Document:

Exhibit 4.1

 

Execution Version

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

SANCHEZ MIDSTREAM PARTNERS LP

AND

STONEPEAK CATARINA HOLDINGS LLC

 

This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of August 2, 2019, by and between Sanchez Midstream Partners LP, a Delaware limited partnership (the “Partnership”), and Stonepeak Catarina Holdings LLC, a Delaware limited liability company (“Stonepeak”).

 

WHEREAS, the Partnership and Stonepeak are parties to that certain Registration Rights Agreement, dated as of October 14, 2015, as amended by Amendment No. 1 dated January 25, 2017;

 

WHEREAS, this Agreement is made in connection with the issuance by the Partnership of a Warrant Exercisable for Junior Securities (the “Warrant”) to Stonepeak; and

 

WHEREAS, the Partnership desires to provide the registration and other rights set forth in this Agreement for the benefit of Stonepeak.

 

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 are hereby acknowledged by each party hereto, the parties hereby agree as follows:

 

Article I
 DEFINITIONS

 

Section 1.01                             Definitions. The terms set forth below are used herein as so defined:

 

“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. For avoidance of doubt, for purposes of this Agreement, the Partnership, on the one hand, and Stonepeak, on the other hand, shall not be considered Affiliates.

 

“Agreement” has the meaning specified therefor in the introductory paragraph of this Agreement.

 

“Amended Partnership Agreement” means the Third Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of August 2, 2019.

 

 

“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 State of Texas are authorized or required by law or other governmental action to close.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Common Unit Price” means the volume-weighted average closing price of the Common Units on the principal market on which the Common Units are then traded during the ten (10) Trading Days (as defined in the Amended Partnership Agreement) prior to the date of measurement.

 

“Common Units” has the meaning specified therefor in Article I of the Amended Partnership Agreement.

 

“Effectiveness Period” means the period from the date that the Shelf Registration Statement becomes or is declared effective until the date as of which all Registrable Securities are sold by Stonepeak.

 

“Exchange Act” means the Securities and Exchange Act of 1934, as amended.

 

“Excluded Junior Securities” means any class or series of Junior Security that, with respect to distributions on such Junior Securities of cash or property and distributions upon liquidation of the Partnership (taking into account the intended effects of the allocation of gain and losses as provided in the Partnership Agreement), ranks junior to the Class C Preferred Units and senior to the Common Units, the proceeds from the sale of which are used to redeem the Class C Preferred Units.

 

“General Partner” means Sanchez Midstream Partners GP LLC, a Delaware limited liability company.

 

“Governmental Authority” means any federal, state, local or foreign government, or other governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

 

“Holder” means the record holder of any Registrable Securities. For the avoidance of doubt, in accordance with Section 3.05 of this Agreement, for purposes of determining the availability of any rights and applicability of any obligations under this Agreement, including calculating the amount of Registrable Securities held by a Holder, a Holder’s Registrable Securities shall be aggregated together with all Registrable Securities held by other Holders who are Affiliates of such Holder.

 

“Holder Underwriter Registration Statement” has the meaning specified therefor in Section 2.05(p) of this Agreement.

 

“Included Registrable Securities” has the meaning specified therefor in Section 2.02(a) of this Agreement.

 

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“Junior Securities” has the meaning specified therefor in Article I of the Amended Partnership Agreement.

 

“Launch” has the meaning specified therefor in Section 2.04 of this Agreement.

 

“Law” means any statute, law, ordinance, regulation, rule, order, code, governmental restriction, decree, injunction or other requirement of law, or any judicial or administrative interpretation thereof, of any Governmental Authority.

 

“Losses” has the meaning specified therefor in Section 2.09(a) of this Agreement.

 

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

 

“NYSE American” means the NYSE American LLC.

 

“Opt-Out Notice” has the meaning specified therefor in Section 2.02(a) of this Agreement.

 

“Partnership” has the meaning specified therefor in the introductory paragraph of this Agreement.

 

“Person” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

 

“Post-Launch Withdrawing Selling Holders” has the meaning specified therefor in Section 2.04 of this Agreement.

 

“Registrable Securities” means (i) the Common Units issued or issuable upon the exercise of the Warrant and (ii) until such time as Stonepeak beneficially owns less than an aggregate of ten percent (10%) of the Common Units, any other Common Unit issued to or acquired by Stonepeak after the date hereof.

 

“Registrable Securities Amount” means the calculation based on the product of the Common Unit Price times the number of Registrable Securities.

 

“Registration Expenses” has the meaning specified therefor in Section 2.08(c) of this Agreement.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Selling Expenses” has the meaning specified therefor in Section 2.08(c) of this Agreement.

 

“Selling Holder” means a Holder who is selling Registrable Securities pursuant to a registration statement.

 

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“Selling Holder Indemnified Persons” has the meaning specified therefor in Section 2.09(a) of this Agreement.

 

“Shelf Registration Statement” has the meaning specified therefor in Section 2.01(a) of this Agreement.

 

“Stonepeak” has the meaning specified therefor in the introductory paragraph of this Agreement.

 

“Target Effective Date” has the meaning specified therefor in Section 2.01(a) of this Agreement.

 

“Threshold Amount” means $5,000,000 (calculated based on the Registrable Securities Amount).

 

“Underwritten Offering” means an offering (including an offering pursuant to a Shelf Registration Statement) in which Common Units are sold to one or more underwriters on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.

 

“Underwritten Offering Notice” has the meaning specified therefor in Section 2.04 of this Agreement.

 

“Walled-Off Person” has the meaning specified therefor in Section 2.07 of this Agreement.

 

“Warrant” has the meaning specified therefor in the recitals of this Agreement.

 

Section 1.02                             Registrable Securities. Any Registrable Security will cease to be a Registrable Security (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 sold or 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 2.11) pursuant to Rule 144 (or any successor or similar provision adopted by the Commission then in effect) under the Securities Act under circumstances in which all of the applicable conditions of such Rule (then in effect) are met; (c) when such Registrable Security is held by the Partnership or one of its subsidiaries or Affiliates; provided, however, that neither Stonepeak nor its Affiliates shall be considered an Affiliate of the Partnership; or (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 2.11 hereof.

 

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Article II
 REGISTRATION RIGHTS

 

Section 2.01                             Registration.

 

(a)                                 Demand Rights.  A Holder has the option and right, exercisable by providing written notice to the Partnership, to require the Partnership to prepare and file a registration statement under the Securities Act to permit the public resale of all Registrable Securities from time to time as permitted by Rule 415 (or any successor or similar provision adopted by the Commission then in effect) under the Securities Act, on the terms and conditions specified in this Section 2.01 (a “Shelf Registration Statement”).  A Shelf Registration Statement filed pursuant to this Section 2.01 shall be on such registration form of the Commission as is permissible under the Securities Act; provided, however, that the Partnership shall not be required to file a Shelf Registration Statement on Form S-1 unless a Holder either delivers to the Partnership an Underwritten Offering Notice in an amount not less than the Threshold Amount or an Exercise Agreement (as defined in the Warrant).  The Partnership shall use commercially reasonable efforts to cause the Shelf Registration Statement filed pursuant to this Section 2.01(a) to become or be declared effective as soon as practicable thereafter, but in no event later than 210 calendar days after the notice is provided pursuant to the first sentence of this Section 2.01(a) (the “Target Effective Date”).  The Shelf Registration Statement shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders covered by such Shelf Registration Statement, including by way of an Underwritten Offering.  As soon as practicable following the date on which the Shelf Registration Statement becomes effective, but in any event within two (2) Business Days of such date, the Partnership will notify the Holders of the effectiveness of such Shelf Registration Statement.  During the Effectiveness Period, the Partnership shall use commercially reasonable efforts to cause such Shelf Registration Statement filed pursuant to this Section 2.01(a) to remain effective, and to be supplemented and amended to the extent necessary to ensure that such Shelf Registration Statement is available or, if not available, that another registration statement is available for the resale of the Registrable Securities until all Registrable Securities have ceased to be Registrable Securities.

