Common use of Redemption of Class a Units Clause in Contracts

Redemption of Class a Units. (a) Subject to Section 7.11(g), each of the Class A Partners other than PAGP or the General Partner shall be entitled, at any time and from time to time, to cause the Partnership to (i) redeem all or any portion of such Partner’s Class A Units and (ii) in consideration therefor distribute to such Class A Partner one MLP Common Unit for each Class A Unit being redeemed (such transactions, a “Redemption” and such MLP Common Units, the “Consideration Units”). In connection with any such Redemption, the Redeeming Partner shall also transfer to PAGP an equivalent number of PAGP Class B Shares and Holdings GP Units (unless such Redeeming Partner is a former Class B Partner who did not receive any Holdings GP Units upon the conversion of the applicable Class B Units). Notwithstanding the foregoing, the right of a holder of Converted Class A Units to redeem such Converted Class A Units shall be limited to the extent necessary to prevent the Redemption of such Converted Class A Units from causing (or increasing) an Adjusted Capital Account Deficit for such holder (after taking into account any allocations pursuant to Section 5.2(d)) associated with such Redemption. (b) In order to exercise the redemption right under Section 7.11(a), the redeeming Class A Partner (the “Redeeming Partner”) shall provide written notice (the “Redemption Notice”) to the Partnership stating that the Redeeming Partner elects to cause the Partnership to redeem a stated number of Class A Units, represented, if applicable, by a certificate or certificates, to the extent specified in such notice. In connection with the delivery of such notice, the Redeeming Partner shall deliver an instrument of transfer (i) to the Partnership conveying to the Partnership the applicable Class A Units and (ii) to PAGP conveying to PAGP the associated PAGP Class B Shares and Holdings GP Units, as applicable, and present and surrender the certificate or certificates representing such Class A Units, if applicable, during normal business hours at the principal executive offices of the Partnership or PAGP, as applicable. The instrument of transfer delivered by the Redeeming Partner pursuant to the foregoing sentence shall be in a form reasonably satisfactory to the Partnership and duly executed by the Redeeming Partner or the Redeeming Partner’s duly authorized representative. (c) As promptly as practicable after the receipt of (i) the Redemption Notice, (ii) the instrument of transfer described in Section 7.11(b) and (iii) the certificate or certificates, if any, representing such Class A Units (but in any event by the Redemption Date, as defined below), the Partnership shall transfer and deliver the Consideration Units to the Redeeming Partner, which transfer shall be made pursuant to an instrument of transfer in a form reasonably acceptable to the Partnership and the Redeeming Member. Each Redemption shall be deemed to have been effected upon the Business Day following receipt by the Partnership of the required instruments of transfer or other documents required pursuant to Section 7.11(b) or this Section 7.11(c) (such effective date, the “Redemption Date”). On the Redemption Date, the Redeeming Partner shall be deemed to have become the holder of record of the Consideration Units, and the Class A Units redeemed in connection with the Redemption shall be automatically cancelled by the Partnership, without further action of any Person. (d) The Partnership shall at all times keep available, solely for the purpose of distribution upon a Redemption, such number of MLP Common Units that shall be distributable upon the Redemption of all such outstanding Class A Units (which, for purposes of this Section 7.11(d), shall include the Class A Units into which the outstanding Vested Units or Earned Units may be converted in accordance with Section 7.10 hereof). (e) The distribution of MLP Common Units upon a Redemption shall be made without charge to the Redeeming Partner for any stamp or other similar tax in respect of such distribution. (f) No Redemption shall impair the right of the Redeeming Partner to receive any distributions payable on the Class A Units so redeemed in respect of a Record Date that occurs prior to the Redemption Date for such Redemption. For the avoidance of doubt, no Redeeming Partner shall be entitled to receive, with respect to the same fiscal quarter, distributions or dividends both on Class A Units redeemed by such Redeeming Partner and on MLP Common Units received by such Redeeming Partner in such Redemption. (g) Until the first anniversary of the date hereof (the “Lock-Up Period”), (i) neither ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ nor ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ may exercise any Redemption rights with respect to any Class A Units owned by such individuals, (ii) PAA Management, L.P. may not exercise its Redemption right with respect to any Class A Units attributable to the interests of Messrs. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ in such entity and (iii) no other Class A Partner (including PAA Management, L.P. with respect to any Class A Units attributable to the interests of owners other than Messrs. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇) may exercise its Redemption right if such exercise would result in the Redemption (when taken together with all previous Redemptions by such Class A Partner) of more than 78% of the Class A Units owned by such Class A Partner as of the date hereof (the “Lock-Up Threshold”); provided, however, that a Class A Partner (other than Messrs. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ and PAA Management, L.P. with respect to any Class A Units attributable to the interests of Messrs. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ in such entity) may redeem Class A Units pursuant to this Section 7.11 in excess of its Lock-Up Threshold if (A) one or more Class A Partners agrees in writing pursuant to documents reasonably acceptable to the Partnership in form and content to forbear from exercising its Redemption right during the Lock-Up Period with respect to an equal number of Class A Units in excess of its Lock-Up Threshold and (B) such Class A Partners promptly provide the Partnership notice of such agreement and deliver executed copies of such documents to the Partnership promptly following their execution. The foregoing restriction will immediately terminate and be of no further force or effect upon the MLP experiencing a technical tax termination notwithstanding the foregoing restriction. In addition, each holder of Class A Units agrees that, for so long as such holder is subject to a restriction on the exercise of its Redemption right with respect to any portion of its Class A Units pursuant to this Section 7.11(g), such holder agrees not to consummate a Transfer of all or any part of such holder’s Partnership Group Interest pursuant to Sections 7.2 or 7.8 hereof if, after giving effect thereto, such holder would own less than (x) 100% of the Class A Units owned as of the date hereof in the case of Messrs. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ (including both their direct holdings and any indirect holdings through their respective interests in PAA Management, L.P.) or (y) 22% of such holder’s Class A Units as of the date hereof in the case of all other holders, in each case unless the applicable Transferee agrees in writing pursuant to documents reasonably acceptable to the Partnership in form and content to forbear from exercising the Redemption right with respect to the applicable Class A Units being Transferred to the extent required to comply with the provisions of this Section 7.11(g).