Document:

Exhibit 10.3

 

Execution Version

 

OMNIBUS AGREEMENT

 

among

 

EQUITRANS MIDSTREAM CORPORATION,

 

EQM MIDSTREAM PARTNERS, LP

 

and

 

EQM MIDSTREAM SERVICES, LLC

 

 

OMNIBUS AGREEMENT

 

This OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of, the Closing Date (as defined herein) among Equitrans Midstream Corporation, a Pennsylvania corporation (“ETRN”), EQM Midstream Partners, LP, a Delaware limited partnership (the “Partnership”), and EQM Midstream Services, LLC, a Delaware limited liability company (the “General Partner”).  The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, the Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article II, with respect to certain general and administrative services to be performed by the ETRN Entities (as defined herein) for and on behalf of the Partnership Group (as defined herein) and the Partnership’s reimbursement obligations related thereto; and

 

WHEREAS, the Parties desire by their execution of this Agreement to evidence their understanding, as is more fully set forth in Article III, with respect to the granting of a license from the Partnership to the ETRN Entities and the Partnership Entities (other than the Partnership).

 

NOW THEREFORE, in consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I
 DEFINITIONS

 

1.1                               Definitions.  As used in this Agreement, the following terms shall have the respective meanings set forth below:

 

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. For the avoidance of doubt, neither EQT Corporation nor any of its Subsidiaries shall be deemed to be “Affiliates” of ETRN, the Partnership, the General Partner, EQGP or the EQGP General Partner.

 

“Agreement” is defined in the preamble.

 

“Cause” is defined in the Partnership Agreement.

 

“Change of Control” means, with respect to any Person (the “Applicable Person”), any of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the Applicable Person’s assets to any other Person, unless immediately following such sale, lease, exchange or other transfer such assets are owned, directly or indirectly, by the Applicable Person or such Applicable Person owns or controls such other Person; (ii) the dissolution or liquidation of the

 

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Applicable Person; (iii) the consolidation or merger of the Applicable Person with or into another Person, other than any such transaction where (a) the outstanding Voting Securities of the Applicable Person are changed into or exchanged for Voting Securities of the surviving Person or its parent and (b) the holders of the Voting Securities of the Applicable Person immediately prior to such transaction own, directly or indirectly, not less than a majority of the outstanding Voting Securities of the surviving Person or its parent immediately after such transaction; and (iv) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act), other than ETRN or its Affiliates, being or becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of all of the then outstanding Voting Securities of the Applicable Person, except in a merger or consolidation that would not constitute a Change of Control under clause (iii) above.

 

“Closing Date” means November 13, 2018.

 

“Common Units” is defined in the Partnership Agreement.

 

“Conflicts Committee” is defined in the Partnership Agreement.

 

“control,” “is controlled by” or “is under common control with” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

 

“EQGP” means EQGP Holdings, LP, a Delaware limited partnership.

 

“EQGP General Partner” means EQGP Services, LLC, a Delaware limited liability company.

 

“ETRN” is defined in the preamble.

 

“ETRN Entities” means ETRN and any Person controlled, directly or indirectly, by ETRN other than the General Partner, EQGP, the EQGP General Partner, or a member of the Partnership Group; and “ETRN Entity” means any of the ETRN Entities.

 

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

 

“G&A Services” is defined in Section 2.1.

 

“General Partner” is defined in the preamble.

 

“License” is defined in Section 3.1.

 

“Limited Partner” is defined in the Partnership Agreement.

 

“Marks” is defined in Section 3.1.

 

“Name” is defined in Section 3.1.

 

“Partnership” is defined in the preamble.

 

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“Partnership Agreement” means the Second Amended and Restated Agreement of Limited Partnership of EQM Midstream Partners, LP, dated as of the Closing Date, as such agreement may be further amended from time to time, to which reference is hereby made for all purposes of this Agreement.

 

“Partnership Assets” means all of the assets of the Partnership Group from time to time, including, without limitation, gathering pipelines, transportation pipelines, water pipelines, natural gas storage assets, related facilities, offices and related equipment and real estate.

 

“Partnership Group” means the Partnership and its Subsidiaries treated as a single consolidated entity.

 

“Partnership Entities” means the General Partner and each member of the Partnership Group.

 

“Party” and “Parties” are defined in the preamble.

 

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

 

“Secondment Agreement” is defined in Section 2.2.

 

“Service Provider” is defined in Section 2.4.

 

“Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

 

“Voting Securities” of a Person means securities of any class of such Person entitling the holders thereof to vote in the election of, or to appoint, members of the board of directors or other similar governing body of the Person.

