UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01Entry into a Material Definitive Agreement.
Framework Agreement
On November 3, 2021, Evolve Transition Infrastructure LP (“Evolve”) entered into a Framework Agreement (the “Framework Agreement”) with HOBO Renewable Diesel LLC (“HOBO”). At the time of entry into the Framework Agreement there were no other material relationships between Evolve (or any of its affiliates) and HOBO. The Framework Agreement provides that, subject to the satisfaction of applicable conditions precedent, Evolve will fund certain development expenses of HOBO as HOBO seeks to develop, construct, own and operate renewable fuels facilities (each, a “Project”). HOBO’s initial Project is a 9,000 barrel per day (120 million gallons per year) renewable diesel production facility (the “Initial Project”). Pursuant to the Framework Agreement, all associated assets and rights related to each Project shall be held by a special purpose entity (“Project Company”), which shall initially be owned by HOBO.
Upon satisfaction of the Offtake Condition (as defined in the Framework Agreement), which includes the Project Company entering into offtake agreements for a specified portion of the Initial Project’s estimated capacity with entities meeting certain credit rating thresholds, and securing corresponding feedstock supplies, whether from the offtakers or pursuant to separate feedstock agreements reasonably satisfactory to Evolve, HOBO will send written notice thereof to Evolve. Such notice shall include (i) a certification that HOBO reasonably believes the Initial Project can achieve Commercial Operation (as defined in the Framework Agreement) within the requirements of the Offtake Condition, (ii) a detailed listing of the Qualified Development Costs (as defined in the Framework Agreement) incurred as of such date, (iii) a Qualified Project Model (as defined in the Framework Agreement) related to the Initial Project, and (iv) sufficient details and supporting materials for Evolve’s analysis and review thereof. If Evolve is reasonably satisfied with its review then it shall pay to HOBO the lesser of 50% of the Qualified Development Costs incurred as of such date and $3,000,000 (the “Initial Development Payment”).
Upon the payment of the Initial Development Payment, among other things, (i) Evolve will form a Delaware limited liability company (“HoldCo”), (ii) Evolve and HOBO will execute a limited liability company agreement for Holdco, a form of which is attached to the Framework Agreement as Exhibit A (“HoldCo LLC Agreement”), (iii) Evolve and HOBO will execute a contribution agreement, a form of which is attached to the Framework Agreement as Exhibit B, pursuant to which HOBO will contribute the membership interests in the applicable Project Company to HoldCo, and (iv) HOBO or one of its affiliates and the applicable Project Company shall execute a project management agreement incorporating the terms set forth in Exhibit C to the Framework Agreement.
Upon receipt of all Material Permits (as defined in the Framework Agreement) for the Initial Project and conclusion of the FEL2 Level Pre-Feasibility Study Report verifying the Initial Project can be completed in accordance with the Qualified Project Model, HOBO will send written notice thereof to Evolve. Such notice shall include certification of the same, a detailed listing of Qualified Development Costs, and sufficient supporting details and materials for Evolve’s review. If Evolve is reasonably satisfied with its review, it shall pay to HOBO (i) the lesser of 50% of the aggregate Qualified Development Costs incurred as of such date and $7,500,000 minus (ii) the amount of any Qualified Development Costs previously paid by Evolve (the “Interim Development Payment”).
Upon achievement of all Conditions Precedent (as defined in the Framework Agreement) for the Initial Project (other than Evolve Approval (as defined in the Framework Agreement)), HOBO will send written notice thereof to Evolve. Such notice shall include certification of the same, a schedule of the amount and timing of anticipated equity capital contributions necessary to build, complete and achieve Commercial Operations of the Initial Project, a detailed listing of the Qualified Development Costs incurred as of such date and sufficient supporting details and materials for Evolve’s review. If Evolve is reasonably satisfied with such review, then subject to the closing and initial funding of Project Financing (as defined in the Framework Agreement), which is required to cover a specified percentage of the anticipated procurement, construction, completion and commercialization costs of the Initial Project, Evolve shall pay to HOBO (i) the lesser of $15,000,000 and the aggregate Qualified Development Costs incurred as of such date, minus (ii) the aggregate amount of the Initial Development Payment, the Interim Development Payment and any other Qualified Development Costs previously paid by Evolve (the “Final Development Payment”). If the
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aggregate Qualified Development Costs are greater than $15,000,000, any excess will be deemed a capital contribution and Evolve shall cause HoldCo to issue an appropriate number of Class A Units (as defined in the HoldCo LLC Agreement) to HOBO.
For the Initial Project, HOBO shall also be entitled to payment of an Incentive Development Fee (as defined in the Framework Agreement), equal to 5% of the aggregate capital expenditures in the final capital expenditure budget included in the Final Qualified Project Model (as defined in the Framework Agreement), at least 50% of which shall be payable in Class A Units. Evolve may be required to issue common units representing limited partner interests in Evolve (“Common Units”) to HOBO if, at HOBO’s election, it chooses to receive payment of the Incentive Development Fee in the form of Common Units in lieu of cash or Class A Units. Half of the Incentive Development Fee shall be due at Financial Close (as defined in the Framework Agreement) and the remaining half shall be due upon the Initial Project achieving Commercial Operation. On or prior to Financial Close, HOBO shall also have the right to commit to purchase up to 10% of the total expected Class A Units in HoldCo.
At any time prior to Financial Close of the Initial Project, if the Offtake Condition has been achieved and Evolve either does not approve the Initial Project or will not be able to provide sufficient equity financing for the Initial Project, Evolve may deliver a Funding Termination Notice (as defined in the Framework Agreement). Upon delivery of a Funding Termination Notice, Stonepeak Partners LP or an affiliate thereof (“Stonepeak”) may elect to assume Evolve’s obligations under the Framework Agreement and Evolve will be released from its obligations thereunder. If Stonepeak does not assume Evolve’s obligations, then HOBO’s exclusive remedy shall be termination of exclusivity under the Framework Agreement, the right to conveyance of the membership interests of the Project Company that owns the Initial Project for $0 cash, and, subject to the satisfaction of certain conditions, the enforcement of Evolve’s obligation to pay aggregate Qualified Development Costs actually incurred by HOBO but not yet reimbursed prior to the delivery of the Funding Termination Notice subject to the applicable caps on such Qualified Development Costs for Conditions Precedent not yet achieved. If HOBO thereafter obtains debt or equity financing from a third party for the Initial Project, HOBO will reimburse Evolve for all prior cash payments made and any other out-of-pocket amounts actually spent, loaned or contributed by Evolve for the development of the Initial Project plus interest.
Following Financial Close, HOBO or one of its affiliates and the applicable Project Company will execute an operations and maintenance/asset management agreement incorporating the terms set forth in Exhibit D to the Framework Agreement, pursuant to which HOBO will provide operations and maintenance services to the Initial Project after Commercial Operation.
The Framework Agreement will be terminated upon the occurrence of, among other things, (i) Evolve’s investment of equity capital greater than or equal to $600,000,000 in Projects, (ii) Evolve’s transfer of 50% or more of its membership interests in a Project Company other than to an affiliate of Stonepeak, (iii) failure to reach Financial Close of the Initial Project within 24 months, or (iv) delivery of a Funding Termination Notice, if Stonepeak fails to assume Evolve’s obligations under the Framework Agreement.
The Framework Agreement also provides an exclusivity period for two years following Financial Close of the Initial Project. During such exclusivity period, subject to certain exceptions, HOBO will not direct or participate in any Projects with any third party or provide any development, construction or operation services or support any Project, other than the Initial Project or a Project that was proposed to Evolve and which Evolve failed to timely accept in accordance with the terms of the Framework Agreement.
The Framework Agreement also contains customary representations and warranties from each of Evolve and HOBO, information rights for Evolve with respect to any Projects, inspection rights for Evolve, drag-along rights for Evolve regarding the transfer of units of HoldCo or any future Project Holdco (as defined in the Framework Agreement), standard confidentiality provisions and a framework by which HOBO can originate and propose additional Projects for Evolve to approve and fund on terms similar to the Initial Project and subject to the same Conditions Precedent.
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Throughout this Current Report on Form 8-K we refer to the transactions described above or otherwise included in the Framework Agreement as the “HOBO Transaction.”
The foregoing description of the Framework Agreement does not purport to be complete and is qualified in its entirety by the full text of the Framework Agreement, a copy of which is filed as Exhibit 10.1 and incorporated into this Item 1.01 by reference.
Item 3.02Unregistered Sales of Equity Securities.
The disclosure in Item 5.02 regarding the issuance of the Inducement Awards and the LTIP Awards to each of the New Executives is incorporated by reference into this Item 3.02. The issuances of the Common Units subject to each of the Inducement Awards and the LTIP Awards (as such terms are defined in Item 5.02 below) are exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) thereof as a transaction by an issuer not involving a public offering.
Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Adoption of Inducement Plan
On November 3, 2021, the Board of Directors (the “Board”) of Evolve Transition Infrastructure GP LLC, the sole general partner of Evolve (the “General Partner”) adopted the Evolve Transition Infrastructure LP 2021 Equity Inducement Award Plan (the “Inducement Plan”). The Board also adopted a form of Inducement Award Agreement Relating to Restricted Units and reserved 14,100,000 Common Units for issuance pursuant to equity awards granted under the Inducement Plan.
The Inducement Plan was adopted without unitholder approval pursuant to Section 711 of the NYSE American Company Guide (the “Company Guide”). The purposes of the Inducement Plan is to further the long term stability and success of Evolve and its affiliates by providing a program to reward selected individuals hired as employees of Evolve, the General Partner and their affiliates with grants of inducement awards by affording such individuals an opportunity to acquire a proprietary interest in Evolve. In accordance with Section 711(a) of the Company Guide, inducement awards may only be issued to an individuals who were not previously employees or non-employee directors of the General Partner, or following a bona fide period of non-employment, as an inducement material to entering into employment with the General Partner or, to the extent permitted by Section 711(c) of the Company Guide, in connection with a merger or acquisition.
The Inducement Plan is administered by the Board and its terms are substantially similar to Evolve’s Long-Term Incentive Plan (the “LTIP”).
The foregoing description of the Inducement Plan does not purport to be complete and is qualified in its entirety by the full text of each of the Inducement Plan, a copy of which is filed as Exhibit 10.2 and incorporated into this Item 5.02 by reference.
Resignation of Current Chief Executive Officer
On November 4, 2021, Evolve announced that, on November 3, 2021, Gerald F. Willinger resigned from his positions as Chief Executive Officer of the General Partner and a member of the Board, to be effective November 30, 2021 as of such time that is immediately prior to December 1, 2021 (the “Effective Time”) with a transition period from November 4, 2021 through the Effective Time. Mr. Willinger’s resignation did not result from a disagreement with Evolve or the General Partner or any matter relating to the operations, policies or practices of Evolve or the General Partner.
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In connection with Mr. Willinger’s departure, on November 3, 2021, the General Partner and Mr. Willinger entered into a Separation and Transition Agreement (the “Transition Agreement”). The Transition Agreement was approved by the Board on November 3, 2021.
Pursuant to the Transition Agreement, Mr. Willinger is entitled to (i) payment of his current base salary earned through November 30, 2021, (ii) payment of any then-outstanding expense reimbursement amounts, and (iii) payment of the Special Separation Compensation (as defined in the Transition Agreement), which includes (x) the retention payments described in, and payable at the times specified under, the Amended and Restated Executive Services Agreement for Realignment between Mr. Willinger, the General Partner and Evolve, dated April 15, 2021 (the “Restated Agreement”), and (y) the acceleration of the unvested portion of any outstanding awards issued to Mr. Willinger under the LTIP, subject to Mr. Willinger’s continued compliance with certain lock-up and tax withholding reimbursement obligations. Additionally, payment of the Special Separation Compensation is conditioned on, among other things, Mr. Willinger’s execution, delivery and non-revocation of the release attached as Exhibit 2 to the Transition Agreement and continued compliance with the covenants and other obligations under the Transition Agreement and under the Restated Agreement, including restrictive covenants with respect to confidentiality, mutual non-disparagement, non-solicitation and non-competition, among others.
The foregoing description of the Transition Agreement does not purport to be complete and is qualified in its entirety by the full text of each of the Transition Agreement, a copy of which is filed as Exhibit 10.3 and incorporated into this Item 5.02 by reference.
Appointment of New Director
On November 3, 2021, as a result of the resignation of Mr. Willinger and in connection with his appointment as the incoming Chief Executive Officer of the General Partner and the HOBO Transaction, Randall Gibbs was appointed to serve as a director on the Board, effective December 1, 2021. As an employee of the General Partner, Mr. Gibbs will not receive any compensation in connection with his service on the Board. Mr. Gibbs is not currently expected to serve on any committees of the Board. Mr. Gibbs has forty years’ experience in the energy industry, with the last twenty years in energy infrastructure development and operations across the broad energy spectrum, and brings considerable operating and management experience to the Board.
Appointment of New Principal Executive Officer; Appointment of New Presidents
On November 3, 2021, in connection with the HOBO Transaction, the Board appointed Randall Gibbs as Chief Executive Officer of the General Partner, Mike Keuss as the President and Chief Operating Officer of the General Partner and Jonathan Hartigan as the President and Chief Investment Officer of the General Partner, with each such appointment becoming effective on December 1, 2021 (the “New Executives”). Prior to December 1, 2021, each of Messrs. Gibbs, Keuss and Hartigan will serve as employees of the General Partner. The General Partner entered into the Executive Agreements (as defined below) with each of the New Executives, which are described in more detail below under the header “Executive Services Agreements” in this Item 5.02. When each New Executive transitions into his executive officer role with the General Partner on December 1, 2021, the HOBO Transaction will be considered a related party transaction. Each of Messrs. Gibbs, Keuss and Hartigan has a substantial interest in the HOBO Transaction due to their ownership of approximately 45.25%, 45.25% and 9.5%, respectively, of HOBO. As a result, in connection with the potential payments of the Initial Development Payment, Interim Development Payment, Final Development Payment and Incentive Development Fee in connection with the Initial Project, each of Messrs. Gibbs, Keuss and Hartigan would receive an aggregate of approximately 45.25%, 45.25% and 9.5%, respectively, of each such payment. Additionally, all or part of the cash portion of the Incentive Development Fee may be utilized to purchase Class A Units. As a result, HOBO may choose to acquire additional interests in the Initial Project as a result of ownership of such Class A Units. Any increase in HOBO’s ownership of Class A Units would increase each of Messrs. Gibbs, Keuss and Hartigan’s indirect interest in HoldCo and could increase the value of their interest in the HOBO Transaction.
Mr. Gibbs, 69, brings to the General Partner forty years’ experience in the energy industry, with twenty years on the energy commodity trading and marketing side as a founding partner of Texport Oil LP, a trader and gasoline
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blender focused on refined products distribution in the Northeast United States, and Canada including New York Harbor, and the last twenty years in energy infrastructure development and operations across the broad energy spectrum. From August 2019 to present, Mr. Gibbs has served as a co-founder and Chief Executive Officer of HOBO, a privately-owned energy infrastructure developer, where Mr. Gibbs co-manages the company and its business development activities with a specific focus on corporate strategy, commercial agreements and structured finance including development of the relationship with Stonepeak and Evolve. Prior to his work with HOBO, beginning in 2001, Mr. Gibbs was sole owner and Chief Executive Officer of Multifuels LP (“Multifuels”), a privately-owned energy infrastructure developer, which Mr. Gibbs founded. Multifuels developed pipelines, terminals, natural gas storage and various forms of renewables under Mr. Gibbs’ direction, including Freebird Natural Gas Storage (“Freebird”) a depleted reservoir FERC certified storage facility connected to the Tennessee Gas Pipeline (500 Leg) by a lateral pipeline entirely developed, constructed and operated by Multifuels in partnership with private equity sponsorship in 2006 until its sale in 2008. More recently, Multifuels, in a combination of transactions, developed, acquired, reconfigured, constructed and operated approximately 150 miles of natural gas pipeline laterals in central Texas primarily serving a large public utility and collectively operating as Multifuels Midstream Group LLC. Multifuels and its private equity partner sold this business in a transaction with Macquarie Principal Finance, Inc. Mr. Gibbs is also presently the majority owner of Victory Solar LLC, a Texas based solar sales and installation company operating in Texas, Florida, Virginia and North Carolina. As described below, Mr. Gibbs received an Inducement Award and an LTIP Award in connection with acceptance of employment with the General Partner.
Mr. Keuss, 52, has extensive experience in management, manufacturing, trading and business development in the renewable fuels, chemical and petroleum refining industries. From August 2019 to present, Mr. Keuss has served as a co-founder and President of HOBO, where Mr. Keuss co-founded and co-manages the company and its business development activities and utilizes his extensive experience in marketing, trading and engineering to further the development of multiple potential renewable diesel and sustainable aviation fuels projects. From June 2018 to August 2019, Mr. Keuss served as a founder, officer and director of Aristide Energy Corporation, a privately-owned energy trading company (“Aristide”). At Aristide, Mr. Keuss developed a renewable fuels trading company in Houston with a complimentary recycling manufacturing facility and engineering services division. From 2011 to 2018, Mr. Keuss served as Vice President of Business Development for Kolmar Group, where he developed a biodiesel business platform that traded and blended biodiesel. Over the course of 2½ years, Mr. Keuss also managed and engineered the transformation of the American Green Fuels biodiesel facility from a soy-only operation to a multi-feedstock operation as of early 2018. From 2000 to 2010, Mr. Keuss worked for LyondellBasell, a multinational publicly traded corporation, and Musket Corporation, a privately held company, where he held various marketing roles, primarily in the physical trading of gasoline, diesel and natural gas, and a short period as a business analyst. From 1991 to 1999, Mr. Keuss held various engineering, operations and management roles for crude refining operations for Valero Energy and Mobil Corporation. As described below, Mr. Keuss received an Inducement Award and an LTIP Award in connection with acceptance of employment with the General Partner.
Mr. Hartigan, 43, has more than 20 years’ experience in capital raising, M&A, strategy, finance and accounting, focused on the development of and investment in projects in the energy infrastructure space. From June 2020 to present, Mr. Hartigan has served as Executive Vice President and Chief Financial Officer of HOBO, where Mr. Hartigan directs capital raising, M&A, and commercial and marketing activities. Prior to that, from May 2019 to January 2020, Mr. Hartigan served as Senior Vice President, Strategy and Analytics for SemGroup Corporation, a publicly-traded company with pipelines, processing plants, refinery-connected storage facilities and deep-water marine terminals with import and export capabilities. At SemGroup Corporation, Mr. Hartigan led corporate development, deal structuring and corporate strategy resulting in the sale of SemGroup to Energy Transfer. After the transaction closed, Mr. Hartigan led the post-merger integration efforts. From December 2016 to March 2019, Mr. Hartigan served as Senior Vice President, Corporate Development and Capital Markets for Sunnova Energy International Inc. (“Sunnova”), a leader in residential solar, battery storage and system protection services. At Sunnova, Mr. Hartigan raised equity and debt at the corporate level as well as project finance and tax equity at the asset level. From December 2014 to November 2016, Mr. Hartigan served as a Senior Vice President for GE Energy Financial Services focusing on energy investments in the midstream industry. From December 2011 to November 2014, Mr. Hartigan was a Vice President/Associate with Alinda Capital Partners (“Alinda”), an infrastructure investment firm. At Alinda, Mr. Hartigan managed certain of Alinda’s portfolio companies, and led capital market transactions, follow-on mergers and acquisitions, strategic reviews, and greenfield expansion projects executed under
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long-term contracts. Previously, Mr. Hartigan developed renewable power and midstream projects at Devonshire Investors (an affiliate of Fidelity Investments) and began his career at Ernst & Young in their Transaction Advisory Services Group. As described below, Mr. Hartigan received an Inducement Award and an LTIP Award in connection with acceptance of employment with the General Partner.
Executive Services Agreements
On November 3, 2021, the General Partner entered into Executive Services Agreements (each, an “Executive Agreement” and, collectively, the “Executive Agreements”) with each of the New Executives. The Executive Agreements were approved by the Board on November 3, 2021.
The Executive Agreements provide that each of the New Executives will be hired as an employee of the General Partner as of November 3, 2021, and will transition into an executive officer role with the General Partner effective as of December 1, 2021. Mr. Gibbs will transition into the role of the Chief Executive Officer of the General Partner, Mr. Keuss will transition into the role of the President and Chief Operating Officer of the General Partner and Mr. Hartigan will transition into the role of the President and Chief Investment Officer of the General Partner.
Each respective Executive Agreement provides for: (i) an annual base salary (Mr. Gibbs: $600,000, Mr. Keuss: $600,000, and Mr. Hartigan: $375,000), (ii) eligibility to receive an annual cash bonus equal to an amount between 100% and 150% of such New Executive’s base salary based on a qualitative assessment of financial and individual performance achievements, as determined in the Board’s sole discretion, (iii) a grant of Common Units as an inducement material to entering into employment with the General Partner pursuant to the Evolve Transition Infrastructure 2021 Equity Inducement Award Plan (Mr. Gibbs: 5,755,056 Common Units, Mr. Keuss: 5,755,056 Common Units, and Mr. Hartigan: 2,589,888 Common Units) (the “Inducement Awards”), (iv) eligibility to receive awards under the LTIP, (v) participation in applicable retirement plans, health and welfare plans and disability insurance plans of the General Partner and Evolve, (vi) unlimited paid vacation to be used in each New Executive’s reasonable discretion, and (vii) reimbursement of certain reasonable out-of-pocket business expenses.
Under each Executive Agreement, each New Executive will be entitled the payments described below upon the occurrence of certain termination of employment or related change of control events. A termination of employment by General Partner for Cause or by such New Executive without Good Reason (as each term is defined in such Executive Agreement) will result in payment of any accrued but unpaid then-current base salary and any unpaid expense reimbursements (collectively, “Accrued Obligations”). A termination of employment upon such New Executive’s death or Disability (as defined in the Executive Agreements) will result in (i) payment of any Accrued Obligations and any then-unpaid Deferred Initial Bonus Amounts (as defined in such Employment Agreement) (“Unpaid Deferred Bonus”), and (ii) if the Offtake Condition is achieved prior to the termination date for such New Executive, payment of any unpaid annual bonus for the year prior to the year of termination (“Unpaid Prior-Year Bonus”) and a pro-rated annual bonus for the year of termination (the “Pro-Rated Current Bonus”). A termination of employment by General Partner without Cause or by such New Executive for Good Reason will result in (x) payment of any Accrued Obligations and Unpaid Deferred Bonus, (y) if the Offtake Condition (as defined in the Framework Agreement) is achieved prior to the termination date for such New Executive, (A) payment of an amount equal to 100% of such New Executive’s then-current base salary, plus 100% of the largest annual bonus paid to (or due to be paid to) such New Executive for the year in which the termination occurs or any of the previous three calendar year periods, (B) if such New Executive timely elects, payment of the COBRA premiums for such executive and such executive’s eligible dependents during the COBRA continuation period, and (C) payment of any Unpaid Prior-Year Bonus and the Pro-Rated Current Year Bonus (payments in (y)(A)-(C), “Severance Payments”); provided that, in the event such termination of employment occurs during the period beginning 60 days prior to and ending two years immediately following a Change in Control (as defined in the Executive Agreements), then the payments provided under (x), (y) and (z) above will be made, except that references to 100% in (y)(A) will be 200%. As a condition to receive any Severance Payments, such New Executive must sign and return a release acceptable to the General Partner. Treatment of long-term incentive compensation awards in connection with any termination described above shall all be governed by the applicable award agreement. Following any termination, such New Executive will be subject to a standard one-year non-compete covenant.
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The Executive Agreements also contain standard covenants with respect to non-disparagement and confidentiality and an agreement by the General Partner to provide directors and officers insurance during the term of the Executive Agreements and for a period of six years following termination.
The foregoing description of the Executive Agreements does not purport to be complete and is qualified in its entirety by the full text of each of the Executive Agreements, copies of which are filed as Exhibits 10.4, 10.5 and 10.6 and incorporated into this Item 5.02 by reference.
Inducement Awards
On November 3, 2021 (the “Inducement Grant Date”), in connection with the hiring of the New Executives, Inducement Awards were issued to the New Executives as an inducement material to each of the New Executives becoming employees of the General Partner in accordance with Section 711(a) of the Company Guide. The Inducement Awards were approved by the Board on November 3, 2021.
The Inducement Awards vest in three separate tranches if certain performance conditions are satisfied, subject to the recipient’s continued qualification as an Eligible Person (as defined in the Inducement Plan) until the time each tranche vests (or if applicable, until the time of the recipient’s termination without cause or death). With respect to each tranche there is a primary vesting schedule which is tied to satisfaction of certain conditions set forth in the Framework Agreement and an alternative vesting schedule that may apply upon satisfaction of certain performance metrics relating to total unitholder return.
The first tranche is comprised of 3,000,000 Restricted Units (as defined in the Inducement Plan) (1,224,480 Restricted Units for each of Messrs. Gibbs and Keuss and 551,040 Restricted Units for Mr. Hartigan). The performance goal under the first tranche will be met upon the occurrence of the Offtake Condition within seven years of the Inducement Grant Date, or alternatively, upon Evolve’s achievement of a total unitholder return of 150% for 60 consecutive days during the period commencing on the Inducement Grant Date and ending on December 31, 2023. The second tranche is comprised of 5,550,000 Restricted Units (2,265,288 Restricted Units for each of Messrs. Gibbs and Keuss and 1,019,424 Restricted Units for Mr. Hartigan). The performance goal under the second tranche will be met upon the occurrence of Financial Close within seven years of the Inducement Grant Date, or alternatively, upon Evolve’s achievement of a total unitholder return of 200% for 60 consecutive days during the period commencing on January 1, 2023 and ending on December 31, 2024. The third tranche is also comprised of 5,550,000 Restricted Units (2,265,288 Restricted Units for each of Messrs. Gibbs and Keuss and 1,019,424 Restricted Units for Mr. Hartigan). The performance goal under the third tranche will be met upon the occurrence of Commercial Operation within seven years of the Inducement Grant Date, or alternatively, upon Evolve’s achievement of a total unitholder return of 250% for 60 consecutive days during the period commencing on January 1, 2024 and ending on December 31, 2025.
The foregoing description of the Inducement Awards does not purport to be complete and is qualified in its entirety by the full text of each of the award agreements, copies of which are filed as Exhibits 10.7, 10.8 and 10.9 and are incorporated into this Item 5.02 by reference.
LTIP Awards
On November 3, 2021 (the “LTIP Grant Date”), in connection with the hiring of the New Executives, awards under the LTIP were issued to the New Executives (the “LTIP Awards”). The LTIP Awards were approved by the Board on November 3, 2021.
The LTIP Awards vest in three separate tranches if certain performance conditions are satisfied, subject to the recipient’s continued qualification as an Eligible Person (as defined in the LTIP) until the time each tranche vests (or if applicable, until the time of the recipient’s termination without cause or death). With respect to each tranche there is a primary vesting schedule which is tied to satisfaction of the Offtake Condition set forth in the Framework Agreement and an alternative vesting schedule that may apply upon satisfaction of certain performance metrics relating to total unitholder return. The performance goal under all tranches will be met upon the occurrence of the Offtake Condition within seven years of the LTIP Grant Date; provided that, if the Offtake Condition occurs prior to
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November 3, 2022, then the second tranche will vest as of November 3, 2022, and similarly, if the Offtake Condition occurs prior to November 3, 2023, then the third tranche will vest as of November 3, 2022. Alternatively, the performance goal will be met upon Evolve’s achievement of a total unitholder return, (i) with respect to the first tranche, of 150% for 60 consecutive days during the period commencing on the LTIP Grant Date and ending on December 31, 2023, (ii) with respect to the second tranche, of 200% for 60 consecutive days during the period commencing on January 1, 2023 and ending on December 31, 2024, and (iii) with respect to the third tranche, of 250% for 60 consecutive days during the period commencing on January 1, 2024 and ending on December 31, 2025.
The foregoing description of the LTIP Awards does not purport to be complete and is qualified in its entirety by the full text of each of the award agreements, copies of which are filed as Exhibits 10.10, 10.11 and 10.12 and are incorporated into this Item 5.02 by reference.
Item 7.01Regulation FD Disclosure.
On November 4, 2021, Evolve issued a press release announcing its entrance into the Framework Agreement. A copy of the press release is included herewith as Exhibit 99.1 and incorporated into this Item 7.01 by reference.
Also on November 4, 2021, Evolve issued a press release announcing the Inducement Awards. A copy of the press release is included herewith as Exhibit 99.2 and incorporated into this Item 7.01 by reference.
