Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 8, 2018

 

 

KAYNE ANDERSON ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-38048   81-4675947
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (I.R.S. Employer
Identification No.)

811 Main Street

14th Floor

Houston, TX

  77002
(address of principal executive offices)   (zip code)

(713) 493-2000

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencements communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 1.01

Entry into a Material Definitive Agreement

On August 8, 2018, Kayne Anderson Acquisition Corp., a Delaware corporation (the “Company”), and Altus Midstream LP, a Delaware limited partnership and wholly owned subsidiary of the Company (“Altus Midstream”), entered into a Contribution Agreement (the “Contribution Agreement”) with Apache Midstream LLC, a Delaware limited liability company (the “Apache Contributor”) and wholly owned subsidiary of Apache Corporation, a Delaware corporation (“Apache”), Alpine High Gathering LP, a Delaware limited partnership (“Alpine High Gathering”), Alpine High Pipeline LP, a Delaware limited partnership (“Alpine High Pipeline”), Alpine High Processing LP, a Delaware limited partnership (“Alpine High Processing”), Alpine High NGL Pipeline LP, a Delaware limited partnership (“Alpine High NGL”), and Alpine High Subsidiary GP LLC, a Delaware limited liability company (“Alpine High GP” and, together with Alpine High Gathering, Alpine High Pipeline, Alpine High Processing and Alpine High NGL, the “Alpine High Entities”), pursuant to which the Company will acquire from the Apache Contributor:

 

   

100% of the equity interests in each of the Alpine High Entities; and

 

   

options, currently held by the Apache Contributor, to acquire equity interests in certain third party pipelines that are expected to be placed into service in 2019 and 2020 (the “Options”), which include:

 

   

an option to acquire up to a 15% equity interest in the Gulf Coast Express pipeline;

 

   

an option to acquire up to a 15% equity interest in the EPIC Crude pipeline;

 

   

an option to acquire a 50% equity interest in the Salt Creek NGL pipeline; and

 

   

an option to acquire up to a 33% equity interest in the Shin Oak pipeline.

In addition, pursuant to a purchase rights and restrictive covenants agreement to be entered into at the Closing (as defined below) as described below in “— Other Ancillary Documents,” the Company will acquire from Apache, at cost, an additional option to acquire a 33% (or approximately 25% if another option holder exercises its option) equity interest in the Permian Highway pipeline when and if such option is agreed to by Apache and the operator of the Permian Highway pipeline.

Pursuant to the Contribution Agreement, at the Closing, the Company will contribute cash to Altus Midstream in an amount equal to the Available Funds (as defined below) in exchange for the issuance by Altus Midstream to the Company of (a) a number of common units representing limited partner interests in Altus Midstream (“Common Units”) equal to the number of shares of the Company’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), outstanding as of the Closing and (b) a number of Altus Midstream warrants exercisable for Common Units equal to the number of the Company’s warrants outstanding as of the Closing. Following the Closing, the Company will control Altus Midstream through its ownership of Altus Midstream GP LLC, a Delaware limited liability company and the sole general partner of Altus Midstream.

The acquisition of the Alpine High Entities and the Options pursuant to the Contribution Agreement is referred to herein as the “business combination,” and the transactions contemplated by the Contribution Agreement are referred to herein as the “Transactions.”

Consideration

Pursuant to the Contribution Agreement, at the closing of the Transactions (the “Closing”), the Apache Contributor will receive the following consideration:

 

   

equity consideration, consisting of: (a) 250,000,000 Common Units, (b) 1,862,606 newly-issued shares of Class A Common Stock and (c) a number of newly-issued shares of Class A Common Stock equal to the product of (i) the number of public shares of Class A Common Stock redeemed for cash at the closing of the business combination minus 2,000,000 and (ii) 26.6% (provided that such number of shares of Class A Common Stock will not be less than zero or greater than 5,450,422) (the number of shares referred to in this clause (c), the “Assigned Shares”), with such amounts of Class A Common Stock set forth in clauses (b) and (c) corresponding to certain forfeitures of Class B Common Stock (as defined below) by the Company’s sponsor, Kayne Anderson Sponsor, LLC, a Delaware limited liability company (“KAAC Sponsor”), as described below in “Other Ancillary Agreements – Sponsor Forfeiture Agreement”;

 

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if the closing of the business combination occurs after September 30, 2018, cash consideration in an amount equal to the capital expenditures incurred by or on behalf of the Alpine High Entities from and including October 1, 2018 through and including the closing date of the business combination (the “Closing Date”);

 

   

3,182,140 warrants exercisable for shares of Class A Common Stock (the “Warrants”), with such amount of Warrants corresponding to certain forfeitures of Warrants by KAAC Sponsor as described below in “Other Ancillary Agreements — Sponsor Forfeiture Agreement”; and

 

   

the right to receive earn-out consideration of up to 37,500,000 shares of Class A Common Stock as follows:

 

Number of Shares of

Class A Common Stock to be

Received

  


Condition to be Satisfied

12,500,000 shares    if, during the calendar year 2021, the aggregate gathered gas from an area of dedication in Pecos County, Texas that is assessed a low pressure gathering fee pursuant to that certain Amended and Restated Gas Gathering Agreement, dated August 8, 2018, between Apache and Alpine High Gathering is equal to or greater than 574,380 million cubic feet
12,500,000 shares    if the per share closing price of the Class A Common Stock as reported by the NASDAQ Capital Market (“NASDAQ”) during any 30-trading-day period ending prior to the fifth anniversary of the Closing Date is equal to or greater than $14.00 for any 20 trading days within such 30-trading-day period
12,500,000 shares    if the per share closing price of the Class A Common Stock as reported by NASDAQ during any 30-trading-day period ending prior to the fifth anniversary of the Closing Date is equal to or greater than $16.00 for any 20 trading days within such 30-trading-day period

In addition, the Company will issue to Apache Contributor newly issued shares of non-economic capital stock of the Company, designated as Class C common stock, par value $0.0001 per share (the “Class C Common Stock”), corresponding to the number of Common Units received by the Apache Contributor at the Closing.

Redemption of Common Units

Beginning 180 days after Closing and subject to the requirement that the Apache Contributor hold a number of Common Units (and a corresponding number of shares of Class C Common Stock) sufficient to fulfill its obligations set forth under the Option Letter (as defined below), the Apache Contributor will have the right to redeem the Common Units it receives at Closing for shares of Class A Common Stock or cash (at the Company’s election). Upon any redemption of Common Units by the Apache Contributor, a corresponding number of shares of Class C Common Stock owned by the Apache Contributor will be cancelled.

Warranties and Covenants

The Contribution Agreement contains customary warranties by the parties thereto, which shall not survive the Closing.

 

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The Contribution Agreement also contains customary pre-closing covenants of the parties, including the obligation of the Apache Contributor to cause the Alpine High Entities to conduct their respective businesses in the ordinary course and to refrain from taking certain specified actions, subject to certain exceptions, without the prior written consent of the Company. Additionally, the Apache Contributor and the Alpine High Entities have agreed not to directly or indirectly initiate, solicit, facilitate, or encourage participation in any discussions or negotiations with, enter into any contract, or furnish to any other person any information with respect to, any proposal from any person relating to an acquisition of any interests in the Alpine High Entities or all or substantially all of the assets of the Alpine High Entities. Similarly, the Company has agreed not to directly or indirectly initiate, solicit, facilitate, or encourage participation in any discussions or negotiations with, enter into any contract, or furnish to any other person any information with respect to, any proposal from any person relating to a business combination transaction.

Conditions to the Parties’ Obligations to Consummate the Transactions

Under the Contribution Agreement, the obligations of the parties to consummate the Transactions are subject to a number of customary conditions, including, among others, the following: (i) the absence of specified adverse laws or orders, (ii) the warranties of the other parties being true and correct, subject to the materiality standards contained in the Contribution Agreement, (iii) material compliance by the other parties with their respective pre-closing covenants, subject to the materiality standards contained in the Contribution Agreement, (iv) the approval of the business combination and the Transactions by the Company’s stockholders and (v) the Company having provided the Apache Contributor with a schedule of the Company’s fees through and including the Closing and the fees specified therein shall not have exceeded $30,000,000. The Closing is also conditioned upon the Company having a minimum of $475,000,000 in Available Funds at the time of Closing. “Available Funds” means (i) the amount of funds from the trust account (the “Trust Account”) that holds the proceeds (including interest but net of franchise and income taxes payable) from the Company’s initial public offering (the “IPO”) and the concurrent private placement of warrants to KAAC Sponsor, plus (ii) the proceeds received pursuant to the Private Placements (as defined below), minus (iii) the amount to be paid to the Company’s public stockholders who timely exercise and do not waive their right to have their public shares redeemed for cash at the closing of the business combination, minus (iv) certain amounts payable by the Company and its subsidiaries in respect of all out-of-pocket costs, fees, and expenses incurred by or on the Company’s or its subsidiaries’ behalf, other than the financing fees described in clause (v) below (including deferred underwriting commissions payable by the Company to the underwriters in the IPO and all costs, fees and expenses related to pursuing the business combination), minus (v) approximately $3.8 million of fees related to the Private Placements and all out-of-pocket costs, fees, and expenses incurred by the Apache Contributor or its affiliates related to marketing the Transactions that will not otherwise be subject to the COMA (as defined below), plus any amounts payable by the Company or any of its subsidiaries in respect of all out-of-pocket costs, fees, and expenses incurred by or on behalf of the Company related to obtaining a new credit facility prior to the Closing Date.

Termination Rights

The Contribution Agreement contains certain customary termination rights, including, among others, the following: (i) if the Closing has not occurred on or before December 31, 2018 (the “Outside Date”); (ii) upon the applicable parties’ mutual written consent; (iii) if the consummation of the Transactions is prohibited by law; or (iv) breach of a warranty, covenant or other agreement by a party which is not capable of being cured by the Outside Date, subject to the materiality standards contained in the Contribution Agreement.

None of the parties to the Contribution Agreement is required to pay a termination fee or reimburse any other party for its expenses as a result of a termination of the Contribution Agreement.

The Contribution Agreement is filed as Exhibit 2.1 to this Current Report on Form 8-K (this “Current Report”), and the foregoing description thereof is qualified in its entirety by reference to the full text of the Contribution Agreement. The Contribution Agreement is filed herewith to provide investors with information regarding its terms and is not intended to provide any other factual information about the parties. In particular, the assertions embodied in the warranties contained in the Contribution Agreement were made as of the execution date of the Contribution Agreement only and are qualified by information in confidential disclosure schedules provided by the parties to each other in connection with the signing of the Contribution Agreement. These disclosure schedules contain information that modifies, qualifies, and creates exceptions to the warranties set forth in the Contribution Agreement. Moreover, certain warranties in the

 

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Contribution Agreement may have been used for the purpose of allocating risk between the parties rather than establishing matters of fact. Accordingly, you should not rely on the warranties in the Contribution Agreement as characterizations of the actual statements of fact about the parties.

Other Ancillary Agreements

The Contribution Agreement contemplates the execution by the parties of various agreements at the Closing, including, among others, (i) a registration rights agreement relating to the resale of securities issuable to the Apache Contributor, (ii) a stockholders agreement relating to the nomination of directors of the Company following the Closing by the Apache Contributor and KAAC Sponsor, (iii) a partnership agreement of Altus Midstream defining the rights of the parties thereto, including the Company, (iv) a construction, operations and maintenance agreement (the “COMA”) pursuant to which Apache will provide services to the Company and its subsidiaries related to the design, development, construction, operation, management, and maintenance of certain gathering, processing, and other midstream assets on behalf of the Company, (v) a purchase rights and restrictive covenants agreement providing the Company with certain rights with respect to certain midstream assets and business opportunities of Apache, including the right of the Company to acquire from Apache, at cost, a 33% (or approximately 25% if another option holder exercises its option) equity interest in the Permian Highway pipeline when and if such option is agreed to by Apache and the operator of the Permian Highway pipeline, and (vi) a warrant agreement relating to the issuance of the Warrants to the Apache Contributor.

Option Letter

On August 8, 2018, the Company, Apache, and the Apache Contributor entered into a letter agreement with respect to certain of the Options (the “Option Letter”). Pursuant to the Option Letter, the Apache Contributor is required to comply in all material respects with the terms and conditions of the agreements governing such Options and use commercially reasonable efforts to preserve the ability of the Company or its designated subsidiaries to exercise such Options from and after Closing. The Option Letter also imposes certain obligations on Apache with respect to certain commercial agreements associated with such Options. If, as a result of a breach of the obligations of the Apache Contributor or Apache, as applicable, under the Option Letter, the Company is not able to exercise one or more of the Options, certain of the Common Units (together with a corresponding number of shares of Class C Common Stock) received by the Apache Contributor at Closing will be subject to forfeiture. The maximum number of Common Units (and associated shares of Class C Common Stock) subject to forfeiture pursuant to the Option Letter is 40,000,000.

The foregoing description of the Option Letter does not purport to be complete and is qualified in its entirety by the terms and conditions of the Option Letter, a copy of which is filed as Exhibit 10.1 to this Current Report and is incorporated herein by reference.

Subscription Agreements

In connection with its entry into the Contribution Agreement, the Company entered into Subscription Agreements (the “Subscription Agreements”) with certain qualified institutional buyers and accredited investors, including certain funds and accounts managed by Kayne Anderson Capital Advisors, L.P., a California limited partnership, pursuant to which, among other things, the Company agreed to issue and sell in private placements an aggregate of 57,234,023 shares of Class A Common Stock to investors for aggregate consideration of approximately $572.3 million (the “Private Placements”). The proceeds from the Private Placements will be used to fund a portion of the cash consideration required to effect the business combination. The Subscription Agreements provide that the Company must register the resale of the shares of Class A Common Stock issued thereunder pursuant to a registration statement that must be filed with the Securities and Exchange Commission (the “SEC”) within 30 calendar days after the Closing. In the event that (i) the registration statement has not been declared effective by the SEC by the earlier of (x) the 90th calendar day (or 120th calendar day if the SEC notifies the Company that it will “review” the registration statement) following the closing of the business combination and (y) the 10th business day after the date that the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review, due to the Company’s failure to use commercially reasonable efforts; (ii) after the registration statement is declared effective by the SEC, (x) the registration statement ceases for any reason to remain continuously effective or (y) a holder is not permitted to utilize the registration statement to resell shares of Class A Common Stock; or (iii) after the date one year following the Closing Date, and only if the registration

 

5


statement is not effective or available to sell shares of Class A Common Stock, the Company fails to file with the SEC any required reports under Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, such that the Company is not in compliance with Rule 144(c)(1) under the Securities Act of 1933, as amended (the “Securities Act”) (or Rule 144(i)(2) under the Securities Act, if applicable), as a result of which unaffiliated holders are unable to sell shares of Class A Common Stock without restriction under Rule 144 under the Securities Act) (each event referred to in clauses (i) through (iii), a “Registration Default” and the date on which such Registration Default occurs, a “Default Date”), then on each Default Date and on each monthly anniversary of each Default Date until the applicable Registration Default is cured, the Company will pay to each holder an amount in cash, as liquidated damages and not as a penalty, equal to 0.50% of the aggregate purchase price paid by such holder for any shares of Class A Common Stock that may not be disposed by the holder without restriction on the Default Date; provided, however, that in no event will the Company be required to pay to a holder an aggregate amount that exceeds 5.0% of the aggregate purchase price paid by such holder for any shares of Class A Common Stock that may not be disposed.

The closings under the Subscription Agreements will occur substantially concurrently with the Closing of the business combination and are conditioned thereon, as well as on other customary closing conditions. The Subscription Agreements will be terminated, and be of no further force and effect, upon the earlier to occur of (i) the termination of the Contribution Agreement in accordance with its terms, (ii) if any of the conditions to the closing under the Subscription Agreements are not satisfied or waived on or prior to the closing, and (iii) December 31, 2018, if the Closing has not occurred by such date.

The shares of Class A Common Stock to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act and will be issued in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. The Company will pay a placement fee of approximately $3.8 million in the aggregate in connection with such sales.

The foregoing description of the Subscription Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the form of Subscription Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report and is incorporated herein by reference.

Sponsor Forfeiture Agreement

On August 8, 2018, the Company and KAAC Sponsor entered into a Sponsor Forfeiture Agreement (the “Forfeiture Agreement”) with the Apache Contributor, pursuant to which KAAC Sponsor will at the Closing forfeit to the Company (a) 1,862,606 shares of the Company’s Class B common stock, par value $0.0001 per share (the “Class B Common Stock”), (b) a number of shares of Class B Common Stock equal to the number of Assigned Shares and (c) 3,182,140 of the warrants exercisable for shares of Class A Common Stock that were issued to KAAC Sponsor in a private placement simultaneously with the closing of the IPO.

The foregoing description of the Forfeiture Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Forfeiture Agreement, a copy of which is filed as Exhibit 10.3 to this Current Report and is incorporated herein by reference.

 

Item 3.02

Unregistered Sales of Equity Securities

The disclosure set forth in Item 1.01 of this Current Report under “Subscription Agreements” is incorporated by reference herein.

In connection with the Closing, and as described in more detail above in Item 1.01 of this Current Report, the Company expects to issue shares of Class A Common Stock, shares of Class C Common Stock, and warrants to purchase shares of Class A Common Stock to the Apache Contributor. The shares of Class A Common Stock, shares of Class C Common Stock and warrants to purchase shares of Class A Common Stock to be issued will not be registered under the Securities Act, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

 

Item 7.01

Regulation FD Disclosure

On August 8, 2018, the Company and Apache issued a joint press release announcing the execution of the Contribution Agreement. A copy of the joint press release is furnished as Exhibit 99.1 hereto.