 

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ARTICLE II 
 SERVICES

 

2.1                               Agreement to Provide General and Administrative Services.  Until such time as this Agreement is terminated as provided in Section 4.4, ETRN hereby agrees to cause the ETRN Entities to provide the Partnership Group with certain centralized corporate, general and administrative services, such as accounting, audit, billing, business development, corporate record keeping, treasury services, cash management and banking, real property/land, legal, engineering, planning, budgeting, geology/geophysics, investor relations, risk management, information technology, insurance administration and claims processing, regulatory compliance and government relations, tax, payroll, human resources and environmental, health and safety, including without limitation permit filing, support for permit filing and maintenance (collectively, the “G&A Services”).  ETRN shall, and shall cause the ETRN Entities to, use commercially reasonable efforts to provide the Partnership Group with such G&A Services in a manner materially consistent in nature and quality to the services of such type previously provided by EQT Corporation and its Affiliates in connection with the Partnership Assets prior to the Closing Date.

 

2.2                               Secondment.  Pursuant to a Secondment Agreement, dated as of the Closing Date (the “Secondment Agreement”), ETRN has agreed to second, or cause to be seconded, to certain members of the Partnership Group available employees of the ETRN Entities for the purpose of providing certain services to such members of the Partnership Group relating to their respective assets, as set forth in, and subject to all terms and conditions of, the Secondment Agreement.

 

2.3                               Reimbursement by Partnership.  Subject to and in accordance with the terms and provisions of this Article II and such reasonable allocation and other procedures as may be agreed upon by ETRN and the General Partner from time to time, the Partnership hereby agrees to reimburse ETRN for all direct and indirect costs and expenses incurred by ETRN Entities in connection with the provision of the G&A Services to the Partnership Group, including the following:

 

(a)                                 any payments or expenses incurred for insurance coverage, including allocable portions of premiums, and negotiated instruments (including surety bonds and performance bonds) provided by underwriters with respect to the Partnership Assets or the business of the Partnership Group;

 

(b)                                 salaries and related benefits and expenses of personnel employed by the ETRN Entities who render G&A Services to the Partnership Group, plus general and administrative expenses associated with such personnel, including long-term incentive programs; it being agreed that such allocation shall include any withholding and payroll related taxes paid by ETRN or its Affiliates in connection with any long-term incentive plan of the General Partner or the Partnership Group;

 

(c)                                  any taxes or other direct operating expenses paid by the ETRN Entities for the benefit of the Partnership Group (including any state income, franchise or similar tax paid by the ETRN Entities resulting from the inclusion of the Partnership Group in a combined or consolidated state income, franchise or similar tax report with ETRN as required by applicable

 

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law as opposed to the flow through of income attributable to the ETRN Entities’ ownership interest in the Partnership Group), provided, however, that the amount of any such reimbursement shall be limited to the tax that the Partnership Group would have paid had it not been included in a combined or consolidated group with ETRN; and

 

(d)                                 all expenses and expenditures incurred by the ETRN Entities as a result of the Partnership being a publicly traded entity, including costs associated with annual and quarterly reports, tax return and Schedule K-1 preparation and distribution, independent auditor fees, partnership governance and compliance expenses, registrar and transfer agent fees, legal fees and independent director compensation;

 

it being agreed, however, that to the extent any reimbursable costs or expenses incurred by the ETRN Entities consist of an allocated portion of costs and expenses incurred by the ETRN Entities for the benefit of both the Partnership Group and the other ETRN Entities, such allocation shall be made on a reasonable cost reimbursement basis as determined by ETRN.

 

2.4                               Billing Procedures.  The Partnership will reimburse ETRN, or the ETRN Entities providing the G&A Services, as applicable (the “Service Provider”), for billed costs no later than the later of (a) the last day of the month following the performance month, or (b) thirty (30) business days following the date of the Service Provider’s billing to the Partnership.  Billings and payments may be accomplished by inter-company accounting procedures and transfers. The Partnership shall have the right to review all source documentation concerning the liabilities, costs, and expenses upon reasonable notice and during regular business hours.

 

ARTICLE III 
 LICENSE OF NAME AND MARK

 

3.1                               Grant of License.  Upon the terms and conditions set forth in this Article III, the Partnership hereby grants and conveys to each ETRN Entity and each Partnership Entity a nontransferable, nonexclusive, royalty-free right and license (“License”) to use the name “Equitrans” (the “Name”) and any other trademarks owned by the Partnership which contain the Name (collectively, the “Marks”).

 

3.2                               Ownership and Quality.

 

(a)                                 ETRN agrees that ownership of the Name and the Marks and the goodwill relating thereto shall remain vested in the Partnership, the owner of the mark, and any successor thereto, both during the term of this License and thereafter, and ETRN further agrees, and agrees to cause the ETRN Entities and Partnership Entities never to challenge, contest or question the validity of the Partnership’s ownership of the Name and Marks or any registration thereto by the Partnership.  In connection with the use of the Name and the Marks, each ETRN Entity and each Partnership Entity shall not in any manner represent that they have any ownership in the Name and the Marks or registration thereof except as set forth herein, and ETRN, on behalf of itself and the ETRN Entities and Partnership Entities, acknowledges that the use of the Name and the Marks shall not create any right, title or interest in or to the Name and the Marks, and all use of the Name and the Marks by an ETRN Entity or a Partnership Entity shall inure to the benefit of the Partnership.