 

When effective, a Shelf Registration Statement (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 (in the case of any prospectus contained in such Shelf Registration Statement, in the light of the circumstances under which a statement is made).  The Partnership shall not include in a Shelf Registration Statement contemplated by this Section 2.01(a) any securities which are not Registrable Securities, other than Common Units that are to be offered and sold for the Partnership’s own account pursuant to an Underwritten Offering, without the prior written consent of Stonepeak, which consent shall not be unreasonably withheld or delayed.

 

Section 2.02                             Piggyback Rights.

 

(a)                                 Participation. If the Partnership proposes to file during the Effectiveness Period (i) a shelf registration statement other than a Shelf Registration Statement contemplated by Section 2.01(a), (ii) a prospectus supplement to an effective shelf registration statement, other than a Shelf Registration Statement contemplated by Section 2.01(a) and Holders may be included in such Underwritten Offering without the filing of a post-effective amendment thereto, or (iii) a registration statement, other than a shelf registration statement, in each case, for the sale of Common Units in an Underwritten Offering for its own account or that of another Person, or

 

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both, then as soon as practicable following the selection of the Managing Underwriter for such Underwritten Offering, the Partnership shall give notice (including, but not limited to, notification by electronic mail) of such Underwritten Offering to each Holder (together with its Affiliates) holding at least the Threshold Amount of the then-outstanding Registrable Securities and such notice shall offer such Holders the opportunity to include in such Underwritten Offering such number of Registrable Securities (the “Included Registrable Securities”) as each such Holder may request in writing; provided, however, that (A) the Partnership shall not be required to provide such opportunity to any such Holder that does not offer a minimum of the Threshold Amount of Registrable Securities, and (B) if the Partnership has been advised by the Managing Underwriter that the inclusion of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on the price, timing or distribution of the Common Units in the Underwritten Offering, then (i) if no Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter, the Partnership shall not be required to offer such opportunity to the Holders or (ii) if any Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter, then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.02(b). Any notice required to be provided pursuant to this Section 2.02(a) to Holders shall be provided on a Business Day and receipt of such notice shall be confirmed by the Holder. Each such Holder shall then have two (2) Business Days (or one (1) Business Day in connection with any overnight or bought Underwritten Offering) after notice has been delivered to request in writing the inclusion of Registrable Securities in the Underwritten Offering. If no written request for inclusion from a Holder is received within the specified time, each such Holder shall have no further right to participate in such Underwritten Offering. If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the Partnership shall determine for any reason not to undertake or to delay such Underwritten Offering, the Partnership may, at its election, give written notice of such determination to the Selling Holders and, (x) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering, and (y) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities as part of such Underwritten Offering 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 Registrable Securities in such Underwritten Offering by giving written notice to the Partnership of such withdrawal at or prior to the time of pricing of such Underwritten Offering. Any Holder may deliver written notice (an “Opt-Out Notice”) to the Partnership requesting that such Holder not receive notice from the Partnership of any proposed Underwritten Offering; provided, however, that such Holder may later revoke any such Opt-Out Notice in writing.  Following receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), the Partnership 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 by the Partnership pursuant to this Section 2.02(a).

 

(b)                                 Priority. Other than situations outlined in Section 2.01 of this Agreement, if the Managing Underwriter of any proposed Underwritten Offering involving Included Registrable Securities advises the Partnership, or the Partnership reasonably determines, that the total amount of Common Units that the Selling Holders and any other Persons intend to include in such

 

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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 Units offered or the market for the Common Units, then the Common Units to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter advises the Partnership can be sold without having such adverse effect, with such number to be allocated (i) first, to the Partnership or other party requesting such registration, (ii) second, pro rata among the Selling Holders who have requested participation in such Underwritten Offering, based on the percentage derived by dividing (x) the number of Registrable Securities proposed to be sold by such Selling Holder by (y) the aggregate number of Registrable Securities proposed to be sold by all Selling Holders and (iii) third, to any other holder of securities of the Partnership having rights of registration that are neither expressly senior nor subordinated to the Holders in respect of the Registrable Securities, allocated among such holders in such manner as they may agree.

 

(c)                                  Termination of Piggyback Registration Rights. Each Holder’s rights under Section 2.02 shall terminate upon such Holder (together with its Affiliates) ceasing to hold at least the Threshold Amount of Registrable Securities.

 

Section 2.03                             Delay Rights.

 

Notwithstanding anything to the contrary contained herein, the Partnership may, upon written notice to any Selling Holder whose Registrable Securities are included in a Shelf Registration Statement or other registration statement contemplated by this Agreement, suspend such Selling Holder’s use of any prospectus which is a part of such Shelf Registration Statement or other registration statement (in which event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to such Shelf Registration Statement or other registration statement contemplated by this Agreement but may settle any previously made sales of Registrable Securities) if (i) the Partnership is pursuing an acquisition, merger, reorganization, disposition or other similar transaction and the Partnership determines in good faith that the Partnership’s ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in such Shelf Registration Statement or other registration statement or (ii) the Partnership has experienced some other material non-public event the disclosure of which at such time, in the good faith judgment of the Partnership, would materially adversely affect the Partnership; provided, however, that in no event shall the Selling Holders be suspended from selling Registrable Securities pursuant to such Shelf Registration Statement or other registration statement for a period that exceeds an aggregate of 60 calendar days in any 180-calendar day period or 105 calendar days in any 365-calendar day period, in each case, exclusive of days covered by any lock-up agreement executed by a Selling Holder in connection with any Underwritten Offering. Upon disclosure of such information or the termination of the condition described above, the Partnership shall provide prompt notice to the Selling Holders whose Registrable Securities are included in such Shelf Registration Statement and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated in this Agreement.

 

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Section 2.04                             Underwritten Offerings.

 

In the event that one or more Holders elects to include, other than pursuant to Section 2.02 of this Agreement, at least the Threshold Amount of the then-outstanding Registrable Securities under a Shelf Registration Statement pursuant to an Underwritten Offering, the Partnership shall, upon request by such Holders (such request, an “Underwritten Offering Notice”), retain underwriters in order to permit such Holders to effect such sale through an Underwritten Offering; provided, however, that the Holders shall have the option and right, to require the Partnership to effect not more than three (3) Underwritten Offerings, pursuant to and subject to the conditions of this Section 2.04 of this Agreement.  Upon delivery of such Underwritten Offering Notice to the Partnership, the Partnership shall as soon as practicable (but in no event later than one (1) calendar day following the date of delivery of the Underwritten Offering Notice to the Partnership) deliver notice of such Underwritten Offering Notice to all other Holders who shall then have two (2) calendar days from the date that such notice is given to them to notify the Partnership in writing of the number of Registrable Securities held by such Holder that they want to be included in such Underwritten Offering.  For the avoidance of doubt, any Holders notified about an Underwritten Offering by the Partnership after the Partnership has received the corresponding Underwritten Offering Notice may participate in such Underwritten Offering, but shall not count toward the Threshold Amount of Registrable Securities necessary to request an Underwritten Offering pursuant to an Underwritten Offering Notice. In connection with any Underwritten Offering under this Agreement, the Holders of a majority of the Registrable Securities being disposed of pursuant to the Underwritten Offering shall be entitled to select the Managing Underwriter or Underwriters for such Underwritten Offering, subject to the reasonable consent of the Partnership. In connection with an Underwritten Offering contemplated by this Agreement in which a Selling Holder participates, each Selling Holder and the Partnership shall be obligated to enter into an underwriting agreement that contains such representations, covenants, indemnities and other rights and obligations as are customary in underwriting agreements for firm commitment offerings of securities. No Selling Holder may participate in such Underwritten Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement. Each Selling Holder may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Partnership to and for the benefit of such underwriters also be made to and for such Selling Holder’s benefit and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also be conditions precedent to its obligations. No Selling Holder shall be required to make any representations or warranties to or agreements with the Partnership or the underwriters other than representations, warranties or agreements regarding such Selling Holder, its authority to enter into such underwriting agreement and to sell, and its ownership of, the securities whose offer and resale will be 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 underwriting, such Selling Holder may elect to withdraw therefrom by notice to the Partnership and the Managing Underwriter; provided, however, that any such withdrawal must be made no later than the time of pricing of such Underwritten Offering. If all Selling Holders withdraw from an Underwritten Offering prior to the pricing of such Underwritten Offering, the events will not be considered an Underwritten Offering and will not decrease the number of available Underwritten Offerings the Selling Holders have the right and option to request under this Section 2.04.  No such withdrawal or abandonment shall affect