 

6


Item 8.01

Other Events

On August 8, 2018, the Company provided information regarding the Transactions in an investor presentation, a copy of which is filed as Exhibit 99.2 hereto.

Waiver Agreement

In connection with the execution of the Contribution Agreement, on August 8, 2018, all of the holders of shares of Class B Common Stock entered into a Waiver and Agreement (the “Waiver Agreement”) with the Apache Contributor, pursuant to which such holders agreed to waive their rights to receive additional shares of Class A Common Stock upon conversion of the shares of Class B Common Stock in connection with the business combination pursuant to certain adjustments provided for in the Company’s Amended and Restated Certificate of Incorporation.

 

Item 9.01

Financial Statements and Exhibits

(d) Exhibits.

 

Exhibit

    No.    

 

Description of Exhibits

  2.1*   Contribution Agreement, dated as of August  8, 2018, by and among Kayne Anderson Acquisition Corp., Altus Midstream LP, Apache Midstream LLC, Alpine High Gathering LP, Alpine High Pipeline LP, Alpine High Processing LP, Alpine High NGL Pipeline LP and Alpine High Subsidiary GP LLC.
10.1   Option Letter Agreement, dated as of August 8, 2018, by and among Kayne Anderson Acquisition Corp., Apache Midstream LLC and Apache Corporation.
10.2   Form of Subscription Agreement, by and between Kayne Anderson Acquisition Corp. and the subscriber named therein.
10.3   Sponsor Forfeiture Agreement, dated as of August 8, 2018, by and among Kayne Anderson Acquisition Corp., Kayne Anderson Sponsor, LLC and Apache Midstream LLC.
99.1   Press Release, dated as of August 8, 2018.
99.2   Investor Presentation, dated as of August 8, 2018.

 

*

Schedules and exhibits to this Exhibit have been omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

Legend Information

Forward-Looking Statements

This communication includes certain statements that may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include, for example, statements about Apache’s and the Company’s ability to effect the business combination; the benefits of the business combination; the future financial performance of the Company following the business combination; changes in the Company’s, the Alpine High Entities’ or Apache’s strategy, future operations, financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management. These forward-looking statements are based on information available as of the date of this Current Report, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing Apache’s or the Company’s views as of any subsequent date, and the Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, Apache’s or Altus Midstream’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: (i) the

 

7


occurrence of any event, change or other circumstances that could delay the business combination or give rise to the termination of the definitive agreements relating to the business combination; (ii) the outcome of any legal proceedings that may be instituted against Apache or the Company following announcement of the proposed business combination; (iii) the inability to complete the business combination due to the failure to obtain approval of the stockholders of the Company, or other conditions to closing in the definitive agreements relating to the business combination; (iv) the risk that the proposed business combination disrupts current plans and operations of the Company, the Alpine High Entities or Apache as a result of the announcement and consummation of the proposed business combination; (v) Apache’s or the Company’s ability to realize the anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably following the business combination; (vi) costs related to the business combination; (vii) changes in applicable laws or regulations; and (viii) the possibility that the Company, the Alpine High Entities or Apache may be adversely affected by other economic, business, and/or competitive factors.

No Offer or Solicitation

This Current Report is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the proposed business combination or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

Important Information For Investors and Stockholders

In connection with the proposed business combination, the Company intends to file a proxy statement with the SEC. The definitive proxy statement and other relevant documents will be sent or given to the stockholders of the Company and will contain important information about the proposed business combination and related matters. The Company’s stockholders and other interested persons are advised to read, when available, the proxy statement in connection with the Company’s solicitation of proxies for the meeting of stockholders to be held to approve the business combination because the proxy statement will contain important information about the proposed business combination. When available, the definitive proxy statement will be mailed to the Company’s stockholders as of a record date to be established for voting on the business combination. Stockholders will also be able to obtain copies of the proxy statement, without charge, once available, at the SEC’s website at www.sec.gov.

Participants in the Solicitation

The Company and its directors and officers may be deemed participants in the solicitation of proxies of the Company’s stockholders in connection with the proposed business combination. The Company stockholders and other interested persons may obtain, without charge, more detailed information regarding the directors and officers of the Company in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 27, 2018. Additional information will be available in the definitive proxy statement when it becomes available.

 

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SIGNATURE

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.

 

 

Kayne Anderson Acquisition Corp.

Date: August 8, 2018

 

By:

   

/s/ Terry A. Hart

 

Name:

   

Terry A. Hart

 

Title:

   

Chief Financial Officer

 

9

EX-2.1

Exhibit 2.1

Execution Version

CONTRIBUTION AGREEMENT

by and among

APACHE MIDSTREAM LLC,

ALPINE HIGH GATHERING LP,

ALPINE HIGH PIPELINE LP,

ALPINE HIGH PROCESSING LP,

ALPINE HIGH NGL PIPELINE LP,

and

ALPINE HIGH SUBSIDIARY GP LLC

and

KAYNE ANDERSON ACQUISITION CORP.

and

ALTUS MIDSTREAM LP

Dated as of August 8, 2018


TABLE OF CONTENTS

 

Article I

 

DEFINITIONS AND CONSTRUCTION

     2  

1.1

 

Definitions

     2  

1.2

 

Construction

     11  
Article II

 

CONTRIBUTION AND CLOSING

     12  

2.1

 

Buyer Contribution

     12  

2.2

 

Contributor Contribution

     12  

2.3

 

Closing

     13  

2.4

 

Closing Deliveries by Contributor

     13  

2.5

 

Closing Deliveries by Buyer

     14  

2.6

 

Delivery Procedure

     16  

2.7

 

Further Deliveries

     16  

2.8

 

Calculation of Cash Consideration

     16  

2.9

 

Earn-Out Consideration

     16  
Article III

 

WARRANTIES OF CONTRIBUTOR

     18  

3.1

 

Organization of Contributor

     18  

3.2

 

Companies

     18  

3.3

 

Authority

     19  

3.4

 

No Conflict

     19  

3.5

 

Consents and Approvals

     19  

3.6

 

Absence of Certain Changes

     19  

3.7

 

Compliance With Applicable Laws

     20  

3.8

 

Legal Proceedings; Orders

     20  

3.9

 

Brokerage Fees

     20  

3.10

 

Taxes

     20  

3.11

 

Information Supplied

     21  

3.12

 

Nature of Investment

     21  

3.13

 

Permits

     21  

3.14

 

Title to Properties

     22  

3.15

 

Real Property

     22  

3.16

 

Material Agreements

     23  

3.17

 

Employee Matters

     24  

3.18

 

Environmental

     24  

3.19

 

Intellectual Property

     25  

3.20

 

Insurance

     25  

3.21

 

No Prior Dedications

     25  

3.22

 

Preparation of Schedules

     25  

 

-i-


Article IV

 

WARRANTIES OF BUYER

     25  

4.1

 

Organization of Buyer

     25  

4.2

 

KAAC General Partner and the KAAC Partnership

     25  

4.3

 

Authority

     27  

4.4

 

No Conflicts

     27  

4.5

 

Consents and Approvals

     28  

4.6

 

Absence of Certain Changes

     28  

4.7

 

Compliance With Applicable Laws

     28  

4.8

 

Legal Proceedings; Orders

     28  

4.9

 

Brokerage Fees

     28  

4.10

 

Tax

     28  

4.11

 

Information Supplied; Proxy Statement

     28  

4.12

 

Nature of Investment

     28  

4.13

 

Buyer Capital Structure

     29  

4.14

 

Buyer SEC Documents; Controls

     30  

4.15

 

Trust Account

     31  

4.16

 

Listing

     31  

4.17

 

Independent Investigation

     32  

4.18

 

Non-Reliance

     32  

4.19

 

Nature of Warranties

     33  
Article V

 

COVENANTS

     33  

5.1

 

Regulatory and Other Approvals

     33  

5.2

 

Access of Buyer

     34  

5.3

 

Conduct of Business

     35  

5.4

 

Certain Restrictions

     35  

5.5

 

Tax Matters

     37  

5.6

 

Public Announcements

     39  

5.7

 

Use of Certain Names

     39  

5.8

 

Accounts Payable and Accounts Receivable; Distributions

     40  

5.9

 

Support Obligations

     40  

5.10

 

The Proxy Statement and the Special Meeting

     41  

5.11

 

Exclusivity

     43  

5.12

 

Notice of Certain Events

     44  

5.13

 

Trust

     44  

5.14

 

Transaction Litigation

     44  
Article VI

 

BUYER’S CONDITIONS TO CLOSING

     45  

6.1

 

Contributor Warranties

     45  

6.2

 

Contributor and Company Covenants

     45  

6.3

 

Orders and Laws

     45  

6.4

 

Stockholder Approval

     45  

 

-ii-


Article VII

 

CONTRIBUTOR’S CONDITIONS TO CLOSING

     46  

7.1

 

Buyer Warranties

     46  

7.2

 

Buyer Covenants

     46  

7.3

 

Orders and Laws

     46  

7.4

 

Stockholder Approval

     46  

7.5

 

Minimum Cash

     46  

7.6

 

Buyer Fees Cap

     47  
Article VIII

 

TERMINATION

     47  

8.1

 

Termination

     47  

8.2

 

Effect of Termination

     47  
Article IX

 

WAIVERS; LIMITATIONS ON LIABILITY

     48  

9.1

 

Survival and Waivers of other Warranties

     48  

9.2

 

Waiver of Remedies; Non-Recourse

     49  

9.3

 

Waiver of Claims

     49  
Article X

 

MISCELLANEOUS

     50  

10.1

 

Trust Account Waiver

     50  

10.2

 

Notices

     51  

10.3

 

Entire Agreement

     52  

10.4

 

Waiver

     52  

10.5

 

Binding Effect

     53  

10.6

 

Governing Law; Consent to Jurisdiction; Severability; Waiver of Jury Trial

     53  

10.7

 

Amendments

     54  

10.8

 

Further Assurances

     54  

10.9

 

Disclosure Schedules

     54  

10.10

 

Assignment and Successors and Assigns

     54  

10.11

 

Counterparts

     55  

10.12

 

Legal Representation and Privilege

     55  

10.13

 

No Third Party Beneficiary

     56  

 

-iii-


INDEX OF DEFINED TERMS

 

A&R LP Agreement

     13  

Accounts Payable

     40  

Accounts Receivable

     40  

Affiliate

     2  

Affiliate Contract

     23  

Agreed Allocation Methodology

     39  

Agreement

     1  

Amended and Restated Certificate of Incorporation

     46  

Ancillary Agreements

     2  

Assigned Shares

     2  

Assignment and Assumption Agreement

     14  

Available Funds

     2  

Benefit Plan

     2  

Business Combination

     2  

Business Day

     3  

Buyer

     1  

Buyer Board

     3  

Buyer Board Recommendation

     42  

Buyer Class A Common Stock

     3  

Buyer Class B Common Stock

     3  

Buyer Class C Common Stock

     13  

Buyer Common Stock

     3  

Buyer Contribution

     12  

Buyer Equity Financing

     3  

Buyer Fees

     3  

Buyer Fees Cap

     3  

Buyer Fundamental Warranties

     3  

Buyer Material Adverse Effect

     3  

Buyer Preferred Stock

     29  

Buyer Public Securities

     31  

Buyer Related Persons

     49  

Buyer Released Claims

     50  

Buyer Stockholder Redemption Right

     3  

Buyer Warrants

     29  

Capital Expenditures

     4  

Capital Expenditures Amount

     16  

Cash

     40  

Cash Consideration

     13  

CERCLA

     5  

Change in Recommendation

     42  

Closing

     4  

Closing Certificates

     4  

Closing Date

     4  

Code

     4  

COMA

     14  

Common Units

     12  

Companies

     1  

Company

     1  

Confidentiality Agreement

     4  

Contributed Interests

     1  

Contribution Price

     13  

Contribution Warrants

     13  

Contributor

     1  

Contributor Accounts Payable

     40  

Contributor Accounts Receivable

     40  

Contributor Appointees

     4  

Contributor Contribution

     13  

Contributor Fundamental Warranties

     4  

Contributor Related Persons

     49  

Contributor Released Claims

     50  

Contributor’s Marks

     39  

Data Room

     4  

Dedication Agreements

     4  

Disclosure Schedules

     5  

Earn-Out Consideration

     16  

Encumbrance

     5  

Environmental Law

     5  

Equity Consideration

     13  

ERISA

     5  

Exchange Act

     30  

Excluded Marks

     5  

Execution Date

     1  

Financing Fees

     5  

Fixed Common Stock

     13  

GAAP

     5  

Gas Gathering Agreement

     5  

General Partner

     1  

General Partner Interests

     1  

Governmental Entity

     6  

GP Membership Interests

     1  

Hazardous Material

     6  

Indebtedness for Borrowed Money

     6  

Interest

     6  

Interests Assignment Agreement

     13  

Interim Period

     34  

Intervening Event

     6  

Intrastate Firm Natural Gas Transportation Service Agreement

     6  

IPO

     50  
 

 

-iv-


KAAC General Partner

     1  

KAAC Partnership

     1  

KAAC Sponsor

     1  

Knowledge

     6  

Laws

     6  

Lease

     14  

Leased Real Property

     22  

Liabilities

     7  

License Agreement

     14  

Licensed Marks

     7  

Liquidity Event

     7  

Liquidity Event Consideration

     7  

Loss

     7  

Low Pressure Gathering Fee

     7  

MAE Exclusion

     8  

Material Adverse Effect

     8  

Material Agreement

     23  

NASDAQ

     8  

New Gas Pipeline Option

     8  

Options

     8  

Order

     9  

Organizational Documents

     9  

Outside Date

     47  

Parties

     1  

Partnership

     1  

Partnership Interests

     1  

Partnership Warrants

     9  

Partnerships

     1  

Party

     1  

Permits

     9  

Permitted Encumbrance

     9  

Person

     10  

Proceeding

     10  

Prospectus

     50  

Proxy Statement

     41  

Purchase Rights and Restrictive Covenants Agreement

     14  

Real Property Leases

     22  

Registration Rights Agreement

     14  

Related Party Transaction Policy

     15  

Representatives

     10  

Rights-of-Way

     22  

SEC

     10  

SEC Documents

     30  

Securities Act

     30  

Share Price Target (Tier 1)

     16  

Share Price Target (Tier 2)

     16  

Special Meeting

     42  

Stockholder Proposals

     46  

Stockholders Agreement

     14  

Subsidiary

     10  

Support Obligations

     40  

Tax

     10  

Tax Allocation Statement

     39  

Tax Return

     10  

Taxes

     10  

Taxing Authority

     10  

Third Party

     10  

Transactions

     11  

Transportation Service Agreement

     11  

Treasury Regulations

     11  

Trust Account

     11  

Trust Agreement

     11  

Trustee

     11  

Unrecoverable Damages

     11  

Warrant Agreement

     15  
 

 

-v-


EXHIBITS

 

Exhibit A

 

Form of A&R LP Agreement

Exhibit B

 

Form of Interests Assignment Agreement

Exhibit C

 

Form of Amended and Restated Registration Rights Agreement

Exhibit D

 

Form of Construction, Operations and Maintenance Agreement

Exhibit E

 

Form of Purchase Rights and Restrictive Covenant Agreement

Exhibit F

 

Form of Amended and Restated Certificate of Incorporation

Exhibit G

 

Form of Stockholders Agreement

Exhibit H

 

Form of Warrant Agreement

Exhibit I-1

 

Composition of Conflicts Committee

Exhibit I-2

 

Form of Conflicts Committee Charter

Exhibit I-3

 

Composition of Independent Directors

Exhibit J

 

Form of Assignment and Assumption Agreement

Exhibit K

 

Form of License Agreement

Exhibit L

 

Form of Lease

SCHEDULES

 

Schedule 1.1(a)

 

Buyer Fees

Schedule 1.1(b)

 

Contributor Knowledge Parties

Schedule 1.1(c)

 

Buyer Knowledge Parties

Schedule 2.5

 

Form of Related Party Transaction Policy

Schedule 2.9(a)(i)

 

Earn-Out Consideration

Schedule 3.6

 

Absence of Certain Changes

Schedule 3.7

 

Compliance With Applicable Laws

Schedule 3.8

 

Legal Proceedings; Orders

Schedule 3.9

 

Brokerage Fees

Schedule 3.10

 

Taxes

Schedule 3.15

 

Real Property

Schedule 3.16

 

Material Agreements

Schedule 3.18

 

Environmental

Schedule 3.20

 

Insurance

Schedule 3.21

 

No Prior Dedications

Schedule 5.4

 

Certain Restrictions

Schedule 5.5(g)

 

Agreed Allocation Methodology

Schedule 5.9

 

Support Obligations

 

-vi-


CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) dated as of August 8, 2018 (the “Execution Date”) is made and entered into by and among (a) Apache Midstream LLC, a Delaware limited liability company (“Contributor”), (b) Kayne Anderson Acquisition Corp., a Delaware corporation (“Buyer”), (c) Altus Midstream LP, a Delaware limited partnership (the “KAAC Partnership”), (d)(i) Alpine High Gathering LP, a Delaware limited partnership (f/k/a Alpine High Gathering LLC), (ii) Alpine High Pipeline LP, a Delaware limited partnership (f/k/a Alpine High Pipeline LLC), (iii) Alpine High Processing LP, a Delaware limited partnership (f/k/a Alpine High Processing LLC), and (iv) Alpine High NGL Pipeline LP, a Delaware limited partnership (f/k/a Alpine High NGL Pipeline LLC) (individually, a “Partnership” and collectively, the “Partnerships”), and (e) Alpine High Subsidiary GP LLC, a Delaware limited liability company and the sole general partner of each of the Partnerships (the “General Partner” and, together with the Partnerships, the “Companies”, and each individually, a “Company”). Each of the parties to this Agreement is sometimes referred to individually in this Agreement as a “Party,” and all of the parties to this Agreement are sometimes collectively referred to in this Agreement as the “Parties.”