 

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(b)                                 ETRN agrees, and agrees to cause each ETRN Entity and Partnership Entity, to use the Name and Marks in accordance with such quality standards established by or for the Partnership and communicated to ETRN from time to time, it being understood that the products and services offered by the ETRN Entities and the Partnership Entities immediately before the Closing Date are of a quality that is acceptable to the Partnership and justifies the License.  In the event any ETRN Entity or Partnership Entity is determined by the Partnership to be using the Marks in a manner not in accordance with quality standards established by the Partnership, the Partnership shall provide written notice of such unacceptable use including the reason why applicable quality standards are not being met.  If acceptable proof that quality standards are met is not provided to the Partnership within thirty (30) days of such notice, the entity’s license to use the Marks shall terminate and shall not be renewed absent written authorization from the Partnership.

 

3.3                               In the Event of Termination.  In the event of termination of this Agreement, pursuant to Section 4.4 or otherwise, or the termination of the License, the right of the ETRN Entities and the Partnership Entities to utilize or possess the Marks licensed under this Agreement shall automatically cease, and no later than ninety (90) days following such termination, (a) each ETRN Entity and Partnership Entity shall cease all use of the Marks and shall adopt trademarks, service marks, and trade names that are not confusingly similar to the Marks, provided, however, that any use of the Marks during such 90-day period shall continue to be subject to Section 3.2(b), (b) at the Partnership’s request, the ETRN Entities and the Partnership Entities shall destroy all materials and content upon which the Marks continue to appear (or otherwise modify such materials and content such that the use or appearance of the Marks ceases) that are under their control, and certify in writing to the Partnership that the ETRN Entities and the Partnership Entities have done so, and (c) each ETRN Entity and Partnership Entity shall change its legal name so that there is no reference therein to the name “Equitrans,” any name or d/b/a then used by the Partnership or any variation, derivation or abbreviation thereof, and in connection therewith, shall make all necessary filings of certificates with the Secretary of State of the State of Delaware and to otherwise amend its organizational documents by such date.

 

ARTICLE IV 
 MISCELLANEOUS

 

4.1                               Choice of Law; Submission to Jurisdiction.  This Agreement shall be subject to and governed by the laws of the Commonwealth of Pennsylvania, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in the Commonwealth of Pennsylvania and to venue in the state and federal courts in Allegheny County, Pennsylvania.

 

4.2                               Notice.  All notices or requests or consents provided for by, or permitted to be given pursuant to, this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postage-paid, and registered or certified with return receipt requested or by delivering such notice in person, by overnight delivery service or by facsimile to such Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by facsimile shall be effective upon actual receipt if

 

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received during the recipient’s normal business hours or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below or at such other address as such Party may stipulate to the other Parties in the manner provided in this Section 4.2.

 

If to any of the ETRN Entities:

 

Equitrans Midstream Corporation

625 Liberty Avenue, Suite 2000

Pittsburgh, PA 15222

Attn:  General Counsel

 

If to any member of the Partnership Group:

 

EQM Midstream Partners, LP

c/o EQM Midstream Services, LLC, its General Partner

625 Liberty Avenue, Suite 2000

Pittsburgh, PA 15222

Attn:  General Counsel

 

4.3                               Entire Agreement.  This Agreement, together with the Secondment Agreement, constitute the entire agreement of the Parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.

 

4.4                               Termination of Agreement.  Notwithstanding any other provision of this Agreement, (a) if the General Partner is removed as general partner of the Partnership under circumstances where (i) Cause does not exist and the Common Units held by the General Partner and its Affiliates are not voted in favor of such removal, or (ii) Cause exists, then this Agreement, other than the provisions set forth in Section 3.3, may at any time thereafter be terminated by ETRN by written notice to the other Parties, or (b) if a Change of Control of the General Partner, ETRN or the Partnership occurs, then this Agreement, other than the provisions set forth in Section 3.3, may at any time thereafter be terminated by ETRN by written notice to the other Parties.

 

4.5                               Amendment or Modification.  This Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto; provided, however, that the Partnership may not, without the prior approval of the Conflicts Committee, agree to any amendment or modification of this Agreement that, in the reasonable discretion of the General Partner, would be adverse in any material respect to the holders of Common Units.  Each such instrument shall be reduced to writing and shall be designated on its face an “Amendment” or an “Addendum” to this Agreement.

 

4.6                               Assignment; Third Party Beneficiaries.  No Party shall have the right to assign its rights or obligations under this Agreement without the consent of the other Parties hereto; provided, however, that the Partnership may make a collateral assignment of this Agreement

 

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solely to secure working capital financing for the Partnership. Each of the Parties hereto specifically intends that each entity comprising the ETRN Entities and the Partnership Entities, as applicable, whether or not a Party to this Agreement, shall be entitled to assert rights and remedies hereunder as third-party beneficiaries hereto with respect to those provisions of this Agreement affording a right, benefit or privilege to any such entity.

