NGL ENERGY PARTNERS LP (NYSE:NGL) Files An 8-K Material Modification to Rights of Security Holders
Item 3.03 Material Modification to Rights of Security Holders
The information set forth under Item 5.03 is incorporated by reference into this Item 3.03.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Amended and Restated Partnership Agreement
On April2, 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% ClassC Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, liquidation preference $25.00 per ClassC Preferred Unit, representing limited partner interests in the Partnership (the “ClassC Preferred Units”). The amendments effected by the Amended and Restated Partnership Agreement provide, among other things, for the issuance of the ClassC Preferred Units, in summary, with the features described below.
The ClassC 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 ClassC Preferred Units (the “Original Issue Date”) that is not expressly made senior to or on parity with the ClassC Preferred Units as to the payment of distributions (“Junior Securities”), (b)on parity with (i)the Partnership’s 10.75%ClassA Convertible Preferred Units (“ClassA Preferred Units”), (ii)the Partnership’s 9.00%ClassB Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“ClassB 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 ClassC 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 ClassC Preferred Units as to the payment of distributions (“Senior Securities”).
Distributions on the ClassC Preferred Units are cumulative from the Original Issue Date and will be payable quarterly in arrears on January15, April15, July15 and October15 of each year, commencing on July15, 2019, when, as and if declared by the General Partner out of legally available funds for such purpose. Distributions on the ClassC 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 January1, April1, July1 or October1 next preceding the Distribution Payment Date. The initial distribution on the ClassC Preferred Units will accumulate from the Original Issue Date until June30, 2019 and will be payable on July15, 2019. The initial distribution rate for the ClassC Preferred Units from and including the Original Issue Date to, but not including April15, 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 April15, 2024, distributions on the ClassC 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 ClassC Preferred Units and any Parity Securities through the most recent respective distribution payment dates.
At any time on or after April15, 2024, the Partnership may redeem, in whole or in part, the ClassC Preferred Units at a redemption price in cash of $25.00 per ClassC 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 ClassC 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 ClassC 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 ClassC Preferred
Units, holders of the ClassC Preferred Units that the Partnership has elected to redeem will not have the conversion right related to a Change of Control.
Upon the occurrence of a Change of Control, each holder of ClassC Preferred Units will have the right (unless, prior to the Change of Control Conversion Date, the Partnership provides notice of its election to redeem the ClassC Preferred Units) to convert some or all of the ClassC Preferred Units held by such holder on the Change of Control Conversion Date into a number of Common Units per ClassC Preferred Unit to be converted equal to the lesser of (a)the quotient obtained by dividing (i)the sum of the $25.00 liquidation preference plus the amount of any accumulated and unpaid distributions to, but not including, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a record date for a ClassC Preferred Unit distribution payment and prior to the corresponding Distribution Payment Date, in which case no additional amount for such accumulated and unpaid distribution will be included in this sum) by (ii)the Common Unit Price, and (b)3.5791, subject, in each case, to certain exceptions and adjustments.
Any amounts distributed by the Partnership upon its liquidation will be made to its partners in accordance with their respective positive capital account balances. The holders of outstanding ClassC Preferred Units will be specially allocated items of the Partnership’s gross income and gain in a manner designed to achieve, in the event of any liquidation, dissolution or winding up of the Partnership’s affairs, whether voluntary or involuntary, a capital account balance equal to the liquidation preference of $25.00 per ClassC Preferred Unit (subject to adjustment for any splits, combinations or similar adjustment to the ClassC Preferred Units). However, if the amount of the Partnership’s gross income and gain available to be specially allocated to the ClassC Preferred Units is not sufficient to cause the capital account of a ClassC Preferred Unit to equal the liquidation preference of a ClassC Preferred Unit, then the amount that a holder of ClassC Preferred Units would receive upon liquidation may be less than the ClassC Preferred Unit liquidation preference. Any accumulated and unpaid distributions on the ClassC Preferred Units will be paid prior to any distributions in liquidation made in accordance with capital accounts.