 

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the Partnership’s obligation to pay Registration Expenses; provided, however, that if (i) certain Selling Holders withdraw from an Underwritten Offering after the public announcement at launch (the “Launch”) of such Underwritten Offering (such Selling Holders, the “Post-Launch Withdrawing Selling Holders”), and (ii) all Selling Holders withdraw from such Underwritten Offering prior to pricing, then the Post-Launch Withdrawing Selling Holders shall pay for all reasonable Registration Expenses incurred by the Partnership during the period from the Launch of such Underwritten Offering until the time all Selling Holders withdraw from such Underwritten Offering.

 

Section 2.05                             Sale Procedures.

 

In connection with its obligations under this Article II, the Partnership will, as expeditiously as possible:

 

(a)                                 use commercially reasonable efforts to prepare and file with the Commission such amendments and supplements to a Shelf Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Shelf 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 Shelf Registration Statement;

 

(b)                                 if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering from a Shelf Registration Statement and the Managing Underwriter at any time shall notify the Partnership 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 the Underwritten Offering of such Registrable Securities, the Partnership shall use 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 Shelf 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 make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing a Shelf Registration Statement or such other registration statement or supplement or amendment thereto, and (ii) such number of copies of such Shelf Registration Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Shelf Registration Statement or other registration statement;

 

(d)                                 if applicable, use commercially reasonable efforts to register or qualify the Registrable Securities covered by a Shelf Registration Statement or any other registration statement contemplated by this Agreement under the securities or blue sky laws of such

 

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jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request; provided, however, that the Partnership 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 Shelf 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 such Shelf 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 such Shelf Registration Statement or any other registration statement or any prospectus or prospectus supplement thereto;

 

(f)                                   immediately notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in a Shelf 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 such Shelf 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 Partnership 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 Partnership 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 commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

 

(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, use commercially reasonable efforts to furnish upon request, (i) an opinion of counsel for the Partnership dated the date of the closing under the underwriting agreement and (ii) a “cold comfort” letter, dated the pricing date of such Underwritten Offering and a letter of like kind dated the date of the closing under the

 

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underwriting agreement, in each case, signed by the independent public accountants who have certified the Partnership’s financial statements included or incorporated by reference into the applicable registration statement, and each of the opinion and the “cold 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 included therein) 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 Partnership and such other matters as such underwriters and Selling Holders may reasonably request;

 

(i)                                     otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement, covering a period of twelve months beginning within three months after the effective date of such Shelf Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

 

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

 

(k)                                 use commercially reasonable efforts to cause all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which the Common Units issued by the Partnership are then listed;

 

(l)                                     use commercially reasonable efforts to cause the 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 Partnership 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 such registration statement not later than the effective date of such registration statement;

 

(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 such Registrable Securities (including, making appropriate officers of the General Partner available to participate in any “road show” presentations before analysts, and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Securities)), provided, however, that in the event the Partnership, using commercially reasonable efforts, is unable to make such appropriate officers of the General Partner available to participate in connection with any “road show” presentations and other customary marketing activities (whether in person or otherwise), the Partnership shall make such appropriate officers available to participate via conference call or other means of communication in connection with no more than one (1) “road show” presentation per Underwritten Offering;

 

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(o)                                 if 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; and

 

(p)                                 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 Shelf Registration Statement and any amendment or supplement thereof (a “Holder Underwriter Registration Statement”), then the Partnership will reasonably cooperate with such Holder in allowing such Holder to conduct customary “underwriter’s due diligence” with respect to the Partnership and satisfy its obligations in respect thereof.  In addition, at any Holder’s request, the Partnership 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 “cold comfort” letter, dated such date, from the Partnership’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to such Holder, (ii) an opinion, dated as of such date, of counsel representing the Partnership for purposes of the Holder Underwriter Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, including standard “10b-5” negative assurance for such offering, 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 general partner of the Partnership addressed to the Holder.  The Partnership will also permit legal counsel to such Holder to review and comment upon any such Holder Underwriter Registration Statement at least five Business Days prior to its filing with the Commission and all amendments and supplements to any such Holder Underwriter Registration Statement with a reasonable number of days prior to their filing with the Commission and not file any Holder Underwriter Registration Statement or amendment or supplement thereto in a form to which such Holder’s legal counsel reasonably objects.  Each Selling Holder, upon receipt of notice from the Partnership of the happening of any event of the kind described in subsection (f) of this Section 2.05, shall forthwith discontinue offers and sales of the Registrable Securities until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (f) of this Section 2.05 or until it is advised in writing by the Partnership 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 Partnership, such Selling Holder will, or will request the managing underwriter or underwriters, if any, to deliver to the Partnership (at the Partnership’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.

 

Notwithstanding anything to the contrary in this Section 2.05, the Partnership will not name a Holder as an underwriter as defined in Section 2(a)(11) of the Securities Act in any Shelf

 

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Registration Statement or Holder Underwriter Registration Statement, as applicable, without such Holder’s consent. If the staff of the Commission requires the Partnership 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 such Shelf Registration Statement or the Holder Underwriter Registration Statement, as applicable, the Partnership 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 (p) of this Section 2.05 with respect to the Partnership at the time such Holder’s consent is sought.

 

Each Selling Holder, upon receipt of notice from the Partnership of the happening of any event of the kind described in subsection (f) of this Section 2.05, 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 2.05 or until it is advised in writing by the Partnership 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 Partnership, such Selling Holder will, or will request the Managing Underwriter, if any, to deliver to the Partnership (at the Partnership’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 2.06                             Cooperation by Holders.

 

The Partnership shall have no obligation to include Registrable Securities of a Holder in a Shelf Registration Statement or in an Underwritten Offering pursuant to Section 2.02(a) who has failed to timely furnish such information that the Partnership determines, after consultation with its counsel, is reasonably required in order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act.

 

Section 2.07                             Restrictions on Public Sale by Holders of Registrable Securities.