 

4.7                               Counterparts.  This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission or in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart hereof.

 

4.8                               Severability.  If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.

 

4.9                               Further Assurances.  In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

 

4.10                        Rights of Limited Partners.  Except as set forth in Section 4.6, the provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no Limited Partner of the Partnership shall have the right, separate and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the Closing Date.

 

	
 
    	
EQUITRANS   MIDSTREAM CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas F. Karam
    
	
 
    	
 
    	
Thomas F. Karam
    
	
 
    	
 
    	
President and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EQM   MIDSTREAM PARTNERS, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
EQM Midstream Services, LLC,
    
	
 
    	
 
    	
its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kirk Oliver
    
	
 
    	
 
    	
Kirk Oliver
    
	
 
    	
 
    	
Senior Vice President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EQM   MIDSTREAM SERVICES, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kirk Oliver
    
	
 
    	
 
    	
Kirk Oliver
    
	
 
    	
 
    	
Senior Vice President and Chief Financial Officer
    

 

[Signature Page to Omnibus Agreement (EQM)]Exhibit 10.4

 

Execution Version

 

SECONDMENT AGREEMENT

 

This SECONDMENT AGREEMENT (“Agreement”) is dated as of November 13, 2018 (the “Effective Date”) by and among Equitrans Midstream Corporation, a Pennsylvania corporation (“ETRN”), EQM Midstream Partners, LP, a Delaware limited partnership (the “Partnership”), and EQM Midstream Services, LLC, a Delaware limited liability company and the general partner of the Partnership (“General Partner”).  ETRN, the Partnership and the General Partner may be referred to herein individually as “Party” or collectively as “Parties.”

 

RECITALS

 

WHEREAS, the Partnership, the General Partner and ETRN, are parties to that certain Omnibus Agreement (as amended from time to time, the “Omnibus Agreement”) dated as of the date hereof, which provides for, among other things, the provision by ETRN of certain corporate, general and administrative services to the Partnership and its subsidiaries (the “Partnership Group”);

 

WHEREAS, certain members of the Partnership Group (each an “Owner”) own or lease natural gas pipelines, including natural gas gathering and transmission systems, compressors, storage and other related facilities, and water lines and related equipment and facilities; and

 

WHEREAS, the Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article 2, with respect to the secondment of employees for the provision of certain operation and management services by the ETRN Group (as defined below) for and on behalf of the Partnership Group and the Partnership’s obligations related thereto.

 

NOW THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the Parties undertake and agree as follows:

 

ARTICLE 1
 DESCRIPTION OF FACILITIES

 

1.1                               Facilities Description.  “Facilities” means all facilities, pipelines (including natural gas, natural gas liquid and water pipelines), machinery, measurement equipment (including vehicles) and other equipment, accessions and improvements in respect of the foregoing, now or hereafter owned or leased by a member of the Partnership Group, unless ETRN and the Partnership determine to exclude any such assets from being subject to this Agreement (such excluded assets, “Excluded Facilities”).

 

ARTICLE 2
 SECONDMENT OF EMPLOYEES

 

2.1                               Seconded Employees.  Subject to the terms of this Agreement, ETRN agrees to second, or cause to be seconded, respectively, those available employees of any of ETRN and its affiliates (other than the General Partner, the Partnership and its subsidiaries) (the “ETRN Group”) for the purpose of providing services (“Services”) with respect to the assets of any Owner from time to time (the “Seconded Employees”) to such Owner, and such Owner agrees to accept each assignment of any Seconded Employees to the Owner from ETRN in accordance with the terms

 

 

of this Agreement (a “Secondment”) for the purpose of performing the Services with respect to the Facilities.  The Seconded Employees will remain at all times the employees of the applicable ETRN Group member, and, in addition, they will also be temporary co-employees of the applicable Owner during the Period of Secondment (as defined below) and shall, at all times during the Period of Secondment, work under the direction, supervision and control of the Owner related to the Facilities.  Seconded Employees shall have no authority or apparent authority to act on behalf of any ETRN Group member during the Period of Secondment related to the Facilities.  The rights and obligations of the Parties under this Agreement that relate to individuals that were Seconded Employees but then later ceased to be Seconded Employees, which rights and obligations accrued during the Period of Secondment, will survive the removal of such individuals from the group of Seconded Employees to the extent necessary to enforce such rights and obligations.

 

2.2                               Duties and Authority of Seconded Employees.  Under the direction of the applicable Owner, the Seconded Employees shall, subject to the terms of this Agreement, perform duties for the operation, maintenance, repair, design, alteration and replacement of the Facilities and of the business processes associated with the Facilities.

