0001104659-20-025798.txt : 20200227 0001104659-20-025798.hdr.sgml : 20200227 20200227093904 ACCESSION NUMBER: 0001104659-20-025798 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 20 CONFORMED PERIOD OF REPORT: 20200226 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200227 DATE AS OF CHANGE: 20200227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Equitrans Midstream Corp CENTRAL INDEX KEY: 0001747009 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION [4922] IRS NUMBER: 830516635 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-38629 FILM NUMBER: 20658796 BUSINESS ADDRESS: STREET 1: 2200 ENERGY DRIVE CITY: CANONSBURG STATE: PA ZIP: 15317 BUSINESS PHONE: 724-271-7600 MAIL ADDRESS: STREET 1: 2200 ENERGY DRIVE CITY: CANONSBURG STATE: PA ZIP: 15317 FORMER COMPANY: FORMER CONFORMED NAME: EQT Midstream SpinCo, Inc. DATE OF NAME CHANGE: 20180717 8-K 1 tm2010833d1_8k.htm FORM 8-K
0001747009 false 0001747009 2020-02-25 2020-02-26 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 26, 2020

 

 

 

Equitrans Midstream Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Pennsylvania 001-38629 83-0516635
(State or other jurisdiction
of incorporation)  
(Commission File Number) (IRS Employer
Identification No.)

 

2200 Energy Drive

Canonsburg, Pennsylvania

15317
(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (724) 271-7600

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

xWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, no par value   ETRN   New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 1.01 Entry Into a Material Definitive Agreement.

 

Agreement and Plan of Merger

 

On February 26, 2020, Equitrans Midstream Corporation, a Pennsylvania corporation (Equitrans Midstream), EQM LP Corporation, a Delaware corporation and a wholly owned subsidiary of Equitrans Midstream (EQM LP), LS Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of EQM LP (Merger Sub), EQM Midstream Partners, LP, a Delaware limited partnership (EQM), and EQGP Services, LLC, a Delaware limited liability company, a wholly owned subsidiary of Equitrans Midstream and the general partner of EQM (the EQM General Partner), entered into an Agreement and Plan of Merger (the EQM Merger Agreement), pursuant to which Merger Sub, will merge with and into EQM (the EQM Merger), with EQM continuing and surviving as an indirect, wholly owned subsidiary of Equitrans Midstream following the EQM Merger.

 

Under the terms of the EQM Merger Agreement, and subject to the satisfaction or waiver of certain conditions therein, at the effective time of the EQM Merger (the Effective Time), (i) each outstanding EQM common unit (each, an EQM Common Unit), other than EQM Common Units owned by Equitrans Midstream and its subsidiaries (each, a Public Common Unit), will be converted into the right to receive, subject to adjustment as described in the EQM Merger Agreement, 2.44 shares of Equitrans Midstream common stock, no par value (Equitrans Midstream common stock) (the Merger Consideration); (ii) (x) $600.0 million of the Series A Perpetual Convertible Preferred Units (each, a Series A Preferred Unit) issued and outstanding immediately prior to the Effective Time will be redeemed by EQM, and (y) the remaining portion of the Series A Preferred Units issued and outstanding immediately prior to the Effective Time will be exchanged for shares of a newly authorized and created series of preferred stock, without par value, of Equitrans Midstream, convertible into Equitrans Midstream common stock (the ETRN Preferred Shares); and (iii) each outstanding phantom unit relating to an EQM Common Unit issued pursuant to the Amended and Restated EQGP Services, LLC 2012 Long-Term Incentive Plan, dated as of February 22, 2019 (the EQM LTIP), and any other award issued pursuant to the EQM LTIP, whether vested or unvested, will be converted into the right to receive, with respect to each EQM Common Unit subject thereto, the Merger Consideration (plus any accrued but unpaid amounts in relation to distribution equivalent rights), less applicable tax withholding. The interests in EQM owned by Equitrans Midstream and its subsidiaries (including the Class B units representing limited partner interests of EQM) will remain outstanding as limited partner interests in the surviving entity. The EQM General Partner will continue to own the non-economic general partner interest in the surviving entity.

 

The Board of Directors of Equitrans Midstream (the Board), by unanimous vote, (i) determined that the execution, delivery and performance of the EQM Merger Agreement and the transactions contemplated thereby, including the EQM Merger (the Transactions), and the issuance of Equitrans Midstream common stock as the Merger Consideration (the Equitrans Midstream Stock Issuance), are in the best interests of Equitrans Midstream and the holders of the outstanding shares of Equitrans Midstream common stock (the ETRN Shareholders), (ii) approved the execution, delivery and performance of the EQM Merger Agreement, the Transactions and the Equitrans Midstream Stock Issuance, and (iii) resolved to submit the approval of the Equitrans Midstream Stock Issuance to a vote of the ETRN Shareholders and recommend that the ETRN Shareholders approve the Equitrans Midstream Stock Issuance.

 

The Conflicts Committee (the EQM Conflicts Committee) of the Board of Directors of the EQM General Partner (the EQM Board), by unanimous vote, (i) determined that the EQM Merger Agreement and the Transactions are in the best interests of EQM, its subsidiaries and each holder of Public Common Units (each, an Unaffiliated Partnership Unitholder), (ii) approved the EQM Merger Agreement and the Transactions (the foregoing constituting “Special Approval” as defined in EQM’s Fourth Amended and Restated Agreement of Limited Partnership dated as of April 10, 2019, as amended (the Partnership Agreement)), (iii) recommended that the EQM Board approve the EQM Merger Agreement and the execution, delivery and performance of the EQM Merger Agreement and the Transactions, and (iv) resolved, and recommended that the EQM Board resolve, to recommend approval of the EQM Merger Agreement and the EQM Merger by the limited partners of EQM.

 

 2 

 

 

The EQM Board (acting, in part, upon the recommendation of the EQM Conflicts Committee), by unanimous vote, (i) determined that the terms of the EQM Merger Agreement and the Transactions are in the best interests of EQM, its subsidiaries and the limited partners of EQM, (ii) approved the EQM Merger Agreement, the execution, delivery and performance of the EQM Merger Agreement and the Transactions and (iii) resolved to submit the EQM Merger Agreement to a vote of the limited partners of EQM and recommend that the limited partners of EQM approve the EQM Merger Agreement and the EQM Merger.

 

EQM has agreed to, and the EQM General Partner will use its reasonable best efforts to cause EQM to, cease and cause to be terminated any discussions or negotiations with any person conducted heretofore with respect to a competing acquisition proposal, not to directly or indirectly solicit competing acquisition proposals or to enter into discussions concerning, or provide confidential information in connection with, any unsolicited alternative business combinations, subject to certain exceptions with respect to unsolicited proposals received by EQM. In addition, EQM has agreed to call a special meeting of the holders of EQM Common Units (the EQM Special Meeting) to approve the EQM Merger Agreement. The EQM Conflicts Committee may, subject to certain conditions, change its recommendation in favor of approval of the EQM Merger Agreement and the EQM Merger if, in connection with receipt of a superior proposal or the occurrence of a Partnership Changed Circumstance (as defined in the EQM Merger Agreement), it determines in good faith that failure to take such action would constitute a breach of, or otherwise be inconsistent with, its duties under applicable law, as modified by the Partnership Agreement. However, even if the EQM Conflicts Committee changes its recommendation, the EQM Merger Agreement and the EQM Merger require EQM to submit the EQM Merger Agreement for approval by the limited partners of EQM.

 

The EQM Merger Agreement contains representations and warranties from the parties and indemnification obligations, and each party has agreed to certain covenants, including, among others, covenants relating to, among others, (i) the conduct of business during the interim period between the execution of the EQM Merger Agreement and the Effective Time and (ii) the obligation to use reasonable best efforts to cause the EQM Merger to be consummated.

 

Completion of the EQM Merger is conditioned upon, among others: (i) approval (the Partnership Approval) of the EQM Merger Agreement and the EQM Merger by holders of a majority of the outstanding EQM Common Units, Class B units, and Series A Preferred Units, with such Series A Preferred Units treated as EQM Common Units on an as-converted basis, voting together as a single class; (ii) approval (the ETRN Shareholder Approval) of the Equitrans Midstream Stock Issuance by a majority of votes cast at a special meeting of holders of shares of Equitrans Midstream common stock (the ETRN Special Meeting); (iii) there being no law or injunction prohibiting consummation of the transactions contemplated under the EQM Merger Agreement; (iv) the effectiveness of a registration statement on Form S-4, and no stop order suspending the effectiveness of such registration statement, relating to the issuance of shares of Equitrans Midstream common stock pursuant to the EQM Merger Agreement; (v) approval for listing on the New York Stock Exchange of the shares of Equitrans Midstream common stock issuable pursuant to the EQM Merger Agreement; (vi) subject to specified materiality standards, the accuracy of certain representations and warranties of each party; (vii) the delivery of a tax opinion to Equitrans Midstream in form and substance approved by EQT Corporation, a Pennsylvania corporation (EQT), satisfying the requirements of an unqualified tax opinion (as defined in the Tax Matters Agreement, dated November 12, 2018, between EQT and Equitrans Midstream) with respect to the transactions contemplated by the EQM Merger Agreement; (viii) compliance with, or waiver, if permissible, by the respective parties in all material respects with their respective covenants; and (ix) closing of the Restructuring (as defined below).

 

 3 

 

 

The EQM Merger Agreement contains provisions granting each of Equitrans Midstream and EQM the right to terminate the EQM Merger Agreement for certain reasons, including, among others, (i) by the mutual written consent of Equitrans Midstream and EQM; (ii) if the EQM Merger has not been consummated on or before August 26, 2020; (iii) if any law, injunction, judgment or ruling enacted, promulgated, issued, entered, amended or enforced by any governmental authority shall be in effect, and has become final and nonappealable, enjoining, restraining, preventing or prohibiting the consummation of the Transactions or making the consummation of the Transactions illegal; (iv) if the EQM Special Meeting shall have concluded and the Partnership Approval shall not have been obtained; (v) if the ETRN Special Meeting shall have concluded and the ETRN Shareholder Approval shall not have been obtained or (vi) if a Partnership Adverse Recommendation Change (as defined in the EQM Merger Agreement) shall have occurred prior to receipt of the Partnership Equityholder Approval (as defined the EQM Merger Agreement) (provided that the Partnership may only terminate as a result of Partnership Changed Circumstances (as defined in the EQM Merger Agreement)). The EQM Merger Agreement contains provisions granting Equitrans Midstream the right to terminate the EQM Merger Agreement for certain reasons, including if EQM or the EQM General Partner shall have breached or failed to perform its representations, warranties, covenants or agreements set forth in the EQM Merger Agreement, which breach or failure (x) would give rise to a failure of certain of the conditions to Equitrans Midstream’s obligations to consummate the Transactions under the EQM Merger Agreement and (y) is incapable of being cured or is not cured within the earlier of 30 days of written notice of such breach or failure by Equitrans Midstream, provided Equitrans Midstream shall not have the right to terminate if Equitrans Midstream, EQM LP or Merger Sub are in material breach of any of their representations, warranties, covenants or agreements contained in the EQM Merger Agreement, or (c) prior to receipt of Partnership Approval, EQM is in Willful Breach (as defined in the EQM Merger Agreement) of its obligations set forth under the non-solicitation provisions of the EQM Merger Agreement; provided Equitrans Midstream shall not have the right to terminate if Equitrans Midstream, EQM LP or Merger Sub are in material breach of any of its representations, warranties, covenants or agreements contained in the EQM Merger Agreement. The EQM Merger Agreement contains provisions granting EQM the right to terminate the EQM Merger Agreement if (a) Equitrans Midstream has breached or failed to perform its representations, warranties, covenants or agreements set forth in the EQM Merger Agreement, which breach or failure (1) would give rise to a failure of certain of the conditions to EQM’s obligations to consummate the Transactions under the EQM Merger Agreement and (2) is incapable of being cured or is not cured within the earlier of 30 days of written notice of such breach or failure by EQM, provided EQM shall not have the right to terminate if EQM or the EQM General Partner is in material breach of any of its representations, warranties, covenants or agreements contained in the EQM Merger Agreement or (b) prior to receipt of the Partnership Approval (as defined in the EQM Merger Agreement), in order to enter into an agreement providing for a Superior Proposal (as defined in the EQM Merger Agreement). Upon termination of the EQM Merger Agreement under certain circumstances, EQM will be obligated to (i) pay Equitrans Midstream a termination fee equal to $36.5 million and/or (ii) reimburse Equitrans Midstream for its expenses in an amount not to exceed $10.0 million. The EQM Merger Agreement also provides that upon termination of the EQM Merger Agreement under certain circumstances, Equitrans Midstream will be obligated to reimburse EQM for its expenses in an amount not to exceed $10.0 million.

 

The EQM Merger Agreement is attached as Exhibit 2.1 to this Current Report on Form 8-K (this Current Report) and incorporated into this Item 1.01 by reference. The foregoing summary has been included to provide investors and security holders with information regarding the terms of the EQM Merger Agreement and is qualified in its entirety by the terms and conditions of the EQM Merger Agreement. It is not intended to provide any other factual information about Equitrans Midstream, EQM, the EQM General Partner or their respective subsidiaries and affiliates. The EQM Merger Agreement contains representations and warranties by each of the parties to the EQM Merger Agreement, which were made only for purposes of the EQM Merger Agreement and as of specified dates. The representations, warranties and covenants in the EQM Merger Agreement were made solely for the benefit of the parties to the EQM Merger Agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the EQM Merger Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Equitrans Midstream, EQM, the EQM General Partner or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the EQM Merger Agreement, which subsequent information may or may not be fully reflected in Equitrans Midstream’s or EQM’s public disclosures.

 

 4 

 

 

Preferred Restructuring Agreement

 

On February 26, 2020, Equitrans Midstream and EQM entered into a Preferred Restructuring Agreement (the Restructuring Agreement) with all of the holders of Series A Preferred Units (collectively, the Investors), pursuant to which (i) EQM will redeem $600.0 million of the Investor's Series A Preferred Units issued and outstanding immediately prior to the effective time of the Restructuring Agreement and (ii) the remaining portion of the Series A Preferred Units issued and outstanding immediately prior to the effective time of the Restructuring Agreement will be exchanged for ETRN Preferred Shares on a one for one basis (the Private Placement), in each case, in connection with the occurrence of the “Series A Change of Control” (as defined in the Partnership Agreement) that will occur upon the closing of the EQM Merger (the Restructuring). The ETRN Preferred Shares to be issued in the Private Placement have not been registered under the Securities Act of 1933, as amended (the Securities Act), in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

 

The Restructuring is expected to close substantially concurrent with the closing of the EQM Merger (the Restructuring Closing), subject to the delivery of certain closing deliverables and certain closing conditions, including, among others: (i) the continued accuracy of the representations and warranties contained in the Restructuring Agreement; (ii) the performance by each party of its respective obligations under the Restructuring Agreement; (iii) the absence of any suit, action or proceeding by any governmental authority restraining, precluding, enjoining or prohibiting the Restructuring; (iv) the closing of the EQM Merger either prior to or concurrently with the Restructuring Closing; and (v) the execution of certain agreements and delivery of certain documents related to the Restructuring, including the certificate of designations to be filed by Equitrans Midstream with the Pennsylvania Department of State at the Restructuring Closing (the Certificate of Designations) and a registration rights agreement to be entered into by and among Equitrans Midstream and the Investors (the Registration Rights Agreement), each in substantially the form attached as an exhibit to the Restructuring Agreement.

 

Pursuant to the Restructuring Agreement, in connection with the Restructuring Closing, Equitrans Midstream will file the Certificate of Designations with the Pennsylvania Department of State in substantially the form attached as an exhibit to the Restructuring Agreement to, among other things, authorize and establish the designations, rights and preferences of the ETRN Preferred Shares.

 

The ETRN Preferred Shares are a new class of security that will rank pari passu with any other outstanding class or series of preferred stock of Equitrans Midstream and senior to Equitrans Midstream common stock with respect to dividend rights and rights upon liquidation. The ETRN Preferred Shares will vote on an as-converted basis with the Equitrans Midstream common stock and will have certain other class voting rights with respect to any amendment to the Certificate of Designations or Equitrans Midstream’s articles of incorporation that would be adverse (other than in a de minimis manner) to any of the rights, preferences or privileges of the ETRN Preferred Shares.

 

The holders of the ETRN Preferred Shares will receive cumulative quarterly dividends at a rate per annum of 9.75% for each quarter ending on or before March 31, 2024, and thereafter the quarterly dividends at a rate per annum equal to the sum of (i) three-month LIBOR as of a LIBOR Determination Date (as defined in the Certificate of Designations) in respect of the applicable quarter and (ii) 8.15%; provided that the rate per annum shall not be less than 10.50%. Equitrans Midstream will not be entitled to pay any dividends on any junior securities, including any of the Equitrans Midstream common stock, prior to paying the quarterly dividends payable to the ETRN Preferred Shares, including any previously accrued and unpaid dividends.

 

Each holder of the ETRN Preferred Shares may elect to convert all or any portion of the ETRN Preferred Shares owned by it into Equitrans Midstream common stock initially on a one-for-one basis, subject to certain anti-dilution adjustments and an adjustment for any dividends that have accrued but not been paid when due and partial period dividends (referred to as the “conversion rate”), at any time (but not more often than once per fiscal quarter) after April 10, 2021 (or earlier liquidation, dissolution or winding up of Equitrans Midstream), provided that any conversion is for at least $20.0 million (calculated based on the closing price of the Equitrans Midstream common stock on the trading day preceding notice of the conversion) or such lesser amount if such conversion relates to all of a holder’s remaining ETRN Preferred Shares.

 

 5 

 

 

Equitrans Midstream may elect to convert all or any portion of the ETRN Preferred Shares for Equitrans Midstream common stock at any time (but not more often than once per quarter) after April 10, 2021 if (i) the shares of Equitrans Midstream common stock are listed for, or admitted to, trading on a national securities exchange, (ii) the closing price per share of Equitrans Midstream common stock on the national securities exchange on which the shares of Equitrans Midstream common stock are listed for, or admitted to, trading exceeds 140% of the price at which the shares of Equitrans Midstream common stock were issued for the 20 consecutive trading days immediately preceding notice of the conversion, (iii) the average daily trading volume of the shares of Equitrans Midstream common stock on the national securities exchange on which the shares of Equitrans Midstream common stock are listed for, or admitted to, trading exceeds 1,000,000 shares of Equitrans Midstream common stock for the 20 consecutive trading days immediately preceding notice of the conversion, (iv) Equitrans Midstream has an effective registration statement on file with the Securities and Exchange Commission covering resales of the shares of Equitrans Midstream common stock to be received by such holders upon any such conversion and (v) Equitrans Midstream has paid all accrued quarterly dividends in cash to the holders.

 

Upon certain events involving a Change of Control (as defined in the Certificate of Designations) in which more than 90% of the consideration payable to the holders of the Equitrans Midstream common stock is payable in cash, the ETRN Preferred Shares will automatically convert into Equitrans Midstream common stock at a conversion ratio equal to the issue price of the ETRN Preferred Shares (the ETRN Preferred Shares Issue Price) multiplied by 110% plus any unpaid dividends on such date and any partial period dividend with respect to the ETRN Preferred Shares for the quarter in which the conversion occurs, divided by the ETRN Preferred Shares Issue Price.

 

In connection with other Change of Control events that do not satisfy the 90% cash consideration threshold described above, in addition to certain other conditions, each holder of ETRN Preferred Shares may elect to (a) convert all, but not less than all, of its ETRN Preferred Shares into Equitrans Midstream common stock at the then applicable conversion rate, (b) if Equitrans Midstream is not the surviving entity (or if Equitrans Midstream is the surviving entity, but the Equitrans Midstream common stock will cease to be listed), require Equitrans Midstream to use commercially reasonable efforts to cause the surviving entity in any such transaction to issue a substantially equivalent security (or if Equitrans Midstream is unable to cause such substantially equivalent securities to be issued, to convert into Equitrans Midstream common stock at a premium of 110% of the ETRN Preferred Shares Issue Price), (c) if Equitrans Midstream is the surviving entity, continue to hold the ETRN Preferred Shares or (d) require Equitrans Midstream to redeem the ETRN Preferred Shares at a price per share equal to 101% of the ETRN Preferred Shares Issue Price, plus accrued and unpaid dividends on the applicable ETRN Preferred Shares and any partial period dividends for the quarter in which the redemption occurs, which redemption price may be payable in cash, Equitrans Midstream common stock or a combination thereof at the election of the Board (and, if payable in Equitrans Midstream common stock, such Equitrans Midstream common stock will be issued at 95% of the VWAP of the Equitrans Midstream common stock for the 20-day period ending on the fifth trading day immediately preceding the consummation of the Change of Control). Any holder of ETRN Preferred Shares that requires Equitrans Midstream to redeem its ETRN Preferred Shares pursuant to clause (d) above will have the right to withdraw such election with respect to all, but not less than all, of its ETRN Preferred Shares at any time prior to the fifth trading day immediately preceding the consummation of the Change of Control and instead elect to be treated in accordance with any of clauses (a), (b) or (c) above.

 

At any time on or after January 1, 2024, Equitrans Midstream will have the right to redeem ETRN Preferred Shares, in whole or in part, by paying cash for each ETRN Preferred Share to be redeemed in an amount equal to the greater of (a) the sum of (i)(1) the ETRN Preferred Shares Issue Price multiplied by (2) 110%, plus (ii) any unpaid dividends on such date and any partial period dividend with respect to the ETRN Preferred Shares for the quarter in which the conversion occurs and (b) the amount the holder of such ETRN Preferred Share would receive if such holder had converted such ETRN Preferred Share into shares of Equitrans Midstream common stock at the applicable conversion ratio and Equitrans Midstream liquidated immediately thereafter.

 

Pursuant to the terms of the Restructuring Agreement, in connection with the Restructuring Closing, Equitrans Midstream has agreed to enter into the Registration Rights Agreement pursuant to which, among other things, Equitrans Midstream will give the Investors certain rights to require Equitrans Midstream to file and maintain one or more registration statements with respect to the resale of the ETRN Preferred Shares and the shares of Equitrans Midstream common stock that are issuable upon conversion of the ETRN Preferred Shares, and to require Equitrans Midstream to initiate underwritten offerings for the ETRN Preferred Shares and the shares of Equitrans Midstream common stock that are issuable upon conversion of the ETRN Preferred Shares.

 

 6 

 

 

The Restructuring Agreement is attached hereto as Exhibit 10.1 to this Current Report and incorporated into this Item 1.01 by reference. The foregoing summary has been included to provide investors and security holders with information regarding the terms of the Restructuring Agreement and is qualified in its entirety by the terms and conditions of the Restructuring Agreement. It is not intended to provide any other factual information about Equitrans Midstream, EQM or their subsidiaries and affiliates. The Restructuring Agreement contains representations and warranties by each of the parties to the Restructuring Agreement, which were made only for purposes of the Restructuring Agreement and as of specified dates. The representations and warranties in the Restructuring Agreement were made solely for the benefit of the parties to the Restructuring Agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Restructuring Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual state of facts or condition of Equitrans Midstream, EQM or any of their subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Restructuring Agreement, which subsequent information may or may not be fully reflected in Equitrans Midstream’s or EQM’s public disclosures.

 

EQT Global GGA

 

On February 26, 2020 (the EQT Global GGA Effective Date), EQM Gathering Opco, LLC, a Delaware limited liability company and a wholly owned subsidiary of EQM (EQM Opco), entered into a Gas Gathering and Compression Agreement (the EQT Global GGA) with EQT, EQT Production Company, a Pennsylvania corporation and wholly owned subsidiary of EQT (EQT Production), Rice Drilling B LLC, a Delaware limited liability company and wholly owned subsidiary of EQT (Rice Drilling), and EQT Energy, LLC, a Delaware limited liability company and wholly owned subsidiary of EQT (EQT Energy and, together with EQT, EQT Production and Rice Drilling, the Producer), for the provision by EQM Opco of gas gathering services to Producer in the Marcellus and Utica Shales of Pennsylvania and West Virginia. Effective as of the EQT Global GGA Effective Date, Producer will be subject to an initial annual minimum volume commitment of 3.0 billion cubic feet of natural gas per day. The EQT Global GGA runs from the EQT Global GGA Effective Date through December 31, 2035, and will renew year to year thereafter unless terminated by the Producer or EQM Opco. Pursuant to the EQT Global GGA, EQM Opco shall have certain obligations to build additional connections to connect additional of Producer’s wells to the gathering system which are subject to geographical limitations in relation to the dedicated area in Pennsylvania and West Virginia as well as the distance to the then-existing gathering system.

 

In addition to the fees related to gathering services, the EQT Global GGA provides for potential cash bonus payments payable by EQT to EQM during the period beginning on the in-service date of the Mountain Valley Pipeline (the MVP) until the earlier of (i) 36 months following the in-service date of the MVP or (ii) December 31, 2024. The potential cash bonus payments are conditioned upon the quarterly average of the NYMEX Henry Hub Natural Gas Spot Price exceeding certain price thresholds.

 

Following the MVP in-service date, the gathering fees payable by EQT to EQM (or its affiliates) set forth in the EQT Global GGA are subject to potential reductions for certain contract years set forth in the EQT Global GGA, conditioned upon the in-service date of the MVP, which provide for estimated aggregate fee relief of $270 million in the first year after the in-service date of the MVP, $230 million in the second year after the in-service date of the MVP, and $35 million in the third year after the in-service date of the MVP. In addition, if the MVP in-service date has not occurred by January 1, 2022, EQT has an option, exercisable for a period of twelve months, to forgo $145 million of the gathering fee relief in the first year after the MVP in-service date and $90 million of the gathering fee relief in the second year after the MVP in-service date in exchange for a cash payment from EQM to EQT in the amount of $196 million.

 

 7 

 

 

The foregoing summary has been included to provide investors and security holders with information regarding the terms of the EQT Global GGA and is qualified in its entirety by the terms and conditions of the EQT Global GGA, a copy of which will be filed as an exhibit to a subsequent filing with the Securities and Exchange Commission (the SEC) by Equitrans Midstream. It is not intended to provide any other factual information about Equitrans Midstream, EQM or their respective subsidiaries and affiliates.

 

Credit Letter Agreement

 

On February 26, 2020, EQM and EQT Energy entered into a letter agreement (the Credit Letter Agreement), pursuant to which, among other things, (i) EQM agreed to relieve certain credit posting requirement for EQT, in an amount up to approximately $250.0 million, under its commercial agreements with EQM, subject to EQT maintaining a minimum credit rating from two of the three rating agencies of (a) Ba3 with Moody’s Investor Services, Inc., (b) BB- with S&P Global Ratings and (c) BB- with Fitch Investor Services, and (ii) EQM agreed to use commercially reasonable good faith efforts to negotiate similar credit support arrangements for EQT in respect of its commitments to the MVP joint venture.

 

The foregoing summary has been included to provide investors and security holders with information regarding the terms of the Credit Letter Agreement and is qualified in its entirety by the terms and conditions of the Credit Letter Agreement, a copy of which will be filed as an exhibit to a subsequent filing with the SEC by Equitrans Midstream. It is not intended to provide any other factual information about Equitrans Midstream, EQM or their respective subsidiaries and affiliates.

 

Water Services Letter Agreement

 

On February 26, 2020, EQM Opco and/or certain affiliated entities (the Service Provider) entered into a letter agreement with EQT Production, Rice Drilling and/or certain affiliated entities (the Customer), pursuant to which Customer agreed to utilize the Service Provider for the provision of water services under one or more water services agreements (the Water Services Letter Agreement). The Water Services Letter Agreement is effective as of the first day of the first month following the MVP in-service date and shall expire on the fifth anniversary of such date. During each year of the Water Services Letter Agreement, Customer agreed that fees incurred to Service Provider for services pursuant to the Water Services Letter Agreement shall be equal to or greater than $60.0 million per year.

 

The foregoing summary has been included to provide investors and security holders with information regarding the terms of the Water Services Letter Agreement and is qualified in its entirety by the terms and conditions of the Water Services Letter Agreement, a copy of which will be filed as an exhibit in a subsequent filing with the SEC by Equitrans Midstream. It is not intended to provide any other factual information about Equitrans Midstream or its subsidiaries and affiliates or EQM. Investors should not rely on any descriptions thereof as characterizations of the actual state of facts or condition of Equitrans Midstream or any of its subsidiaries or affiliates or EQM.

 

Share Purchase Agreements

 

On February 26, 2020, Equitrans Midstream entered into two share purchase agreements (the Share Purchase Agreements) with EQT, pursuant to which (i) Equitrans Midstream will purchase 4,769,496 shares of Equitrans Midstream common stock (the Cash Shares) from EQT in exchange for approximately $46 million in cash, (ii) Equitrans Midstream will purchase 20,530,256 shares of Equitrans Midstream common stock (the Rate Relief Shares and, together with the Cash Shares, the Share Purchases) from EQT in exchange for a promissory note (the Rate Relief Note) representing approximately $196 million in aggregate principal amount, and (iii) Equitrans Midstream will pay to EQT cash in the amount of approximately $7 million. At the Share Purchase Closing (as defined below), EQT will assign the Rate Relief Note to EQM as consideration for certain commercial terms, including potential reductions in gathering fees, contemplated in the EQT Global GGA.

 

 8 

 

 

The Board, by unanimous vote, determined that the execution, delivery and performance of the Share Purchase Agreements and the transactions contemplated thereby are in the best interests of Equitrans Midstream and the ETRN Shareholders and approved the Share Purchase Agreements and the transactions contemplated thereby.

 

The Share Purchase Agreements contain certain representations, warranties, covenants and conditions to closing, including the termination of certain existing credit agreements. The transactions contemplated by the Share Purchase Agreements are expected to close in early March 2020 (the Share Purchase Closing).

 

Equitrans Midstream intends to use borrowings under the anticipated Intercompany Loan to fund the purchase of the Cash Shares contemplated by the Share Purchase Agreements in addition to other uses of proceeds. Additionally, at the Share Purchase Closing, Equitrans Midstream will issue the Rate Relief Note to EQT in exchange for the Rate Relief Shares, and EQT will immediately thereafter assign the Rate Relief Note to EQM.

 

The interest rate for the Rate Relief Note will be fixed at 7.0% per annum and interest payments will be due semi-annually in arrears commencing on the earlier of (i) March 31, 2022 and (ii) the MVP in-service date. The Rate Relief Note will mature on February 29, 2024. The holder of the Rate Relief Note will be able to accelerate amounts payable under the Rate Relief Note upon Equitrans Midstream’s failure to pay debts as they become due and other customary events of default. Equitrans Midstream will be able to prepay the Rate Relief Note in whole or in part at any time without premium or penalty.

 

The Share Purchase Agreements are attached as Exhibits 10.2 and 10.3 to this Current Report and incorporated into this Item 1.01 by reference. The foregoing summary has been included to provide investors and security holders with information regarding the terms of the Share Purchase Agreements and is qualified in its entirety by the terms and conditions of the Share Purchase Agreements. It is not intended to provide any other factual information about Equitrans Midstream or its subsidiaries and affiliates or EQT. The Share Purchase Agreements contain representations and warranties by each of the parties to the Share Purchase Agreements, which were made only for purposes of the Share Purchase Agreements and as of specified dates. The representations, warranties and covenants in the Share Purchase Agreements were made solely for the benefit of the parties to the Share Purchase Agreements and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Share Purchase Agreements instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Equitrans Midstream or any of its subsidiaries or affiliates or EQT. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Share Purchase Agreements, which subsequent information may or may not be fully reflected in Equitrans Midstream’s public disclosures.

 

Item 1.02. Termination of a Material Definitive Agreement.

 

On the EQT Global GGA Effective Date, the following material contracts will terminate:

 

·Jupiter Gas Gathering Agreement, effective as of May 1, 2014, by and among EQT Production and EQT Energy, on the one hand, and EQM Opco, on the other hand, as amended by Amendment No. 1 to Jupiter Gas Gathering Agreement, dated as of December 17, 2014, Amendment No. 2 to Jupiter Gas Gathering Agreement, dated as of October 26, 2015, Amendment No. 3 to Jupiter Gas Gathering Agreement, dated as of August 1, 2016, Amendment No. 4 to Jupiter Gas Gathering Agreement, dated as of June 1, 2017, Amendment No. 5 to Jupiter Gas Gathering Agreement, dated as of October 1, 2017, and Amendment No. 6 to Jupiter Gas Gathering Agreement, dated as of March 1, 2019. 
·Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems, effective as of March 1, 2015, by and among EQT Production and EQT Energy, on the one hand, and EQM Opco, as amended by Amendment No. 1 to Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems, dated as of September 18, 2015, Amendment No. 2 to Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems, dated as of March 30, 2017, and Amendment No. 3 to Gas Gathering for Mercury, Pandora, Pluto, and Saturn Gas Gathering Systems, dated June 1, 2019.

 

 9 

 

 

·Second Amended and Restated Gas Gathering and Compression Agreement, dated as of March 31, 2017, by and between Rice Drilling and EQM Olympus Midstream LLC (formerly known as Rice Olympus Midstream LLC).
·Gas Gathering Agreement for the WG-100 Gas Gathering System, effective as of March 1, 2015, by and among EQT Production and EQT Energy, on the one hand, and EQM Opco, on the other hand, as amended by Amendment No. 1 to Gas Gathering Agreement for the WG-100 Gas Gathering System, dated as of April 1, 2017, and Amendment No. 2 to Gas Gathering Agreement for the WG-100 Gas Gathering System, dated June 1, 2019.
·Gas Gathering and Compression Agreement, dated as of December 22, 2014, by and among Rice, RM Partners LP (formerly known as Rice Midstream Partners LP) and Alpha Shale Resources LP, as amended by the First Amendment to Gas Gathering and Compression Agreement, effective as of October 19, 2016. 
·Sixth Amended and Restated Cracker Jack Gas Gathering Agreement, dated as of February 28, 2017, by and among EQM Poseidon Midstream LLC (formerly known as Rice Poseidon Midstream LLC), EQT Energy and EQT Production, as amended by that certain First Amendment to Sixth Amended and Restated Cracker Jack Gas Gathering Agreement, dated December 1, 2019.

 

Item 3.02. Unregistered Sale of Equity Securities.

 

The information in Item 1.01 “Preferred Restructuring Agreement” above is incorporated herein by reference.

 

Item 8.01. Other Events.

 

Intercompany Loan Agreement

 

In order to fund the prepayment of amounts outstanding under the ETRN Term Loan Credit Agreement (defined below) and the purchase of the Cash Shares contemplated by the Share Purchase Agreements, Equitrans Midstream intends to enter into a senior unsecured term loan agreement (the Intercompany Loan Agreement) by and among EQM, as lender, and Equitrans Midstream, as borrower, pursuant to which Equitrans Midstream will borrow the stated principal amount of $650.0 million (the Intercompany Loan) from EQM. The Intercompany Loan Agreement is expected to close in early March 2020 and has an anticipated maturity date in March 2023. It is anticipated that EQM will have the option to accelerate the maturity of the Intercompany Loan upon Equitrans Midstream’s failure to pay interest and other obligations as they become due (subject to certain specified grace periods) and upon other customary events of default. It is anticipated that interest on the Intercompany Loan will accrue and be payable semi-annually in arrears starting in September 2020 at an interest rate of 7.0% per annum, subject to an additional 2.0% per annum during the occurrence and continuance of certain events of default. The Intercompany Loan Agreement is expected to be a general unsecured, senior obligation of Equitrans Midstream and is expected to contain certain customary representations and covenants, including a limitation on indebtedness, subject to certain exceptions to be enumerated therein. Equitrans Midstream is expected to have the option to prepay the Intercompany Loan in whole or in part at any time without premium or penalty but to be unable to reborrow any Intercompany Loan prepaid. EQM expects to borrow under its existing revolving credit facility in order to source funds for making the loan to Equitrans Midstream in connection with the Intercompany Loan Agreement.

 

The Board, by unanimous vote, (i) determined that the execution, delivery and performance of the Intercompany Loan Agreement and the transactions contemplated thereby are in the best interests of Equitrans Midstream and the ETRN Shareholders and (ii) approved the Intercompany Loan Agreement and the transactions contemplated thereby.

 

Equitrans Midstream intends to apply a portion of the proceeds from the Intercompany Loan Agreement to prepay the amounts outstanding under that certain Credit Agreement, dated as of December 31, 2018 (as amended, the ETRN Term Loan Credit Agreement), among Equitrans Midstream, the lenders from time to time party thereto, Goldman Sachs Bank USA, the administrative agent, PNC Bank, National Associated, as collateral agent, and any other party thereto. Equitrans Midstream also intends to terminate all of the aggregate revolving commitments under that certain Credit Agreement, dated as of October 31, 2018 (as amended, the Equitrans Midstream Credit Facility), among Equitrans Midstream, the lenders from time to time party thereto, PNC Bank, National Association, as administrative agent, and any other parties thereto.

 

 10 

 

 

The Intercompany Loan Agreement has not been executed and the terms thereof remain subject to change. The foregoing summary of the anticipated terms of the Intercompany Loan Agreement has been prepared in good faith based upon assumptions that Equitrans Midstream considers reasonable as of the date hereof, but remains subject to uncertainties and contingencies which may be beyond the control of Equitrans Midstream. No assurances can be given that the Intercompany Loan Agreement will be executed on such terms and the foregoing summary should not be viewed as fact. The actual terms of the Intercompany Loan Agreement may differ significantly from the foregoing summary and no representation or warranty is made with respect to the predictive accuracy thereof. The foregoing summary of the anticipated terms of the Intercompany Loan Agreement has been included to provide investors and security holders with information regarding such anticipated terms and the intended use of proceeds of the Intercompany Loan and is qualified entirely by this paragraph. The foregoing summary is not intended to provide any factual information about Equitrans Midstream, EQM or their respective subsidiaries and affiliates.

 

Cautionary Statement Regarding Forward-Looking Information

 

Disclosures in this Current Report contain certain forward-looking statements within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act. Statements that do not relate strictly to historical or current facts are forward-looking. Words such as “could,” “will,” “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” or “continue,” and similar expressions are used to identify forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this Current Report specifically include the expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of Equitrans Midstream and its affiliates, including whether the EQM Merger, the Restructuring and the Share Purchases will be completed, as expected or at all, and the timing of the closing of the EQM Merger, the Restructuring and the Share Purchases; and whether the conditions to the EQM Merger, the Restructuring and the Share Purchases can be satisfied. These statements involve risks and uncertainties that could cause actual results to differ materially from projected results.

 

Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Equitrans Midstream has based these forward-looking statements on current expectations and assumptions about future events. While Equitrans Midstream considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond Equitrans Midstream’s control. The risks and uncertainties that may affect the operations, performance and results of Equitrans Midstream’s business and forward-looking statements include, but are not limited to, those set forth in Equitrans Midstream’s publicly filed reports with the Securities and Exchange Commission (the SEC), including those set forth under Item 1A, “Risk Factors” of Equitrans Midstream’s Form 10-K for the year ended December 31, 2019.

 

All forward-looking statements speak only as of the date they are made and are based on information available at that time. Equitrans Midstream assumes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

 

Additional Information and Where to Find It

 

This Current Report does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. The proposed EQM Merger will be submitted to the EQM unitholders for their consideration.

 

 11 

 

 

In connection with their proposed merger, Equitrans Midstream and EQM intend to file a registration statement on Form S-4, containing a proxy statement/prospectus (the Form S-4) with the SEC. This communication is not a substitute for the registration statement, definitive proxy statement/prospectus or any other documents that Equitrans Midstream or EQM may file with the SEC or send to ETRN Shareholders or the EQM unitholders in connection with the proposed transaction. SHAREHOLDERS OF EQUITRANS MIDSTREAM AND UNITHOLDERS OF EQM ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE FORM S-4 AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS INCLUDED THEREIN IF AND WHEN FILED, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. When available, investors and security holders will be able to obtain copies of these documents, including the proxy statement/prospectus and the registration statement, and any other documents that may be filed with the SEC with respect to the proposed transactions free of charge at the SEC’s website, http://www.sec.gov or as described in the following paragraph.

 

The documents filed with the SEC by Equitrans Midstream may be obtained free of charge at its website (www.equitransmidstream.com) or by requesting them by mail at Equitrans Midstream Corporation, 2200 Energy Drive, Canonsburg, PA 15317, Attention: Corporate Secretary, or by telephone at (724) 271-7600. The documents filed with the SEC by EQM may be obtained free of charge at its website (www.eqm-midstreampartners.com) or by requesting them by mail at EQM Midstream Partners, LP, 2200 Energy Drive, Canonsburg, PA 15317, Attention: Corporate Secretary, or by telephone at (724) 271-7600.

 

Participants in the Solicitation

 

Equitrans Midstream, EQM, the EQM General Partner and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the proposed EQM Merger and Equitrans Midstream Stock Issuance. Information regarding the directors and executive officers of Equitrans Midstream is contained in Equitrans Midstream’s Form 10-K for the year ended December 31, 2019. Information regarding the directors and executive officers of the EQM General Partner is contained in EQM’s Form 10-K for the year ended December 31, 2019. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed EQM Merger and Equitrans Midstream Stock Issuance will be included in the proxy statement/prospectus.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)       Exhibits

 

Exhibit No. Description
2.1* Agreement and Plan of Merger, dated as of February 26, 2020, by and among Equitrans Midstream Corporation, EQM LP Corporation, LS Merger Sub, LLC, EQM Midstream Partners, LP and EQGP Services, LLC
10.1 Preferred Restructuring Agreement, dated as of February 26, 2020, by and among Equitrans Midstream Corporation, EQM Midstream Partners, LP and the Investors party thereto
10.2 Share Purchase Agreement, dated as of February 26, 2020, by and between Equitrans Midstream Corporation and EQT Corporation
10.3 Share Purchase Agreement, dated as of February 26, 2020, by and between Equitrans Midstream Corporation and EQT Corporation
104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

*Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Equitrans Midstream Corporation hereby undertakes to furnish supplemental copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.

