Section 4.7
Legal Proceedings.
There are no Proceedings pending or, to the knowledge of the
Partnership, threatened in writing with respect to the Partnership or any of its Subsidiaries or
Proceedings pending or, to the knowledge of the Partnership, threatened in writing with respect to any of their respective properties or assets at law or in equity before any Governmental Authority,
and there are no orders, judgments, decrees or similar rulings of any Governmental Authority against the Partnership or any of its Subsidiaries, in each case except for those that have not had and
would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect.
Section 4.8
Compliance With Laws.
(a) The
Partnership and its Subsidiaries are, and since the later of December 31, 2013 and their respective dates of incorporation, formation or organization have
been, in compliance with and are not in default under or in violation of any applicable federal, state, local or foreign or provincial law, statute, tariff, ordinance, rule, regulation, judgment,
order, injunction, stipulation, determination, award or decree or agency requirement of or undertaking to any Governmental Authority, including common law (collectively,
"
Laws
" and each, a "
Law
"), except where such non-compliance, default or violation has not had and would
not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect.
(b) The
Partnership and its Subsidiaries are in possession of all franchises, tariffs, grants, authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Authority ("
Permits
"), necessary for the Partnership and its Subsidiaries to own, lease and
operate their properties and assets or to carry on their businesses as they are now being conducted (collectively, the "
Partnership Permits
"), except
where the failure to have any of the Partnership Permits has not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect. All
Partnership Permits are in full force and effect, except where the failure to be in full force and effect has not had and would not reasonably be
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expected
to have, individually or in the aggregate, a Partnership Material Adverse Effect. No suspension or cancellation of any of the Partnership Permits is pending or, to the knowledge of the
Partnership, threatened in writing, except where such suspension or cancellation has not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material
Adverse Effect. The Partnership and its Subsidiaries are not, and since December 31, 2013 have not been, in violation or breach of, or default under, any Partnership Permit, except where such
violation, breach or default has not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect. As of the date of this Agreement, no
event or condition has occurred or exists which would result in a violation of, breach, default or loss of a benefit under, or acceleration of an obligation of Partnership or any of its Subsidiaries
under, any Partnership Permit, or has caused (or would cause) an applicable Governmental Authority to fail or refuse to issue, renew or extend, any Partnership Permit (in each case, with or without
notice or lapse of time or both), except for violations, breaches, defaults, losses, accelerations or failures that have not had and would not reasonably be expected to have, individually or in the
aggregate, a Partnership Material Adverse Effect. The Partnership Permits will not be subject to suspension, modification, revocation or non-renewal as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, except, in each case, as would not, individually or in the aggregate, have a Partnership Material Adverse Effect. No Proceeding
is pending or, to the knowledge of the Partnership, threatened with respect to any alleged failure by the Partnership or any of its Subsidiaries to have any material Permit necessary for the operation
of any asset or the conduct of their businesses or to be in compliance therewith, except, in each case, as would not, individually or in the aggregate, have a Partnership Material Adverse Effect.
(c) Without
limiting the generality of
Section 4.8(a)
, none of the Partnership, its Subsidiaries, or, to the knowledge
of the Partnership, any consultant, agent or representative of any of the foregoing (in their respective capacities as such), (i) has violated the U.S. Foreign Corrupt Practices Act, and any
other U.S. and foreign anti-corruption Laws that are applicable to the Partnership or its Subsidiaries; (ii) has, to the knowledge of the Partnership, been given written notice by any
Governmental Authority of any facts which, if true, would constitute a violation of the U.S. Foreign Corrupt Practices Act or any other U.S. or foreign anti-corruption Laws by any such person; and
(iii) to the knowledge of the Partnership, is being (and has not been) investigated by any Governmental Authority except, in each case of the foregoing clauses (i) through (iii), as
would not have, individually or in the aggregate, a Partnership Material Adverse Effect.
Section 4.9
Information Supplied.
Subject to the accuracy of the representations and warranties
of Parent and Merger Sub set forth in
Section 5.9
, none of the information supplied (or to be supplied) in writing by or on behalf of the Partnership, the General Partner and the
Managing GP specifically for inclusion or incorporation by reference in (a) the registration statement on Form S-4 to be filed with the SEC by Parent in connection with the
issuance of Parent Shares in connection with the Merger (as amended or supplemented from time to time, the "
Registration Statement
") will, at the time
the Registration Statement, or any amendment or supplement thereto, is filed with the SEC or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (b) the Joint Proxy Statement will, on the date it is first
mailed to Limited Partners and the Parent Stockholders, and at the time of the Partnership Unitholder Meeting and the Parent Stockholder Meeting, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Joint Proxy Statement will comply as
to form in all material respects with the applicable requirements of the Securities Act or Exchange Act, as applicable. Notwithstanding the foregoing, the Partnership makes no representation or
warranty with respect to information supplied by or on behalf of Parent or Merger Sub for inclusion or incorporation by reference in any of the foregoing documents.
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Section 4.10
Tax Matters.
(a) Except
as has not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect: (i) all Tax Returns
that were required to be filed by or with respect to the Partnership or any of its Subsidiaries have been duly and timely filed (taking into account any extension of time within which to file) and all
such Tax Returns are complete and accurate, (ii) all Taxes owed by the Partnership or any of its Subsidiaries that are or have become due have been timely paid in full or an adequate reserve
for the payment of such Taxes has been established on the balance sheet of the Partnership and its consolidated Subsidiaries as of the Balance Sheet Date included in the Partnership SEC Documents,
(iii) there is no claim against the Partnership or any of its Subsidiaries for any Taxes, and no assessment, deficiency, or adjustment has been asserted, proposed, or threatened with respect to
any Taxes or Tax Returns of or with respect to the Partnership or any of its Subsidiaries, (iv) the Partnership and each of its Subsidiaries that is classified as a partnership for U.S. federal
income tax purposes has in effect an election under Section 754 of the Code, (v) the Partnership is currently (and has been since its formation) either (A) properly classified as
a partnership for U.S. federal income tax purposes or (B) properly disregarded as an entity separate from its respective owner for U.S. federal income tax purposes pursuant to Treasury
Regulation Section 301.7701-3(b), (vi) at least 90% of the gross income of the Partnership for each taxable year since its formation through and including the current taxable year has
been income that is "qualifying income" within the meaning of Section 7704(d) of the Code, (vii) each Subsidiary of the Partnership, other than Archrock Partners Finance Corp., is
currently (and has been since its respective acquisition by the Partnership) either (A) properly classified as a partnership for U.S. federal income tax purposes or (B) properly
disregarded as an entity separate from its respective owner for U.S. federal income tax purposes pursuant to Treasury Regulation Section 301.7701-3(b) and (viii) there are no Liens on
any of the assets of the Partnership or any of its Subsidiaries that arose in connection with any failure (or alleged failure) to pay any Taxes on any of such assets (except in all cases for Liens
permissible under or not prohibited by any applicable material loan agreements and indentures (together with all related mortgages, deeds of trust and other security agreements)).
(b) As
used in this Agreement, (i) "
Tax
" or "
Taxes
" means any and all
federal, state, local or foreign or provincial taxes, charges, imposts, levies or other assessments, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs
duties, fees, escheat or unclaimed property obligations, assessments and similar charges, including any and all interest, penalties, fines, additions to tax or additional amounts imposed by any
Governmental Authority with respect thereto and any liability for the payment of amounts described in this
Section 4.10(b)
of any other Person
(other than the Partnership or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of applicable state, local, or foreign Law), as a transferee or
successor, by contract, or otherwise and (ii) "
Tax Return
" means any return, report or similar filing (including any attached schedules,
supplements and additional or supporting material) filed or required to be filed with respect to Taxes, including any information return, claim for refund, amended return or declaration of estimated
Taxes (and including any amendments with respect thereto).
Section 4.11
Contracts.
(a) Except
for this Agreement or as filed or publicly furnished with the SEC prior to the date of this Agreement, neither the Partnership nor any of its Subsidiaries is a
party to or bound by, as of the date of this Agreement, any Contract (whether written or oral) which is a "material contract" (as such term is defined in Item 601(b)(10) of
Regulation S-K of the SEC) to the Partnership (each Contract that is described in this
Section 4.11(a)
being a
"
Partnership Material Contract
").
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(b) Except
as has not had and would not reasonably be expected to have, either individually or in the aggregate, a Partnership Material Adverse Effect, (i) each
Partnership Material Contract is legal, valid and binding on and enforceable against the Partnership and its Subsidiaries, as applicable, except as such enforcement may be limited by the
Enforceability Exceptions, and is in full force and effect, (ii) the Partnership and each of its Subsidiaries has in all respects performed all obligations required to be performed by it to
date under each Partnership Material Contract, (iii) neither the Partnership nor any of its Subsidiaries has received written notice of or knows of, the existence of any event or condition
which constitutes, or, after notice or lapse of time or both, will constitute, a breach or default on the part of the Partnership or any of its Subsidiaries, or permit termination, modification or
acceleration, under any such Partnership Material Contract and (iv) as of the date of this Agreement no other party to any Partnership Material Contract is in default thereunder, nor does any
condition exist that with notice or lapse of time or both would constitute a default by any such other party thereunder, or permit termination, modification or acceleration under any Partnership
Material Contract other than in accordance with its terms nor has any other party repudiated any provision of the Partnership Material Contract.
Section 4.12
Partnership Benefit Plans; Labor Matters.
(a) Except
for the Partnership Long-Term Incentive Plans (and award agreements thereunder), neither the Partnership nor any Subsidiary thereof sponsors, maintains,
administers or is a party to, or has at any time sponsored, maintained, administered or entered into, or has any liability or obligation (whether contingent or otherwise, and other than reimbursement
obligations to Parent in respect of any Parent Benefit Plan) under, any Benefit Plan, and neither the Partnership nor any of its Subsidiaries has any commitment to create or adopt any Benefit Plan.
Without limiting the generality of the foregoing, (i) none of the Partnership, its Subsidiaries or their respective ERISA Affiliates has at any time sponsored, maintained, contributed to or had
any liability (contingent or otherwise) with respect to any, (A) multiemployer plan (within the meaning of Section 3(37) of ERISA), (B) pension plan subject to Title IV of ERISA
or Section 302 of ERISA or Section 412 of the Code, (C) "multiple employer plan" within the meaning of ERISA or an employee benefit plan subject to Section 413(c) of the
Code, or (D) a "multiple employer welfare arrangement" within the meaning of Section 3(40) of ERISA; (ii) neither the Partnership nor any of its Subsidiaries has any obligation to
provide, any of the following retiree or post-termination benefits to any Person: health, accident, life insurance, death or other welfare benefits; and (iii) neither the Partnership nor any of
its Subsidiaries has any liability arising under Title IV of ERISA or Section 4980B of the Code by reason of its affiliation with any of its ERISA Affiliates.
(b) Each
Partnership Long-Term Incentive Plan has been established, maintained and administered in compliance with its terms and with applicable Laws, including the Code,
except for such non-compliance which has not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect. No Proceeding, including any
audit or investigation by any Governmental Authority, is pending or, to the knowledge of the Partnership, threatened, with respect to any Partnership Long-Term Incentive Plan (or award thereunder).
(c) Neither
the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby (whether alone or in combination with another event,
whether contingent or otherwise) will (i) entitle any current or former employee, consultant, director, manager or other service provider to any payment or benefit (or any increased or enhanced
payment or benefit) from the General Partner, the Managing GP, the Partnership or its Subsidiaries, or (ii) accelerate the vesting or time of payment of any Partnership Phantom Unit.
(d) Neither
the Partnership nor any of its Subsidiaries employs or engages, or has at any time employed or engaged, any employees, consultants or other individual service
providers, and neither the Partnership nor any of its Subsidiaries has extended any offer of employment or service to any
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employee
or other individual service provider that is outstanding as of the date hereof. Neither the Partnership nor any of its Subsidiaries has incurred or would reasonably be expected to incur any
material liability as a joint employer. All of the employees, individual consultants and individual independent contractors that perform services for or on behalf of the Partnership and its
Subsidiaries
(collectively, the "
Partnership Service Providers
") are employed or engaged (as applicable) directly by Parent. To the knowledge of the Partnership, no
key Partnership Service Provider has any plans to cease providing services to Parent, the Partnership or any of their respective Affiliates.
(e) Neither
the Partnership nor any of its Subsidiaries is, or has at any time been, bound by, or a party to, any collective bargaining agreement or similar contract with
any labor union or organization. Neither the Partnership nor any of its Subsidiaries is currently engaged in any negotiation with any labor union or organization, and to the knowledge of the
Partnership, there is no union representation question or certification petition pending before the National Labor Relations Board or any other similar Governmental Authority relating to the
Partnership or any of its Subsidiaries. No organized work stoppage, labor strike, labor dispute, lockout or slowdown against the Partnership or any of its Subsidiaries is pending or, to the knowledge
of the Partnership, threatened against or involving the Partnership or any of its Subsidiaries. Neither the Partnership nor any of its Subsidiaries has received written notice of any unfair labor
practice complaint and, to the knowledge of the Partnership, no such complaints against the Partnership or any of its Subsidiaries are pending before the National Labor Relations Board or other
similar Governmental Authority.
Section 4.13
Environmental Matters.
Except as has not had and would not reasonably be expected to
have, individually or in the aggregate, a Partnership Material Adverse Effect: (a) each of
the Partnership and its Subsidiaries is and has been in compliance with all applicable Environmental Laws, which compliance includes obtaining, maintaining and complying with all Partnership Permits
required to be obtained to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted pursuant to applicable Environmental Laws
("
Partnership Environmental Permits
"); (b) all Partnership Environmental Permits are in full force and effect and, where applicable, applications
for renewal or amendment thereof have been timely filed; (c) no suspension or cancellation of any Partnership Environmental Permit is pending or, to the knowledge of the Partnership, threatened
in writing; (d) there has been no Release or arrangement for disposal of any Hazardous Substance by the Partnership or any of its Subsidiaries or, to the knowledge of the Partnership, by any
other Person that would reasonably be expected to give rise to the Partnership or any of its Subsidiaries incurring any liability, remedial obligation, or corrective action requirement under
applicable Environmental Laws; (e) there are no Proceedings pending or, to the knowledge of the Partnership, threatened in writing against the Partnership or any of its Subsidiaries or
involving any real property currently or, to the knowledge of the Partnership formerly owned, operated or leased by or for the Partnership or any of its Subsidiaries alleging noncompliance with, or
liability under, any applicable Environmental Law; (f) to the knowledge of the Partnership, no Hazardous Substance has been disposed of, Released or transported on, to or from any properties
while owned or operated by the Partnership or any of its Subsidiaries or as a result of any operations or activities of the Partnership or any of its Subsidiaries in violation of any applicable
Environmental Law or in a manner that would reasonably be expected to give rise to the Partnership or any of its Subsidiaries incurring any liability, remedial obligation, or corrective action
requirement under applicable Environmental Laws; and (g) neither the Partnership nor any of its Subsidiaries has either, expressly or by operation of Law, assumed or undertaken any liability,
including any obligation for remedial or corrective action, of any other Person relating to Environmental Laws, other than in the ordinary course of its business.
Section 4.14
Property.
(a) Except
as has not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect, the Partnership or a
Subsidiary of the Partnership owns and has good and valid title to all of its owned real property and good and valid title to all its
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owned
personal property, and has good and valid leasehold interests in all of its leased real properties (other than hydrocarbon interests) free and clear of all Liens, in each case, to an extent
sufficient to conduct their respective businesses as currently conducted (except in all cases for Liens permissible under or not prohibited by any applicable material loan agreements and indentures
(together with all related mortgages, deeds of trust and other security agreements)). Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a
Partnership Material Adverse Effect, all leases under which the Partnership or any of its Subsidiaries lease any real or personal property are valid and effective against the Partnership or any of its
Subsidiaries and the counterparties thereto, in accordance with their respective terms and there is not, under any of such leases, any existing material default by the Partnership or any of its
Subsidiaries the counterparties thereto, or any event which, with notice or lapse of time or both, would become a material default by the Partnership or any of its Subsidiaries or the counterparties
thereto.
(b) The
Partnership and its Subsidiaries have such consents, easements, rights-of-way, permits or licenses from each person (collectively,
"
rights-of-way
") as are sufficient to conduct their businesses in all respects as currently conducted, except such rights-of-way that, if not obtained
(or which, if obtained, if the same were to expire or be revoked or terminated), would not, individually or in the aggregate, have a Partnership Material Adverse Effect. Except as has not had and
would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect, each of the Partnership and its Subsidiaries has fulfilled and performed all its
obligations with respect to such rights-of-way which are required to be fulfilled or performed as of the date of this Agreement (subject to all applicable waivers, modifications, grace periods and
extensions) and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any
such rights-of-way, except for rights reserved to, or vested in, any municipality or other Governmental Authority or any railroad by the terms of any right, power, franchise, grant, license, permit,
or by any other provision of any applicable Law, to terminate or to require annual or other periodic payments as a condition to the continuance of such right.
Section 4.15
Intellectual Property.
Except as has not had and would not reasonably be expected
to have, individually or in the aggregate, a Partnership Material Adverse Effect, the Partnership or an
Affiliate of the Partnership (including, solely for purposes of this
Section 4.15
, Parent and its Subsidiaries) owns, or is licensed or otherwise
possesses adequate rights to use, all material trademarks, trade names, service marks, service names, mark registrations, logos, assumed names, domain names, registered and unregistered copyrights,
patents or applications and registrations, and trade secrets (collectively, the "
Partnership Intellectual Property
") used in their respective businesses
as currently conducted. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect, (a) there are no pending or
threatened in writing claims by any Person alleging infringement or misappropriation by the Partnership or any of its Subsidiaries of such Person's intellectual property, (b) the conduct of the
business of the Partnership and its Subsidiaries does not infringe or misappropriate any intellectual property rights of any Person, (c) neither the Partnership nor any of its Subsidiaries has
made any claim of a violation or infringement, or misappropriation by others of its rights to or in connection with the Partnership Intellectual Property and (d) no Person is infringing or
misappropriating any Partnership Intellectual Property.
Section 4.16
Opinion of Financial Advisor.
The Conflicts Committee has received the opinion of
Evercore Group L.L.C. (the "
Partnership Financial Advisor
") to
the effect that, as of the date of such opinion, and based upon and subject to the assumptions, qualifications, limitations and other matters set forth therein, the Exchange Ratio is fair, from a
financial point of view, to the Partnership Unaffiliated Unitholders.
Section 4.17
Brokers and Other Advisors.