The information included in this Item 7.01 and in Exhibits 99.1 and 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit No. | Exhibit | |
10.1* | ||
10.2 | ||
10.3 | ||
10.4 | ||
10.5 | ||
10.6 | ||
10.7 | ||
10.8 | ||
10.9 | ||
10.10 |
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10.11 | |||
10.12 | |||
99.1 | |||
99.2 | |||
______________
* Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item 601(b)(10) of Regulation S-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
EVOLVE TRANSITION INFRASTRUCTURE LP | |||||||||||||
By: Evolve Transition Infrastructure GP LLC, | |||||||||||||
Date: November 9, 2021 | By: | /s/ Charles C. Ward | |||||||||||
Charles C. Ward | |||||||||||||
Chief Financial Officer and Secretary |
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Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item 601(b)(10) of Regulation S-K. Such excluded information is both not material and is the type that the registrant treats as private or confidential.
FRAMEWORK AGREEMENT
BY AND BETWEEN
HOBO RENEWABLE DIESEL LLC
AND
EVOLVE TRANSITION INFRASTRUCTURE LP
Dated as of November 3, 2021
EXHIBITS
Exhibit AForm of Limited Liability Company Agreement
Exhibit BForm of Contribution Agreement
Exhibit C | PM Agreement Term Sheet |
Exhibit D | O&M Agreement Term Sheet |
SCHEDULES
Schedule INecessary Consents
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This Framework Agreement (this “Agreement”) is made and entered into as of November 3, 2021 by and between HOBO Renewable Diesel LLC, a Delaware limited liability company (“HOBO”), and Evolve Transition Infrastructure LP, a Delaware limited partnership (“Evolve”). Each of HOBO and Evolve are sometimes referred to herein individually as a “Party” and, together, the “Parties”.
RECITALS
WHEREAS, HOBO is in the business of developing, constructing, owning and operating renewable fuels facilities (each, a “Project”), and Evolve is in the business of acquiring, developing and owning infrastructure critical to the transition of energy supply to lower carbon sources;
WHEREAS, HOBO has identified an initial Project to be a 9,000 barrel a day (120 million gallons annually) renewable diesel production facility located in [***] (the “Initial Project”);
WHEREAS, subject to the conditions set forth herein, Evolve is willing to fund certain development expenses of HOBO as it seeks to develop the Initial Project in a manner that would satisfy certain conditions described herein and, following the satisfaction of such conditions, Evolve would form a Delaware limited liability company to hold a Project Company which would in turn develop, construct, own and operate the Initial Project;
WHEREAS, subject to the conditions set forth herein, Evolve would form Delaware limited liability companies to each hold a Project Company which would in turn develop, construct, own and operate Subsequent Projects; and
WHEREAS, the Parties desire, by entering into this Agreement, to set forth the terms pursuant to which HOBO would seek to develop the Initial Project and Subsequent Projects and Evolve would invest therein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of where are hereby acknowledged, the Parties hereby agree as follows:
“AAA” has the meaning set forth in Section 8.1(a).
“Acceptance Notice” has the meaning set forth in Section 3.1(b).
“Accounting Expert” has the meaning set forth in Section 8.2(b).
“Affiliate” means, with respect to a Person, any other Person controlling, controlled by or under common control with the first Person. As used in this definition, the term “control,” “controlling” or “controlled by” shall mean the possession, directly or indirectly, of the power either to (a) vote more than 50% or more of the securities or interests having ordinary voting power for the election of directors (or
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other comparable controlling body) of such Person or (b) direct or cause the direction of the actions, management or policies of such Person, in each case, whether through the ownership of voting securities or interests, by contract or otherwise.
“Agreement” has the meaning set forth in the first paragraph hereof and includes all Schedules and Exhibits attached hereto.
“Arbitration Parties” has the meaning set forth in Section 8.1(a).
“Bolt-On” has the meaning set forth in Section 2.8(b).
“Business Day” has the meaning set forth in the Form LLC Agreement
“Class A Member” has the meaning set forth in the Form LLC Agreement.
“Class A Units” has the meaning set forth in the Form LLC Agreement.
“Class B Member” has the meaning set forth in the Form LLC Agreement.
“Class B Units” has the meaning set forth in the Form LLC Agreement.
“Commercial Operation” means, with respect to a Project, the Project has achieved a stage of completion such that:
“Conditions Precedent” means the following conditions:
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“Construction Contract” means, with respect to a Project, an agreement between the Project Company and one or more Construction Counterparties pursuant to which such Construction Counterparties agree to provide engineering, procurement and/or construction services with respect to such Project.
“Construction Counterparty” means, with respect to a Construction Contract, any one or more Persons party to such Construction Contract that agree thereunder to provide the engineering, procurement and/or construction services contemplated thereunder. For the avoidance of doubt, the engineering, procurement and/or construction services may be provided by multiple Construction Counterparties, including HOBO.
“Contribution Agreement” has the meaning set forth in Section 2.4(e).
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“Development Cost Reimbursement” shall be each of (a) the Initial Development Payment, (b) the Interim Development Payment and (c) the Final Development Payment.
“Dispute” has the meaning set forth in Section 8.1(a).
“Dragged Company” has the meaning in Section 4.5(a).
“Equity Financing” means, with respect to a Project, equity capital contributions in an amount, when taking into account the projected amount of the Project Financing, as are reasonably expected to be sufficient to build, complete and achieve Commercial Operation of such Project.
“Evolve” has the meaning set forth in the first paragraph hereof.
“Evolve Approval” has the meaning set forth in clause (i) of the definition of “Conditions Precedent”.
“Excluded Entities” has the meaning set forth in Section 5.5.
“Final Development Payment” has the meaning in Section 2.6(b).
“Final Qualified Project Model” means the Qualified Project Model mutually agreed between the Parties and prepared at the time of (or shortly before) the satisfaction of the last of the other Conditions Precedent.
“Financial Close” means, with respect to any Project, the day on which the Conditions Precedent have been satisfied or waived by Evolve; provided that, if (a) the Initial Development Payment has been made, (b) Evolve has not conveyed the Project Company to HOBO following HOBO’s exercise of its right to such conveyance pursuant to Section 2.7, (c) an official “notice to proceed” is issued by the Project Company and (d) construction of the Project has commenced, then Financial Close shall be deemed to have been achieved.
“Form LLC Agreement” means the limited liability company agreement to be entered into between the Parties in the form of Exhibit A attached hereto, as provided in Section 2.4(b) and Section 3.1(c)(ii).
“Funding Termination Notice” means a written notice from Evolve delivered to HOBO electing to terminate Evolve’s commitment to reimburse Qualified Development Costs from and after the date of such notice.
“Governmental Authority” means any (a) national, federal, provincial, territorial, state, regional, municipal, local or other government, (b) governmental or public department, court, tribunal, arbitral body, statutory body, commission, board, bureau or agency, (c) self-regulatory organization, regulatory authority, administrative tribunal or authority, (d) subdivision, agent, commission, board or authority of any of the foregoing or (e) quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing.
“HOBO” has the meaning set forth in the recitals hereto.
“Incentive Development Fee” has the meaning set forth in Section 2.8(a).
“Independent Engineer” means an independent engineer mutually acceptable to HOBO and Evolve.
“Initial Development Payment” has the meaning set forth in Section 2.3(b).
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“Initial Project” has the meaning set forth in the Recitals.
“Initial Project Contribution Date” has the meaning set forth Section 2.4(c).
“Interim Development Payment” has the meaning set forth in Section 2.5(b).
“Investment Grade” means a credit rating of at least “BBB-” from S&P, and at least “Baa3” from Moody’s.
“Law” means (a) all applicable laws, regulations, statutes, codes, rules, Permits, licenses, certifications, decrees or standards imposed by any Governmental Authority and (b) all applicable Orders, rulings, assessments, awards, subpoenas, verdicts, settlements or findings from any Governmental Authority.
“Material Permits” means, with respect to a Project, all material Permits reasonably required for the initial Commercial Operation of such Project, including those Permits needed to commence and conduct the construction of such Project, excluding those administrative Permits not customarily secured prior to the commencement of construction.
“O&M Agreement” has the meaning set forth in Section 2.6(d).
“Offtake Agreement” means, with respect to a Project, a binding agreement (or several related agreements) pursuant to which one or more Persons agree to purchase the renewable fuels (or the related “conversion services”) produced by such Project from the Project Company in a tolling structure or which otherwise results in a similar outcome as contemplated in the definition of “Offtake Condition”.
“Offtake Condition” means (a) the Project Company having entered into one or more Offtake Agreement(s) for the purchase of goods or services comprising (i) [***] of the Project’s estimated capacity subject to Offtake Agreement(s) with Person(s) with [***] credit rating or supported by comparable credit support and (ii) [***], in the aggregate, of the Project’s estimated capacity, in each case, at prices and for quantities materially consistent with the base case of the Qualified Project Model, and which are not subject to conditions precedent to the counterparties’ obligations thereunder other than conditions that would be satisfied by the satisfaction of the other Conditions Precedent and the achievement of Commercial Operation of the applicable Project, and (b) [***].
“Order” means any writ, judgment, decree, injunction or similar order of any Governmental Authority (in each such case whether preliminary or final).
“Party” has the meaning set forth in the first paragraph hereof.
“Payment Dispute” means a reasonable and good faith dispute by Evolve related to any costs or expenses set forth in an invoice.
“Permits” means all licenses, permits, Orders, consents, approvals, registrations, authorizations, qualifications, plans, and filings required under or issued pursuant to any Law or by any Governmental Authority or non-governmental self-regulatory organizations.
“Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, limited liability company, unincorporated organization, Governmental Authority or any other form of entity or status recognized, under Law, as a separate legal person.
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“PM Agreement” has the meaning set forth in Section 2.4(f).
“Project” has the meaning set forth in the Recitals.
“Project Company” means a special purpose entity that owns a Project and all associated assets and rights and no unrelated assets, rights or liabilities.
“Project Documents” means the PM Agreement and the O&M Agreement.
“Project Financing” has the meaning set forth in clause (f) of the definition of “Conditions Precedent”.
“Project HoldCo” means a Delaware limited liability company to be formed as contemplated by Section 2.4(a).
“Project Proposal” has the meaning set forth in Section 3.1(a).
“Project Terms” means, with respect to any Project, the financial and operating attributes of such Project, including, with respect to such Project, an estimated timeline for achieving each of the Conditions Precedent for such Project, a detailed monthly budget, including a good faith estimate of the costs and expenses of development, construction, operation and maintenance, th
e contemplated Project Financing, the material financial terms of an investment in a Project, including the cost and rates of return, and such other information as Evolve may reasonably request.
“Qualified Development Cost” means, with respect to a Project, the documented internal and third-party costs and expenses incurred on or prior to Financial Close (or, if applicable, on or prior to delivery of a Funding Termination Notice or termination of this Agreement), which shall, for the avoidance of doubt, include (i) general and administrative expenses of HOBO in an amount equal to $3,000,000 for employee salaries and benefits (including accrued salaries for the founders of HOBO), (ii) any transfer taxes required to be paid by HOBO pursuant to the Contribution Agreement in connection with the contribution of the Initial Project to a Project HoldCo thereunder and (iii) the fees and expenses of counsel incurred in connection with the negotiation and execution of this Agreement and the other transaction documents contemplated hereby, and that are either (a) reasonably incurred by HOBO in the development of the Project, (b) described in the financial models previously shared by HOBO with Evolve or (c) approved in writing by Evolve prior to their incurrence.
“Qualified Project Model” means a financial model in Excel to be provided to Evolve under Section 2.3(a), Section 3.1(a) and Section 5.3(b), as applicable, prepared by HOBO in good faith and based on reasonable assumptions reflecting all projected costs and revenues of the development (after the first funding of development costs by Evolve), construction and operation of such Project through the term of the executed Offtake Agreements, and reflecting a pre-tax internal rate of return (using the XIRR function in Excel) which is materially consistent in form and content with the model provided by HOBO to Evolve prior to the date hereof.
“Stonepeak” means Stonepeak Partners LP, a Delaware limited partnership, or an Affiliate thereof.
“Subsequent Project” has the meaning set forth in Section 3.1(b).
“Target Company” has the meaning in Section 4.5(a).
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“Term” means the period from the date hereof to and including the date on which this Agreement is terminated in accordance with Section 7.1(a).
“Third Party” means any Person other than Evolve, HOBO and their respective Affiliates.
“Transfer” has the meaning set forth in the Form LLC Agreement.
“Unit” has the meaning set forth in the Form LLC Agreement.
Unless otherwise expressly specified in this Agreement, the provisions of this Article II shall apply only to the Initial Project.
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satisfy its obligations under this Section 2.1, Evolve’s sole remedy with respect thereto shall be limited to the termination of this Agreement and Evolve shall have no right to any damages or claims with respect thereto.
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Initial Project, Evolve shall deliver to the applicable Project Company or Project HoldCo a commercially reasonable equity commitment letter, in customary form for a private equity contribution commitment, pursuant to which Evolve will commit to contribute equity capital to such Project Company in accordance with and subject to the achievement of the Conditions Precedent and other applicable provisions of this Agreement.
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information is required to be disclosed. Furthermore, the Parties acknowledge that Evolve’s, Stonepeak’s and their respective Affiliates’ employees, directors, officers and principals serve, or may in the future serve, as directors of direct or indirect portfolio companies (which will be deemed to include entities in which Evolve, Stonepeak or their respective Affiliates own equity interests) of investment funds advised or managed by Evolve, Stonepeak or any of their respective Affiliates or any of their respective direct or indirect investors (collectively, the “Excluded Entities”), and that such employees, directors, officers, principals and Excluded Entities will not be deemed to have used confidential information solely due to the dual roles of any such employee, director, officer or principal or the use by such employee, director, officer or principal of general industry information that is confidential information.
Each Party hereby represents and warrants to such other Party, as of the date hereof, as follows:
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such Party from performing its obligations hereunder or that would otherwise conflict with this Agreement and (b) have not disclosed to the other Party or such other Party’s Affiliates any confidential information of others (including any previous employer), regardless of whether such Party or such individual is prohibited from doing so by any other agreement with any Third Party.
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If to HOBO, to:
HOBO Renewable Diesel LLC
1300 Post Oak Blvd., Suite 1350
Houston, Texas 77056
Attention: Mike Keuss
Title: President
Email: mkeuss@hobord.com
with a copy to (which shall not constitute notice):
King & Spalding LLP
1100 Louisiana Street, Suite 4100
Houston, Texas 77002
Attention: Stuart R. Zisman
Email: szisman@kslaw.com
If to Evolve, to:
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Evolve Transition Infrastructure LP
c/o Stonepeak Infrastructure Partners
600 Travis Street, Suite 6290
Houston, Texas 77002
Attn: Jack Howell
Email: Howell@stonepeakpartners.com
with a copy to:
Stonepeak Partners LP
55 Hudson Yards
550 W. 34th Street, 48th Floor
New York, New York 10001
Attention: Michael Bricker and Adrienne Saunders
Email: bricker@stonepeakpartners.com; legalandcompliance@stonepeakpartners.com
with a copy to (which shall not constitute notice):
1000 Louisiana St., Suite 5900
Houston, Texas 77002
Attention: Cliff W. Vrielink
Email: cvrielink@sidley.com
Any Party from time to time may change its address or other information for the purpose of notices to that Party by giving notice specifying such change to the other Party.
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for any obligations or liabilities of any Party under this Agreement or for any claim based on, in respect of or by reason of the transactions contemplated hereby or thereby. Without limiting the foregoing, to the extent permitted by Law, (a) each Party hereby waives and releases all rights, claims, demands, or causes of action that may otherwise be available at law or in equity, or granted by statute, to avoid or disregard the entity form of any Party or otherwise impose liability of any Party on any other Person, whether granted by statute or based on theories of equity, agency, control, instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil, unfairness, undercapitalization, or otherwise and (b) each Party disclaims any reliance upon any other Person not party hereto with respect to the performance of this Agreement or any representation or warranty made in, in connection with, or as an inducement to this Agreement.
[Signatures appear on the following pages.]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officer of each Party as of the date first above written.
HOBO:
HOBO RENEWABLE DIESEL LLC
By:/s/ Randall Gibbs
Name:Randall Gibbs
Title:Chief Executive Officer
EVOLVE:
EVOLVE TRANSITION INFRASTRUCTURE LP
By:/s/ Charles Ward
Name:Charles Ward
Title:Chief Financial Officer
Signature Page to Framework Agreement
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TABLE OF CONTENTS
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TABLE OF CONTENTS
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TABLE OF CONTENTS
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Article VIII TAXES | 46 |
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TABLE OF CONTENTS
(Continued)
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Schedule 1 Members, Classes, Capital Contributions and Units
Schedule 2 Initial Managers
Schedule 3 Officers
Exhibit AForm of Adoption Agreement
Exhibit B Form of Release
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LIMITED LIABILITY COMPANY AGREEMENT
OF
[●]
This Limited Liability Company Agreement (this “Agreement”) of [●], a Delaware limited liability company (the “Company”), is made and entered into as of [●] (the “Effective Date”) by and among HOBO Renewable Diesel, LLC, a Delaware limited liability company (“HOBO”), and Evolve Transition Infrastructure LP, a Delaware limited partnership (“Evolve”).
RECITALS
WHEREAS, Evolve and HOBO have entered into that certain Framework Agreement, dated as of November 3, 2021 (as amended, modified or supplemented from time to time, the “Framework Agreement”);
WHEREAS, pursuant to the Framework Agreement, [upon payment of the Initial Development Payment (as defined in the Framework Agreement) and]1 in connection with entering into this Agreement, Evolve and HOBO made or shall be deemed to have made Capital Contributions to the Company on or before the Effective Date in the amounts described in this Agreement in exchange for certain Class A Units;
WHEREAS, after giving effect to the foregoing, as of the Effective Date, Evolve and HOBO own the number of Units set forth opposite their names on Schedule 1; and
WHEREAS, as of the Effective Date, Evolve and HOBO desire to set forth the agreement of the Members with respect to the governance of the Company and the other matters set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
“AAA” has the meaning set forth in Section 10.9(a).
“Accredited Investor” has the meaning set forth in Regulation D promulgated under the Securities Act.
“Adjusted Capital Account” means, with respect to any Member, the balance, if any, in such Member’s Capital Account as of the end of the relevant Tax Year or other period, after giving effect to the following adjustments:
1 To be deleted in respect of any Subsequent Project.
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This definition is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and will be interpreted consistently therewith.
“Adoption Agreement” means an Adoption Agreement substantially in the form of Exhibit A.
“Affiliate” means, with respect to a Person, any other Person Controlling, Controlled by or under common Control with the first Person. As used in this definition, the term “Control,” “Controlling” or “Controlled by” shall mean the possession, directly or indirectly, of the power either to (a) vote more than 50% or more of the securities or interests having ordinary voting power for the election of directors (or other comparable controlling body) of such Person or (b) direct or cause the direction of the actions, management or policies of such Person, in each case, whether through the ownership of voting securities or interests, by contract or otherwise. For purposes of this Agreement, (i) the Members and their respective Affiliates (other than the Company Group) shall be deemed not to be Affiliates of the Company Group, (ii) each Company Group member shall be deemed not to be an Affiliate of any Member or its Affiliates (other than the Company Group); provided that, for purposes of Section 6.3, Evolve and its Affiliates shall be deemed to be Affiliates of the Company Group, and (iii) no Class B Member shall be considered an Affiliate of Evolve or Stonepeak or any of their respective Affiliates.
“Affiliate Contract” has the meaning set forth in Section 6.3.
“Affiliate Transaction” has the meaning set forth in Section 6.3.
“Agreement” has the meaning set forth in the introductory paragraph hereof.
“Arbitration Parties” has the meaning set forth in Section 10.9(a).
“Assumed Tax Liability” means an amount, as determined in good faith by the Board, for each Member that is equal to the excess, if any, of (a) the cumulative amounts of U.S. federal, state and local tax due from such Member with respect to such Member’s allocable share of Company items of income, gain, loss deduction and credit (including remedial items under Treasury Regulations Section 1.704-3(d)) pursuant to Section 5.3(c) as determined for the most recently completed Quarterly Estimated Tax Period of the current Tax Year and all prior Quarterly Estimated Tax Periods of such Tax Year and all prior Tax Years, assuming that the applicable tax rate is the highest combined marginal income tax rate (taking into account losses from prior periods that may be utilized to offset income and items, if any, determined at the owner-level with respect to properties owned by the Company) that the Board estimates in good faith would be applicable to an individual resident in New York, New York or a U.S. corporation doing business in New York, New York, whichever is greater, over (b) the cumulative actual cash distributions made to such Member pursuant to Section 5.1 during the most recently completed Quarterly Estimated Tax Period, all prior Quarterly Estimated Tax Periods of the current Tax Year and all prior Tax Years plus the cumulative actual cash distributions made to such Member pursuant to Section 5.2 with respect to all prior periods (without duplication).
“Available Cash” means, at any time, cash and cash equivalents of the Company Group on hand at such time after provision for reserves for payment of costs and expenses, including capital costs and
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expenses, operating costs and expenses, administrative costs and expenses, Taxes, future acquisitions, debt service and contingencies, as determined by the Board in good faith.
“Board” has the meaning set forth in Section 6.1.
“Breaching Member” has the meaning set forth in Section 3.3(c)(i).
“Business” means the development, construction, ownership and operation of the Project, including any related assets or developments.
“Business Day” means any day other than a Saturday, Sunday or legal holiday on which banks in New York City, New York or Houston, Texas are authorized or obligated by Law to close.
“Cancellation Event” means, with respect to any Member, any of the following, as applicable:
“Capital Account” means an account maintained for each Member on the Company’s books and records in accordance with the following terms:
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The foregoing terms and the other terms of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2 (including with respect to the issuance of any Class A Units to a Member who exercises its right to make additional Capital Contributions in exchange for additional Class A Units pursuant to Section 3.3(b), pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(s)) and will be interpreted and applied consistently therewith. If the Board determines that it is prudent to modify the manner in which the Capital Accounts, or any additions or subtractions thereto, are computed to comply with such Treasury Regulations, then the Board may make such modification so long as it is not likely to have a material effect on the amounts distributable to any Member pursuant to Article IX upon the Company’s dissolution.
“Capital Contribution” means any amount of cash and property (based on the Fair Market Value thereof, net of any liabilities assumed or taken subject to by the Company) contributed or deemed contributed to the Company by a Member pursuant to this Agreement; provided that indemnity payments by a Member to the Company pursuant to Section 8.3(c), whether or not treated as a Capital Contribution for federal income tax purposes, shall not be treated as a Capital Contribution for purposes of calculating Return Threshold 1.
“Cause Event” means a Project Document is terminated by Evolve (a) due to the actual fraud, willful misconduct or acts of dishonesty by HOBO or its Affiliates after giving effect to any notice and cure provisions therein or (b) in the event any two of Randall Gibbs, Jonathan Hartigan or Mike Keuss cease to provide services to HOBO in support of HOBO’s obligations under the Project Documents other than due to the death or disability of such Person.
“Certificate” has the meaning set forth in Section 2.1.
“Class A Member” means any Member owning Class A Units, in such capacity.
“Class A Units” means Class A Units issued to those Persons listed as Class A Members on Schedule 1 as of the Effective Date and any other Units issued after the Effective Date and designated by the Board as Class A Units.
“Class B Member” means any Member holding Class B Units, in such capacity.
“Class B Units” means the Class B Units issued to HOBO as of the Effective Date as set forth on Schedule 1 and any other Units issued after the Effective Date and designated by the Board as Class B Units.
“Class Sharing Percentage” means, at any time, (a) with respect to a particular class (or subdivided class) of Units (other than Class B Units), a fraction (expressed as a percentage), the numerator of which is the total number of Units of such class held by the applicable Member at such time and the denominator of which is the total number of Units of such class (or subdivided class) held by all Members at such time, and (b) with respect to any Class B Units, a fraction (expressed as a percentage), the numerator of which is the total number of Class B Units held by the applicable Class B Member at such time and the denominator of which is the total number of Class B Units held by all Class B Members at such time.
“Code” means the Internal Revenue Code of 1986.
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“Company” has the meaning set forth in the introductory paragraph hereof.
“Company Group” means the Company and any Entity which is Controlled by the Company in accordance with clause (a) of the definition of Control.
“Company Minimum Gain” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d)(1) for the phrase “partnership minimum gain.”
“Company Related Party” means any member of the Company Group or any of their respective Affiliates, former or current members, agents, employees, managers, officers, directors or representatives.
“Company Sale” has the meaning set forth in Section 4.4(a).
[“Contribution Agreement” means that certain Contribution Agreement, dated as of the date hereof, by and between HOBO and the Company.]2
“Control” as to any Entity means (a) the possession, directly or indirectly, of the right to more than 50% of the distributions therefrom (including liquidating distributions) or (b) the power or authority, directly or indirectly, through ownership of voting securities, by contract or otherwise, to direct the management, activities or policies of such Entity.
“Default Contribution Amount” has the meaning set forth in Section 3.3(c)(ii).
“Delaware LLC Act” means the Delaware Limited Liability Company Act.
“Depreciation” means, for each Tax Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such Tax Year or other period, except that (a) with respect to any property the Gross Asset Value of which differs from its adjusted tax basis for federal income tax purposes and which difference is being eliminated by use of the “remedial method” pursuant to Treasury Regulations Section 1.704-3(d), Depreciation for such Tax Year or other period will be the amount of book basis recovered for such Tax Year or other period under the rules prescribed by Treasury Regulations Section 1.704-3(d)(2) and (b) with respect to any other property the Gross Asset Value of which differs from its adjusted basis for federal income tax purposes at the beginning of such Tax Year or other period, Depreciation for such Tax Year or other period will be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such Tax Year or other period bears to such beginning adjusted tax basis. Notwithstanding the foregoing, if the federal income tax depreciation, amortization or other cost recovery deduction for such Tax Year or other period is zero, then, for the purposes of clause (b) above, Depreciation will be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Board.
“Designated Evolve Manager” has the meaning set forth in Section 6.2(a).
“Designated Individual” means any individual meeting the requirements of Treasury Regulation Section 301.6223-1(b)(2) that is appointed as the sole individual through whom the Tax Representative will act for purposes of subchapter C of chapter 63 of the Code, as provided in proposed Treasury Regulation Section 301.6223-1(b)(3).
2 To be deleted in respect of any Subsequent Project.
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“Discretionary Capital Contributions” has the meaning set forth in Section 3.3(b)(ii).
“Dispute” has the meaning set forth in Section 10.9(a).
“Drag Sale” has the meaning set forth in Section 4.2(a).
“Effective Date” has the meaning set forth in the introductory paragraph hereof.
“Entity” means any corporation, limited liability company, general partnership, limited partnership, venture, trust, business trust, plan, unincorporated association, estate or other entity.
“Equity Financing” has the meaning set forth in the Framework Agreement.
“Evolve” has the meaning set forth in the introductory paragraph hereof.
“Evolve Credit Agreement” means that Third Amended and Restated Credit Agreement, dated as of March 31, 2015, by and among Evolve, Royal Bank of Canada, RBC Capital Markets and the lenders party thereto, as amended, modified or supplemented from time to time.
“Evolve Managers” has the meaning set forth in Section 6.2(a).
“Excluded Entities” has the meaning set forth in Section 7.3.
“Fair Market Value” means the value of any specified interest or property, which shall not in any event be less than zero, that would be obtained in an arm’s length transaction for cash between an informed and willing buyer and an informed and willing seller, neither of whom is under any compulsion to purchase or sell, respectively, and without regard to the particular circumstances of the buyer or seller, and determined without giving effect to any discount for minority interest, any lack of liquidity or any special governance rights, as reasonably determined in good faith by the Board.
“Financial Close” has the meaning set forth in the Framework Agreement.
“Framework Agreement” has the meaning set forth in the Recitals.
“Governmental Authority” means any (a) national, federal, provincial, territorial, state, regional, municipal, local or other government, (b) governmental or public department, court, tribunal, arbitral body, statutory body, commission, board, bureau or agency, (c) self-regulatory organization, regulatory authority, administrative tribunal or authority, (d) subdivision, agent, commission, board or authority of any of the foregoing or (e) quasi-governmental or private body exercising any regulatory, expropriation or Taxing authority under or for the account of any of the foregoing.
“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:
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“Gross Liability Value” means, with respect to any Company liability described in Treasury Regulations Section 1.752-7(b)(3)(i), and subject to the provisions of Treasury Regulations Section 1.752-7(c), the amount of cash that a willing assignor would pay to a willing assignee to assume such liability in an arms’-length transaction, as determined by the Board. The Gross Liability Value of each such Company liability described in Treasury Regulations Section 1.752-7(b)(3)(i) shall be adjusted at such times as provided in this Agreement for an adjustment to Gross Asset Values.
“HOBO” has the meaning set forth in the introductory paragraph hereof.
“HOBO Managers” has the meaning set forth in Section 6.2(a).
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“Imputed Underpayment” has the meaning set forth in Section 8.3(d).
“Indemnified Losses” has the meaning set forth in Section 6.6(c).
“Indemnitee” has the meaning set forth in Section 6.6(c).