 

ARTICLE 3
 TERMS OF SECONDMENT

 

3.1                               Independent Contractor.  ETRN is an independent contractor and, upon the reasonable request by an Owner and subject to the availability of employees to second, shall second, or cause to be seconded, the Seconded Employees as an independent contractor. Nothing hereunder shall be construed as creating any other relationship among the Parties, including but not limited to a partnership, agency or fiduciary relationship, joint venture, limited liability company, association, or any other enterprise. Except to the extent provided in Section 2.1, none of the Parties or any of their employees shall be deemed to be an employee of another Party.

 

3.2                               Period of Secondment.  ETRN will second, or cause to be seconded, the Seconded Employees to the applicable Owner starting on the Effective Date and continuing, during the period (and only during the period) that the Seconded Employees are performing Services for such Owner, until the earlier of:

 

(a)                                 the end of the term of this Agreement;

 

(b)                                 such end date for any Seconded Employees as may be mutually agreed by ETRN and the applicable Owner (the “End Date”);

 

(c)                                  a withdrawal, departure, resignation or termination of such Seconded Employees under Section 3.3; or

 

(d)                                 a termination of Secondment of such Seconded Employees under Section 3.4.

 

The period of time that any Seconded Employee is provided by ETRN to an Owner is referred to in this Agreement as the “Period of Secondment.”  At the end of the Period of Secondment for any Seconded Employee, such Seconded Employee will no longer be subject to the direction by such Owner of the Seconded Employee’s day-to-day activities.  The Parties acknowledge that certain of the Seconded Employees may also provide services to the ETRN

 

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Group in connection with operations conducted by the ETRN Group (“Shared Seconded Employees”) and the Parties intend that such Shared Seconded Employees shall only be seconded to the applicable Owner during those times that the Shared Seconded Employees are performing Services for such Owner hereunder.

 

3.3                               Withdrawal, Departure or Resignation.  If any Seconded Employee tenders his or her resignation to an applicable ETRN Group member, or if the employment of any Seconded Employee is terminated by an applicable ETRN Group member, ETRN will promptly notify the applicable Owner.  During the Period of Secondment of any Seconded Employee, the applicable ETRN Group member will not voluntarily withdraw or terminate such Seconded Employee except under Section 3.4 or with the consent of the applicable Owner, which consent shall not be unreasonably withheld, conditioned or delayed.

 

3.4                               Termination of Secondment.  Subject to any restrictions contained in any collective bargaining agreement to which an ETRN Group member is a party, the applicable Owner will have the right to terminate the Secondment to such Owner of any Seconded Employee for any reason at any time.  ETRN will not, without the applicable Owner’s express consent, agree to any future amendments to any collective bargaining agreement that would increase the type or degree of any limitations on the Owner’s ability to terminate the Secondment of any Seconded Employee. In addition, any member of the ETRN Group shall have the right at any time and from time to time to terminate the Secondment of any Seconded Employee by providing a substitute Seconded Employee.  Upon the termination of any Seconded Employee’s Period of Secondment, ETRN will be solely liable for any costs or expenses associated with the termination of the Secondment, except as otherwise specifically set forth in this Agreement.

 

3.5                               Supervision.  During the Period of Secondment, the applicable Owner shall:

 

(a)                                 be ultimately and fully responsible for the daily work assignments of the Seconded Employees (and with respect to Shared Seconded Employees, during those times that the Shared Seconded Employees are performing Services for the Owner hereunder), including supervision of their day-to-day work activities and performance consistent with the job functions associated with the Services;

 

(b)                                 have the right to set the hours of work and the holidays and vacation schedules (other than with respect to Shared Seconded Employees, as to which the Owner and ETRN shall jointly determine) for Seconded Employees; and

 

(c)                                  have the right to determine training which will be received by the Seconded Employees.

 

The Partnership, for itself and on behalf of each Owner, agrees that with respect to any Seconded Employee who is otherwise represented by a union while working for the ETRN Group, the Owner will be assigned the applicable ETRN Group member’s rights and responsibilities of any applicable collective bargaining agreement for the Period of Secondment as to any such employee, subject to any changes agreed to between the applicable ETRN Group member and any applicable union or as may be allowed by law.  The Owner is not, hereby, agreeing to recognize

 

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any union or assume any bargaining obligation.  Any and all recognition and bargaining obligations, to the extent that they exist, will remain with the applicable ETRN Group member.

 

3.6                               Seconded Employees Qualifications; Approval.  ETRN will provide such suitably qualified and experienced Seconded Employees as ETRN is reasonably able to make available to the Partnership, and the applicable Owner will have the right to approve such Seconded Employees.  All Seconded Employees identified as of the Effective Date have been approved and accepted by the applicable Owner as suitable for performing job functions related to the Services.

