Document:

Exhibit 10.8

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of                                      , 2014, by and between PES Logistics Partners, L.P., a Delaware limited partnership (the “Partnership”), and PES Holdings, LLC, a Delaware limited liability company (“Holdings”).

 

WHEREAS, this Agreement is made in connection with the transactions contemplated by the First Amended and Restated Agreement of Limited Partnership of PES Logistics Partners, L.P. dated                                          , 2014, as amended from time to time (the “Partnership Agreement”);

 

WHEREAS, the Partnership has agreed to provide the registration and other rights set forth in this Agreement for the benefit of Holdings; and

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party hereto, the parties hereby agree as follows:

 

ARTICLE I. 
 DEFINITIONS

 

Section 1.01 Definitions. Capitalized terms used herein without definition shall have the meanings given to them in the Partnership Agreement. The terms set forth below are used herein as so defined:

 

“Affiliate” means, with respect to a specified Person, directly or indirectly controlling, controlled by, or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” has the meaning given to such term in the introductory paragraph.

 

“Commission” has the meaning given to such term in Section 1.02.

 

“Effectiveness Period” has the meaning given to such term in Section 2.01.

 

“Exchange Act” has the meaning given to such term in Section 2.08(a).

 

“General Partner” means PES Logistics GP LLC, a Delaware limited liability company and the general partner of the Partnership.

 

“Holder” means the record holder of any Registrable Securities.

 

“Holdings” has the meaning given to such term in the introductory paragraph.

 

“Included Registrable Securities” has the meaning given to such term in Section 2.03(a).

 

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“Losses” has the meaning given to such term in Section 2.08(a).

 

“Managing Underwriter” means, with respect to any Underwritten Offering, the book-running lead manager of such Underwritten Offering.

 

“Notice” has the meaning given to such term in Section 2.01.

 

“Partnership” has the meaning given to such term in the introductory paragraph.

 

“Partnership Agreement” has the meaning given to such term in the recitals of this Agreement.

 

“Person” means any individual, corporation, partnership, limited liability company, voluntary association, joint venture, trust, limited liability partnership, unincorporated organization, government or any agency, instrumentality or political subdivision thereof, or any other form of entity.

 

“Primary Offering” has the meaning given to such term in Section 2.02(b).

 

“Primary Units” has the meaning given to such term in Section 2.02(b).

 

“Redemptee” has the meaning given to such term in Section 2.02(b).

 

“Redemption” has the meaning given to such term in Section 2.02(b).

 

“Redemption Demand Notice” has the meaning given to such term in Section 2.02(b).

 

“Registrable Securities” means the (i) Common Units issued (or issuable) to Holdings pursuant to the Partnership Agreement; (ii) Subordinated Units; and (iii) Common Units issuable upon conversion of the Subordinated Units or the Combined Interests pursuant to the terms of the Partnership Agreement, which Registrable Securities are subject to the rights provided herein until such rights terminate pursuant to the provisions hereof.

 

“Registration Expenses” means all expenses (other than Selling Expenses) incident to the Partnership’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on a Registration Statement pursuant to Section 2.01 and/or in connection with an Underwritten Offering or a Primary Offering pursuant to Section 2.02(a) or Section 2.02(b), respectively, and the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing and securities exchange fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, fees of transfer agents and registrars, all word processing, duplicating and printing expenses, any transfer taxes and the fees and disbursements of counsel for the Partnership and independent public accountants for the Partnership, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance.

 

“Registration Statement” has the meaning given to such term in Section 2.01.

 

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“Secondary Offering” has the meaning given to such term in Section 2.02(a).

 

“Secondary Offering Demand Notice” has the meaning given to such term in Section 2.02(a).

 

“Securities Act” has the meaning given to such term in Section 1.02.

 

“Selling Agent” has the meaning given to such term in Section 2.02(b).

 

“Selling Expenses” means all underwriting fees, discounts and selling commissions applicable to the sale of Registrable Securities.

 

“Selling Holder” means a Holder who is selling Registrable Securities pursuant to a Registration Statement.

 

“Shelf Registration Statement” has the meaning given to such term in Section 2.01.

 

“Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.

 

“Underwritten Offering” means an offering (including an offering pursuant to a Registration Statement) in which Registrable Securities are sold to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.

 

“Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.

 

Section 1.02  Registrable Securities. Any Registrable Security will cease to be a Registrable Security (a) at the time a Registration Statement covering such Registrable Security has been declared effective by the Securities and Exchange Commission (the “Commission”), or otherwise has become effective, and such Registrable Security has been sold or disposed of pursuant to such Registration Statement; (b) at the time such Registrable Security has been disposed of pursuant to Rule 144 (or any similar provision then in effect under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”)); (c) if such Registrable Security is held by the Partnership or one of its subsidiaries; (d) at the time such Registrable Security has been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities; or (e) if such Registrable Security has been sold in a private transaction in which the transferor’s rights under this Agreement are assigned to the transferee and such transferee is not an Affiliate of the General Partner of the Partnership, at the time that is two years following the later of: (i) if the Registrable Security is a Subordinated Unit, the conversion of the Subordinated Units into Common Units and (ii) the transfer of such Registrable Security to such transferee.

 

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ARTICLE II.

REGISTRATION RIGHTS

 

Section 2.01 Demand Registration. Upon the written request (a “Notice”) by Holdings or by Holders owning at least twenty percent (20%) of the then outstanding Registrable Securities, the Partnership shall file with the Commission, as soon as reasonably practicable, but in no event more than 90 days following the receipt of the Notice, a registration statement (each, a “Registration Statement”) under the Securities Act (which Registration Statement may, at the option of the Holders giving such Notice, be a registration statement under the Securities Act that provides for the resale of the Registrable Securities pursuant to Rule 415 from time to time by the Holders (a “Shelf Registration Statement”)). The Partnership shall use its commercially reasonable efforts to cause each Registration Statement to be declared effective by the Commission as soon as reasonably practicable after the initial filing of the Registration Statement. Any Registration Statement shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders of any and all Registrable Securities covered by such Registration Statement. The Partnership shall use its commercially reasonable efforts to cause each Registration Statement filed pursuant to this Section 2.01 to be continuously effective, supplemented and amended to the extent necessary to ensure that it is available for the resale of all Registrable Securities by the Holders until all Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities (the “Effectiveness Period”). Each Registration Statement when effective (and the documents incorporated therein by reference) shall comply as to form in all material respects with all applicable requirements of the Securities Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Each Holder shall be limited to two demand registrations under this Section 2.01 in any twelve-month period (provided, however, that there shall be no limit on the number of Shelf Registration Statements that may be required by the Holders hereunder), and the Partnership shall not be obligated to file more than one Registration Statement within 120 days after the effective date of any Registration Statement filed by the Partnership.

 

Section 2.02 Underwritten and Redemptive Offerings.

 

(a)           Request for a Secondary Offering. If one or more Holders collectively elect to dispose of at least 2.5 million Registrable Securities (subject to adjustment pursuant to Section 3.04), the Partnership shall, upon the written request (a “Secondary Offering Demand Notice”) by such Holders, retain underwriters in order to permit such Holders to effect such sale through an Underwritten Offering (a “Secondary Offering”). The obligation of the Partnership to retain underwriters shall include the preparation and entry into an underwriting agreement, in customary form, with the Managing Underwriter or underwriters, which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08 and taking all reasonable actions as requested by the Managing Underwriter or underwriters to expedite or facilitate the disposition of such Registrable Securities, including causing its management to participate in a “roadshow” or similar marketing efforts.

 

(b)           Request for Equity-Financed Redemption. In lieu of a Secondary Offering pursuant to Section 2.02(a), the Partnership, upon the written request (the “Redemption Demand Notice”) by such Holders (the “Redemptees”), shall use commercially reasonable efforts to undertake an equity financing consisting of (i) a public offering (including an Underwritten Offering), (ii) a private placement or (iii) a combination of each (a “Primary

 

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Offering”), in each case, of an equal number of Common Units (the “Primary Units”). The net proceeds (after Registration Expenses but before Selling Expenses) of such Primary Offering will be used to redeem from each Redemptee the number of Registrable Securities specified in each Redemptee’s Redemption Demand Notice (the “Redemption”). The obligation of the Partnership to undertake the Primary Offering shall include the preparation and filing of an offering document, such as an offering memorandum or Registration Statement, as applicable, as well as the preparation and execution of a purchase agreement or underwriting agreement in customary form, which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08 and taking all reasonable actions as are requested by the Managing Underwriter or underwriters or placement agent (as applicable, the “Selling Agent”), or, if no Selling Agent, the Redemptees, to expedite or facilitate the disposition of Primary Units, including causing its management to participate in a “roadshow” or similar marketing efforts.