RECITALS

WHEREAS, (a) Contributor owns (i) one hundred percent (100%) of the outstanding limited partner interests in each of the Partnerships (the “Partnership Interests”), and (ii) one hundred percent (100%) of the outstanding limited liability company membership interests in the General Partner (the “GP Membership Interests” and, together with the Partnership Interests, the “Contributed Interests”); and (b) the General Partner owns one hundred percent (100%) of the outstanding general partner interests in each of the Partnerships (the “General Partner Interests”);

WHEREAS, Contributor is party to the Options (as defined below);

WHEREAS, for purposes of completing the Transactions (as defined below), Buyer formed Altus Midstream GP LLC, a Delaware limited liability company (the “KAAC General Partner”), and Buyer owns one hundred percent (100%) of the outstanding limited liability company membership interests in the KAAC General Partner;

WHEREAS, for purposes of completing the Transactions, the KAAC General Partner and Buyer formed the KAAC Partnership, and Buyer owns one hundred percent (100%) of the outstanding limited partner interests in the KAAC Partnership, and the KAAC General Partner owns one hundred percent (100%) of the outstanding general partner interests in the KAAC Partnership;

WHEREAS, contemporaneously with the execution of this Agreement Kayne Anderson Sponsor, LLC (“KAAC Sponsor”) and certain individuals entered into that certain support agreement with Contributor; and

WHEREAS, subject to the terms and conditions of this Agreement, Buyer desires to make the Buyer Contribution (as defined below) to the KAAC Partnership, and Contributor desires to make the Contributor Contribution (as defined below) to the KAAC Partnership, in each case in exchange for the consideration specified in this Agreement.


STATEMENT OF AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual warranties, covenants, and agreements in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS AND CONSTRUCTION

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

Affiliate” means, with respect to any Person, any other Person that directly or indirectly Controls, is Controlled by, or is under common Control with, such Person; provided, that for purposes of this Agreement, prior to the Closing, (a) the Companies shall constitute Affiliates of Contributor and not Buyer and (b) the KAAC Partnership and the KAAC General Partner shall constitute Affiliates of Buyer and not Contributor.

Ancillary Agreements” means the Closing Certificates, the Interests Assignment Agreement, the A&R LP Agreement, the Registration Rights Agreement, the COMA, the Purchase Rights and Restrictive Covenants Agreement, the Stockholders Agreement, the Warrant Agreement, the License Agreement, the Lease, and any and all additional agreements, certificates, documents, and instruments that may be executed or delivered by any Party at or in connection with the Closing.

Assigned Shares” means a number of shares of Buyer Class A Common Stock equal to the product of (a) the number of shares of Buyer Class A Common Stock redeemed pursuant to exercise of the Buyer Stockholder Redemption Right minus 2,000,000 and (b) 26.6%; provided, however, that the number of Assigned Shares shall in no event be less than zero or greater than 5,450,422.

Available Funds” means the amount in the Trust Account on the Closing Date plus the proceeds of the Buyer Equity Financing, minus the amount to be paid to holders of Buyer Class A Common Stock that timely exercise and do not waive their Buyer Stockholder Redemption Right, minus the Buyer Fees, and minus the Financing Fees.

Benefit Plan” means any employee benefit plan or arrangement, including any stock purchase, stock option, stock bonus, stock ownership, phantom stock or other stock or equity plan, pension, profit sharing, bonus, deferred compensation, incentive compensation, severance or termination pay, hospitalization or other medical or dental, life, or other insurance, supplemental unemployment benefits plan or agreement, or policy or other arrangement providing employment-related compensation, fringe benefits, or other benefits, and including “employee benefit plans,” as defined in Section 3(3) of ERISA.

Business Combination” has the meaning set forth in the Prospectus.

 

-2-


Business Day” means any day other than a Saturday, a Sunday, or a day on which national banking associations located in Houston, Texas are closed.

Buyer Board” means the board of directors of Buyer.

Buyer Class A Common Stock” means the Class A common stock of Buyer, par value $0.0001 per share.

Buyer Class B Common Stock” means the Class B common stock of Buyer, par value $0.0001 per share.

Buyer Common Stock” means, collectively, the Buyer Class A Common Stock and Buyer Class B Common Stock.

Buyer Equity Financing” means the purchase and sale of Buyer Class A Common Stock in respect of which Buyer has, as of or prior to the Execution Date, obtained firm commitments aggregating proceeds of at least $350,000,000.

Buyer Fees” means any amounts payable by Buyer or any of its Subsidiaries in respect of all out-of-pocket costs, fees, and expenses incurred by or on behalf of Buyer or any of its Subsidiaries, other than the Financing Fees (including deferred underwriting commissions payable by Buyer to the underwriters in the IPO and all costs, fees, and expenses related to pursuing a Business Combination), which estimated amounts as of the Execution Date are set forth on Schedule 1.1(a).

Buyer Fees Cap” means $30,000,000.

Buyer Fundamental Warranties” means those warranties set forth in Section 4.1 (Organization of Buyer), Section 4.2(a) (Organization) Section 4.2(c) (Ownership and Interests), Section 4.3 (Authority), Section 4.4(a) (No Conflict with Organizational Documents), Section 4.9 (Brokerage Fees), and Section 4.13 (Buyer Capital Structure).

Buyer Material Adverse Effect” means, any change, circumstance, development, state of facts, effect, or condition that, individually or in the aggregate, (a) is or would reasonably be expected to be materially adverse to the assets, condition (financial or otherwise), results of operations, or business of Buyer and its Subsidiaries, taken as a whole, or (b) prevents, materially delays, or materially impairs the ability of Buyer or the KAAC Partnership to perform its obligations under this Agreement or to consummate any of the Transactions; provided that any change, circumstance, development, state of facts, effect, or condition arising from, or relating to, the Buyer Stockholder Redemption Right shall not be deemed to constitute a Buyer Material Adverse Effect.

Buyer Stockholder Redemption Right” means the right held by holders of the shares of Buyer Class A Common Stock to redeem all or a portion of their shares of Buyer Class A Common Stock upon the consummation of a Business Combination, for a per share redemption price of cash equal to (a) the aggregate amount then on deposit in the Trust Account as of two (2) Business Days prior to the consummation of such Business Combination, including interest earned on the funds held in the Trust Account and not previously released to Buyer to pay certain Taxes, divided by (b) the number of then outstanding shares of Buyer Class A Common Stock issued in connection with the IPO.

 

-3-


Capital Expenditures” means (a) all expenditures, costs, and expenses that are or will be capitalized on the books and records of any Company in a manner consistent with the principles, practices, assumptions, policies, and methodologies used by Contributor and the Companies in the preparation of the financial information made available to Buyer in the Data Room and (b) expenditures, costs, and expenses resulting from the exercise of any Option or capital contributions made in respect of such Option once exercised.

Closing” means the consummation of the Transactions.

Closing Certificates” means the officer’s certificates referenced in Section 2.4(d) and Section 2.5(d).

Closing Date” means the date on which Closing occurs.

Code” means the United States Internal Revenue Code of 1986 and any successor statute, as amended from time to time.

Confidentiality Agreement” means that certain confidentiality agreement between Contributor and KA Fund Advisors, LLC, dated as of March 20, 2018 and amended on May 8, 2018.

Contributor Fundamental Warranties” means those warranties set forth in Section 3.1 (Organization of Contributor), Section 3.2(a) (Organization of the Companies), Section 3.2(c) (Ownership of the Companies), Section 3.2(d) (Rights to Acquire Equity), Section 3.3 (Authority), Section 3.4(a) (No Conflict with Organizational Documents), and Section 3.9 (Brokerage Fees).

Contributor Appointees” means all current and former officers, managers, directors, and similar persons of any Company that are or were employees of Contributor or any of its Affiliates.

Control (and its correlative terms) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

Data Room” means the information and documents relating to the acquisition of the Contributed Interests by Buyer, the Companies, or their respective businesses, which have been made available to Buyer, its Affiliates, or its or their respective Representatives on the virtual data room entitled “Ascent” established with Merrill Corporation in connection with the Transactions.

Dedication Agreements” means, collectively or individually as the context requires, the Gas Gathering Agreement, the Gas Processing Agreement, the Intrastate Firm Natural Gas Transportation Service Agreement, and the Transportation Services Agreement.

 

-4-


Disclosure Schedules” means the disclosure schedules attached hereto of Contributor or Buyer, as applicable.

Encumbrance” means any lien, charge, claim, condition, lease, pledge, option, right of first refusal, mortgage, deed of trust, security interest, restriction (whether on voting, sale, transfer, disposition, or otherwise), and easement, or other restriction or limitation whatsoever, whether imposed by Law or agreement.

Environmental Law” means any and all applicable Laws pertaining to pollution or protection of the environment, including releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic, or hazardous substances, materials, or wastes, in effect in any and all jurisdictions in which the assets of the Partnerships are located or in which the business of the Partnerships has been operated, including the Clean Air Act, as amended, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), the Federal Water Pollution Control Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, and the Hazardous Materials Transportation Act, as amended.

ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

Excluded Marks” mean all the trademarks set forth in Exhibit 2 of the License Agreement, in each case whether used on a standalone basis or in connection with any other trademark, design, company name, trade name, domain name, or other source identifier (other than as specifically used in the trademarks set forth in Exhibit 1 of the License Agreement).

Financing Fees” means the $3.8 million fee payable to Citigroup Global Markets Inc., Barclays Capital Inc., and Credit Suisse Securities (USA) LLC related to the Buyer Equity Financing, plus all out-of-pocket costs, fees, and expenses incurred by Contributor or its Affiliates related to marketing the Transactions that will not otherwise be subject to the COMA, plus any amounts payable by Buyer or any of its Subsidiaries in respect of all out-of-pocket costs, fees, and expenses incurred by or on behalf of Buyer or any of its Subsidiaries related to obtaining a new credit facility for Buyer or any of its Subsidiaries during the Interim Period.

GAAP” means United States generally accepted accounting principles with such exceptions thereto as may be noted or otherwise referred to on any individual financial statement or schedule.

Gas Gathering Agreement” means the Gas Gathering Agreement dated May 1, 2018 between Apache Corporation and Alpine High Gathering LP (f/k/a Alpine High Gathering LLC), as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.

Gas Processing Agreement” means the Gas Processing Agreement dated May 1, 2018 between Apache Corporation and Alpine High Processing LP (f/k/a Alpine High Processing LLC), as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.

 

-5-


Governmental Entity” means any legislature, court, tribunal, authority, agency, commission, division, board, bureau, branch, official, or other instrumentality of the United States, or any domestic state, county, city, or other political subdivision, governmental department, or similar governing entity, and including any governmental body exercising similar powers of authority and jurisdiction, in each case with jurisdiction over the Parties or their respective businesses.

Hazardous Material” means any substance, material, or waste that is regulated by any Environmental Law as hazardous, toxic, a pollutant, contaminant, solid waste, or words of similar import, including, without limitation, petroleum, petroleum derivatives, natural gas liquids and by-products, asbestos, urea formaldehyde, and polychlorinated biphenyls.

Indebtedness for Borrowed Money” means, with respect to any Person, all obligations of such Person to any other Person for borrowed money, including (a) any obligation to reimburse any bank or other Person in respect of amounts paid or payable under a standby letter of credit or (b) any guarantee with respect to indebtedness for borrowed money of another Person, provided that obligations related to any letter of credit (or reimbursement agreement) shall constitute Indebtedness for Borrowed Money only to the extent that such letter of credit is drawn and not repaid (or if the beneficiary is entitled to draw thereon) with respect to events occurring prior to the Closing.

Interest” means, with respect to any Person: (a) capital stock, membership interests, partnership interests, other equity interests, rights to profits or revenue, and any other similar interest of such Person; (b) any security or other interest convertible into or exchangeable or exercisable for any of the foregoing; and (c) any right (contingent or otherwise) to acquire any of the foregoing.

Intervening Event” means any material event, development, circumstance, occurrence, or change in circumstance or fact that did not result from a breach of this Agreement by Buyer or the KAAC Partnership, and does not relate to a Business Combination that is an alternative to the Transactions or any MAE Exclusion.

Intrastate Firm Natural Gas Transportation Service Agreement” means the Intrastate Firm Natural Gas Transportation Service Agreement dated April 1, 2017 (Contract No: 1000-001-01) between Apache Corporation and Alpine High Pipeline LP (f/k/a Alpine High Pipeline LLC), as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.

Knowledge” means, (a) with respect to Contributor, the actual knowledge of the Persons listed on Schedule 1.1(b) without a duty of inquiry and (b) with respect to Buyer, the actual knowledge of the Persons listed on Schedule 1.1(c) without a duty of inquiry.

Laws” means any applicable constitutional provision, statute, act, code (including the Code), law, regulation, rule, order, or decree of a Governmental Entity.

 

-6-


Liabilities” of any Person means any direct or indirect liability, indebtedness, obligation, commitment, expense, claim, deficiency, guaranty, or endorsement, whether accrued, absolute, contingent, matured, or unmatured.

Licensed Marks” mean the trademarks set forth (and only as set forth) on Exhibit 1 of the License Agreement, whether registered or unregistered, including the applications for those trademarks and any registrations which may be granted pursuant to such applications. For the avoidance of doubt, the Licensed Marks shall not include any domain names, or any trademark that is a derivative of the trademarks set forth in Exhibit 1 of the License Agreement, or any Excluded Mark.

Liquidity Event” means:

(a)    The consummation of any merger, reorganization, or consolidation of Buyer that results in any Person or group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act (or any successor rule)) (other than Contributor or its Affiliates) becoming the record or beneficial owner of more than fifty percent (50%) of the combined voting power of the voting securities of Buyer or the surviving company or the parent of such surviving company;

(b)    The consummation of a sale or disposition by Buyer of all or substantially all of Buyer’s assets, including Interests in the KAAC Partnership, other than a sale or disposition if the holders of the voting securities of Buyer outstanding immediately prior thereto hold securities immediately thereafter which represent more than fifty percent (50%) of the combined voting power of the voting securities of the acquirer of such assets (or the parent of such acquirer);

(c)    The stockholders of Buyer approve a plan of complete liquidation or dissolution of Buyer; or

(d)    The consummation of any transaction described in the foregoing clauses (a), (b), or (c) following which the voting securities of Buyer outstanding immediately prior thereto are no longer traded on a national securities exchange or registered under Section 12(b) or (g) of the Exchange Act.

Liquidity Event Consideration” means the amount per share to be received by a holder of shares of Buyer Class A Common Stock in connection with a Liquidity Event, with any non-cash consideration valued as determined by the value ascribed to such non-cash consideration in the definitive documents pursuant to which such Liquidity Event is to occur.

Loss” means any and all judgments, Liabilities, amounts paid in settlement, damages, fines, penalties, deficiencies, and expenses (including interest, court costs, reasonable fees of attorneys, accountants, and other experts or other reasonable expenses of litigation, or of any claim, default, or assessment) other than Unrecoverable Damages.

Low Pressure Gathering Fee” has the meaning ascribed to such term in the Gas Gathering Agreement.

 

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Material Adverse Effect” means any change, circumstance, development, state of facts, effect, or condition that, individually or in the aggregate, (i) is or would reasonably be expected to be materially adverse to the assets, condition (financial or otherwise), results of operations, or business of the Companies, taken as a whole, or (ii) prevents, materially delays, or materially impairs the ability of Contributor or any Company to perform their obligations under this Agreement or to consummate the Transactions; provided that any change, circumstance, development, state of facts, effect, or condition arising from, or relating to, the following shall not be deemed to constitute a Material Adverse Effect: (a) general economic or industry conditions (including any change in the prices of oil, natural gas, natural gas liquids, or other hydrocarbon products, or the demand for related transportation, processing, or storage services or conditions generally affecting the oil and gas industry); (b) changes, events, effects, or developments generally applicable to the onshore oil and gas industry in Texas; (c) changes in Law or accounting rules (including GAAP); (d) changes in financial, credit, currency, banking, or securities markets in general (including the failure of any financial institution), including any disruption thereof and any decline in the price of any security or any market index, or any change in prevailing interest rates, monetary policy, or inflation; (e) acts of God, including earthquakes, fires, tornadoes, flooding, and other natural disasters or man-made disasters; (f) local, regional, national, or international political or social conditions, including the occurrence of any military or terrorist attack or the engagement by the United States of America in hostilities, whether or not pursuant to the declaration of a national emergency or war; (g) any failure by the Companies to meet any internal or analyst projections or forecasts or estimates of revenues, earnings, or other financial metrics for any period (it being understood that the underlying cause of any such failure, not otherwise excluded by the exceptions set forth in this definition, may be taken into consideration in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur); (h) any matter of which Buyer is aware on the Execution Date, including matters set forth in the Data Room the effect or scope of which is reasonably apparent from materials made available in the Data Room; (i) the effects on the Companies’ business arising from departures of personnel providing services to the Companies, whether such departures result from the announcement of the Transactions or otherwise; and (j) the announcement of the Transactions and the taking of any actions contemplated by this Agreement (foregoing clauses (a) through (j), each an “MAE Exclusion”). The Parties agree that the determination of whether there has been a Material Adverse Effect shall be made after giving effect to any insurance proceeds (net of any deductibles) and indemnification payments received or receivable by the Companies that, in either case, could reasonably be expected to be payable to the Companies as a result of the adverse change, circumstance, development, state of facts, effect, or condition subject to such determination.

NASDAQ” means the NASDAQ Capital Market.