Except for the Partnership Financial Advisor, the fees
and expenses of which will be paid by the Partnership, no broker, investment banker or financial
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advisor
is entitled to any broker's, finder's or financial advisor's fee or commission, or the reimbursement of expenses, in connection with the Merger or the other transactions contemplated by this
Agreement based on arrangements made by or on behalf of the Conflicts Committee. The Partnership has made available to Parent a correct and complete copy of the Partnership's engagement letter with
the Partnership Financial Advisor, which letter describes all fees payable to the Partnership Financial Advisor, in connection with the transactions contemplated herby and all agreements under which
any such fees or any expenses are payable and all indemnification and other agreements with the Partnership Financial Advisor, entered into in connection with the transactions contemplated hereby.
Section 4.18
Insurance.
Except as would not, individually or in the aggregate, have a
Partnership Material Adverse Effect, (a) the businesses and assets of the Partnership and its
Subsidiaries are covered by, and insured under, insurance policies underwritten by reputable insurers that include coverages and related limits and deductibles that are customary in the natural gas
gathering, processing, treating, transportation and storage industries and natural gas liquids marketing industry, (b) all such insurance policies are in full force and effect and all premiums
due and payable on such policies have been paid and (c) no notice of cancellation of, material premium increase of, or indication of an intention not to renew, any such insurance policy has
been received by the Partnership or any of its Subsidiaries other than in the ordinary course of business.
Section 4.19
Investment Company Act.
The Partnership is not, nor immediately after the Closing
will be, subject to regulation under the Investment Company Act of 1940, as amended.
Section 4.20
No Other Representations or Warranties.
Except for the representations and
warranties set forth in this
Article IV
, neither the Partnership nor any
other Person makes or has made any express or implied representation or warranty with respect to the Partnership or with respect to any other information provided to Parent or Merger Sub in connection
with the Merger or the other transactions contemplated by this Agreement. Each of Parent and Merger Sub acknowledges and agrees that, without limiting the generality of the foregoing, neither the
Partnership nor any other Person will have or be subject to any liability or other obligation to Parent, Merger Sub or any other Person resulting from the distribution to Parent or Merger Sub
(including their respective Representatives), or Parent's or Merger Sub's (or such Representatives') use of, any such information, including any information, documents, projections, forecasts or other
materials made available to Parent or Merger Sub in expectation of the Merger, unless any such information is the subject of an express representation or warranty set forth in this
Article IV
.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as disclosed in (a) the Parent SEC Documents filed or publicly furnished with the SEC on or after December 31, 2016, and
prior to the date of this Agreement (but excluding any disclosure contained in any such Parent SEC Documents under the heading "Risk Factors" or "Cautionary Statement about Forward-Looking Statements"
or similar heading (other than any factual information contained within such headings, disclosure or statements)), or (b) the disclosure letter delivered by Parent to the Partnership (the
"
Parent Disclosure Schedule
") prior to the execution of this
Agreement (
provided
, that (i) disclosure in any section of such Parent Disclosure Schedule shall be deemed to be disclosed with respect to any
other section of this Agreement to the extent that it is reasonably apparent on the face of such disclosure that it is applicable to such other section notwithstanding the omission of a reference or
cross reference thereto and (ii) the mere inclusion of an item in such Parent Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission that such item
represents a material exception or material fact, event or circumstance or that such item
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has
had, would have or would reasonably be expected to have a Parent Material Adverse Effect), Parent represents and warrants to the Partnership as follows:
Section 5.1
Organization, Standing and Corporate Power.
(a) Each
of Parent and its Subsidiaries is a legal entity duly organized, validly existing and in good standing under the applicable Laws of the jurisdiction in which it is
incorporated, formed or organized, as applicable, and has all requisite partnership, corporate, limited liability company or other applicable entity power and authority necessary to own or lease all
of its properties and assets and to carry on its business as it is now being conducted, except where the failure to have such power or authority has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Parent ("
Parent Material Adverse Effect
").
(b) Each
of Parent and its Subsidiaries is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified
or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(c) All
the outstanding partnership interests, limited liability company interests, shares of capital stock of, or other equity interests in, each material Subsidiary of
Parent that are owned directly or indirectly by Parent have been duly authorized and validly issued in accordance with the Organizational Documents of such entity (in each case as in effect on the
date of this Agreement and on the Closing Date) and are fully paid (in the case of an interest in a limited partnership or limited liability company, to the extent required under the Organizational
Documents of such entity) and nonassessable (to the extent such Subsidiary is a corporate entity) and are owned free and clear of all Liens.
(d) Parent
has made available to the Partnership correct and complete copies of its Organizational Documents, and correct and complete copies of the Organizational Documents
of each of its material Subsidiaries, in each case as amended to the date of this Agreement. All such Organizational Documents are in full force and effect and Parent is not in violation of any of
their provisions.
Section 5.2
Capitalization.
(a) As
of the date of this Agreement, the authorized equity interests of Parent consist of 50,000,000 shares of preferred stock, par value $0.01 per share (the
"
Parent Preferred Stock
"), and 250,000,000 Parent Shares. As of November 30, 2017, there were (i) 76,863,541 Parent Shares issued and
outstanding, (ii) 5,891,667 Parent Shares held in treasury, (iii) no shares of Parent Preferred Stock issued and outstanding, (iv) no shares of Parent Preferred Stock held in
treasury, (v) 1,734,664 Parent Shares subject to outstanding awards granted under Parent's equity plans (assuming any applicable performance goals are attained at maximum level), and
(vi) 6,425,138 Parent Shares reserved for issuance in connection with future grants of awards under Parent's equity plans. From November 30, 2017 until the date of this Agreement, no
additional equity interests of Parent have been issued, other than Parent Shares issued in the ordinary course of business in connection with or pursuant to the Parent's equity plans. All outstanding
equity securities of Parent are, and all Parent Shares issuable pursuant to Parent's outstanding equity awards will be, when issued in accordance with the respective terms thereof, will be, duly
authorized, validly issued, fully paid and nonassessable and free of preemptive rights.
(b) As
of November 30, 2017, except as set forth above in this
Section 5.2
and set forth in Parent's equity
plans or grant documents issued thereunder, (i) there are no partnership interests, limited liability company interests or other equity securities of Parent issued or authorized and reserved
for issuance, (ii) there are no outstanding options, profits interest units, phantom units, restricted units, unit appreciation rights, warrants, preemptive rights, subscriptions, calls or
other Rights, convertible
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securities,
exchangeable securities, agreements or commitments of any character obligating Parent to issue, transfer or sell any equity interest of Parent or any securities convertible into or
exchangeable for such equity interests, or any commitment to authorize, issue or sell the same or any such equity securities, except pursuant to this Agreement, and (iii) there are no
contractual obligations of Parent to repurchase, redeem or otherwise acquire any other equity interest in Parent or any such securities or agreements listed in
clause (ii)
of this sentence. Since
November 30, 2017, there have been no partnership interests, limited liability company interests,
other equity securities, options, profits interest units, phantom units, restricted units, unit appreciation rights, warrants, preemptive rights, subscriptions, calls or other Rights, convertible
securities, exchangeable securities, agreements or
commitments, or contractual obligations of the types described in the foregoing sentence issued or entered into by or on behalf of Parent.
(c) Neither
Parent nor any of its Subsidiaries has outstanding bonds, debentures, notes or other indebtedness, the holders of which have the right to vote (or which are
convertible or exchangeable into or exercisable for securities having the right to vote) with Parent Stockholders or any other equity interest on any matter.
(d) There
are no voting trusts or other agreements or understandings to which Parent or any of its Subsidiaries is a party with respect to the voting or registration of
capital stock or other equity interest of Parent.
(e) When
issued pursuant to the terms of this Agreement, all Parent Shares constituting any part of the Merger Consideration will be duly authorized, validly issued, fully
paid and nonassessable and free of preemptive rights.
Section 5.3
Authority; Noncontravention; Voting Requirements.
(a) Each
of Parent and Merger Sub has all necessary entity power and authority to execute and deliver this Agreement and, subject to obtaining the Parent Stockholder
Approval in the case of Parent, to consummate the transactions contemplated by this Agreement. The execution, delivery and performance by Parent and Merger Sub of this Agreement, and the consummation
of the transactions contemplated by this Agreement, have been duly authorized and approved by each of Merger Sub, NewCo as the sole member of Merger Sub and Parent, and no other entity action on the
part of Parent or Merger Sub is necessary to authorize the execution, delivery and performance by Parent or Merger Sub of this Agreement and, except for obtaining the Parent Stockholder Approval in
the case of Parent, the consummation of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by each of Parent and Merger Sub and, assuming due
authorization, execution and delivery of this Agreement by the other parties hereto constitutes a legal, valid and binding obligation of Parent and Merger Sub, enforceable against each of them in
accordance with its terms, except as such enforcement may be limited by the Enforceability Exceptions. The Parent Board has taken all necessary action so that any takeover, anti-takeover, moratorium,
"fair price," "control share" or similar Law applicable to Parent or any of its Subsidiaries (including the restrictions on "business combinations" with an "interested stockholder" (each as defined in
Section 203 of the DGCL) under Section 203 of the DGCL) ("
Takeover Laws
") do not, and will not, apply to this Agreement and the
consummation of the transactions contemplated this Agreement, including the Merger and the Parent Stock Issuance.
(b) Neither
the execution and delivery of this Agreement by Parent and Merger Sub, nor the consummation by Parent and Merger Sub of the transactions contemplated by this
Agreement, nor compliance by Parent and Merger Sub with any of the terms or provisions of this Agreement, will (i) assuming the Parent Stockholder Approval is obtained, contravene, conflict
with, violate any provision of, result in any breach of, or require the consent of any Person under, the terms, conditions or provisions of the Organizational Documents of Parent or any of Parent's
material Subsidiaries, (ii) assuming the authorizations, consents and approvals referred to in
Section 5.4
and the Parent
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Stockholder
Approval are obtained and the filings referred to in
Section 5.4
are made, (A) contravene, violate or conflict with any Law,
judgment, writ or injunction of any Governmental Authority applicable to Parent or any of its Subsidiaries or any of their respective properties or assets, or (B) violate, conflict with, result
in the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of
termination or cancellation under, give rise to a right to receive a change of control payment (or similar payment) under, accelerate the performance required by, or result in the creation of any Lien
upon any of the respective properties or assets of, Parent or any of its Subsidiaries under, any of the terms, conditions or provisions of any Contract or Parent Permit to which Parent or any of its
Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound or affected or (iii) result in the exercisability of any right to purchase or acquire any
material asset of Parent or any of its Subsidiaries, except, in the case of
clause (ii)
of this sentence, for such violations, conflicts, losses,
defaults, terminations, cancellations, accelerations or Liens that have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(c) The
affirmative vote of a majority of votes cast at the Parent Stockholder Meeting at which a quorum is present or any adjournment or postponement thereof (the
"
Parent Stockholder Approval
") is the only vote of the holders of any class or series of the capital stock of Parent necessary to approve the Parent
Stock Issuance and approve and consummate the transactions contemplated by this Agreement.
(d) The
Parent Board, at a meeting duly called and held, has unanimously (i) determined that it is in the best interests of Parent and the Parent Stockholders, and
declared it advisable, to enter into this Agreement, (ii) approved the execution, delivery and performance of this Agreement and the transactions contemplated by this Agreement, including the
Parent Stock Issuance and (iii) resolved to submit the Parent Stock Issuance to a vote of the Parent Stockholders and recommend approval of the Parent Stock Issuance by the Parent Stockholders.
Section 5.4
Governmental Approvals.
Except for (a) filings required under, and compliance
with other applicable requirements of, the Exchange Act, the Securities Act, including the filing of
the Registration Statement and the Joint Proxy Statement with the SEC, and applicable state securities and "blue sky" laws, (b) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, (c) filings required under, and compliance with other applicable requirements of, applicable Antitrust Laws or (d) any consents, authorizations,
approvals, filings or exemptions in connection with compliance with the rules of the NYSE, no consents or approvals of, or filings, declarations or registrations with, any Governmental Authority are
necessary for the execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated by this Agreement, other
than such other consents, approvals, filings, declarations or registrations that are not required to be obtained or made prior to consummation of such transactions or, if not obtained, made or given,
would not, individually or in the aggregate, reasonably be expected to result in a Parent Material Adverse Effect.
Section 5.5
Parent SEC Documents; Undisclosed Liabilities; Internal Controls
.
(a) Parent
and its Subsidiaries have filed or furnished all reports, schedules, forms, certifications, prospectuses, and registration, proxy and other statements required to
be filed or furnished by them with the SEC since December 31, 2014 (collectively and together with all documents filed or publicly furnished on a voluntary basis on Form 8-K, and in each
case including all exhibits and schedules thereto and documents incorporated by reference therein, the "
Parent SEC Documents
"). The Parent SEC
Documents, as of their respective effective dates (in the case of the Parent SEC Documents that are registration statements filed pursuant to the requirements of the Securities Act) and as of their
respective SEC filing dates (in the case of all other Parent SEC Documents), or, if amended, as finally
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amended
prior to the date of this Agreement, complied in all material respects with the requirements of the Exchange Act, the Securities Act and the Sarbanes-Oxley Act, as the case may be, applicable
to such Parent SEC Documents, and none of the Parent SEC Documents as of such respective dates contained any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(b) The
consolidated financial statements of Parent included in the Parent SEC Documents as of their respective dates (if amended, as of the date of the last such amendment)
comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited quarterly statements, as indicated in the notes thereto) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto)
and fairly present in all material respects the consolidated financial position of Parent and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations,
cash flows and changes in stockholders' equity for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end audit adjustments, none of which has been or will
be, individually or in the aggregate, material to Parent and its consolidated Subsidiaries, taken as a whole).
(c) Except
(i) as reflected or otherwise reserved against on the balance sheet of Parent and its consolidated subsidiaries (including the notes thereto) included in
the Parent SEC Documents filed by Parent and publicly available prior to the date of this Agreement, (ii) for liabilities and obligations incurred since the Balance Sheet Date in the ordinary
course of business consistent with past practice and (iii) for liabilities and obligations incurred under or in accordance with this Agreement or in connection with the transactions
contemplated by this Agreement, neither Parent nor any of its Subsidiaries has any liabilities or obligations of any nature (whether or not accrued or contingent), that would be required to be
reflected or reserved against on a consolidated balance sheet of Parent prepared in accordance with GAAP or the notes thereto, other than as have not and would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
(d) No
Parent Subsidiary is required to file reports, forms or other documents with the SEC pursuant to the Exchange Act. There are no outstanding comments from, or
unresolved issues raised by, the staff of the SEC with respect to the Parent SEC Documents. No enforcement action has been initiated against Parent relating to disclosures contained or omitted from
any Parent SEC Document.
(e) Parent
makes and keeps books, records, and accounts and has devised and maintains a system of internal controls, in each case, in all material respects, as required
pursuant to Section 13(b)(2) under the Exchange Act. Parent has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are
defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act and the applicable listing standards of
the NYSE. Such disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by Parent in the reports that it files under the Exchange Act
are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to its
management as appropriate to allow timely decisions regarding required disclosure. Parent's principal executive officer and its principal financial officer have disclosed, based on their most recent
evaluation, to Parent's auditors and the audit committee of the Parent Board (x) all significant deficiencies in the designation or operation of internal controls which could adversely affect
Parent's ability to record, process, summarize and report financial data and have identified for Parent's auditors any material weakness in internal controls and (y) any fraud, whether or not
material, that involves management or other employees who have a significant role in Parent's internal controls.
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(f) Since
January 1, 2015, the principal executive officer and principal financial officer of Parent have made all certifications (without qualification or exceptions
to the matters certified, except as to knowledge) required by the Sarbanes-Oxley Act, and the statements contained in any such certifications are complete and correct, and none of such entities or its
officers have received notice from any Governmental Authority questioning or challenging the accuracy, completeness, form or manner of filing or submission of such certification. As of the date of
this Agreement, and except as disclosed in a Parent SEC Document filed with the SEC prior to the date of this Agreement, none of such entities has any knowledge of any material weaknesses in the
design or operation of such internal controls over financial reporting.
Section 5.6
Absence of Certain Changes or Events.
Since the Balance Sheet Date, there has not
occurred any change, effect, event or occurrence that, individually or in the aggregate, has resulted, or would
reasonably be likely to result, in a Parent Material Adverse Effect.
Section 5.7
Legal Proceedings.
There are no Proceedings pending or, to the knowledge of Parent,
threatened in writing with respect to Parent or any of its Subsidiaries or Proceedings pending
or, to the knowledge of Parent, threatened in writing with respect to any of their respective properties or assets at law or in equity before any Governmental Authority, and there are no orders,
judgments, decrees or similar rulings of any Governmental Authority against Parent or any of its Subsidiaries, in each case except for those that have not had and would not reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 5.8
Compliance With Laws; Permits
.
(a) Parent
and its Subsidiaries are, and since the later of December 31, 2013 and their respective dates of incorporation, formation or organization, have been, in
compliance with and are not in default under or in violation of any applicable Law, except where such non-compliance, default or violation has not had and would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
(b) Parent
and its Subsidiaries are in possession of all Permits necessary for Parent and its Subsidiaries to own, lease and operate their properties and assets or to carry
on their businesses as they are now being conducted (collectively, the "
Parent Permits
"), except where the failure to have any of the Parent Permits has
not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. All Parent Permits are in full force and effect, except where the failure to
be in full force and effect has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. No suspension or cancellation of any of the
Parent Permits is pending or, to the knowledge of Parent, threatened in writing, except where such suspension or cancellation has not had and would not reasonably be expected to have, individually or
in the aggregate, a Parent Material Adverse Effect. Parent and its Subsidiaries are not, and since December 31, 2013 have not been, in violation or breach of, or default under, any Parent
Permit, except where such violation, breach or default has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. As of the date of
this Agreement, no event or condition has occurred or exists which would result in a violation of, breach, default or loss of a benefit under, or acceleration of an obligation of Parent or any of its
Subsidiaries under, any Parent Permit, or has caused (or would cause) an applicable Governmental Authority to fail or refuse to issue, renew or extend, any Parent Permit (in each case, with or without
notice or lapse of time or both), except for violations, breaches, defaults, losses, accelerations or failures that have not had and would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect. The Parent Permits will not be subject to suspension, modification, revocation or non-renewal as a result of the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby, except, in each case, as would not, individually or in the aggregate, have a Parent Material Adverse Effect. No Proceeding is pending or,
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to
the knowledge of Parent, threatened with respect to any alleged failure by Parent or any of its Subsidiaries to have any material Permit necessary for the operation of any asset or the conduct of
their businesses or to be in compliance therewith, except, in each case, as would not, individually or in the aggregate, have a Parent Material Adverse Effect.