 

(c)           Limitation on Offerings. In no event shall the Partnership be required hereunder to participate in more than an aggregate of two Primary Offerings and Secondary Offerings in any twelve-month period.

 

(d)           General Procedures. In connection with any Primary Offering or Secondary Offering under this Agreement, the Holders of a majority of the Registrable Securities being sold in such Underwritten Offering shall be entitled, subject to the Partnership’s consent (which is not to be unreasonably withheld), to select the Managing Underwriter or Underwriters. In connection with any Underwritten Offering under this Agreement, each Selling Holder and the Partnership shall be obligated to enter into an underwriting agreement that contains such representations and warranties, covenants, indemnities and other rights and obligations as are customary in underwriting agreements for firm commitment offerings of securities. No Selling Holder may participate in such Underwritten Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement. Each Selling Holder may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Partnership to and for the benefit of such underwriters also be made to and for such Selling Holder’s benefit and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also be conditions precedent to such Selling Holder’s obligations. If any Selling Holder disapproves of the terms of an Underwritten Offering, such Selling Holder may elect to withdraw from the Underwritten Offering by notice to the Partnership and the Managing Underwriter; provided, however, that such withdrawal must be made at a time prior to the time of pricing of such Underwritten Offering. No such withdrawal shall affect the Partnership’s obligation to pay Registration Expenses.

 

(e)           Withdrawal. If any (i) Selling Holder disapproves of the terms of a Secondary Offering or (ii) Redemptee disapproves of the terms of a Primary Offering, such Person may elect to withdraw its request that the Partnership undertake such offering by written notice to the Partnership; provided, however, that such withdrawal must be made at a time prior to the time of pricing of such offering. No such withdrawal shall affect the Partnership’s obligation to pay Registration Expenses, if applicable.

 

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Section 2.03 Piggyback Rights.

 

(a)           Participation. If the Partnership proposes to file (i) a Registration Statement or (ii) a prospectus supplement to an effective Shelf Registration Statement and Holders may be included in the offering to which such prospectus supplement relates without the filing of a post-effective amendment to such Shelf Registration Statement, in each case, for the sale of Common Units in an Underwritten Offering for its own account and/or another Person, then as soon as practicable following the engagement of counsel by the Partnership to prepare the documents to be used in connection with such Underwritten Offering, the Partnership shall give notice (which may be given by electronic mail) of such proposed Underwritten Offering to each Holder holding at least one million Registrable Securities (subject to adjustment in accordance with Section 3.04) and such notice shall offer such Holders the opportunity to include in such Underwritten Offering such number of Registrable Securities (the “Included Registrable Securities”) as each such Holder may request in writing; provided, however, that if the Partnership has been advised by the Managing Underwriter that the inclusion of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on the price, timing or distribution of the Common Units in the Underwritten Offering, then (A) if no Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter, the Partnership shall not be required to offer such opportunity to the Holders or (B) if any Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter, then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.03(b). Subject to Section 2.03(b), the Partnership shall include in such Underwritten Offering all included Registrable Securities with respect to which the Partnership has received requests within two (2) Business Days (or one (1) Business Day in connection with a “bought deal” or an “overnight” Underwritten Offering) after the Partnership’s notice has been delivered in accordance with Section 3.01. If no written request for inclusion from a Holder is received within the specified time, such Holder shall have no further right to participate in such Underwritten Offering. If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the Partnership shall determine for any reason not to undertake or to delay such Underwritten Offering, the Partnership may, at its election, give written notice of such determination to the Selling Holders and, (x) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering and (y) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such Underwritten Offering by giving written notice to the Partnership of such withdrawal at or prior to the time of pricing of such Underwritten Offering.

 

(b)           Priority of Registration. If the Managing Underwriter of any proposed Underwritten Offering advises the Partnership that the total amount of Registrable Securities that the Selling Holders and any other Persons intend to include in such offering exceeds the number that can be sold in such offering without being likely to have an adverse effect in any material respect on the price, timing or distribution of the Common Units offered or the market for the Common Units, then the Common Units to be included in such Underwritten Offering shall

 

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include the number of Common Units that such Managing Underwriter advises the Partnership can be sold without having such adverse effect, with such number to be allocated (i) first, to the Partnership unless a Holder initiates the Underwritten Offering, in which case it shall be to the Holders, and (ii) second, and if any, the number of included Registrable Securities that, in the opinion of such Managing Underwriter, can be sold without having such adverse effect, with such number to be allocated pro rata among the Holders (or the Partnership if a Holder initiates the Underwritten Offering) that have requested to participate in such Underwritten Offering based on the relative number of Registrable Securities then held by each such Holder (provided that any securities thereby allocated to a Holder that exceed such Holder’s request shall be reallocated among the remaining requesting Holders in like manner).

 

Section 2.04  Delay Rights. If the General Partner determines that the Partnership’s compliance with its obligations under this Article II would be materially detrimental to the Partnership and its partners because such compliance would (a) materially interfere with a significant acquisition, reorganization, financing or other similar transaction involving the Partnership, (b) require premature disclosure of material information that the Partnership has a bona fide business purpose for preserving as confidential or (c) render the Partnership unable to comply with applicable securities laws, then the Partnership shall have the right to postpone compliance with its obligations under this Article II for a period of not more than three months; provided, that such right pursuant to this Section 2.04 may not be utilized more than twice in any twelve-month period.

 

Section 2.05 Sale Procedures. In connection with its obligations under this Article II, the Partnership will, as expeditiously as reasonably practicable:

 

(a)           prepare and file with the Commission such amendments and supplements to each Registration Statement and the prospectus used in connection therewith as may be necessary to keep each Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement;

 

(b)           if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering and the Managing Underwriter notifies the Partnership in writing that, in the sole judgment of such Managing Underwriter, inclusion of detailed information in such prospectus supplement is of material importance to the success of the Underwritten Offering of such Registrable Securities, the Partnership shall use its commercially reasonable efforts to include such information in such prospectus supplement;

 

(c)           furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing a Registration Statement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the Commission), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing a Registration Statement or supplement or amendment thereto, and (ii) such number of copies of such Registration Statement and the prospectus

 

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included therein and any supplements and amendments thereto as such Persons may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement;

 

(d)           if applicable, use its commercially reasonable efforts to register or qualify the Registrable Securities covered by a Registration Statement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request; provided, however, that the Partnership will not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action that would subject it to general service of process in any jurisdiction where it is not then so subject;

 

(e)           promptly notify each Selling Holder and each underwriter, at any time when a prospectus is required to be delivered under the Securities Act, of (i) the filing of a Registration Statement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such Registration Statement or any post-effective amendment thereto, when the same has become effective; and (ii) any written comments from the Commission with respect to any filing referred to in clause (i) and any written request by the Commission for amendments or supplements to a Registration Statement or any prospectus or prospectus supplement thereto;

 

(f)            immediately notify each Selling Holder and each underwriter, at any time when a prospectus is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading (in the case of the prospectus contained therein, in the light of the circumstances under which a statement is made); (ii) the issuance or threat of issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement, or the initiation of any proceedings for that purpose; or (iii) the receipt by the Partnership of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. Following the provision of such notice, the Partnership agrees to, as promptly as practicable, amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading in the light of the circumstances then existing and to take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

 

(g)           upon request and subject to appropriate confidentiality obligations, furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the Commission or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to any offering of Registrable Securities;

 

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(h)           in the case of an Underwritten Offering, furnish upon request, (i) an opinion of counsel for the Partnership dated the date of the closing under the underwriting agreement and (ii) a “cold comfort” letter, dated the pricing date of such Underwritten Offering (to the extent available) and a letter of like kind dated the date of the closing under the underwriting agreement, in each case, signed by the independent public accountants who have certified the Partnership’s financial statements included or incorporated by reference into the applicable Registration Statement, and each of the opinion and the “cold comfort” letter shall be in customary form and covering substantially the same matters with respect to such Registration Statement (and the prospectus and any prospectus supplement included therein) as have been customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in Underwritten Offerings of securities by the Partnership and such other matters as such underwriters and Selling Holders may reasonably request;

 

(i)            otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

 

(j)            make available to the appropriate representatives of the Managing Underwriter and Selling Holders access to such information and Partnership personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act;

 

(k)           cause all Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which similar securities issued by the Partnership are then listed;

 

(l)            use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Partnership to enable the Selling Holders to consummate the disposition of the Registrable Securities;

 

(m)          provide a transfer agent and registrar for all Registrable Securities covered by a Registration Statement not later than the effective date of such Registration Statement; and

 

(n)           enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition of the Registrable Securities.