 

 12 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  EQUITRANS MIDSTREAM CORPORATION
     
Date: February 27, 2020 By: /s/ Kirk R. Oliver
  Name: Kirk R. Oliver
  Title: Senior Vice President and Chief Financial Officer

 

Signature Page to ETRN 8-K

 

 

 

EX-2.1 2 tm2010833d1_ex2-1.htm EXHIBIT 2.1

Exhibit 2.1

 

Execution Version

 

AGREEMENT AND PLAN OF MERGER

 

by and among

 

EQUITRANS MIDSTREAM CORPORATION,

 

EQM LP CORPORATION,

 

LS MERGER SUB, LLC,

 

EQGP SERVICES, LLC

 

and

 

EQM MIDSTREAM PARTNERS, LP

 

 

 

February 26, 2020

 

 

 

 

TABLE OF CONTENTS

 

 

 

    Page
     
ARTICLE I DEFINED TERMS; CONSTRUCTION 3
     
Section 1.1 Definitions 3
Section 1.2 Interpretation 13
   
Article II THE MERGER 15
   
Section 2.1 The Merger and Surviving Entity 15
Section 2.2 Closing 15
Section 2.3 Effective Time 15
Section 2.4 Effects of the Merger 15
Section 2.5 Organizational Documents of the Surviving Entity; Directors and Officers of the General Partner 15
Section 2.6 Admission as Partner 16
   
Article III MERGER CONSIDERATION; EXCHANGE PROCEDURES 16
   
Section 3.1 Merger Consideration 16
Section 3.2 Rights as Partnership Unitholders; Common Unit Transfers 17
Section 3.3 Exchange of Certificates and Book-Entry Units 18
Section 3.4 No Dissenters’ Rights 20
Section 3.5 Anti-Dilution Provisions 20
Section 3.6 Treatment of Awards 21
   
Article IV REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP AND THE GENERAL PARTNER 22
   
Section 4.1 Organization, Standing and Power 22
Section 4.2 Capitalization 23
Section 4.3 Authority; Noncontravention; Voting Requirements 24
Section 4.4 Governmental Approvals 26
Section 4.5 Partnership SEC Documents; Undisclosed Liabilities; Internal Controls 26
Section 4.6 Absence of Certain Changes or Events 28
Section 4.7 Legal Proceedings 28
Section 4.8 Compliance With Laws 28
Section 4.9 Information Supplied 29
Section 4.10 Tax Matters 29
Section 4.11 Opinion of Financial Advisor 30
Section 4.12 Brokers and Other Advisors 30
Section 4.13 Investment Company Act 30
Section 4.14 No Other Representations or Warranties 30

 

 i 

 

 

Article V REPRESENTATIONS AND WARRANTIES OF PARENT, EQM LP and Merger Sub 31
   
Section 5.1 Organization, Standing and Power 31
Section 5.2 Capitalization 32
Section 5.3 Authority; Noncontravention; Voting Requirements 33
Section 5.4 Governmental Approvals 35
Section 5.5 Parent SEC Documents; Undisclosed Liabilities; Internal Controls 35
Section 5.6 Absence of Certain Changes or Events 37
Section 5.7 Legal Proceedings 37
Section 5.8 Compliance With Laws 37
Section 5.9 Information Supplied 38
Section 5.10 Tax Matters 38
Section 5.11 Opinion of Financial Advisor 38
Section 5.12 Brokers and Other Advisors 38
Section 5.13 Investment Company Act 38
Section 5.14 Ownership of Partnership Interests 38
Section 5.15 No Other Representations or Warranties 39
   
Article VI ADDITIONAL COVENANTS AND AGREEMENTS 39
   
Section 6.1 Preparation of the Registration Statement and the Joint Proxy Statement; Equityholder Meetings 39
Section 6.2 Conduct of Business 42
Section 6.3 No Solicitation by the Partnership; Partnership Adverse Recommendation Change 46
Section 6.4 Reasonable Best Efforts 50
Section 6.5 Public Announcements 50
Section 6.6 Access to Information 51
Section 6.7 Indemnification and Insurance 51
Section 6.8 Fees and Expenses 53
Section 6.9 Section 16 Matters 53
Section 6.10 Stock Exchange Listing, Delisting and Deregistration 53
Section 6.11 Conflicts Committee 54
Section 6.12 Performance by the General Partner 54
Section 6.13 Tax Matters 54
Section 6.14 Takeover Statutes 55
Section 6.15 Securityholder Litigation 55
Section 6.16 Voting and Consent 55
   
Article VII CONDITIONS PRECEDENT 55
   
Section 7.1 Conditions to Each Party’s Obligation to Effect the Merger 55
Section 7.2 Conditions to Obligations of Parent, EQM LP and Merger Sub to Effect the Merger 56
Section 7.3 Conditions to Obligation of the Partnership to Effect the Merger 57
Section 7.4 Frustration of Closing Conditions 58

 

 ii 

 

 

Article VIII TERMINATION 58
   
Section 8.1 Termination 58
Section 8.2 Effect of Termination 60
Section 8.3 Termination Fees; Expenses 60
   
Article IX MISCELLANEOUS 62
   
Section 9.1 No Survival, Etc. 62
Section 9.2 Amendment or Supplement 62
Section 9.3 GP Board Consent 62
Section 9.4 Extension of Time, Waiver, Etc. 62
Section 9.5 Assignment 63
Section 9.6 Counterparts 63
Section 9.7 Entire Understanding; No Third-Party Beneficiaries 63
Section 9.8 Governing Law; Jurisdiction; Waiver of Jury Trial 63
Section 9.9 Specific Performance 64
Section 9.10 Notices 64
Section 9.11 Severability 66
Section 9.12 Non-Recourse 66

 

 iii 

 

 

AGREEMENT AND PLAN OF MERGER

 

This AGREEMENT AND PLAN OF MERGER, dated as of February 26, 2020 (this “Agreement”), is entered into by and among Equitrans Midstream Corporation, a Pennsylvania corporation (“Parent”), EQM LP Corporation, a Delaware corporation and a wholly owned Subsidiary of Parent (“EQM LP”), LS Merger Sub, LLC, a Delaware limited liability company and a wholly owned Subsidiary of EQM LP (“Merger Sub”), EQM Midstream Partners, LP, a Delaware limited partnership (the “Partnership”), and EQGP Services, LLC, a Delaware limited liability company and the general partner of the Partnership (the “General Partner”). Certain capitalized terms used in this Agreement are defined in Article I.

 

W I T N E S S E T H:

 

WHEREAS, Parent has organized EQM LP and EQM LP has organized Merger Sub for the purpose of effecting the transactions contemplated by this Agreement;

 

WHEREAS, each of Parent and the Partnership wishes to effect a strategic business combination by means of a merger of Merger Sub with and into the Partnership (the “Merger”), with the Partnership surviving the Merger;

 

WHEREAS, the Conflicts Committee (the “Conflicts Committee”) of the Board of Directors of the General Partner (the “GP Board”), by unanimous vote, in good faith, has, among other things, (a) determined that this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of the Partnership and its Subsidiaries and the Partnership Unaffiliated Unitholders, (b) approved this Agreement and the transactions contemplated hereby, including the Merger (the foregoing constituting “Special Approval” as defined in the Partnership Agreement), (c) resolved to recommend to the GP Board the approval of this Agreement and the execution, delivery and performance of this Agreement and the transactions contemplated hereby, including the Merger, and (d) resolved, and recommended that the GP Board resolve, to recommend approval of this Agreement and the Merger by the Limited Partners at a special meeting of the Limited Partners (the “Partnership Equityholder Meeting”);

 

WHEREAS, the GP Board (acting, in part, based upon the receipt of such approval and recommendation of the Conflicts Committee), by unanimous vote, in good faith, has, among other things, (a) determined that the forms, terms and provisions of this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of the Partnership and its Subsidiaries and the holders of Common Units (as defined herein), (b) authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, on the terms and subject to the conditions set forth in this Agreement, (c) authorized the submittal of a proposal to approve the adoption of this Agreement and the Merger to a vote of the Limited Partners at the Partnership Equityholder Meeting and (d) resolved to recommend approval of the adoption of this Agreement and the Merger by the Limited Partners at the Partnership Equityholder Meeting;

 

WHEREAS, in accordance with Section 5.13 of the General Partner Company Agreement, Equitrans Gathering Holdings, LLC, a Delaware limited liability company and the sole member of the General Partner (the “Sole Member”), has delivered to the GP Board its consent (the “Sole Member Consent”), in its capacity as the sole member of the General Partner, pursuant to which the Sole Member has (a) determined that this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of the General Partner and the Partnership and (b) approved the execution, delivery and performance of this Agreement and the transactions contemplated hereby, including the Merger, by the General Partner and the Partnership;

 

 1 

 

 

WHEREAS, the Board of Directors of Parent (the “Parent Board”) has unanimously (a) determined that the forms, terms and provisions of this Agreement and the transactions contemplated hereby, including the Merger and the issuance of Parent Shares as consideration for the Merger (the “Common Stock Issuance” and, together with the issuance of the Series A Preferred Shares in the Preferred Exchange (as defined herein), the “Parent Stock Issuance”), are in the best interests of Parent and the Parent Shareholders, (b) authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, including the Merger and the Common Stock Issuance, on the terms and subject to the conditions set forth in this Agreement, (c) authorized the submittal of a proposal to approve the Parent Stock Issuance to a vote of the Parent Shareholders at a meeting of the Parent Shareholders (the “Parent Shareholder Meeting”) and (d) resolved to recommend approval of the Parent Stock Issuance by the Parent Shareholders at the Parent Shareholder Meeting;

 

WHEREAS, the board of directors of EQM LP has unanimously (a) determined that this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of EQM LP and its sole stockholder and declared it advisable to enter into this Agreement and (b) approved the execution, delivery and performance of this Agreement and the transactions contemplated hereby;

 

WHEREAS, EQM LP, in its capacity as the sole member of Merger Sub, has (a) determined that the Merger is in the best interests of Merger Sub and declared it advisable for Merger Sub to enter into this Agreement and consummate the Merger and (b) approved the execution, delivery and performance of this Agreement and the transactions contemplated hereby, including the Merger;

 

WHEREAS, the Merger will constitute a Partnership Rollup Event (as defined in the Fourth Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of April 10, 2019, as amended by the First Amendment thereto, dated as of October 9, 2019, and as amended by the Second Amendment thereto, dated as of February 26, 2020 (as so amended, the “Partnership Agreement”));

 

WHEREAS, in connection with the Partnership Rollup Event and concurrently with their entry into this Agreement, Parent and the Partnership will enter into a Preferred Restructuring Agreement (the “Preferred Restructuring Agreement”), among Parent, the Partnership and the holders of all of the Series A Preferred Units (the “Investors”), pursuant to which each Investor will (i) irrevocably elect to (a) have a portion of the Series A Preferred Units owned (beneficially or of record) by such Investor redeemed at or prior to the Effective Time by the Partnership for cash at a price per Series A Preferred Unit as provided in the Preferred Restructuring Agreement and (b) exchange all remaining Series A Preferred Units owned (beneficially or of record) by such Investor for Series A Preferred Shares at the Effective Time, in full satisfaction of the Partnership’s obligations with respect to each such Investor upon a Partnership Rollup Event (the “Preferred Exchange”) and (ii) agree to vote, or cause to be voted, all such Series A Preferred Units in favor of the Merger; and

 

 2 

 

 

WHEREAS, Parent has received the TMA Signing Opinion.

 

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound, the parties agree as follows:

 

Article I

DEFINED TERMS; CONSTRUCTION

 

Section 1.1            Definitions. As used in this Agreement, the following terms have the meanings ascribed thereto below:

 

Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person. For this purpose, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise; provided, however, that, except where otherwise expressly provided, for the purposes of this Agreement, none of the Partnership and its Subsidiaries, on the one hand, and Parent and all of its other Subsidiaries (including the General Partner, EQM LP and Merger Sub), on the other hand, shall be considered to be Affiliates with respect to each other.

 

Agreement” has the meaning set forth in the Preamble.

 

Alternative Proposal” means any inquiry, proposal or offer from any Person or “group” (as defined in Section 13(d) of the Exchange Act), other than Parent, its Subsidiaries and their Affiliates, relating to any (i) direct or indirect acquisition (whether in a single transaction or a series of related transactions), outside of the ordinary course of business, of assets of the Partnership and its Subsidiaries (including securities of Subsidiaries) equal to 15% or more of the Partnership’s consolidated assets or to which 15% or more of the Partnership’s revenues or earnings on a consolidated basis are attributable, (ii) direct or indirect acquisition (whether in a single transaction or a series of related transactions) of beneficial ownership (within the meaning of Section 13 of the Exchange Act) of 15% or more of the outstanding equity securities of the Partnership, (iii) tender offer or exchange offer that if consummated would result in any Person or “group” (as defined in Section 13(d) of the Exchange Act) beneficially owning 15% or more of the outstanding equity securities of the Partnership or (iv) merger, consolidation, unit exchange, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction (whether in a single transaction or a series of related transactions) involving the Partnership or any of its Subsidiaries which is structured to permit such Person or group to acquire beneficial ownership of 15% or more of the Partnership’s consolidated assets or outstanding equity interests; in each case, other than the transactions contemplated by this Agreement.

 

 3 

 

 

Balance Sheet Date” means December 31, 2018.

 

Benefit Plan” means (i) any “employee benefit plan” within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA, and (ii) any employment, consulting, severance, termination, retention, change of control, health, medical, dental, vision, cafeteria, disability, accident, insurance, vacation, paid-time-off, flex spending, perquisite, welfare fringe benefit, compensatory equity or equity-based, deferred compensation, profit sharing, retirement, pension, savings, termination and each other compensation or employee benefit plan, program, policy, agreement or arrangement.

 

Book-Entry Units” has the meaning set forth in Section 3.2.

 

Business Day” means a day except a Saturday, a Sunday or other day on which the SEC or banks in Pittsburgh, Pennsylvania or New York, New York are authorized or required by applicable Laws to be closed.

 

Certificate” has the meaning set forth in Section 3.2.

 

Certificate of Merger” has the meaning set forth in Section 2.3.

 

Class B Units” have the meaning set forth in the Partnership Agreement.

 

Closing” has the meaning set forth in Section 2.2.

 

Closing Date” has the meaning set forth in Section 2.2.

 

Code” means the Internal Revenue Code of 1986, as amended.

 

Common Unit” has the meaning set forth in the Partnership Agreement.

 

Common Stock Issuance” has the meaning set forth in the Recitals.

 

Conflicts Committee” has the meaning set forth in the Recitals.

 

Conflicts Committee Financial Advisor” has the meaning set forth in Section 4.11.

 

Contract” has the meaning set forth in Section 4.3(b)(i).

 

Converted Units” has the meaning set forth in Section 3.1(b).

 

DLLCA” means the Delaware Limited Liability Company Act.

 

DRULPA” means the Delaware Revised Uniform Limited Partnership Act.

 

Effective Time” has the meaning set forth in Section 2.3.

 

 4 

 

 

Enforceability Exceptions” has the meaning set forth in Section 4.3(a).

 

EQM LP” has the meaning set forth in the Preamble.

 

EQT” means EQT Corporation, a Pennsylvania corporation.

 

ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

Eureka Credit Agreement” means that certain Amended and Restated Credit Agreement, dated as of August 25, 2017, among Eureka Midstream, LLC, as borrower, ABN Amro Capital USA, LLC, as administrative agent, and the lenders party thereto, as amended, restated, supplemented or otherwise modified from time to time.

 

Exchange Act” has the meaning set forth in Section 4.4.

 

Exchange Agent” has the meaning set forth in Section 3.3(a).

 

Exchange Fund” has the meaning set forth in Section 3.3(a).

 

Exchange Ratio” has the meaning set forth in Section 3.1(a).

 

GAAP” means generally accepted accounting principles in the United States, as applied on a consistent basis.

 

Gas Gathering Agreement” means that certain Gas Gathering and Compression Agreement, by and among EQT, EQT Production Company, a Pennsylvania corporation, Rice Drilling B LLC, a Delaware limited liability company, EQT Energy, LLC, a Delaware limited liability company, and EQM Gathering Opco, LLC, a Delaware limited liability company.

 

General Partner” has the meaning set forth in the Preamble.

 

General Partner Company Agreement” means the Second Amended and Restated Limited Liability Company Agreement of the General Partner, dated as of October 12, 2018, as amended by the First Amendment thereto, effective as of February 22, 2019, and as further amended by the Second Amendment thereto, effective as of October 9, 2019, as may be further amended, modified or supplemented from time to time.

 

General Partner Interest” has the meaning set forth in the Partnership Agreement.

 

Governmental Authority” means any government, court, arbitrator, regulatory or administrative agency, commission or authority or other governmental instrumentality, federal, state or local, domestic, foreign or multinational.

 

GP Board” has the meaning set forth in the Recitals.

 

Indemnified Person” means any Person who is now, or has been or becomes at any time prior to the Effective Time, an officer, director or employee of Parent, the Partnership, the General Partner or any of their respective Subsidiaries and also with respect to any such Person, in their capacity as a director, officer, employee, member, trustee or fiduciary of another corporation, foundation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise (whether or not such other entity or enterprise is affiliated with Parent or the Partnership, as applicable) serving at the request of or on behalf of Parent, the Partnership, the General Partner, as applicable, or any of their respective Subsidiaries and together with such Person’s heirs, executors or administrators.

 

 5 

 

 

Investors” has the meaning set forth in the Recitals.

 

Joint Proxy Statement” has the meaning set forth in Section 4.4.

 

Laws” or “Law” has the meaning set forth in Section 4.8(a).

 

Liens” has the meaning set forth in Section 4.1(c).

 

Limited Partner” has the meaning set forth in the Partnership Agreement.

 

Material Adverse Effect” means, when used with respect to a Person, any change, condition, circumstance, effect, event, development or occurrence that, individually or in the aggregate, (x) has had or would reasonably be expected to have a material adverse effect on the business, assets, liquidity, condition (financial or otherwise) or results of operations of such Person and its Subsidiaries, taken as a whole, or (y) prevents or materially impedes, interferes with or hinders a party’s ability to consummate the transactions contemplated hereby, including the Merger, on or before the Outside Date; provided, however, that any adverse changes, conditions, circumstances, effects, events, developments or occurrences resulting from or due to any of the following shall be disregarded in determining whether there has been a Material Adverse Effect: (i) changes, conditions, circumstances, effects, events, developments or occurrences generally affecting the economy, the financial or capital markets or political, legislative or regulatory conditions or changes in the industries in which such Person operates; (ii) the announcement or pendency of this Agreement or the transactions contemplated by this Agreement or the performance of this Agreement; (iii) the announcement of the Gas Gathering Agreement and any agreement providing for water services by and among Parent, the Partnership and EQT and/or certain of their respective affiliates and the matters that are the subject thereof; (iv) any change in the market price or trading volume of the limited partner interests, shares of common stock or other equity securities of such Person (it being understood and agreed that the foregoing shall not preclude any other party to this Agreement from asserting that any facts or occurrences giving rise to or contributing to such change that are not otherwise excluded from the definition of Material Adverse Effect should be deemed to constitute, or be taken into account in determining whether there has been, or would reasonably be expected to be, a Material Adverse Effect); (v) acts of war, terrorism or other hostilities (or the escalation of the foregoing) or natural disasters or other force majeure events; (vi) changes in any applicable Laws or regulations applicable to such Person or applicable accounting regulations or principles or the interpretation thereof; (vii) any Proceedings commenced by or involving any current or former member, partner or stockholder of such Person or any of its Subsidiaries arising out of or related to this Agreement or the transactions contemplated by this Agreement; (viii) changes, effects, events or occurrences generally affecting the prices of oil, natural gas, natural gas liquids, propane or other commodities; (ix) any failure of a Person to meet any internal or external projections, forecasts or estimates of revenues, earnings or other financial or operating metrics for any period (it being understood and agreed that the foregoing shall not preclude any other party to this Agreement from asserting that any facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of Material Adverse Effect should be deemed to constitute, or be taken into account in determining whether there has been, or would reasonably be expected to be, a Material Adverse Effect); (x) any delays of the commercial operation date of, or expenditures in excess of budget for, any project set forth on Section 1.1 of the Parent Disclosure Schedule or Section 1.1 of the Partnership Disclosure Schedule and (xi) with respect to Parent only, any effect to the extent resulting from a change, condition, circumstance, effect, event, development or occurrence that has a Material Adverse Effect on the Partnership and its Subsidiaries; provided, however, that changes, conditions, circumstances, effects, events, developments or occurrences referred to in clauses (i), (i), (i) and (i) above shall be considered for purposes of determining whether there has been or would reasonably be expected to be a Material Adverse Effect if and to the extent such changes, conditions, circumstances, effects, events, developments or occurrences have had or would reasonably be expected to have a disproportionate adverse effect on such Person and its Subsidiaries, taken as a whole, as compared to other companies of similar size operating in the industries in which such Person and its Subsidiaries operate.

 

 6 

 

 

Maximum Amount” has the meaning set forth in Section 6.7(b).

 

Merger” has the meaning set forth in the Recitals.

 

Merger Consideration” has the meaning set forth in Section 3.1(a).

 

Merger Sub” has the meaning set forth in the Preamble.

 

NYSE” means the New York Stock Exchange.

 

NYSE Listing Application has the meaning set forth in Section 6.10(a).

 

Organizational Documents” means any charter, certificate of incorporation, articles of association, bylaws, operating agreement, agreement of limited partnership, limited liability company agreement or similar formation or governing documents and instruments.

 

Outside Date” has the meaning set forth in Section 8.1(b)(i).

 

Parent” has the meaning set forth in the Preamble.

 

Parent Benefit Plan” means any Benefit Plan maintained, sponsored or administered by Parent or any of its Subsidiaries (excluding the General Partner, the Partnership or any of their respective Subsidiaries) for the benefit of their respective current or former employees, independent contractors and directors (and their respective beneficiaries), other than any statutory plan, program or arrangement that is required by applicable Laws, other than the Laws of the United States, and maintained by any Governmental Authority. For the avoidance of doubt, no Partnership Benefit Plan is a Parent Benefit Plan.

 

Parent Board” has the meaning set forth in the Recitals.

 

 7 

 

 

Parent Board Recommendation” has the meaning set forth in Section 6.1(c).

 

Parent Bylaws” means the Second Amended and Restated Bylaws of Parent, amended through October 9, 2019.

 

Parent Charter” means the Amended and Restated Articles of Incorporation of Parent, dated November 12, 2018, as may be amended, modified or supplemented from time to time.

 

Parent Common Stock” means the common stock of Parent, without par value.

 

Parent Disclosure Schedule” has the meaning set forth in the introductory paragraph of Article V.

 

Parent Dividend Reinvestment and Stock Purchase Plan” means the Equitrans Midstream Corporation 2018 Dividend Reinvestment and Stock Purchase Plan, as may be amended, modified or supplemented from time to time.

 

Parent Equity Awards” means collectively, the stock options, restricted stock units, performance awards, stock units, phantom stock or other awards relating to Parent Common Stock granted under or governed by the Parent Equity Plans, including awards previously granted by EQT and assumed by Parent.

 

Parent Equity Plans” means the Equitrans Midstream Corporation 2018 Long-Term Incentive Plan, the Equitrans Midstream Corporation Directors’ Deferred Compensation Plan and any other plans or arrangements of Parent providing for or governing the grant, exercise or settlement of awards of Parent Common Stock or cash settlement of awards valued, in whole or in part, by reference to Parent Common Stock, or otherwise relating thereto.

 

Parent Expense Reimbursement” has the meaning set forth in Section 8.3(b).

 

Parent Material Adverse Effect” has the meaning set forth in Section 5.1(a).

 

Parent Material Contract” means any Contract (whether written or oral) that would be required to be filed with the SEC by Parent as an exhibit under Item 601(b)(10) of Regulation S-K.

 

Parent Organizational Documents” means the Parent Bylaws and Parent Charter, together.

 

Parent Permits” means all Permits necessary for Parent and its Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted.

 

Parent Preferred Stock” means the preferred stock of Parent, without par value.

 

Parent Savings Plan” means the Equitrans Midstream Corporation Employee Savings Plan.

 

 8 

 

 

Parent SEC Documents” has the meaning set forth in Section 5.5(a).

 

Parent Shareholder Approval” has the meaning set forth in Section 5.3(c).

 

Parent Shareholder Meeting” has the meaning set forth in the Recitals.

 

Parent Shareholders” means the holders of the outstanding Parent Shares as of (i) the date hereof, or (ii) the record date determined by the Parent Board for the Parent Shareholder Meeting, as the context requires.

 

Parent Shares” means the shares of Parent Common Stock.

 

Parent Stock Issuance” has the meaning set forth in the Recitals.

 

Partnership” has the meaning set forth in the Preamble.

 

Partnership Adverse Recommendation Change” has the meaning set forth in Section 6.3(a).

 

Partnership Agreement” has the meaning set forth in the Recitals.

 

Partnership Agreement Amendment” has the meaning set forth in Section 2.5(a).

 

Partnership Benefit Plan” means any Benefit Plan maintained, sponsored or administered by the General Partner, the Partnership or any of their respective Subsidiaries for the benefit of the Partnership Service Providers, other than any statutory plan, program or arrangement that is required by applicable Laws, other than the Laws of the United States, and maintained by any Governmental Authority. For the avoidance of doubt, no Parent Benefit Plan is a Partnership Benefit Plan.

 

Partnership Board Recommendation” has the meaning set forth in Section 6.1(b).

 

Partnership Changed Circumstance” means a material event, circumstance, effect, condition, change or development, in each case that arises or occurs after the date of this Agreement and was not, prior to the date of this Agreement, known to or reasonably foreseeable by the Conflicts Committee and did not result from or arise out of the announcement or pendency of, or any actions required to be taken by (or to be refrained from being taken by) the Partnership pursuant to, this Agreement; provided, however, that in no event shall the following events, circumstances, or changes in circumstances constitute a Partnership Changed Circumstance: (i) the receipt, existence or terms of an Alternative Proposal or any inquiry, proposal, offer, request for information or expression of interest that may reasonably be expected to lead to, or result in, an Alternative Proposal, (ii) any event, circumstance, or change in circumstance resulting from any action taken or omitted by the Partnership or any of its Subsidiaries that is required to be taken or omitted by the Partnership or any of its Subsidiaries pursuant to this Agreement, (iii) any change in the market price or trading volume of the Common Units or Parent Shares or (iv) the fact that the Partnership or any of its Subsidiaries meets or exceeds internal or external projections, forecasts or estimates of revenues, earnings or other financial or operating metrics for any period.

 

 9 

 

 

Partnership Disclosure Schedule” has the meaning set forth in the introductory paragraph to Article IV.

 

Partnership Equityholder Approval” has the meaning set forth in Section 7.1(a).

 

Partnership Equityholder Meeting” has the meaning set forth in the Recitals.

 

Partnership Existing Credit Facility” means that certain Third Amended and Restated Credit Agreement, dated as of October 31, 2018, by and among the Partnership, Wells Fargo Bank, National Association, as administrative agent, the lenders party thereto and any other parties thereto, as amended, restated, supplemented or otherwise modified from time to time.

 

Partnership Expense Reimbursement” has the meaning set forth in Section 8.3(c).

 

Partnership Interest” has the meaning set forth in the Partnership Agreement.

 

Partnership Long-Term Incentive Plans” means the Amended and Restated EQGP Services, LLC 2012 Long-Term Incentive Plan, dated as of February 22, 2019, including any amendment and/or amendment and restatement thereof, and any other plans or arrangements of the Partnership or the General Partner providing for the grant of awards of Common Units or cash settled awards valued, in whole or in part, by reference to Common Units, or otherwise relating thereto.

 

Partnership LTIP Awards” means, collectively, the Partnership Phantom Units and any other awards issued under a Partnership Long-Term Incentive Plan.

 

Partnership LTIP Reserve” has the meaning set forth in Section 3.6(b).

 

Partnership Material Adverse Effect” has the meaning set forth in Section 4.1(a).

 

Partnership Material Contract” means any Contract (whether written or oral) that would be required to be filed with the SEC by the Partnership as an exhibit under Item 601(b)(10) of Regulation S-K.

 

Partnership Permits” means all Permits necessary for the Partnership and its Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted.

 

Partnership Phantom Unit” means a phantom unit relating to a Common Unit issued under a Partnership Long-Term Incentive Plan.

 

Partnership SEC Documents” has the meaning set forth in Section 4.5(a).

 

Partnership Service Providers” means all of the employees, individual consultants and individual independent contractors that perform services for or on behalf of the Partnership and its Subsidiaries.

 

Partnership Termination Fee” has the meaning set forth in Section 8.3(a)(i).

 

 10 

 

 

Partnership Unaffiliated Unitholders” means holders of Common Units other than Parent, the General Partner and their respective Affiliates.

 

Partnership Unitholders” means holders of Common Units.

 

Permits” means all franchises, tariffs, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority.

 

Person” means an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity, including a Governmental Authority.

 

Preferred Exchange” has the meaning set forth in the Recitals.

 

Preferred Restructuring Agreement” has the meaning set forth in the Recitals.

 

Proceeding” means any actual or threatened claim (including a claim of a violation of Law), action, audit, demand, suit, proceeding, investigation or other proceeding at law or in equity or order or ruling, in each case whether civil, criminal, administrative, investigative, arbitral or otherwise and whether or not such claim, action, audit, demand, suit, proceeding, investigation or other proceeding or order or ruling results in a formal civil or criminal litigation or regulatory action.

 

Public Common Unit” has the meaning set forth in Section 3.1(a).

 

Registration Statement” has the meaning set forth in Section 4.9.

 

Release” means any spilling, leaking, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping, disposing or other release into the environment.

 

Representatives” has the meaning set forth in Section 6.3(a).

 

Restraints” has the meaning set forth in Section 7.1(c).

 

Rights” means, with respect to any Person, (i) options, warrants, preemptive rights, subscriptions, calls or other rights, convertible securities, exchangeable securities, agreements or commitments of any character obligating such Person (or the general partner of such Person) to issue, transfer or sell, or to cause the issuance, transfer or sale of, any partnership or other equity interest of such Person or any of its Subsidiaries or any securities convertible into or exchangeable for such partnership interests or equity interests, or (ii) contractual obligations of such Person (or the general partner of such Person) to repurchase, redeem or otherwise acquire, or to cause the repurchase, redemption or other acquisition of, any partnership interest or other equity interest in such Person or any of its Subsidiaries or any such securities or agreements listed in clause (i) of this definition.

 

Sarbanes-Oxley Act” has the meaning set forth in Section 4.5(a).

 

 11 

 

 

SEC” means the Securities and Exchange Commission.

 

Securities Act” has the meaning set forth in Section 4.1(c).

 

Series A Preferred Units” has the meaning set forth in the Partnership Agreement.

 

Series A Preferred Shares” means the class of shares of Parent to be designated as “Series A Perpetual Convertible Preferred Shares” with the designations, preferences and relative, participating, optional or other special rights, privileges, powers, duties and obligations to be set forth in a Certificate of Designations to be filed with the Secretary of State of the Commonwealth of Pennsylvania simultaneously with the Effective Time pursuant to the terms and subject to the conditions of the Preferred Restructuring Agreement.

 

Sole Member” has the meaning set forth in the Recitals.

 

Sole Member Consent” has the meaning set forth in the Recitals.

 

Subsidiary” when used with respect to any Person, means any Person of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power (or in the case of a partnership, more than 50% of the general partner interests, or in the case of a limited liability company, more than 50% of the ownership interests in the managing member) are, as of such date, owned by such Person or one or more Subsidiaries of such Person; provided, however, that, except where otherwise expressly provided, for the purposes of this Agreement, the Partnership and its Subsidiaries shall not be considered Subsidiaries of Parent.

 

Superior Proposal” means a bona fide written Alternative Proposal (except that references to 15% within the definition of “Alternative Proposal” shall be replaced by 70%), obtained after the date of this Agreement and not in breach of Section 6.3, made by a third party (other than Parent or any of its Affiliates), which is on terms and conditions which the Conflicts Committee determines in good faith to be (i) reasonably capable of being consummated in accordance with its terms, taking into account legal, regulatory, financial, financing and timing aspects of the proposal, and (ii) if consummated, more favorable to the Partnership Unaffiliated Unitholders (in their capacity as Partnership Unitholders) from a financial point of view than the transactions contemplated hereby, taking into account at the time of determination any changes to the terms of this Agreement that as of that time had been committed to by Parent in writing.

 

Superior Proposal Notice” has the meaning set forth in Section 6.3(d)(i)(3).

 

Superior Proposal Notice Period” has the meaning set forth in Section 6.3(d)(i)(4).

 

Surviving Entity” has the meaning set forth in Section 2.1.

 

Takeover Laws” has the meaning set forth in Section 4.3(a).

 

Tax” or “Taxes” means any and all federal, state, local or foreign or provincial taxes, charges, imposts, levies or other assessments, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and similar charges, including any and all interest, penalties, fines, additions to tax or additional amounts imposed by any Governmental Authority with respect thereto.

 

 12 

 

 

Tax Counsel” means Latham & Watkins LLP.

 

Tax Matters Agreement” means the Tax Matters Agreement by and between EQT and Parent, dated as of November 12, 2018.

 

Tax Return” means any return, report or similar filing (including any attached schedules, supplements and additional or supporting material) filed or required to be filed with respect to Taxes, including any information return, claim for refund, amended return or declaration of estimated Taxes (and including any amendments with respect thereto).

 

TMA Closing Opinion” means a written Tax opinion from Tax Counsel, dated as of the Closing Date, the form and substance of which have been approved in writing by EQT, satisfying the requirements of an “Unqualified Tax Opinion” (as defined in the Tax Matters Agreement) with respect to the transactions contemplated by this Agreement.

 

TMA Signing Opinion” means a written Tax opinion from Tax Counsel, dated as of the date hereof, the form and substance of which have been approved in writing by EQT, satisfying the requirements of an “Unqualified Tax Opinion” (as defined in the Tax Matters Agreement) with respect to Parent’s entry into this Agreement.

 

Willful Breach” has the meaning set forth in Section 8.2.

 

Section 1.2            Interpretation. Unless expressly provided for elsewhere in this Agreement, this Agreement will be interpreted in accordance with the following provisions:

 

(a)               the words “this Agreement,” “herein,” “hereby,” “hereunder,” “hereof,” and other equivalent words refer to this Agreement as an entirety and not solely to the particular portion, article, section, subsection or other subdivision of this Agreement in which any such word is used;

 

(b)               examples are not to be construed to limit, expressly or by implication, the matter they illustrate;

 

(c)               the word “including” and its derivatives means “including without limitation” and is a term of illustration and not of limitation;

 

(d)               all definitions set forth herein are deemed applicable whether the words defined are used herein in the singular or in the plural and correlative forms of defined terms have corresponding meanings;

 

(e)               the word “or” is not exclusive and has the inclusive meaning represented by the phrase “and/or”;

 

 13 

 

 

(f)                the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or thing extends, and such phrase shall not mean simply “if”;

 

(g)               a defined term has its defined meaning throughout this Agreement and each exhibit and schedule to this Agreement, regardless of whether it appears before or after the place where it is defined;

 

(h)               all references to prices, values or monetary amounts refer to United States dollars;

 

(i)                 wherever used herein, any pronoun or pronouns will be deemed to include both the singular and plural and to cover all genders;

 

(j)                 this Agreement has been jointly prepared by the parties, and this Agreement will not be construed against any Person as the principal draftsperson of this Agreement and no consideration may be given to any fact or presumption that any party had a greater or lesser hand in drafting this Agreement;

 

(k)               each covenant, term and provision of this Agreement will be construed simply according to its fair meaning; prior drafts of this Agreement or the fact that any clauses have been added, deleted or otherwise modified from any prior drafts of this Agreement will not be used as an aid of construction or otherwise constitute evidence of the intent of the parties and no presumption or burden of proof will arise favoring or disfavoring any party hereto by virtue of such prior drafts;

 

(l)                 the captions of the articles, sections or subsections appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or extent of such section, or in any way affect this Agreement;

 

(m)             any references herein to a particular Section, Article or Schedule means a Section or Article of, or Schedule to, this Agreement unless otherwise expressly stated herein;

 

(n)               the Schedules attached hereto are incorporated herein by reference and will be considered part of this Agreement;

 

(o)               unless otherwise specified herein, all accounting terms used herein will be interpreted, and all determinations with respect to accounting matters hereunder will be made, in accordance with GAAP, applied on a consistent basis;

 

(p)               all references to days mean calendar days unless otherwise provided; and

 

(q)               except as otherwise noted, all references to time mean Pittsburgh, Pennsylvania time.

 

 14 

 

 

Article II

THE MERGER

 

Section 2.1            The Merger and Surviving Entity. Upon the terms and subject to the conditions of this Agreement, and in accordance with the DRULPA and the DLLCA, at the Effective Time, Merger Sub shall merge with and into the Partnership, the separate existence of Merger Sub shall cease and the Partnership shall survive and continue to exist as a Delaware limited partnership (the Partnership as the surviving entity in the Merger, sometimes being referred to herein as the “Surviving Entity”).

 

Section 2.2            Closing. Subject to the provisions of Article VII, the closing of the Merger (the “Closing”) shall take place at the offices of Latham & Watkins LLP, 811 Main St., Suite 3700, Houston, Texas 77002 at 10:00 A.M., Houston, Texas time, on the second Business Day after the satisfaction or waiver of the conditions set forth in Article VII (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), or at such other place and at such later date and time as the Partnership and Parent shall agree. The date on which the Closing actually occurs is referred to as the “Closing Date.”

 

Section 2.3            Effective Time. Subject to the provisions of this Agreement, at the Closing, the parties hereto will cause a certificate of merger, executed in accordance with the relevant provisions of the Partnership Agreement, the DRULPA and the DLLCA (the “Certificate of Merger”), to be duly filed with the Secretary of State of the State of Delaware. The Merger will become effective at such time as the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or at such later date or time as may be agreed by the Partnership and Parent in writing and specified in the Certificate of Merger (the effective time of the Merger being hereinafter referred to as the “Effective Time”).

 

Section 2.4            Effects of the Merger. The Merger shall have the effects set forth in this Agreement, the Partnership Agreement and the applicable provisions of the DRULPA and the DLLCA.

 

Section 2.5            Organizational Documents of the Surviving Entity; Directors and Officers of the General Partner.

 

(a)               At the Effective Time, (i) the certificate of limited partnership of the Partnership as in effect immediately prior to the Effective Time shall remain unchanged and shall be the certificate of limited partnership of the Surviving Entity from and after the Effective Time, until duly amended in accordance with applicable Laws and (ii) the Partnership Agreement as in effect immediately prior to the Effective Time shall remain unchanged and shall be the partnership agreement of the Surviving Entity, from and after the Effective Time until duly amended in accordance with applicable Laws. The name of the Surviving Entity shall be “EQM Midstream Partners, LP.”

 

 15 

 

 

(b)               Immediately prior to the Effective Time, the Partnership shall use its reasonable best efforts to deliver to Parent the resignation of each officer of the General Partner and each member of the GP Board. Immediately following the Effective Time, the Sole Member shall cause (i) the directors of Merger Sub serving immediately prior to the Effective Time to become the directors of the General Partner until the earlier of their death, resignation or removal or the time at which their respective successors are duly elected or appointed and qualified, and (ii) the officers of Merger Sub serving immediately prior to the Effective Time to become the officers of the General Partner until the earlier of their death, resignation or removal or the time at which their respective successors are duly elected or appointed and qualified.

 

Section 2.6            Admission as Partner. At the Effective Time, (a) by virtue of the Merger, notwithstanding anything to the contrary in the Partnership Agreement, EQM LP will be admitted as a limited partner of the Partnership, (b) the General Partner shall continue as the general partner of the Partnership and (c) the Partnership (as the Surviving Entity) will continue without dissolution.

 

Article III

MERGER CONSIDERATION; EXCHANGE PROCEDURES

 

Section 3.1            Merger Consideration. Subject to the provisions of this Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, EQM LP, Merger Sub, the Partnership, the General Partner or any holder of Parent securities or Partnership securities:

 

(a)               Conversion of Common Units. Subject to Section 3.1(d), Section 3.3(d) and Section 3.5, each Common Unit (other than Common Units owned by Parent and its Subsidiaries immediately prior to the Effective Time) (each, a “Public Common Unit”) issued and outstanding as of immediately prior to the Effective Time shall be converted into the right to receive 2.44 Parent Shares (the “Merger Consideration” and such ratio, the “Exchange Ratio”), subject to adjustment in accordance with Section 3.5, which Parent Shares will be duly authorized, validly issued, fully paid and non-assessable in accordance with applicable Laws.

 

(b)               Redemption, Exchange and Cancellation of Series A Preferred Units. Pursuant to the terms of the Preferred Restructuring Agreement, 12,302,650 Series A Preferred Units shall be redeemed by the Partnership for cash at a price per Series A Preferred Unit as provided in the Preferred Restructuring Agreement and each of the remaining Series A Preferred Units shall be exchanged for one Series A Preferred Share, which Series A Preferred Shares will be duly authorized, validly issued, fully paid and non-assessable in accordance with applicable Laws. Following the redemption or exchange, as applicable, of each Series A Preferred Unit, each such Series A Preferred Unit shall be cancelled and thereafter shall not be treated as issued and outstanding for any purpose.

 

(c)               Equity of Merger Sub. The limited liability company interests in Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into a number of Common Units of the Surviving Entity equal to the number of Common Units converted into the right to receive the Merger Consideration pursuant to Section 3.1(a), and EQM LP (as the sole member of Merger Sub prior to the Effective Time) shall be admitted as a Limited Partner of the Partnership (as the Surviving Entity) in accordance with Section 2.6.

 

 16 

 

 

(d)               Treatment of Partnership Owned Units and Parent Owned Partnership Interests.

 

(i)                 Any Partnership Interests that are owned immediately prior to the Effective Time by the Partnership or any Subsidiary of the Partnership will be automatically canceled and will cease to exist. No consideration will be delivered in exchange for such canceled Partnership Interests.

 

(ii)              Any Partnership Interests that are owned immediately prior to the Effective Time by Parent or any Subsidiary of Parent (including the Class B Units but excluding the General Partner Interest (discussed below)) shall not be canceled, shall not be converted into the Merger Consideration, and shall remain outstanding as Partnership Interests in the Surviving Entity.

 

(iii)            The General Partner Interest issued and outstanding as of immediately prior to the Effective Time shall remain, immediately following the Effective Time, outstanding as a non-economic general partner interest in the Surviving Entity.

 

(e)               Books and Records of the Partnership. The books and records of the Partnership shall be revised to reflect (i) the conversion and cancellation of all Public Common Units in accordance with Section 3.1 and Section 3.2, (ii) the conversion of the limited liability company interests in Merger Sub in accordance with Section 3.1(c), (iii) the cancellation and extinguishment of any Partnership Interests that are owned by the Partnership or any Subsidiary of the Partnership in accordance with Section 3.1(d)(i), and (iv) the cancellation and extinguishment of the Series A Preferred Units in accordance with Section 3.1(b).