New Gas Pipeline Option” means Contributor’s potential option to acquire equity in the pipeline project being developed by Affiliates of Kinder Morgan, Inc. known as the “Permian Highway Pipeline Project” or, if such potential equity option does not materialize, the next potential equity option in which Contributor participates for an unidentified long-haul natural gas pipeline from the Permian Basin in Texas to the Texas gulf coast.

Options” means, collectively or individually as the context requires, that certain (a) Letter Agreement, dated May 23, 2018, by and between Contributor and Enterprise Products

 

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Operating LLC, (b) Option Agreement, dated December 20, 2017, by and between Contributor and Kinder Morgan Tejas Pipeline LLC, (c) Letter Agreement, dated May 10, 2018, by and among Contributor, EPIC Midstream Holdings, LP, EPIC Crude Holdings, LP, and EPIC Crude Holdings GP, LLC, and (d) Letter Agreement, dated May 4, 2018, by and between Contributor and SCM Topco, LLC, in the case of each of the foregoing clauses (a), (b), (c), and (d), as assigned by Contributor to the KAAC Partnership.

Order” means any writ, judgment, decree, injunction, or award issued or otherwise put into effect by or under the authority of any Governmental Entity (in each such case whether preliminary or final).

Organizational Documents” means with respect to any Person, the articles or certificate of incorporation, formation, or organization and by-laws, the limited partnership agreement, the partnership agreement, or the limited liability company agreement, and such other organizational documents of such Person, including those that are required to be registered or kept in the place of incorporation, organization, or formation of such Person or which establish the legal personality of such Person.

Partnership Warrants” means warrants exercisable for Common Units on the terms and conditions identical to warrants to purchase Buyer Class A Common Stock outstanding on the date hereof.

Permits” means licenses, permits, franchises, certificates, consents, approvals, variances, waivers, exemptions, registrations and other authorizations of, with or from Governmental Entities.

Permitted Encumbrance” means (a) liens for Taxes, assessments, fees, rents, or other governmental charges, not yet delinquent, or that are being contested in good faith by appropriate proceedings, (b) statutory liens (including materialmen’s, warehousemen’s, mechanics’, repairmen’s, landlord’s, and other similar liens) arising in the ordinary course of business securing payments not yet delinquent, or that are being contested in good faith by appropriate proceedings, provided appropriate reserves have been established with respect to such contest, (c) Encumbrances of public record that do not materially impair the operation or use of the subject property, (d) the rights of lessors and lessees under leases executed in the ordinary course of business, (e) the rights of licensors and licensees under licenses executed in the ordinary course of business, (f) utility easements, restrictive covenants, and defects, imperfections, or irregularities of title, (g) purchase money liens and liens securing rental payments under capital lease arrangements, (h) preferential purchase rights and other similar arrangements with respect to which consents or waivers are obtained in connection with the Transactions or as to which the time for asserting such rights has expired at the Closing Date without an exercise of such rights, (i) Encumbrances entered into in the ordinary course of business that do not secure the payment of Indebtedness for Borrowed Money, (j) any conditions relating to the real property or real property rights owned, leased, or otherwise held by any Company that are disclosed in the Data Room that do not materially impair the operation or use of the subject property, and (k) Encumbrances that arise out of any actions taken by or on behalf of Buyer or its Affiliates.

 

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Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, enterprise, unincorporated organization, or Governmental Entity.

Proceeding” means all proceedings, actions, claims, suits, investigations, and inquiries by or before any Governmental Entity.

Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping, or disposing in, into or through the environment.

Representatives” means, as to any Person, its officers, directors, employees, managers, members, partners, shareholders, owners, counsel, accountants, financial advisers, consultants, and agents.

SEC” means the Securities and Exchange Commission.

System” means the pipelines, lateral lines, pumps, pump stations, compressors, meters, storage facilities, terminals, processing plants, and other related operations, assets, machinery, and equipment that are owned by any Company and are used for the conduct of the business of any Company as presently conducted.

Subsidiary” means, with respect to a Person, any Person, whether incorporated or unincorporated, of which (a) at least 50% of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions, (b) a general partner interest, or (c) a managing member interest, is directly or indirectly owned or controlled by the subject Person or by one or more of its respective Subsidiaries.

Tax” or “Taxes” means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative, add-on minimum, or estimated tax, including, in each case, any interest and penalties applicable thereto.

Tax Return” means any return or report, declaration, claim for refund, information return, or statement relating to Taxes, including any related schedules, attachments, or other supporting information, with respect to Taxes and including any amendment thereto, filed or required to be filed with any Taxing Authority.

Taxing Authority” means, with respect to any Tax, the Governmental Entity that imposes or purports to impose such Tax, and the agency (if any) charged with collection of such Tax for such Governmental Entity.

Third Party” means any Person other than (a) Contributor or any of its Affiliates, (b) Buyer or any of its Affiliates, or (c) any of the Companies.

 

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Transactions” means the transactions contemplated by this Agreement or the Ancillary Agreements and including the Buyer Equity Financing.

Transfer Taxes” means all transfer, sales, use, goods and services, value added, documentary, stamp duty, transfer, conveyance, registration, and other similar Taxes, duties, fees, or charges incurred in connection with this Agreement and the Transactions.

Transportation Services Agreement” means the Transportation Services Agreement dated March 1, 2018 between Apache Corporation and Alpine High NGL Pipeline LP (f/k/a Alpine High NGL Pipeline LLC), as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.

Treasury Regulations” means the regulations promulgated by the United States Department of the Treasury pursuant to and in respect of provision of the Code.

Trust Account” means that certain trust account at J.P. Morgan Chase Bank, N.A. (with American Stock Transfer & Trust Company, LLC (“Trustee”) acting as trustee) established by Buyer into which the proceeds received by Buyer as a result of its IPO have been deposited for the benefit of Buyer’s public stockholders.

Trust Agreement” means that certain Investment Management Trust Agreement, dated March 29, 2017, between Buyer and Trustee.

Unrecoverable Damages” means any exemplary, special, punitive, indirect, remote, or speculative, incidental, or consequential damages.

1.2    Construction. The headings and captions herein are inserted for convenience of reference only and are not intended to govern, limit, or aid in the construction of any term or provision hereof. The Parties recognize that this Agreement is the product of the joint efforts of the Parties. It is the intention of the Parties that every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Party (notwithstanding any rule of Law requiring an agreement to be strictly construed against the drafting party), it being understood that the Parties are sophisticated and have had adequate opportunity and means to retain counsel to represent their interests and to otherwise negotiate the provisions of this Agreement. Further, unless the context requires otherwise:

(a)    terms defined in Section 1.1 or elsewhere in this Agreement have the meanings assigned to them in that Section for purposes of this Agreement;

(b)    the gender (or lack of gender) of all words used in this Agreement includes the masculine, feminine, and neuter;

(c)    references to Articles and Sections (other than in connection with the Code, other Law, or the Treasury Regulations) refer to Articles and Sections, respectively, of this Agreement unless otherwise indicated by the context thereof;

(d)    the words “herein,” “hereof,” “hereunder,” and other words of similar import refer to this Agreement as a whole and not to any particular Article or Section;

 

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(e)    the words “include,” “includes,” and “including” mean “include, without limitation,” “includes, without limitation,” and “including, without limitation,” respectively;

(f)    terms defined herein include the plural as well as the singular;

(g)    unless otherwise indicated, the terms “ordinary course of business” or “ordinary course” shall be deemed to refer to the ordinary conduct of business in a manner consistent with the past practices and customs of the Companies;

(h)    the terms “day” and “days” mean and refer to calendar day(s). The terms “year” and “years” mean and refer to calendar year(s). If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action shall be deferred until the next Business Day;

(i)    the phrase “made available” means that the subject document or information was included in the Data Room at least two (2) Business Days prior to the Execution Date, or at such other time as Buyer and Contributor mutually agree;

(j)    all exhibits or schedules attached hereto are hereby incorporated herein and made a part hereof for all purposes;

(k)    the word “or” is not exclusive; and

(l)    the serial comma is sometimes included and sometimes omitted. Its inclusion or omission shall not affect the interpretation of any phrase.

ARTICLE II

CONTRIBUTION AND CLOSING

2.1    Buyer Contribution. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Buyer shall contribute to the KAAC Partnership, as a capital contribution, the Available Funds (the “Buyer Contribution”) in exchange for the issuance by the KAAC Partnership to Buyer of (a) a number of common units representing limited partner interests in the KAAC Partnership (“Common Units”) equal to the number of shares of Buyer Class A Common Stock outstanding at the Closing after the consummation of the Transactions (including shares of Buyer Class A Common Stock that are issued in connection with the Buyer Equity Financing, upon conversion of the Buyer Class B Common Stock, or issued to Contributor at Closing) and after any exercise by the holders of shares of Buyer Class A Common Stock of the Buyer Stockholder Redemption Right and (b) a number of Partnership Warrants equal to the number of Buyer Warrants outstanding at the Closing after the consummation of the Transactions, including the Contribution Warrants.

2.2    Contributor Contribution. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Contributor shall contribute, assign, transfer, convey, and deliver to the KAAC Partnership, and Buyer shall cause the KAAC Partnership to accept from Contributor, (i) free and clear of all Encumbrances (other than transfer restrictions under applicable securities Laws) all of the Contributed Interests and (ii) the

 

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Options (the foregoing clauses (i) and (ii), collectively, the “Contributor Contribution”). As consideration for the Contributor Contribution, Buyer shall cause the KAAC Partnership to pay and deliver the following aggregate consideration to Contributor (“Contribution Price”): (a) (i) 250,000,000 Common Units, (ii) 1,862,606 shares of Buyer Class A Common Stock (the “Fixed Common Stock”), and (iii) the Assigned Shares, if any (the foregoing clauses (i), (ii), and (iii) collectively, the “Equity Consideration”), (b) cash, if any, in the amount determined as provided in Section 2.8 (the “Cash Consideration”), (c) the right to receive the Earn-Out Consideration if and when the conditions of Section 2.9 have been satisfied, and (d) 3,182,140 warrants issued pursuant to the Warrant Agreement (the “Contribution Warrants”). In addition, at the Closing, Buyer shall issue to Contributor a number of shares of Class C common stock, par value $0.0001 per share, of Buyer (the “Buyer Class C Common Stock”) equal to the number of Common Units received by Contributor pursuant to clause (a) of this Section 2.2, and Contributor shall separately pay Buyer an amount of cash equal to the number of shares of Buyer Class C Common Stock received multiplied by the par value for such shares.

2.3    Closing. The Closing shall take place at the offices of Bracewell LLP, 711 Louisiana Street, Suite 2300, Houston, Texas 77002 at 10:00 A.M. local time, on the third Business Day after either Buyer or Contributor delivers notice to the other Parties that the conditions to Closing set forth in Article VI and Article VII, as applicable (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) have been either satisfied or waived by the Party for whose benefit such conditions exist, or on such other date and at such other time and place as Buyer and Contributor mutually agree in writing. All actions listed in Section 2.4 or 2.5 that occur on the Closing Date shall be deemed to occur simultaneously at the Closing. The Closing shall be effective for all purposes at 12:01 A.M., local time, in Houston, Texas, on the Closing Date.

2.4    Closing Deliveries by Contributor. At the Closing, Contributor shall deliver, or shall cause to be delivered, the following:

(a)    to Buyer and the KAAC Partnership, a counterpart of that certain Amended and Restated Agreement of Limited Partnership of the KAAC Partnership, dated as of the Closing Date, in the form attached hereto as Exhibit A (“A&R LP Agreement”), duly executed by Contributor;

(b)    to the KAAC Partnership, a counterpart of the Interests Assignment Agreement by and between Contributor and the KAAC Partnership, dated as of the Closing Date, and in the form attached hereto as Exhibit B (“Interests Assignment Agreement”), duly executed by Contributor;

(c)    to Buyer and the KAAC Partnership, a certification of non-foreign status in the form prescribed by Treasury Regulation Section 1.1445-2(b);

(d)    to Buyer, a certificate duly executed by an authorized Person of Contributor, certifying that the conditions set forth in Section 6.1 with respect to Contributor have been fulfilled;

 

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(e)    to Buyer, a counterpart of the Registration Rights Agreement by and among Contributor, Buyer, and the other parties thereto, dated as of the Closing Date, in the form attached hereto as Exhibit C (“Registration Rights Agreement”), duly executed by Contributor;

(f)    to Buyer, a counterpart of the Construction, Operations, and Maintenance Agreement by and between Apache Corporation and Buyer, dated as of the Closing Date, in the form attached hereto as Exhibit D (the “COMA”), duly executed by Apache Corporation;

(g)    to Buyer, a counterpart of the Purchase Rights and Restrictive Covenants Agreement by and between Apache Corporation and Buyer, dated as of the Closing Date, in the form attached hereto as Exhibit E (“Purchase Rights and Restrictive Covenants Agreement”), duly executed by Apache Corporation;

(h)    to Buyer, a counterpart of the Stockholders Agreement by and among Contributor, Buyer, and KAAC Sponsor, dated as of the Closing Date, in the form attached hereto as Exhibit G (“Stockholders Agreement ”), duly executed by Contributor;

(i)    to Buyer, counterparts of the Assignment and Assumption Agreements by and between Contributor and the KAAC Partnership, dated as of the Closing Date, in the form attached hereto as Exhibit J (“Assignment and Assumption Agreement”) in respect of each of the Options, duly executed by Contributor;

(j)    to Buyer, if immediately preceding and as of Closing the names of the Companies include any one of the Licensed Marks, a counterpart of the Trademark License Agreement by and between Apache Corporation and the KAAC Partnership, dated as of the Closing Date, in the form attached hereto as Exhibit K (“License Agreement”), duly executed by Apache Corporation; and

(k)     to Buyer, a counterpart of the Lease Agreement by and between Apache Corporation and the KAAC Partnership, dated as of the Closing Date, in the form attached hereto as Exhibit L (“Lease”), duly executed by Apache Corporation.

2.5    Closing Deliveries by Buyer. At the Closing, Buyer shall deliver, or shall cause to be delivered, the following:

(a)    to Contributor, a counterpart of the A&R LP Agreement, duly executed by Buyer;

(b)    to Contributor, by wire transfer of immediately available funds to such accounts as Contributor shall have notified Buyer at least two (2) Business Days prior to the Closing Date, an amount equal to the Cash Consideration, if any (delivered in the manner described in Section 2.6);

(c)    to Contributor, a counterpart of the Interests Assignment Agreement, duly executed by Buyer;

 

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(d)    to Contributor, a certificate of Buyer, dated as of the Closing Date, signed by an authorized Person of Buyer, certifying that the conditions set forth in Section 7.1 have been fulfilled;

(e)    to Contributor, a counterpart of the Registration Rights Agreement, duly executed by Buyer;

(f)    to Contributor, a counterpart of the COMA, duly executed by Buyer;

(g)    to Contributor, a counterpart of the Stockholders Agreement, duly executed by Buyer;

(h)    to Contributor, a counterpart of the Purchase Rights and Restrictive Covenants Agreement, duly executed by Buyer;

(i)    to Contributor, a copy of the Amended and Restated Certificate of Incorporation file stamped by the Delaware Secretary of State evidencing that the same has been accepted for filing and filed with the Delaware Secretary of State;

(j)    to Contributor, evidence reasonably satisfactory to Contributor of the issuances by Buyer or the KAAC Partnership, as applicable, of Buyer Class C Common Stock and the Equity Consideration (with the Fixed Common Stock and Assigned Shares, if any, delivered in the manner described in Section 2.6);

(k)    to Contributor, (i) a counterpart to the Warrant Agreement by and between Buyer and Trustee, dated as of the Closing Date, in the form attached hereto as Exhibit H (the “Warrant Agreement”), duly executed by Buyer and Trustee and (ii) evidence reasonably satisfactory to Contributor of the issuance by Buyer of the Contribution Warrants (delivered in the manner described in Section 2.6);

(l)    to Contributor, evidence reasonably satisfactory to Contributor (i) that the Buyer Board has a conflicts committee composed of certain individuals selected by the process and procedures set forth on Exhibit I-1 hereto and operating under the charter in the form attached hereto as Exhibit I-2, (ii) that the Buyer Board has adopted the related party transaction policy as of Closing in the form attached hereto as Schedule 2.5 (“Related Party Transaction Policy”), and (iii) that the independent directors of the Buyer Board are composed of certain individuals selected by the process and procedures set forth on Exhibit I-3;

(m)    to Contributor, a counterpart of the Assignment and Assumption Agreement in respect of each of the Options, duly executed by the KAAC Partnership; and

(n)    to Contributor, if immediately preceding and as of Closing the names of the Companies include any one of the Licensed Marks, a counterpart of the License Agreement, duly executed by the KAAC Partnership; and

 

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(o)    to Contributor, a counterpart of the Lease, duly executed by the KAAC Partnership.

2.6    Delivery Procedure. The Cash Consideration, if any, Fixed Common Stock, Assigned Shares, if any, and Contribution Warrants delivered to Contributor shall first be paid or issued, as applicable, to the KAAC Partnership, all of which will immediately thereafter at the Closing be transferred by the KAAC Partnership to Contributor.

2.7    Further Deliveries. Each Party shall execute and deliver such additional documents as another Party may reasonably request it to execute in order to implement or document the Closing or give effect to the Transactions.

2.8    Calculation of Cash Consideration. The Cash Consideration, if any, shall be determined as follows:

(a)    if the Closing occurs on or prior to September 30, 2018, there shall be no Cash Consideration; or

(b)    if the Closing occurs after September 30, 2018, the Cash Consideration shall equal (dollar-for-dollar) the Capital Expenditures incurred by or on behalf of the Companies, from and including October 1, 2018 through and including the Closing Date (the “Capital Expenditures Amount”).