(c) Without
limiting the generality of
Section 5.8(a)
, none of Parent, its Subsidiaries, nor, to the knowledge of
Parent, any consultant, agent or representative of any of the foregoing (in their respective capacities as such), (i) has violated the U.S. Foreign Corrupt Practices Act, and any other U.S. and
foreign anti-corruption Laws that are applicable to Parent or its Subsidiaries; (ii) has, to the knowledge of Parent, been given written notice by any Governmental Authority of any facts which,
if true, would constitute a violation of the U.S. Foreign Corrupt Practices Act or any other U.S. or foreign anti-corruption Laws by any such person; and (iii) to the knowledge of Parent, is
being (and has not been) investigated by any Governmental Authority except, in each case of the foregoing clauses (i) through (iii), as would not have, individually or in the aggregate, a
Parent Material Adverse Effect.
Section 5.9
Information Supplied.
Subject to the accuracy of the representations and warranties
of the Partnership, the General Partner and the Managing GP, set forth in
Section 4.9
, none of the information supplied (or to be supplied) in writing by or on behalf of Parent specifically
for inclusion or
incorporation by reference in (a) the Registration Statement will, at the time the Registration Statement, or any amendment or supplement thereto, is filed with the SEC or at the time it
becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
not misleading and (b) the Joint Proxy Statement will, on the date it is first mailed to Limited Partners and the Parent Stockholders, and at the time of the Partnership Unitholder Meeting and
the Parent Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading. The Joint Proxy Statement will comply as to form in all material respects with the applicable requirements of the Securities Act or Exchange Act, as
applicable. Notwithstanding the foregoing, Parent makes no representation or warranty with respect to information supplied by or on behalf of the Partnership for inclusion or incorporation by
reference in any of the foregoing documents.
Section 5.10
Tax Matters
.
Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect: (a) all Tax Returns that were required to
be filed by or with respect to Parent or any of its Subsidiaries have been duly and timely filed (taking into account any extension of time within which to file) and all such Tax Returns are complete
and accurate, (b) all Taxes owed by Parent or any of its Subsidiaries that are or have become due have been timely paid in full or an adequate reserve for the payment of such Taxes has been
established on the balance sheet of Parent and its consolidated subsidiaries as of the Balance Sheet Date in the Parent SEC Documents, (c) there are no Liens on any of the assets of the Parent
or any of its Subsidiaries that arose in connection with any failure (or alleged failure) to pay any Taxes on any of such assets (except in all cases for Liens permissible under or not prohibited by
any applicable material loan agreements and indentures (together with all related mortgages, deeds of trust and other security agreements)), (d) there is no claim against Parent or any of its
Subsidiaries for any Taxes, and no assessment, deficiency, or adjustment has been asserted, proposed, or threatened with respect to any Taxes or Tax Returns of or with respect to Parent or any of its
Subsidiaries, and (e) Parent has not constituted either a "distributing corporation" or a "controlled corporation" in a distribution of stock intended to qualify for tax-free treatment under
Section 355 of the Code in the two years prior to the date of this Agreement or in a distribution which could otherwise constitute part of a "plan" or "series of related transactions" (within
the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this Agreement.
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Section 5.11
Contracts.
(a) Except
for this Agreement or as filed or publicly furnished with the SEC prior to the date of this Agreement, neither Parent nor any of its Subsidiaries is a party to or
bound by, as of the date of this Agreement, any Contract (whether written or oral) which is a "material contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC) to Parent (each Contract that is described in this
Section 5.11(a)
being a "
Parent Material
Contract
").
(b) Except
as has not had and would not reasonably be expected to have, either individually or in the aggregate, a Parent Material Adverse Effect, (i) each Parent
Material Contract is legal, valid and binding on and enforceable against Parent and its Subsidiaries, as applicable, except as such enforcement may be limited by the Enforceability Exceptions, and is
in full force and effect, (ii) Parent and each of its Subsidiaries has in all respects performed all obligations required to be performed by it to date under each Parent Material Contract,
(iii) neither Parent nor any of its Subsidiaries has received written notice of or knows of, the existence of any event or condition which constitutes, or, after notice or lapse of time or
both, will constitute, a breach or default on the part of Parent or any of its Subsidiaries or permit termination, modification or acceleration, under any such Parent Material Contract and
(iv) as of the date of this Agreement no other party to any Parent Material Contract is in default thereunder, nor does any condition exist that with notice or lapse of time or both would
constitute a default by any such other party thereunder, or permit termination, modification or acceleration under any Parent Material Contract other than in accordance with its terms nor has any
other party repudiated any provision of the Parent Material Contract.
Section 5.12
Parent Benefit Plans; Labor Matters
.
(a) Each
Parent Benefit Plan has been established, maintained and administered in compliance with its terms and with applicable Laws, including ERISA and the Code, except
for such non-compliance which has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Except as has not had and would not
reasonably be expected to have a Parent Material Adverse Effect, (i) no Parent Benefit Plan is or has been within the past six years a (A) multiemployer plan (within the meaning of
Section 3(37) of ERISA), (B) pension plan subject to Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code, (C) "multiple employer plan" within the
meaning of ERISA or an employee benefit plan subject to Section 413(c) of the Code, or (D) a "multiple employer welfare arrangement" within the meaning of Section 3(40) of ERISA;
(ii) neither Parent nor its Subsidiaries (excluding the Partnership and its Subsidiaries) has or could reasonably be expected to incur any liability arising under Title IV of ERISA or
Section 4980B of the Code by reason of its affiliation with any of their respective ERISA Affiliates; and (iii) neither Parent nor its Subsidiaries (excluding the Partnership and its
Subsidiaries) has any liability arising under Title IV of ERISA or Section 4980B of the Code by reason of its affiliation with any of its ERISA Affiliates.
(b) Each
Parent Benefit Plan intended to be "qualified" within the meaning of Section 401(a) of the Code has received a favorable determination or opinion letter as
to such qualification from the Internal Revenue Service, and, to the knowledge of Parent, no event has occurred that could reasonably be expected to cause the loss of any such qualification, except
where such loss of qualification, individually or in the aggregate, would not have a Parent Material Adverse Effect.
(c) Except
as would not reasonably be expected to have a Parent Material Adverse Effect, no Proceeding, including any audit or investigation by any Governmental Authority,
is pending or, to the knowledge of Parent, threatened with respect to any Parent Benefit Plan (other than routine claims for benefits and non-material appeals of such claims).
(d) Neither
Parent nor its Subsidiaries (excluding the Partnership and its Subsidiaries) is not, and has not at any time been, bound by or a party to any collective
bargaining agreement or similar
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contract
with any labor union or organization. Neither Parent nor its Subsidiaries (excluding the Partnership and its Subsidiaries) is currently engaged in any negotiation with any labor union or
organization and, to the knowledge of Parent, there is no union representation question or certification petition pending before the National Labor Relations Board or any other similar Governmental
Authority relating to Parent or its Subsidiaries (excluding the Partnership and its Subsidiaries). Except as has not had and would not reasonably be expected to have a Parent Material Adverse Effect,
(i) no organized work stoppage, labor strike, labor dispute, lockout or slowdown against Parent is pending or, to the knowledge of Parent, threatened against or involving Parent or its
Subsidiaries (excluding the Partnership and its Subsidiaries; and (ii) neither Parent nor its Subsidiaries (excluding the Partnership and its Subsidiaries) has received written notice of any
unfair labor practice complaint and, to the
knowledge of Parent, no such complaints against Parent or such Subsidiaries are pending before the National Labor Relations Board or other similar Governmental Authority.
Section 5.13
Environmental Matters.
Except as has not had and would not reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect: (a) each of Parent
and its Subsidiaries is and has been in compliance with all applicable Environmental Laws, which compliance includes obtaining, maintaining and complying with all Parent Permits required to be
obtained to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted pursuant to applicable Environmental Laws
("
Parent Environmental Permits
"); (b) all Parent Environmental Permits are in full force and effect and, where applicable, applications for
renewal or amendment thereof have been timely filed; (c) no suspension or cancellation of any Parent Environmental Permit is pending or, to the knowledge of Parent, threatened in writing;
(d) there has been no Release or arrangement for disposal of any Hazardous Substance by Parent or any of its Subsidiaries or, to the knowledge of Parent, by any other Person that would
reasonably be expected to give rise to Parent or any of its Subsidiaries incurring any liability, remedial obligation, or corrective action requirement under applicable Environmental Laws;
(e) there are no Proceedings pending or, to the knowledge of Parent, threatened in writing against Parent or any of its Subsidiaries or involving any real property currently or, to the
knowledge of Parent, formerly owned, operated or leased by or for Parent or any of its Subsidiaries alleging noncompliance with, or liability under, any applicable Environmental Law; (f) to the
knowledge of Parent, no Hazardous Substance has been disposed of, Released or transported on, to or from any properties while owned or operated by Parent or any of its Subsidiaries or as a result of
any operations or activities of Parent or any of its Subsidiaries in violation of any applicable Environmental Law or in a manner that would reasonably be expected to give rise to Parent or any of its
Subsidiaries incurring any liability, remedial obligation, or corrective action requirement under applicable Environmental Laws; and (g) neither the Parent nor any of its Subsidiaries has
either, expressly or by operation of Law, assumed or undertaken any liability, including any obligation for remedial or corrective action, of any other Person relating to Environmental Laws, other
than in the ordinary course of its business.
Section 5.14
Property
.
(a) Except
as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, Parent or a Subsidiary of Parent
owns and has good and valid title to all of its owned real property and good and valid title to all its owned personal property, and has good and valid leasehold interests in all of its leased real
properties (other than hydrocarbon interests) free and clear of all Liens, in each case, to an extent sufficient to conduct their respective businesses as currently conducted (except in all cases for
Liens permissible under or not prohibited by any applicable material loan agreements and indentures (together with all related mortgages, deeds of trust and other security agreements)). Except as has
not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, all leases under which Parent or any of its Subsidiaries lease any real or
personal property are valid and effective against Parent or any of its Subsidiaries and the counterparties thereto, in accordance with their respective terms and
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there
is not, under any of such leases, any existing material default by Parent or any of its Subsidiaries the counterparties thereto, or any event which, with notice or lapse of time or both, would
become a material default by Parent or any of its Subsidiaries or the counterparties thereto.
(b) Parent
and its Subsidiaries have such rights-of-way as are sufficient to conduct their businesses in all respects as currently conducted, except such rights-of-way that,
if not obtained (or which, if obtained, if the same were to expire or be revoked or terminated), would not, individually or in the aggregate, have a Parent Material Adverse Effect. Except as has not
had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, each of Parent and its Subsidiaries has fulfilled and performed all its
obligations with respect to such rights-of-way which are required to be fulfilled or performed as of the date of this Agreement (subject to all applicable waivers, modifications, grace periods and
extensions) and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any
such rights-of-way, except for rights reserved to, or vested in, any municipality or other Governmental Authority or any railroad by the terms of any right, power, franchise, grant, license, permit,
or by any other provision of any applicable Law, to terminate or to require annual or other periodic payments as a condition to the continuance of such right.
Section 5.15
Intellectual Property.
Except as has not had and would not reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect, Parent or a Subsidiary of
Parent (including, solely for purposes of this
Section 5.15
, the Partnership and its Subsidiaries) owns, or is licensed or otherwise possesses
adequate rights to use, all material trademarks, trade names, service marks, service names, mark registrations, logos, assumed names, domain names, registered and unregistered copyrights, patents or
applications and registrations, and trade secrets (collectively, the "
Parent Intellectual Property
") used in their respective businesses as currently
conducted. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, (a) there are no pending or threatened in
writing claims by any Person alleging infringement or misappropriation by Parent or any of its Subsidiaries of such Person's intellectual property, (b) the conduct of the business of Parent and
its Subsidiaries does not infringe or misappropriate any intellectual property rights of any Person, (c) neither Parent nor any of its Subsidiaries has made any claim of a violation or
infringement, or misappropriation by others of its rights to or in connection with the Parent Intellectual Property, and (d) no Person is infringing or misappropriating any Parent Intellectual
Property.
Section 5.16
Opinion of Parent Financial Advisor.
The Parent Board has received the opinion of
Citigroup Global Markets Inc. (the "
Parent Financial Advisor
")
to the effect that, as of the date of such opinion and based on and subject to the factors, qualifications, limitations, assumptions and other matters set forth therein, the Exchange Ratio provided
for in this Agreement is fair, from a financial point of view, to Parent.
Section 5.17
Brokers and Other Advisors.
Except for the Parent Financial Advisor, the fees and
expenses of which will be paid by Parent, no broker, investment banker or financial advisor is entitled to
any broker's, finder's or financial advisor's fee or commission, or the reimbursement of expenses, in connection with the Merger or the other transactions contemplated by this Agreement based on
arrangements made by or on behalf of Parent or any of its Subsidiaries.
Section 5.18
Insurance.
Except as would not, individually or in the aggregate, have a Parent
Material Adverse Effect, (a) the businesses and assets of Parent and its Subsidiaries
are covered by, and insured under, insurance policies underwritten by reputable insurers that include coverages and related limits and deductibles that are customary in the natural gas gathering,
processing, treating, transportation and storage industries and natural gas liquids marketing industry, (b) all such insurance policies are in full force and effect and all premiums due and
payable on such policies have been paid, and (c) no notice of cancellation of, material premium increase of, or indication of an intention not to renew, any such insurance policy has been
received by Parent or any of its Subsidiaries other than in the ordinary course of business.
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Section 5.19
Investment Company Act.
Parent is not, nor immediately after the Closing will be,
subject to regulation under the Investment Company Act of 1940, as amended.
Section 5.20
Ownership of Common Units.
Parent and its Subsidiaries, taken together, are the
beneficial owners of 29,064,637 Common Units, which represent all Common Units held of record or beneficially
by Parent or any of its Subsidiaries as of the date of this Agreement.
Section 5.21
No Other Representations or Warranties.
Except for the representations and
warranties set forth in this
Article V
, neither Parent nor any other
Person makes or has made any express or implied representation or warranty with respect to Parent and Merger Sub or with respect to any other information provided to the Partnership in connection with
the Merger or the other transactions contemplated by this Agreement. Without limiting the generality of the foregoing, neither Parent nor any other Person will have or be subject to any liability or
other obligation to the Partnership, the General Partner or the Managing GP or any other Person resulting from the distribution to the Partnership (including their Representatives), or the
Partnership's, the General Partner's or the Managing GP's (or such Representatives') use of, any such information, including any information, documents, projections, forecasts or other
materials made available to the Partnership, the General Partner and the Managing GP in expectation of the Merger, unless any such information is the subject of an express representation or
warranty set forth in this
Article V
.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
Section 6.1
Preparation of the Registration Statement and the Joint Proxy Statement; Equityholder Meetings.
(a) As
promptly as practicable following the date of this Agreement, (i) the Partnership and Parent shall jointly prepare and file with the SEC the Joint Proxy
Statement, and (ii) the Partnership and Parent shall jointly prepare and Parent shall file with the SEC the Registration Statement, in which the Joint Proxy Statement will be included as a
prospectus. Each of the Partnership and Parent shall use its reasonable best efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after
such filing and keep the Registration Statement effective for so long as necessary to consummate the transactions contemplated by this Agreement. Each of the Partnership and Parent shall use its
reasonable best efforts to cause the Joint Proxy Statement to be mailed to the Limited Partners and the Parent Stockholders as promptly as practicable after the Registration Statement is declared
effective under the Securities Act. No filing of, or amendment or supplement to, the Registration Statement or the Joint Proxy Statement will be made by Parent without providing the Partnership a
reasonable opportunity to review and comment thereon. If at any time prior to the Effective Time any information relating to the Partnership or Parent, or any of their respective Affiliates, directors
or officers, is discovered by the Partnership or Parent that should be set forth in an amendment or supplement to the Registration Statement or the Joint Proxy Statement, so that any such document
would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading, the party that discovers such information shall promptly notify the other parties hereto and an appropriate amendment or supplement describing such information shall be promptly filed with
the SEC and, to the extent required by applicable Laws, disseminated to the Limited Partners and the Parent Stockholders.
The
parties shall notify each other promptly of the receipt of any comments from the SEC or the staff of the SEC and of any request by the SEC or the staff of the SEC for amendments or
supplements to the Joint Proxy Statement or the Registration Statement or for additional information and shall supply each other with copies of (i) all correspondence between it or any of its
Representatives, on the one hand, and the SEC or the staff of the SEC, on the other hand, with
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respect
to the Joint Proxy Statement, the Registration Statement or the transactions contemplated by this Agreement and (ii) all orders of the SEC relating to the Registration Statement.
(b) Subject
to
Section 6.1(d)
, the Partnership shall, as promptly as practicable after the Registration Statement is
declared effective under the Securities Act, establish a record date for, duly call, give notice of, convene and hold a special meeting of the Limited Partners (the
"
Partnership Unitholder Meeting
") (which Partnership Unitholder Meeting date shall be no later than thirty-five (35) days after the date that the
Registration Statement is declared effective under the Securities Act) for the purpose of obtaining the Partnership Unitholder Approval. Subject to
Section 6.3
, the Partnership shall, through the
Managing GP Board and the Conflicts Committee, recommend to the Limited Partners approval
of this Agreement (collectively, the "
Partnership Board Recommendation
") and use the Partnership's reasonable best efforts to obtain from the Limited
Partners the Partnership Unitholder Approval. The Joint Proxy Statement shall include, subject to
Section 6.3
, the Partnership Board
Recommendation. Without limiting the generality of the foregoing, the Partnership's obligations pursuant to the first sentence of this
Section 6.1(b)
shall not be affected by the withdrawal or
modification by the Conflicts Committee or the Managing GP Board of the
Partnership Board Recommendation or any other action by the Conflicts Committee or the Managing GP Board with respect to this Agreement or the transactions contemplated by this Agreement.
Notwithstanding anything in this Agreement to the contrary, the Partnership may postpone or adjourn the Partnership Unitholder Meeting (A) to solicit additional proxies for the purpose of
obtaining the Partnership Unitholder Approval, (B) for the absence of quorum, (C) to the extent reasonably necessary to ensure that any supplement or amendment to the Joint Proxy
Statement that the Conflicts Committee has determined after consultation with outside legal counsel is necessary under applicable Laws is provided to the Limited Partners within the minimum amount of
time reasonably practicable prior to the Partnership Unitholder Meeting, and (D) if the Partnership has delivered any notice contemplated by
Section 6.3(b)
and the time periods contemplated by
Section 6.3(b)
have not expired;
provided
,
however
, that in each case, the Partnership shall not be
permitted to postpone or adjourn the
Partnership Unitholder Meeting for more than ten (10) Business Days later than the most recently adjourned meeting or to a date after the date that is two (2) Business Days prior to the
Outside Date. The Partnership shall adjourn the Partnership Unitholder Meeting at the request of Parent (but in no event for more than thirty (30) days from the date the Partnership Unitholder
Meeting was originally scheduled to convene) (A) to solicit additional proxies for the purpose of obtaining the Partnership Unitholder Approval or (B) for the absence of quorum. Without
the written consent of the Parent (which shall not be unreasonably withheld, delayed or conditioned), no matter shall be submitted for action at the Partnership Unitholder Meeting except the approval
of this Agreement and matters reasonably related to this Agreement.
