Document:

mcep-ex41_299.htm

Exhibit 4.1

DESCRIPTION OF COMMON UNITS

REGISTERED UNDER SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

 

The following description of the common units of Mid-Con Energy Partners, LP (the “Partnership”) is a summary and does not purport to be complete.  The description is subject to, and qualified in its entirety by, reference to the Partnership’s Certificate of Limited Partnership (the “Certificate of Limited Partnership”) and First Amended and Restated Agreement of Limited Partnership (as amended, the “LP Agreement”), each of which are incorporated as an exhibit to the Annual Report on Form 10-K, of which this Exhibit 4.1 is a part.  We encourage you to read the Certificate of Limited Partnership, the LP Agreement and the applicable provisions of the Revised Uniform Limited Partnership Act of the State of Delaware, Chapter 17 of Title 6 of the Delaware Code (the “Delaware Act”), for additional information.

 

Number of Units

 

As of December 31, 2019, there were 30,824,291 outstanding common units representing limited partner interests in the Partnership (the “Common Units”).  Our general partner, Mid-Con Energy GP, LLC, a Delaware limited liability company (the “General Partner”), owned 360,000 units as of December 31, 2019.  

 

Under the LP Agreement, the Partnership may issue additional equity interests in the Partnership for any Partnership purpose at any time and from time to time for such consideration and on such terms and conditions, including additional Common Units and units that are senior to the Common Units in right of distribution, liquidation and voting (collectively, the “Preferred Units”), as the General Partner in its sole discretion shall determine, all without approval of any limited partners.

 

Listing

 

The Common Units are listed on the NASDAQ Global Select Market under the symbol “MCEP.”  

 

Distribution Rights

 

The LP Agreement requires us to distribute all of our available cash on a quarterly basis, subject to the distribution rights of any outstanding Preferred Units.  Our available cash is our cash on hand at the end of a quarter after the payment of our expenses and the establishment of reserves for future capital expenditures and operational needs, including cash from working capital borrowings. 

 

As of December 31, 2019, cash distributions to the holders of our Common Units continued to be indefinitely suspended. Our credit agreement stipulates written consent from our lenders is required in order to reinstate Common Unit distributions. Management and the Board will continue to evaluate, on a quarterly basis, the appropriate level of cash reserves in determining future distributions. The suspension of Common Unit cash distributions is designed to preserve liquidity and reallocate excess cash flow towards capital expenditure projects and debt reduction to maximize long-term value for our unitholders. There is no assurance as to future cash distributions since they are dependent upon our projections for future earnings, cash flows, capital requirements, financial conditions and other factors.

 

Limited Voting Rights

 

The General Partner manages us and operates our business.  Unlike stockholders of a corporation, our unitholders have only limited voting rights on matters affecting the Partnership.  Our unitholders have no right to elect the General Partner or its Board of Directors on an annual or other continuing basis.  The General Partner may not be removed except by a vote of the holders of at least 66 2/3% of the outstanding Common Units, including any Common Units owned by the General Partner and its affiliates (“Unit Supermajority”).  

 

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Certain amendments to the LP Agreement may be made by the General Partner without the approval of any limited partner.  Certain other amendments to the LP Agreement require the approval of a majority of the outstanding Common Units (“Unit Majority”) including, but not limited to, a merger of the Partnership or the sale of all or substantially all of the Partnership’s assets, dissolution of the Partnership upon the election of the General Partner and continuation of the Partnership’s business upon dissolution.  

 

Except for the transfer by the General Partner of all, but not less than all, of its general partner interest to: (i) an affiliate of the General Partner (other than an individual); or (ii) another entity as part of the merger or consolidation of the General Partner with or into another entity or the transfer by the General Partner of all or substantially all of its assets to another entity, the General Partner may not transfer all or any part of its general partner interest to another person prior to December 31, 2021, without the approval a Unit Majority, excluding Common Units held by the General Partner and its affiliates (including Charles R. Olmstead, Jeffrey R. Olmstead and Mid-Con Affiliate1).  Prior to December 31, 2021, the approval of a Unit Majority, excluding Common Units held by the General Partner and its affiliates, is required in most circumstances for the withdrawal of the General Partner in a manner that would cause a dissolution of the Partnership. 

