Amended and Restated Omnibus Agreement, dated as of March 31, 2019, by and among Equitrans Midstream Corporation, EQM Midstream Partners, LP, EQGP Services, LLC and, for limited purposes, EQM Midstream Services, LLC
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EX-10.6 2 etrn3312019ex1061.htm EXHIBIT 10.6 Exhibit
Execution Version
Exhibit 10.6
AMENDED AND RESTATED
OMNIBUS AGREEMENT
among
EQUITRANS MIDSTREAM CORPORATION,
EQM MIDSTREAM PARTNERS, LP,
EQGP SERVICES, LLC
and, for the limited purposes set forth herein,
EQM MIDSTREAM SERVICES, LLC
AMENDED AND RESTATED OMNIBUS AGREEMENT
This AMENDED AND RESTATED OMNIBUS AGREEMENT (“Agreement”) is entered into on March 31, 2019 and deemed effective as of 12:01 a.m. on January 1, 2019 (the “Effective Date”) among Equitrans Midstream Corporation, a Pennsylvania corporation (“ETRN”), EQM Midstream Partners, LP, a Delaware limited partnership (the “Partnership”), EQGP Services, LLC, a Delaware limited liability company (including any successor general partner of the Partnership, the “General Partner”), and, for the limited purposes set forth herein, EQM Midstream Services, LLC, a Delaware limited liability company and the prior general partner of the Partnership (the “Prior General Partner”). ETRN, the Partnership and the General Partner are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, ETRN, the General Partner and the Prior General Partner previously entered into that certain Omnibus Agreement, effective as of November 13, 2018 (the “Original Agreement”), governing certain general administrative services and licensing matters;
WHEREAS, simultaneously herewith, ETRN and the Partnership are entering into an Assignment and Bill of Sale (the “Bill of Sale”) pursuant to which ETRN will sell, transfer, convey and assign to the Partnership certain assets and leases (collectively, the “Subject Assets”), which assets are comprised of both real and personal property and relate primarily to the Partnership’s operations and which leases are for facilities utilized by personnel primarily to support the Partnership;
WHEREAS, in connection with the execution and delivery of the Bill of Sale and in accordance with Section 4.5 of the Original Agreement, the Parties desire to enter into this Agreement in order to amend and restate the Original Agreement to govern ETRN’s use of the Subject Assets following their conveyance to the Partnership as more fully described herein;
WHEREAS, on February 22, 2019, pursuant to that certain Agreement and Plan of Merger, dated as of February 13, 2019 (the “IDR Merger Agreement”), by and among ETRN, the Partnership, the General Partner, the Prior General Partner and the other parties thereto, the Prior General Partner assigned, transferred and conveyed its general partner interest in the Partnership to the General Partner, and the General Partner assumed the rights and duties of the Prior General Partner under any contracts, understandings, instruments or other agreements to which the Prior General Partner was party prior to such assignment, transfer and conveyance, including its obligations pursuant to this Agreement; and
WHEREAS, the Conflicts Committee of the Board of Directors of the General Partner (the “Conflicts Committee”) found the transactions contemplated by this Agreement to be fair and reasonable to, and in the best interest of, the Partnership Group and the unitholders of the Partnership other than ETRN and its affiliates and recommended that the Board of Directors of the General Partner (the “Board of Directors”) approve this Agreement and the transactions contemplated hereby, and, subsequently, the Board of Directors approved this Agreement and the transactions contemplated hereby.
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NOW THEREFORE, in consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:
“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. For the avoidance of doubt, neither EQT Corporation nor any of its Subsidiaries shall be deemed to be “Affiliates” of ETRN, the Partnership or the General Partner.
“Agreement” is defined in the preamble.
“Bill of Sale” is defined in the recitals.
“Board of Directors” is defined in the recitals.
“Cause” is defined in the Partnership Agreement.