 

Section 3.2            Rights as Partnership Unitholders; Common Unit Transfers. All Public Common Units converted into the right to receive the Merger Consideration pursuant to Section 3.1(a) will cease to be Outstanding (as such term is defined in the Partnership Agreement) and will automatically be canceled and will cease to exist when converted into the right to receive the Merger Consideration as a result of and pursuant to the Merger. At the Effective Time, each holder of a certificate that immediately prior to the Effective Time represented Public Common Units (a “Certificate”) and each holder of non-certificated Public Common Units represented by book-entry immediately prior to the Effective Time (“Book-Entry Units”) will cease to have any rights with respect thereto or thereunder, except the right to receive (a) the Merger Consideration, (b) any dividend or distribution in accordance with Section 3.3(c), in each case to be issued or paid, without interest, in consideration therefor upon surrender of such Certificate or Book-Entry Units in accordance with Section 3.3, and (c) any distribution in respect of the Common Units with a record date occurring prior to the Effective Time that may have been declared by the Partnership on the Common Units in accordance with the terms of this Agreement and the Partnership Agreement and which remains unpaid at the Effective Time. At the Effective Time, the transfer books of the Partnership will be closed immediately and there will be no further registration of transfers on the transfer books of the Partnership with respect to Common Units.

 

 17 

 

 

Section 3.3            Exchange of Certificates and Book-Entry Units.

 

(a)          Exchange Agent. Prior to the Effective Time, Parent will appoint American Stock Transfer & Trust Company, LLC to act as exchange and payment agent hereunder for the purpose of receiving elections and exchanging Public Common Units for the Merger Consideration as required by this Article III (the “Exchange Agent”). Promptly after the Effective Time, Parent will, on behalf of EQM LP, deposit, or cause to be deposited, with the Exchange Agent for the benefit of the holders of the applicable Public Common Units, for exchange in accordance with this Article III, through the Exchange Agent, Parent Shares as required by this Article III. Parent agrees to make available, or cause to be made available, to the Exchange Agent, from time to time as needed, cash sufficient to pay any dividends or other distributions pursuant to Section 3.3(c), without interest. Any dividends or other distributions with respect to Parent Shares pursuant to Section 3.3(c) and the Parent Shares for payment of the Merger Consideration deposited with the Exchange Agent are hereinafter referred to as the “Exchange Fund.” The Exchange Agent will, pursuant to irrevocable instructions from Parent and the Partnership, deliver the Merger Consideration contemplated to be issued or paid pursuant to this Agreement out of the Exchange Fund. Except as contemplated by Section 3.3(b) and Section 3.3(c), the Exchange Fund will not be used for any other purpose.

 

(b)          Exchange Procedures. Promptly after the Effective Time, Parent will instruct the Exchange Agent to mail to each record holder of Public Common Units as of the Effective Time (i) a letter of transmittal (specifying that in respect of certificated Public Common Units, delivery will be effected, and risk of loss and title to the Certificates will pass, only upon proper delivery of the Certificates to the Exchange Agent, and which will be in customary form and agreed to by Parent and the Partnership prior to the Effective Time) and (ii) instructions (in customary form and agreed to by Parent and the Partnership prior to the Effective Time) for use in effecting the surrender of the Certificates or Book-Entry Units in exchange for the Merger Consideration payable in respect of Public Common Units represented by such Certificates or Book-Entry Units, as applicable. Promptly after the Effective Time, upon surrender of Certificates, if any, for cancellation to the Exchange Agent together with such letters of transmittal, properly completed and duly executed, and such other documents (including in respect of Book-Entry Units) as may be reasonably required pursuant to such instructions, each holder who held Public Common Units immediately prior to the Effective Time will be entitled to receive upon surrender of the Certificates or Book-Entry Units therefor (subject to any applicable withholding Tax) (A) Parent Shares representing, in the aggregate, the whole number of Parent Shares that such holder has the right to receive pursuant to this Article III (after taking into account all Public Common Units then held by such holder) and/or (B) a check in an amount equal to the aggregate amount of cash that such holder has the right to receive pursuant to this Article III, including dividends or other distributions pursuant to Section 3.3(c), if any. No interest will be paid or accrued on any dividends or other distributions payable pursuant to Section 3.3(c). In the event of a transfer of ownership of Public Common Units that is not registered in the transfer records of the Partnership, the Merger Consideration payable in respect of such Public Common Units may be paid to a transferee if the Certificate representing such Public Common Units or evidence of ownership of the Book-Entry Units is presented to the Exchange Agent, and in the case of both certificated and book-entry Public Common Units, accompanied by all documents reasonably required to evidence and effect such transfer, and the Person requesting such exchange will pay to the Exchange Agent in advance any transfer or other Taxes required by reason of the delivery of the Merger Consideration in any name other than that of the record holder of such Public Common Units, or will establish to the satisfaction of the Exchange Agent that such Taxes have been paid or are not payable. Until all such required documentation has been delivered and Certificates, if any, have been surrendered as contemplated by this Section 3.3(b), each Certificate or Book-Entry Unit will be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration upon such delivery and surrender, and any cash or dividends or other distributions to which such holder is entitled pursuant to Section 3.3(c).

 

 18 

 

 

(c)          Distributions with Respect to Unexchanged Public Common Units. No dividends or other distributions with respect to Parent Shares issued in the Merger shall be paid to the holder of any unsurrendered Certificates or Book-Entry Units until such Certificates or Book-Entry Units are surrendered as provided in this Section 3.3. Following such surrender, subject to the effect of escheat, Tax or other applicable Laws, there shall be paid, without interest, to the record holder of the Parent Shares issued in exchange therefor (i) at the time of such surrender, all dividends and other distributions payable in respect of any such Parent Shares with a record date after the Effective Time and a payment date on or prior to the date of such surrender and not previously paid and (ii) at the appropriate payment date, the dividends or other distributions payable with respect to such Parent Shares with a record date after the Effective Time but with a payment date subsequent to such surrender. For purposes of dividends or other distributions in respect of Parent Shares, all Parent Shares to be issued pursuant to the Merger shall be entitled to dividends and other distributions pursuant to the immediately preceding sentence as if issued and outstanding as of the Effective Time.

 

(d)          No Fractional Parent Shares. No certificates or scrip for Parent Shares representing fractional Parent Shares or book entry credit of the same will be issued upon the surrender of Public Common Units outstanding immediately prior to the Effective Time in accordance with Section 3.3(b), and such fractional interests will not entitle the owner thereof to vote or to have any rights as a holder of any Parent Shares. Notwithstanding any other provision of this Agreement, in lieu of receiving any fraction of a Parent Share, all fractions of Parent Shares to which a holder of Public Common Units converted into the right to receive the Merger Consideration in the Merger would otherwise have been entitled shall be aggregated and the resulting fraction of a Parent Share will be rounded up to a whole Parent Share.

 

(e)          No Further Rights in Public Common Units. The Merger Consideration issued upon conversion of a Public Common Unit in accordance with the terms hereof will be deemed to have been issued and/or paid in full satisfaction of all rights pertaining to such Public Common Unit (other than any distribution in respect of the Common Units with a record date occurring prior to the Effective Time that may have been declared by the Partnership on the Common Units in accordance with the terms of this Agreement and the Partnership Agreement and which remains unpaid at the Effective Time).

 

(f)           Termination of Exchange Fund. Any portion of the Exchange Fund that remains undistributed to the holders of Public Common Units on the one-year anniversary of the Effective Time will be delivered to Parent upon demand by Parent and, from and after such delivery, any former holders of Public Common Units who have not theretofore complied with this Article III will thereafter look only to Parent for the Merger Consideration payable in respect of such Public Common Units or any dividends or other distributions with respect to Parent Shares to which they are entitled pursuant to Section 3.1 or Section 3.3(c), respectively, in each case, without any interest thereon. Any amounts remaining unclaimed by holders of Public Common Units immediately prior to such time as such amounts would otherwise escheat to or become the property of any Governmental Authority will, to the extent permitted by applicable Law, become the property of Parent. Without limitation of the foregoing, after the date that is the one-year anniversary of the Effective Time, any amounts remaining unclaimed by holders of Public Common Units will become the property of Parent, subject to the legitimate claims of any Person previously entitled thereto hereunder or under abandoned property, escheat or similar Laws. Notwithstanding anything in this Agreement to the contrary, none of Parent, EQM LP, the Partnership, Merger Sub, the Surviving Entity, the General Partner, the Exchange Agent, or any other Person shall be liable to any former holder of Public Common Units for any amount properly delivered to a public official pursuant to any abandoned property, escheat or similar Law.

 

 19 

 

 

(g)          Lost, Stolen or Destroyed Certificates. If any Certificate is lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such Person of an indemnity agreement or a bond, in a customary amount, as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate and affidavit the Merger Consideration payable in respect of Public Common Units represented by such Certificate as contemplated by this Article III and pay any dividends and other distributions pursuant to Section 3.3(c).

 

(h)          Withholding Taxes. Each of Parent, EQM LP, Merger Sub, the Surviving Entity and the Exchange Agent are entitled to deduct and withhold from any amounts, including the Merger Consideration, payable pursuant to this Agreement to any Person such amounts as Parent, EQM LP, Merger Sub, the Surviving Entity or the Exchange Agent reasonably deems it is required to deduct and withhold under the Code or any provision of state, local, or foreign Tax Law, with respect to the making of such payment. Such deduction and withholding may be taken in securities, in which case Parent, EQM LP, Merger Sub, the Surviving Entity or the Exchange Agent, as applicable, shall be treated as having sold such securities for an amount of cash equal to the fair market value of such securities at the time of such deemed sale. To the extent that deducted and withheld amounts (including deemed proceeds from the deemed sale of securities) are paid over to the appropriate Governmental Authority, such amounts (including securities) will be treated for all purposes of this Agreement as having been paid or issued to the Person in respect of whom such deduction and withholding was made.

 

(i)            Book Entry Shares. All Parent Shares to be issued in the Merger will be issued in book-entry form, without physical certificates.

 

Section 3.4           No Dissenters’ Rights. No dissenters’ or appraisal rights shall be available with respect to the Merger or the other transactions contemplated by this Agreement.

 

Section 3.5           Anti-Dilution Provisions. Notwithstanding any provision of this Article III to the contrary, if between the date of this Agreement and the Effective Time the number of outstanding Common Units or shares of Parent Common Stock shall have been changed into a different number of units or shares or a different class or series by reason of any subdivisions, reclassifications, splits, share distributions, combinations or exchanges of Common Units or shares of Parent Common Stock, as applicable, then the Merger Consideration, the Exchange Ratio and any other similar dependent item, as applicable, will be correspondingly adjusted to provide to the holders of Public Common Units the same economic effect as contemplated by this Agreement prior to such event; provided, however, that nothing in this Section 3.5 shall be deemed to permit or authorize any party hereto to effect any such change that it is not otherwise authorized or permitted to undertake pursuant to this Agreement.

 

 20 

 

 

Section 3.6           Treatment of Awards. Prior to the Effective Time, Parent, the General Partner and the Partnership shall take all action as may be necessary or required in accordance with applicable Law and each Partnership Long-Term Incentive Plan and Parent Equity Plan (including the award agreements in respect of awards granted thereunder) to give effect to this Section 3.6 as follows:

 

(a)           As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each Partnership LTIP Award, whether or not vested, that is outstanding immediately prior to the Effective Time, shall become fully vested and shall be automatically converted into the right to receive, with respect to each Common Unit subject thereto, the Merger Consideration (plus any accrued but unpaid amounts in relation to distribution equivalent rights). The cancellation of a Partnership LTIP Award as provided in the immediately preceding sentence shall be deemed a release of any and all rights the holder thereof had or may have had in respect of such Partnership LTIP Award. From and after the Effective Time, the former holder of any canceled Partnership LTIP Award shall only be entitled to receive the Merger Consideration (plus any accrued but unpaid amounts in relation to distribution equivalent rights) in respect of each Common Unit subject to such canceled Partnership LTIP Award. Payment of the Merger Consideration (and any accrued but unpaid amounts in relation to distribution equivalent rights) with respect to canceled Partnership LTIP Awards shall be subject to the holder’s satisfaction of all Tax withholding amounts payable in connection with the receipt of such payments, in each case in accordance with the terms of the award agreements governing such canceled Partnership LTIP Awards and the Partnership Long-Term Incentive Plans.

 

(b)          As of the Effective Time, unless otherwise determined by the Parent Board, Parent shall assume the outstanding unused unit reserve (the “Partnership LTIP Reserve”) under the Partnership Long-Term Incentive Plans for the purpose of making future grants relating to Parent Shares to applicable employees and other service providers of Parent and its Subsidiaries, which Partnership LTIP Reserve shall (i) be adjusted as reasonably determined by the Parent Board or a committee thereof to give effect to the transactions contemplated by this Agreement, and (ii) be added to and merged with the Parent Equity Plans in such manner as determined by the Parent Board or a committee thereof.

 

 21 

 

 

Article IV

 

REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP AND THE GENERAL PARTNER

 

Except as disclosed in (a) the Partnership SEC Documents filed with or publicly furnished to the SEC on or after December 31, 2018 and prior to the date of this Agreement (but excluding any disclosure contained in any such Partnership SEC Documents under the heading “Risk Factors” or “Cautionary Statements” or similar heading (other than any factual information contained within such headings, disclosure or statements)) or (b) the disclosure letter delivered by the Partnership to Parent (the “Partnership Disclosure Schedule”) prior to the execution of this Agreement (provided, that (i) disclosure in any section of such Partnership Disclosure Schedule shall be deemed to be disclosed with respect to any other section of this Agreement to the extent that it is reasonably apparent on the face of such disclosure that it is applicable to such other section notwithstanding the omission of a reference or cross reference thereto and (ii) the mere inclusion of an item in such Partnership Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had, would have or would reasonably be expected to have a Partnership Material Adverse Effect), each of the Partnership and the General Partner (solely for purposes of this Article IV other than this paragraph, the term “General Partner” shall mean, as applicable, (i) as of and after February 22, 2019, EQGP Services, LLC and (ii) prior to February 22, 2019, EQM Midstream Services, LLC), jointly and severally, represent and warrant to Parent, EQM LP and Merger Sub as follows:

 

Section 4.1            Organization, Standing and Power.

 

(a)           Each of the Partnership, the General Partner and their respective Subsidiaries is a legal entity duly organized, validly existing and in good standing under the applicable Laws of the jurisdiction in which it is incorporated, formed or organized, as applicable, and has all requisite limited liability company, corporate, partnership or other applicable entity power and authority necessary to own or lease all of its properties and assets and to carry on its business as it is now being conducted, except where the failure to have such power or authority has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Partnership (a “Partnership Material Adverse Effect”).

 

(b)          Each of the Partnership and its Subsidiaries is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect.

 

(c)          Other than as set forth on Section 4.1(c) of the Partnership Disclosure Schedule, all of the outstanding limited liability company interests, partnership interests, shares of capital stock of, or other equity interests in, each material Subsidiary of the Partnership that are owned directly or indirectly by the Partnership have been duly authorized and validly issued in accordance with the Organizational Documents of each such entity (in each case as in effect on the date of this Agreement and on the Closing Date) and are fully paid (in the case of an interest in a limited partnership or limited liability company, to the extent required under the Organizational Documents of such entity) and nonassessable (to the extent such Subsidiary is a corporate entity) and are owned free and clear of all liens, pledges, charges, mortgages, encumbrances, options, rights of first refusal or other preferential purchase rights, adverse rights or claims and security interests of any kind or nature whatsoever (including any restriction on the right to vote or transfer the same, except for such voting or transfer restrictions as set forth in the Organizational Documents of such Subsidiary and for such transfer restrictions of general applicability as may be provided under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), and the “blue sky” Laws of the various states of the United States) (collectively, “Liens”).

 

 22 

 

 

(d)          The Partnership has made available to Parent correct and complete copies of its Organizational Documents and correct and complete copies of the Organizational Documents of each of its material Subsidiaries, in each case as amended to the date of this Agreement. All such Organizational Documents are in full force and effect and the Partnership and each of its material Subsidiaries is not in violation of any of their provisions in any material respect.

 

Section 4.2           Capitalization.

 

(a)          The authorized equity interests of the Partnership consist of Common Units, Series A Preferred Units and Class B Units. As of February 25, 2020, the issued and outstanding limited partner interests and general partner interests of the Partnership consisted of (i) 200,457,630 Common Units, (ii) 24,605,291 Series A Preferred Units, (iii) 7,000,000 Class B Units and (iv) the General Partner Interest. The Partnership has reserved 2,000,000 Common Units for issuance pursuant to the Partnership Long-Term Incentive Plans, of which, as of February 25, 2020, 38,190 Common Units are subject to outstanding Partnership LTIP Awards, and 1,473,983 Common Units are available for issuance in connection with future grants of awards under the Partnership Long-Term Incentive Plans. From February 25, 2020 until the date of this Agreement, no additional limited partner interests or general partner interests have been issued, other than Common Units issued in connection with or pursuant to the Partnership Long-Term Incentive Plans. The General Partner is the sole general partner of the Partnership and owns the General Partner Interest free and clear of any Lien, and the General Partner Interest has been duly authorized and validly issued in accordance with the Organizational Documents of the Partnership. All outstanding equity interests of the Partnership (excluding the General Partner Interest) are, and all Common Units issuable pursuant to the Partnership LTIP Awards, when issued in accordance with the respective terms thereof, will be, duly authorized, validly issued, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in Sections 17-303, 17-607 and 17-804 of the DRULPA) and free of preemptive rights (except as set forth in the Partnership Agreement).

 

(b)          As of the date of this Agreement, except pursuant to this Agreement or as set forth on Section 4.2(b)(i) of the Partnership Disclosure Schedule or in the Partnership Agreement, (i) there are no equity securities of the Partnership issued or authorized and reserved for issuance, (ii) there are no outstanding options, profits interest units, phantom units, restricted units, unit appreciation rights or other compensatory equity or equity-based awards or rights, warrants, preemptive rights, subscriptions, calls or other Rights, convertible securities, exchangeable securities, agreements or commitments of any character obligating the Partnership or any of its Subsidiaries to issue, transfer or sell any Partnership Interest or other equity interest of the Partnership or such Subsidiary or any securities convertible into or exchangeable for such Partnership Interests or equity interests, or any commitment to authorize, issue or sell the same or any such equity securities and (iii) there are no contractual obligations of the Partnership or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Partnership Interest or other equity interest in the Partnership or any of its Subsidiaries or any such securities or agreements listed in clause (i) of this sentence.

 

 23 

 

 

(c)          Neither the Partnership nor any of its Subsidiaries has any outstanding bonds, debentures, notes or other indebtedness, the holders of which have the right to vote (or which are convertible into, exchangeable for or exercisable for securities having the right to vote) with the holders of Common Units or any other equity interest on any matter.

 

(d)          Other than as set forth in Section 4.2(d) of the Partnership Disclosure Schedule, there are no voting trusts or other agreements or understandings to which the Partnership or any of its Subsidiaries is a party with respect to the voting or registration of capital stock or other equity interest of the Partnership or any of its Subsidiaries.

 

Section 4.3           Authority; Noncontravention; Voting Requirements.

 

(a)          Each of the Partnership and the General Partner has all necessary entity power and authority to execute and deliver this Agreement and, subject to obtaining the Partnership Equityholder Approval in the case of the Partnership, to consummate the transactions contemplated by this Agreement. The execution, delivery and performance by each of the Partnership and the General Partner of this Agreement, and the consummation of the transactions contemplated by this Agreement, have been, as applicable, duly authorized by the GP Board, approved by each of the Conflicts Committee and the GP Board and consented to by the Sole Member and no other entity action on the part of the Partnership, the General Partner or the Sole Member is necessary to authorize the execution, delivery and performance by the Partnership and the General Partner of this Agreement and, except for obtaining the Partnership Equityholder Approval, the consummation of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by the Partnership and the General Partner and, assuming due authorization, execution and delivery of this Agreement by the other parties hereto, constitutes a legal, valid and binding obligation of the Partnership and the General Partner, enforceable against them in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws affecting the enforcement of creditors’ rights and remedies generally and by general principles of equity (whether applied in a Proceeding at law or in equity) (collectively, the “Enforceability Exceptions”). The GP Board has taken all necessary action so that any takeover, anti-takeover, moratorium, “fair price,” “control share” or similar Law (collectively, “Takeover Laws”) and any takeover provision of the Partnership Agreement applicable to the Partnership, the General Partner or any of their respective Subsidiaries do not, and will not, apply to this Agreement and the consummation of the transactions contemplated by this Agreement, including the Merger. 

 

 24 

 

 

(b)         Neither the execution and delivery of this Agreement by the Partnership or the General Partner nor the consummation by the Partnership and the General Partner of the transactions contemplated by this Agreement, nor compliance by the Partnership and the General Partner with any of the terms or provisions of this Agreement, will (i) assuming the Partnership Equityholder Approval is obtained, contravene, conflict with, violate any provision of, result in any breach of, or require the consent (other than the Sole Member Consent, which has been obtained) of any Person under, the terms, conditions or provisions of the Partnership Agreement, the General Partner Company Agreement or any of the Organizational Documents of the Partnership’s material Subsidiaries, (ii) assuming the authorizations, consents and approvals referred to in Section 4.3(e) and (f) and Section 4.4 and the Partnership Equityholder Approval are obtained, the amendments, restatements, amendments and restatements, replacements, terminations, waivers, consents and/or other modifications, referred to in Section 4.3(b)(i) of the Partnership Disclosure Schedule are effective on or prior to the Closing Date, and the filings referred to in Section 4.4 are made, (A) contravene, violate or conflict with any Law, judgment, writ or injunction of any Governmental Authority applicable to the Partnership or any of its Subsidiaries or any of their respective properties or assets, or (B) violate, conflict with, result in the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, give rise to a right to receive a change of control payment (or similar payment) under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of, the Partnership or any of its Subsidiaries under, any of the terms, conditions or provisions of any loan or credit agreement, debenture, note, bond, mortgage, indenture, deed of trust, license, lease, contract or other agreement, instrument or obligation (each, a “Contract”) or Partnership Permit to which the Partnership or any of its Subsidiaries is a party or by which they or any of their respective properties or assets may be bound or affected or (iii) result in the exercisability of any right to purchase or acquire any material asset of the Partnership or any of its Subsidiaries, except, in the case of clause (i) of this sentence, for such violations, conflicts, losses, defaults, terminations, cancellations, accelerations or Liens that have not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect.

 

(c)          Except for the Sole Member Consent and approval by the GP Board, each of which was obtained prior to the execution of this Agreement, the Partnership Equityholder Approval is the only vote or approval of the holders of any class or series of Partnership Interests that is necessary to approve and adopt this Agreement and the transactions contemplated by this Agreement.

 

(d)          The Conflicts Committee, at a meeting duly called and held, by unanimous vote, in good faith, has, among other things, (i) determined that this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of the Partnership and its Subsidiaries and the Partnership Unaffiliated Unitholders, (ii) approved this Agreement and the transactions contemplated hereby, including the Merger, (iii) resolved to recommend to the GP Board the approval of this Agreement and the execution, delivery and performance of this Agreement and the transactions contemplated hereby, including the Merger, and (iv) resolved, and recommended that the GP Board resolve, to recommend approval of this Agreement and the Merger by the Limited Partners. Such approval by the Conflicts Committee constituted “Special Approval” (as defined in the Partnership Agreement) of this Agreement and the transactions contemplated by this Agreement under the Partnership Agreement.

 

 25 

 

 

(e)          The GP Board (acting, in part, based upon the receipt of such approval and recommendation of the Conflicts Committee), by unanimous vote, in good faith, has, among other things, (i) determined that the forms, terms and provisions of this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of the Partnership and its Subsidiaries and the holders of Common Units, (ii) authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, including the Merger, on the terms and subject to the conditions set forth in this Agreement, (iii) authorized the submittal of a proposal to approve the adoption of this Agreement and the Merger to a vote of the Limited Partners at the Partnership Equityholder Meeting and (iv) resolved to recommend approval of the adoption of this Agreement and the Merger by the Limited Partners at the Partnership Equityholder Meeting.

 

(f)           In accordance with Section 5.13 of the General Partner Company Agreement, the GP Board has obtained the Sole Member Consent, pursuant to which the Sole Member has (i) determined that the Merger is in the best interests of the Sole Member and the General Partner and (ii) authorized the execution and delivery of this Agreement by the General Partner.

 

Section 4.4           Governmental Approvals. Except for (a) filings required under, and compliance with other applicable requirements of, the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”), the Securities Act, including the filing of a joint proxy statement/prospectus with the SEC in connection with the Merger (the “Joint Proxy Statement”), and applicable state securities and “blue sky” laws, (b) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, or (c) any consents, authorizations, approvals, filings or exemptions in connection with compliance with the rules of the NYSE, no consents or approvals of, or filings, declarations or registrations with, any Governmental Authority are necessary for the execution, delivery and performance of this Agreement by the Partnership and the consummation by the Partnership of the transactions contemplated by this Agreement, other than such other consents, approvals, filings, declarations or registrations that are not required to be obtained or made prior to the consummation of such transactions or, if not obtained, made or given, would not, individually or in the aggregate, reasonably be expected to result in a Partnership Material Adverse Effect.

 

Section 4.5            Partnership SEC Documents; Undisclosed Liabilities; Internal Controls.

 

(a)          The Partnership and its Subsidiaries have filed or furnished all reports, schedules, forms, certifications, prospectuses, and registration, proxy and other statements required to be filed or furnished by them with the SEC since December 31, 2018 (collectively and together with all documents filed or publicly furnished on a voluntary basis on Form 8-K, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the “Partnership SEC Documents”). The Partnership SEC Documents, as of their respective effective dates (in the case of Partnership SEC Documents that are registration statements filed pursuant to the requirements of the Securities Act) and as of their respective SEC filing dates (in the case of all other Partnership SEC Documents), or, if amended, as finally amended prior to the date of this Agreement, complied in all material respects with the requirements of the Exchange Act, the Securities Act and the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder (the “Sarbanes-Oxley Act”), as the case may be, applicable to such Partnership SEC Documents, and none of the Partnership SEC Documents as of such respective dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

 26 

 

 

(b)          The consolidated financial statements of the Partnership included in the Partnership SEC Documents as of their respective dates (if amended, as of the date of the last such amendment) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP (except, in the case of unaudited quarterly statements, as indicated in the notes thereto) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Partnership and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations, cash flows and changes in partners’ capital for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end audit adjustments, none of which has been or will be, individually or in the aggregate, material to the Partnership and its consolidated Subsidiaries, taken as a whole).

 

(c)          Except (i) as reflected or otherwise reserved against on the balance sheet of the Partnership and its consolidated Subsidiaries as of the Balance Sheet Date (including the notes thereto) included in the Partnership SEC Documents filed by the Partnership and publicly available prior to the date of this Agreement, (ii) for liabilities and obligations incurred since the Balance Sheet Date in the ordinary course of business consistent with past practice, (iii) for liabilities and obligations set forth in Section 4.5(c) of the Partnership Disclosure Schedule and (iv) for liabilities and other obligations incurred under or in accordance with this Agreement or in connection with the transactions contemplated by this Agreement, neither the Partnership nor any of its Subsidiaries has any liabilities or obligations of any nature (whether or not accrued or contingent) that would be required to be reflected or reserved against on a consolidated balance sheet of the Partnership prepared in accordance with GAAP or the notes thereto, other than as have not and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect.

 

(d)          No Subsidiary of the Partnership is required to file reports, forms or other documents with the SEC pursuant to the Exchange Act. There are no outstanding comments from, or unresolved issues raised by, the staff of the SEC with respect to the Partnership SEC Documents. No enforcement action has been initiated against the Partnership relating to disclosures contained or omitted from any Partnership SEC Document.

 

(e)          The General Partner has established and maintains adequate internal control over financial reporting and disclosure controls and procedures for the Partnership sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including policies and procedures that ensure that all material information required to be disclosed by the Partnership in the reports that it files under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to its management as appropriate to allow timely decisions regarding required disclosure. The General Partner has disclosed, based on its most recent evaluation, to the Partnership’s auditors and the Conflicts Committee (i) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the Partnership’s ability to record, process, summarize and report financial information and have identified for the Partnership’s auditors and the Conflicts Committee any material weakness in internal controls and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Partnership’s internal control over financial reporting.

 

 27 

 

 

(f)          Since December 31, 2018, the principal executive officer and principal financial officer of the General Partner have made all certifications (without qualification or exceptions to the matters certified, except as to knowledge) required by the Sarbanes-Oxley Act, and the statements contained in any such certifications are complete and correct, and none of the General Partner or its officers have received notice from any Governmental Authority questioning or challenging the accuracy, completeness, form or manner of filing or submission of such certification. As of the date of this Agreement, and except as disclosed in a Partnership SEC Document filed with the SEC prior to the date of this Agreement, the General Partner has no knowledge of any material weaknesses in the design or operation of such internal controls over financial reporting.

 

Section 4.6           Absence of Certain Changes or Events.

 

(a)          Since the Balance Sheet Date, there has not occurred any change, effect, event or occurrence that, individually or in the aggregate, has resulted, or would reasonably be likely to result, in a Partnership Material Adverse Effect.

 

(b)          Since the Balance Sheet Date, except for this Agreement and the transactions contemplated hereby, the Partnership and its Subsidiaries have carried on and operated their respective businesses in the ordinary course of business.

 

(c)          Since the Balance Sheet Date, no actions prohibited under Section 6.2(a) have occurred.

 

Section 4.7           Legal Proceedings. There are no Proceedings pending or, to the knowledge of the Partnership, threatened with respect to the Partnership or any of its Subsidiaries or Proceedings pending or, to the knowledge of the Partnership, threatened with respect to any of their respective properties or assets at law or in equity before any Governmental Authority, and there are no orders, judgments, decrees or similar rulings of any Governmental Authority against the Partnership or any of its Subsidiaries, in each case except for those that have not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect.

 

Section 4.8            Compliance With Laws.

 

(a)          The Partnership and its Subsidiaries are, and since the later of December 31, 2018 and their respective dates of incorporation, formation or organization have been, in compliance with and are not in default under or in violation of any applicable federal, state, local or foreign or provincial law, statute, tariff, ordinance, rule, regulation, judgment, order, injunction, stipulation, determination, award or decree or agency requirement of or undertaking to any Governmental Authority, including common law (collectively, “Laws” and each, a “Law”), except where such non-compliance, default or violation has not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect.

 

(b)          Without limiting the generality of Section 4.8(a), none of the General Partner, the Partnership, the Partnership’s Subsidiaries, or, to the knowledge of the General Partner or the Partnership, any consultant, agent or Representative of any of the foregoing (in their respective capacities as such), (i) has violated the U.S. Foreign Corrupt Practices Act, or any other U.S. and foreign anti-corruption Laws that are applicable to the Partnership or its Subsidiaries; (ii) has, to the knowledge of the Partnership, been given written notice by any Governmental Authority of any facts which, if true, would constitute a violation of the U.S. Foreign Corrupt Practices Act or any other U.S. or foreign anti-corruption Laws by any such Person; and (iii) to the knowledge of the Partnership, is being (or has been) investigated by any Governmental Authority except, in each case of the foregoing clauses (i) through (i), as would not have, individually or in the aggregate, a Partnership Material Adverse Effect.

 

 28 

 

 

Section 4.9           Information Supplied. Subject to the accuracy of the representations and warranties of Parent, EQM LP and Merger Sub set forth in Section 5.9, none of the information supplied (or to be supplied) in writing by or on behalf of the Partnership or the General Partner specifically for inclusion or incorporation by reference in (a) the registration statement on Form S-4 to be filed with the SEC by Parent in connection with the issuance of Parent Shares in connection with the Merger (as amended or supplemented from time to time, the “Registration Statement”) will, at the time the Registration Statement, or any amendment or supplement thereto, is filed with the SEC or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (b) the Joint Proxy Statement will, on the date it is first mailed to the Limited Partners and the Parent Shareholders, and at the time of the Partnership Equityholder Meeting and the Parent Shareholder Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Joint Proxy Statement will comply as to form in all material respects with the applicable requirements of the Securities Act or Exchange Act, as applicable. Notwithstanding the foregoing, neither the General Partner nor the Partnership make any representation or warranty with respect to information supplied by or on behalf of Parent, EQM LP or Merger Sub for inclusion or incorporation by reference in any of the foregoing documents.

 

Section 4.10        Tax Matters. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect: (a) all Tax Returns that were required to be filed by or with respect to the Partnership or any of its Subsidiaries have been duly and timely filed (taking into account any extension of time within which to file) and all such Tax Returns are complete and accurate, (b) all Taxes owed by the Partnership or any of its Subsidiaries that are or have become due have been timely paid in full or an adequate reserve for the payment of such Taxes has been established in their books and records, (c) there are no Liens on any of the assets of the Partnership or any of its Subsidiaries that arose in connection with any failure (or alleged failure) to pay any Taxes on any of such assets, (d) there is no claim against the Partnership or any of its Subsidiaries for any Taxes, and no assessment, deficiency, or adjustment has been asserted, proposed, or threatened in writing with respect to any Taxes or Tax Returns of or with respect to the Partnership or any of its Subsidiaries, (e) each of the Partnership and any of its Subsidiaries that is classified as a partnership for U.S. federal income tax purposes has in effect a valid election under Section 754 of the Code, (f) the Partnership is properly classified as a partnership for U.S. federal income tax purposes, and not as an association or publicly traded partnership taxable as a corporation under Section 7704 of the Code, and has been properly treated as such (or properly treated as disregarded as separate from its owner for U.S. federal income tax purposes) since its formation, and (g) at least 90% of the gross income of the Partnership for each taxable year since its formation through and including the current taxable year has been treated as “qualifying income” within the meaning of Section 7704(d) of the Code.

 

 29 

 

 

Section 4.11        Opinion of Financial Advisor. The Conflicts Committee has received the opinion of Evercore Group L.L.C. (the “Conflicts Committee Financial Advisor”) to the effect that, as of the date of such opinion, and based upon and subject to the assumptions, qualifications, limitations and other matters set forth therein, the Exchange Ratio is fair, from a financial point of view, to the Partnership and the Partnership Unaffiliated Unitholders.

 

Section 4.12        Brokers and Other Advisors. Except for the Conflicts Committee Financial Advisor, the fees and expenses of which will be paid by the Partnership, no broker, investment banker or financial advisor is entitled to any broker’s, finder’s or financial advisor’s fee or commission, or the reimbursement of expenses, in connection with the Merger or the other transactions contemplated by this Agreement based on arrangements made by or on behalf of the Partnership or any of its Subsidiaries or the Conflicts Committee. The Partnership has made available to Parent a correct and complete copy of the Partnership’s engagement letter with the Conflicts Committee Financial Advisor, which letter describes all fees payable to the Conflicts Committee Financial Advisor in connection with the transactions contemplated hereby and all agreements under which any such fees or any expenses are payable and all indemnification and other agreements with the Conflicts Committee Financial Advisor, entered into in connection with the transactions contemplated hereby.

 

Section 4.13        Investment Company Act. The Partnership is not, nor immediately after the Closing will be, subject to regulation under the Investment Company Act of 1940, as amended.

 

Section 4.14        No Other Representations or Warranties. Except for the representations and warranties set forth in this Article IV, neither the Partnership nor any other Person makes or has made any express or implied representation or warranty with respect to the Partnership or its Subsidiaries with respect to any other information provided to Parent, EQM LP or Merger Sub in connection with the Merger or the other transactions contemplated by this Agreement. Each of Parent, EQM LP and Merger Sub acknowledges and agrees that, without limiting the generality of the foregoing, neither the Partnership nor any other Person will have or be subject to any liability or other obligation to Parent, EQM LP, Merger Sub or any other Person resulting from the distribution to Parent, EQM LP or Merger Sub (including their respective Representatives), or Parent’s, EQM LP’s or Merger Sub’s (or such Representatives’) use of, any such information, including any information, documents, projections, forecasts or other materials made available to Parent, EQM LP or Merger Sub in expectation of the Merger, unless any such information is the subject of an express representation or warranty set forth in this Article IV.

 

 30 

 

 

Article V

 

REPRESENTATIONS AND WARRANTIES OF
PARENT, EQM LP and Merger Sub

 

Except as disclosed in (a) the Parent SEC Documents filed with or publicly furnished to the SEC on or after December 31, 2018, and prior to the date of this Agreement (but excluding any disclosure contained in any such Parent SEC Documents under the heading “Risk Factors” or “Cautionary Statements” or similar heading (other than any factual information contained within such headings, disclosure or statements)), or (b) the disclosure letter delivered by Parent to the Partnership (the “Parent Disclosure Schedule”) prior to the execution of this Agreement (provided, that (i) disclosure in any section of such Parent Disclosure Schedule shall be deemed to be disclosed with respect to any other section of this Agreement to the extent that it is reasonably apparent on the face of such disclosure that it is applicable to such other section notwithstanding the omission of a reference or cross reference thereto and (ii) the mere inclusion of an item in such Parent Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had, would have or would reasonably be expected to have a Parent Material Adverse Effect), Parent, EQM LP and Merger Sub, jointly and severally, represent and warrant to the Partnership and the General Partner as follows:

 

Section 5.1            Organization, Standing and Power.

 

(a)           Each of Parent and its Subsidiaries is a legal entity duly organized, validly existing and in good standing under the applicable Laws of the jurisdiction in which it is incorporated, formed or organized, as applicable, and has all requisite partnership, corporate, limited liability company or other applicable entity power and authority necessary to own or lease all of its properties and assets and to carry on its business as it is now being conducted, except where the failure to have such power or authority has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Parent (“Parent Material Adverse Effect”).

 

(b)           Each of Parent and its Subsidiaries is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

 

(c)           Except as set forth on Section 5.1(c) of the Parent Disclosure Schedule, all of the outstanding partnership interests, limited liability company interests, shares of capital stock of, or other equity interests in, each material Subsidiary of Parent that are owned directly or indirectly by Parent have been duly authorized and validly issued in accordance with the Organizational Documents of each such entity (in each case as in effect on the date of this Agreement and on the Closing Date) and are fully paid (in the case of an interest in a limited partnership or limited liability company, to the extent required under the Organizational Documents of such entity) and nonassessable (to the extent such Subsidiary is a corporate entity) and are owned free and clear of all Liens.

 

 31 

 

 

(d)          Parent has made available to the Partnership correct and complete copies of its Organizational Documents, and correct and complete copies of the Organizational Documents of each of its material Subsidiaries, in each case as amended to the date of this Agreement. All such Organizational Documents are in full force and effect, and Parent and each of its material Subsidiaries is not in violation of any of their provisions in any material respect.

 

Section 5.2           Capitalization.

 

(a)          The authorized equity interests of Parent consist of (i) 1,250,000,000 Parent Shares and (ii) 50,000,000 shares of Parent Preferred Stock. As of February 25, 2020, there were (i) 254,968,290 Parent Shares issued and outstanding (excluding, for the avoidance of doubt, any Parent Shares held in treasury), (ii) no Parent Shares held in treasury and (iii) no shares of Parent Preferred Stock issued and outstanding or held in treasury. Parent has reserved 35,100,000 Parent Shares for issuance pursuant to the Parent Equity Plans, of which, as of February 25, 2020, 2,163,265 Parent Shares are subject to outstanding Parent Equity Awards, and 29,176,825 Parent Shares are available for issuance in connection with future grants of awards under the Parent Equity Plans. From February 25, 2020 until the date of this Agreement, no additional equity interests of Parent have been issued, other than Parent Shares issued in connection with or pursuant to the Parent Equity Plans, the Parent Savings Plan or the Parent Dividend Reinvestment and Stock Purchase Plan. All outstanding equity securities of Parent are, and all Parent Shares issuable pursuant to the Parent Equity Plans, the Parent Savings Plan or the Parent Dividend Reinvestment and Stock Purchase Plan, when issued in accordance with the respective terms thereof, will be, duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights.

 

(b)          As of the date of this Agreement, except pursuant to this Agreement or the Preferred Restructuring Agreement, and as set forth in Section 3.1(b), the Parent Equity Plans, the Parent Savings Plan, the Parent Dividend Reinvestment and Stock Purchase Plan or grant documents issued thereunder, (i) there are no equity securities of Parent issued or authorized and reserved for issuance, (ii) there are no outstanding options, profits interest units, phantom units, restricted units, unit appreciation rights or other compensatory equity or equity-based awards or rights, warrants, preemptive rights, subscriptions, calls or other Rights, convertible securities, exchangeable securities, agreements or commitments of any character obligating Parent or its Subsidiaries to issue, transfer or sell any equity interest of Parent or any such Subsidiary or any securities convertible into or exchangeable for such equity interests, or any commitment to authorize, issue or sell the same or any such equity securities and (iii) there are no contractual obligations of Parent or its Subsidiaries to repurchase, redeem or otherwise acquire any other equity interest in Parent or its Subsidiaries or any such securities or agreements listed in clause (i) of this sentence. Since December 31, 2019, except pursuant to the Parent Equity Plans, the Parent Savings Plan or the Parent Dividend Reinvestment and Stock Purchase Plan, there have been no partnership interests, limited liability company interests, other equity securities, options, profits interest units, phantom units, restricted units, unit appreciation rights, warrants, preemptive rights, subscriptions, calls or other Rights, convertible securities, exchangeable securities, agreements or commitments, or contractual obligations of the types described in the foregoing sentence issued or entered into by or on behalf of Parent.

 

 32 

 

 

(c)           Neither Parent nor any of its Subsidiaries has outstanding bonds, debentures, notes or other indebtedness, the holders of which have the right to vote (or which are convertible into, exchangeable for or exercisable for securities having the right to vote) with Parent Shareholders or any other equity interest on any matter.

 

(d)          Other than as set forth in Section 5.2(d) of the Parent Disclosure Schedule, there are no voting trusts or other agreements or understandings to which Parent or any of its Subsidiaries is a party with respect to the voting or registration of capital stock or other equity interest of Parent.

 

(e)          When issued pursuant to the terms of this Agreement, all Parent Shares constituting the Merger Consideration will be duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights.

