
" or, individually, as a "
Member
").
WHEREAS,
the Company was formed on July 17, 2013 as a limited liability company under the Act (as defined below) by the filing of a certificate of formation of the Company with
the Delaware Secretary of State; and
WHEREAS,
the Board has approved this Agreement and authorized the Company to amend and restate the Amended and Restated Limited Liability Company Agreement of PAA GP
Holdings LLC dated as of October 21, 2013 (as amended, the "
Original Agreement
") in its entirety with the terms and conditions set forth
herein.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the following meanings, unless the context otherwise requires:
"
AAP
" means Plains AAP, L.P., a Delaware limited partnership.
"
AAP Class A Units
" means the Class A Units of AAP, having the rights and obligations specified in the AAP Partnership
Agreement.
"
AAP Class B Units
" means the Class B Units of AAP, having the rights and obligations specified in the AAP Partnership
Agreement.
"
AAP Partnership Agreement
" means the Eighth Amended and Restated Limited Partnership Agreement, dated as of the date hereof, as such may
be further amended, modified, supplemented or restated from time to time in accordance with the terms thereof.
"
AAP Redemption
" means a redemption in accordance with Section 7.11 of the AAP Partnership Agreement.
"
Act
" means the Delaware Limited Liability Company Act, 6 Del. C. Section 18-101, et seq., as amended from time to time.
"
Affiliate
" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified Person. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise;
provided
that the
determination as to whether a Person, directly or indirectly through one or more intermediaries, controls, is controlled by or under common control with another Person shall be made taking into
account, at the time of such determination, the context and circumstances surrounding such determination, including any known agreements or understandings that may impact such Person's possession,
directly or indirectly, of the
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power
to direct or cause the direction of the management or policies of such other Person. For purposes of the foregoing:
(a) any
individual who is an officer or director of the Company or any Group Member (excluding the Chief Executive Officer and Chairman of the Board) shall not be considered
to be an Affiliate of the Company or any Group Member by virtue of such Person's status as an officer or director and the possession of the powers that are within the scope of the designated or
delegated authority of such officer or director;
(b) any
Person that, alone or together with any Affiliate Group of which such Person is a part, owns less than 50% of the total number of outstanding Company Units shall not
be considered to be an Affiliate of the Company or any Group Member by virtue of the ownership by such Person (and Affiliate Group, if applicable) of such Company Units; and
(c) any
Person that, alone or together with any Affiliate Group of which such Person is a part, owns less than 50% of the total "Partnership Interests" (as such term is
defined in the AAP Partnership Agreement) held by all partners of AAP, shall not be considered to be an Affiliate of the Company or any Group Member by virtue of the ownership by such Person (and
Affiliate Group, if applicable) of such interests.
For
the avoidance of doubt, for purposes of this Agreement, as of the date hereof (but subject to redetermination upon changed circumstances) (i) each of KAFU
Holdings, L.P., KAFU Holdings (QP), L.P., Kayne Anderson MLP Investment Company, Kayne Anderson Energy Development Company, Kayne
Anderson Midstream/Energy Fund, Inc. and KAFU Holdings II, L.P. is an Affiliate of each other, and (ii) each of EMG Investment, LLC and Lynx Holdings I, LLC is an
Affiliate of the other.
"
Affiliate Group
" means a Person that with or through any of its Affiliates has any agreement, arrangement, understanding or relationship
for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or consent solicitation made to 10 or more Persons),
exercising investment power or disposing of any Company Units or "Partnership Interests" (as that term is defined in the AAP Partnership Agreement) with any other Person that beneficially owns, or
whose Affiliates beneficially own, directly or indirectly, Company Units.
"
Agreement
" has the meaning set forth in the preamble hereof, as such may be amended, supplemented or restated from time to time.
"
Audit Committee
" has the meaning set forth in
Section 6.6(c)
.
"
Authorized Representative
" has the meaning set forth in
Section 5.3
.
"
Board
" means the Board of Directors of the Company.
"
Business Day
" means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United
States of America or the States of New York or Texas shall not be regarded as a Business Day.
"
Cause
" means (i) with respect to any Director, gross misconduct or neglect, false or fraudulent misrepresentation regarding such
director's qualifications or credentials, unauthorized disclosure of material confidential information concerning the Company and its Subsidiaries, conversion of corporate funds, acts involving moral
turpitude, material violation of any code of conduct adopted by the Company or PAGP or similar acts detrimental to the Company or (ii) with respect to any Independent Director, the occurrence
of an event or a change in circumstances that causes such Independent Director to fail to satisfy the applicable "bright-line" independence requirements (i.e., those resulting in automatic
disqualification) of the Commission and any National Securities Exchange on which the PAGP Class A Shares or MLP Common Units are listed or admitted for trading,
provided
that such
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failure
results in the Company ceasing to have the minimum number of Independent Directors required under applicable rules, laws or restrictions of the Commission and any National Securities Exchange
on which the PAGP Class A Shares or MLP Common Units are listed or admitted for trading.
"
Certificate
" means the Certificate of Formation of the Company filed with the Secretary of State of Delaware, as amended or restated from
time to time.
"
Class
" has the meaning set forth in
Section 6.2(a)
.
"
Code
" means the United States Internal Revenue Code of 1986, as amended.
"
Commission
" means the United States Securities and Exchange Commission.
"
Company
" has the meaning set forth in the preamble hereof.
"
Company Group
" means the Company and its Subsidiaries treated as a single consolidated entity, but excluding the MLP and its
Subsidiaries.
"
Company Unit
" means a fractional part of the Membership Interest having the rights and preferences specified with respect to the
Membership Interest.
"
Competitor
" has the meaning set forth in
Section 6.1(c)
.
"
Conflicts Committee
" has the meaning set forth in
Section 6.6(b)
.
"
Designating Members
" means the Initial Designating Members and any Subsequent Designating Members, in each case until a Designation Loss
Event with respect to such Member.
"
Designation Loss Event
" has the meaning set forth in
Section 6.1(a)(iv)
.
"
Designation Right Termination Event
" has the meaning set forth in
Section 6.1(e)
.
"
Directors
" has the meaning set forth in
Section 6.1(a)
.
"
Eligible Directors
" means any Director that is not (a) designated by a Designating Member, (b) the Chief Executive Officer
of the Company or (c) a Series A Designated Director.
"
EMG
" shall have the meaning set forth in
Section 11.1
.
"
Employees
" has the meaning set forth in
Section 11.2
.
"
Encumbrance
" means any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, any defect or imperfection in title, preferential arrangement or restriction, right to purchase, right of first refusal or other burden or encumbrance of any kind, other
than those imposed by this Agreement.
"
Exchange Act
" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"
Existing Owners
" means the Original Members listed on Schedule 1 attached hereto, excluding PAGP.
"
Group Member
" means a member of the Company Group.
"
IDM Observer
" has the meaning set forth in
Section 6.1(b)
.
"
Indemnitee
" means (a) any Existing Owner or any Qualifying Interest Holder, (b) any Person who is or was an Affiliate of
the Company, any Existing Owner or any Qualifying Interest Holder, (c) any Person who is or was a managing member, manager, general partner, shareholder, director, officer, fiduciary,
agent or trustee of the Company, any Existing Owner or any Qualifying Interest Holder or any Affiliate of the Company, any Existing Owner or any Qualifying Interest Holder, (d) any Person
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who
is or was serving at the request of the Company, any Existing Owner or any Qualifying Interest Holder or any Affiliate of the Company, any Existing Owner or any Qualifying Interest Holder as a
member, manager, partner, director, officer, fiduciary, agent or trustee of another Person in furtherance of the business or affairs of any Group Member;
provided
, that a Person shall not be an
Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services, and
(e) any Person the Board designates an "Indemnitee" for purposes of this Agreement.
"
Independent Director
" means a Director who is eligible to serve on the Board's Audit Committee (in accordance with the applicable
requirements of the Commission and any National Securities Exchange on which the PAGP Class A Shares or MLP Common Units are listed or admitted for trading).
"
Initial Designating Members
" means KAFU Holdings, L.P., Oxy and EMG Investment, LLC.
"
Initial Offering
" means the initial offering and sale of the PAGP Class A Shares to the public, as described in the Registration
Statement.
"
Institutional Investments
" has the meaning set forth in
Section 11.1
.
"
Kayne Anderson
" has the meaning set forth in
Section 11.1
.
"
Majority in Interest
" means, with respect to the Members, Members owning more than fifty percent (50%) of the outstanding Company Units.
"
Member
" or "
Members
" has the meaning set forth in the preamble hereof.
"
Membership Interest
" means a Member's limited liability company interest in the Company which refers to all of a Member's rights and
interests in the Company in such Member's capacity as a Member, all as provided in this Agreement and the Act.
"
Membership Transfer
" has the meaning set forth in
Section 8.1(a)
.
"
MLP
" means Plains All American Pipeline, L.P., a Delaware limited partnership.
"
MLP Common Units
" has the meaning given to "Common Units" in the MLP Partnership Agreement.
"
MLP Partnership Agreement
" means the Sixth Amended and Restated Agreement of Limited Partnership of Plains All American
Pipeline, L.P., dated as of the date hereof, as such may be further amended, modified, supplemented or restated from time to time in accordance with the terms thereof.
"
MLP Redemption Units
" means MLP Common Units received by a Member upon an AAP Redemption.
"
National Securities Exchange
" means an exchange registered with the Commission under Section 6(a) of the Securities Exchange Act
or any successor to such statute.
"
Notice
" means a writing, containing the information required by this Agreement to be communicated to a party, and shall be deemed to have
been received (a) when personally delivered or sent by facsimile, (b) one day following delivery by overnight delivery courier, with all delivery charges pre-paid, or (c) on the
third Business Day following the date on which it was sent by United States mail, postage prepaid, to such party at the address or fax number, as the case may be, of such party as shown on the records
of the Company.
"
Officer
" has the meaning set forth in
Section 6.9
.
"
Original Agreement
" has the meaning set forth in the recitals hereto.
"
Original Members
" means each of the owners of limited liability company interests in the Company as of the date of the Original Agreement
as set forth in Schedule 1 attached hereto.
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"
Oxy
" has the meaning set forth in
Section 11.1
.
"
PAA GP LLC Agreement
" means the Seventh Amended and Restated Limited Liability Company Agreement of Plains All
American GP LLC, dated as of the date hereof, as such may be further amended, modified, supplemented or restated from time to time in accordance with the terms thereof.
"
PAGP
" means Plains GP Holdings, L.P., a Delaware limited partnership.
"
PAGP Class A Shares
" means the Class A shares in PAGP, having the rights and obligations specified in the PAGP Partnership
Agreement.
"
PAGP Class B Shares
" means the Class B shares in PAGP, having the rights and obligations specified in the PAGP Partnership
Agreement.
"
PAGP Class C Shares
" means the Class C shares in PAGP, having the rights and obligations specified in the PAGP Partnership
Agreement.
"
PAGP Limited Partners
" means the Limited Partners of PAGP as such term is given meaning in the PAGP Partnership Agreement.
"
PAGP Partnership Agreement
" means the Second Amended and Restated Agreement of Limited Partnership of PAGP, dated as of the date hereof,
as such may be further amended, modified, supplemented or restated from time to time in accordance with the terms thereof.
"
PAGP Reverse Stock Split
" has the meaning set forth in that certain Simplification Agreement, dated as of July 11, 2016, by and
among the Company, PAGP, AAP, the MLP, PAA GP LLC and Plains All American GP LLC.
"
Permitted Transfer
" has the meaning set forth in
Section 8.1(a)
.
"
Permitted Transferee
" means any Person who shall have acquired and who shall hold a Company Unit pursuant to a Permitted Transfer.
"
Person
" means any individual, partnership, corporation, limited liability company, trust, incorporated or unincorporated organization or
other legal entity of any kind.
"
Property
" means all assets, real or intangible, that the Company may own or otherwise have an interest in from time to time.
"Qualifying Interest"
means a direct or indirect ownership interest in the issued and outstanding limited partner interests of AAP
represented by AAP Class A Units (i.e., excluding any AAP Class B Units) and, solely with respect to the Initial Designating Members, (a) including for this purpose any
indirect ownership of such AAP Class A Units through the ownership of issued and outstanding PAGP Class A Shares and (b) treating any MLP Common Units held by an Initial
Designating Member that were issued to such Initial Designating Member in connection with an AAP Redemption as an equivalent number of AAP Class A Units.
"
Qualifying Interest Holder
" means a Person holding a 10% or greater Qualifying Interest.
"
Registration Statement
" means the Registration Statement on Form S-1 (Registration No. 333-190227) as it has been or as it
may be amended or supplemented from time to time, filed by PAGP with the Commission under the Securities Act to register the offering and sale of the PAGP Class A Shares in the Initial
Offering.
"
Representatives
" has the meaning set forth in
Section 10.4
.
"
Securities Act
" means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such
statute.
"
Series A Designated Director
" has the meaning set forth in
Section 6.1(c)
.
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"
Subsequent Designating Member
" has the meaning set forth in
Section 6.1(a)(iii)
.
"
Subsidiary
" means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled
(without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination,
by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at
the date of determination, a general partner of such partnership, but only if such Person, directly or by one or more Subsidiaries of such Person, or a combination thereof, controls such partnership
on the date of determination or (c) any other Person in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of
determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.
"
Transfer
" or "
Transferred
" means to give, sell, exchange, assign, transfer, pledge,
hypothecate, bequeath, devise or otherwise dispose of or encumber, voluntarily or involuntarily, by operation of law or otherwise. When referring to a Company Unit, "Transfer" shall mean the Transfer
of such Company Unit whether of record, beneficially, by participation or otherwise.
ARTICLE 2
GENERAL
2.1
Formation.
The name of the Company is PAA GP Holdings LLC. The rights and liabilities of the
Members shall be as provided in the Act for Members except as provided herein. To the extent that the rights or obligations of any Member are different by reason of any provision of this Agreement
than they would be under applicable law in the absence of such provision, to the extent permitted by the Act, this Agreement shall control.
2.2
Principal Office.
The principal office of the Company shall be located at 333 Clay Street,
Suite 1600, Houston, Texas 77002 or at such other place(s) as the Board may determine from time to time.
2.3
Registered Office and Registered Agent.
The location of the registered office and the name of the registered
agent of the Company in the State of Delaware shall be as stated in the Certificate or as determined from time to time by the Board.
2.4
Purpose of the Company.
The Company's purposes, and the nature of the business to be conducted and promoted
by the Company, are (a) to act as the general partner of PAGP in accordance with the terms of the PAGP Partnership Agreement and (b) to engage in any and all activities necessary,
advisable, convenient or incidental to the foregoing.
2.5
Date of Dissolution.
The Company shall have perpetual existence unless the Company is dissolved pursuant to
Article 9
hereof. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate in the manner
required by the Act.
2.6
Qualification.
The President, Chief Executive Officer, any Vice President, the Secretary and any Assistant
Secretary of the Company is hereby authorized to qualify the Company to do business as a foreign limited liability company in any jurisdiction in which the Company may wish to conduct business and
each is hereby designated as an authorized person, within the meaning of the Act (or as a "manager" for such limited purposes only, if signature of a manager is required under relevant state
regulations) to execute, deliver and file any amendments or restatements of the Certificate and any other certificates and any amendments or restatements thereof necessary for the Company to so
qualify to do business in any such state or territory.
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2.7
Members
.
(a)
Powers of Members.
Except to the extent waived or limited in a separate written agreement executed by a
Member, the Members shall have the power to exercise any and all rights or powers granted to the Members pursuant to the express terms of this Agreement. Except as expressly provided herein, the
Members shall have no power to bind the Company and no authority to act on behalf of the Company.
(b)
Resignation
. Except upon a Transfer of all of its Company Units in accordance with this Agreement, a Member
may not resign from the Company prior to the dissolution and winding up of the Company. A Member ceases to be a Member only upon such Member holding no Company Units following: (i) a Permitted
Transfer of all of such Member's Company Units (other than a "Permitted Transfer" pursuant to clause (a) of the definition of such term in the AAP Partnership Agreement) and the transferee's
admission as a substitute Member, all in accordance with the terms of this Agreement or (ii) completion of dissolution and winding up of the Company pursuant to
Article 9
.
(c)
Ownership.
Each Company Unit shall correspond to a "limited liability company interest" as is provided in
the Act. The Company shall be the owner of the Property. No Member shall have any ownership interest or right in any Property, including any Property conveyed by a Member to the Company, except
indirectly by virtue of a Member's ownership of a Company Unit.
2.8
Reliance by Third Parties.
Persons dealing with the Company shall be entitled to rely conclusively upon the
power and authority of an Officer.
ARTICLE 3
CAPITALIZATION OF THE COMPANY
3.1
Capital Contributions.
No capital was contributed to the Company in connection with its formation. The
number of each current Member's initial Company Units is set forth on
Schedule 2
attached hereto.
3.2
Additional Capital Contributions.
No Member shall be required to make any capital contribution to the
Company.
3.3
Splits.
Any distribution, subdivision or combination of the Company Units shall be accompanied by a
simultaneous and proportionate distribution, subdivision or combination of the AAP Class A Units and AAP Class B Units pursuant to the AAP Partnership Agreement and the PAGP
Class A Shares, PAGP Class B Shares and PAGP Class C Shares pursuant to the PAGP LP Agreement, and vice versa. This provision shall not be amended unless corresponding
changes are made to the AAP Partnership Agreement and the PAGP LP Agreement.
ARTICLE 4
DISTRIBUTIONS
4.1
Distributions.
The Board shall have sole discretion to determine the timing, amount and manner of any
distribution of cash or property of the Company. Any distribution declared by the Board shall be paid to the Members in proportion to their Company Units.
4.2
Persons Entitled to Distributions.
Any distributions to Members pursuant to
Section 4.1
shall be made to the Members
shown on the records of the Company to be entitled thereto as of the record date for any such
distributions established by the Board. Notwithstanding any provision of this Agreement to the contrary, no distribution hereunder shall be permitted if such distribution would violate
Section 18-607 of the Act or other applicable law.
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ARTICLE 5
MEMBERS' MEETINGS
5.1
Meetings of Members.
Meetings of the Members may be held on an annual basis or as otherwise determined by a
Majority in Interest. Special meetings of the Members may be held for any purpose or purposes, unless otherwise prohibited by law, and may be called by the Board or by a Majority in Interest. All
meetings of the Members shall be held within or outside the State of Delaware as designated from time to time by the Board or by a Majority in Interest and stated in the Notice of the meeting or in a
duly executed waiver of the Notice thereof. Members and Authorized Representatives
may participate in a meeting of the Members by means of conference telephone or other similar communication equipment whereby all Members or Authorized Representatives participating in the meeting can
hear each other, and such participation in a meeting shall constitute presence in person at the meeting, except when a Member or Authorized Representative participates for the express purpose of
objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.
5.2
Quorum; Voting Requirement.
The presence, in person or by proxy, of a Majority in Interest of the Members
shall constitute a quorum for the transaction of business by the Members. The affirmative vote of a Majority in Interest shall constitute a valid decision of the Members, except where a different vote
is required by the Act or this Agreement.
5.3
Proxies.
Any Member entitled to vote but expecting to be absent from a meeting shall be entitled to
designate in writing (or orally;
provided
, that such oral designation is later confirmed in writing) a proxy (an "
Authorized
Representative
") to act on behalf of such Member with respect to such meeting (to the same extent and with the same force and effect as the Member who has designated such
Authorized Representative). Such Authorized Representative shall have full power and authority to act and take actions or refrain from taking actions as the Member by whom such Authorized
Representative has been designated.
5.4
Action Without Meeting.