(c) Subject
to
Section 6.1(d)
, Parent shall, as promptly as practicable after the Registration Statement is declared
effective under the Securities Act, establish a record date for, duly call, give notice of, convene and hold a special meeting of the Parent Stockholders (the "
Parent
Stockholder Meeting
") (which Parent Stockholder Meeting date shall be no later than thirty-five (35) days after the date that the Registration Statement is declared
effective under the Securities Act) for the purpose of obtaining the Parent Stockholder Approval. Parent shall include in the Joint Proxy Statement Parent's recommendation, through the Parent Board,
that the Parent Stockholders approve the Parent Stock Issuance (the "
Parent Board Recommendation
") and use Parent's reasonable best efforts to obtain
from the Parent Stockholders the Parent Stockholder Approval. The Joint Proxy Statement shall include the Parent Board Recommendation. Without limiting the generality of the foregoing, the obligations
of Parent set forth in the first sentence of this
Section 6.1(c)
shall not be affected by any action by the Parent Board with respect to this
Agreement or the transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, Parent may postpone or adjourn the Parent Stockholder Meeting (A) to
solicit additional proxies for the purpose of obtaining the Parent Stockholder Approval, (B) for the absence of quorum and (C) to the extent reasonably necessary to
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ensure
that any supplement or amendment to the Joint Proxy Statement that the Parent Board has determined after consultation with outside legal counsel is necessary under applicable Laws is provided
to Parent Stockholders within the minimum amount of time reasonably practicable prior to the Parent Stockholder Meeting;
provided
,
however
, that in each
case, Parent shall not be permitted to postpone or adjourn the Parent Stockholder Meeting for more than ten (10) Business
Days later than the most recently adjourned meeting or to a date after the date that is two (2) Business Days prior to the Outside Date. The Parent shall adjourn the Parent Stockholder Meeting
at the request of the Partnership (but in no event for more than thirty (30) days from the date the Parent Stockholder Meeting was originally scheduled to convene) (A) to solicit
additional proxies for the purpose of obtaining the Parent Stockholder Approval or (B) for the absence of quorum. Without the written consent of the Conflicts Committee (which shall not be
unreasonably withheld, delayed or conditioned), no matter shall be submitted for action at the Parent Stockholder Meeting except the approval of the Parent Stock Issuance and matters reasonably
related to the Parent Stock Issuance. Notwithstanding the foregoing, the Parent Stockholder Meeting may be combined with the Parent's 2018 annual meeting of stockholders, provided that no other
matters shall be submitted for action at such meeting other than the Parent Stock Issuance, election of the Parent's directors, the appointment of the Parent's auditors and any required stockholder
proposals, without the written consent of the Conflicts Committee (which shall not be unreasonably withheld, delayed or conditioned), and provided further that such combination does not cause the
Parent Stockholder Meeting to occur materially later than it would have occurred without such combination.
(d) The
parties shall use their reasonable best efforts to hold the Partnership Unitholder Meeting and the Parent Stockholder Meeting on the same day.
(e) Unless
this Agreement is validly terminated in accordance with
Article VIII
, the Partnership shall submit this
Agreement to the Limited Partners for approval at the Partnership Unitholder Meeting even if the Managing GP Board or the Conflicts Committee shall have effected a Partnership Adverse
Recommendation Change.
(f) Unless
this Agreement is validly terminated in accordance with
Article VIII
, Parent shall submit the Parent Stock
Issuance for approval at the Parent Stockholder Meeting.
Section 6.2
Conduct of Business.
(a) Except
(i) as expressly permitted by this Agreement, (ii) as set forth in
Section 6.2(a)
of the
Partnership Disclosure Schedule, (iii) as required by applicable Laws, (iv) as provided in any Partnership Material Contract in effect as of the date of this Agreement (including the
Partnership Agreement) or (v) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the period from the date of this Agreement
until the Effective Time, each of the Partnership, the General Partner and the Managing GP shall, and shall cause each of their respective Subsidiaries to, (A) conduct its business in
the ordinary course of business consistent with past practice, (B) use commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having
business relationship with it and retain the services of its present officers and key employees, (C) use commercially reasonable efforts to keep in full force and effect all material
Partnership Permits and all material insurance policies maintained by the Partnership and its Subsidiaries, other than changes to such policies made in the ordinary course of business, and
(D) use commercially reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all Partnership Material Contracts. Without limiting the generality
of the foregoing, except (i) as expressly permitted by this Agreement, (ii) as set forth in
Section 6.2(a)
of the Partnership
Disclosure Schedule, (iii) as required by applicable Laws, (iv) as provided in any Partnership Material Contract in effect as of the date of this Agreement (including the Partnership
Agreement) or (v) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the period from the date of this Agreement
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until
the Effective Time, the Partnership, the General Partner and the Managing GP shall not, and shall not permit any of their respective Subsidiaries to:
(i) amend
the Organizational Documents (whether by merger, consolidation, conversion or otherwise) of such entity in any manner that would reasonably be expected to prevent
or in any material respect
hinder, impede or delay the ability of the parties to satisfy any of the conditions to or the consummation of the Merger or the other transactions contemplated by this Agreement;
(ii) declare,
authorize, set aside or pay any dividend or distribution payable in cash, equity or property in respect of the Common Units, other than regular quarterly cash
distributions on the Common Units not to exceed $0.285 per Common Unit;
(iii) make
any acquisition or disposition, directly or indirectly (including by merger, consolidation, acquisition of assets, tender or exchange offer or otherwise), of any
business or any corporation, partnership, limited liability company, joint venture or other business organization or division thereof or any property or assets of any other Person, other than
acquisitions or dispositions (x) in the ordinary course of business or (y) outside the ordinary course of business the consideration for which does not exceed $25,000,000 in value in the
aggregate;
(iv) split,
combine, divide, subdivide, reverse split, reclassify, recapitalize or effect any other similar transaction with respect to any of such entity's capital stock or
other equity interests;
(v) solely
with respect to the Partnership, adopt a plan or agreement of complete or partial liquidation, dissolution or restructuring or a plan or agreement of
reorganization under any bankruptcy or similar law;
(vi) waive,
release, assign, settle or compromise any claim, action or proceeding, including any state or federal regulatory proceeding seeking damages or injunction or
other equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to result in a Partnership Material Adverse Effect; or
(vii) agree,
in writing or otherwise, to take any of the foregoing actions, or take any action or agree, in writing or otherwise, to take any action, including proposing or
undertaking any merger, consolidation or acquisition, in each case, that would reasonably be expected to prohibit, prevent or in any material respect hinder, impede or delay the ability of the parties
to satisfy any of the conditions to or the consummation of the Merger or the other transactions contemplated by this Agreement.
(b) Except
(i) as expressly permitted by this Agreement, (ii) as set forth in
Section 6.2(b)
of the
Parent Disclosure Schedule, (iii) as required by applicable Laws, (iv) as provided in any Parent Material Contract in effect as of the date of this Agreement or (v) as consented
to in writing by the Partnership (which consent shall not be unreasonably withheld, delayed or conditioned), during the period from the date of this Agreement until the Effective Time, Parent shall,
and shall cause each of its Subsidiaries to, (A) conduct its business in the ordinary course of business consistent with past practice, (B) use commercially reasonable efforts to
maintain and preserve intact its business organization and the goodwill of those having business relationship with it and retain the services of its present officers and key employees, (C) use
commercially reasonable efforts to keep in full force and effect all material Parent Permits and all material insurance policies maintained by the Parent and its Subsidiaries, other than changes to
such policies made in the ordinary course of business, and (D) use commercially reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all Parent
Material Contracts. Without limiting the generality of the foregoing, except (i) as expressly permitted by this Agreement, (ii) as set forth in
Section 6.2(b)
of the Parent Disclosure
Schedule, (iii) as required by applicable Laws, (iv) as provided in any Parent Material
Contract in effect as of the date of this Agreement or (v) as consented to in writing by the Partnership (which consent shall not be unreasonably withheld, delayed or conditioned), during the
period from the date
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of
this Agreement until the Effective Time, Parent shall not, and shall not permit any of its Subsidiaries to:
(i) amend
Parent's or any of its Subsidiaries' Organizational Documents (whether by merger, consolidation, conversion or otherwise) in any manner that would reasonably be
expected to (a) prevent or in any material respect hinder, impede or delay the ability of the parties to satisfy any of the conditions to or the consummation of the Merger or the other
transactions contemplated by this Agreement, or (b) adversely affect (1) the economic benefits to be obtained by the holders of Public Common Units upon the consummation of the Merger or
(2) the terms of the Parent Common Stock in any material respect;
(ii) declare,
authorize, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any of Parent's capital stock, other than regular
quarterly cash dividends on the Parent Common Stock in the ordinary course of business consistent with past practice and other than dividends or distributions with a record date after the Effective
Time;
provided
,
however
, that nothing contained herein shall prohibit Parent from increasing the
quarterly cash dividend on Parent Common Stock;
(iii) make
any acquisition or disposition, directly or indirectly (including by merger, consolidation, acquisition of assets, tender or exchange offer or otherwise), of any
business or any corporation, partnership, limited liability company, joint venture or other business organization or division thereof or any property or assets of any other Person, other than
acquisitions or dispositions (x) in the ordinary
course of business or (y) outside the ordinary course of business the consideration for which does not exceed $25,000,000 in value in the aggregate;
(iv) merge,
consolidate or enter into any other business combination transaction or agreement with any Person;
(v) split,
combine, divide, subdivide, reverse split, reclassify, recapitalize or effect any other similar transaction with respect to any of Parent's capital stock or other
equity interests;
(vi) issue
or sell any Parent Shares, issue or sell any preferred stock, or grant or issue any warrant, option, right, contract, call, or other security or instrument
granting the holder thereof the right to acquire Parent Shares or any other capital stock of the Parent or its Subsidiaries, in each case other than pursuant to a Benefit Plan of the Parent existing
on the date of this Agreement;
(vii) solely
with respect to Parent, adopt a plan or agreement of complete or partial liquidation, dissolution or restructuring or a plan or agreement of reorganization
under any bankruptcy or similar law;
(viii) directly
or indirectly purchase, acquire or otherwise become beneficial owner of (or direct the Partnership to repurchase, redeem or otherwise acquire) any Common
Units (other than Common Units held by Parent or its Subsidiaries on the date of this Agreement);
(ix) waive,
release, assign, settle or compromise any claim, action or proceeding, including any state or federal regulatory proceeding seeking damages or injunction or
other equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to result in a Parent Material Adverse Effect; or
(x) agree,
in writing or otherwise, to take any of the foregoing actions, or take any action or agree, in writing or otherwise, to take any action, including proposing or
undertaking any acquisition or disposition, in each case, that would reasonably be expected to prohibit, prevent or in any material respect hinder, impede or delay the ability of the parties to
satisfy any of the conditions to or the consummation of the Merger or the other transactions contemplated by this Agreement.
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Section 6.3
Recommendation of Merger; No Solicitation by Parent.
(a) Except
as permitted by this
Section 6.3
, the Partnership, the General Partner and the Managing GP, acting
through the Managing GP Board, the Conflicts Committee or otherwise, shall not, and shall cause their respective Subsidiaries and the foregoing shall use their reasonable best efforts to cause
their respective directors, officers, employees, investment bankers, financial advisors, attorneys, accountants, agents and other representatives (collectively, the
"
Representatives
") not to, directly or indirectly (i) withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify, in a
manner adverse to Parent, the Partnership Board Recommendation or (ii) fail to include the Partnership Board Recommendation in the Joint Proxy Statement (the taking of any such action being
referred to as a "
Partnership Adverse Recommendation Change
"). Without limiting the foregoing, it is understood that any violation of the foregoing
restrictions by the Partnership's, the General Partner's or the Managing GP's Representatives, other than any violation caused by or at the direction of Parent, shall be deemed to be a breach
of this
Section 6.3
by the Partnership, the General Partner and the Managing GP.
(b) Notwithstanding
anything to the contrary in this Agreement, at any time prior to obtaining the Partnership Unitholder Approval, and subject to compliance in all material
respects with this
Section 6.3(b)
, the Managing GP Board (but only with the written approval of the Conflicts Committee) or the Conflicts
Committee may make a Partnership Adverse Recommendation Change if the Managing GP Board or the Conflicts Committee, as applicable, after consultation with its financial advisors and outside
legal counsel, determines in good faith that failure to take such action would be inconsistent with its duties under the Partnership Agreement or applicable Laws if:
(i) the
Managing GP Board or the Conflicts Committee, as applicable, has provided prior written notice to Parent specifying in reasonable detail the material events
giving rise to the proposed Partnership Adverse Recommendation Change at least three (3) days in advance of its intention to take such action with respect to a Partnership Adverse
Recommendation Change, unless at the time such notice is otherwise required to be given there are fewer than three (3) days prior to the Partnership Unitholder Meeting, in which case the
Managing GP Board or the Conflicts Committee, as applicable, shall provide as much notice as is practicable (the period inclusive of all such days, the "
Partnership
Notice Period
"); and
(ii) during
the Partnership Notice Period, the Managing GP Board or the Conflicts Committee, as applicable, has negotiated, and has used its reasonable best efforts
to cause its financial advisors and outside legal counsel to negotiate, with Parent in good faith (to the extent Parent desires to negotiate) to make such adjustments in the terms and conditions of
this Agreement so that the failure to effect such Partnership Adverse Recommendation Change would not be inconsistent with its duties under the Partnership Agreement and applicable Laws;
provided
,
however
, that the Conflicts Committee shall take into account all changes to the terms of this
Agreement proposed by Parent in determining whether the failure to effect such Partnership Adverse Recommendation Change would not be inconsistent with its duties under the Partnership Agreement and
applicable Laws.
(c) Parent
shall, and shall cause its Subsidiaries and use reasonable best efforts to cause its and its Subsidiaries' respective Representatives to, immediately cease and
cause to be terminated any discussions or negotiations with any Person conducted heretofore with respect to an Alternative Proposal, and immediately prohibit any access by any Person (other than the
Partnership, the Managing GP and their Representatives) to any confidential information relating to a possible Alternative Proposal. Except as permitted by this
Section 6.3
, from the date of
this Agreement until the Effective Time, Parent shall not, and shall cause its Subsidiaries and use reasonable best
efforts to cause its and its Subsidiaries' respective Representatives not to, directly or indirectly, (i) solicit, initiate, knowingly facilitate or knowingly encourage the submission of an
Alternative Proposal (including any
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acquisition
structured as a merger, consolidation or share exchange), (ii) participate in any discussions or negotiations regarding, or furnish any information with respect to, any proposal or
offer from any Person relating to, or that could reasonably be expected to lead to, an Alternative Proposal; (iii) knowingly assist, participate in or facilitate in any other manner any effort
or attempt by any Person to do or seek any of the foregoing, (iv) enter into an Alternative Acquisition Agreement, or (v) (A) withdraw, modify or qualify, or propose publicly to
withdraw, modify or qualify, in a manner adverse to the Partnership, the Parent Board Recommendation, (B) fail to include the Parent Board Recommendation in the Joint Proxy Statement,
(C) authorize, approve, declare advisable, adopt or recommend or propose to publicly authorize, approve, declare advisable, adopt or recommend, any Alternative Proposal, or (D) authorize
Parent or any of its Subsidiaries to enter into an Alternative Acquisition Agreement or enter into an agreement, arrangement or understanding with respect to any Alternative Proposal (other than an
Acceptable Confidentiality Agreement) or (E) if an Alternative Proposal has been publicly known (including by way of media rumors or speculations with respect thereto) or been delivered to
Parent, fail to publicly recommend against such Alternative Proposal within ten (10) Business Days of a request by the Partnership and to reaffirm the Parent Board Recommendation within such
ten (10) Business Day period upon such request. Parent will notify the Conflicts Committee immediately if any Person makes any proposal, offer, inquiry or contact with respect to an Alternative
Proposal and the terms of any such proposal, offer, inquiry or contact (the taking of any action described in clause (v) being referred to as a "
Parent Adverse
Recommendation Change
"). Without limiting the foregoing, it is understood that any violation of the foregoing restrictions by Parent's Subsidiaries or Parent's Representatives
shall be deemed to be a breach of this
Section 6.3
by Parent.
(d) Notwithstanding
anything to the contrary contained in
Section 6.3(c)
, if at any time following the date of this
Agreement and prior to obtaining the Parent Stockholder Approval, (i) Parent has received a written Alternative Proposal that the Parent Board believes is bona fide, (ii) the Parent
Board, after consultation with Parent's financial advisors and outside legal counsel, determines in good faith that such Alternative Proposal constitutes or could reasonably be expected to lead to or
result in a Superior Proposal and, after consultation with Parent's outside legal counsel, failure to take such action would be inconsistent with its duties under applicable Laws and (iii) such
Alternative Proposal did not result from a material breach of this
Section 6.3
, then Parent may, subject to clauses (x) and
(y) below, (A) furnish information, including confidential information, with respect to Parent and its Subsidiaries to the Person making such Alternative Proposal and
(B) participate in discussions or negotiations regarding such Alternative Proposal;
provided
,
however
, that (x) Parent and its respective
Subsidiaries will not, and will use their reasonable best efforts to cause their respective
Representatives not to, disclose any non-public information to such Person unless Parent has, or first enters into, an Acceptable Confidentiality Agreement with such Person and (y) Parent will
provide to the Partnership, the General Partner and the Managing GP non-public information with respect to Parent and its Subsidiaries that was not previously provided or made available to the
Partnership, the General Partner and the Managing GP prior to or substantially concurrently with providing or making available such non-public information to such other Person.
