Attached files
file | filename |
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8-K - FORM 8-K - Crestwood Midstream Partners LP | h81153e8vk.htm |
EX-4.4 - EX-4.4 - Crestwood Midstream Partners LP | h81153exv4w4.htm |
EX-4.3 - EX-4.3 - Crestwood Midstream Partners LP | h81153exv4w3.htm |
EX-4.1 - EX-4.1 - Crestwood Midstream Partners LP | h81153exv4w1.htm |
EX-99.1 - EX-99.1 - Crestwood Midstream Partners LP | h81153exv99w1.htm |
EX-10.1 - EX-10.1 - Crestwood Midstream Partners LP | h81153exv10w1.htm |
EX-99.2 - EX-99.2 - Crestwood Midstream Partners LP | h81153exv99w2.htm |
EX-23.1 - EX-23.1 - Crestwood Midstream Partners LP | h81153exv23w1.htm |
Exhibit 3.1
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
CRESTWOOD MIDSTREAM PARTNERS LP
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
CRESTWOOD MIDSTREAM PARTNERS LP
This Second Amendment to the Second Amended and Restated Agreement of Limited Partnership
(this Amendment) of Crestwood Midstream Partners LP, a Delaware limited partnership (the
Partnership), is executed effective as of the 1st day of April, 2011, by Crestwood Gas Services
GP LLC, a Delaware limited liability company (the General Partner), as the sole general partner
of the Partnership. Capitalized terms used herein but not defined shall have the meanings given
them in the Partnership Agreement (as defined below).
WHEREAS, the undersigned General Partner entered into that certain Second Amended and Restated
Agreement of Limited Partnership, dated as of February 19, 2008, as amended by that certain First
Amendment to the Second Amended and Restated Agreement of Limited Partnership, dated as of October
4, 2010 (the Partnership Agreement);
WHEREAS, Section 5.6(a) of the Partnership Agreement provides that the Partnership may issue
additional Partnership Securities and options, rights, warrants and appreciation rights relating to
the Partnership Securities for any Partnership purpose at any time and from time to time to such
Persons for such consideration and on such terms and conditions as the General Partner shall
determine, all without the approval of any Limited Partners;
WHEREAS, Section 13.1(g) of the Partnership Agreement provides that the General Partner,
without the approval of any Partner, may amend any provision of the Partnership Agreement and
execute, swear to, acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect an amendment that the General Partner determines to be necessary
or appropriate in connection with the authorization of issuance of any class or series of
Partnership Securities pursuant to Section 5.6 of the Partnership Agreement;
WHEREAS, Section 13.1(h) of the Partnership Agreement provides that the General Partner,
without the approval of any Partner, may amend any provision of the Partnership Agreement and
execute, swear to, acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect any amendment expressly permitted in the Partnership Agreement to
be made by the General Partner acting alone;
WHEREAS, the Board of Directors of the General Partner has determined that the standards
specified in Sections 13.1(g) or 13.1(h) are satisfied with respect to the amendments to be made by
this Amendment;
WHEREAS, the Partnership has entered into a Class C Unit Purchase Agreement, dated as of
February 18, 2011 (the Unit Purchase Agreement), with the purchasers listed on Schedule 2.1
thereto (collectively, the Unit Purchasers);
WHEREAS, the Unit Purchase Agreement obligates the Partnership to issue Limited Partner
Interests to be designated as Class C Units having the terms set forth herein;
WHEREAS, in connection with the entry into the Unit Purchase Agreement, the Partnership and
the Unit Purchasers have entered into a Registration Rights Agreement, dated as of the date hereof,
under which the Unit Purchasers may from time to time be issued Class C Units in lieu of cash as
liquidated damages and in lieu of quarterly distributions; and
WHEREAS, the General Partner deems it in the best interest of the Partnership to effect this
Amendment in order to (i) specify the rights and obligations of the Limited Partner Interests
designated as Class C Units, (ii) provide for the economic uniformity of the Class C Units, the
PIK Units, and any other Partnership Securities that may be issued in connection with the Class C
Units, and (iii) provide for such other matters as are provided herein.
NOW, THEREFORE, in consideration of the execution of the Partnership Agreement and this
Amendment, and the benefits and advantages to be derived therefrom, the General Partner, pursuant
to Article XIII of the Partnership Agreement, hereby amends the Partnership Agreement as
follows:
1. Article I of the Partnership Agreement is hereby amended to add or restate, as applicable,
the following definitions:
Class C Unit means a Partnership Security representing a fractional part of the
Partnership Interests of all Limited Partners, and having the rights and obligations
specified with respect to Class C Units in this Agreement.
Class C Unit Distribution means any distribution payable to each Class C Unit,
determined in accordance with Sections 6.4(a)(i), 6.4(a)(ii), 6.4(a)(iv), 6.4(a)(v),
6.4(a)(vi), 6.4(a)(vii), 6.4(b)(i), 6.4(b)(ii), 6.4(b)(iii), 6.4(b)(iv), 6.4(b)(v) and 6.5.