“Internal Restructure” means, with respect to the Company Group, any re-formation, conversion, transfer of assets, Transfer by Members of their Units, merger, incorporation, liquidation, recapitalization, reorganization, contribution and exchange of Units into other equity interests or other transaction in connection with tax, the Investment Company Act of 1940 or other regulatory or other reasons, in each case undertaken (a) in connection with a Public Offering in accordance with this Agreement or (b) as Evolve reasonably determines appropriate to comply with changes in Law, in each case, in a manner that does not materially and disproportionately adversely affect any Member or class of Units as compared to the effect on any other Member or class of Units.
“Law” means (a) all applicable laws, regulations, statutes, codes, rules, permits, licenses, certifications, decrees or standards imposed by any Governmental Authority and (b) all applicable orders, injunctions, judgments, decrees, rulings, writs, assessments, awards, subpoenas, verdicts, settlements or findings from any Governmental Authority.
“Managers” has the meaning set forth in Section 6.2(a).
“Mandatory Capital Contributions” means, collectively, the Capital Contributions described in Section 3.3(b)(i) and those Discretionary Capital Contributions that, pursuant to Section 3.3(b)(v), are deemed Mandatory Capital Contributions.
“Member” means any Person owning Units as permitted under this Agreement.
“Member in Default” has the meaning set forth in Section 3.3(c)(i).
“Member Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulations Section 1.704-2(i) with respect to “partner minimum gain.”
“Member Nonrecourse Debt” has the meaning set forth in Treasury Regulations Section 1.704-2(b)(4) for the phrase “partner nonrecourse debt.”
“Member Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Section 1.704-2(i) for the phrase “partner nonrecourse deductions.”
“Membership Interest” means with respect to any Member at any time, the entire equity interest (or “limited liability company interest” as that term is used in the Delaware LLC Act) of such Member in the Company and all rights and liabilities associated therewith, including the Member’s Units.
“Monetary Default” has the meaning set forth in Section 3.3(c)(i).
“Non-Contributing Member” has the meaning set forth in Section 3.3(c)(ii).
“Non-Default Members” has the meaning set forth in Section 3.3(c)(ii).
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“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(1) and 1.704-2(c).
“Nonrecourse Liability” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(3) and 1.752-1(a)(2).
“Other Indemnitor” has the meaning set forth in Section 6.7(a).
“Partially Adjusted Capital Account” means, with respect to each Tax Year or other period and with respect to each Person who was a Member during such Tax Year or other period, the Capital Account balance of such Person at the beginning of such Tax Year or other period, adjusted as set forth in the definition of Capital Account for all contributions and distributions during such Tax Year or other period, all special allocations pursuant to Section 5.3(b) made to such Person for such Tax Year or other period, but before giving effect to any allocations of Profits or Losses (or items thereof).
“Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, limited liability company, unincorporated organization, Governmental Authority or any other form of Entity or status recognized, under Law, as a separate legal person.
“Profits” and “Losses” means, for each Tax Year or other period, an amount equal to the Company’s Taxable income or loss for such year or period determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, deduction or credit required to be stated separately pursuant to Code Section 703(a)(1) will be included in Taxable income or loss), with the following adjustments:
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“Project” means [insert description of specific renewable fuels facility].
“Project Document” has the meaning set forth in the Framework Agreement.
“Public Offering” means any sale in a (a) firm underwritten public offering registered under the Securities Act of any class of equity securities of the Company (or any successor thereto), or (b) a two-step transaction in which any class of equity securities of the Company (or any successor thereto) is issued in a private placement effected pursuant to an exemption from the registration requirements of the Securities Act coupled with a subsequent public offering registered under the Securities Act of any class of equity securities of the Company (or any successor thereto).
“Quarterly Estimated Tax Period” means the four payment periods designated by the Internal Revenue Service for calculating estimated tax payments for individual taxpayers, currently consisting under current Law of the three-month period January 1 through March 31, the two-month period April 1 through May 31, the three-month period June 1 through August 31, and the four-month period September 1 through December 31.
“Restricted Member” has the meaning set forth in Section 3.4.
“Return Threshold 1” means, as of the date of determination, Total Distributions pursuant to Section 5.1 (including pursuant to Section 9.2) that have been distributed to all holders of Class A Units are such as result in an internal rate of return of 8% on the aggregate Capital Contributions associated with such Class A Units, with such internal rate of return being the actual annual pre-tax rate of return (specified as a percentage) calculated using the “XIRR” function of Microsoft Excel® or, if Microsoft Excel® is no longer supported by Microsoft Corporation, by a similar function to which the Members reasonably agree.
“Return Threshold 2” means, as of the date of determination, Total Distributions pursuant to Section 5.1 (including pursuant to Section 9.2) that have been distributed to all holders of Class A Units (a) are such as result in an internal rate of return of 8% on the aggregate Capital Contributions associated with such Class A Units, with such internal rate of return being the actual annual pre-tax rate of return (specified as a percentage) calculated using the “XIRR” function of Microsoft Excel® or, if Microsoft Excel® is no longer supported by Microsoft Corporation, by a similar function to which the Members reasonably agree, and (b) equal 2.0 times the aggregate Capital Contributions associated with such Class A Units.
“Return Threshold 3” means, as of the date of determination, Total Distributions pursuant to Section 5.1 (including pursuant to Section 9.2) that have been distributed to all holders of Class A Units (a) are such as result in an internal rate of return of 8% on the aggregate Capital Contributions associated with
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such Class A Units, with such internal rate of return being the actual annual pre-tax rate of return (specified as a percentage) calculated using the “XIRR” function of Microsoft Excel® or, if Microsoft Excel® is no longer supported by Microsoft Corporation, by a similar function to which the Members reasonably agree, and (b) equal 3.0 times the aggregate Capital Contributions associated with such Class A Units.
“Securities Act” means the Securities Act of 1933.
“Stonepeak” means Stonepeak Partners LP, a Delaware limited partnership, and its Affiliates.
“Tag Sale” has the meaning set forth in Section 4.3(a).
“Tag Sale Notice” has the meaning set forth in Section 4.3(a).
“Target Capital Account” means, with respect to each Tax Year or other period and with respect to each Person who was a Member during such Tax Year or other period, the amount (which may be either a positive or a deficit balance) equal to the difference between (a) the amount of the hypothetical distribution (if any) that such Person would receive if, on the last day of such Tax Year or other period, (i) all Company assets, including cash, were sold for cash equal to their Gross Asset Values, taking into account any adjustments thereto for such Tax Year or other period, (ii) all Company liabilities were satisfied in cash according to their terms (limited, with respect to each Nonrecourse Liability or Member Nonrecourse Debt, to the Gross Asset Values of the assets securing such liability) and (iii) the net proceeds thereof (after satisfaction of such liabilities) were distributed in full pursuant to Section 9.2(c)(iii) treating any unvested Units as fully vested and (b) the sum of (i) the amount, if any, without duplication, that such Person would be obligated to contribute to the Company’s capital pursuant to this Agreement, if applicable, computed immediately after the hypothetical sale described in clause (a) above, (ii) such Person’s share of Company Minimum Gain determined pursuant to Treasury Regulations Section 1.704-2(g) and (iii) such Person’s share of Member Minimum Gain determined pursuant to Treasury Regulations Section 1.704-2(i)(5), clauses (ii) and (iii) to be computed immediately prior to the hypothetical sale described in clause (a) above.
“Tax” means any federal, state, local or foreign income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, natural resources, severance, stamp, occupation, premium, windfall profit, environmental, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll, license, employee or other withholding, or other tax, of any kind whatsoever, including any interest, penalties or additions to tax or additional amounts in respect of the foregoing.
“Tax Distribution Date” means (a) with respect to a Quarterly Estimated Tax Period ending on March 31, April 15, (b) with respect to a Quarterly Estimated Tax Period ending on May 31, June 15, (c) with respect to a Quarterly Estimated Tax Period ending on August 31, September 15, and (d) with respect to a Quarterly Estimated Tax Period ending on December 31, January 15.
“Tax Distributions” has the meaning set forth in Section 5.2.
“Tax Representative” has the meaning set forth in Section 8.3(a).
“Tax Year” has the meaning set forth in Section 2.6.
“Total Distributions” means, with respect to any Member at any time, the sum of the total amount of cash and the Fair Market Value (as of the date of actual distribution) of all property distributed by the Company as of such date to such Member pursuant to Section 5.1 (including pursuant to Section 9.2). Notwithstanding any provision to the contrary in this Agreement, for purposes of determining a Member’s
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Total Distributions, (a) any amounts withheld or paid pursuant to Section 5.4 will be treated as having been distributed to such Member pursuant to Section 5.1, (b) solely for the purposes of calculating Return Threshold 1, Tax Distributions will not be treated as having been distributed to such Member pursuant to Section 5.1, and (c) any amounts paid to Evolve pursuant to Section 8.2(e) will not be treated as a distribution to Evolve pursuant to Section 5.1.
“Transfer” means, with respect to a Person, a direct or indirect disposition, sale, assignment, transfer, gift, surrender for cancellation, exchange, pledge or grant of a security interest, in each case whether voluntary or involuntary, including the issuance of equity interests in any such Person that is an Entity or by way of a merger or consolidation or division; provided, however, that (a) (i) changes in the direct or indirect ownership of Evolve will not be deemed to be a Transfer unless the value of the Company comprises more than 50% of Evolve’s total value and (ii) pledges or grants of a security interest in the Units held by Evolve will not be deemed a Transfer to the extent such pledges or grants are required by any secured debt financing of Evolve, including the Evolve Credit Agreement, to secure the obligations of Evolve thereunder and (b) changes in the direct or indirect ownership of HOBO will not be deemed to be a Transfer so long as (i) HOBO remains under the Control of some combination of Randall Gibbs, Jonathan Hartigan or Mike Keuss and (ii)(A) in respect of any transfers in the equity interests in HOBO, such transfers are only to (1) employees of (or service providers to) HOBO or its Affiliates or (2) the family members of or trusts established by such employees for estate or other similar planning purposes, (B) in respect of any pledge or grant of a security interest in such equity interests, such pledge or grant of a security interest secures loans obtained by individual members of HOBO (subject to the condition that such pledge or grant of a security interest is limited to the economic interests in HOBO in the event of any foreclosure), or (C) in respect of any issuance of new shares in HOBO, any proceeds of such issuance are used by HOBO for business purposes and are not used to facilitate a distribution to any direct or indirect equity holders (provided, however, that no changes in the direct or indirect ownership in HOBO will be considered a Transfer for purposes of this Agreement following the third anniversary of Financial Close of the Project).
“Treasury Regulations” means temporary and final Treasury Regulations promulgated under the Code.
“Units” means units representing the Membership Interests in the Company, including the Class A Units, the Class B Units and any other class or series of units or other equity securities of the Company issued after the Effective Date.
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the execution, delivery and filing of, any amendments or restatements of the Certificate and any other certificates, notices, statements or other instruments (and any amendments or restatements thereof) necessary or advisable for the Company’s formation or operation in all jurisdictions where the Company may elect to do business.
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Upon the occurrence of a Cause Event, any Class B Units that are then unvested shall be forfeited by the Class B Members to the Company and, for the avoidance of doubt, may be reallocated by the Company to any Person other than Evolve, Stonepeak or any of their respective Affiliates. Notwithstanding the foregoing, upon a sale of (1) all of the Units or (2) all of the equity interests of Evolve, in either case, to a third party, all previously unvested Class B Units of such Class B Member shall be deemed irrevocably vested. The Board shall have the right to accelerate the date that any Class B Unit becomes vested or to waive any vesting requirements in respect of any Class B Unit, in whole or in part, for any reason or no reason.
3 To be deleted in respect of any Subsequent Project.
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4 To be deleted in respect of any Subsequent Project.
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are not issued with respect to a Public Offering pursuant to an effective registration statement under the Securities Act or (b) such transaction would otherwise require under securities Law the registration of the offer and sale of any equity securities, then such Class B Member shall not have a right to participate in such transaction. In such case, if the acquirer or surviving Entity in such transaction, as applicable, desires to pay cash equal to the Fair Market Value of such Member’s Units, then such Member shall accept the cash payment in exchange for his Units.
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Section 4.9 is a special power of attorney, is coupled with an interest, is irrevocable and shall survive the bankruptcy, insolvency, dissolution or cessation of existence of the applicable Member.
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provided, however, that notwithstanding the foregoing, distributions pursuant to this Agreement shall be modified in accordance with the provisions of Sections 4.5 and 4.6 of the Framework Agreement (or in the case of any future amendment of the Framework Agreement by the parties thereto, the appropriate successor provision), to the extent applicable.
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permitted pursuant to the terms of a separate agreement between the Company Group, on the one hand, and such Member, on the other; provided, however, that Evolve may disclose any of the above confidential information to Stonepeak and its and their potential and actual Transferees, lenders, and investors and their respective employees, agents and representatives. The obligations of the Members hereunder will not apply to the extent that the disclosure of information otherwise determined to be confidential is required by Law; provided that prior to disclosing such confidential information, to the extent practicable a Member must notify the Company thereof, which notice will include the basis upon which such Member believes the information is required to be disclosed. Each Member agrees that it will not use any such confidential information for any purpose except (a) in connection with its investment in the Company, including a potential sale or acquisition of its Units, (b) in a manner that is not reasonably expected to be adverse to the Company in any material manner, and (c) to enforce its rights hereunder. Furthermore, Members and the Company acknowledge that Evolve’s and its Affiliates’ employees, directors, officers and principals serve, or may in the future serve, as directors of direct or indirect portfolio companies (which will be deemed to include entities in which Evolve or its Affiliates own equity interests) of investment funds advised or managed by Evolve or any of its Affiliates or any of their respective direct or indirect investors (collectively, the “Excluded Entities”), and that such employees, directors, officers, principals and Excluded Entities will not be deemed to have used confidential information solely due to the dual roles of any such employee, director, officer or principal or the use by such employee, director, officer or principal of general industry information that is confidential information.
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Agreement or the transactions contemplated herein or Evolve without the prior consent of Evolve; provided, that the Company Group or such Member, as applicable, shall provide the other Members an advance opportunity to review and comment upon such proposed press release, interview, article or other public announcement or media release; consider in good faith the comments of the other Member; and provide the other Members with final copies thereof;
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If to HOBO, to:
HOBO Renewable Diesel LLC
1300 Post Oak Blvd., Suite 1350
Houston, Texas 77056
Attention: Mike Keuss
Title: President
Email: mkeuss@hobord.com
with a copy to (which shall not constitute notice):
King & Spalding LLP
1100 Louisiana Street, Suite 4100
Houston, Texas 77002
Attention: Stuart R. Zisman
Email: szisman@kslaw.com
If to Evolve, to:
Evolve Transition Infrastructure LP
c/o Stonepeak Infrastructure Partners
600 Travis Street, Suite 6290
Houston, Texas 77002
Attn: Jack Howell
Email: Howell@stonepeakpartners.com
with a copy to:
Stonepeak Partners LP
55 Hudson Yards
550 W. 34th Street, 48th Floor
New York, New York 10001
Attention: Michael Bricker and Adrienne Saunders
Email: bricker@stonepeakpartners.com; legalandcompliance@stonepeakpartners.com
with a copy to (which shall not constitute notice):
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1000 Louisiana St., Suite 5900
Houston, Texas 77002
Attention: Cliff W. Vrielink
Email: cvrielink@sidley.com
Any Member from time to time may change its address or other information for the purpose of notices to that party by giving notice specifying such change to the other Member(s).
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hereto, and then only with respect to the specific obligations set forth herein or therein with respect to such Persons. For further clarity, no past, present or future director, officer, employee, incorporator, manager, member, partner, equityholder, Affiliate, agent, attorney or other representative (in each case, in their capacities as such) of any Person party hereto, including Stonepeak, or of any Affiliate of any Person party hereto, or any of their successors or permitted assigns, shall have any liability for any obligations or liabilities of any Member under this Agreement or for any claim based on, in respect of or by reason of the transactions contemplated hereby or thereby. Without limiting the foregoing, to the extent permitted by Law, (a) each Person party hereto hereby waives and releases all rights, claims, demands, or causes of action that may otherwise be available at law or in equity, or granted by statute, to avoid or disregard the Entity form of any Person party hereto or otherwise impose liability of any Person party hereto on any other Person, whether granted by statute or based on theories of equity, agency, control, instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil, unfairness, undercapitalization, or otherwise and (b) each Person party hereto disclaims any reliance upon any other Person not party hereto with respect to the performance of this Agreement or any representation or warranty made in, in connection with, or as an inducement to this Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the undersigned Members have executed this Agreement effective as of the Effective Date.
CLASS A MEMBERS:
EVOLVE TRANSITION INFRASTRUCTURE LP
By: [●]
By:
Name:[●]
Title:[●]
HOBO RENEWABLE DIESEL, LLC
By:
Name:[●]
Title:[●]
CLASS B MEMBERS:
HOBO RENEWABLE DIESEL, LLC
By:
Name:[●]
Title:[●]
Signature Page to
Limited Liability Company Agreement of
[●]
Members, Classes, Capital Contributions and Units
Name and Address | Initial Capital Contribution | Additional Capital Contribution | Total Capital Contributions | Units |
---|---|---|---|---|
Class A Members: | | | | Class A |
Evolve Transition Infrastructure LP With a copy to (which shall not constitute notice): Sidley Austin LLP | $[●] | $0 | $[●] | [●] |
HOBO Renewable Diesel, LLC 1300 Post Oak Blvd., Suite 1350 Houston, Texas 77056 Attention: Mike Keuss Title: President Email: mkeuss@hobord.com | $[●] | $0 | $[●] | [●] |
Class B Members: | | | | Class B Units |
HOBO Renewable Diesel, LLC 1300 Post Oak Blvd., Suite 1350 Houston, Texas 77056 Attention: Mike Keuss Title: President Email: mkeuss@hobord.com | – | $0 | – | 1000 |
Schedule 1
Initial Managers
Name | Position |
[●] | Evolve Manager (Designated Evolve Manager) |
[●] | Evolve Manager |
[●] | Evolve Manager |
[●] | HOBO Manager |
[●] | HOBO Manager |
Schedule 2
Officers
Name | Position |
---|---|
[●] | Chief Executive Officer |
[●] | President |
[●] | Chief Financial Officer and Executive Vice President |
Schedule 3
Form of Adoption Agreement
This adoption agreement (this “Adoption Agreement”) is executed as of [●] pursuant to the terms of the limited liability company agreement of [●] dated [●], and the Schedules and Exhibits thereto, as amended or restated from time to time, a copy of which is attached hereto (the “LLC Agreement”), by the transferee (“Transferee”) executing this Adoption Agreement. Initially capitalized terms not defined herein shall have the meanings assigned to such terms in the LLC Agreement. By the execution of this Adoption Agreement, the Transferee agrees as follows:
1.Acknowledgment. Transferee acknowledges that Transferee is acquiring [●] [Class A/Class B] Units, subject to the terms of the LLC Agreement. Transferee further acknowledges that until Transferee is admitted to the Company as a Member that Transferee has only the rights described in the LLC Agreement pertaining to Transferees.
2.Agreement. Transferee (a) agrees that the [●] [Class A/Class B] Units acquired by Transferee shall be bound by and subject to the terms of the LLC Agreement and (b) hereby joins in, and agrees to be bound by, the LLC Agreement (including the Exhibits and Schedules) with the same force and effect as if the Transferee were originally a party thereto.
3.Notice. Any notice required by the LLC Agreement shall be given to Transferee at the address listed below Transferee’s signature below.
4.Joinder. The spouse of the undersigned Transferee, if applicable, executes this Adoption Agreement to acknowledge that he/she is fully aware of, understands, and consents, for himself/herself and his/her heirs, assigns and legal representatives, to the terms of the LLC Agreement, as amended from time to time in accordance with its terms, and its binding effect upon any community property interest or marital settlement awards he/she may now or hereafter own or receive, and agrees that the termination of his/her marital relationship with such Transferee for any reason shall not have the effect of removing any Unit in the Company subject to the LLC Agreement from the coverage thereof and that his/her awareness, understanding, consent, and agreement is evidenced by his/her signature below.
TRANSFEREE:
By:
Name:
Information for Notices:
Fax:
SPOUSE:
By:
Name:
Exhibit A - 1
Form of Release
This confidential mutual release agreement (this “Agreement”) is made effective as of [●] (the “Effective Date”) among [●], a Delaware limited liability company (the “Member”), [●], a Delaware limited liability company (the “Company”) and [●], a Delaware limited liability company (the “Project Company” and together with the Company, the “Company Group”). Each of the Member, the Company and the Project Company is referred to individually as a “Party” and collectively as the “Parties”.
WHEREAS, the Member and the other parties named therein are parties to the Limited Liability Company Agreement of the Company, dated as of [●], as the same may be amended from time to time, (the “LLC Agreement”);
WHEREAS, pursuant to the LLC Agreement, as a condition to the receipt of consideration from any Drag Sale, Tag Sale or Company Sale (each, as used herein, as defined in the LLC Agreement), the Member shall provide the Company Group with a release of claims such Member has or may have against the Company Group, and in consideration thereof such Member shall receive from the Company Group, a release of claims the Company Group has or may have against the Member; and
WHEREAS, the Company has consummated a [Drag Sale / Tag Sale / Company Sale] and intends to distribute the consideration from such [Drag Sale / Tag Sale / Company Sale].
NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants set out in this Agreement, the Parties agree as follows:
1.Final Distribution. In accordance with the LLC Agreement, as a final distribution of proceeds from the [Drag Sale / Tag Sale / Company Sale], the Member will receive a distribution of $[●] plus, to the extent applicable, its pro rata portion of any subsequent proceeds in connection with any purchase price adjustments related thereto.
2.Mutual Releases.
(a)Release by Member. The Member, on behalf of itself, its heirs, executors, successors, administrators and assigns (collectively, the “Member Release Group”), does hereby knowingly and voluntarily fully settle, release, and forever discharge, as permitted by law, the Company and the Project Company and their respective owners, partners, officers, managers, administrators, employees, directors, attorneys, affiliates, subsidiaries, parent companies, successors and assigns (collectively, the “Company Release Group”) from, and covenants not to sue the Company Release Group for, any claims, causes of action or promises of any and every kind, whether known or unknown, that exist or have existed at any time on or prior to the Effective Date, except for the Excluded Member Claims (as defined below), including the following: (i) any contractual claims, including any claims related to, regarding or arising from any aspects or terms of the LLC Agreement occurring through the Effective Date; (ii) any statutory claims; (iii) any tort claims, including claims for negligence; and (iv) any claims, matters, or actions related to the Member’s employment and/or affiliation with, or separation from, any member of the Company Release Group. Notwithstanding the above, the Member may make any claims against the Company Release Group in connection with any breach by the Company Release Group of this Agreement. “Excluded Member Claims” means all (A) claims to indemnification under the LLC Agreement, (B) claims under the Company Group’s manager and officer liability insurance policy; (C) claims that arise following the Effective Date, including, without limitation, any such claims under an employment or separation agreement existing after the Effective Date between the Member, on the one hand, and the Company or the Project Company, on the other hand, or (D) claims against the Company Group relating to unpaid compensation or unreimbursed
Exhibit B-1
expenses or otherwise arising under an employment agreement between the Member, on the one hand, and the Company or the Project Company, on the other hand.
(b)Release by Company Release Group. Each member of the Company Release Group does hereby knowingly and voluntarily fully settle, release, and forever discharge, as permitted by law, the Member Release Group from, and covenants not to sue the Member Release Group for, all claims, causes of action or promises of any and every kind, whether known or unknown, that are based upon facts occurring or existing at any time on or prior to the Effective Date, except for the Excluded Company Claims (as defined below), including the following: (i) any contractual claims, including any claims related to, regarding or arising from any aspects or terms of the LLC Agreement occurring through the Effective Date; (ii) any statutory claims; (iii) all tort claims, including claims for negligence; and (iv) any claims, matters, or actions related to the Member’s employment and/or affiliation with, or separation from, any member of the Company Release Group. Notwithstanding the above, the Company Release Group may make any claims against the Member Release Group in connection with any breach by the Member Release Group of this Agreement. “Excluded Company Claims” means all (A) claims to indemnification under any employment or separation agreement existing as of the Effective Date between Member, on the one hand, and the Company Group, on the other hand, (B) claims that arise following the Effective Date, or (C) claims that arise prior to, on or following the Effective Date under an employment agreement, separation agreement, grant agreement or other similar agreement existing prior to, on or following the Effective Date between the Member, on the one hand, and the Company, the Project Company, or, in each case an affiliate thereof, on the other hand[, including, for the avoidance of doubt that certain [Executive Services Agreement dated [•], 2021 by and between Member, on the one hand, and Evolve Transition Infrastructure GP LLC, on the other hand.5]
3.Certain Acknowledgements. Each Party acknowledges that it has read and understands this Agreement, has, to the extent such party so desired, consulted with legal counsel, is fully aware of its legal effect and has entered into this Agreement freely based on its own judgment with the advice of legal counsel and such other advisers as such party has deemed necessary or advisable.
4.Non-Admission. This Agreement is not an admission by any Party of any wrongdoing or liability whatsoever, and any wrongdoing or liability is denied by any such Party.
5.Confidentiality. The Member represents and agrees that he shall keep the terms, amount, and facts of this Agreement completely confidential and that he shall not hereafter disclose, directly or indirectly, any information concerning this Agreement to anyone, except his attorney(s), tax advisor(s), or spouse, or except as may be required by any federal or state agency or court, or as otherwise required by law. The Member shall affirmatively instruct his attorney(s), tax advisor(s) and spouse to abide strictly by the confidentiality requirement imposed in this Agreement.
Dispute Resolution. |
5 Bracketed language or substantially similar language to be included depending on the facts.
Exhibit A - 2
8. | Consent to Jurisdiction; Waiver of Jury Trial. |
Exhibit A - 3
Exhibit A - 4
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
MEMBER:
[●]
By: ________
Name: ________
Title: ________
COMPANY:
[●]
By: ________
Name: ________
Title: ________
PROJECT COMPANY:
[●]
By: ________
Name: ________
Title: ________
Exhibit A - 5
FORM OF
CONTRIBUTION AGREEMENT
BETWEEN
HOBO RENEWABLE DIESEL LLC,
as Contributor,
AND
[PROJECT HOLDCO],
as Project HoldCo
Dated as of [●]
Exhibit B - 2
EXHIBITS
Exhibit AForm of Assignment Agreement
SCHEDULES
Schedule 1.1-PL | Permitted Liens |
Schedule 3.2(a) | Ownership of Acquired Company Interests |
Schedule 3.4 | Financial Statements |
Schedule 3.5 | Absence of Changes |
Schedule 3.6(a) | Compliance with Law |
Schedule 3.6(b) | Material Permits |
Schedule 3.6(c) | Required Permits |
Schedule 3.7(b) | Licenses of Intellectual Property |
Schedule 3.8 | Litigation |
Schedule 3.9 | Insurance |
Schedule 3.10(a) | Real Property – Fee Title Ownership |
Schedule 3.10(b) | Real Property – Leases |
Schedule 3.10(c) | Real Property – Easements |
Schedule 3.10(d) | Real Property – ROFRs, Options and Other Similar Rights |
Schedule 3.11 | Personal Property |
Schedule 3.12 | Environmental Matters |
Schedule 3.13 | Taxes |
Schedule 3.14(a) | Project Contracts |
Schedule 3.17 | Affiliate Transactions |
Schedule 3.18 | Bank Accounts |
Schedule 3.21-CS | Credit Support |
Schedule 3.21-I | Indebtedness |
Schedule 3.21-P | Payables |
Schedule 4.4 | Contributor Approvals |
Schedule 4.5 | Broker’s Commissions |
Schedule 5.6 | Broker’s Commissions |
CONTRIBUTION AGREEMENT
This Contribution Agreement (this “Agreement”) is made and entered into as of [_______ __, 202_] by and between HOBO Renewable Diesel, LLC, a Delaware limited liability company (“Contributor”), and [insert reference to Project HoldCo], a Delaware limited liability company (“Project HoldCo”). Each of Contributor and Project HoldCo are sometimes referred to herein individually as a “Party” and, together, the “Parties.”
RECITALS
WHEREAS, Evolve Transition Infrastructure LP, a Delaware limited partnership (“Evolve”), and Contributor have entered into that certain Framework Agreement dated as of November 3, 2021 (as amended, modified or supplemented from time to time, the “Framework Agreement”);
WHEREAS, pursuant to the Framework Agreement, following the satisfaction of the Offtake Condition (as defined therein) and the payment of the Initial Development Payment (as defined therein), the Initial Project (as defined in the Framework Agreement) is intended by Evolve and Contributor to be contributed to a holding company;
WHEREAS, the Acquired Company (as defined below) owns all of the assets and interests relating to the Project (as defined below), which is a “Project” contemplated by the Framework Agreement to be contributed to Project HoldCo, and Evolve and Contributor have agreed that all of the Acquired Company Interests (as defined below) should be contributed by Contributor to Project HoldCo pursuant to this Agreement, in exchange for the issuance by Project HoldCo of the New Units (as defined below) on the terms and subject to the conditions set forth herein; and
WHEREAS, Project HoldCo is a wholly-owned subsidiary of Evolve, and Project HoldCo, as of the date of this Agreement, is governed by that certain Amended and Restated Limited Liability Company Agreement of Project HoldCo dated as of the date of this Agreement (as amended, modified or supplemented from time to time, the “LLCA”).