“Change of Control” means, with respect to any Person (the “Applicable Person”), any of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the Applicable Person’s assets to any other Person, unless immediately following such sale, lease, exchange or other transfer such assets are owned, directly or indirectly, by the Applicable Person or such Applicable Person owns or controls such other Person; (ii) the dissolution or liquidation of the Applicable Person; (iii) the consolidation or merger of the Applicable Person with or into another Person, other than any such transaction where (a) the outstanding Voting Securities of the Applicable Person are changed into or exchanged for Voting Securities of the surviving Person or its parent and (b) the holders of the Voting Securities of the Applicable Person immediately prior to such transaction own, directly or indirectly, not less than a majority of the outstanding Voting Securities of the surviving Person or its parent immediately after such transaction; and (iv) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act), other than ETRN or its Affiliates, being or becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of all of the then outstanding Voting Securities of the Applicable Person, except in a merger or consolidation that would not constitute a Change of Control under clause (iii) above.
“Closing Date” means November 13, 2018.
“Common Units” is defined in the Partnership Agreement.
“Conflicts Committee” is defined in the recitals.
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“control,” “is controlled by” or “is under common control with” means the possession, directly or indirectly, 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.
“Effective Date” is defined in the preamble.
“ETRN” is defined in the preamble.
“ETRN Entities” means ETRN and any Person controlled, directly or indirectly, by ETRN other than the General Partner or a member of the Partnership Group; and “ETRN Entity” means any of the ETRN Entities.
“ETRN Service Provider” is defined in Section 2.4.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“G&A Services” is defined in Section 2.1.
“General Partner” is defined in the preamble.
“IDR Merger Agreement” is defined in the recitals.
“License” is defined in Section 4.1.
“Limited Partner” is defined in the Partnership Agreement.
“Marks” is defined in Section 4.1.
“Name” is defined in Section 4.1.
“Original Agreement” is defined in the recitals.
“Partnership” is defined in the preamble.
“Partnership Agreement” means the Third Amended and Restated Agreement of Limited Partnership of EQM Midstream Partners, LP, dated as of February 22, 2019, as such agreement may be further amended from time to time, to which reference is hereby made for all purposes of this Agreement.
“Partnership Assets” means all of the assets of the Partnership Group from time to time, including, without limitation, gathering pipelines, transportation pipelines, water pipelines, natural gas storage assets, related facilities, offices and related equipment and real estate.
“Partnership Group” means the Partnership and its Subsidiaries treated as a single consolidated entity.
“Partnership Entities” means the General Partner and each member of the Partnership Group.
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“Party” and “Parties” are defined in the preamble.
“Person” means an individual or a corporation, firm, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.
“Prior General Partner” is defined in the preamble.
“Secondment Agreement” is defined in Section 2.2.
“Subject Assets” is defined in the recitals.
“Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.
“Voting Securities” of a Person means securities of any class of such Person entitling the holders thereof to vote in the election of, or to appoint, members of the board of directors or other similar governing body of the Person.
ARTICLE II
SERVICES
2.1 Agreement to Provide General and Administrative Services. Until such time as this Agreement is terminated as provided in Section 5.4, ETRN hereby agrees to cause the ETRN Entities to provide the Partnership Group with certain centralized corporate, general and administrative services, such as accounting, audit, billing, business development, corporate record keeping, treasury services, cash management and banking, real property/land, legal, engineering, planning, budgeting, geology/geophysics, investor relations, risk management, information technology, insurance administration and claims processing, regulatory compliance and government relations, tax, payroll, human resources and environmental, health and safety, including without limitation permit filing, support for permit filing and maintenance (collectively, the “G&A Services”). ETRN shall, and shall cause the ETRN Entities to, use commercially reasonable efforts to provide the Partnership Group with such G&A Services in a manner materially consistent in nature and quality
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to the services of such type previously provided by EQT Corporation and its Affiliates in connection with the Partnership Assets prior to the Closing Date.
2.2 Secondment. Pursuant to a Secondment Agreement, dated as of the Closing Date (as amended or restated from time to time, the “Secondment Agreement”), ETRN has agreed to second, or cause to be seconded, to certain members of the Partnership Group available employees of the ETRN Entities for the purpose of providing certain services to such members of the Partnership Group relating to their respective assets, as set forth in, and subject to all terms and conditions of, the Secondment Agreement.
