Item 1.01 Entry into a Material Definitive Agreement.
Joinder Agreements to Convertible Preferred Unit Purchase Agreement
As previously disclosed, on March 13, 2019, EQM Midstream Partners, LP (EQM) entered into a Convertible Preferred Unit Purchase Agreement (the Purchase Agreement) with certain affiliates of BlackRock, Inc., GSO Capital Partners LP, Magnetar Financial LLC, The Carlyle Group and Foundation Infrastructure Partners (collectively, the Purchasers) to issue and sell in a private placement (the Private Placement) an aggregate of 22,554,851 Series A Perpetual Convertible Preferred Units representing limited partner interests in EQM (the Series A Preferred Units) for a cash purchase price of $48.77 per Series A Preferred Unit (the Series A Preferred Unit Purchase Price), resulting in total gross proceeds of approximately $1.10 billion.
In accordance with the Purchase Agreement, on March 18, 2019, EQM entered into Joinder Agreements to the Purchase Agreement (collectively, the Joinder Agreements) with certain additional institutional investors identified therein (each, an Additional Purchaser) and affiliates of Magnetar Financial LLC (such affiliates, together, Magnetar) pursuant to which EQM will issue and sell in the Private Placement an aggregate of 2,050,440 additional Series A Preferred Units (the Additional Series A Preferred Units) at the Series A Preferred Unit Purchase Price, resulting in additional gross proceeds of approximately $100 million.
Pursuant to the Joinder Agreements by and between EQM and each Additional Purchaser, each Additional Purchaser acknowledged and agreed that it will acquire its respective amount of Additional Series A Preferred Units subject to the terms and conditions of the Purchase Agreement and will be bound by and subject to the Purchase Agreement as if it were originally a Purchaser party thereto, and EQM acknowledged and agreed that each Additional Purchaser will be deemed a Purchaser under the Purchase Agreement and will be entitled to all of the rights and benefits, and subject to all of the obligations, of a Purchaser under the Purchase Agreement. Pursuant to the Joinder Agreements by and between EQM and Magnetar, Magnetar agreed to acquire its Additional Series A Preferred Units on the same terms and conditions as the initial Series A Preferred Units it agreed to purchase on March 13, 2019 pursuant to the Purchase Agreement except that Magnetar will not be entitled to receive the Structuring Fee (as such term is defined in the Purchase Agreement) with respect to the incremental Funding Obligation (as such term is defined in the Purchase Agreement) attributable to the Additional Series A Preferred Units. EQM also acknowledged and agreed that Magentar shall be deemed a Lead Purchaser (as such term is defined in the Purchase Agreement) with respect to Magnetars Additional Series A Preferred Units.
The rights and preferences of the Series A Preferred Units will be established in the Fourth Amended and Restated Agreement of Limited Partnership of EQM, which will be executed by EQGP Services, LLC, a Delaware limited liability company and the general partner of EQM, and certain limited partners of EQM in connection with the closing of the Private Placement (the Private Placement Closing). A description of the rights and preferences of the Series A Preferred Units and the conditions to the Private Placement Closing is included in Item 1.01 of the Current Report on Form 8-K filed by EQM on March 15, 2019, and such description is incorporated into this Item 1.01 by reference.
Pursuant to the terms of the Purchase Agreement, in connection with the Private Placement Closing, EQM has agreed to enter into a registration rights agreement in substantially the form attached as an exhibit to the Purchase Agreement pursuant to which, among other things, EQM will give the Additional Purchasers and Magnetar certain rights to require EQM to file and maintain one or more registration statements with respect to the resale of the Additional Series A Preferred Units and the common units representing limited partner interests in EQM (the Common Units) that are issuable upon conversion of the Additional Series A Preferred Units, and to require EQM to initiate underwritten offerings for the Common Units that are issuable upon conversion of the Additional Series A Preferred Units.
The foregoing description of the Joinder Agreements does not purport to be complete and is qualified in its entirety by reference to the text of the Joinder Agreements, which are filed as Exhibits 10.1-10.7 to this Current Report on Form 8-K (this Report) and are incorporated herein by reference.