 

(f)           All of the issued and outstanding limited liability company interests of Merger Sub and all of the outstanding shares of EQM LP are duly authorized, validly issued, fully paid and nonassessable (except, with respect to the limited liability company interests of Merger Sub, as such nonassessability may be affected by matters described in Sections 18-607 and 18-804 of the DLLCA), and are owned, directly or indirectly, by Parent, in the case of EQM LP, and by EQM LP, in the case of Merger Sub, and Parent has no obligation to make contributions to EQM LP by reason of Parent’s ownership of equity interests in EQM LP and EQM LP has no obligation to make contributions to Merger Sub by reason of EQM LP’s ownership of equity interests in Merger Sub, and Parent has no personal liability for the debts, obligations and liabilities of EQM LP, whether arising in contract, tort or otherwise, solely by reason of being an equity holder of EQM LP and EQM LP has no personal liability for the debts, obligations and liabilities of Merger Sub, whether arising in contract, tort or otherwise, solely by reason of being an equity holder of Merger Sub. Each of EQM LP and Merger Sub was formed solely for the purpose of engaging in the transactions contemplated hereby. Except for the obligations and liabilities incurred in connection with its formation, and the transactions contemplated hereby, each of EQM LP and Merger Sub has not and will not have incurred, directly or indirectly, any obligations or engaged in any business activities of any type or kind whatsoever or entered into any agreements or arrangements with any Person.

 

Section 5.3           Authority; Noncontravention; Voting Requirements.

 

(a)           Each of Parent, EQM LP and Merger Sub has all necessary entity power and authority to execute and deliver this Agreement and, subject to obtaining the Parent Shareholder Approval in the case of Parent, to consummate the transactions contemplated by this Agreement. The execution, delivery and performance by Parent, EQM LP and Merger Sub of this Agreement, and the consummation of the transactions contemplated by this Agreement, have been duly authorized and approved by each of the boards of directors of Parent and EQM LP, for the relevant entity and for and on behalf of Merger Sub, and no other entity action on the part of Parent, EQM LP or Merger Sub is necessary to authorize the execution, delivery and performance by Parent, EQM LP and Merger Sub of this Agreement and, except for obtaining the Parent Shareholder Approval in the case of Parent, the consummation of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by each of Parent, EQM LP and Merger Sub and, assuming due authorization, execution and delivery of this Agreement by the other parties hereto, constitutes a legal, valid and binding obligation of Parent, EQM LP and Merger Sub, enforceable against each of them in accordance with its terms, except as such enforcement may be limited by the Enforceability Exceptions. The Parent Board has taken all necessary action so that any Takeover Laws applicable to Parent or any of its Subsidiaries do not, and will not, apply to this Agreement and the consummation of the transactions contemplated by this Agreement, including the Merger and the Parent Stock Issuance.

 

 33 

 

 

(b)           Neither the execution and delivery of this Agreement by Parent, EQM LP and Merger Sub, nor the consummation by Parent, EQM LP and Merger Sub of the transactions contemplated by this Agreement, nor compliance by Parent, EQM LP and Merger Sub with any of the terms or provisions of this Agreement, will (i) assuming the Parent Shareholder Approval is obtained, contravene, conflict with, violate any provision of, result in any breach of, or require the consent of any Person under, the terms, conditions or provisions of the Parent Organizational Documents or the Organizational Documents of EQM LP or Merger Sub or any of Parent’s other material Subsidiaries, (ii) assuming the authorizations, consents and approvals referred to in Section 5.3(d) and Section 5.4 and the Parent Shareholder Approval are obtained, the amendments, restatements, amendments and restatements, replacements, terminations, waivers, consents and/or other modifications referred to in Section 5.3(b)(i) of the Parent Disclosure Schedule are effective on or prior to the Closing Date, and the filings referred to in Section 5.4 are made, (A) contravene, violate or conflict with any Law, judgment, writ or injunction of any Governmental Authority applicable to Parent or any of its Subsidiaries or any of their respective properties or assets, or (B) violate, conflict with, result in the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, give rise to a right to receive a change of control payment (or similar payment) under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of, Parent or any of its Subsidiaries under, any of the terms, conditions or provisions of any Contract or Parent Permit to which Parent or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound or affected or (iii) result in the exercisability of any right to purchase or acquire any material asset of Parent or any of its Subsidiaries, except, in the case of clause (i) of this sentence, for such violations, conflicts, losses, defaults, terminations, cancellations, accelerations or Liens that have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

 

(c)           The affirmative vote of a majority of votes cast at the Parent Shareholder Meeting at which a quorum is present or any adjournment or postponement thereof (the “Parent Shareholder Approval”) is the only vote of the holders of any class or series of the capital stock of Parent necessary to approve the Parent Stock Issuance.

 

 34 

 

 

(d)          The Parent Board has unanimously (i) determined that the forms, terms and provisions of this Agreement and the transactions contemplated hereby, including the Merger and the Common Stock Issuance, are in the best interests of Parent and the Parent Shareholders, (ii) authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, including the Merger and the Common Stock Issuance, on the terms and subject to the conditions set forth in this Agreement, (iii) authorized the submittal of a proposal to approve the Parent Stock Issuance to a vote of the Parent Shareholders at the Parent Shareholder Meeting and (iv) resolved to recommend approval of the Parent Stock Issuance by the Parent Shareholders at the Parent Shareholder Meeting.

 

Section 5.4           Governmental Approvals. Except for (a) filings required under, and compliance with other applicable requirements of, the Exchange Act, the Securities Act, including the filing of the Registration Statement and the Joint Proxy Statement with the SEC, and applicable state securities and “blue sky” laws, (b) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, or (c) any consents, authorizations, approvals, filings or exemptions in connection with compliance with the rules of the NYSE, no consents or approvals of, or filings, declarations or registrations with, any Governmental Authority are necessary for the execution, delivery and performance of this Agreement by Parent, EQM LP and Merger Sub and the consummation by Parent, EQM LP and Merger Sub of the transactions contemplated by this Agreement, other than such other consents, approvals, filings, declarations or registrations that are not required to be obtained or made prior to the consummation of such transactions or, if not obtained, made or given, would not, individually or in the aggregate, reasonably be expected to result in a Parent Material Adverse Effect.

 

Section 5.5           Parent SEC Documents; Undisclosed Liabilities; Internal Controls.

 

(a)          Parent and its Subsidiaries have filed or furnished all reports, schedules, forms, certifications, prospectuses, and registration, proxy and other statements required to be filed or furnished by them with the SEC since October 26, 2018 (collectively and together with all documents filed or publicly furnished on a voluntary basis on Form 8-K, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the “Parent SEC Documents”). The Parent SEC Documents, as of their respective effective dates (in the case of the Parent SEC Documents that are registration statements filed pursuant to the requirements of the Securities Act) and as of their respective SEC filing dates (in the case of all other Parent SEC Documents), or, if amended, as finally amended prior to the date of this Agreement, complied in all material respects with the requirements of the Exchange Act, the Securities Act and the Sarbanes-Oxley Act, as the case may be, applicable to such Parent SEC Documents, and none of the Parent SEC Documents as of such respective dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(b)          The consolidated financial statements of Parent included in the Parent SEC Documents as of their respective dates (if amended, as of the date of the last such amendment) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP (except, in the case of unaudited quarterly statements, as indicated in the notes thereto) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of Parent and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations, cash flows and changes in shareholders’ equity for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end audit adjustments, none of which has been or will be, individually or in the aggregate, material to Parent and its consolidated Subsidiaries, taken as a whole).

 

 35 

 

 

(c)          Except (i) as reflected or otherwise reserved against on the balance sheet of Parent and its consolidated Subsidiaries (including the notes thereto) included in the Parent SEC Documents filed by Parent and publicly available prior to the date of this Agreement, (ii) for liabilities and obligations incurred since the Balance Sheet Date in the ordinary course of business consistent with past practice, (iii) for liabilities and obligations set forth in Section 5.5(c) of the Partnership Disclosure Schedule and (iv) for liabilities and other obligations incurred under or in accordance with this Agreement or in connection with the transactions contemplated by this Agreement, neither Parent nor any of its Subsidiaries has any liabilities or obligations of any nature (whether or not accrued or contingent) that would be required to be reflected or reserved against on a consolidated balance sheet of Parent prepared in accordance with GAAP or the notes thereto, other than as have not and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

 

(d)          No Subsidiary of Parent is required to file reports, forms or other documents with the SEC pursuant to the Exchange Act. There are no outstanding comments from, or unresolved issues raised by, the staff of the SEC with respect to the Parent SEC Documents. No enforcement action has been initiated against Parent relating to disclosures contained or omitted from any Parent SEC Document.

 

(e)          Parent has established and maintains adequate internal control over financial reporting and disclosure controls and procedures sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including policies and procedures that ensure that all material information required to be disclosed by Parent in the reports that it files under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to its management as appropriate to allow timely decisions regarding required disclosure. Parent has disclosed, based on its most recent evaluation, to the Parent’s auditors (i) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect Parent’s ability to record, process, summarize and report financial information and have identified for the Parent’s auditors any material weakness in internal controls and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Parent’s internal control over financial reporting.

 

(f)           Since December 31, 2018, the principal executive officer and principal financial officer of Parent have made all certifications (without qualification or exceptions to the matters certified, except as to knowledge) required by the Sarbanes-Oxley Act, and the statements contained in any such certifications are complete and correct, and none of Parent or its officers have received notice from any Governmental Authority questioning or challenging the accuracy, completeness, form or manner of filing or submission of such certification. As of the date of this Agreement, and except as disclosed in a Parent SEC Document filed with the SEC prior to the date of this Agreement, Parent has no knowledge of any material weaknesses in the design or operation of such internal controls over financial reporting.

 

 36 

 

 

Section 5.6           Absence of Certain Changes or Events.

 

(a)          Since the Balance Sheet Date, there has not occurred any change, effect, event or occurrence that, individually or in the aggregate, has resulted, or would reasonably be likely to result, in a Parent Material Adverse Effect.

 

(b)         Since the Balance Sheet Date, except for this Agreement and the transactions contemplated hereby, the Parent and its Subsidiaries have carried on and operated their respective businesses in the ordinary course of business.

 

(c)          Since the Balance Sheet Date, no actions prohibited under Section 6.2(b) have occurred.

 

Section 5.7           Legal Proceedings. There are no Proceedings pending or, to the knowledge of Parent, threatened with respect to Parent or any of its Subsidiaries or Proceedings pending or, to the knowledge of Parent, threatened with respect to any of their respective properties or assets at law or in equity before any Governmental Authority, and there are no orders, judgments, decrees or similar rulings of any Governmental Authority against Parent or any of its Subsidiaries, in each case except for those that have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

 

Section 5.8           Compliance With Laws.

 

(a)          Parent and its Subsidiaries are, and since the later of December 31, 2018 and their respective dates of incorporation, formation or organization have been, in compliance with and are not in default under or in violation of any applicable Law, except where such non-compliance, default or violation has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

 

(b)          Without limiting the generality of Section 5.8(a), none of Parent, its Subsidiaries, nor, to the knowledge of Parent, any consultant, agent or Representative of any of the foregoing (in their respective capacities as such), (i) has violated the U.S. Foreign Corrupt Practices Act, or any other U.S. and foreign anti-corruption Laws that are applicable to Parent or its Subsidiaries; (ii) has, to the knowledge of Parent, been given written notice by any Governmental Authority of any facts which, if true, would constitute a violation of the U.S. Foreign Corrupt Practices Act or any other U.S. or foreign anti-corruption Laws by any such Person; and (iii) to the knowledge of Parent, is being (or has been) investigated by any Governmental Authority except, in each case of the foregoing clauses (i) through (i), as would not have, individually or in the aggregate, a Parent Material Adverse Effect.

 

 37 

 

 

Section 5.9           Information Supplied. Subject to the accuracy of the representations and warranties of the Partnership and the General Partner set forth in Section 4.9, none of the information supplied (or to be supplied) in writing by or on behalf of Parent, EQM LP or Merger Sub specifically for inclusion or incorporation by reference in (a) the Registration Statement will, at the time the Registration Statement, or any amendment or supplement thereto, is filed with the SEC or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (b) the Joint Proxy Statement will, on the date it is first mailed to the Limited Partners and the Parent Shareholders and at the time of the Partnership Equityholder Meeting and the Parent Shareholder Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Joint Proxy Statement and the Registration Statement will comply as to form in all material respects with the applicable requirements of the Securities Act or Exchange Act, as applicable. Notwithstanding the foregoing, none of Parent, EQM LP or Merger Sub make any representation or warranty with respect to information supplied by or on behalf of the Partnership or the General Partner for inclusion or incorporation by reference in any of the foregoing documents.

 

Section 5.10        Tax Matters. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect: (a) all Tax Returns that were required to be filed by or with respect to Parent or any of its Subsidiaries have been duly and timely filed (taking into account any extension of time within which to file) and all such Tax Returns are complete and accurate, (b) all Taxes owed by Parent or any of its Subsidiaries that are or have become due have been timely paid in full or an adequate reserve for the payment of such Taxes has been established in their books and records, (c) there are no Liens on any of the assets of Parent or any of its Subsidiaries that arose in connection with any failure (or alleged failure) to pay any Taxes on any of such assets and (d) there is no claim against Parent or any of its Subsidiaries for any Taxes, and no assessment, deficiency, or adjustment has been asserted, proposed, or threatened in writing with respect to any Taxes or Tax Returns of or with respect to Parent or any of its Subsidiaries. Parent has caused the TMA Signing Opinion to be issued by Tax Counsel in accordance with the Tax Matters Agreement.

 

Section 5.11        Opinion of Financial Advisor. The Parent Board has received an opinion from Guggenheim Securities, LLC to the effect that, as of the date of such opinion, and based upon and subject to the assumptions, qualifications, limitations and other matters set forth therein, the Exchange Ratio provided for in this Agreement is fair, from a financial point of view, to Parent.

 

Section 5.12        Brokers and Other Advisors. Except for Guggenheim Securities, LLC and Citigroup Global Markets Inc., the fees and expenses of which will be paid by Parent, no broker, investment banker or financial advisor is entitled to any broker’s, finder’s or financial advisor’s fee or commission, or the reimbursement of expenses, in connection with the transactions contemplated by this Agreement based on arrangements made by or on behalf of Parent or any of its Subsidiaries.

 

Section 5.13        Investment Company Act. Parent is not, nor immediately after the Closing will be, subject to regulation under the Investment Company Act of 1940, as amended.

 

Section 5.14         Ownership of Partnership Interests. Parent and its Subsidiaries, taken together, are the beneficial owners of 117,245,455 Common Units, 7,000,000 Class B Units and the General Partner Interest, which represent all Partnership Interests held of record or beneficially by Parent or any of its Subsidiaries as of the date of this Agreement. As of the date of this Agreement, the Common Units and Class B Units beneficially owned by Parent and its Subsidiaries constitute a Unit Majority (as defined in the Partnership Agreement).

 

 38 

 

 

Section 5.15        No Other Representations or Warranties. Except for the representations and warranties set forth in this Article V, none of Parent, EQM LP or Merger Sub nor any other Person makes or has made any express or implied representation or warranty with respect to Parent, EQM LP and Merger Sub or with respect to any other information provided to the Partnership in connection with the Merger or the other transactions contemplated by this Agreement. Without limiting the generality of the foregoing, none of Parent, EQM LP or Merger Sub nor any other Person will have or be subject to any liability or other obligation to the Partnership or the General Partner or any other Person resulting from the distribution to the Partnership, the General Partner or the Conflicts Committee (including their respective Representatives), or the Partnership’s, the General Partner’s or the Conflicts Committee’s (or such Representatives’) use of, any such information, including any information, documents, projections, forecasts or other materials made available to the Partnership, the General Partner and the Conflicts Committee in expectation of the Merger, unless any such information is the subject of an express representation or warranty set forth in this Article V.

 

Article VI
 

ADDITIONAL COVENANTS AND AGREEMENTS

 

Section 6.1            Preparation of the Registration Statement and the Joint Proxy Statement; Equityholder Meetings.

 

(a)          As promptly as practicable following the date of this Agreement, (i) the Partnership and Parent shall jointly prepare and file with the SEC the Joint Proxy Statement and (ii) the Partnership and Parent shall jointly prepare and Parent shall file with the SEC the Registration Statement, in which the Joint Proxy Statement will be included as a prospectus. Each of the Partnership and Parent shall use its reasonable best efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing and keep the Registration Statement effective for so long as necessary to consummate the transactions contemplated by this Agreement. Each of the Partnership and Parent shall use its reasonable best efforts to cause the Joint Proxy Statement to be mailed to the Limited Partners and the Parent Shareholders as promptly as practicable after the Registration Statement is declared effective under the Securities Act. Each of the parties shall cooperate and consult with each other in connection with the preparation and filing of the Registration Statement and the Joint Proxy Statement, as applicable, including promptly furnishing to each other in writing upon request any and all information relating to a party or its Affiliates as may be required to be set forth therein, as applicable, under applicable Law. No filing of, or amendment or supplement to, the Registration Statement or the Joint Proxy Statement will be made by a party without providing the other parties a reasonable opportunity to review and comment thereon. If at any time prior to the Effective Time any information relating to the Partnership or Parent, or any of their respective Affiliates, directors or officers, is discovered by the Partnership or Parent that should be set forth in an amendment or supplement to, the Registration Statement or the Joint Proxy Statement, so that any such document would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other parties and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by applicable Laws, disseminated to the Limited Partners and the Parent Shareholders. The parties shall notify each other promptly of the receipt of any comments, written or oral, from the SEC or the staff of the SEC and of any request by the SEC or the staff of the SEC for amendments or supplements to the Joint Proxy Statement or the Registration Statement or for additional information, and each party shall supply each other with copies of (i) all correspondence between it or any of its Representatives, on the one hand, and the SEC or the staff of the SEC, on the other hand, with respect to the Joint Proxy Statement, the Registration Statement or the transactions contemplated by this Agreement and (ii) all orders of the SEC relating to the Registration Statement.

 

 39 

 

 

(b)          The Partnership shall, as promptly as practicable after the Registration Statement is declared effective under the Securities Act, establish a record date for, duly call, give notice of, convene and hold the Partnership Equityholder Meeting for the purpose of obtaining the Partnership Equityholder Approval. Subject to Section 6.3, the Partnership shall, through the GP Board and the Conflicts Committee, recommend to the Limited Partners approval of this Agreement and the Merger (collectively, the “Partnership Board Recommendation”) and use the Partnership’s reasonable best efforts to obtain from the Limited Partners the Partnership Equityholder Approval. The Joint Proxy Statement shall include, subject to Section 6.3, the Partnership Board Recommendation. Without limiting the generality of the foregoing, unless this Agreement is validly terminated in accordance with Article VIII, the Partnership’s obligations pursuant to the first sentence of this Section 6.1(b) shall not be affected by the withdrawal or modification by the Conflicts Committee or the GP Board of the Partnership Board Recommendation or any other action by the Conflicts Committee or the GP Board with respect to this Agreement or the transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, the Partnership may postpone or adjourn the Partnership Equityholder Meeting (i) to solicit additional proxies for the purpose of obtaining the Partnership Equityholder Approval, (ii) for the absence of a quorum, (iii) to the extent reasonably necessary to ensure that any supplement or amendment to the Joint Proxy Statement that the Conflicts Committee or the GP Board has determined after consultation with outside legal counsel is necessary under applicable Laws is provided to the Limited Partners within the minimum amount of time reasonably practicable prior to the Partnership Equityholder Meeting, and (iv) if the Partnership has delivered any notice contemplated by Section 6.3(d) and the time periods contemplated by Section 6.3(d) have not expired; provided, however, that in each case, without the written consent of Parent (which shall not be unreasonably withheld, delayed or conditioned), the Partnership shall not be permitted to postpone or adjourn the Partnership Equityholder Meeting for more than 10 Business Days later than the most recently adjourned meeting or to a date after the date that is two Business Days prior to the Outside Date. The Partnership shall adjourn the Partnership Equityholder Meeting at the request of Parent (but in no event for more than 30 days from the date the Partnership Equityholder Meeting was originally scheduled to convene) (i) to solicit additional proxies for the purpose of obtaining the Partnership Equityholder Approval or (ii) for the absence of a quorum. Without the written consent of Parent (which shall not be unreasonably withheld, delayed or conditioned), no matter shall be submitted for action at the Partnership Equityholder Meeting except the approval of this Agreement, the Merger and matters reasonably related to this Agreement.

 

 40 

 

 

(c)           Parent shall, as promptly as practicable after the Registration Statement is declared effective under the Securities Act, establish a record date for, duly call, give notice of, convene and hold the Parent Shareholder Meeting for the purpose of obtaining the Parent Shareholder Approval. Parent shall include in the Joint Proxy Statement Parent’s recommendation, through the Parent Board, that the Parent Shareholders approve the Parent Stock Issuance (collectively, the “Parent Board Recommendation”) and use Parent’s reasonable best efforts to obtain from the Parent Shareholders the Parent Shareholder Approval. The Joint Proxy Statement shall include the Parent Board Recommendation. Without limiting the generality of the foregoing, unless this Agreement is validly terminated in accordance with Article VIII, Parent’s obligations pursuant to the first sentence of this Section 6.1(c) shall not be affected by the withdrawal or modification by the Parent Board of the Parent Board Recommendation or any other action by the Parent Board with respect to this Agreement or the transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, Parent may postpone or adjourn the Parent Shareholder Meeting (i) to solicit additional proxies for the purpose of obtaining the Parent Shareholder Approval, (ii) for the absence of a quorum and (iii) to the extent reasonably necessary to ensure that any supplement or amendment to the Joint Proxy Statement that the Parent Board has determined after consultation with outside legal counsel is necessary under applicable Laws is provided to the Parent Shareholders within the minimum amount of time reasonably practicable prior to the Parent Shareholder Meeting; provided, however, that in each case, without the written consent of the Partnership (which shall not be unreasonably withheld, delayed or conditioned), Parent shall not be permitted to postpone or adjourn the Parent Shareholder Meeting for more than 10 Business Days later than the most recently adjourned meeting or to a date after the date that is two Business Days prior to the Outside Date. Parent shall adjourn the Parent Shareholder Meeting at the request of the Partnership (but in no event for more than 30 days from the date the Parent Shareholder Meeting was originally scheduled to convene) (i) to solicit additional proxies for the purpose of obtaining the Parent Shareholder Approval or (ii) for the absence of a quorum. Without the written consent of the Partnership (which shall not be unreasonably withheld, delayed or conditioned), no matter shall be submitted for action at the Parent Shareholder Meeting except the approval of the Parent Stock Issuance and matters reasonably related thereto. Notwithstanding the foregoing, the Parent Shareholder Meeting may be combined with Parent’s 2020 annual meeting of shareholders, provided that no other matters shall be submitted for action at such meeting other than the approval of the Parent Stock Issuance, election of Parent’s directors, appointment of Parent’s auditors and any required shareholder proposals, without the written consent of the Partnership (which shall not be unreasonably withheld, delayed or conditioned), and provided further that such combination does not cause the Parent Shareholder Meeting to occur materially later than it would have occurred without such combination.

 

(d)           The parties shall use their reasonable best efforts to hold the Partnership Equityholder Meeting and the Parent Shareholder Meeting on the same day.

 

(e)           Unless this Agreement is validly terminated in accordance with Article VIII, the Partnership shall submit this Agreement and the Merger to the Limited Partners for approval at the Partnership Equityholder Meeting even if the GP Board or the Conflicts Committee shall have effected a Partnership Adverse Recommendation Change.

 

 41 

 

 

(f)           Unless this Agreement is validly terminated in accordance with Article VIII, Parent shall submit the Parent Stock Issuance for approval at the Parent Shareholder Meeting.

 

Section 6.2            Conduct of Business.

 

(a)           Except (i) as permitted by this Agreement, (ii) as set forth in Section 6.2(a) of the Partnership Disclosure Schedule, (iii) as required by applicable Laws, (iv) as provided in any Partnership Material Contract in effect as of the date of this Agreement (including the Partnership Agreement and the Preferred Restructuring Agreement) or (v) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the period from the date of this Agreement until the Effective Time, each of the Partnership and the General Partner shall, and shall cause each of their respective Subsidiaries to, (A) conduct its business in the ordinary course of business consistent with past practice, (B) use commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having business relationships with it and retain the services of its present officers and key employees, if any, (C) use commercially reasonable efforts to keep in full force and effect all material Partnership Permits and all material insurance policies maintained by the Partnership and its Subsidiaries, other than changes to such policies made in the ordinary course of business, and (D) use commercially reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all Partnership Material Contracts. Without limiting the generality of the foregoing, except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 6.2(a) of the Partnership Disclosure Schedule, (iii) as required by applicable Laws, (iv) as provided in any Partnership Material Contract in effect as of the date of this Agreement (including the Partnership Agreement and the Preferred Restructuring Agreement) or (v) as consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), during the period from the date of this Agreement until the Effective Time, the Partnership and the General Partner shall not, and shall not permit any of their respective Subsidiaries to:

 

(i)           amend the Organizational Documents (whether by merger, consolidation, conversion or otherwise) of such entity in any manner that would reasonably be expected to prevent or in any material respect hinder, impede or delay the ability of the parties to satisfy any of the conditions to or the consummation of the Merger or the other transactions contemplated by this Agreement;

 

(ii)          declare, authorize, set aside or pay any distribution payable in cash, equity or property in respect of the Common Units, other than regular quarterly cash distributions on the Common Units not to exceed $1.16 per Common Unit; provided, however, that nothing herein shall prohibit the payment of dividends or distributions or the making of cash advances or a transfer of property to the Parent or any direct or indirect subsidiary of the Parent and nothing shall prohibit the General Partner from decreasing the quarterly cash distribution on the Common Units;

 

(iii)         split, combine, divide, subdivide, reverse split, reclassify, recapitalize or effect any other similar transaction with respect to any of such entity’s capital stock or other equity interests;

 

 42 

 

 

(iv)         adopt a plan or agreement of complete or partial liquidation, dissolution or restructuring or a plan or agreement of reorganization under any bankruptcy or similar Law;

 

(v)          waive, release, assign, settle or compromise any Proceeding, including any state or federal regulatory Proceeding seeking damages or injunction or other equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to result in a Partnership Material Adverse Effect;

 

(vi)         (1) change its fiscal year or any method of Tax accounting, (2) make, change or revoke any material Tax election (including any entity classification election under Treasury Regulations Section 301.7701-3), (3) settle or compromise any material liability for Taxes or any audit, examination or other legal Proceeding in respect of a material amount of Taxes, (4) file any material amended Tax Return, (5) enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any material Tax, (6) surrender any right to claim a material Tax refund or (7) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;

 

(vii)        make any material changes in financial accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by a change in GAAP or applicable Law;

 

(viii)       engage in any activity or conduct its business in a manner that would cause less than 90% of the gross income of the Partnership for any calendar quarter since its formation and prior to the Effective Time to be treated as “qualifying income” within the meaning of Section 7704(d) of the Code;

 

(ix)          except as required by applicable Law or the terms of any Partnership Benefit Plan existing and in effect on the date of this Agreement or as contemplated by this Agreement, (1) establish, adopt, materially amend or modify, commence participation in or terminate (or commit to establish, adopt, materially amend or modify, commence participation in or terminate) any Partnership Benefit Plan (or any plan or arrangement that would be a Partnership Benefit Plan if in effect as of the date of this Agreement), (2) increase in any manner the compensation, severance or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of the General Partner, the Partnership or any of their respective Subsidiaries, or enter into or amend any employment, severance, termination, retention or consulting agreement, in each case, other than in the ordinary course of business, (3) accelerate any material rights or benefits under any Partnership Benefit Plan, or (4) grant or amend any equity awards; or

 

(x)           agree, in writing or otherwise, to take any of the foregoing actions, or take any action or agree, in writing or otherwise, to take any action, including proposing or undertaking any merger, consolidation or acquisition, in each case, that would reasonably be expected to prohibit, prevent or in any material respect hinder, impede or delay the ability of the parties to satisfy any of the conditions to or the consummation of the Merger or the other transactions contemplated by this Agreement (including the transactions contemplated by the Preferred Restructuring Agreement).

 

 43 

 

 

(b)          Except (i) as permitted by this Agreement, (ii) as set forth in Section 6.2(b) of the Parent Disclosure Schedule, (iii) as required by applicable Laws, (iv) as provided in any Parent Material Contract in effect as of the date of this Agreement (including the Preferred Restructuring Agreement) or (v) as consented to in writing by the Partnership (which consent shall not be unreasonably withheld, delayed or conditioned), during the period from the date of this Agreement until the Effective Time, Parent shall, and shall cause each of its Subsidiaries to, (A) conduct its business in the ordinary course of business consistent with past practice, (B) use commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having business relationship with it and retain the services of its present officers and key employees, (C) use commercially reasonable efforts to keep in full force and effect all material Parent Permits and all material insurance policies maintained by the Parent and its Subsidiaries, other than changes to such policies made in the ordinary course of business, and (D) use commercially reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all Parent Material Contracts. Without limiting the generality of the foregoing, except (i) as expressly permitted by this Agreement, (ii) as set forth in Section 6.2(b) of the Parent Disclosure Schedule, (iii) as required by applicable Laws, (iv) as provided in any Parent Material Contract in effect as of the date of this Agreement (including the Preferred Restructuring Agreement) or (v) as consented to in writing by the Partnership (which consent shall not be unreasonably withheld, delayed or conditioned), during the period from the date of this Agreement until the Effective Time, Parent shall not, and shall not permit any of its Subsidiaries to:

 

(i)            amend Parent’s or any of its Subsidiaries’ Organizational Documents (whether by merger, consolidation, conversion or otherwise) in any manner that would reasonably be expected to (a) prevent or in any material respect hinder, impede or delay the ability of the parties to satisfy any of the conditions to or the consummation of the Merger or the other transactions contemplated by this Agreement, (b) adversely affect the terms of the Parent Common Stock in any material respect or (c) adversely affect the rights of the Investors in respect of the Series A Preferred Shares to be issued pursuant to the Preferred Restructuring Agreement at the Closing;

 

(ii)          declare, authorize, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any of Parent’s capital stock, other than regular quarterly cash dividends on the Parent Common Stock in the ordinary course of business consistent with past practice and other than dividends or distributions with a record date after the Effective Time; provided, however, that nothing contained herein shall prohibit Parent Board from increasing or decreasing the quarterly cash dividend on Parent Common Stock;

 

(iii)          merge, consolidate or enter into any other business combination transaction or agreement with any Person;

 

 44 

 

 

(iv)         split, combine, divide, subdivide, reverse split, reclassify, recapitalize or effect any other similar transaction with respect to any of Parent’s capital stock or other equity interests;

 

(v)          issue, sell or reclassify any capital stock of Parent or its Subsidiaries, or grant, issue or reclassify any warrant, option, right, contract, call, or other security or instrument granting the holder thereof the right to acquire capital stock of Parent or its Subsidiaries, in each case other than (i) the issuance or sale, in one or more transactions pursuant to a Parent Equity Plan, another Parent Benefit Plan or the Parent Dividend Reinvestment and Stock Purchase Plan, of up to 1,370,000 Parent Shares or (ii) the issuance of Series A Preferred Shares pursuant to the Preferred Restructuring Agreement;

 

(vi)         solely with respect to Parent, adopt a plan or agreement of complete or partial liquidation, dissolution or restructuring or a plan or agreement of reorganization under any bankruptcy or similar Law and, with respect to any Subsidiary of Parent, adopt a plan or agreement of complete or partial liquidation, dissolution or restructuring or a plan or agreement of reorganization under any bankruptcy or similar law that would reasonably be expected to prevent or in any material respect hinder, impede or delay the ability of the parties to satisfy any of the conditions to or the consummation of the Merger or the other transactions contemplated by this Agreement;

 

(vii)        waive, release, assign, settle or compromise any Proceeding, including any state or federal regulatory Proceeding seeking damages or injunction or other equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to result in a Parent Material Adverse Effect;

 

(viii)       (1) change its fiscal year or any method of Tax accounting, (2) make, change or revoke any material Tax election, (3) settle or compromise any material liability for Taxes or any audit, examination or other legal Proceeding in respect of a material amount of Taxes, (4) file any material amended Tax Return, (5) enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any material Tax, (6) surrender any right to claim a material Tax refund or (7) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;

 

(ix)         directly or indirectly purchase, acquire or otherwise become beneficial owner of (or direct the Partnership to repurchase, redeem or otherwise acquire) any Public Common Units; or

 

(x)          agree, in writing or otherwise, to take any of the foregoing actions, or take any action or agree, in writing or otherwise, to take any action, including proposing or undertaking any acquisition or disposition, in each case, that would reasonably be expected to prohibit, prevent or in any material respect hinder, impede or delay the ability of the parties to satisfy any of the conditions to or the consummation of the Merger or the other transactions contemplated by this Agreement (including the consummation of the transactions contemplated by the Preferred Restructuring Agreement).

 

 45 

 

 

Section 6.3           No Solicitation by the Partnership; Partnership Adverse Recommendation Change.

 

(a)         The Partnership shall, and the General Partner shall use its reasonable best efforts to cause its and the Partnership’s and its Subsidiaries’ respective directors, officers, employees, investment bankers, financial advisors, attorneys, accountants, agents and other representatives (collectively, “Representatives”) to, immediately cease and cause to be terminated any discussions or negotiations with any Person conducted heretofore with respect to an Alternative Proposal, request the return or destruction of all confidential information previously provided to such parties by or on behalf of the Partnership or its Subsidiaries and immediately prohibit any access by any Person (other than Parent and its Representatives) to any physical or electronic data room relating to a possible Alternative Proposal. Except as permitted by this Section 6.3, from the date of this Agreement until the Effective Time or the termination of this Agreement in accordance with Article VIII, (x) without the prior written consent of Parent, the Partnership shall not, and shall cause its Subsidiaries not to, and shall use its reasonable best efforts to cause their respective Representatives not to, directly or indirectly (A) solicit, initiate, knowingly facilitate, knowingly encourage (including by way of furnishing confidential information) or knowingly induce or take any other action intended to lead to any inquiries or any proposals that constitute or could reasonably be expected to lead to an Alternative Proposal, (B) grant any waiver or release of any standstill or similar agreement with respect to any Partnership Interests of the Partnership or of any of its Subsidiaries, (C) enter into any confidentiality agreement, merger agreement, letter of intent, agreement in principle, unit purchase agreement, asset purchase agreement or unit exchange agreement, option agreement or other similar agreement relating to an Alternative Proposal, or (D) withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify, in a manner adverse to Parent, the Partnership Board Recommendation or publicly recommend the approval or adoption of, or publicly approve or adopt, or propose to publicly recommend, approve or adopt, any Alternative Proposal, or fail to recommend against acceptance of any tender offer or exchange offer for Common Units within ten Business Days after commencement of such offer, or resolving or agreeing to take any of the foregoing actions, and (y) subject to Section 6.3(b), within five Business Days of receipt of a written request of Parent following the receipt by the Partnership of any Alternative Proposal (but, for the avoidance of doubt, not during any Superior Proposal Notice Period), the Partnership shall publicly reconfirm the Partnership Board Recommendation; provided, that, in the event that Parent requests such public reconfirmation of the Partnership Board Recommendation, then the Partnership may not unreasonably withhold, delay (beyond the five Business Day period) or condition the public reconfirmation of the Partnership Board Recommendation and, provided, further that Parent shall not be permitted to make such request on more than one occasion in respect of each (i) Alternative Proposal or (ii) subsequent material modification to an Alternative Proposal, if any (the taking of any action described in clause (x)(C) or clause (x)(D), the failure to take the action described in clause (y) or the failure to include the Partnership Board Recommendation in the Joint Proxy Statement being referred to as a “Partnership Adverse Recommendation Change”; provided, however, that to the extent any such action was taken solely by Representatives of Parent or by the Partnership at the explicit direction of Representatives of Parent, it will not be deemed a “Partnership Adverse Recommendation Change”).

 

 46 

 

 

 

(b)           Notwithstanding anything to the contrary contained in this Agreement, if at any time following the date of this Agreement and prior to obtaining the Partnership Equityholder Approval, (i) the Partnership has received an unsolicited written Alternative Proposal that the Conflicts Committee believes is bona fide, (ii) the Conflicts Committee, after consultation with its financial advisors and outside legal counsel, determines in good faith that (A) such Alternative Proposal constitutes or could reasonably be expected to lead to or result in a Superior Proposal and (B) failure to take such action would constitute a breach of, or otherwise be inconsistent with, its duties under applicable Law, as modified by the Partnership Agreement, and (iii) such Alternative Proposal did not result from a breach of Section 6.3(a), then the Partnership may, subject to clauses (x) and (y) below, (A) furnish information, including confidential information, with respect to the Partnership and its Subsidiaries to the Person making such Alternative Proposal and (B) participate in discussions or negotiations regarding such Alternative Proposal; provided, that (x) the Partnership will not, and will use reasonable best efforts to cause its Representatives not to, disclose any non-public information to such Person unless the Partnership has, or first enters into, a confidentiality agreement with such Person of the nature generally used in similar circumstances, as determined by the Partnership in its reasonable business judgment, and (y) the Partnership will provide to Parent non-public information about the Partnership or its Subsidiaries that was not previously provided or made available to Parent prior to or substantially concurrently with providing or making available such non-public information to such other Person.

 

(c)           In addition to the other obligations of the Partnership set forth in this Section 6.3, the Partnership shall promptly advise Parent, orally and in writing, and in no event later than 48 hours after receipt, if any proposal, offer, inquiry or other contact is received by, any information is requested from, or any discussions or negotiations are sought to be initiated or continued with, the Partnership in respect of any Alternative Proposal, and shall, in any such notice to Parent, indicate the identity of the Person making such proposal, offer, inquiry or other contact and the terms and conditions of any proposals or offers or the nature of any inquiries or contacts (and shall include with such notice copies of any written materials received from or on behalf of such Person relating to such proposal, offer, inquiry or contact), and thereafter shall promptly keep Parent reasonably informed of all material developments affecting the status and terms of any such proposals, offers, inquiries or contacts (and the Partnership shall promptly provide Parent with copies of any additional material written materials received by the Partnership or that the Partnership has delivered to any third party making an Alternative Proposal that relate to such proposals, offers, inquiries or contacts) and of the status of any such discussions or negotiations.

 

(d)           Notwithstanding any other provision of this Agreement, at any time prior to obtaining the Partnership Equityholder Approval, the Conflicts Committee may effect a Partnership Adverse Recommendation Change in response to an Alternative Proposal or a Partnership Changed Circumstance if the Conflicts Committee, after consultation with its outside legal counsel and financial advisors, determines in good faith that the failure to take such action would constitute a breach of, or otherwise be inconsistent with, its duties under applicable Law, as modified by the Partnership Agreement, and;

 

(i)            if the Conflicts Committee intends to effect such Partnership Adverse Recommendation Change in response to an Alternative Proposal:

 

 47 

 

 

(1)such Alternative Proposal is bona fide, in writing and has not been withdrawn or abandoned;

 

(2)the Conflicts Committee has determined, after consultation with its outside legal counsel and financial advisors, that such Alternative Proposal constitutes a Superior Proposal after giving effect to all of the adjustments offered by Parent pursuant to clause (iv) below;

 

(3)the Conflicts Committee or the Partnership has provided prior written notice to Parent in accordance with Section 9.10 of the Conflicts Committee’s intention to effect a Partnership Adverse Recommendation Change with respect to such Superior Proposal (the “Superior Proposal Notice”), and such Superior Proposal Notice has specified the identity of the Person making such Alternative Proposal and the material terms and conditions of such Alternative Proposal, and included complete copies of any written proposal or offers (including proposed agreements) received by the Partnership in connection with such Alternative Proposal;

 

(4)during the period that commences on the date of delivery of the Superior Proposal Notice as determined in accordance with Section 9.10 and ends at 11:59 p.m. Eastern time on the date that is the fifth calendar day following the date of such delivery (the “Superior Proposal Notice Period”), the Conflicts Committee shall (A) negotiate with Parent in good faith (to the extent Parent seeks to negotiate) to make such adjustments to the terms and conditions of this Agreement as would permit the Conflicts Committee not to effect a Partnership Adverse Recommendation Change; and (B) keep Parent reasonably informed with respect to the status and changes in the material terms and conditions of such Alternative Proposal or other change in circumstances related thereto; provided, however, that any material revisions to such Alternative Proposal (it being agreed that any change in the purchase price in such Alternative Proposal shall be deemed a material revision) shall require delivery of a subsequent Superior Proposal Notice and a subsequent Superior Proposal Notice Period in respect of such revised Alternative Proposal, except that such subsequent Superior Proposal Notice Period shall expire upon the later of (x) the end of the initial Superior Proposal Notice Period and (y) 11:59 p.m. Eastern time on the date that is the third calendar day following the date of the delivery of such subsequent Superior Proposal Notice; and

 

 48 

 

 

(5)the Conflicts Committee shall have considered all revisions to the terms of this Agreement irrevocably offered in writing by Parent and, at the end of the Superior Proposal Notice Period, shall have determined in good faith that (A) such Alternative Proposal continues to constitute a Superior Proposal even if such revisions were to be given effect and (B) failure to effect a Partnership Adverse Recommendation Change would constitute a breach of, or otherwise be inconsistent with, its duties under applicable Law, as modified by the Partnership Agreement, even if such revisions were to be given effect.

 

(ii)           if the Conflicts Committee intends to effect such Partnership Adverse Recommendation Change in response to a Partnership Changed Circumstance:

 

(1)the Conflicts Committee or the Partnership has provided prior written notice to Parent in accordance with Section 9.10 of the Conflicts Committee’s intention to effect a Partnership Adverse Recommendation Change with respect to such Partnership Changed Circumstance (the “Changed Circumstance Notice”), and such Changed Circumstance Notice has specified the details of such Partnership Changed Circumstance and the reasons for the Partnership Adverse Recommendation Change;

 

(2)during the period that commences on the date of delivery of the Changed Circumstance Notice as determined in accordance with Section 9.10 and ends at 11:59 p.m. Eastern time on the date that is the fifth calendar day following the date of such delivery (the “Changed Circumstance Notice Period”), the Conflicts Committee shall (A) negotiate with Parent in good faith (to the extent Parent seeks to negotiate) to make such adjustments to the terms and conditions of this Agreement as would permit the Conflicts Committee not to effect a Partnership Adverse Recommendation Change; and (B) keep Parent reasonably informed with respect to the status and changes in the Partnership Changed Circumstance or other change in circumstances related thereto; and

 

(3)the Conflicts Committee shall have considered all revisions to the terms of this Agreement irrevocably offered in writing by Parent and, at the end of the Changed Circumstance Notice Period, shall have determined in good faith that the failure to effect a Partnership Adverse Recommendation Change would constitute a breach of, or otherwise be inconsistent with, its duties under applicable Law, as modified by the Partnership Agreement, even if such revisions were to be given effect.