Common Unit means a Partnership Security representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees, and having the rights and
obligations specified with respect to Common Units in this Agreement. The term Common
Unit does not include a Subordinated Unit, Class B Unit, Class C Unit or PIK Unit prior to
its conversion into a Common Unit pursuant to the terms hereof; provided that,
notwithstanding the foregoing each Class C Unit shall be deemed a Common Unit (whether
converted or not) with respect to any voting, approval or consent rights conferred upon
Common Units in this Agreement including pursuant to Sections 4.7, 7.9(a), 11.1(b), 11.2,
and 12.3 (i.e., Common Units and Class C Units shall vote together as a single class, except
that Class C Units shall be entitled to vote as a separate class on any matter on which
Unitholders are entitled to vote that adversely affects the rights or preferences of the
Class C Units in relation to other classes of Partnership Interests in any material respect
or as required by law).
Conversion Date means the date that is the earliest of (i) the second anniversary of
the initial issuance of Class C Units pursuant to the Unit Purchase Agreement, and (ii) the
date on which the Partnership delivers notice to the holders of the Class C Units that the
Class C Units have converted, which such notice shall be delivered upon the determination of
the General Partner.
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Converted Class C Units has the meaning assigned to such term in Section
6.1(d)(x)(C).
Incentive Distributions means any amount of cash or deemed cash distributed to the
holders of the Incentive Distribution Rights pursuant to Sections 6.4(a)(v), (vi) and (vii)
and 6.4(b)(iii), (iv) and (v).
Issue Price means the price at which a Unit is purchased from the
Partnership, net of any sales commission or underwriting discount charged to the
Partnership. Each PIK Unit shall have an Issue Price determined in accordance with Section
5.12(d)(iv) or Section 5.12(d)(v), as applicable. Each Class C Unit issued pursuant to the
Registration Rights Agreement shall have an Issue Price equal to the amount of cash in lieu
of which such Class C Unit is issued.
Limited Partner Interest means the ownership interest of a Limited Partner in the
Partnership, which may be evidenced by Common Units, Class B Units, Class C Units,
Subordinated Units, Incentive Distribution Rights or other Partnership Securities or a
combination thereof or interest therein, and includes any and all benefits to which such
Limited Partner is entitled as provided in this Agreement, together with all obligations of
such Limited Partner to comply with the terms and provisions of this Agreement; provided,
however, that when the term Limited Partner Interest is used herein in the context of any
vote or other approval, including Articles XIII and XIV, such term shall not, solely for
such purpose, include any Incentive Distribution Right except as may otherwise be required
by law.
Partnership Security means any class or series of equity interest in the Partnership
(but excluding any options, rights, warrants and appreciation rights relating to an equity
interest in the Partnership), including Common Units, Subordinated Units, Class B Units,
Class C Units, General Partner Units and Incentive Distribution Rights.
PIK Distribution Amount has the meaning assigned to such term in Section 5.12(d)(i).
PIK IDR Distribution Amount has the meaning assigned to such term in Section
5.12(d)(v).
PIK Payment Date has the meaning assigned to such term in Section 5.12(d)(iii).
PIK Unit means a Class C Unit that may be issued by the Partnership in lieu of cash
distributions in respect of the Class C Units (or Incentive Distributions, as applicable)
pursuant to Section 5.12(d).
Registration Rights Agreement means the Registration Rights Agreement, dated as of
the date hereof, among the Partnership and the Unit Purchasers.
Remaining Net Positive Adjustments means as of the end of any taxable period, (i)
with respect to the Unitholders holding Common Units, Subordinated Units, Class B
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Units or Class C Units, the excess of (a) the Net Positive Adjustments of the
Unitholders holding Common Units, Subordinated Units, Class B Units or Class C Units as of
the end of such period over (b) the sum of those Partners Share of Additional Book Basis
Derivative Items for each prior taxable period, (ii) with respect to the General Partner (as
holder of the General Partner Units), the excess of (a) the Net Positive Adjustments of the
General Partner as of the end of such period over (b) the sum of the General Partners Share
of Additional Book Basis Derivative Items with respect to the General Partner Units for each
prior taxable period, and (iii) with respect to the holders of Incentive Distribution
Rights, the excess of (a) the Net Positive Adjustments of the holders of Incentive
Distribution Rights as of the end of such period over (b) the sum of the Share of Additional
Book Basis Derivative Items of the holders of the Incentive Distribution Rights for each
prior taxable period.
Retained Converted Class C Units has the meaning assigned to such term in Section
5.5(c)(iii).
Share of Additional Book Basis Derivative Items means in connection with any
allocation of Additional Book Basis Derivative Items for any taxable period, (i) with
respect to the Unitholders holding Common Units, Subordinated Units, Class B Units or Class
C Units, the amount that bears the same ratio to such Additional Book Basis Derivative Items
as the Unitholders Remaining Net Positive Adjustments as of the end of such period bears to
the Aggregate Remaining Net Positive Adjustments as of that time, (ii) with respect to the
General Partner (as holder of the General Partner Units), the amount that bears the same
ratio to such Additional Book Basis Derivative Items as the General Partners Remaining Net
Positive Adjustments as of the end of such period bears to the Aggregate Remaining Net
Positive Adjustment as of that time, and (iii) with respect to the Partners holding
Incentive Distribution Rights, the amount that bears the same ratio to such Additional Book
Basis Derivative Items as the Remaining Net Positive Adjustments of the Partners holding the
Incentive Distribution Rights as of the end of such period bears to the Aggregate Remaining
Net Positive Adjustments as of that time.