 

3.7                               Workers Compensation.  At all times, the ETRN Group will maintain workers’ compensation insurance (either through an insurance company or approved self-insurance arrangement) applicable to the Seconded Employees, and will include each Owner as an Alternate Employer under each applicable insurance policy.  The Parties agree that a Seconded Employee’s sole remedy for any workplace injury suffered during the Period of Secondment shall be under the workers’ compensation insurance (either through an insurance company or approved self-insurance arrangement) applicable to the Seconded Employees.

 

3.8                               Benefit Plans.  No Owner nor any member of the Partnership Group shall be a participating employer in any Benefit Plan (as defined below) during the Period of Secondment.  Subject to the applicable Owner’s reimbursement obligations hereunder, the ETRN Group shall remain solely responsible for all obligations and liabilities arising under the express terms of the Benefit Plans, and the Seconded Employees will be covered under the Benefit Plans subject to and in accordance with their terms and conditions, as they may be amended from time to time. ETRN and its ERISA Affiliates (as defined below) may amend or terminate any Benefit Plan in whole or in part at any time (subject to the applicable provisions of any collective bargaining agreement covering Seconded Employees, if any). During the Period of Secondment, no Owner nor any other member of the Partnership Group shall assume any Benefit Plan or have any obligations, liabilities or rights arising under the express terms of the Benefit Plans, in each case except for cost reimbursement pursuant to this Agreement.

 

For the purposes of this Section 3.8, “Benefit Plans” means each employee benefit plan, as defined in Section 3(3) of The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and any other material plan, policy, program, practice, agreement, understanding or arrangement (whether written or oral) providing compensation or other benefits to any Seconded Employee (or to any dependent or beneficiary thereof), including, without limitation, any stock bonus, stock ownership, stock option, stock purchase, stock appreciation rights, phantom stock, restricted stock or other equity-based compensation plans, policies, programs, practices or arrangements, and any bonus or incentive compensation plan, deferred compensation, profit sharing, holiday, cafeteria, medical, disability or other employee benefit plan, program, policy, agreement or arrangement sponsored, maintained, or contributed to by the applicable ETRN Group member or any entity that would be treated as a single employer with ETRN or the ETRN Group member under Sections 414(b), (c) or (m) of the Code or Section 4001(b)(1) of ERISA (“ERISA Affiliates”), or under which ETRN, the ETRN Group member, or any ERISA Affiliate may have any obligation or liability, whether actual or contingent, in respect of or for the benefit of any Seconded Employee (but excluding workers’ compensation benefits (whether through insured or self-insured arrangements) and directors and officers liability insurance).

 

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ARTICLE 4
 REIMBURSEMENT AND BILLING PROCEDURES

 

4.1                               Reimbursement.  Except as provided below in Sections 4.3, 4.4 and 4.5, the applicable Owner shall reimburse ETRN for the secondment of the Seconded Employees pursuant to this Agreement in the same manner that the Partnership reimburses ETRN pursuant to the reimbursement for services provisions of the Omnibus Agreement (“Services/Secondment Reimbursement”).

 

4.2                               Billing Procedures.  ETRN shall invoice the applicable Owner for the Seconded Employees in accordance with the billing procedures provisions of the Omnibus Agreement.

 

4.3                               Adjustments Based on Period of Secondment.  It is understood and agreed that the applicable Owner shall be liable for wages and other costs associated with a Seconded Employee (“Seconded Employee Expenses”) to the extent, and only to the extent, they are attributable to the Period of Secondment.  As such, if the Period of Secondment begins on other than the first day of a month or ends on other than the last day of a month, the Seconded Employee Expenses for such month shall be prorated based on the number of days during such month that the Period of Secondment was in effect.

 

4.4                               Adjustments for Shared Services. With respect to each Shared Seconded Employee, ETRN will determine in good faith the percentage of such Shared Seconded Employee’s time spent providing Services to the applicable Owner (the “Allocation Percentage”). For each month during the Period of Secondment, the amount of the Services Reimbursement payable by the applicable Owner with respect to each Shared Seconded Employee shall be calculated by multiplying the Seconded Employee Expenses for such Shared Seconded Employee times the Allocation Percentage for such Shared Seconded Employee; provided, however, that certain Second Employee Expenses shall not be allocated based on the Allocation Percentage but rather shall be allocated as follows:

 

(a)                                 termination costs with respect to any Shared Seconded Employee shall be allocated between the applicable Owner and the ETRN Group based upon the Allocation Percentage, provided that the Owner and ETRN or the applicable ETRN Group member agree in advance to terminate such Shared Seconded Employee; otherwise, a Party who terminates a Shared Seconded Employee without first consulting with the other Party or applicable affiliate (including an actual or alleged constructive termination) shall be solely responsible for all termination costs related to such termination, other than any termination costs arising solely out of the gross negligence or willful misconduct of the other Party or applicable affiliate;

 

(b)                                 travel expenses and other expenses incurred with respect to and/or reimbursable to a Shared Seconded Employee shall be paid by the Party for whom the Shared Seconded Employee was working at the time they were incurred, except that expenses related to activities that benefit both the applicable Owner and the ETRN Group (e.g., some types of training) shall be shared by the affected Parties in accordance with the Allocation Percentage (or such other allocation as may be agreed between the affected Parties); and

 

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(c)                                  any sales taxes imposed upon the provision of any taxable Services provided under this Agreement shall be reimbursable in full by the applicable Owner, provided that the Owner and ETRN contemplate that the Services provided pursuant to this Agreement are not taxable services for sales and use tax purposes.