 

Each Holder of Registrable Securities agrees to enter into a customary letter agreement with underwriters providing such Holder will not effect any public sale or distribution of Registrable Securities during the 60 calendar day period beginning on the date of a prospectus or prospectus supplement filed with the Commission with respect to the pricing of any Underwritten Offering, provided that (i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction imposed by the underwriters on the Partnership or the officers, directors or any other Affiliate of the Partnership or the General Partner on whom a restriction is imposed and (ii) the restrictions set forth in this Section 2.07 shall not apply to any Registrable Securities that are included in such Underwritten Offering by such Holder. In addition, this Section 2.07 shall not apply to any Holder that is not entitled to participate in such Underwritten Offering, whether because such Holder delivered an Opt-Out Notice prior to receiving notice of the Underwritten Offering or because such Holder (together with its Affiliates) holds less than the Threshold Amount of the then-outstanding Registrable Securities or because the Registrable Securities held by such Holder may be disposed of without restriction pursuant to any section of Rule 144 (or any successor or similar provision adopted by the

 

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Commission then in effect) under the Securities Act.  Subject to such Holder’s compliance with its obligations under the U.S. federal securities laws and its internal policies:  (a) Holder, for purposes hereof, shall not be deemed to include any employees, subsidiaries or Affiliates that are effectively walled off by appropriate “Chinese Wall” information barriers approved by Holder’s legal or compliance department (and thus have not been privy to any information concerning this transaction) (a “Walled-Off Person”) and (b) the foregoing covenants in this paragraph shall not apply to any transaction by or on behalf of Holder that was effected by a Walled-Off Person in the ordinary course of trading without the advice or participation of Holder or receipt of confidential or other information regarding this transaction provided by Holder to such entity.

 

Section 2.08                             Expenses.

 

(a)                                           Expenses. The Partnership will pay all reasonable Registration Expenses as determined in good faith, including, in the case of an Underwritten Offering, whether or not any sale is made pursuant to such 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. For the avoidance of doubt, each Selling Holder’s pro rata allocation of Selling Expenses shall be the percentage derived by dividing (i) the number of Registrable Securities sold by such Selling Holder in connection with such sale by (ii) the aggregate number of Registrable Securities sold by all Selling Holders in connection with such sale. In addition, except as otherwise provided in Section 2.08 and Section 2.09 hereof, the Partnership shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder.

 

(c)                                            Certain Definitions. “Registration Expenses” means all expenses incident to the Partnership’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on a Shelf Registration Statement pursuant to Section 2.01(a) or an Underwritten Offering covered under this Agreement, and the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing and NYSE American 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, Inc., fees of transfer agents and registrars, all word processing, duplicating and printing expenses, any transfer taxes, the fees and disbursements of counsel and independent public accountants for the Partnership, 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 or similar fees or arrangements allocable to the sale of the Registrable Securities, and fees and disbursements of counsel to the Selling Holders.

 

Section 2.09                             Indemnification.

 

(a)                                 By the Partnership. In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Partnership will indemnify and hold harmless each Selling Holder thereunder, its directors, officers, managers, 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, employees or agents (collectively, the “Selling Holder Indemnified Persons”), against any losses, claims, damages, expenses or

 

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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) such Shelf 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 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 Partnership 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 such Shelf Registration Statement or such other registration statement, or prospectus supplement, 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.

 

(b)                                 By Each Selling Holder. Each Selling Holder agrees severally and not jointly to indemnify and hold harmless the Partnership, the General Partner, their respective directors, officers, employees and agents and each Person, if any, who controls the Partnership within the meaning of the Securities Act or of the Exchange Act, and its directors, officers, employees and agents, to the same extent as the foregoing indemnity from the Partnership 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 such Shelf 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 thereof, 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 so to notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party other than under this Section 2.09. 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

 

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election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.09 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 acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and (A) 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 (B) if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then, in each case, 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 is entitled to indemnification hereunder without the consent of the indemnified party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnified party.

 

(d)                                 Contribution. If the indemnification provided for in this Section 2.09 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 Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of such indemnified party on the other 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 such 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 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.

 

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(e)                                  Other Indemnification. The provisions of this Section 2.09 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 2.10                             Rule 144 Reporting.

 

With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, the Partnership agrees to use its commercially reasonable efforts to:

 

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

 

(c)                                  so long as a Holder owns any Registrable Securities, furnish, unless otherwise available electronically at no additional charge via the Commission’s EDGAR system, to such Holder forthwith upon request a copy of the most recent annual or quarterly report of the Partnership, and such other reports and documents 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 2.11                             Transfer or Assignment of Registration Rights.

 

The rights to cause the Partnership to register Registrable Securities under this Article II may be transferred or assigned by Stonepeak to one or more transferees or assignees of Registrable Securities, subject to the transfer restrictions provided in Section 4.7 of the Amended Partnership Agreement, provided, however, that (a) the Partnership is given written notice prior to any said transfer or assignment, stating the name and address of each of the transferee or assignee and identifying the Registrable Securities with respect to which such registration rights are being transferred or assigned and (b) each such transferee or assignee assumes in writing responsibility for its portion of the obligations of Stonepeak under this Agreement.

 

Section 2.12                             Subsequent Registration Rights.

 

(a)                                 From and after the date hereof, the Partnership shall not, without the prior written consent of the Holders of at least a majority of the then outstanding Registrable Securities, enter into any agreement with any current or future holder of any securities of the Partnership that would allow such current or future holder to require the Partnership to include securities in any registration statement filed by the Partnership on a basis that is superior or pari passu to the rights of the Holders of Registrable Securities hereunder.

 

(b)                                 The Partnership agrees that it will promptly upon issuance of any Junior Securities (other than Common Units or Excluded Junior Securities) enter into a separate

 

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registration rights agreement substantially similar to this Agreement with respect to any other Junior Securities that are issuable to Stonepeak upon exercise of the Warrant.

 

Article III
 MISCELLANEOUS

 

Section 3.01          Communications.

 

All notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, electronic mail, courier service or personal delivery:

 

(a)           if to Stonepeak:

 

Stonepeak Infrastructure Partners
 55 Hudson Yards, 550 W. 34th St., 48th Floor
 New York, NY 10001
 Attention: Adrienne Saunders, General Counsel
 Email: saunders@stonepeakpartners.com

 

With a copy to (which shall not constitute notice):

 

Sidley Austin LLP

1000 Louisiana Street, Suite 5900

Houston TX 77002

Attention: Tim Chandler
 Email: tim.chandler@sidley.com

 

(b)           if to a transferee of Stonepeak, to such Holder at the address provided pursuant to Section 2.11 above; and

 

(c)           if to the Partnership:

 

Sanchez Midstream Partners LP

1000 Main Street, Suite 3000

Houston, TX 7702

Attention: Charles C. Ward

Email: cward@sanchezmidstream.com

 

With a copy to (which shall not constitute notice):

 

Hunton Andrews Kurth LLP

600 Travis, Suite 4200

Houston, TX 77002

Attention: Philip Haines

Email: phaines@huntonak.com

 

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All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or sent via Internet electronic mail; and when actually received, if sent by courier service.

 

Section 3.02          Successor and Assigns.

 

This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.

 

Section 3.03          Assignment of Rights.

 

All or any portion of the rights and obligations of Stonepeak under this Agreement may be transferred or assigned by Stonepeak only in accordance with Section 2.11 hereof.

 

Section 3.04          Recapitalization, Exchanges, Etc. Affecting the Units.

 

The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all units of the Partnership or any successor or assign of the Partnership (whether by merger, consolidation, 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, unit splits, recapitalizations, pro rata distributions of units and the like occurring after the date of this Agreement.

 

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 and applicability of any obligations 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 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, including facsimile or .pdf 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.

 

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Section 3.08          Headings.

 

The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 3.09          Governing Law.

 

THIS AGREEMENT, INCLUDING ALL ISSUES AND QUESTIONS CONCERNING ITS APPLICATION, CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT, SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.

 

Section 3.10          Severability of Provisions.

 

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

 

Section 3.11          Entire Agreement.

 

This Agreement is 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. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by the Partnership set forth herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

Section 3.12          Amendment.

 

This Agreement may be amended only by means of a written amendment signed by the Partnership and Stonepeak; provided, however, that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder.