Subordinated Unit means a Partnership Security representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees and having the rights and
obligations specified with respect to Subordinated Units in this Agreement. The term
Subordinated Unit does not include a Common Unit, a Class B Unit or a Class C Unit. A
Subordinated Unit that is convertible into a Common Unit shall not constitute a Common Unit
until such conversion occurs.
Unit means a Partnership Security that is designated as a Unit and shall include
Common Units, Subordinated Units, Class B Units and Class C Units but shall not include (i)
General Partner Units (or the General Partner Interest represented thereby) or (ii)
Incentive Distribution Rights.
Unit Majority means (i) during the Subordination Period, at least a majority of the
Outstanding Common Units and Class C Units, if any, (excluding Common Units and Class C
Units owned by the General Partner and its Affiliates), voting as a single class, and at
least a majority of the Outstanding Subordinated Units, voting as a class, and
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(ii) after the end of the Subordination Period, at least a majority of the Outstanding
Common Units, Class B Units, if any, and Class C Units, if any, voting as a single class.
Unit Purchase Agreement means the Class C Unit Purchase Agreement, dated as of
February 18, 2011, between the Partnership and the Unit Purchasers.
Unit Purchasers means the purchasers listed on Schedule 2.1 to the Unit Purchase
Agreement.
2. Section 4.1 of the Partnership Agreement is hereby amended and restated as follows:
Section 4.1 Certificate
Upon the Partnerships issuance of Common Units, Subordinated Units, Class B Units or
Class C Units to any Person, the Partnership shall issue, upon the request of such Person,
one or more Certificates in the name of such Person evidencing the number of such Units
being so issued. In addition, (a) upon the General Partners request, the Partnership shall
issue to it one or more Certificates in the name of the General Partner evidencing its
General Partner Units and (b) upon the request of any Person owning Incentive Distribution
Rights or any other Partnership Securities other than Common Units, Subordinated Units,
Class B Units or Class C Units, the Partnership shall issue to such Person one or more
certificates evidencing such Incentive Distribution Rights or other Partnership Securities
other than Common Units, Subordinated Units, Class B Units or Class C Units. Certificates
shall be executed on behalf of the Partnership by the Chairman of the Board, President or
any Executive Vice President, Senior Vice President or Vice President and the Secretary or
any Assistant Secretary of the General Partner. No Common Unit Certificate shall be valid
for any purpose until it has been countersigned by the Transfer Agent; provided, however,
that the Units may be certificated or uncertificated as provided in the Delaware Act; and
provided, further, that if the General Partner elects to issue Common Units in global form,
the Common Unit Certificates shall be valid upon receipt of a certificate from the Transfer
Agent certifying that the Common Units have been duly registered in accordance with the
directions of the Partnership. Subject to the requirements of Section 6.7(c), the Partners
holding Certificates evidencing Subordinated Units may exchange such Certificates for
Certificates evidencing Common Units on or after the date on which such Subordinated Units
are converted into Common Units pursuant to the terms of Section 5.7. Subject to the
requirements of Section 6.7(e), the Partners holding Certificates evidencing Class B Units
may exchange such Certificates for Certificates evidencing Common Units on or after the
period set forth in Section 5.11(f) pursuant to the terms of Section 5.11. The Partners
holding Certificates evidencing Class C Units may exchange such Certificates for
Certificates evidencing Common Units on or after the date on which such Class C Units are
converted into Common Units pursuant to the terms of Section 5.12.
3. Section 4.5(d) of the Partnership Agreement is hereby amended and restated as follows:
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(d) The General Partner and its Affiliates shall have the right at any time to transfer
their Subordinated Units, Class B Units, Class C Units and Common Units (whether issued upon
conversion of the Subordinated Units, conversion of Class C Units or otherwise) to one or
more Persons.
4. Section 5.5(a) of the Partnership Agreement is hereby amended and restated as follows:
(a) The Partnership shall maintain for each Partner (or a beneficial owner of
Partnership Interests held by a nominee in any case in which the nominee has furnished the
identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or
any other method acceptable to the General Partner) owning a Partnership Interest a separate
Capital Account with respect to such Partnership Interest in accordance with the rules of
Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by
(i) the amount of all Capital Contributions made to the Partnership with respect to such
Partnership Interest and (ii) all items of Partnership income and gain (including income and
gain exempt from tax) computed in accordance with Section 5.5(b) and allocated with respect
to such Partnership Interest pursuant to Section 6.1, and decreased by (x) the amount of
cash or Net Agreed Value of all actual and deemed distributions of cash or property
(provided that PIK Units shall not be deemed property for these purposes) made with respect
to such Partnership Interest and (y) all items of Partnership deduction and loss computed in
accordance with Section 5.5(b) and allocated with respect to such Partnership Interest
pursuant to Section 6.1. The initial Capital Account balance in respect of each Class C
Unit (other than PIK Units) shall be determined by reference to the fair market value of a
Common Unit on the date such Unit is issued as set forth in the Unit Purchase Agreement or
Registration Rights Agreement, as applicable. The initial Capital Account balance in
respect of each PIK Unit shall be determined in accordance with Section 5.12(d)(iv).
