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Exhibit 10.5
FORM OF INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of ____________, between Lument Finance Trust, Inc., a Maryland corporation (the “Company”), and ____________ (“Indemnitee”).

WHEREAS, at the request of the Company, Indemnitee currently serves as a director or officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and

WHEREAS, as an inducement to Indemnitee to continue to serve as such director or officer of the Company, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings; and

WHEREAS, the parties to this Agreement desire to set forth their agreement regarding indemnification and advance of expenses.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Definitions. For purposes of this Agreement:

(a)    “Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining such percentage interest; (ii) there occurs a proxy/contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who were directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the Effective Date or whose election or nomination for election was previously so approved.

(b)    “Corporate Status” means the status of a person as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company: (i) if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust or other enterprise (1) of which a majority of the voting power or equity interest is owned directly or indirectly by the Company or (2) the management of which is controlled directly or indirectly by the Company, or (ii) if, as a result of Indemnitee’s service to the Company or any of its affiliated entities, Indemnitee is subject to duties by, or required to perform services for, an employee benefit plan or its participants or beneficiaries, including as a deemed fiduciary thereof.
(c)    “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by Indemnitee.

(d)    “Effective Date” means the date set forth in the first paragraph of this Agreement.

(e)    “Expenses” means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal 

resulting from any Proceeding including, without limitation, the premium for, security for and other costs relating to any cost bond, supersedes bond or other appeal bond or its equivalent.

(f)    “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

(g)    “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.

Section 2. Services by Indemnitee. Indemnitee serves as a director or officer of the Company. However, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee.

Section 3. General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) as otherwise permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the “MGCL”).

Section 4. Standard for Indemnification. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding unless it is established by clear and convincing evidence that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
Section 5. Certain Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not be entitled to indemnification or advancement of Expenses hereunder:

(a)    if the Proceeding was by or in the right of the Company and Indemnitee is adjudged to be liable to the Company;

(b)    if Indemnitee is adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging improper personal benefit to Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status;

(c)    on account of any Proceeding in which it is determined by final judgment by a court having jurisdiction in the matter that (i) Indemnitee intentionally caused or intentionally contributed to the injury complained of or
(ii) Indemnitee’s conduct was knowingly fraudulent, deliberately dishonest or deemed willful misconduct;

(d)    if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party, expressly provides otherwise;

(e)    which have been paid to Indemnitee by an insurance carrier under a policy of officers’ and directors’ liability insurance maintained by the Company; or

(f)    on account of an alleged violation of federal or state securities laws unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged 

material securities law violations as to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws.

Section 6. Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:

(a)    if such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or

(b)    if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.

Section 7. Indemnification for Expenses of an Indemnitee Who is Wholly or Partially Successful. Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, Indemnitee shall be indemnified for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under
this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7, and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 8. Advance of Expenses for Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to (or otherwise becomes a participant in) any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with (a) such Proceeding which is initiated by a third party who is not a stockholder of the Company or (b) such Proceeding which is initiated by a stockholder of the Company acting in his or her capacity as such and for which a court of competent jurisdiction specifically approves such advancement, and which relates to acts or omissions with respect to the performance of duties or services on behalf of the Company. Such advance or advances shall be made within ten days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding, and may be in the form of, in the reasonable discretion of Indemnitee (but without duplication) (a) payment of such Expenses directly to third parties on behalf of Indemnitee, (b) advancement to Indemnitee of funds in an amount sufficient to pay such Expenses or (c) reimbursement to Indemnitee for Indemnitee’s payment of such Expenses. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established, by clear and convincing evidence, that the standard of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 7 of this Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.

Section 9. Indemnification and Advance of Expenses as a Witness or Other Participant. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall be advanced all reasonable Expenses and 

indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee. Section 10. Procedure for Determination of Entitlement to Indemnification.
(a)    To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

(b)    Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, which Independent Counsel shall be
selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.

(c)    The Company shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed.

Section 11. Presumptions and Effect of Certain Proceedings.

(a)    In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.

(b)    The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

(c)    The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement.

Section 12. Remedies of Indemnitee.

(a)    If (i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement 

within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to any other section of this Agreement or the charter or Bylaws of the Company is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days
following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his or her rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b)    In any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement.

(c)    If a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification.

(d)    In the event that Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him or her in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

(e)    Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60th day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) ending on the date such payment is made to Indemnitee by the Company.

Section 13. Defense of the Underlying Proceeding.

(a)    Indemnitee shall notify the Company promptly in writing upon being served with or receiving any summons, citation, subpoena, complaint, indictment, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)    Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend
within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise of a claim against Indemnitee which (i) includes an admission of fault of Indemnitee, (ii) does 

not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement.

(c)    Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter.

Section 14. Non-Exclusivity; Survival of Rights; Subrogation.

(a)    The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy.

(b)    In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

Section 15. Insurance.

(a)    The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee by reason of his or her Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of his or her Corporate Status.
(b)    Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence. The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.

Section 16. Coordination of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 17. Contribution. If the indemnification provided in this Agreement is unavailable in whole or in part and may not be paid to Indemnitee for any reason, other than for failure to satisfy the standard of conduct set forth in Section 4 or due to the provisions of Section 5, then, with respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), to the fullest extent permissible under applicable law, the Company, in lieu of indemnifying and holding harmless Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for Expenses, judgments, penalties, and/or amounts paid or to be paid in settlement, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.

Section 18. Reports to Stockholders. To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.

Section 19. Duration of Agreement; Binding Effect.

(a)    This Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).

(b)    The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.
(c)    The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

(d)    The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking.

Section 20. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 21. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same 

Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

Section 22. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 23. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 24. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(a)    If to Indemnitee, to the address set forth on the signature page hereto.
(b)    If to the Company, to:

Lument Finance Trust, Inc.
c/o Lument Investment Management, LLC 230 Park Avenue
20th Floor
New York, NY 10169 Attn: General Counsel

or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Section 25. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.

[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

LUMENT FINANCE TRUST, INC.

By:_________________________________
          Name: ___________________________
Title: ____________________________

INDEMNITEE

By:_________________________________
          Name: ___________________________
      Address: _________________________
           _________________________

EXHIBIT A

AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED

						
	To:	The Board of Directors of Lument Finance Trust, Inc.