 

No amendment to the LP Agreement may (i) enlarge the obligations of any limited partner without its consent, unless approved by at least a majority of the type or class of limited partner interests so affected; or (ii) enlarge the obligations of, restrict, change or modify in any way any action by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable by us to the General Partner or any of its affiliates without the consent of the General Partner, which consent may be given or withheld in its sole discretion.  

 

The provision of the LP Agreement preventing the amendments having the effects described in any of the clauses in the immediately preceding paragraph can be amended upon the approval of the holders of at least 90% of the outstanding units (including units owned by the General Partner, the General Partner’s affiliates and Yorktown2) or upon receipt of a written opinion of counsel acceptable to the General Partner to the effect that such amendment will not affect the limited liability of any limited partner under the Delaware Act.  

 

If any person or group other than the General Partner, its affiliates and Yorktown acquires beneficial ownership of 20% or more of any class of units, that person or group loses voting rights with respect to all of such partnership interests. This loss of voting rights does not apply to any person or group that acquires partnership interests directly from the General Partner or its affiliates and any transferees of that person or group approved by the General Partner or to any person or group who acquires partnership interests with the prior approval of the Board of the General Partner.

 

Merger, Consolidation, Sale or Other Disposition of Assets

 

A merger or consolidation of us requires the prior consent of the General Partner. However, the General Partner will have no duty or obligation to consent to any merger or consolidation and may decline to do so free of any duty (including any fiduciary duty) or obligation whatsoever to us or our limited partners, including any duty to act in good faith and in the best interest of us or our limited partners.  In addition, the LP Agreement generally prohibits the General Partner, without the prior approval of a Unit Majority, from causing us, among other things, to sell, exchange or otherwise dispose of all or substantially all of our and our subsidiary’s assets (taken as a whole) in 

	
	 

	
1 
	
 For purposes of this Exhibit, “Mid-Con Affiliate” refers to Mid-Con Energy III, LLC, and its subsidiaries, which is an affiliate of the General Partner.

	
2 
	
 For purposes of this Exhibit, “Yorktown” collectively refers to Yorktown Partners, LLC, Yorktown Energy Partners VI, LP, Yorktown Energy Partners VII, LP, Yorktown Energy Partners VIII, LP, Yorktown Energy Partners IX, LP, and/or Yorktown Energy Partners X, LP.

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2

 

a single transaction or a series of related transactions, including by way of merger, consolidation or other combination or sale of ownership interests of our subsidiary.

 

Removal of General Partner

 

The LP Agreement contains specific provisions that are intended to discourage a person or group from attempting to remove the General Partner or otherwise change the management of the General Partner. In particular, the General Partner may not be removed except by a vote of a Unit Supermajority.  

 

If the General Partner is removed without cause, the LP Agreement provides that, among other things, the General Partner will have the right to convert its General Partner interest into Common Units or receive cash in exchange for those interests.

 

Limited Call Right

 

If at any time the General Partner and its affiliates own more than 80% of the outstanding Common Units, the General Partner has the right, but not the obligation, to purchase all of the remaining Common Units at a purchase price not less than the then-current market price of the Common Units, as calculated pursuant to the terms of the LP Agreement.  

 

Limited Liability

 

Assuming that a limited partner does not participate in the control of our business within the meaning of the Delaware Act and it otherwise acts in conformity with the provisions of the LP Agreement, such limited partner’s liability under the Delaware Act will be limited, subject to possible exceptions, to the amount of capital the limited partner is obligated to contribute to us for its Common Units plus its share of any undistributed profits and assets. If it were determined, however, that the right or exercise of the right by our limited partners as a group: (i) to remove or replace the General Partner; (ii) to approve some amendments to the LP Agreement; or (iii) to take other action under the LP Agreement, constituted “participation in the control” of our business for the purposes of the Delaware Act, then our limited partners could be held personally liable for our obligations under Delaware law, to the same extent as the General Partner.