Any action required or permitted to be taken at any meeting of Members of the
Company may be taken without a meeting, without prior Notice and without a vote if a consent in writing setting forth the action so taken is signed by a Majority in Interest, except where a different
vote is required by the Act or this Agreement, in which case such consent must be signed by the Members as would be necessary to authorize or take such action at a meeting of the Members. Prompt
Notice of the taking of any action taken pursuant to this
Section 5.4
by less than the unanimous written consent of the Members shall be given to
those Members who have not consented in writing. A consent transmitted by electronic transmission by a Member shall be deemed to be written and signed.
5.5
Notice.
Notice stating the place, day and hour of the meeting of Members and the purpose for which the
meeting is called shall be delivered personally or sent by mail or by facsimile or email not less than one Business Day nor more than 60 days before the date of the meeting by or at the
direction of the Board or a representative of a Majority in Interest calling the meeting, to each Member entitled to vote at such meeting.
5.6
Waiver of Notice.
When any Notice is required to be given to any Member hereunder, a waiver thereof in
writing signed by the Member or its Authorized Representative, whether before, at or after the time stated therein, shall be equivalent to the giving of such Notice. Attendance at a meeting will be
deemed a waiver of Notice, except when a Member or Authorized Representative participates for the express purpose of objecting to the transaction of any business on the ground that the meeting was not
lawfully called or convened.
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ARTICLE 6
MANAGEMENT AND CONTROL
6.1
Board of Directors
.
(a) Except
as otherwise provided hereunder, the business and affairs of the Company shall be managed by or under the direction of the Board, which shall, subject to this
Section 6.1(a)
,
Section 6.2(b)
and
Section 6.2(c)
, consist of ten (plus up to two additional Directors, one of which may be appointed by the Series A Preferred
Unitholders
pursuant to
Section 6.1(c)
, and the other of which may be appointed by a majority of the Directors at any time) individuals designated as
directors of the Company (the "
Directors
"). Except as otherwise expressly provided herein, the power and authority granted to the Board hereunder shall
include all those necessary or convenient for the furtherance of the purposes of the Company and shall include the power to make or delegate to Officers all decisions with regard to the management,
operations, assets, financing and capitalization of the Company. The Board will be composed in accordance with the following provisions subject, where applicable, to
Section 6.2
:
(i) The
Chief Executive Officer of the Company as of the date hereof shall be a Director and shall serve as Chairman of the Board. Subject to
Section 6.1(a)(iii)
and
(iv)
and
Section 6.2
, each Initial Designating Member shall be entitled to designate one Director. Unless otherwise required pursuant to the Exchange Act
and the rules and regulations of the Commission thereunder and by the principal
National Securities Exchange on which the PAGP Class A Shares or MLP Common Units are listed, the Board shall include at least three Independent Directors;
provided
,
however
, that if at any time there shall be fewer than the required number of Independent
Directors, the Board shall take such actions as may be necessary to cause the Board to re-establish the required number of Independent Directors;
provided
,
further
, that if at any time there shall be fewer than two Independent Directors to serve on
the Conflicts Committee of Plains All American GP LLC, the Board may take such actions as may be necessary to cause the Board to have at least two Independent Directors to serve on such
Conflicts Committee of Plains All American GP LLC. In connection therewith, the Board may exercise its Director removal and appointment rights hereunder and may, to the extent required,
increase the size of the Board and appoint one or more new Independent Directors to fill the resulting vacancies. The Directors of the Company as of the date hereof are set forth on
Schedule 3
to
this Agreement. Each Director shall hold office until his or her successor is elected pursuant to this
Article 6
or until his or her earlier death, resignation or removal.
(ii) Subject
to
Section 6.1(a)(iv)
, any individual designated by a Designating Member as a Director may only be
removed by such Designating Member, which removal may be effected at any time, with or without Cause;
provided
,
however
, that such designated Director may
also be removed by majority vote of the remaining Directors if such removal is for Cause. Subject to
Section 6.1(a)(iv)
, in the event of the death, resignation or removal of a Director designated
by a Designating Member, such Designating Member
may designate a replacement Director. In the event of the death, resignation or removal of or any vacancy relating to a Director (other than a Director designated by a Designating Member), a majority
of the remaining Directors may designate a replacement Independent Director. In the event the individual serving as Chief Executive Officer of the Company no longer holds such office for any reason,
such individual shall be automatically removed as a Director and the successor to such individual as Chief Executive Officer of the Company shall, by virtue of such appointment, be designated to
replace such individual as a Director and shall, unless the Board otherwise determines by a majority vote of the other Directors, serve as Chairman of the Board.
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(iii) Each
Initial Designating Member shall have the right to designate a Director pursuant to
Section 6.1(a)(i)
so
long as such Initial Designating Member owns at least a 10% Qualifying Interest. If any Member who is not otherwise entitled to designate a Director acquires a 20% or greater Qualifying Interest (a
"
Subsequent Designating Member
") in accordance with the provisions of this Agreement, such Subsequent Designating Member shall have the right to
designate a Director, and such Director shall be treated as a Director designated by a Designating Member for purposes of
Section 6.1(a)(ii)
until such time as such Subsequent Designating Member ceases to own at least a 20% Qualifying Interest;
provided, however,
that at all times there shall
be no more than three Directors designated by the Designating Members. Accordingly, if a Member becomes a Subsequent Designating Member at a time when there are already three Directors designated by
other Designating Members, such Subsequent Designating Member's right to designate a Director shall be deferred until the next Designation Loss Event, whereupon the replacement Director shall be
determined as provided in
Section 6.1(a)(iv)
below.
(iv) In
the event an Initial Designating Member ceases to maintain ownership of at least a 10% Qualifying Interest or a Subsequent Designating Member ceases to maintain
ownership of at least a 20% Qualifying Interest (a "
Designation Loss Event
"), the Director designated by such Designating Member shall be automatically
removed as a Director, and any Subsequent Designating Member whose right to designate a Director has been deferred in accordance with
Section 6.1(a)(iii)
shall be entitled to designate a Director,
or, if there is no such remaining Subsequent Designating Member, a majority of the
remaining Directors shall elect a replacement Director;
provided, however
, in the event that there is more than one remaining Subsequent Designating
Member whose right to designate a Director has been deferred, the Subsequent Designating Member who first accumulated ownership of at least a 20% Qualifying Interest shall be entitled to designate the
Director.
(v) If
any Designating Member fails to exercise its right to designate a Director and a vacancy on the Board remains unfilled for at least sixty (60) days, the Board
may fill that vacancy upon the vote of a majority of the remaining Directors. If the Board exercises its right to fill a vacancy pursuant to this
Section 6.1(a)(v)
, such Designating Member's
designation right shall be suspended for a period to be determined by the Board, which period shall
not exceed one hundred eighty (180) days. Following the end of any such suspension period and provided that a Designation Loss Event has not occurred with respect to such Designating Member,
such Designating Member will be entitled to designate a Director in accordance with the terms of this Agreement. Any Director designated by such Designating Member shall immediately replace the
Director appointed by the Board pursuant to this
Section 6.1(a)(v)
;
provided, however
, that the
Board may, by majority vote of the Directors elect to increase the size of the Board by one Director and fill the resulting vacancy with the Director that was appointed by the Board to fill the
initial vacancy as provided in the first sentence of this
Section 6.1(a)(v)
;
provided further,
however
, that if, following any such increase or increases in the size of the Board, there shall be any subsequent vacancy on the Board, the Board shall not fill such vacancy
and shall reduce the size of the Board by one (but not below ten members) unless either (1) any Designating Member shall be entitled to fill such vacancy or (2) the failure to fill such
vacancy would cause the Board to fail to consist of the required number of Independent Directors pursuant to
Section 6.1(a)
.
(b) Subject
to the terms and conditions set forth below, following the occurrence of a Designation Loss Event with respect to any Initial Designating Member and so long as
such Initial Designating Member continues to own at least a 5% Qualifying Interest, (A) such Initial Designating Member shall have the right to designate an individual (who shall be a senior
representative of such Initial Designating Member's management team and acceptable to the
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Board)
(each, an "
IDM Observer
") to receive notice of and attend meetings of the Board in an observer capacity and (B) until such Initial
Designating Member's right to designate an IDM Observer terminates or the Initial Designating Member rescinds its request to receive such information in writing, each IDM
Observer shall be entitled to receive copies of information routinely provided to the Directors;
provided
, that the failure to give any such notice or
documents or information shall not affect the validity of any action taken by the Board. The terms and conditions of the foregoing provisions are as follows:
(i) the
applicable Initial Designating Member agrees to treat any and all such information, whether written or oral, as confidential information subject to
Section 10.4
.
(ii) In
recognition that an Initial Designating Member or one or more of its Affiliates are currently, or may become, engaged in certain aspects of the midstream crude oil,
refined products, natural gas and liquefied petroleum gas or other current or future energy infrastructure-related activities that may be deemed to be competitive with the MLP, (1) written
materials may be redacted or withheld from any Initial Designating Member or any IDM Observer pursuant to (iii) below, and (2) the IDM Observer may be excluded from relevant portions of
the Board meetings or committee meetings pursuant to (iv) below.
(iii) Written
materials may be redacted or withheld from any Initial Designating Member or any IDM Observer if the Board, the Chairman, the Chief Executive Officer or the
general counsel of the Company reasonably believe that (1) providing such information (a) would result in a potential breach of confidentiality agreements between third parties and the
Company Group or the MLP and its Subsidiaries; (b) may otherwise disadvantage the Company Group, the MLP or any of its Subsidiaries in ongoing commercial dealings with such Initial Designating
Member or any of its affiliates; or (c) could result in the competitive positioning of the Company Group or the MLP or its Subsidiaries being compromised; or (2) such redaction or
withholding is necessary or advisable for the protection and retention of any attorney-client privilege.
(iv) At
the discretion of a majority of the Directors (or any committee of the Board) then in attendance, any IDM Observer may be excluded from relevant portions of the
Board meetings or committee meetings if such majority reasonably believes that (1) such IDM Observer's attendance (a) would result in a potential breach of confidentiality agreements
between third parties and the Company Group or the MLP and its Subsidiaries; (b) may otherwise disadvantage the Company Group, the MLP or any of its Subsidiaries in ongoing commercial dealings
with any Initial Designating Member or any of its affiliates; or (c) could result in the competitive positioning of the Company Group or the MLP or its Subsidiaries being compromised; or
(2) such exclusion is necessary or advisable for the protection and retention of any attorney-client privilege.
(v) Any
Initial Designating Member may eliminate the foregoing restrictions in clauses (ii), (iii) and (iv) above by requesting information or
requesting that its IDM Observer not be excluded and, if applicable, agreeing in writing to be bound by any applicable confidentiality agreements that would permit disclosure of the information being
redacted or withheld, unless such disclosure or presence of such IDM Observer would (1) adversely affect the retention of any attorney-client privilege or (2) disadvantage the Company
Group, the MLP or any of its Subsidiaries in ongoing commercial dealings with the applicable Initial Designating Member or any of its affiliates.
(vi) Notwithstanding
Section 10.4
or
Section 11.1
, with respect
to materials provided to any Initial Designating Member pursuant to
Section 6.1(b)(ii)
or otherwise provided by the Company Group without
solicitation by such Initial Designating Member, such Initial Designating Member shall not be presumed to have misused such information solely because
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its
IDM Observer may have retained a mental impression of such information in connection with such Initial Designating Member's participation in activities competitive with the Company Group or the
MLP and its Subsidiaries. This
Section 6.1(b)(vi)
shall not apply with respect to information provided to any Initial Designating Member pursuant
to
Section 6.2(b)(v)
or otherwise provided upon an Initial Designating Member's request.
(vii) No
IDM Observer shall have any voting rights. No consent or approval of any IDM Observer shall be required for any action taken by the Board. The attendance or
participation of any IDM Observer at a meeting shall not be required for action by the Board.
(c) If
a Series A Trigger Event (as such term is defined in the MLP Partnership Agreement) occurs, then the Series A Preferred Unitholders (as such term is
defined in the MLP Partnership Agreement) shall have the right, upon written notice, to appoint one representative to the Board, as set forth in the MLP Partnership Agreement, but such right shall be
subject to the terms set forth in this Agreement. The Board representative identified in the notice delivered by the Series A Preferred Unitholders shall be referred to herein as the
"
Series A Designated Director
." The Series A Designated Director must, in the reasonable judgment of the Board, (i) have the
requisite skill and experience to serve as a director of a public company in the energy sector, (ii) not be prohibited from serving as a director pursuant to any rule or regulation of the
Commission or any national securities exchange on which the PAGP Class A Shares or MLP Common Units are listed or admitted to trading, and (iii) not be an employee or a director of any
Competitor (as defined below);
provided
, that an individual employed by a financial institution, fund or investment vehicle, who serves as a director of
a portfolio company of such institution, which portfolio company is a Competitor, shall not be excluded from serving as a Series A Designated Director solely by virtue of such role as a
director of such portfolio company. For purposes of the immediately preceding sentence the term "
Competitor
" shall mean any entity that (a) is an
operating company (and not a financial institution) and (b) competes with the MLP in the transportation, storage, terminaling or marketing of crude oil, natural gas liquids or natural gas in
the United States or Canada. If the Series A Preferred Unitholders exercise their right to appoint a Series A Designated Director, such Series A Designated Director shall be a
member of the Board until such Series A Designated Director is removed pursuant to
Section 6.1(d)
or
Section 6.1(e)
. Any Series A
Designated Director shall have all the rights and duties of a Director otherwise serving hereunder.
(d) Prior
to a Designation Right Termination Event (as defined below), the Series A Designated Director may be removed or replaced by the Series A Purchasers
(as defined in the MLP Partnership Agreement) at any time for any reason or by majority vote of the other Directors for "cause" (as defined below); and any vacancy occurring by reason of the death,
disability, resignation, removal or other cessation of a person serving as a Series A Designated Director shall be filled by a vote of the Series A Preferred Unitholders holding a
majority of the then outstanding Series A Preferred Units and the subsequent delivery of written notice to the Company. As used herein, "cause" means that the Series A Designated
Director (i) is prohibited from serving as a director under any rule or regulation of the Commission or any national securities exchange on which the PAGP Class A Shares or MLP Common
Units are listed; (ii) while serving as the Series A Designated Director, is convicted by a court of competent jurisdiction of a felony; (iii) a court of competent jurisdiction
has entered a final, non-appealable judgment finding the Series A Designated Director liable for actual fraud or willful misconduct against PAGP or the MLP (including, but not limited to,
intentionally or willfully failing to observe any obligations of confidentiality to PAGP or the MLP); (iv) is determined to have acted intentionally or in bad faith in a manner that results in
a material detriment to the assets, business or prospects of PAGP or the MLP; or (v) is terminated, removed or resigns for any reason from his or her position, if any, with any such
Series A Preferred Unitholder at which the Series A
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Designated
Director was employed at the time of his or her appointment as the Series A Designated Director. Any action by the Series A Preferred Unitholders to designate, remove or
replace a Series A Designated Director shall be evidenced in writing furnished to the Company, shall include a statement that the action has been approved by a vote of the Series A
Preferred Unitholders holding a majority of the then outstanding Series A Preferred Units and shall be executed by or on behalf of the Series A Unitholders.
(e) Upon
payment by the MLP to the Series A Preferred Unitholders of all accrued but unpaid distributions on the Series A Preferred Units then outstanding
following a Series A Trigger Event (a "
Designation Right Termination Event
"), the right of the Series A Preferred Unitholders to designate
a Series A Designated Director shall automatically terminate (unless and until another Series A Trigger Event shall have occurred) and the Series A Designated Director then
serving as a member of the Board shall, promptly upon (and in any event within two (2) Business Days following) receipt of a written request from the Board, resign as a member of the Board. If
the Series A Designated Director does not resign upon such request, then a majority of the other Directors then serving on the Board may remove the Series A Designated Director as a
member of the Board.
(f) Notwithstanding
any other provision of this Agreement, Director designation rights are not separately transferable and in no event shall both a Member and its Permitted
Transferee be entitled to
designate a Director, unless the transferee otherwise satisfies the criteria of a Subsequent Designating Member.
(g) For
the purpose of calculating the 10%, 20% and 5% Qualifying Interest thresholds referenced in
Section 6.1(a)(iii)
,
Section 6.1(a)(iv)
and
Section 6.1(b)
, Qualifying Interests owned by an Affiliate of an Initial Designating Member or a Subsequent Designating Member, as applicable,
shall be attributed to such Initial Designating Member or Subsequent Designating Member, as applicable, for purposes of determining whether the applicable Qualifying Interest threshold has been
satisfied.
(h) Notwithstanding
anything herein to the contrary, while a Conflicts Committee of Plains All American GP LLC is empaneled, each Independent Director serving
on such conflicts committee shall abstain from all decision-making activities of the Board with respect to matters being considered by, or that have been assigned to, such conflicts committee.
6.2
Classification of the Board
.
(a) The
Directors, other than the Chief Executive Officer of the Company and any Series A Designated Director, shall as of the date hereof be divided into three
classes as follows: (i) the classes shall be denominated Class I, Class II and Class III (each being referred to herein as a
"
Class
"); and (ii) each Class shall initially be composed of three Directors, with each Class having two Independent Directors and one Director
designated by a Designating Member. If the size of the Board is increased in accordance with the terms of this Agreement, the Board shall place the additional Directors into the Class or Classes such
that Directors are as evenly distributed among Classes as possible. The Classes of the Directors as of the date hereof are set forth on
Schedule 3
to this Agreement.
(b) The
Chief Executive Officer of the Company shall continue to be a Director until his removal or replacement in accordance with
Section 6.1(a)(ii)
. Each Director that has been designated by a
Designating Member shall continue to be a Director until such Director's removal
or replacement in accordance with
Section 6.1(a)
. Any Series A Designated Director shall continue to be a Director until his removal or
replacement in accordance with
Section 6.1(d)
or
Section 6.1(e)
. Each Eligible Director
shall serve for a term ending as follows, subject to earlier death, resignation or removal as provided herein: (i) the Directors designated to Class III shall
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serve
for an initial term that expires at the first annual meeting of PAGP Limited Partners following the date hereof; (ii) the Directors designated to Class II shall serve for an
initial term that expires at the second annual meeting of PAGP Limited Partners following the date hereof; and (iii) and the Directors designated to Class I shall serve for an initial
term that expires at the third annual meeting of PAGP Limited Partners following the date hereof. At each annual meeting of PAGP Limited Partners, successors to the class of Directors whose term
expires at that annual meeting shall be elected or designated for a three-year term. The first annual meeting after the date hereof shall be held during the calendar year commencing on
January 1, 2018.
(c) At
each annual meeting of the PAGP Limited Partners held after the date hereof, any Designating Member for which the term of its designated Director shall expire at such
annual meeting shall designate a Director to hold office until the third succeeding annual meeting. Each such designated Director shall hold office for such term or until such Director's earlier
death, resignation or removal.
(d) An
Eligible Director may be removed with or without Cause upon a vote of a majority of the remaining Directors then in office;
provided,
however
, that any Director who is elected by the holders of PAGP Class A Shares, PAGP Class B Shares and PAGP Class C Shares pursuant to the terms of the
PAGP Partnership Agreement may only be removed for Cause upon a vote of a majority of the remaining Directors then in office.
(e) After
the date hereof, individuals shall be nominated for election as Eligible Directors, and the election of Eligible Directors shall be conducted, in accordance with
the provisions of the PAGP Partnership Agreement.
6.3
Meetings of the Board.
The Board may hold meetings, both regular and special, within or outside the State of
Delaware. Regular meetings of the Board may be called by the Chief Executive Officer or two or more of the Directors upon delivery of written Notice to the remainder of the Board at least five days
prior to the date of such meeting. Special meetings of the Board may be called at the request of the Chief Executive Officer or any two or more of the Directors upon delivery of written Notice sent to
each other Director by the means most likely to reach such Director as may be determined by the Secretary in his best judgment so as to be received at least 24 hours prior to the time of such
meeting. Notwithstanding anything contained herein to the contrary, such Notice may be telephonic if no other reasonable means are available. Such Notices shall be accompanied by a proposed agenda or
general statement of purpose. Advance notice of a meeting may be waived and attendance or participation in a
meeting shall be deemed to constitute waiver of any advance notice requirement for such meeting, unless the reason for such participation or attendance is for the express purpose of objecting to the
transaction of any business on the basis that the meeting was not lawfully called or convened.