						
	Re:	Affirmation and Undertaking

Ladies and Gentlemen:

This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement, dated as of March [●], 2020, by and between Lument Finance Trust, Inc., a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”). Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.

I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as a director or officer of the Company, in any of the facts or events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.

In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and related Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or
(2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking as of the date written above.

[Name]exhibit41december312021

    EXHIBIT 4.1    1    DESCRIPTION OF SISECAM RESOURCES LP’s SECURITIES    REGISTERED PURSUANT TO SECTION 12 OF THE  SECURITIES EXCHANGE ACT OF 1934    As of December 31, 2021, Sisecam Resources LP (the “Partnership,” “we,” “our,” or “us”) had a single class of  security registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended: common units  representing limited partner interests (the “common units”).  References to our “general partner” or “Sisecam GP”  refer to Sisecam Resource Partners LLC. References to “Ciner Enterprises,” refer to Ciner Enterprises Inc.; references  to “Sisecam USA” refer to Sisecam Chemicals USA Inc.; and references to “SCW LLC” refer to Sisecam Chemicals  Wyoming LLC (formerly known as Ciner Wyoming Holding Co.). The following description of common units is a  summary and, as such, we do not deem them to be complete.  It is subject to, and qualified in its entirety by, reference  to the First Amended and Restated Agreement of Limited Partnership of Sisecam Resources LP, dated as of September  18, 2013 (as amended, our “partnership agreement”), which is incorporated by reference as an exhibit to the Annual  Report on Form 10-K of which this Exhibit 4.1 is a part.  Please refer to our partnership agreement for additional  information.    DESCRIPTION OF THE COMMON UNITS    The Common Units    The common units are a class of limited partner interests in us.  The holders of common units are entitled to  participate in partnership distributions and exercise the rights or privileges available to limited partners under our  partnership agreement. For a description of the rights and preferences of holders of common units in and to Partnership  cash distributions, please read this section and “Provisions of Our Partnership Agreement Relating to Cash  Distributions” below. For a description of certain other rights and privileges of limited partners under our partnership  agreement, including voting rights, please read “Description of Our Partnership Agreement” below.     Listing    Our common units are traded on The New York Stock Exchange under the symbol “SIRE.”     Transfer Agent and Registrar        Duties    Equiniti Trust Company (formerly Wells Fargo Bank, N.A.) serves as the registrar and transfer agent for the  common units. We will pay all fees charged by the transfer agent for transfers of common units except the following,  which must be paid by unitholders:    • surety bond premiums to replace lost or stolen certificates, taxes and other governmental charges;    • special charges for services requested by a holder of a common unit; and    • other similar fees or charges.    

 

  2    There will be no charge to unitholders for disbursements of our cash distributions. We will indemnify the  transfer agent, its agents and each of their stockholders, directors, officers and employees against all claims and  losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to  any gross negligence or intentional misconduct of the indemnified person or entity.      Resignation or Removal    The transfer agent may resign, by notice to us, or be removed by us. The resignation or removal of the transfer  agent will become effective upon our appointment of a successor transfer agent and registrar and its acceptance of  the appointment. If no successor has been appointed or has not accepted its appointment within 30 days of the  resignation or removal, our general partner may act as the transfer agent and registrar until a successor is appointed    Transfer of Common Units    Upon the transfer of a common unit in accordance with our partnership agreement, the transferee of the  common unit shall be admitted as a limited partner with respect to the common units transferred when such transfer  and admission are reflected in our books and records. Each transferee:    • represents that the transferee has the capacity, power and authority to become bound by our partnership  agreement;    • automatically agrees to be bound by the terms and conditions of, and is deemed to have executed, our  partnership agreement; and    • gives the consents, waivers, acknowledgments and approvals contained in our partnership agreement.    Our general partner will cause any transfers to be recorded on our books and records from time to time as  necessary to accurately reflect transfers but no less frequently than quarterly.    We may, at our discretion, treat the nominee holder of a common unit as the absolute owner. In that case, the  beneficial holder’s rights are limited solely to those that it has against the nominee holder as a result of any  agreement between the beneficial owner and the nominee holder.    Common units are securities and any transfers are subject to the laws governing the transfer of securities. In  addition to other rights acquired upon transfer, the transferor gives the transferee the right to become a substituted  limited partner in our partnership for the transferred common units.    Until a common unit has been transferred on our books, we and the transfer agent may treat the record holder  of the common unit as the absolute owner for all purposes, except as otherwise required by law or securities  exchange regulations.    Number of Units    As of March 10, 2022, we had outstanding 19,788,208 common units and 399,000 general partner units.      PROVISIONS OF OUR PARTNERSHIP AGREEMENT RELATING TO CASH DISTRIBUTIONS  

 

  3      Set forth below is a summary of the significant provisions of our partnership agreement that relate to cash  distributions.    Distributions of Available Cash    Our partnership agreement requires that, within 60 days after the end of each quarter, we distribute our available  cash to unitholders of record on the applicable record date.  Available cash generally means, for any quarter, all cash and cash equivalents on hand at the end of that quarter:  • less, the amount of cash reserves established by our general partner to:    o provide for the proper conduct of our business (including reserves for our future capital expenditures  and for anticipated future credit needs subsequent to that quarter);    o comply with applicable law, any of our debt instruments or other agreements; or    o provide funds for distributions to our unitholders and to our general partner for any one or more of  the next four quarters (provided that our general partner may not establish cash reserves for  distributions if the effect of the establishment of such reserves will prevent us from distributing the  minimum quarterly distribution on all common units and any cumulative arrearages on such  common units for the current quarter);    • plus, if our general partner so determines, all or any portion of the cash on hand on the date of determination  of available cash for the quarter, resulting from working capital borrowings made subsequent to the end of  such quarter.    The purpose and effect of the last bullet point above is to allow our general partner, if it so decides, to use cash  received by us after the end of the quarter but on or before the date of determination of available cash for the quarter,  including cash on hand from working capital borrowings made after the end of the quarter but on or before the date  of determination of available cash for that quarter, to pay distributions to unitholders. Under our partnership  agreement, working capital borrowings are generally borrowings that are made under a credit facility, commercial  paper facility or similar financing arrangement, and in all cases are used solely for working capital purposes or to pay  distributions to partners, and with the intent of the borrower to repay such borrowings within 12 months with funds  other than from additional working capital borrowings.    Our general partner has considerable discretion in determining the amount of available cash, the amount of  distributions and the decision to make any distribution. Although our partnership agreement requires that we distribute  all of our available cash quarterly, there is no guarantee that we will make quarterly cash distributions to our  unitholders at our current quarterly distribution level of $0.650 per unit, at the minimum quarterly distribution level  (as listed below) or at any other rate, and we have no legal obligation to do so.    General Partner Interest and Incentive Distribution Rights    Our partnership agreement provides that our general partner initially is entitled, with respect to its general partner  interest, to 2.0% of all distributions that we make prior to our liquidation. Our general partner has the right, but not  