 

Each Selling Holder, upon receipt of notice from the Partnership of the happening of any event of the kind described in subsection (f) of this Section 2.05, shall forthwith discontinue disposition of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (f) of this Section 2.05 or until it is advised in writing by the Partnership that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings incorporated by reference in the prospectus.

 

Section 2.06 Cooperation by Holders. The Partnership shall have no obligation to include in a Registration Statement, or in an Underwritten Offering pursuant to Section 2.02(a), 

 

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Registrable Securities of a Selling Holder who has failed to timely furnish such information that, in the opinion of counsel to the Partnership, is reasonably required in order for the Registration Statement, prospectus or prospectus supplement, as applicable, to comply with the Securities Act.

 

Section 2.07 Expenses. The Partnership will pay all reasonable Registration Expenses, including in the case of an Underwritten Offering, regardless of whether any sale is made in such Underwritten Offering. Each Selling Holder shall pay all Selling Expenses in connection with any sale of its Registrable Securities hereunder. In addition, except as otherwise provided in Section 2.08, the Partnership shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder.

 

Section 2.08 Indemnification.

 

(a)           By the Partnership. In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Partnership will indemnify and hold harmless each Selling Holder participating therein, its directors, officers, employees and agents, and each Person, if any, who controls such Selling Holder within the meaning of the Securities Act and the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”), and its directors, officers, employees or agents, against any losses, claims, damages, expenses or liabilities (including reasonable attorneys’ fees and expenses) (collectively, “Losses”), joint or several, to which such Selling Holder, director, officer, employee, agent or controlling Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact (in the case of any prospectus or any Written Testing-the-Waters Communication, in the light of the circumstances under which such statement is made) contained in any Written Testing-the-Waters Communication, a Registration Statement, any preliminary prospectus or prospectus supplement, free writing prospectus or final prospectus or prospectus supplement contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus or any Written Testing-the-Waters Communication, in the light of the circumstances under which they were made) not misleading, and will reimburse each such Selling Holder, its directors, officers, employees and agents, and each such controlling Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Loss or actions or proceedings as such expenses are incurred; provided, however, that the Partnership will not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Selling Holder, its directors, officers, employees and agents or such controlling Person in writing specifically for use in any Written Testing-the-Waters Communication, a Registration Statement, any preliminary prospectus or prospectus supplement, free writing prospectus or final prospectus or prospectus supplement contained therein, or any amendment or supplement thereof, as applicable. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder or any such directors, officers, employees, agents or controlling Person, and shall survive the transfer of such securities by such Selling Holder.

 

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(b)           By Each Selling Holder. Each Selling Holder agrees severally and not jointly to indemnify and hold harmless the Partnership, its directors, officers, employees and agents and each Person, if any, who controls the Partnership within the meaning of the Securities Act or of the Exchange Act, and its directors, officers, employees and agents, to the same extent as the foregoing indemnity from the Partnership to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in any Written Testing-the-Waters Communication, a Registration Statement, any preliminary prospectus or prospectus supplement, free writing prospectus or final prospectus or prospectus supplement contained therein, or any amendment or supplement thereof; provided, however, that the liability of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.

 

(c)           Notice. Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party other than under this Section 2.08. In any action brought against any indemnified party, the indemnified party shall notify the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however, that, (i) if the indemnifying party has failed to assume the defense or employ counsel reasonably acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no indemnified party shall settle any action brought against it with respect to which it is entitled to indemnification hereunder without the consent of the indemnifying party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnifying party.

 

(d)           Contribution. If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold them harmless in respect of any Losses, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Loss in such proportion as is appropriate to reflect the 

 

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relative fault of the indemnifying party on the one hand and of such indemnified party on the other in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided, however, that in no event shall the Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of Registrable Securities giving rise to such indemnification. The relative fault of the indemnifying party on the one hand and the indemnified party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to herein. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in connection with investigating or defending any Loss that is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of fraudulent misrepresentation.

 

(e)           Other Indemnification. The provisions of this Section 2.08 shall be in addition to any other rights to indemnification or contribution that an indemnified party may have pursuant to law, equity, contract or otherwise.

 

Section 2.09 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, the Partnership agrees to use its commercially reasonable efforts to:

 

(a)           make and keep public information regarding the Partnership available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the date hereof;

 

(b)           file with the Commission in a timely manner all reports and other documents required of the Partnership under the Exchange Act at all times from and after the date hereof; and

 

(c)           so long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request a copy of the most recent annual or quarterly report of the Partnership, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration.

 

Section 2.10 Transfer or Assignment of Registration Rights. The rights to cause the Partnership to register Registrable Securities granted to a Holder by the Partnership under this Article II may be transferred or assigned by such Holder to one or more transferee(s) or assignee(s) of such Registrable Securities; provided, however, that (a) unless such transferee or 

 

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assignee is an Affiliate of Holdings, each such transferee or assignee holds Registrable Securities representing at least 2.5 million of the then-outstanding Registrable Securities, subject to adjustment pursuant to Section 3.04, (b) the Partnership is given written notice prior to any said transfer or assignment, stating the name and address of each such transferee and identifying the Registrable Securities with respect to which such registration rights are being transferred or assigned, and (c) each such transferee agrees to be bound by this Agreement.

 

Section 2.11 Restrictions on Public Sale by Holders of Registrable Securities. Each Holder who, along with its Affiliates, holds at least one million of the then outstanding Registrable Securities (subject to adjustment pursuant to Section 3.04), agrees to enter into a customary letter agreement with underwriters providing such Holder will not effect any public sale or distribution of the Registrable Securities during the 90 calendar day period beginning on the date of a prospectus or prospectus supplement filed with the Commission with respect to the pricing of an Underwritten Offering; provided that (i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters on the Partnership or the officers, directors or any other unitholder of the Partnership on whom a restriction is imposed and (ii) the restrictions set forth in this Section 2.11 shall not apply to any Registrable Securities that are included in such Underwritten Offering by such Holder.

 

ARTICLE III. 
 MISCELLANEOUS

 

Section 3.01 Communications. All notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, electronic mail, courier service or personal delivery:

 

(a)           if to Holdings:

 

PES Holdings, LLC

1735 Market Street, 10th Floor

Philadelphia, PA  19103

Attn:  John McShane

Facsimile No.:  (866) 456-1587

Email:  john.mcshane@pes-companies.com

 

(b)           if to a transferee of Holdings, to such Holder at the address provided pursuant to Section 2.10; and

 

(c)           if to the Partnership:

 

PES Logistics Partners, L.P.

1735 Market Street, 10th Floor

Philadelphia, PA  19103

Attn:  Michael Colavita

Facsimile No.:  (866) 456-1587

Email:  michael.colavita@pes-companies.com

 

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All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or sent via electronic mail; and when actually received, if sent by courier service or any other means.

 

Section 3.02 Successor and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.

 

Section 3.03 Assignment of Rights. All or any portion of the rights and obligations of the Holders under this Agreement may be transferred or assigned by the Holders in accordance with Section 2.10 hereof.

 

Section 3.04 Recapitalization, Exchanges, Etc. Affecting the Registrable Securities. The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all securities of the Partnership or any successor or assign of the Partnership (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, splits, recapitalizations, pro rata distributions and the like occurring after the date of this Agreement.