6.4
Quorum and Acts of the Board.
A majority of the Directors shall constitute a quorum for the transaction of
business at all meetings of the Board, and, except as otherwise provided in this Agreement, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of
the Board. If a quorum shall not be present at any meeting of the Board, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting,
until a quorum shall be present. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or
committee, as the case may be, consent thereto in writing (including by electronic transmission), and the writing or writings or electronic transmission or transmissions are filed with the minutes of
proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
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6.5
Communications.
Members of the Board, or any committee designated by the Board, may
participate in a meeting of the Board or any committee thereof by means of conference telephone or similar communications equipment through which all persons participating in the meeting can hear each
other, and such participation in a meeting shall constitute presence in person at the meeting, except when a Director participates for the express purpose of objecting to the transaction of any
business on the ground that the meeting was not lawfully called or convened.
6.6
Committees of Directors
.
(a) The
Board, by unanimous resolution of all Directors present and voting at a duly constituted meeting of the Board or by unanimous written consent, may designate one or
more committees, each
committee to consist of one (1) or more of the Directors. In the event of the disqualification, resignation or removal of a committee member, the Board may appoint another member of the Board
to fill such vacancy. Any such committee, to the extent provided in the Board's resolution, shall have and may exercise all the powers and authority of the Board in the management of the Company's
business and affairs subject to any limitations contained herein or in the Act. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted
by the Board. Each committee shall keep regular minutes of its meetings and report the same to the Board when required.
(b) In
addition to any other committees established by the Board pursuant to
Section 6.6(a)
, the Board may, as
necessary, convene a "
Conflicts Committee
," which shall be composed of at least two Directors, each of whom shall meet the requirements set forth in the
PAGP Partnership Agreement. The Conflicts Committee shall be responsible for (A) approving or disapproving, as the case may be, any matters regarding the business and affairs of the Company,
PAGP or AAP submitted to such Conflicts Committee by the Board and (B) performing such other functions as the Board may assign from time to time or as may be specified in a specific delegation
to the Conflicts Committee.
(c) In
addition to any other committees established by the Board pursuant to
Section 6.6(a)
, the Board shall maintain
an "Audit Committee," which shall be composed of at least three Independent Directors at all times, subject to
Section 6.1(a)(i)
. The Audit
Committee shall be responsible for such matters as the Board may assign from time to time or as may be specified in a written charter for the Audit Committee adopted by the Board.
6.7
Compensation of Directors.
Each Director shall be entitled to reimbursement from the Company for all
reasonable direct out-of-pocket expenses incurred by such Director in connection with attending Board meetings and such other compensation as may be approved by the Board.
6.8
Directors as Agents.
The Board, acting as a body pursuant to this Agreement, shall constitute a "manager"
for purposes of the Act. No Director, in such capacity, acting singly or with any other Director, shall have any authority or right to act on behalf of or bind the Company other than by exercising the
Director's voting power as a member of the Board, unless specifically authorized by the Board in each instance.
6.9
Officers; Agents.
The Board shall have the power to appoint any Person or Persons as the Company's officers
(the "
Officers
") to act for the Company and to delegate to such Officers such of the powers as
are granted to the Board hereunder. Any decision or act of an Officer within the scope of the Officer's designated or delegated authority shall control and shall bind the Company (and any business
entity for which the Company exercises direct or indirect executory authority). The Officers may have such titles as the Board shall deem appropriate, which may include (but need not be limited to)
Chairman of the Board, President, Chief Executive Officer, Executive Vice President, Vice President, Chief Operating Officer, Chief Financial Officer, Treasurer, Controller or Secretary. A Director
may be an Officer. Unless the authority of an Officer is limited by the Board, any Officer so
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appointed
shall have the same authority to act for the Company as a corresponding officer of a Delaware corporation would have to act for a Delaware corporation in the absence of a specific delegation
of authority. The Officers shall hold office until their respective successors are chosen and qualify or until their earlier death, resignation or removal. Any Officer elected or appointed by the
Board may be removed at any time by the affirmative vote of a majority of the Board. Any vacancy occurring in any office of the Company shall be filled by the affirmative vote of a majority of the
Board.
6.10
Actions Requiring Consent of Oxy.
Until Oxy and its Affiliates (a) do not have a Qualifying Interest
of at least 5% and (b) beneficially own less than 5% of the outstanding Shares (as such term is defined in the PAGP Partnership Agreement), without the prior written consent of Oxy, the Company
shall not, and shall not permit or cause any of its Subsidiaries (including the MLP) to, become a "retailer" (as defined under Section 613A(d)(2) of the Code) or a "refiner" (as defined under
Section 613A(d)(4) of the Code).
6.11
Amendments to the PAGP Partnership Agreement.
The Company shall not propose any amendment to the PAGP
Partnership Agreement that, directly or indirectly, would accomplish the effect of the matters prohibited by the provisions of
Section 12.2(a)(iii)
without the consent of the affected Designating
Member or Designating Members, as applicable.
ARTICLE 7
LIABILITY AND INDEMNIFICATION
7.1
Limitation on Liability of Members, Directors and Officers
.
(a) Subject
to, and as limited by, the provisions of this Agreement, the Members and Directors, in the performance of their duties as such, shall not, to the maximum extent
permitted by the Act or other applicable law, owe any duties (including fiduciary duties) as a Member or Director of the Company, notwithstanding anything to the contrary in existing law, in equity or
otherwise;
provided, however
, that for the avoidance of doubt nothing set forth herein shall be deemed to limit the obligations of the "General Partner"
under the PAGP Partnership Agreement. Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Company, the Members or any other
Persons who have acquired Membership Interests, for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee in connection with the conduct of the business or
affairs of the Company unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee
acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee's conduct was criminal. To the fullest extent permitted by
Section 18-1101(c) of the Act, a Director designated by a Designating Member, in performing his or her obligations under this Agreement, shall be entitled to act or omit to act at the direction
of the Member who designated such Director, considering only such factors, including the separate interests of the designating Member, as such Director or the designating Member chooses to consider,
and any action of a Director or failure to act, taken or omitted in good faith reliance on the foregoing provisions of this
Section 7.1
shall not
constitute a breach of any duty including any fiduciary duty on the part of the Director or designating Member to the Company or any other Member or Director. Except as required by the Act, the
Company's debts, obligations, and liabilities, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Indemnitee shall be
personally responsible for any such debt, obligation or liability of the Company solely by reason of being an Indemnitee. No Member shall be responsible for any debts, obligations or liabilities,
whether arising in contract, tort or otherwise, of any other Member. The provisions of this Agreement, to the extent that they restrict, eliminate or otherwise modify the duties and liabilities,
including fiduciary duties, of any Indemnitee otherwise existing at
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law
or in equity, are agreed by the Members to replace such duties and liabilities of such Indemnitee. To the fullest extent permitted by law, in connection with any action or inaction of, or
determination made by, any Indemnitee with respect to any matter relating to the Company, it shall be presumed that the Indemnitee acted in a manner that satisfied the contractual standards set forth
in this Agreement, and in any proceeding brought by any Member or by or on behalf of such Member or any other Member or the Company challenging any such action or inaction of, or determination made
by, any Indemnitee, the Person bringing or prosecuting such proceeding shall have the burden of overcoming such presumption.
(b) Any
Indemnitee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
(c) No
amendment, modification or repeal of this
Section 7.1
or any provision hereof shall in any manner terminate,
reduce or impair the waiver or limitation on liability with respect to any past, present or future Indemnitee under and in accordance with the provisions of this
Section 7.1
as in effect
immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
7.2
Indemnification
.
(a) Notwithstanding
anything to the contrary set forth in this Agreement and except as required by the Act, to the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, the Company shall indemnify and hold harmless the Indemnitees (when not acting in violation of this Agreement or applicable law) from and against any
and all losses, claims, demands, costs, damages, liabilities, expenses of any nature (including reasonable attorneys' fees and disbursements), judgments, fines, settlements and other amounts arising
from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which an Indemnitee may be involved, or threatened to be involved, as a party or
otherwise, by reason of his, her or its status as an Indemnitee, if such Indemnitee acted in good faith and in a manner he or she subjectively believed to be in, or not opposed to, the interests of
the Company and with respect to any criminal proceeding, had no reason to believe his, her or its conduct was unlawful.
(b) Expenses
incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding subject to
Section 7.2(a)
shall, from time to time, be advanced by the Company prior to the final disposition of
such claim, demand, action, suit or
proceeding upon receipt by the Company of an undertaking by or on behalf of the Indemnitee to repay such amounts if it is ultimately determined that the Indemnitee is not entitled to be indemnified as
authorized in this
Section 7.2
.
(c) The
indemnification provided by this
Section 7.2
shall be in addition to any other rights to which an Indemnitee
may be entitled pursuant to any approval of the Board, as a matter of law or equity, or otherwise, and shall continue as to an Indemnitee who has ceased to hold the status with respect to which it was
an Indemnitee and shall inure to the benefit of the heirs, successors, assigns, and administrators of such Indemnitee;
provided, however
, that in the
event such Indemnitee is also an Affiliate of a Member who is a Designating Member, the vote of the Director designated by such Designating Member shall be disregarded for purposes of the Board's vote
pursuant to this
Section 7.2(c)
. The Company shall not be required to indemnify any Member in connection with any losses, claims, demands,
actions, disputes, suits or proceedings, of any Member against any other Member.
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(d) The
Company may purchase and maintain directors and officers insurance or similar coverage for its Directors and Officers in such amounts and with such deductibles or
self-insured retentions as determined by the Board.
(e) Any
indemnification hereunder shall be satisfied only out of the assets of the Company, and the Members shall not be subject to personal liability by reason of the
indemnification provisions under this
Section 7.2
.
(f) An
Indemnitee shall not be denied indemnification in whole or in part under this
Section 7.2
because the
Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement and all material facts
relating to such Indemnitee's interest were adequately disclosed to the Board at the time the transaction was consummated.
(g) Subject
to
Section 7.2(c)
, the provisions of this
Section 7.2
are for the benefit of the Indemnitees and the heirs, successors, assigns and
administrators of the Indemnitees and shall not be
deemed to create any rights for the benefit of any other Persons.
(h) No
amendment, modification or repeal of this
Section 7.2
or any provision hereof shall in any manner terminate,
reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Company or any Affiliate of the Company, nor the obligations of the Company or such Affiliate to indemnify
any such Indemnitee under and in accordance with the provisions of this
Section 7.2
as in effect immediately prior to such amendment,
modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
ARTICLE 8
TRANSFERS OF UNITS
8.1
General Restrictions
.
(a) Except
for Transfers that are necessary in order to give effect to (i) an exchange of such Member's AAP Class A Units and PAGP Class B Shares for
PAGP Class A Shares in accordance with Section 7.9 of the AAP Partnership Agreement; or (ii) a redemption of such Member's AAP Class A Units for MLP Redemption Units in
accordance with Section 7.11 of the AAP Partnership Agreement, a Member shall be prohibited from Transferring any of its Company Units (a "
Membership
Transfer
") unless such Member simultaneously Transfers to the transferee of such Company Units a corresponding number of AAP Class A Units and PAGP Class B Shares
in accordance with the applicable terms of the AAP Partnership Agreement, including in compliance with any transfer restriction or right of first refusal provisions contained therein. A transfer in
compliance with such terms is referred to herein as a "
Permitted Transfer
." If for any reason the transfer of such AAP Class A Units or PAGP
Class B Shares does not occur simultaneously and proportionately with the Membership Transfer, then the Membership Transfer shall be null and void and of no force and effect.
(b) Notwithstanding
any other provision of this Agreement, no Member may pledge, mortgage or otherwise subject its Company Units to any Encumbrance.
8.2
Substitute Members
.
(a) Unless
and until admitted as a substitute Member pursuant to this
Section 8.2
, a transferee of a Member's Company
Units shall be an assignee with respect to such Transferred Company Units and shall not be entitled to participate in the management of the business and affairs of the Company or to become, or to
exercise the rights of, a Member, including the right to appoint Directors, the right to vote, the right to require any information or accounting of the
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Company's
business, or the right to inspect the Company's books and records. Such transferee shall only be entitled to receive, to the extent of the Company Units Transferred to such transferee, the
share of distributions and profits, if any, to which the transferor would otherwise be entitled with respect to the Transferred Company Units. The transferor shall have the right to vote such
Transferred Company Units until the transferee is admitted to the Company as a substitute Member with respect to the Transferred Company Units.
(b) No
transferee of all or any of a Member's Company Units shall become a substitute Member in place of the transferor unless and until:
(i) Such
Transfer is in compliance with the terms of
Section 8.1
;
(ii) the
transferee has executed an instrument in form and substance reasonably satisfactory to the Board accepting and adopting, and agreeing to be bound by, the terms and
provisions of the Certificate and this Agreement; and
(iii) the
transferee has caused to be paid all reasonable expenses of the Company in connection with the admission of the transferee as a substitute Member.
Upon
satisfaction of all the foregoing conditions with respect to a particular transferee, the books and records of the Company shall be adjusted to reflect the admission of the transferee as a
substitute Member to the extent of the Transferred Company Units held by such transferee.
8.3
Effect of Admission as a Substitute Member.
Unless otherwise provided hereunder, a transferee who has become
a substitute Member has, to the extent of the Transferred Company Units, all the rights, powers and benefits of, and is subject to the obligations, restrictions and liabilities of a Member under, the
Certificate, this Agreement and the Act. Upon admission of a transferee as a substitute Member, the transferor of the Company Units so held by the substitute Member shall cease to be a Member of the
Company to the extent of such Transferred Company Units.
8.4
Consent.
Each Member hereby agrees that upon satisfaction of the terms and conditions of this
Article 8
with respect
to any proposed Transfer, the transferee may be admitted as a Member without any further action by a Member hereunder.
8.5
No Dissolution
. If a Member Transfers all of its Company Units pursuant to this
Article 8
and the transferee of such
Company Units is admitted as a Member pursuant to
Section 8.2
, such Person
shall be admitted to the Company as a Member effective on the effective date of the Transfer and the Company shall not dissolve pursuant to
Section 9.1
.
8.6
Additional Members
. Any Person acceptable to the Board may become an additional Member of the Company on
terms and conditions as the Board shall determine,
provided
that such additional Member complies with all the requirements of a transferee
under
Section 8.2(b)(ii) and (b)(iii)
.
ARTICLE 9
DISSOLUTION AND TERMINATION
9.1
Events Causing Dissolution
.
(a) The
Company shall be dissolved and its affairs wound up upon the first to occur of the following events:
(i) the
consent of at least two-thirds of the members of the Board;
(ii) at
any time there are no Members, unless the Company is continued in accordance with the Act or this Agreement; or
(iii) the
entry of a decree of judicial dissolution pursuant to Section 18-802 of the Act.
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(b) The
withdrawal, death, retirement, resignation, expulsion, bankruptcy or dissolution of any Member or the occurrence of any other event that terminates the continued
membership of any Member in the Company shall not, in and of itself, cause the Company's dissolution.
9.2
Final Accounting.
Upon dissolution and winding up of the Company, an accounting will be made of the accounts
of the Company and each Member and of the Company's assets, liabilities and operations from the date of the last previous accounting to the date of such dissolution.
9.3
Distributions Following Dissolution and Termination.
Upon dissolution and liquidation of the Company, the
assets of the Company shall be applied and distributed in the following order of priority:
(a) to
the payment of debts and liabilities of the Company (including to the Members to the extent otherwise permitted by law) and the expenses of liquidation;
(b) next,
to the setting up of such reserves as the Person required or authorized by law to wind up the Company's affairs may reasonably deem necessary or appropriate for
any disputed, contingent or unforeseen liabilities or obligations of the Company,
provided
that any such reserves shall be paid over by such Person to
an escrow agent appointed by the Board, to be held by such agent or its successor for such period as such Person shall deem advisable for the purpose of applying such reserves to the payment of such
liabilities or obligations and, at the expiration of such period, the balance of such reserves, if any, shall be distributed as hereinafter provided; and
(c) the
remainder to the Members in proportion to their relative ownership of Company Units.
The
provisions of this Agreement, including, without limitation, this
Section 9.3
, are intended solely to benefit the Members and,
to the fullest extent permitted by law, shall not be construed as conferring any benefit upon any creditor of the Company, and no such creditor of the Company shall be a third-party beneficiary of
this Agreement, and no Member or Director shall have any duty or obligation to any creditor of the Company to issue any call for capital pursuant to this Agreement.
9.4
Termination of the Company.
The Company shall terminate when all assets of the Company, after payment or due
provision for all debts, liabilities and obligations of the Company, shall have been distributed to the Members in the manner provided for in this
Article 9
, and the Certificate of Formation of the
Company shall have been canceled in the manner required by the Act.
9.5
No Action for Dissolution.
The Members acknowledge that irreparable damage would be done to the goodwill and
reputation of the Company if any Member should bring an action in court to dissolve the Company under circumstances where dissolution is not required by
Section 9.1
. Accordingly, except where the
Board has failed to cause the liquidation of the Company as required by
Section 9.1
and except as specifically provided in Section 18-802 of the Act, each Member hereby to the fullest extent
permitted by law
waives and renounces his right to initiate legal action to seek dissolution of the Company or to seek the appointment of a receiver or trustee to wind up the affairs of the Company, except in the
cases of fraud, violation of law, bad faith, willful misconduct or willful violation of this Agreement.
ARTICLE 10
ACCOUNTING; BOOKS AND RECORDS
10.1
Fiscal Year and Accounting Method.
The fiscal year and taxable year of the Company shall be the calendar
year. The Company shall use an accrual method of accounting.
10.2
Books and Records.
The Company shall maintain at its principal office, or such other office as may be
determined by the Board, all the following:
(a) a
current list of the full name and last known business or residence address of each Member, and of each member of the Board;
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(b) a
copy of the Certificate and this Agreement, including any and all amendments to either thereof, together with executed copies of any powers of attorney pursuant to
which the Certificate, this Agreement, or any amendments have been executed; and
(c) the
Company's books and records.
10.3
Delivery to Members; Inspection.
Upon the request of any Member, for any purpose reasonably related to such
Member's interest as a member of the Company, the Board shall cause to be made available to the requesting Member the information required to be maintained by clauses (a) through (c) of
Section 10.2
and such other information regarding the business and affairs and financial condition of the Company as any Member may reasonably
request.
10.4
Non-Disclosure.
Each Member (other than PAGP) agrees that, except as otherwise consented to by the Company
in writing, all non-public and confidential information furnished to it pursuant to this Agreement will be kept confidential and will not be disclosed by such Member, or by any of its agents,
representatives, or employees, in any manner whatsoever (other than to the Company, another Member or any Person designated by the Company), in whole or in part, except that (a) each Member
shall be permitted to disclose such information to those of its agents, representatives, and employees who need to be familiar with such information in connection with such Member's investment in the
Company (collectively, "
Representatives
") and are apprised of the confidential nature of such information, (b) each Member shall be permitted to
disclose information to the extent required by law, legal process or regulatory requirements, so long as such Member shall have used its reasonable efforts to first afford the Company with a
reasonable opportunity to contest the necessity of disclosing such information, (c) each Member shall be permitted to disclose such information to possible purchasers of all or a portion of the
Member's Company Units,
provided
that such prospective purchaser shall execute a suitable confidentiality agreement in a form approved by the Company
containing terms not less restrictive than the terms set forth herein, (d) each Member shall be permitted to disclose information to the extent necessary for the enforcement of any right of
such Member arising under this Agreement and (e) each Member shall be permitted to report to its shareholders, limited partners, members or other owners, as applicable, regarding the general
status of its investment in the Company (without disclosing specific Confidential Information);
provided, however
, that information shall not be deemed
to be confidential information for purposes of this
Section 10.4
or
Section 11.1
, where
such information (i) is already known to such Member (or its Representatives), having been disclosed to such Member (or its Representatives) by a third Person without such third Person having
an obligation of confidentiality to the Company (ii) is or becomes publicly known through no wrongful act of such Member (or its Representatives) or (iii) is independently developed by
such Member (or its Representatives) without reference to any confidential information disclosed to such Member under this Agreement. Each Member shall be responsible for any breach of this
Section 10.4
by its Representatives.