2.3 Reimbursement by Partnership. Subject to and in accordance with the terms and provisions of this Article II and such reasonable allocation and other procedures as may be agreed upon by ETRN and the General Partner from time to time, the Partnership hereby agrees to reimburse ETRN for all direct and indirect costs and expenses incurred by ETRN Entities in connection with the provision of the G&A Services to the Partnership Group, including the following:
(a) any payments or expenses incurred for insurance coverage, including allocable portions of premiums, and negotiated instruments (including surety bonds and performance bonds) provided by underwriters with respect to the Partnership Assets or the business of the Partnership Group;
(b) salaries and related benefits and expenses of personnel employed by the ETRN Entities who render G&A Services to the Partnership Group, plus general and administrative expenses associated with such personnel, including long-term incentive programs; it being agreed that such allocation shall include any withholding and payroll related taxes paid by ETRN or its Affiliates in connection with any long-term incentive plan of the General Partner or the Partnership Group;
(c) any taxes or other direct operating expenses paid by the ETRN Entities for the benefit of the Partnership Group (including any state income, franchise or similar tax paid by the ETRN Entities resulting from the inclusion of the Partnership Group in a combined or consolidated state income, franchise or similar tax report with ETRN as required by applicable law as opposed to the flow through of income attributable to the ETRN Entities’ ownership interest in the Partnership Group), provided, however, that the amount of any such reimbursement shall be limited to the tax that the Partnership Group would have paid had it not been included in a combined or consolidated group with ETRN; and
(d) all expenses and expenditures incurred by the ETRN Entities as a result of the Partnership being a publicly traded entity, including costs associated with annual and quarterly reports, tax return and Schedule K-1 preparation and distribution, independent auditor fees, partnership governance and compliance expenses, registrar and transfer agent fees, legal fees and independent director compensation;
it being agreed, however, that to the extent any reimbursable costs or expenses incurred by the ETRN Entities consist of an allocated portion of costs and expenses incurred by the ETRN Entities
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for the benefit of both the Partnership Group and the other ETRN Entities, such allocation shall be made on a reasonable cost reimbursement basis as determined by ETRN.
2.4 Billing Procedures. The Partnership will reimburse ETRN, or the ETRN Entities providing the G&A Services, as applicable (the “ETRN Service Provider”), for billed costs no later than the later of (a) the last day of the month following the performance month, or (b) thirty (30) business days following the date of the ETRN Service Provider’s billing to the Partnership. Billings and payments may be accomplished by inter-company accounting procedures and transfers, including offsets of amounts owed pursuant to Article III. The Partnership shall have the right to review all source documentation concerning the liabilities, costs, and expenses upon reasonable notice and during regular business hours.
ARTICLE III
ACCESS TO AND USE OF SUBJECT ASSETS
ACCESS TO AND USE OF SUBJECT ASSETS
3.1 Agreement to Provide Access to and Use of Subject Assets. Until such time as this Agreement is terminated as provided in Section 5.4, the Partnership hereby agrees to provide the ETRN Entities with access to, and use of, the Subject Assets for purposes of providing G&A Services to the ETRN Entities due to the fact that the ETRN Entities do not otherwise own similar assets.
3.2 Reimbursement by ETRN. Subject to and in accordance with the terms and provisions of this Article III and such reasonable allocation and other procedures as may be agreed upon by ETRN and the General Partner from time to time, ETRN hereby agrees to reimburse the Partnership for all direct and indirect costs and expenses incurred by the Partnership Group in connection with the access to and use of the Subject Assets by the ETRN Entities.
3.3 Billing Procedures. ETRN will reimburse the Partnership for billed costs associated with access to and use of the Subject Assets by the ETRN Entities no later than the later of (a) the last day of the month following the performance month, or (b) thirty (30) business days following the date of the Partnership’s billing to ETRN. Billings and payments may be accomplished by inter-company accounting procedures and transfers, including offsets of amounts owed pursuant to Article II. ETRN shall have the right to review all source documentation concerning the liabilities, costs, and expenses upon reasonable notice and during regular business hours.