2.9    Earn-Out Consideration.

(a)    In addition to the Equity Consideration, Contributor shall receive, and Buyer shall deliver to the KAAC Partnership and the KAAC Partnership shall immediately deliver to Contributor, the following consideration if and when the following conditions are satisfied (collectively, the “Earn-Out Consideration”):

(i)    12,500,000 shares of Buyer Class A Common Stock, if, during the calendar year 2021, the aggregate gathered gas from the area of dedication specified on Schedule 2.9(a)(i) that is assessed a Low Pressure Gathering Fee pursuant to the Gas Gathering Agreement is equal to or greater than 574,380 million cubic feet;

(ii)    12,500,000 shares of Buyer Class A Common Stock, if, the per-share closing price of Buyer Class A Common Stock as reported by NASDAQ during any 30-trading-day period ending prior to the fifth anniversary of the Closing Date is equal to or greater than $14.00 (the “Share Price Target (Tier 1)”) for any 20 trading days within such 30-trading-day period; and

(iii)    12,500,000 shares of Buyer Class A Common Stock, if, the per-share closing price of Buyer Class A Common Stock as reported by NASDAQ during any 30-trading-day period ending prior to the fifth anniversary of the Closing Date is equal to or greater than $16.00 (the “Share Price Target (Tier 2)”) for any 20 trading days within such 30-trading-day period.

 

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(b)    Buyer shall reserve at all times a sufficient number of authorized and unissued shares of Buyer Class A Common Stock necessary to issue the Earn-Out Consideration. In the event that Contributor is entitled to any Earn-Out Consideration, Buyer shall issue such Earn-Out Consideration promptly and in any event within five (5) Business Days of Contributor becoming entitled thereto. The Earn-Out Consideration to be issued to Contributor hereunder, if any, when delivered, shall be duly authorized and validly issued, fully paid, and non-assessable, and issued in compliance with all applicable state and federal securities Laws and not subject to, and not issued in violation of, any options, warrants, calls, rights (including preemptive rights), Organizational Documents, commitments, or agreements to which Buyer, the KAAC General Partner, or the KAAC Partnership is a party or by which it is bound. The right to receive the Earn-Out Consideration shall not be transferrable by Contributor.

(c)    In the event that a Liquidity Event occurs prior to:

(i)    December 31, 2021 and the Earn-Out Consideration contemplated by Section 2.9(a)(i) has not already been paid, then the Person becoming the record or beneficial owner of more than fifty percent (50%) of the combined voting power of the voting securities of Buyer or the surviving company or the parent of such surviving company as a result of the Liquidity Event, or to whom all or substantially all of the Buyer’s assets have been sold in the Liquidity Event, shall assume the obligation to pay the Earn-Out Consideration contemplated by Section 2.9(a)(i) pursuant to the terms thereof, provided that, instead of issuing the applicable shares of Buyer Class A Common Stock, Contributor shall receive the Liquidity Event Consideration;

(ii)    the fifth anniversary of the Closing Date and the Liquidity Event Consideration in such Liquidity Event is greater than the Share Price Target (Tier 1) and the Earn-Out Consideration contemplated by Section 2.9(a)(ii) has not already been paid, then the Earn-Out Consideration contemplated by Section 2.9(a)(ii) shall be paid, and the applicable shares of Buyer Class A Common Stock shall be deemed issued and outstanding, effective immediately prior to the consummation of such Liquidity Event and the holders thereof shall be entitled to receive the corresponding Liquidity Event Consideration; or

(iii)    the fifth anniversary of the Closing Date and the Liquidity Event Consideration in such Liquidity Event is greater than the Share Price Target (Tier 2) and the Earn-Out Consideration contemplated by Section 2.9(a)(iii) has not already been paid, then the Earn-Out Consideration contemplated by Section 2.9(a)(iii) shall be paid, and the applicable shares of Buyer Class A Common Stock shall be deemed issued and outstanding, effective immediately prior to the consummation of such Liquidity Event and the holders thereof shall be entitled to receive the corresponding Liquidity Event Consideration.

(d)    If, prior to the expiration or satisfaction, as applicable, of Buyer’s obligation to issue any Earn-Out Consideration as provided in this Section 2.9, any change in the outstanding shares of Buyer Class A Common Stock shall occur by reason of any reclassification, recapitalization, stock or unit split (including reverse stock or unit

 

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split) or combination, exchange, or readjustment of shares, or any stock dividend, the number of Buyer Class A Common Stock comprising the Earn-Out Consideration, the Share Price Target (Tier 1), and the Share Price Target (Tier 2) shall be appropriately adjusted to reflect such change and to provide to Contributor the same economic effect as contemplated by this Section 2.9 prior to such change.

ARTICLE III

WARRANTIES OF CONTRIBUTOR

Subject to the disclosures made in the Disclosure Schedules and the Data Room, Contributor warrants to Buyer as follows:

3.1    Organization of Contributor. Contributor is a limited liability company duly formed, validly existing, and in good standing under the Laws of the State of Delaware.

3.2    Companies.

(a)    Each Company is a limited liability company or limited partnership, as applicable, duly formed, validly existing, and in good standing under the Laws of the State of Delaware. Each Company has all requisite limited liability company or limited partnership, as applicable, power and authority to own, lease, and operate its properties and to carry on its business as presently conducted.

(b)    Each Company is (i) duly qualified or licensed to do business as a limited liability company or a limited partnership, as applicable, and (ii) in good standing in the jurisdictions in which the property owned, leased, or operated by it or the conduct of its business requires such qualification or licensing, except for jurisdictions in which the failure to be so qualified or licensed would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c)    The Contributed Interests constitute all of the limited liability company membership interests or limited partner interests, as applicable, in the Companies, and Contributor is the sole record and beneficial owner of the Contributed Interests. The General Partner Interests constitute all of the general partner interests in the Partnerships, and the General Partner is the sole record and beneficial owner of the General Partner Interests. Upon the delivery of and payment for the Contributed Interests at the Closing as provided for in this Agreement, the KAAC Partnership will receive good and valid title to the Contributed Interests, free and clear of all Encumbrances, other than restrictions on transfer that may be imposed by federal or state securities Laws.

(d)    There are outstanding (i) no securities of any Company that are convertible into or exchangeable for equity interests of such Company and (ii) no options or other rights to acquire from Contributor or any Company, and no obligations of Contributor or any Company to issue or sell, any Interests of any Company, other than the rights of Buyer to acquire the Contributed Interests pursuant to this Agreement.

(e)    Contributor has made available to Buyer copies of the Organizational Documents of each Company as currently in effect.

 

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3.3    Authority. Contributor and each Company has full limited partnership or limited liability company, as applicable, power and authority to execute, deliver, and perform this Agreement and each Ancillary Agreement to which it is a party. The execution, delivery, and performance by Contributor and each Company of this Agreement and each Ancillary Agreement to which it is a party, and the consummation of the Transactions, have been duly authorized by all necessary limited partnership and limited liability company, as applicable, action of Contributor and each Company, as the case may be. This Agreement has been, and each Ancillary Agreement to which it is a party will be, duly executed and delivered by Contributor and each Company, and constitutes, or will constitute, a valid and legally binding obligation of Contributor and each Company, enforceable against Contributor and each Company in accordance with its terms, except that such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium, and similar Laws affecting creditors’ rights generally and (b) equitable principles that may limit the availability of certain equitable remedies (such as specific performance) in certain instances.

3.4    No Conflict. The execution, delivery, and performance of this Agreement and the Ancillary Agreements to which it is a party by Contributor and each Company, and the consummation of the Transactions, do not and will not:

(a)    violate or breach the certificate of formation, limited partnership agreement, or limited liability company agreement, as applicable, of Contributor or any Company;

(b)    violate or breach any Law binding upon Contributor or any Company, as applicable, except for such violations or breaches as would not, individually or in the aggregate, reasonably be expected to be material to Contributor or to the Companies, taken as a whole; or

(c)    result in any breach of, or constitute a default under, or give to any Third Party any rights of termination, consent, acceleration, or cancellation of, or result in the creation of, any material Encumbrance (other than a Permitted Encumbrance) with respect to any of the assets of Contributor or any Company pursuant to any note, bond, mortgage, deed of trust, indenture, contract, agreement, lease, license, Permit, or other instrument to which Contributor or any Company is a party, or by which any of such assets is bound or affected, except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Companies, taken as a whole.

3.5    Consents and Approvals. No material consent or approval of, or notification to, any Person, is required to be made or obtained by Contributor or any Company in connection with the execution, delivery, and performance of this Agreement and each Ancillary Agreement to which it is a party or the consummation of the Transactions, except (a) for consents or approvals that have been obtained as of the Execution Date or (b) as may be necessary as a result of any facts or circumstances relating solely to Buyer or its Affiliates.

3.6    Absence of Certain Changes. Except as disclosed in Schedule 3.6 or as contemplated by this Agreement, since January 1, 2018, (a) there have not been any material and adverse changes in the assets or financial condition of the Companies, taken as a whole, and (b) the Companies, taken as a whole, have not suffered any material loss, damage, destruction, or other casualty to any of its property, plant, equipment, or inventories (whether or not covered by insurance).

 

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3.7    Compliance With Applicable Laws. To Contributor’s Knowledge, each Company is in compliance, in all material respects, with all applicable Laws (other than Laws relating to Taxes, as to which Contributor’s sole warranties are set forth in Section 3.10, Laws relating to employee matters, as to which Contributor’s sole warranties are set forth in Section 3.17, and Environmental Laws, as to which Contributor’s sole warranties are set forth in Section 3.18), except as disclosed in Schedule 3.7.

3.8    Legal Proceedings; Orders. Except as disclosed in Schedule 3.8, there are no Proceedings pending against any Company and, to the Knowledge of Contributor, there are no material Proceedings threatened against any Company.

3.9    Brokerage Fees. Except as disclosed in Schedule 3.9, none of Contributor, the Companies, or any of their respective Affiliates has retained any financial advisor, broker, agent, or finder on account of this Agreement or the Transactions for which Buyer, its Affiliates, or any Company will be liable.

3.10    Taxes. Except as disclosed in Schedule 3.10:

(a)    all material Tax Returns required to be filed by any Company have been duly filed on a timely basis (taking into account valid extensions of time to file) with the appropriate Taxing Authority, and all such Tax Returns are true, correct, and complete in all material respects;

(b)    all material Taxes due and payable by any Company have been duly and timely paid in full (regardless of whether shown on any Tax Return);

(c)    all material withholding Tax requirements imposed on or with respect to any Company have been satisfied in full;

(d)    no written claim has been made by any Taxing Authority to any Company in a jurisdiction where such Company does not currently file a Tax Return that it is or may be subject to any material Tax in such jurisdiction, nor has any such assertion been threatened or proposed in writing and received by any Company;

(e)    there are no audits or Proceedings relating to Tax currently being conducted with respect to any Company, nor has any Company received any written claim for material additional Tax that is still pending, and there is not in force any waiver or agreement for any extension of time for the assessment or payment of any material Tax of any Company;

(f)    there are no material Encumbrances with respect to Taxes upon any of the assets of any Company, except for statutory Encumbrances for Taxes not yet due and payable;

 

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(g)    no Company is a party to any material agreement or arrangement relating to the apportionment, sharing, assignment or allocation of Taxes (other than any customary Tax sharing or indemnification provisions contained in any agreement entered into in the ordinary course of business and not primarily relating to Tax);

(h)    each Company is, and has been since its respective date of formation, classified as a disregarded entity for U.S. federal income Tax purposes; and

(i)    notwithstanding anything to the contrary in this Agreement, the warranties set forth in this Section 3.10 are Contributor’s sole and exclusive warranties regarding Taxes of the Companies.

3.11    Information Supplied. None of the information supplied by Contributor expressly marked for inclusion or incorporation by reference in the Proxy Statement will, at the time the Proxy Statement is first mailed to the stockholders of Buyer and at the time of any meeting of Buyer’s stockholders to be held in connection with the Transactions, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no warranty is made by Contributor with respect to information so provided by Contributor that is modified, without Contributor’s approval, by Buyer (including by omission).

3.12    Nature of Investment. Contributor is acquiring the Equity Consideration and the Buyer Class C Common Stock for investment purposes only and not with a view toward resale or distribution thereof in violation of applicable securities Laws. Contributor acknowledges that it can bear the economic risk of its investment in the Equity Consideration and the Buyer Class C Common Stock, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Equity Consideration and the Buyer Class C Common Stock. Contributor has made, independently and without reliance on Buyer (except to the extent that Contributor has relied on the warranties set forth in Article IV), its own analysis of the Equity Consideration, the Buyer Class C Common Stock, and Buyer for the purpose of acquiring the Equity Consideration and the Buyer Class C Common Stock, and Contributor has had reasonable and sufficient access to documents, other information, and materials as it considers appropriate to make its evaluations. Contributor is an “accredited investor” as such term is defined in Regulation D under the Securities Act. Contributor understands that none of the Equity Consideration or the Buyer Class C Common Stock will have been registered pursuant to the Securities Act or any applicable state securities Laws, that the Equity Consideration and the Buyer Class C Common Stock will be characterized as “restricted securities” under federal securities Laws, and that the Equity Consideration and the Buyer Class C Common Stock may not be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom.

3.13    Permits. Each Company has obtained all material Permits required for its respective operations, all such material Permits are in full force and effect, and each Company is in compliance, in all material respects, with its respective obligations under such material Permits.

 

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3.14    Title to Properties. Except with respect to Rights-of-Way, which are the subject of Section 3.15(b), each of the Companies has good and marketable title to, or valid rights to lease or otherwise use, all items of real property and personal property that are material to the conduct of the respective businesses of the Companies, in each case free and clear of all Encumbrances (other than Permitted Encumbrances) except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Companies or (ii) would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Companies, taken as a whole. For the avoidance of doubt, no warranty is made by Contributor with respect to any real property or personal property that is dedicated to any of the Companies pursuant to a gas processing, gas gathering, or similar agreement, including the Dedication Agreements.

3.15    Real Property.

(a)    Schedule 3.15 sets forth a complete list, as of the Execution Date, of the material leases, licenses, and similar occupancy agreements in respect of real property (other than Rights-of-Way, which are addressed exclusively in Section 3.15(b)) to which any Company is a party (as lessor or lessee) (collectively, the “Real Property Leases” and the real property subject to such Real Property Leases, the “Leased Real Property”). Each Real Property Lease is a legal, valid, and binding agreement, enforceable in accordance with its terms, of the applicable Company, and to the Knowledge of Contributor, of each other Person that is a party thereto, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar Laws affecting creditors’ rights generally and (ii) equitable principles that may limit the availability of certain equitable remedies (such as specific performance) in certain instances. Except as disclosed in Schedule 3.15, no Company has received any written notice during the twelve (12) month period prior to the Execution Date that it is in default in payment of rent or in performance of its obligations thereunder. Prior to the Execution Date, Contributor has made available to Buyer copies of all Real Property Leases.

(b)    The Companies have, subject to Permitted Encumbrances, such consents, easements, rights-of-way, permits, servitudes, licenses, and other similar surface rights from any Person (“Rights-of-Way”) as are sufficient to conduct its business substantially in the manner conducted as of the Execution Date. Each of the Companies has fulfilled and performed, in all material respects, its obligations with respect to such Rights-of-Way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such rights-of-way, except for such revocations, terminations and impairments that, would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Companies, taken as a whole. All Systems operated by the Companies are subject to Rights-of-Way, and there are no gaps (including any gap arising as a result of any breach by any Company of the terms of any Rights-of-Way) in the Rights-of-Way other than gaps that would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Companies, taken as a whole.

 

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3.16    Material Agreements.

(a)    Set forth in Schedule 3.16 is a list of each of the following agreements and contracts to which any Company is a party or by which any Company or any of their respective properties is otherwise bound as of the Execution Date (each of the following being referred to as a “Material Agreement”; provided, however, “Material Agreement” shall not include any contract or agreement that may be terminated by a party thereto within a ninety (90) day period):

(i)    contracts, agreements, and instruments representing Indebtedness for Borrowed Money and all guarantees thereof, and any related agreements or instruments creating Encumbrances securing such obligations, in each case having an outstanding principal amount in excess of $10,000,000;

(ii)    the Options;

(iii)    contracts containing covenants limiting the freedom of any Company to engage in any line of business, compete with any Person, or operate at any location;

(iv)    contracts in excess of $10,000,000 to which any Company, on the one hand, and an Affiliate of Contributor, on the other hand, is a party or is otherwise bound, other than any bona fide arm’s length contract entered into prior to the date on which such Person became an Affiliate of Contributor (each such contract, an “Affiliate Contract”);

(v)    joint venture or partnership agreements, including any agreement or commitment to make any loan or capital contribution to any joint venture or partnership;

(vi)    contracts in excess of $10,000,000 relating to the acquisition or disposition by any Company of any business (whether by acquisition or disposition of equity interests or assets) pursuant to which any Company has any remaining material obligation or liability; and

(vii)    contracts or agreements which, individually, require or entitle any Company to make or receive payments of at least $10,000,000 annually, provided that the calculation of the aggregate payments for any such agreement or contract shall not include payments attributable to any renewal periods or extensions for which such Company may exercise a renewal or extension option in its sole discretion.

(b)    Except as disclosed in Schedule 3.16, no Company is in breach in any material respect of the terms of any such Material Agreement and, to the Knowledge of Contributor, no other party to any Material Agreement is in breach of the material terms thereof.

 

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(c)    Contributor has made available to Buyer copies of all Material Agreements.