ARTICLE 11
NON-COMPETITION AND NON-SOLICITATION
11.1
Non-Competition.
Each of the Members (other than PAGP) hereby acknowledges that the Company and its
Subsidiaries operate in a competitive business and compete with other Persons operating in the
midstream segment of the oil and gas industry for acquisition opportunities. Each of the Members agrees that during the period that it is a Member, it shall not, directly or indirectly, use any of the
confidential information it receives as a Member or which its designee receives as a Director of the Company or as an IDM Observer to compete with, or engage in or become interested financially in as
a principal, employee, partner, shareholder, agent, manager, owner, advisor, lender, guarantor of any Person that competes in North America with, the business conducted by the Company and its
Subsidiaries;
provided
,
however
, that when a Member engages in such activities, there shall be no
presumption of misuse of such confidential information solely because a Representative or Director
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designee
of such Member or IDM Observer may retain a mental impression of any such confidential information. The Company and the Members acknowledge that a Member may have in conception or development
technology or business opportunities which may be very similar or even identical to the Company's confidential information and, so long as such Member abides by
Section 10.4
, neither such Member
nor its designee Director or observer shall have any other restriction on such technology or business
opportunities and the Company and the other Members shall have no rights in such technology or business opportunities. The Company and each of the Members also acknowledge and agree that
(i) Kayne Anderson Capital Advisors L.P. and its Affiliates ("
Kayne Anderson
") and EMG Investment, LLC and its Affiliates
("
EMG
") manage investments in the energy industry in the ordinary course of business (such investments referred to as
"
Institutional Investments
") and that Kayne Anderson and EMG may make Institutional Investments, even if such Institutional Investments are competitive
with the Partnership's and its Subsidiaries' business; (ii) Oxy Holding Company (Pipeline), Inc. ("
Oxy
") and its Affiliates engage in
business that includes activities and business or strategic interests or investments that are related to, complement or compete with the businesses of the Company and its Subsidiaries and that Oxy and
its Affiliates may engage in such activities or business; and (iii) Kayne Anderson, EMG, Oxy and their respective Affiliates (A) shall not be prohibited, by virtue of its status as a
Member or its designation of a Director or an observer, from pursuing or engaging in such Institutional Investments described in clause (i) above or activities or interests described in
clause (ii) above, as applicable; (B) shall not be obligated, or have a duty, to inform or present to the Company or any of its Subsidiaries, of any opportunity, relationship or
investment (and no other Member will acquire or be entitled to any interest or participation in any such opportunity, relationship or investment) and shall not be bound by the doctrine of corporate
opportunity (or any analogous doctrine); and (C) shall not be deemed to have a conflict of interest with, or to have breached this
Section 11.1
or any duty (if any), whether express or implied
by law, to, the Company or its Affiliates or any other Member by reason of such
Member's (or any of its Representative's or equity holder's) involvement in such activities or interests;
provided,
that in all cases, such
Institutional Investments are not in violation of the provisions of
Section 10.4
or the second sentence of this
Section 11.1
. Each of the Members
confirms that the restrictions in this
Section 11.1
are
reasonable and valid and all defenses to the strict enforcement thereof are hereby waived by each of the Members.
11.2
Non-Solicitation.
Each of the Members (other than PAGP) undertakes toward the Company and is obligated
(absent the prior written consent of the Company), during the period that it is a Member and
for a period of one year thereafter, not to solicit or hire, directly or indirectly, in any manner whatsoever (except in response to a general solicitation or a non-directed executive search), in the
capacity of employee, consultant or in any other capacity whatsoever, one or more of the employees, directors or officers or other Persons (hereinafter collectively referred to as
"
Employees
") who at the time of solicitation or hire, or in the 90-day period prior thereto, are working full-time or part-time for the Company or any
of its Subsidiaries and not to endeavor, directly or indirectly, in any manner whatsoever, to encourage any of said Employees to leave his or her job with the Company or any of its Subsidiaries and
not to endeavor, directly or indirectly, and in any manner whatsoever, to incite or induce any client of the Company or any of its Subsidiaries to terminate, in whole or in part, its business
relations with the Company or any of its Subsidiaries.
11.3
Damages.
Each of the Members acknowledges that damages may not be an adequate compensation for the losses
which may be suffered by the Company as a result of the breach by such Member of the covenants contained in this
Article 11
and that the Company
shall be entitled to seek injunctive relief with respect to any such breach in lieu of or in addition to any recourse in damages without the posting of a bond or other security.
11.4
Limitations.
In the event that a court of competent jurisdiction decides that the limitations set forth in
Section 11.1
hereof are too broad, such limitations shall be reduced to those limitations that such court deems reasonable.
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ARTICLE 12
MISCELLANEOUS
12.1
Waiver of Default.
No consent or waiver, express or implied, by the Company or a Member with respect to any
breach or default by the Company or a Member hereunder shall be deemed or
construed to be a consent or waiver with respect to any other breach or default by any party of the same provision or any other provision of this Agreement. Failure on the part of the Company or a
Member to complain of any act or failure to act of the Company or a Member or to declare such party in default shall not be deemed or constitute a waiver by the Company or the Member of any rights
hereunder.
12.2
Amendment
.
(a) Except
as otherwise expressly provided elsewhere in this Agreement, this Agreement shall not be altered, modified or changed except by an amendment approved by the
Board;
provided, however
, that
(i) no
amendment of the terms of this Agreement that (A) increases or extends any financial obligation or liability of a Member, (B) adversely affects a
Member's ability to designate Directors or (C) otherwise adversely affects the obligations or rights of a Member (as a Member under this Agreement) in a manner different than a Majority in
Interest shall be effective without the prior written consent of such Member;
(ii) no
amendment of
Sections 6.1
,
6.2
,
6.3
,
6.4
,
6.10
,
6.11
or
11.1
or this
Section 12.2
that adversely
affects the obligations or rights of a Member shall be effective as to any Member without the prior written consent of that Member;
(iii) no
amendment of this Agreement that would (A) except as expressly provided for hereunder, increase the size of the Board, (B) grant any Person the right
to designate more than one Director, (C) improve the designation right of a Designating Member disproportionately with respect to any or all of the other Designating Members or
(D) reduce the power and authority of the Board, shall be effective without the prior written consent of the affected Designating Member or Designating Members, as applicable;
(iv) no
amendment of Article 6 that would adversely affect the director election rights of holders of PAGP Class A Shares in any material respect shall be
effective without the approval of a majority of the Company's Independent Directors; and
(v) no
amendment to
Section 6.1(c)
,
Section 6.1(d)
,
Section 6.1(e)
or this
Section 12.2(a)(v)
shall be effective without the consent of the
Series A Preferred Unitholders holding a majority of the then outstanding Series A Preferred Units.
(b) In
addition to any amendments otherwise authorized herein, the Board may make any amendments to any of the Schedules to this Agreement from time to time to reflect
transfers of Company Units and issuances of additional Company Units. Copies of such amendments shall be delivered to the Members promptly following execution thereof.
(c) The
Board shall cause to be prepared and filed any amendment to the Certificate that may be required to be filed under the Act as a consequence of any amendment to this
Agreement.
(d) Any
modification or amendment to this Agreement or the Certificate made in accordance with this
Section 12.2
shall
be binding on all Members and the Board.
12.3
No Third Party Rights.
Except for the rights provided to the Initial Designating Members in
Section 6.1(a)
, the
rights provided to the Series A Preferred Unitholders in
Sections 6.1(c)
,
(d)
and
(e)
, and as
provided in
Article 7
, none of the provisions contained in this Agreement shall be for the benefit of or enforceable by any third parties,
including creditors of the Company.
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12.4
Severability.
In the event any provision of this Agreement is held to be illegal, invalid or unenforceable
to any extent, the legality, validity and enforceability of the remainder of this Agreement shall not be affected thereby and shall remain in full force and effect and shall be enforced to the
greatest extent permitted by law.
12.5
Nature of Interest in the Company.
A Member's Company Units shall be personal property for all purposes.
12.6
Binding Agreement.
Subject to the restrictions on the disposition of Company Units herein contained, the
provisions of this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, personal representatives, successors and permitted assigns.
12.7
Headings.
The headings of the sections of this Agreement are for convenience only and shall not be
considered in construing or interpreting any of the terms or provisions hereof.
12.8
Word Meanings.
The words "herein," "hereinafter," "hereof", and "hereunder" refer to this Agreement as a
whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The singular shall include the plural, and vice versa, unless the context otherwise requires.
Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." When verbs are used as nouns, the nouns
correspond to such verbs and vice versa.
12.9
Counterparts.
This Agreement may be executed in several counterparts, all of which together shall
constitute one agreement binding on all parties hereto, notwithstanding that all the parties have not signed the same counterpart.
12.10
Entire Agreement.
This Agreement contains the entire agreement between the parties hereto and thereto and
supersedes all prior writings or agreements with respect to the subject matter hereof.
12.11
Partition.
The Members agree that the Property is not and will not be suitable for partition. Accordingly,
each of the Members hereby irrevocably waives any and all right such Member may have to maintain any action for partition of any of the Property. No Member shall have any right to any specific assets
of the Company upon the liquidation of, or any distribution from, the Company.
12.12
Governing Law; Consent to Jurisdiction and Venue.
This Agreement shall be construed according to and
governed by the laws of the State of Delaware without regard to principles of conflict of laws. The parties hereby submit to the exclusive jurisdiction and venue of the state courts of Harris County,
Texas or to the Court of Chancery of the State of Delaware and the United States District Court for the Southern District of Texas and of the United States District Court for the District of Delaware,
as the case may be, and agree that the Company or Members may, at their option, enforce their rights hereunder in such courts.
[
Signature pages follow
]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed as of the date first written above.
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PAA GP HOLDINGS LLC
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By:
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Name:
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Title:
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SIGNATURE PAGE FOR SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
Table of Contents
Annex D
Final Form
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
PLAINS GP HOLDINGS, L.P.
Table of Contents
TABLE OF CONTENTS
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SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
PLAINS GP HOLDINGS, L.P.
This SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF PLAINS GP HOLDINGS, L.P. dated as of
[
·
], 2016, is entered into by and among PAA GP Holdings LLC, a
Delaware limited liability company, as the General Partner, together with any other Persons who are or become Partners in the Partnership or parties hereto as provided herein.
WHEREAS,
the General Partner and the other parties thereto entered into that certain Amended and Restated Agreement of Limited Partnership dated as of October 21, 2013 (the
"
Original Agreement
");
WHEREAS,
the General Partner desires to amend and restate the Original Agreement, to reflect the amendments set forth herein;
WHEREAS,
Shareholders holding a Share Majority have approved each of the amendments set forth herein; and
WHEREAS,
the General Partner has determined that each of the amendments set forth herein either (i) does not adversely affect the Limited Partners (including any particular class
of Partnership Interests as compared to other classes of Partnership Interests) in any material respect (taking into account the overall net impact of the proposed change or amendment), (ii) is
necessary or appropriate in connection with the authorization of issuance of the Class C Shares, which constitute a class or series of Partnership Interests authorized and issued pursuant to
Section 5.5 or (iii) is required to effect the intent expressed in the Registration Statement or the intent of the provisions of this Agreement or is otherwise contemplated by this
Agreement.
In
consideration of the covenants, conditions and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1
Definitions
. The following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement.
"
AAP
" means Plains AAP, L.P., a Delaware limited partnership.
"
AAP Agreement
" means the Eighth Amended and Restated Limited Partnership Agreement of AAP, dated as of the date hereof, as such may be
amended, modified, supplemented or restated from time to time in accordance with the terms thereof.
"
AAP Class A Units
" means Class A Units representing limited partner interests in AAP.
"
AAP Class B Units
" means Class B Units representing limited partner interests in AAP.
"
AAP Exchange
" has the meaning ascribed to the term "Exchange" in the AAP Agreement.
"
AAP Redemption
" means a redemption of AAP Class A Units in accordance with Section 7.11 of the AAP Agreement.
"
AAP Units
" means limited partnership interests in AAP, including AAP Class A Units and AAP Class B Units.
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"
Administrative Agreement
" means that certain Amended and Restated Administrative Agreement, dated as of the date hereof, among the
General Partner, the Partnership and certain other parties, as such may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.
"
Affiliate
" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with, the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise;
provided
that the determination as to
whether a Person, directly or indirectly through one or more intermediaries, controls, is controlled by or under common control with another Person shall be made taking into account, at the time of
such determination, the context and circumstances surrounding such determination, including any known agreements or understandings that may impact such Person's possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of such other Person.
For
purposes of the foregoing:
(a) any
individual who is an officer or director of the General Partner or any Group Member (excluding the Chief Executive Officer and Chairman of the Board of the General
Partner) shall not be considered to be an Affiliate of the General Partner, a Departing General Partner or any Group Member by virtue of such Person's status as an officer or director and the
possession of the powers that are within the scope of the designated or delegated authority of such officer or director;
(b) any
individual who is an officer or director of the MLP Managing General Partner or any of its Affiliates other than the General Partner and the Group Members (excluding
the Chief Executive Officer and Chairman of the Board of the MLP Managing General Partner) shall not be considered to be an Affiliate of the General Partner, a Departing General Partner, any Group
Member, the MLP Managing General Partner or the MLP by virtue of such Person's status as an officer or director and the possession of the powers that are within the scope of the designated or
delegated authority of such officer or director;
(c) any
Person that, alone or together with any Affiliate Group of which such Person is a part, owns less than 50% of the total number of outstanding General Partner Units
of the General Partner, shall not be considered to be an Affiliate of the General Partner, a Departing General Partner or any Group Member by virtue of the ownership by such Person (and Affiliate
Group, if applicable) of such General Partner Units; and
(d) any
Person that, alone or together with any Affiliate Group of which such Person is a part, owns less than 50% of the total "Partnership Interests" (as such term is
defined in the AAP Agreement) held by all partners of AAP, shall not be considered to be an Affiliate of the General Partner, a Departing General Partner, any Group Member, or the MLP by virtue of the
ownership by such Person (and Affiliate Group, if applicable) of such interests.
"
Affiliate Group
" means a Person that with or through any of its Affiliates has any agreement, arrangement, understanding or relationship
for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or consent solicitation made to 10 or more Persons),
exercising investment power or disposing of any General Partner Units or Partnership Interests with any other Person that beneficially owns, or whose Affiliates beneficially own, directly or
indirectly, Partnership Interests.
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"
Agreement
" means this Second Amended and Restated Agreement of Limited Partnership of Plains GP Holdings, L.P., as it may
be amended, modified, supplemented or restated from time to time in accordance with the terms hereof.
"
Associate
" means, when used to indicate a relationship with any Person, (a) any corporation or organization of which such Person
is a director, officer, manager, general partner or managing member or is, directly or indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any trust
or other estate in which such Person has at least a 20% beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of such spouse, who has the same principal residence as
such Person.
"
Available Cash
" means, with respect to any Quarter ending prior to the Liquidation Date,
(a) the
sum, without duplication, of (i) all cash and cash equivalents of the Partnership Group (or the Partnership Group's proportionate share of cash and cash
equivalents in the case of Subsidiaries of Group Members that are not wholly owned) on hand at the end of such Quarter, (ii) all cash and cash equivalents expected to be received by the
Partnership from AAP (including any amounts expected to be received by the Partnership from AAP in respect of distributions declared by the MLP but not yet paid) or any other Group Member in respect
of such Quarter and (iii) if the General Partner so determines, all or any portion of any additional cash and cash equivalents of the Partnership Group (or the Partnership Group's proportionate
share of cash and cash equivalents in the case of Subsidiaries of Group Members that are not wholly owned) on hand on the date of determination of Available Cash with respect to such Quarter, less
(b) the
amount of any cash reserves established by the General Partner (or the Partnership Group's proportionate share of cash reserves in the case of Subsidiaries of Group
Members that are not wholly owned) to (i) comply with applicable law, (ii) comply with any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation
to which any Group Member is a party or by which it is bound or its assets are subject, (iii) provide funds for future distributions to the Shareholders under Section 6.3,
(iv) provide for future capital expenditures, debt service and other credit needs and any federal, state, provincial or other income tax that may affect the Partnership in the future,
(v) provide for the Partnership's general, administrative and other expenses, or (vi) otherwise provide for the proper conduct of the business of the Partnership Group subsequent to such
Quarter;
provided
, that disbursements made by a Group Member or cash reserves established, increased or reduced after the end of such Quarter, but on or before
the date of determination of Available Cash with respect to such Quarter, shall be deemed to have been made, established, increased or reduced, for purposes of determining Available Cash, within such
Quarter if the General Partner so determines.
Notwithstanding
the foregoing, "Available Cash" with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.
"
Board Classification Date
" means the date of this Agreement.
"
Board of Directors
" means, the board of directors of the General Partner, or any of its successors and permitted assigns (or if such
successor or permitted assign is a limited partnership, the board of directors of its general partner) that may be admitted to the Partnership as general partner of the Partnership (except as the
context otherwise requires).
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"
Business Day
" means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United
States of America or the States of New York or Texas shall not be regarded as a Business Day.
"
Capital Contribution
" means any cash, cash equivalents or the fair market value of Property that a Partner contributes to the Partnership
or that is contributed or deemed contributed to the Partnership on behalf of a Partner (including, in the case of an underwritten offering of Shares, the amount of any underwriting discounts or
commissions).
"
Cause
" means a court of competent jurisdiction has entered a final, non-appealable judgment finding the General Partner is liable to the
Partnership or any Limited Partner for actual fraud or willful misconduct in its capacity as a general partner of the Partnership.
"
Certificate
" means a certificate in such form (including in global form if permitted by applicable rules and regulations) as may be
adopted by the General Partner, issued by the Partnership evidencing ownership of one or more Partnership Interests.
"
Certificate of Limited Partnership
" means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of
the State of Delaware as referenced in Section 2.1, as such Certificate of Limited Partnership may be amended, modified, supplemented or restated from time to time.
"
Citizenship Assignee
" means a Non-citizen Assignee or a Person to whom one or more Limited Partner Interests have been transferred in a
manner permitted under this Agreement who has not been admitted as a Substituted Limited Partner.
"
Class A Share
" means a Partnership Interest representing a fractional part of the Partnership Interests of all Limited Partners,
and having the rights and obligations specified with respect to Class A Shares in this Agreement.
"
Class A Shareholders
" means the holders of Class A Shares.
"
Class B Share
" means a Partnership Interest representing a fractional part of the Partnership Interests of all Limited Partners,
and having the rights and obligations specified with respect to Class B Shares in this Agreement. The Class B Shares are non-economic interests that do not include any rights to receive
distributions from operations or upon the liquidation or winding-up of the Partnership.
"
Class B Shareholders
" means the holders of Class B Shares.
"
Class B Transfer
" has the meaning assigned to such term in Section 4.5(e).
"
Class C Share
" means a Partnership Interest representing a fractional part of the Partnership Interests of all Limited Partners,
and having the rights and obligations specified with respect to Class C Shares in this Agreement. The Class C Shares are non-economic interests that (i) do not include any rights
to receive distributions from operations or upon the liquidation or winding-up of the Partnership, and (ii) have limited voting and amendment approval rights as described in
Section 13.13.
