Name of selling unitholder | | | Common units beneficially owned prior to the offering | | | Common units to be offered | | | Common units beneficially owned after the offering | ||||||
| Number | | | Percentage | | | Number | | | Percentage | |||||
EIG Nova Equity Aggregator, L.P.(1) | | | 17,336,485 | | | 13.1% | | | 17,336,485 | | | — | | | — |
Gladwyne Funding LLC(2) | | | 3,910,165 | | | 3.0% | | | 3,910,165 | | | — | | | — |
T. Rowe Price High Yield Fund, Inc.(3) | | | 1,199,625 | | | * | | | 1,199,625 | | | — | | | — |
T. Rowe Price High Yield Trust(3) | | | 284,650 | | | * | | | 284,650 | | | — | | | — |
T. Rowe Price Institutional High Yield Fund(3) | | | 229,325 | | | * | | | 229,325 | | | — | | | — |
T. Rowe Price Institutional Floating Rate Fund(3) | | | 140,075 | | | * | | | 140,075 | | | — | | | — |
T. Rowe Price Floating Rate Fund, Inc.(3) | | | 105,250 | | | * | | | 105,250 | | | — | | | — |
T. Rowe Price Floating Rate Trust(3) | | | 41,075 | | | * | | | 41,075 | | | — | | | — |
* | Represents less than 1%. |
(1) | EIG Nova Equity Aggregator, L.P. is a holding company for certain funds managed by EIG Management Company, LLC (the “Manager”). The funds’ investment committee has the power to vote or to direct the vote of, and to dispose or to direct the disposition of, the common units held by the funds. The members of the funds’ investment committee are R. Blair Thomas, Randall S. Wade, Jean-Daniel Borgeaud, Linda Cook and Richard Punches. The Manager is a registered investment adviser under the Investment Advisers Act of 1940, as amended. |
(2) | Gladwyne Funding LLC (“Gladwyne”) is a wholly-owned, direct subsidiary of FS Energy and Power Fund (“FSEP”), an externally managed closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. The investment adviser to FSEP is FS/EIG Advisor, LLC (“FS/EIG Advisor”). The investment committee of FS/EIG Advisor makes investment decisions on behalf of FS/EIG Advisor and has the power to vote or to direct the vote of, and to dispose or to direct the disposition of, the common units held by Gladwyne. The members of the investment committee of FS/EIG Advisor are Sean Coleman, Brian Gerson, Michael Kelly, Eric Long, R. Blair Thomas and Randall S. Wade. FS/EIG Advisor is a registered investment adviser under the Investment Advisers Act of 1940, as amended. |
(3) | T. Rowe Price Associates, Inc. (“TRPA”) serves as investment advisor with power to direct investments and/or sole power to vote the securities owned by the selling unitholder. TRPA may be deemed to be the beneficial owner of all of the securities held by the selling unitholder; however, TRPA expressly disclaims that it is, in fact, the beneficial owner of such securities. TRPA is a wholly-owned subsidiary of T. Rowe Price Group, Inc., which is a publicly-traded financial services holding company. T. Rowe Price Investment Services, Inc. (“TRPIS”), a registered broker-dealer, is a subsidiary of TRPA. TRPIS was formed primarily for the limited purpose of acting as the principal underwriter and distributor of shares of the funds in the T. Rowe Price fund family. TRPIS does not engage in underwriting or market-making activities involving individual securities. |
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• | Annual Report on Form 10-K (File No. 001-16417) for the year ended December 31, 2018, filed on February 28, 2019; |
• |
• | The description of NuStar Energy’s common units under the heading “Description of Common Units,” contained in NuStar Energy L.P.’s registration statement on Form S-4 (File No. 333-223671) initially filed with the SEC on March 15, 2018, and any amendments or reports filed for the purpose of updating such description. |
• | provide for the proper conduct of NuStar Energy’s business, including reserves for future capital expenditures and anticipated credit needs; |
• | comply with applicable law or any debt instrument or other agreement or obligation; |
• | provide funds for payments to holders of NuStar Energy’s preferred units; or |
• | provide funds for distributions with respect to any one or more of the next four fiscal quarters. |
• | to remove or replace NuStar Energy’s general partner; |
• | to approve some amendments to the partnership agreement; or |
• | to take other action under the partnership agreement |
Election of directors to the board | | | Plurality of the votes cast by the limited partners holding outstanding common units and Series D Preferred Units (voting on an as-converted basis), voting together as a single class, at a meeting of the limited partners. Please read “—Meetings; Voting.” |
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Amendment of the partnership agreement | | | Certain amendments may be made by NuStar Energy’s general partner without the approval of unitholders. Certain other amendments require the approval of a unit majority. Certain other amendments require the approval of the holders of a super-majority of outstanding common units and Series D Preferred Units (voting on an as-converted basis), voting together as a single class. Certain amendments that would have a material adverse effect on a class of |
| | NuStar Energy interests require the approval of a majority of NuStar Energy interests to be affected by such amendment. Please read “—Amendment of the Partnership Agreement.” | |
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Merger or the sale of all or substantially all of NuStar Energy’s assets | | | The holders of a unit majority. Please read “—Merger, Sale or Other Disposition of Assets.” |
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Dissolution of NuStar Energy | | | The holders of a unit majority. Please read “—Termination and Dissolution.” |