 

ARTICLE 5
 TERMINATION

 

5.1                               Termination.  This Agreement will terminate automatically upon the termination of the Omnibus Agreement.  Upon termination of this Agreement, all rights and obligations of the Parties under this Agreement shall terminate, provided, however, that such termination shall not affect or excuse the performance of any party under the provisions of Article 6, which provisions shall survive the termination of this Agreement indefinitely.

 

ARTICLE 6
 INDEMNITY

 

6.1                               Indemnification Scope.  IT IS IN THE BEST INTERESTS OF THE PARTIES THAT CERTAIN RISKS RELATING TO THE MATTERS GOVERNED BY THIS AGREEMENT SHOULD BE IDENTIFIED AND ALLOCATED AS AMONG THEM. IT IS THEREFORE THE INTENT AND PURPOSE OF THIS AGREEMENT TO PROVIDE FOR THE INDEMNITIES SET FORTH HEREIN TO THE MAXIMUM EXTENT ALLOWED BY LAW. ALL PROVISIONS OF THIS ARTICLE SHALL BE DEEMED CONSPICUOUS WHETHER OR NOT CAPITALIZED OR OTHERWISE EMPHASIZED.

 

6.2                               Indemnified Persons.  Wherever “ETRN” appears as an Indemnitee in this Article, the term shall include that entity, its parents, subsidiaries, affiliates, partners, members, contractors and subcontractors at any tier, and the respective agents, officers, directors, employees, and representatives of the foregoing entities involved in actions or duties to act on behalf of the indemnified party (collectively, the “ETRN Indemnitees”); provided, however, that the ETRN Indemnitees shall not include the Owners, the General Partner or the Partnership. As used in this Article 6, references to “third parties” shall not include any ETRN Indemnitees.

 

6.3                               Indemnification. THE OWNERS SHALL RELEASE, DEFEND, INDEMNIFY, AND HOLD HARMLESS THE ETRN INDEMNITEES FROM AND AGAINST ANY AND ALL CLAIMS, CAUSES OF ACTION, DEMANDS, LIABILITIES, LOSSES, DAMAGES, FINES, PENALTIES, JUDGMENTS, EXPENSES AND COSTS, INCLUDING REASONABLE ATTORNEYS’ FEES AND COSTS OF INVESTIGATION AND DEFENSE (EACH, A “LIABILITY”) (INCLUDING, WITHOUT LIMITATION, ANY LIABILITY FOR (A) DAMAGE, LOSS OR DESTRUCTION OF THE FACILITIES, (B) BODILY INJURY, ILLNESS OR DEATH OF ANY PERSON, AND (C) LOSS OF OR DAMAGE TO EQUIPMENT OR PROPERTY OF ANY PERSON) ARISING FROM OR RELATING TO THIS AGREEMENT.

 

6.4                               Damages Limitations.  Any and all damages recovered by a Party pursuant to this Article 6 or pursuant to any other provision of or actions or omissions under this Agreement shall be limited to actual damages. CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT

 

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LIMITATION BUSINESS INTERRUPTIONS AND LOST PROFITS) AND EXEMPLARY AND PUNITIVE DAMAGES SHALL NOT BE RECOVERABLE UNDER ANY CIRCUMSTANCES EXCEPT TO THE EXTENT THOSE DAMAGES ARE INCLUDED IN THIRD PARTY CLAIMS FOR WHICH A PARTY HAS AGREED HEREIN TO INDEMNIFY THE OTHER PARTY. EACH PARTY ACKNOWLEDGES IT IS AWARE THAT IT HAS POTENTIALLY VARIABLE LEGAL RIGHTS UNDER COMMON LAW AND BY STATUTE TO RECOVER CONSEQUENTIAL, EXEMPLARY, AND PUNITIVE DAMAGES UNDER CERTAIN CIRCUMSTANCES, AND EACH OF THE PARTIES NEVERTHELESS WAIVES, RELEASES, RELINQUISHES, AND SURRENDERS RIGHTS TO CONSEQUENTIAL PUNITIVE AND EXEMPLARY DAMAGES TO THE FULLEST EXTENT PERMITTED BY LAW WITH FULL KNOWLEDGE AND AWARENESS OF THE CONSEQUENCES OF THE WAIVER REGARDLESS OF THE NEGLIGENCE OR FAULT OF EITHER PARTY.