 

Eligible Holders and Redemption

 

The General Partner may request that a transferee of Common Units certify that such transferee is an Eligible Holder.  “Eligible Holder” means (i) a citizen of the United States; (ii) a corporation organized under the laws of the United States or any state thereof; (iii) a public body of the United States, including a municipality of the United States; (iv) an association of United States citizens, such as a partnership or limited liability company, organized under the laws of the United States or of any state thereof, but only if such association does not have any direct or indirect foreign ownership, other than foreign ownership of stock in a parent corporation organized under the laws of the United States or of any state thereof; or (v) a limited partner whose nationality, citizenship or other related status would not, in the determination of our general partner, create a substantial risk of cancellation or forfeiture of any property in which we or our subsidiary has an interest.

 

For the avoidance of doubt, onshore mineral leases or any direct or indirect interest therein may be acquired and held by aliens only through stock ownership, holding or control in a corporation organized under the laws of the United States or of any state thereof.

 

Common Units held by persons who the General Partner determines are not Eligible Holders will be subject to redemption.  If, following a request by the General Partner, a transferee or unitholder, as the case may be, does not properly complete a recertification for any reason, we will have the right to redeem the Common Units held by such 

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person at the then-current market price of the Common Units held by such person.  The redemption price will be paid in cash or by delivery of a promissory note, as determined by the General Partner.  

 

Registration Rights

 

Under the LP Agreement, the General Partner and its affiliates as of the date of our initial public offering (including Charles R. Olmstead, Jeffrey R. Olmstead, Mid-Con Affiliate and Yorktown) have the right to cause us to register for resale under the Securities Act of 1933, as amended (the “Securities Act”), and applicable state securities laws any Common Units or other partnership interests proposed to be sold by the General Partner or any of its affiliates or their assignees if an exemption from the registration requirements is not otherwise available. In addition, the General Partner and its affiliates as of the date of our initial public offering (including Charles R. Olmstead, Jeffrey R. Olmstead, Mid-Con Affiliate and Yorktown) have the right to include such securities in a registration by us or any other unitholder, subject to customary exceptions. These registration rights continue for two years following the withdrawal or removal of the General Partner and for so long as is required for the holder to sell all of the partnership interests with respect to which it has requested registration during such two-year period. In addition, we are restricted from granting any superior piggyback registration rights during this two-year period. We will pay all expenses incidental to the registration, excluding underwriting fees and discounts. In connection with any registration of this kind, we will indemnify the unitholders participating in the registration and their officers, directors and controlling persons from and against specified liabilities, including under the Securities Act or any applicable state securities laws.

 

Liquidation Rights

 

In the event of any liquidation, dissolution or winding up of the Partnership, we will first apply the proceeds of liquidation to the payment of our creditors and the liquidator in the order of priority provided in the LP Agreement and by law. Thereafter, we will distribute any remaining proceeds to our unitholders and the General Partner, in accordance with their capital account balances, as adjusted to reflect any gain or loss upon the sale or other disposition of our assets in liquidation.  The holders of the Preferred Units would have the right to receive proceeds from any liquidation, winding-up or dissolution before the holders of the Common Units.

 

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4Exhibit 4.1

 

Description
of Securities

 

The
following summary does not purport to be a complete description of the applicable provisions of Weyco Group, Inc.’s (the
 “Company”) Articles of Incorporation and Bylaws, as either may be amended or restated from time to time, or of applicable
statutory or other law, and is qualified in its entirety by reference thereto.

 

The
authorized capital stock of the Company consists of 24,000,000 shares of Common Stock, $1.00 par value (“Common Stock”).