 

  4    the obligation, to contribute up to a proportionate amount of capital to us in order to maintain a 2% general partner  interest if we issue additional units. Our general partner’s initial 2% interest in our cash distributions will be  proportionately reduced if we issue additional units in the future (other than the issuance of common units upon a reset  of the incentive distribution rights), and our general partner does not contribute a proportionate amount of capital to  us in order to maintain its 2% general partner interest. As of December 31, 2021, our general partner held an  approximate 2% general partner interest.      Our general partner currently holds incentive distribution rights that represent the right to receive increasing  percentages, up to a maximum of 48%, of the available cash we distribute from operating surplus (as defined in our  partnership agreement) after we have achieved the minimum quarterly distribution and the target distribution levels.  Our general partner currently holds the incentive distribution rights, but may transfer these rights separately from its  general partner interest, subject to certain restrictions in our partnership agreement.    Percentage Allocations of Distributions from Operating Surplus  The following table illustrates the percentage allocations of distributions from operating surplus between the  unitholders and our general partner based on the specified target distribution levels. The amounts set forth under the  column heading “Marginal Percentage Interest in Distributions” are the approximate percentage interests of our  general partner and the unitholders in any distributions from operating surplus we distribute up to and including the  corresponding amount in the column “Total Quarterly Distribution per Unit Target Amount.” The percentage  interests shown for our unitholders and our general partner for the minimum quarterly distribution also apply to  quarterly distribution amounts that are less than the minimum quarterly distribution.  Under our partnership agreement, our general partner has considerable discretion to determine the amount of  available cash (as defined therein) for distribution each quarter to the Partnership’s unitholders, including the  discretion to establish cash reserves that would limit the amount of available cash eligible for distribution to the  Partnership’s unitholders for any quarter. The Partnership does not guarantee that it will pay the target amount of the  minimum quarterly distribution listed below (or any distributions) on its units in any quarter. The percentage  interests set forth below for our general partner (1) include its 2.0% general partner interest, (2) assume that our  general partner has contributed any additional capital necessary to maintain its 2.0% general partner interest, (3)  assume that our general partner has not transferred its incentive distribution rights and (4) assume that we do not  issue additional classes of equity securities.      Total Quarterly Distribution per Unit  Target Amount  Marginal Percentage  Interest in Distributions   General Partner  Minimum Quarterly Distribution   $0.50000  98.0 %   2.0 %   First Target Distribution above $0.5000 up to $0.5750   98.0 %   2.0 %   Second Target Distribution above $0.5750 up to $0.6250   85.0 %   15.0 %   Third Target Distribution above $0.6250 up to $0.7500   75.0 %   25.0 %   Thereafter above $0.7500   50.0 %   50.0 %   Distributions of Cash Upon Liquidation  If we dissolve in accordance with our partnership agreement, we will sell or otherwise dispose of our assets in a  process called liquidation. We will first apply the proceeds of liquidation to the payment of our creditors. We will  distribute any remaining proceeds to the unitholders and our general partner, in accordance with their capital account  balances, as adjusted to reflect any gain or loss upon the sale or other disposition of our assets in liquidation. Any  

 

  5    further net gain recognized upon liquidation will be allocated in a manner that takes into account the incentive  distribution rights of our general partner.       DESCRIPTION OF OUR PARTNERSHIP AGREEMENT    The following is a summary of the material provisions of our partnership agreement. Please refer to our  partnership agreement for additional information, which is incorporated by reference as an exhibit to the Annual  Report on Form 10-K of which this Exhibit 4.1 is a part. We summarize the following provisions of our partnership  agreement elsewhere in this Exhibit 4.1:       •    with regard to the rights and preferences of holders of common units in and to Partnership cash  distributions, please read “Provisions of Our Partnership Agreement Relating to Cash Distributions”  above; and      •    with regard to the transfer of common units, please read “Description of the Common Units—Transfer of  Common Units” above.    Capital Contributions    Unitholders are not obligated to make additional capital contributions, except as described under “—Limited  Liability” below.    For a discussion of our general partner’s right to contribute capital to maintain an approximate 2% general partner  interest if we issue additional units, please read “—Issuance of Additional Interests” below.    Voting Rights    The following is a summary of the unitholder vote required for approval of the matters specified below.  Matters  that require the approval of a “unit majority” require the approval of a majority of the outstanding common units,  voting as a single class.  In voting their common units, our general partner and its affiliates will have no duty or obligation whatsoever to  us or the limited partners, including any duty to act in the best interests of us or the limited partners, other than the  implied contractual covenant of good faith and fair dealing.    