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Removal/Replacement of the general partner | | | The holders of a unit majority. Please read “—Withdrawal or Removal of the General Partner.” |
• | amend, alter, change, repeal or rescind, in any respect, a provision of the partnership agreement that establishes a percentage of outstanding units required to take any action, that would have the effect of reducing such voting percentage, unless such amendment is approved by the written consent or the affirmative vote of holders of outstanding units whose aggregate outstanding units constitute not less than the voting requirement sought to be reduced; |
• | 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; |
• | 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 NuStar Energy to its general partner or any of its affiliates without the consent of NuStar Energy’s general partner, which may be given or withheld in its sole discretion; |
• | change the term of NuStar Energy; |
• | provide that NuStar Energy is not dissolved upon an election to dissolve NuStar Energy by its general partner that is approved by the holders of a unit majority; |
• | give any person the right to dissolve NuStar Energy, other than its general partner’s right to dissolve NuStar Energy with the approval of the holders of a unit majority; or |
• | have a material adverse effect on the rights or preferences of any class of partnership securities in relation to other classes of partnership securities, unless approved by the holders of not less than a majority of the outstanding partnership securities of the class affected. |
• | a change in the name of NuStar Energy, the location of the principal place of business of NuStar Energy, the registered agent or the registered office of NuStar Energy; |
• | the admission, substitution, withdrawal or removal of partners in accordance with the partnership agreement; |
• | a change that, in the sole discretion of NuStar Energy’s general partner, is necessary or advisable to qualify or continue the qualification of NuStar Energy as a limited partnership or a partnership in which the limited partners have limited liability under the laws of any state or to ensure that neither NuStar Energy nor the Operating Partnership will be treated as an association taxable as a corporation or otherwise taxed as an entity for federal income tax purposes; |
• | an amendment that is necessary, in the opinion of counsel to NuStar Energy, to prevent NuStar Energy, its general partner, NuStar GP, LLC, or any of the directors, officers, agents or trustees of NuStar GP, LLC 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, as amended (“ERISA”), whether or not substantially similar to plan asset regulations currently applied or proposed; |
• | subject to any restrictions imposed by the terms of the Preferred Units and the limitations on the issuance of additional partnership securities described above, an amendment that in the discretion of NuStar Energy’s general partner is necessary or advisable for the authorization of additional partnership securities; |
• | any amendment expressly permitted in the partnership agreement to be made by NuStar Energy’s general partner acting alone; |
• | an amendment effected, necessitated or contemplated by a merger agreement that has been approved under the terms of the partnership agreement; |
• | any amendment that, in the discretion of NuStar Energy’s general partner, is necessary or advisable for the formation by NuStar Energy of, or its investment in, any corporation, partnership or other entity, as otherwise permitted by the partnership agreement; |
• | a change in the fiscal year or taxable year of NuStar Energy and related changes; and |
• | any other amendments substantially similar to any of the matters described above. |
• | do not adversely affect the limited partners (or any particular class of limited partners) in any material respect; |
• | are necessary or advisable 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 advisable 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, compliance with any of which NuStar Energy’s general partner deems to be in the best interests of NuStar Energy and the limited partners; |
• | are necessary or advisable for any action taken by NuStar Energy’s general partner relating to splits or combinations of partnership securities under the provisions of the partnership agreement; or |
• | are required to effect the intent of the provisions of the partnership agreement or are otherwise contemplated by the partnership agreement. |
• | the election of NuStar Energy’s general partner to dissolve NuStar Energy, if approved by the holders of a unit majority; |
• | the entry of a decree of judicial dissolution of NuStar Energy pursuant to Delaware law; |
• | the sale of all or substantially all of the assets and properties of NuStar Energy, the Operating Partnership and their subsidiaries; or |
• | the withdrawal or removal of NuStar Energy’s general partner or any other event that results in its ceasing to be the general partner other than by reason of a transfer of its general partner interest in accordance with the partnership agreement or withdrawal or removal following approval and admission of a successor. |
• | the action would not result in the loss of limited liability of any limited partner; and |
• | neither NuStar Energy, the reconstituted limited partnership, nor any operating subsidiary would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of that right to continue. |