 

Section 3.05 Specific Performance. Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each party, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such party from pursuing any other rights and remedies at law or in equity that such party may have.

 

Section 3.06 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

 

Section 3.07 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 3.08 Governing Law. The laws of the State of New York shall govern this Agreement.

 

Section 3.09 Severability of Provisions. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

 

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Section 3.10 Scope of Agreement. The rights granted pursuant to this Agreement are intended to supplement and not to reduce or replace any rights any Holders may have under the Partnership Agreement with respect to the Registrable Securities. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. Except as provided in the Partnership Agreement, there are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by the Partnership set forth herein. Except as provided in the Partnership Agreement, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

Section 3.11 Amendment. This Agreement may be amended only by means of a written amendment signed by the Partnership and the Holders of a majority of the then outstanding Registrable Securities; provided, however, that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder.

 

Section 3.12 No Presumption. If any claim is made by a party relating to any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.

 

Section 3.13 Aggregation of Registrable Securities. All Registrable Securities held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

Section 3.14 Obligations Limited to Parties to Agreement. Each of the parties hereto covenants, agrees and acknowledges that no Person other than the Partnership and the Holders shall have any obligation hereunder and that, notwithstanding that one or more of the Holders may be a corporation, partnership or limited liability company, no recourse under this Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Holders or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Holders or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for any obligations of the Holders under this Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation, except in each case for any assignee of the Holders hereunder.

 

Section 3.15 Interpretation. All references to “Articles” and “Sections” shall be deemed to be references to Articles and Sections of this Agreement, unless otherwise specified. All references to instruments, documents, contracts and agreements are references to such 

 

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instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” Whenever any determination, consent or approval is to be made or given by the Holders under this Agreement, such action shall be in the Holders’ sole discretion unless otherwise specified.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.

 

	
 
    	
PES HOLDINGS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:  James T. Rens
    
	
 
    	
Title: Chief Financial   Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PES LOGISTICS PARTNERS,   L.P.
    
	
 
    	
 
    
	
 
    	
By: PES Logistics GP,   LLC, its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:  Michael Colavita
    
	
 
    	
Title: Chief Executive   Officer
    

 

[Signature Page to Registration Rights Agreement]Exhibit 10.9

 

FIRST AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

 

OF

 

NORTH YARD LOGISTICS, L.P.

 

This FIRST AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this “Agreement”), dated                  , 2014, of North Yard Logistics, L.P. (the “Partnership”) is entered into by and among North Yard GP, LLC, a Delaware limited liability company, as general partner of the Partnership (the “General Partner”), PES Holdings, LLC, a Delaware limited liability company (“PES Holdings”), and PES Logistics Partners, L.P., a Delaware limited partnership (“MLP”), as limited partners of the Partnership (each, a “Limited Partner”, and together, the “Limited Partners”).

 

RECITALS

 

WHEREAS, the Partnership was formed as a Delaware limited partnership on June 4, 2014;

 

WHEREAS, the General Partner and PES Holdings executed the Limited Partnership Agreement of North Yard Logistics, L.P., dated July 10, 2014 (the “Original LP Agreement”);

 

WHEREAS, PES Holdings, MLP and the Partnership entered into that certain Contribution, Conveyance and Assumption Agreement, dated            , 2014 (the “Contribution Agreement”), whereby PES Holdings contributed to MLP a 45% limited partner interest in the Partnership; and

 

WHEREAS, the General Partner deems it advisable to amend and restate the Original LP Agreement in its entirety as set forth herein.

 

NOW THEREFORE, for and in consideration of the premises, the covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the General Partner hereby amends and restates the Original LP Agreement in its entirety as follows:

 

ARTICLE I
 DEFINITIONS

 

The following definitions shall for all purposes, unless otherwise clearly indicated to the contrary, apply to the terms used in this Agreement.

 

“Adjusted Capital Account” means the Capital Account maintained for each Partner (a) increased by any amounts that the Partner is deemed obligated to contribute or restore to the Partnership pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), and (b) decreased by any amounts described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) with respect to such Partner.

 

 

“Adjusted Capital Account Deficit” means a deficit balance in the Adjusted Capital Account of a Partner.

 

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question.  As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

“Agreement” is defined in the introductory paragraph, as the same may be amended, modified, supplemented or restated from time to time.

 

“Capital Account” means, with respect to any Partner, the capital account maintained for such Partner in accordance with the provisions of Section 5.1.

 

“Capital Contribution” means, with respect to any Partner, the aggregate amount of cash and the initial Gross Asset Value of any property other than cash contributed to the Partnership by such Partner.  Any reference in this Agreement to a Capital Contribution of a Partner shall include a Capital Contribution contributed by its predecessors in interest.

 

“Certificate of Limited Partnership” means the Certificate of Limited Partnership filed with the Secretary of State of the State of Delaware as described in the first sentence of Section 2.4, as amended or restated from time to time.

 

“Code” means the Internal Revenue Code of 1986, as amended, and in effect from time to time.  Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.

 

“Contribution Agreement” has the meaning assigned to such term in the recitals.

 

“Delaware Act” means the Delaware Revised Uniform Limited Partnership Act, as amended from time to time, and any successor to such act.

 

“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for the Fiscal Year as determined by the General Partner; provided that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of the Fiscal Year or other period, Depreciation for the Fiscal Year or other period shall equal to the amount of book basis recovered for the Fiscal Year or other period under the rules prescribed by Treasury Regulations Section 1.704-3(d)(2) and provided, further, that if the federal income tax depreciation, amortization or other cost recovery deduction for the Fiscal Year or other period is zero, Depreciation shall be determined with reference to the beginning Gross Asset Value using any reasonable method selected by the General Partner.

 

“Fiscal Year” has the meaning set forth in Section 2.6.

 

“General Partner” is defined in the introductory paragraph.

 

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“Gross Asset Value” means, with respect to any asset, such asset’s adjusted basis for federal income tax purposes, except as follows:

 

(a) the initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as agreed to by the Partners;

 

(b) the Gross Asset Value of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the Partners, in connection with: (i) the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership assets as consideration for an interest in the Partnership; (iii) the liquidation of the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g) (other than pursuant to Section 708(b)(1)(B) of the Code); (iv) the issuance of a Noncompensatory Option; or (v) any other event to the extent determined by the Partners to be necessary to properly reflect the Gross Asset Values in accordance with the standards set forth in Treasury Regulations Section 1.704-1(b)(2)(iv)(q); provided, however, that in the event of the issuance of an interest in the Partnership pursuant to the exercise of a Noncompensatory Option where the right to share in Partnership capital represented by the Partnership interest differs from the consideration paid to acquire and exercise the Noncompensatory Option, the Gross Asset Value of each Partnership asset immediately after the issuance of the Partnership interest shall be adjusted upward or downward to reflect any unrealized gain or unrealized loss attributable to the Partnership asset and the Capital Accounts of the Partners shall be adjusted in a manner consistent with Treasury Regulations Section 1.704-1(b)(2)(iv)(s); and provided further, however, that adjustments pursuant to clause (i) and clause (ii) of this sentence (or clause (iv) of this sentence in the event of the issuance of a Noncompensatory Option to acquire a de minimis Interest in the Partnership) shall be made only if the General Partner reasonably determines that the adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership.  If any Noncompensatory Options are outstanding upon the occurrence of an event described in this paragraph (b)(i) through (b)(v), the Partnership shall adjust the Gross Asset Values of its properties in accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2).

 

(c) the Gross Asset Value of any Partnership asset distributed to any Partner shall be the gross fair market value of such asset on the date of distribution, as determined by the distributee Partner and the other Partners; and

 

(d) the Gross Asset Values of Partnership assets shall be adjusted to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) (including Treasury Regulations Section 1.734-2(b)(1)), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Value shall not be adjusted pursuant to this paragraph (d) to the extent that an adjustment pursuant to paragraph (b) above is made in connection with a transaction that would otherwise result in an adjustment pursuant to this paragraph (d).