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:
“Acquired Company” means [●].
“Acquired Company Interests” means Contributor’s 100% membership interest in the Acquired Company.
“Affiliate” has the meaning set forth in the Framework Agreement.
“Agreement” has the meaning set forth in the introductory paragraph hereof.
“Anti-Corruption Law” means the U.S. Foreign Corrupt Practices Act of 1977, as amended, and all other applicable Law related to bribery or corruption.
“Asserted Liability” has the meaning set forth in Section 7.5(a).
“Assets” of any Person means all properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including Equity Interests and Real Property, easements, servitudes and similar non-possessory interests.
“Assignment Agreement” has the meaning set forth in Section 2.4(a).
“Business” means the early stage development of a renewable diesel and sustainable aviation fuel production facility.
“Business Day” means any day other than a Saturday, Sunday or legal holiday on which banks in New York City, New York are authorized or obligated by Law to close.
“Charter Documents” means, with respect to any Person that is not a natural person, the articles of incorporation or organization, memorandum of association, articles of association and by-laws, the limited partnership agreement, the partnership agreement or the limited liability company agreement or such other organizational documents of such Person which establish the legal personality of such Person.
“Claim” means any demand, claim, action, investigation or Proceeding.
“Claims Notice” has the meaning set forth in Section 7.5(a).
“Closing” has the meaning set forth in Section 2.3.
“Closing Date” means the date of this Agreement.
“Code” means the Internal Revenue Code of 1986.
“Commercial Operation” has the meaning set forth in the Framework Agreement.
“Commission” means the United States Securities and Exchange Commission.
“Consolidated Group” means any affiliated, combined, consolidated, unitary or similar group with respect to any Tax, including any affiliated group within the meaning of Section 1504 of the Code electing to file consolidated federal income Tax Returns and any similar group under foreign, state or local law.
“Contract” means any legally binding contract, commitment, agreement, lease, license, evidence of indebtedness, mortgage, indenture, purchase order, binding bid, letter of credit, security agreement, or other arrangement, in each case, whether written or oral.
“Contributor” has the meaning set forth in the introductory paragraph of this Agreement.
“Contributor Approvals” has the meaning set forth in Section 4.4(b).
“Contributor Payment Obligation” has the meaning set forth in Section 7.10.
“Contributor Taxes” means any and all Taxes (a) imposed on the Acquired Company or with respect to the Project or for which the Acquired Company may otherwise be liable for any Tax period or the portion of a Straddle Period ending on or before the Closing Date, as determined pursuant to Section 6.2(b); (b) for which the Acquired Company is liable by reason of being or having been a member of any Consolidated Group (other than Taxes attributable to an Acquired Company) prior to the Closing; (c) of any other Person for which the Acquired Company is or has been liable as a transferee or successor or by Contract (other than a Contract entered into in the ordinary course of the Business and the primary subject of which is not Taxes), resulting from events, transactions or relationships occurring or existing prior to the Closing; and (d) Taxes allocable to Contributor pursuant to Section 6.2(c).
“Contributor Warranty Breach” has the meaning set forth in Section 7.2(a).
“Delaware LLC Act” means the Delaware Limited Liability Company Act.
“Dispute” has the meaning set forth in Section 7.8(a).
“Employee Benefit Plan” means the following, whether written or oral: (a) any nonqualified deferred compensation or retirement plan or arrangement that is an Employee Pension Benefit Plan; (b) any qualified defined contribution retirement plan or arrangement that is an Employee Pension Benefit Plan; (c) any qualified defined benefit retirement plan or arrangement that is an Employee Pension Benefit Plan; (d) any Employee Welfare Benefit Plan or material fringe benefit plan or program; (e) any profit sharing, bonus, phantom stock, stock bonus, stock appreciation right, stock option, stock purchase, consulting, retention, employment, change in control, severance or incentive plan, agreement or arrangement; or (f) any material plan, agreement or arrangement providing benefits related to clubs, vacation, childcare, parenting, sabbatical or sick leave.
“Employee Pension Benefit Plan” has the meaning set forth in Section 3(2) of ERISA and includes any such plan, such as foreign plans and plans for directors, that is not subject to ERISA.
“Employee Welfare Benefit Plan” has the meaning set forth in Section 3(1) of ERISA and includes any such plan, such as foreign plans and plans for directors, that is not subject to ERISA.
“Environmental Law” means any and all Laws pertaining to pollution or protection of the environment, natural resources), pipeline safety, or human health and safety or relating to the use, treatment, storage, transportation, handling, disposal or Release of, or exposure to, Hazardous Material, including the Clean Air Act, the Federal Water Pollution Control Act, the Oil Pollution Act of 1990, the Rivers and Harbors Act of 1899, the Safe Drinking Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Hazardous and Solid Waste Amendments Act of 1984, the Emergency Planning and Community Right-to-Know Act, the Toxic Substances Control Act, the National Environmental Policy Act, the Hazardous Materials Transportation Act, the Endangered Species Act, the Occupational Safety and Health Act and comparable tribal, state and local counterparts.
“Environmental Permits” means any Permit required under or issued pursuant to Environmental Law.
“Equity Interests” means capital stock, partnership or membership interests or units (whether general or limited), and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity, including any interests convertible into, or exchangeable or exercisable for, any of the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any entity, trade or business that is under common control with the Acquired Company within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA, or that is a member of the same “controlled group” as the Acquired Company pursuant to Section 4001(a)(14) of ERISA.
“Evolve” has the meaning set forth in the recitals.
“Excluded Entities” has the meaning set forth in Section 6.3.
“Expiration Time” has the meaning set forth in Section 7.1.
“Framework Agreement” has the meaning set forth in the recitals.
“Fundamental Representations” has the meaning set forth in Section 7.1.
“GAAP” means generally accepted accounting principles in the United States, applied on a consistent basis.
“Governmental Authority” means any (a) national, federal, provincial, territorial, state, regional, municipal, local or other government, (b) governmental or public department, court, tribunal, arbitral body, statutory body, commission, board, bureau or agency, (c) self-regulatory organization, regulatory authority, administrative tribunal or authority, (d) subdivision, agent, commission, board or authority of any of the foregoing or (e) quasi-governmental or private body exercising any regulatory, expropriation or Taxing authority under or for the account of any of the foregoing.
“Hazardous Material” (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is defined, designated, identified or classified as a hazardous waste, hazardous substance, hazardous material, pollutant, contaminant or toxic substance under, or for which liability or standards of care are imposed by, any Environmental Law; and (b) any petroleum, petroleum distillate or petroleum-derived products, natural gas, natural gas liquids, radioactive materials or wastes, per- and polyfluoroalkyl substances, asbestos or asbestos-containing materials and polychlorinated biphenyls.
“Indebtedness” means, with respect to any Person, at any date, without duplication, (a) all obligations of such Person for borrowed money, including all principal, interest, premiums, fees, expenses, overdrafts and, to the extent required to be carried on a balance sheet prepared in accordance with GAAP penalties with respect thereto, whether short-term or long-term, and whether secured or unsecured, or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or debt securities, (c) all obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or bankers’ acceptances or similar instruments, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) all guarantees, whether direct or indirect, by such Person of indebtedness of others or indebtedness of any other Person secured by any assets of such Person, and (f) all other obligations of a Person which would be required to be shown as indebtedness on a balance sheet of such Person prepared in accordance with GAAP.
“Intellectual Property Rights” means material rights in any of the following to the extent subject to protection under applicable Law: (a) trademarks, service marks and trade names; (b) patents; (c) copyrights;
(d) internet domain names; (e) trade secrets and other proprietary and confidential information; and (f) any registrations or applications for registration for any of the foregoing.
“Knowledge” when used in a particular representation or warranty in this Agreement (a) with respect to Contributor, means the actual knowledge, following reasonable inquiry, of Randall Gibbs, Jonathan Hartigan and Mike Keuss, and (b) with respect to Project HoldCo, means the actual knowledge, following reasonable inquiry, of [●] and [●].
“Law” means (a) all applicable laws, regulations, statutes, codes, rules, permits, licenses, certifications, decrees or standards imposed by any Governmental Authority and (b) all applicable orders, injunctions, judgments, decrees, rulings, writs, assessments, awards, subpoenas, verdicts, settlements or findings from any Governmental Authority.
“Lien” means any mortgage, pledge, hypothecation, deed of trust, assessment, security interest, charge, lien (statutory or otherwise), encumbrance, option, warranty, purchase right, preferential arrangement, easement, servitude, claim, restriction, lease or other similar property interest or encumbrance.
“LLCA” has the meaning set forth in the recitals.
“Loss” means any and all judgments, losses, liabilities, amounts paid in settlement, Taxes, damages, fines, penalties, deficiencies, expenses (including interest, court costs, reasonable fees of attorneys, accountants and other experts or other reasonable expenses of litigation or other Proceedings or of any Claim, default or assessment). For all purposes in this Agreement the term “Losses” shall not include any Non-Reimbursable Damages.
“Material Permits” has the meaning set forth in Section 3.6.
“New Units” has the meaning set forth in Section 2.2.
“Non-Reimbursable Damages” has the meaning set forth in Section 7.7(b).
“Party” and “Parties” each has the meaning set forth in the introductory paragraph hereof.
“Permits” means all permits, licenses, registrations, certifications, approvals, consents, exemptions, waivers, franchises or other authorizations issued by or obtained from any Governmental Authority.
“Permitted Lien” means (a) solely to the extent set forth on Schedule 1.1-PL, any Lien for Taxes not yet due or delinquent or being contested in good faith by appropriate proceedings, (b) solely to the extent set forth on Schedule 1.1-PL, any Lien arising in the ordinary course of business by operation of Law with respect to a liability that is not yet due or delinquent or which is being contested in good faith by or on behalf of an Acquired Company, (c) all matters that are disclosed in the deed or instrument conveying such property that have been made available to Project HoldCo and Evolve by Contributor, (d) any other imperfection or irregularity of title or other Lien that could not reasonably be expected to interfere with the conduct of the Business, (e) zoning, planning and other similar limitations and restrictions and all rights of any Governmental Authority to regulate a property, (f) the terms and conditions of the Permits or the Contracts of the Acquired Company, (g) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security Law and (h) the other matters identified on Schedule 1.1-PL.
“Permitted Equity Liens” means Liens that may arise pursuant to (i) this Agreement, but only those Liens in favor of Project HoldCo, (ii) the Charter Documents of the Acquired Company or (iii) applicable securities laws.
“Person” means any natural person, corporation, general partnership, limited partnership, limited liability company, unlimited liability corporation, proprietorship, other business organization, trust, union, association or Governmental Authority.
“Personal Property” has the meaning set forth in Section 3.11.
“Proceeding” means any complaint, lawsuit, action, appeal, review, investigation, suit, arbitration or other proceeding at Law or in equity or order or ruling, in each case by or before any Governmental Authority or arbitral tribunal.
“Project” means [●].
“Project Assets” means [●].
“Project Contracts” has the meaning given to it in Section 3.14(a).
“Project HoldCo” has the meaning given to it in the introductory paragraph of this Agreement.
“Project HoldCo Warranty Breach” has the meaning set forth in Section 7.3(a).
“Public Official” means (a) any officer, employee or representative of any regional, federal, state, provincial, county or municipal government or government department, agency, or other division, (b) any officer, employee or representative of any commercial enterprise that is owned or controlled by a government, (c) any officer, employee or representative of any public international organization, (d) any person acting in an official capacity for any government or government entity, enterprise, or organization identified above and (e) any political party, party official or candidate for political office.
“Qualified Project Model” has the meaning set forth in the Framework Agreement.
“Real Property” means the real property owned in fee or leased, used or held for use by the Acquired Company.
“Records” means all books and records relating to the Project or to the ownership, development and design of any of the Project Assets.
“Release” means any release, spill, emission, leaking, pumping, pouring, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Materials into or through the indoor or outdoor environment or into or out of any property, including the movement of Hazardous Materials through or in the air, soil, surface water, or groundwater.
“Representatives” means, as to any Person, its officers, directors, employees, managers, members, partners, shareholders, owners, counsel, accountants, financial advisers and consultants.
“Securities Act” means the Securities Act of 1933, and the rules and regulations of the Commission promulgated thereunder.
“Stonepeak” means Stonepeak Partners LP, a Delaware limited partnership.
“Straddle Period” means any Tax period beginning on or before and ending after the Closing Date.
“Subsidiary” means, as to any Person, any corporation or other entity of which: (a) such Person or a Subsidiary of such Person is a general partner or, in the case of a limited liability company, the managing member or manager thereof; or (b) Equity Interests are at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries.
“Taxes” means (a) all taxes, charges, fees, imposts, levies or other assessments or fees of any kind, including income, corporate, capital, excise, property, sales, use, turnover, unemployment, social security, disability, withholding, real property, personal property, environmental (including any tax imposed by Section 59A of the Code), transfer, registration, value added and franchise taxes, deductions, withholdings and customs duties, imposed by any Governmental Authority, and including any interest or penalty imposed with respect thereto; and (b) any liability for the payment of any amounts of the type described in clause (a) as a result of the operation of Law or any express or implied obligation to indemnify any other Person, including as a successor or by Contract.
“Tax Claim” means any action, suit, arbitration, investigation, inquiry, hearing, request for information or filing, audit, examination, claim, demand, dispute, assessment, proposed adjustment or proceeding (whether administrative, regulatory or otherwise, or whether oral or in writing) with respect to Taxes or any Tax Returns.
“Tax Return” means any return, report, rendition, claim for refund, statement, information return or other document (including any related or supporting information or Schedule attached thereto, or amendment thereof) filed or required to be filed with any Governmental Authority in connection with the determination, assessment, collection or administration of any Tax or the administration of any Law relating to any Tax.
“Taxing Authority” means, with respect to any Tax, the Governmental Authority or political subdivision thereof that imposes such Tax, and the agency (if any) charged with collection of such Tax for such entity or subdivision.
“Warranty Breach” means any Project HoldCo Warranty Breach or Contributor Warranty Breach.
herein, or unless the context requires otherwise, any time period within which a payment is to be made or any other action is to be taken under this Agreement shall be calculated excluding the day on which the period commences and including the day on which the period ends. Unless otherwise specified herein, all references to any currency or $ are to United States dollars.
Contributor hereby represents and warrants to Project HoldCo, as of the date hereof, as follows:
Statements have been prepared in good faith based upon the Records and reflect the financial position of the Project and the Acquired Company.
assumptions set forth in the Qualified Project Model. To the Knowledge of Contributor, Schedule 3.6(c) sets forth all material Permits relating to the Project that have not yet been obtained by the Acquired Company.
matured or unmatured, determined or determinable or otherwise), other than pursuant to the Project Contracts or as set forth on Schedule 3.21-I. The Acquired Company has no outstanding accounts payable or trade payables, in each case, other than as set forth on Schedule 3.21-P. A true and complete list of all Indebtedness of the Acquired Company is set forth Schedule 3.21-I. Schedule 3.21-CS sets forth a true and complete list of all bonds, letters of credit, guarantees or other credit support posted or entered into in connection with the Project or the Project Assets or the ownership, development, design, construction, ownership, installation, operation or maintenance thereof.
Contributor hereby represents and warrants to Project HoldCo as to itself, as of the date hereof, as follows:
Project HoldCo hereby represents and warrants to Contributor, as of the date hereof, as follows:
provided, however, that Taxes shall be treated as due for the period during which the base of such Taxes are determined without regard to whether the payment of such Taxes provides the right to business or other benefits for another period.
provided that for purposes of determining Losses under subsection (a) above and determining whether or not any Contributor Warranty Breach has occurred, any qualification or exception contained therein relating to materiality shall be disregarded; provided further that in no event shall the aggregate amount of all Losses for which Contributor is obligated to indemnify Project HoldCo and its Affiliates pursuant to this Section 7.3 exceed the Fair Market Value (as defined in the LLCA) of the New Units issued to Contributor in consideration for the contribution of the Acquired Company Interests in accordance with this Agreement.
provided that for purposes of determining Losses under subsection (a) above and determining whether or not any Project HoldCo Warranty Breach has occurred, any qualification or exception contained therein relating to materiality shall be disregarded.
If to Contributor, to:
HOBO Renewable Diesel LLC
1300 Post Oak Blvd., Suite 1350
Houston, Texas 77056
Attention: Randy Gibbs
Email: rgibbs@hobord.com
With a copy to (which shall not constitute notice):
King & Spalding LLP
1100 Louisiana Street, Suite 4100
Houston, Texas 77002
Attention: Stuart R. Zisman
Email: szisman@kslaw.com
If to Project HoldCo, to:
[insert legal name of Project HoldCo]
1360 Post Oak Blvd, Suite 2400
Houston, TX 77056
Attention: [●]
Email: [●]
With a copy to:
Evolve Transition Infrastructure LP
c/o Stonepeak Infrastructure Partners
600 Travis Street, Suite 6290
Houston, Texas 77002
Attn: Jack Howell
Email: Howell@stonepeakpartners.com
With an additional copy to:
Stonepeak Partners LP
55 Hudson Yards
550 W. 34th Street, 48th Floor
New York, New York 10001
Attention: Michael Bricker and Adrienne Saunders
Email: bricker@stonepeakpartners.com; legalandcompliance@stonepeakpartners.com
With an additional copy to (which shall not constitute notice):
Sidley Austin LLP
1000 Louisiana St., Suite 5900
Houston, Texas 77002
Attention: Cliff W. Vrielink
Email: cvrielink@sidley.com
hereby waives and releases all rights, claims, demands, or causes of action that may otherwise be available at law or in equity, or granted by statute, to avoid or disregard the entity form of any Person party hereto or otherwise impose liability of any Person party hereto on any other Person, whether granted by statute or based on theories of equity, agency, control, instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil, unfairness, undercapitalization, or otherwise and (b) each Person party hereto disclaims any reliance upon any other Person not party hereto with respect to the performance of this Agreement or any representation or warranty made in, in connection with, or as an inducement to this Agreement.
[Signatures appear on the following pages.]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officer of each Party as of the date first above written.
CONTRIBUTOR:
HOBO RENEWABLE DIESEL, LLC
Name:[●]
Title:[●]
Signature Page to Contribution Agreement
PROJECT HOLDCO:
[PROJECT HOLDCO]
Name:[●]
Title:[●]
Signature Page to Contribution Agreement
Exhibit A
Form of Assignment Agreement
ASSIGNMENT AGREEMENT
This Assignment Agreement (this “Assignment”), dated as of [_______ __, 202_], is made and entered into by and between HOBO Renewable Diesel, LLC, a Delaware limited liability company (“Assignor”), and [insert reference to Project HoldCo], a Delaware limited liability company (“Assignee”). Capitalized terms used herein but not otherwise defined herein shall have the respective meanings ascribed to them in the Contribution Agreement (defined below).
WHEREAS, Assignor owns all of the Acquired Company Interests;
WHEREAS, pursuant to the terms of that certain Contribution Agreement dated [_______ __, 202_] (the “Contribution Agreement”) between Assignor and Assignee, Assignor has agreed to contribute, assign, transfer and convey to Assignee the Acquired Company Interests free and clear of all Liens other than Permitted Equity Liens;
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereby agree as follows:
Exhibit A-1
IN WITNESS WHEREOF, this Assignment is executed and delivered as of the date first above written.
ASSIGNOR:
HOBO RENEWABLE DIESEL, LLC
By:
Name:
Title:
Acknowledged and Agreed as of [_______ __, 202_]:
ASSIGNEE:
[INSERT REFERENCE TO PROJECT HOLDCO]
By:
Name:
Title:
Exhibit A-2
PM Agreement Term Sheet
Parties: | HOBO, or one of its Affiliates, as the “PM Manager” and a Project Company, for such Project. |
Term: | As to each Project, until 60 days after the date of Commercial Operation for such Project, and in general for the period that any Projects are being developed under the Framework Agreement and the applicable Project HoldCo’s limited liability company agreement. |
Termination | Typical termination rights for a material breach of covenant or representation and warranty (in each case, subject to standard grace and cure periods) and a termination right for the Project Company (a) due to the actual fraud, willful misconduct or acts of dishonesty by the PM Manager after giving effect to any notice and cure provisions or (b) if at least two of Randall Gibbs, Jonathan Hartigan or Mike Keuss cease to provide services to HOBO in support of HOBO’s obligations as PM Manager for any reason, including death or disability of such members of management. |
Services: | HOBO shall provide all project management services that would customarily be provided by the development team of the knowledgeable and prudent owner of a Project as to the development and construction thereof from Financial Close through 60 days after Commercial Operation, including: The agreement would contain a more fulsome list, but would include the following with respect to a Project: - Obtaining all Project Permits to be obtained in the name of the applicable Project Company not obtained by Financial Close, and monitoring compliance with all Permits, including those obtained in the name of any Construction Counterparty for such Project. - Acting as the applicable Project Company’s representative in performing all contract supervision of the performance of the Construction Counterparties and vendors, including all contract communications and attending all field and factory testing, and all performance testing of the applicable Project. - Coordinating the performance of all activities of the applicable Project Company under its contractual arrangements, including (i) timely verifying the appropriateness, milestones and amounts of all invoices from contract counterparties, (ii) disputing amounts thereunder as appropriate and as directed by such Project Company, (iii) processing for payment the undisputed invoice amounts for payment by such Project Company. - Processing change order requests. |
Exhibit C-1
- Preserving all claim opportunities for the applicable Project Company. - Subject to the overall authority of the applicable Project Company, preparing all cash calls of equity and draw requests under the Project Financing, to support the payment on or before due of all Project costs. - Monitoring and performing the reporting and other actions (other than payment) necessary to keep the applicable Project Company and any Affiliate in compliance with Law and the Project Company contracts, including the Project Financing. - Performing such other project management and supervision tasks reasonably requested by the applicable Project Company. | |
Development Costs | For all Projects after the Initial Project, the applicable Project Company will provide all development costs, and HOBO shall not be obligated to advance any such amounts. At any time prior to Financial Close of a Subsequent Project, Evolve can elect to terminate its commitment to provide additional development costs by delivering written notice to such effect to HOBO, in which case no additional notices shall be required to be delivered by HOBO with respect to such Subsequent Project and the sole and exclusive remedy of HOBO in such event shall be (i) the termination of exclusivity under Section 4.2 of the Framework Agreement and (ii) the right to the Transfer of the membership interest in the applicable Project Company if HOBO (or any of its Affiliates) thereafter obtains direct or indirect debt or equity financing from a Third Party for such Subsequent Project upon payment in full of the reimbursement of all such development costs plus interest on such amounts, accruing in each case at a per annum rate equal to eight percent (compounding quarterly) since the date paid, which reimbursement shall be made by HOBO no later than 30 days after the first funding provided by a Third Party. |
Services Fee: | A fixed fee for each Project determined by the applicable Project Company and HOBO to represent a reasonable allocation of the salary and benefits of the HOBO team providing the “Services” for such Project based on time spent on such Project, the costs of required insurance, and a reasonable allocation of the corporate overhead costs for HOBO, in each case, allocated over the various Projects on a basis agreed by HOBO and the applicable Project Companies, but without providing any profits for HOBO. |
Standard of Care: | The standard of HOBO providing the Services shall be as a reasonably prudent developer for similar projects in the United States, and such Services shall be provided in accordance with Law and in compliance with the terms of the material contracts of the applicable Project Company. The individuals of HOBO performing the Services shall not, unless approved by the applicable |
Exhibit C-2
Exhibit C-3
O&M Agreement Term Sheet
Parties: | The Project Company for the Project and HOBO or one of its Affiliates, as the “O&M Provider”. |
Term: | 15 Years |
Termination | Typical termination rights for a material breach of covenant or representation and warranty (in each case, subject to standard grace and cure periods) and a termination right for the Project Company (a) due to the actual fraud, willful misconduct or acts of dishonesty by the O&M Provider after giving effect to any notice and cure provisions or (b) if at least two of Randall Gibbs, Jonathan Hartigan or Mike Keuss cease to provide services to HOBO in support of HOBO’s obligations as O&M Provider for any reason, including death or disability of such members of management. |
Services: | HOBO shall provide all operation and maintenance services required for the Project as would customarily be provided by a third-party operation and maintenance provider, including: The agreement would contain a more fulsome list, but would include the following: - Providing the on-site operations and maintenance personnel to operate and maintain the Project, including all on-site spare parts for the Project. - Monitoring and maintaining compliance with all Permits. - Acting as the Project Company’s representative in performing all contract supervision of the performance of all service providers and vendors to the Project, including all contract communications. - Coordinating the performance of all activities of the Project Company under its contractual arrangements, including (i) timely verifying all invoices from contract counterparties, (ii) disputing amounts thereunder as appropriate and as directed by the applicable Project Company, (iii) processing for payment the undisputed invoice amounts for payment by the Project Company. - Preserving all claim opportunities for the Project Company. - Preparing maintenance and capital expenditure budgets for the approval by the Project Company. - Providing all Project level cost accounting for the Project and preparing any necessary cash calls of equity and draw requests under |
Exhibit D-1
the Project Financing, to support the payment on or before due of all Project costs. - Monitoring and performing the reporting and other actions (other than payment) necessary to keep the Project and the Project in compliance with Law and the Project Company contracts, including the Project Financing. - Performing such other operating and maintenance tasks as are reasonably requested by the Project Company. | |
Fee: | The fee for each Project shall be a fixed fee determined by the applicable Project Company and HOBO to represent a reasonable allocation of the salary and benefits of the HOBO team providing the “Services” for such Project based on time spent on such Project, the costs of required insurance, and a reasonable allocation of the corporate overhead costs for HOBO, but without providing any profits for HOBO; provided that Evolve shall have a right to review the books and records of HOBO related to such allocations. The fee shall not commence to be earned or paid until the fee to the PM Manager ceases to be paid. |
Standard of Care: | The standard of HOBO providing the Services shall be as a reasonably prudent operations and maintenance service provider for similar projects in the United States, and such Services shall be provided in accordance with Law and in compliance with the terms of the material contracts of the Project Company. The individuals of HOBO performing the Services shall not, unless approved by the applicable Project Company, manage or undertake the development, project management or operations and maintenance services for any other Project. |
Accounts: | At or near the beginning of each month, the Project Company would advance to an account of the Project Company (the “Project Account”) as to which the O&M Provider shall have access, the amounts required for Project Costs for such ensuing month. “Project Costs” shall be the third-party costs of operating and maintaining the Project and shall not include any HOBO internal costs. The O&M Provider shall not have access to any other bank account of the Project Company and the revenues of the Project Company shall not be deposited into the Project Account or paid through the O&M Provider. |
Limit on Authority: | The agreement would contain a more fulsome list, but the O&M Provider would not have the right to: |
Exhibit D-2
approved by the Project Company, (ii) $250,000 individually or (iii) during any fiscal year, $1,000,000 in the aggregate. - Waive any claims of the Project Company, settle any claims of or against the Project Company or admitting any default or failure of the Project Company. | |
Liability: | So long as O&M Provider fulfills the standard of care, the Project Company would indemnify the PM Manager for claims by a Third Party arising from the Services unless caused by the gross negligence or willful misconduct of the O&M Provider. |
The O&M Provider would be required to maintain a customary level of liability insurance and workers compensation coverage. | |
Governing Law: | Delaware |
Exhibit D-3
Exhibit 10.2
Evolve Transition Infrastructure LP
2021 Equity Inducement Award Plan
1. | PURPOSE OF PLAN |
The purpose of this Evolve Transition Infrastructure LP 2021 Equity Inducement Award Plan (this “Inducement Plan”) of Evolve Transition Infrastructure LP., a Delaware limited partnership (formerly known as Sanchez Midstream Partners LP), a Delaware limited partnership (the “Partnership”), as adopted in connection with the Evolve Transition Infrastructure LP 2021 Equity Inducement Award Program, is to further the long term stability and success of the Partnership and its Affiliates (as defined in the “Plan” referenced below) by providing a program to reward selected individuals hired as employees of the Partnership, Evolve Transition Infrastructure GP LLC, a Delaware limited liability company, as general partner of the Partnership (the “General Partner”), and their Affiliates (“Eligible Persons”) with grants of inducement awards by affording such individuals an opportunity to acquire a proprietary interest in the Partnership.