ARTICLE IV
LICENSE OF NAME AND MARK
LICENSE OF NAME AND MARK
4.1 Grant of License. Upon the terms and conditions set forth in this Article IV, the Partnership hereby grants and conveys to each ETRN Entity and each Partnership Entity (other than the Partnership) a nontransferable, nonexclusive, royalty-free right and license (“License”) to use the name “Equitrans” (the “Name”) and any other trademarks owned by the Partnership which contain the Name (collectively, the “Marks”).
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4.2 Ownership and Quality.
(a) ETRN agrees that ownership of the Name and the Marks and the goodwill relating thereto shall remain vested in the Partnership, the owner of the mark, and any successor thereto, both during the term of this License and thereafter, and ETRN further agrees, and agrees to cause the ETRN Entities and Partnership Entities never to challenge, contest or question the validity of the Partnership’s ownership of the Name and Marks or any registration thereto by the Partnership. In connection with the use of the Name and the Marks, each ETRN Entity and each Partnership Entity (other than the Partnership) shall not in any manner represent that they have any ownership interest in the Name and the Marks or registration thereof except as set forth herein, and ETRN, on behalf of itself and the ETRN Entities and Partnership Entities, acknowledges that the use of the Name and the Marks shall not create any right, title or interest in or to the Name and the Marks, and all use of the Name and the Marks by an ETRN Entity or a Partnership Entity shall inure to the benefit of the Partnership.
(b) ETRN agrees, and agrees to cause each ETRN Entity and Partnership Entity, to use the Name and Marks in accordance with such quality standards established by or for the Partnership and communicated to ETRN from time to time, it being understood that the products and services offered by the ETRN Entities and the Partnership Entities immediately before the Closing Date are of a quality that is acceptable to the Partnership and justifies the License. In the event any ETRN Entity or Partnership Entity is determined by the Partnership to be using the Marks in a manner not in accordance with quality standards established by the Partnership, the Partnership shall provide written notice of such unacceptable use including the reason why applicable quality standards are not being met. If acceptable proof that quality standards are met is not provided to the Partnership within thirty (30) days of such notice, the entity’s license to use the Marks shall terminate and shall not be renewed absent written authorization from the Partnership.
4.3 In the Event of Termination. In the event of termination of this Agreement, pursuant to Section 5.4 or otherwise, or the termination of the License, the right of the ETRN Entities and the Partnership Entities (other than the Partnership) to utilize or possess the Marks licensed under this Agreement shall automatically cease, and no later than ninety (90) days following such termination, (a) each ETRN Entity and, at the Partnership’s request, each Partnership Entity (other than the Partnership) shall cease all use of the Marks and shall adopt trademarks, service marks, and trade names that are not confusingly similar to the Marks, provided, however, that any use of the Marks during such 90-day period shall continue to be subject to Section 4.2(b), (b) at the Partnership’s request, the ETRN Entities and the Partnership Entities (other than the Partnership) shall destroy all materials and content upon which the Marks continue to appear (or otherwise modify such materials and content such that the use or appearance of the Marks ceases) that are under their control, and certify in writing to the Partnership that the ETRN Entities and the Partnership Entities have done so, and (c) each ETRN Entity and, at the Partnership’s request, each Partnership Entity shall change its legal name so that there is no reference therein to the name “Equitrans,” any name or d/b/a then used by the Partnership or any variation, derivation or abbreviation thereof, and in connection therewith, shall make all necessary filings of certificates with the Secretary of State of the State of Delaware and to otherwise amend its organizational documents by such date.
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ARTICLE V
MISCELLANEOUS
MISCELLANEOUS
5.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and governed by the laws of the Commonwealth of Pennsylvania, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in the Commonwealth of Pennsylvania and to venue in the state and federal courts in Allegheny County, Pennsylvania.