 

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If the Gross Asset Value of an asset has been determined or adjusted pursuant to paragraph (a), paragraph (b) or paragraph (d) above, such Gross Asset Value shall thereafter be adjusted by the depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

 

“Gross Liability Value” means, with respect to any liability of the Partnership described in Treasury Regulations Section 1.752-7(b)(3)(i), the amount of cash that a willing assignor would pay to a willing assignee to assume the liability in an arm’s-length transaction.

 

“Indemnitee” means (a) the General Partner, (b) any former General Partner, (c) any Person who is or was an Affiliate of the General Partner or any former General Partner, (d) any Person who is or was a member, partner, director, officer, fiduciary or trustee of any Person which any of the preceding clauses of this definition describes, (e) any Person who is or was serving at the request of the General Partner or any former General Partner or any Affiliate of the General Partner or any former General Partner as an officer, director, member, partner, fiduciary or trustee of another Person, (provided, however, that that Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services), and (f) any other Person the General Partner designates as an “Indemnitee” for purposes of this Agreement.

 

“Limited Partner” and “Limited Partners” are defined in the introductory paragraph.

 

“MLP” is defined in the introductory paragraph.

 

“MLP IPO” means the initial public offering of MLP’s common units representing limited partner interests in MLP as described in that certain Registration Statement on Form S-1 (File No. 333-198866), as it has been or as it may be amended or supplemented from time to time, filed by MLP with the Securities and Exchange Commission under the Securities Act of 1933, as amended.

 

“MLP IPO Effective Date” means the closing date of the MLP IPO.

 

“Noncompensatory Option” has the meaning set forth in Treasury Regulations Section 1.721-2(f).

 

“Nonrecourse Deductions” shall have the meaning assigned to that term in Treasury Regulations Section 1.704-2(b).

 

“Partner” means the General Partner or any Limited Partner.

 

“Partner Nonrecourse Debt” has the meaning set forth in Treasury Regulations Section 1.704-2(b)(4).

 

“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Treasury Regulations Section 1.704-2(i)(2).

 

“Partner Nonrecourse Deductions” shall have the meaning assigned to that term in Treasury Regulations Section 1.704-2(i).

 

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“Partnership” is defined in the introductory paragraph.

 

“Partnership Minimum Gain” shall have the meaning assigned to that term in Treasury Regulations Section 1.704-2(d).

 

“Percentage Interest” means, with respect to any Partner, each Partner’s percentage ownership interest in the Partnership.

 

“Person” means an individual or a corporation, firm, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

 

“PES Holdings” is defined in the introductory paragraph.

 

“Profits” or “Losses” means, for each Fiscal Year, an amount equal to the Partnership’s taxable income or loss for such Fiscal Year, determined in accordance with Section 703(a) of the Code (but including in taxable income or loss, for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code), with the following adjustments:

 

(a) any income of the Partnership exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss;

 

(b) any expenditures of the Partnership described in Section 705(a)(2)(b) of the Code (or treated as expenditures described in Section 705(a)(2)(b) of the Code pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be subtracted from such taxable income or loss;

 

(c) in the event the Gross Asset Value of any Partnership asset is adjusted in accordance with paragraph (b) or paragraph (c) of the definition of “Gross Asset Value,” the amount of such adjustment shall be taken into account as gain (if the adjustment increases the Gross Asset Value of the Partnership asset) or loss (if the adjustment decreases the Gross Asset Value of the Partnership asset) from the disposition of such asset for purposes of computing Profits or Losses;

 

(d) gain or loss resulting from any disposition of any Partnership asset with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value;

 

(e) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year or other period, computed in accordance with the definition of Depreciation;

 

(f) to the extent an adjustment to the adjusted tax basis of any asset pursuant to Code Section 734(b) (including Treasury Regulations Section 1.734-2(b)(1)) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Account balances as a result of a distribution other than in liquidation of a Partner’s

 

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interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or an item of loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses;

 

(g) the Gross Liability Value of each liability of the Partnership described in Treasury Regulations Section 1.752-7(b)(3)(i) will be adjusted at such times as are provided in this Agreement for an adjustment to the Gross Asset Values of the Partnership’s assets.  The amount of any adjustment will be treated as an item of loss (if the adjustment increases the Gross Liability Value of the liability) or an item of gain (if the adjustment decreases the Gross Liability Value of the liability); and

 

(h) notwithstanding any other provisions of this definition, any items which are specially allocated pursuant to Section 7.3, Section 7.4, or Section 11.2(b) shall not be taken into account in computing Profits or Losses.

 

“Quarter” means, unless the context requires otherwise, a fiscal quarter of the Partnership, or, with respect to the fiscal quarter of the Partnership which includes the MLP IPO Effective Date, the portion of such fiscal quarter after the MLP IPO Effective Date.

 

“Regulatory Allocations” has the meaning set forth in Section 7.4.

 

“Treasury Regulations” means the applicable Income Tax Regulations, including Temporary Regulations, promulgated under the Code. Any and all references herein to a specific provision of a Treasury Regulation shall be deemed to refer to any corresponding successor provision.

 

ARTICLE II
 ORGANIZATIONAL MATTERS

 

2.1                               Formation.  The General Partner and PES Holdings have formed the Partnership as a limited partnership pursuant to the provisions of the Delaware Act, and MLP has acquired a limited partner interest in the Partnership pursuant to the Contribution Agreement.  The General Partner and the Limited Partners hereby enter into this Agreement to set forth the rights and obligations of the Partnership and certain matters related thereto.  Except as expressly provided herein to the contrary, the rights and obligations of the Partners and the administration, dissolution and termination of the Partnership shall be governed by the Delaware Act.

 

2.2                               Name.  The name of the Partnership shall be, and the business of the Partnership shall be conducted under the name of, “North Yard Logistics, L.P.”.

 

2.3                               Registered Office; Registered Agent; Principal Office in the United States; Other Offices.  The registered office of the Partnership in the State of Delaware shall be the initial registered office designated in the Certificate of Limited Partnership or such other office (which need not be a place of business of the Partnership) as the General Partner may designate from time to time in the manner provided by law.  The registered agent of the Partnership in the State of Delaware shall be the initial registered agent designated in the Certificate of Limited Partnership or such other Person or Persons as the General Partner may designate from time to 

 

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time in the manner provided by law.  The registered office of the Partnership in the United States shall be at the place specified in the Certificate of Limited Partnership, or such other place(s) as the General Partner may designate from time to time.  The Partnership may have such other offices as the General Partner may determine appropriate.

 

2.4                               Organizational Certificate.  The Partnership was organized as a Delaware limited partnership by the filing of a certificate of limited partnership in the office of the Secretary of State of the State of Delaware on June 4, 2014.  The General Partner shall file any necessary amendments to the Certificate of Limited Partnership and any such other certificates and documents and do all things requisite to the maintenance of the Partnership as a limited partnership under the laws of Delaware and any state or jurisdiction in which the Partnership may elect to do business.

 

2.5                               Partnership Interests.  The Percentage Interests of the Partners are set forth on Schedule I, as such schedule may be updated, amended, supplemented or restated from time to time.

 

2.6                               Fiscal Year.  The fiscal year of the Partnership shall be January 1 to December 31.

 

ARTICLE III
 PURPOSE

 

The purpose and business of the Partnership shall be to engage in any lawful activity for which limited partnerships may be organized under the Delaware Act.

 

ARTICLE IV
 CAPITAL CONTRIBUTIONS

 

No Partner shall have the obligation to make any additional capital contribution to the Partnership.

 

ARTICLE V
 CAPITAL ACCOUNTS

 

5.1                               Capital Accounts.

 

(a)                                 A separate Capital Account shall be established and maintained for each Partner in accordance with the requirements of Treasury Regulations Section 1.704-1(b)(2)(iv). The Capital Account of each Partner shall be maintained in accordance with the following provisions:

 

(i)                                     to such Partner’s Capital Account there shall be credited such Partner’s Capital Contributions, such Partner’s distributive share of Profits, special allocations of income and gain, and the net amount of any Partnership liabilities that are assumed by such Partner or that are secured by any Partnership assets distributed to such Partners and

 

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(ii)                                  to such Partner’s Capital Account there shall be debited the amount of cash and the Gross Asset Value of any Partnership assets distributed to such Partner pursuant to any provision of this Agreement, such Partner’s distributive share of Losses, special allocations of loss and deduction, and the net amount of any liabilities of such Partner that are assumed by the Partnership or that are secured by any property contributed by such Partner to the Partnership;

 

(b)                                 In the event an interest is transferred in accordance with the terms of this Agreement, the transferee will succeed to the Capital Account of the transferor to the extent it relates to the transferred interest.