2. | ELIGIBILITY |
This Inducement Plan will be reserved solely for awards in respect of common units representing limited partner interests in the Partnership (“Units”) that may be issued to Eligible Persons without unitholder approval pursuant to Rule 711(a) of the NYSE American Company Guide, or any successor rule relating to inducement awards.
3. | UNIT LIMITS; GRANT OF AWARDS |
The maximum number of Units that may be issued pursuant to awards granted to Eligible Persons under this Inducement Plan is 14,000,000 Units, such limit subject to adjustment as contemplated by Section 4(c) of the Plan.
4. | EFFECTIVE DATE |
This Inducement Plan is effective as of November 3, 2021 (the “Effective Date”), the date of its approval by the Board of Directors of the General Partner (the “Board”). Unless earlier terminated by the Board, this Inducement Plan shall terminate at the close of business on the day before the tenth anniversary of the Effective Date. After the termination of this Inducement Plan either upon such stated expiration date or its earlier termination by the Board, no additional awards may be granted under this Inducement Plan, but previously granted awards (and the authority of the Committee with respect thereto, including the authority to amend such awards) shall remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of this Inducement Plan.
5. | OTHER TERMS |
Except as expressly set forth herein, the terms of this Inducement Plan shall be identical to the terms of the Plan, and such terms are incorporated by reference into this Inducement Plan (with such non-substantive changes as are necessary to reflect their usage in this Inducement Plan instead of the Plan). In the event of any conflict between the provisions in this Inducement Plan and those of the Plan, the provisions of this Inducement Plan shall govern.
6. | DEFINED TERMS |
6.1. “Plan” means the Sanchez Production Partners LP Long-Term Incentive Plan, as may be amended from time to time (the form of which in effect as of the Effective Date being attached hereto as Annex 1).
6.2 Defined terms not defined herein shall have the meaning set forth in the Plan.
Annex 1
SANCHEZ PRODUCTION PARTNERS LP
LONG-TERM INCENTIVE PLAN
1. | Introduction. |
(a) Purpose of Plan. This Sanchez Production Partners LP Long-Term Incentive Plan (the “Plan”) is intended to promote the interests of Sanchez Production Partners LP, a Delaware limited partnership (the “Partnership”) by providing directors, officers, employees and consultants of the Partnership, of Sanchez Production Partners GP LLC, a Delaware limited liability company (the “General Partner”) and of their Affiliates, who provide services to the Partnership, a means to develop a sense of ownership and personal involvement in the development and financial success of the Partnership, and to encourage them to remain with and devote their best efforts to the business of the Partnership and, in doing so, advance the interests of the Partnership and its unitholders. The Plan is also contemplated to enhance the ability of the General Partner, the Partnership and their respective Affiliates to attract and retain the services of individuals who are essential for the growth and profitability of the Partnership.
The Plan is an amendment and restatement of the Constellation Energy Partners LLC 2009 Omnibus Incentive Compensation Plan (the “Prior Plan”), which resulted in the name of the Prior Plan being changed to the Sanchez Production Partners LP Long-Term Incentive Plan. As part of this amendment and restatement, the Constellation Energy Partners LLC Long-Term Incentive Plan, as amended, is merged into the Plan.
(b) Effective Date. This amendment and restatement of the Plan (and the merger into the Plan of the Constellation Energy Partners LLC Long-Term Incentive Plan) shall become effective upon both (i) approval of the amendment and restatement by the unitholders of Sanchez Production Partners LLC (predecessor-in-interest to the Partnership) and (b) the effectiveness of the conversion of Sanchez Production Partners LLC (f/k/a Constellation Energy Partners LLC) from a limited liability company into a limited partnership, with the date that both such conditions being satisfied referred to herein as the “Effective Date.” Except to the extent an Award is to be settled in cash according to its terms, no Award granted hereunder shall be effective unless and until such approval of the Plan occurs; provided, however, that outstanding Awards granted under the Prior Plan and the Constellation Energy Partners LLC Long-Term Incentive Plan shall continue to be effective regardless of whether such approval occurs.
2. | Construction. |
(a) Definitions.
As used in the Plan, the following terms shall have the 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. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. For purposes of the
Plan, Sanchez Oil & Gas Corporation, SP Holdings, LLC and their Affiliates shall be deemed to be an Affiliate of both the General Partner and the Partnership.
“Award” means an Option, Restricted Unit, Unit Grant, Notional Unit, Unit Appreciation Right, Performance Award or Other Unit-Based Award granted under the Plan, and shall include tandem any DERs granted with respect to a Notional Unit.
“Award Agreement” means the written agreement by which an Award shall be evidenced.
“Board” means the Board of Directors of the General Partner.
“Change in Control” means the occurrence of any of the following events:
(i) any “person” or “group” within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Exchange Act, other than the General Partner, the Partnership or an Affiliate of either of the foregoing, shall become the beneficial owner, by way of merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the combined voting power of the equity interests in the Partnership;
(ii) the equity holders of the Partnership approve, in one or a series of transactions, a program of complete liquidation of the Partnership, respectively;
(iii) the sale or other disposition by the Partnership of all or substantially all of the Partnership’s assets in one or more transactions to any Person other than the General Partner or an Affiliate thereof; or
(iv) a transaction resulting in a Person other than the General Partner or an Affiliate of the General Partner or of the Partnership being the general partner of the Partnership.
Notwithstanding the foregoing, in any circumstance or transaction in which compensation payable pursuant to this Plan or an Award Agreement would be subject to the income tax under the Section 409A Rules if the foregoing definition of “Change in Control” were to apply, but would not be so subject if the term “Change in Control” were defined herein to mean a “change in control event” within the meaning of Treasury Regulation § 1.409A-3(i)(5), then “Change in Control” means, but only to the extent necessary to prevent such compensation from becoming subject to the income tax under the Section 409A Rules, a transaction or circumstance that satisfies the requirements of both (1) a Change in Control under the applicable clause (i) through (iv) above, and (2) a “change in control event” within the meaning of Treasury Regulation § 1.409A-3(i)(5).
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations and administrative guidance promulgated thereunder.
“Committee” means the Board or such committee of the Board as may be appointed by the Board to administer the Plan.
“Consultant” means a Person, other than an Employee or a Director, providing bona fide services to the Partnership or any of its subsidiaries as a consultant or advisor, as applicable.
“DER” or “Distribution Equivalent Right” means a contingent right, granted in tandem with a specific Notional Unit or Restricted Unit, to receive an amount in cash or Units, as determined by the Committee, which cash or Units shall have a value equal to the cash distributions made by the Partnership with respect to a Unit during the period such tandem Award is outstanding.
“Director” means a member of the Board who is not an Employee.
“Disability” means that a Participant has been determined to be “disabled” under the General Partner’s or the Partnership’s long-term disability plan, as applicable, in effect at the time the Participant ceases to be an Officer, Employee, Consultant or Director, as applicable; provided, however, in any circumstance in which compensation payable pursuant to this Plan or an Award Agreement would be subject to the income tax under the Section 409A Rules if the foregoing definition of “Disability” were to apply, but would not be so subject if the term “Disability” were defined herein to mean a “disability” within the meaning of Treasury Regulation § 1.409A-3(i)(4), then “Disability” means, but only to the extent necessary to prevent such compensation from becoming subject to the income tax under the Section 409A Rules, a “disability” within the meaning of Treasury Regulation § 1.409A-3(i)(4).
“Eligible Person” means any Officer, Employee, Consultant or Director of the Partnership or the general partner of the Partnership or any of their Affiliates, and any other Person selected by the Committee (including Sanchez Oil & Gas Corporation and SP Holdings, LLC), performing bona fide services for the Partnership or any of its subsidiaries.
“Employee” means any employee of the General Partner, the Partnership or an Affiliate of either of the foregoing.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” means the closing sales price of a Unit on the applicable date (or if there is no trading in the Units on such date, on the next preceding date on which there was trading) as reported in The Wall Street Journal (or other reporting service approved by the Committee). In the event Units are not publicly traded at the time a determination of fair market value is required to be made hereunder, the determination of Fair Market Value shall be made in good faith by the Committee using a “reasonable application of a reasonable valuation method” within the meaning of the Section 409A Rules.
“Notional Unit” means a notional Unit granted under the Plan that, upon vesting, entitles the Participant to receive a Unit or an amount of cash equal to the Fair Market Value of a Unit. Whether cash or Units are received for Notional Units shall be determined in the sole discretion of the Committee and shall be set forth in the Award Agreement.
“Officer” means any Employee who is or other individual who is an officer of the General Partner, the Partnership or an Affiliate of either of the foregoing.
“Option” means an option to purchase Units granted under the Plan.
“Other Unit-Based Award” means an Award granted pursuant to Section 6(f)(iii) of the Plan that is not otherwise specifically provided for in another paragraph of Section 6.
“Participant” means any Eligible Person (or former Eligible Person) who holds an outstanding Award under the Plan.
“Performance Award” means an Award granted under the Plan that, if earned, shall be payable in cash, Units, or any combination thereof as determined by the Committee.
“Performance Goal” means one or more targeted levels of performance for a performance period based on one or more Performance Metrics.
“Performance Metric” means one or more of the following criteria: (a) total unitholder return; (b) return on assets, return on equity, or return on capital employed; (c) measures of profitability such as earnings per unit, corporate or business-unit net income, net income before extraordinary or one-time items, earnings before interest and taxes, or earnings before interest, taxes, depreciation and amortization; (d) cash flow from operations; (e) gross or net margins; (f) levels of operating expense or other expense items; (g) annual or multi-year operating plan; (h) safety; (i) annual or multi-year average production growth; (j) efficiency or productivity measures such as annual or multi-year absolute or per-unit operating and maintenance costs; (k) satisfactory completion of a major project or organizational initiative with specific criteria set in advance by the Committee; (l) specific performance goals for a particular job; (m) debt ratios or other measures of credit quality or liquidity; (n) strategic asset sales or acquisitions in compliance with specific criteria set in advance by the Committee; (o) distribution growth; (p) efficiencies and results of field operations or drilling programs, including total wells/recompletions drilled, cost of wells, lease operating expenses, cycle time to hook up wells to flow and infrastructure improvements; and (q) any other measure deemed appropriate by the Committee.
“Person” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.
“Plan” means the Sanchez Production Partners LP Long-Term Incentive Plan (formerly known as the Constellation Energy Partners LLC 2009 Omnibus Incentive Compensation Plan).
“Prior Plan” means the Constellation Energy Partners LLC 2009 Omnibus Incentive Compensation Plan.
“Restricted Period” means the period established by the Committee with respect to an Award during which the Award is not transferable, remains subject to forfeiture or is not exercisable by the Participant.
“Restricted Unit” means a Unit granted under the Plan that is subject to a Restricted Period.
“Retirement” means retirement on or after the earliest retirement date permissible under the employee pension benefit plan or plans (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended) that are (i) sponsored or maintained by the Partnership and (ii) intended to qualify for favorable federal income tax treatment under Section 401(a) of the Code.
“Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to time.
“SEC” means the Securities and Exchange Commission, or any successor thereto.
“Section 409A Rules” means Section 409A of the Code and the Treasury Regulations and administrative guidance promulgated thereunder.
“UAR” or “Unit Appreciation Right” means an Award that, upon exercise, entitles the holder to receive the excess of the Fair Market Value of a Unit on the exercise date over the exercise price established for such Unit Appreciation Right. Such excess may be paid in cash and/or in Units as determined in the sole discretion of the Committee and set forth in the Award Agreement.
“UDR” or “Unit Distribution Right” means a distribution made by the Partnership with respect to a Restricted Unit.
“Unit” means a common unit representing a limited partner interest of the Partnership.
“Unit Grant” means an Award of an unrestricted Unit.
(b) Construction. In this Plan, unless a clear contrary intention appears, (a) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Plan as a whole and not to any particular section or other subdivision, (b) reference to any section means such section hereof and (c) the words “including” (and with correlative meaning “include”) means including, without limiting the generality of any description preceding such term.
3. | Administration. |
The Plan shall be administered by the Committee. A majority of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Committee in writing, shall be the acts of the Committee. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) determine who is an Eligible Person; (ii) designate Participants; (iii) determine the type or types of Awards to be granted to a Participant; (iv) determine the number of Units to be covered by Awards; (v) determine the terms and conditions of any Award (including performance requirements for such Award); (vi) determine whether, to what extent and under what circumstances Awards may be settled, exercised, canceled or forfeited; (vii) interpret and administer the Plan and any instrument or agreement relating to an Award made under the Plan; (viii) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding
upon all Persons, including the Partnership, any Affiliate of the Partnership, any Participant and any beneficiary of any Award.
4. | Units. |
(a) Limits on Units Deliverable. Subject to adjustment as provided in Section 4(c), the maximum number of Units that may be delivered or reserved for delivery with respect to the Plan or underlying any Award is fifteen percent (15%) of the aggregate number of issued and outstanding Units as of the date of adoption of the Plan plus, upon the issuance of additional Units from time to time, an automatic increase equal to the lesser of (i) fifteen percent (15%) of such additional Units or (ii) such lesser number of Units as determined by the Committee. If any Award to be settled in Units according to its terms expires, is canceled, exercised, paid or otherwise terminates without the delivery of Units (including Units withheld pursuant to Section8(b)(ii)), then the Units covered by such Award, to the extent of such expiration, cancellation, exercise, payment or termination, shall again be Units with respect to which Awards may be granted. Units that cease to be subject to an Award because of the exercise of the Award, or the vesting of Restricted Units or similar Awards, shall no longer be subject to or available for any further grant under this Plan. Notwithstanding the foregoing, there shall not be any limitation on the number of Awards that are to be settled solely in cash according to the terms of the Award.
(b) Sources of Units Deliverable Under Awards. Any Units delivered pursuant to an Award shall consist, in whole or in part, of Units (i) acquired in the open market or (ii) from the General Partner, the Partnership, any Affiliate of either of the foregoing or any other Person, or any combination of the foregoing as determined by the Committee in its sole discretion.
(c) Adjustments. In the event that any distribution (whether in the form of cash, Units, other securities, or other property), recapitalization, split, reverse split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Units or other securities of the Partnership, issuance of warrants or other rights to purchase Units or other securities of the Partnership, or other similar transaction or event affects the Units, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Units (or other securities or property) with respect to which Awards may be granted, (ii) the number and type of Units (or other securities or property) subject to outstanding Awards, and (iii) the grant or exercise price with respect to any Award or make provision for a cash payment to the holder of an outstanding Award; provided, however, that the number of Units subject to any Award shall always be a whole number; provided, further, that the Committee shall not take any action otherwise authorized under this subparagraph (c) to the extent that such action would, except as permitted in Section 7(c), materially reduce the benefit to the Participant without the consent of the Participant.
5. | Eligibility. |
Any Eligible Persons shall be eligible to be designated a Participant by the Committee and receive Awards under the Plan.
6. | Awards. |
(a) Options. The Committee shall have the authority to determine the Eligible Persons to whom Options shall be granted, the number of Units to be covered by each Option, the purchase price therefor and the conditions and limitations applicable to the exercise of the Option, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan.
Exercise Price. The purchase price per Unit purchasable under an Option shall be determined by the Committee at the time the Option is granted; provided, however, that such purchase price per Unit may not be less than 100% of the Fair Market Value of a Unit as of the date of grant.
(iii) Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, which may include accelerated vesting upon the achievement of specified performance goals, and the method or methods by which payment of the exercise price with respect thereto may be made or deemed to have been made, which may include cash, check acceptable to the General Partner or the Partnership, as applicable, a “cashless-broker” exercise through procedures approved by the Committee, with the consent of the Committee, the withholding of Units that would otherwise be delivered to the Participant upon the exercise of the Option, other securities or other property, or any combination thereof, having a fair market value (as determined by the Committee) on the exercise date equal to the relevant exercise price.
(iv) Forfeiture. Except as otherwise provided in the terms of the Award Agreement, upon a Participant ceasing to be an Officer, Employee, Consultant or Director, as applicable and as determined by the Committee, for any reason prior to the date an Option becomes vested, all unvested Options shall automatically be forfeited by the Participant for no consideration on such date. Except as otherwise provided in the terms of the Award Agreement, if the Participant ceases to be an Officer, Employee, Consultant or Director prior to the expiration of the Option, the Option will be forfeited or expire, as applicable, as follows:
(A) Termination Not For Retirement, Disability or Death – any unvested Option will be forfeited on the date the Participant ceases to be an Officer, Employee, Consultant or Director for reasons other than the Participant’s Retirement, Disability or death and any vested Option will expire on the earlier of (i) the date that is 90 days after the effective date of such termination or (ii) the last day of the term of the Option; or
(B) Termination For Retirement, Disability or Death – any unvested Option will be forfeited on the date the Participant ceases to be an Officer, Employee, Consultant or Director due to the Participant’s Retirement, Disability or death and any vested Option will expire on the earlier of (i) the date that is 60 months after the effective date of such termination or (ii) the last day of the term of the Option.
The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Options.
(v) Restrictions on Option Grants. The Committee may grant Options that are intended to comply with Treasury Regulation § 1.409A-l(b)(5)(i)(A) only to Officers, Employees, Consultants and Directors performing direct services for the Partnership or a corporation or
other type of entity in a chain of corporations or other entities in which each corporation or other entity has a “controlling interest” in another corporation or entity in the chain, starting with the Partnership and ending with the corporation or other entity for which the Officer, Employee, Consultant or Director performs direct services. For purposes of this Section 6(a), “controlling interest” means (1) in the case of a corporation, ownership of stock possessing at least 50% of total combined voting power of all classes of stock of such corporation entitled to vote or at least 50% of the total value of shares of all classes of stock of such corporation; (2) in the case of a partnership, ownership of at least 50% of the profits interest or capital interest of such partnership; (3) in the case of a sole proprietorship, ownership of the sole proprietorship; or (4) in the case of a trust or estate, ownership of an actuarial interest (as defined in Treasury Regulation § 1.414(c)-2(b)(2)(ii)) of at least 50% of such trust or estate. The Committee may grant Options that are otherwise exempt from or compliant with the Section 409A Rules to any Eligible Person.
(b) Restricted Units. The Committee shall have the authority to determine the Eligible Persons to whom Restricted Units shall be granted, the number of Restricted Units to be granted to each such Participant, the Restricted Period relating thereto, the conditions under which the Restricted Units may become vested or forfeited, and such other terms and conditions as the Committee may establish with respect to such Awards.
(i) UDRs. To the extent provided by the Committee, in its discretion, a grant of Restricted Units may provide that (A) no UDRs are to be earned or paid with respect to such Restricted Units or (B) distributions made by the Partnership with respect to the Restricted Units shall be subject to the same forfeiture and other restrictions as the Restricted Unit and, if restricted, such distributions shall be held, without interest, until the Restricted Unit vests or is forfeited with the UDR being paid or forfeited at the same time, as the case may be. Absent such a restriction on the UDRs in the grant agreement, UDRs shall be paid to the holder of the Restricted Unit without restriction.
(ii) DERs. To the extent provided by the Committee, in its discretion, a grant of Restricted Units may include a tandem DER grant, which may provide that such DERs shall be credited to a bookkeeping account (with or without interest in the discretion of the Committee) subject to the same forfeiture and other restrictions as the tandem Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion.
(iii) Forfeitures. Except as otherwise provided in the terms of the Award Agreement, upon the Participant ceasing to be an Officer, Employee, Consultant or Director, as applicable and as determined by the Committee, for any reason during the applicable Restricted Period, all outstanding Restricted Units (and any associated UDRs and DERs and amounts accumulated with respect thereto) awarded the Participant shall be automatically forfeited for no consideration on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Restricted Units (and any associated UDRs and DERs and amounts accumulated with respect thereto).
(iv) Lapse of Restrictions. Upon or as soon as reasonably practical following the vesting of each Restricted Unit, subject to the provisions of Section 8(b), the Participant shall have the restrictions removed from his or her Unit certificate so that the Participant
then holds an unrestricted Unit. In addition, settlement shall be made in a single lump sum with respect to UDRs and DERs associated with such Units no later than the fifteenth (15th) day of the third (3rd) month following the date on which vesting occurs and the restrictions lapse. Upon vesting of a Restricted Unit, other than with respect to accumulated amounts to be paid up through the date of such vesting, all UDRs and DERs associated with such Restricted Unit shall automatically expire for no consideration.
(c) Unit Grants. The Committee shall have the authority to make Unit Grants to Eligible Persons. Each Unit Grant shall constitute a transfer of a Unit without other payment therefor and that is not subject to transfer restriction or risk of forfeiture hereunder.
(d) Notional Units. The Committee shall have the authority to determine the Eligible Persons to whom Notional Units shall be granted, the number of Notional Units to be granted to each such Eligible Person, the Restricted Period, the time or conditions under which the Notional Units may become vested or forfeited, which may include the accelerated vesting upon the achievement of specified performance goals, and such other terms and conditions as the Committee may establish with respect to such Awards, including whether DERs are granted with respect to such Notional Units.
(i) DERs. To the extent provided by the Committee, in its discretion, a grant of Notional Units may include a tandem DER grant, which may provide that such DERs shall be credited to a bookkeeping account (with or without interest in the discretion of the Committee), be subject to the same forfeiture and other restrictions as the tandem Award, or be subject to such other provisions or restrictions or no provisions or restrictions, as determined by the Committee in its discretion.
(ii) Forfeitures. Except as otherwise provided in the terms of the Award Agreement, upon a Participant ceasing to be an Officer, Employee, Consultant or Director, as applicable and as determined by the Committee, for any reason during the applicable Restricted Period, all unvested outstanding Notional Units (and any associated DERs and amounts accumulated with respect thereto) awarded the Participant shall be automatically forfeited for no consideration on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Notional Units (and any associated DERs and amounts accumulated with respect thereto).
(iii) Lapse of Restrictions. Upon or as soon as reasonably practical following the vesting of each Notional Unit, subject to the provisions of Section 8(b), the Participant shall be entitled to receive from the Partnership one Unit or cash equal to the Fair Market Value of a Unit, as determined by the Committee, in its discretion, along with accumulated DERs with respect thereto. Unless provided otherwise in the Award Agreement, settlement shall be made in a single lump sum no later than the fifteenth (15th) day of the third (3rd) month following the date on which vesting occurs and the restrictions lapse. Upon vesting of a Notional Unit, other than with respect to accumulated amounts to be paid up through the date of such vesting, all DERs associated with such Notional Unit shall automatically expire for no consideration. Should the Participant die before receiving all vested amounts payable hereunder, the balance shall be paid to the Participant’s estate by such date.
(e) Unit Appreciation Rights. The Committee shall have the authority to determine the Eligible Persons to whom Unit Appreciation Rights shall be granted, the number of Units to be covered by each grant and the conditions and limitations applicable to the exercise of the Unit Appreciation Right, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan.
(i) Exercise Price. The exercise price per Unit Appreciation Right shall be not less than 100% of Fair Market Value of a Unit as of the date of grant.
(ii) Vesting/Time of Payment. The Committee shall determine the time or times at which a Unit Appreciation Right shall become vested and exercisable and the time or times at which a Unit Appreciation Right shall be paid in whole or in part.
(iii) Forfeitures. Except as otherwise provided in the terms of the Award Agreement, upon the Participant ceasing to be an Officer, Employee, Consultant or Director, as applicable and as determined by the Committee, for any reason prior to vesting, all unvested Unit Appreciation Rights awarded the Participant shall be automatically forfeited for no consideration on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Unit Appreciation Rights, in which case, such Unit Appreciation Rights shall be deemed vested upon termination of employment or service and paid as soon as administratively practical thereafter.
(iv) Restrictions on UAR Grants. The Committee may grant UARs that are intended to comply with Treasury Regulation § 1.409A-l(b)(5)(i)(A) only to Officers, Employees, Consultants and Directors performing direct services for the Partnership or a corporation or other type of entity in a chain of corporations or other entities in which each corporation or other entity has a “controlling interest” in another corporation or entity in the chain, starting with the Partnership and ending with the corporation or other entity for which the Officer, Employee, Consultant or Director performs direct services. For purposes of this Section 6(e), “controlling interest” shall mean “controlling interest” as defined in Section 6(a). The Committee may grant UARs that are otherwise exempt from or compliant with the Section 409A Rules to any Eligible Person.
(f) Performance Awards. The Committee shall have the authority to determine the Eligible Persons to whom Performance Awards shall be granted and the conditions and limitations applicable to the Performance Award, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan.
(i) Terms and Conditions. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the Performance Metrics and related Performance Goals to be achieved (on an absolute or relative basis) during any performance period, the length of any performance period, the vesting criteria, the amount of any Performance Award and the amount of any payment to be made pursuant to any Performance Award. Which factor or factors are to be used with respect to any grant, and the weight to be accorded thereto if more than one factor is used, shall be determined by the Committee, in its sole discretion, at the time of grant. Performance Metrics and related Performance Goals need not be the same for all Participants, and Performance Metrics and
related Performance Goals may be based on one or more of the business criteria enumerated in the definition of Performance Metrics as determined by the Committee.
(ii) Payment of Performance Awards. Performance Awards that become vested shall, unless provided otherwise in the Award Agreement, be paid in a single lump sum no later than the fifteenth (15th) day of the third (3rd) month following the date on which vesting occurs and the restrictions lapse. Such payment(s) may be made in cash or Units as determined by the Committee.
(iii) Forfeiture. Except as otherwise determined by the Committee, upon a Participant ceasing to be an Officer, Employee, Consultant or Director, as applicable and as determined by the Committee, for any reason prior to vesting, all unvested Performance Awards awarded the Participant shall be automatically forfeited for no consideration on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Performance Awards, in which case, a prorated portion of such Performance Awards shall be deemed vested upon termination of employment or service and paid in accordance with the provisions of Section 6(f)(ii) above.
(g) Other Unit-Based Awards. The Committee may grant to Eligible Persons Other Unit-Based Awards, which shall consist of an Award denominated or payable in, valued in whole or in part by references to or otherwise based on or related to, Units, in each case as deemed by the Committee to be consistent with the purpose of the Plan. Subject to the terms of the Plan, the Committee shall determine the terms and conditions of any such Other Unit-Based Award. An Other Unit-Based Award may be paid in cash, Units or any combination thereof as determined by the Committee.
(h) General.
(i) Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted to Eligible Persons either alone or in addition to, in tandem with, or in substitution for any other Award granted under the Plan or any award granted under any other plan of the General Partner, the Partnership or any Affiliate of either of the foregoing. No Award shall be issued in tandem with another Award if the tandem Awards would result in adverse tax consequences under the Section 409A Rules. Awards granted in addition to or in tandem with other Awards or awards granted under any other plan of the General Partner, the Partnership or any Affiliate of either of the foregoing may be granted either at the same time as or at a different time from the grant of such other Awards or awards.
(ii) Limits on Transfer of Awards.
(A) Except as provided in Section 6(h)(ii)(C) below, each Award shall be exercisable by or payable to only the Participant during the Participant’s lifetime, or to the person to whom the Participant’s rights shall pass by will or the laws of descent and distribution.
(B) Except as provided in Section 6(h)(ii)(C) below, no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the General Partner, the Partnership or any Affiliate of either of the foregoing.
(C) To the extent specifically provided by the Committee with respect to an Award, an Award may be transferred by a Participant without consideration to immediate family members or related family trusts, limited partnerships or similar entities or on such terms and conditions as the Committee may from time to time establish.
(iii) Term of Awards. The term of each Award shall be for such period as may be determined by the Committee, but shall not exceed 10 years. Unless the Award Agreement provides otherwise, the term of an Award shall be 10 years. If upon the expiration of the term of an outstanding Award such Award has not either vested or been exercised (if exercisable), then such Award shall immediately expire for no consideration.
(iv) Unit Certificates. All certificates for Units or other securities of the Partnership delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the SEC, any stock exchange upon which such Units or other securities are then listed, and any applicable federal or state laws; the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
(v) Consideration for Grants. Awards may be granted for such consideration, including services, as the Committee determines.
(vi) Delivery of Units or other Securities and Payment by Participant of Consideration. Notwithstanding anything in the Plan or any Award Agreement to the contrary, delivery of Units pursuant to the exercise or vesting of an Award may be deferred for any period during which, in the good faith determination of the Committee, the Partnership is not reasonably able to obtain Units to deliver pursuant to such Award without violating the rules or regulations of any applicable law or securities exchange. No Units or other securities shall be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including any exercise price or tax withholding) is received by the Partnership.
(vii) Change in Control.
(A) Unless specifically provided otherwise in the Award Agreement, upon a Change in Control or such time prior thereto as established by the Committee, to the extent that (1) the Partnership does not survive as an independent organization and (2) any surviving or successor organization or any of its affiliates does not assume or continue the Awards substantially on the same terms, then, immediately prior to the Change in Control (or any earlier date related to the Change in Control and established by the Committee) all outstanding Awards shall automatically vest or become exercisable in full, as the case may be. In this regard, all Restricted Periods shall terminate and all performance criteria, if any, shall be deemed to have been achieved at the target level.