 

Section 3.13          No Presumption.

 

If any claim is made by a party relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.

 

Section 3.14          Obligations Limited to Parties to Agreement.

 

Each of the parties hereto covenants, agrees and acknowledges that no Person other than Stonepeak (and their permitted transferees and assignees) and the Partnership shall have any obligation hereunder. Notwithstanding that Stonepeak is a limited liability company, no recourse under this Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent,

 

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general or limited partner, manager, member, stockholder or Affiliate of Stonepeak or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate thereof, 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, stockholder or Affiliate of Stonepeak or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate thereof, as such, for any obligations of Stonepeak under this Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation, except in each case for any transferee or assignee of Stonepeak hereunder.

 

Section 3.15          Interpretation.

 

Article, Section and Schedule references are to this Agreement, unless otherwise specified. 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 words “include,” “includes” and “including” or words of similar import shall be deemed to be followed by the words “without limitation.” Whenever any determination, consent or approval is to be made or given by Stonepeak under this Agreement, such action shall be in Stonepeak’s sole discretion unless otherwise specified. Unless expressly set forth or qualified otherwise (e.g., by “Business” or “trading”), all references herein to a “day” are deemed to be a reference to a calendar day.

 

[SIGNATURE PAGES FOLLOW]

 

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

 

	
 
    	
SANCHEZ MIDSTREAM PARTNERS LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Sanchez   Midstream Partners GP LLC,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Charles C. Ward
    
	
 
    	
 
    	
Name:   Charles C. Ward 
    
	
 
    	
 
    	
Title:   Chief Financial Officer
    

 

Signature Page to Amended and Restated Registration Rights Agreement

 

 

	
 
    	
STONEPEAK CATARINA HOLDINGS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
STONEPEAK   INFRASTRUCTURE FUND (ORION AIV) LP, its managing member
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
STONEPEAK ASSOCIATES   LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
STONEPEAK GP HOLDINGS   LP, its sole member
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
STONEPEAK GP INVESTORS   LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
STONEPEAK GP INVESTORS   MANAGER LLC, its managing member
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jack Howell
    
	
 
    	
Name:Jack Howell
    
	
 
    	
Title:Senior Managing   Director
    

 

Signature Page to Amended and Restated Registration Rights AgreementExhibit 10.1

 

Execution Version

 

AMENDED AND RESTATED 
 BOARD REPRESENTATION AND STANDSTILL AGREEMENT

 

This AMENDED AND RESTATED BOARD REPRESENTATION AND STANDSTILL AGREEMENT (this “Agreement”), dated as of August 2, 2019 (the “Effective Date”), is entered into by and among Sanchez Midstream Partners GP LLC, a Delaware limited liability company (the “General Partner”), Sanchez Midstream Partners LP, a Delaware limited partnership (the “Partnership” and, together with the General Partner, the “Sanchez Entities”), and Stonepeak Catarina Holdings LLC (“Stonepeak”).  The Sanchez Entities and Stonepeak are herein referred to as the “Parties.”  Capitalized terms used but not defined herein shall have the meaning assigned to such term in the Third Amended and Restated Agreement of Limited Partnership of the Partnership (as amended, the “Partnership Agreement”).

 

Recitals

 

WHEREAS, the Sanchez Entities and Stonepeak are parties to that certain Board Representation and Standstill Agreement, dated as of October 14, 2015 (as amended, supplemented or otherwise modified prior to the date hereof, the “Existing Agreement”);

 

WHEREAS, on August 2, 2019 (the “Partnership Agreement Effective Date”), the General Partner executed and delivered the Partnership Agreement;

 

WHEREAS, the General Partner, in its individual capacity and in its capacity as the general partner of the Partnership, has determined it to be in the best interests of Partnership to provide Stonepeak with (i) ongoing designation rights and obligations in respect of the board of directors of the General Partner (or such other governing body thereof) (the “Board”), and (ii) certain approval rights in respect of actions of the Sanchez Entities, in each case, pursuant to the terms of this Agreement; and

 

WHEREAS, Stonepeak is willing to provide the Sanchez Entities with certain standstill rights, pursuant to the terms of 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 by each of the Parties hereto, the Parties hereby agree to amend and restate in its entirety the Existing Agreement and hereto agree as follows:

 

Agreement

 

Section 1.                                           Board Designation Rights.

 

(a)                                 Each of the Sanchez Entities shall take all actions necessary or advisable to cause (i) two (2) directors serving on the Board to be designated by Stonepeak, in its sole discretion, at all times from the Effective Date until the occurrence of (A) the First Designation Right Termination Event (as defined below), at which time the right of Stonepeak under this Agreement to designate one (1) director serving on the Board shall terminate and (B) the Second Designation Right Termination Event (as defined below), at which time the right of Stonepeak

 

 

under this Agreement to designate one (1) director serving on the Board shall terminate and (ii) three (3) independent directors serving on the Board to be designated by Stonepeak, in its sole discretion (each director designated by Stonepeak pursuant to this Section 1(a), a “Stonepeak Designated Director”), at all times during the Redemption Designation Period (as defined below); provided, however, that each such Stonepeak Designated Director shall (1) in the reasonable judgment of the General Partner, have the requisite skill and experience to serve as a director of a public company, (2) not be prohibited or disqualified from serving as a director of the General Partner by any rule or regulation of the Commission, the National Securities Exchange on which the Common Units are listed or applicable law and (3) otherwise be reasonably acceptable to the General Partner.  Prior to a Designation Right Termination Event (as defined below) or during the Redemption Designation Period, any Stonepeak Designated Director may be removed by Stonepeak at any time and may be removed by a majority of the other directors then serving on the Board for “cause” (as defined below); and any vacancy in such positions shall be filled solely by Stonepeak.  As used herein, “cause” means that a Stonepeak Designated Director (w) is prohibited from serving as a director of the General Partner under any rule or regulation of the Commission or the National Securities Exchange on which the Common Units are listed; (x) has been convicted of a felony or misdemeanor involving moral turpitude; (y) has engaged in acts or omissions against the General Partner or the Partnership constituting dishonesty, breach of fiduciary obligation, or intentional wrongdoing or misfeasance; or (z) has acted intentionally or in bad faith in a manner that results in a material detriment to the assets, business or prospects of the General Partner or the Partnership.  None of the Sanchez Entities shall take any action which would, or would be reasonably likely to, adversely affect Stonepeak’s right to appoint the Stonepeak Designated Directors; provided, however, that the Sanchez Entities shall not be prohibited from taking such action that the Board determines is necessary to comply with any rule or regulation of the Commission or the National Securities Exchange on which the Common Units are listed or applicable law.

 

(b)                                 Prior to the occurrence of a Designation Right Termination Event, the General Partner shall invite the Stonepeak Designated Directors to attend all meetings of each committee of the Board (other than the Audit Committee, the Conflicts Committee, any pricing committee established for an offering of securities by the Partnership and any committee established to deal with conflicts with Stonepeak or its Affiliates) in a nonvoting observer capacity and, in this respect, shall give the Stonepeak Designated Directors copies of all notices, minutes, consents and other materials that it provides to the other members of such committee; provided, however, that during the Redemption Designation Period, the Stonepeak Designated Directors designated pursuant to clause (ii) of Section 1(a) shall serve on all committees of the Board in a voting capacity. For the avoidance of doubt, no Stonepeak Designated Director shall be permitted to serve on any committees of the Board in a voting capacity prior to the Redemption Designation Period.

 

(c)                                  The Stonepeak Designated Directors are Jack Howell and Luke Taylor.