The ClassC Preferred Units will have no voting rights, except as set forth below or as otherwise provided by Delaware law. Unless the Partnership has received the affirmative vote or consent of the holders of at least two-thirds of the outstanding ClassC Preferred Units, voting as a separate class, the Partnership may not adopt any amendment to the Partnership’s Partnership Agreement that has a material adverse effect on the terms of the ClassC Preferred Units. In addition, unless the Partnership has received the affirmative vote or consent of the holders of at least two-thirds of the outstanding ClassC Preferred Units, voting as a single class with the Class B Preferred Units and holders of any future Parity Securities upon which like voting rights have been conferred and are exercisable, the Partnership may not (a)create or issue any additional Parity Securities (including any additional ClassA Preferred Units or ClassB Preferred Units) if the cumulative distributions payable on then outstanding ClassC Preferred Units or Parity Securities are in arrears or (b)create or issue any Senior Securities. On any matter described above on which the holders of the ClassC Preferred Units are entitled to vote as a class, such holders will be entitled to one vote per ClassC Preferred Unit.
In addition to the terms of the ClassC Preferred Units, the Amended and Restated Partnership Agreement also provides for: (i)a decrease in the amount of the redemption premium that would be payable to the holders of ClassA Preferred Units (as defined in the Amended and Restated Partnership Agreement) upon a redemption of ClassA Preferred Units occurring on or after April1, 2019 and on or prior to May13, 2019 from 115% to 111.25% of the ClassA Preferred Unit Price (as defined in the Amended and Restated Partnership Agreement); and (ii)redemption of all or less than all of the issued and outstanding ClassA Preferred Units.
The description of the Amended and Restated Partnership Agreement contained in this Item 5.03 is qualified in its entirety by reference to the full text of the Amended and Restated Partnership Agreement, which is filed as Exhibit3.1 hereto and is incorporated by reference herein.
Item 8.01 Other Events.
On April2, 2019, the Partnership issued 1,800,000 ClassC Preferred Units, which includes 200,000 Class C Preferred Units issued to the partial exercise of the underwriters’ option to purchase an additional 240,000 Class C Preferred Units to cover overallotments, upon the closing of its previously announced registered public offering of such units.
NGL Energy Partners LP Exhibit
EX-3.1 2 a19-6974_6ex3d1.htm EX-3.1 Exhibit 3.1 Execution Version FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF NGL ENERGY PARTNERS LP Table of Contents Page ARTICLE I DEFINITIONS Section 1.1 Definitions 1 Section 1.2 Construction 37 ARTICLE II ORGANIZATION Section 2.1 Formation 37 Section 2.2 Name 37 Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices 37 Section 2.4 Purpose and Business 37 Section 2.5 Powers 38 Section 2.6 Term 38 Section 2.7 Title to Partnership Assets 38 ARTICLE III RIGHTS OF LIMITED PARTNERS Section 3.1 Limitation of Liability 39 Section 3.2 Management of Business 39 Section 3.3 Outside Activities of the Limited Partners 39 Section 3.4 Rights of Limited Partners 39 ARTICLE IV CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS Section 4.1 Certificates 40 Section 4.2 Mutilated,…
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About NGL ENERGY PARTNERS LP (NYSE:NGL)
NGL Energy Partners LP owns and operates a vertically integrated energy business. The Company’s segments are crude oil logistics, water solutions, liquids, retail propane, refined products and renewables, and corporate and other. Its crude oil logistics segment includes owned and leased crude oil storage terminals, and owned and leased pipeline injection stations. Its water solutions segment provides services for the treatment and disposal of wastewater generated from crude oil and natural gas production, and for the disposal of solids, such as tank bottoms and drilling fluids. Its liquids segment supplies natural gas liquids to retailers, wholesalers, refiners and petrochemical plants throughout the United States and in Canada. Its retail propane segment consists of the retail marketing, and sale and distribution of propane and distillates, among others. The Company’s refined products and renewables segment is engaged in gasoline, diesel, ethanol and biodiesel marketing operations.