 

(c)                                  In determining the amount of any liability for purposes of this Section 5.1, there shall be taken into account Section 752(c) of the Code and any other applicable provisions of the Code and the Treasury Regulations.

 

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b), and will be interpreted and applied in a manner consistent with those Treasury Regulations.  In the event the General Partner determines in good faith and on a commercially reasonable basis that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto are computed in order to comply with those Treasury Regulations, the General Partner may make the modification.  The General Partner also shall, in good faith and on a commercially reasonable basis, (a) make any adjustments to the Capital Accounts that are necessary or appropriate to maintain equality between the aggregate Capital Accounts of the Partners and the amount of capital reflected on the Partnership’s balance sheet, as computed for book purposes, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(q) and (b) make any appropriate modifications to the Capital Accounts in the event unanticipated events might otherwise cause this Agreement not to comply with Treasury Regulations Section 1.704-1(b).

 

ARTICLE VI

DISTRIBUTIONS

 

Within 30 days following the end of each Quarter commencing with the Quarter during which the MLP IPO Effective Date occurs, the General Partner shall review the Partnership’s accounts and determine the amount of the Partnership’s available cash and appropriate reserves (including cash reserves for future maintenance capital expenditures, working capital, turnaround reserves and other matters) for such Quarter, and the Partnership shall make a distribution to the Partners of the available cash, subject to the reserves.  The General Partner’s determination of the amount of distributions and reserves shall be made on its behalf by its sole member, PES Logistics Partners, L.P.  The General Partner may make such cash distributions as it may determine and without being limited to current or accumulated income or gains from any Partnership funds, including, without limitation, Partnership revenues, capital contributions or borrowed funds; provided, that no such distribution shall be made if, after giving effect thereto, the liabilities of the Partnership exceed the fair market value of the assets of the Partnership.  The General Partner may, subject to the foregoing proviso, also cause the Partnership to distribute to the Partners other Partnership property or other securities of the Partnership or other entities.

 

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Except as provided in Section 11.2, all distributions shall be made to the Partners in accordance with their Percentage Interests.

 

ARTICLE VII

ALLOCATIONS

 

7.1                               Profits.  After giving effect to the special allocations set forth in Section 7.3 and Section 7.4, and except as provided in Section 7.2 and Section 11.2(b), all Profits from operations for each Fiscal Year (or part thereof) shall be allocated to the Partners in the following order and priority:

 

(a)                                 First, to the General Partner until the General Partner has been allocated an amount equal to the excess, if any, of (i) the absolute value of cumulative Losses allocated to the General Partner pursuant to Section 7.2(b) for all prior Fiscal Years, over (ii) the cumulative amount of Profits allocated to the General Partner pursuant this Section 7.1(a) for all prior Fiscal Years;

 

(b)                                 Second, to the Limited Partners in proportion to, and to the extent of, an amount equal to the excess, if any, of (i) the absolute value of cumulative Losses allocated to each such Limited Partner pursuant to Section 7.2(a) for all prior Fiscal Years, over (ii) the cumulative Profits allocated to such Limited Partner pursuant to this Section 7.1(b) for all prior Fiscal Years; and

 

(c)                                  Third, to the Limited Partners accordance with their Percentage Interests.

 

7.2                               Losses.  After giving effect to the special allocations set forth in Section 7.3 and Section 7.4, and except as provided in Section 11.2, all Losses from operations for each Fiscal Year (or part thereof) shall be allocated to the Partners in the following order and priority:

 

(a)                                 First, to the Limited Partners in accordance with their Percentage Interests; provided, no Losses shall be allocated to any Limited Partner to the extent that such allocation would result in a Limited Partner having an Adjusted Capital Account Deficit; and

 

(b)                                 Second, to the General Partner.

 

To the extent Losses allocated to a Limited Partner would cause such Limited Partner to have an Adjusted Capital Account Deficit at the end of any Fiscal Year, the Losses will be reallocated to the other Limited Partners to the extent such reallocation will not cause any such Limited Partner to have an Adjusted Capital Account Deficit.  If any Limited Partner receives an allocation of Losses otherwise allocable to another Limited Partner pursuant to this provision, such Limited Partner shall be allocated Profits in subsequent Fiscal Years necessary to reverse the effect of such reallocation of Losses and such allocation of Profits (if any) shall be made before any other Profit allocations under Section 7.1.

 

7.3                               Special Allocations.  The following special allocations shall be made in the following order:

 

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(a)                                 Minimum Gain Chargeback.  Except as otherwise provided in Treasury Regulations Section 1.704-2(f), notwithstanding any other provision of this Article VII, if there is a net decrease in Partnership Minimum Gain during any Fiscal Year, each Partner will be allocated items of Partnership income and gain for the Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to the Partner’s share of the net decrease in Partnership Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g).  Allocations pursuant to the previous sentence will be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto.  The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2).  This Section 7.3(a) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and will be interpreted consistently therewith.

 

(b)                                 Partner Minimum Gain Chargeback.  Except as otherwise provided in Treasury Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article VII, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year, each Partner who has a share of the Partner Nonrecourse Debt Minimum Gain attributable to that Partner Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), will be allocated items of Partnership income and gain for the Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to the Partner’s share of the net decrease in Partner Nonrecourse Debt Minimum Gain attributable to the Partner Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(4).  Allocations pursuant to the previous sentence will be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto.  The items to be so allocated will be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 7.3(b) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(i)(4) and will be interpreted consistently therewith.

 

(c)                                  Qualified Income Offset. In the event that any Partner unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain will be allocated to the Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of the Partner as promptly as possible; provided that an allocation pursuant to this Section 7.3(c) will be made only if and to the extent that the Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VII have been tentatively made as if this Section 7.3(c) were not in this Agreement.

 

(d)                                 Gross Income Allocation.  In the event that any Partner has an Adjusted Capital Account Deficit at the end of any Fiscal Year, each such Partner shall be allocated items of Partnership income and gain in the amount of the deficit as promptly as possible; provided that an allocation pursuant to this Section 7.3(d) will be made only if and to the extent that the Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VII have been tentatively made as if Section 7.3(c) and this Section 7.3(d) were not in this Agreement.

 

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(e)                                  Nonrecourse Deductions.  Nonrecourse Deductions for any Fiscal Year shall be allocated to the Partners in accordance each Partner’s Percentage Interest.

 

(f)                                   Partner Nonrecourse Deductions.  Any Partner Nonrecourse Deductions for any Fiscal Year will be allocated to the Partner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which the Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i)(1).

 

(g)                                  Section 754 Adjustments.  To the extent an adjustment to the adjusted tax basis of any Partnership asset, pursuant to Code Section 734(b) (including pursuant to Treasury Regulations Section 1.734-2(b)(1)) is required, pursuant to Treasury Regulations Sections 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Partner in complete liquidation of the Partner’s interest in the Partnership, the amount of the adjustment to Capital Accounts will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis) and the gain or loss will be allocated to the Partners in proportion to their interests in the Partnership in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to whom the distribution was made in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

 

7.4                               Regulatory Allocations.  The allocations set forth in Section 7.3 (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations.  It is the intent of the Partners that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Partnership income, gain, loss or deduction pursuant to this Section 7.4.  Therefore, notwithstanding any other provision of this Article VII (other than the Regulatory Allocations), but subject to the Code and the Treasury Regulations, the General Partner shall make such offsetting special allocations of Partnership income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Partner’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Partner would have had if the Regulatory Allocations were not part of this Agreement.  In making such determination, the General Partner shall take into account future Regulatory Allocations that, although not yet made, are likely to offset other Regulatory Allocations previously made.

 

7.5                               Income Tax Allocations.

 

(a)                                 Except as provided in this Section 7.5, each item of income, gain, loss and deduction of the Partnership for federal income tax purposes shall be allocated among the Partners in the same manner as such items are allocated for book purposes under Section 7.1, Section 7.2, Section 7.3, Section 7.4 and Section 11.2.