 

6.5                               Defense of Claims.  The indemnifying Party shall defend, at its sole expense, any claim, demand, loss, liability, damage, or other cause of action within the scope of the indemnifying Party’s indemnification obligations under this Agreement, provided that the indemnified Party notifies the indemnifying Party promptly in writing of any claim, loss, liability, damage, or cause of action against the indemnified Party and gives the indemnifying Party authority, information, and assistance at the reasonable expense of the indemnified Party in defense of the matter. The indemnified Party may be represented by its own counsel (at the indemnified Party’s sole expense) and may participate in any proceeding relating to a claim, loss, liability, damage, or cause of action in which the indemnified Party or both Parties are defendants, provided, however, that the indemnifying Party shall, at all times, control the defense and any appeal or settlement of any matter for which it has indemnification obligations under this Agreement so long as any such settlement includes an unconditional release of the indemnified Party from all liability arising out of such claim, demand, loss, liability, damage, or other cause of action and does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of the indemnified Party.  Should an Owner and ETRN both be named as defendants in any third-party claim or cause of action arising out of or relating to the Facilities or Services, the Parties will cooperate with each other in the joint defense of their common interests to the extent permitted by law, and will enter into an agreement for joint defense of the action if the Parties mutually agree that the execution of the same would be beneficial.

 

ARTICLE 7
 NOTICES

 

A Party may give notices to the other Parties by first class mail postage prepaid, by overnight delivery service, or by facsimile with receipt confirmed at the following addresses or other addresses furnished by a Party by written notice. Any telephone numbers below are solely for information and are not for Agreement notices.

 

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If to the Partnership or the General Partner to:

 

EQM Midstream Partners, LP

EQM Midstream Services, LLC

625 Liberty Avenue, Suite 2000

Pittsburgh, PA 15222

Attn: General Counsel

 

If to any member of the ETRN Group, to:

 

Equitrans Midstream Corporation

625 Liberty Avenue, Suite 2000

Pittsburgh, PA 15222

Attn:  General Counsel

 

ARTICLE 8
  GENERAL

 

8.1                               Succession and Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties named herein. No Party may assign or otherwise transfer either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other Parties, which approval shall not be unreasonably withheld, conditioned or delayed.

 

8.2                               Governing Law.  THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPALS.  Jurisdiction and venue shall be in the Court of Common Pleas of Allegheny County, Pennsylvania, or the United States District Court for the Western District of Pennsylvania.

 

8.3                               Non-waiver of Future Default.  No waiver of any Party of any one or more defaults by the other in performance of any of the provisions of this Agreement shall operate or be construed as a waiver of any other existing or future default or defaults, whether of a like or different character.

 

8.4                               Audit and Maintenance of Records; Reporting.  Notwithstanding the payment by the Owners of any charges, the Owners shall have the right to review and contest the charges. For a period of two years from the end of any calendar year, the Owners shall have the right, upon reasonable notice and at reasonable times, to inspect and audit all the records, books, reports, data and processes related to the Services performed by the Seconded Employees to ensure ETRN’s compliance with the terms of this Agreement.  If the information is confidential, the parties shall execute a mutually acceptable confidentiality agreement prior to such inspection or audit.

 

8.5                               Entire Agreement; Amendments and Schedules.  This Agreement, together with the Omnibus Agreement, constitutes the entire agreement concerning the subject matter among the Parties and shall be amended or waived only by an instrument in writing executed by ETRN and

 

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the Partnership. Any schedule, annex, or exhibit referenced in the text of this Agreement and attached hereto is by this reference made a part hereof for all purposes.  This Agreement shall be deemed to replace and terminate the Prior Agreement in its entirety.

 

8.6                               Counterpart Execution.  This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the Parties hereto.

 

8.7                               Third Parties.  This Agreement is not intended to confer upon any person not a Party, ETRN Group member or an Owner any rights or remedies hereunder, and no person other than the Parties, ETRN Group members and Owners is entitled to rely on or enforce any representation, warranty or covenant contained herein.  The ETRN Group members and Owners are intended third-party beneficiaries of this Agreement.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the Effective Date.

 

	
 
    	
EQUITRANS   MIDSTREAM CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas F. Karam
    
	
 
    	
 
    	
Thomas F. Karam
    
	
 
    	
 
    	
President and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EQM   MIDSTREAM PARTNERS, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
EQM Midstream Services, LLC,
    
	
 
    	
 
    	
its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kirk Oliver
    
	
 
    	
 
    	
Kirk Oliver
    
	
 
    	
 
    	
Senior Vice President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EQM   MIDSTREAM SERVICES, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kirk Oliver
    
	
 
    	
 
    	
Kirk Oliver
    
	
 
    	
 
    	
Senior Vice President and Chief Financial Officer
    

 

[Signature Page to Secondment Agreement (EQM)]

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