"
Class C Shareholders
" means the holders of Class C Shares.
"
Closing Date
" means the first date on which Class A Shares were sold by the Partnership to the Underwriters pursuant to the
provisions of the Underwriting Agreement.
"
Closing Price
" has the meaning assigned to such term in Section 15.1(a).
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"
Code
" means the Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or
sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.
"
Combined Interest
" has the meaning assigned to such term in Section 11.3(a).
"
Commission
" means the United States Securities and Exchange Commission.
"
Conflicts Committee
" means a committee of the Board of Directors composed entirely of two or more Directors, each of whom (a) is
not an officer or employee of the General Partner, (b) is not the holder of any ownership interest in the General Partner, its Affiliates or the Partnership Group (other than
(i) Class A Shares or (ii) other awards of Partnership Interests that are granted to such Director under a long-term incentive plan) or MLP Group (except that a Director shall not
be precluded from serving on such committee due to the ownership of common units of the MLP or indirect interests in the General Partner unless the Board of Directors determines, after taking into
account the totality of the specific circumstances involving such Director, that such ownership will likely have an adverse impact on the ability of such Director to act in an independent manner with
respect to the matter submitted to the Conflicts Committee), (c) is not an officer, director, general partner, managing member or employee of any Existing Owner, any Affiliate of an Existing
Owner or the General Partner or any Associate of any such Affiliate and (d) is determined by the Board of Directors to be independent under the independence standards for directors who serve on
an audit committee of a board of directors established by the Securities Exchange Act and the rules and regulations of the Commission thereunder and by the National Securities Exchange on which any
class of Partnership Interests is listed or admitted to trading (or, if no Partnership Interests are listed or admitted for trading on a National Securities Exchange, the New York Stock Exchange).
"
Contribution Agreement
" means the Contribution Agreement, dated as of October 21, 2013, among the General Partner, the Partnership
and certain other parties, together with the additional conveyance documents and instruments contemplated or referenced thereunder, as such may be amended, modified, supplemented or restated from time
to time in accordance with the terms thereof.
"
Current Market Price
" has the meaning assigned to such term in Section 15.1(a).
"
Delaware Act
" means the Delaware Revised Uniform Limited Partnership Act, 6 Del C. Section 17-101, et seq., as amended,
supplemented or restated from time to time, and any successor to such statute.
"
Departing General Partner
" means a former General Partner from and after the effective date of any withdrawal or removal of such former
General Partner pursuant to Section 11.1 or 11.2.
"
Designated Directors
" means the Directors appointed by the Existing Owners or their permitted transferees pursuant to Sections 6.1
and 6.2 of the Holdings GP LLC Agreement.
"
Directors
" shall mean the members of the Board of Directors.
"
Eligible Directors
" shall have the meaning given such term in the Holdings GP LLC Agreement.
"
Eligibility Certificate
" means a properly competed certificate in such form as may be specified by the General Partner by which a
Citizenship Assignee or a Limited Partner certifies that he (and if he is a nominee holding for the account of another Person, that to the best of his knowledge such other Person) is an Eligible
Citizen.
"
Eligible Citizen
" means a Person qualified to own interests in real property in jurisdictions in which any Group Member does business or
proposes to do business from time to time, and whose
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status
as a Limited Partner does not or would not subject such Group Member to a significant risk of cancellation or forfeiture of any of its real properties or interests therein.
"
Event of Withdrawal
" has the meaning assigned to such term in Section 11.1(a).
"
Existing Owners
" means each of the owners of General Partner Units as of the date of the Original Agreement, in each case for so long as
they continue to own General Partner Units.
"
General Partner
" means PAA GP Holdings LLC, a Delaware limited liability company, and its successors and permitted assigns
that are admitted to the Partnership as general partner of the Partnership (except as the context otherwise requires).
"
General Partner Interest
" means the management interest of the General Partner in the Partnership (in its capacity as a general partner
without reference to any Limited Partner Interest held by it), and includes any and all benefits to which a General Partner is entitled as provided in this Agreement, together with all obligations of
a General Partner to comply with the terms and provisions of this Agreement. The General Partner Interest does not include any rights to receive distributions from operations or upon the liquidation
or winding-up of the Partnership.
"
General Partner Unit
" means a fractional part of the membership interest of the General Partner.
"
Group
" means a Person that with or through any of its Affiliates or Associates has any agreement, arrangement, understanding or
relationship for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or consent solicitation made to 10 or
more Persons), exercising investment power or disposing of any Partnership Interests with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or
indirectly, Partnership Interests.
"
Group Member
" means a member of the Partnership Group.
"
Group Member Agreement
" means the partnership agreement of any Group Member, other than the Partnership, that is a limited or general
partnership, the limited liability company agreement of any Group Member that is a limited liability company, the certificate of incorporation and bylaws or similar organizational documents of any
Group Member that is a corporation, the joint venture agreement or similar governing document of any Group Member that is a joint venture and the governing or organizational or similar documents of
any other Group Member that is a Person other than a limited
or general partnership, limited liability company, corporation or joint venture, as such may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.
"
Holdings GP LLC Agreement
" means that certain Second Amended and Restated Limited Liability Company Agreement of
PAA GP Holdings LLC dated as of the date hereof, as such may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.
"
Indemnitee
" means (a) the General Partner, (b) any Departing General Partner, (c) any Existing Owner, (d) any
Qualifying Interest Holder, (e) any Person who is or was an Affiliate of the General Partner, any Departing General Partner, any Existing Owner or any Qualifying Interest Holder, (f) any
Person who is or was a managing member, manager, general partner, director, officer, fiduciary, agent or trustee of any Group Member, the General Partner, any Departing General Partner, any Existing
Owner or any Qualifying Interest Holder or any Affiliate of any Group Member, the General Partner, any Departing General Partner, any Existing Owner or any Qualifying Interest Holder, (f) any
Person who is or was serving at the request of the General Partner, any Departing General Partner, any Existing Owner or any Qualifying Interest Holder or any Affiliate of the General Partner, any
Departing General Partner, any Existing Owner or any Qualifying Interest Holder as a member, manager, partner, director, officer, fiduciary, agent or trustee of another Person in furtherance of the
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business
of any Group Member;
provided
, that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary
or custodial services, and (g) any Person the General Partner designates as an "Indemnitee" for purposes of this Agreement.
"
Ineligible Holder
" has the meaning assigned to such term in Section 4.8(a).
"
Initial Class A Shares
" means the Class A Shares sold in the Initial Offering.
"
Initial Limited Partners
" means the Existing Owners (with respect to the Class B Shares received by them as described in
Section 5.2) upon being admitted to the Partnership in accordance with Section 10.1.
"
Initial Offering
" means the initial offering and sale of Class A Shares to the public, as described in the Registration Statement.
"
Issue Price
" means the price at which an Initial Class A Share is purchased from the Partnership net of any sales commission or
underwriting discount charged to the Partnership.
"
Limited Partner
" means, unless the context otherwise requires, each Initial Limited Partner, each Class A Shareholder, each
Class B Shareholder, each Class C Shareholder, each additional Person that becomes a Limited Partner in accordance with the terms of this Agreement and any Departing General Partner upon
the change of its status from General Partner to Limited Partner pursuant to Section 11.3, in each case, in such Person's capacity as a limited partner of the Partnership.
"
Limited Partner Interest
" means the ownership interest of a Limited Partner in the Partnership, which may be evidenced by Class A
Shares, Class B Shares, Class C Shares, or other Partnership Interests or a combination thereof or interest therein, and includes any and all benefits to which such Limited Partner is
entitled as provided in this Agreement, together with all obligations of such Limited Partner to comply with the terms and provisions of this Agreement.
"
Liquidation Date
" means (a) in the case of an event giving rise to the dissolution of the Partnership of the type described in
clauses (a) and (b) of the first sentence of Section 12.2, the date on which the applicable time period during which the holders of Outstanding Shares have the right to elect to
continue the business of the Partnership has expired without such an election being made, and (b) in the case of any other event giving rise to the dissolution of the Partnership, the date on
which such event occurs.
"
Liquidator
" means one or more Persons selected by the General Partner to perform the functions described in Section 12.3 as
liquidating trustee of the Partnership within the meaning of the Delaware Act.
"
Merger Agreement
" has the meaning assigned to such term in Section 14.1.
"
MLP
" means Plains All American Pipeline, L.P., a Delaware limited partnership, and any successors thereto.
"
MLP Agreement
" means the Sixth Amended and Restated Agreement of Limited Partnership of Plains All American Pipeline, L.P., dated
as of the date hereof, as such may be further amended, modified, supplemented or restated from time to time in accordance with the terms thereof.
"
MLP General Partner
" means PAA GP LLC, a Delaware limited liability company and the general partner of the MLP, and any
successors thereto.
"
MLP Group
" means the MLP and its Subsidiaries.
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MLP Managing General Partner
" means Plains All American GP LLC, a Delaware limited liability
company.
"
National Securities Exchange
" means an exchange registered with the Commission under the Securities Exchange Act or any successor to such
statute.
"
Non-citizen Assignee
" means a Person whom the General Partner has determined in accordance with
Section 4.8(a)
does not constitute an Eligible Citizen and
as to whose Partnership Interest the General Partner has become the Substituted
Limited Partner, pursuant to
Section 4.9
.
"
Notice of Election to Purchase
" has the meaning assigned to such term in Section 15.1(b).
"
Omnibus Agreement
"
means the Omnibus Agreement, by and among the MLP, PAA GP LLC, a Delaware
limited liability company, AAP, the MLP Managing General Partner, the Partnership and PAA GP Holdings LLC, a Delaware limited liability company, dated as of the date hereof.
"
Opinion of Counsel
" means a written opinion of counsel (who may be regular counsel to the Partnership or the General Partner or any of
its Affiliates) in a form acceptable to the General Partner.
"
Option Closing Date
" means the date or dates on which any Class A Shares are sold by the Partnership to the Underwriters upon
exercise of the Over-Allotment Option.
"
Organizational Limited Partner
" means PAA Management, L.P., in its capacity as the organizational limited partner of the
Partnership pursuant to this Agreement.
"
Original Agreement
" has the meaning assigned to such term in the Preamble.
"
Outstanding
" means, with respect to Partnership Interests, all Partnership Interests that are issued by the Partnership and reflected as
outstanding on the Partnership's books and records as of the date of determination;
provided
,
however
,
that if at any time any Person or Group (other than the General Partner, any of the Existing Owners and their permitted transferees or their respective Affiliates) beneficially owns 20% or more of the
Outstanding Partnership Interests of any class then Outstanding, none of the Partnership Interests owned by such Person or Group shall be voted on any matter and shall not be considered to be
Outstanding when sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for
other similar purposes under this Agreement (such Class A Shares shall not, however, be treated as a separate class of Partnership Interests for purposes of this Agreement or the Delaware Act);
provided
,
further
, that the foregoing limitation shall not apply to (i) any Person or Group who
acquired 20% or more of the Outstanding Partnership Interests of any class then Outstanding directly from the Partnership, the General Partner, any of the Existing Owners, any Qualifying Interest
Holder or their respective Affiliates, (ii) any Person or Group who acquired 20% or more of the Outstanding Partnership Interests of any class then Outstanding directly or indirectly from a
Person or Group described in clause (i)
provided
that the General Partner shall have notified such Person or Group in writing that such
limitation shall not apply or (iii) any Person or Group who acquired 20% or more of any Partnership Interests with the prior approval of the Board of Directors;
provided
,
further
, that if any time any Person or Group (other than the General Partner, any of the
Existing Owners and their permitted transferees or their respective Affiliates) beneficially owns 20% or more of the Outstanding Partnership Interests of any class then Outstanding, taken together as
a single class, all of the Partnership Interests owned by such Person or Group shall be deemed Outstanding solely for purposes of nominating persons for election as Eligible Directors in accordance
with Section 13.4(c)(ii) and the Partnership Interests held by such Person or Group constituting up to 19.9%
of the Class A Shares, Class B Shares and Class C Shares, taken together as a single class, shall be considered Outstanding with respect to voting on the election of persons to
serve as Eligible Directors
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accordance with Section 13.4 and be considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on such matters, calculating required votes with respect to
such matters, determining the presence of a quorum for meetings at which such matters are to be acted upon or for other similar purposes under this Agreement.
"
Over-Allotment Option
" means the over-allotment option granted to the Underwriters by the Partnership pursuant to the Underwriting
Agreement.
"
Partners
" means the General Partner and the Limited Partners.
"
Partnership
" means Plains GP Holdings, L.P., a Delaware limited partnership.
"
Partnership Group
" means the Partnership and its Subsidiaries treated as a single consolidated entity, but excluding the MLP Group.
"
Partnership Interest
" means any class or series of equity interest in the Partnership (but excluding any options to purchase, rights,
warrants or appreciation rights or phantom or tracking interests relating to an equity interest in the Partnership), including Class A Shares, Class B Shares and Class C Shares.
"
Percentage Interest
" means, as of any date of determination, as to any Shareholder, with respect to a class or classes of Shares, as
applicable, the quotient obtained by dividing (i) the number of applicable
Shares held by such Shareholder by (ii) the total number of all applicable Outstanding Shares. The Percentage Interests with respect to the General Partner Interest and the Class C
Shares shall at all times be zero.
"
Person
" means an individual or a corporation, firm, limited liability company, partnership, joint venture, trust, unincorporated
organization, association, government agency or political subdivision thereof or other entity.
"
Plan of Conversion
" has the meaning assigned to such term in Section 14.1.
"
Pro Rata
" means (a) when used with respect to Shares or any class thereof, apportioned among all designated Shares in accordance
with their relative Percentage Interests, and (b) when used with respect to Partners or Record Holders, apportioned among all Partners or Record Holders in accordance with their relative
Percentage Interests.
"
Purchase Date
" means the date determined by the General Partner as the date for purchase of all Outstanding Limited Partner Interests of
a certain class (other than Limited Partner Interests owned by the General Partner and its Affiliates) pursuant to Article XV.
"
Qualifying Interest Holder
" means a Person holding a 10% or greater Qualifying Interest (as such term is defined in the
Holdings GP LLC Agreement).
"
Quarter
" means, unless the context requires otherwise, a fiscal quarter of the Partnership, or with respect to the fiscal quarter of the
Partnership in which the Closing Date occurs, the portion of such fiscal quarter after the Closing Date.
"
Record Date
" means the date established by the General Partner or otherwise in accordance with this Agreement for determining
(a) the identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited Partners or entitled to vote by ballot or give approval of Partnership action in writing
without a meeting or entitled to exercise rights in respect of any lawful action of Limited Partners or (b) the identity of Record Holders entitled to receive any report or distribution or to
participate in any offer.
"
Record Holder
" means (a) with respect to Partnership Interests of any class for which a Transfer Agent has been appointed, the
Person in whose name a Partnership Interest of such class is registered
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the books of the Transfer Agent as of the opening of business on a particular Business Day, or (b) with respect to other classes of Partnership Interests, the Person in whose name any such
other Partnership Interest is registered on the books that the General Partner has caused to be kept as of the opening of business on such Business Day.
"
Redeemable Interests
" means any Partnership Interests for which a redemption notice has been given, and has not been withdrawn, pursuant
to Section 4.9.
"
Registration Statement
" means the Registration Statement on Form S-1 (Registration No. 333-190227) as it has been or as it
may be amended or supplemented from time to time, filed by the Partnership with the Commission under the Securities Act to register the offering and sale of the Class A Shares in the Initial
Offering.
"
SEC
" means the Securities and Exchange Commission.
"
Securities Act
" means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such
statute.
"
Securities Exchange Act
" means the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time and any
successor to such statute.
"
Share
" means a Partnership Interest that is designated as a "Share" and shall include Class A Shares and Class B Shares,
but shall not include Class C Shares.
"
Share Majority
" means at least a majority of the Outstanding Shares, voting together as a single class.
"
Shareholders
" means the holders of Shares. For the avoidance of doubt, Shareholders shall not include Class C Shareholders.
"
Simplification
" means the transactions contemplated by the Simplification Agreement.
"
Simplification Agreement
" means the Simplification Agreement, by and among, the Partnership, PAA GP Holdings LLC, a
Delaware limited liability company, AAP, the MLP Managing General Partner, the MLP General Partner and the MLP, dated as of July 11, 2016.
"
Special Approval
" means approval by a majority of the members of the Conflicts Committee after due inquiry (as defined herein), based on
a subjective belief that the course of action or determination that is the subject of such approval is fair and reasonable to the Partnership.
"
Subsidiary
" means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled
(without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination,
by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at
the date of determination, a general partner of such partnership, but only if such Person, directly or by one or more Subsidiaries of such Person, or a combination thereof, controls such partnership
on the date of determination or (c) any other Person in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of
determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person. For
purposes of this Agreement, with respect to the Partnership Group, none of the members of the MLP Group shall be a Subsidiary of any member of the Partnership Group.
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"
Substituted Limited Partner
" means the General Partner, in its capacity as the holder of Limited Partner Interests on behalf of a
Non-citizen Assignee, in accordance with the provisions of
Section 4.8
.
"
Surviving Business Entity
" has the meaning assigned to such term in Section 14.2(b)(ii).
"
Trading Day
" has the meaning assigned to such term in Section 15.1(a)(iii).
"
transfer
" has the meaning assigned to such term in Section 4.4(a).
"
Transfer Agent
" means such bank, trust company or other Person (including the General Partner or one of its Affiliates) as shall be
appointed from time to time by the General Partner to act as registrar and transfer agent for Partnership Interests;
provided
that if no Transfer Agent
is specifically designated for any Partnership Interests other than the Class A Shares, the General Partner shall act in such capacity with respect to such Partnership Interests.
"
Underwriter
" means each Person named as an underwriter in Schedule I to the Underwriting Agreement who purchased Class A
Shares pursuant thereto.
"
Underwriting Agreement
" means that certain Underwriting Agreement dated October 15, 2013 among the Underwriters, the Partnership
and certain other parties, providing for the purchase of Class A Shares by the Underwriters.
"
U.S. GAAP
" means United States generally accepted accounting principles consistently applied.
"
Withdrawal Opinion of Counsel
" means an Opinion of Counsel to the effect that the withdrawal as General Partner by the General Partner
(following the selection of the successor General Partner) would not result in the loss of the limited liability of any Limited Partner or any Group Member.
Section 1.2
Construction
. Unless the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; (c) the terms
"include," "includes" or "including" or words of like import shall be deemed to be followed by the words "without limitation;" and (d) the terms "hereof," "herein" or "hereunder" refer to this
Agreement as a whole and not to any particular provision of this Agreement. The table of contents and headings contained in this Agreement are for reference purposes only, and shall not affect in any
way the meaning or interpretation of this Agreement.
ARTICLE II
ORGANIZATION
Section 2.1
Formation.
The Partnership was formed on July 17, 2013 pursuant to the Certificate of
Limited Partnership as filed with the Secretary of State of the State of Delaware pursuant to the provisions of the Delaware Act. This Agreement amends and restates the Original Agreement in its
entirety. Except as expressly provided to the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and obligations of the Partners and the administration,
dissolution and termination of the Partnership shall be governed by the Delaware Act. All Partnership Interests shall constitute personal property of the owner thereof for all purposes.
Section 2.2
Name.
The name of the Partnership shall be "Plains GP Holdings, L.P." The
Partnership's business may be conducted under any other name or names as determined by the General Partner, including the name of the General Partner. The words "Limited Partnership," "LP," "Ltd." or
similar words or letters shall be included in the Partnership's name where necessary for the purpose of complying with the laws of any jurisdiction that so requires. The General Partner may change the
name
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of
the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.