 

 49 

 

 

(e)           Nothing contained in this Agreement shall prevent the Partnership, the GP Board or the Conflicts Committee from issuing a “stop, look and listen” communication pursuant to Rule 14d-9(f) under the Exchange Act or complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act with respect to an Alternative Proposal if the GP Board or the Conflicts Committee determines in good faith (after consultation with outside legal counsel) that its failure to do so would be reasonably likely to constitute a violation of applicable Law; provided, that any Partnership Adverse Recommendation Change may only be made in accordance with Section 6.3(d). For the avoidance of doubt, a public statement that describes the Partnership’s receipt of an Alternative Proposal and the operation of this Agreement with respect thereto shall not be deemed a Partnership Adverse Recommendation Change.

 

Section 6.4            Reasonable Best Efforts. Subject to the terms and conditions of this Agreement, Parent, EQM LP and Merger Sub, on the one hand, and the Partnership and the General Partner, on the other hand, shall cooperate with the other and use and shall cause their respective Subsidiaries to use their reasonable best efforts to (i) take, or cause to be taken, all appropriate actions, and do, or cause to be done, all things, necessary, proper or advisable to cause the conditions to the Closing to be satisfied as promptly as practicable (and in any event no later than the Outside Date), including, for the avoidance of doubt, in the case of Parent and the General Partner, until the Effective Time or the termination of this Agreement, retaining ownership and voting control over all Common Units and the non-economic general partner interest in the Partnership beneficially owned by Parent and the General Partner, as applicable, as of the date of this Agreement or acquired thereafter and to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including preparing and filing as promptly as practicable all documentation to effect all necessary filings, notifications, notices, petitions, statements, registrations, submissions of information, applications and other documents, (ii) obtain promptly (and in any event no later than the Outside Date) all approvals, consents, waivers, clearances, expirations or terminations of waiting periods, registrations, permits, authorizations and other confirmations from any Governmental Authority or third party necessary, proper or advisable to consummate the transactions contemplated by this Agreement, and (iii) defend any Proceedings challenging this Agreement or the consummation of the transactions contemplated by this Agreement or seek to have lifted or rescinded any injunction or restraining order or other order adversely affecting the ability of the parties to consummate the transactions contemplated hereby.

 

Section 6.5            Public Announcements. The initial press release with respect to the execution of this Agreement shall be a joint press release to be reasonably agreed upon by Parent and the Partnership. Thereafter, neither Parent nor the Partnership shall issue or cause the publication of any press release or other public announcement (to the extent not previously issued or made in accordance with this Agreement) with respect to this Agreement or the transactions contemplated by this Agreement without the prior consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed), except as may be required by applicable Laws or by any applicable listing agreement with the NYSE as determined in the good faith judgment of the party proposing to make such release (in which case such party shall not issue or cause the publication of such press release or other public announcement without prior consultation with the other party); provided, however, that neither the Partnership nor Parent shall be required by this Section 6.5 to consult with any other party with respect to a public announcement in connection with a Partnership Adverse Recommendation Change but nothing in this proviso shall limit the obligations of the Partnership, the General Partner, the GP Board or the Conflicts Committee under Section 6.3; provided, further, that each party and their respective Affiliates may make statements that are consistent with statements made in previous press releases, public disclosures or public statements made by Parent or the Partnership in compliance with this Section 6.5.

 

 50 

 

 

Section 6.6            Access to Information. Upon reasonable advance notice and subject to applicable Laws relating to the exchange of information, each party shall, and shall cause each of its Subsidiaries to, afford to the other party and its Representatives, reasonable access during normal business hours (and, with respect to books and records, the right to copy) to all of its and such Subsidiaries’ properties, commitments, books, Contracts, records and correspondence (in each case, whether in physical or electronic form), officers, employees, accountants, counsel, financial advisors and other Representatives, in each case for the purpose of completing diligence related to the transactions contemplated by this Agreement; provided, that such access shall be provided on a basis that minimizes the disruption to the operations of the requested party and its Representatives. Subject to applicable Laws, from the date of this Agreement until the Effective Time, Parent and the Partnership shall furnish promptly to one another (i) a copy of each report, schedule, registration statement and other document filed, published, announced or received by it in connection with the transactions contemplated by this Agreement during such period pursuant to the requirements of federal, state or foreign Laws (including pursuant to the Securities Act, the Exchange Act and the rules of any Governmental Authority thereunder), as applicable (other than documents which such party is not permitted to disclose under applicable Laws) (which such furnishing will be deemed to have occurred in the case of any document filed with or furnished to the SEC without further action on the part of the furnishing party), and (ii) all information concerning Parent’s or the Partnership’s business, properties and personnel as the other party may reasonably request, including all information relating to environmental matters, for the purpose of completing the other party’s due diligence. Notwithstanding the foregoing, no party shall have an obligation to provide access to any information the disclosure of which the other party has concluded may jeopardize any privilege available to such party or any of its Affiliates relating to such information or would be in violation of a confidentiality obligation binding on such party or any of its Affiliates.

 

Section 6.7             Indemnification and Insurance.

 

(a)           From and after the Effective Time, to the fullest extent permitted under applicable Laws, Parent shall, and shall cause the Surviving Entity to, (i) indemnify and hold harmless against any reasonable costs or expenses (including reasonable attorneys’ fees and all other reasonable costs, expenses and obligations (including experts’ fees, travel expenses, court costs, retainers, transcript fees, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in, any Proceeding, including any Proceeding relating to a claim for indemnification or advancement brought by an Indemnified Person), judgments, fines, losses, claims, damages or liabilities, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any thereof) in connection with any actual or threatened Proceeding, and, upon receipt by Parent of an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined in a final and non-appealable judgment entered by a court of competent jurisdiction that the Indemnified Person is not entitled to be indemnified, provide advancement of expenses with respect to each of the foregoing to, all Indemnified Persons and (ii) honor the provisions regarding elimination of liability of officers and directors, indemnification of officers, directors and employees and advancement of expenses contained in the Organizational Documents of the Partnership and the General Partner immediately prior to the Effective Time, and ensure that the Organizational Documents of the Partnership and the General Partner or any of their respective successors or assigns, if applicable, shall, for a period of six years following the Effective Time, contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of present and former directors, officers and employees of the Partnership and the General Partner than are presently set forth in such Organizational Documents. Any right of an Indemnified Person pursuant to this Section 6.7(a) shall not be amended, repealed, terminated or otherwise modified at any time in a manner that would adversely affect the rights of such Indemnified Person as provided herein, and shall be enforceable by such Indemnified Person and their respective heirs and Representatives against Parent, the Partnership and the General Partner and their respective successors and assigns.

 

 51 

 

 

(b)           The Surviving Entity shall maintain in effect for a period of six years following the Effective Time the Partnership’s current directors’ and officers’ liability insurance policies covering acts or omissions occurring at or prior to the Effective Time with respect to Indemnified Persons (provided, that the Surviving Entity may substitute therefor policies with reputable carriers of at least the same coverage containing terms and conditions that are no less favorable to the Indemnified Persons); provided, however, that in no event shall the Surviving Entity be required to expend pursuant to this Section 6.7(b) more than an amount per year equal to 300% of current annual premiums paid by the Partnership for such insurance (the “Maximum Amount”). In the event that, but for the proviso to the immediately preceding sentence, the Surviving Entity would be required to expend more than the Maximum Amount, the Surviving Entity shall obtain the maximum amount of such insurance as is available for the Maximum Amount. If the Partnership in its sole discretion elects, then, in lieu of the obligations of the Surviving Entity under this Section 6.7(b), the Partnership may (but shall be under no obligation to), prior to the Effective Time, purchase a “tail policy” with respect to acts or omissions occurring or alleged to have occurred prior to the Effective Time that were committed or alleged to have been committed by such Indemnified Persons in their capacity as such; provided, that in no event shall the cost of such policy exceed the Maximum Amount.

 

(c)           The rights of any Indemnified Person under this Section 6.7 shall be in addition to any other rights such Indemnified Person may have under the Parent Organizational Documents, the Organizational Documents of each of the Partnership, the General Partner, the Surviving Entity or any Subsidiary of Parent or the Partnership, any indemnification agreements, or the DLLCA or DRULPA. The provisions of this Section 6.7 shall survive the consummation of the transactions contemplated by this Agreement and are expressly intended to benefit each of the Indemnified Persons and their respective heirs and Representatives. If Parent, the Surviving Entity and/or the General Partner, or any of their respective successors or assigns (i) consolidates with or merges into any other Person, or (ii) transfers or conveys all or substantially all of their businesses or assets to any other Person, then, in each such case, to the extent necessary, a proper provision shall be made so that the successors and assigns of Parent, the Surviving Entity and/or the General Partner shall assume the obligations of Parent, the Surviving Entity and the General Partner set forth in this Section 6.7.

 

 52 

 

 

Section 6.8            Fees and Expenses. Except as otherwise provided in Section 8.2 and Section 8.3, all fees and expenses incurred in connection with the transactions contemplated by this Agreement including all legal, accounting, financial advisory, consulting and all other fees and expenses of third parties incurred by a party in connection with the negotiation and effectuation of the terms and conditions of this Agreement and the transactions contemplated by this Agreement, shall be the obligation of the respective party incurring such fees and expenses, except (a) Parent and the Partnership shall each bear and pay one half of the expenses incurred in connection with the filing, printing and mailing of the Registration Statement and the Joint Proxy Statement and (b) Parent shall pay all costs and fees of the Exchange Agent and all expenses associated with the exchange process.

 

Section 6.9            Section 16 Matters. Prior to the Effective Time, the Partnership shall take all such steps as may be required (to the extent permitted under applicable Laws) to cause any dispositions of Common Units (including derivative securities with respect to Common Units) or acquisitions of Parent Common Stock (including derivative securities with respect to Parent Common Stock) resulting from the transactions contemplated by this Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Partnership, or will become subject to such reporting requirements with respect to Parent, to be exempt under Rule 16b-3 promulgated under the Exchange Act.

 

Section 6.10          Stock Exchange Listing, Delisting and Deregistration.

 

(a)               Parent shall use its reasonable best efforts to cause the Parent Shares to be issued in connection with the Merger (including Parent Shares to be reserved for issuance upon the conversion of any Series A Preferred Shares) to be listed on the NYSE, subject to official notice of issuance, prior to the Effective Time. Prior to the Closing, Parent shall submit a supplemental listing application with the NYSE (the “NYSE Listing Application”) with respect to such Parent Shares in accordance with the requirements of the NYSE. Parent shall use its reasonable best efforts to have the NYSE Listing Application approved (subject to official notice of issuance) as promptly as practicable after such submission (including by responding to comments of NYSE). The Partnership shall furnish all information as may be reasonably requested by Parent in connection with any such action and the preparation and submission of the NYSE Listing Application. No submission of, or amendment or supplement to, the NYSE Listing Application will be made by Parent without providing the Partnership with a reasonable opportunity to review and comment thereon. In addition, Parent agrees to provide the Partnership and its legal counsel with copies of any written comments, and shall inform the Partnership of any oral comments, that Parent or its counsel may receive from time to time from the NYSE or its staff with respect to the NYSE Listing Application promptly after receipt of such comments, and any written or oral responses thereto. The Partnership and its legal counsel shall be given a reasonable opportunity to review any such written responses and Parent shall give due consideration to the additions, deletions or changes suggested thereto by the Partnership and its counsel.

 

 53 

 

 

(b)          The Partnership will cooperate and use its reasonable best efforts to cause the delisting of Common Units from the NYSE and the deregistration of such securities under the Exchange Act as promptly as practicable following the Closing in compliance with applicable Law.

 

Section 6.11          Conflicts Committee. Prior to the earlier of the Effective Time and the termination of this Agreement, Parent shall not and it shall not permit any of its Subsidiaries to, and it shall not and shall not permit any of its Subsidiaries to take any action intended to cause the General Partner (or the sole member of the General Partner) to, without the consent of a majority of the then existing members of the Conflicts Committee, eliminate the Conflicts Committee, revoke or diminish the authority of the Conflicts Committee or remove or cause the removal of any director of the General Partner who is a member of the Conflicts Committee either as a director or as a member of such committee. For the avoidance of doubt, this Section 6.11 shall not apply to the filling, in accordance with the provisions of the General Partner Company Agreement, of any vacancies caused by the resignation, death or incapacity of any such director.

 

Section 6.12          Performance by the General Partner. Parent will cause the General Partner, the Partnership and their respective Subsidiaries to comply with the provisions of this Agreement. Notwithstanding the foregoing, it is understood and agreed that actions or inactions by the Partnership and the General Partner and their respective Subsidiaries shall not be deemed to be breaches or violations or failures to perform by Parent of any of the provisions of this Agreement unless such action or inaction was or was not taken, in either case, at the direction of Parent. In no event shall the General Partner or the Partnership have any liability for, or be deemed to breach, violate or fail to perform any of the provisions of this Agreement by reason of, any action taken or omitted to be taken by the General Partner, the Partnership, any of their respective Subsidiaries or any of their respective Representatives at the direction of Parent, any of its Subsidiaries or any of their respective Representatives.

 

Section 6.13           Tax Matters.

 

(a)           For U.S. federal income tax purposes (and for purposes of any applicable state, local or foreign Tax that follows the U.S. federal income tax treatment), the parties agree to treat the Merger as a taxable sale of the Public Common Units to EQM LP in exchange for the Merger Consideration. The parties will prepare and file all Tax Returns consistent with the foregoing and will not take any inconsistent position on any Tax Return, or during the course of any Proceeding with respect to Taxes, except as otherwise required by applicable Law following a final determination by a court of competent jurisdiction or other administrative settlement with or final administrative decision by the relevant Governmental Authority.

 

(b)           Parent shall use its reasonable best efforts to obtain the TMA Closing Opinion. Without limiting the generality of the foregoing, after the date of this Agreement until the Effective Time, Parent shall use its reasonable best efforts to not, and shall cause each of its Subsidiaries to use their respective reasonable best efforts to not, take any action or fail to take any action if such action or failure would reasonably be expected to cause Tax Counsel to be unable to issue the TMA Closing Opinion at or prior to the Closing in accordance with the Tax Matters Agreement or that would cause any of the representations made to Tax Counsel in connection with the TMA Signing Opinion to fail to be true and correct at the Closing.

 

 54 

 

 

Section 6.14          Takeover Statutes. Parent shall not, and shall cause its Subsidiaries not to, take any action that would, or would reasonably be expected to, cause any Takeover Law to become applicable to this Agreement, the Merger, the Parent Stock Issuance or the other transactions contemplated hereby or related thereto. If any Takeover Law shall become applicable to this Agreement, the Merger or the other transactions contemplated hereby or related thereto, Parent, the Parent Board, the General Partner, the GP Board and the Conflicts Committee shall use reasonable best efforts to take such actions so that the transactions contemplated hereby, including the Merger and the Parent Stock Issuance, may be consummated as promptly as practicable on the terms contemplated hereby and otherwise use reasonable best efforts to eliminate or minimize the effects of such statute or regulation on the transactions contemplated hereby, including the Merger and the Parent Stock Issuance.

 

Section 6.15           Securityholder Litigation. The Partnership and the General Partner shall give Parent prompt notice and the opportunity to participate in the defense or settlement of any securityholder litigation against the Partnership and the General Partner and/or their directors (as applicable) relating to the transactions contemplated by this Agreement and no such settlement shall be agreed to without the prior written consent of Parent, which shall not be unreasonably withheld, conditioned or delayed; provided, that the Partnership and the General Partner shall in any event control such defense and/or settlement and shall not be required to provide information if doing so would be reasonably expected to violate the confidentiality obligations of such party or threaten the loss of any attorney-client privilege or other applicable legal privilege.

 

Section 6.16           Voting and Consent. Parent covenants and agrees that, until the Effective Time or the earlier of a termination of this Agreement, (i) at the Partnership Equityholder Meeting or any other meeting of Limited Partners or any vote of Partnership Interests in connection with a vote of the Limited Partners, however called, Parent will vote, or cause to be voted, all Partnership Interests then owned beneficially or of record by it or any of its Subsidiaries, as of the record date for such meeting, in favor of the approval of this Agreement (as it may be amended or otherwise modified from time to time) and the Merger and the approval of any actions required in furtherance thereof and (ii) that Parent will not, and will cause each of its Subsidiaries not to, directly or indirectly, transfer, assign or otherwise dispose of any Partnership Interests owned by Parent or its Subsidiaries. Parent consents to, and has caused or shall cause, to the extent necessary and to the extent permitted by the Organizational Documents thereof, each of its Subsidiaries to consent to, this Agreement and the transactions contemplated by this Agreement.

 

Article VII

 

CONDITIONS PRECEDENT

 

Section 7.1            Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of each party hereto to effect the Merger shall be subject to the satisfaction (or waiver, if permissible under applicable Laws) on or prior to the Closing Date of the following conditions:

 

 55 

 

 

(a)            Partnership Equityholder Approval. The affirmative vote or consent of the holders of at least a majority of the outstanding Common Units, outstanding Class B Units, if any, and outstanding Series A Preferred Units, if any, with such Series A Preferred Units to be treated as Common Units on an as-converted basis, voting together as a single class at the Partnership Equityholder Meeting or any adjournment or postponement thereof in favor of the approval of this Agreement and the Merger (the “Partnership Equityholder Approval”) shall have been obtained in accordance with applicable Laws and the Partnership Agreement.

 

(b)            Parent Shareholder Approval. The Parent Shareholder Approval shall have been obtained in accordance with the rules of the NYSE.

 

(c)            No Injunctions or Restraints. No Law, injunction, judgment or ruling enacted, promulgated, issued, entered, amended or enforced by any Governmental Authority (collectively, “Restraints”) shall be in effect enjoining, restraining, preventing or prohibiting consummation of the transactions contemplated by this Agreement or making the consummation of the transactions contemplated by this Agreement illegal.

 

(d)           Registration Statement. The Registration Statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no Proceedings for that purpose shall have been initiated or threatened by the SEC.

 

(e)            Stock Exchange Listing. The Parent Common Stock deliverable to the Limited Partners as contemplated by this Agreement shall have been approved for listing on the NYSE, subject to official notice of issuance.

 

(f)            Tax Matters Opinion. Parent shall have caused Tax Counsel to issue the TMA Closing Opinion in accordance with the Tax Matters Agreement. In rendering such opinion, Tax Counsel shall be entitled to rely upon customary assumptions, representations, warranties and covenants from each of Parent, the Partnership and EQT (and any other relevant parties), in each case, in form and substance reasonably satisfactory to Tax Counsel.

 

(g)           Preferred Restructuring Agreement. The “Closing” (as defined in the Preferred Restructuring Agreement) shall have occurred, or shall occur concurrently with the Closing, in accordance with the terms of the Preferred Restructuring Agreement.

 

Section 7.2            Conditions to Obligations of Parent, EQM LP and Merger Sub to Effect the Merger. The obligations of Parent, EQM LP and Merger Sub to effect the Merger are further subject to the satisfaction (or waiver, if permissible under applicable Laws) on or prior to the Closing Date of the following conditions:

 

(a)            Representations and Warranties. (i) The representations and warranties of the Partnership and the General Partner contained in Section 4.1, Section 4.3(a), Section 4.3(c) and Section 4.6 shall be true and correct in all respects, in each case both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date); (ii) the representations and warranties of the Partnership and the General Partner contained in Section 4.2(a) and Section 4.2(c) shall be true and correct in all respects, other than immaterial misstatements or omissions, both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date); and (iii) all other representations and warranties of the Partnership and the General Partner set forth herein shall be true and correct both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this clause (i), where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “Partnership Material Adverse Effect” set forth in any individual representation or warranty, other than in Section 4.5 and Section 4.9) does not have, and would not reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect. Parent shall have received a certificate signed on behalf of the Partnership and the General Partner by an executive officer of the General Partner to such effect.

 

 56 

 

 

(b)           Performance of Obligations of the Partnership and the General Partner. Each of the Partnership and the General Partner shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date. Parent shall have received a certificate signed on behalf of the Partnership and the General Partner by an executive officer of the General Partner to such effect.

 

Section 7.3            Conditions to Obligation of the Partnership to Effect the Merger. The obligation of the Partnership to effect the Merger is further subject to the satisfaction (or waiver, if permissible under applicable Laws) on or prior to the Closing Date of the following conditions:

 

(a)            Representations and Warranties. (i) The representations and warranties of Parent contained in Section 5.1, Section 5.3(a) and Section 5.6 shall be true and correct in all respects, in each case both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date); (ii) the representations and warranties of Parent contained in Section 5.2(a) and (e) shall be true and correct in all respects, other than immaterial misstatements or omissions, both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date); and (iii) all other representations and warranties of Parent set forth herein shall be true and correct both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this clause (i), where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “Parent Material Adverse Effect” set forth in any individual representation or warranty, other than in Section 5.5 and Section 5.9) does not have, and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. The Partnership shall have received a certificate signed on behalf of Parent by an executive officer of Parent to such effect.

 

(b)            Performance of Obligations of Parent, EQM LP and Merger Sub. Each of Parent, EQM LP and Merger Sub shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date. The Partnership shall have received a certificate signed on behalf of Parent by an executive officer of Parent to such effect.

 

 57 

 

 

Section 7.4             Frustration of Closing Conditions.

 

(a)            Neither the Partnership nor the General Partner may rely on the failure of any condition set forth in Section 7.1, Section 7.2 or Section 7.3, as the case may be, to be satisfied if such failure was due to the failure of either such party to perform and comply in all material respects with the covenants and agreements in this Agreement to be performed or complied with by it prior to the Closing.

 

(b)            None of Parent, EQM LP or Merger Sub may rely on the failure of any condition set forth in Section 7.1, Section 7.2 or Section 7.3, as the case may be, to be satisfied if such failure was due to the failure of any such party to perform and comply in all material respects with the covenants and agreements in this Agreement to be performed or complied with by it prior to the Closing.

 

Article VIII

 

TERMINATION

 

Section 8.1            Termination. This Agreement may be terminated and the transactions contemplated by this Agreement abandoned at any time prior to the Effective Time:

 

(a)           by the mutual written consent of Parent and the Partnership duly authorized by the Parent Board and the Conflicts Committee, respectively;

 

(b)           by either of the Parent or the Partnership:

 

(i)            if the Closing shall not have been consummated on or before August 26, 2020 (the “Outside Date”); provided, however, that the right to terminate this Agreement under this Section 8.1(b)(i) shall not be available (A) to Parent or the Partnership if the inability to satisfy such condition was due to the failure of, in the case of Parent, Parent, EQM LP or Merger Sub, or, in the case of the Partnership, the Partnership or the General Partner, to perform and comply in all material respects with the covenants and agreements to be performed or complied with by it prior to the Closing or (B) to Parent or the Partnership if, in the case of Parent, the Partnership or the General Partner, or, in the case of the Partnership, Parent, EQM LP or Merger Sub, has filed (and is then pursuing) an action seeking specific performance as permitted by Section 9.9;

 

(ii)           if any Restraint having the effect set forth in Section 7.1(c) shall be in effect and shall have become final and nonappealable; provided, however, that the right to terminate this Agreement under this Section 8.1(b)(ii) shall not be available to Parent or the Partnership if such Restraint was due to the failure of, in the case of Parent, Parent, EQM LP or Merger Sub, or, in the case of the Partnership, the Partnership or the General Partner, to perform any of its obligations under this Agreement;

 

(iii)          if the Partnership Equityholder Meeting shall have concluded and the Partnership Equityholder Approval shall not have been obtained;

 

 58 

 

 

(iv)           if the Parent Shareholder Meeting shall have concluded and the Parent Shareholder Approval shall have not been obtained; or

 

(v)           if a Partnership Adverse Recommendation Change shall have occurred prior to receipt of the Partnership Equityholder Approval; provided that the Partnership may terminate this Agreement pursuant to this Section 8.1(b)(v) only if a Partnership Adverse Recommendation Change shall have occurred prior to receipt of the Partnership Equityholder Approval as a result of a Partnership Changed Circumstance and not, for the avoidance of doubt, as a result of a Superior Proposal;

 

(c)            by Parent:

 

(i)             if the Partnership or the General Partner shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement (or if any of the representations or warranties of the Partnership or the General Partner set forth in this Agreement shall fail to be true), which breach or failure (A) would (if it occurred or was continuing as of the Closing Date) give rise to the failure of a condition set forth in Section 7.2(a)(i) or Section 7.2(b) and (B) is incapable of being cured, or is not cured, by the Partnership or the General Partner within 30 days following receipt of written notice from Parent of such breach or failure; provided, however, that Parent shall not have the right to terminate this Agreement pursuant to this Section 8.1(c)(i) if Parent, EQM LP or Merger Sub is then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement; or

 

(ii)           if prior to receipt of the Partnership Equityholder Approval, the Partnership shall be in Willful Breach of its obligations set forth in Section 6.3; provided, however, that Parent shall not have the right to terminate this Agreement pursuant to Section 8.1(c)(ii) if Parent, EQM LP or Merger Sub is then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement.

 

(d)           by the Partnership:

 

(i)             if Parent shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement (or if any of the representations or warranties of Parent set forth in this Agreement shall fail to be true), which breach or failure (A) would (if it occurred or was continuing as of the Closing Date) give rise to the failure of a condition set forth in Section 7.3(a)(i) or Section 7.3(b) and (B) is incapable of being cured, or is not cured, by Parent within 30 days following receipt of written notice from the Partnership of such breach or failure; provided, that the Partnership shall not have the right to terminate this Agreement pursuant to this Section 8.1(d)(i) if the Partnership or the General Partner is then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement; or

 

(ii)           prior to the receipt of the Partnership Equityholder Approval, in order to enter into (concurrently with such termination) any agreement, understanding or arrangement providing for a Superior Proposal in accordance with Section 6.3.

 

 59 

 

 

Section 8.2            Effect of Termination. In the event of the termination of this Agreement as provided in Section 8.1, written notice thereof shall be given to the other party or parties, specifying the provision of this Agreement pursuant to which such termination is made, and this Agreement shall forthwith become null and void (other than the provisions in the last sentence of Section 6.6, the provisions in Section 6.8, this Section 8.2, Section 8.3 and Article IX, all of which shall survive termination of this Agreement), and, except as otherwise provided in this Section 8.2, there shall be no liability on the part of any of Parent, EQM LP, Merger Sub, the Partnership and the General Partner or their respective Representatives, directors, officers and Affiliates; provided, however, that no such termination shall relieve any party hereto from (a) its obligation to pay the Parent Expense Reimbursement, the Partnership Expense Reimbursement or the Partnership Termination Fee, as applicable, if, as and when required pursuant to Section 8.3, (b) any liability for any failure to consummate the Merger and the other transactions contemplated by this Agreement when required pursuant to this Agreement or (c) any liability for intentional fraud or a Willful Breach of any covenant or other agreement contained in this Agreement. Notwithstanding the foregoing, in no event shall the General Partner or the Partnership have any liability for any matter set forth in the proviso of the preceding sentence for any action taken or omitted to be taken by the General Partner, the Partnership, any of their respective Subsidiaries or any of their respective Representatives at the direction of Parent, any of its Subsidiaries or any of their respective Representatives. For purposes of this Agreement, “Willful Breach” shall mean a material breach of this Agreement that is a consequence of a deliberate act or a deliberate failure to act by the breaching party with the knowledge that the taking of such act (or the failure to take such act) would (i) cause a material breach of this Agreement and (ii) prevent or materially delay the Closing.

 

Section 8.3            Termination Fees; Expenses.

 

(a)           In the event this Agreement is terminated (i) by the Partnership or Parent pursuant to Section 8.1(b)(v) (Partnership Adverse Recommendation Change), (ii) by Parent pursuant to Section 8.1(c)(ii) (Breach of Non-Solicit), (iii) by the Partnership or Parent pursuant to Section 8.1(b)(iii) (Failed Partnership Equityholder Approval) in a case where a Partnership Adverse Recommendation Change has occurred, (iv) by the Partnership pursuant to Section 8.1(b)(i) (Outside Date) and, at the time of such termination under this clause (iv), (A) the Partnership Equityholder Approval shall not have been obtained and (B) Parent would have been permitted to terminate this Agreement pursuant to Section 8.1(b)(v) (Partnership Adverse Recommendation Change) or (v) by the Partnership pursuant to Section 8.1(d)(ii) (Superior Proposal), then the Partnership shall pay to Parent a termination fee equal to $36,500,000 (the “Partnership Termination Fee”) within two Business Days after the date of termination.

 

(b)          In the event of termination of this Agreement by (i) the Partnership or Parent pursuant to Section 8.1(b)(iii) (Failed Partnership Equityholder Approval) or (ii) Parent pursuant to Section 8.1(c)(i) (Partnership or General Partner Uncured Breach), then the Partnership shall promptly, but in no event later than two Business Days after receipt of an invoice (with supporting documentation) therefor from Parent, pay Parent’s designee all of the reasonably documented out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, financing sources, hedging counterparties, experts and consultants) incurred by Parent and its Affiliates in connection with this Agreement and the transactions contemplated hereby up to a maximum amount of $10 million (the “Parent Expense Reimbursement”).

 

 60 

 

 

(c)           In the event of termination of this Agreement by (i) the Partnership or Parent pursuant to Section 8.1(b)(iv) (Failed Parent Shareholder Vote) or (ii) the Partnership pursuant to Section 8.1(d)(i) (Parent Uncured Breach), then Parent shall promptly, but in no event later than two Business Days after receipt of an invoice (with supporting documentation) therefor from the Partnership, pay the Partnership’s designee all of the reasonably documented out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, financing sources, hedging counterparties, experts and consultants) incurred by the Partnership and its Affiliates in connection with this Agreement and the transactions contemplated hereby up to a maximum amount of $10 million (the “Partnership Expense Reimbursement”); provided, that the Partnership Expense Reimbursement shall not exceed the maximum amount, if any, that the Partnership reasonably determines can be paid to the Partnership without causing the Partnership to fail the gross income requirement in Section 7704(c)(2) of the Code, treating the Partnership Expense Reimbursement as non-qualifying income and after taking into consideration all other sources of non-qualifying income of the Partnership, unless the Partnership receives an opinion of counsel or a ruling from the Internal Revenue Service to the effect that the Partnership’s receipt of the Partnership Expense Reimbursement will either constitute qualifying income (as defined in Section 7704(d) of the Code) or be excluded from gross income for purposes of Section 7704 of the Code.

 

(d)           Each of the parties hereto acknowledges that the Partnership Termination Fee, Parent Expense Reimbursement and Partnership Expense Reimbursement are not intended to be a penalty, but rather are liquidated damages in a reasonable amount that will compensate the other party, as applicable, in the circumstances in which such amounts are due and payable and which do not involve fraud or Willful Breach, for the efforts and resources expended and opportunities forgone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the transactions contemplated hereby, which amount would otherwise be impossible to calculate with precision. In no event shall a party be entitled to more than one payment of the Partnership Termination Fee, Parent Expense Reimbursement and Partnership Expense Reimbursement, as applicable, in connection with a termination of this Agreement pursuant to which such amounts are payable.

 

(e)           The parties acknowledge that the provisions of this Section 8.3 are an integral part of the transactions contemplated hereby and that, without these agreements, none of the Partnership, the General Partner, Parent, EQM LP or Merger Sub would enter into this Agreement. Accordingly, in the event that the Partnership shall fail to pay the Partnership Termination Fee required pursuant to this Section 8.3 when due, such fee shall accrue interest for the period commencing on the date such fee became past due, at a rate equal to the prime rate set forth in The Wall Street Journal in effect on the date such payment was required to be made plus 5%. In addition, if the Partnership shall fail to pay the Partnership Termination Fee when due, the Partnership shall also pay all of Parent’s reasonable costs and expenses (including fees and expenses of counsel) in connection with efforts to collect such fee.

 

 61 

 

 

Article IX

 

MISCELLANEOUS

 

Section 9.1            No Survival, Etc. The representations, warranties and agreements in this Agreement (including, for the avoidance of doubt, any schedule, instrument or other document delivered pursuant to this Agreement) shall terminate at the Effective Time or, except as otherwise provided in Section 8.2 or Section 8.3, upon the termination of this Agreement pursuant to Section 8.1, as the case may be, except that the agreements set forth in Article I, Article II, Article III, the last sentence of Section 6.6, Section 6.8 and Article IX and any other agreement in this Agreement that contemplates performance after the Effective Time shall survive the Effective Time.

 

Section 9.2            Amendment or Supplement. At any time prior to the Effective Time, this Agreement may be amended or supplemented in any and all respects, whether before or after receipt of the Partnership Equityholder Approval and the Parent Shareholder Approval, by written agreement of the parties, by action taken or authorized by the Parent Board and the GP Board; provided, however, that the GP Board may not take or authorize any such action unless it has been approved by the Conflicts Committee; provided, further, that (i) following receipt of the Parent Shareholder Approval, there shall be no amendment or change to the provisions of this Agreement which by applicable Laws, the Parent Organizational Documents or stock exchange rule would require further approval by Parent Shareholders and (ii) following receipt of the Partnership Equityholder Approval, there shall be no amendment or change to the provisions of this Agreement which by applicable Laws, the Partnership Agreement or stock exchange rule would require further approval by the Limited Partners.

 

Section 9.3            GP Board Consent. Unless otherwise expressly set forth in this Agreement, whenever a determination, decision, approval, consent, waiver or agreement of the Partnership or the General Partner is required pursuant to this Agreement (including any determination to exercise or refrain from exercising any rights under Article VIII or to enforce the terms of this Agreement (including Section 9.9)), such determination, decision, approval or consent must be authorized by the GP Board; provided, however, that the GP Board may not take or authorize any such action unless it has been approved in writing by the Conflicts Committee.

 

Section 9.4            Extension of Time, Waiver, Etc. At any time prior to the Effective Time, any party may, subject to applicable Law, (a) waive any inaccuracies in the representations and warranties of any other party hereto, (b) extend the time for the performance of any of the obligations or acts of any other party hereto, (c) waive compliance by the other party with any of the agreements contained herein or, except as otherwise provided herein, waive any of such party’s conditions or (d) make or grant any consent under this Agreement; provided, however, that the GP Board may not take or authorize any such action unless it has been approved in writing by the Conflicts Committee. Notwithstanding the foregoing, no failure or delay by the Partnership, the General Partner, Parent, EQM LP or Merger Sub in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

 

 62 

 

 

Section 9.5            Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by operation of Law or otherwise, by any of the parties without the prior written consent of the other parties, but no such assignment shall relieve Merger Sub of any of its obligations hereunder. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns. Any purported assignment not permitted under this Section 9.5 shall be null, void and ineffective.

 

Section 9.6            Counterparts. This Agreement may be executed in counterparts (each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement) and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.

 

Section 9.7            Entire Understanding; No Third-Party Beneficiaries. This Agreement, the Partnership Disclosure Schedule, the Parent Disclosure Schedule and any certificates delivered by any party pursuant to this agreement (a) constitute the entire agreement and understanding, and supersede all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement and thereof and (b) shall not confer upon any Person other than the parties hereto any rights (including third-party beneficiary rights or otherwise) or remedies hereunder, except for, in the case of clause (b) of this sentence, (i) the right of a holder of Public Common Units to receive the Merger Consideration (a claim by any holder of Public Common Units with respect to which may not be made unless and until the Closing shall have occurred), the right of a holder of a Partnership LTIP Award to receive the Merger Consideration (a claim by any holder of Partnership LTIP Award with respect to which may not be made unless and until the Closing shall have occurred) and (ii) the provisions of Section 6.7 and Section 9.12.

 

Section 9.8             Governing Law; Jurisdiction; Waiver of Jury Trial.

 

(a)           This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, applicable to contracts executed in and to be performed entirely within that State.

 

(b)           Each of the parties hereto irrevocably agrees that any legal action or Proceeding with respect to this Agreement and the rights and obligations arising hereunder, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each of the parties hereto consents to service being made through the notice procedures set forth in Section 9.10, irrevocably submits with regard to any such action or Proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts. Each of the parties hereto irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or Proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 9.8, (ii) any claim that it or its property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by the applicable Laws, any claim that (A) the suit, action or Proceeding in such court is brought in an inconvenient forum, (B) the venue of such suit, action or Proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Each party hereto expressly acknowledges that the foregoing waiver is intended to be irrevocable under the Law of the State of Delaware and of the United States of America; provided, however, that each such party’s consent to jurisdiction and service contained in this Section 9.8(b) is solely for the purpose referred to in this Section 9.8(b) and shall not be deemed to be a general submission to such courts or in the State of Delaware other than for such purpose.

 

 63 

 

 

(c)            EACH PARTY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

Section 9.9            Specific Performance. The parties agree that irreparable damage would occur and that the parties would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and it is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, in accordance with this Section 9.9 in the Delaware Court of Chancery or any other state or federal court sitting in the State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity. Each of the parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief as provided herein on the basis that (a) either party has an adequate remedy at law or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity (it being understood that nothing in this sentence shall prohibit the parties hereto from raising other defenses to a claim for specific performance or other equitable relief under this Agreement). Each party further agrees that no party shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 9.9, and each party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

 

Section 9.10           Notices. All notices and other communications hereunder must be in writing and will be deemed duly given if delivered personally or by email transmission, or mailed through a nationally recognized overnight courier, postage prepaid, to the parties at the following addresses (or at such other address for a party as specified by like notice, provided, however, that notices of a change of address will be effective only upon receipt thereof):

 

 64 

 

 

If to Parent, EQM LP or Merger Sub, to:

 

Equitrans Midstream Corporation

2200 Energy Drive

Canonsburg, PA 15317

Attention: Kirk R. Oliver
 Stephen M. Moore
 Email: koliver@equitransmidstream.com
  smoore@equitransmidstream.com

 

with copies (which shall not constitute notice) to:

 

Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, TX 77002

 Attention:Ryan J. Maierson
  Nick S. Dhesi
 Email:ryan.maierson@lw.com
  nick.dhesi@lw.com

 

If to the Partnership or the General Partner, to:

 

EQM Midstream Partners, LP

2200 Energy Drive

Canonsburg, PA 15317

 Attention: Kirk R. Oliver
  Stephen M. Moore
 Email:koliver@equitransmidstream.com
  smoore@equitransmidstream.com

 

with copies (which shall not constitute notice) to:

 

Richards, Layton & Finger, P.A.
One Rodney Square
920 North King Street
Wilmington, Delaware 19801

 Attention: Srinivas M. Raju
  Gregory W. Ladner
 Email:Raju@RLF.com
  Ladner@RLF.com

 

Notices will be deemed to have been received on the date of receipt if (a) delivered by hand or nationally recognized overnight courier service or (b) upon receipt of an appropriate confirmation by the recipient when so delivered by email (to such email specified or another email or emails as such person may subsequently designate by notice given hereunder only if followed by overnight or hand delivery).

 

 65 

 

 

Section 9.11         Severability. If any term or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, provisions and conditions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Laws in an acceptable manner to the end that the transactions contemplated by this Agreement are fulfilled to the extent possible.

 

Section 9.12         Non-Recourse. No past, present or future director, officer, employee, incorporator, member, partner, equityholder, agent, attorney, financing source, Representative or Affiliate of any party hereto or of any of their respective Affiliates (unless such Affiliate is expressly a party to this Agreement) shall have any liability (whether in contract or in tort or otherwise) for any obligations or liabilities arising under, in connection with or related to this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated by this Agreement; provided, however, that nothing in this Section 9.12 shall limit any liability of the parties to this Agreement for breaches of the terms and conditions of this Agreement.

 

[Signature pages follow.]

 

 66 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.

 

 

  PARENT:  
     
  EQUITRANS MIDSTREAM CORPORATION
     
     
  By: /s/ Thomas F. Karam
  Name: Thomas F. Karam
  Title: Chief Executive Officer
     
     
  EQM LP:  
     
  EQM LP CORPORATION
     
     
  By: /s/ Thomas F. Karam
  Name: Thomas F. Karam
  Title: Chief Executive Officer
     
     
     
  MERGER SUB:
     
  LS MERGER SUB, LLC
     
     
  By: /s/ Thomas F. Karam
  Name: Thomas F. Karam
  Title: Chief Executive Officer

 

Signature Page to Agreement and Plan of Merger

 

 

 

 

  PARTNERSHIP:
     
  EQM MIDSTREAM PARTNERS, LP
     
  By: EQGP SERVICES, LLC,
  its general partner
     
     
  By: /s/ Kirk R. Oliver
  Name: Kirk R. Oliver
  Title: Senior Vice President and Chief Financial Officer
     
     
  GENERAL PARTNER:
     
  EQGP SERVICES, LLC
     
     
  By: /s/ Kirk R. Oliver
  Name: Kirk R. Oliver
  Title: Senior Vice President and Chief Financial Officer

 

Signature Page to Agreement and Plan of Merger

 

 

 

EX-10.1 3 tm2010833d1_ex10-1.htm EXHIBIT 10.1

Exhibit 10.1

 

Execution Version

 

PREFERRED RESTRUCTURING AGREEMENT

 

This PREFERRED RESTRUCTURING AGREEMENT (this “Agreement”), dated as of February 26, 2020, is made and entered into by and among Equitrans Midstream Corporation, a Pennsylvania corporation (the “Company”), EQM Midstream Partners, LP, a Delaware limited partnership (the “Partnership”), and the investors set forth on Schedule I hereto (collectively, the “Investors”).  The Company, the Partnership and each of the Investors are referred to herein individually as a “Party” and collectively as the “Parties.” All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Partnership Agreement (as defined below).

