FIRST AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF VIPER ENERGY PARTNERS LP
Exhibit 3.2
FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF VIPER ENERGY PARTNERS LP, dated as of May 10, 2018 (this “Amendment”), is entered into by VIPER ENERGY PARTNERS GP LLC (the “General Partner”), a Delaware limited liability company and the general partner of VIPER ENERGY PARTNERS LP (the “Partnership”), a Delaware limited partnership, pursuant to the authority granted to the General Partner in Section 13.1 of the Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of May 9, 2018 (the “Partnership Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Partnership Agreement.
RECITALS
WHEREAS, the Partnership is authorized and will promptly elect to be classified as an association taxable as a corporation for federal income tax purposes pursuant to Treasury Regulations Section 301.7701-3(c) (the “Tax Election”) after the closing of the transactions contemplated by the Recapitalization Agreement, as amended;
WHEREAS, Section 13.1(d)(i) of the Partnership Agreement provides that the General Partner may, without the approval of any other Partner, amend any provision of the Partnership Agreement to reflect a change that the General Partner determines does not adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to other classes of Partnership Interests) in any material respect; and
WHEREAS, acting pursuant to the power and authority granted to it under Section 13.1(d) of the Partnership Agreement, the General Partner has determined that the amendments contemplated by this Amendment do not adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to other classes of Partnership Interests) in any material respect;
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NOW, THEREFORE, the Partnership Agreement is hereby amended as follows:
A. | Amendments |
1. | Section 1.1 is hereby amended by adding the following defined terms in appropriate alphabetical order: |
“Class B Capital Contribution Amount” equals $1,000,000.
“Class B Capital Contribution Per Unit Amount” equals the Class B Capital Contribution Amount divided by 73,150,000 Class B Units, subject to adjustment for any splits or combinations pursuant to Section 5.7.
“Class B Distribution Amount” means an amount per Class B Unit equal to 2% of the Class B Capital Contribution Per Unit Amount.
“First Amendment” means that certain First Amendment to Second Amended and Restated Agreement of Limited Partnership of Viper Energy Partners LP, dated as of May 10, 2018.
“GP Capital Contribution Amount” equals $1,000,000.
“GP Distribution Amount” means an amount equal to 2% of the GP Capital Contribution Amount.
2. | The defined term “Class B Unit” is hereby amended and restated in its entirety as follows: |
“Class B Unit” means a Unit representing, when outstanding, a fractional part of the Partnership Interests of all Limited Partners, and having the rights and obligations specified with respect to Class B Units in this Agreement.
3. | The defined term “General Partner Interest” is hereby amended and restated in its entirety as follows: |
“General Partner Interest” means the equity interest of the General Partner in the Partnership (in its capacity as general partner and without reference to any Limited Partner Interest held by it), which includes any and all rights, powers and benefits to which the General Partner is entitled as provided in this Agreement, together with all obligations of the General Partner to comply with the terms and provisions of this Agreement.
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4. | Section 5.1 is hereby amended by adding the following subsection (e) thereto: |
“(e) Pursuant to the Recapitalization Agreement, as amended, Diamondback agreed to contribute $1,000,000 to the Partnership as additional consideration for the 73,150,000 Class B Units and the General Partner agreed to contribute $1,000,000 to the Partnership as an additional contribution with respect to its General Partner Interest, such contributions to be made on the effective date of the Tax Election.”
5. | Section 5.5(f) is hereby amended and restated in its entirety as follows: |
“(f) Upon any exchange of OpCo Units and Class B Units for Common Units pursuant to the Exchange Agreement, the Partnership shall issue to the exchanging holder of such OpCo Units and Class B Units (i) a number of Common Units equal to the number of OpCo Units delivered in connection with such exchange and (ii) an amount of cash equal to the product of the number of Class B Units exchanged multiplied by the Class B Capital Contribution Per Unit Amount. The Class B Units involved in such exchange shall automatically be cancelled and shall cease to be outstanding.”