Immediately following the initial creation of a Capital Account balance in respect of each
Class C Unit, each Unitholder acquiring such a Unit at original issuance shall be deemed to
have received a cash distribution or to have made a cash contribution, as the case may be,
in respect of such Unit equal to the amount by which (A) the fair market value of a Common
Unit on the date of issuance exceeds or is less than, as the case may be, (B) the Issue
Price for such Unit.
5. Section 5.5(c) of the Partnership Agreement is hereby amended to add a new subclause (iii)
as follows:
(iii) Immediately prior to the transfer of a Class C Unit or of a Class C Unit that has
converted into a Common Unit pursuant to Section 5.12 by a holder thereof (other than a
transfer to an Affiliate unless the General Partner elects to have this subparagraph
5.5(c)(iii) apply), the Capital Account maintained for such Person with respect to its Class
C Units or converted Class C Units will (A) first, be allocated to the Class C Units or
converted Class C Units to be transferred in an amount equal to the product of (x) the
number of such Class C Units or converted Class C Units to be transferred and (y) the Per
Unit Capital Amount for a Common Unit, and (B) second, any remaining balance in such Capital
Account will be retained by the transferor, regardless
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of whether it has retained any Class C Units or converted Class C Units (Retained Converted
Class C Units); provided that, if such remaining balance would be negative, items of
Partnership income and gain shall be specially allocated pursuant to Section 6.1(d)(v) to
such transferor Partner in an amount and manner sufficient to eliminate the deficit in its
Capital Account as quickly as possible. Following any such allocation, the transferors
Capital Account, if any, maintained with respect to the retained Class C Units or Retained
Converted Class C Units, if any, will have a balance equal to the amount allocated under
clause (B) hereinabove, and the transferees Capital Account established with respect to the
transferred Class C Units or converted Class C Units will have a balance equal to the amount
allocated under clause (A) hereinabove.
6. Section 5.5(d) of the Partnership Agreement is hereby amended and restated as follows:
(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an
issuance of additional Partnership Interests for cash or Contributed Property, the issuance
of Partnership Interests as consideration for the provision of services, the conversion of
the General Partners Combined Interest to Common Units pursuant to Section 11.3(b), or the
conversion of Class C Units to Common Units pursuant to Section 5.12(c), the Capital
Accounts of all Partners and the Carrying Value of each Partnership property immediately
prior to such issuance or conversion shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such
property immediately prior to such issuance and had been allocated to the Partners at such
time (x) first, if such issuance or conversion occurs after the initial issuance of Class C
Units, in a manner that to the nearest extent possible results in the Capital Accounts
maintained with respect to the Class C Units and the converted Class C Units on a per unit
basis equaling the Per Unit Capital Amount for a Common Unit (other than a Common Unit
issued upon the conversion of a Subordinated Unit, a Class B Unit or a Class C Unit) and (y)
second, pursuant to Section 6.1(c) in the same manner as any item of gain or loss actually
recognized during such period would have been allocated. In determining such Unrealized
Gain or Unrealized Loss, the aggregate cash amount and fair market value of all Partnership
assets (including cash or cash equivalents) immediately prior to the issuance of additional
Partnership Interests, or immediately after the conversion, shall be determined by the
General Partner using such method of valuation as it may adopt; provided, however, that the
General Partner, in arriving at such valuation, must take fully into account the fair market
value of the Partnership Interests of all Partners at such time. The General Partner shall
allocate such aggregate value among the assets of the Partnership (in such manner as it
determines) to arrive at a fair market value for individual properties.
(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately
prior to any actual or deemed distribution to a Partner of any Partnership property (other
than a distribution of cash that is not in redemption or retirement of a Partnership
Interest), the Capital Accounts of all Partners and the Carrying Value of all Partnership
property shall be adjusted upward or downward to reflect any Unrealized
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Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized
Gain or Unrealized Loss had been recognized in a sale of such property immediately prior to
such distribution for an amount equal to its fair market value, and had been allocated to
the Partners at such time (x) first, if such actual or deemed distribution occurs after the
initial issuance of Class C Units, in a manner that to the nearest extent possible results
in the Capital Accounts maintained with respect to the Class C Units and the converted Class
C Units on a per unit basis equaling the Per Unit Capital Amount for a Common Unit (other
than a Common Unit issued upon the conversion of a Subordinated Unit, a Class B Unit or a
Class C Unit) and (y) second, pursuant to Section 6.1(c) in the same manner as any item of
gain or loss actually recognized during such period would have been allocated. In
determining such Unrealized Gain or Unrealized Loss the aggregate cash amount and fair
market value of all Partnership assets (including cash or cash equivalents) immediately
prior to a distribution shall (A) in the case of an actual distribution that is not made
pursuant to Section 12.4 or in the case of a deemed distribution, be determined and
allocated in the same manner as that provided in Section 5.5(d)(i) or (B) in the case of a
liquidating distribution pursuant to Section 12.4, be determined and allocated by the
Liquidator using such method of valuation as it may adopt.