(B) The Committee shall have the discretion to vary the definition of Change in Control in any Award Agreement.
(C) Except as otherwise provided in the Award Agreement, any positive “spread” (determined based on the Fair Market Value of Units on the payment date) on an Option or UAR that is or becomes fully vested and exercisable as of the date of a Change in Control (or any earlier date related to the Change in Control and established by the Committee) shall be paid in a single payment in Units, or cash or other property, or any combination of Units and cash and other property, as determined by the Committee. Except as otherwise provided in the Award Agreement, any Award of time-based Notional Units or Restricted Units that pursuant to his Section 6(h)(viii) are deemed to have the applicable Restriction Period lapse as of the date of a Change in Control (or any earlier date related to the Change in Control and established by the Committee), shall be settled by (i) issuance of unrestricted Units based on the number of Units that were subject to the Award on the date of grant of the Award or (ii) payment of cash and/or other property equal to the Fair Market Value of a Unit on the payout date for each Notional Unit or Restricted Unit or (iii) any combination of payouts under clauses (i) and (ii) of this sentence, as determined by the Committee. Except as otherwise provided in the Award Agreement, any Award of performance-based Notional Units or Restricted Units that pursuant to this Section 6(h)(vii) are deemed to have the applicable Restriction Period lapse and to have all applicable performance criteria achieved at the target level as of the date of a Change in Control (or any earlier date related to the Change in Control and established by the Committee), shall be settled by (i) issuance of unrestricted Units based on the number of Units that were subject to the Award as established on the date of grant of the Award, prorated based on the number of complete months of the Restricted Period that have elapsed as of the payment date, and assuming that target performance was achieved or (ii) payment of cash and/or other property equal to the Fair Market Value of a Unit on the payout date for each Notional Unit or Restricted Unit that is payable under clause (i) of this sentence or (iii) any combination of payouts under clauses (i) and (ii) of this sentence, as determined by the Committee. Except as otherwise provided in the Award Agreement or determined by the Committee, any Performance Award that pursuant to this Section 6(h)(vii) is deemed to have all applicable performance criteria achieved at the target level as of the date of a Change in Control (or any earlier date related to the Change in Control and established by the Committee), shall be paid in cash, prorated based on the number of complete months of the performance period that have elapsed as of the payment date, and assuming that target-level performance was achieved. Any accelerated payout pursuant to this Section 6(h)(vii) shall be made in a single payment within 30 days after the date of the Change in Control.
To the extent an Option or UAR is not vested or exercisable, or a Notional Unit or Restricted Unit does not vest, pursuant to the preceding provisions of this Section 6(h)(vii) or the Award Agreement therefor upon the Change in Control, the Committee may, in its discretion, cancel such Award or provide for an assumption of such Award or a replacement grant on substantially the same terms; provided, however, that upon any cancellation of an Option or UAR that has a positive “spread” or a Notional Unit or Restricted Unit, the holder shall be paid an
amount in Units or cash and/or other property or any combination of cash and other property, as determined by the Committee, equal to (1) such “spread” if an Option or UAR or (2) the Fair Market Value of a Unit, if a Notional Unit or Restricted Unit. Such payment shall be made within 30 days after the date of the Change in Control.
(viii) Payment of DERs and UDRs. Except as otherwise provided in the Award Agreement, DERs and UDRs that are not subject to any restrictions shall be currently paid to the Participant at the time the distribution is made to unitholders. Except as otherwise provided in the Award Agreement, to the extent DERs or UDRs are subject to any restrictions, such amounts shall be paid to the Participant in a single lump sum no later than the fifteenth (15th) day of the third (3rd) month following the date on which vesting occurs and the restrictions lapse. Should the Participant die before receiving all vested amounts hereunder, the balance shall be paid to the Participant’s estate by such date.
(ix) Section 409A Rules. This Plan, the Awards and all Award Agreements are intended to either comply with or be exempt from the Section 409A Rules, and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent. The General Partner, the Partnership and their respective Affiliates make no representations that the Plan, the administration of the Plan, or the Awards, Award Agreements or amounts payable hereunder comply with, or are exempt from, the Section 409A Rules, and undertake no obligation to ensure such compliance or exemption. For purposes of the Section 409A Rules, each payment or amount due under this Plan shall be considered a separate payment, and a Participant’s entitlement to a series of payments under this Plan shall be treated as an entitlement to a series of separate payments. Notwithstanding any other provision of the Plan or an Award Agreement to the contrary, if a Participant is a “specified employee” under the Section 409A Rules, except to the extent permitted under the Section 409A Rules, no benefit or payment that is not otherwise exempt from the Section 409A Rules (after taking into account all applicable exceptions to the Section 409A Rules, including to the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”) shall be made to that Participant under the Plan or the affected Award granted thereunder on account of the Participant’s “separation from service,” as defined in the Section 409A Rules, until the later of the date prescribed for payment in the Plan or the affected Award granted thereunder and the first (1st) day of the seventh (7th) calendar month that begins after the date of the Participant’s separation from service (or, if earlier, the date of death of the Participant). Unless otherwise provided in the Award Agreement, any amount that is otherwise payable within the delay period described in the immediately preceding sentence will be aggregated and paid in a lump sum without interest.
7. | Amendment and Termination. |
Except to the extent prohibited by applicable law:
(a) Amendments to the Plan. Except as required by the rules of the principal securities exchange on which the Units are traded and subject to Section 7(b) below, the Board may amend, alter, suspend, discontinue or terminate the Plan in any manner, including increasing the number of Units available for Awards under the Plan, without the consent of any partner, Participant, other holder or beneficiary of an Award, or other Person.
(b) Amendments to Awards Subject to Section 7(a). The Committee may waive any conditions or rights under, amend any terms of, or alter any Award theretofore granted or Award Agreement related thereto; provided, however, that no change, other than pursuant to Section 7(c), in any Award or Award Agreement related thereto shall materially reduce the benefit to a Participant without the consent of such Participant.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including the events described in Section 4(c) of the Plan) affecting the Partnership or the financial statements of the Partnership, or of changes in applicable laws, regulations or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available to Participants under the Plan or such Award.
Notwithstanding the foregoing, (i) with respect to an above event that is an “equity restructuring” event that would be subject to a compensation expense pursuant to ASC Topic 718, or any successor accounting standard, the provisions in Section 4(c) shall control to the extent they are in conflict with the discretionary provisions of this Section 7(c); provided, however, that nothing in this Section 7(c) or Section 4(c) shall be construed as providing any Participant or any beneficiary any rights with respect to the “time value,” “economic opportunity” or “intrinsic value” of an Award or limiting in any manner the Committee’s actions that may be taken with respect to an Award as set forth above or in Section 4(c); and (ii) no action shall be taken under this Section 7(c) which shall cause an Award to fail to comply with the Section 409A Rules, to the extent the Section 409A Rules are applicable to such Award.
8. | General Provisions. |
(a) No Rights to Award. No Person shall have any right or claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants. The terms and conditions of Awards need not be the same with respect to each recipient.
(b) Tax Withholding.
(i) The General Partner, the Partnership and Affiliates of either of the foregoing are authorized (1) to withhold from any Award, from any payment due or transfer made under any Award or from any compensation or other amount owing to a Participant the amount (in cash, Units, other securities, Units that would otherwise be issued pursuant to such Award or other property) of any applicable taxes payable in respect of the grant of an Award, its exercise, the lapse of restrictions thereon or any payment or transfer under an Award or under the Plan and (2) to take such other action as may be necessary in the opinion of the Partnership to satisfy applicable withholding obligations for the payment of such taxes.
(ii) Unless otherwise provided to the contrary in an Award Agreement, all Units to be issued under an Award shall be net of tax withholding, such that the tax withholding obligation of the Participant in respect of such Units is satisfied through the retention by the General Partner or by the Partnership of such number of Units with a Fair Market Value equal to the tax withholding obligation.
(c) No Right to Employment or Services. The grant of an Award shall not be construed as giving a Participant the right to be retained as an Officer, Employee, Consultant or Director, as applicable, or to otherwise continue to provide services to the General Partner, the Partnership or any Affiliate of either of the foregoing. Furthermore, the General Partner, the Partnership or an Affiliate of either of the foregoing, as applicable, may at any time dismiss a Participant from employment or terminate a consulting or other service relationship, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan, any Award Agreement or any other agreement.
(d) Governing Law. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware without regard to its conflict of laws principles.
(e) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Units or other consideration under an Award if, in its sole discretion, it determines that the issuance or transfer of such Units or such other consideration might violate any applicable law or regulation, the rules of the principal securities exchange on which the Units are then traded, or entitle the General Partner, the Partnership or an Affiliate of either of the foregoing to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the General Partner or to the Partnership by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the General Partner, the Partnership or any Affiliate of either of the foregoing and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the General Partner, the Partnership or any Affiliate of either of the foregoing pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the General Partner, the Partnership or any Affiliate of either of the foregoing.
(h) No Fractional Units. No fractional Units shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Units or whether such fractional Units or any rights thereto shall be canceled, terminated or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
(j) Facility Payment. Any amounts payable hereunder to any person under legal disability or who, in the judgment of the Committee, is unable to properly manage his financial affairs, may be paid to the legal representative of such person, or may be applied for the benefit of such person in any manner that the Committee may select, and the General Partner, the Partnership and Affiliates of either of the foregoing shall be relieved of any further liability for payment of such amounts.
(k) Participation by Affiliates. In making Awards to Consultants engaged by and Employees employed by an Affiliate of either the General Partner or of the Partnership, the Committee shall be acting on behalf of such Affiliate, and to the extent the General Partner or the Partnership has an obligation to reimburse such Affiliate for compensation paid to Consultants and Employees for services rendered for the benefit of the Partnership, such payments or reimbursement payments may be made by the General Partner or by the Partnership directly to the Affiliate.
(l) Gender and Number. Words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural.
(m) No Guarantee of Tax Consequences. None of the Board, the General Partner, the Partnership or the Committee makes any commitment or guarantee that any federal, state, local or other tax treatment will (or will not) apply or be available to any person participating or eligible to participate hereunder or to any person claiming through or on behalf of any such person.
(n) Claw-back Policy. All Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of any Award or upon the receipt or resale of any Units underlying the Award) shall be subject to the provisions of any claw-back policy implemented by, as applicable, the General Partner, the Partnership or any Affiliate of either of the foregoing, including, without limitation, any claw-back policy adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement.
9. | Term of the Plan. |
Once effective pursuant to Section 1(b), the Plan shall remain effective until the tenth (10th) anniversary of the Effective Date. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted prior to such termination, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award or to waive any conditions or rights under such Award, shall extend beyond such termination date.
Effective Date: March 6, 2015
Exhibit 10.3
SEPARATION AND TRANSITION AGREEMENT
This SEPARATION AND TRANSITION AGREEMENT and Exhibits (collectively, this “Agreement”) is entered into on November 3, 2021 (the “Execution Date”) by and between Gerald F. Willinger (“Executive”), on the one hand, and Evolve Transition Infrastructure GP LLC (formerly known as Sanchez Midstream Partners GP LLC), a Delaware limited liability company (the “Company”) and general partner of Evolve Transition Infrastructure LP (formerly known as Sanchez Midstream Partners LP), a Delaware limited partnership (“Partnership” and, together with the Company, the “Employer Parties”), on the other hand. Executive, the Company and the Partnership are collectively referred to herein as the “Parties,” and individually as a “Party.” Unless otherwise defined herein, all capitalized terms used in this Agreement that are not otherwise defined herein shall have the meanings assigned to them in certain Amended and Restated Executive Services Agreement for Realignment by and between Executive, the Company and the Partnership, dated April 15, 2021 (the “Employment Agreement”).
WHEREAS, Executive has served as a member of the Board of Directors of the Company (the “Board”) and Chief Executive Officer of the Company pursuant to the Employment Agreement;
WHEREAS, Executive previously agreed to be bound by certain restrictive covenants in Section 7 of the Employment Agreement, which restrictive covenants remain enforceable as provided herein;
WHEREAS, Executive has previously received the Deferred Award and Legacy Award, the vesting of which is subject to the terms and conditions set forth in the Employment Agreement and the governing plan document and award agreements that are applicable to the Deferred Award and Legacy Award;
WHEREAS, the Parties mutually desire to transition Executive’s duties and responsibilities with respect to the Employer Parties;
WHEREAS, Executive wishes to voluntarily resign from any and all employment, board and other positions with respect to the Employer Parties; and
WHEREAS, in connection with Executive’s voluntarily resignation described above, the Parties desire to settle all outstanding potential disputes between the Employer Parties and Executive as set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual promises contained herein, the Parties, intending to be legally bound, agree as follows:
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[Execution page Follows]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date written below.
Dated: November 3, 2021_________/s/ Gerald F. Willinger_______________________
Gerald F. Willinger
[Execution Page to Separation Agreement]
Dated: November 3, 2021_________COMPANY
Evolve Transition Infrastructure GP LLC
By: /s/ John Steen___________________
Name: John Steen
Title: Chairman of the Board
Dated: November 3, 2021_________PARTNERSHIP
Evolve Transition Infrastructure LP
By: Evolve Transition Infrastructure GP LLC, its general partner
By: /s/ Charles C. Ward__________
Name: Charles C. Ward
Title: Chief Financial Officer
[Execution Page to Separation Agreement]
EXHIBIT 1
November 3, 2021
Via Email
Evolve Transition Infrastructure GP LLC
c/o Evolve Transition Infrastructure LP
(f/k/a Sanchez Midstream Partners LP)
Attn: John Steen
1360 Post Oak Blvd, Suite 2400
Houston, TX 77056
Attention: Chief Financial Officer
Re: | Notice of Voluntary Resignation |
John:
I hereby provide notice of my voluntary resignation from my employment from Evolve Transition Infrastructure GP LLC (formerly known as Sanchez Midstream Partners GP LLC) (the “Company”) and from any and all positions with the Company, Evolve Transition Infrastructure LP (formerly known as Sanchez Midstream Partners LP), a Delaware limited partnership, or any of their affiliates, including but not limited to my position on the board of the Company, as of November 30, 2021, and at such time that is immediately prior to December 1, 2021, Central Time.
Sincerely,
Gerald F. Willinger
EXHIBIT 2
GENERAL RELEASE
This GENERAL RELEASE OF CLAIMS (this “Release”) is made as of _______________ ____, 2021 and effective as of the Effective Date (defined below) by Gerald F. Willinger (“Executive”) in favor of Evolve Transition Infrastructure GP LLC (formerly known as Sanchez Midstream Partners GP LLC), a Delaware limited liability company (the “Company”) and general partner of Evolve Transition Infrastructure LP (formerly known as Sanchez Midstream Partners LP), a Delaware limited partnership (the “Partnership” and, together with Company, the “Employer Parties”), and the other Releasees (as defined herein) in connection with the Separation and Transition Agreement entered into by and among Executive, the Company and the Partnership, dated as of November __, 2021 (the “Separation Agreement”). Unless otherwise defined herein, all capitalized terms used in this Release that are defined in the Separation Agreement and are not otherwise defined herein shall have the meanings assigned to them in the Separation Agreement.
WHEREAS, the Employer Parties wish to obtain a final general release of all claims as of the Effective Date by Executive; and
WHEREAS, Executive is willing to execute and deliver this Release to the Employer Parties, as specifically provided herein.
NOW, THEREFORE, in consideration of the promises, covenants and undertakings set forth herein, and in full compromise, release and settlement, accord and satisfaction and discharge of all claims or causes of action, known or unknown, the Parties agree as follows:
1.Consideration. Following Executive’s execution and return of this Release, provided this Release is not timely revoked by Executive, Executive shall be eligible to receive the applicable benefits described in, and subject to, Section 2(b) of the Separation Agreement. Executive acknowledges that Executive is not entitled to, and will not receive, any other compensation or benefits from the Employer Parties except as specified herein.
2.Waiver and Release of Claims.
(a)General Release by Executive. In consideration of the foregoing, including the payment described in Section 1 above, which Executive hereby expressly acknowledges as good and sufficient consideration for the releases provided below, Executive hereby unconditionally and irrevocably releases, acquits and forever discharges, to the fullest extent permitted by applicable law, (i) the Company, the Partnership and all of their predecessors, successors and assigns, (ii) all of the Company’s and the Partnership’s past, present and future affiliates, parent entities, subsidiaries, divisions and joint venture entities and all of their respective predecessors, successors and assigns, and (iii) all of the past, present and future officers, directors, managers, partners, members, shareholders, investors, employee benefit plan administrators, employees, agents, insurers, attorneys and other representatives of each of the entities described in the immediately preceding clauses (i) and (ii), individually and in their respective representative capacities (the persons or entities referred to in the immediately preceding clauses (i), (ii) and (iii) being, individually, a “Releasee” and, collectively, the “Releasees”), from any and every action, cause of action, complaint, claim, demand, administrative charge, legal right, compensation, obligation, damages (including consequential, exemplary and punitive damages), liability, cost or expense (including attorney’s fees) that Executive has, may have or may be entitled to from or against any of the Releasees, whether legal, equitable or administrative, in any forum or jurisdiction, whether known or unknown, foreseen or unforeseen, matured or unmatured, accrued or not accrued, of any kind or nature whatsoever
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arising from the beginning of time to the Effective Date (defined below), including but not limited to those that arise directly or indirectly out of, or are based on or related in any way to Executive’s employment with any Employer Party or any of its affiliates, including any such matter arising in respect of that certain Original Employment Agreement, the Employment Agreement, or from the negligence, gross negligence or reckless, willful or wanton misconduct of any of the Releasees (together, the “Released Claims”).
(b)Release to be Full and Complete; Waiver of Claims, Rights and Benefits. The Parties intend this Release to cover any and all Released Claims, whether they are contract claims, equitable claims, fraud claims, tort claims, discrimination claims, harassment claims, whistleblower or retaliation claims, personal injury claims, constructive or wrongful discharge claims, emotional distress claims, pain and suffering claims, public policy claims, claims for debts, claims for expense reimbursement, wage claims, claims with respect to any other form of compensation, claims for attorneys’ fees, other claims or any combination of the foregoing, and whether they may arise under any employment contract (express or implied), policies, procedures, practices or by any acts or omissions of any of the Releasees or whether they may arise under any state, local or federal law, statute, ordinance, rule or regulation, including all Texas employment discrimination laws, Chapter 21 of the Texas Labor Code, the Texas Payday Act, all U.S. federal discrimination laws, including the Age Discrimination in Employment Act of 1967, the Employee Retirement Income Security Act of 1974, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the Equal Pay Act, the National Labor Relations Act, the Older Workers Benefit Protection Act, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, the Sarbanes-Oxley Act of 2002 or common law, without exception. As such, it is expressly acknowledged and agreed that this Release is a general release, representing a full and complete disposition and satisfaction of all of any Releasee’s real or alleged legal obligations to Executive, with the only exceptions being as expressly stated Section 2(c) below. Executive understands and agrees, in compliance with any law, statute, ordinance, rule or regulation which requires a specific release of unknown claims or benefits, that this Release includes a release of unknown claims, and Executive hereby expressly waives and relinquishes any and all Released Claims and any associated rights or benefits that Executive may have, including any that are unknown to Executive at the time of the execution of this Release.
(c)Notwithstanding the foregoing, the Release does not apply to, and the Released Claims do not include: (x) any claim arising from any breach or failure to perform any provision of the Realignment Agreement or this Release; (y) any claim for worker’s compensation benefits; or (z) any other claim that cannot be waived by a general release. In addition, nothing herein waives any claims that Executive may have: (i) to vested benefits pursuant to any plan governed by ERISA; (ii) to any insurance protections or benefits or indemnification rights; or (iii) to any claims first arising, and under circumstances first occurring, after the time that Executive signs this Release.
(d)Certain Representations and Acknowledgements of Executive. Executive represents and warrants that: (x) Executive is the sole and lawful owner of all rights, titles and interests in and to all Released Claims; and (y) Executive has the fully legal right, power, authority and capacity to execute and deliver this Release. Executive acknowledges that Executive has been given a reasonable period of time of twenty-one (21) days, in which to consider this Release and has been advised to discuss the terms of this Release with legal counsel of Executive’s own choosing and has had the opportunity to do so. Executive represents that: (i) Executive has relied on Executive’s own knowledge and judgment and on the advice of independent legal counsel of Executive’s choosing and has consulted with such other independent advisors as Executive and Executive’s counsel deemed appropriate in connection with Executive’s review of this Release; (ii) based on Executive’s review, Executive acknowledges that Executive fully and completely understands and accepts all the terms of this Release and their legal effects; (iii) Executive is entering into this Release voluntarily and of Executive’s own free will, with full consideration of any and all rights which Executive may currently have; (iv) Executive is not relying on
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any representations or statements made by the Company, the Partnership or any of their affiliates, or by any of their respective officers, directors, employees, affiliates, agents, attorneys or other representatives, regarding this Release, except to the extent such representations are expressly set forth in this Release; (v) Executive has made Executive’s own investigation of the facts and is relying solely upon Executive’s own knowledge in entering into this Release; (vi) Executive is not relying upon a legal duty, if one exists, on the part of the Company, the Partnership or any of their affiliates, or any of their respective officers, directors, employees, subsidiaries, affiliates, agents, attorneys or other representatives, to disclose any information in connection with the execution of this Release or its preparation, it being expressly understood that Executive shall never assert any failure to disclose information on the part of any such person or entity as a ground for challenging this Release or any provision hereof; and (vii) Executive knowingly waives any claim that this Release was induced by any misrepresentation or nondisclosure and any right to rescind or avoid this Release based upon presently existing facts, known or unknown.
(e)Covenant Not to Sue. Executive expressly agrees that neither Executive nor any person acting on Executive’s behalf will file or bring or permit to be filed or have brought any lawsuit or other action before any court, agency or other governmental authority for legal or equitable relief against any of the Releasees involving any of the Released Claims. Notwithstanding the foregoing, Executive acknowledges that nothing contained in this Release limits Executive’s ability to file a charge or complaint with a federal, state or local governmental agency or commission. Executive further acknowledges that this Release does not limit Executive’s ability to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agency, including providing documents or other information, without notice to the Company. While nothing in this Release limits Executive’s ability to file a charge or complaint with any federal, state or local governmental agency or commission, should Executive file a charge or complaint with any governmental agency, or should any governmental entity, agency or commission file a charge, action, complaint or lawsuit against any of the Releasees based on any Released Claim, Executive agrees not to seek or accept any resulting payment from the Releasees. This Release does not limit or prohibit Executive’s right to receive an award for information provided to any federal, state or local governmental agency or commission to the extent that such limitation or prohibition is a violation of law.
(f)Covenants. Executive reaffirms the covenants set forth in Section 7 of the Employment Agreement and Section 3 of the Separation Agreement and represents that he is in full compliance with such terms. Executive further represents that he has returned all property as required by Section 3(b) of the Separation Agreement.
(g)Parties in Interest. This Release is for the benefit of the Releasees and shall be binding on Executive and his or her heirs, successors and assigns.
3.Amendment; Revocation. This Release may not be clarified, modified, changed or amended except in writing signed by Executive and the Employer Parties. Notwithstanding any other provision in this Release to the contrary, Executive may revoke this Release, in writing, for up to seven days following the date of Executive’s execution of this Release, by delivering a written notice of Executive’s revocation of this Release to the Company. Any such notice of revocation shall be (a) addressed to Evolve Transition Infrastructure GP LLC c/o Evolve Transition Infrastructure LP (f/k/a Sanchez Midstream Partners LP), 1360 Post Oak Blvd, Suite 2400, Houston, TX 77056, Attention: Chief Financial Officer or via email (email: cward@evolvetransition.com); and (b) deemed given, delivered and effective on the earliest of: (i) in the case of delivery by email, on the date of transmission, if such notice is delivered, and confirmation of receipt is received, by Executive, prior to 5:00 p.m. (Central Time) on a business day, and, otherwise, on the first business day after the date of transmission (provided that Executive has received confirmation of receipt of such transmission); (ii) one business day after when sent,
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if sent by nationally recognized overnight courier service (charges prepaid); or (iii) upon actual receipt. Executive acknowledges and agrees that if Executive (x) fails to timely sign this Release prior to the close of the twenty-one (21)-day consideration period described in Section 2(d) above or (y) timely revokes this Release, this Release will be null and void and of no effect, and the Company will not have any obligation to pay Executive the consideration described in Section 1 above. If no such revocation occurs, the Release shall become effective on the eighth (8th) day following execution of this Release (the “Effective Date”).
4.Severability. If any provision of this Release is held to be illegal, invalid or unenforceable under applicable law, that provision shall be severable and this Release shall be construed and enforced as if that illegal, invalid or unenforceable provision never comprised a part hereof, and the remaining provisions of this Release shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision, and there shall be added automatically as part of this Release a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. This Release should be construed by limiting and reducing it only to the minimum extent necessary to be enforceable under then applicable law.
5.Section Headings. Titles and headings to Sections and subsections hereof are for the purpose of reference only and shall in no way limit, define or otherwise affect the provisions of this Release.
6.Applicable Law. This Release shall be interpreted and construed in accordance with the substantive laws of the State of Texas, without giving effect to any conflicts of laws provisions thereof that would result in the application of the laws of any other jurisdiction.
7.Dispute Resolution. The Parties agree to submit any dispute arising out of or relating to this Release to the arbitration procedure as described in Section 4 of the Separation Agreement.
8.Successors and Heirs. This Release shall bind and inure to the benefit of the Employer Parties’ successors and to Executive’s heirs and devisees.
[Execution Page Follows]
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Release as of the Determination Date.
PARTNERSHIP | ||
Evolve Transition Infrastructure LP | ||
By: | Evolve Transition Infrastructure GP LLC, its general partner | |
By: | /s/ Charles C. Ward | |
EXECUTIVE |
/s/ Gerald F. Willinger |
Gerald F. Willinger |
[Execution Page to Release]
Exhibit 10.4
THIS EXECUTIVE SERVICES AGREEMENT (this “Agreement”) is made and entered into as of November 3, 2021 (the “Effective Date”), by and between Randall L. Gibbs (“Executive”) and Evolve Transition Infrastructure GP LLC (formerly known as Sanchez Midstream Partners GP LLC), a Delaware limited liability company (the “Company”) and the general partner of Evolve Transition Infrastructure LP (formerly known as Sanchez Midstream Partners LP), a Delaware limited partnership (the “Partnership,” and together with the Company, the “Partnership Parties”). Executive and the Company are collectively referred to herein as the “Parties,” and individually as a “Party.”
WHEREAS, the Parties wish that Executive be hired as an employee of the Company as of the Effective Date, and to transition into the role of the Chief Executive Officer of the Company effective as of December 1, 2021, in each case, to provide services for and on behalf of the Partnership Parties; and
WHEREAS, the Parties wish to memorialize their agreement with respect to the terms and conditions of Executive’s employment as specified hereunder.
NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, mutually agree as follows:
i. | participation in the applicable retirement plans, health and welfare plans and disability insurance plans of the Partnership Parties, under the terms of such plans (in effect from time to time) and to the same extent and under the same conditions such participation and coverages are provided to other similarly situated executive officers of the Company; |
ii. | unlimited paid vacation each calendar year which may be used in Executive’s reasonable discretion, so long as the vacation time does not interfere with Executive’s ability to complete his or her corporate obligations, and is used only for time off for vacation and personal days, and not for other purposes covered by leave of absence and paid sick leave policies; and |
iii. | reimbursement within thirty (30) days of its receipt from Executive of supporting receipts, to the extent required by the Company’s reimbursement policies, for all of Executive’s out-of-pocket business expenses reasonably and actually incurred by Executive in connection with his or her employment hereunder (Board approval shall be required for any single expense exceeding $10,000 or for expenses exceeding in the aggregate annually $120,000 and reimbursement of any and all business expenses is conditioned on Executive submitting his or her request to the Company for reimbursement and supporting substantiation within ninety (90) days of the date on which any such expenses shall have been incurred). |
provided, that, any of the events described in Section 4(b)(iv)(3) or Section 4(b)(iv)(4) above shall constitute Cause only if Executive fails to cure such event to the reasonable satisfaction of the Board within thirty (30) calendar days of receiving written notice from the Board of the event which allegedly constitutes Cause.
provided, that, any of the conditions described in Section 4(b)(vi)(1) through 4(b)(vi)(4) above shall constitute Good Reason only if the Company fails to cure such condition to the reasonable satisfaction of Executive within thirty (30) calendar days of receiving written notice from Executive of the condition which allegedly constitutes Good Reason; and provided further, that, Executive’s termination shall constitute a termination by Executive for Good Reason only if the Termination Date occurs not later than ninety (90) calendar days following the initial existence of one or more of the conditions described in Section 4(b)(vi)(1) through 4(b)(vi)(4) above.
provided, that, as a condition to receiving the benefits described in the above paragraphs 2-4, Executive must sign and return a release of all known and unknown claims in a termination agreement that is acceptable to the Company within the applicable deadline set forth therein, but in no event later than forty-five (45) days after the Termination Date.
provided, that, as a condition to receiving the benefits described in the above paragraphs 2-4, Executive must sign and return a release of all known and unknown claims in a termination agreement that is acceptable to the Company within the applicable deadline set forth therein, but in no event later than forty-five (45) days after the Termination Date.