 

  6    Issuance of additional units No approval right.  Amendment of our partnership agreement Certain amendments may be made by our general partner  without the approval of the unitholders.  Other  amendments generally require the approval of a unit  majority.  Please read “—Amendment of Our Partnership  Agreement” below.  Merger of our Partnership or the sale of all or  substantially all of our assets  Unit majority in certain circumstances.  Please read “— Merger, Consolidation, Conversion, Sale or Other  Disposition of Assets” below.  Dissolution of our Partnership Unit majority.  Please read “—Dissolution” below.  Continuation of our business upon dissolution Unit majority.  Please read “—Dissolution” below.  Withdrawal of our general partner Under most circumstances, the approval of unitholders  holding at least a majority of the outstanding common  units, excluding common units held by our general  partner and its affiliates, is required for the withdrawal of  our general partner prior to September 30, 2023 in a  manner that would cause a dissolution of our Partnership.  Removal of our general partner Not less than 66 2/3% of the outstanding units, voting as  a single class, including units held by our general partner  and its affiliates.  Transfer of the general partner interest No approval right.  Transfer of incentive distribution rights No approval right.  Reset of incentive distribution rights No approval right.  Transfer of ownership interests in our general  partner  No approval right.    If any person or group other than our general partner and its affiliates acquires beneficial ownership of 20% or  more of any class of units, that person or group loses voting rights on all of its units.  This loss of voting rights does  not apply to any person or group that acquires the units from our general partner or its affiliates and any transferees of  that person or group approved by our general partner or to any person or group who acquires the units with the specific  prior approval of our general partner.      Applicable Law; Forum, Venue and Jurisdiction    Our partnership agreement is governed by Delaware law.  Our partnership agreement requires that any claims,  suits, actions or proceedings:  • arising out of or relating in any way to our partnership agreement (including any claims, suits or actions to  interpret, apply or enforce the provisions of our partnership agreement or the duties, obligations or liabilities  among limited partners or of limited partners to us, or the rights or powers of, or restrictions on, the limited  partners or us);    • brought in a derivative manner on our behalf;  

 

  7      • asserting a claim of breach of a duty (including a fiduciary duty) owed by any director, officer or other  employee of us or our general partner, or owed by our general partner, to us or the limited partners;    • asserting a claim arising pursuant to any provision of the Delaware Revised Uniform Limited Partnership  Act, as amended (the “Delaware Act”); or    • asserting a claim governed by the internal affairs doctrine;    shall be exclusively brought in the Court of Chancery of the State of Delaware, regardless of whether such claims,  suits, actions or proceedings sound in contract, tort, fraud or otherwise, are based on common law, statutory, equitable,  legal or other grounds, or are derivative or direct claims.  Each of the partners and each person or group holding any  beneficial interest in us is irrevocably consenting to these limitations and provisions regarding claims, suits, actions  or proceedings and submitting to the exclusive jurisdiction of the Court of Chancery of the State of Delaware in  connection with any such claims, suits, actions or proceedings.    Limited Liability    Assuming that a limited partner does not participate in the control of our business within the meaning of the  Delaware Act and that it otherwise acts in conformity with the provisions of our partnership agreement, its liability  under the Delaware Act will be limited, subject to possible exceptions, to the amount of capital it is obligated to  contribute to us for its common units plus its share of any undistributed profits and assets. However, if it were  determined that the right, or exercise of the right, by the limited partners as a group:    • to remove or replace our general partner;    • to approve some amendments to our partnership agreement; or    • to take other action under our partnership agreement;    constituted “participation in the control” of our business for purposes of the Delaware Act, then the limited partners  could be held personally liable for our obligations under the laws of Delaware, to the same extent as our general  partner. This liability would extend to persons who transact business with us under the reasonable belief that the  limited partner is a general partner. Neither our partnership agreement nor the Delaware Act specifically provides for  legal recourse against our general partner if a limited partner were to lose limited liability through any fault of our  general partner. While this does not mean that a limited partner could not seek legal recourse, we know of no precedent  for this type of a claim in Delaware case law.    Under the Delaware Act, a limited partnership may not make a distribution to a partner if, after the distribution,  all liabilities of the limited partnership, other than liabilities to partners on account of their partnership interests and  liabilities for which the recourse of creditors is limited to specific property of the partnership, would exceed the fair  value of the assets of the limited partnership. For the purpose of determining the fair value of the assets of a limited  partnership, the Delaware Act provides that the fair value of property subject to liability for which recourse of creditors  is limited shall be included in the assets of the limited partnership only to the extent that the fair value of that property  exceeds the nonrecourse liability. The Delaware Act provides that a limited partner who receives a distribution and  knew at the time of the distribution that the distribution was in violation of the Delaware Act shall be liable to the  limited partnership for the amount of the distribution for three years.    

 

  8      Our subsidiary conducts business in Wyoming, but we may have subsidiaries that conduct business in other  states or countries in the future. Maintenance of our limited liability as owner of our operating subsidiaries may require  compliance with legal requirements in the jurisdictions in which the operating subsidiaries conduct business, including  qualifying our subsidiaries to do business there.    Limitations on the liability of members or limited partners for the obligations of a limited liability company or  limited partnership have not been clearly established in many jurisdictions. If, by virtue of our ownership interest in  our subsidiaries or otherwise, it were determined that we were conducting business in any jurisdiction without  compliance with the applicable limited partnership or limited liability company statute, or that the right or exercise of  the right by the limited partners as a group to remove or replace our general partner, to approve some amendments to  our partnership agreement, or to take other action under our partnership agreement constituted “participation in the  control” of our business for purposes of the statutes of any relevant jurisdiction, then the limited partners could be  held personally liable for our obligations under the law of that jurisdiction to the same extent as our general partner  under the circumstances. We will operate in a manner that our general partner considers reasonable and necessary or  appropriate to preserve the limited liability of the limited partners.    Issuance of Additional Interests    Our partnership agreement authorizes us to issue an unlimited number of additional partnership interests (except  for general partner interests) for the consideration and on the terms and conditions determined by our general partner  without the approval of any limited partners.  It is possible that we will fund acquisitions through the issuance of additional common units or other partnership  interests.  Holders of any additional common units we issue will be entitled to share equally with the then-existing  common unitholders in our distributions.  In addition, the issuance of additional common units or other partnership  interests may dilute the value of the interests of the then-existing common unitholders in our net assets.  In accordance with Delaware law and the provisions of our partnership agreement, we may also issue additional  partnership interests that, as determined by our general partner, may have rights to distributions or special voting rights  to which the common units are not entitled.  In addition, our partnership agreement does not prohibit our subsidiaries  from issuing equity interests, which may effectively rank senior to the common units.  Upon issuance of additional limited partner interests (other than the issuance of common units in connection  with a reset of the incentive distribution target levels), our general partner will be entitled, but not required, to make  additional capital contributions to the extent necessary to maintain a 2% general partner interest in us.  Our general  partner’s approximate 2% interest in us will be reduced if we issue additional units in the future and our general partner  does not contribute a proportionate amount of capital to us to maintain an approximate 2% general partner interest.   Moreover, our general partner has the right, which it may from time to time assign in whole or in part to any of its  affiliates, to purchase common units or other partnership interests or to make additional capital contributions to us  whenever, and on the same terms that, we issue partnership interests to persons other than our general partner and its  affiliates, to the extent necessary to maintain the percentage interest of our general partner and its affiliates, including  such interest represented by common units, that existed immediately prior to each issuance.  The common unitholders  will not have preemptive rights under our partnership agreement to acquire additional common units or other  partnership interests.    Amendment of Our Partnership Agreement  