(e) Notwithstanding
anything to the contrary in this Agreement, at any time prior to obtaining the Parent Stockholder Approval, and subject to compliance in all material
respects with this
Section 6.3(e)
, the Parent Board may (x) make a Parent Adverse Recommendation Change or (y) solely in the case
of
Section 6.3(e)(i)
terminate this Agreement pursuant to
Section 8.1 (c)(iii)
, in each
case:
(i) if
Parent has received a written Alternative Proposal that the Parent Board believes is bona fide and the Parent Board, after consultation with Parent's financial
advisors and outside legal counsel, determines in good faith that such Alternative Proposal constitutes a Superior Proposal and, after consultation with Parent's outside legal counsel, failure to take
such action would be inconsistent with its duties under applicable Laws;
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(ii) if
the Parent Board has provided prior written notice to the Partnership (A) stating that the Parent Board, after consultation with Parent's financial advisors
and outside legal counsel, has determined in good faith that such Alternative Proposal constitutes a Superior Proposal and (B) including a description of the material terms of such Alternative
Proposal, at least three (3) days in advance of its intention to take such action with respect to a Parent Adverse Recommendation Change, unless at the time such notice is otherwise required to
be given there are less than three (3) days prior to the Parent Stockholder Meeting, in which case the Parent Board shall provide as much notice as is practicable (it being understood and
agreed that any material amendment to the terms of an Alternative Proposal, if applicable, shall require a new notice pursuant to this
Section 6.3(e)
and a new Parent Notice Period, except that
such new Parent Notice Period in connection with any material amendment to the terms
of an Alternative Proposal shall be for two (2) days from the time the Partnership receives such notice (as opposed to three (3) days) (the period inclusive of all such days, the
"
Parent Notice Period
"); and
(iii) if,
during the Parent Notice Period, the Parent Board has negotiated, and has used its reasonable best efforts to cause Parent's financial advisors and outside legal
counsel to negotiate, with the Partnership, the General Partner and the Managing GP in good faith (to the extent the Partnership, the General Partner and the Managing GP desire to
negotiate) to make such adjustments in the terms and conditions of this Agreement so that the failure to effect such Parent Adverse Recommendation Change would not be inconsistent with its duties
under applicable Laws;
provided
,
however
, that the Parent Board shall take into account all changes to
the terms of this Agreement proposed by the Partnership in determining whether such Alternative Proposal continues to constitute a Superior Proposal.
(f) Nothing
contained in this Agreement shall prevent Parent or the Parent Board, as applicable, from issuing a "stop, look and listen" communication pursuant to
Rule 14d-9(f) under the Exchange Act or complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act with respect to an Alternative Proposal if the Parent Board determines in
good faith (after consultation with outside legal counsel) that its failure to do so would be reasonably likely to constitute a violation of applicable Laws;
provided
,
however
, that any Parent Adverse Recommendation Change may only be made in accordance with
Section 6.3(e)
.
Section 6.4
Reasonable Best Efforts.
(a) Subject
to the terms and conditions of this Agreement, Parent, on the one hand, and each of the Partnership, the General Partner and the Managing Partner, on the other
hand, shall cooperate with the other and use and shall cause their respective Subsidiaries to use its reasonable best efforts to (i) take, or cause to be taken, all appropriate actions, and do,
or cause to be done, all things, necessary, proper or advisable to cause the conditions to the Closing to be satisfied as promptly as practicable (and in any event no later than the Outside Date),
including, for the avoidance of doubt, in the case of Parent until the Effective Time or the termination of this Agreement, retaining ownership and voting control over, and voting or causing to be
voted, all Common Units beneficially owned by Parent as of the date of this Agreement or acquired thereafter in favor of the Merger at the Partnership Unitholder Meeting (unless there is a Partnership
Adverse Recommendation Change, in which case Parent shall be free to vote such Common Units in Parent's sole discretion) and to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement, including preparing and filing as promptly as practicable all documentation to effect all necessary filings, notifications, notices,
petitions, statements, registrations, submissions of information, applications and other documents (including any required or recommended filings under applicable Antitrust Laws), (ii) obtain
promptly (and in any event no later than the Outside Date) all approvals, consents, clearances, expirations or terminations of waiting periods, registrations, permits, authorizations and other
confirmations from any Governmental Authority or third party necessary, proper or advisable to consummate the transactions contemplated by this Agreement, (iii) defend any Proceedings
challenging
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this
Agreement or the consummation of the transactions contemplated by this Agreement or seek to have lifted or rescinded any injunction or restraining order or other order adversely affecting the
ability of the parties to consummate the transactions contemplated hereby and (iv) obtain all necessary consents, approvals or waivers from third parties.
(b) In
furtherance and not in limitation of the foregoing, each party hereto (including by their respective Subsidiaries) agrees to make an appropriate filing (if required
by applicable Laws) of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by this Agreement as promptly as practicable and in any event within ten
(10) Business Days after the date of this Agreement (unless a later date is mutually agreed to by the parties hereto) and to supply as promptly as practicable any additional information and
documentary material that may be requested by any Governmental Authority pursuant to the HSR Act or any other applicable Antitrust Law and use its reasonable best efforts to take, or cause to be taken
(including by their respective Subsidiaries), all other actions consistent with this
Section 6.4
necessary to cause the expiration or termination
of any applicable waiting periods under the HSR Act as promptly as practicable (and in any event no later than the Outside Date).
(c) Each
of the parties hereto shall, and shall cause their respective Subsidiaries to, use its reasonable best efforts to (i) cooperate in all respects with each
other party in connection with any filing or submission with a Governmental Authority in connection with the transactions contemplated hereby, including by providing the other party a reasonable
opportunity to review and comment thereon, and in connection with any investigation or other inquiry by or before a Governmental Authority relating to the transactions contemplated hereby, including
any proceeding initiated by a private Person, (ii) promptly inform the other party of (and supply to the other party) any written communication received by such party from, or given by such
party to, the Federal Trade Commission, the Antitrust Division of the Department of Justice, or any other Governmental Authority and any material written communication received or given in connection
with any proceeding by a private Person, in each case regarding any of the transactions contemplated hereby, (iii) permit the other party to review in advance and incorporate the other party's
reasonable comments in any communication to be given by it to any Governmental Authority with respect to obtaining any clearances required under any Antitrust Law in connection with the transactions
contemplated hereby and (iv) consult with the other party in advance of any meeting or teleconference with any Governmental Authority or, in connection with any proceeding by a private Person,
with any other Person, and, to the extent not prohibited by the Governmental Authority or other Person, give the other party the opportunity to attend and participate in such meetings and
teleconferences. Parent shall have the principal responsibility for devising and implementing the strategy for obtaining any clearances required under any Antitrust Law in connection with the
transactions contemplated hereby and shall take the lead in all meetings and communications with any Governmental Authority in connection with obtaining such clearances;
provided
,
however
, that Parent shall consult in advance with the Partnership and in good faith take the
Partnership's views into account regarding the overall strategy. The parties shall take reasonable efforts to share information protected from disclosure under the attorney-client privilege, work
product doctrine, joint defense privilege or any other privilege pursuant to this
Section 6.4
in a manner so as to preserve the applicable
privilege.
(d) Parent
and the Partnership (including by causing their respective Subsidiaries) agree to use their reasonable best efforts to (x) resolve any objections that a
Governmental Authority or other Person may assert under any Antitrust Law with respect to the transactions contemplated hereby, and (y) avoid or eliminate each and every impediment under any
Antitrust Law that may be asserted by any Governmental Authority with respect to the transactions contemplated hereby, in each case, so as to enable the Closing to occur as promptly as practicable and
in any event no later than the Outside Date, and including offering, accepting and agreeing to (A) dispose or hold separate any part of the Partnership's, Parent's or their respective
Subsidiaries' businesses, operations or assets (or a
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combination
thereof), and/or (B) restrict the manner in which, or whether, Parent, the Partnership or any of their respective Subsidiaries may carry on business in any part of the world. The
Partnership shall not, without Parent's prior written consent, commit to any disposal, hold separate, or other restriction related to its or its Subsidiaries' businesses, operations or assets.
Section 6.5
Public Announcements.
The initial press release with respect to the execution of
this Agreement shall be a joint press release to be reasonably agreed upon by Parent and the
Partnership. Thereafter, neither the Partnership nor Parent shall issue or cause the publication of any press release or other public announcement (to the extent not previously issued or made in
accordance with this Agreement) with respect to this Agreement or the transactions contemplated by this Agreement without the prior consent of the other party (which consent shall not be unreasonably
withheld, conditioned or delayed), except as may be required by applicable Laws or by any applicable listing agreement with the NYSE or NASDAQ, as applicable, as determined in the good faith judgment
of the party proposing to make such release (in which case such party shall not issue or cause the publication of such press release or other public announcement without prior consultation with the
other party);
provided
,
however
, that neither the Partnership nor Parent shall be required by this
Section 6.5
to consult with any other party with respect to a public announcement in connection with a Partnership Adverse Recommendation Change
or a Parent Adverse Recommendation Change but nothing in this proviso shall limit the obligations of the Partnership, the General Partner, the Managing GP, the Managing GP Board, the
Conflicts Committee, Parent or the Parent Board under
Section 6.3
;
provided
,
further
, that each party
and their respective controlled affiliates may make statements that are consistent with statements made in previous press
releases, public disclosures or public statements made by Parent or the Partnership in compliance with this
Section 6.5
.
Section 6.6
Access to Information.
Upon reasonable advance notice and subject to applicable Laws
relating to the exchange of information, each party shall, and shall cause each of its Subsidiaries
to afford to the other party and its Representatives reasonable access during normal business hours (and, with respect to books and records, the right to copy) to all of its and its Subsidiaries'
properties, commitments, books, Contracts, records and correspondence (in each case, whether in physical or electronic form), officers, employees, accountants, counsel, financial advisors and other
Representatives;
provided
, that such access shall be provided on a basis that minimizes the disruption to the operations of the requested party and its
Representatives. Subject to applicable Laws, during such period, Parent shall furnish promptly to the Partnership (i) a copy of each report, schedule, registration statement and other document
filed, published, announced or received by it in connection with the transactions contemplated by this Agreement during such period pursuant to the requirements of federal, state or foreign Laws
(including pursuant to the Securities Act, the Exchange Act and the rules of any Governmental Authority thereunder), as applicable (other than documents which such party is not permitted to disclose
under applicable Laws) and (ii) all information concerning Parent's business, properties and personnel as the Partnership may reasonably request, including all information relating to
environmental matters. Notwithstanding the foregoing, no party shall have an obligation to provide access to any information the disclosure of which the other party has concluded may jeopardize any
privilege available to such party or any of its Affiliates relating to such information or would be in violation of a confidentiality obligation binding on such party or any of its Affiliates.
Section 6.7
Indemnification and Insurance.
(a) From
and after the Effective Time, to the fullest extent permitted under applicable Laws, Parent and the Surviving Entity jointly and severally agree to
(i) indemnify and hold harmless against any reasonable costs or expenses (including reasonable attorneys' fees and all other reasonable costs, expenses and obligations (including experts' fees,
travel expenses, court costs, retainers, transcript fees, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with
investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in, any
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Proceeding,
including any Proceeding relating to a claim for indemnification or advancement brought by an Indemnified Person), judgments, fines, losses, claims, damages or liabilities, penalties and
amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any thereof) in connection with any actual or threatened
Proceeding, and, upon receipt by Parent of an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined in a final and non-appealable judgment entered by a
court of competent jurisdiction that the Indemnified Person is not entitled to be indemnified, provide
advancement of expenses with respect to each of the foregoing to, all Indemnified Persons and (ii) honor the provisions regarding elimination of liability of officers and directors,
indemnification of officers, directors and employees and advancement of expenses contained in the Organizational Documents of the Partnership, the General Partner and the Managing GP
immediately prior to the Effective Time, and ensure that the Organizational Documents of the Partnership, the General Partner and the Managing GP or any of their respective successors or
assigns, if applicable, shall, for a period of six years following the Effective Time, contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of
present and former directors, officers and employees of the Partnership, the General Partner and the Managing GP than are presently set forth in such Organizational Documents. Any right of an
Indemnified Person pursuant to this
Section 6.7(a)
shall not be amended, repealed, terminated or otherwise modified at any time in a manner that
would adversely affect the rights of such Indemnified Person as provided herein, and shall be enforceable by such Indemnified Person and their respective heirs and representatives against Parent and
the Managing GP and their respective successors and assigns.
(b) Parent
shall maintain in effect for six (6) years from the Effective Time Parent's current directors' and officers' liability insurance policies covering acts or
omissions occurring at or prior to the Effective Time with respect to Indemnified Persons (
provided
, that Parent may substitute therefor policies with
reputable carriers of at least the same coverage containing terms and conditions that are no less favorable to the Indemnified Persons);
provided
,
however
,
that in no event shall Parent be required to expend pursuant to this
Section 6.7(b)
more
than an amount per year equal to 300% of current annual premiums paid by Parent for such insurance (the "
Maximum Amount
"). In the event that, but for
the proviso to the immediately preceding sentence, Parent would be required to expend more than the Maximum Amount, Parent shall obtain the maximum amount of such insurance as is available for the
Maximum Amount. If Parent in its sole discretion elects, then, in lieu of the obligations of Parent under this
Section 6.7(b)
, Parent may (but
shall be under no obligation to), prior to the Effective Time, purchase a "tail policy" with respect to acts or omissions occurring or alleged to have occurred prior to the Effective Time that were
committed or alleged to have been committed by such Indemnified Persons in their capacity as such;
provided
, that in no event shall the cost of such
policy exceed the Maximum Amount.
(c) The
rights of any Indemnified Person under this
Section 6.7
shall be in addition to any other rights such
Indemnified Person may have under the Organizational Documents of the Partnership, the General Partner and the Managing GP, any indemnification agreements, or the DLLCA and DRULPA. The
provisions of this
Section 6.7
shall survive the consummation of the transactions contemplated by this Agreement and are expressly intended to
benefit each of the Indemnified Persons and their respective heirs and representatives. If Parent and/or the Managing GP, or any of their respective successors or assigns
(i) consolidates with or merges into any other Person, or (ii) transfers or conveys all or substantially all of their businesses or assets to any other Person, then, in each such case,
to the extent necessary, a proper provision shall be made so that the successors and assigns of Parent and/or the Managing GP shall assume the obligations of Parent and the Managing GP
set forth in this
Section 6.7
.
Section 6.8
Fees and Expenses.
Except as otherwise provided in
Section 8.2
and
Section 8.3
, all fees and expenses incurred in connection with the transactions contemplated by this Agreement
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including
all legal, accounting, financial advisory, consulting and all other fees and expenses of third parties incurred by a party in connection with the negotiation and effectuation of the terms
and conditions of this Agreement and the transactions contemplated by this Agreement, shall be the obligation of the respective party incurring such fees and expenses, except Parent and the
Partnership shall each bear and pay one half of the expenses incurred in connection with the filing, printing and mailing of the Registration Statement and the Joint Proxy Statement.
Section 6.9
Section 16 Matters.
Prior to the Effective Time, Parent and the Partnership
shall take all such steps as may be required (to the extent permitted under applicable Laws) to cause any
dispositions of Common Units (including derivative securities with respect to Common Units) or acquisitions of Parent Common Stock (including derivative securities with respect to Parent Common Stock)
resulting from the transactions contemplated by this Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the
Partnership, or will become subject to such reporting requirements with respect to Parent, to be exempt under Rule 16b-3 promulgated under the Exchange Act.
Section 6.10
Listing.
Parent shall use reasonable best efforts to cause the Parent Common Stock
to be issued pursuant to and in accordance with this Agreement to be approved for
listing (subject, if applicable, to notice of issuance) for trading on the NYSE prior to the Closing.
Section 6.11
Dividends and Distributions.
(a) After
the date of this Agreement until the Effective Time, each of Parent and the Partnership shall coordinate with the other regarding the declaration of any dividends
or distributions in respect of Parent Common Stock and Partnership Interests and the record dates and payment dates relating thereto, it being the intention of the parties that holders of Partnership
Interests shall not receive, for any quarter, distributions both in respect of Partnership Interests and also dividends in respect of Parent Common Stock that they receive in exchange therefor in the
Merger, but that they shall receive for any such quarter either: (a) only distributions in respect of Partnership Interests or (b) only dividends in respect of Parent Common Stock that
they receive in exchange therefor in the Merger.
(b) Prior
to the Effective Time, the Managing GP Board shall determine and declare quarterly distributions in the ordinary course and consistent with past practice,
including with timing consistent with past practice;
provided
, that the amount of any such quarterly distribution declared prior to the Effective Time
shall not exceed $0.285 per Common Unit.
Section 6.12
Conflicts Committee.
Prior to the earlier of the Effective Time and the termination
of this Agreement, Parent shall not and it shall not permit any of its Subsidiaries to, and it
shall not and shall not permit any of its Subsidiaries to take any action intended to cause the Managing GP to, without the consent of a majority of the then existing members of the Conflicts
Committee, eliminate the Conflicts Committee, revoke or diminish the authority of the Conflicts Committee or remove or cause the removal of any director of the Managing GP that is a member of
the Conflicts Committee either as a director or as a member of such committee. For the avoidance of doubt, this
Section 6.12
shall not apply to
the filling, in accordance with the provisions of the Managing GP LLC Agreement, of any vacancies caused by the resignation, death or incapacity of any such director.
Section 6.13
Performance by Managing GP.
Parent will cause the Managing GP to cause
the General Partner, the Partnership and its Subsidiaries to comply with the provisions of this Agreement.
Notwithstanding the foregoing, it is understood and agreed that actions or inactions by the Partnership, the General Partner and the Managing GP and their respective Subsidiaries shall not be
deemed to be breaches or violations or failures to perform by Parent of any of the provisions of this Agreement unless such action or inaction was or was not taken, in either case, at the direction of
Parent.
Section 6.14
Cooperation with Debt and Equity Financing.
From and after the date of this
Agreement, the Partnership shall, and the Partnership shall cause each of its Subsidiaries and use
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reasonable
best efforts to cause its and their representatives (including their auditors) to, use its respective reasonable best efforts to provide all customary cooperation (including providing
reasonably available financial and other information regarding the Partnership and its Subsidiaries for use in marketing and offering documents and to enable Parent to prepare pro forma financial
statements) as reasonably requested by Parent to assist Parent in the arrangement of any bank debt financing or any capital markets debt or equity financing, any repayment, restructuring or
refinancing of debt contemplated by this Agreement or required in connection with the transactions contemplated by this Agreement and any other amounts required to be paid in connection with the
consummation of the Merger; it being understood that the arrangement of any bank debt financing or any capital markets
debt financing or the repayment, restructuring or refinancing of any debt shall not be a condition to Parent's or Merger Sub's obligations to effect the Merger. Parent shall indemnify and hold
harmless the Managing GP, the General Partner, the Partnership and their respective Subsidiaries from and against any and all losses or damages actually suffered or incurred by them directly in
connection with the arrangement of any such bank debt financing or any capital markets debt financing.
Section 6.15
Tax Treatment.
For United States federal income tax purposes (and for purposes of
any applicable state, local or foreign Tax that follows the United States federal income tax
treatment), the parties agree to treat the Merger (a) with respect to the holders of Public Common Units, as a taxable sale of such Public Common Units to NewCo and (b) with respect to
NewCo, as if NewCo purchased the Parent Shares issued pursuant to the Merger for fair market value with cash deemed contributed to NewCo by Parent, through one or more intermediate entities, and then
as a purchase by NewCo of the Public Common Units from the holders of such Common Units in exchange for such Parent Shares. The parties will prepare and file all Tax Returns consistent with the
foregoing and will not take any inconsistent position on any Tax Return, or during the course of any Proceeding with respect to Taxes, except as otherwise required by applicable Laws following a final
determination by a court of competent jurisdiction or other administrative settlement with or final administrative decision by the relevant Governmental Authority.