 

(b)                                 In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the Partnership shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for federal income tax purposes and its Gross Asset Value at the time of its contribution to the Partnership.  If the Gross Asset Value of any Partnership property is adjusted in accordance with

 

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clause (b) or (d) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss and deduction shall take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code Section 704(c) and the related Treasury Regulations. For purposes of such allocations, the Partnership shall elect the remedial allocation method described in Treasury Regulations Section 1.704-3(d).

 

(c)                                  All items of income, gain, loss, deduction and credit allocated to the Partners in accordance with the provisions hereof and basis allocations recognized by the Partnership for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Partnership.

 

(d)                                 If any deductions for depreciation or cost recovery are recaptured as ordinary income upon the transfer of Partnership properties, the ordinary income character of the gain from such transfer shall be allocated among the Partners in the same ratio as the deductions giving rise to such ordinary character were allocated.

 

7.6                               Allocation and Other Rules.

 

(a)                                 Profits, Losses, and any other items of income, gain, loss or deduction will be allocated to the Partners pursuant to this Article VII as of the last day of each Fiscal Year, provided that Profits, Losses, and the other items will also be allocated at any time the Gross Asset Values of the Partnership’s assets are adjusted pursuant to paragraph (b) of the definition of “Gross Asset Value.”

 

(b)                                 In the event Partners are admitted to the Partnership pursuant to this Agreement on different dates, the Profits (or Losses) allocated to the Partners for each Fiscal Year during which Partners are so admitted shall be allocated among the Partners in proportion to their Percentage Interests during such Fiscal Year in accordance with Section 706 of the Code, using any convention permitted by Law and selected by the General Partner that takes into account the varying interests of the Partners during such Fiscal Year.

 

(c)                                  For purposes of determining the Profits, Losses or any other items allocable to any period, Profits, Losses and any such other items shall be determined on a daily, monthly or other basis, as determined by the General Partner using any method that is permissible under Section 706 of the Code and the Treasury Regulations thereunder.

 

(d)                                 The Partners are aware of the income tax consequences of the allocations made by this Article VII and hereby agree to be bound by the provisions of this Article VII in reporting their shares of Partnership income and loss for tax purposes.

 

ARTICLE VIII
 MANAGEMENT AND OPERATION OF BUSINESS

 

8.1                               General Partner’s Authority; Reimbursement.  Except as otherwise expressly provided in this Agreement, all powers to control and manage the business and affairs of the Partnership shall be vested exclusively in the General Partner.  The Limited Partners shall not have any power to control or manage the Partnership.  The General Partner shall be reimbursed on a basis as the General Partner may determine for (a) all direct and indirect expenses it incurs

 

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or payments it makes on behalf of the Partnership (including amounts paid to any Person, including Affiliates of the General Partner, to perform services for the Partnership or for the General Partner in the discharge of its duties to the Partnership) and (b) all other direct and indirect expenses allocable to the Partnership or otherwise incurred by the General Partner in connection with operating the Partnership’s business (including expenses allocated to the General Partner by its Affiliates).  The General Partner shall determine the expenses that are allocable to the Partnership. Reimbursements pursuant to this Section 8.1 shall be in addition to any reimbursement to the General Partner as a result of indemnification pursuant to Section 8.3.  The General Partner may be removed or replaced only with the written consent of the General Partner and Limited Partners having at least 80% of the Percentage Interests.

 

8.2                               Approval Required for Certain Action.  In addition to matters set forth in Section 6.1, the General Partner shall not cause the Partnership to, and the Partnership shall not, take any of the following actions without the approval or consent of the Limited Partners (which consent may be made categorically or by policy):

 

(a)                                 effecting any merger or consolidation involving the Partnership;

 

(b)                                 effecting any sale or exchange of all or substantially all of Partnership’s assets;

 

(c)                                  dissolving or liquidating the Partnership;

 

(d)                                 creating or causing to exist any consensual restriction on the ability of the Partnership or its subsidiaries to make distributions, pay any indebtedness, make loans or advances or transfer assets to its Limited Partners or their subsidiaries; or

 

(e)                                  issuing additional interests in the Partnership.

 

8.3                               Indemnification.

 

(a)                                 To the fullest extent permitted by applicable law but subject to the limitations expressly provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the Partnership from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all threatened, pending or completed claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, and whether formal or informal and including appeals, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee and acting (or refraining to act) in such capacity on behalf of or for the benefit of the Partnership; provided, however, that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Agreement, the Indemnitee acted in bad faith or engaged in intentional fraud, willful misconduct (including a willful breach of this Agreement) or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful.  Any indemnification pursuant to this Section 8.3 shall be made only out of the assets of the Partnership, it being agreed that the Partners shall not be personally liable for such

 

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indemnification and shall have no obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate such indemnification.

 

(b)                                 To the fullest extent permitted by applicable law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to Section 8.3(a) in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Partnership prior to a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 8.3, the Indemnitee is not entitled to be indemnified upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be ultimately determined that the Indemnitee is not entitled to be indemnified as authorized by this Section 8.3.

 

(c)                                  The indemnification provided by this Section 8.3 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, as a matter of law, in equity or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

 

(d)                                 The Partnership may purchase and maintain (or reimburse its Affiliates for the cost of) insurance on behalf of the Indemnitees, the Partnership and its Affiliates and such other Persons as the Partnership shall determine, against any liability that may be asserted against or expense that may be incurred by such Person in connection with the Partnership’s activities or such Person’s activities on behalf of the Partnership, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.

 

(e)                                  For purposes of this Section 8.3, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of Section 8.3; and action taken or omitted by it with respect to any employee benefit plan in the performance of its duties for a purpose subjectively believed by it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in the best interests of the Partnership.

 

(f)                                   In no event may an Indemnitee subject the Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.

 

(g)                                  An Indemnitee shall not be denied indemnification in whole or in part under this Section 8.3 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

 

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(h)                                 The provisions of this Section 8.3 are for the benefit of the Indemnitees, their heirs, successors, assigns, executors and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

 

(i)                                     No amendment, modification or repeal of this Section 8.3 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Partnership, nor the obligations of the Partnership to indemnify any such Indemnitee under and in accordance with the provisions of this Section 8.3 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

(j)                                    TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, AND SUBJECT TO SECTION 8.3(a), THE PROVISIONS OF THE INDEMNIFICATION PROVIDED IN THIS SECTION 8.3 ARE INTENDED BY THE PARTIES TO APPLY EVEN IF SUCH PROVISIONS HAVE THE EFFECT OF EXCULPATING THE INDEMNITEE FROM LEGAL RESPONSIBILITY FOR THE CONSEQUENCES OF SUCH PERSON’S NEGLIGENCE, FAULT OR OTHER CONDUCT.

 

8.4                               Liability of Indemnitees.

 

(a)                                 Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Partnership, the Partners or any other Person bound by this Agreement, for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, with respect to the matter in question, the Indemnitee acted in bad faith or engaged in intentional fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful.

 

(b)                                 To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Partnership, any Partners, any other Persons who acquire an interest in the Partnership or any other Person bound by this Agreement, the General Partner and any other Indemnitee acting in connection with the Partnership’s business or affairs shall not be liable to the Partnership, to any Partner, to any Person who acquires an interest in the Partnership or to any other Person bound by this Agreement for its reliance on the provisions of this Agreement.

 

(c)                                  No amendment, modification or repeal of this Section 8.4 or any provision hereof shall in any manner affect the limitations on the liability of any Indemnitee under this Section 8.4 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

8.5                               Loans or Contributions from the Partnership.  The Partnership may lend or contribute to any Affiliate or Limited Partner, and any Affiliate or Limited Partner may borrow from the Partnership, funds on terms and conditions determined by the General Partner.

 

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ARTICLE IX
 RIGHTS AND OBLIGATIONS OF LIMITED PARTNER

 

The Limited Partners shall have no liability under this Agreement.

 

ARTICLE X
 TAX MATTERS

 

10.1                        Tax Matters Partner.  The “tax matters partner” of the Partnership for purposes of Section 6231(a)(7) of the Code shall be the General Partner.  The tax matters partner shall have the power to manage and control, on behalf of the Partnership, any administrative proceeding at the Partnership level with the Internal Revenue Service relating to the determination of any item of Partnership income, gain, loss, deduction or credit for federal income tax purposes.