 

  9      General    Amendments to our partnership agreement may be proposed only by our general partner.  However, our general  partner has no duty or obligation to propose any amendment and may decline to do so free of any duty or obligation  whatsoever to us or the limited partners, including any duty to act in the best interests of us or the limited partners,  other than the implied contractual covenant of good faith and fair dealing.  In order to adopt a proposed amendment,  other than the amendments discussed below, our general partner is required to seek written approval of the holders of  the number of units required to approve the amendment or to call a meeting of the limited partners to consider and  vote upon the proposed amendment.  Except as described below, an amendment must be approved by a unit majority.    Prohibited Amendments    No amendment may be made that would:  • enlarge the obligations of any limited partner without its consent, unless approved by at least a majority of  the type or class of limited partner interests so affected; or    • enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way the amounts  distributable, reimbursable or otherwise payable by us to our general partner or any of its affiliates without  the consent of our general partner, which consent may be given or withheld in its sole discretion.    The provisions of our partnership agreement preventing the amendments having the effects described in the  clauses above can be amended upon the approval of the holders of at least 90.0% of the outstanding units, voting as a  single class (including units owned by our general partner and its affiliates).  As of March 10, 2022, SCW LLC owned  an aggregate of 14,551,000 common units, representing an aggregate 73.5% of the common units in us.    No Limited Partner Approval    Our general partner may generally make amendments to our partnership agreement without the approval of any  limited partner to reflect:  • a change in our name, the location of our principal place of business, our registered agent or our registered  office;    • the admission, substitution, withdrawal or removal of partners in accordance with our partnership agreement;    • a change that our general partner determines to be necessary or appropriate to qualify or continue our  qualification as a limited partnership or other entity in which the limited partners have limited liability under  the laws of any state or to ensure that neither we nor any of our subsidiaries will be treated as an association  taxable as a corporation or otherwise taxed as an entity for U.S. federal income tax purposes;    • an amendment that is necessary, in the opinion of our counsel, to prevent us or our general partner or its  directors, officers, agents or trustees from in any manner being subjected to the provisions of the Investment  Company Act of 1940, the Investment Advisors Act of 1940 or “plan asset” regulations adopted under the  Employee Retirement Income Security Act of 1974, or ERISA, each as amended, whether or not substantially  similar to plan asset regulations currently applied or proposed;  

 

  10      • an amendment that our general partner determines to be necessary or appropriate in connection with  authorization or issuance of additional partnership interests;    • any amendment expressly permitted in our partnership agreement to be made by our general partner acting  alone;    • an amendment effected, necessitated or contemplated by a merger agreement or plan of conversion that has  been approved under the terms of our partnership agreement;    • any amendment that our general partner determines to be necessary or appropriate for the formation by us of,  or our investment in, any corporation, partnership, joint venture, limited liability company or other entity, as  otherwise permitted by our partnership agreement;    • a change in our fiscal year or taxable year and any other changes that our general partner determines to be  necessary or appropriate as a result of such change;    • conversions into, mergers with or conveyances to another limited liability entity that is newly formed and  has no assets, liabilities or operations at the time of the conversion, merger or conveyance other than those it  receives by way of the conversion, merger or conveyance; or    • any other amendments substantially similar to any of the matters described in the clauses above.    In addition, our general partner may make amendments to our partnership agreement, without the approval of  any limited partner, if our general partner determines that those amendments:  • do not adversely affect the limited partners, considered as a whole, or any particular class of limited partners,  in any material respect;    • are necessary or appropriate to satisfy any requirements, conditions or guidelines contained in any opinion,  directive, order, ruling or regulation of any federal or state agency or judicial authority or contained in any  federal or state statute;    • are necessary or appropriate to facilitate the trading of limited partner interests or to comply with any rule,  regulation, guideline or requirement of any securities exchange on which the limited partner interests are or  will be listed for trading;    • are necessary or appropriate for any action taken by our general partner relating to splits or combinations of  units under the provisions of our partnership agreement; or    • are required to effect the intent expressed in this prospectus or the intent of the provisions of our partnership  agreement or are otherwise contemplated by our partnership agreement.      Opinion of Counsel and Unitholder Approval    

 

