Document:

Exhibit 10.3

 

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)]Exhibit 10.4

 

Execution Version

 

WORKING CAPITAL LOAN AGREEMENT

 

This WORKING CAPITAL LOAN AGREEMENT (as the same may be amended, supplemented and restated from time to time, this “Agreement”) is made as of November 13, 2018 (the “Effective Date”), between Equitrans Midstream Corporation, a Pennsylvania corporation (“Lender”), and EQGP Holdings, LP, a Delaware limited partnership (“Borrower”).   Capitalized terms used but not defined in the body of this Agreement have the meanings given to them in Exhibit A and shall be subject to the rules of construction set forth therein.

 

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lender and Borrower agree as follows:

 

1.                                      Loans.  Subject to the terms and conditions of this Agreement, from time to time during the period from the Effective Date to the date that is the earlier of (a) October 31, 2023 or (b) the date specified by Lender to Borrower with at least 90 days’ prior written notice (such earlier date, the “Maturity Date”), Lender agrees to make loans (“Loans”) to Borrower in an aggregate principal amount outstanding not to exceed $20,000,000 at any time. Within the foregoing limits, Borrower may borrow, repay and reborrow Loans in accordance with the terms and conditions hereof.  Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

 

2.                                      Repayment of the Loans.  Borrower shall repay the then-outstanding principal balance of the Loans, together with interest accrued and outstanding thereon and any other sums due hereunder, on the Maturity Date or such earlier date upon which the maturity of the Loans may have been accelerated pursuant to Section 8.

 

3.                                      Procedure for Borrowing.  Borrower may borrow Loans or continue Eurodollar Rate Loans or convert Eurodollar Rate Loans to Base Rate Loans or convert Base Rate Loans to Eurodollar Rate Loans on any Business Day (the date of any such borrowing, conversion or continuation, each a “Borrowing Date”) upon written notice (each a “Borrowing Notice”) to Lender no later than 11:00 am (Pittsburgh time) on the Business Day that is at least three Business Days before the requested Borrowing Date. Borrower shall give such notice in a form acceptable to Lender and each such Borrowing Notice shall specify (i) whether Borrower is requesting a Loan, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, (v) if applicable, the duration of the Interest Period with respect thereto and (vi) the location and number of Borrower’s account to which funds are to be disbursed.  If Borrower fails to specify a Type of Loan in a Borrowing Notice or if Borrower fails to give a timely notice requesting a conversion or continuation of any Eurodollar Rate Loan, then the applicable Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.  A Loan may only be made in US Dollars.  Lender will make such Loans available to Borrower by wire transfer of immediately available funds to the domestic bank account of Borrower designated by Borrower in the applicable Borrowing Notice.

 

 

4.                                      Interest.

 

(a)   Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate and (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.

 

(b)    If any amount payable by Borrower under this Agreement is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable laws.  Furthermore, while any Event of Default exists, Borrower shall pay interest on the principal amount of all outstanding Loans hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable laws (including the laws of the Commonwealth of Pennsylvania).  Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(c)      Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Bankruptcy Law.  Interest shall be calculated on the basis of a 360-day year for the actual days elapsed.

 

5.                                      Increased Costs; Taxes; Prepayments of Loans.  Borrower shall pay increased costs on the Loans and taxes in connection with the Loans, in each case in accordance with the procedures and terms of the Revolving Credit Agreement as if the loans were loans thereunder and Lender were a lender thereunder.

 

Borrower may, at its option, as provided in this Section 5, at any time and from time to time prepay the Loans, in whole or in part, upon notice to the Lender specifying (i) the date and amount of prepayment and (ii) the respective amounts to be prepaid in respect of such Loans.  The payment amount specified in such notice shall be due and payable on the date specified.  All prepayments pursuant to this Section 5 shall include accrued interest on the amount prepaid to the date of prepayment.

 

6.                                      Borrower’s Representations and Warranties.  Borrower represents and warrants to Lender that:

 

(a)                                 Borrower (i) has been duly formed and is validly existing in good standing under the laws of the State of Delaware and (ii) is qualified to do business as a foreign entity in good standing in each jurisdiction of the United States in which the ownership of its properties or the conduct of its business requires such qualification and where the failure to so qualify would be reasonably expected to have a material adverse effect on Borrower and its subsidiaries, taken as a whole; and

 

(b)                                 this Agreement has been duly authorized, executed and delivered by Borrower and constitutes the valid and binding agreement of Borrower, enforceable in accordance with its terms.

 

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7.                                      Conditions of Lending.  The obligation of Lender to make any Loan is subject to the conditions precedent that:

 

(a)                                 Each of the representations and warranties set forth in Section 6 is true and accurate on and as of the date of the making of such Loan; and

 

(b)                                 no event has occurred and is continuing or would result from the proposed Loan that constitutes a Default or Event of Default.