Section 2.3
Registered Office; Registered Agent; Principal Office; Other Offices
. Unless and until
changed by the General Partner, the registered office of the Partnership in the State of Delaware shall be located at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, and the
registered agent for service of process on the Partnership in the State of Delaware at such registered office shall be Corporation Service Company. The principal office of the Partnership shall be
located at 333 Clay Street, Suite 1600, Houston, Texas 77002 or such other place as the General Partner may from time to time designate by notice to the Limited Partners. The Partnership may
maintain offices at such other place or places within or outside the State of Delaware as the General Partner determines to be necessary or appropriate. The address of the General Partner shall be 333
Clay Street, Suite 1600, Houston, Texas 77002 or such other place as the General Partner may from time to time designate by notice to the Limited Partners.
Section 2.4
Purpose and Business
. The purpose and nature of the business to be conducted by the
Partnership shall be to (a) engage directly in, or enter into or form, hold and dispose of any corporation, partnership, joint venture, limited liability company or other arrangement to engage
indirectly in, any business activity that is approved by the General Partner and that lawfully may be conducted by a limited partnership organized pursuant to the Delaware Act and, in connection
therewith, to exercise all of the rights and powers conferred upon the Partnership pursuant to the agreements relating to such business activity; and (b) do anything necessary or appropriate to
the foregoing, including the making of capital contributions or loans to a Group Member or a member of the MLP Group. The General Partner shall have no duty or obligation to propose or approve, and
may decline to propose or approve, the conduct by the Partnership of any business free of any fiduciary duty or obligation whatsoever to the Partnership or any Limited Partner and, in declining to so
propose or approve, shall not be required to act in good faith or pursuant to any other standard imposed by this Agreement, any other agreement contemplated hereby or under the Delaware Act or any
other law, rule or regulation or at equity.
Section 2.5
Powers
. The Partnership shall be empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described in Section 2.4 and for the protection and benefit of
the Partnership.
Section 2.6
Term
. The term of the Partnership commenced upon the filing of the Certificate of Limited
Partnership in accordance with the Delaware Act and shall continue in existence until the dissolution of the Partnership in accordance with the provisions of Article XII. The existence of the
Partnership as a separate legal entity shall continue until the cancellation of the Certificate of Limited Partnership as provided in the Delaware Act.
Section 2.7
Title to Partnership Assets
. Title to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively, shall have any ownership interest in such Partnership assets
or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner, one or more of its Affiliates or one or more nominees, as the
General Partner may determine. The General Partner hereby declares and warrants that any Partnership assets for which record title is held in the name of the General Partner or one or more of its
Affiliates or one or more nominees shall be held by the General Partner or such Affiliate or nominee for the use and benefit of the Partnership in accordance with the provisions of this Agreement;
provided
,
however
, that the General Partner shall use reasonable efforts to cause record
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title
to such assets (other than those assets in respect of which the General Partner determines that the expense and difficulty of conveyancing makes transfer of record title to the Partnership
impracticable) to be vested in the Partnership as soon as reasonably practicable;
provided
,
further
,
that, prior to the withdrawal or removal of the General Partner or as soon thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer to the Partnership of
record title to all Partnership assets held by the General Partner or its Affiliates and, prior to any such transfer, will provide for the use of such assets in a manner satisfactory to the General
Partner. All Partnership assets shall be
recorded as the property of the Partnership in its books and records, irrespective of the name in which record title to such Partnership assets is held.
ARTICLE III
RIGHTS OF LIMITED PARTNERS
Section 3.1
Limitation of Liability
. The Limited Partners shall have no liability under this Agreement
except as expressly provided in this Agreement or required under the Delaware Act.
Section 3.2
Management of Business
. No Limited Partner, in its capacity as such, shall participate in the
operation, management or control (within the meaning of the Delaware Act) of the Partnership's business, transact any business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership. Any action taken by any Affiliate of the General Partner or any officer, director, employee, manager, member, general partner, agent or trustee of the General Partner
or any of its Affiliates, or any officer, director, employee, manager, member, general partner, agent or trustee of a Group Member or a member of the MLP Group, in its capacity as such, shall not be
deemed to be participation in the control of the business of the Partnership by a limited partner of the Partnership (within the meaning of Section 17-303(a) of the Delaware Act) and shall not
affect, impair or eliminate the limitations on the liability of the Limited Partners under this Agreement.
Section 3.3
Outside Activities of the Limited Partners
. Subject to the provisions of Section 7.5,
which shall continue to be applicable to the Persons referred to therein, regardless of whether such Persons shall also be Limited Partners, any Limited Partner shall be entitled to and may have
business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership Group or
the MLP Group. Neither the Partnership nor any of the other Partners shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner.
Section 3.4
Rights of Limited Partners
.
(a) In
addition to other rights provided by this Agreement or by applicable law, and except as limited by Section 3.4(b), each Limited Partner shall have the right,
for a purpose reasonably related to such Limited Partner's interest as a Limited Partner in the Partnership, upon reasonable written demand stating the purpose of such demand and at such Limited
Partner's own expense:
(i) to
obtain true and full information regarding the status of the business and financial condition of the Partnership (provided that the requirements of this
Section 3.4(a)(i) shall be satisfied to the extent the Limited Partner is furnished the Partnership's most recent annual report and any subsequent quarterly or periodic reports required to be
filed with the Commission pursuant to Section 13 of the Securities Exchange Act);
(ii) to
obtain a current list of the name and last known business, residence or mailing address of each Partner; and
(iii) to
obtain a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto.
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(b) The
rights to information granted the Limited Partners pursuant to Section 3.4(a) replace in their entirety any rights to information provided for in
Section 17-305(a) of the Delaware Act and each of the Partners and each other Person or Group who acquires an interest in Partnership Interests hereby agrees to the fullest extent permitted by
law that their rights as Partners to receive any information either pursuant to Sections 17-305(a) of the Delaware Act or otherwise is restricted solely to the information identified in
Section 3.4(a).
(c) Notwithstanding
any other provision of this Agreement, the General Partner may keep confidential from the Limited Partners, for such period of time as the General
Partner determines, (i) any information that the General Partner reasonably believes to be in the nature of trade secrets or (ii) other information the disclosure of which the General
Partner believes (A) is not in the best interests of the Partnership Group or the MLP Group, (B) could damage the Partnership Group or the MLP Group or either of their consolidated
businesses or (C) that any Group Member is required by law or by agreement with any third party to keep confidential.
(d) Notwithstanding
any other provision of this Agreement or Section 17-305 of the Delaware Act, each of the Partners, each other Person who acquires an interest in a
Partnership Interest and each other Person bound by this Agreement hereby agrees to the fullest extent permitted by law that they do not have rights to receive information from the Partnership or any
Indemnitee for the purpose of determining whether to pursue litigation or assist in pending litigation against the Partnership or any Indemnitee relating to the affairs of the Partnership except
pursuant to the applicable rules of discovery relating to litigation commenced by such Person.
ARTICLE IV
CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
REDEMPTION OF PARTNERSHIP INTERESTS
Section 4.1
Certificates
. The General Partner may cause some or all of any or all classes of Partnership
Interests to be evidenced by certificates. Certificates that may be issued shall be executed on behalf of the Partnership by the Chairman of the Board, Chief Executive Officer, President or any
Executive Vice President or Vice President and the Chief Financial Officer or the Secretary or any Assistant Secretary of the General Partner. No Certificate for a class of Partnership Interests shall
be valid for any purpose until it has been countersigned by the Transfer Agent for such class of Partnership Interests;
provided, however,
that if the
General Partner elects to cause the Partnership to issue Partnership Interests of such class in global form, the Certificate shall be valid upon receipt of a certificate from the Transfer Agent
certifying that the Partnership Interests have been duly registered in accordance with the directions of the Partnership.
Section 4.2
Mutilated, Destroyed, Lost or Stolen Certificates
.
(a) If
any mutilated Certificate is surrendered to the Transfer Agent, the appropriate officers of the General Partner on behalf of the Partnership shall execute, and the
Transfer Agent shall countersign and deliver in exchange therefor, a new Certificate, or shall deliver other evidence of the issuance of uncertificated Shares or other Partnership Interests,
evidencing the same number and type of Partnership Interests as the Certificate so surrendered.
(b) The
appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and the Transfer Agent shall countersign a new Certificate, or
shall deliver other
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evidence
of the issuance of uncertificated Shares or other Partnership Interests, in place of any Certificate previously issued if the Record Holder of the Certificate:
(i) makes
proof by affidavit, in form and substance satisfactory to the General Partner, that a previously issued Certificate has been lost, destroyed or stolen;
(ii) requests
the issuance of a new Certificate before the General Partner has notice that the Certificate has been acquired by a purchaser for value in good faith and
without notice of an adverse claim (as such term is construed under the Uniform Commercial Code of the State of Delaware);
(iii) if
requested by the General Partner, delivers to the General Partner a bond, in form and substance satisfactory to the General Partner, with surety or sureties and
with fixed or open penalty as the General Partner may direct to indemnify the Partnership, the Partners, the General Partner and the
Transfer Agent against any claim that may be made on account of the alleged loss, destruction or theft of the Certificate; and
(iv) satisfies
any other reasonable requirements imposed by the General Partner.
(c) If
a Limited Partner fails to notify the General Partner within a reasonable period of time after he has notice of the loss, destruction or theft of a Certificate, and a
transfer of the Limited Partner Interests represented by the Certificate is registered before the Partnership, the General Partner or the Transfer Agent receives such notification, the Limited Partner
shall be precluded from making any claim against the Partnership, the General Partner or the Transfer Agent for such transfer or for a new Certificate, or other evidence of the issuance of
uncertificated Shares or other Partnership Interests.
(d) As
a condition to the issuance of any new Certificate, or other evidence of the issuance of uncertificated Shares or other Partnership Interests, under this
Section 4.2, the General Partner may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Transfer Agent) reasonably connected therewith.
Section 4.3
Record Holders.
The Partnership shall be entitled to recognize the Record Holder as the
Limited Partner with respect to any Partnership Interest and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Partnership Interest on the part of any
other Person, regardless of whether the Partnership shall have actual or other notice thereof, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any
National Securities Exchange on which such Partnership Interests are listed or admitted to trading. Without limiting the foregoing, when a Person (such as a broker, dealer, bank, trust company or
clearing corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other representative capacity for another Person in acquiring and/or holding Partnership Interests, as
between the Partnership on the one hand, and such other Persons on the other, such representative Person shall be (a) the Record Holder of such Partnership Interest and (b) bound by this
Agreement and shall have the rights and obligations of a Partner hereunder and as, and to the extent, provided for herein.
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Section 4.4
Transfer Generally.
(a) The
term "
transfer
," when used in this Agreement with respect to a Partnership Interest, shall be deemed to refer to a
transaction (i) by which the General Partner assigns its General Partner Interest to another Person, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage,
exchange, or any other disposition by law or otherwise, (ii) by which the holder of a Class A Share assigns such Class A Share to another Person who is or becomes a Class A
Shareholder, and includes a sale, assignment, gift, exchange or any other disposition by law or otherwise, including any transfer upon foreclosure of any pledge, encumbrance, hypothecation or
mortgage, (iii) by which the holder of a Class B Share assigns such Class B Share to another Person who is or becomes a Class B Shareholder, and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or other
disposition by law or otherwise or (iv) by which the holder of a Class C Share assigns such Class C Share to another Person who is or becomes a Class C Shareholder, and
includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or other disposition by law or otherwise.
(b) No
Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article IV. Any transfer
or purported transfer of a Partnership Interest not made in accordance with this Article IV shall be, to the fullest extent permitted by law, null and void.
(c) Nothing
contained in this Agreement shall be construed to prevent a disposition by any stockholder, member, partner or other owner of the General Partner of any or all
of the issued and outstanding equity interests or other ownership interests in the General Partner, including through a merger or consolidation of the General Partner.
Section 4.5
Registration and Transfer of Limited Partner Interests.
(a) The
General Partner shall keep or cause to be kept on behalf of the Partnership a register in which, subject to such reasonable regulations as it may prescribe and
subject to the provisions of Section 4.5(b), the Partnership will provide for the registration and transfer of Limited Partner Interests. The Partnership shall not recognize transfers of
Certificates evidencing Limited Partner Interests unless such transfers are effected in the manner described in this Section 4.5. Upon surrender of a Certificate for registration of transfer of
any Limited Partner Interests evidenced by a Certificate, and subject to the provisions of Section 4.5(b), the appropriate officers of the General Partner on behalf of the Partnership shall
execute and deliver, and in the case of Class A Shares, the Transfer Agent shall countersign and deliver, in the name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Certificates, or shall deliver other evidence of the issuance of uncertificated Shares, evidencing the same aggregate number and type of Limited
Partner Interests as was evidenced by the Certificate so surrendered.
(b) Except
as otherwise provided in Section 4.8, the General Partner shall not recognize any transfer of Limited Partner Interests until the Certificates evidencing
such Limited Partner Interests, or other evidence of the issuance of uncertificated Shares or other Partnership Interests, are surrendered for registration of transfer. No charge shall be imposed by
the General Partner for such transfer;
provided
, that as a condition to the issuance of any new Certificate under this Section 4.5, the General
Partner may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto.
(c) By
acceptance of the transfer of any Limited Partner Interests in accordance with this Section 4.5 and except as provided in Section 4.8, each transferee
of a Limited Partner Interest
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(including
any nominee holder or an agent or representative acquiring such Limited Partner Interests for the account of another Person) (i) shall be admitted to the Partnership as a Limited
Partner with respect to the Limited Partner Interests so transferred to such other Person when any such transfer or admission is reflected in the books and records of the Partnership, with or without
execution of this Agreement, (ii) shall be deemed to agree to be bound by the terms of, and shall be deemed to have executed, this Agreement, (iii) shall become the Record Holder of the
Limited Partner Interests so transferred, (iv) represents that the transferee has the capacity, power and authority to enter into this Agreement and (v) makes the consents and waivers
contained in this Agreement. The transfer of any Limited Partner interests and the admission of any new Limited Partner shall not constitute an amendment to this Agreement.
(d) Subject
to (i) the provisions of this Section 4.5, (ii) Section 4.3, (iii) Section 4.7, (iv) with respect to any class
or series of Limited Partner Interests, the provisions of any statement of designations or amendment to this Agreement establishing such series, (v) any contractual provisions binding on any
Limited Partner and (vi) provisions of applicable law including the Securities Act, Limited Partner Interests shall be freely transferable.
(e) Except
for transfers that are necessary in order to give effect to an AAP Exchange, a Limited Partner shall be prohibited from transferring any of its Class B
Shares (a "
Class B Transfer
") unless such Limited Partner simultaneously transfers to the transferee of such Class B Shares the same
number of shares of AAP Class A Units in accordance with the applicable terms of the AAP Agreement, including compliance with any transfer restriction or right of first refusal provisions, and,
except to the extent not required pursuant to the terms of the AAP Agreement, a proportionate number of General Partner Units in accordance with the applicable terms of the
Holdings GP LLC Agreement. If for any reason the transfer of such AAP Class A Units or General Partner Units, as applicable, does not occur simultaneously with the Class B
Transfer, then the Class B Transfer shall be null and void and of no force and effect.
(f) Except
for transfers that are approved in writing by the General Partner, a Limited Partner shall be prohibited from transferring any of its Class C Shares.
Section 4.6
Transfer of the General Partner Interest.
(a) Subject
to Section 4.6(b) below, the General Partner shall be free to transfer all or any part of its General Partner Interest to another Person at any time.
(b) Notwithstanding
anything herein to the contrary, no transfer by the General Partner of all or any part of its General Partner Interest to another Person shall be
permitted unless (i) the transferee agrees to assume the rights and duties of the General Partner under this Agreement and to be bound by the provisions of this Agreement, (ii) the
Partnership receives an Opinion of Counsel that such transfer would not result in the loss of limited liability of any Limited Partner under the Delaware Act and (iii) such transferee also
agrees to purchase all (or the appropriate portion thereof, if applicable) of the partnership or membership or limited liability company interest of the General Partner as the general partner or
managing member, if any, of each other Group Member. In the case of a transfer pursuant to and in compliance with this Section 4.6, the transferee or successor (as the case may be) shall,
subject to compliance with the terms of Section 10.3, be admitted to the Partnership as the General Partner effective immediately prior to the transfer of the General Partner Interest, and the
business of the Partnership shall continue without dissolution.
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Section 4.7
Restrictions on Transfers.
(a) Notwithstanding
the other provisions of this Article IV, no transfer of any Partnership Interests shall be made if such transfer would (i) violate the then
applicable federal or state securities laws or rules and regulations of the Commission, any state securities commission or any other governmental authority with jurisdiction over such transfer or
(ii) terminate the existence or qualification of the Partnership under the laws of the jurisdiction of its formation.
(b) Nothing
contained in this Article IV, or elsewhere in this Agreement, shall preclude the settlement of any transactions involving Partnership Interests entered
into through the facilities of any National Securities Exchange on which such Partnership Interests are listed or admitted to trading.
Section 4.8
Eligibility Certificates; Ineligible Holders.
(a) If
any Group Member is or becomes subject to any federal, state or local law or regulation that, in the reasonable determination of the General Partner, creates a
substantial risk of cancellation or forfeiture of any property in which the Group Member has an interest based on the nationality, citizenship or other related status of a Limited Partner or
Citizenship Assignee, the General Partner may request any Limited Partner or Citizenship Assignee to furnish to the General Partner, within 30 days after receipt of such request, an executed
Eligibility Certificate or such proof of the nationality, citizenship or other related status (or, if the Limited Partner or Citizenship Assignee is a nominee holding for the account of another
Person, the nationality, citizenship or other related status of such Person) as the General Partner may request. If a Limited Partner or Citizenship Assignee fails to furnish to the General Partner
within the aforementioned 30-day period such Eligibility Certificate or other requested information or if upon receipt of such Eligibility Certificate or other requested information the General
Partner determines, with the advice of counsel, that a Limited Partner or Citizenship Assignee is not an Eligible Citizen (an "
Ineligible Holder
"), the
Partnership Interests owned by such Ineligible Holder shall be subject to redemption in accordance with the provisions of Section 4.9. In addition, the General Partner may require that the
status of any such Ineligible Holder be changed to that of a Non-citizen Assignee and, thereupon, the General Partner shall be substituted for such Non-citizen Assignee as the Limited Partner in
respect of such Limited Partner's Limited Partner Interests.
(b) The
General Partner shall, in exercising voting rights in respect of Limited Partner Interests held by it on behalf of Non-citizen Assignees, distribute the votes in the
same ratios as the votes of Partners (including the General Partner) in respect of Limited Partner Interests other than those of Non-citizen Assignees are cast, either for, against or abstaining as to
the matter.
(c) Upon
dissolution of the Partnership, a Non-citizen Assignee shall have no right to receive a distribution in kind pursuant to Section 12.4 but shall be entitled
to the cash equivalent thereof, and the Partnership shall provide cash in exchange for an assignment of the Non-citizen Assignee's share of any distribution in kind. Such payment and assignment shall
be treated for Partnership purposes as a purchase by the Partnership from the Non-citizen Assignee of his Limited Partner Interest (representing his right to receive his share of such distribution in
kind).
(d) At
any time after a Non-citizen Assignee can and does certify that such Non-citizen Assignee has become an Eligible Citizen, such Non-citizen Assignee may, upon
application to the General Partner, request admission as a Substituted Limited Partner with respect to any Limited Partner Interests of such Non-citizen Assignee not redeemed pursuant to
Section 4.9
and upon such Non-citizen Assignee's admission pursuant to Section 12.4, the General Partner shall cease to
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be
deemed to be the Limited Partner in respect of the Non-citizen Assignee's Limited Partner Interests.
Section 4.9
Redemption of Partnership Interests of Ineligible Holders.