  11    Any amendment that our general partner determines adversely affects in any material respect one or more  particular classes of limited partners will require the approval of at least a majority of the class or classes so affected,  but no vote will be required by any class or classes of limited partners that our general partner determines are not  adversely affected in any material respect. Any amendment that would have a material adverse effect on the rights or  preferences of any type or class of outstanding units in relation to other classes of units will require the approval of at  least a majority of the type or class of units so affected. Any amendment that would reduce the voting percentage  required to take any action other than to remove the general partner or call a meeting of unitholders is required to be  approved by written consent or the affirmative vote of limited partners whose aggregate outstanding units constitute  not less than the voting requirement sought to be reduced. Any amendment that would increase the percentage of units  required to remove the general partner or call a meeting of unitholders must be approved by written consent or the  affirmative vote of limited partners whose aggregate outstanding units constitute not less than the percentage sought  to be increased. For amendments of the type not requiring unitholder approval, our general partner will not be required  to obtain an opinion of counsel that an amendment will neither result in a loss of limited liability to the limited partners  nor result in our being treated as a taxable entity for U.S. federal income tax purposes in connection with any of the  amendments. No other amendments to our partnership agreement will become effective without the approval of  holders of at least 90% of the outstanding units, voting as a single class, unless we first obtain an opinion of counsel  to the effect that the amendment will not affect the limited liability under applicable law of any of our limited partners.    Merger, Consolidation, Conversion, Sale or Other Disposition of Assets    A merger, consolidation or conversion of us requires the prior consent of our general partner.  However, our  general partner will have no duty or obligation to consent to any merger, consolidation or conversion and may decline  to do so free of any duty or obligation whatsoever to us or the limited partners, including any duty to act in good faith  or in the best interest of us or the limited partners, other than the implied contractual covenant of good faith and fair  dealing.  In addition, our partnership agreement generally prohibits our general partner, without the prior approval of the  holders of a unit majority from causing us to sell, exchange or otherwise dispose of all or substantially all of our assets  in a single transaction or a series of related transactions, including by way of merger, consolidation or other  combination.  Our general partner may, however, mortgage, pledge, hypothecate or grant a security interest in all or  substantially all of our assets without such approval.  Our general partner may also sell all or substantially all of our  assets under a foreclosure or other realization upon those encumbrances without such approval.  Finally, our general  partner may consummate any merger with another limited liability entity without the prior approval of our unitholders  if we are the surviving entity in the transaction, our general partner has received an opinion of counsel regarding  limited liability and tax matters, the transaction would not result in an amendment to our partnership agreement  (requiring unitholder approval, each of our units will be an identical unit of our Partnership following the transaction  and the partnership interests to be issued do not exceed 20% of our outstanding partnership interests (other than  incentive distribution rights) immediately prior to the transaction.  If the conditions specified in our partnership  agreement are satisfied, our general partner may convert us or any of our subsidiaries into a new limited liability entity  or merge us or any of our subsidiaries into, or convey all of our assets to, a newly formed entity, if the sole purpose of  that conversion, merger or conveyance is to effect a mere change in our legal form into another limited liability entity,  we have received an opinion of counsel regarding limited liability and tax matters and the governing instruments of  the new entity provide the limited partners and our general partner with the same rights and obligations as contained  in our partnership agreement.  Our unitholders are not entitled to dissenters’ rights of appraisal under our partnership  agreement or applicable Delaware law in the event of a conversion, merger or consolidation, a sale of substantially all  of our assets or any other similar transaction or event.    

 

  12    Dissolution    We will continue as a limited partnership until dissolved under our partnership agreement. We will dissolve  upon:    • the election of our general partner to dissolve us, if approved by the holders of units representing a unit  majority;    • there being no limited partners, unless we are continued without dissolution in accordance with applicable  Delaware law;    • the entry of a decree of judicial dissolution of our partnership; or    • the withdrawal or removal of our general partner or any other event that results in its ceasing to be our general  partner other than by reason of a transfer of its general partner interest in accordance with our partnership  agreement or its withdrawal or removal following the approval and admission of a successor.    Upon a dissolution under the last clause above, the holders of a unit majority may also elect, within 90 days thereafter,  to continue our business on the same terms and conditions described in our partnership agreement by appointing as a  successor general partner an individual or entity approved by the holders of units representing a unit majority, subject  to our receipt of an opinion of counsel to the effect that:    • the action would not result in the loss of limited liability under Delaware law of any limited partner; and    • neither we nor any of our subsidiaries would be treated as an association taxable as a corporation or otherwise  be taxable as an entity for U.S. federal income tax purposes upon the exercise of that right to continue (to the  extent not already so treated or taxed).    Liquidation and Distribution of Proceeds    Upon our dissolution, unless our business is continued, the liquidator authorized to wind up our affairs will,  acting with all of the powers of our general partner that are necessary or appropriate, dispose of our assets and apply  the proceeds of the liquidation as described in “Provisions of Our Partnership Agreement Relating to Cash  Distributions—Distributions of Cash Upon Liquidation” above. The liquidator may defer liquidation or distribution  of our assets for a reasonable period of time or distribute assets to partners in kind if it determines that a sale would  be impractical or would cause undue loss to our partners.    Withdrawal or Removal of Our General Partner    Except as described below, our general partner has agreed not to withdraw voluntarily as our general partner  prior to September 30, 2023 without obtaining the approval of the holders of at least a majority of the outstanding  common units, excluding common units held by our general partner and its affiliates, and furnishing an opinion of  counsel regarding limited liability and tax matters. On or after September 30, 2023, our general partner may withdraw  as general partner without first obtaining approval of any unitholder by giving 90 days’ written notice, and that  withdrawal will not constitute a violation of our partnership agreement. Notwithstanding the information above, our  general partner may withdraw without unitholder approval upon 90 days’ notice to the limited partners if at least 50%  of the outstanding common units are held or controlled by one person and its affiliates, other than our general partner  

 