6. | Section 6.1 is hereby amended and restated in its entirety as follows: |
Section 6.1 Distributions to Record Holders.
“(a) The Board of Directors may adopt a cash distribution policy, which it may change from time to time without amendment to this Agreement.
(b) Prior to making any distributions in respect of any calendar quarter to Record Holders of Common Units pursuant to Section 6.1(c), the Partnership will distribute to the Record Holders of Class B Units a quarterly amount per Class B Unit equal to the Class B Distribution Amount and will distribute to the Record Holder of the General Partner Interest a quarterly amount in respect of the General Partner Interest equal to the GP Distribution Amount; provided, however, that if insufficient cash is available for such distribution, any amount distributed pursuant to this Section 6.1(b) will be distributed pro rata between the Class B Units, on the one hand, and the GP Interest, on the other hand, based on the ratio of (A) the product of the number of outstanding Class B Units multiplied by Class B Distribution Amount to (B) the GP Distribution Amount.
(c) Except as contemplated by Section 5.7, after making the distributions in Section 6.1(b), (i) the Partnership will make distributions, if any, to all Record Holders of Common Units, Pro Rata and (ii) no distributions shall be made under any circumstances in respect of any Class B Units, except to the extent provided in Section 6.1(b).
(d) All distributions required to be made under this Agreement shall be made subject to
Sections 17-607 and 17-804 of the Delaware Act.
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(e) Notwithstanding Section 6.1(b) and Section 6.1(c), in the event of the dissolution and liquidation of the Partnership, cash shall be applied and distributed solely in accordance with, and subject to the terms and conditions of, Section 12.4.
(f) Each distribution in respect of a Partnership Interest shall be paid by the Partnership, directly or through any Transfer Agent or through any other Person or agent, only to the Record Holder of such Partnership Interest as of the Record Date set for such distribution. Such payment shall constitute full payment and satisfaction of the Partnership’s liability in respect of such payment, regardless of any claim of any Person who may have an interest in such payment by reason of an assignment or otherwise.”
7. | Section 12.4(c) is hereby amended and restated in its entirety as follows: |
“(c) All property and all cash in excess of that required to satisfy or discharge liabilities as provided in Section 12.4(b) shall (i) first be distributed to the Record Holders of Class B Units and the Record Holder of the General Partner Interest pro rata between the Class B Units, on the one hand, and the GP Interest, on the other hand, based on the ratio of (A) the product of the number of outstanding Class B Units multiplied by the Class B Capital Contribution Per Unit Amount to (B) the GP Capital Contribution Amount, until the Record Holders of all outstanding Class B Units have received the Class B Capital Contribution Per Unit Amount in respect of each such Class B Unit and the Record Holder of the General Partner Interest has received an amount equal to the GP Capital Contribution Amount, and then (ii) be distributed to the Partners in accordance with the priorities for distributions set forth in Section 6.1(c) (except that no further distributions shall be made in respect of any Class B Units or in respect of the General Partner Interest) and such distribution shall be made by the end of such taxable period (or, if later, within 90 days after said date of such occurrence).”
B. | Applicable Law. This Amendment shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to principles of conflicts of laws. |
C. | Severability. Each clause or provision of this Amendment shall be considered severable and if for any reason any clause or provision herein is determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Amendment that are valid, enforceable and legal. |
D. | Ratification of Partnership Agreement. Except as expressly modified and amended herein, all of the terms and conditions of the Partnership Agreement shall remain in full force and effect. |
[Signature page follows.]
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IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.
GENERAL PARTNER | |
Viper Energy Partners GP LLC | |
By: | /s/ Xxxxxxx X. Xxxxxx |
Name: | Xxxxxxx X. Xxxxxx |
Title: | Executive Vice President, General Counsel and Secretary |
Signature Page to First Amendment to Second Amended and Restated Agreement of Limited Partnership