7. Section 5.9 of the Partnership Agreement is hereby amended to add a new clause (e) as
follows:
(e) For the avoidance of doubt, upon any pro rata distribution of Partnership
Securities to all Record Holders of Common Units or any subdivision or combination (or
reclassified into a greater or smaller number) of Common Units, the Partnership will
proportionately adjust the number of Class C Units as follows: (i) if the Partnership issues
Partnership Securities as a distribution on its Common Units or subdivides the Common Units
(or reclassifies them into a greater number of Common Units) then the Class C Units shall be
subdivided into a number of Class C Units equal to the result of multiplying the number of
Class C Units by a fraction, (A) the numerator of which shall be the sum of the number of
Common Units outstanding immediately prior to such distribution or subdivision plus the
total number of Partnership Securities constituting such distribution or newly created by
such subdivision; and (B) the denominator of which shall be the number of Common Units
outstanding immediately prior to such distribution or subdivision; and (ii) if the
Partnership combines the Common Units (or reclassifies them into a smaller number of Common
Units) then the Class C Units shall be combined into a number of Class C Units equal to the
result of multiplying the number of Class C Units by a fraction, (A) the numerator of which
shall be the sum of the number of Common Units outstanding immediately following such
combination; and (B) the denominator of which shall be the number of Common Units
outstanding immediately prior to such combination.
8. Article V of the Partnership Agreement is hereby amended to add a new Section 5.12 creating
a new series of Units as follows:
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Section 5.12 Establishment of Class C Units
(a) The General Partner hereby designates and creates a series of Limited Partner
Interests to be designated as Class C Units and consisting of a total of 7,500,000 Class C
Units, having the terms and conditions set forth herein.
(b) The holders of the Class C Units shall have rights upon dissolution and liquidation
of the Partnership, including the right to share in any liquidating distributions pursuant
to Section 12.4, in accordance with Article XII of this Agreement.
(c) Conversion of Class C Units
(i) Immediately before the close of business on the Conversion Date (which
shall be the date that is the earliest of (i) the second anniversary of the initial
issuance of Class C Units pursuant to the Unit Purchase Agreement, and (ii) the date
on which the Partnership delivers notice to the holders of the Class C Units that
the Class C Units have converted, which such notice shall be delivered upon the
determination of the General Partner), the Class C Units shall automatically convert
into Common Units on a one-for-one basis.
(ii) Upon conversion, the rights of a holder of converted Class C Units as
holder of Class C Units shall cease with respect to such converted Class C Units,
including any rights under this Agreement with respect to holders of Class C Units,
and such Person shall continue to be a Limited Partner and have the rights of a
holder of Common Units under this Agreement. All Class C Units shall, upon the
Conversion Date, be deemed to be transferred to, and cancelled by, the Partnership
in exchange for the Common Units into which the Class C Units converted.
(iii) The Partnership shall pay any documentary, stamp or similar issue or
transfer taxes or duties relating to the issuance or delivery of Common Units upon
conversion of the Class C Units. However, the holder shall pay any tax or duty
which may be payable relating to any transfer involving the issuance or delivery of
Common Units in a name other than the holders name. The Transfer Agent may refuse
to deliver a Certificate representing Common Units being issued in a name other than
the holders name until the Transfer Agent receives a sum sufficient to pay any tax
or duties which will be due because the shares are to be issued in a name other than
the holders name. Nothing herein shall preclude any tax withholding required by
law or regulation.
(iv) (A) Except as otherwise provided in Section 5.8, the Partnership shall
keep free from preemptive rights a sufficient number of Common Units to permit the
conversion of all outstanding Class C Units into Common Units to the extent provided
in, and in accordance with, this Section 5.12(c).
(B) All Common Units delivered upon conversion of the Class C Units shall be
newly issued, shall be duly authorized and validly issued, and shall
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be free from preemptive rights (except as otherwise provided in Section 5.8) and
free of any lien or adverse claim.
(C) The Partnership shall comply with all applicable securities laws
regulating the offer and delivery of any Common Units upon conversion of Class C
Units and, if the Common Units are then listed or quoted on the New York Stock
Exchange, or any other National Securities Exchange or other market, shall list or
cause to have quoted and keep listed and quoted the Common Units issuable upon
conversion of the Class C Units to the extent permitted or required by the rules of
such exchange or market.
(D) Notwithstanding anything herein to the contrary, nothing herein shall give
to any holder of Class C Units any rights as a creditor in respect of its right to
conversion.
(d) Class C Distributions.
(i) Each Class C Unit shall have the right to share in distributions pursuant
to Sections 6.4(a)(i), 6.4(a)(ii), 6.4(a)(iv), 6.4(a)(v), 6.4(a)(vi), 6.4(a)(vii),
6.4(b)(i), 6.4(b)(ii), 6.4(b)(iii), 6.4(b)(iv), 6.4(b)(v) and 6.5 on a pro rata
basis with the Common Units as provided therein. All or any portion of each
distribution payable in respect of the Class C Units (the Class C Unit
Distribution) may, at the election of the Partnership, be paid in Class C Units
(any amount of such Class C Unit Distribution so paid in PIK Units, the PIK
Distribution Amount). The number of PIK Units to be issued in connection with a
PIK Distribution Amount shall be the quotient of (A) the PIK Distribution Amount
divided by (B) the volume-weighted average price of the Partnerships Common Units
for the ten (10) trading days immediately preceding the date the Class C Unit
Distribution is declared; provided that instead of issuing any fractional PIK Units,
the Partnership shall round the number of PIK Units issued down to the next lower
whole PIK Unit and pay cash in lieu of such fractional units, or at the
Partnerships option, the Partnership may round the number of PIK Units issued up to
the next higher whole PIK Unit.