(a) If
at any time a Limited Partner or Citizenship Assignee fails to furnish an Eligibility Certificate or other information requested within the 30-day period specified in
Section 4.8(a), or if upon receipt of such Eligibility Certificate or other information the General Partner determines, with the advice of counsel, that a Limited Partner or Citizenship
Assignee is not an Eligible Citizen, the Partnership may, unless the Limited Partner or Citizenship Assignee establishes to the satisfaction of the General Partner that such Limited Partner or
Citizenship Assignee is an Eligible Citizen or has transferred his
Partnership Interests to a Person who is an Eligible Citizen and who furnishes an Eligibility Certificate to the General Partner prior to the date fixed for redemption as provided below, redeem the
Partnership Interest of such Limited Partner or Citizenship Assignee as follows:
(i) The
General Partner shall, not later than the 30th day before the date fixed for redemption, give notice of redemption to the Limited Partner or Citizenship
Assignee, at his last address designated on the records of the Partnership or the Transfer Agent, by registered or certified mail, postage prepaid. The notice shall be deemed to have been given when
so mailed. The notice shall specify the Redeemable Interests, the date fixed for redemption, the place of payment, that payment of the redemption price will be made upon surrender of the Certificate
evidencing the Redeemable Interests or other evidence of the issuance of uncertificated Limited Partnership Interests and that on and after the date fixed for redemption no further allocations or
distributions to which the Limited Partner or Citizenship Assignee would otherwise be entitled in respect of the Redeemable Interests will accrue or be made.
(ii) The
aggregate redemption price for Redeemable Interests shall be an amount equal to the Current Market Price (the date of determination of which shall be the date fixed
for redemption) of Limited Partner Interests of the class to be so redeemed multiplied by the number of Limited Partner Interests of each such class included among the Redeemable Interests. The
redemption price shall be paid, in the discretion of the General Partner, in cash or by delivery of a promissory note of the Partnership in the principal amount of the redemption price, bearing
interest at the rate of 10% annually and payable in three equal annual installments of principal together with accrued interest, commencing one year after the redemption date.
(iii) Upon
surrender by or on behalf of the Limited Partner or Citizenship Assignee, at the place specified in the notice of redemption, of the Certificate evidencing the
Redeemable Interests, duly endorsed in blank or accompanied by an assignment duly executed in blank, or other evidence of the issuance of uncertificated Limited Partnership Interests, the Limited
Partner or Citizenship Assignee or his duly authorized representative shall be entitled to receive the payment therefor.
(iv) After
the redemption date, Redeemable Interests shall no longer constitute issued and Outstanding Limited Partner Interests.
(b) The
provisions of this Section 4.9 shall also be applicable to Limited Partner Interests held by a Limited Partner or Citizenship Assignee as nominee of a Person
determined to be other than an Eligible Citizen.
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(c) Nothing
in this Section 4.9 shall prevent the recipient of a notice of redemption from transferring his Limited Partner Interest before the redemption date if
such transfer is otherwise permitted under this Agreement. Upon receipt of notice of such a transfer, the General Partner shall withdraw the notice of redemption, provided the transferee of such
Limited Partner Interest certifies to the satisfaction of the General Partner in an Eligibility Certificate that he is an Eligible Citizen. If the transferee fails to make such certification, such
redemption shall be effected from the transferee on the original redemption date.
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
Section 5.1
Organizational Issuances.
In connection with the formation of the Partnership under the
Delaware Act, the General Partner received a non-economic General Partner Interest in the Partnership, and has been admitted as the General Partner of the Partnership, and the Organizational Limited
Partner received a Limited Partner Interest in the Partnership equal to a one-hundred percent Percentage Interest and has been admitted as a Limited Partner of the Partnership. As of the Closing Date
and effective with the admission of another Limited Partner to the Partnership, the interests of the Organizational Limited Partner were cancelled as provided in the Contribution Agreement.
Section 5.2
Contributions by Limited Partners.
(a) On
the Closing Date, the General Partner and the Existing Owners made the contributions contemplated by the Contribution Agreement in exchange for the interests provided
for therein, including the Class B Shares.
(b) At
the closing of the Simplification, the Class C Shares were issued to the MLP in accordance with the Simplification Agreement.
Section 5.3
Contributions by the Underwriters.
(a) On
the Closing Date and pursuant to the Underwriting Agreement, each Underwriter contributed to the Partnership cash in an amount equal to the Issue Price per Initial
Class A Share multiplied by the number of Class A Shares specified in the Underwriting Agreement to be purchased by such Underwriter at the Closing Date. In exchange for such Capital
Contributions by the Underwriters, the Partnership issued Class A Shares to each Underwriter on whose behalf such Capital Contribution is made in an amount equal to the quotient obtained by
dividing (i) the cash contribution to the Partnership by or on behalf of such Underwriter by (ii) the Issue Price per Initial Class A Share. The Partnership used the proceeds from
such Capital Contributions to purchase AAP Class A Units and General Partner Units as provided in the Contribution Agreement.
(b) Upon
the exercise of the Over-Allotment Option, each Underwriter contributed to the Partnership cash in an amount equal to the Issue Price per Initial Class A
Share, multiplied by the number of Class A Shares to be purchased by such Underwriter at the Option Closing Date. In exchange for such Capital Contributions by the Underwriters, the Partnership
issued Class A Shares to each Underwriter on whose behalf such Capital Contribution is made in an amount equal to the quotient obtained by dividing (i) the cash contributions to the
Partnership by or on behalf of such Underwriter by (ii) the Issue Price per Initial Class A Share. The Partnership used the proceeds from such Capital Contributions to purchase a number
of Class B Shares, AAP Class A Units and General Partner Units as provided in the Contribution Agreement.
Section 5.4
Interest and Withdrawal.
No interest on Capital Contributions shall be paid by the
Partnership. No Partner shall be entitled to the withdrawal or return of its Capital Contribution, except
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to
the extent, if any, that distributions made pursuant to this Agreement or upon termination of the Partnership may be considered as such by law and then only to the extent provided for in this
Agreement. Except to the extent expressly provided in this Agreement, no Partner shall have priority over any other Partner either as to the return of Capital Contributions or as to profits, losses or
distributions.
Section 5.5
Issuances of Additional Partnership Interests.
(a) The
Partnership may issue additional Partnership Interests and options, rights, warrants and appreciation rights relating to the Partnership Interests (including
pursuant to Section 7.4(c), but subject to Article XIV) for any Partnership purpose at any time and from time to time to such Persons for such consideration and on such terms and
conditions as the General Partner shall determine, all without the approval of any Limited Partners.
(b) Each
additional Partnership Interest authorized to be issued by the Partnership pursuant to Section 5.5(a) or security authorized to be issued pursuant to
Section 7.4(c) may be issued in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties (which may be senior to existing
classes and series of Partnership Interests), as shall be fixed by the General Partner, including (i) the right to share in Partnership distributions; (ii) the rights upon dissolution
and liquidation of the Partnership; (iii) whether, and the terms and conditions upon which, the Partnership may or shall be required to redeem the Partnership Interest (including sinking fund
provisions) or other security; (iv) whether such Partnership Interest is issued with the privilege of conversion or exchange and, if so, the terms and conditions of such conversion or exchange;
(v) the terms and conditions upon which each Partnership Interest or other security will be issued, evidenced by certificates and assigned or transferred; (vi) the method for determining
the Percentage Interest as to such Partnership Interest; and (vii) the right, if any, of each such Partnership Interest to vote on Partnership matters, including matters relating to the
relative preferences, rights, powers and duties of such Partnership Interest.
(c) The
General Partner shall take all actions that it determines to be necessary or appropriate in connection with (i) each issuance of Partnership Interests and
options, rights, warrants and appreciation rights relating to Partnership Interests pursuant to this Section 5.5 or Section 7.4(c), (ii) the admission of additional Limited
Partners and (iii) all additional issuances of Partnership Interests. The General Partner shall (aa) determine the relative preferences, rights, powers and duties of the holders of the
Shares or other Partnership Interests being so issued and (bb) reflect the admission of such additional Limited Partners in the books and records of the Partnership as the Record Holder of such
Limited Partner Interest. The General Partner shall do all things necessary to comply with the Delaware Act and is authorized and directed to do all things that it determines to be necessary or
appropriate in connection with any future issuance of Partnership Interests, including compliance with any statute, rule, regulation or guideline of any federal, state or other governmental agency or
any, National Securities Exchange on which the Shares or other Partnership Interests are listed or admitted to trading.
(d) No
fractional Shares or fractional Partnership Interests shall be issued by the Partnership.
Section 5.6
AAP Exchanges and Redemptions.
(a) Upon
any exchange of AAP Class B Units for AAP Class A Units pursuant to the AAP Agreement, the Partnership shall issue to the exchanging holder of such
AAP Class B Units a number of Class B Shares equal to the number of AAP Class A Units issued in connection with such exchange.
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(b) Upon
any AAP Exchange, the Partnership shall issue to AAP (or, if the Call Right (as defined in the AAP Agreement) is exercised, the party exchanging AAP Class A
Units) a number of Class A Shares equal to the number of AAP Class A Units being exchanged. Simultaneous with the consummation of such exchange, the Class B Shares involved in
such exchange shall automatically be cancelled and shall cease to be outstanding.
(c) Upon
any AAP Redemption by a Limited Partner, a number of Class B Shares held by such Limited Partner equal to the number of AAP Class A Units redeemed by
such Limited Partner shall automatically be cancelled and shall cease to be outstanding with no consideration owing therefor.
Section 5.7
No Preemptive Right.
No Person shall have any preemptive, preferential or other similar right
with respect to the issuance of any Partnership Interest, whether unissued, held in the treasury or hereafter created.
Section 5.8
Splits and Combinations.
(a) Subject
to Section 5.8(d), the Partnership may make a Pro Rata distribution of Partnership Interests to all Record Holders or may effect a subdivision or
combination of Partnership Interests so long as, after any such event, each Partner shall have the same Percentage Interest in the Partnership as before such event, and any amounts calculated on a per
Share basis or stated as a number of Shares are proportionately adjusted. Any such distribution, subdivision or combination of the Class A Shares shall be accompanied by a simultaneous and
proportionate distribution, subdivision or combination of the Class B Shares and Class C Shares (notwithstanding the fact that the Percentage Interest of the Class C Shares is
zero) pursuant to this Agreement, General Partner Units pursuant to the Holdings GP LLC Agreement, and the AAP Class A Units or AAP Class B Units, respectively, pursuant to
the AAP Agreement, and vice versa. This provision shall not be amended unless corresponding changes are made to the Holdings GP LLC Agreement and the AAP Agreement.
(b) Whenever
such a distribution, subdivision or combination of Partnership Interests is declared, the General Partner shall select a Record Date as of which the
distribution, subdivision or combination shall be effective and shall send notice thereof at least 20 days prior to such Record Date to each Record Holder as of a date not less than
10 days prior to the date of such notice. The General Partner also may cause a firm of independent public accountants selected by it to calculate the number of Partnership Interests to be held
by each Record Holder after giving effect to such distribution, subdivision or combination. The General Partner shall be entitled to rely on any certificate provided by such firm as conclusive
evidence of the accuracy of such calculation.
(c) Promptly
following any such distribution, subdivision or combination, the Partnership may issue Certificates, or other evidence of the issuance of uncertificated Shares
or other Partnership Interests, to the Record Holders of Partnership Interests as of the applicable Record Date representing the new number of Partnership Interests held by such Record Holders, or the
General Partner may adopt such other procedures that it determines to be necessary or appropriate to reflect such changes. If any such combination results in a smaller total number of Partnership
Interests Outstanding, the Partnership shall require, as a condition to the delivery to a Record Holder of such new Certificate, or other
evidence of the issuance of uncertificated Shares or other Partnership Interests, the surrender of any Certificate, or other evidence of the issuance of uncertificated Shares or other Partnership
Interests, held by such Record Holder immediately prior to such Record Date.
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(d) The
Partnership shall not issue fractional Shares or other Partnership Interests upon any distribution, subdivision or combination of Shares or other Partnership
Interests. If a distribution, subdivision or combination of Shares or other Partnership Interests would result in the issuance of fractional Shares or other Partnership Interests but for the
provisions of this Section 5.8(d), each fractional Share or other Partnership Interest shall be rounded to the nearest whole Share or other Partnership Interest (and a 0.5 Share shall be
rounded to the next higher Share or other Partnership Interest).
Section 5.9
Fully Paid and Non-Assessable Nature of Limited Partner
Interests.
All Limited Partner Interests issued pursuant to, and in accordance with the requirements of, this Article V shall be fully paid and
non-assessable Limited Partner Interests in the Partnership, except as such non assessability may be affected by Section 17-607 of the Delaware Act.
ARTICLE VI
DISTRIBUTIONS
Section 6.1
Requirement and Characterization of Distributions; Distributions to Record Holders
.
(a) Within
55 days following the end of each Quarter commencing with the Quarter ending on December 31, 2013, an amount equal to 100% of Available Cash with
respect to such Quarter shall, subject to Section 17-607 of the Delaware Act, be distributed in accordance with this Article VI by the Partnership to the Partners as of the Record Date
selected by the General Partner. All distributions required to be made under this Agreement shall be made subject to Section 17-607 and 17-804 of the Delaware Act.
(b) Notwithstanding
Section 6.1(a), in the event of the dissolution and liquidation of the Partnership, all cash received during or after the Quarter in which the
Liquidation Date occurs shall be applied and distributed solely in accordance with, and subject to the terms and conditions of, Section 12.4.
(c) Each
distribution in respect of a Partnership Interest shall be paid by the Partnership, directly or through the Transfer Agent or through any other Person or agent,
only to the Record Holder of such Partnership Interest as of the Record Date set for such distribution. Such payment shall constitute full payment and satisfaction of the Partnership's liability in
respect of such payment, regardless of any claim of any Person who may have an interest in such payment by reason of an assignment or otherwise.
(d) For
the avoidance of doubt, no holder of Class A Shares issued in connection with an AAP Exchange shall be entitled to receive, in respect of the same Quarter,
distributions or dividends both on such Class A Shares and the AAP Class A Units that were conveyed to the Partnership as part of such AAP Exchange.
Section 6.2
Distributions of Available Cash
. Available Cash shall, subject to Section 17-607 of
the Delaware Act, be distributed, except as otherwise contemplated by Section 5.5 in respect of other Partnership Interests issued pursuant thereto, 100% to the Class A Shareholders Pro
Rata.
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1
Management
.
(a) The
General Partner shall conduct, direct and manage all activities of the Partnership. Except as otherwise expressly provided in this Agreement or required by law, all
management
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powers
over the business and affairs of the Partnership shall be exclusively vested in the General Partner, and no Limited Partner shall have any management power over the business and affairs or
property of the Partnership. In addition to the powers now or hereafter granted to a general partner of a limited partnership under applicable law or that are granted to the General Partner under any
other provision of this Agreement, the General Partner, subject to Section 7.3, shall have full power and authority to do all things and on such terms as it determines to be necessary or
appropriate to conduct
the business of the Partnership, to exercise all powers set forth in Section 2.5 and to effectuate the purposes set forth in Section 2.4, including the following:
(i) the
making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the
issuance of evidences of indebtedness, including indebtedness that is convertible into Partnership Interests, and the incurring of any other obligations;
(ii) the
making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or
assets of the Partnership;
(iii) the
acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of the assets of the Partnership or the merger or other
combination of the Partnership with or into another Person (the matters described in this clause (iii) being subject, however, to any prior approval that may be required by Section 7.3
and Article XIV);
(iv) the
use of the assets of the Partnership (including cash on hand) for any purpose consistent with the terms of this Agreement, including the financing of the conduct of
the operations of the Partnership, its Subsidiaries and the MLP Group, the lending of funds to other Persons; the repayment or guarantee of obligations of the Partnership, its Subsidiaries and the MLP
Group; and the making of capital contributions to any member of the Partnership, its Subsidiaries and the MLP Group;
(v) the
negotiation, execution and performance of any contracts, conveyances or other instruments (including instruments that limit the liability of the Partnership under
contractual arrangements to all or particular assets of the Partnership, with the other party to the contract to have no recourse against the General Partner or its assets other than its interest in
the Partnership, even if such lack of recourse results in the terms of the transaction being less favorable to the Partnership than would otherwise be the case);
(vi) the
distribution of Partnership cash;
(vii) the
selection and dismissal of employees (including employees having titles such as "president," "vice president," "secretary" and "treasurer") and agents, outside
attorneys, accountants, consultants and contractors and the determination of their compensation and other terms of employment or hiring;
(viii) the
maintenance of insurance for the benefit of the Partnership, the Partners and Indemnitees;
(ix) the
formation of, or acquisition of an interest in, and the contribution of property and the making of loans to, any further limited or general partnerships, joint
ventures, limited liability companies, corporations or other relationships (including the acquisition of interests in, and the contributions of property to, the MLP and its Subsidiaries from time to
time);
(x) the
control of any matters affecting the rights and obligations of the Partnership, including the bringing and defending of actions at law or in equity and otherwise
engaging in
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the
conduct of litigation, arbitration or mediation and the incurring of legal expense and the settlement of claims and litigation;
(xi) the
indemnification of any Person against liabilities and contingencies to the extent permitted by law;
(xii) the
entering into of listing agreements with any National Securities Exchange and the delisting of some or all of the Limited Partner Interests from, or requesting
that trading be suspended on, any such exchange;
(xiii) the
purchase, sale or other acquisition or disposition of Partnership Interests, or the issuance of options, rights, warrants and appreciation rights relating to
Partnership Interests; and
(xiv) the
undertaking of any action in connection with the Partnership's participation and management of the MLP through its ownership of the MLP Managing General Partner,
including the approval or disapproval on behalf of the Partnership in its capacity as the sole member of the MLP Managing General Partner, of any proposed actions that may not be effected or
authorized without the prior written consent of the Partnership pursuant to the terms of the limited liability company agreement of the MLP Managing General Partner, including any modification,
amendment, waiver or other action affecting the general partner interest provided for in the MLP Agreement.
(b) Notwithstanding
any other provision of this Agreement, any Group Member Agreement, the Delaware Act or any applicable law, rule or regulation, each of the Partners and
each other Person who may acquire an interest in Partnership Interests or is otherwise bound by the provisions of this Agreement hereby (i) approves, ratifies and confirms the execution,
delivery and performance by the parties thereto of this Agreement and the Group Member Agreement of each other Group Member, the Underwriting Agreement, the Administrative Agreement, the Contribution
Agreement, and the other agreements described in or filed as exhibits to the Registration Statement that are related to the transactions contemplated by the Registration Statement (which approval,
ratification and confirmation shall not, with respect to each such agreement, be considered to cover or include any amendments or supplements thereof entered into after the date such Person becomes
bound by the provisions of this Agreement, except for amendments or supplements made to this Agreement in accordance with the provisions hereof) and the Omnibus Agreement (which approval, ratification
and confirmation shall not, with respect to each such agreement, be considered to cover or include any amendments or supplements thereof entered into after the date of this Agreement, except for
amendments or supplements made to this Agreement in accordance with the provisions hereof); (ii) agrees that the General Partner (on its own behalf or through any officer of the Partnership) is
authorized to execute, deliver and perform the agreements referred to in clause (i) of this sentence and the other agreements, acts, transactions and matters described in or contemplated by the
Registration Statement on behalf of the Partnership without any further act, approval or vote of the Partners or the other Persons who may acquire an interest in Partnership Interests or are otherwise
bound by the provisions of this Agreement; and (iii) agrees that the execution, delivery or performance by the General Partner, any Group Member or any Affiliate of any of them of this
Agreement or any agreement authorized or permitted under this Agreement and any amendment of such agreements in accordance with the terms thereof (including the exercise by the General Partner or any
Affiliate of the General Partner of the rights accorded pursuant to Article XV) shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership
or
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the
Limited Partners or any other Persons under this Agreement (or any other agreements) or of any duty otherwise existing at law, in equity or otherwise.