 

R E C I T A L S

 

WHEREAS, on March 13, 2019, the Partnership entered into that certain Convertible Preferred Unit Purchase Agreement (the “Preferred Purchase Agreement”) with the purchasers party thereto (the “Initial Series A Purchasers”), pursuant to which, among other things, the Partnership agreed to issue and sell Series A Perpetual Convertible Preferred Units representing limited partner interests in the Partnership (the “Series A Preferred Units”) to the Initial Series A Purchasers;

 

WHEREAS, on March 18, 2019, the Partnership entered into those certain Joinder Agreements to the Preferred Purchase Agreement (collectively, the “Joinder Agreements”) with the purchasers identified therein (the “Joinder Series A Purchasers” and, together with the Initial Series A Purchasers, the “Series A Preferred Unitholders”), pursuant to which, among other things, the Partnership agreed to issue and sell Series A Preferred Units to the Joinder Series A Purchasers;

 

WHEREAS, concurrently with the execution and delivery of this Agreement, the Company, EQM LP Corporation, a Delaware corporation and a wholly owned subsidiary of the Company (“EQM LP”), LS Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of EQM LP (“Merger Sub”), the Partnership, and EQGP Services, LLC, a Delaware limited liability company and the general partner of the Partnership, are entering into an Agreement and Plan of Merger (the “Merger Agreement”), providing for, among other things, the merger of Merger Sub with and into the Partnership (the “Merger”), with the Partnership surviving the Merger as an indirect wholly owned subsidiary of the Company;

 

WHEREAS, the consummation of the Merger will constitute a “Series A Change of Control” and “Partnership Rollup Event” (each as defined in the Partnership Agreement);

 

WHEREAS, the Investors constitute all of the Series A Preferred Unitholders as of the date of this Agreement;

 

WHEREAS, pursuant to Section 5.11(b)(vi)(B) of the Partnership Agreement, upon a Series A Change of Control that constitutes a Partnership Rollup Event, each Series A Preferred Unitholder is entitled to elect the treatment of their Series A Preferred Units (the “Series A CoC Options”);

 

WHEREAS, in lieu of electing a Series A CoC Option as set forth in the Partnership Agreement, and upon performance in full of the Company’s and the Partnership’s obligations hereunder at the Closing (as defined below), in full satisfaction of each Series A Preferred Unitholder’s right to elect a Series A CoC Option under the Partnership Agreement upon the Series A Change of Control and Partnership Rollup Event resulting from the Merger, the Parties desire for (i) the Partnership to redeem in cash from each Investor the number of Series A Preferred Units set forth opposite such Investor’s name under “Redeemed Series A Preferred Units” on Schedule I (the “Redemption”) and (ii) each Investor to exchange (together with the Redemption, the “Restructuring”) the total number of Series A Preferred Units such Investor owns, after giving effect to the Redemption, for the number of Series A Preferred Shares (as defined below) set forth opposite such Investor’s name under “Series A Preferred Shares” on Schedule I (each such Series A Preferred Share constituting a “Series A Substantially Equivalent Unit” as defined in the Partnership Agreement), in each case, on the terms and subject to the conditions set forth in this Agreement;

 

 

 

 

WHEREAS, the Investors and the Partnership’s management have discussed the reasons for the Merger and the potential benefits to the unitholders of the Partnership that may result therefrom, and based on such discussions and the terms of the Merger, the Investors desire to support the Merger as more fully described in this Agreement; and

 

WHEREAS, the Parties are entering into this Agreement to reflect the agreements between the Parties in connection with the Restructuring.

 

NOW, THEREFORE, in consideration of the foregoing, the representations, warranties, covenants, and agreements contained in this Agreement and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

 

Article I
DEFINITIONS

 

1.1          Definitions.  For all purposes of and under this Agreement, the following terms shall have the following respective meanings:

 

(a)                Affiliate” means, with respect to a specified Person, any other Person, directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control” (including, with correlative meanings, “controlling,” “controlled by,” and “under common control with”) means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding anything to the contrary provided herein, for purposes of this Agreement, no Investor shall be considered an Affiliate of the Company or the Partnership, and no Investor or any of its Affiliates shall be considered Affiliates of any other Investor or any of such other Investor’s Affiliates, in either case, solely by virtue of such Investor’s ownership of the Series A Preferred Shares. Notwithstanding anything in this definition to the contrary, for purposes of this Agreement, (a) the Company Entities and the Partnership Entities, on the one hand, and any Investor, on the other hand, shall not be considered Affiliates and (b) any fund or account managed, advised or subadvised, directly or indirectly, by an Investor or its Affiliates, shall be considered an Affiliate of such Investor.

 

(b)                Affiliate Group” means, with respect to each Investor, collectively, such Investor and each of its Affiliates who is also a holder of Series A Preferred Units.

 

(c)                Assets” means all of the assets that are owned and operated by the Company Entities or the Partnership Entities, as applicable.

 

(d)                Business Day” means any day other than a Saturday, Sunday, any federal legal holiday or any other day on which banking institutions in the State of New York or the Commonwealth of Pennsylvania are authorized or required by Law or other governmental action to close.

 

(e)                Certificate of Designations” means the Certificate of Designations establishing the Series A Preferred Shares, in the form attached hereto as Exhibit B.

 

2

 

 

(f)                 Code” means the Internal Revenue Code of 1986, as amended.

 

(g)                Common Shares” means the shares of common stock, no par value, of the Company.

 

(h)                Company Articles” means the Amended and Restated Articles of the Company, as amended.

 

(i)                 Company Disclosure Schedule” has the meaning set forth in the lead-in to Article III.

 

(j)                 Company Entities” means the Company and its subsidiaries; provided, however, that none of the Partnership or its subsidiaries shall be considered a Company Entity for purposes of this Agreement.

 

(k)                Company Schedule” has the meaning set forth in the lead-in to Article III.

 

(l)                 Enforceability Exceptions” means (i) applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a Proceeding in equity or at Law) and (ii) public policy, applicable Law relating to fiduciary duties and indemnification and contribution and an implied covenant of good faith and fair dealing.

 

(m)              Exchange Act” means the Securities and Exchange Act of 1934, as amended.

 

(n)                GAAP” means generally accepted accounting principles in the United States of America in effect as of the date hereof; provided, that for the financial statements of the Company prepared as of a certain date, GAAP referenced therein shall be GAAP as of the date of such financial statements.

 

(o)                Governmental Authority” means any federal, state, provincial, local or foreign court, tribunal, arbitrator, administrative body or other governmental or quasi-governmental entity, including any head of a government department, body or agency, with competent jurisdiction.

 

(p)                Knowledge” means, with respect to the Company, the actual knowledge of the Chief Executive Officer, the Chief Financial Officer and the Chief Operating Officer of the Company after reasonable inquiry.

 

(q)                Laws” means all statutes, regulations, codes, tariffs, ordinances, decisions, administrative interpretations, writs, injunctions, stipulations, statutory rules, orders, judgments, decrees, and terms and conditions of any grant of approval, permission, authority, permit, or license of any court, Governmental Authority, statutory body, or self-regulatory authority (including the New York Stock Exchange).

 

(r)                 Lead Investors” means the Investors listed on Exhibit E.

 

(s)                Liens” means any lien (statutory or otherwise), encumbrance, security interest, security agreement, pledge, mortgage, conditional sale, trust receipt, charge or claim or a lease, consignment or bailment, preference or priority, assessment, easement, servitude, restriction on transfer or other encumbrance upon or with respect to any property of any kind.

 

3

 

 

(t)                 Material Adverse Effect” means any event, circumstance, occurrence, change or effect that, individually or in the aggregate, has had or would reasonably be expected to have a material and adverse effect on (a) the Assets, liabilities, condition (financial or otherwise), business, results of operations, affairs or prospects of the Company Entities taken as a whole; (b) the ability of the Company Entities taken as a whole to carry on their respective business as such business is conducted as of the date hereof or on the ability of the Company Entities taken as a whole to meet their obligations under the Restructuring Documents on a timely basis; or (c) the ability of the Company or the Company Entities to consummate the transactions contemplated by the Restructuring Documents; provided, however, that a Material Adverse Effect shall not include any material and adverse effect on the foregoing to the extent such material and adverse effect results from, arises out of, or is attributable to (i) a general deterioration in the economy or changes in the general state of the industries in which the Company Entities operate, except, with respect to this clause (i), to the extent that the Company Entities, taken as a whole, are adversely affected in a disproportionate manner as compared to other industry participants, (ii) acts of war (whether or not declared), hostilities, sabotage, terrorism, military actions or the escalation of any of the foregoing, hurricane, flood, tornado, earthquake or other natural disaster, or any other force majeure event, whether or not caused by any Person, or any national or international calamity or crisis, (iii) any change in applicable Law or GAAP or the interpretation or enforcement thereof applicable to any of the Company Entities, (iv) any change in the credit rating of any of the Company Entities or any of their securities (it being understood that the facts and circumstances giving rise to such change in the credit rating may be deemed to constitute, and may be taken into account in determining whether there has been or would reasonably be expected to be a Material Adverse Effect if such facts and circumstances are not otherwise described in clauses (i) through (v) of this definition), or (v) any change resulting or arising from (A) the taking of any action by the Company or any of its Affiliates required or otherwise expressly contemplated by this Agreement or consented to or requested by the Investors in writing or (B) the abstaining by the Company or any of its Affiliates from taking any action that is prohibited by this Agreement or which abstention is otherwise requested by the Investors.

 

(u)                “NYSE” means the New York Stock Exchange.

 

(v)                Organizational Documents” means, as applicable, an entity’s agreement or certificate of limited partnership, limited liability company agreement, certificate of formation, certificate or articles of incorporation, bylaws or other similar organizational documents.

 

(w)               Partnership Agreement” means the Fourth Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of April 10, 2019, as amended by the First Amendment thereto, dated as of October 9, 2019, and the Second Amendment thereto, dated as of February 26, 2020.

 

(x)                 Partnership Disclosure Schedule” has the meaning set forth in the lead-in to Article IV.

 

(y)                Partnership Entities” has the meaning ascribed to such term in the Preferred Purchase Agreement.

 

(z)                 Partnership Schedule” has the meaning set forth in the lead-in to Article IV.

 

(aa)              Person” means an individual or entity, including any partnership, corporation, association, trust, limited liability company, joint venture, unincorporated organization, or other entity or Governmental Authority.

 

(bb)             Proceeding” means any claim, action, suit, proceeding, arbitration, mediation, investigation, or inquiry by or before any Governmental Authority or otherwise.

 

4

 

 

(cc)              Representatives” of any Person means the officers, directors, managers, employees, agents, counsel, accountants, investment bankers and other representatives of such Person.

 

(dd)             Restructuring Documents” means, collectively, this Agreement, the Certificate of Designations (as defined below), the Registration Rights Agreement and any and all other agreements or instruments executed and delivered by the Company, the Partnership or the Investors hereunder or thereunder.

 

(ee)              Rules and Regulations” means the requirements of the Securities Act and the rules and regulations of the Commission thereunder.

 

(ff)                SEC Documents” means the Company’s registration statements, reports, schedules and statements required to be filed by it with the Commission under the Exchange Act or the Securities Act and filed prior to the date hereof.

 

(gg)              Securities Act” means the Securities Act of 1933, as amended.

 

(hh)              Series A Preferred Shares” means the class of shares of the Company designated as “Series A Perpetual Convertible Preferred Shares” with the designations, preferences and relative, participating, optional or other special rights, privileges, powers, duties and obligations as set forth in the Certificate of Designations.

 

(ii)                Tax Return” means any return, report or similar filing (including attached schedules, statements and exhibits) filed or required to be filed with respect to Taxes (and any amendments thereto), including any information return, claim for refund or declaration of estimated Taxes.

 

(jj)                Taxes” means any foreign, federal, state, local or other taxes of any kind whatsoever (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Authority, including taxes on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, unemployment, social security, workers’ compensation or net worth, and taxes in the nature of excise, withholding, ad valorem, value added and production or severance taxes.

 

(kk)              Treasury Regulations” means the Treasury regulations promulgated under the Code.

 

1.2          Other Definitional and Interpretative Provisions.

 

(a)                The division of this Agreement into articles, sections, and other portions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof. Unless otherwise indicated, all references to an “Article” or “Section” followed by a number or a letter refer to the specified Article or Section of this Agreement. The terms “this Agreement,” “hereof,” “herein,” and “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section, or other portion hereof.  Unless otherwise specifically indicated or the context otherwise requires, (i) all references to “dollars” or “$” mean United States dollars, (ii) words importing the singular shall include the plural and vice versa and words importing any gender shall include all genders, and (iii) “include,” “includes,” and “including” shall be deemed to be followed by the words “without limitation.”

 

5

 

 

(b)                In the event that any date on which any action is required to be taken hereunder by any of the Parties that can only be taken on a Business Day, but such date does not fall on a Business Day, such action shall be required to be taken on the next succeeding day that is a Business Day.  Reference to any Party is also a reference to such Party’s permitted successors and assigns. The Exhibits attached to this Agreement are hereby incorporated by reference into this Agreement and form part hereof. Unless otherwise indicated, all references to an “Exhibit” followed by a number or a letter refer to the specified Exhibit to this Agreement. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, it is the intention of the Parties that this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Person by virtue of the authorship of any of the provisions of this Agreement. In this Agreement, specific provisions shall prevail over general provisions.  Further, prior drafts of this Agreement, or the fact that any clauses have been added, deleted, or otherwise modified from any prior drafts of this Agreement, shall not be used as an aid of construction or otherwise constitute evidence of the intent of the Parties; and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of such prior drafts.

 

Article II
SERIES A RESTRUCTURING

 

2.1          Restructuring.

 

(a)                The Parties hereby acknowledge and agree that in connection with the occurrence of a Series A Change of Control pursuant to the Merger, at the Closing (and further conditioned upon, in the case of the Investors, delivery by the Company and the Partnership, substantially concurrently with the Closing, of the deliverables set forth in Sections 2.10 and 2.11, as applicable) (i) the Partnership will redeem in cash from each Investor the number of Series A Preferred Units set forth opposite such Investor’s name under “Redeemed Series A Preferred Units” on Schedule I (subject to Section 2.1(b)) at a price per Series A Preferred Unit equal to 101% of the sum of (i) the Series A Accrued Amount of such Series A Preferred Unit as of the Closing plus (ii) any Series A Partial Period Distributions on such Series A Preferred Unit as of the Closing (such cash payment as to each Investor, the “Redemption Payment”), and (ii) each Investor will exchange each remaining Series A Preferred Unit, after giving effect to the Redemption, such Investor owns for 2.44 Series A Preferred Shares issued by the Company. In consideration for the foregoing, each Investor hereby waives its rights (including, without limitation, in respect of any notice requirement) granted to such Investor in the Partnership Agreement to elect a Series A CoC Option with respect to the Merger (provided, that for the avoidance of doubt, the foregoing shall not limit any Investor in exercising any such right to make any Series A CoC Option election with respect to any applicable transaction following any termination of this Agreement). Effective as of the Closing, (a) each Investor hereby agrees to surrender for cancellation to the transfer agent of the Partnership (the “Partnership Transfer Agent”), free and clear of any and all Liens other than those arising under the Partnership Agreement, the number of Series A Preferred Units set forth opposite such Investor’s name under the heading “Series A Preferred Units” on Schedule I hereto and (b) upon such surrender, (1) the Partnership hereby agrees to cause the Partnership Transfer Agent to pay to such Investor such Investor’s Redemption Payment in accordance with Section 2.11(a) and (2) the Company hereby agrees to cause the transfer agent of the Company (the “Company Transfer Agent”) to issue to such Investor, free and clear of any and all Liens, the number of Series A Preferred Shares set forth opposite such Investor’s name under the heading “Series A Preferred Shares” on Schedule I hereto. Each Investor hereby acknowledges and agrees that each Series A Preferred Share it receives pursuant to this Agreement and the Certificate of Designations shall constitute a “Series A Substantially Equivalent Unit” as defined in the Partnership Agreement and hereby waives any right to bring any Proceeding against the Partnership or its Affiliates claiming the contrary.

 

6

 

 

(b)                Notwithstanding anything to the contrary in this Agreement, each Investor shall have the right, by delivering written notice to the Company and the Partnership not less than five Business Days prior to the Closing, to re-allocate among the Investors in such Investor’s Affiliate Group the number of Series A Preferred Units to be redeemed from each Investor in such Affiliate Group (and the corresponding Redemption Payment to be made to each such Investor) in the Redemption; provided, that such new allocations shall not result in any change to the aggregate number of Series A Preferred Units to be redeemed from all Investors in such Affiliate Group in the Redemption as set forth on Schedule I.

 

2.2          Closing. Upon the terms and subject to the conditions hereof, the consummation of the Restructuring (the “Closing”) shall take place on the same date (the “Closing Date”) as, and concurrently with, the closing of the Merger, at the offices of Latham & Watkins LLP at 811 Main Street, Suite 3700, Houston, Texas 77002.

 

2.3           No Further Rights in Series A Preferred Units. Each Investor hereby acknowledges and agrees that, upon surrender of such Investor’s Series A Preferred Units to the Partnership Transfer Agent and receipt of both the Redemption Payment and Series A Preferred Shares in accordance with the terms hereof, such Investor’s rights pursuant to Section 2.1 of this Agreement and Section 5.11(b)(vi) of the Partnership Agreement will be deemed to have been satisfied, and any rights, preferences and privileges afforded to the Investor in the Partnership Agreement as a holder of Series A Preferred Units shall also be automatically canceled and cease to exist.

 

2.4           NYSE. The Company hereby acknowledges and agrees that, prior to the consummation of the Restructuring, the New York Stock Exchange shall have authorized, upon official notice of issuance, the listing of the Common Shares issuable upon conversion of the Series A Preferred Shares in accordance with the Certificate of Designations (the “Conversion Shares”).

 

2.5           Support of Merger. In accordance with Section 5.11(b)(ii)(C)(1) of the Partnership Agreement, each Investor hereby acknowledges and agrees that such Investor will vote, or cause to be voted, all Series A Preferred Units owned (beneficially or of record) by such Investor in favor of the Merger and the Merger Agreement at the special meeting of the limited partners of the Partnership for the purposes of considering and voting upon approval of the Merger and the Merger Agreement; provided, however, that no Investor shall be required to comply with the provisions of this Section 2.5 if (a) the Partnership is in violation, breach or default (or, with the giving of notice or lapse of time, would be in violation, breach or default) under any provision of its Organizational Documents or this Agreement or (b) the Company or the Partnership is in violation, breach or default (or, with the giving of notice or lapse of time, would be in violation, breach or default) under any of the Restructuring Documents, except, in the case of clauses (a) and (b), where such breaches, violations or defaults, individually or in the aggregate, would not reasonably be likely to materially impair the ability of the Company or the Partnership to consummate the transactions contemplated by the Merger Agreement or this Agreement.

 

2.6          Restrictions on Transfer. Until the earlier of (i) the Closing and (ii) the termination of this Agreement, each Investor shall not transfer any of its Series A Preferred Units unless (a) such transfer complies with the terms and conditions of the Partnership Agreement and (b) any assignee of such transferred Series A Preferred Units executes a Joinder Agreement to this Agreement in the form attached hereto as Exhibit F. Notwithstanding anything to the contrary herein, in the event that prior to the Closing any lender, other creditor or counterparty under any Permitted Loan transaction (including any agent or trustee on their behalf) or any Affiliate of the foregoing (A) exercises any rights or remedies under such Permitted Loan on foreclosure or other exercise of remedies or rights in respect of any pledged Series A Preferred Units and (B) converts any or all of such pledged Series A Preferred Units into Series A Conversion Units in accordance with Section 5.11(b)(v)(A) of the Partnership Agreement, then Section 3.2(b) and Schedule I of this Agreement shall each be appropriately adjusted to reflect such reduction in the number of outstanding Series A Preferred Units and corresponding reduction in the Series A Preferred Shares to be issued at the Closing. In the event any such lender, creditor or counterparty converts less than all Series A Preferred Units held by such Person, the resulting reduction to the number of “Redeemed Series A Preferred Units” and “Series A Preferred Units Not Redeemed” as set forth opposite the applicable Investor’s name on Schedule I shall be made pro rata.

 

7

 

 

2.7          Registration Rights Agreement.  Each Investor, the Partnership and the Company, as applicable, hereby agree that, if the Closing occurs and the Series A Preferred Shares are issued to the Investors, then (a) effective as of the Closing, their respective rights under that certain Registration Rights Agreement, dated as of April 10, 2019, by and among the Partnership and the Investors shall terminate without any further action on the part of the Partnership or any Investor, and (b) on the Closing, the Company and each of the Investors shall execute and deliver a Registration Rights Agreement in substantially the form attached hereto as Exhibit A (the “Registration Rights Agreement”).

 

2.8          DTC Eligibility. The Company will cooperate with the Investors and use its commercially reasonable efforts to cause the Series A Preferred Shares to be eligible for clearance and settlement through the facilities of DTC by the earlier of the twentieth (20th) Business Day following the Closing or the time by which the Series A Preferred Shares have been registered under the Securities Act.

 

2.9          Certificate of Designations.  Immediately following the Closing, the Company shall file with the Secretary of State of Pennsylvania a Statement with Respect to Shares amending the Company Articles to establish the Series A Preferred Stock as contemplated by the Certificate of Designations, which shall be attached to such Statement with Respect to Shares. The Certificate of Designations shall set forth the designations, preferences and relative, participating, optional or other special rights, privileges, powers, duties and obligations of the Series A Preferred Shares in accordance with Section 1.1 of the Amended and Restated Articles of the Company.

 

2.10        Deliverables of the Company.  At the Closing, the Company shall deliver, or cause to be delivered, to each Investor:

 

(a)                 a duly executed Certificate of Designations;

 

(b)                a counterpart of the Registration Rights Agreement duly executed by the Company;

 

(c)                evidence of the Series A Preferred Shares being credited to book-entry accounts maintained by the Company Transfer Agent, bearing the legend set forth in Section 10(a)(iii) of the Certificate of Designations;

 

(d)                an opinion from McGuireWoods LLP, Pennsylvania counsel for the Company, in substantially the form attached hereto as Exhibit C, which shall be addressed to the Investors and dated the Closing Date;

 

(e)                an opinion from Latham & Watkins LLP, counsel for the Company, in substantially the form attached hereto as Exhibit D, which shall be addressed to the Investors and dated the Closing Date;

 

(f)                 a certificate of the Secretary of State of the State of Pennsylvania, dated as of the Closing Date or a recent date prior thereto, to the effect that the Company is in good standing in the State of Pennsylvania;

 

(g)                a certificate signed by an authorized signatory of the Company, dated as of the Closing Date, to the effect that (i) the representations and warranties of the Company set forth in Article III hereto are true and correct, both when made and as of the Closing Date and (ii) the Company has performed in all material respects all of the covenants required to be performed by the Company hereunder on or prior to the Closing Date; and

 

8

 

 

(h)                a certificate, dated as of the Closing Date, of the Secretary or Assistant Secretary of the Company certifying as to (i) the Company Articles, (ii) the bylaws of the Company, as amended, (iii) resolutions of the board of directors of the Company authorizing the execution and delivery of the Restructuring Documents and the consummation of the transactions contemplated thereby, including the Restructuring, and (iv) the incumbency of the officers authorized to execute the Restructuring Documents on behalf of the Company, setting forth the name and title and bearing the signatures of such officers, each as in effect as of the Closing.

 

2.11        Deliverables of the Partnership.  At the Closing, the Partnership shall deliver, or cause to be delivered, to each Investor:

 

(a)                payment of such Investor’s Redemption Payment, payable by wire transfer of immediately available funds to an account designated at least five Business Days in advance of the Closing Date by such Investor;

 

(b)                a certificate signed by an authorized signatory of the Partnership, dated as of the Closing Date, to the effect that (i) the representations and warranties of the Partnership set forth in Article IV hereto are true and correct, both when made and as of the Closing Date and (ii) the Partnership has performed in all material respects all of the covenants required to be performed by such Investor hereunder on or prior to the Closing Date; and

 

(c)                a certificate, dated as of the Closing Date, of the Secretary or Assistant Secretary of the General Partner certifying as to (i) resolutions of the board of directors of the General Partner authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, including the Restructuring, and (ii) the incumbency of the officers authorized to execute this Agreement on behalf of the Partnership, setting forth the name and title and bearing the signatures of such officers, each as in effect as of the Closing.

 

2.12        Deliverables of the Investors.  At the Closing, each Investor shall deliver, or cause to be delivered, to the Company:

 

(a)                 a counterpart of the Registration Rights Agreement duly executed by such Investor;

 

(b)                a duly executed Internal Revenue Service Form W-9 from such Investor;

 

(c)                a properly executed affidavit prepared in accordance with Treasury Regulations Section 1.1445-2(b) certifying such Investor’s non-foreign status;

 

(d)                instructions and/or other instruments of transfer, in form and substance reasonably satisfactory to the Partnership Transfer Agent, duly executed by such Investor, surrendering the number of Series A Preferred Units set forth opposite such Investor’s name under the heading “Series A Preferred Units” on Schedule I hereto to the Partnership Transfer Agent; and

 

(e)                a certificate signed by an authorized signatory of such Investor, dated as of the Closing Date, to the effect that (i) the representations and warranties of such Investor set forth in Article V hereto are true and correct, both when made and as of the Closing Date and (ii) such Investor has performed in all material respects all of the covenants required to be performed by such Investor hereunder on or prior to the Closing Date.

 

9

 

 

2.13        Withholding.  Each of the Company, the Partnership, the Company Transfer Agent and the Partnership Transfer Agent are entitled to deduct and withhold from any amounts payable in cash or property pursuant to this Agreement to any Person such amounts as it is required to deduct and withhold under applicable Law with respect to the making of such payment; provided, however, that the Company and the Partnership shall use commercially reasonable efforts to notify such Person in advance of any such deduction and withholding and cooperate with such Person, at such Person’s expense, to reduce or eliminate any such deduction and withholding. Such deduction and withholding may be taken in securities, in which case the Company, the Partnership, the Company Transfer Agent or the Partnership Transfer Agent, as applicable, shall be treated as having sold such securities for an amount of cash equal to the fair market value of such securities at the time of such deemed sale as reasonably determined by the Company, the Partnership, the Company Transfer Agent or the Partnership Transfer Agent, as applicable. To the extent that deducted and withheld amounts (including deemed proceeds from the deemed sale of securities) are paid over to the appropriate Governmental Authority, such amounts (including securities) will be treated for all purposes of this Agreement as having been paid or issued to the Person in respect of which such deduction and withholding was made.

 

2.14        Tax Treatment.  For U.S. federal income Tax purposes (and for purposes of any applicable state, local or foreign Tax that follows the U.S. federal income Tax treatment), the Parties agree (1) to treat the Redemption as a distribution described in Section 731 of the Code, (2) to treat the exchange of Series A Preferred Units for Series A Preferred Shares as a taxable sale of the Series A Preferred Units by the Investors to the Company and (3) not to treat the Series A Preferred Shares as “preferred stock” under Section 305 of the Code and the Treasury Regulations thereunder. Following the Closing, the Parties shall cooperate in good faith to determine the fair market value of the Series A Preferred Shares received by the Investors. The Parties will prepare and file all Tax Returns consistent with the agreed treatment set forth in this Section 2.14 and the fair market value determination pursuant to the foregoing sentence and will not take any inconsistent position on any Tax Return, or during the course of any proceeding with respect to Taxes, except as otherwise required by applicable Law following a final determination by a court of competent jurisdiction or other administrative settlement with or final administrative decision by the relevant Governmental Authority.

 

Article III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth in the schedules accompanying this Agreement (each, a “Company Schedule” and, collectively, the “Company Disclosure Schedule”), the Company represents and warrants to the Investors that:

 

3.1          Formation and Qualification of the Company Entities. Each of the Company Entities has been duly formed and is validly existing as a corporation, limited partnership or limited liability company, as applicable, in good standing under the Laws of its jurisdiction of organization with all requisite power and authority, in the case of the Company, to enter into and perform its obligations under this Agreement, and to consummate the transactions contemplated hereby. Each of the Company Entities has all requisite power and authority to own or lease and to operate its properties currently owned or leased and conduct its business as currently conducted and is duly qualified to do business as a foreign corporation, limited partnership or limited liability company, as applicable, and is in good standing under the Laws of each jurisdiction which requires such qualification, except where the failure to be so qualified would not reasonably be likely to have a Material Adverse Effect.

 

10

 

 

3.2          Capitalization; Issuance.

 

(a)           As of February 25, 2020, the Company has no capital stock or other equity securities outstanding other than 254,968,290 Common Shares. All such Common Shares have been duly authorized and validly issued in accordance with the Company Articles and are fully paid (to the extent required under the Company Articles) and nonassessable.

 

(b)           As of the Closing, after giving effect to the Merger and the Restructuring, the Company shall have capital stock or other equity securities outstanding in an aggregate amount no more than the sum of 30,018,446 Series A Preferred Shares issued to the Investors under this Agreement, 254,968,290 Common Shares issued and outstanding as the date hereof, and any capital stock or equity securities (i) to be issued as consideration to unitholders of the Partnership in connection with the Merger and (ii) permitted to be issued by the Company pursuant to Section 6.2(b) of the Merger Agreement.

 

(c)           The Series A Preferred Shares will be duly authorized by the Company pursuant to the Company Articles prior to the Closing and the Certificate of Designations as of the Closing, and, when issued and delivered to the Investors in exchange for the applicable Series A Preferred Units in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable and will be free of any and all Liens and restrictions on transfer, other than (i) restrictions on transferability that may be imposed by federal or state securities Laws or contained in the Company Articles, the Certificate of Designations or this Agreement and (ii) such Liens as are created by the Investors.

 

(d)           Except (i) for the Series A Preferred Shares to be issued pursuant to this Agreement, (ii) as expressly provided in the Company Articles or (iii) as disclosed in the SEC Documents or as have been awarded pursuant to the Equitrans Midstream Corporation 2018 Long-Term Incentive Plan or the Equitrans Midstream Corporation Directors’ Deferred Compensation Plan, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, securities or ownership interests in the Company are outstanding.

 

(e)           The Certificate of Designations sets forth the rights, preferences and priorities of the Series A Preferred Shares, and the holders of the Series A Preferred Shares will have the rights set forth in the Certificate of Designations upon the Closing.

 

3.3          Authority and Authorization. The Company has all requisite power and authority to execute and deliver this Agreement and the Restructuring Documents and perform its respective obligations hereunder and thereunder. The Company has all requisite corporate power and authority to issue, sell and deliver the Series A Preferred Shares, in accordance with and upon the terms and conditions set forth in this Agreement and the Certificate of Designations.

 

3.4          Authorization of this Agreement. This Agreement has been duly authorized, executed and delivered by the Company and each of the other Restructuring Documents has been duly and validly authorized and has been or, with respect to the Restructuring Documents to be delivered at the Closing, will be, validly executed and delivered by the Company. Each of the Restructuring Documents constitutes, or will constitute, the legal, valid and binding obligations of the Company enforceable in accordance with its terms; provided, that, with respect to each such agreement, the enforceability thereof may be limited by the Enforceability Exceptions.

 

11

 

 

3.5          No Conflicts. None of the issuance or sale by the Company of the Series A Preferred Shares, the execution, delivery and performance of this Agreement or the other Restructuring Documents by the Company, or the consummation of any other transactions contemplated thereby (i) conflicts or will conflict with or constitutes or will constitute a violation of the Organizational Documents of any of the Company Entities, (ii) assuming the amendments, restatements, amendments and restatements, replacement, terminations, waivers, consents and/or modifications referred to in Section 3.5 of the Company Disclosure Schedules are effective, conflicts or will conflict with or constitutes or will constitute a breach or violation of, or a default (or an event that, with notice or lapse of time or both, would constitute such a default) under, accelerate payment or rights under, or will result in the creation or imposition of any Lien upon any property or Assets of any of the Company Entities under, any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which any of the Company Entities is a party or by which any of them or any of their respective properties may be bound or (iii) violates or will violate any statute, Law or regulation or any order, judgment, decree or injunction of any court or governmental agency or body having jurisdiction over any of the Company Entities or any of their properties in a proceeding to which any of them or their property is a party, or any rule of regulation of any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the rules and regulations of the NYSE) except, in the case of clauses (ii) and (iii), where such breaches, violations, defaults or Liens would not, individually or in the aggregate, reasonably be likely to have a Material Adverse Effect or materially impair the ability of the Company to consummate the transactions contemplated by the Restructuring Documents.

 

3.6          Organizational Documents. The Organizational Documents of each of the Company Entities have been, and in the case of the Certificate of Designations, at the Closing will be, duly authorized and validly executed and delivered by the parties thereto and are, and in the case of the Certificate of Designations, at the Closing will be, valid and legally binding agreements of such party, enforceable against such party in accordance with their respective terms; provided, that, with respect to each Organizational Document described in this Section 3.6, the enforceability thereof may be limited by the Enforceability Exceptions.

 

3.7          No Integration. Neither the Company nor any of its Affiliates, nor, to the Company’s Knowledge, any Representative of the foregoing has, directly or indirectly, made any offers or sales of any security of the Company or solicited any offers to buy any security of the Company, under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) of the Securities Act for the exemption from the registration requirements imposed under Section 5 of the Securities Act for the transactions contemplated hereby or that would require such registration under the Securities Act.

 

3.8          No Consents. No permit, consent, waiver, license, written exemption from, approval, authorization, order, registration, filing or qualification of or with any court, governmental agency or body or any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the NYSE) having jurisdiction over any of the Company Entities or any of their properties or Assets or approval of the security holders of the Company Entities, is required in connection with the issuance by the Company of the Series A Preferred Shares, the execution, delivery and performance of the Restructuring Documents by the Company or the consummation of the transactions contemplated by the Restructuring Documents by the Company, other than consents (a) required by the Commission in connection with the Company’s obligations under the Registration Rights Agreement, (b) required by the shareholders of the Company in connection with the Merger pursuant to the rules of the NYSE, (c) required under state securities or “Blue Sky” Laws, (d) that have been, or prior to the Closing Date will be, obtained and (e) that, the absence or omission of which would not, individually or in the aggregate, have a Material Adverse Effect.

 

3.9          SEC Documents. Since January 1, 2019, all the Company’s forms, registration statements, reports, schedules and statements required to be filed by it under the Exchange Act have been filed with the Commission on a timely basis. Since the filing date of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, the SEC Documents, at the time filed (or in the case of registration statements, solely on the dates of effectiveness), except to the extent corrected by a subsequent SEC Document, (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made in the case of any such documents other than a registration statement, not misleading and (b) complied as to form in all material respects with the applicable requirements of the Exchange Act or the Securities Act, as the case may be.

 

12

 

 

3.10        Financial Statements.

 

(a)           The historical financial statements and schedules of the Company (together with its consolidated or combined subsidiaries) included in or incorporated by reference in the SEC Documents present fairly the financial condition, results of operations and cash flows of the entities purported to be shown thereby on the basis stated therein as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements under the Securities Act and the Exchange Act and have been prepared in conformity with GAAP in the United States applied on a consistent basis throughout the periods involved (except as otherwise noted therein). The other financial information of the Company Entities, including non-GAAP financial measures, if any, contained or incorporated by reference in the SEC Documents has been derived from the accounting records of the Company Entities and fairly presents in all material respects the information purported to be shown thereby. Nothing has come to the attention of the Company that has caused it to believe that the statistical and market-related data included in the SEC Documents is not based on or derived from sources that are reliable and accurate in all material respects as of the date of such information. There are no financial statements (historical or pro forma) that are required to be included in or incorporated by reference in the SEC Documents that are not so included as required; other than as set forth in Section 3.10(a) of the Company Disclosure Schedules, the Company Entities do not have any material liabilities or obligations, direct or contingent (including any off balance sheet obligations), not described in the SEC Documents; and all disclosures contained in the SEC Documents regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G and Item 10 of Regulation S-K under the Exchange Act, to the extent applicable.

 

(b)           Since the date of the most recent balance sheet of the Company audited by the Company’s auditor, (i) the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the SEC Documents fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto in all material respects and (ii) based on an annual evaluation of disclosure controls and procedures, the Company is not aware of (A) any significant deficiency or material weakness in the design or operation of internal controls over financial reporting that are likely to adversely affect its ability to record, process, summarize and report financial data or (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the internal controls over financial reporting of the Company.

 

3.11        Independent Registered Public Accounting Firm. Ernst & Young LLP, which has audited and certified certain financial statements of the Company and its consolidated or combined subsidiaries (including the related notes thereto), included in or incorporated by reference in the SEC Documents is and was during the periods covered by such financial statements an independent registered public accounting firm with respect to the Company as required by the Exchange Act and the Public Company Accounting Oversight Board (United States). Ernst & Young LLP has not resigned or been dismissed as independent registered public accountants of the Company as a result of or in connection with any disagreement with the Company on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures.

 

13

 

 

3.12        Investment Company. None of the Company Entities is now, and immediately following the issuance of the Series A Preferred Shares to be issued by the Company hereunder and application of the net proceeds from such sale, none will be, an “investment company” or a company “controlled by” an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”).

 

3.13        No Unlawful Payment. No Company Entity nor, to the Knowledge of the Company, any director, officer, agent, employee or Affiliate of any Company Entity, has (i) used any funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anti-corruption laws; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Company Entities, and to the Knowledge of the Company, the Affiliates of the Company have instituted, and maintain and enforce, policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption Laws.

 

3.14        Money Laundering Laws. The operations of the Company Entities are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the Company Entities conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental or regulatory agency, authority or body or any arbitrator involving any Company Entity with respect to the Anti-Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.

 

3.15        No Conflicts with Sanctions Laws. No Company Entity nor, to the Knowledge of the Company, any director, officer, employee or Affiliate of any Company Entity, is currently the subject or the target of any sanctions administered or enforced by the U.S. Government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is any Company Entity located, organized or resident in a country or territory that is the subject or the target of Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan, Syria and the Crimea region of Ukraine (each, a “Sanctioned Country”); and the Company Entities will not directly or indirectly use the proceeds of the sale of the Series A Preferred Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or the target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For the past five years, none of the Company Entities have knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.

 

14

 

 

3.17         NYSE Listing. The Common Shares are listed on the NYSE, and the Company has not received any notice of delisting. The issuance and sale of the Series A Preferred Shares hereunder and issuance of Common Shares upon conversion of the Series A Preferred Shares do not contravene NYSE rules and regulations.

 

3.18        No Investor Side Agreements. Except as previously disclosed in writing to each Person who is an Investor as of the date hereof or as set forth in Section 3.18 of the Company Disclosure Schedules, there are no binding agreements by, among or between the Company Entities or any of their Affiliates, on the one hand, and any Investor or any of their Affiliates, on the other hand, with respect to the transactions contemplated hereby, other than the Restructuring Documents.

 

Article IV
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

 

Except as set forth in the schedules accompanying this Agreement (each, a “Partnership Schedule” and, collectively, the “Partnership Disclosure Schedule”), the Partnership represents and warrants to the Investors that:

 

4.1           Authority and Authorization. The Partnership has all requisite power and authority to execute and deliver this Agreement and perform its respective obligations hereunder. The Partnership has all requisite partnership power and authority to redeem in cash the Series A Preferred Units. No approval from the holders of outstanding Common Units is required under the Partnership Agreement or the rules of the NYSE in connection with the Redemption.

 

4.2          Authorization of this Agreement. This Agreement has been duly authorized, executed and delivered by the Partnership or the General Partner, as the case may be. This Agreement constitutes, or will constitute, the legal, valid and binding obligation of the Partnership or the General Partner, as the case may be, enforceable in accordance with its terms; provided, that, with respect to such agreement, the enforceability thereof may be limited by the Enforceability Exceptions.

 

4.3          No Consents. No permit, consent, waiver, license, written exemption from, approval, authorization, order, registration, filing or qualification of or with any court, governmental agency or body or any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the NYSE) having jurisdiction over any of the Partnership Entities or any of their properties or Assets or approval of the security holders of the Partnership Entities, is required in connection with the Redemption, the execution, delivery and performance of the Restructuring Documents by the Partnership or the consummation of the transactions contemplated by this Agreement by the Partnership, other than consents (a) that have been, or prior to the Closing Date will be, obtained and (b) consents, the absence or omission of which would not, individually or in the aggregate, have a Material Adverse Effect (as defined in the Preferred Purchase Agreement).

 

4.4          No Investor Side Agreements. Except as previously disclosed in writing to each Person who is an Investor as of the date hereof or as set forth in Section 4.4 of the Partnership Disclosure Schedules, there are no binding agreements by, among or between the Partnership Entities or any of their Affiliates, on the one hand, and any Investor or any of their Affiliates, on the other hand, with respect to the transactions contemplated hereby, other than the Restructuring Documents.

 

15

 

 

 

Article V

REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

 

Each of the Investors, severally but not jointly, represents and warrants to the Company and the Partnership that:

 

5.1          Existence. Such Investor is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization, with full power and authority to own, lease, use and operate its properties and to conduct its business as currently conducted.

 

5.2          Authority. Such Investor has all requisite power and authority to enter into, deliver and perform its obligations under the Restructuring Documents, and has the right to vote and dispose of, all of the Series A Preferred Units set forth opposite such Investor’s name under the heading “Series A Preferred Units” on Schedule I hereto. All corporate, limited liability company or partnership action required to be taken by such Investor or any of its members or partners for the consummation of the transactions contemplated by the Restructuring Documents has been validly taken. The Restructuring Documents, as applicable, have been or will be duly executed and delivered by such Investor and constitute, or with respect to Restructuring Documents to be executed following the date hereof, will constitute legal, valid and binding obligations of such Investor, enforceable in accordance with their terms, except as such enforceability may be limited by the Enforceability Exceptions.

 

5.3          No Conflicts. The execution, delivery and performance of the Restructuring Documents to which such Investor is a party by such Investor and the consummation by such Investor of the transactions contemplated thereby will not (i) conflict with, or constitute a violation of or require the consent of any Person under, any of the terms, conditions or provisions of the Organizational Documents of such Investor, (ii) conflict with, or constitute a breach or violation of, or a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which such Investor is a party or by which it or any of its properties may be bound, (iii) violate any statute, Law or regulation or any order, judgment, decree or injunction of any court or governmental agency or body directed to such Investor or any of its properties in a proceeding to which it is a party or by which any of its property is subject or (iv) result in the creation or imposition of any Lien upon any property of such Investor, which conflicts, breaches, violations, defaults or Liens, in the case of clauses (ii), (iii) or (iv), could materially impair the ability of such Investor to perform its obligations under the Restructuring Documents or consummate the transactions contemplated thereby.

 

5.4          Litigation. There is no action, suit or proceeding before or by any federal or state court, commission, arbitrator or governmental or regulatory agency, body or official, domestic or foreign, now pending or, to the knowledge of such Investor, threatened, to which such Investor is or may be a party or to which the business or property of such Investor is or may be subject that is reasonably likely to (i) individually or in the aggregate have a material adverse effect on the business, prospects, financial condition or results of operations of such Investor, taken as a whole, (ii) prevent the consummation of the transactions contemplated by the Restructuring Documents or (iii) in any manner draw into question the validity of the Restructuring Documents.