IF TO THE COMPANY:
Evolve Transition Infrastructure GP LLC
c/o Evolve Transition Infrastructure LP
1360 Post Oak Blvd, Suite 2400
Houston, TX 77056
Attn: Jack Howell
Email: Howell@stonepeakpartners.com
With a copy to:
Sidley Austin LLP
1000 Louisiana St., Suite 5900
Houston, Texas 77002
Attention: Cliff W. Vrielink
Email: cvrielink@sidley.com
IF TO EXECUTIVE:
Randall L. Gibbs
c/o Evolve Transition Infrastructure LP
1360 Post Oak Blvd, Suite 2400
Houston, TX 77056
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the Effective Date first written above.
COMPANY | |||
Evolve Transition Infrastructure GP LLC | |||
By: | /s/ Charles Ward | ||
Name:Charles Ward | |||
| |
EXECUTIVE |
/s/ Randall L. Gibbs |
Randall L. Gibbs |
[Signature Page to Executive Services Agreement]
Schedule A
Permitted Outside Activities
The business of, or the performance of services with respect to, developing, constructing, owning and operating renewable fuels facilities that are not in contravention of that certain Framework Agreement by and between HOBO Renewable Diesel LLC and Evolve Transition Instructure LP, dated November 3, 2021.
Victory Solar
A Texas domiciled provider of primarily residential solar sales, installation and maintenance in several states. I am 51% owner and passive to the business. I provide capital and mentoring on strategy and other administrative functions to my 49% Partner. My involvement generally consists of a lunch meeting once a month and consumes less than 4 hours a month of my time.
Northern New England Energy Company
A Maine Corporation is the owner of the largest contiguous tract of land (1056+/- acres) south of Portland Maine, in York County Maine. The Company was formed and acquired the property in 1973 in response to the Arab Oil Embargo and was initially developed as a petroleum refinery site so that New England could be energy independent. The refinery project never went forward and the property has languished for 40+ years. NNEECO is 43% owned by Nicor Oil and Gas Corporation a wholly owned sub of Southern Company through a series of mergers and acquisitions and 57% interest owned by APC Associates. I presently serve as the Chairman of the Board of NNEECO and administer to all the affairs of NNEECO. There is relatively little activity at the property presently as it has been put under option for sale to NextEra for the next 3+ years who is considering an expansion to its Sanford Solar Park project (an operating 50 MGW solar park at the Sanford Airport in Sanford, Maine). I spend less than 2 hours a month administering to the affairs of the Company.
APC Associates
A Massachusetts family legacy corporation and 57% owner of Northern New England Energy Company. I Chair the Board of Directors of APC and am the responsible person administering to the affairs of the Company. I spend a couple of hours a month on average in so doing.
Schedule B
Change in Control Matters
Clause (B) of the Change in Control definition set forth in Section 4(b)(v) of this Agreement shall not apply with respect to any direct or indirect sale, transfer, conveyance or other disposition, in one or a series of related transactions of the assets that relate to the Partnership’s midstream business (“Midstream Assets”), and such Midstream Assets, to the extent sold, transferred, conveyed or disposed, shall not be taken into consideration in determining whether a Change in Control has occurred for purposes of Section 4(b)(v) of this Agreement.
Exhibit 10.5
THIS EXECUTIVE SERVICES AGREEMENT (this “Agreement”) is made and entered into as of November 3, 2021 (the “Effective Date”), by and between Mike Keuss (“Executive”) and Evolve Transition Infrastructure GP LLC (formerly known as Sanchez Midstream Partners GP LLC), a Delaware limited liability company (the “Company”) and the general partner of Evolve Transition Infrastructure LP (formerly known as Sanchez Midstream Partners LP), a Delaware limited partnership (the “Partnership,” and together with the Company, the “Partnership Parties”). Executive and the Company are collectively referred to herein as the “Parties,” and individually as a “Party.”
WHEREAS, the Parties wish that Executive be hired as an employee of the Company as of the Effective Date, and to transition into the role of the President and Chief Operating Officer of the Company effective as of December 1, 2021, in each case, to provide services for and on behalf of the Partnership Parties; and
WHEREAS, the Parties wish to memorialize their agreement with respect to the terms and conditions of Executive’s employment as specified hereunder.
NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, mutually agree as follows:
i. | participation in the applicable retirement plans, health and welfare plans and disability insurance plans of the Partnership Parties, under the terms of such plans (in effect from time to time) and to the same extent and under the same conditions such participation and coverages are provided to other similarly situated executive officers of the Company; |
ii. | unlimited paid vacation each calendar year which may be used in Executive’s reasonable discretion, so long as the vacation time does not interfere with Executive’s ability to complete his or her corporate obligations, and is used only for time off for vacation and personal days, and not for other purposes covered by leave of absence and paid sick leave policies; and |
iii. | reimbursement within thirty (30) days of its receipt from Executive of supporting receipts, to the extent required by the Company’s reimbursement policies, for all of Executive’s out-of-pocket business expenses reasonably and actually incurred by Executive in connection with his or her employment hereunder (Board approval shall be required for any single expense exceeding $10,000 or for expenses exceeding in the aggregate annually $120,000 and reimbursement of any and all business expenses is conditioned on Executive submitting his or her request to the Company for reimbursement and supporting substantiation within ninety (90) days of the date on which any such expenses shall have been incurred). |
provided, that, any of the events described in Section 4(b)(iv)(3) or Section 4(b)(iv)(4) above shall constitute Cause only if Executive fails to cure such event to the reasonable satisfaction of the Board within thirty (30) calendar days of receiving written notice from the Board of the event which allegedly constitutes Cause.
provided, that, any of the conditions described in Section 4(b)(vi)(1) through 4(b)(vi)(4) above shall constitute Good Reason only if the Company fails to cure such condition to the reasonable satisfaction of Executive within thirty (30) calendar days of receiving written notice from Executive of the condition which allegedly constitutes Good Reason; and provided further, that, Executive’s termination shall constitute a termination by Executive for Good Reason only if the Termination Date occurs not later than ninety (90) calendar days following the initial existence of one or more of the conditions described in Section 4(b)(vi)(1) through 4(b)(vi)(4) above.
provided, that, as a condition to receiving the benefits described in the above paragraphs 2-4, Executive must sign and return a release of all known and unknown claims in a termination agreement that is acceptable to the Company within the applicable deadline set forth therein, but in no event later than forty-five (45) days after the Termination Date.
provided, that, as a condition to receiving the benefits described in the above paragraphs 2-4, Executive must sign and return a release of all known and unknown claims in a termination agreement that is acceptable to the Company within the applicable deadline set forth therein, but in no event later than forty-five (45) days after the Termination Date.
IF TO THE COMPANY:
Evolve Transition Infrastructure GP LLC
c/o Evolve Transition Infrastructure LP
1360 Post Oak Blvd, Suite 2400
Houston, TX 77056
Attn: Jack Howell
Email: Howell@stonepeakpartners.com
With a copy to:
Sidley Austin LLP
1000 Louisiana St., Suite 5900
Houston, Texas 77002
Attention: Cliff W. Vrielink
Email: cvrielink@sidley.com
IF TO EXECUTIVE:
Mike Keuss
c/o Evolve Transition Infrastructure LP
1360 Post Oak Blvd, Suite 2400
Houston, TX 77056
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the Effective Date first written above.
COMPANY | |||
Evolve Transition Infrastructure GP LLC | |||
By: | /s/ Charles Ward | ||
Name:Charles Ward | |||
| |
EXECUTIVE |
/s/ Mike Keuss |
Mike Keuss |
[Signature Page to Executive Services Agreement]
Schedule A
Permitted Outside Activities
Aristide Energy Corporation
The business of, or the performance of services with respect to, logistic services, engineering and capital management for transportation of commodities with respect to Aristide Energy Corporation that are not in contravention of that certain Framework Agreement by and between HOBO Renewable Diesel LLC and Evolve Transition Instructure LP, dated November 3, 2021.
MKAW Consulting LLC
The business of, or the performance of services with respect to, recycling oily sludges and operating facilities with respect to MKAW Consulting LLC that are not in contravention of that certain Framework Agreement by and between HOBO Renewable Diesel LLC and Evolve Transition Instructure LP, dated November 3, 2021.
HOBO Renewable Diesel LLC
The business of, or the performance of services with respect to, developing, constructing, owning and operating renewable fuels facilities with respect to HOBO Renewable Diesel LLC that are not in contravention of that certain Framework Agreement by and between HOBO Renewable Diesel LLC and Evolve Transition Instructure LP, dated November 3, 2021.
Sixteen Stone Capital LLC
The business of, or the performance of services with respect to, developing, constructing, owning and operating renewable fuels facilities with respect to Sixteen Stone Capital LLC that are not in contravention of that certain Framework Agreement by and between HOBO Renewable Diesel LLC and Evolve Transition Instructure LP, dated November 3, 2021.
Crest Real Estate
The business of, or the performance of services with respect to, renting residential properties with respect to Crest Real Estate that are not in contravention of that certain Framework Agreement by and between HOBO Renewable Diesel LLC and Evolve Transition Instructure LP, dated November 3, 2021.
Schedule B
Change in Control Matters
Clause (B) of the Change in Control definition set forth in Section 4(b)(v) of this Agreement shall not apply with respect to any direct or indirect sale, transfer, conveyance or other disposition, in one or a series of related transactions of the assets that relate to the Partnership’s midstream business (“Midstream Assets”), and such Midstream Assets, to the extent sold, transferred, conveyed or disposed, shall not be taken into consideration in determining whether a Change in Control has occurred for purposes of Section 4(b)(v) of this Agreement.
Exhibit 10.6
THIS EXECUTIVE SERVICES AGREEMENT (this “Agreement”) is made and entered into as of November 3, 2021 (the “Effective Date”), by and between Jonathan Hartigan (“Executive”) and Evolve Transition Infrastructure GP LLC (formerly known as Sanchez Midstream Partners GP LLC), a Delaware limited liability company (the “Company”) and the general partner of Evolve Transition Infrastructure LP (formerly known as Sanchez Midstream Partners LP), a Delaware limited partnership (the “Partnership,” and together with the Company, the “Partnership Parties”). Executive and the Company are collectively referred to herein as the “Parties,” and individually as a “Party.”
WHEREAS, the Parties wish that Executive be hired as an employee of the Company as of the Effective Date, and to transition into the role of the President and Chief Investment Officer of the Company effective as of December 1, 2021, in each case, to provide services for and on behalf of the Partnership Parties; and
WHEREAS, the Parties wish to memorialize their agreement with respect to the terms and conditions of Executive’s employment as specified hereunder.
NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, mutually agree as follows:
i. | participation in the applicable retirement plans, health and welfare plans and disability insurance plans of the Partnership Parties, under the terms of such plans (in effect from time to time) and to the same extent and under the same conditions such participation and coverages are provided to other similarly situated executive officers of the Company; |
ii. | unlimited paid vacation each calendar year which may be used in Executive’s reasonable discretion, so long as the vacation time does not interfere with Executive’s ability to complete his or her corporate obligations, and is used only for time off for vacation and personal days, and not for other purposes covered by leave of absence and paid sick leave policies; and |
iii. | reimbursement within thirty (30) days of its receipt from Executive of supporting receipts, to the extent required by the Company’s reimbursement policies, for all of Executive’s out-of-pocket business expenses reasonably and actually incurred by Executive in connection with his or her employment hereunder (Board approval shall be required for any single expense exceeding $10,000 or for expenses exceeding in the aggregate annually $120,000 and reimbursement of any and all business expenses is conditioned on Executive submitting his or her request to the Company for reimbursement and supporting substantiation within ninety (90) days of the date on which any such expenses shall have been incurred). |
provided, that, any of the events described in Section 4(b)(iv)(3) or Section 4(b)(iv)(4) above shall constitute Cause only if Executive fails to cure such event to the reasonable satisfaction of the Board within thirty (30) calendar days of receiving written notice from the Board of the event which allegedly constitutes Cause.
provided, that, any of the conditions described in Section 4(b)(vi)(1) through 4(b)(vi)(4) above shall constitute Good Reason only if the Company fails to cure such condition to the reasonable satisfaction of Executive within thirty (30) calendar days of receiving written notice from Executive of the condition which allegedly constitutes Good Reason; and provided further, that, Executive’s termination shall constitute a termination by Executive for Good Reason only if the Termination Date occurs not later than ninety (90) calendar days following the initial existence of one or more of the conditions described in Section 4(b)(vi)(1) through 4(b)(vi)(4) above.
provided, that, as a condition to receiving the benefits described in the above paragraphs 2-4, Executive must sign and return a release of all known and unknown claims in a termination agreement that is acceptable to the Company within the applicable deadline set forth therein, but in no event later than forty-five (45) days after the Termination Date.
provided, that, as a condition to receiving the benefits described in the above paragraphs 2-4, Executive must sign and return a release of all known and unknown claims in a termination agreement that is acceptable to the Company within the applicable deadline set forth therein, but in no event later than forty-five (45) days after the Termination Date.
IF TO THE COMPANY:
Evolve Transition Infrastructure GP LLC
c/o Evolve Transition Infrastructure LP
1360 Post Oak Blvd, Suite 2400
Houston, TX 77056
Attn: Jack Howell
Email: Howell@stonepeakpartners.com
With a copy to:
Sidley Austin LLP
1000 Louisiana St., Suite 5900
Houston, Texas 77002
Attention: Cliff W. Vrielink
Email: cvrielink@sidley.com
IF TO EXECUTIVE:
Jonathan Hartigan
c/o Evolve Transition Infrastructure LP
1360 Post Oak Blvd, Suite 2400
Houston, TX 77056
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the Effective Date first written above.
COMPANY | |||
Evolve Transition Infrastructure GP LLC | |||
By: | /s/ Charles Ward | ||
Name:Charles Ward | |||
| |
EXECUTIVE |
/s/ Jonathan Hartigan |
Jonathan Hartigan |
[Signature Page to Executive Services Agreement]
Schedule A
Permitted Outside Activities
N/A.
Schedule B
Change in Control Matters
Clause (B) of the Change in Control definition set forth in Section 4(b)(v) of this Agreement shall not apply with respect to any direct or indirect sale, transfer, conveyance or other disposition, in one or a series of related transactions of the assets that relate to the Partnership’s midstream business (“Midstream Assets”), and such Midstream Assets, to the extent sold, transferred, conveyed or disposed, shall not be taken into consideration in determining whether a Change in Control has occurred for purposes of Section 4(b)(v) of this Agreement.
Exhibit 10.7
Evolve Transition Infrastructure LP
2021 Equity Inducement Award Program
Inducement Award Agreement Relating to
Restricted Units – NYSE American: SNMP
Participant: Randall L. Gibbs
Grant Date: November 3, 2021
2
Tranche | Number of Restricted Units | Vesting Event |
First | 1,224,480 | Earlier of (i) the occurrence of the “Offtake Condition” for the “Initial Project” or a “Subsequent Project” within the Vesting Period (as defined below) or (ii) the achievement of the First Tranche TSR Goal. |
Second | 2,265,288 | Earlier of (i) the occurrence of “Financial Close” for the “Initial Project” or a “Subsequent Project” within the Vesting Period or (ii) the achievement of the Second Tranche TSR Goal. |
Third | 2,265,288 | Earlier of (i) the occurrence of “Commercial Operation” for the “Initial Project” or a “Subsequent Project” within the Vesting Period or (ii) the achievement of the Third Tranche TSR Goal. |
3
TSR = ((Closing Average Value - Opening Average Value) + Distributions) ÷ Opening Average Value
Each of the foregoing amounts shall be equitably adjusted for unit splits, unit distributions, recapitalizations, and other similar events affecting the units in question.
4
For purposes of this Award Agreement, “Involuntary Termination” shall mean any termination of Participant’s service with the Partnership or any subsidiary or Affiliate of the Partnership, including the General Partner (any of whom is the “Service Recipient”) that results from: a termination of Participant’s services with respect to the Service Recipient without Cause (as defined below) at a time when Participant is otherwise willing and able to continue providing services. The term “Involuntary Termination” shall not include a termination for Cause or any termination as a result of Participant’s death. An “Involuntary Termination” is intended to constitute an “involuntary separation from service” pursuant to Treasury Regulation 1.409A-1(n).
For purposes of this Award Agreement, “Change in Control” and “Cause” shall have the meaning set forth in the Employment Agreement; provided that, “Cause” for purposes of this Award Agreement shall also mean:
Participant’s willful and continued failure to substantially perform his or her services to the Service Recipient (other than any such failure resulting from his or
5
her incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Participant by the Service Recipient, which demand specifically identifies the manner in which the Service Recipient believes that Participant has not substantially performed his or her services to the Partnership or an Affiliate thereof (the “Additional Cause Event Clause”);
provided, however, that, any of the events described in Section 4(b)(iv)(3) or Section 4(b)(iv)(4) of the Employment Agreement or in the Additional Cause Event Clause shall constitute Cause only if Participant fails to cure such event to the reasonable satisfaction of the Service Recipient within 30 calendar days of receiving written notice from the Service Recipient of the event which allegedly constitutes Cause.
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[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement to be effective as of November 3, 2021.
| Evolve Transition Infrastructure LP By: Evolve Transition Infrastructure GP LLC, its general partner By: /s/ Charles Ward Name:Charles Ward Title:Chief Financial Officer |
[Signature Page to Grant Agreement]
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE RESTRICTED UNITS SUBJECT TO THE INDUCEMENT AWARD SHALL VEST AND THE FORFEITURE RESTRICTIONS SHALL LAPSE, IF AT ALL, ONLY DURING THE PERIOD OF PARTICIPANT’S CONTINUOUS QUALIFICATION AS AN ELIGIBLE PERSON OR AS OTHERWISE PROVIDED IN THIS AWARD AGREEMENT (NOT THROUGH THE ACT OF BEING GRANTED THE INDUCEMENT AWARD). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AWARD AGREEMENT, THE INCORPORATED PLAN OR THE EMPLOYMENT AGREEMENT SHALL CONFER UPON PARTICIPANT ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF PARTICIPANT’S CONTINUOUS SERVICE. Participant acknowledges receipt of a copy of the Inducement Plan and the Employment Agreement, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Inducement Award subject to all of the terms and provisions hereof and thereof. Participant has reviewed this Award Agreement, the Inducement Plan and the Employment Agreement in their entirety, has had an opportunity to obtain the advice of tax and legal counsel prior to executing this Award Agreement, and fully understands all provisions of this Award Agreement, the Inducement Plan and the Employment Agreement. Participant hereby agrees that all disputes arising out of or relating to this Award Agreement, the Inducement Plan and the Inducement Provision shall be resolved in accordance with the Plan. Participant further agrees to notify the Partnership upon any change in the address for notice indicated in this Agreement.
Dated: November 3, 2021 Name: /s/ Randall L. Gibbs
[Signature Page to Grant Agreement]
APPENDIX A
INDUCEMENT PLAN
A-1
APPENDIX B
EMPLOYMENT AGREEMENT
A-2
Exhibit 10.8
Evolve Transition Infrastructure LP
2021 Equity Inducement Award Program
Inducement Award Agreement Relating to
Restricted Units – NYSE American: SNMP
Participant: Mike Keuss
Grant Date: November 3, 2021
2
Tranche | Number of Restricted Units | Vesting Event |
First | 1,224,480 | Earlier of (i) the occurrence of the “Offtake Condition” for the “Initial Project” or a “Subsequent Project” within the Vesting Period (as defined below) or (ii) the achievement of the First Tranche TSR Goal. |
Second | 2,265,288 | Earlier of (i) the occurrence of “Financial Close” for the “Initial Project” or a “Subsequent Project” within the Vesting Period or (ii) the achievement of the Second Tranche TSR Goal. |
Third | 2,265,288 | Earlier of (i) the occurrence of “Commercial Operation” for the “Initial Project” or a “Subsequent Project” within the Vesting Period or (ii) the achievement of the Third Tranche TSR Goal. |
3
TSR = ((Closing Average Value - Opening Average Value) + Distributions) ÷ Opening Average Value
Each of the foregoing amounts shall be equitably adjusted for unit splits, unit distributions, recapitalizations, and other similar events affecting the units in question.
4
For purposes of this Award Agreement, “Involuntary Termination” shall mean any termination of Participant’s service with the Partnership or any subsidiary or Affiliate of the Partnership, including the General Partner (any of whom is the “Service Recipient”) that results from: a termination of Participant’s services with respect to the Service Recipient without Cause (as defined below) at a time when Participant is otherwise willing and able to continue providing services. The term “Involuntary Termination” shall not include a termination for Cause or any termination as a result of Participant’s death. An “Involuntary Termination” is intended to constitute an “involuntary separation from service” pursuant to Treasury Regulation 1.409A-1(n).
For purposes of this Award Agreement, “Change in Control” and “Cause” shall have the meaning set forth in the Employment Agreement; provided that, “Cause” for purposes of this Award Agreement shall also mean:
Participant’s willful and continued failure to substantially perform his or her services to the Service Recipient (other than any such failure resulting from his or
5
her incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Participant by the Service Recipient, which demand specifically identifies the manner in which the Service Recipient believes that Participant has not substantially performed his or her services to the Partnership or an Affiliate thereof (the “Additional Cause Event Clause”);
provided, however, that, any of the events described in Section 4(b)(iv)(3) or Section 4(b)(iv)(4) of the Employment Agreement or in the Additional Cause Event Clause shall constitute Cause only if Participant fails to cure such event to the reasonable satisfaction of the Service Recipient within 30 calendar days of receiving written notice from the Service Recipient of the event which allegedly constitutes Cause.
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[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement to be effective as of November 3, 2021.
| Evolve Transition Infrastructure LP By: Evolve Transition Infrastructure GP LLC, its general partner By: /s/ Charles Ward Name:Charles Ward Title:Chief Financial Officer |
[Signature Page to Grant Agreement]
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE RESTRICTED UNITS SUBJECT TO THE INDUCEMENT AWARD SHALL VEST AND THE FORFEITURE RESTRICTIONS SHALL LAPSE, IF AT ALL, ONLY DURING THE PERIOD OF PARTICIPANT’S CONTINUOUS QUALIFICATION AS AN ELIGIBLE PERSON OR AS OTHERWISE PROVIDED IN THIS AWARD AGREEMENT (NOT THROUGH THE ACT OF BEING GRANTED THE INDUCEMENT AWARD). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AWARD AGREEMENT, THE INCORPORATED PLAN OR THE EMPLOYMENT AGREEMENT SHALL CONFER UPON PARTICIPANT ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF PARTICIPANT’S CONTINUOUS SERVICE. Participant acknowledges receipt of a copy of the Inducement Plan and the Employment Agreement, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Inducement Award subject to all of the terms and provisions hereof and thereof. Participant has reviewed this Award Agreement, the Inducement Plan and the Employment Agreement in their entirety, has had an opportunity to obtain the advice of tax and legal counsel prior to executing this Award Agreement, and fully understands all provisions of this Award Agreement, the Inducement Plan and the Employment Agreement. Participant hereby agrees that all disputes arising out of or relating to this Award Agreement, the Inducement Plan and the Inducement Provision shall be resolved in accordance with the Plan. Participant further agrees to notify the Partnership upon any change in the address for notice indicated in this Agreement.
Dated: November 3, 2021 Name: /s/ Mike Keuss
[Signature Page to Grant Agreement]
APPENDIX A
INDUCEMENT PLAN
A-1
APPENDIX B
EMPLOYMENT AGREEMENT
A-2
Exhibit 10.9
Evolve Transition Infrastructure LP
2021 Equity Inducement Award Program
Inducement Award Agreement Relating to
Restricted Units – NYSE American: SNMP
Participant: Jonathan Hartigan
Grant Date: November 3, 2021
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Tranche | Number of Restricted Units | Vesting Event |
First | 551,040 | Earlier of (i) the occurrence of the “Offtake Condition” for the “Initial Project” or a “Subsequent Project” within the Vesting Period (as defined below) or (ii) the achievement of the First Tranche TSR Goal. |
Second | 1,019,424 | Earlier of (i) the occurrence of “Financial Close” for the “Initial Project” or a “Subsequent Project” within the Vesting Period or (ii) the achievement of the Second Tranche TSR Goal. |
Third | 1,019,424 | Earlier of (i) the occurrence of “Commercial Operation” for the “Initial Project” or a “Subsequent Project” within the Vesting Period or (ii) the achievement of the Third Tranche TSR Goal. |
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TSR = ((Closing Average Value - Opening Average Value) + Distributions) ÷ Opening Average Value
Each of the foregoing amounts shall be equitably adjusted for unit splits, unit distributions, recapitalizations, and other similar events affecting the units in question.
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For purposes of this Award Agreement, “Involuntary Termination” shall mean any termination of Participant’s service with the Partnership or any subsidiary or Affiliate of the Partnership, including the General Partner (any of whom is the “Service Recipient”) that results from: a termination of Participant’s services with respect to the Service Recipient without Cause (as defined below) at a time when Participant is otherwise willing and able to continue providing services. The term “Involuntary Termination” shall not include a termination for Cause or any termination as a result of Participant’s death. An “Involuntary Termination” is intended to constitute an “involuntary separation from service” pursuant to Treasury Regulation 1.409A-1(n).
For purposes of this Award Agreement, “Change in Control” and “Cause” shall have the meaning set forth in the Employment Agreement; provided that, “Cause” for purposes of this Award Agreement shall also mean:
Participant’s willful and continued failure to substantially perform his or her services to the Service Recipient (other than any such failure resulting from his or
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her incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Participant by the Service Recipient, which demand specifically identifies the manner in which the Service Recipient believes that Participant has not substantially performed his or her services to the Partnership or an Affiliate thereof (the “Additional Cause Event Clause”);
provided, however, that, any of the events described in Section 4(b)(iv)(3) or Section 4(b)(iv)(4) of the Employment Agreement or in the Additional Cause Event Clause shall constitute Cause only if Participant fails to cure such event to the reasonable satisfaction of the Service Recipient within 30 calendar days of receiving written notice from the Service Recipient of the event which allegedly constitutes Cause.
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[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement to be effective as of November 3, 2021.
| Evolve Transition Infrastructure LP By: Evolve Transition Infrastructure GP LLC, its general partner By: /s/ Charles Ward Name:Charles Ward Title:Chief Financial Officer |
[Signature Page to Grant Agreement]
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE RESTRICTED UNITS SUBJECT TO THE INDUCEMENT AWARD SHALL VEST AND THE FORFEITURE RESTRICTIONS SHALL LAPSE, IF AT ALL, ONLY DURING THE PERIOD OF PARTICIPANT’S CONTINUOUS QUALIFICATION AS AN ELIGIBLE PERSON OR AS OTHERWISE PROVIDED IN THIS AWARD AGREEMENT (NOT THROUGH THE ACT OF BEING GRANTED THE INDUCEMENT AWARD). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AWARD AGREEMENT, THE INCORPORATED PLAN OR THE EMPLOYMENT AGREEMENT SHALL CONFER UPON PARTICIPANT ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF PARTICIPANT’S CONTINUOUS SERVICE. Participant acknowledges receipt of a copy of the Inducement Plan and the Employment Agreement, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Inducement Award subject to all of the terms and provisions hereof and thereof. Participant has reviewed this Award Agreement, the Inducement Plan and the Employment Agreement in their entirety, has had an opportunity to obtain the advice of tax and legal counsel prior to executing this Award Agreement, and fully understands all provisions of this Award Agreement, the Inducement Plan and the Employment Agreement. Participant hereby agrees that all disputes arising out of or relating to this Award Agreement, the Inducement Plan and the Inducement Provision shall be resolved in accordance with the Plan. Participant further agrees to notify the Partnership upon any change in the address for notice indicated in this Agreement.