(ii) Notwithstanding anything in this Section 5.12(d) to the contrary, with
respect to Class C Units that are converted into Common Units, the holder thereof
shall not be entitled to a Class C Unit Distribution and a Common Unit distribution
with respect to the same period, but shall be entitled only to the distribution to
be paid based upon the class of Units held as of the close of business on the
applicable Record Date.
(iii) When any PIK Units are payable to a holder of Class C Units pursuant to
this Section 5.12, the Partnership shall issue the PIK Units to such holder no later
than the date the corresponding distributions are made pursuant to Section 6.4 or
6.5, as applicable (the date of issuance of such PIK Units, the
PIK Payment Date).
On the PIK Payment Date, the Partnership shall issue to such
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holder of Class C Units a certificate or certificates for the number of PIK Units to
which such holder of Class C Units shall be entitled.
(iv) For purposes of maintaining Capital Accounts under Section 5.5, if the
Partnership distributes one or more PIK Units to a holder of Class C Units or to a
holder of Incentive Distribution Rights, (i) the Partnership shall be treated as
distributing cash to such holder of Class C Units or Incentive Distribution Rights
equal to the PIK Distribution Amount or PIK IDR Distribution Amount, as applicable,
and (ii) the holder of Class C Units or Incentive Distribution Rights shall be
deemed to have recontributed to the Partnership in exchange for such newly issued
PIK Units an amount of cash equal to the PIK Distribution Amount or PIK IDR
Distribution Amount, as applicable, less the amount of any cash distributed by the
Partnership in lieu of fractional PIK Units.
(v) To the extent any portion of the Class C Unit Distribution is paid in PIK
Units for any Quarter pursuant to Section 5.12(d)(i), a portion of the Incentive
Distributions for such Quarter shall likewise be paid to the holders of Incentive
Distribution Rights in PIK Units (any amount of such Incentive Distributions so paid
in PIK Units, the PIK IDR Distribution Amount). The PIK IDR Distribution Amount
for any such Quarter shall be equal to the product of the aggregate Incentive
Distributions distributable to the holders of Incentive Distribution Rights
(including any PIK IDR Distribution Amount) for such Quarter, multiplied by the
quotient of (1) the PIK Distribution Amount for such Quarter divided by (2) the
aggregate distributions distributable (including any PIK Distribution Amount) with
respect to all Units for such Quarter pursuant to Sections to Sections 6.4 and 6.5.
The number of PIK Units to be issued in connection with a PIK IDR Distribution
Amount shall be the quotient of (A) the PIK IDR Distribution Amount divided by (B)
the volume-weighted average price of the Partnerships Common Units for the ten (10)
trading days immediately preceding the date the relevant Class C Unit Distribution
is declared; provided that instead of issuing any fractional PIK Units, the
Partnership shall round the number of PIK Units issued down to the next lower whole
PIK Unit and pay cash in lieu of such fractional units, or at the Partnerships
option, the Partnership may round the number of PIK Units issued up to the next
higher whole PIK Unit.
(e) The Class C Units will have such voting rights pursuant to this Agreement as such
Class C Units would have if they were Common Units that were then outstanding and shall vote
together with the Common Units as a single class, except that the Class C Units shall be
entitled to vote as a separate class on any matter on which Unitholders are entitled to vote
that adversely affects the rights or preferences of the Class C Units in relation to other
classes of Partnership Interests in any material respect or as required by law. The
approval of a majority (or such other percentage as set forth in this Agreement) of the
Class C Units shall be required to approve any matter for which the holders of the Class C
Units are entitled to vote as a separate class.
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(f) Each Class C Unit and each Class C Unit that has converted into a Common Unit shall
be subject to the provisions of Sections 5.5(c)(iii), 5.5(d), 6.1(d)(x)(C) and 6.7(f).