Section 6.16
Takeover Statutes.
Parent shall not, and shall cause its Subsidiaries not to, take
any action that would, or would reasonably be expected to, cause any Takeover Law to become
applicable to this Agreement, the Merger, the Parent Stock Issuance or the other transactions contemplated hereby or related thereto. If any Takeover Law shall become applicable to this Agreement, the
Merger, the Parent Stock Issuance or the other transactions contemplated hereby or related thereto, Parent and the Parent Board shall grant such approvals and shall use reasonable best efforts to take
such actions so that the transactions contemplated hereby, including the Merger and the Parent Stock Issuance, may be consummated as promptly as practicable on the terms contemplated hereby and
otherwise use reasonable best efforts to eliminate or minimize the effects of such statute or regulation on the transactions contemplated hereby, including the Merger and the Parent Stock Issuance.
Section 6.17
Securityholder Litigation.
The Partnership and the General Partner shall give Parent
the opportunity to participate in the defense or settlement of any securityholder litigation against the
Partnership and the General Partner and/or their directors (as applicable) relating to the transactions contemplated by this Agreement;
provided
, that
the Partnership and the General Partner shall in any event control such defense and/or settlement and shall not be required to provide information if doing so would be reasonably expected to violate
the confidentiality obligations of such party or threaten the loss of any attorney-client privilege or other applicable legal privilege.
Section 6.18
Additional Structuring Transactions Prior to Closing.
(a) Promptly
(and in any event no later than ten (10) Business Days) following the execution of this Agreement, Parent shall form (through one or more intermediate
entities) a new wholly owned Subsidiary as a Delaware limited liability company ("
Merger Sub
") solely for the purpose of engaging in the transactions
contemplated by this Agreement, including merging with and into the Partnership at
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the
Effective Time to effect the Merger. At the Effective Time, NewCo shall own all of the issued and outstanding limited liability company interests of Merger Sub. Except for obligations and
liabilities incurred in connection with its formation and the transactions contemplated by this Agreement, Merger Sub shall not incur, and prior to the Effective Time will not have incurred, directly
or indirectly, any obligations or engaged in any business activities of any type or kind whatsoever or entered into any agreements or arrangements with any Person.
(b) Promptly
(and in any event no later than ten (10) Business Days) following the execution of this Agreement, Parent shall form (through one or more intermediate
entities) a new wholly owned Subsidiary ("
NewCo
") to serve as the direct parent of Merger Sub at the Effective Time. At the Effective Time, Parent shall
own (through one or more intermediate entities) all of the issued and outstanding equity interests of NewCo. Except for obligations and liabilities incurred in connection with its formation and the
transactions contemplated by this Agreement, NewCo shall not incur, and prior to the Effective Time will not have incurred, directly or indirectly, any obligations or engaged in any business
activities of any type or kind whatsoever or entered into any agreements or arrangements with any Person. Not later than one Business Day prior to the Effective Time, Parent shall cause NewCo, to the
extent relevant, to elect to be treated as an association taxable as a corporation for U.S. federal income tax purposes pursuant to Treas. Reg. §301.7701-3(c).
(c) Promptly
(and in any event no later than two (2) Business Days) following the formation of Merger Sub, Parent, the Partnership, the General Partner and the
Managing GP will, and Parent will cause Merger Sub to, enter into an amendment to this Agreement pursuant to which Merger Sub will become a party to this Agreement and thereupon be immediately
bound by the terms and conditions of this Agreement. The representations and warranties in this Agreement that are expressed to be given by or in relation to Merger Sub and the covenants and
agreements of Merger Sub in this Agreement shall in each case be of no force or effect until Merger Sub become a party to this Agreement, at which time all such representations, warranties, covenants
and agreements of or relating to Merger Sub in this Agreement will immediately become effective as of the date of such amendment.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1
Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of
each party hereto to effect the Merger shall be subject to the satisfaction (or waiver, if permissible under applicable Laws) on or
prior to the Closing Date of the following conditions:
(a)
Partnership Unitholder Approval.
The affirmative vote or consent of the holders of a majority of
the Outstanding Common Units at the Partnership Unitholder Meeting or any adjournment or
postponement thereof in favor of the approval of this Agreement (the "
Partnership Unitholder Approval
") shall have been obtained in accordance with
applicable Laws and the Organizational Documents of the Partnership.
(b)
Parent Stockholder Approval.
The Parent Stockholder Approval shall have been obtained in
accordance with applicable Laws, the rules of the NYSE and the Organizational Documents of Parent.
(c)
Regulatory Approval.
Any waiting period applicable to the transactions contemplated by this
Agreement under the HSR Act shall have been terminated or shall have expired.
(d)
No Injunctions or Restraints.
No Law, injunction, judgment or ruling enacted, promulgated, issued,
entered, amended or enforced by any Governmental Authority (collectively,
"
Restraints
") shall be in effect enjoining, restraining, preventing or prohibiting consummation of the transactions contemplated by this Agreement or
making the consummation of the transactions contemplated by this Agreement illegal.
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(e)
Registration Statement.
The Registration Statement shall have become effective under the
Securities Act and no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC.
(f)
Stock Exchange Listing.
The Parent Common Stock deliverable to the Limited Partners as
contemplated by this Agreement shall have been approved for listing on the NYSE, subject to
official notice of issuance.
Section 7.2
Conditions to Obligations of Parent and Merger Sub to Effect the Merger.
The
obligations of Parent and Merger Sub to effect the Merger are further subject to the satisfaction (or waiver, if permissible under applicable Laws) on or
prior to the Closing Date of the following conditions:
(a)
Representations and Warranties.
(i) The representations and warranties of the Partnership, the
General Partner and the Managing GP contained in
Section 4.3(a)
,
Section 4.3(c)
and
Section 4.6
shall be true and correct in all respects, in each case both when made and at and as of the Closing Date, as if made at and as of
such time (except to the extent expressly made as of an earlier date, in which case as of such date); (ii) the representations and warranties of the Partnership, the General Partner and the
Managing GP contained in
Section 4.2(a)
shall be true and correct in all respects, other than immaterial misstatements or omissions, both
when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date); and (iii) all other
representations and warranties of the Partnership, the General Partner and Managing GP set forth herein shall be true and correct both when made and at and as of the Closing Date, as if made at
and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this
clause (iii)
, where the failure of such representations
and warranties to be so true and correct (without giving effect to any limitation as to
"materiality" or "Partnership Material Adverse Effect" set forth in any individual representation or warranty, other than in
Section 4.5
and
Section 4.9
and the definition of Partnership Material Contract in
Section 4.11
) does not
have, and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect. Parent shall have received a certificate signed on behalf of the
Partnership, the General Partner and Managing GP by an executive officer of the Managing GP to such effect.
(b)
Performance of Obligations of the Partnership, the General Partner and the Managing GP.
The
Partnership, the General Partner and the Managing GP shall have performed in all material respects all obligations required to be performed by it under
this Agreement at or prior to the Closing Date. Parent shall have received a certificate signed on behalf of the Partnership, the General Partner and the Managing GP by an executive officer of
the Managing GP to such effect.
Section 7.3
Conditions to Obligation of the Partnership to Effect the Merger.
The obligation of
the Partnership to effect the Merger is further subject to the satisfaction (or waiver, if permissible under applicable Laws) on or prior to the
Closing Date of the following conditions:
(a)
Representations and Warranties.
(i) The representations and warranties of Parent contained in
Section 5.3(a)
,
Section 5.3(c)
and
Section 5.6
shall be true and correct in all respects, in
each case
both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date); (ii) the
representations and warranties of Parent contained in
Section 5.2(a)
shall be true and correct in all respects, other than immaterial
misstatements or omissions, both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such
date); and (iii) all other representations and warranties of Parent set forth herein shall be true and correct both when made and at and as of the Closing Date, as if made at and as of such
time (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this
clause (iii)
, where
the failure of such representations and warranties to be so true and
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correct
(without giving effect to any limitation as to "materiality" or "Parent Material Adverse Effect" set forth in any individual representation or warranty, other than in
Sections 5.5
,
5.6
and
5.9
and the definition of
Parent Material Contract in
Section 5.11
) does not have, and would not reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect. The Partnership shall have received a certificate signed on behalf of Parent by an executive officer of Parent to such effect.
(b)
Performance of Obligations of the Parent and Merger Sub.
Each of Parent and Merger Sub shall have
performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the
Closing Date. The Partnership shall have received a certificate signed on behalf of Parent by an executive officer of Parent to such effect.
Section 7.4
Frustration of Closing Conditions.
(a) None
of the Partnership, the General Partner nor the Managing GP may rely on the failure of any condition set forth in
Section 7.1
,
Section 7.2
or
Section 7.3
, as the case may be, to be satisfied if such failure was due to the failure of either such party to perform and comply in all
material respects with the covenants and agreements in this Agreement to be performed or complied with by it prior to the Closing.
(b) Neither
Parent nor Merger Sub may rely on the failure of any condition set forth in
Section 7.1
,
Section 7.2
or
Section 7.3
, as the case may be, to be satisfied if such failure was due to
the failure of either such party to perform and comply in all material respects with the covenants and agreements in this Agreement to be performed or complied with by it prior to the Closing.
ARTICLE VIII
TERMINATION
Section 8.1
Termination.
This Agreement may be terminated and the transactions contemplated by this
Agreement abandoned at any time prior to the Effective Time:
(a) by
the mutual written consent of the Partnership and Parent duly authorized by the Parent Board and the Conflicts Committee, respectively.
(b) by
either of the Partnership or Parent:
(i) if
the Closing shall not have been consummated on or before September 30, 2018 (the "
Outside Date
");
provided
,
however
, that the right to terminate this Agreement under this
Section 8.1(b)(i)
shall not be available (A) to the Partnership or Parent, if the failure to
satisfy such condition was due to the failure
of, in the case of the Partnership, the Partnership, the General Partner or the Managing GP, or, in the case of Parent, Parent or Merger Sub, to perform and comply in all material respects with
the covenants and agreements to be performed or complied with by it prior to the Closing or (B) to the Partnership or Parent if, in the case of Parent, the Partnership, the General Partner or
the Managing GP, or, in the case of the Partnership, Parent or Merger Sub, has filed (and is then pursuing) an action seeking specific performance as permitted by
Section 9.9
;
(ii) if
any Restraint having the effect set forth in
Section 7.1(d)
shall be in effect and shall have become final and
nonappealable;
provided
,
however
, that the right to terminate this Agreement under this
Section 8.1(b)(ii)
shall not be available to the Partnership or Parent if such Restraint was due to the failure of, in the case of the
Partnership, the Partnership, the General Partner or the Managing GP, or, in the case of Parent, Parent or Merger Sub, to perform any of its obligations under this Agreement;
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(iii) if
the Partnership Unitholder Meeting and any postponements or adjournments thereof shall have concluded and the Partnership Unitholder Approval shall not have been
obtained; or
(iv) if
the Parent Stockholder Meeting and any postponements or adjournments thereof shall have concluded and the Parent Stockholder Approval shall not have been obtained.
(c) by
Parent:
(i) if
a Partnership Adverse Recommendation Change shall have occurred prior to the Partnership Unitholder Meeting, unless Partnership Unitholder Approval shall have been
obtained;
(ii) if
the Partnership, the General Partner or the Managing GP shall have breached or failed to perform any of its representations, warranties, covenants or
agreements set forth in this Agreement (or if any of the representations or warranties of the Partnership, the General Partner or the Managing GP set forth in this Agreement shall fail to be
true), which breach or failure (A) would (if it occurred or was continuing as of the Closing Date) give rise to the failure of a condition set forth in
Section 7.2(a)
or
Section 7.2(b)
and (B) is incapable of being cured, or is not
cured, by the Partnership, the General Partner or the Managing GP within thirty (30) days following receipt of written notice from Parent of such breach or failure;
provided
,
however
, that Parent shall not have the right to terminate this Agreement pursuant to this
Section 8.1(c)(ii)
if Parent or Merger Sub is then in material breach of
any of its representations, warranties, covenants or agreements
contained in this Agreement; or
(iii) prior
to the receipt of Parent Stockholder Approval, in order to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal;
provided
, that Parent shall have complied in all material
respects with Section 6.3(c) and
Section 6.3(e)
.
(d) by
the Partnership (which termination may be effected for the Partnership by the Conflicts Committee without the consent, authorization or approval of the
Managing GP Board):
(i) if
Parent shall have breached or failed to perform any of its covenants or agreements set forth in Section 6.3(c) in any material respect; or
(ii) if
Parent shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement (other than in
Section 6.3(c)) (or if any of the representations or warranties of Parent set forth in this Agreement shall fail to be true), which breach or failure (A) would (if it occurred or was
continuing as of the Closing Date) give rise to the failure of a condition set forth in
Section 7.3(a)
or
Section 7.3(b)
and (B) is
incapable of being cured, or is not cured, by Parent within thirty (30) days following receipt of written
notice from the Partnership of such breach or failure;
provided
,
however
, that the Partnership shall not
have the right to terminate this Agreement pursuant to this
Section 8.1(d)
if the Partnership, the General Partner or the Managing GP is
then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement.
Section 8.2
Effect of Termination.
In the event of the termination of this Agreement as provided
in
Section 8.1
, written notice thereof shall
be given to the other party or parties, specifying the provision of this Agreement pursuant to which such termination is made, and this Agreement shall forthwith become null and void (other than the
provisions in the last sentence of
Section 6.6
, the provisions in
Section 6.8
, this
Section 8.2
,
Section 8.3
and
Article IX
, all of which shall survive termination of this Agreement), and, except as otherwise provided in this
Section 8.2
, there shall be no liability on the part of any of Parent, Merger Sub or the Partnership, the General Partner and the
Managing GP or their respective directors, officers and Affiliates;
provided
,
however
, that no
such termination shall relieve any party hereto from (a) its obligation to pay the Parent Expenses, the Partnership Expenses or the Partnership Termination Fee, as applicable, if, as and when
required pursuant to
Section 8.3
, (b) any liability for any failure to consummate the Merger and the other
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transactions
contemplated by this Agreement when required pursuant to this Agreement or (c) any liability for intentional fraud or a willful breach of any covenant or other agreement contained
in this
Agreement. For purposes of this
Section 8.2
, "
willful breach
" shall mean a material breach of
this Agreement that is a consequence of a deliberate act or a deliberate failure to act by the breaching party with the knowledge that the taking of such act (or the failure to take such act) would
(x) cause a material breach of this Agreement and (y) prevent or materially delay the Closing. Notwithstanding the foregoing, in no event shall the Managing GP, the General
Partner or the Partnership have any liability for any matter set forth in the proviso of the preceding sentence for any action taken or omitted to be taken by the Managing GP, the General
Partner, the Partnership, any of their respective Subsidiaries or any of their respective Representatives at the direction of Parent, any of its Subsidiaries or any of their respective
Representatives.
Section 8.3
Termination Fees; Expenses.
(a) If
this Agreement is validly terminated by the Partnership or Parent pursuant to the provisions of
Section 8.1(b)(i)
(Outside Date), then Parent shall pay to the Partnership (or its designated
Affiliate) by wire transfer of immediately
available funds to an account designated by the Partnership an amount equal to the Partnership Expenses, and such payment shall be made within five (5) Business Days after such termination.
(b) If
this Agreement is validly terminated by the Partnership or Parent pursuant to the provisions of
Section 8.1(b)(iv)
(No Parent Stockholder Approval), then Parent shall pay to the Partnership (or its
designated Affiliate) by wire transfer of
immediately available funds to an account designated by the Partnership an amount equal to the Partnership Expenses, and such payment shall be made within five (5) Business Days after such
termination.
(c) If
this Agreement is validly terminated by the Partnership pursuant to
Section 8.1(d)
(Parent Uncured Breach),
then Parent shall pay to the Partnership (or its designated Affiliate) by wire transfer of immediately available funds to an account designated by the Partnership an amount equal to the Partnership
Termination Fee, and such payment shall be made within five (5) Business Days after such termination.
(d) If
this Agreement is validly terminated by Parent pursuant to
Section 8.1(c)(ii)
(Partnership Uncured Breach),
then the Partnership shall pay to the Parent (or its designated Affiliate) by wire transfer of immediately available funds to an account designated by Parent an amount equal to the Parent Expenses,
and such payment shall be made within five (5) Business Days after such termination.
(e) If
this Agreement is validly terminated by Parent pursuant to
Section 8.1(c)(iii)
(Parent Superior Proposal), then
Parent shall pay to the Partnership (or its designated Affiliate) by wire transfer of immediately available funds to an account designated by the Partnership an amount equal to the Partnership
Termination Fee, and such payment shall be made within five (5) Business Days after such termination.
(f) If
(i) after the date of this Agreement, an Alternative Proposal is publicly proposed or publicly disclosed prior to the Parent Stockholder Meeting,
(ii) this Agreement is validly terminated by the Partnership or Parent pursuant to
Section 8.1(b)(i)
(Outside Date) or
Section 8.1(b)(iv)
(No Parent Stockholder Approval) and (iii) at any time on or prior to the twelve (12) month anniversary of such
termination, Parent or any of its Subsidiaries has entered into a definitive agreement in respect of an Alternative Proposal or consummated an Alternative Proposal (whether or not such Alternative
Proposal is the same Alternative Proposal referred to in sub-clause (i) above), Parent shall pay to the Partnership (or its designated Affiliate), by wire transfer of immediately available
funds to an account designated by the Partnership, the Partnership Termination Fee, upon the earlier of the public announcement that Parent has entered into such definitive agreement or the
consummation of any such transaction; provided, that the payment by Parent of the Partnership Termination Fee pursuant to this
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Section 8.3
shall not relieve Parent from any liability or damage resulting from a willful breach as defined in
Section 8.2
.
(g) In
no event shall Parent be required to pay the Partnership Termination Fee on more than one occasion. In the event that Parent pays the Partnership Expenses pursuant to
this
Section 8.3
, then any Partnership Termination Fee required to be paid by Parent under this
Section 8.3
shall be reduced by the amount of the
Partnership Expenses previously paid.
(h) Parent
acknowledges that the agreements contained in this
Section 8.3
are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, the Partnership, the General Partner and the Managing GP would not enter into this Agreement. The parties acknowledge that
payment of the Parent Expenses, the Partnership Expenses or the Partnership Termination Fee, as applicable, if, as and when required pursuant to this
Section 8.3
, shall constitute the sole and
exclusive remedy with respect thereto, except as expressly set forth in
Section 8.2
.