 

8.                                      Events of Default.  If one or more of the following events of default (each an “Event of Default”) shall occur and be continuing:

 

(a)                                 Borrower shall default in any payment of principal when and as the payment shall become due and payable, or Borrower shall default in any payment of interest as required herein, or in the payment of any fees or other amounts, when the same shall become due and payable, and such default shall continue for a period of three Business Days;

 

(b)                                 Borrower shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of its property, (ii) admit in writing of its inability to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under any Bankruptcy Law, (v) file a petition seeking to take advantage of any other law providing for similar relief of debtors, or (vi) consent or acquiesce in writing to any petition duly filed against it in any involuntary case under any Bankruptcy Law; or

 

(c)                                  a proceeding or case shall be commenced, without the application or consent of Borrower in any court of competent jurisdiction seeking (i) its liquidation, reorganization, dissolution or winding up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of its assets, or (iii) similar relief in respect of it, under any law providing for the relief of debtors, and such proceeding or case shall continue undismissed, or unstayed and in effect, for a period of 60 days (or such longer period, so long as Borrower shall be taking such action in good faith as shall be reasonably necessary to obtain the timely dismissal or stay of such proceeding or case); or an order for relief shall be entered in an involuntary case under any applicable Bankruptcy Law, against Borrower; or

 

(d)                                 a Change of Control shall occur,

 

then and in each and every case Lender, by notice in writing to Borrower, may terminate the commitment of Lender hereunder and/or declare the unpaid balance of the Loans and any other amounts payable hereunder to be forthwith due and payable, and thereupon such balance shall become so due and payable without presentation, protest or further demand or notice of any kind, all of which are hereby expressly waived; but in the case of Section 8(b) and Section 8(c) above, the commitments of Lender hereunder shall automatically terminate and the Loans and any other amounts payable hereunder shall forthwith be due and payable.

 

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9.                                      Notices.  All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

 

if to Borrower, to it at 625 Liberty Avenue, Suite 2000, Pittsburgh, Pennsylvania 15222, Attention of the Chief Financial Officer.

 

if to Lender, to it at to it at 625 Liberty Avenue, Suite 2000, Pittsburgh, Pennsylvania 15222, Attention of the Chief Financial Officer.

 

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other party hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

 

Lender or Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; but approval of such procedures may be limited to particular notices or communications.

 

10.                               Waivers; Amendments.  No failure or delay by Lender to exercise any right or power shall operate as a waiver thereof, nor shall any partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise of such right or power.  No waiver of any right or power of Lender in this Agreement shall be effective unless given in writing signed by Lender.  This Agreement may not be amended or modified except by a writing signed by the parties.

 

11.                               Expenses of Enforcement.  Borrower shall reimburse Lender on demand for any fees or other expenses of Lender in connection with the enforcement of this Agreement and the collection of the Loans and any other amounts due Lender hereunder.  Borrower agrees, to the fullest extent permitted by law, to indemnify and hold harmless Lender and each of its directors, officers, employees and agents (each an “Indemnified Party” ) from and against any and all claims, damages, liabilities and expenses (including without limitation fees and disbursements of counsel) arising out of or in connection with any investigation, litigation or proceeding (whether or not any Indemnified Party is a party) arising out of, related to or in connection with this Agreement, the Loans or any transaction in which any proceeds of all or any part of the Loans made hereunder are applied, but such indemnity shall not, as to any Indemnified Party, be available to the extent that such losses, claims, damages, liabilities or related expenses resulted from the gross negligence, unlawful conduct or willful misconduct of such Indemnified Party.

 

12.                               Successors and Assigns.  This Agreement shall be binding on and inure to the benefit of the parties and their respective successors and permitted assigns.  Borrower may not assign this Agreement or delegate any of its duties hereunder without the express written consent of Lender.

 

13.                               Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania.

 

14.                               Headings; Section References.  Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.  References to Sections in this Agreement are to Sections of this Agreement.

 

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15.                               Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

16.                               Entire Agreement.  This instrument and any other loan documents executed in connection herewith constitute the entire Agreement between Lender and Borrower relating to the subject matter hereof and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.  There are no unwritten oral agreements between the parties relating to the subject matter hereof.

 

17.                               No Third Party Beneficiaries.  The agreement of Lender to make Loans to Borrower on the terms and conditions set forth in this Agreement is solely for the benefit of Borrower and no other Person has any rights hereunder against Lender or with respect to the extension of credit contemplated hereby.

 

18.                               Special Exculpation.  No claim may be made by Borrower or any other Person against Lender or any of its directors, officers, employees, attorneys and agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or relating to this Agreement or any other financing document or the transactions contemplated hereby or thereby, or any act, omission or event occurring in connection therewith, and Borrower hereby waives, releases and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

 

19.                               Waiver of Jury Trial.  Each of Borrower and Lender hereby irrevocably waives, to the fullest extent permitted by law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

20.                               Severability.  If any term or provision of this Agreement shall be determined to be illegal or unenforceable, all other terms and provisions of this Agreement shall nevertheless remain effective and shall be enforced to the fullest extent permitted by applicable law.

 

21.                               Further Assurances. The parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement.

 

[Remainder of page intentionally left blank; signature page follows.]

 

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In witness whereof the parties have caused this Agreement to be executed by their proper officers on the day and year first above written.