9. Section 6.1(c)(i)(C) of the Partnership Agreement is hereby amended and restated as
follows:
(C) Third, (x) to the extent the Adjusted Capital Account of a Common Unit or
comparable fraction thereof and a Class C Unit (or converted Class C Unit) or comparable
fraction thereof are not identical, (1) to all Unitholders holding such class of Units with
the lower Adjusted Capital Account, proportionately, a percentage equal to 100% less the
percentage applicable to subclause (2) of this subclause (x) of this Clause (C) and (2) to
the General Partner in accordance with its Percentage Interest, until the Adjusted Capital
Account of each Common Unit or comparable fraction thereof and each Class C Unit (or
converted Class C Unit) or comparable fraction thereof are equal, and (y) if after
application of subclause (x) of this Clause (C), the Adjusted Capital Account of a Common
Unit or comparable fraction thereof and a Class C Unit or comparable fraction thereof, on
the one hand, and a Class B Unit (or converted Class B Unit) or comparable fraction thereof,
on the other hand, are not identical, (1) to all Unitholders holding the class (or classes)
of Units with the lower Adjusted Capital Account, proportionately, a percentage equal to
100% less the percentage applicable to subclause (2) of this subclause (y) of this Clause
(C) and (2) to the General Partner in accordance with its Percentage Interest, until the
Adjusted Capital Accounts of all of such Unitholders in such Units (on a per Unit basis) are
equal;
10. Section 6.1(c)(ii)(B) of the Partnership Agreement is hereby amended and restated as
follows:
(B) Second, (x) if the Adjusted Capital Account of a Common Unit or comparable fraction
thereof, a Class C Unit (or converted Class C Unit) or comparable fraction thereof and a
Class B Unit (or converted Class B Unit) or comparable fraction thereof are not identical,
(1) to the Unitholders holding the class of Units with the highest Adjusted Capital Account,
proportionately, a percentage equal to 100% less the percentage applicable to subclause (2)
of this subclause (x) of this Clause (B) and (2) to the General Partner, in accordance with
its Percentage Interest, until the Adjusted Capital Account of such Unitholders (on a per
Unit basis) is equal to the Adjusted Capital Account of the Unitholders holding the class of
Units with the next highest Adjusted Capital Account (on a per Unit basis) and (y) if after
application of subclause (x) of this Clause (B), the Adjusted Capital Account of a Common
Unit or comparable fraction thereof, a Class C Unit (or converted Class C Unit) or
comparable fraction thereof and a Class B Unit (or converted Class B Unit) or comparable
fraction thereof are not identical, (1) to the Unitholders holding the class(es) of Units
with the higher Adjusted Capital Account, proportionately, a percentage equal to 100% less
the percentage applicable to subclause (2) of this subclause (y) of this Clause (B), and (2)
to the General Partner, in accordance with its Percentage Interest, until the Adjusted
Capital Account of each Common Unit or comparable fraction thereof, each Class C Unit (or
converted Class C
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Unit) or comparable fraction thereof and each Class B Unit (or converted Class B Unit) or
comparable fraction thereof are equal;
11. Section 6.1(d)(x) of the Partnership Agreement is hereby amended and restated as follows:
(x) Economic Uniformity.
(A) At the election of the General Partner with respect to any taxable period ending
upon, or after, the termination of the Subordination Period, all or a portion of the
remaining items of Partnership gross income or gain for such taxable period, after taking
into account allocations pursuant to Section 6.1(d)(iii), shall be allocated 100% to each
Partner holding Subordinated Units that are Outstanding as of the termination of the
Subordination Period (Final Subordinated Units) in the proportion of the number of Final
Subordinated Units held by such Partner to the total number of Final Subordinated Units then
Outstanding, until each such Partner has been allocated an amount of income or gain that
increases the Capital Account maintained with respect to such Final Subordinated Units to an
amount equal to the product of (A) the number of Final Subordinated Units held by such
Partner and (B) the Per Unit Capital Amount for a Common Unit (other than a Common Unit
issued upon the conversion of a Subordinated Unit, a Class B Unit or a Class C Unit). The
purpose of this allocation is to establish uniformity between the Capital Accounts
underlying Final Subordinated Units and the Capital Accounts underlying most or all of the
Common Units held by Persons other than the General Partner and its Affiliates immediately
prior to the conversion of such Final Subordinated Units into Common Units. This allocation
method for establishing such economic uniformity will be available to the General Partner
only if the method for allocating the Capital Account maintained with respect to the
Subordinated Units between the transferred and retained Subordinated Units pursuant to
Section 5.5(c)(ii) does not otherwise provide such economic uniformity to the Final
Subordinated Units.
(B) At the election of the General Partner with respect to any taxable period ending
upon, or after, the conversion of the Class B Units pursuant to Section 5.11(f), all or a
portion of the remaining items of Partnership gross income or gain for such taxable period,
after taking into account allocations pursuant to Section 6.1(d)(iii) and Section
6.1(d)(x)(A), shall be allocated 100% to the holder or holders of the Common Units resulting
from the conversion pursuant to Section 5.11(f) (Converted Common Units) in the proportion
of the number of the Converted Common Units held by such holder or holders to the total
number of Converted Common Units then Outstanding, until each such holder has been allocated
an amount of income or gain that increases the Capital Account maintained with respect to
such Converted Common Units to an amount equal to the product of (A) the number of Converted
Common Units held by such holder and (B) the Per Unit Capital Amount for a Common Unit
(other than a Common Unit issued upon the conversion of a Subordinated Unit, a Class B Unit
or a Class C Unit). The purpose of this allocation is to establish uniformity between the
Capital Accounts underlying Converted Common Units and the Capital Accounts underlying most
or all of the Common Units held by Persons other than the General Partner and its Affiliates
immediately prior to the receipt of Common Units pursuant to Section 5.11(f)
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(C) At the election of the General Partner with respect to any taxable period ending
upon, or after, the conversion of the Class C Units into Common Units pursuant to Section
5.12, all or a portion of the remaining items of Partnership gross income or gain for such
taxable period, after taking into account allocations pursuant to Section 6.1(d)(iii), shall
be allocated 100% to the holder or holders of the Common Units resulting from the conversion
of Class C Units pursuant to Section 5.12 (Converted Class C Units) in the proportion of
the number of the Converted Class C Units held by such holder or holders to the total number
of Converted Class C Units then Outstanding, until each such holder has been allocated an
amount of income or gain that increases the Capital Account maintained with respect to such
Converted Class C Units to an amount equal to the product of (A) the number of Converted
Class C Units held by such holder and (B) the Per Unit Capital Amount for a Common Unit
(other than a Common Unit issued upon the conversion of a Subordinated Unit, a Class B Unit
or a Class C Unit). The purpose of this allocation is to establish uniformity between the
Capital Accounts underlying Converted Class C Units and the Capital Accounts underlying most
or all of the Common Units held by Persons other than the General Partner and its Affiliates
immediately prior to the conversion of Class C Units into Common Units. The General Partner
shall have discretion as to the priority of the application of this Section 6.1(d)(x)(C) as
compared to Sections 6.1(d)(x)(A) and 6.1(d)(x)(B).