 

5.5          Unregistered Securities.

 

(a)          Investment Intent. Such Investor is acquiring the Series A Preferred Shares for its own account with the present intention of holding Series A Preferred Shares for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or state securities Laws. Other than with respect to any transfers of Series A Preferred Shares as may be made to Affiliates of such Investor after the date hereof in accordance with the terms and conditions of the Certificate of Designations, such Investor does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to such Series A Preferred Shares.

 

16

 

 

(b)          Accredited Investor Status; Sophisticated Investor. Such Investor is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated by the Commission pursuant to the Securities Act. Such Investor has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risk of an investment in such Series A Preferred Shares and the Conversion Shares, is able to bear the economic risk of such investment and, at the present time, would be able to afford a complete loss of such investment.

 

(c)          Information. Such Investor and its Representatives have been furnished with all materials relating to the business, finances and operations of the Company and its subsidiaries and materials relating to the Series A Preferred Shares and the Conversion Shares that such Investor has requested. Such Investor and its Representatives have been afforded the opportunity to ask questions of and speak with members of management of the Company. Neither such inquiries nor any other due diligence investigations conducted at any time by such Investor and its Representatives shall modify, amend or affect such Investor’s right (i) to rely on the Company’s representations and warranties contained in Article III or (ii) to indemnification or any other remedy based on, or with respect to the accuracy or inaccuracy of, or compliance with, the representations, warranties, covenants and agreements in this Agreement. Such Investor has sought such accounting, legal and Tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Series A Preferred Shares.

 

(d)          Securities Not Registered. Such Investor acknowledges that the Series A Preferred Shares and the Conversion Shares are not currently registered under the Securities Act or any applicable state securities law and might not be registered in the future, and that such Series A Preferred Shares and, upon their conversion, the Conversion Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and pursuant to state securities laws and regulations as applicable.

 

(e)          Legends. Such Investor understands that, until such time as the Series A Preferred Shares have been registered pursuant to the provisions of the Securities Act, or the Series A Preferred Shares are otherwise eligible for resale under the Securities Act (including pursuant to Rule 144 promulgated thereunder) without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Series A Preferred Shares will bear a restrictive legend. Such Investor understands that, until such time as the Conversion Shares have been registered pursuant to the provisions of the Securities Act, or the Conversion Shares are otherwise eligible for resale under the Securities Act (including pursuant to Rule 144 promulgated thereunder) without restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares will bear a restrictive legend.

 

(f)          Reliance by the Company. Such Investor understands that the Company is offering the Series A Preferred Shares in reliance on a transactional exemption from the registration requirements of federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the applicability of such exemptions and the suitability of such Investor to acquire the Series A Preferred Shares and the Conversion Shares issuable upon conversion thereof.

 

5.6          Series A Preferred Units. Such Investor is the holder (record or beneficial) of, and has the right to vote and dispose of, all of the Series A Preferred Units set forth opposite such Investor’s name under the heading “Series A Preferred Units” on Schedule I hereto.

 

17

 

 

Article VI

INDEMNIFICATION, COSTS AND EXPENSES

 

6.1          Indemnification by the Company. Subject to the limitations set forth in this Agreement, the Company agrees to indemnify each Investor and its Affiliates and Representatives (collectively, “Investor Related Parties”) from, and hold each of them harmless against, any and all losses, actions, suits, proceedings (including any investigations, litigation or inquiries), demands and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all reasonable costs, losses, liabilities, Taxes, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them, whether or not involving a third party claim, as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of the Company contained herein; provided, that any such claim for indemnification relating to a breach of any representation or warranty is made prior to the expiration of such representation or warranty (it being understood that (x) for purposes of determining when an indemnification claim has been made, the date upon which an Investor Related Party has given notice (stating in reasonable detail the basis of the claim for indemnification) to the Company shall constitute the date upon which such claim has been made and (y) the aggregate liability of the Company (i) to each Investor pursuant to this Section 6.1 shall not exceed the amount of such Investor’s respective Funding Obligation (as defined in the Preferred Purchase Agreement) and (ii) to all Investors pursuant to this Section 6.1 shall not exceed the Total Funding Obligation (as defined in the Preferred Purchase Agreement)); provided, further, that no Investor Related Party shall be entitled to recover special, indirect, exemplary, incidental, lost profits, speculative or punitive damages.

 

6.2          Indemnification by the Investors. Subject to the limitations set forth in this Agreement, each Investor agrees, severally and not jointly, to indemnify the Company and its respective Representatives (collectively, “Company Related Parties”) from, and hold each of them harmless against, any and all losses, actions, suits, proceedings (including any investigations, litigation or inquiries), demands and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all reasonable costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them, whether or not involving a third party claim, as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of such Investor contained herein; provided, that such claim for indemnification relating to a breach of any representation or warranty is made prior to the expiration of such representation or warranty (it being understood that (x) for purposes of determining when an indemnification claim has been made, the date upon which a Company Related Party has given notice (stating in reasonable detail the basis of the claim for indemnification) to such Investor shall constitute the date upon which such claim has been made and (y) the liability of each such Investor shall not exceed the amount equal to the sum of such Investor’s respective Funding Obligation (as defined in the Preferred Purchase Agreement), plus any distributions paid to such Investor with respect to the Series A Preferred Units, Series A Preferred Shares and any Conversion Shares); provided, further, that no Company Related Party shall be entitled to recover special, indirect, exemplary, incidental, speculative or punitive damages.

 

18

 

 

6.3          Indemnification Procedures.

 

(a)          Promptly after any Company Related Party or Investor Related Party (hereinafter, the “Indemnified Party”) discovers facts giving rise to a claim for indemnification hereunder, including receipt by it of notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third Person, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”) written notice of such claim or the commencement of such action, suit or proceeding. Failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice shall state the nature and the basis of such claim to the extent then known and shall include a formal demand for indemnification under this Agreement. The Indemnifying Party shall have the right to defend and settle any such matter, at its own expense and by its own counsel (provided, that such counsel is reasonably satisfactory to the Indemnified Party), as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle such claim, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such matter, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that the Indemnified Party shall be entitled (i) at its expense, to participate in the defense of such matter and the negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense and employ counsel reasonably satisfactory to the Indemnified Party within 30 days of when the Indemnified Party has provided written notice of the claim for indemnification or (B) if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred.

 

(b)          Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, includes a complete release from liability of, and does not contain any admission of wrongdoing by, the Indemnified Party.

 

(c)          Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any third party indemnity claim (but shall be liable for the reasonable fees and expenses of counsel incurred by the Indemnified Party in defending such third party indemnity claim) if the third party indemnity claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnified Party which the Indemnified Party reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the third party indemnity claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages.

 

19

 

 

6.4          Survival of Provisions. All the provisions of this Agreement shall survive the Closing, notwithstanding any investigation at any time made by or on behalf of any Party; provided, that the representations and warranties set forth in Article III, Article IV and Article V shall terminate and expire on the date that is 60 days following the date on which the Company files with the Commission its Annual Report on Form 10-K for fiscal year 2020, except (a) the representations and warranties of the Company set forth in Section 3.1 (Formation and Qualification of the Company Entities), Section 3.2 (Capitalization; Issuance), Section 3.3 (Authority and Authorization), Section 3.4 (Authorization of this Agreement), Section 3.6 (Organizational Documents) and Section 3.14 (Money Laundering Laws) (b) the representations and warranties of the Partnership set forth in Section 4.1 (Authority and Authorization) and Section 4.2 (Authorization of this Agreement) and (c) the representations and warranties of each Investor set forth in Section 5.1 (Existence) and Section 5.2 (Authority) shall survive indefinitely. After a representation and warranty has terminated and expired, no indemnification shall or may be sought pursuant to this Article VI on the basis of that representation and warranty by any Person who would have been entitled pursuant to this Article VI to indemnification on the basis of that representation and warranty prior to its termination and expiration; provided, that in the case of each representation and warranty that shall terminate and expire as provided in this Section 6.4, no claim presented in writing for indemnification pursuant to this Article VI on the basis of that representation and warranty prior to its termination and expiration shall be affected in any way by that termination and expiration. The covenants or agreements entered into pursuant to this Agreement to be performed after the Closing shall survive the Closing and shall remain in full force and effect until such covenant or agreement is fully performed in accordance with the terms of this Agreement.

 

Article VII

MISCELLANEOUS

 

7.1          Further Assurances.  Each of the Company, the Partnership and the Investors agree to execute and deliver all such documents or instruments, to take all appropriate action and to do all other things it determines to be necessary, proper or advisable under applicable Laws and regulations or as otherwise reasonably requested by the other to consummate the transactions contemplated by this Agreement; provided, however, that nothing in this Agreement will require any Party hereto to hold separate or make any divestiture of any asset or otherwise agree to any restriction on its operations or other burdensome condition which would in any such case be material to its assets, liabilities or business in order to obtain any required consent or approval or other clearance.

 

7.2          Publicity.  Each Investor consents to and authorizes the Company and the Partnership to include and disclose in any registration statement, prospectus, current report, proxy statement, or information statement that is filed with the Commission in connection with the Merger, and in such other schedules, certificates, applications, agreements, or documents, to be filed with the Commission or otherwise publicly disclosed, as the Company and the Partnership reasonably determine to be necessary or appropriate, the identity of the Investors, the ownership of the Series A Preferred Shares and the nature of the Parties’ respective commitments, arrangements, and understandings pursuant to this Agreement and the other Restructuring Documents only after providing the Lead Investors a reasonable opportunity to review and comment (but only with respect to any disclosure relating to any such Lead Investor) on any such registration statement, prospectus, current report, proxy statement, or information statement that is filed with the Commission in connection with the Merger, and in such other schedules, certificates, applications, agreements, or documents, to be filed with the Commission or otherwise publicly disclosed in connection with the Merger; provided, however, that nothing in this Section 7.2 shall delay any required filing or other disclosure with the Commission or otherwise hinder the Company’s or the Partnership’s ability to timely comply with all Laws or rules and regulations of the Commission.

 

7.3          Notices.  All notices and demands provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, air courier guaranteeing overnight delivery, via email, or personal delivery to the following addresses:

 

20

 

 

if to the Investors, to the addresses set forth on Schedule I hereto.

 

with copies (which shall not constitute notice) to:

 

  Kirkland & Ellis LLP
  609 Main Street, Suite 4700
  Houston, TX 77002
  Attention: John D. Pitts, P.C.
    David Thompson
  Email: john.pitts@kirkland.com
    david.thompson@kirkland.com

 

If to the Company:

 

  Equitrans Midstream Corporation
  2200 Energy Drive
  Canonsburg, PA 15317
  Attention: Kirk R. Oliver
    Stephen M. Moore
  Email: koliver@equitransmidstream.com
    smoore@equitransmidstream.com

 

with copies (which shall not constitute notice) to:

 

  Latham & Watkins LLP
811 Main Street, Suite 3700
  Houston, TX 77002
  Attention: Ryan J. Maierson
    Nick S. Dhesi
  Email: ryan.maierson@lw.com
    nick.dhesi@lw.com

 

If to the Partnership:

 

  EQM Midstream Partners, LP
  2200 Energy Drive
  Canonsburg, PA 15317
  Attention: Kirk R. Oliver
    Stephen M. Moore
  Email: koliver@equitransmidstream.com
    smoore@equitransmidstream.com

 

with copies (which shall not constitute notice) to:

 

  Latham & Watkins LLP
  811 Main Street, Suite 3700
  Houston, TX 77002
  Attention: Ryan J. Maierson
    Nick S. Dhesi
  Email: ryan.maierson@lw.com
    nick.dhesi@lw.com

 

21

 

 

or to such other address as the Company, the Partnership or the Investors may designate to each other in writing from time to time. All notices and communications shall be deemed to have been duly given: (a) at the time delivered by hand, if personally delivered, (b) upon actual receipt if sent by certified or registered mail, return receipt requested, or regular mail, if mailed, (c) upon actual receipt of the email, if sent via email and (d) upon actual receipt when delivered to an air courier guaranteeing overnight delivery. The Company and the Partnership shall promptly notify all Investors in writing upon (A) the granting of any consent or waiver, or the execution and delivery of any amendment, modification or termination of any provision of this Agreement or the Merger Agreement or (B) the termination of this Agreement by any Investor with respect to such Investor pursuant to Section 7.5.

 

7.4          Specific Waiver.  Except as otherwise provided herein, no amendment, waiver, consent, modification or termination of any provision of this Agreement shall be effective unless signed by the Company, the Partnership and each of the Lead Investors (for the avoidance of doubt, such amendment, waiver, consent, modification or termination shall require the consent of only one member of each Lead Investor’s Affiliate Group); provided, that no amendment or other modification which adversely affects the rights under this Agreement of any Investor in a disproportionate manner relative to any other Investor shall be effective unless consented to in writing by such affected Investor; provided, further, that no amendment or modification which modifies the type or amount of consideration to be received by an Investor hereunder shall be effective unless consented to in writing by such Investor. Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by the Company, the Partnership or an Investor from the terms of any provision of this Agreement shall be effective only in the specific instance and for the specific purpose for which such amendment, supplement, modification, waiver or consent has been made or given. No failure or delay on the part of any Party in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided herein are cumulative and are not exclusive of any remedies that may be available to a Party at Law or in equity or otherwise.

 

7.5          Termination.  This Agreement may be terminated at any time prior to the Closing: (a) by mutual written consent of the Company, the Partnership and each of the Lead Investors (for the avoidance of doubt, such termination shall require the written consent of only one member of each Lead Investor’s Affiliate Group); (b) by either the Company and the Partnership, on one hand, or an Investor, with respect to itself but not any other Investor, if any Governmental Authority with lawful jurisdiction shall have issued a final order, decree or ruling or taken any other final action restraining, enjoining or otherwise prohibiting the transactions contemplated by the Restructuring Documents and such order, decree, ruling or other action is or shall have become final and nonappealable, and (c) by an Investor, with respect to itself but not any other Investor, if the Merger is not consummated in accordance with the Merger Agreement on or prior to August 26, 2020 (as such date may be extended by mutual agreement of the Company, the Partnership and the Lead Investors); provided, that any such extension to a date later than February 26, 2021 shall require the consent of each Investor. This Agreement shall terminate automatically upon any termination of the Merger Agreement.

 

7.6          Expenses.  The Partnership will pay the reasonable out-of-pocket fees and expenses of the primary outside lead legal counsel and one regulatory counsel incurred by the Investors collectively in connection with the transactions contemplated hereby; provided, however, that the Partnership’s obligations pursuant to this sentence shall not exceed $300,000. Each Party will otherwise be responsible for its own out-of-pocket fees and expenses incurred in connection with the transactions contemplated hereby.

 

22

 

 

7.7          Entire Agreement; Disclaimer of Reliance.  This Agreement, the other Restructuring Documents and the other agreements and documents referred to herein are intended by the Parties as a final expression of their agreement and are intended to be a complete and exclusive statement of the agreement and understanding of the Parties hereto, in respect of the subject matter contained herein and therein. There are no, and neither the Company nor the Partnership nor any Investor has relied upon, restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or in the other Restructuring Documents with respect to the rights and obligations of the Company, the Partnership, the Investors or any of their respective Affiliates hereunder or thereunder, and each of the Company, the Partnership and the Investors expressly disclaims that it is owed any duties or is entitled to any remedies not expressly set forth in this Agreement or the Certificate of Designations. This Agreement, the Restructuring Documents and the other agreements and documents referred to herein or therein supersede all prior agreements and understandings between the Parties with respect to such subject matter.

 

7.8          Binding Effect; Assignment.  This Agreement shall be binding upon the Company, the Partnership each of the Investors and their respective successors and permitted assigns. Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the Parties to this Agreement and their respective successors and permitted assigns. Without the written consent of the Company and the Partnership, no portion of the rights and obligations of the Investor under this Agreement may be assigned or transferred by the Investor to a Person that is not an Affiliate of the Investor. No portion of the rights and obligations of the Company or the Partnership under this Agreement may be transferred or assigned (including by merger or operation of Law) without the prior written consent of the Investors.

 

7.9          No Third Party Beneficiaries.  Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person, other than for purposes of Section 7.10 only, any member, partner, shareholder, unitholder, Affiliate or Representative of the Company, the Partnership or the Investors, or any member, partner, shareholder, unitholder, Affiliate or Representative of any of the foregoing, any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

7.10       Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)          This Agreement and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution, termination, performance or nonperformance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement) will be construed in accordance with and governed by the laws of the State of Delaware without regard to principles of conflicts of laws that might otherwise require the application of the Laws of any other jurisdiction. Any action against any Party relating to the foregoing shall be brought in any federal or state court of competent jurisdiction located within the State of Delaware (the “Chosen Courts”), and the Parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of any federal or state court located within the State of Delaware over any such action. The Parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the Parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.

 

(b)          EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER ARISING OUT OF THIS AGREEMENT TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW.

 

23

 

 

7.11       Specific Performance. Irreparable damage would occur and each Party would not have an adequate remedy at Law in the event that the other Party fails to consummate the Restructuring concurrently with the closing of the Merger. Accordingly, each Party shall be entitled to seek one or more injunctions to cause the consummation of the Restructuring or to prevent any breach of any such obligation or covenant and to enforce specifically this Agreement in the Chosen Courts, in addition to any other remedy to which such Party may be entitled at Law or in equity. Each Party agrees not to dispute or resist any such application for relief on the basis that any other Party to this Agreement has an adequate remedy at Law or that damage arising from such non-performance or breach is not irreparable.

 

7.12       No Recourse Against Others.

 

(a)          All claims, obligations, liabilities, or causes of action (whether in contract or in tort, in Law or in equity, or granted by statute) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement, or the negotiation, execution, or performance of this Agreement (including any representation or warranty made in, in connection with, or as inducement to, this Agreement), may be made only against (and are expressly limited to) the Company, the Partnership and the Investors. No Person other than the Company, the Partnership or the Investors, including no member, partner, shareholder, unitholder, Affiliate or Representative thereof, nor any member, partner, shareholder, unitholder, Affiliate or Representative of any of the foregoing, shall have any liability (whether in contract or in tort, in Law or in equity, or granted by statute) for any claims, causes of action, obligations, or liabilities arising under, out of, in connection with, or related in any manner to this Agreement or based on, in respect of, or by reason of this Agreement or its negotiation, execution, performance, or breach; and, to the maximum extent permitted by Law, each of the Company, the Partnership and each Investor hereby waives and releases all such liabilities, claims, causes of action, and obligations against any such third Person.

 

(b)          Without limiting the foregoing, to the maximum extent permitted by Law, (i) the Company, the Partnership and each Investor hereby waives and releases any and all rights, claims, demands, or causes of action that may otherwise be available at Law or in equity, or granted by statute, to avoid or disregard the entity form of the other or otherwise impose liability of the other on any third Person, whether granted by statute or based on theories of equity, agency, control, instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil, unfairness, undercapitalization, or otherwise; and (ii) the Company, the Partnership and each Investor disclaims any reliance upon any third Person with respect to the performance of this Agreement or any representation or warranty made in, in connection with, or as an inducement to this Agreement.

 

7.13       Counterparts.  This Agreement may be executed in any number of counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same agreement.

 

7.14       Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Laws, but if any provision or portion of this Agreement is held to be invalid, illegal, or unenforceable in any respect under any applicable Laws in any jurisdiction by any applicable Governmental Authority, (a) such invalidity, illegality, or unenforceability shall not affect the validity, legality, or enforceability of any other provision of this Agreement in such jurisdiction or affect the validity, legality, or enforceability of any provision in any other jurisdiction, (b) such provision shall be invalid, illegal, or unenforceable only to the extent strictly required by such Governmental Authority, (c) to the extent any such provision is deemed to be invalid, illegal, or unenforceable, each Party agrees that it shall use its commercially reasonable efforts to cause such Governmental Authority to modify such provision so that such provision shall be valid, legal, and enforceable as originally intended to the greatest extent possible, and (d) to the extent that the Governmental Authority does not modify such provision, each of the Parties agree that they shall endeavor in good faith to exercise or modify such provision so that such provision shall be valid, legal, and enforceable as originally intended to the greatest extent possible.

 

24

 

 

7.15       Damages.  Anything to the contrary in this Agreement notwithstanding, in no event shall a Party be liable hereunder for (a) any remote, exemplary, or punitive damages or (b) any special, consequential, incidental, or indirect damages or lost profits, except in the case of clause (b), to the extent any such damages or lost profits would otherwise be recoverable under applicable Law in an action for breach of contract.

 

7.16       Amendment of Merger Agreement; Interim Actions.

 

(a)          Notwithstanding anything to the contrary in the Restructuring Documents, neither Company, nor the Partnership shall, and each shall cause each of its respective Affiliates not to, amend or modify the Merger Agreement or amend, modify or waive any right under, or the satisfaction of any condition in, the Merger Agreement, in each case, in any manner or respect that would materially and adversely affect any Investor without the prior written consent of each Lead Investor (for the avoidance of doubt, such prior written consent shall require the consent of only one member of each Lead Investor’s Affiliate Group). The Company and the Partnership shall provide the Investors with reasonable updates regarding the status of the transactions contemplated by the Merger Agreement, including with respect to (i) prompt notice of all material developments with respect thereto and (ii) to the extent not duplicative with preceding clause (i), true, correct and complete copies of any written notice given by or to the Company or the Partnership or any of their Affiliates under the Merger Agreement promptly following their receipt or delivery, as applicable.

 

(b)          Notwithstanding anything to the contrary in the Restructuring Documents, during the term of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall not take any action described under Section 4(d) or 4(e) of the Certificate of Designations, in each case, without the prior written consent of the Investors who, as of the Closing (as set forth on Schedule I, as may be amended), will hold at least 66 2/3% of the Series A Preferred Shares.

 

7.17       Effect on the Partnership Agreement. Except as expressly set forth in this Agreement, prior to the Closing, (a) all of the terms and conditions of the Partnership Agreement shall continue in full force and effect and remain unchanged and (b) nothing in this Agreement shall be deemed to be an amendment, modification or waiver of any of the rights, preferences and privileges afforded to the Investors in the Partnership Agreement as holders of Series A Preferred Units.

 

25

 

 

7.18       Removal of Legend. In connection with a sale of the Series A Preferred Shares or Conversion Shares by an Investor in reliance on Rule 144 promulgated under the Securities Act, the applicable Investor or its broker shall deliver to the Company and the Company Transfer Agent a broker representation letter providing to the Company and the Company Transfer Agent any information the Company deems necessary to determine that such sale is made in compliance with Rule 144, including, as may be appropriate, a certification that the applicable Investor is not an Affiliate of the Company and regarding the length of time the Series A Preferred Shares or Conversion Shares have been held. Upon receipt of such representation letter, the Company shall promptly direct the Company Transfer Agent to remove the legend referred to in Section 5.5(e) from the appropriate book-entry accounts maintained by the Company Transfer Agent, and the Company shall bear all costs associated therewith (including paying the reasonable customary cost of any legal opinion required by the Company Transfer Agent to be rendered in connection with the removal of such legend). After an Investor or its permitted assigns have held the Series A Preferred Shares or Conversion Shares for such time as non-Affiliates are permitted to sell without the requirement for the Company to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) as to such Series A Preferred Shares or Conversion Shares and without volume or manner of sale restrictions under Rule 144, if the book-entry accounts for such Series A Preferred Shares or Conversion Shares still bear the restrictive legend referred to in Section 5.5(e), the Company agrees, upon request of such Investor or permitted assignee, to take all steps necessary to promptly effect the removal of the legend described in Section 5.5(e) therefrom, and the Company shall bear all costs associated therewith (including paying the reasonable customary cost of any legal opinion required by the Company Transfer Agent to be rendered in connection with the removal of such legend), regardless of whether the request is made in connection with a sale or otherwise, so long as such Investor or its permitted assigns provide to the Company any information the Company deems necessary to determine that the legend is no longer required under the Rules and Regulations or applicable state laws, including a certification that the holder is not an Affiliate of the Company (and a covenant to inform the Company if it should thereafter become an Affiliate and to consent to the placing of an appropriate restrictive legend on the applicable Series A Preferred Shares in such case) and regarding the length of time the Series A Preferred Shares or Conversion Shares have been held. The Company shall cooperate with the Investors to effect the removal of the legend referred to in Section 5.5(e) at any time such legend is no longer appropriate.

 

7.19       Tax Information. Reasonably promptly following the Closing, the Company shall deliver to each Investor a reasonable projection of the portion of the Cash Dividends (as defined in the Certificate of Designations) for the current taxable year and the succeeding two taxable years that will be treated as a dividend for U.S. federal income tax purposes. The Company shall use commercially reasonable efforts to deliver, prior to December 15 of each taxable year, to each Investor that owns Series A Preferred Shares as of such date a reasonable projection of the portion of the Cash Dividends (as defined in the Certificate of Designations) for the immediately succeeding taxable year that will be treated as a dividend for U.S. federal income tax purposes.

 

7.20       Transfer Taxes. The Company shall be responsible for any transfer Taxes or other similar Taxes required to be paid and shall comply with associated Tax reporting requirements, in each case, in connection with the Restructuring.

 

7.21       No Relationship Among Investors. Notwithstanding anything to the contrary herein, the duties and obligations of the Investors under this Agreement shall be several, not joint. None of the Investors shall have any fiduciary duty, any duty of trust or confidence in any form, or other duties or responsibilities to each other or any other Party. No prior history, pattern or practice of sharing confidence among or between any of the Investors and/or the Company or the Partnership shall in any way affect or negate this understanding and agreement. The Investors have no agreement, arrangement or understanding with respect to acting together for the purpose of acquiring, holding, voting or disposing of any securities of any of the Company or the Partnership and do not constitute a “group” within the meaning of Section 13(d)(3) of the Exchange Act or Rule 13d-5 promulgated thereunder. For the avoidance of doubt: (1) each Investor is entering into this Agreement directly with the Company and the Partnership and not with any other Investor, (2) no other Investor shall have any right to bring any action against any other Investor with respect to this Agreement (or any breach thereof) and (3) no Investor shall, nor shall any action taken by an Investor pursuant to this Agreement, be deemed to be acting in concert or as any group with any other Investor with respect to the obligations under this Agreement nor shall this Agreement create a presumption that the Investors are in any way acting as a group. All rights under this Agreement are separately granted to each Investor by the Company and the Partnership, as applicable, and vice versa. The decision to commit to enter into the transactions contemplated by this Agreement has been made independently by each Investor.

 

[Signature page follows.]

 

26

 

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

  EQUITRANS MIDSTREAM CORPORATION
   
  By: /s/ Kirk R. Oliver
  Name: Kirk R. Oliver
  Title: Senior Vice President and Chief Financial Officer

 

  EQM MIDSTREAM PARTNERS, LP
   
  By: EQGP Services, LLC, its general partner
   
  By: /s/ Kirk R. Oliver
  Name: Kirk R. Oliver
  Title: Senior Vice President and Chief Financial Officer

 

Signature Page to Preferred Restructuring Agreement

 

 

 

 

INVESTORS:

 

  INVESTMENT PARTNERS V (II), LLC
   
  By: BAA Co-Investment Fund (GenPar), LLC, its sole member
   
  By: BlackRock Financial Management, Inc., its sole member
   
  By: /s/ Bryan J. Smith
  Name: Bryan J. Smith
  Title: Managing Director

 

 

  GEPIF III EQM HOLDINGS, L.P.
   
  By: GEPIF III EQM Holdings GP, LLC, its general partner
   
   
  By: /s/ Mark Saxe
  Name: Mark Saxe
  Title: President

 

 

  GSO EQUITABLE FINANCE LP
   
  By: GSO Equitable Finance Holdings LLC, its general partner
   
   
  By: /s/ Marisa J. Beeney
  Name: Marisa J. Beeney
  Title: Authorized Signatory

 

Signature Page to Preferred Restructuring Agreement

 

 

 

 

  MTP ENERGY OPPORTUNITIES FUND II LLC
   
  By: MTP Energy Management LLC, its managing member
   
  By: Magnetar Financial LLC, its sole member
   
  By: /s/ Michael Turro
  Name: Michael Turro
  Title: Chief Compliance Officer

 

 

  MTP EOF II IP LLC
   
  By: MTP Energy Management LLC, its managing member
   
  By: Magnetar Financial LLC, its sole member
   
  By: /s/ Michael Turro
  Name: Michael Turro
  Title: Chief Compliance Officer
     
     
  MTP ENERGY MASTER FUND LLC
   
  By: MTP Energy Management LLC, its manager
   
  By: Magnetar Financial LLC, its sole member
   
  By: /s/ Michael Turro
  Name: Michael Turro
  Title: Chief Compliance Officer

 

Signature Page to Preferred Restructuring Agreement

 

 

 

 

  MAGNETAR STRUCTURED CREDIT FUND, LP
   
  By: Magnetar Financial LLC, its general partner
   
  By: /s/ Michael Turro
  Name: Michael Turro
  Title: Chief Compliance Officer

 

 

  MAGNETAR CONSTELLATION FUND V LLC
   
  By: Magnetar Financial LLC, its manager
   
  By: /s/ Michael Turro
  Name: Michael Turro
  Title: Chief Compliance Officer

 

 

  MAGNETAR LONGHORN FUND LP
   
  By: Magnetar Financial LLC, its investment manager
   
  By: /s/ Michael Turro
  Name: Michael Turro
  Title: Chief Compliance Officer

 

 

  SERIES V, A SERIES OF ASTRUM PARTNERS LLC
   
  By: Magnetar Financial LLC, its manager
   
  By: /s/ Michael Turro
  Name: Michael Turro
  Title: Chief Compliance Officer

 

Signature Page to Preferred Restructuring Agreement

 

 

 

 

  BSOF QMODEM (M) 2 L.P.
   
  By: Magnetar Financial LLC, its advisor
   
  By: /s/ Michael Turro
  Name: Michael Turro
  Title: Chief Compliance Officer

 

 

  MTP EMERALD FUND LLC
   
  By: MTP Energy Management LLC, its manager
     
  By: Magnetar Financial LLC, its sole member
   
  By: /s/ Michael Turro
  Name: Michael Turro
  Title: Chief Compliance Officer
     
     
  CEQM HOLDINGS, LLC
   
  By: /s/ Todd Triller
  Name: Todd Triller
  Title: Managing Director

 

 

  NB BURLINGTON AGGREGATOR LP
   
  By: /s/ David Lyon
  Name: David Lyon
  Title: Authorized Signatory

 

 

  KAYNE ANDERSON MLP/MIDSTREAM INVESTMENT COMPANY  
   
  By: KA Fund Advisors, LLC, its manager
   
  By: /s/ James C. Baker
  Name: James C. Baker
  Title: Managing Director  

 

Signature Page to Preferred Restructuring Agreement

 

 

 

 

  KAYNE ANDERSON MIDSTREAM/ENERGY FUND, INC.  
   
  By: KA Fund Advisors, LLC, its manager
   
  By: /s/ James C. Baker
  Name: James C. Baker
  Title: Managing Director
     
     
  TORTOISE DIRECT OPPORTUNITIES FUND II, LP  
   
  By: Tortoise Direct Opportunities GP II LLC, its general partner
   
  By: /s/ Michelle Johnston
  Name: Michelle Johnston
  Title: Director    
     
     
  PORTCULLIS PARTNERS, LP
   
  By: /s/ Duane Kelley
  Name: Duane Kelley
  Title: Vice President
     
     
  CENTAURUS CAPITAL LP
   
  By: Centaurus Holdings, LLC, its general partner
   
  By: /s/ John D. Arnold
  Name: John D. Arnold
  Title: Manager

 

Signature Page to Preferred Restructuring Agreement

 

 

 

 

 Schedule I

 

Investors

 

Investor: Series A
Preferred
Units:
Redeemed
Series A
Preferred
Units:
Series A
Preferred
Units Not
Redeemed:
Series A
Preferred
Shares:

GSO Equitable Finance LP

 

c/o GSO Capital Partners LP
345 Park Avenue, 31st Floor
New York, NY 10154
Attention: Robert Horn
Email: robert.horn@gsocap.com;
GSOLegal@gsocap.com

 

6,151,323 3,230,999 2,920,324 7,125,591

MTP Energy Opportunities Fund II LLC

 

 

 

Magnetar Financial LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Email: MTP_Notices@magnetar.com
Phone: 847-905-4400

 

2,398,690 1,259,918 1,138,772 2,778,604

MTP EOF II IP LLC

 

 

 

Magnetar Financial LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Email: MTP_Notices@magnetar.com
Phone: 847-905-4400

 

320,638 168,416 152,222 371,422

MTP Energy Master Fund LLC

 

Magnetar Financial LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Email: MTP_Notices@magnetar.com
Phone: 847-905-4400

 

1,469,561 771,892 697,669 1,702,312

Magnetar Structured Credit Fund, LP

 

Magnetar Financial LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Email: MTP_Notices@magnetar.com
Phone: 847-905-4400

 

204,019 107,162 96,857 236,331

 

Schedule I
Preferred Restructuring Agreement

 

 

 

 

Magnetar Constellation Fund V LLC

 

Magnetar Financial LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Email: MTP_Notices@magnetar.com
Phone: 847-905-4400

 

277,835 145,934 131,901 321,838

Magnetar Longhorn Fund LP

 

Magnetar Financial LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Email: MTP_Notices@magnetar.com
Phone: 847-905-4400

 

338,323 177,705 160,618 391,908

SERIES V, A SERIES OF ASTRUM PARTNERS LLC

 

Magnetar Financial LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Email: MTP_Notices@magnetar.com
Phone: 847-905-4400

 

123,026 64,620 58,406 142,511

BSOF Qmodem (M) 2 L.P.

 

Magnetar Financial LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Email: MTP_Notices@magnetar.com
Phone: 847-905-4400

 

697,150 366,180 330,970 807,567

MTP Emerald Fund LLC

 

Magnetar Financial LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Email: MTP_Notices@magnetar.com
Phone: 847-905-4400

 

65,776 34,549 31,227 76,194

 

Schedule I
Preferred Restructuring Agreement

 

 

 

 

Investment Partners V (II), LLC

 

c/o BlackRock Financial Management, Inc.
40 East 52nd Street
New York, NY 10022
Attention: Stephen Kavulich      
Email:  GroupBAACorePM@blackrock.com

With copy to:

c/o BlackRock, Inc.
Office of the General Counsel
40 East 52nd Street
New York, NY 10022
Attention: David Maryles and Jelena Napolitano
Email: legaltransactions@blackrock.com

 

512,610 269,249 243,361 593,801

GEPIF III EQM Holdings, L.P.

 

c/o BlackRock Financial Management, Inc.
609 Main Street
Houston, TX 77002
Attention: Mark Saxe    
Email:  mark.saxe@blackrock.com

With copy to: 

c/o BlackRock, Inc.
Office of the General Counsel
40 East 52nd Street
New York, NY 10022
Attention: David Maryles and Jelena Napolitano
Email: legaltransactions@blackrock.com

 

6,151,323 3,230,999 2,920,324 7,125,591

CEQM Holdings, LLC

 

 

 

520 Madison Avenue, 38th Floor
New York, NY 10022
Attention: Arleen Spangler; Emily Chang
Email: Arleen.Spangler@carlyle.com;
Emily.Chang@carlyle.com

 

2,050,441 1,025,221 1,025,220 2,501,537

 

Schedule I
Preferred Restructuring Agreement

 

 

 

 

NB Burlington Aggregator LP

 

 

 

c/o David Lyon
Neuberger Berman
1290 Avenue of the Americas, 43rd Floor
New York, NY 10104
David.lyon@nb.com

With copies to:

Dean Winick
Neuberger Berman
1290 Avenue of the Americas, 24th Floor
New York, NY 10104
Dean.winick@nb.com

 

2,050,441 512,610 1,537,831 3,752,308

Kayne Anderson MLP/Midstream Investment Company

 

 

 

c/o KA Fund Advisors, LLC
Attention: James C. Baker
811 Main Street, 14th Floor
Houston, TX 77002
Email: jbaker@kaynecapital.com

 

1,025,220 538,500 486,720 1,187,597

Kayne Anderson Midstream/Energy Fund, Inc.

 

 

 

c/o KA Fund Advisors, LLC
Attention: James C. Baker
811 Main Street, 14th Floor
Houston, TX 77002
Email: jbaker@kaynecapital.com

 

205,044 107,700 97,344 237,519

Centaurus Capital LP

 

 

 

1717 West Loop South, Suite 1800
Houston, TX 77027
Email: cameron@centcap.net;
allen@centcap.net

 

307,566 161,549 146,017 356,281

Tortoise Direct Opportunities Fund II, LP

 

 

 

c/o Tortoise Capital Advisors
5100 W. 115th Place
Leawood, KS 66211
Email: spang@tortoiseadvisors.com

 

205,044 102,522 102,522 250,154

Portcullis Partners, LP

 

 

 

11 Greenway Plaza, Suite 2000
Houston, TX 77046
Email: duanekelley@wvmorgan.com
Phone: 713-877-8033

 

51,261 26,925 24,336 59,380
Total 24,605,291 12,302,650 12,302,641 30,018,446

 

Schedule I
Preferred Restructuring Agreement

 

 

 

 

 

Exhibit A

 

Form of Registration Rights Agreement

 

[See attached.]

 

Exhibit A

Preferred Restructuring Agreement 

 

 

 

 

EQUITRANS MIDSTREAM CORPORATION

 

and

 

THE PURCHASERS NAMED ON SCHEDULE A

HERETO

 

 

FORM OF

 

REGISTRATION RIGHTS AGREEMENT

 

Dated [ · ], 2020

 

 

 

 

 

TABLE OF CONTENTS

 

Article I. DEFINITIONS 1
   
Section 1.01   Definitions 1
Section 1.02   Registrable Securities 5
   
Article II. REGISTRATION RIGHTS 5
   
Section 2.01   Shelf Registration. 5
Section 2.02   Piggyback Registration 7
Section 2.03   Underwritten Offering 9
Section 2.04   Further Obligations 11
Section 2.05   Cooperation by Holders 15
Section 2.06   Restrictions on Public Sale by Holders of Registrable Securities 15
Section 2.07   Expenses 15
Section 2.08   Indemnification 16
Section 2.09   Rule 144 Reporting 18
Section 2.10   Transfer or Assignment of Registration Rights 18
Section 2.11   Limitation on Subsequent Registration Rights 19
Section 2.12   Limitation on Obligations for Series A Preferred Share Registrable Securities 19
Section 2.13   Obligation to Obtain Rating for Series A Preferred Shares 19
   
Article III. MISCELLANEOUS 20
   
Section 3.01   Communications 20
Section 3.02   Binding Effect 20
Section 3.03   Assignment of Rights 21
Section 3.04   Recapitalization, Exchanges, Etc. Affecting Shares 21
Section 3.05   Aggregation of Registrable Securities 21
Section 3.06   Specific Performance 21
Section 3.07   Counterparts 21
Section 3.08   Governing Law, Submission to Jurisdiction 21
Section 3.09   Waiver of Jury Trial 22
Section 3.10   Entire Agreement 22
Section 3.11   Amendment 22
Section 3.12   No Presumption 22
Section 3.13   Obligations Limited to Parties to Agreement 23
Section 3.14   Interpretation 23
   
SCHEDULE A- Purchaser Name; Notice and Contact Information A-1
   
SCHEDULE B - Purchasers Deemed to have Delivered the Piggyback Opt-out Notice B-1
   

 

i 

 

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT, dated as of [ · ], 2020 (this “Agreement”), is entered into by and among Equitrans Midstream Corporation, a Pennsylvania corporation (the “Company”), and each of the Persons set forth on Schedule A hereto (the “Purchasers”).

 

WHEREAS, in connection with the closing of that certain Preferred Restructuring Agreement, dated as of February 26, 2020, by and among the Company, EQM Midstream Partners, LP, a Delaware limited partnership (the “Partnership”), and the Purchasers (the “Restructuring Agreement”), $600.0 million of the Partnership’s Series A Perpetual Convertible Preferred Units (each, a “Series A Preferred Unit”) issued and outstanding immediately prior to the closing of the transactions contemplated by the Restructuring Agreement were redeemed by the Partnership at a price equal to $[ · ]1 per Series A Preferred Unit and the remaining portion of the Series A Preferred Units issued and outstanding immediately prior to the closing of the transactions contemplated by the Restructuring Agreement were exchanged for newly issued Series A Preferred Shares (as defined below) of the Company; and

 

WHEREAS, pursuant to the terms of the Restructuring Agreement, the Company and each of the Purchasers agreed to execute and deliver an agreement governing registration and other rights among the parties thereto as set forth in this Agreement.

 

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

 

Article I.

 

DEFINITIONS

 

Section 1.01       Definitions. As used in this Agreement, the following terms have the meanings indicated:

 

Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding anything to the contrary provided herein, for purposes of this Agreement, no Series A Preferred Shareholder shall be considered an Affiliate of the Company or its subsidiaries, and no Series A Preferred Shareholder or any of its Affiliates shall be considered Affiliates of any other Series A Preferred Shareholder or any of such other Series A Preferred Shareholder’s Affiliates, in either case, solely by virtue of such Series A Preferred Shareholder’s ownership of the Series A Preferred Shares. Notwithstanding anything in this definition to the contrary, for purposes of this Agreement, (a) the Company and its subsidiaries, on the one hand, and any Series A Preferred Shareholder, on the other hand, shall not be considered Affiliates and (b) any fund or account managed, advised or subadvised, directly or indirectly, by a Series A Preferred Shareholder or its Affiliates, shall be considered an Affiliate of such Series A Preferred Shareholder.

 

 

1 To be calculated in accordance with the Preferred Restructuring Agreement.

 

1

 

 

Agreement” has the meaning set forth in the introductory paragraph of this Agreement.

 

Articles of Incorporation” means the Amended and Restated Articles of Incorporation of the Company, dated as of November 12, 2018.

 

BlackRock” means, collectively, the Purchasers listed on Annex A hereto under the heading “BlackRock”, and their permitted assignees.

 

Business Day” means any day other than a Saturday, Sunday, any federal legal holiday or day on which banking institutions in the State of New York or Commonwealth of Pennsylvania are authorized or required by law or other governmental action to close.

 

Certificate of Designationsmeans the Certificate of Designations of the Company relating to Series A Preferred Shares, dated [ · ], 2020, as it may be amended from time to time in accordance therewith.

 

Change of Control” has the meaning set forth in the Certificate of Designations.

 

Commission” means the United States Securities and Exchange Commission.