 

Common Stock

 

Holders
of the Company’s Common Stock (a) are entitled to one vote per share on all matters presented to shareholders and do not
have cumulative voting rights, (b) are entitled to share ratably in dividends that may be declared by the Board of Directors of
the Company out of assets or funds legally available therefor, (c) are entitled, upon any liquidation, dissolution or winding up
of the Company, to share ratably in the net assets of the Company available for distribution on the Common Stock, and (d) do not
have preemptive or conversion rights.

 

The
Company’s Common Stock trades on the Nasdaq Stock Market (symbol: WEYS).

 

The
transfer agent for the Common Stock of the Company is AST Financial, 6201 15th Avenue, Brooklyn, New York 11219.

 

General

 

The
Company’s Articles of Incorporation contain provisions designed to discourage certain transactions that involve an actual
or threatened change of control of the Company.  For example, the Articles of Incorporation provide that the affirmative
vote of the holders of four-fifths (4/5) of all stock of the Company entitled to vote in an election of directors shall be required
(a) for the adoption of any agreement for the merger or consolidation of the Company with or into any other corporation, or (b)
to authorize any sale, lease, or exchange of all or any substantial part of the assets of the Company to, or any sale, lease, or
exchange to the Company or any subsidiary thereof in exchange for securities of the Company of any assets of, any other  corporation,
person or other entity if, in either case, as of the record date for the determination of shareholders entitled to notice thereof
and to vote thereon, such other corporation, person, or entity is the beneficial owner, directly or indirectly, of more than five
percent (5%) of the outstanding shares of stock of the Company entitled to vote in elections of directors. Such affirmative vote
is in addition to the vote of the holders of the stock of the Company otherwise required by law or any agreement to which the Company
is a party.

 

The
above voting requirements shall not be applicable if (a) such transaction shall have been approved by resolution adopted by a number
of directors that is one less than the number of the members of the Board of Directors of the Company holding office at the time
such resolution is adopted, (b) the Board of Directors of the Company shall by resolution have approved a memorandum of understanding
with such other person or entity with respect to and substantially consistent with such transactions prior to the time that such
other person or entity shall have become a holder of more than five percent (5%) of the outstanding shares of stock of the Company
entitled to vote in elections of directors, or (c) such transaction is with any other corporation of which a majority of the outstanding
shares of all classes of stock entitled to vote in elections of directors is owned of record or beneficially by the Company and
its subsidiaries.

 

For
purposes of the above voting requirements, the Board of Directors of the Company shall determine (a) whether any entity or person
beneficially owns more than five percent (5%) of the outstanding shares of stock of the Company entitled to vote in elections of
directors, or (b) with respect to determining beneficial ownership whether (i) an entity or other person has a right to acquire
shares of stock of the Company, (ii) an entity or other person is an “affiliate” or “associate” of another,
(iii) an entity or other person has any agreement, arrangement, or understanding with respect to acquiring, holding, voting, or
disposing of shares of stock of the Company, or (iv) an entity or other person is acting in concert with any other corporation,
person, or other entity.  All such determinations shall be conclusive.

 

     

     

    

 

The
above voting requirements may be amended, altered, changed or repealed only by the affirmative vote of the holders of four-fifths
(4/5) of the capital stock of the Company entitled to vote in the election of directors.

 

The
Company’s Bylaws also contain provisions designed to discourage certain transactions that involve an actual or threatened
change of control of the Company, including provisions that (a) provide for classification of the Board of Directors into three
(3) classes, (b) provide that directors may be removed only for cause by a vote of the shareholders, and (c) provide that vacancies
on the Board of Directors may be filled by the remaining directors in office, though less than a quorum.