  13    and its affiliates. In addition, our partnership agreement permits our general partner, in some instances, to sell or  otherwise transfer all of its general partner interest in us without the approval of the unitholders. Please read “— Transfer of General Partner Interest” below.    If our general partner gives notice of withdrawal, the holders of a unit majority may, prior to the effective date  of such withdrawal, elect a successor to that withdrawing general partner. If a successor is not elected, or is elected  but an opinion of counsel regarding limited liability and tax matters cannot be obtained, we will be dissolved, wound  up and liquidated, unless within a specified period after that notice of withdrawal, the holders of a unit majority agree  in writing to continue our business and to appoint a successor general partner. Please read “—Dissolution” above.    Our general partner may not be removed unless that removal is approved by the vote of the holders of not less  than 66 2/3% of the outstanding units, voting together as a single class, including units held by our general partner  and its affiliates, and we receive an opinion of counsel regarding limited liability and tax matters. Any removal of our  general partner is also subject to the approval of a successor general partner by the vote of the holders of a majority  of the outstanding common units, voting as a separate class, including those held by our general partner and its  affiliates. The ownership of more than 33 1/3% of the outstanding units by our general partner and its affiliates gives  them the ability to prevent our general partner’s removal. As of  March 10, 2022, SCW LLC owns  approximately 73.5% of our outstanding common units.    In the event of the removal of our general partner under circumstances where cause exists or withdrawal of our  general partner where that withdrawal violates our partnership agreement, a successor general partner will have the  option to purchase the general partner interest and incentive distribution rights of the departing general partner and its  affiliates for a cash payment equal to the fair market value of those interests. Under all other circumstances where our  general partner withdraws or is removed by the limited partners, the departing general partner will have the option to  require the successor general partner to purchase the general partner interest and the incentive distribution rights of  the departing general partner and its affiliates for fair market value. In each case, this fair market value will be  determined by agreement between the departing general partner and the successor general partner. If no agreement is  reached within 30 days after the effective date of such departing general partner’s withdrawal or removal, an  independent investment banking firm or other independent expert selected by the departing general partner and the  successor general partner will determine the fair market value. Or, if the departing general partner and the successor  general partner cannot agree upon an expert within 45 days after the effective date of such withdrawal or removal,  then an expert chosen by agreement of the experts selected by each of them will determine the fair market value.    If the option described above is not exercised by either the departing general partner or the successor general  partner, the departing general partner’s general partner interest and all its and its affiliates’ incentive distribution rights  will automatically convert into common units equal to the fair market value of those interests as determined by an  investment banking firm or other independent expert selected in the manner described in the preceding paragraph.    In addition, we will be required to reimburse the departing general partner for all amounts due the departing  general partner, including, all employee-related liabilities, including severance liabilities, incurred in connection with  the termination of any employees employed for our benefit by the departing general partner or its affiliates.    Transfer of General Partner Interest    At any time, our general partner may transfer all or any of its general partner interest to another person without  the approval of any limited partner or any other person. As a condition of this transfer, the transferee must, among  

 

  14    other things, assume the rights and duties of our general partner, agree to be bound by the provisions of our partnership  agreement and furnish an opinion of counsel regarding limited liability and tax matters.    Transfer of Ownership Interests in the General Partner    At any time, Ciner Enterprises and Sisecam USA and their respective affiliates may sell or transfer all or part of  their ownership interests in our general partner to an affiliate or third-party without the approval of our unitholders.    Transfer of Incentive Distribution Rights    At any time, our general partner or any other holder of incentive distribution rights may sell or transfer its  incentive distribution rights without the approval of any limited partner or any other person.    Change of Management Provisions    Our partnership agreement contains specific provisions that are intended to discourage a person or group from  attempting to remove Sisecam GP as our general partner or from otherwise changing our management. Please read  “—Withdrawal or Removal of Our General Partner” above for a discussion of certain consequences of the removal of  our general partner. If any person or group, other than our general partner and its affiliates, acquires beneficial  ownership of 20% or more of any class of units, that person or group loses voting rights on all of its units. This loss  of voting rights does not apply in certain circumstances. Please read “—Meetings; Voting” below.    Our partnership agreement also provides that if our general partner is removed as our general partner under  circumstances where cause does not exist and units held by our general partner and its affiliates are not voted in favor  of that removal, our general partner will have the right to convert its general partner units and its incentive distribution  rights into common units or to receive cash in exchange for those interests based on the fair market value of those  interests as of the effective date of its removal.    Limited Call Right    If at any time our general partner and its affiliates own more than 80% of the total limited partner interests of  any class then outstanding, our general partner will have the right, which it may assign and transfer in whole or in part  to any of its affiliates or beneficial owners or to us, exercisable at its option to purchase all, but not less than all, of the  limited partner interests of the class then outstanding held by unaffiliated persons, as of a record date to be selected  by our general partner, on at least 10, but not more than 90, days’ notice.  The purchase price in the event of this  purchase is the greater of:  • the highest cash price paid by our general partner or any of its affiliates for any limited partner interests of  the class purchased within the 90 days preceding the date on which our general partner first mails notice of  its election to purchase those limited partner interests; and    • the average of the daily closing prices of the Partnership securities of such class over the 20 consecutive  trading days preceding the date that is three business days before the date the notice is mailed.    As a result of our general partner’s right to purchase outstanding limited partner interests, a holder of limited  partner interests may have his limited partner interests purchased at an undesirable time or at a price that may be lower  

 

  15    than market prices at various times prior to such purchase or lower than a unitholder may anticipate the market price  to be in the future.  The tax consequences to a unitholder of the exercise of this call right are the same as a sale by that  unitholder of his common units in the market.    Redemption of Ineligible Holders    In order to avoid a substantial risk of cancellation or forfeiture of any property, including any governmental  permit, endorsement or other authorization, in which we have an interest as the result of any federal, state or local law  or regulation concerning the nationality, citizenship or other related status of any unitholder, our general partner may  at any time request unitholders to certify as to, or provide other information with respect to, their nationality,  citizenship or other related status.  The certifications as to nationality, citizenship or other related status can be changed in any manner our general  partner determines is necessary or appropriate to implement its original purpose.  If a unitholder fails to furnish the certification or other requested information within a reasonable period of time  specified by our general partner or if our general partner determines, with the advice of counsel, upon review of such  certification or other information that a unitholder does not meet the status set forth in the certification, we will have  the right to redeem all of the units held by such unitholder at the current market price (the date of determination of  which will be the date fixed for redemption).  The purchase price will be paid in cash or by delivery of a promissory note, as determined by our general partner.   Any such promissory note will bear interest at the rate of 5.0% annually and be payable in three equal annual  installments of principal and accrued interest, commencing one year after the redemption date.  Further, the units will  not be entitled to any allocations of income or loss, distributions or voting rights while held by such unitholder.    Meetings; Voting    Except as described below regarding a person or group owning 20% or more of any class of units then  outstanding, record holders of units on the record date will be entitled to notice of, and to vote at, meetings of our  limited partners and to act upon matters for which approvals may be solicited.    Our general partner does not anticipate that any meeting of our unitholders will be called in the foreseeable  future. Any action that is required or permitted to be taken by the unitholders may be taken either at a meeting of the  unitholders or without a meeting if consents in writing describing the action so taken are signed by holders of the  number of units necessary to authorize or take that action at a meeting. Meetings of the limited partners may be called  by our general partner or by unitholders owning at least 20% of the outstanding units of the class or classes for which  a meeting is proposed. Unitholders may vote either in person or by proxy at meetings. The holders of a majority of  the outstanding units of the class or classes for which a meeting has been called, represented in person or by proxy,  will constitute a quorum, unless any action by the unitholders requires approval by holders of a greater percentage of  the units, in which case the quorum will be the greater percentage.    Each record holder of a unit has a vote according to his percentage interest in us, although additional limited  partner interests having special voting rights could be issued. Please read “Description of Our Partnership  Agreement—Issuance of Additional Interests” above. However, if at any time any person or group, other than our  general partner and its affiliates, or a direct or subsequently approved transferee of our general partner or its affiliates  and purchasers specifically approved by our general partner, acquires, in the aggregate, beneficial ownership of 20%  

