Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Amended and Restated Partnership Agreement
On April 2, 2019, NGL Energy Holdings LLC, a Delaware limited liability company and the general partner (the “General Partner”) of NGL Energy Partners LP, a Delaware limited partnership (the “Partnership”), executed the Fifth Amended and Restated Agreement of Limited Partnership of the Partnership (the “Amended and Restated Partnership Agreement”) for the purpose of creating and defining the preferences, rights, powers and terms of the
9.625% Class C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, liquidation preference $25.00 per Class C Preferred Unit, representing limited partner interests in the Partnership (the “Class C Preferred Units”). The amendments effected by the Amended and Restated Partnership Agreement provide, among other things, for the issuance of the Class C Preferred Units, in summary, with the features described below.
The Class C Preferred Units rank (a) senior to common units representing limited partner interests in the Partnership (“Common Units”) and to each other class or series of limited partner interests or other equity securities of the Partnership established after the original issue date of the Class C Preferred Units (the “Original Issue Date”) that is not expressly made senior to or on parity with the Class C Preferred Units as to the payment of distributions (“Junior Securities”), (b) on parity with (i) the Partnership’s 10.75% Class A Convertible Preferred Units (“Class A Preferred Units”), (ii) the Partnership’s 9.00% Class B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Class B Preferred Units”) and (iii) any class or series of limited partner interests or other equity securities of the Partnership established after the Original Issue Date with terms expressly providing that such class or series ranks on parity with the Class C Preferred Units as to the payment of distributions (the securities described in clauses (i), (ii) and (iii) being referred to herein as “Parity Securities”) and (c) junior to each other class or series of limited partner interests or equity securities of the Partnership established after the Original Issue Date with terms expressly made senior to the Class C Preferred Units as to the payment of distributions (“Senior Securities”).
Distributions on the Class C Preferred Units are cumulative from the Original Issue Date and will be payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, commencing on July 15, 2019, when, as and if declared by the General Partner out of legally available funds for such purpose. Distributions on the Class C Preferred Units will be paid on an equal priority basis with distributions on outstanding Parity Securities, if any. Distributions will be paid to holders of record as of the opening of business on the January 1, April 1, July 1 or October 1 next preceding the Distribution Payment Date. The initial distribution on the Class C Preferred Units will accumulate from the Original Issue Date until June 30, 2019 and will be payable on July 15, 2019. The initial distribution rate for the Class C Preferred Units from and including the Original Issue Date to, but not including April 15, 2024, will be 9.625% per annum of the $25.00 liquidation preference per unit (equal to $2.40625 per unit per annum). On and after April 15, 2024, distributions on the Class C Preferred Units will accumulate for each quarterly distribution period at a percentage of the $25.00 liquidation preference equal to the applicable Three-Month LIBOR (as defined in the Amended and Restated Partnership Agreement) plus a spread of 738.4 basis points.
No distribution may be declared or paid or set apart for payment on any Junior Securities (other than a distribution payable solely in Junior Securities), unless full cumulative distributions have been or contemporaneously are being paid or provided for on all outstanding Class C Preferred Units and any Parity Securities through the most recent respective distribution payment dates.
At any time on or after April 15, 2024, the Partnership may redeem, in whole or in part, the Class C Preferred Units at a redemption price in cash of $25.00 per Class C Preferred Unit plus an amount equal to all accumulated and unpaid distributions thereon to, but not including, the date of redemption, regardless of whether declared. The Partnership must provide not less than 30 days’ and not more than 60 days’ advance written notice of any such redemption.
Upon the occurrence of a Change of Control (as defined in the Amended and Restated Partnership Agreement), the Partnership may, at its option, redeem the Class C Preferred Units, in whole or in part, within 120 days after the first date on which such Change of Control occurred, by paying $25.00 per Class C Preferred Unit, plus all accumulated and unpaid distributions to, but not including, the date of redemption, regardless of whether declared. If, prior to the Change of Control Conversion Date (as defined in the Amended and Restated Partnership Agreement), the Partnership exercises its redemption rights relating to Class C Preferred
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