 

All
of the outstanding shares of Common Stock are fully paid and nonassessable, subject to the personal liability which may be imposed
on shareholders by former Section 180.0622(2)(b) of the Wisconsin Business Corporation Law (“WBCL”), as judicially
interpreted, for debts incurred prior to June 14, 2006 (for debts incurred on or after such date, Section 180.0622(2)(b)
of the WBCL has been repealed) owing to employees for services performed, but not exceeding six months’ service in any one
case.

 

Certain
Statutory Provisions

 

Under
Section 180.1150(2) of the WBCL, the voting power of shares of a “resident domestic corporation” such as the Company
(as long as it continues to meet the statutory definition), which are held by any person (including two or more persons acting
in concert) in excess of twenty percent (20%) of the voting power in the election of directors shall be limited (in voting on any
matter) to ten percent (10%) of the full voting power of such excess shares, unless otherwise provided in the articles of incorporation
or otherwise specified by the board of directors, or unless full voting rights have been restored at a special meeting of the shareholders
called for that purpose. Shares held or acquired under certain circumstances are excluded from the application of Section 180.1150(2),
including (among others) shares acquired directly from the Company, shares acquired before April 22, 1986, and shares acquired
in a merger or share exchange to which the Company is a party.

 

Sections
180.1130 to 180.1134 of the WBCL provide generally that, in addition to the vote otherwise required by law or the articles of incorporation
of a “resident domestic corporation,” such as the Company (as long as it continues to meet the statutory definition),
certain business combinations not meeting certain fair price standards specified in the statute must be approved by the affirmative
vote of at least (a) eighty percent (80%) of the votes entitled to be cast by the outstanding voting shares of the corporation
and (b) two-thirds (2/3) of the votes entitled to be cast by the holders of voting shares other than voting shares beneficially
owned by a “significant shareholder” or an affiliate or associate thereof who is a  party to the transaction.
The term “business combination” is defined to include, subject to certain exceptions, a merger or share exchange of
the resident domestic corporation (or any subsidiary thereof) with, or the sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the resident domestic corporation to, any significant shareholder or affiliate
thereof. “Significant shareholder” is defined generally to mean a person that is the beneficial owner of ten percent
(10%) or more of the voting power of the outstanding voting shares of the resident domestic corporation, or an affiliate of the
resident domestic corporation who within two (2) years prior to the date in question was the beneficial owner of ten percent (10%)
or more of the voting power of the outstanding voting shares of the resident domestic corporation. In addition, the WBCL contains
certain restrictions on repurchases of shares and sales of corporate assets by a resident domestic corporation in response to a
take-over offer.

 

Sections
180.1140 to 180.1144 of the WBCL prohibit certain “business combinations” between a “resident domestic corporation,”
such as the Company (as long as it continues to meet the statutory definition), and an “interested stockholder” for
a period of three (3) years after the date such person became an “interested stockholder,” unless prior to such stock
acquisition date, the business combination or the acquisition of such stock has been approved by the corporation’s board
of directors.  After such three (3)-year period, a business combination with an interested stockholder may be consummated
in specified circumstances, including among others, if the board approval described above is obtained, if the business combination
is approved by the holders of a majority of the voting stock not beneficially owned by the interested stockholder at a meeting
called for that purpose or if the business combination satisfies certain conditions, including for example, adequacy-of-price standards
intended to provide a fair price for shares held by disinterested shareholders. For these purposes, an “interested stockholder”
is defined generally to mean a person that is the beneficial owner of ten percent (10%) or more of the voting power of the outstanding
voting stock of the resident domestic corporation, or an affiliate of the resident domestic corporation who within three (3) years
prior to the date in question was the beneficial owner of ten percent (10%) or more of the voting power of the outstanding voting
stock of the resident domestic corporation.

 

These
provisions of the WBCL and certain other provisions of the Company’s Articles of Incorporation and Bylaws discussed above
could have the effect, among others, of discouraging take-over proposals for the Company, delaying or preventing a change of control
of the Company, or impeding a business combination between the Company and a major shareholder of the Company.

 

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