12. Section 6.4(a)(i) of the Partnership Agreement is hereby amended and restated as follows:
(i) First, (x) to the General Partner in accordance with its Percentage Interest and
(y) to the Unitholders holding Common Units and Class C Units, Pro Rata, a percentage equal
to 100% less the General Partners Percentage Interest, until there has been distributed in
respect of each Common Unit then Outstanding an amount equal to the Minimum Quarterly
Distribution for such Quarter;
13. Section 6.4(a)(ii) of the Partnership Agreement is hereby amended and restated as follows:
(ii) Second, (x) to the General Partner in accordance with its Percentage
Interest and (y) to the Unitholders holding Common Units and Class C Units, Pro Rata, a
percentage equal to 100% less the General Partners Percentage Interest, until there has
been distributed in respect of each Common Unit then Outstanding an amount equal to the
Cumulative Common Unit Arrearage existing with respect to such Quarter;
14. Section 6.5 of the Partnership Agreement is hereby amended and restated as follows:
Section 6.5 Distributions of Available Cash from Capital Surplus
Available Cash that is deemed to be Capital Surplus pursuant to the provisions of
Section 6.3(a) shall, subject to Section 17-607 of the Delaware Act, be distributed, unless
the provisions of Section 6.3 require otherwise, 100% to the General Partner and the
Unitholders in accordance with their respective Percentage Interests, until a hypothetical
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holder of a Common Unit acquired on the Closing Date has received with respect to such
Common Unit, during the period since the Closing Date through such date, distributions of
Available Cash that are deemed to be Capital Surplus in an aggregate amount equal to the
Initial Unit Price. Available Cash that is deemed to be Capital Surplus shall then be
distributed (A) to the General Partner in accordance with its Percentage Interest and (B) to
all Unitholders holding Common Units and Class C Units, Pro Rata, a percentage equal to 100%
less the General Partners Percentage Interest, until there has been distributed in respect
of each Common Unit then Outstanding an amount equal to the Cumulative Common Unit
Arrearage. Thereafter, all Available Cash shall be distributed as if it were Operating
Surplus and shall be distributed in accordance with Section 6.4.
15. The heading to Section 6.7 of the Partnership Agreement is hereby amended to read in its
entirety: Special Provisions Relating to the Holders of Subordinated Units, Class B Units and Class
C Units.
16. Section 6.7 of the Partnership Agreement is hereby amended to add a new clause (f) as
follows:
(f) The holder of a Class C Unit shall have all of the rights and obligations of a
Unitholder holding Common Units hereunder; provided, however, that such Class C Units shall
be and after conversion into Common Units pursuant to Section 5.12 shall remain subject to
the provisions of Sections 5.5(c)(iii) and 6.1(d)(x)(C).
17. Except as hereby expressly modified, all terms of the Partnership Agreement remain in full
force and effect. This Amendment (i) shall bind and benefit the partners and their respective
heirs, beneficiaries, administrators, executors, receivers, trustees, successors, and assigns; (ii)
shall be modified or amended only in the manner set forth in the Partnership Agreement; (iii) SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND THE UNITED
STATES OF AMERICA FROM TIME TO TIME IN EFFECT; (iv) and embodies the entire agreement and
understanding between the parties with respect to modifications of instruments provided for herein
and supersedes all prior conflicting or inconsistent agreements, consents, and understandings
relating to such subject matter.
18. SEVERABILITY. EACH PROVISION OF THIS AMENDMENT SHALL BE CONSIDERED SEVERABLE AND
IF FOR ANY REASON ANY PROVISION OR PROVISIONS HEREIN ARE DETERMINED TO BE INVALID, UNENFORCEABLE OR
ILLEGAL UNDER ANY EXISTING OR FUTURE LAW, SUCH INVALIDITY, UNENFORCEABILITY OR ILLEGALITY SHALL NOT
IMPAIR THE OPERATION OF OR AFFECT THOSE PORTIONS OF THIS AMENDMENT THAT ARE VALID, ENFORCEABLE AND
LEGAL.
19. All the terms and provisions of the Partnership Agreement, as amended hereby, are hereby
ratified, confirmed, and adopted.
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20. This Amendment may be executed in one or more counterparts, each of which shall be deemed
to be an original, but all of which together will constitute one and the same Amendment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the General Partner has executed this Amendment as of the date first above
written.
GENERAL PARTNER: CRESTWOOD GAS SERVICES GP LLC |
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By: | /s/ William G. Manias | |||
Name: | William G. Manias | |||
Title: | Senior Vice President and Chief Financial Officer |
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Signature Page to Second Amendment to Second Amended and Restated Limited Partnership Agreement