 

(d)                                 Any action by Stonepeak to designate, remove or replace a Stonepeak Designated Director shall be evidenced in writing and furnished to the General Partner no later than one (1) Business Day after the taking of such action, shall include a statement that the action has been approved by the requisite vote of Stonepeak and shall be executed by or on behalf of Stonepeak.  Stonepeak agrees to cause each Stonepeak Designated Director to timely provide the

 

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Partnership with accurate and complete information relating to Stonepeak and such Stonepeak Designated Director that may be required to be disclosed by the Partnership under the Exchange Act.  In addition, at the Partnership’s reasonable request, Stonepeak shall cause each Stonepeak Designated Director to complete and execute the Partnership’s standard director and officer questionnaire prior to being admitted to the Board.

 

(e)                                  Upon the occurrence of a Designation Right Termination Event or the end of the Redemption Designation Period, as applicable, the right of Stonepeak to designate a Stonepeak Designated Director shall terminate and the Stonepeak Designated Director then serving as such a member of the Board, promptly upon (and in any event within two (2) Business Days following) receipt of a request from a majority of the other director(s) then serving on the Board or the owner(s) of a majority of the equity interests of the General Partner, shall resign as a member of the Board.  If the Stonepeak Designated Director does not resign upon such request, then a majority of the other director(s) then serving on the Board or the owner(s) of a majority of the equity interests of the General Partner, may remove the Stonepeak Designated Director as a member of the Board.

 

(f)                                   For the purposes of this Agreement, the “First Designation Right Termination Event” shall occur on the date on which Stonepeak and its Affiliates hold fewer than 25% of the number of Class C Preferred Units initially issued to Stonepeak in exchange for all issued and outstanding Class B Preferred Units, as adjusted for any subdivisions, splits, reverse unit splits, reclassification, reorganization or other similar transaction by the Partnership affecting the Class C Preferred Units.  For the purposes of this Agreement, the “Second Designation Right Termination Event” shall occur on the date on which Stonepeak and its Affiliates no longer hold any Class C Preferred Units.  Each of the First Designation Right Termination Event and the Second Designation Right Termination Event are referred to herein as a “Designation Right Termination Event.” For the purposes of this Agreement, the “Redemption Designation Period” shall commence on January 1, 2022 if any Class C Preferred Units remain outstanding on such date and shall continue until the date on which all Class C Preferred Units have been redeemed pursuant to the provisions of the Partnership Agreement.

 

Section 2.                                           Limitation of Liability; Indemnification; Business Opportunities.

 

(a)                                 At all times while each Stonepeak Designated Director is serving as a member of the Board, and following any such Stonepeak Designated Director’s death, resignation, removal or other cessation as a director in such former Stonepeak Designated Director’s capacity as a former director, such Stonepeak Designated Director shall be entitled to (i) the same modification and restriction of traditional fiduciary duties, (ii) the same safe harbors for resolving conflicts of interest transactions and (iii) all rights to indemnification and exculpation, in each case, as are then made available to any other member of the Board.

 

(b)                                 At all times while each Stonepeak Designated Director is serving as a member of the Board, such Stonepeak Designated Director, Stonepeak and their respective Affiliates may engage in, possess an interest in, or trade in the securities of, other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Sanchez Entities, and the Sanchez Entities, the Board and their Affiliates shall have no rights by virtue of this Agreement or otherwise in and to such independent ventures or the income or

 

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profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Sanchez Entities, shall not be deemed wrongful or improper.  None of the Stonepeak Designated Directors, Stonepeak or their respective Affiliates shall be obligated to present any investment opportunity to the Sanchez Entities even if such opportunity is of a character that the Sanchez Entities or any of their respective Affiliates might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and each of the Stonepeak Designated Directors, Stonepeak and their respective Affiliates shall have the right to take for such Person’s own account (individually or as a partner, fiduciary or otherwise) or to recommend to others any such investment opportunity.  Notwithstanding the foregoing, Stonepeak shall cause each Stonepeak Designated Director to maintain the confidentiality of all information and proceedings of the Board.

 

(c)                                  The Sanchez Entities shall purchase and maintain (or reimburse each Stonepeak Designated Director for the cost of) insurance, on behalf of such Stonepeak Designated Director, in an amount and scope of coverage commensurate with that provided to an independent member of the Board, with respect to liabilities that may be asserted against, or expense that may be incurred by, such Stonepeak Designated Director in connection with the Sanchez Entities’ activities or such Stonepeak Designated Director’s activities on behalf of the Sanchez Entities, regardless of whether the Sanchez Entities would have the power to indemnify such Stonepeak Designated Director against such liability under the provisions of the Partnership Agreement or the Limited Liability Company Agreement of the General Partner, as amended (the “GP LLC Agreement”).

 

(d)                                 For the avoidance of doubt, each Stonepeak Designated Director shall constitute an “Indemnitee,” as such term is defined under the Partnership Agreement and the GP LLC Agreement.

 

Section 3.                                           Standstill.

 

(a)                                 During the period commencing on the Effective Date and ending on the earlier of (x) the occurrence of a material breach of the Partnership Agreement by the Partnership or the General Partner and (y) the date on which all Class C Preferred Units have been redeemed, without the prior written consent of the Board (provided that such consent shall not be required in the event of fraud or gross negligence on the part of the Partnership or the General Partner), Stonepeak shall not, and shall cause its Affiliates not to, directly or indirectly (whether with respect to the General Partner, the Partnership or any Affiliate or Subsidiary thereof):

 

(i)                                     acquire beneficial ownership of additional Common Units, Class C Preferred Units or other Partnership Interests (as defined in the Partnership Agreement);

 

(ii)                                  acquire any debt or assets of the Partnership or its Subsidiaries;

 

(iii)                               engage in any hostile or takeover activities with respect to the Partnership or the General Partner (including by means of a tender offer or soliciting proxies or written consents for purposes of any hostile or takeover

 

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activities, other than as recommended by the Board), including any merger, consolidation, recapitalization, business combination, partnership, joint venture, acquisition or similar transaction involving the Partnership or the General Partner or any of their Affiliates or their properties (excluding Sanchez Energy Corporation and its subsidiaries and its and their properties);

 

(iv)                              enter into any transaction the effect of which would be to “short” any securities of the Partnership;

 

(v)                                 form, join or participate in a “group” (within the meaning of Section 13(d) of the Exchange Act) with respect to any voting securities of the Partnership or any of its Affiliates in respect of any action otherwise prohibited pursuant to this Section 3(a);

 

(vi)                              call (or participate in a group calling of) a meeting of the limited partners of the Partnership for the purpose of removing (or approving the removal of) the General Partner as the general partner of the Partnership and/or electing a successor general partner of the Partnership;

 

(vii)                           “solicit” any “proxies” (as such terms are used in the rules and regulations of the Commission) or votes for or in support of (A) the removal of the General Partner as the general partner of the Partnership or (B) the election of any successor general partner of the Partnership, or take any action the direct effect or purpose of which would be to induce limited partners of the Partnership to vote or provide proxies that may be voted in favor of any action contemplated by either of sub-clauses (A) or (B) of this Section 3(a)(vii);

 

(viii)                        seek to advise or influence any person (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the voting of any Partnership Interest in connection with the removal (or approving the removal) of the General Partner as the general partner of the Partnership and/or the election of a successor general partner of the Partnership;

 

(ix)                              issue, induce or assist in the publication of any press release, media report or other publication in connection with the potential or proposed removal of the General Partner as the general partner of the Partnership and/or the election of a successor general partner of the Partnership;

 

(x)                                 propose to remove Sanchez Midstream Partners GP LLC as the general partner of the Partnership or vote to remove Sanchez Midstream Partners GP LLC as the general partner of the Partnership;

 

(xi)                              advise, assist or encourage any third party to do any of the foregoing; or

 

(xii)                           if the General Partner is removed as the general partner of the Partnership in violation of this Agreement, participate in any way in the management, ownership and/or control of the successor general partner or the

 

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successor general partner’s operation of the Partnership, other than participation by any Stonepeak Designated Director, as described in Section 1 of this Agreement.