Dated: November 3, 2021 Name: /s/ Jonathan Hartigan
[Signature Page to Grant Agreement]
APPENDIX A
INDUCEMENT PLAN
A-1
APPENDIX B
EMPLOYMENT AGREEMENT
A-2
Exhibit 10.10
Evolve Transition Infrastructure LP
Long-Term Incentive Program
Award Agreement Relating to
Restricted Units – NYSE American: SNMP
Participant: Randall L. Gibbs
Grant Date: November 3, 2021
Tranche | Number of Restricted Units | Vesting Event |
First | 489,792 | Earlier of (i) the occurrence of the “Offtake Condition” within the Vesting Period (as defined below) or (ii) the achievement of the First Tranche TSR Goal. |
Second | 489,792 | Earlier of (i) the occurrence of the “Offtake Condition” within the Vesting Period or (ii) the achievement of the Second Tranche TSR Goal; provided, however, that, in the event the condition described in clause (i) is satisfied with respect to the Second Tranche prior to the first anniversary of the Grant Date, then the Restrictions shall lapse with respect to the Second Tranche as of such first anniversary of the Grant Date. |
Third | 489,792 | Earlier of (i) the occurrence of the “Offtake Condition” within the Vesting Period or (ii) the achievement of the Third Tranche TSR Goal; provided, however, that, in the event the condition described in clause (i) is satisfied with respect to the Third Tranche prior to the second anniversary of the Grant Date, then the Restrictions shall lapse with respect to the Third Tranche as of such second anniversary of the Grant Date. |
2
TSR = ((Closing Average Value - Opening Average Value) + Distributions) ÷ Opening Average Value
Each of the foregoing amounts shall be equitably adjusted for unit splits, unit distributions, recapitalizations, and other similar events affecting the units in question.
3
For purposes of this Award Agreement, “Involuntary Termination” shall mean any termination of Participant’s service with the Partnership or any subsidiary or Affiliate of the Partnership, including the General Partner (any of whom is the “Service Recipient”) that results from: a termination of Participant’s services with respect to the Service Recipient without Cause (as defined below) at a time when Participant is otherwise willing and able to continue providing services. The term “Involuntary Termination” shall not include a termination for Cause or any termination as a result of Participant’s death. An “Involuntary Termination” is intended to constitute an “involuntary separation from service” pursuant to Treasury Regulation 1.409A-1(n).
For purposes of this Award Agreement, “Change in Control” and “Cause” shall have the meaning set forth in that certain Executive Services Agreement with the General Partner dated November 3, 2021 (the “Employment Agreement”); provided that, “Cause” for purposes of this Award Agreement shall also mean:
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Participant’s willful and continued failure to substantially perform his or her services to the Service Recipient (other than any such failure resulting from his or her incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Participant by the Service Recipient, which demand specifically identifies the manner in which the Service Recipient believes that Participant has not substantially performed his or her services to the Partnership or an Affiliate thereof (the “Additional Cause Event Clause”);
provided, however, that, any of the events described in Section 4(b)(iv)(3) or Section 4(b)(iv)(4) of the Employment Agreement or in the Additional Cause Event Clause shall constitute Cause only if Participant fails to cure such event to the reasonable satisfaction of the Service Recipient within 30 calendar days of receiving written notice from the Service Recipient of the event which allegedly constitutes Cause.
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[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement to be effective as of November 3, 2021.
| Evolve Transition Infrastructure LP By: Evolve Transition Infrastructure GP LLC, its general partner By: /s/ Charles Ward Name:Charles Ward Title:Chief Financial Officer |
[Signature Page to Grant Agreement]
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE RESTRICTED UNITS SUBJECT TO THIS AWARD SHALL VEST AND THE FORFEITURE RESTRICTIONS SHALL LAPSE, IF AT ALL, ONLY DURING THE PERIOD OF PARTICIPANT’S CONTINUOUS QUALIFICATION AS AN ELIGIBLE PERSON OR AS OTHERWISE PROVIDED IN THIS AWARD AGREEMENT (NOT THROUGH THE ACT OF BEING GRANTED THIS AWARD). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AWARD AGREEMENT OR THE PLAN SHALL CONFER UPON PARTICIPANT ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF PARTICIPANT’S CONTINUOUS SERVICE. Participant acknowledges receipt of a copy of the Plan, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all of the terms and provisions hereof and thereof. Participant has reviewed this Award Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of tax and legal counsel prior to executing this Award Agreement, and fully understands all provisions of this Award Agreement and the Plan. Participant hereby agrees that all disputes arising out of or relating to this Award Agreement and the Plan shall be resolved in accordance with the Plan. Participant further agrees to notify the Partnership upon any change in the address for notice indicated in this Agreement.
Dated: November 3, 2021 Name: /s/ Randall L. Gibbs
[Signature Page to Grant Agreement]
APPENDIX A
SANCHEZ PRODUCTION PARTNERS LP
LONG-TERM INCENTIVE PLAN
A-1
Exhibit 10.11
Evolve Transition Infrastructure LP
Long-Term Incentive Program
Award Agreement Relating to
Restricted Units – NYSE American: SNMP
Participant: Mike Keuss
Grant Date: November 3, 2021
Tranche | Number of Restricted Units | Vesting Event |
First | 489,792 | Earlier of (i) the occurrence of the “Offtake Condition” within the Vesting Period (as defined below) or (ii) the achievement of the First Tranche TSR Goal. |
Second | 489,792 | Earlier of (i) the occurrence of the “Offtake Condition” within the Vesting Period or (ii) the achievement of the Second Tranche TSR Goal; provided, however, that, in the event the condition described in clause (i) is satisfied with respect to the Second Tranche prior to the first anniversary of the Grant Date, then the Restrictions shall lapse with respect to the Second Tranche as of such first anniversary of the Grant Date. |
Third | 489,792 | Earlier of (i) the occurrence of the “Offtake Condition” within the Vesting Period or (ii) the achievement of the Third Tranche TSR Goal; provided, however, that, in the event the condition described in clause (i) is satisfied with respect to the Third Tranche prior to the second anniversary of the Grant Date, then the Restrictions shall lapse with respect to the Third Tranche as of such second anniversary of the Grant Date. |
2
TSR = ((Closing Average Value - Opening Average Value) + Distributions) ÷ Opening Average Value
Each of the foregoing amounts shall be equitably adjusted for unit splits, unit distributions, recapitalizations, and other similar events affecting the units in question.
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For purposes of this Award Agreement, “Involuntary Termination” shall mean any termination of Participant’s service with the Partnership or any subsidiary or Affiliate of the Partnership, including the General Partner (any of whom is the “Service Recipient”) that results from: a termination of Participant’s services with respect to the Service Recipient without Cause (as defined below) at a time when Participant is otherwise willing and able to continue providing services. The term “Involuntary Termination” shall not include a termination for Cause or any termination as a result of Participant’s death. An “Involuntary Termination” is intended to constitute an “involuntary separation from service” pursuant to Treasury Regulation 1.409A-1(n).
For purposes of this Award Agreement, “Change in Control” and “Cause” shall have the meaning set forth in that certain Executive Services Agreement with the General Partner dated November 3, 2021 (the “Employment Agreement”); provided that, “Cause” for purposes of this Award Agreement shall also mean:
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Participant’s willful and continued failure to substantially perform his or her services to the Service Recipient (other than any such failure resulting from his or her incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Participant by the Service Recipient, which demand specifically identifies the manner in which the Service Recipient believes that Participant has not substantially performed his or her services to the Partnership or an Affiliate thereof (the “Additional Cause Event Clause”);
provided, however, that, any of the events described in Section 4(b)(iv)(3) or Section 4(b)(iv)(4) of the Employment Agreement or in the Additional Cause Event Clause shall constitute Cause only if Participant fails to cure such event to the reasonable satisfaction of the Service Recipient within 30 calendar days of receiving written notice from the Service Recipient of the event which allegedly constitutes Cause.
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[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement to be effective as of November 3, 2021.
| Evolve Transition Infrastructure LP By: Evolve Transition Infrastructure GP LLC, its general partner By: /s/ Charles Ward Name:Charles Ward Title:Chief Financial Officer |
[Signature Page to Grant Agreement]
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE RESTRICTED UNITS SUBJECT TO THIS AWARD SHALL VEST AND THE FORFEITURE RESTRICTIONS SHALL LAPSE, IF AT ALL, ONLY DURING THE PERIOD OF PARTICIPANT’S CONTINUOUS QUALIFICATION AS AN ELIGIBLE PERSON OR AS OTHERWISE PROVIDED IN THIS AWARD AGREEMENT (NOT THROUGH THE ACT OF BEING GRANTED THIS AWARD). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AWARD AGREEMENT OR THE PLAN SHALL CONFER UPON PARTICIPANT ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF PARTICIPANT’S CONTINUOUS SERVICE. Participant acknowledges receipt of a copy of the Plan, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all of the terms and provisions hereof and thereof. Participant has reviewed this Award Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of tax and legal counsel prior to executing this Award Agreement, and fully understands all provisions of this Award Agreement and the Plan. Participant hereby agrees that all disputes arising out of or relating to this Award Agreement and the Plan shall be resolved in accordance with the Plan. Participant further agrees to notify the Partnership upon any change in the address for notice indicated in this Agreement.
Dated: November 3, 2021 Name: /s/ Mike Keuss
[Signature Page to Grant Agreement]
APPENDIX A
SANCHEZ PRODUCTION PARTNERS LP
LONG-TERM INCENTIVE PLAN
A-1
Exhibit 10.12
Evolve Transition Infrastructure LP
Long-Term Incentive Program
Award Agreement Relating to
Restricted Units – NYSE American: SNMP
Participant: Jonathan Hartigan
Grant Date: November 3, 2021
Tranche | Number of Restricted Units | Vesting Event |
First | 220,416 | Earlier of (i) the occurrence of the “Offtake Condition” within the Vesting Period (as defined below) or (ii) the achievement of the First Tranche TSR Goal. |
Second | 220,416 | Earlier of (i) the occurrence of the “Offtake Condition” within the Vesting Period or (ii) the achievement of the Second Tranche TSR Goal; provided, however, that, in the event the condition described in clause (i) is satisfied with respect to the Second Tranche prior to the first anniversary of the Grant Date, then the Restrictions shall lapse with respect to the Second Tranche as of such first anniversary of the Grant Date. |
Third | 220,416 | Earlier of (i) the occurrence of the “Offtake Condition” within the Vesting Period or (ii) the achievement of the Third Tranche TSR Goal; provided, however, that, in the event the condition described in clause (i) is satisfied with respect to the Third Tranche prior to the second anniversary of the Grant Date, then the Restrictions shall lapse with respect to the Third Tranche as of such second anniversary of the Grant Date. |
2
TSR = ((Closing Average Value - Opening Average Value) + Distributions) ÷ Opening Average Value
Each of the foregoing amounts shall be equitably adjusted for unit splits, unit distributions, recapitalizations, and other similar events affecting the units in question.
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For purposes of this Award Agreement, “Involuntary Termination” shall mean any termination of Participant’s service with the Partnership or any subsidiary or Affiliate of the Partnership, including the General Partner (any of whom is the “Service Recipient”) that results from: a termination of Participant’s services with respect to the Service Recipient without Cause (as defined below) at a time when Participant is otherwise willing and able to continue providing services. The term “Involuntary Termination” shall not include a termination for Cause or any termination as a result of Participant’s death. An “Involuntary Termination” is intended to constitute an “involuntary separation from service” pursuant to Treasury Regulation 1.409A-1(n).
For purposes of this Award Agreement, “Change in Control” and “Cause” shall have the meaning set forth in that certain Executive Services Agreement with the General Partner dated November 3, 2021 (the “Employment Agreement”); provided that, “Cause” for purposes of this Award Agreement shall also mean:
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Participant’s willful and continued failure to substantially perform his or her services to the Service Recipient (other than any such failure resulting from his or her incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Participant by the Service Recipient, which demand specifically identifies the manner in which the Service Recipient believes that Participant has not substantially performed his or her services to the Partnership or an Affiliate thereof (the “Additional Cause Event Clause”);
provided, however, that, any of the events described in Section 4(b)(iv)(3) or Section 4(b)(iv)(4) of the Employment Agreement or in the Additional Cause Event Clause shall constitute Cause only if Participant fails to cure such event to the reasonable satisfaction of the Service Recipient within 30 calendar days of receiving written notice from the Service Recipient of the event which allegedly constitutes Cause.
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[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement to be effective as of November 3, 2021.
| Evolve Transition Infrastructure LP By: Evolve Transition Infrastructure GP LLC, its general partner By: /s/ Charles Ward Name:Charles Ward Title:Chief Financial Officer |
[Signature Page to Grant Agreement]
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE RESTRICTED UNITS SUBJECT TO THIS AWARD SHALL VEST AND THE FORFEITURE RESTRICTIONS SHALL LAPSE, IF AT ALL, ONLY DURING THE PERIOD OF PARTICIPANT’S CONTINUOUS QUALIFICATION AS AN ELIGIBLE PERSON OR AS OTHERWISE PROVIDED IN THIS AWARD AGREEMENT (NOT THROUGH THE ACT OF BEING GRANTED THIS AWARD). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AWARD AGREEMENT OR THE PLAN SHALL CONFER UPON PARTICIPANT ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF PARTICIPANT’S CONTINUOUS SERVICE. Participant acknowledges receipt of a copy of the Plan, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all of the terms and provisions hereof and thereof. Participant has reviewed this Award Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of tax and legal counsel prior to executing this Award Agreement, and fully understands all provisions of this Award Agreement and the Plan. Participant hereby agrees that all disputes arising out of or relating to this Award Agreement and the Plan shall be resolved in accordance with the Plan. Participant further agrees to notify the Partnership upon any change in the address for notice indicated in this Agreement.
Dated: November 3, 2021 Name: /s/ Jonathan Hartigan
[Signature Page to Grant Agreement]
APPENDIX A
SANCHEZ PRODUCTION PARTNERS LP
LONG-TERM INCENTIVE PLAN
A-1
Exhibit 99.1
Evolve Transition Infrastructure and HOBO Renewable Diesel Announce Agreement to Develop Renewable Fuels Projects
Key Leaders from HOBO to Join Evolve’s Management Team
Evolve to Invest $600 Million in Construction of Initial Renewable Fuels Project
HOUSTON, TX, November 4, 2021 — Evolve Transition Infrastructure LP (“Evolve”) (NYSE American: SNMP), a publicly traded limited partnership focused on the acquisition, development and ownership of infrastructure critical to the transition of energy supply to lower carbon sources, and HOBO Renewable Diesel, LLC (“HOBO”), a renewable fuel project developer, today announced an agreement for Evolve to fund the construction of HOBO’s initial project that is expected to produce more than 120 million gallons of renewable fuels annually (the “Fuels Project”).
In furtherance of the Fuels Project and to support Evolve’s energy transaction focus, key members of the HOBO leadership team will join Evolve’s management team effective December 1st, 2021. HOBO Co-Founder and Chief Executive Officer Randy Gibbs will join Evolve as the new Chief Executive Officer of, and as a member of the board of directors of Evolve’s general partner, HOBO Co-Founder and President Mike Keuss will join Evolve as the new President and Chief Operating Officer of Evolve’s general partner, and HOBO’s Chief Financial Officer Jonathan Hartigan will join Evolve as the new President and Chief Investment Officer of Evolve’s general partner. Each of Messrs. Gibbs, Keuss and Hartigan will accept employment with Evolve’s general partner effective November 3, 2021, and will transition to their respective director and executive roles effective December 1, 2021. Messrs. Gibbs, Keuss and Hartigan have each had long and successful careers in both the fossil fuel and renewable energy spaces and bring extensive experience in project development, engineering, operations, and financing to Evolve’s management team. Gerald Willinger, the current Chief Executive Officer of Evolve’s general partner, plans to resign on December 1st but will assist in the onboarding of new management in November to ensure a smooth transition. Charles Ward, the current Chief Financial Officer of Evolve’s general partner, will continue in his role along with other existing Evolve employees.
Subject to the satisfaction of certain conditions, including HOBO securing a long-term strategic offtake agreement for the Fuels Project, Evolve will exclusively fund the development and construction of the Fuels Project and future renewable fuels projects that can produce renewable diesel and sustainable aviation fuel (“SAF”) and contribute to the advancement of the transition to a low-carbon world. Renewable diesel and SAF are unique drop-in fuels that are immediately consumable by existing automotive and airplane engines and reduce carbon emissions relative to petroleum based products. These drop-in fuels are in increasingly high demand by customers, including the US federal government, as more organizations embrace de-carbonization. HOBO and Evolve are also considering incorporation of additional carbon reduction opportunities into the Fuels Project and future projects which the management teams believe could result in the production of some of the lowest carbon intensity fuels in the US.
“We believe the initial and future HOBO projects are extremely attractive opportunities to execute on our previously announced business strategy shift to focus on the acquisition and development of infrastructure critical to the transition of energy supply to lower carbon sources. Randy, Mike and Jonathan are proven leaders and their skill sets and experience will be tremendous complements to our existing team,” said Chuck Ward, Chief Financial Officer of Evolve.
“Inclusive of Evolve’s participation in the previously announced Levo JV opportunity focused on fleet electrification, Stonepeak believes pursuing renewable fuels projects with HOBO further solidifies Evolve’s standing as a diversified energy transition vehicle with the full support of a strong sponsor,” said Michael Bricker, a member of the board of directors of Evolve’s general partner and Managing Director at Stonepeak Partners LP, a leading alternative investment firm specializing in infrastructure and real assets and an affiliate of Evolve’s general partner.
“HOBO management is thrilled to collaborate with Evolve and Stonepeak in this exciting and differentiated renewable fuel production platform.” said Randall Gibbs, Co-Founder and CEO of HOBO and incoming CEO of Evolve. “Our shared vision is to build multiple plants of similar design levering off of what we believe are strategic advantages when compared to our competitors.”
“We believe HOBO’s strategy of building for purpose renewable facilities positions our liquid renewable fuels at the lowest cost point in the marketplace and gives our customers the shortest time to commercialization, two primary reasons that we are seeing strong interest in long-term strategic offtakes for our initial project and also for additional projects” said Mike Keuss, Co-Founder and President of HOBO and incoming President and Chief Operating Officer of Evolve.
About Evolve Transition Infrastructure LP
Evolve Transition Infrastructure LP (NYSE American: SNMP) is a publicly-traded limited partnership formed in 2005 focused on the acquisition, development and ownership of infrastructure critical to the transition of energy supply to lower carbon sources.
Additional information about Evolve can be found in our documents on file with the SEC which are available on our website at www.evolvetransition.com and on the SEC’s website at www.sec.gov.
About HOBO Renewable Diesel, LLC
HOBO Renewable Diesel, LLC, is a developer of renewable fuels projects that convert agriculture feedstocks into renewable fuels such as renewable diesel and sustainable aviation fuel. HOBO is led by an experienced group of energy professionals who have demonstrated expertise across project development, engineering, operations, and financing, and the organization has partnered with a premier team of technology and engineering/construction companies as well as other advisors. For more information please visit http://hobord.com.
About Stonepeak
Stonepeak is a leading alternative investment firm specializing in infrastructure and real assets with approximately $39 billion of assets under management. Through its investment in defensive, hard-asset businesses globally, Stonepeak aims to create value for its investors and portfolio companies, and to have a positive impact on the communities in which it operates. Stonepeak is headquartered in New York with offices in Houston, Austin and Hong Kong. For more information, please visit https://stonepeakpartners.com.
Contacts
Evolve
Charles Ward
Chief Financial Officer
ir@evolvetransition.com
(713) 800-9477
HOBO
Jonathan Hartigan
Chief Financial Officer
jhartigan@hobord.com
(713) 800-2910
Stonepeak
Kate Beers
beers@stonepeakpartners.com
(646) 540-5225
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact, included in this press release are forward-looking statements. Any statements that refer to Evolve’s future strategy, future investments, future uses of capital, future operations, plans and objectives of management or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements in this press release may include, for example, statements about Evolve’s expected deployment of capital in support of the announced renewable fuels project, the anticipated benefits of such project, Evolve’s ability to raise capital for purposes of funding the development of any renewable fuels project, HOBO’s ability to execute on the Fuels Project and future projects, customer and market demand for renewable fuels, including renewable diesel and SAF, the carbon intensity of fuels produced by the Fuels Project and future projects, and other statements about Evolve or HOBO. In some cases, you can identify forward-looking statements by terminology such as “may,” “expect,” “plan,” “anticipate,” “believe,” “project” or the negative of such terms or other similar expressions. These forward-looking statements are based on management’s current beliefs, expectations and assumptions regarding the future of Evolve’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions.
These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about Evolve, HOBO, the Levo JV opportunity and Stonepeak that may cause Evolve’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward looking statements. Therefore, you should not rely on any of these forward-looking statements. Management cautions all readers that the forward-looking statements contained in this press release are not guarantees of future performance, and actual results may differ materially from those anticipated or implied in forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, please read Evolve’s filings with the SEC, with
particular attention to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in Evolve’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, all of which are available on Evolve’s website at www.evolvetransition.com and on the SEC’s website at www.sec.gov. These cautionary statements qualify all forward-looking statements attributable to Evolve or persons acting on Evolve’s behalf. Except as otherwise required by applicable law, Evolve disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release.
Exhibit 99.2
Evolve Reports New Employment Inducement Awards Under NYSE American Listing Rules
HOUSTON, TX, November 4, 2021 — Evolve Transition Infrastructure LP (“Evolve”) (NYSE American: SNMP), a publicly traded limited partnership focused on the acquisition, development and ownership of infrastructure critical to the transition of energy supply to lower carbon sources, today reported, as required by Section 711(a) of the NYSE American Company Guide (the “Company Guide”), equity inducement awards to each of Randall Gibbs, Mike Keuss, and Jonathan Hartigan.
Messrs. Gibbs, Keuss, and Hartigan will accept employment with Evolve Transition Infrastructure GP LLC, the sole general partner of Evolve (the “General Partner”), effective November 3, 2021. Effective December 1, 2021, Mr. Gibbs will serve as the new Chief Executive Officer of the General Partner, Mr. Keuss will serve as the new President and Chief Operating Officer of the General Partner, and Mr. Hartigan will serve as the new President and Chief Investment Officer of the General Partner. The Inducement Awards (as defined below) will have a grant date of November 3, 2021 (the “Grant Date”), and will be granted to Messrs. Gibbs, Keuss, and Hartigan pursuant to the Evolve Transition Infrastructure LP 2021 Equity Inducement Award Plan (the “Inducement Plan”). The Inducement Plan was approved by the Board of Directors (the “Board”) of the General Partner, under Rule 711(a) and the other relevant rules of the Company Guide for equity grants, to induce new employees to accept employment with the General Partner.
Messrs. Gibbs, Keuss, and Hartigan currently serve as the Chief Executive Officer, President, and Executive Vice President and Chief Financial Officer, respectively, of HOBO Renewable Diesel, LLC (“HOBO”), a renewable fuel project developer. As separately announced today, Evolve and HOBO have entered into a Framework Agreement (the “Framework Agreement”), pursuant to which Evolve will fund the construction of HOBO’s initial project that is expected to produce more than 120 million gallons of renewable fuels annually (the “Fuels Project”).
As an inducement material to each of Messrs. Gibbs, Keuss, and Hartigan accepting employment with the General Partner, and in accordance with Rule 711(a) of the Company Guide, the independent directors of the Board approved grants of 5,755,056 restricted common units representing limited partner interests in Evolve (“Restricted Units”) to each of Messrs. Gibbs and Keuss, and a grant of 2,589,888 Restricted Units to Mr. Hartigan (collectively, the “Inducement Awards”).
The Inducement Awards vest in three separate tranches if certain performance conditions are satisfied, subject to the recipient’s continued qualification as an Eligible Person (as defined in the Inducement Plan) until the time each tranche vests (or if applicable, until the time of the recipient’s termination without cause or death). With respect to each tranche there is a primary vesting schedule which is tied to satisfaction of certain conditions set forth in the Framework Agreement and an alternative vesting schedule that may apply upon satisfaction of certain performance metrics relating to total unitholder return.
The first tranche is comprised of 3,000,000 Restricted Units (1,224,480 Restricted Units for each of Messrs. Gibbs and Keuss and 551,040 Restricted Units for Mr. Hartigan) and vests upon the occurrence of the Offtake Condition (as defined in the Framework Agreement) for the Fuels Project within seven years of the Grant Date, which includes, among other things, execution of offtake agreements covering at least 70% of the Fuels Project’s estimated capacity. Alternatively, the first tranche may become vested if Evolve achieves a total unitholder return of 150% for 60 consecutive days during the period commencing on the Grant Date and ending on December 31, 2023.
The second tranche is comprised of 5,550,000 Restricted Units (2,265,288 Restricted Units for each of Messrs. Gibbs and Keuss and 1,019,424 Restricted Units for Mr. Hartigan) and vests upon the occurrence of Financial Close (as defined in the Framework Agreement) for the Fuels Project within seven years of the Grant Date, which includes, among other things, satisfaction of certain conditions precedent required in the Framework Agreement. Alternatively, the second tranche may become vested if Evolve achieves a total unitholder return of 200% for 60 consecutive days during the period commencing on January 1, 2023 and ending on December 31, 2024.
The third tranche is also comprised of 5,550,000 Restricted Units (2,265,288 Restricted Units for each of Messrs. Gibbs and Keuss and 1,019,424 Restricted Units for Mr. Hartigan) and vests upon the occurrence of Commercial Operation (as defined in the Framework Agreement) for the Fuels Project within seven years of the Grant Date, which includes, among other things, completion of any performance tests required by any contract entered into in connection with the Fuels Project, completion of all work under the construction contracts covering the full scope of the Fuels Project, and the occurrence of the commercial operations or similar requirement under any project financing or offtake agreement for the Fuels Project. Alternatively, the third tranche may become vested if Evolve achieves a total unitholder return of 250% for 60 consecutive days during the period commencing on January 1, 2024 and ending on December 31, 2025 or, in the discretion of the Board upon certain acquisitions by Evolve.
Failure to satisfy the performance conditions or continued status as an Eligible Person generally will result in the forfeiture of any unvested Restricted Units. However, the Restricted Units granted under each Inducement Award that are then unvested are subject to full acceleration upon a change of control, and pro rata acceleration upon termination of the recipient without cause or upon the death of the recipient. Unless the Restricted Units granted under the applicable Inducement Award are subject to acceleration, all Restricted Units that are then unvested shall become forfeited on the date the recipient ceases to be an officer, employee, consultant, or director of the General Partner, Evolve or any of their affiliates.
About Evolve Transition Infrastructure LP
Evolve Transition Infrastructure LP (NYSE American: SNMP) is a publicly-traded limited partnership formed in 2005 focused on the acquisition, development and ownership of infrastructure critical to the transition of energy supply to lower carbon sources.
Additional information about Evolve can be found in our documents on file with the SEC which are available on our website at www.evolvetransition.com and on the SEC’s website at www.sec.gov.
About HOBO Renewable Diesel, LLC
HOBO Renewable Diesel, LLC, is a developer of renewable fuels projects that convert agriculture feedstocks into renewable fuels such as renewable diesel and sustainable aviation fuel. HOBO is led by an experienced group of energy professionals who have demonstrated expertise across project development, engineering, operations, and financing, and the organization has partnered with a premier
team of technology and engineering/construction companies as well as other advisors. For more information please visit http://hobord.com.
Contacts
Evolve
Charles Ward
Chief Financial Officer
ir@evolvetransition.com
(713) 800-9477
HOBO
Jonathan Hartigan
Chief Financial Officer
jhartigan@hobord.com
(713) 800-2910
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact, included in this press release are forward-looking statements. Any statements that refer to Evolve’s future strategy, future investments, future uses of capital, future operations, plans and objectives of management, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements in this press release may include, for example, statements about Evolve’s expected deployment of capital in support of the Fuels Project, the anticipated benefits of such project, Evolve’s ability to raise capital for purposes of funding the development of any renewable fuels project, the ability of the Offtake Condition to occur, the ability of the Fuels Project to achieve Financial Close or Commercial Operation, and other statements about Evolve or HOBO. In some cases, you can identify forward-looking statements by terminology such as “may,” “expect,” “plan,” “anticipate,” “believe,” “project,” or the negative of such terms or other similar expressions. These forward-looking statements are based on management’s current beliefs, expectations and assumptions regarding the future of Evolve’s business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions.
These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about Evolve and HOBO that may cause Evolve’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward looking statements. Therefore, you should not rely on any of these forward-looking statements. Management cautions all readers that the forward-looking statements contained in this press release are not guarantees of future performance, and actual results may differ materially from those anticipated or implied in forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, please read Evolve’s filings with the SEC, with particular attention to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in Evolve’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, all of which are available on Evolve’s website at www.evolvetransition.com and on the SEC’s website at www.sec.gov. These cautionary statements qualify all forward-looking statements attributable to Evolve or persons acting on Evolve’s behalf. Except as otherwise required by applicable law, Evolve disclaims
any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release.
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Document and Entity Information |
Nov. 03, 2021 |
---|---|
Document and Entity Information [Abstract] | |
Document Type | 8-K |
Document Period End Date | Nov. 03, 2021 |
Entity Registrant Name | Evolve Transition Infrastructure LP |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 001-33147 |
Entity Tax Identification Number | 11-3742489 |
Entity Address, Address Line One | 1360 Post Oak Blvd, Suite 2400 |
Entity Address, City or Town | Houston |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 77056 |
City Area Code | 713 |
Local Phone Number | 783-8000 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Units representing limited partner interests |
Trading Symbol | SNMP |
Security Exchange Name | NYSEAMER |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0001362705 |
Amendment Flag | false |
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