5.2 Notice. All notices or requests or consents provided for by, or permitted to be given pursuant to, this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postage-paid, and registered or certified with return receipt requested or by delivering such notice in person, by overnight delivery service or by electronic mail to such Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by electronic mail shall be effective upon actual receipt if received during the recipient’s normal business hours or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below or at such other address as such Party may stipulate to the other Parties in the manner provided in this Section 5.2.
If to any of the ETRN Entities:
Equitrans Midstream Corporation
625 Liberty Avenue, Suite 2000
Pittsburgh, PA 15222
Attn: General Counsel
If to any member of the Partnership Group:
EQM Midstream Partners, LP
c/o EQGP Services, LLC, its General Partner
625 Liberty Avenue, Suite 2000
Pittsburgh, PA 15222
Attn: General Counsel
5.3 Entire Agreement. This Agreement, together with the Secondment Agreement, constitute the entire agreement of the Parties and the Prior General Partner relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written (including the Original Agreement), relating to the matters contained herein.
5.4 Termination of Agreement. Notwithstanding any other provision of this Agreement, (a) if the General Partner is removed as general partner of the Partnership under circumstances where (i) Cause does not exist and the Units held by the General Partner and its Affiliates are not voted in favor of such removal, or (ii) Cause exists, then this Agreement, other than the provisions
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set forth in Section 4.3, may at any time thereafter be terminated by ETRN by written notice to the other Parties, or (b) if a Change of Control of the General Partner, ETRN or the Partnership occurs, then this Agreement, other than the provisions set forth in Section 4.3, may at any time thereafter be terminated by ETRN by written notice to the other Parties. For the avoidance of doubt, ETRN irrevocably elected not to terminate this Agreement in connection with the transactions contemplated by the IDR Merger Agreement.
5.5 Amendment or Modification. This Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto; provided, however, that the Partnership may not, without the prior approval of the Conflicts Committee, agree to any amendment or modification of this Agreement that, in the reasonable discretion of the General Partner, would be adverse in any material respect to the holders of Units. Each such instrument shall be reduced to writing and shall be designated on its face an “Amendment” or an “Addendum” to this Agreement. By its execution of this Agreement, the Prior General Partner consents to the amendment of the Original Agreement, and, in connection therewith, ETRN and the Partnership acknowledge and consent to the succession of the General Partner to the Prior General Partner’s rights and duties under the Original Agreement, as modified herein.
5.6 Assignment; Third Party Beneficiaries. No Party shall have the right to assign its rights or obligations under this Agreement without the consent of the other Parties hereto; provided, however, that the Partnership may make a collateral assignment of this Agreement solely to secure working capital financing for the Partnership. Each of the Parties hereto specifically intends that each entity comprising the ETRN Entities and the Partnership Entities, as applicable, whether or not a Party to this Agreement, shall be entitled to assert rights and remedies hereunder as third-party beneficiaries hereto with respect to those provisions of this Agreement affording a right, benefit or privilege to any such entity.
5.7 Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. Delivery of an executed signature page of this Agreement in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart hereof.
5.8 Severability. If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.
5.9 Further Assurances. In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.
5.10 Rights of Limited Partners. Except as set forth in Section 5.6, the provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no Limited Partner of the Partnership shall have the right, separate and apart from the Partnership, to enforce any provision
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of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the Effective Date.
EQUITRANS MIDSTREAM CORPORATION | |
By: /s/ Diana M. Charletta | |
Diana M. Charletta | |
Executive Vice President and Chief Operating | |
Officer | |
EQM MIDSTREAM PARTNERS, LP | |
By: EQGP Services, LLC, | |
its general partner | |
By: /s/ Kirk R. Oliver | |
Kirk R. Oliver | |
Senior Vice President and Chief Financial | |
Officer | |
EQGP SERVICES, LLC | |
By: /s/ Kirk R. Oliver | |
Kirk R. Oliver | |
Senior Vice President and Chief Financial | |
Officer | |
EQM MIDSTREAM SERVICES, LLC | |
By: /s/ Kirk R. Oliver | |
Kirk R. Oliver | |
Senior Vice President and Chief Financial | |
Officer |
Signature Page to
Amended and Restated Omnibus Agreement