 

(b)                                 Notwithstanding anything to the contrary in this Agreement, the foregoing shall not in any way limit the right of Stonepeak or its Affiliates to:

 

(i)                                     privately communicate with, including making any offer or proposal to, the Board, directly or through any Stonepeak Designated Director;

 

(ii)                                  to the extent permitted by the Partnership Agreement, vote Partnership Interests in the Partnership at any meeting of limited partners of the Partnership so long as there has been no breach of Section 3(a) of this Agreement;

 

(iii)                               restrict the manner in which any Stonepeak Designated Director (A) may vote on any matter submitted to the Board, (B) participate in deliberations or discussions of the Board (including making suggestions or raising issues to the Board) in his or her capacity as a member of the Board, or (C) may take actions required by his or her exercise of legal duties and obligations as a member of the Board or refrain from taking any action prohibited by his or her legal duties and obligations as a member of the Board;

 

(iv)                              sell or transfer any of their respective Partnership Interests, subject to any restrictions relating thereto contained in the Partnership Agreement;

 

(v)                                 receive any (A) Class C Preferred PIK Units (as defined in the Partnership Agreement) as distributions on Class C Preferred Units pursuant to the Partnership Agreement or (B) Partnership Interests pursuant to a unit split, reverse unit split, reclassification, reorganization or other transaction by the Partnership affecting any class of Partnership Interests generally or a dividend of units or other pro rata distribution by the Partnership to holders of Partnership Interests; or

 

(vi)                              (A) exercise the Warrant issued by the Partnership to Stonepeak on August 2, 2019 in accordance with the terms and provisions thereof, and (B) receive the Junior Securities issuable upon such exercise.

 

(c)                                  For the purposes of Section 3(a), Stonepeak’s Affiliates shall not include (i) any portfolio company of Stonepeak that is not controlled (as defined in the definition of “Affiliate” contained in the Partnership Agreement) by Stonepeak, unless such portfolio company is a holder of Class C Preferred Units, or (ii) any employee, officer or director of a portfolio company that is not an employee, officer or director of Stonepeak.

 

Section 4.                                           Certain Approval and Access Rights.

 

(a)                                 During the period commencing on the Effective Date and ending on the date on which all Class C Preferred Units have been redeemed (the “Approval Term”), the prior written consent of Stonepeak shall be required in order for the Sanchez Entities, SP Holdings, LLC, or

 

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their respective Affiliates or the Board, as applicable, to take or approve any of the following actions:

 

(i)                                     approval of any proposed Maintenance Capital Expenditures, Expansion Capital Expenditures or Investment Capital Expenditures (collectively, “Capital Expenditures”); provided, however, that the prior written consent of Stonepeak shall not be required with respect to (i) up to $5.0 million in Capital Expenditures per year, (ii) up to $20.0 million in Capital Expenditures specifically related to an interconnection with the Gulf Coast Express Pipeline project and the Whistler Pipeline project, and (iii) any ordinary course Capital Expenditures, including capital calls, required by Carnero G&P, LLC;

 

(ii)                                  approval of, or amendment, waiver or other modification to (including assignment or termination of), any transaction or agreement with any member of the Partnership Group on the one hand and the General Partner, SP Holdings, LLC, or any of their respective Affiliates on the other hand (including, but not limited to, commercial contracts containing acreage dedication terms);

 

(iii)                               approval of, or amendment, waiver or other modification to, any gathering agreement with any member of the Partnership Group on the one hand and Sanchez Energy Corporation, or its successor(s) in interest to its business or assets, or any of its or their Affiliates on the other hand that, directly or indirectly, results in gathering rates lower than the gathering rates currently in effect as of the Effective Date;

 

(iv)                              approval of any increases to the total compensation of any officer, independent contractors performing officer functions or independent director of the General Partner, any member of the Partnership Group or SP Holdings, LLC in amounts greater than ten percent (10%) in the aggregate of the salary approved in 2019 (as approved prior to the Partnership Agreement Effective Date) and the bonus approved for 2018 performance;

 

(v)                                 approval of any increases to the total compensation of any non-independent director of the General Partner or any member of the Partnership Group beyond the salary approved in 2019 (as approved prior to the Partnership Agreement Effective Date) and the bonus approved for 2018 performance;

 

(vi)                              approval of any increases to the general and administrative expenses of the General Partner, SP Holdings, LLC and the Partnership Group taken as a whole (or any other expenses of the General Partner, SP Holdings, LLC or any member of the Partnership Group that have in the historical practices of the General Partner, SP Holdings, LLC or such member of the Partnership Group been classified as general and administrative expenses), excluding any unplanned third party specialist expenses, such as the expenses of legal, accounting and consulting specialists, to be paid or reimbursed by the Partnership Group in amounts greater than ten percent (10%) in the aggregate of the general and administrative expenses approved by the Board in January 2019; and

 

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(vii)                           any member of the Partnership Group having cash or cash equivalents in excess of $10,000,000 in the aggregate at any time other than to pay dividends or distributions with respect to such Partnership Group member’s equityholders within the following 90 calendar days.

 

For the avoidance of doubt, the prior written consent of Stonepeak shall not be required with respect to any change of control or termination special compensation payments made pursuant to that certain Executive Services Agreement, dated as of August 2, 2019, by and between Gerald F. Willinger and the General Partner, or that certain Executive Services Agreement, dated as of August 2, 2019, by and between Charles C. Ward and the General Partner.

 

(b)                                 During the Approval Term, in connection with any determination of Available Cash or Adjusted Available Cash, the General Partner shall make such determination in good faith and shall consult with the Stonepeak Designated Director(s) and the independent directors of the Board in making such determination.

 

Section 5.                                           Chief Executive Officer.

 

(a)                                 From and after the Effective Date, the General Partner agrees not to materially diminish the duties or responsibilities of the chief executive officer of the General Partner without the consent of the Stonepeak Designated Directors.

 

(b)                                 If, as of any time after the third anniversary of the Effective Date, the ratio of (i) the sum of (A) Total Net Debt (as defined in the Existing Credit Facility as of the Partnership Agreement Effective Date) of the Partnership and its Consolidated Subsidiaries (as defined in the Existing Credit Facility as of the Partnership Agreement Effective Date), (B) the outstanding principal amount of the Class C Preferred Units, (C) the outstanding principal amount of Parity Securities and (D) the outstanding principal amount of Senior Securities to (ii) Adjusted EBITDA (as defined in the Existing Credit Facility as of the Partnership Agreement Effective Date) (the “Leverage Ratio”) for the period of four (4) consecutive fiscal quarters of the Partnership most recently ended for which financial statements are available is greater than 5.50 to 1.00, then the General Partner shall promptly appoint and retain as the General Partner’s chief executive officer a nominee designated by Stonepeak (the “Stonepeak CEO”) until such time as the Leverage Ratio for any fiscal quarter of the Partnership subsequent to the appointment of the Stonepeak CEO is less than or equal to 3.00 to 1.00.  The Stonepeak CEO shall have such rights at least equal to the greater of (i) the rights of the General Partner’s chief executive officer immediately prior to the appointment of the Stonepeak CEO and (ii) the rights customarily held by a chief executive officer of a company similarly situated to the Partnership.  The Stonepeak CEO shall be entitled to a compensation package substantially similar to that of the immediately prior chief executive officer of the General Partner. Upon appointment of the Stonepeak CEO, the chief executive officer of the General Partner immediately prior to the appointment of the Stonepeak CEO (the “Pre-Leverage CEO”) shall become the chief operating officer of the General Partner and shall, if desired by the General Partner, retain a compensation package substantially similar to the compensation package he or she held as chief executive officer.  Stonepeak’s rights under this Section 5(b) shall terminate on the date on which Stonepeak and its Affiliates no longer hold any Class C Preferred Units (the “CEO Designation Right Termination Event”). Following the CEO

 

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Designation Right Termination Event, the General Partner shall promptly remove the Stonepeak CEO as the chief executive officer of the General Partner and reinstate the Pre-Leverage CEO. If the Pre-Leverage CEO is unwilling or unable to accept the position of chief executive officer of the General Partner, then a replacement chief executive officer shall be appointed in accordance with the Partnership Agreement.