 

  16    or more of any class of units then outstanding, that person or group will lose voting rights on all of its units and the  units may not be voted on any matter and will not be considered to be outstanding when sending notices of a meeting  of unitholders, calculating required votes, determining the presence of a quorum or for other similar purposes.  Common units held in nominee or street name account will be voted by the broker or other nominee in accordance  with the instruction of the beneficial owner unless the arrangement between the beneficial owner and his nominee  provides otherwise.     Any notice, demand, request, report or proxy material required or permitted to be given or made to record  common unitholders under our partnership agreement will be delivered to the record holder by us or by the transfer  agent.    Status as Limited Partner    By transfer of common units in accordance with our partnership agreement, each transferee of common units  shall be admitted as a limited partner with respect to the common units transferred when such transfer and admission  are reflected in our books and records. Except as described under “—Limited Liability” above, the common units will  be fully paid, and unitholders will not be required to make additional contributions.    Indemnification    Under our partnership agreement, in most circumstances, we will indemnify the following persons, to the fullest  extent permitted by law, from and against all losses, claims, damages or similar events:  • our general partner;    • any departing general partner;    • any person who is or was an affiliate of our general partner or any departing general partner;    • any person who is or was a manager, managing member, general partner, director, officer, employee, agent,  fiduciary or trustee of our Partnership, our subsidiaries, our general partner, any departing general partner or  any of their affiliates;    • any person who is or was serving at the request of a general partner, any departing general partner or any of  their respective affiliates as a manager, managing member, general partner, director, officer, employee, agent,  fiduciary or trustee of another person owing a fiduciary duty to us or our subsidiaries; and    • any person designated by our general partner.    Any indemnification under these provisions will only be out of our assets.  Unless our general partner otherwise  agrees, it will not be personally liable for, or have any obligation to contribute or lend funds or assets to us to enable  us to effectuate, indemnification.  We may purchase insurance against liabilities asserted against and expenses incurred  by persons for our activities, regardless of whether we would have the power to indemnify the person against liabilities  under our partnership agreement.    Reimbursement of Expenses    

 

  17    Our partnership agreement requires us to reimburse our general partner and its affiliates for all direct and indirect  expenses they incur or payments they make on our behalf and all other expenses allocable to us or otherwise incurred  by our general partner and its affiliates in connection with operating our business.  Our partnership agreement does  not set a limit on the amount of expenses for which our general partner and its affiliates may be reimbursed.  These  expenses may include salary, bonus, incentive compensation and other amounts paid to persons who perform services  for us or on our behalf and expenses allocated to our general partner by its affiliates.  Our general partner is entitled  to determine in good faith the expenses that are allocable to us.    Books and Reports    Our general partner is required to keep appropriate books of our business at our principal offices.  These books  will be maintained for both tax and financial reporting purposes on an accrual basis.  For tax and fiscal reporting  purposes, our fiscal year is the calendar year.  We will furnish or make available to record holders of our common units, within 105 days after the close of each  fiscal year, an annual report containing audited consolidated financial statements and a report on those consolidated  financial statements by our independent public accountants.  Except for our fourth quarter, we will also furnish or  make available summary financial information within 50 days after the close of each quarter.  We will be deemed to  have made any such report available if we file such report with the United States Securities and Exchange Commission  (the “SEC”) on EDGAR or make the report available on our or the SEC’s website.  We will furnish each record holder with information reasonably required for federal, state and local tax reporting  purposes within 90 days after the close of each calendar year.  This information is expected to be furnished in summary  form so that some complex calculations normally required of partners can be avoided.  Our ability to furnish this  summary information to our unitholders will depend on their cooperation in supplying us with specific information.   Every unitholder will receive information to assist him in determining his federal and state tax liability and in filing  his federal and state income tax returns, regardless of whether he supplies us with the necessary information.    Right to Inspect Our Books and Records    Our partnership agreement provides that a limited partner can, for a purpose reasonably related to his interest as  a limited partner, upon reasonable written demand stating the purpose of such demand and at his own expense, have  furnished to him:  • a current list of the name and last known business, residence or mailing address of each partner;    • information as to the amount of cash, and a description and statement of the agreed value of any other capital  contribution, contributed or to be contributed by each partner and the date on which each became a partner;    • copies of our partnership agreement, our certificate of limited partnership and related amendments thereto;  and    • certain information regarding the status of our business and financial condition.    Under our partnership agreement, however, each of our limited partners and other persons who acquire interests  in our partnership interests, do not have rights to receive information from us or any of the persons we indemnify as  described above under “—Indemnification” above for the purpose of determining whether to pursue litigation or assist  

 

  18    in pending litigation against us or those indemnified persons relating to our affairs, except pursuant to the applicable  rules of discovery relating to the litigation commenced by the person seeking information.  Our general partner may, and intends to, keep confidential from the limited partners trade secrets or other  information the disclosure of which our general partner believes in good faith is not in our best interests or that we are  required by law or by agreements with third parties to keep confidential.    Registration Rights    Under our partnership agreement, we have agreed to register for resale under the Securities Act of 1933, as  amended (the “Securities Act”) and applicable state securities laws any common units or other limited partner interests  proposed to be sold by our general partner or any of its affiliates or their assignees if an exemption from the registration  requirements of the Securities Act is not otherwise available.  These registration rights continue for two years  following any withdrawal or removal of our general partner.  We are obligated to pay all expenses incidental to the  registration, excluding underwriting discounts and commissions on registrable securities and fees and expenses of  counsel and advisors to selling holders.

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