 

	
 
    	
Equitrans   Midstream Corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas F. Karam
    
	
 
    	
Name: 
    	
Thomas F. Karam
    
	
 
    	
Title:
    	
President and Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
EQGP   Holdings, LP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
EQGP Services, LLC,
    
	
 
    	
 
    	
its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kirk R. Oliver
    
	
 
    	
Name: 
    	
Kirk R. Oliver
    
	
 
    	
Title: 
    	
Senior Vice President and   Chief Financial Officer
    

 

[Signature Page to Working Capital Loan Agreement]

 

 

Exhibit A

 

As used in the Agreement to which this Exhibit A is attached, the following terms have the meanings indicated:

 

“Applicable Rate” shall mean, on any day and with respect to Base Rate Loans or Eurodollar Rate Loans, as the case may be, the “Applicable Rate” as defined in the Revolving Credit Agreement with respect to “Base Rate Loans” or “Eurodollar Rate Loans” as defined therein (which may be based on the Lender’s credit ratings, the consolidated leverage ratio of the Lender or other relevant financial metric, as set forth in such definition, if applicable).

 

“Base Rate” shall mean the “Base Rate” as defined in the Revolving Credit Agreement.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Bankruptcy Law” means Title 11 of the United States Code entitled “Bankruptcy”, as amended from time to time and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Business Day” means any day that is not (i) a Saturday, Sunday or other day on which commercial banks in New York City, New York are authorized or required by law to remain closed; or (ii) a day on which banks are not open for dealings in United States dollar deposits in the London interbank market.

 

“Change of Control” means (1) 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 General Partner’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 General Partner; (ii) the dissolution or liquidation of the General Partner; (iii) the consolidation or merger of the General Partner with or into another Person pursuant to a transaction in which the outstanding membership interests of the General Partner are changed into or exchanged for cash, securities or other property, other than any such transaction where (a) the outstanding membership interests of the General Partner are changed into or exchanged for Voting Securities of the surviving entity or its parent and (b) Lender continues to own, directly or indirectly, not less than a majority of the outstanding Voting Securities of the surviving entity or its parent immediately after such transaction; and (iv) other than Lender and its affiliates, a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act) 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 membership interests of the General Partner, except in a merger or consolidation which would not constitute a Change of Control under clause (iii) above; and (2) any “Change of Control” as defined in the Revolving Credit Agreement.

 

“Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum; but with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable law.

 

A-4

 

“Eurodollar Rate” shall mean, with respect to any Interest Period, the “Fixed Period Eurodollar Rate” with respect to such Interest Period, as defined in the Revolving Credit Agreement.

 

“Eurodollar Rate Loan” means a Loan that bears interest at a rate of interest based on the Eurodollar Rate.

 

“General Partner” means EQGP Services, LLC, a Delaware limited liability company (including any permitted successors and assigns under the Agreement of Limited Partnership of Borrower).

 

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; but if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates and (b) as to any Base Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date.

 

“Interest Period” means, with respect to any Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by Borrower and notified to Lender in the Borrowing Notice; but:

 

(i)            any Interest Period which would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately preceding Business Day;

 

(ii)           any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to the provisions of clause (i) above, end on the last Business Day of the calendar month at the end of such Interest Period; and

 

(iii)          no Interest Period shall extend beyond the Maturity Date.

 

“Person” means a corporation, partnership, joint venture, trust, limited liability company, unincorporated organization or any other entity.

 

“Revolving Credit Agreement” at any time means the revolving credit agreement with the largest aggregate commitment amount to which Lender is then a party as the borrower, as amended, or if there is no such revolving credit agreement then in effect, the last revolving credit agreement to which Lender was a party as the borrower. As of the Effective Date, the Revolving Credit Agreement is the revolving credit agreement dated as of October 31, 2018 among, inter alia, Equitrans Midstream Corporation, PNC Bank, National Association, as Administrative Agent, and Lenders party thereto.

 

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

 

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

 

A-5

 

Person, or in the case of a limited partnership, a majority of the general partner interests in such limited partnership.

 

If any term defined by reference to the Revolving Credit Agreement is not defined in the Revolving Credit Agreement then in effect, then such term shall have the meaning of the term then defined in (or other applicable clause or provision of) the Revolving Credit Agreement that most closely approximates such term as defined in the Revolving Credit Agreement as in effect on the date hereof, as determined by Lender.

 

The Base Rate and Eurodollar Rate shall be reasonably determined by Lender and such determination shall be conclusive absent manifest error.  If the terms “Base Rate” or “Eurodollar Rate” as defined in the Revolving Credit Agreement, or any component or input thereof, shall be unavailable, or if Lender is otherwise unable to calculate or determine such rate, including due to any circumstance described in Section 3.03 (Inability to Determine Rates) of the Revolving Credit Agreement as in effect on the date hereof (or similar provision), then Borrower and Lender shall mutually cooperate to determine such rate or a replacement rate of interest that most closely effectuates the intention of the parties as of the date hereof, namely, that (other than in a circumstance in which the Default Rate applies) the interest rate applicable to Loans hereunder shall match the Revolving Credit Agreement.

 

A-6

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