 

Section 6.                                           Miscellaneous.

 

(a)                                 Entire Agreement.  This Agreement is 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.  There are no restrictions, promises, warranties or undertakings other than those set forth or referred to herein with respect to the rights granted by the Sanchez Entities or any of their Affiliates or Stonepeak or any of its Affiliates set forth herein.  This Agreement supersedes all prior agreements and understandings between the Parties with respect to the subject matter hereof.

 

(b)                                 Notices.  All notices and other communications provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, electronic mail (with written confirmation of receipt), air courier guaranteeing overnight delivery or personal delivery to the following addresses:

 

If to the General Partner or the Partnership:

 

Sanchez Midstream Partners GP LLC
 1000 Main Street, Suite 3000
 Houston, TX 77002
 Attention: Charles C. Ward
 Email: cward@sanchezmidstream.com

 

with a copy to (which shall not constitute notice):

 

Hunton Andrews Kurth LLP
 600 Travis Street, Suite 4200
 Houston, TX 77002
 Attention: Philip Haines
 Email: phaines@huntonak.com

 

If to Stonepeak:

 

Stonepeak Infrastructure Partners

55 Hudson Yards, 550 W. 34th St., 48th Floor

New York, NY 10001

Attention: Adrienne Saunders, General Counsel

Email: saunders@stonepeakpartners.com

 

with a copy (which shall not constitute notice):

 

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Sidley Austin LLP
 1000 Louisiana Street, Suite 5900
 Houston, TX 77002
 Attention: Tim Chandler
 Email: tim.chandler@sidley.com

 

(c)                                  Interpretation.  Section references in this Agreement are references to the corresponding Section to this Agreement, unless otherwise specified.  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 any determination, consent or approval is to be made or given by a Party, such action shall be in such Party’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, (i) 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 (ii) 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, and 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 division of this Agreement into 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.

 

(d)                                 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 non-exclusive jurisdiction of any federal or state court located within the State of Delaware over any such action.  Each of the Parties hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection that it 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.

 

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(e)                                  Waiver of Jury Trial.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, AND AGREES TO CAUSE ITS 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 (i) ARISING UNDER THIS AGREEMENT OR (ii) 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.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES AND CONSENTS 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.

 

(f)                                   No Waiver; Modifications in Writing.

 

(i)                                     Delay.  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 for herein are cumulative and are not exclusive of any remedies that may be available to a Party at law or in equity or otherwise.

 

(ii)                                  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 each of the Parties hereto affected by such amendment, waiver, consent, modification or termination.  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 a Party from the terms of any provision of this Agreement shall be effective only in the specific instance and for the specific purpose for which made or given.  Except where notice is specifically required by this Agreement, no notice to or demand on a Party in any case shall entitle such Party to any other or further notice or demand in similar or other circumstances.  Any investigation by or on behalf of any Party shall not be deemed to constitute a waiver by the Party taking such action of compliance with any representation, warranty, covenant or agreement contained herein.

 

(g)                                  Execution in 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 one and the same agreement.

 

(h)                                 Binding Effect; Assignment.  This Agreement will be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, but will not be assignable or delegable by any Party hereto without the prior written consent of each of the other Parties.

 

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(i)                                     Independent Counsel.  Each of the Parties acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that it has executed the same with consent and upon the advice of said independent counsel.  Each Party and its counsel cooperated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto will be deemed the work product of the Parties and may not be construed against any Party by reason of its preparation.  Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the Party that drafted it is of no application and is hereby expressly waived.

 

(j)                                    Specific Enforcement.  Each of the Parties acknowledges and agrees that monetary damages would not adequately compensate an injured Party for the breach of this Agreement by any Party, that this Agreement shall be specifically enforceable and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order without a requirement of posting bond.  Furthermore, each Party hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach.

 

(k)                                 Transfer of Board Rights; Aggregation. The right to appoint a Stonepeak Designated Director granted to Stonepeak under Section 1 of this Agreement may be transferred or assigned by Stonepeak to one or more of its Affiliates, subject to the transfer restrictions provided in Section 4.7(e) of the Partnership Agreement; provided, however, that (i) the Partnership is given written notice prior to any said transfer or assignment, stating the name and address of each of the transferee or assignee and identifying the securities with respect to which such rights are being transferred or assigned, (ii) each such transferee or assignee assumes in writing responsibility for its portion of the obligations of Stonepeak under this Agreement and (iii) to the extent such right is transferred or assigned to more than one Person, such right shall be exercised by those Persons holding a majority of the Class C Preferred Units, acting collectively.

 

(l)                                     Further Assurances.  Each of the Parties hereto shall, from time to time and without further consideration, execute such further instruments and take such other actions as any other Party hereto shall reasonably request in order to fulfill its obligations under this Agreement to effectuate the purposes of this Agreement.

 

(m)                             Expenses.  Promptly following receipt of an invoice therefore, the Partnership shall reimburse Stonepeak in an amount not to exceed $75,000 for the reasonable documented fees and expenses of Sidley Austin LLP, counsel to Stonepeak, incurred in connection with this Agreement, the Warrant and the Partnership Agreement and the transactions contemplated hereby and thereby.

 

[Signature Page Follows]

 

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

 

	
 
    	
SANCHEZ MIDSTREAM   PARTNERS GP LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Charles C.   Ward
    
	
 
    	
Name:
    	
Charles C. Ward
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
SANCHEZ MIDSTREAM PARTNERS   LP
    
	
 
    	
 
    
	
 
    	
By: Sanchez   Midstream Partners GP LLC,
    
	
 
    	
 
    	
its general partner
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Charles C.   Ward
    
	
 
    	
Name: 
    	
Charles C. Ward
    
	
 
    	
Title:
    	
Chief Financial Officer
    

 

Signature Page to Amended and Restated Board Representation and Standstill Agreement

 

 

	
 
    	
STONEPEAK:
    
	
 
    	
 
    
	
 
    	
STONEPEAK   CATARINA HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
STONEPEAK   INFRASTRUCTURE FUND (ORION AIV) LP, its managing member
    
	
 
    	
 
    
	
 
    	
By:
    	
STONEPEAK   ASSOCIATES LLC, its general partner
    
	
 
    	
 
    
	
 
    	
By:
    	
STONEPEAK   GP HOLDINGS LP, its sole member
    
	
 
    	
 
    
	
 
    	
By:
    	
STONEPEAK   GP INVESTORS LLC, its general partner
    
	
 
    	
 
    
	
 
    	
By:
    	
STONEPEAK   GP INVESTORS MANAGER LLC, its managing member
    

 

	
 
    	
By:
    	
/s/ Jack Howell
    
	
 
    	
Name:Jack   Howell
    
	
 
    	
Title:Senior   Managing Director
    

 

Signature Page to Amended and Restated Board Representation and Standstill Agreement

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