 

10.2                        Section 754 Election.

 

(a)                                 The tax matters partner may make, on behalf of the Partnership, all elections for federal income and all other tax purposes.

 

(b)                                 The tax matters partner shall make, on behalf of the Partnership, an election in accordance with Section 754 of the Code, so as to adjust the basis of Partnership property in the case of a distribution of property within the meaning of Section 734 of the Code, and in the case of a transfer of interests within the meaning of Section 743 of the Code.

 

ARTICLE XI
 DISSOLUTION AND LIQUIDATION

 

11.1                        Dissolution.  The Partnership shall terminate and be dissolved only upon (i) the written consent of the Partners, (ii) upon the sale of all or substantially all of the assets of the Partnership outside the ordinary course of the Partnership’s business, or (iii) the happening of any other event causing the dissolution or termination of the Partnership as a limited partnership under the laws of the State of Delaware.  Dissolution of the Partnership shall be effective on the day on which the event giving rise to the dissolution occurs.  Upon the dissolution of the Partnership, the General Partner shall promptly notify the Partners of such dissolution.

 

11.2                        Liquidation.

 

(a)                                 Upon dissolution of the Partnership, the General Partner shall carry out the winding up of the Partnership and shall immediately commence to wind up the Partnership’s affairs; provided, a reasonable time shall be allowed for the orderly liquidation of the assets of the Partnership and the satisfaction of liabilities to creditors so as to enable the Partners to minimize the normal losses attendant upon a liquidation.  The proceeds of liquidation shall be applied first to payment of all expenses and debts of the Partnership and setting up of such reserves as the General Partner reasonably deems necessary to wind up the Partnership’s affairs and to provide for any contingent liabilities or obligations of the Partnership; provided, the unpaid principal of and interest on any loans made to the Partnership by Partners (and their Affiliates) shall be distributed pro rata to the Partners (and their Affiliates) who made such loans, in proportion to the total amount of principal and interest payable on such loans, such

 

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distributions being treated first as a payment of accrued interest on such loans and next as a payment of principal on such loans.  Any remaining proceeds shall be distributed to the Partners in accordance with their positive Capital Account balances after giving effect to all contributions, distributions and allocations for all periods.

 

(b)                                 In the event of any liquidation and winding up of the Partnership under this Section 11.2 or a sale, exchange or other disposition of all or substantially all of the assets of the Partnership, either voluntary or involuntary, Profits and Losses and each item of gross income, gain, loss and deduction for such period shall be allocated to the Partners so that, to the maximum extent possible, the Partners’ Capital Account balances are in proportion to their Percentage Interests, and no other allocation of Profit or Loss pursuant to this Agreement shall reverse the effect of such allocation.  If in the year of such liquidation, dissolution or winding up, the Partners’ Capital Accounts are not in proportion to their Percentage Interests after the application of the preceding sentence, then to the extent permitted by Law and notwithstanding anything to the contrary contained in this Agreement, items of gross income and gain for any preceding taxable period(s) with respect to which IRS Form 1065 Schedules K-1 have not been filed by the Partnership shall be reallocated among the Partners until the Partners’ Capital Accounts are in proportion to their Percentage Interests, and no other allocation of Profit or Loss pursuant to this Agreement shall reverse the effect of such allocation.

 

11.3                        Termination.  The Partnership shall terminate when all of the assets of the Partnership, after payment of or due provision for all debts, liabilities and obligations of the Partnership, shall have been distributed to the Partners in the manner provided for in this Article XI and the Certificate of Limited Partnership shall have been canceled, or such other documents required under the Delaware Act to be executed and filed with the Secretary of State of the State of Delaware have been so executed and filed, in the manner required by the Delaware Act.

 

11.4                        Claims of the Partners or Third Parties.  The Partners and former Partners shall look first to the Partnership’s assets for the return of their Capital Contributions, and if the assets of the Partnership remaining after payment of or due provision for all debts, liabilities and obligations of the Partnership are insufficient to return such Capital Contributions, the Partners shall look to the General Partner for a return of their Capital Contributions; provided, nothing contained herein shall be deemed to limit the rights of a Partner under applicable law.  In the event any Partner other than the General Partner has a deficit balance in its Capital Account at the time of the Partnership’s dissolution, it shall not be required to restore such account to a positive balance or otherwise make any payments to the Partnership or its creditors or other third parties in respect of such deficiency.

 

11.5                        Distributions In-Kind.  If any assets of the Partnership shall be distributed in kind, such assets shall be distributed to the Partner(s) entitled thereto as tenants-in-common in the same proportions as such Partner(s) would have been entitled to cash distributions if (a) such assets had been sold for cash by the Partnership at the fair market value of such property (taking the Gross Asset Value definition herein and Code Section 7701(g) into account) on the date of distribution; (b) any unrealized income, gain, loss and deduction inherent in such property (that has not been reflected in the Capital Accounts previously) that would be realized by the Partnership from such sale were allocated among the Partner(s) as Profits or Losses in accordance with this Agreement; and (c) the cash proceeds were distributed to the Partner(s) in

 

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accordance with this Article XII.  The Capital Accounts of the Partner(s) shall be increased by the amount of any unrealized income or gain inherent in such property or decreased by the amount of any loss or deduction inherent in such property that would be allocable to them, and shall be reduced by the fair market value of the assets distributed to them under the preceding sentence.  Notwithstanding the foregoing, the Partners shall have the right to assign their interest to such in-kind distribution to any Person.

 

ARTICLE XII
 AMENDMENT OF PARTNERSHIP AGREEMENT

 

The General Partner may amend any provision of this Agreement without the consent of any Limited Partners and may execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith.

 

ARTICLE XIII
 GENERAL PROVISIONS

 

13.1                        Addresses and Notices.  Any notice to the Partnership shall be deemed given if received by the Partnership in writing at its principal office located at:

 

North Yard Logistics, L.P.

1735 Market Street, 10th Floor

Philadelphia, Pennsylvania 19103

Attn: John B. McShane, General Counsel

 

Any notice to the General Partner or a Limited Partner shall be deemed given if received by it in writing at the address designated in Schedule I, or such other place as the General Partner or Limited Partner may from time to time designate.

 

13.2                        Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns.

 

13.3                        Integration.  This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.

 

13.4                        Severability.  If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions hereof, or of such provision in other respects, shall not be affected thereby.

 

13.5                        Applicable Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the General Partner and the Limited Partners as of the date first set forth above.

 

	
 
    	
GENERAL   PARTNER:
    
	
 
    	
 
    
	
 
    	
North   Yard GP, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   
    	
Michael   J. Colavita
    
	
 
    	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
LIMITED   PARTNERS:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
PES   Holdings, LLC,
    	
 
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   
    	
James   T. Rens
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
PES   Logistics Partners, L.P.,
    
	
 
    	
a   Delaware limited partnership
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
PES   Logistics GP, LLC,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   
    	
Michael   J. Colavita
    
	
 
    	
 
    	
Title:
    	
Chief   Executive Officer
    
					

 

Signature Page to First Amended and Limited Partnership Agreement of North Yard Logistics, L.P.

 

 

SCHEDULE I

 

	
Limited Partner Name and Address
    	
 
    	
Percentage Interest
    	
 
    
	
PES Holdings, LLC  

1735 Market Street, 10th Floor 

Philadelphia, PA 19103 

Attention: James T. Rens 
    	
 
    	
55.0
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
PES Logistics Partners, L.P.  

c/o PES Logistics GP, LLC 

1735 Market Street, 10th Floor 

Philadelphia, PA 19103 

Attention: Michael J. Colavita 
    	
 
    	
45.0
    	
%
    

 

	
General Partner Name and Address
    	
 
    	
 
    	
 
    
	
North Yard GP, LLC  

1735 Market Street, 10th Floor 

Philadelphia, PA 19103 

Attention: Michael J. Colavita 
    	
 
    	
*
    	
 
    

 

*Denotes a non-economic interest

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00236-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00236-of-00352.parquet"}]]