(i) Any
amount of Partnership Termination Fee received by the Partnership (or its designated Affiliate) (less any unreimbursed out-of-pocket expenses (including all fees and
expenses of counsel, accountants, investment bankers, experts and consultants) incurred by the Partnership, the General Partner, the Managing GP and their respective controlled Affiliates in
connection with this Agreement) will be distributed to the Partnership Unaffiliated Unitholders by a special distribution, in any manner as may be determined by the Conflicts Committee, and Parent
agrees that it will (and will cause the General Partner, the Managing GP, MLP LP LLC and any of their respective Subsidiaries that own any Partnership Interests to) waive any
rights it or they may have to receive such special distribution.
ARTICLE IX
MISCELLANEOUS
Section 9.1
No Survival, Etc.
The representations, warranties and agreements in this Agreement
(including, for the avoidance of doubt, any schedule, instrument or other document delivered
pursuant to this Agreement) shall terminate at the Effective Time or, except as otherwise provided in
Section 8.2
or
Section 8.3
, upon the
termination of this Agreement pursuant to
Section 8.1
, as the case
may be, except that the agreements set forth in
Article I
,
Article II
,
Article III,
the last
sentence of
Section 6.6
,
Section 6.8
,
Section 6.10
and
Article IX
and any other agreement in this Agreement that contemplates performance after the Effective Time shall survive the Effective Time.
Section 9.2
Amendment or Supplement.
At any time prior to the Effective Time, this Agreement may
be amended or supplemented in any and all respects, whether before or after receipt of the Partnership
Unitholder Approval and the Parent Stockholder Approval, by written agreement of the parties hereto, by action taken or authorized by the Parent Board and the Managing GP Board;
provided
,
however
, that the Managing GP Board may not take or authorize any such action unless it
has been approved by the Conflicts Committee;
provided
,
further
, that following receipt of the
Partnership Unitholder Approval or the Parent Stockholder Approval, there shall be no amendment or change to the provisions of this Agreement which by applicable Laws or stock exchange rule would
require further approval by the Limited Partners or Parent Stockholders, as applicable, without such approval.
Section 9.3
Managing GP Board Consent.
Unless otherwise expressly set forth in this
Agreement, whenever a determination, decision, approval or consent of the Partnership, the General Partner or the
Managing GP is required pursuant to this Agreement, such determination, decision, approval or consent must be authorized by the Managing GP Board;
provided
,
however
, that the Managing GP Board may not take or authorize any such action unless it
has been approved in writing by the Conflicts Committee.
Section 9.4
Extension of Time, Waiver, Etc.
At any time prior to the Effective Time, any party
may, subject to applicable Laws, (a) waive any inaccuracies in the representations and warranties of any
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other
party hereto, (b) extend the time for the performance of any of the obligations or acts of any other party hereto, (c) waive compliance by the other party with any of the
agreements contained herein or, except as otherwise provided herein, waive any of such party's conditions or (d) make or grant any consent under this Agreement;
provided
,
however
, that the Managing GP Board may not take or authorize any such action unless it
has been approved in writing by the Conflicts Committee. Notwithstanding the foregoing, no failure or delay by the Partnership, the General Partner, the Managing GP, Parent or Merger Sub in
exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right
hereunder. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.
Section 9.5
Assignment.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, in whole or in part, by operation of Law or otherwise, by any
of the parties without the prior written consent of the other parties, except that Merger Sub may assign, in its sole discretion, any of or all of its rights, interests and obligations under this
Agreement to any other wholly owned Subsidiary of Parent (including any wholly owned Subsidiary of Parent created after the date of this Agreement but prior to the Effective Time), but no such
assignment shall relieve Merger Sub of any of its obligations hereunder. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the
parties hereto and their respective successors and permitted assigns. Any purported assignment not permitted under this
Section 9.5
shall be
null, void and ineffective.
Section 9.6
Counterparts.
This Agreement may be executed in counterparts (each of which shall be
deemed to be an original but all of which taken together shall constitute one and the same
agreement) and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. Signatures to this Agreement transmitted by facsimile
transmission, by electronic mail in "portable document format" ("
.pdf
") form, or by any other electronic means intended to preserve the original graphic
and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.
Section 9.7
Entire Understanding; No Third-Party Beneficiaries.
This Agreement, the Partnership
Disclosure Schedule, the Parent Disclosure Schedule and any certificates delivered by any party pursuant to this agreement
(a) constitute the entire agreement and understanding, and supersede all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter
of this Agreement and thereof and (b) shall not confer upon any Person other than the parties hereto any rights (including third-party beneficiary rights or otherwise) or remedies hereunder,
except for, in the case of
clause (b)
of this sentence, the provisions of
Section 6.7
and
Section 9.12
. Notwithstanding anything to the contrary in this Agreement,
Section 9.8
and
Section 9.12
shall be for the benefit of, and enforceable by, any financing sources or lender providing financing in connection with the Merger.
Section 9.8
Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) This
Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, applicable to contracts executed in and to be performed
entirely within that State.
(b) Each
of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, shall
be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept
jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each of the parties hereto consents to service being made through the notice procedures set forth in
Section 9.9
, irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and
A-56
unconditionally,
to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement
in any court other than the aforesaid courts. Each of the parties hereto irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or proceeding with respect
to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this
Section 9.8
, (ii) any claim that it or its property is exempt or immune from the jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the
fullest extent permitted by the applicable Laws, any claim that (A) the suit, action or proceeding in such court is brought in an inconvenient forum, (B) the venue of such suit, action
or proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Each party
hereto expressly acknowledges that the foregoing waiver is intended to be irrevocable under the Law of the State of Delaware and of the United States of America;
provided
,
however
, that each such party's consent to jurisdiction and service contained in this
Section 9.8(b)is solely for the purpose referred to in this Section 9.8(b)and shall not be deemed to be a general submission to such courts or in the State of Delaware other than for
such purpose.
(c) EACH
PARTY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
Section 9.9
Specific Performance.
The parties agree that irreparable damage would occur and that
the parties would not have any adequate remedy at law in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or were otherwise breached and it is accordingly agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, in accordance with this
Section 9.9
in the Delaware Court of Chancery or any
federal court sitting in the State of Delaware, this being in addition to any other remedy
to which they are entitled at law or in equity. Each of the parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief as provided herein on
the basis that (a) either party has an adequate remedy at law or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity (it being understood
that nothing in this sentence shall prohibit the parties hereto from raising other defenses to a claim for specific performance or other equitable relief under this Agreement). Each party further
agrees that no party shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this
Section 9.9
, and
each party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar
instrument.
Section 9.10
Notices.
All notices and other communications hereunder must be in writing and will
be deemed duly given if delivered personally or by email transmission, or mailed
through a nationally recognized overnight courier or registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other address for a
party as
A-57
specified
by like notice,
provided
,
however
, that notices of a change of address will be effective only
upon receipt thereof):
If
to Parent or Merger Sub, to:
Archrock, Inc.
9807 Katy Freeway, Suite 100
Houston, Texas 77024
Attention: D. Bradley Childers
President and Chief Executive Officer
Email: brad.childers@archrock.com
with
copies (which shall not constitute notice) to:
Archrock, Inc.
9807 Katy Freeway, Suite 100
Houston, Texas 77024
Attention: Stephanie C. Hildebrandt
Senior Vice President, General Counsel and Secretary
Email: stephanie.hildebrandt@archrock.com
Latham &
Watkins LLP
811 Main Street, Suite 3700
Houston, Texas 77002
Attention: Ryan J. Maierson
Email: ryan.maierson@lw.com
If
to the Partnership or the General Partner, to:
Archrock
Partners, L.P.
9807 Katy Freeway, Suite 100
Houston, Texas 77024
Attention: G. Stephen Finley
Chairman of the Conflicts Committee of Archrock GP LLC
Email: gsfcef@yahoo.com
with
copies (which shall not constitute notice) to:
Archrock
Partners, L.P.
9807 Katy Freeway, Suite 100
Houston, Texas 77024
Attention: Stephanie C. Hildebrandt
Senior Vice President and General Counsel
Email: stephanie.hildebrandt@archrock.com
Akin
Gump Strauss Hauer & Feld LLP
1111 Louisiana Street, 44
th
Floor
Houston, Texas 77002
Attention: John Goodgame / Lisa Hearn
Email: jgoodgame@akingump.com / lhearn@akingump.com
Notices
will be deemed to have been received (x) on the date of receipt if (i) delivered by hand or nationally recognized overnight courier service or (ii) upon
receipt of an appropriate confirmation by the recipient when so delivered by email (to such email specified above or another email or emails as such person may subsequently designate by notice given
hereunder only if followed by overnight or hand delivery) or (y) on the date five (5) Business Days after dispatch by certified or registered mail.
A-58
Section 9.11
Severability.
If any term or other provision of this Agreement is determined by a
court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other terms, provisions and conditions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible
to the fullest extent permitted by applicable Laws in an acceptable manner to the end that the transactions contemplated by this Agreement are fulfilled to the extent possible.
Section 9.12
Non-Recourse.
No past, present or future director, officer, employee, incorporator,
member, partner, stockholder, financing source, lender, agent, attorney, representative or
affiliate of any party hereto or of any of their respective Affiliates (unless such Affiliate is expressly a party to this Agreement) shall have any liability (whether in contract or in tort or
otherwise) for any obligations or liabilities arising under, in connection with or related to this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated by
this Agreement;
provided
,
however
, that nothing in this
Section 9.12
shall limit any liability of the
parties to this Agreement for breaches of the terms and conditions of this Agreement.
[Signature
page follows]
A-59
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.
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PARENT
:
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ARCHROCK, INC.
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By:
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/s/ D. BRADLEY CHILDERS
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Name:
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D. Bradley Childers
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Title:
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President, Chief Executive Officer and Director
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PARTNERSHIP
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ARCHROCK PARTNERS, L.P.
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By: ARCHROCK GENERAL PARTNER, L.P.,
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its general partner
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By: ARCHROCK GP LLC,
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its general partner
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By:
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/s/ D. BRADLEY CHILDERS
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Name:
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D. Bradley Childers
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Title:
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President, Chief Executive Officer and Chairman of the Board
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GENERAL PARTNER:
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ARCHROCK GENERAL PARTNER, L.P.
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By: ARCHROCK GP LLC,
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its general partner
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By:
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/s/ D. BRADLEY CHILDERS
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Title:
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President, Chief Executive Officer and Chairman of the Board
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MANAGING GP
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ARCHROCK GP LLC
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By:
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/s/ D. BRADLEY CHILDERS
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Title:
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President, Chief Executive Officer and Chairman of the Board
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[SIGNATURE
PAGE TO THE AGREEMENT AND PLAN OF MERGER]
A-60
Table of Contents
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this "
Amendment
") is made and entered into
as of January 11, 2018, by and among Archrock, Inc., a Delaware corporation ("
Parent
"), Amethyst Merger Sub LLC, a Delaware limited
liability company and an indirect wholly owned Subsidiary of Parent ("
Amethyst Merger Sub
"), Archrock Partners, L.P., a Delaware limited
partnership (the "
Partnership
"), Archrock General Partner, L.P., a Delaware limited partnership and the general partner of the Partnership (the
"
General Partner
"), and Archrock GP LLC, a Delaware limited liability company and the general partner of the General Partner (the
"
Managing GP
"). Capitalized terms used and not defined herein shall have the meanings given to such terms in the Merger Agreement (as defined
below).
WHEREAS,
Parent, the Partnership, the General Partner and the Managing GP entered into that certain Agreement and Plan of Merger (the "
Merger
Agreement
"), dated as of January 1, 2018, pursuant to which, among other things, a wholly owned Subsidiary of Parent will merge with and into the
Partnership with the Partnership surviving as an indirect wholly owned Subsidiary of Parent, subject to the terms and conditions therein (the "
Merger
");
WHEREAS,
Section 6.18(a) of the Merger Agreement provides that promptly (and in any event no later than ten (10) Business Days) following the execution of the Merger
Agreement, Parent shall form (through one or more intermediate entities) a new wholly owned Subsidiary as a Delaware limited liability company ("
Merger
Sub
") solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, including merging with and into the Partnership at the Effective Time to
effect the Merger;
WHEREAS,
Parent (through one or more intermediate entities) formed Amethyst Merger Sub as a wholly owned Subsidiary pursuant to the filing of a Certificate of Formation with the
Secretary of State of the State of Delaware on January 10, 2018 to act as Merger Sub under the Merger Agreement;
WHEREAS,
Section 6.18(c) of the Merger Agreement provides that promptly (and in any event no later than two (2) Business Days) following the formation of Merger Sub,
Parent, the Partnership, the General Partner and the Managing GP will, and Parent will cause Merger Sub to, enter into an amendment to the Merger Agreement pursuant to which Merger Sub will
become a party to the Merger Agreement and thereupon be immediately bound by the terms and conditions of the Merger Agreement; and
WHEREAS,
in accordance with Section 9.2 of the Merger Agreement, Parent, the Partnership, the General Partner and the Managing GP wish to enter into this Amendment with
Amethyst Merger Sub to amend the Merger Agreement to acknowledge the joinder of Amethyst Merger Sub as a party thereto pursuant to Section 6.18(c) thereof.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained in this Amendment and in the Merger Agreement and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as follows:
1.
Joinder.
Amethyst Merger Sub hereby agrees to join, enter into and become a party to the Merger
Agreement and agrees to be bound by the provisions of the Merger Agreement
as Merger Sub. Each of Parent, the Partnership, the General Partner and the Managing GP hereby acknowledges and agrees to the joinder of Amethyst Merger Sub to the Merger Agreement as Merger
Sub.
2.
Effect of Joinder.
Pursuant to Section 6.18(c) of the Merger Agreement, upon the execution of
this Amendment by the parties hereto, the representations and warranties in the
Merger Agreement that are expressed to be given by or in relation to Merger Sub and the covenants and agreements of Merger Sub in the Merger Agreement shall immediately become effective as of the date
of this
A-61
Table of Contents
Amendment.
Except as expressly amended hereby, the Merger Agreement is in all respects ratified and confirmed and all the terms, conditions, and provisions thereof shall remain in full force and
effect.
3.
Effect of Amendment.
This Amendment shall form a part of the Merger Agreement for all
purposes, and each party thereto and hereto shall be bound hereby. From and after the
execution of this Amendment by the parties hereto, each reference in the Merger Agreement to "this Agreement," "hereof," "hereunder," "herein," "hereby" or words of like import referring to the Merger
Agreement shall mean and be a reference to the Merger Agreement as amended by this Amendment.
4.
Counterparts.
This Amendment may be executed in counterparts (each of which shall be deemed to be
an original but all of which taken together shall constitute one and the same
agreement) and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. Signatures to this Amendment transmitted by facsimile
transmission, by electronic mail in "portable document format" (".pdf") form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will
have the same effect as physical delivery of the paper document bearing the original signature.
5.
Governing Law.
This Amendment shall be governed by, and construed in accordance with, the laws of
the State of Delaware, applicable to contracts executed in and to be performed
entirely within that State.
6.
Additional Miscellaneous Terms.
The provisions of Section 1.2 and Article IX
(Miscellaneous) of the Merger Agreement shall apply
mutatis
mutandis
to this Amendment, and to the Merger Agreement as modified by this Amendment, taken together as a single agreement, reflecting the terms as modified hereby.
(Signature Page Follows)
A-62
IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered as of the date first above written.
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PARENT
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ARCHROCK, INC.
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By:
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/s/ STEPHANIE C. HILDEBRANDT
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Name:
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Stephanie C. Hildebrandt
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Title:
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Senior Vice President, General Counsel and Secretary
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MERGER SUB
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AMETHYST MERGER SUB LLC
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By:
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/s/ STEPHANIE C. HILDEBRANDT
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Name:
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Stephanie C. Hildebrandt
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Title:
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Senior Vice President, General Counsel and Secretary
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[SIGNATURE
PAGE TO AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER]
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PARTNERSHIP
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ARCHROCK PARTNERS, L.P.
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By: ARCHROCK GENERAL PARTNER, L.P.,
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its general partner
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By: ARCHROCK GP LLC,
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its general partner
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By:
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/s/ STEPHANIE C. HILDEBRANDT
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Name:
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Stephanie C. Hildebrandt
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Title:
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Senior Vice President and General Counsel
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GENERAL PARTNER
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ARCHROCK GENERAL PARTNER, L.P.
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By: ARCHROCK GP LLC,
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its general partner
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By:
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/s/ STEPHANIE C. HILDEBRANDT
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Name:
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Stephanie C. Hildebrandt
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Title:
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Senior Vice President and General Counsel
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MANAGING GP
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ARCHROCK GP LLC
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By:
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/s/ STEPHANIE C. HILDEBRANDT
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Name:
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Stephanie C. Hildebrandt
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Title:
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Senior Vice President and General Counsel
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[SIGNATURE
PAGE TO AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER]
A-64
Annex B
Opinion of Citigroup Global Markets Inc.
January 1,
2018
Archrock, Inc.
9807 Katy Freeway, Suite 100
Houston, Texas 77024
The
Board of Directors:
You
have requested our opinion as to the fairness, from a financial point of view, to Archrock, Inc. ("Archrock") of the Exchange Ratio (defined below) provided for pursuant to
the terms and subject to the conditions set forth in an Agreement and Plan of Merger (the "Agreement") to be entered into among Archrock, Archrock Partners, L.P. (the "Partnership"), Archrock
General Partner, L.P., the general partner of the Partnership ("Archrock GP"), and Archrock GP LLC, the general partner of Archrock GP. As more fully described in
the Agreement, (i) a wholly owned subsidiary of Archrock will be merged with and into the Partnership (the "Merger"), with the Partnership as the surviving entity and a wholly owned subsidiary
of Archrock, and (ii) each outstanding common unit representing limited partner interests in the Partnership ("Partnership Common Units") other than those owned by Archrock and its subsidiaries
will be converted into the right to receive 1.40 (the "Exchange Ratio") shares of the common stock, par value $0.01 per share, of Archrock ("Archrock Common Stock").
We
understand that, pursuant to the Agreement, in connection with the Merger, (i) interests in the Partnership that are owned by the Partnership, any subsidiary of the
Partnership, Archrock or any affiliate of Archrock (including incentive distribution rights but excluding the general partner interest in the Partnership and Partnership Common Units owned by Archrock
MLP LP LLC, a subsidiary of Archrock ("MLP LP LLC")) will be canceled, (ii) the general partner interest in the Partnership will remain outstanding, and
(iii) the Partnership Common Units owned by MLP LP LLC will remain outstanding. The terms and conditions of the Merger are more fully set forth in the Agreement.