Section 7.2
Certificate of Limited Partnership
. The General Partner has caused the Certificate of Limited
Partnership to be filed with the Secretary of State of the State of Delaware as required by the Delaware Act. The General Partner shall use all reasonable efforts to cause to be filed such other
certificates or documents that the General Partner determines to be necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in
which the limited partners have limited liability) in the State of Delaware or any other state in which the Partnership may elect to do business or own property. To the extent the General Partner
determines such action to be necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate of Limited Partnership and do all things to maintain the
Partnership as a limited partnership (or a partnership or other entity in which the limited partners have limited liability) under the laws of the State of Delaware or of any other state in which the
Partnership may elect to do business or own property. Subject to the terms of Section 3.4(a), the General Partner shall not be required, before or after filing, to deliver or mail a copy of the
Certificate of Limited Partnership, any qualification document or any amendment thereto to any Limited Partner.
Section 7.3
Restrictions on General Partner's Authority
. Except as provided in Articles XII and
XIV, the General Partner may not sell, exchange or otherwise dispose of all or substantially all of the assets of the Partnership Group, taken as a whole, in a single transaction or a series of
related transactions without the approval of holders of a Share Majority;
provided
,
however
, that this
provision shall not preclude or limit the General Partner's ability to mortgage, pledge, hypothecate or grant a security interest in all or substantially all of the assets of the Partnership Group and
shall not apply to any forced sale of any or all of the assets of the Partnership Group pursuant to the foreclosure of, or other realization upon, any such encumbrance.
Section 7.4
Reimbursement of the General Partner
.
(a) Except
as provided in this Section 7.4 and elsewhere in this Agreement, the General Partner shall not be compensated for its services as general a partner or
managing member of any Group Member.
(b) The
General Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine, for (i) all direct and indirect expenses it
incurs or payments it makes on behalf of the Partnership Group (including salary, bonus, incentive compensation, directors fees and other amounts paid to any Person, including Affiliates of the
General Partner to perform services for the Partnership Group or for the General Partner in the discharge of its duties to the Partnership Group), and (ii) all other expenses allocable to the
Partnership Group or otherwise incurred by the General Partner in connection with operating the Partnership Group's business (including expenses allocated to the General Partner by its Affiliates).
The General Partner shall determine the expenses that are allocable to the Partnership Group. Reimbursements pursuant to this Section 7.4 shall be in addition to any reimbursement to the
General Partner as a result of indemnification pursuant to Section 7.7.
(c) The
General Partner, without the approval of the Limited Partners (who shall have no right to vote in respect thereof), may propose and adopt on behalf of the
Partnership Group employee benefit plans, employee programs and employee practices (including plans, programs and practices involving the issuance of Partnership Interests or options to purchase or
rights, warrants or appreciation rights or phantom or tracking interests relating to Partnership Interests), or cause the Partnership to issue Partnership Interests in connection with, or pursuant to,
any employee benefit plan, employee program or employee practice maintained or sponsored by the General
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or any one of its Affiliates, in each case for the benefit of employees and directors of the General Partner, any Group Member or any Affiliate, or any of them, in respect of services
performed, directly or indirectly, for the benefit of the Partnership Group or the MLP Group. The Partnership agrees to issue to the General Partner, any Group Member or any of their Affiliates any
Partnership Interests that the General Partner or such Affiliates are obligated to provide to any employees and directors pursuant to any such employee benefit plans, employee programs or employee
practices. Expenses incurred by the General Partner in connection with any such plans, programs and practices (including the net cost to the General Partner or such Affiliates of Partnership Interests
purchased by the General Partner or such Affiliates from the Partnership to fulfill options or awards under such plans, programs and practices) shall be reimbursed in accordance with
Section 7.4(b). Any and all
obligations of the General Partner under any employee benefit plans, employee programs or employee practices adopted by the General Partner as permitted by this Section 7.4(c) shall constitute
obligations of the General Partner hereunder and shall be assumed by any successor General Partner approved pursuant to Section 11.1 or 11.2 or the transferee of or successor to all of the
General Partner's General Partner Interest.
Section 7.5
Outside Activities
.
(a) The
General Partner, for so long as it is the general partner of the Partnership, shall not engage in any business or activity or incur any debts or liabilities except
in connection with or incidental to (i) its performance as general partner or managing member of one or more Group Members or as described in or contemplated by the Registration Statement or
(ii) the acquiring, owning or disposing of debt or equity securities in any Group Member.
(b) Each
Indemnitee (other than the General Partner) shall have the right to engage in businesses of every type and description and other activities for profit and to engage
in and possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by any Group Member or any member of the
MLP Group, independently or with others, including business interests and activities in direct competition with the business and activities of any Group Member or any member of the MLP Group, and none
of the same shall constitute a breach of this Agreement or any duty expressed or implied by law to any Group Member, any member of the MLP Group or any Partner. None of any Group Member, any Limited
Partner or any other Person shall have any rights by virtue of this Agreement, the constituent documents of any Group Member, the MLP Agreement or the partnership relationship established hereby or
thereby in any business ventures of any Group Member or Indemnitee.
(c) Notwithstanding
anything to the contrary in this Agreement, (i) the engaging in competitive activities by any Indemnitee (other than the General Partner) in
accordance with the provisions of this Section 7.5 is hereby approved by the Partnership and all Partners, (ii) it shall be deemed not to be a breach of any duty (including any fiduciary
duty) or any other obligation of any type whatsoever of any Indemnitee (other than the General Partner) to engage in such business interests and activities in preference to or to the exclusion of the
Partnership Group or the members of the MLP Group and the Indemnitee shall have no obligation hereunder or as a result of any duty otherwise existing at law, in equity or otherwise, to present
business opportunities to the Partnership. The doctrine of corporate opportunity, or any analogous doctrine, shall not apply to any Indemnitee. No Indemnitee who acquires knowledge of a potential
transaction, agreement, arrangement or other matter that may be an opportunity for the Partnership, shall have any duty to communicate or offer such opportunity to the Partnership, and, except as
otherwise provided in Section 7.5(a) or Section 7.5(b), such Indemnitee shall not be liable to the Partnership, to any Limited Partner or any other Person for breach of duty (including
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any
fiduciary duty) or any other obligation by reason of the fact that such Indemnitee pursues or acquires for itself, directs such opportunity to another Person or does not communicate such
opportunity or information to the Partnership;
provided
such Indemnitee does not engage in such business or activity using confidential or proprietary
information provided by or on behalf of the Partnership to Indemnitee;
provided further, however,
that when an Indemnitee engages in such activities,
there shall be no presumption of misuse of such confidential information solely because a Person associated with the Indemnitee may retain a mental impression of any such confidential information.
(d) The
General Partner, Existing Owners and each of their respective Affiliates may acquire Shares or other Partnership Interests in addition to those acquired on the
Closing Date and, except as otherwise provided in this Agreement, shall be entitled to exercise all rights of a General Partner or Limited Partner, as applicable, relating to such Shares or
Partnership Interests. The term "Affiliates," when used in this Section 7.5(d) with respect to the General Partner, shall not include any Group Member or any Subsidiary of the Group Member.
(e) Notwithstanding
anything to the contrary in this Agreement, to the extent that any provision of this Agreement purports or is interpreted (i) to have the effect
of modifying, limiting or restricting the duties that might otherwise, as a result of Delaware or other applicable law, be owed by the General Partner to the Partnership and its Limited Partners, or
(ii) to constitute a waiver or consent by the Limited Partners to any such modification, limitation or restriction, such provisions shall be deemed to have been approved by the Partners and to
replace such duties of the General Partner;
provided
,
however
, that nothing in this Section 7.5
shall limit or otherwise affect the effectiveness of any Group Member Agreement, the Holdings GP LLC Agreement or any separate contractual obligations of any Person (including any
Indemnitee) to the Partnership or any of its Affiliates pursuant to agreements entered into following the date of the Original Agreement.
Section 7.6
Loans from the General Partner; Loans or Contributions from the Partnership
.
(a) The
General Partner or any of its Affiliates may lend to any Group Member or a member of the MLP Group, and any Group Member or a member of the MLP Group may borrow from
the General Partner or any of its Affiliates, funds needed or desired by the Group Member or member of the MLP Group for such periods of time and in such amounts as the General Partner may determine;
provided
,
however
, that in any such case the lending party may not charge the borrowing party interest
at a rate greater than the rate that would be charged the borrowing party or impose terms less favorable to the borrowing party than would be charged or imposed on the borrowing party by unrelated
lenders on comparable loans made on an arm's-length basis (without reference to the lending party's financial abilities or guarantees) all as determined by the General Partner. The borrowing party
shall reimburse the lending party for any costs (other than any additional interest costs) incurred by the lending party in connection with the borrowing of such funds. For purposes of this
Section 7.6(a) and Section 7.6(b), the term "Group Member" shall include any Affiliate of a Group Member that is controlled by the Group Member and the term "member of the MLP Group"
shall include any Affiliate of a member of the MLP Group that is controlled by a member of the MLP Group.
(b) The
Partnership may lend or contribute to any Group Member, and any Group Member may borrow from the Partnership, funds on terms and conditions determined by the General
Partner.
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Section 7.7
Indemnification
.
(a) Notwithstanding
anything to the contrary set forth in this Agreement, to the fullest extent permitted by law but subject to the limitations expressly provided in this
Agreement, all Indemnitees shall be indemnified and held harmless by the Partnership from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees
and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or
investigative, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee;
provided
, that the Indemnitee shall be
indemnified and held harmless unless there has been a final and non-appealable judgment entered by a court of
competent jurisdiction determining
that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 7.7, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct, or in
the case of a criminal matter, acted with knowledge that the Indemnitee's conduct was unlawful;
provided
,
further
, no indemnification pursuant to this
Section 7.7 shall be available to any Indemnitee (other than a Group Member or an individual Person)
with respect to its or their obligations incurred pursuant to the Underwriting Agreement, the Administrative Agreement, the Contribution Agreement, the Registration Rights Agreement or the
Holdings GP LLC Agreement (other than obligations incurred by the General Partner on behalf of the Partnership). Any indemnification pursuant to this Section 7.7 shall be made
only out of the assets of the Partnership, it being agreed that the General Partner shall not be personally liable for such indemnification and shall have no obligation to contribute or loan any
monies or property to the Partnership to enable it to effectuate such indemnification.
(b) To
the fullest extent permitted by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to Section 7.7(a) in
defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Partnership prior to a final and non-appealable judgment entered by a court of competent
jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 7.7, the Indemnitee is not entitled to be indemnified upon
receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be ultimately determined that the Indemnitee is not entitled to be indemnified as
authorized by this Section 7.7.
(c) The
indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, pursuant to
any vote of the holders of Outstanding Limited Partner Interests, any vote by the Board of Directors, as a matter of law or otherwise, both as to actions in the Indemnitee's status as an Indemnitee
and as to actions in any other capacity (including any capacity under the Underwriting Agreement), and shall continue as to an Indemnitee who has ceased to hold the status with respect to which it was
Indemnitee and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee;
provided
, that if an Indemnitee is
also an Affiliate of a voting Person, the vote of such Person will be disregarded in the vote.
(d) The
Partnership may purchase and maintain (or reimburse the General Partner or its Affiliates for the cost of) insurance, on behalf of the General Partner, its
Affiliates and such other Persons as the General Partner shall determine, including the purchase and maintenance of insurance pursuant to the terms of the Administrative Agreement, against any
liability that may be asserted against, or expense that may be incurred by, such Person in connection with the activities of the Group Member or its Affiliates or such Person's activities on behalf of
the Group Member or its Affiliates, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
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(e) For
purposes of this Section 7.7, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the
performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute "fines" within the meaning of Section 7.7(a); and action taken or omitted by it with respect to
any employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be
for a purpose that is in the best interests of the Partnership.
(f) In
no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement or have any
obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate such indemnification.
(g) An
Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with
respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
(h) The
provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create
any rights for the benefit of any other Persons.
(i) No
amendment, modification or repeal of this Section 7.7 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or
future Indemnitee to be indemnified by the any Group Member or any Affiliate of a Group Member, nor the obligations of the Group Member or such Affiliate to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring,
in whole or-in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.8
Liability of Indemnitees
.
(a) Notwithstanding
anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Partnership, the Limited Partners or any
other Persons who have acquired interests in the Partnership Interests, for losses sustained solely due to the fact that the Indemnitee holds the status which respect to which it is an Indemnitee or
liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in
respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee's conduct
was criminal.
(b) Subject
to its obligations and duties as General Partner set forth in Section 7.1(a), the General Partner may exercise any of the powers granted to it by this
Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents, and the General Partner shall not be responsible for any misconduct or negligence on the
part of any such agent appointed by the General Partner in good faith.
(c) To
the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to a Group Member, the MLP or any of its
Subsidiaries, the Partners or any other Indemnitee acting in connection with the business or affairs of the Group Member or the MLP and its Subsidiaries, such Indemnitee shall not be liable to the
Group
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or the MLP or its Subsidiaries or to any Partner or other Indemnitee for its reliance in good faith on the provisions of this Agreement.
(d) Any
amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the
liability of the Indemnitees under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.9
Resolution of Conflicts of Interest; Standards of Conduct and Modification of Duties
.
(a) Unless
otherwise expressly provided in this Agreement, whenever a potential conflict of interest exists or arises between the General Partner or any of its Affiliates,
any Existing Owner or any of their respective Affiliates or any Affiliate of the Partnership that may "control" (as that term is defined in the definition of "Affiliate" hereunder) the Partnership, on
the one hand, and the Partnership, any Group Member or any Partner, on the other, any resolution or course of action by the General Partner or its Affiliates in respect of such conflict of interest
shall be permitted and deemed approved by all Partners, and shall not constitute a breach of this Agreement, or of any agreement contemplated herein or therein, or of any duty stated or implied by law
or equity, if the resolution or course of action in respect of such conflict of interest is (i) approved by Special Approval, (ii) approved by the vote of a Share Majority (excluding
Shares owned by the General Partner and its Affiliates), (iii) determined by the General Partner (after due inquiry) to be on terms no less favorable to the Partnership than those generally
being provided to or available from unrelated third parties or (iv) approved by the General Partner (after due inquiry) based on a subjective belief that the course of action or determination
that is the subject of such approval is fair and reasonable to the Partnership, which may include taking into account the circumstances and the relationships among the parties involved (including the
short-term or long-term interests of the Partnership and other arrangements or relationships that could be considered favorable or advantageous to the Partnership), including (A) the relative
interests of any party to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interest; (B) any customary or accepted industry practices and any
customary or historical dealings with a particular Person; (C) any applicable generally accepted accounting practices or principles; and (D) such additional factors as the General
Partner (including the Conflicts Committee) determines in its sole discretion to be relevant, reasonable or appropriate under the circumstances. Nothing contained in this Agreement, however, is
intended to nor shall it be construed to require the General Partner (including the Conflicts Committee) to consider the interests of any Person other than the Partnership. The General Partner shall
be authorized but not required in connection with its resolution of such conflict of interest to seek Special Approval of such resolution, and the General Partner may also adopt a resolution or course
of action that has not received Special Approval. In making any determination under this Section 7.9(a), it shall be presumed that the Conflicts Committee, the General Partner and the Board of
Directors (as applicable) have satisfied the contractual standards set forth in this Agreement and any Person challenging such determination shall have the burden of overcoming such presumption as
provided in Section 7.9(e). Notwithstanding anything to the contrary in this Agreement or any duty otherwise existing at law or equity, the existence of the conflicts of interest described in
the Registration Statement are hereby approved by all Partners and shall not constitute a breach of this Agreement or any duty otherwise existing at law, in equity or otherwise.
(b) Whenever
the General Partner makes a determination or takes or declines to take any other action, or any of its Affiliates causes it to do so, in its capacity as the
general partner of the
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as opposed to in its individual capacity, whether under this Agreement, or any other agreement contemplated hereby or otherwise, then unless another express standard is provided for in
this Agreement or such other agreement, the General Partner, or such Affiliates causing it to do so, shall make such determination or take or decline to take such other action in good faith and shall
not be subject to any other or different standards (including fiduciary standards) imposed by this Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule
or regulation or at equity. In order for a determination or other action to be in "good faith" for purposes of this Agreement, the Person or Persons making such determination or taking or declining to
take such other action must subjectively believe that the determination, other action or anticipated result thereof is in, or not opposed to, the best interests of the Partnership, and in connection
therewith such Person or Persons may take into account the circumstances and relationships involved (including the short-term or long-term interests of the Partnership and other arrangements or
relationships that could be considered favorable or advantageous to the Partnership).
(c) Whenever
the General Partner makes a determination or takes or declines to take any other action, or any of its Affiliates causes it to do so, in its individual capacity
as opposed to in its capacity as the general partner of the Partnership, whether under this Agreement, any Group Member Agreement or any other agreement contemplated hereby or otherwise, then the
General Partner, or such Affiliates causing it to do so, are entitled, to the fullest extent permitted by law, to make such determination or to take or decline to take such other action free of any
duty (including any fiduciary duty) or obligation whatsoever to the Partnership, any Limited Partner, and any other Person bound by this Agreement, and the General Partner, or such Affiliates causing
it to do so, shall not, to the fullest extent permitted by law, be required to act in good faith or pursuant to any other standard imposed by this Agreement, any Group Member Agreement, any other
agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity. By way of illustration and not of limitation, whenever the phrase, "at the option of the
General Partner," or some variation of that phrase, is used in this Agreement, it indicates that the General Partner is acting in its individual capacity. For the avoidance
of doubt, whenever the General Partner votes or transfers its Partnership Interests, or refrains from voting or transferring its Partnership Interests, it shall be acting in its individual capacity.
(d) Notwithstanding
anything to the contrary in this Agreement, the General Partner and its Affiliates shall have no duty or obligation, express or implied, to
(i) sell or otherwise dispose of any asset of the Partnership Group other than in the ordinary course of business or (ii) permit any Group Member to use any facilities or assets of the
General Partner and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use. Any determination by the General Partner or any of its
Affiliates to enter into such contracts shall be at its option.
(e) Except
as expressly set forth in this Agreement or required by the Delaware Act, to the maximum extent permitted by the Delaware Act or other applicable law, neither the
General Partner nor any other Indemnitee shall have any duties or liabilities, including fiduciary duties, to the Partnership or any Limited Partner notwithstanding anything to the contrary in
existing law, in equity or otherwise; and the provisions of this Agreement, to the extent that they restrict, eliminate or otherwise modify the duties and liabilities, including fiduciary duties, of
the General Partner or any other Indemnitee otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of the General Partner or such other
Indemnitee. To the fullest extent permitted by law, in connection with any action or inaction of, or determination made by,
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General Partner or any other Indemnitee with respect to any matter relating to the Partnership, it shall be presumed that the General Partner and other Indemnitees acted in a manner that satisfied
the contractual standards set forth in this Agreement, and in any proceeding brought by any Limited Partner or by or on behalf of such Limited Partner or any other Limited Partner or the Partnership
challenging any such action or inaction of, or determination made by, of the General Partner or any other Indemnitee, the Person bringing or prosecuting such proceeding shall have the burden of
overcoming such presumption.
(f) The
Shareholders and the Class C Shareholders hereby authorize the General Partner, on behalf of the Partnership as a partner or member of a Group Member, to
approve of actions by the general partner or managing member of such Group Member similar to those actions permitted to be taken by the General Partner pursuant to this Section 7.9.
(g) Where
a determination requires "due inquiry," the Person or Persons making such determination or taking or declining to take such action must subjectively believe that
such Person or Persons had available adequate information to make such determination or to take or decline to take such action in accordance with the applicable contractual standard.