• | with certain limited exceptions, any partnership securities held by a person that owns 20% or more of any class of partnership securities then outstanding, other than NuStar Energy’s general partner and its affiliates, cannot be voted on any matter; provided, however that such restriction generally does not apply to any Series D Preferred Units held by a person who acquired such Series D Preferred Units pursuant to the Series D Cumulative Convertible Preferred Unit Purchase Agreement, dated as of June 26, 2018, among NuStar Energy L.P. and the purchasers party thereto; |
• | limiting the ability of unitholders to replace members of the board of directors of NuStar GP, LLC (the “board”) by having staggered elections where each director is elected for a three year term and providing that directors may only be removed for cause; and |
• | limiting the ability of unitholders to call meetings or to acquire information about NuStar Energy’s operations, as well as other provisions limiting the unitholders’ ability to influence the manner or direction of management. |
• | NuStar Energy’s general partner; |
• | any departing general partner; |
• | any person who is or was an affiliate of NuStar Energy’s general partner or any departing general partner; |
• | any person who is or was a member, partner, officer, director, employee, agent or trustee of NuStar Energy, the Operating Partnership or any of their subsidiaries, NuStar Energy’s general partner or any departing general partner or any affiliate of NuStar Energy, the Operating Partnership, their subsidiaries, NuStar Energy’s general partner or any departing general partner; or |
• | any person who is or was serving at the request of NuStar Energy’s general partner or departing general partner or any affiliate of NuStar Energy’s general partner or departing general partner as an officer, director, employee, member, partner, agent, fiduciary or trustee of another person. |
• | information regarding the status of the business and financial condition of NuStar Energy; |
• | a copy of NuStar Energy’s tax returns; |
• | a current list of the name and last known address of each partner; |
• | copies of the partnership agreement, the certificate of limited partnership of NuStar Energy, related amendments and powers of attorney under which they have been executed; |
• | information as to the amount of cash, and a description and statement of the agreed value of any other property or services, contributed or to be contributed by each partner and the date on which each became a partner; |
• | any other information regarding NuStar Energy’s affairs as is just and reasonable. |
• | approved by a conflicts committee consisting of three or more independent directors of NuStar GP, LLC, although no party is obligated to seek approval and NuStar Energy’s general partner may adopt a resolution or course of action that has not received approval; |
• | on terms no less favorable to NuStar Energy than those generally being provided to or available from unrelated third parties; or |
• | fair to NuStar Energy, taking into account the totality of the relationships between the parties involved, including other transactions that may be particularly favorable or advantageous to NuStar Energy. |
• | the relative interests of the parties involved in the conflict or affected by the action; |
• | any customary or accepted industry practices or historical dealings with a particular person or entity; and |
• | generally accepted accounting principles and other factors it considers relevant, if applicable. |
• | amount and timing of asset purchases and sales; |
• | cash expenditures; |
• | borrowings; |
• | issuance of additional units; and |
• | the creation, decrease or increase of reserves in any quarter. |
• | the incurrence of indebtedness; |
• | the acquisition or disposition of assets, except for the disposition of all of the assets of NuStar Energy which requires unitholder approval; |
• | the negotiation of any contracts; and |
• | the disposition of NuStar Energy’s cash. |
(1) | none of NuStar Energy, NuStar Logistics or NuStar Pipeline Operating Partnership L.P. (“NuPOP”) has elected, nor will elect, to be treated as a corporation; and |
(2) | for each taxable year, more than 90% of NuStar Energy’s gross income has been and will be income of the type that Sidley Austin LLP has opined or will opine is “qualifying income” within the meaning of Section 7704(d) of the Code. |
• | interest on indebtedness properly allocable to property held for investment; |
• | our interest expense attributed to portfolio income; and |
• | the portion of interest expense incurred to purchase or carry an interest in a passive activity to the extent attributable to portfolio income. |
• | the net amount of our items of income, gain, deduction and loss to the extent such items are included or allowed in the determination of taxable income for the year and are attributable to our conduct of a trade or business within the United States, excluding certain specified types of passive investment income (such as capital gains and dividends, which are taxed at a rate of 20%) and certain payments made to the unitholder for services rendered to us; and |
• | any gain recognized upon a disposition of common units to the extent such gain is attributable to Section 751 Assets, such as depreciation recapture and our “inventory items,” and is thus treated as ordinary income under Section 751 of the Code. |
• | a short sale; |
• | an offsetting notional principal contract; or |
• | a futures or forward contract; |
(1) | the name, address and taxpayer identification number of the beneficial owner and the nominee; |
(2) | a statement regarding whether the beneficial owner is: |