 

Common Share Registrable Securities” means (a) the shares of Common Stock issuable upon conversion of the Purchased Shares and (b) any other securities issued or issuable with respect to or in exchange for the shares of Common Stock issuable upon conversion of the Purchased Shares, whether in connection with a Change of Control or Company Restructuring Event or by merger, consolidation, reorganization, charter amendment, sale of all or substantially all assets or otherwise, all of which are subject to the rights provided herein until such time as such securities cease to be Registrable Securities pursuant to Section 1.02.

 

Common Stock” means the shares of common stock, no par value, of the Company, with the rights and obligations specified in the Articles of Incorporation, or any other security issued or issuable with respect to or in exchange for Common Stock, whether in connection with a Change of Control or Company Restructuring Event or by merger, consolidation, reorganization, charter amendment, sale of all or substantially all assets or otherwise.

 

Company” has the meaning set forth in the introductory paragraph of this Agreement.

 

Company Restructuring Event” has the meaning set forth in the Certificate of Designations.

 

Effective Date” means the date of effectiveness of any Registration Statement.

 

Effectiveness Period” has the meaning specified in Section 2.01(a).

 

EQT RRA” means that certain shareholder and registration rights agreement, dated as of November 12, 2018, by and between EQT Corporation and the Company.

 

2

 

 

Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

 

GSO” means, collectively, the Purchasers listed on Annex A hereto under the heading “GSO”, and their permitted assignees.

 

Holder” means the record holder of any Registrable Securities.

 

Holder Underwriter Registration Statement” has the meaning specified in Section 2.04(q).

 

Included Registrable Securities” has the meaning specified in Section 2.02(a).

 

Initiating Holder” has the meaning specified in Section 2.03(d).

 

Lead Investors” means collectively, BlackRock, GSO, Magnetar and, solely for purposes of Section 2.02(b), Investment Partners V (II), LLC.

 

Liquidated Damages” has the meaning specified in Section 2.01(b).

 

Liquidated Damages Multiplier” means the product of (a) the Purchased Share Price and (b) the number of Registrable Securities then held by the applicable Holder and to be included on the applicable Registration Statement.

 

Losses” has the meaning specified in Section 2.08(a).

 

Magnetar” means, collectively, the Purchasers listed on Annex A hereto under the heading “Magnetar”, and their permitted assignees.

 

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

 

National Securities Exchange” means either the New York Stock Exchange, the Nasdaq Stock Market, an exchange registered with the Commission under Section 6(a) of the Exchange Act (or any successor to such Section) or any other securities exchange (whether or not registered with the Commission under Section 6(a) (or successor to such Section) of the Exchange Act) on which shares of Common Stock are then listed.

 

Other Holder” has the meaning specified in Section 2.02(a).

 

Partnership” has the meaning set forth in the Recitals of this Agreement.

 

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

 

Piggyback Notice” has the meaning specified in Section 2.02(a).

 

Piggyback Opt-Out Notice” has the meaning specified in Section 2.02(a).

 

3

 

 

Piggyback Registration” has the meaning specified in Section 2.02(a).

 

Purchased Share Price” means $19.99 per share.

 

Purchased Shares” means the Series A Preferred Shares to be issued and delivered to the Purchasers pursuant to the Restructuring Agreement.

 

Purchasers” has the meaning set forth in the introductory paragraph of this Agreement.

 

Registrable Securities” means the Common Share Registrable Securities and the Series A Preferred Share Registrable Securities.

 

Registration” means any registration pursuant to this Agreement, including pursuant to a Registration Statement or a Piggyback Registration.

 

Registrable Securities Required Voting Percentage” means a majority of the outstanding Registrable Securities voting together as a single class, including the Series A Preferred Share Registrable Securities on an as-converted basis to Common Share Registrable Securities.

 

Registration Expenses” has the meaning specified in Section 2.07(a).

 

Registration Statement” has the meaning specified in Section 2.01(a).

 

Restructuring Agreement” has the meaning set forth in the Recitals of this Agreement.

 

Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

 

Selling Expenses” has the meaning specified in Section 2.07(a).

 

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

 

Selling Holder Indemnified Persons” has the meaning specified in Section 2.08(a).

 

Series A Preferred Share Registrable Securities” means the (a) Purchased Shares and (b) any other securities issued or issuable with respect to or in exchange for the Purchased Shares, whether in connection with a Change of Control or Company Restructuring Event or by merger, consolidation, reorganization, charter amendment, sale of all or substantially all assets or otherwise, all of which are subject to the rights of Series A Preferred Share Registrable Securities provided herein until such time as such securities either (i) convert into shares of Common Stock pursuant to the terms of the Certificate of Designations or (ii) cease to be Registrable Securities pursuant to Section 1.02.

 

Series A Preferred Shares” means the Company’s Series A Perpetual Convertible Preferred Shares, no par value, with the rights and obligations specified in the Certificate of Designations.

 

4

 

 

Series A Preferred Shareholder” means a record holder of Series A Preferred Shares.

 

Series A Preferred Unit” has the meaning set forth in the recitals.

 

Target Effective Date” has the meaning specified in Section 2.01(a).

 

Underwriter” means, with respect to any Underwritten Offering, the underwriters of such Underwritten Offering.

 

Underwritten Offering” means an offering (including an offering pursuant to a Registration Statement) in which Series A Preferred Shares or shares of Common Stock are sold to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.

 

WKSI” means a well-known seasoned issuer (as defined in the rules and regulations of the Commission).

 

Section 1.02       Registrable Securities. Any Registrable Security will cease to be a Registrable Security upon the earliest to occur of the following: (a) when a registration statement covering such Registrable Security becomes or has been declared effective by the Commission and such Registrable Security has been sold or disposed of pursuant to such effective registration statement, (b) when such Registrable Security has been disposed of (excluding transfers or assignments by a Holder to an Affiliate or to another Holder or any of its Affiliates or to any assignee or transferee to whom the rights under this Agreement have been transferred pursuant to Section 2.10) pursuant to any section of Rule 144 (or any similar provision then in effect) under the Securities Act, (c) when such Registrable Security is held by the Company or any of its direct or indirect subsidiaries and (d) when such Registrable Security has been sold or disposed of in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities pursuant to Section 2.10. In addition, a Holder will cease to have rights to require registration of any Registrable Securities held by that Holder under this Agreement on the second anniversary of the date on which all Series A Preferred Shares have been converted into shares of Common Stock.

 

Article II.

 

REGISTRATION RIGHTS

 

Section 2.01       Shelf Registration.

 

(a)         Shelf Registration. The Company shall use its commercially reasonable efforts to (i) prepare and file an initial registration statement under the Securities Act to permit the resale of Registrable Securities from time to time as permitted by Rule 415 (or any similar provision adopted by the Commission then in effect) of the Securities Act (a “Registration Statement”) and (ii) cause such initial Registration Statement to become effective no later than twenty (20) Business Days following the date hereof (the “Target Effective Date”). The Company will use its commercially reasonable efforts to cause such initial Registration Statement filed pursuant to this Section 2.01(a) to be continuously effective under the Securities Act, with respect to any Holder, until the earliest to occur of the following: (A) the date on which there are no longer any Registrable Securities outstanding and (B) the second anniversary of the date on which all Series A Preferred Shares have been converted into shares of Common Stock (in each case of clause (A) or (B) the “Effectiveness Period”). A Registration Statement filed pursuant to this Section 2.01(a) shall be on such appropriate registration form of the Commission as shall be selected by the Company; provided that, if the Company is then eligible, it shall file such Registration Statement on Form S-3 and, if eligible, pursuant to an “automatic shelf registration statement” as defined under Rule 405 of the Securities Act. A Registration Statement when declared effective (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (and, in the case of any prospectus contained in such Registration Statement, in the light of the circumstances under which a statement is made). As soon as practicable following the date that a Registration Statement becomes effective, but in any event within three (3) Business Days of such date, the Company shall provide the Holders with written notice of the effectiveness of such Registration Statement. The Company shall not be obligated to have more than one effective Registration Statement at any given time pursuant to this Section 2.01.

 

5

 

 

(b)        Failure to Become Effective. If a Registration Statement required by Section 2.01(a) does not become or is not declared effective by the Target Effective Date, then each Holder shall be entitled to a payment (with respect to each of the Holder’s Registrable Securities which are included in such Registration Statement), as liquidated damages and not as a penalty, of (i) for each non-overlapping 30-day period for the first 60 days following the Target Effective Date, an amount equal to 0.25% of the Liquidated Damages Multiplier, and (ii) for each non-overlapping 30-day period beginning on the 61st day following the Target Effective Date, an amount equal to the amount set forth in clause (i) plus an additional 0.25% of the Liquidated Damages Multiplier for each subsequent 60 days (i.e., 0.5% for 61-120 days, 0.75% for 121-180 days, and 1.0% thereafter), up to a maximum amount equal to 1.0% of the Liquidated Damages Multiplier per non-overlapping 30-day period (the “Liquidated Damages”), until such time as such Registration Statement is declared or becomes effective or there are no longer any Registrable Securities outstanding. The Liquidated Damages shall be payable within ten (10) Business Days after the end of each such 30-day period in immediately available funds to the account or accounts specified by the applicable Holders. Any amount of Liquidated Damages shall be prorated for any period of less than thirty (30) days accruing during any period for which a Holder is entitled to Liquidated Damages hereunder.

 

(c)         Waiver of Liquidated Damages. If the Company is unable to cause a Registration Statement to become effective on or before the Target Effective Date, then the Company may request a waiver of the Liquidated Damages, which may be granted by the consent of the Holders of at least the Registrable Securities Required Voting Percentage, in their sole discretion, and which such waiver shall apply to all the Holders of Registrable Securities included on such Registration Statement.

 

(d)         Delay Rights. Notwithstanding anything to the contrary contained herein, the Company may, upon written notice to any Selling Holder whose Registrable Securities are included in a Registration Statement, suspend such Selling Holder’s use of any prospectus which is a part of such Registration Statement (in which event the Selling Holder shall suspend sales of the Registrable Securities pursuant to such Registration Statement) if (i) the Company is pursuing an acquisition, merger, reorganization, disposition or other similar transaction and the Company determines in good faith that the Company’s ability to pursue or consummate such a transaction would be materially and adversely affected by any required disclosure of such transaction in such Registration Statement or (ii) the Company or any of its Affiliates has experienced some other material non-public event, the disclosure of which at such time, in the good faith judgment of the Company, would materially and adversely affect the Company; provided, however, that in no event shall the Selling Holders be suspended from selling Registrable Securities pursuant to such Registration Statement for a period that exceeds an aggregate of 60 days in any 180-day period or 105 days in any 365-day period. Upon disclosure of such information or the termination of the condition described above, the Company shall provide prompt notice to the Selling Holders whose Registrable Securities are included in such Registration Statement, and shall promptly terminate any suspension of sales it has put into effect and shall take such other actions necessary or appropriate to permit registered sales of Registrable Securities as contemplated in this Agreement. For the avoidance of doubt, the provisions of this Section 2.01(d) shall apply to any Underwritten Offering undertaken pursuant to Section 2.03.

 

6

 

 

Section 2.02       Piggyback Registration.

 

(a)         Participation. If at any time the Company proposes to file (i) a Registration Statement (other than a Registration Statement contemplated by Section 2.01(a)) on behalf of any other Person who has or has been granted registration rights related to an Underwritten Offering (the “Other Holder”), or (ii) a prospectus supplement relating to the sale of shares of Common Stock by any Other Holders to an effective registration statement, so long as the Company is a WKSI at such time or, whether or not the Company is a WKSI, so long as the Common Share Registrable Securities were previously included in the underlying shelf Registration Statement or are included on an effective Registration Statement, or in any case in which Holders may participate in such offering without the filing of a post-effective amendment, in each case, for the sale of shares of Common Stock by Other Holders in an Underwritten Offering, then the Company shall give not less than four (4) Business Days’ notice (including, but not limited to, notification by electronic mail) (the “Piggyback Notice”) of such proposed Underwritten Offering to each Holder that, together with its Affiliates, owns at least $15 million of Common Share Registrable Securities and such Piggyback Notice shall offer such Holder the opportunity to include in such Underwritten Offering for Other Holders such number of Common Share Registrable Securities (the “Included Registrable Securities”) as such Holder may request in writing (a “Piggyback Registration”); provided, however, that the Company shall not be required to offer such opportunity (A) to such Holders if the Holders, together with their Affiliates, do not offer a minimum of $15 million of Common Share Registrable Securities, in the aggregate (determined by multiplying the number of Common Share Registrable Securities owned by the average of the closing price on the National Securities Exchange for the shares of Common Stock for the ten (10) trading days preceding the date of such notice), or such lesser amount if it constitutes the remaining holdings of the Holder and its Affiliates, or (B) to such Holders if and to the extent that the Company has been advised by the Managing Underwriter that the inclusion of Common Share Registrable Securities for sale for the benefit of such Holders will have an adverse effect on the price, timing or distribution of the shares of Common Stock in such Underwritten Offering, then the amount of Common Share Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.02(b). Each Piggyback Notice shall be provided to Holders on a Business Day pursuant to Section 3.01 and receipt of such notice shall be confirmed and kept confidential by the Holders until either (x) such proposed Underwritten Offering has been publicly announced by the Company or (y) the Holders have received notice from the Company that such proposed Underwritten Offering has been abandoned, which the Company shall provide to the Holders reasonably promptly after the final decision to abandon a proposed Underwritten Offering has been made. Each such Holder will have four (4) Business Days (or two (2) Business Days in connection with any overnight or bought Underwritten Offering) after such Piggyback Notice has been delivered to request in writing to the Company the inclusion of Common Share Registrable Securities in the Underwritten Offering for Other Holders. If no request for inclusion from a Holder is received by the Company within the specified time or if a Holder states in its response to the Piggyback Notice that it declines the opportunity to include Registrable Securities in the Underwritten Offering, such Holder shall have no further right to participate in such Underwritten Offering. If, at any time after giving written notice of the Company’s intention to undertake an Underwritten Offering for Other Holders and prior to the pricing of such Underwritten Offering, such Underwritten Offering is terminated or delayed pursuant to the provisions of this Agreement, the Company may, at its election, give written notice of such determination to the Selling Holders and, (1) in the case of a termination of such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering, and (2) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Common Share Registrable Securities in such Underwritten Offering by giving written notice to the Company of such withdrawal at least one (1) Business Day prior to the time of pricing of such Underwritten Offering. Any Holder may deliver written notice (a “Piggyback Opt-Out Notice”) to the Company requesting that such Holder not receive notice from the Company of any proposed Underwritten Offering for Other Holders; provided, however, that such Holder may later revoke any such Piggyback Opt-Out Notice in writing. Following receipt of a Piggyback Opt-Out Notice from a Holder (unless subsequently revoked), the Company shall not be required to deliver any notice to such Holder pursuant to this Section 2.02(a) and such Holder shall no longer be entitled to participate in Underwritten Offerings for Other Holders pursuant to this Section 2.02(a), unless such Piggyback Opt-Out Notice is revoked by such Holder. The Holders listed on Schedule B shall each be deemed to have delivered a Piggyback Opt-Out Notice as of the date hereof.

 

7

 

 

(b)        Priority of Piggyback Registration. If the Managing Underwriter or Underwriters of any proposed Underwritten Offering for Other Holders advise the Company that the total amount of Common Share Registrable Securities that Holders intend to include in such offering exceeds the number that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Share Registrable Securities offered or the market for the shares of Common Stock, then the Company shall include the number of shares of Common Stock that such Managing Underwriter or Underwriters advise the Company can be sold without having such adverse effect, with such number to be allocated (i) in the event that the Person that initiated such Underwritten Offering is the Company or any of the Company’s subsidiaries, (A) first, to the Company or the Company’s subsidiaries, (B) second, pro rata among the members of the Parent Group (as defined in the EQT RRA) exercising registration rights pursuant to Section 2.02 of the EQT RRA related to such offering, (C) third, pro rata among any Holders who are Lead Investors and exercising piggyback registration rights pursuant to this Section 2.02 related to such offering, (D) fourth, pro rata among (1) all other Holders who are exercising piggyback registration rights pursuant to this Section 2.02 related to such offering and (2) any Persons owning shares of Common Stock, having piggyback registration rights pari passu to those of the Holders described in this Section 2.02(b)(i)(C) and exercising such piggyback registration rights and (E) fifth, pro rata among any Persons owning shares of Common Stock having piggyback registration rights subordinate to those of the Holders and exercising such piggyback registration rights and (ii) in the event that any Person other than the Company or any of the Company’s subsidiaries initiated such Underwritten Offering, (A) first, the Person that initiated such Underwritten Offering, (B) second, pro rata among the members of the Parent Group (as defined in the EQT RRA) exercising registration rights pursuant to Section 2.02 of the EQT RRA related to such offering, (C) third, to any Holders who are Lead Investors and exercising piggyback registration rights pursuant to this Section 2.02 related to such offering, (D) fourth, pro rata among (1) all other Holders who are exercising piggyback registration rights pursuant to this Section 2.02 related to such offering and (2) any Persons owning shares of Common Stock, having piggyback registration rights pari passu to those of the Holders described in this Section 2.02(b)(ii) and exercising such piggyback registration rights and (E) fifth, pro rata among the Company or any of the Company’s subsidiaries (to the extent that such Person was not the Person initiating the Underwritten Offering on its own behalf) and Persons owning shares of Common Stock, having piggyback registration rights subordinate to those of the Holders and exercising such piggyback registration rights (pro rata, as used in this Section 2.02, based, for each such Person or Holder, as applicable, on the percentage derived by dividing (x) the number of shares of Common Stock proposed to be sold by such Person or Holder, as applicable, in such offering by (y) the aggregate number of shares of Common Stock proposed to be sold by the Persons sharing in the same tier of pro rata allocation).

 

Section 2.03       Underwritten Offering.

 

(a)        Common Share Registration. Subject to the limitation set forth in Section 2.03(c) below, in the event that any of BlackRock, GSO or Magnetar elects to dispose of Common Share Registrable Securities under a Registration Statement pursuant to an Underwritten Offering and either (i) reasonably expects gross proceeds of at least $65 million from such Underwritten Offering (together with any Common Share Registrable Securities to be disposed of by a Selling Holder who has elected to participate in such Underwritten Offering pursuant to Section 2.02) or (ii) reasonably expects gross proceeds of at least $30 million from such Underwritten Offering (together with any Common Share Registrable Securities to be disposed of by a Selling Holder who has elected to participate in such Underwritten Offering pursuant to Section 2.02) and such Common Share Registrable Securities represent 100% of the then outstanding Common Share Registrable Securities held by the applicable Selling Holder and Affiliates, the Company shall, at the written request of such Selling Holder(s), enter into an underwriting agreement in a form as is customary in Underwritten Offerings of securities by the Company with the Managing Underwriter or Underwriters selected by the Company (subject to the written consent of the Lead Investor initiating such Underwritten Offering, which consent shall not be unreasonably withheld), which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08, and shall take all such other reasonable actions as are requested by the Managing Underwriter or Underwriters in order to expedite or facilitate the disposition of such Common Share Registrable Securities.

 

8

 

 

(b)        Preferred Share Registration. Subject to the limitation set forth in Section 2.03(c) below, in the event that any of BlackRock, GSO or Magnetar, individually, or Holders holding at least 66 ⅔% of the outstanding Series A Preferred Share Registrable Securities not held by the Lead Investors at such time, collectively, elects to dispose of Series A Preferred Share Registrable Securities under a Registration Statement pursuant to an Underwritten Offering and either (i) reasonably expects gross proceeds of at least $65 million from such Underwritten Offering or (ii) reasonably expects gross proceeds of at least $30 million from such Underwritten Offering and such Series A Preferred Share Registrable Securities represent 100% of the then outstanding Series A Preferred Share Registrable Securities held by the applicable Selling Holder and Affiliates, the Company shall, at the written request of such Selling Holder(s), enter into an underwriting agreement in a form as is customary in Underwritten Offerings of securities by the Company with the Managing Underwriter or Underwriters selected by the Company (subject to the written consent of the Lead Investor initiating such Underwritten Offering, which consent shall not be unreasonably withheld), which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08, and shall take all such other reasonable actions as are requested by the Managing Underwriter or Underwriters in order to expedite or facilitate the disposition of such Series A Preferred Share Registrable Securities.

 

(c)         Limitations on Registration. The Company shall have no obligation to facilitate or participate in, including entering into any underwriting agreement, for more than (i) two Underwritten Offerings pursuant to Section 2.03(a) hereof at the request of BlackRock, (ii) two Underwritten Offerings pursuant to Section 2.03(a) hereof at the request of GSO, (iii) two Underwritten Offerings pursuant to Section 2.03(a) hereof at the request of Magnetar, (iv) one Underwritten Offering pursuant to Section 2.03(b) hereof at the request of BlackRock, (v) one Underwritten Offering pursuant to Section 2.03(b) hereof at the request of GSO, (vi) one Underwritten Offering pursuant to Section 2.03(b) hereof at the request of Magnetar and (vii) one Underwritten Offering pursuant to Section 2.03(b) hereof at the request of Holders holding at least 66 ⅔% of the outstanding Series A Preferred Share Registrable Securities not held by the Lead Investors at such time; provided, further, that none of the foregoing Underwritten Offerings in clauses (i) through (vii) above shall occur within 180 days of each other; provided, further, that if the Company or its Affiliates are conducting or actively pursuing a securities offering of the Company’s Common Stock and/or Series A Preferred Shares with anticipated gross offering proceeds of at least $100 million (other than in connection with any at-the-market offering or similar continuous offering program), then the Company may suspend such Selling Holder’s right to require the Company to conduct an Underwritten Offering on such Selling Holder’s behalf pursuant to this Section 2.03; provided, however, that the Company may only suspend such Selling Holder’s right to require the Company to conduct an Underwritten Offering pursuant to this Section 2.03 once in any six-month period and in no event for a period that exceeds an aggregate of 60 days in any 180-day period or 105 days in any 365-day period.

 

9

 

 

(d)         General Procedures. In connection with any Underwritten Offering contemplated by Section 2.03(a) or Section 2.03(b), the underwriting agreement into which each Selling Holder and the Company shall enter shall contain such representations, covenants, indemnities (subject to Section 2.08) and other rights and obligations as are customary in Underwritten Offerings of securities by the Company. No Selling Holder shall be required to make any representations or warranties to, or agreements with, the Company or the Underwriters other than representations, warranties or agreements regarding such Selling Holder’s authority to enter into such underwriting agreement and to sell, and its ownership of, the securities being registered on its behalf, its intended method of distribution and any other representation required by law. If any Selling Holder disapproves of the terms of an Underwritten Offering contemplated by this Section 2.03, such Selling Holder may elect to withdraw therefrom by notice to the Company and the Managing Underwriter; provided, however, that such withdrawal must be made at least one (1) Business Day prior to the time of pricing of such Underwritten Offering to be effective; provided, further, that in the event the Managing Underwriter or Underwriters of any proposed Underwritten Offering advise the Company that the total amount of Registrable Securities that Holders intend to include in such offering exceeds the number that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Registrable Securities offered or the market for the shares of Common Stock or Series A Preferred Shares, and the amount of Registrable Securities requested to be included in such Underwritten Offering by the Holder that initiated such Underwritten Offering pursuant to Section 2.03(a) or Section 2.03(b) (the “Initiating Holder”) is reduced by 50% or more, the Initiating Holder will have the right to withdraw from such Underwritten Offering by delivering notice to the Company at least one (1) Business Day prior to the time of pricing of such Underwritten Offering, in which case the Company will have no obligation to proceed with such Underwritten Offering and such Underwritten Offering, whether or not completed, will not decrease the number of Underwritten Offerings the Initiating Holder shall have the right and option to request under this Section 2.03. No such withdrawal or abandonment shall affect the Company’s obligation to pay Registration Expenses.

 

Section 2.04       Further Obligations. In connection with its obligations under this Article II, the Company will:

 

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

 

(b)        if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering under a Registration Statement and the Managing Underwriter at any time shall notify the Company in writing that, in the sole judgment of such Managing Underwriter, inclusion of detailed information to be used in such prospectus supplement is of material importance to the success of such Underwritten Offering, use its commercially reasonable efforts to include such information in such prospectus supplement;

 

(c)         furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing a Registration Statement or any other registration statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the Commission), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and, to the extent timely received, make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing such Registration Statement or such other registration statement and the prospectus included therein or any supplement or amendment thereto, and (ii) such number of copies of such Registration Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Persons may reasonably request in order to facilitate the resale or other disposition of the Registrable Securities covered by such Registration Statement or other registration statement;

 

10

 

 

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

 

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

 

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

 

11

 

 

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

 

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

 

(i)          otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission;

 

(j)          make available to the appropriate representatives of the Managing Underwriter during normal business hours access to such information and Company personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act; provided, however, that the Company need not disclose any non-public information to any such representative unless and until such representative has entered into a confidentiality agreement with the Company;

 

(k)         (i) use its commercially reasonable efforts to cause all Common Share Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which similar securities issued by the Company are then listed and (ii) upon the written request of Purchasers holding a majority of the Series A Preferred Share Registrable Securities (which majority must include two of the three Lead Investors), use its best efforts to cause all Series A Preferred Share Registrable Securities registered pursuant to this Agreement to be listed on the securities exchange or nationally recognized quotation system on which Common Share Registrable Securities are then listed;

 

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

 

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

 

12

 

 

 

(n)         enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the Underwriters, if any, in order to expedite or facilitate the disposition of Registrable Securities (including making appropriate officers of the Company available to participate in customary marketing activities); provided, however, that the officers of the Company shall not be required to dedicate an unreasonably burdensome amount of time in connection with any roadshow and related marketing activities for any Underwritten Offering;

 

(o)         if reasonably requested by a Selling Holder, (i) incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; and (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;

 

(p)         if reasonably required by the Company’s transfer agent, promptly deliver any authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to transfer such Registrable Securities without legend upon sale by the Holder of such Registrable Securities under the Registration Statement; and

 

(q)         if any Holder could reasonably be deemed to be an “underwriter,” as defined in Section 2(a)(11) of the Securities Act, in connection with the Registration Statement and any amendment or supplement thereof (a “Holder Underwriter Registration Statement”), then reasonably cooperate with such Holder in allowing such Holder to conduct customary “underwriter’s due diligence” with respect to the Company and satisfy its obligations in respect thereof. In addition, at any Holder’s request, the Company will furnish to such Holder, on the date of the effectiveness of the Holder Underwriter Registration Statement and thereafter from time to time on such dates as such Holder may reasonably request (provided that such request shall not be more frequently than on an annual basis unless such Holder is offering Registrable Securities pursuant to a Holder Underwriter Registration Statement), (i) a “comfort letter”, dated as of such date, from the Company’s independent certified public accountants in form and substance as has been customarily given by independent certified public accountants to underwriters in Underwritten Offerings of securities by the Company, addressed to such Holder, (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of the Holder Underwriter Registration Statement, in form, scope and substance as has been customarily given in Underwritten Offerings of securities by the Company, including standard “10b-5” negative assurance for such offerings, addressed to such Holder and (iii) a standard officer’s certificate from the chief executive officer or chief financial officer, or other officers serving such functions, of the Company addressed to the Holder, as has been customarily given by such officers in Underwritten Offerings of securities by the Company. The Company will also use its reasonable efforts to provide legal counsel to such Holder with an opportunity to review and comment upon any such Holder Underwriter Registration Statement, and any amendments and supplements thereto, prior to its filing with the Commission.

 

13

 

 

Notwithstanding anything to the contrary in this Section 2.04, the Company will not name a Holder as an underwriter (as defined in Section 2(a)(11) of the Securities Act) in any Registration Statement or Holder Underwriter Registration Statement, as applicable, without such Holder’s consent. If the staff of the Commission requires the Company to name any Holder as an underwriter (as defined in Section 2(a)(11) of the Securities Act), and such Holder does not consent thereto, then such Holder’s Registrable Securities shall not be included on the applicable Registration Statement, and the Company shall have no further obligations hereunder with respect to Registrable Securities held by such Holder, unless such Holder has not had an opportunity to conduct customary underwriter’s due diligence as set forth in subsection (q) of this Section 2.04 with respect to the Company at the time such Holder’s consent is sought.

 

Each Selling Holder, upon receipt of notice from the Company of the happening of any event of the kind described in subsection (f) of this Section 2.04, shall forthwith discontinue offers and sales of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (f) of this Section 2.04 or until it is advised in writing by the Company that the use of the prospectus may be resumed and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by the Company, such Selling Holder will, or will request the Managing Underwriter or Managing Underwriters, if any, to deliver to the Company (at the Company’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

Section 2.05      Cooperation by Holders. The Company shall have no obligation to include Registrable Securities of a Holder in a Registration Statement or in an Underwritten Offering pursuant to Section 2.03(a) or Section 2.03(b) if such Holder has failed to timely furnish such information that the Company determines, after consultation with its counsel, is reasonably required in order for any registration statement or prospectus supplement, as applicable, to comply with the Securities Act.

 

Section 2.06      Restrictions on Public Sale by Holders of Registrable Securities. Each Holder of Registrable Securities who is participating in an Underwritten Offering agrees to enter into a customary letter agreement with Underwriters providing that such Holder will not effect any public sale or distribution of Registrable Securities during the 45 calendar day period beginning on the date of a prospectus or prospectus supplement filed with the Commission with respect to the pricing of such Underwritten Offering; provided, however, that, notwithstanding the foregoing, (i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction imposed by the Underwriters on the Company or the officers, directors or any other Affiliate of the Company on whom a restriction is imposed and (ii) the restrictions set forth in this Section 2.06 shall not apply to any Registrable Securities that are included in such Underwritten Offering by such Holder.

 

14

 

 

Section 2.07       Expenses.

 

(a)         Certain Definitions. “Registration Expenses” shall not include Selling Expenses but otherwise means all expenses incident to the Company’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on a Registration Statement pursuant to Section 2.01, a Piggyback Registration pursuant to Section 2.02, or an Underwritten Offering pursuant to Section 2.03, and the disposition of such Registrable Securities, including all registration, filing, securities exchange listing and National Securities Exchange fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, fees of transfer agents and registrars, all word processing, duplicating and printing expenses, and the fees and disbursements of counsel and independent public accountants for the Company, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance. “Selling Expenses” means all underwriting fees, discounts and selling commissions and transfer taxes allocable to the sale of the Registrable Securities, plus any costs or expenses related to any roadshows conducted in connection with the marketing of any Underwritten Offering.

 

(b)         Expenses. The Company will pay all reasonable Registration Expenses, as determined in good faith, in connection with a shelf Registration, a Piggyback Registration or an Underwritten Offering, whether or not any sale is made pursuant to such shelf Registration, Piggyback Registration or Underwritten Offering. Each Selling Holder shall pay its pro rata share of all Selling Expenses in connection with any sale of its Registrable Securities hereunder. In addition, except as otherwise provided in Section 2.08, the Company shall not be responsible for professional fees (including legal fees) incurred by Holders in connection with the exercise of such Holders’ rights hereunder.

 

Section 2.08       Indemnification.

 

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

 

15

 

 

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

 

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

 

16

 

 

(d)         Contribution. If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other hand, in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided, however, that in no event shall any Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of Registrable Securities giving rise to such indemnification. The relative fault of the indemnifying party, on the one hand, and the indemnified party, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to herein. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in connection with investigating, defending or resolving any Loss that is the subject of this paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.

 

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

 

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

 

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

 

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

 

17

 

 

(c)         so long as a Holder owns any Registrable Securities, furnish (i) to the extent accurate, forthwith upon request, a written statement of the Company that it has complied with the reporting requirements of Rule 144 under the Securities Act (or any similar provision then in effect) and (ii) unless otherwise available via the Commission’s EDGAR filing system, to such Holder forthwith upon request a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration.

 

Section 2.10       Transfer or Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities under this Article II may be transferred or assigned by each Holder to one or more transferees or assignees of Registrable Securities; provided, however, that (a) unless any such transferee or assignee is an Affiliate of, and after such transfer or assignment continues to be an Affiliate of, such Holder, the amount of Registrable Securities transferred or assigned to such transferee or assignee shall represent at least $30 million of Registrable Securities, calculated on the basis of the Purchased Share Price or such lesser amount if it constitutes the remaining holdings of the Holder and its Affiliates, (b) the Company is given written notice prior to any said transfer or assignment, stating the name and address of each such transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned and (c) each such transferee or assignee assumes in writing responsibility for its portion of the obligations of such transferring Holder under this Agreement.

 

Section 2.11      Limitation on Subsequent Registration Rights. From and after the date hereof, the Company shall not, without the prior written consent of the Holders of at least the Registrable Securities Required Voting Percentage, enter into any agreement with any current or future holder of any securities of the Company that would allow such current or future holder to require the Company to include securities in any registration statement filed by the Company for Other Holders on a basis other than pari passu with, or expressly subordinate to, the piggyback rights of the Holders of Common Share Registrable Securities hereunder; provided, that in no event shall the Company enter into any agreement that would permit another holder of securities of the Company to participate on a superior or pari passu basis (in terms of priority of cut-back based on advice of Underwriters) with a Holder requesting registration or takedown in an Underwritten Offering pursuant to Section 2.03(a) or Section 2.03(b).

 

Section 2.12      Limitation on Obligations for Series A Preferred Share Registrable Securities. Notwithstanding anything to the contrary in this Agreement, nothing contained herein shall be construed to require the Company to provide any Holder of Series A Preferred Share Registrable Securities any rights to include any Series A Preferred Share Registrable Securities in any underwritten offering relating to the sale by the Company or any other Person of any securities of the Company.

 

18

 

 

Section 2.13       Obligation to Obtain Rating for Series A Preferred Shares. If requested by any of the Lead Investors, the Company shall use commercially reasonable efforts to obtain and maintain a rating from a nationally recognized rating agency (chosen by such Holders) with respect to the Series A Preferred Shares until the date on which all Series A Preferred Shares have been converted into shares of Common Stock. The Company shall be entitled to reimbursement from the Holders holding Series A Preferred Shares for all direct costs paid to the applicable rating agency by the Company in obtaining the initial rating, which costs shall be shared by such Holders pro rata (based, for each such Holder on the percentage derived by dividing (x) the number of Series A Preferred Shares held by each such Holder, by (y) the aggregate number of Series A Preferred Shares outstanding at the time such rating is obtained). After the date on which a rating has been obtained for the Series A Preferred Shares, if requested by the Holders of 75% of the Series A Preferred Shares then outstanding, the Company shall use commercially reasonably efforts to cause such rating on the Series A Preferred Shares to be withdrawn.

  

Article III.
MISCELLANEOUS

 

Section 3.01      Communications. All notices, demands and other communications provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, air courier guaranteeing overnight delivery, personal delivery or (in the case of any notice given by the Shares to the Purchasers) email to the following addresses:

 

(a)         If to the Purchasers, to the addresses set forth on Schedule A.

 

(b)        If to the Company:

 

Equitrans Midstream Corporation
2200 Energy Drive
Canonsburg, Pennsylvania 15317
Attention: Kirk Oliver
  Stephen M. Moore
Email: koliver@equitransmidstream.com
  smoore@equitransmidstream.com

 

with copies to (which shall not constitute notice):

 

Latham & Watkins LLP
811 Main Street
Suite 3700
Houston TX 77002
Attention: Ryan J. Maierson
  Nick S. Dhesi

Email: ryan.maierson@lw.com
    nick.dhesi@lw.com

 

or to such other address as the Company or the Purchasers may designate to each other in writing from time to time or, if to a transferee or assignee of the Purchasers or any transferee or assignee thereof, to such transferee or assignee at the address provided pursuant to Section 2.10. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; upon actual receipt if sent by certified or registered mail, return receipt requested, or regular mail, if mailed; upon actual receipt of the facsimile or email copy, if sent via facsimile or email; and upon actual receipt when delivered to an air courier guaranteeing overnight delivery.

 

19

 

 

Section 3.02      Binding Effect. This Agreement shall be binding upon the Company, each of the Purchasers and their respective successors and permitted assigns, including binding upon (i) in the case of the Company, any Person that will be a successor to the Company, whether in connection with a Change of Control or Company Restructuring Event or by merger, consolidation, reorganization, charter amendment, sale of all or substantially all assets or otherwise and (ii) in the case of the Purchasers, subsequent Holders of Registrable Securities to the extent permitted herein. Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and permitted assigns.

 

Section 3.03      Assignment of Rights. Except as provided in Section 2.10 and as contemplated by Section 3.02, neither this Agreement nor any of the rights, benefits or obligations hereunder may be assigned or transferred, by operation of law or otherwise, by any party hereto without the prior written consent of the other party.

 

Section 3.04      Recapitalization, Exchanges, Etc. Affecting Shares. The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all shares of the Company or any successor or assign of the Company (whether in connection with a Change of Control or Company Restructuring Event or by merger, acquisition, consolidation, reorganization, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, share splits, recapitalizations, pro rata distributions of shares and the like occurring after the date of this Agreement. As a condition to the effectiveness of any transaction discussed in the prior sentence, the Company shall make provision to ensure that any successor or assign of the Company either (i) acknowledges, adopts and assumes in full the Company’s obligations pursuant to this Agreement or (ii) enters into a new registration rights agreements with the holders of the Series A Preferred Shares providing for the same rights set forth herein.

 

Section 3.05      Aggregation of Registrable Securities. All Registrable Securities held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

Section 3.06      Specific Performance. Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to seek an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity that such Person may have.

 

Section 3.07      Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same agreement.

 

20

 

 

Section 3.08      Governing Law, Submission to Jurisdiction. This Agreement, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement), will be construed in accordance with and governed by the laws of the State of Delaware without regard to principles of conflicts of laws. Any action against any party relating to the foregoing shall be brought in any federal or state court of competent jurisdiction located within the State of Delaware, and the parties hereto hereby irrevocably submit to the exclusive jurisdiction of any federal or state court located within the State of Delaware over any such action. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

Section 3.09      Waiver of Jury Trial. THE PARTIES TO THIS AGREEMENT EACH HEREBY WAIVE, AND AGREE TO CAUSE THEIR AFFILIATES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

Section 3.10      Entire Agreement. This Agreement, the Restructuring Agreement and the other agreements and documents referred to herein and therein are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or in the Restructuring Agreement with respect to the rights granted by the Company or any of its Affiliates or the Purchasers or any of their respective Affiliates set forth herein or therein. This Agreement, the Restructuring Agreement and the other agreements and documents referred to herein or therein supersede all prior agreements and understandings between the parties with respect to such subject matter.

 

Section 3.11      Amendment. This Agreement may be amended only by means of a written amendment signed by the Company and the Holders of at least the Registrable Securities Required Voting Percentage; provided, however, that no such amendment shall adversely affect the rights of any Holder hereunder without the consent of such Holder. Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by the Company or any Holder from the terms of any provision of this Agreement shall be effective only in the specific instance and for the specific purpose for which such amendment, supplement, modification, waiver or consent has been made or given.

 

21

 

 

Section 3.12      No Presumption. This Agreement has been reviewed and negotiated by sophisticated parties with access to legal counsel and shall not be construed against the drafter.

 

Section 3.13      Obligations Limited to Parties to Agreement. Each of the parties hereto covenants, agrees and acknowledges that, other than as set forth herein, no Person other than the Purchasers, the Holders, their respective permitted assignees and the Company shall have any obligation hereunder and that, notwithstanding that one or more of such Persons may be a corporation, partnership or limited liability company, no recourse under this Agreement or under any documents or instruments delivered in connection herewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, shareholder or Affiliate of any of such Persons or their respective permitted assignees, or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, shareholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, shareholder or Affiliate of any of such Persons or any of their respective assignees, or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, shareholder or Affiliate of any of the foregoing, as such, for any obligations of such Persons or their respective permitted assignees under this Agreement or any documents or instruments delivered in connection herewith or for any claim based on, in respect of or by reason of such obligation or its creation, except, in each case, for any assignee of any Purchaser or a Selling Holder hereunder.

 

Section 3.14      Interpretation. Article, Section and Schedule references in this Agreement are references to the corresponding Article, Section or Schedule to this Agreement, unless otherwise specified. All Schedules to this Agreement are hereby incorporated and made a part hereof as if set forth in full herein and are an integral part of this Agreement. All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it. Whenever the Company has an obligation under this Agreement, the expense of complying with that obligation shall be an expense of the Company unless otherwise specified. Any reference in this Agreement to “$” shall mean U.S. dollars. Whenever any determination, consent or approval is to be made or given by a Purchaser, such action shall be in such Holder’s sole discretion, unless otherwise specified in this Agreement. If any provision in this Agreement is held to be illegal, invalid, not binding or unenforceable, (a) such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, not binding or unenforceable provision had never comprised a part of this Agreement, and the remaining provisions shall remain in full force and effect, and (b) the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day. Any words imparting the singular number only shall include the plural and vice versa. The words such as “herein,” “hereinafter,” “hereof” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement.

 

[Remainder of Page Left Intentionally Blank]

 

22

 

 

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

 

  Equitrans Midstream Corporation
   
   
   
  By:
  Name: Kirk R. Oliver
  Title: Senior Vice President and Chief Financial Officer

 

[Signature page to Registration Rights Agreement]

 

 

 

 

  INVESTMENT PARTNERS V (II), LLC
   
  By: BAA Co-Investment Fund (GenPar), LLC, its sole member
   
  By: BlackRock Financial Management, Inc., its sole member
   
  By:
  Name:  
  Title:  

 

  GEPIF III EQM HOLDINGS, L.P.
   
  By: GEPIF III EQM Holdings GP, LLC, its general partner
   
  By:
  Name:  
  Title:  

 

[Signature page to Registration Rights Agreement]

 

 

 

 

  GSO EQUITABLE FINANCE LP
   
  By: GSO Equitable Finance Holdings LLC, its general partner
   
   
  By:
  Name:  
  Title:  

 

  MTP ENERGY OPPORTUNITIES FUND II LLC
   
  By: MTP Energy Management LLC, its managing member
   
  By: Magnetar Financial LLC, its sole member
   
  By:
  Name:  
  Title:  

 

  MTP EOF II IP LLC
   
  By: MTP Energy Management LLC, its managing member
   
  By: Magnetar Financial LLC, its sole member
   
  By:
  Name:  
  Title:  

 

[Signature page to Registration Rights Agreement]

 

 

 

 

  MTP ENERGY MASTER FUND LLC
   
  By: MTP Energy Management LLC, its manager
   
  By: Magnetar Financial LLC, its sole member
   
  By:
  Name:  
  Title:  

 

  MAGNETAR STRUCTURED CREDIT FUND, LP
   <