3.17    Employee Matters. No Company (a) has employees, (b) is the sponsor of and contributes to or has an obligation to contribute to any Benefit Plan, or (c) has material liability relating to any Benefit Plan. No Company is or has been a party to, or bound by, any collective bargaining agreement or contract with a labor union, and there are no unfair labor practice or labor arbitration Proceedings pending or, to the Knowledge of Contributor, threatened against any Company. Other than the warranties set forth in this Section 3.17, Contributor makes no other warranty with respect to any employee matter relating to any Company.

3.18    Environmental.

(a)    Except as disclosed in Schedule 3.18, to the Knowledge of Contributor, each Company is in compliance, in all material respects, with all applicable Environmental Laws, and no Company has received any written notice or demand letter from any Governmental Entity or other Third Party indicating that any Company is in violation in any material respect of, or liable under, any Environmental Law, which violation or liability has not heretofore been resolved with such Governmental Entity or Third Party.

(b)    There are no Proceedings that are pending or, to the Knowledge of Contributor, threatened against any of the Companies under Environmental Laws in which a Governmental Entity is also a party, other than such proceedings as would not reasonably be expected to be material and adverse to the Companies, taken as a whole.

(c)    Except as disclosed in Schedule 3.18, (i) no Company has owned, leased, or operated a site that (A) pursuant to CERCLA or any similar state or foreign Law, has been placed or is proposed to be placed by any Governmental Entity on the “National Priorities List”, or similar state or foreign list, as in effect as of the Closing Date, or (B) is involved with any voluntary cleanup program sponsored by a Governmental Entity and (ii) except as would not reasonably be expected to be material and adverse to the Companies, taken as a whole, no Company has been identified by any Governmental Entity as a potentially responsible party under CERCLA or any similar state or foreign Law with respect to any site, and no Hazardous Materials generated, transported, or disposed of, by or on behalf of any Company, have been found at any site where a Person has made written demand on any Company to conduct or pay for a remedial investigation, removal, or other response action pursuant to any applicable Environmental Law.

(d)    Except as disclosed in Schedule 3.18, there have been no Releases of Hazardous Materials at any property currently or, to the Knowledge of Contributor, formerly owned or operated by any Company, which Releases are reasonably likely to be material and adverse to the Companies, taken as a whole.

(e)    There have been no material environmental investigations, studies, audits, or other analyses or reports completed, during the past three (3) years by or on behalf of,

 

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or that are in the possession or control of, Contributor or any Company addressing potentially material environmental matters with respect to any property related to the midstream gathering and processing business that is owned or operated by any of the Companies that have not been delivered or otherwise made available to Buyer prior to the date hereof.

(f)    Notwithstanding anything to the contrary in this Agreement, the warranties set forth in Section 3.13 and this Section 3.18 are Contributor’s sole and exclusive warranties regarding environmental matters, including compliance with Environmental Laws.

3.19    Intellectual Property. Each Company owns or, together with the License Agreement as of the Closing, possesses adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, know-how, software, systems, and technology (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses, except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Companies, taken as a whole.

3.20    Insurance. Each of the Companies carries insurance customary for companies engaged in similar businesses or is covered by an existing insurance program in such amounts and covering such risks as described on Schedule 3.20 of the Disclosure Schedules.

3.21    No Prior Dedications. Except as disclosed in Schedule 3.21, to the Knowledge of Contributor, there are no Prior Dedications (as such term is defined in each Dedication Agreement) that would affect the dedications granted and conveyed under the Dedication Agreements and, to the Knowledge of Contributor, no Third Party has made any claim or assertion that any such Prior Dedication exists.

3.22    Preparation of Schedules. Contributor has used good faith efforts to complete the Schedules specified by this Article III and to schedule any exceptions to the warranties in this Article III about which Contributor has Knowledge as of the Execution Date.

ARTICLE IV

WARRANTIES OF BUYER

Subject to the disclosures made in Buyer’s Disclosure Schedules, Buyer warrants to Contributor and the Companies as follows:

4.1    Organization of Buyer. Buyer is a corporation duly formed, validly existing, and in good standing under the Laws of the State of Delaware.

4.2    KAAC General Partner and the KAAC Partnership.

(a)    The KAAC Partnership and the KAAC General Partner is a limited partnership and limited liability company, respectively, each duly formed, validly existing, and in good standing under the Laws of the State of Delaware. Each of the

 

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KAAC Partnership and the KAAC General Partner has all requisite limited partnership or limited liability company, respectively, power and authority to own, lease, and operate its properties and to carry on its business as presently conducted.

(b)    Each of the KAAC Partnership and the KAAC General Partner is (i) duly qualified or licensed to do business as a limited partnership or limited liability company, respectively, and (ii) in good standing in the jurisdictions in which the property owned, leased, or operated by it or the conduct of its business requires such qualification or licensing, except for jurisdictions in which the failure to be so qualified or licensed would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

(c)     As of the Execution Date, Buyer owns all of the outstanding limited liability company membership interests in the KAAC General Partner and all of the outstanding limited partner interests in the KAAC Partnership, and the KAAC General Partner owns a non-economic general partner interest in the KAAC Partnership, which constitutes all of the outstanding general partner interests in the KAAC Partnership. The outstanding limited partner interests and general partner interests of the KAAC Partnership are duly authorized and validly issued, fully paid, and non-assessable (except as such non-assessability may be affected by Sections 17-303(a), 17-607, and 17-804 of the Delaware Revised Uniform Limited Partnership Act, as amended), and the outstanding limited liability company membership interests of the KAAC General Partner are duly authorized and validly issued, fully paid, and non-assessable (except as such non-assessability may be affected by Sections 18-607, and 18-804 of the Delaware Limited Liability Company Act, as amended). The outstanding limited partner interests and general partner interests of the KAAC Partnership and the outstanding limited liability company membership interests of the KAAC General Partner were issued in compliance with all applicable state and federal securities Laws and not subject to, and not issued in violation of, any options, warrants, calls, rights (including preemptive rights), Organizational Documents, commitments, or agreements to which Buyer, the KAAC Partnership, or the KAAC General Partner is a party or by which it is bound. There are no outstanding (i) Interests in the KAAC General Partner or the KAAC Partnership convertible into or exchangeable for other Interests in the KAAC General Partner or the KAAC Partnership, as applicable, (ii) options, warrants, or other rights (including preemptive rights) or agreements, arrangements, or commitments of any character, whether or not contingent, relating to issued or unissued capital stock or other Interests in the KAAC General Partner or the KAAC Partnership, (iii) obligations of the KAAC General Partner or the KAAC Partnership to issue any Interests in it, other than the rights of Contributor and Buyer to acquire Common Units and Buyer to acquire Partnership Warrants, each pursuant to this Agreement, or (iv) obligations of the KAAC General Partner or the KAAC Partnership to repurchase, redeem, or otherwise acquire any Interests. The Common Units to be issued to Contributor hereunder upon the Closing, shall be duly authorized and validly issued, fully paid (to the extent required under the A&R LP Agreement) and non-assessable (except as such non-assessability may be affected by Sections 17-303(a), 17-607, and 17-804 of the Delaware Revised Uniform Limited Partnership Act, as amended), and issued in compliance with all applicable state and federal securities Laws and not subject to, and not issued in violation of, any options,

 

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warrants, calls, rights (including preemptive rights), Organizational Documents, commitments, or agreements to which Buyer, the KAAC General Partner, or the KAAC Partnership is a party or by which it is bound.

4.3    Authority. Each of Buyer, the KAAC General Partner, and the KAAC Partnership has full corporate, limited liability company, and limited partnership, as applicable, power and authority to execute, deliver, and perform this Agreement and each Ancillary Agreement to which it is a party. Subject to the requisite approval of the Stockholder Proposals, the execution, delivery, and performance by Buyer, the KAAC General Partner, and the KAAC Partnership of this Agreement and each Ancillary Agreement to which it is a party, and the consummation by Buyer, the KAAC General Partner, and the KAAC Partnership of the Transactions, have been duly authorized by all necessary corporate, limited liability company, or limited partnership, as applicable, action of Buyer, the KAAC General Partner, and the KAAC Partnership. This Agreement and each Ancillary Agreement to which it is a party has been duly executed and delivered by Buyer, the KAAC General Partner, and the KAAC Partnership, and constitutes a valid and legally binding obligation of Buyer, the KAAC General Partner, and the KAAC Partnership, as applicable, enforceable against Buyer in accordance with its terms, except that such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium, and similar Laws affecting creditors’ rights generally and (b) equitable principles that may limit the availability of certain equitable remedies (such as specific performance) in certain instances

4.4    No Conflicts. Subject to the requisite approval of the Stockholder Proposals, assuming all consents, approvals, authorizations, and other actions described in Section 4.5 have been obtained, and all filings and notifications listed in Section 4.5 have been made, and except as may result from any facts or circumstances relating solely to Contributor or its Affiliates, the execution, delivery, and performance of this Agreement and the Ancillary Agreements to which it is a party by Buyer, the KAAC General Partner, and the KAAC Partnership, and the consummation of the Transactions, does not and will not:

(a)    violate or breach the Organizational Documents of Buyer, the KAAC General Partner, or the KAAC Partnership, except for such violations or breaches as would not reasonably be expected to be material to KAAC, the General Partner, or the KAAC Partnership, individually or in the aggregate;

(b)     violate or breach any Law binding upon Buyer, the KAAC General Partner, or the KAAC Partnership, except as would not, individually or in the aggregate, reasonably be expected to be material to Buyer; or

(c)    result in any breach of, or constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, or give to others any rights of termination, amendment, acceleration, or cancellation of, or result in the creation of, any Encumbrance on any of the assets or properties of Buyer, the KAAC General Partner, or the KAAC Partnership pursuant to any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise, or other instrument relating to such assets or properties to which Buyer, the KAAC General Partner, or the KAAC Partnership is a party, or by which any of such assets or properties is bound or affected, except as would not reasonably be expected to have a Buyer Material Adverse Effect.

 

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4.5    Consents and Approvals. Except for the requisite approval of the Stockholder Proposals, no material consent or approval of, or notification to, any other Person, is required to be made or obtained by Buyer, the KAAC General Partner, or the KAAC Partnership in connection with the execution, delivery, and performance of this Agreement and each Ancillary Agreement to which it is a party and the consummation of the Transactions.

4.6    Absence of Certain Changes. To Buyer’s Knowledge, except as contemplated by this Agreement, or as has not had, and would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect, since January 1, 2018, there have not been any changes in the assets or financial condition of Buyer.

4.7    Compliance With Applicable Laws. Each of Buyer, the KAAC Partnership, and the KAAC General Partner is in compliance, in all material respects, with all applicable Laws.

4.8    Legal Proceedings; Orders. There are no Proceedings pending or, to the Knowledge of Buyer, threatened against Buyer, the KAAC Partnership, or the KAAC General Partner.

4.9    Brokerage Fees. Except as disclosed in Buyer’s Disclosure Schedules, none of Buyer, the KAAC Partnership, the KAAC General Partner, or any of their respective Affiliates has retained any financial advisor, broker, agent, or finder on account of this Agreement or the Transactions for which Contributor, its Affiliates, the Companies, the KAAC Partnership, or the KAAC General Partner will be liable.

4.10    Tax . The KAAC Partnership is, and has been since its date of formation, classified as a disregarded entity for U.S. federal income Tax purposes.

4.11    Information Supplied; Proxy Statement. None of the information supplied or to be supplied by Buyer for inclusion or incorporation by reference in the Proxy Statement will not, at the time the Proxy Statement is first mailed to the stockholders of Buyer and at the time of any meeting of Buyer’s stockholders to be held in connection with the Transactions, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Proxy Statement (other than with respect to information supplied by Contributor expressly for inclusion therein) will comply in all material respects with the applicable requirements of the Exchange Act and the rules and regulations of the SEC thereunder applicable to the Proxy Statement.

4.12    Nature of Investment. Each of Buyer and the KAAC Partnership is acquiring the Contributed Interests for investment purposes only and not with a view toward resale or distribution thereof in violation of applicable securities Laws. Each of Buyer and the KAAC Partnership acknowledges that it can bear the economic risk of its investment in the Contributed Interests, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Contributed Interests. Each of

 

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Buyer and the KAAC Partnership has made, independently and without reliance on Contributor or any Company (except to the extent that Buyer has relied on the warranties set forth in Article III), its own analysis of the Contributed Interests, the Companies, and the Companies’ assets for the purpose of acquiring the Contributed Interests, and each of Buyer and the KAAC Partnership has had reasonable and sufficient access to documents, other information, and materials as it considers appropriate to make its evaluations. Each of Buyer and the KAAC Partnership is an “accredited investor” as such term is defined in Regulation D under the Securities Act. Each of Buyer and the KAAC Partnership understands that none of the Contributed Interests will have been registered pursuant to the Securities Act or any applicable state securities Laws, that the Contributed Interests will be characterized as “restricted securities” under federal securities Laws, and that the Purchased Interests may not be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom.

4.13    Buyer Capital Structure.

(a)    As of the Execution Date, the authorized capital stock of Buyer consists of (i) 200,000,000 shares of Buyer Class A Common Stock, (ii) 20,000,000 shares of Buyer Class B Common Stock, and (iii) 1,000,000 shares of preferred stock, par value $0.0001 per share (the “Buyer Preferred Stock”). At the close of business on August 6, 2018: (A) 37,732,112 shares of Buyer Class A Common Stock were issued and outstanding, (B) 9,433,028 shares of Buyer Class B Common Stock were issued and outstanding, (C) no shares of Buyer Preferred Stock were issued and outstanding, and (D) 18,941,651 whole warrants, each whole warrant entitling the holder thereof to purchase one share of Buyer Class A Common Stock at an exercise price of $11.50 per share of Buyer Class A Common Stock (the “Buyer Warrants”) were issued and outstanding. All outstanding shares of Buyer Class A Common Stock and Buyer Class B Common Stock are validly issued, fully paid, and non-assessable, and issued in compliance with all applicable state and federal securities Laws and not subject to, and not issued in violation of, any options, warrants, calls, rights (including preemptive rights), Organizational Documents, commitments, or agreements to which Buyer is a party or by which it is bound. Except (i) for the Buyer Class B Common Stock and the Buyer Warrants, as set forth in the Organizational Documents of Buyer, and (ii) in connection with the Buyer Equity Financing, there are no outstanding (w) Interests of Buyer convertible into or exchangeable for other Interests of Buyer, (x) options, warrants, or other rights (including preemptive rights) or agreements, arrangements, or commitments of any character, whether or not contingent, relating to issued or unissued capital stock or other Interests in Buyer, (y) obligations of Buyer to issue any Interests in it, other than the rights of Contributor to acquire Buyer Class A Common Stock, Buyer Class C Common Stock, and the Contribution Warrants pursuant to this Agreement, or (z) obligations of Buyer to repurchase, redeem, or otherwise acquire any Interests. Buyer has no direct or indirect Interests, participation, or voting right or other investment (whether debt, equity, or otherwise) in any Person (including any contract in the nature of a voting trust or similar agreement or understanding) or any other equity equivalents in or issued by any other Person other than the KAAC General Partner and the KAAC Partnership or as may be acquired pursuant to this Agreement.

 

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(b)    The Class A Common Stock and the Class C Common Stock to be issued to Contributor hereunder upon the Closing will be duly authorized, validly issued, fully paid, and non-assessable, and issued in compliance with all applicable state and federal securities Laws and not subject to, and not issued in violation of, any options, warrants, calls, rights (including preemptive rights), Organizational Documents, commitments, or agreements to which Buyer is a party or by which it is bound. The Contribution Warrants to be issued to Contributor hereunder upon Closing will be duly issued and delivered, and will constitute valid and binding obligations of Buyer, enforceable against Buyer in accordance with their terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar Laws affecting creditors’ rights generally and (ii) equitable principles that may limit the availability of certain equitable remedies (such as specific performance) in certain instances. The Class A Common Stock issuable upon exercise of the Contribution Warrants have been duly authorized and reserved for issuance upon exercise thereof and, when issued and delivered against payment therefor pursuant to the Contribution Warrants and the Warrant Agreement, will be duly authorized, validly issued, fully paid, and non-assessable, and issued in compliance with all applicable state and federal securities Laws and not subject to, and not issued in violation of, any options, warrants, calls, rights (including preemptive rights), Organizational Documents, commitments, or agreements to which Buyer, the KAAC General Partner, or the KAAC Partnership is a party or by which it is bound.

4.14    Buyer SEC Documents; Controls.

(a)    Since March 29, 2017, Buyer has timely filed or furnished with the SEC all forms, reports, schedules, and statements required to be filed or furnished under the Securities Act of 1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (such forms, reports, schedules, and statements, the “SEC Documents”). As of their respective dates, each of the SEC Documents, as amended (including, without limitation, all financial statements included therein, exhibits and schedules thereto, and documents incorporated by reference therein), complied in all material respects with the applicable requirements of the Securities Act, or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such SEC Documents, and none of the SEC Documents contained, when filed or, if amended prior to the Execution Date, as of the date of such amendment with respect to those disclosures that are amended, any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. To the Knowledge of Buyer, as of the Execution Date, (i) none of the SEC Documents are the subject of ongoing SEC review or outstanding SEC comment and (ii) neither the SEC nor any other Governmental Entity is conducting any investigation or review of any SEC Document. No notice of any SEC review or investigation of Buyer or the SEC Documents has been received by Buyer.

(b)    The financial statements of Buyer included in the SEC Documents, including all notes and schedules thereto, complied in all material respects, when filed or if amended prior to the Execution Date, as of the date of such amendment, with the rules

 

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and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly present in all material respects in accordance with applicable requirements of GAAP (subject, in the case of the unaudited statements, to normal year-end audit adjustments) the financial position of Buyer and its consolidated Subsidiaries, as of their respective dates, and the results of operations and the cash flows of Buyer and its consolidated Subsidiaries, for the periods presented therein.