In
arriving at our opinion, we reviewed a draft, dated January 1, 2018, of the Agreement and held discussions with certain senior officers, directors and other representatives of
Archrock concerning the businesses, operations and prospects of Archrock and the Partnership. We reviewed certain publicly available and other business and financial information relating to Archrock
and the Partnership provided to or discussed with us by the management of Archrock, including certain financial forecasts and other information and data relating to Archrock and the Partnership
provided to or discussed with us by the management of Archrock. We also reviewed certain information and data relating to the potential strategic implications and financial, operational and tax
benefits (including the amount, timing and achievability thereof) anticipated by the management of Archrock to result from the Merger. We reviewed the financial terms of the Merger as set forth in the
Agreement in relation to, among other things: current and historical market prices of Archrock Common Stock and Partnership Common Units; the financial condition and historical and projected cash
flows and other operating data of Archrock and the Partnership; and the capitalization of Archrock and the Partnership. We analyzed certain financial, stock market and other publicly available
information relating to the businesses of
other companies whose operations we considered relevant in evaluating those of Archrock and the Partnership and we considered, to the extent publicly available, the financial terms of certain other
transactions which we considered relevant in evaluating the Merger. We also evaluated certain potential pro forma financial effects of the Merger relative to Archrock and the Partnership each on a
standalone basis utilizing the financial forecasts and other information and data relating to Archrock and the Partnership and the potential strategic implications and financial, operational and tax
benefits referred to above. In addition to the foregoing, we conducted such other analyses and examinations
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and
considered such other information and financial, economic and market criteria as we deemed appropriate in arriving at our opinion. The issuance of our opinion has been authorized by our fairness
opinion committee.
In
rendering our opinion, we have assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly
available or provided to or otherwise reviewed by or discussed with us and upon the assurances of the management and other representatives of Archrock that they are not aware of any relevant
information that has been omitted or that remains undisclosed to us. With respect to the financial forecasts and other information and data (including, without limitation, as to net operating loss
carryforwards and other tax attributes of Archrock and the potential strategic implications and financial, operational and tax benefits anticipated by the management of Archrock to result from the
Merger) that we have been directed to utilize in our analyses, we have been advised by the management of Archrock and we have assumed, with your consent, that such forecasts and other information and
data were reasonably prepared on bases reflecting the best currently available estimates and judgments of such management as to, and are a reasonable basis upon which to evaluate, the future financial
performance of Archrock and the Partnership (in the case of the Partnership, under alternative cash distribution scenarios), the potential strategic implications and financial, operational and tax
benefits (including the amount, timing and achievability thereof) anticipated by the management of Archrock to result from, and other potential pro forma financial effects of, the Merger and the other
matters covered thereby. We express no opinion as to any financial forecasts and other information or data (or underlying assumptions on which any such financial forecasts and other information or
data are based) provided to or otherwise reviewed by or discussed with us and we have assumed, with your consent, that the financial results, including with respect to the potential strategic
implications and financial, operational and tax benefits anticipated to result from the Merger, reflected in such financial forecasts and other information and data will be realized in the amounts and
at the times projected.
We
have relied, at your direction, upon the assessments of the management of Archrock as to, among other things, (i) matters relating to the separation of Archrock and Exterran
Corporation consummated in November 2015 (the "Spin-off"), including any continuing tax indemnities and other arrangements in connection therewith, (ii) the distribution policies of each of
Archrock and the Partnership on a standalone basis and of the pro forma combined entity following consummation of the Merger, (iii) the potential impact on Archrock and the Partnership of
market, competitive, cyclical and other trends and developments in and prospects for, and governmental, regulatory and legislative matters relating to or otherwise affecting, the oil and natural gas,
energy infrastructure and natural gas compression industries, including commodity pricing, supply and demand for natural gas, oil and natural gas liquids, and supply and demand for contract natural
gas compression services, which are subject to significant volatility and which, if different than as assumed, could have a material impact on our analyses or opinion, (iv) existing and future
contracts and relationships, agreements and arrangements with, and the ability to attract, retain and/or replace, key customers, suppliers, service providers and other commercial relationships of
Archrock and the Partnership, and (v) the ability to integrate the operations of Archrock and the Partnership. We have assumed, with your consent, that there will be no developments with
respect to any such matters that would have an adverse effect on Archrock, the Partnership or the Merger (including the contemplated benefits thereof) or that otherwise would be meaningful in any
respect to our analyses or opinion.
We
have not made or been provided with an independent evaluation or appraisal of the assets or liabilities (contingent, accrued, derivative, off-balance sheet or otherwise) of Archrock,
the Partnership
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or
any other entity nor have we made any physical inspection of the properties or assets of Archrock, the Partnership or any other entity. We express no view or opinion as to the potential impact on
Archrock, the Partnership or any other entity of any pending or potential litigation, claims or governmental, regulatory or other proceedings, enforcement actions or investigations. We have assumed,
with your consent, that the Merger will be consummated in accordance with its terms and in compliance with all applicable laws, documents and other requirements, without waiver, modification or
amendment of any material term, condition or agreement, and that, in the course of obtaining the necessary governmental, regulatory or third party approvals, consents, releases, waivers and agreements
for the Merger, no delay, limitation, restriction or condition, including any divestiture requirements, amendments or modifications, will be imposed or occur that would have an adverse effect on
Archrock, the Partnership or the Merger (including the contemplated benefits thereof) or that otherwise would be meaningful in any respect to our analyses or opinion. We also have assumed, with your
consent, that the Merger will qualify for the intended tax treatment contemplated by the Agreement. Our opinion, as set forth herein, relates to the relative values of Archrock and the Partnership. We
are not expressing any view or opinion as to the actual value of Archrock Common Stock or any other securities when issued in connection with the Merger or the prices at which Archrock Common Stock,
Partnership
Common Units or any other securities will trade or otherwise be transferable at any time, including following the announcement or consummation of the Merger. Representatives of Archrock have advised
us, and we further have assumed, that the final terms of the Agreement will not vary materially from those set forth in the draft reviewed by us. We are not expressing any view or opinion with respect
to accounting, tax, regulatory, legal or similar matters, including, without limitation, tax consequences resulting from the Spin-Off, the Merger or otherwise or changes in, and the impact of, U.S.
tax laws, regulations and governmental and legislative policies on Archrock, the Partnership or the Merger (including the contemplated benefits thereof), and we have relied, with your consent, upon
the assessments of representatives of Archrock as to such matters.
Our
opinion does not address any terms (other than the Exchange Ratio to the extent expressly specified herein), aspects or implications of the Merger, including, without limitation, the
form or structure of the Merger or any other agreement, arrangement or understanding to be entered into in connection with or contemplated by the Merger or otherwise. We express no view as to, and our
opinion does not address, the underlying business decision of Archrock to effect or enter into the Merger, the relative merits of the Merger as compared to any alternative business strategies that
might exist for Archrock or the effect of any other transaction which Archrock might engage in or consider. We also express no view as to, and our opinion does not address, the fairness (financial or
otherwise) of the amount or nature or any other aspect of any compensation or other consideration to any officers, directors or employees of any parties to the Merger, or any class of such persons,
relative to the Exchange Ratio or otherwise. Our opinion is necessarily based upon information available, and financial, stock market and other conditions and circumstances existing and disclosed, to
us as of the date hereof. Although subsequent developments may affect our opinion, we have no obligation to update, revise or reaffirm our opinion. As you are aware, the credit, financial and stock
markets, and the industries in which Archrock and the Partnership operate, have experienced and continue to experience volatility and we express no view or opinion as to any potential effects of such
volatility on Archrock, the Partnership or the Merger (including the contemplated benefits thereof).
Citigroup
Global Markets Inc. has acted as financial advisor to Archrock in connection with the proposed Merger and will receive a fee for such services, the principal portion of
which is contingent upon consummation of the Merger. We also will receive a fee in connection with the delivery of this
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opinion.
In addition, Archrock has agreed to reimburse our expenses and to indemnify us against certain liabilities arising out of our engagement. As you are aware, we and our affiliates in the past
have provided, currently are providing and in the future may provide investment banking, commercial banking and other similar financial services to Archrock and certain of its affiliates unrelated to
the proposed Merger, for which services we and our affiliates have received and expect to receive compensation, including, during the past two years, having acted or acting as (i) financial
advisor to Archrock in connection with a potential acquisition (not consummated) and (ii) a lender under a credit facility of an affiliate of Archrock. As you also are aware, we and our
affiliates in the past have provided, currently are providing and in the future may provide investment banking, commercial banking and other similar financial services to the Partnership and certain
of its affiliates, for which services we and our affiliates have received and expect to receive compensation, including, during the past two years, having acted or acting as (i) joint lead
manager for an equity offering of the Partnership, (ii) sales agent for at-the-market equity offerings of the Partnership and (iii) a lender under certain credit facilities of an
affiliate of the Partnership. In the ordinary course of business, we and our affiliates may actively trade or hold the securities of Archrock, the Partnership and their respective affiliates for our
own account or for the account of our customers and, accordingly, may at any time hold a long or short position in such securities. In addition, we and our affiliates (including Citigroup Inc.
and its affiliates) may maintain relationships with Archrock, the Partnership and their respective affiliates.
Our
advisory services and the opinion expressed herein are provided for the information of the Board of Directors of Archrock (in its capacity as such) in its evaluation of the proposed
Merger. Our opinion is not intended to be and does not constitute a recommendation to any securityholder as to how such securityholder should vote or act on any matters relating to the proposed Merger
or otherwise.
Based
upon and subject to the foregoing, our experience as investment bankers, our work as described above and other factors we deemed relevant, we are of the opinion that, as of the
date hereof, the
Exchange Ratio provided for pursuant to the Agreement is fair, from a financial point of view, to Archrock.
Very
truly yours,
CITIGROUP
GLOBAL MARKETS INC.
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ANNEX C
OPINION OF EVERCORE GROUP L.L.C.
January 1,
2018
The
Conflicts Committee of the Board of Directors of
Archrock GP LLC, the general partner of
Archrock General Partner, L.P., the general partner of
Archrock Partners, L.P.
9807 Katy Freeway, Suite 100
Houston, Texas 77024
Members
of the Conflicts Committee:
We
understand that Archrock Partners, L.P., a Delaware limited partnership (the "Partnership"), proposes to enter into an Agreement and Plan of Merger, dated as of the date hereof
(the "Agreement"), with Archrock, Inc., a Delaware corporation ("Parent"), Archrock General Partner, L.P., a Delaware limited partnership and the general partner of the Partnership (the
"General Partner"), and Archrock GP LLC, a Delaware limited liability company and the general partner of the General Partner (the "Managing GP"), whereby a to-be-formed Delaware
limited liability company that will be wholly-owned by Parent (the "Merger Sub") will merge with and into the Partnership (the "Merger") and each outstanding common unit ("Common Units") of the
Partnership that is not owned by Parent or its subsidiaries immediately prior to the effective time of the Merger will be converted into the right to receive 1.40 (the "Exchange Ratio") shares of
common stock, par value $0.01 (the "Parent Common Stock"), of the Parent, subject to adjustment in accordance with the Agreement (as to which we express no opinion). As a result of the Merger, the
Partnership will become a wholly owned subsidiary of the Parent. The terms and conditions of the Merger are more fully set forth in the Agreement.
The
Conflicts Committee of the Board of Directors of the Managing GP (the "Conflicts Committee") has asked us whether, in our opinion, as of the date hereof, the Exchange Ratio is
fair, from a financial point of view, to the holders of the Partnership's Common Units, other than Parent, the General Partner, the Managing GP and Archrock MLP LP LLC, a Delaware
limited liability company, and their affiliates (the "Partnership Unaffiliated Unitholders").
In
connection with rendering our opinion, we have, among other things:
-
(i)
-
reviewed
certain publicly-available historical business and financial information relating to the Partnership and the Parent that we deemed to be relevant, including
their Annual Reports on Form 10-K for the year ended December 31, 2016, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017, June 30, 2017 and
September 30, 2017 and certain Current Reports on Form 8-K, in each case as filed with or furnished to the U.S. Securities and Exchange Commission by Parent and the Partnership since
January 1, 2017;
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(ii)
-
reviewed
certain non-public historical financial statements and other non-public historical financial and operating data relating to the Partnership and the Parent
prepared and furnished to us by management of the Parent;
-
(iii)
-
reviewed
certain non-public projected financial and operating data and assumptions relating to the Partnership and the Parent prepared and furnished to us by
management of the Partnership and the Parent, which include certain sensitivity cases prepared by the management of the Partnership and Parent;
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(iv)
-
discussed
the past and current operations, financial projections and current financial condition of the Partnership and the Parent with management of the
Partnership and the Parent (including their views on the risks and uncertainties of achieving such projections);
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(v)
-
reviewed
the reported prices and the historical trading activity of the Partnership's Common Units and the Parent Common Stock;
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(vi)
-
reviewed
publicly available research analysts estimates for the Parent's and the Partnership's future financial performance, in each case, on a standalone basis;
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(vii)
-
compared
the financial performance of the Partnership and the Parent and their stock market trading multiples with those of certain other publicly traded companies
that we deemed relevant;
-
(viii)
-
compared
the financial performance of the Partnership and the Parent and the valuation multiples relating to the Merger with those of certain other transactions
that we deemed relevant;
-
(ix)
-
reviewed
the premiums paid in certain historical transactions that we deemed relevant and compared such premiums to those implied by the Merger;
-
(x)
-
performed
discounted cash flow analyses on the Partnership based on the management projections;
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(xi)
-
performed
discounted distribution analyses on the Partnership based on the management projections;
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(xii)
-
performed
discounted dividends analyses on the Parent based on the management projections;
-
(xiii)
-
reviewed
a draft of the Agreement dated January 1, 2018; and
-
(xiv)
-
performed
such other analyses and examinations and considered such other factors that we deemed appropriate for the purposes of providing the opinion contained
herein.
For
purposes of our analysis and opinion, we have assumed and relied upon, without undertaking any independent verification of, the accuracy and completeness of all of the information
publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by us, and we assume no liability therefor. With respect to the projected financial
and operating data relating to the Partnership and the Parent referred to above, we have assumed that such data has been reasonably prepared on bases reflecting the best currently available estimates
and good faith judgments of management of the Partnership and the Parent as to the future financial performance of the Partnership and the Parent under the alternative business assumptions reflected
therein. We express no view as to any projected financial and operating data or any judgments, estimates or assumptions on which they are based. We have relied at your direction, without independent
verification, upon the assessments of the management of the Parent as to the future financial and operating performance of the Partnership and the Parent and we have assumed that the Partnership and
the Parent will realize the benefits that each expects to realize from the Merger.
For
purposes of rendering our opinion, we have assumed, in all respects material to our analysis, that the Agreement will be executed and delivered (in the draft form reviewed by us),
that the representations and warranties of each party contained in the Agreement (in the draft form reviewed by us) are true and correct, that each party will perform all of the covenants and
agreements required to be performed by it under the Agreement and that all conditions to the consummation of the Merger will be satisfied without material waiver or modification thereof. We have
further assumed that all governmental, regulatory or other consents, approvals or releases necessary for the consummation of the Merger will be obtained without any material delay, limitation,
restriction or condition that would have an adverse effect on the Partnership or the consummation of the Merger or materially reduce the benefits to the Partnership Unaffiliated Unitholders.
We
have not made nor assumed any responsibility for making any independent valuation or appraisal of the assets or liabilities of the Partnership or the Parent, nor have we been
furnished with
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any
such appraisals, nor have we evaluated the solvency or fair value of the Partnership or the Parent under any state or federal laws relating to bankruptcy, insolvency or similar matters. Our
opinion is necessarily based upon information made available to us as of the date hereof and financial, economic, monetary, market, regulatory and other conditions and circumstances as they exist and
as can be evaluated on the date hereof. It is understood that subsequent developments may affect this opinion and that we do not have any obligation to update, revise or reaffirm this opinion.
We
have not been asked to pass upon, and express no opinion with respect to, any matter other than whether the Exchange Ratio is fair, from a financial point of view, to the Partnership
Unaffiliated Unitholders. We do not express any view on, and our opinion does not address, the fairness of the proposed transaction to, or any consideration received in connection therewith by, the
holders of any other securities, creditors or other constituencies of the Partnership, nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers,
directors or employees of the Partnership, the General Partner or the Managing GP, or any class of such persons, whether relative to the Exchange Ratio or otherwise. We have assumed that any
modification to the structure of the transaction will not vary in any respect material to our analysis. Our opinion does not address the relative merits of the Merger as compared to other business or
financial strategies that might be available to the Partnership, nor does it address the underlying business decision of the Partnership to engage in the Merger. In arriving at our opinion, we were
not authorized to solicit, and did not solicit, interest from any third party with respect to the acquisition of any or all of the Partnership's Common Units or any business combination or other
extraordinary transaction involving the Partnership. This letter, and our opinion, does not constitute a recommendation to the Conflicts Committee or to any other persons in respect of the Merger,
including as to how any holders of the Partnership's Common Units should vote or act in respect of the Merger. We express no opinion herein as to the price at which the Partnership's Common Units or
the Parent Common Stock will trade at any time. We are not legal, regulatory, accounting or tax experts and have assumed the accuracy and completeness of assessments by the Partnership and the Parent
and their advisors with respect to legal, regulatory, accounting and tax matters.
We
received an initial fee for our services and will receive an additional fee upon the rendering of this opinion and upon the closing of the Merger. The Partnership has also agreed to
reimburse our expenses and to indemnify us against certain liabilities arising out of our engagement. During the two year period prior to the date hereof, no material relationship existed between
Evercore Group L.L.C. or any of its affiliates, on the one hand, and the Partnership or the Parent or any of their respective affiliates, on the other hand, pursuant to which compensation was or is
intended to be received by Evercore Group L.L.C. or its affiliates as a result of such a relationship. We may provide financial or other services to the Partnership or the Parent in the future and in
connection with any such services we may receive compensation.
Evercore
Group L.L.C. and its affiliates engage in a wide range of activities for their own accounts and the accounts of customers. In connection with these businesses or otherwise,
Evercore Group L.L.C. and its affiliates and their respective employees, as well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly hold
long or short positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or equity securities, senior loans and/or derivative products
relating to Partnership, the Parent and their respective affiliates, for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such
securities or instruments.
This
letter, and the opinion expressed herein is addressed to, and for the information and benefit of, the Conflicts Committee in connection with its evaluation of the Merger. The
issuance of this opinion has been approved by an opinion committee of Evercore Group L.L.C. This opinion may not be disclosed, quoted, referred to or communicated (in whole or in part) to, or relied
upon by, any third party for any purpose whatsoever, nor shall any public reference to us be made, except with our prior
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written
approval or except as expressly provided in the engagement letter, dated January 1, 2018, among Evercore Group L.L.C., the Conflicts Committee and the Partnership.
Based
upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Exchange Ratio is fair, from a financial point of view, to the Partnership Unaffiliated
Unitholders.
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Very truly yours,
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EVERCORE GROUP L.L.C.
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By:
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/s/ Raymond B. Strong
Raymond B. Strong
Senior Managing Director
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