(a) | a person that is not a United States person, |
(b) | a foreign government, an international organization or any wholly-owned agency or instrumentality of either of the foregoing, or |
(c) | a tax-exempt entity; |
(3) | the amount and description of units held, acquired or transferred for the beneficial owner; and |
(4) | specific information including the dates of acquisitions and transfers, means of acquisitions and transfers, and acquisition cost for purchases, as well as the amount of net proceeds from sales. |
• | accuracy-related penalties with a broader scope, significantly narrower exceptions, and potentially greater amounts than described above at “—Accuracy-Related Penalties,” |
• | for those persons otherwise entitled to deduct interest on federal tax deficiencies, nondeductibility of interest on any resulting tax liability, and |
• | in the case of a listed transaction, an extended statute of limitations. |
• | whether the investment is prudent under Section 404(a)(1)(B) of ERISA and any other applicable Similar Laws; |
• | whether, in making the investment, that Plan will satisfy the diversification requirements of Section 404(a)(l)(C) of ERISA and any other applicable Similar Laws; and |
• | whether the investment will result in recognition of unrelated business taxable income by the Plan and, if so, the potential after-tax investment return. Please read “Material Tax Consequences—Tax-Exempt Organizations and Other Investors.” |
• | the equity interests acquired by employee benefit plans or other arrangements described above are “publicly offered securities,” as defined in the regulations (i.e., the equity interests are widely held by 100 or more investors independent of the issuer and each other, freely transferable and registered under some provisions of the federal securities laws); or |
• | the entity is an “operating company,” as defined in the regulations (i.e., it is primarily engaged in the production or sale of a product or service other than the investment of capital either directly or through a majority owned subsidiary or subsidiaries); or |
• | less than 25% of the value of each class of equity interest, disregarding any such interests held by our general partner, its affiliates, and some other persons, is held by the employee benefit plans referred to above, IRAs and other employee benefit plans or arrangements subject to ERISA or Section 4975 of the Code. |
| | Common units beneficially owned prior to the offering | | | Common units to be offered | | | Common units beneficially owned after the offering | |||||||
Name of selling unitholder | | | Number | | | Percentage | | | Number | | | Percentage | |||
EIG Nova Equity Aggregator, L.P.(1) | | | 17,336,485 | | | 13.2% | | | 17,336,485 | | | — | | | — |
FS Energy and Power Fund(2) | | | 5,910,165 | | | 4.5% | | | 5,910,165 | | | — | | | — |
(1) | EIG Nova Equity Aggregator, L.P. is a holding company for certain funds managed by EIG Management Company, LLC (the “Manager”). The funds’ investment committee has the power to vote or to direct the vote of, and to dispose or to direct the disposition of, the common units held by the funds. The members of the funds’ investment committee are R. Blair Thomas, Randall S. Wade, William C. Sonneborn, Jean-Daniel Borgeaud, Linda Cook and Richard Punches. The Manager is a registered investment adviser under the Investment Advisers Act of 1940, as amended. |
(2) | FS Energy and Power Fund (“FSEP”) is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. The investment adviser to FSEP is FS/EIG Advisor, LLC (“FS/EIG Advisor”). The investment committee of FS/EIG Advisor makes investment decisions on behalf of FS/EIG Advisor and has the power to vote or to direct the vote of, and to dispose or to direct the disposition of, the common units held by FSEP. The members of the investment committee of FS/EIG Advisor are Sean Coleman, Brian Gerson, Michael Kelly, William C. Sonneborn, R. Blair Thomas and Randall S. Wade. FS/EIG Advisor is a registered investment adviser under the Investment Advisers Act of 1940, as amended. |
• | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
• | a block trade (which may involve crosses in which the same broker-dealer acts as agent on both sides) in which the broker or dealer so engaged will attempt to sell the common units as agent or as riskless principal but may position and resell a portion of the block as principal to facilitate the transaction; |
• | purchases by a broker or dealer as principal and resales by such broker or dealer for its own account pursuant to this prospectus; |
• | exchange distributions and/or secondary distributions in accordance with the rules of the NYSE or any other applicable national securities exchange on which the common units are listed; |
• | sales on any national securities exchange or quotation service on which the common units may be listed or quoted at the time of the sale, including the NYSE, in the over-the-counter markets or through a market maker or into an existing trading market (on an exchange or otherwise) for the common units; |
• | underwritten transactions; |
• | short sales, whether through a broker-dealer or otherwise; |
• | in transactions in which broker-dealers may agree with the selling unitholders to sell a specified number of such common units at a stipulated price per unit; |
• | privately negotiated transactions; |
• | pledges of the common units as security for any loan or obligation, including pledges to brokers or dealers who may from time to time effect sales or other distributions of the securities; |
• | a combination of any such methods of sale; and |
• | any other method permitted pursuant to applicable law. |