(c)    Buyer has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act and the listing standards of NASDAQ. Buyer’s disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by Buyer in the reports that it files under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to Buyer’s management as appropriate to allow timely decisions.

4.15    Trust Account. As of the Execution Date, Buyer has (and, assuming no holders of Buyer Class A Common Stock exercise the Buyer Stockholder Redemption Right, will have immediately prior to the Closing) at least $380 million in the Trust Account, with such funds invested in United States Government securities or money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 and held in trust by the Trustee pursuant to the Trust Agreement. The Trust Agreement is in full force and effect and is a legal, valid, and binding obligation of Buyer and the Trustee, enforceable in accordance with its terms. The Trust Agreement has not been terminated, repudiated, rescinded, amended, supplemented, or modified, in any respect, and no such termination, repudiation, rescission, amendment, supplement, or modification is contemplated. There are no side letters and (except for the Trust Agreement) there are no agreements, contracts, arrangements, or understandings, whether written or oral, with the Trustee or any other Person that would (a) cause the description of the Trust Agreement in the SEC Documents to be inaccurate or (b) entitle any Person (other than holders of Buyer Class A Common Stock who shall have exercised their Buyer Stockholder Redemption Right) to any portion of the proceeds in the Trust Account. Prior to the Closing, none of the funds held in the Trust Account may be released except (y) to pay income and franchise taxes from any interest income earned in the Trust Account and (z) to redeem shares of Buyer Class A Common Stock pursuant to the Buyer Stockholder Redemption Right. There are no Proceedings pending or, to the Knowledge of Buyer, threatened with respect to the Trust Account.

4.16    Listing. The issued and outstanding shares of Buyer Class A Common Stock and the Buyer Warrants (the foregoing, collectively, the “Buyer Public Securities”) are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on NASDAQ. There is no Proceeding pending or, to the Knowledge of Buyer, threatened against Buyer by NASDAQ or the SEC with respect to any intention by such entity to deregister any Buyer Public Securities or prohibit or terminate the listing of any Buyer Public Securities on NASDAQ. Buyer has taken no action that is designed to terminate the registration of Buyer Public Securities under the Exchange Act. Buyer has not received any written or, to Buyer’s knowledge, oral deficiency notice from NASDAQ relating to the continued listing requirements of the Buyer Public Securities.

 

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4.17     Independent Investigation. Each of Buyer and the KAAC Partnership hereby acknowledges and affirms that (a) it has completed its own independent investigation, analysis, and evaluation of the Contributed Interests and the Companies, it has made all such reviews and inspections of the business, assets, results of operations, condition (financial or otherwise), and prospects of the Companies as it has deemed necessary or appropriate, and acknowledges that it has been provided access to the personnel (if any), properties, premises, and records of the Companies for such purpose, (b) it shall be deemed to have knowledge of all facts, materials, and documents described, contained, or set forth in the Data Room, and (c) in making its decision to enter into this Agreement and to consummate the Transactions, it has relied solely on the warranties set forth in Article III and its own independent investigation, analysis, and evaluation.

4.18    Non-Reliance. Except for the specific warranties expressly made by Contributor in Article III, (a) each of Buyer and the KAAC Partnership acknowledges and agrees that (i) none of Contributor, the Companies, or any of its or their respective Affiliates is making or has made any warranty, expressed or implied, at law or in equity, in respect of the Companies or any of the Companies’ respective businesses, assets, Liabilities, operations, prospects, or condition (financial or otherwise), including with respect to (A) merchantability or fitness for any particular purpose of any assets, (B) the nature or extent of any Liabilities, (C) the prospects of the Companies’ businesses, (D) the effectiveness or the success of any operations, (E) the quantity, quality, price, or recoverability of oil, gas, or natural gas liquids associated with the Companies’ businesses, (F) estimates of costs or expenses to be incurred in connection with the Companies’ businesses, including carbon or emission trading costs or liabilities, environmental remediation or rehabilitation costs, the Contributed Interests, future or forecast costs, Taxes, access to land, revenues, prices or profits, markets, or production, (G) the past, present, or future performance, operation, ownership, or profitability of the oil and gas gathering, processing, or storage business or the oil and gas industry, or (H) the accuracy or completeness of any confidential information memoranda, documents, projections, forecasts, estimates, materials, or other information (financial or otherwise) regarding the Companies’ past, present, or future businesses (including any revenue or profits which may be derived from such businesses) that is furnished to Buyer, the KAAC Partnership, or its or their respective Representatives or made available to Buyer, the KAAC Partnership, or its or their respective Representatives by any Representative of Contributor or any Affiliate thereof, including any information provided or made available to Buyer, the KAAC Partnership, or its or their respective Representatives in the Data Room or management presentations or in any other form in expectation of, or in connection with, the Transactions, or in respect of any other matter or thing whatsoever, and (ii) no Representative of Contributor or any Company has any authority, express or implied, to make any warranties or agreements not specifically set forth in this Agreement and subject to the limited remedies herein provided; (b) each of Buyer and the KAAC Partnership specifically disclaims that it is relying upon or has relied upon any such other warranties that may have been made by any Person, and acknowledges and agrees that any Company and Contributor, and their respective Affiliates and Representatives, have specifically disclaimed and do hereby specifically disclaim any such other warranty made by any Person; (c) each of Buyer and the KAAC Partnership specifically disclaims any obligation or duty by any Company or Contributor to

 

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make any disclosures of fact not required to be disclosed pursuant to the specific warranties set forth in Article III; and (d) each of Buyer and the KAAC Partnership is acquiring the Contributed Interests “as is, where is, with all faults,” and subject only to the specific warranties set forth in Article III as further limited by the specifically bargained-for waiver of claims as set forth in Article IX.

4.19    Nature of Warranties. Each of Buyer and the KAAC Partnership acknowledges that (a) all warranties set forth in Article III are contractual in nature only and subject to the waiver of claims set forth in Article IX and (b) Contributor is not asserting the truth of any warranty set forth in Article III; rather the Parties have agreed that should any warranties of Contributor prove untrue, Buyer may assess whether the condition to Buyer’s obligation to close set forth in Section 6.1 shall have been satisfied, but, should the Closing occur, the waiver of claims in Article IX shall apply.

ARTICLE V

COVENANTS

5.1    Regulatory and Other Approvals.

(a)    Each Party shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under any applicable Laws to consummate and make effective the Transactions.

(b)    Each Party shall, and shall cause its respective Affiliates to, (i) promptly inform the other Parties of, and supply to the other Parties, any communication (or other correspondence or memoranda) from or to, and any proposed understanding or agreement with, any Governmental Entity in connection with this Agreement or the Transactions; (ii) consult and cooperate in good faith with the other Parties in connection with any filings, notifications, submissions, analyses, appearances, presentations, memoranda, briefs, arguments and opinions made or submitted by or on behalf of any Party in connection with all meetings, actions, discussions, and Proceedings with Governmental Authorities relating to this Agreement or the Transactions, including, subject to applicable Law, permitting the other Parties to review in advance, and considering in good faith the views of the other Party with respect to, any proposed written communication to any Governmental Entity and to promptly provide the other Parties with copies of any communication to any Governmental Entity; (iii) use commercially reasonable efforts to comply, as promptly as reasonably practicable, with any requests received by a Party or any of its Affiliates under applicable Law for additional information, documents or other materials; and (iv) give the other Parties reasonable advance notice of its or its Subsidiaries’ intention to participate in any meeting or telephone or other discussion with any Governmental Entity with respect to the Transactions or any filings, investigations or inquiries made in connection with the Transactions, and an opportunity to participate in such meeting or discussion.

(c)    Notwithstanding anything to the contrary in this Agreement, no Party shall be required to, and no Party shall, (i) take or agree to take any action with respect to, or

 

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that would require or purport to require any action by, any Party (including any action that limits, or seeks to limit, the freedom of action of, or ownership or control with respect to, any of the businesses, assets, properties or services of any Party or any of its Affiliates), (ii) proffer a consent and/or agree to an order, stipulation or other agreement providing for the sale or other disposition, of the holding separate, of any assets, categories of assets, or lines of business of Buyer or any of its Affiliates or in respect of its or their respective business, or (iii) institute or challenge any Proceeding initiated by a Governmental Entity in respect of the Transactions.

5.2    Access of Buyer.

(a)    From the Execution Date until the Closing Date (the “Interim Period”), Contributor and the Companies shall provide Buyer and its Representatives with reasonable access, upon reasonable prior notice and during normal business hours, to all assets, books and records, contracts, documents, officers, employees (if any), agents, legal advisors, and accountants of the Companies, and Contributor and the Companies shall furnish reasonably promptly to Buyer and its Representatives such information concerning the Companies and their assets, business, books and records, contracts, and personnel as may be reasonably requested, from time to time, by or on behalf of Buyer. Buyer and its Representatives shall conduct any such activities in such a manner as not to interfere unreasonably with the business of the Companies. Contributor shall have the right to have a Representative present for any communication with employees of Contributor (if any) or its Affiliates, and Buyer shall and shall cause its Representatives to observe and comply with all applicable health, safety, and security requirements of Contributor and the Companies if Buyer exercises its rights to access any assets of the Companies under this Section 5.2(a). Neither Buyer nor its Representatives shall contact any of the employees (if any), customers, suppliers, or parties that have business relationships with any Company in connection with the Transactions without the specific prior written authorization of Contributor. For purposes of clarification, Buyer and its Representatives shall be permitted to conduct non-invasive environmental assessments, including any Phase I environmental site assessments in accordance with ASTM Standard E1527-13, but Buyer and its Representatives shall not be entitled to collect any air, soil, surface water, or ground water samples, nor to perform any invasive or destructive sampling on, under, at, or from the Leased Real Property. Buyer shall hold in confidence all information disclosed to Buyer or its Representatives hereunder on the terms and subject to the conditions contained in the Confidentiality Agreement. Notwithstanding anything to the contrary in this Section 5.2(a), Buyer shall have no right of access to, and neither Contributor nor any of its Affiliates shall have any obligation to provide any information (i) relating to bids received from others in connection with the Transactions and information and analysis (including financial analysis) relating to such bids or (ii) the disclosure of which could reasonably be expected to (A) jeopardize any privilege available to Contributor or any of its Affiliates, (B) cause Contributor or any of its Affiliates to breach a contract, or (C) result in a violation of Law; provided that, in the event that the restrictions in clause (ii) of this sentence apply, Contributor shall provide Buyer with a reasonably detailed description of the information not provided, and Contributor shall cooperate in good faith to design and implement alternative disclosure arrangements to enable Buyer to evaluate such information without violating such Law or contract or jeopardizing such privilege. Promptly upon completion of any such access, Buyer shall repair at its sole expense any damage caused by such access.

 

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(b)    Buyer agrees to indemnify, defend, and hold harmless Contributor, its Affiliates, and its and their respective Representatives for any and all Losses incurred by Contributor, its Affiliates, or its or their respective Representatives arising solely as a result of actions taken by Buyer or its Representatives pursuant to the access rights under Section 5.2(a), including any Proceedings by any of Buyer’s Representatives for any injuries or property damage while present, EXCEPT TO THE EXTENT THAT SUCH LOSSES RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF CONTRIBUTOR, ITS AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES. THE PARTIES ACKNOWLEDGE THAT THE INTENT OF THIS SECTION 5.2(B) IS CLEAR AND UNEQUIVOCAL AND THIS STATEMENT CONSTITUTES CONSPICUOUS NOTICE.

5.3     Conduct of Business. Except as specifically provided in this Agreement (including information set forth in the Data Room), during the Interim Period, Contributor shall cause each Company to (a) conduct its operations in the ordinary course of business and (b) use its commercially reasonably efforts to (i) preserve intact its present business organization, (ii) preserve, maintain, and protect its material assets, and (iii) maintain, with financially responsible insurance companies, insurance in such amounts and against such risks and losses as is maintained by it at present.

5.4    Certain Restrictions.

(a)    During the Interim Period, except as expressly permitted or required by the other terms of this Agreement, or as otherwise described in Schedule 5.4, or consented to or approved in writing by Buyer, which consent or approval will not be unreasonably withheld, conditioned, or delayed, Contributor shall not:

(i)    create any Encumbrance (other than any Permitted Encumbrance or any Encumbrance that will be released at or prior to the Closing) against any of the Contributed Interests;

(ii)    sell, transfer, convey, or otherwise dispose of any of the Contributed Interests or any asset with a fair market value of greater than $15,000,000; or

(iii)    agree or commit to do any of the foregoing.

(b)    During the Interim Period, except as (v) expressly permitted or required by the other terms of this Agreement, (w) otherwise described in in Schedule 5.4, (x) contemplated in any Material Agreement, (y) is necessary in Contributor’s good faith judgment to respond to or prevent imminent harm to persons or property or (z) consented to or approved in writing by Buyer, which consent or approval will not be unreasonably withheld, conditioned, or delayed, the Companies shall not, and Contributor shall cause the Companies not to:

(i)    amend or propose to amend the Organizational Documents of any Company;

 

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(ii)    (A) authorize, propose to offer, issue, sell, grant, or deliver any Interest of any Company, (B) amend in any material respect any of the terms of any securities of any Company outstanding as of the Execution Date, or (C) authorize or propose to offer, issue, sell, grant, or deliver, any Interest in any Company;

(iii)    (A) split, combine, or reclassify any Interests in any Company, (B) except as provided in Section 5.8(b), declare, set aside, or pay any dividends on, or make any other distribution in respect of, any outstanding Interests in any Company, (C) repurchase, redeem, or otherwise acquire, or offer to repurchase, redeem, or otherwise acquire, any Interests of any Company, or (D) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing a liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other reorganization of any Company;

(iv)    except in the ordinary course of business, create, incur, guarantee, or assume any Indebtedness for Borrowed Money or otherwise become liable or responsible for the obligations of any other Person;

(v)    other than in connection with the Options or the New Gas Pipeline Option, (A) acquire (by merger, consolidation, or acquisition of stock or assets, or otherwise) any corporation, partnership, limited liability company, or other business organization or division thereof, (B) form any joint venture or similar arrangement or exercise any rights under any existing joint venture or similar agreement, or (C) make any loans, advances, or capital contributions to, or investments in, any Person;

(vi)    change in any material respect any of the financial accounting principles, practices, or methods used by any Company, except for any change required by reason of a concurrent change in GAAP;

(vii)    (A) make or change any material Tax election, (B) settle or compromise any claim, notice, audit, report, assessment or Proceeding in respect of material Taxes, or (C) enter into material agreement or arrangement relating to the apportionment, sharing, assignment or allocation of Taxes (other than any customary Tax sharing or indemnification provisions contained in any agreement entered into in the ordinary course of business and not primarily relating to Tax);

(viii)    enter into, amend in any material respect, or terminate (A) any Affiliate Contract, (B) the Amended and Restated Gas Gathering Agreement by and between Apache Corporation and Alpine High Gathering LP, dated as of the Execution Date, or (C) the Amended and Restated Gas Processing Agreement by and between Apache Corporation and Alpine High Processing LP, dated as of the Execution Date; or

(ix)    agree or commit to do any of the foregoing.

(c)    During the Interim Period, except as expressly permitted or required by the other terms of this Agreement or consented to or approved in writing by Contributor,

 

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which consent or approval will not be unreasonably withheld, conditioned, or delayed, Buyer shall not, and Buyer shall cause its Affiliates not to:

(i)    amend or propose to amend (A) the Organizational Documents of Buyer or any of its Subsidiaries or (B) the Trust Agreement or any other agreement related to the Trust Account;

(ii)    (A) offer, issue, sell, grant, or deliver any Interest of Buyer or any of its Subsidiaries, (B) amend in any material respect any of the terms of any Interests of Buyer or any of its Subsidiaries outstanding as of the Execution Date, or (C) authorize or propose to offer, issue, sell, grant, or deliver any Interest in Buyer or any of its Subsidiaries;

(iii)    (A) split, combine, or reclassify any Interests in Buyer, (B) declare, set aside, or pay any dividends on, or make any other distribution in respect of, any outstanding Interests in Buyer, (C) except pursuant to the Buyer Stockholder Redemption Right, repurchase, redeem, or otherwise acquire, or offer to repurchase, redeem, or otherwise acquire, any Interests in Buyer, or (D) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing a liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other reorganization of Buyer or any of its Subsidiaries;

(iv)    create, incur, guarantee, or assume any Indebtedness for Borrowed Money or otherwise become liable or responsible for the obligations of any other Person;

(v)    (A) acquire (by merger, consolidation, or acquisition of stock or assets, or otherwise) any corporation, partnership, limited liability company, or other business organization or division thereof, (B) form any joint venture or similar arrangement or exercise any rights under any existing joint venture or similar agreement, or (C) make any loans, advances, or capital contributions to, or investments in, any Person; or

(vi)    agree or commit to do any of the foregoing.

5.5    Tax Matters.

(a)    Contributor shall prepare, or cause to be prepared, all Tax Returns required to be filed by the Companies that are due on or prior to the Closing Date and pay, or cause to be paid, any Taxes relating to such Tax Returns. Buyer shall prepare, or cause to be prepared, and file, or cause to be filed, all other Tax Returns of the Companies not specifically addressed in the first sentence of this Section 5.5(a), and such Tax Returns shall be prepared on a basis consistent with past practice except to the extent otherwise required by applicable Law.

(b)    Buyer and Contributor shall cooperate fully, and shall cause the Companies to cooperate fully, as and to the extent reasonably requested by Buyer or Contributor, in connection with the filing of Tax Returns and any audit or Proceeding with respect to Taxes. Such cooperation shall include the retention and, upon the request

 

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of Buyer or Contributor, the provision of records and information that are reasonably relevant to any such audit or Proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Buyer and Contributor further agree, upon request, to use commercially reasonable efforts to obtain any certificate or other document from any Governmental Entity or any other Person as may be necessary to mitigate, reduce, or eliminate any Tax that could be imposed on Contributor, Buyer, or the Companies.

(c)    In the event that any Transfer Taxes are imposed on the Transactions, the KAAC Partnership shall be responsible for the payment of all such Transfer Taxes. Each of Contributor, Buyer, and the KAAC Partnership shall timely file their own Tax Returns relating to Transfer Taxes as required by Law and shall notify the other Parties when such filings have been made. Each of Contributor, Buyer, and the KAAC Partnership shall cooperate and consult with each other prior to filing such Tax Returns (i) in order to minimize such Transfer Taxes, and (ii) to ensure that all such returns are filed in a consistent manner.

(d)    Other than any customary Tax sharing or indemnification provisions contained in any agreement entered into in the ordinary course of business and not primarily relating to Tax, all Tax sharing agreements, or similar agreements between the Companies, on the one hand, and any of Contributor and its Affiliates, on the other hand, shall be terminated prior to the Closing Date, and, after the Closing Date, no Company shall be bound thereby or have any liability thereunder.

(e)    The Parties agree that, except as required by applicable Law, for U.S. federal income Tax purposes, (i) Contributor’s contribution of the Contributor Contribution to the KAAC Partnership in exchange for Common Units shall be treated as a contribution of property to a partnership described in Section 721(a) of the Code in accordance with Revenue Ruling 99-5, Situation 2, (ii) liabilities of the KAAC Partnership shall be allocated in a manner that is consistent with applicable Treasury Regulations to minimize, to the greatest extent possible, the amount of gain that Contributor would recognize, if any, pursuant to Section 707 of the Code, if applicable, or Section 731(a) of the Code, as a result of the contribution of the Contributor Contribution to the KAAC Partnership, (iii) any transfer of money or other consideration to Contributor, including the Fixed Common Stock, the Assigned Shares, the Contribution Warrants, and the Earn-Out Consideration, shall be treated as a reimbursement of preformation capital expenditures in connection with the contribution of the Contributor Contribution to the KAAC Partnership to the maximum extent permitted pursuant to Treasury Regulation Section 1.707-4(d), and (iv) in connection with any receipt of Earn-Out Consideration by Contributor, the value of the Contributor Contribution as of the Closing will be redetermined such that there is no increase or decrease in the value of the Contributor Contribution contributed in exchange for each Common Unit received by Contributor at the Closing. For the avoidance of doubt, except as required by applicable Law, the Parties shall not treat (I) the receipt by Contributor of Buyer Class C Common Stock pursuant to Section 2.2 or (II) the right of Contributor to have its Common Units redeemed for Buyer Class A Common Stock, as consideration paid to Contributor in connection with the contribution of the Contributor Contribution

 

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pursuant to Treasury Regulation Section 1.707-3. The Parties shall (A) prepare and file all Tax Returns in a manner consistent with this Section 5.5(e), and (B) take no position inconsistent with this Section 5.5(e) in any Tax Return, Tax-related Proceeding or otherwise absent a determination within the meaning of Section 1313 of the Code to the contrary.

(f)    The Parties agree that, with respect to the assets contributed by Contributor to the KAAC Partnership, the KAAC Partnership shall use the “traditional allocation method” as described in Treasury Regulations Section 1.704-3(b).

(g)    No later than ten (10) days prior to Closing, Contributor shall deliver to Buyer a statement reflecting a valuation of all of the assets of the Companies (the “Tax Allocation Statement”). The Tax Allocation Statement shall be prepared in a manner consistent with Schedule 5.5(g) including (i) the methodology for allocating value among the assets in accordance with applicable Law and (ii) the draft allocation of value among the assets of the Companies, each as agreed to by Contributor and Buyer as of the Execution Date (the “Agreed Allocation Methodology”). Following the Closing, Contributor shall amend the Tax Allocation Statement to reflect additional information obtained after the Closing, using the same principles used to prepare the Tax Allocation Statement, including the Agreed Allocation Methodology. The Parties agree to (i) be bound by the Tax Allocation Statement, as amended, and (ii) act in accordance with the Tax Allocation Statement, as amended, in the preparation, filing, and audit of any Tax Return.

5.6    Public Announcements. No Party shall make any public announcement or issue any public communication regarding this Agreement or the Transactions without first obtaining the prior written consent of the other Parties, except if such announcement or other communication is required by applicable Law (including in connection with the preparation and filing of the Proxy Statement) or the rules of any stock exchange upon which such Party’s capital stock is traded, in either case, to the extent permitted by Law, the disclosing Party shall use its commercially reasonable efforts to coordinate or communicate such announcement or communication with the other Party prior to announcement or issuance; provided however that no provision of this Agreement shall be deemed to restrict in any manner (a) any Party’s ability to communicate with its employees or equity holders or (b) the ability of Buyer, Contributor, and the Companies to communicate with their financial and legal advisors, lenders, underwriters, or financing sources.

5.7    Use of Certain Names. Within sixty (60) days following the Closing, Buyer shall cause the Companies to cease using the word “Apache” and any word or expression similar thereto or constituting an abbreviation, derivation, or extension thereof (“Contributors Marks”), including eliminating Contributor’s Marks from the Leased Real Property and the assets of the Companies and disposing of any unused stationery and literature of the Companies bearing Contributor’s Marks. Thereafter, except as permitted under the License Agreement, Buyer shall not, and shall cause its Affiliates not to, use Contributor’s Marks or any other logos, trademarks, or trade names belonging to Contributor or any of its Affiliates. Buyer acknowledges that it and its Affiliates, from and after the Closing, have no rights whatsoever to use Contributor’s Marks.

 

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5.8    Accounts Payable and Accounts Receivable; Distributions.

(a)    The Parties acknowledge and agree that Accounts Payable and Accounts Receivable incurred by or on behalf of the Companies prior to September 30, 2018 (“Contributor Accounts Receivable” and “Contributor Accounts Payable”, respectively) are for the account of Contributor and Accounts Payable and Accounts Receivable incurred by or on behalf of the Companies on or after September 30, 2018 are for the account of Buyer. From and after the Closing, if Buyer or any of its Affiliates receives or collects any funds relating to any Contributor Accounts Receivable, Buyer or its Affiliate, as applicable shall remit such funds to Contributor within five Business Days after its receipt thereof. From and after the Closing, Contributor covenants to pay and discharge the valid Contributor Accounts Payable, in accordance with Contributor’s past payment practices and applicable Law. “Accounts Payable” means all accounts and accrued payable (including trade accounts payable, but excluding asset retirement obligations) to any Person in respect of any services performed or products purchased and all other amounts that would be classified as an account payable on the liability side of a balance sheet prepared in accordance with GAAP. “Accounts Receivable” means any right to payment for products sold or services rendered (including trade accounts receivable) and all other amounts that would be classified as an account receivable on the asset side of a balance sheet prepared in accordance with GAAP. “Cash” means cash, cash equivalents, checks received but not yet deposited, short term investments and all other amounts that would be classified as cash or cash equivalents on the asset side of a balance sheet prepared in accordance with GAAP.

(b)    The Parties acknowledge and agree that the Companies shall have no Cash when the Contributor Contribution occurs at the Closing. Therefore, notwithstanding anything in this Agreement to the contrary, Contributor shall have the right to cause the Companies to pay Cash dividends and/or make Cash distributions to Contributor at any time prior to September 30, 2018; provided such distributions do not result in any Liability to any Company.

5.9    Support Obligations. Prior to the Closing, Buyer shall replace or post, as applicable, effective as of Closing, any outstanding credit support obligations provided by Contributor or any of its Affiliates with respect to any Company or the assets of any Company set forth in Schedule 5.9 (“Support Obligations”), including by providing at the Closing replacement bonds, surety bonds, guaranties, letters of credit, and/or cash collateral, as needed, to effect the replacement or posting of such Support Obligations at the Closing; provided that if Buyer is unable to replace or post a Support Obligation at the Closing, such existing Support Obligation shall remain in place and Buyer will indemnify Contributor or its Affiliates, as applicable, for any and all Losses resulting from payment such Person is required to make under such Support Obligation. If Buyer or any of its Subsidiaries intends to participate in any meeting or discussion with any Governmental Entity with respect to such replacement or posting of Support Obligations, Buyer shall give Contributor reasonable prior written notice of, and an opportunity to participate in, such meeting(s) or discussion(s) prior to the Closing.

 

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5.10    The Proxy Statement and the Special Meeting.

(a)    As promptly as reasonably practicable after the Execution Date, but in any event within ten (10) Business Days following the date on which Buyer has received written notice from Contributor that it believes the information required to be provided by Contributor or the Companies hereunder has been delivered to Buyer, Buyer will prepare and file with the SEC a proxy statement containing the information specified in Schedule 14A of the Exchange Act with respect to the Transactions (the “Proxy Statement”) in preliminary form; provided, however, that such ten (10) Business Day period shall not elapse if Buyer provides a reasonably detailed written notice to Contributor regarding information that is required but has not yet been received by Buyer from Contributor or the Companies for the Proxy Statement, in which case the ten (10) Business Day period shall not elapse until Buyer receives such information from Contributor or the Companies, as applicable. Buyer shall as promptly as practicable notify Contributor of any correspondence with the SEC relating to the Proxy Statement, the receipt of any oral or written comments from the SEC relating to the Proxy Statement, and any request by the SEC for any amendment to the Proxy Statement or for additional information. Buyer shall cooperate and provide Contributor with a reasonable opportunity to review and comment on the Proxy Statement (including each amendment or supplement thereto) and all responses to requests for additional information by and replies to comments of the SEC and give due consideration to all comments reasonably proposed by Contributor in respect of such documents and responses prior to filing such with or sending such to the SEC, and the Parties will provide each other with copies of all such filings made and correspondence with the SEC. The Buyer Board Recommendation shall be included in the Proxy Statement. Buyer will use its reasonable best efforts to respond promptly to any comments made by the SEC with respect to the Proxy Statement. Buyer will cause the Proxy Statement to be transmitted to the holders of Buyer Common Stock as promptly as practicable, but in any event within five (5) Business Days, following the date on which the SEC confirms it has no further comments on the Proxy Statement.

(b)    Contributor and the Companies acknowledge that a substantial portion of the Proxy Statement and other filings to be made by Buyer with the SEC shall include disclosure regarding Contributor, the Companies, and the Companies’ management, operations, and financial condition. Accordingly, Contributor and the Companies will, as promptly as reasonably practicable after the Execution Date, use their respective commercially reasonable efforts to provide Buyer with all information concerning Contributor, the Companies, and the Companies’ management, operations, and financial condition, in each case, required to be included in the Proxy Statement or such other filings, including the required financial statements of the Companies prepared in accordance with Regulation S-X and a related consent from the Companies’ independent public accountants. Without limiting the generality of the foregoing, Contributor and the Companies shall use their respective commercially reasonable efforts to cooperate with Buyer in connection with the preparation for inclusion in the Proxy Statement of pro forma financial statements that comply with the requirements of Regulation S-X. Contributor and the Companies shall use their commercially reasonable efforts to cause and make their managers, directors, and officers available to Buyer and its counsel in connection with the drafting of the Proxy Statement and any other filings required to be made by Buyer with the SEC and respond in a timely manner to comments on the Proxy

 

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Statement or such other filings from the SEC; provided that doing so does not unreasonably interfere with the ongoing operations of Contributor or the Companies. Contributor and the Companies hereby consent, subject to approval by the Companies’ independent public accountants, to Buyer’s use of any audited or unaudited financial statements relating to the Companies and businesses acquired by the Companies that are required to be included in the Proxy Statement and supplied by Contributor expressly for inclusion therein.

(c)    Buyer will take, in accordance with applicable Law, NASDAQ rules, and the Organizational Documents of Buyer, all action necessary to call, hold, and convene a special meeting of holders of Buyer Common Stock (including any permitted adjournment or postponement, the “Special Meeting”) to consider and vote upon the Stockholder Proposals as promptly as reasonably practicable after the filing of the Proxy Statement in definitive form with the SEC. Once the Special Meeting to consider and vote upon the Stockholder Proposals has been called and noticed, Buyer will not postpone or adjourn the Special Meeting without the consent of Contributor, other than (i) for the absence of a quorum, in such event Buyer shall postpone the meeting up to ten (10) Business Days (ii) to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure that Buyer has determined in good faith, after consultation with its outside legal advisors, is necessary under applicable Law, and for such supplemental or amended disclosure to be disseminated to and reviewed by the holders of Buyer Common Stock prior to the Special Meeting, or (iii) a postponement of up to ten (10) Business Days to solicit additional proxies from holders of Buyer Common Stock to the extent Buyer has determined in good faith that such postponement is reasonably necessary to obtain the approval of the Stockholder Proposals. Subject to Section 5.10(d), Buyer will take all reasonable lawful action to solicit approval of the Stockholder Proposals by the holders of Buyer Common Stock.

(d)    The Buyer Board will recommend in the Proxy Statement that the holders of Buyer Common Stock approve the Stockholder Proposals (the “Buyer Board Recommendation”). Notwithstanding the foregoing, at any time prior to obtaining the required stockholder approval of the Stockholder Proposals at the Special Meeting, the Buyer Board may withdraw, modify, or qualify in any manner the Buyer Board Recommendation (any such action a “Change in Recommendation”) only if the Buyer Board shall have concluded in good faith, after consultation with its outside legal advisors and financial advisors, that a failure to make a Change in Recommendation is necessary to comply with its fiduciary duties under applicable Law; provided, however, that the Buyer Board shall not be entitled to make a Change in Recommendation pursuant to this sentence unless (i) such Change in Recommendation is based upon an Intervening Event that first occurred during the Interim Period and (ii) Buyer has provided to Contributor three (3) Business Days’ prior written notice advising Contributor that the Buyer Board intends to take such action and specifying the reasons therefor in reasonable detail. Buyer agrees that, unless this Agreement is terminated in accordance with its terms, any Change in Recommendation will not (y) change the approval of this Agreement or any other approval of the Buyer Board or (z) relieve Buyer or the KAAC Partnership of any of their respective obligations under this Agreement, including Buyer’s obligation to establish a record date for, duly call, give notice of, convene and hold the Special Meeting for the purpose of voting on the Stockholder Proposals.

 

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(e)    If at any time prior to the Closing Date, any event, circumstance, or information relating to Buyer, Contributor, or the Companies, or any of their respective officers or directors, should be discovered by Buyer, Contributor, or such Company, as applicable, that should be set forth in an amendment or supplement to the Proxy Statement or any other filings to be made by Buyer with the SEC so that such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, then the Party which discovers such information shall promptly notify the other Parties and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC by Buyer and, to the extent required by Law, disseminated to the holders of Buyer Common Stock.

(f)    Subject to the limitations set forth in Section 10.1, to the extent Buyer has any assets other than its interest in the Trust Account, Buyer shall promptly, upon request by Contributor, reimburse Contributor for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred by Contributor or any of the Companies in connection with the cooperation of Contributor and the Companies contemplated by this Section 5.10 and shall indemnify and hold harmless Contributor, the Companies, and its and their respective Representatives and Affiliates from and against any and all Losses suffered or incurred by any of them in connection with the Proxy Statement and any information used in connection therewith, except for Liabilities of Contributor or the Companies to the extent they resulted from information provided by Contributor or the Companies specifically for use in connection with the Proxy Statement containing any untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

5.11    Exclusivity.

(a)    From the Execution Date until the earlier of the Closing or the termination of this Agreement, Contributor and the Companies will not, and will cause their respective Affiliates not to, take any action, directly or indirectly, to initiate, solicit, facilitate, or encourage participation in any discussions or negotiations with, enter into any contract (including any letter of intent or confidentiality agreement), or furnish to any other Person any information with respect to, any proposal from any Person relating to an acquisition of any Interests in the Companies or all or substantially all of the assets of the Companies. Contributor and the Companies will, and will cause their respective Affiliates to, immediately cease and cause to be terminated all existing discussions, conversations, negotiations, and other communications with any Person (other than Buyer and its Affiliates) with respect to any of the foregoing.

(b)    From the Execution Date until the earlier of the Closing or the termination of this Agreement, Buyer will not, and will cause its Affiliates not to, take any action, directly or indirectly, to initiate, solicit, facilitate, or encourage participation in any

 

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discussions or negotiations with, enter into any contract (including any letter of intent or confidentiality agreement), or furnish to any other Person any information with respect to, any proposal from any Person relating to a Business Combination. Buyer will, and will cause its Affiliates to, immediately cease and cause to be terminated all existing discussions, conversations, negotiations and other communications with any Person (other than Contributor and its Affiliates) with respect to a Business Combination.

5.12    Notice of Certain Events. Each of Contributor and Buyer will give prompt written notice to the other (and will subsequently keep the other informed on a reasonably current basis of any material developments related to such notice), including, in the case of Contributor, by uploading information to the Data Room, upon its becoming aware of (a) the occurrence or existence of any fact, event, or circumstance that, (i) with respect to Contributor, had or would reasonably be expected have a Material Adverse Effect, (ii) with respect to Buyer, had or would reasonably be expected to have a Buyer Material Adverse Effect or would reasonably be expected to result in an Intervening Event, (b) the occurrence or existence of any fact, event, or circumstance that is reasonably likely to result in any of the conditions set forth in Article VI or Article VII, as applicable, not being able to be satisfied prior to the Outside Date, (c) any notice or other communication that has been received by Buyer or Contributor from any Person alleging that the consent of such Person is or may be required in connection with the Transactions, (d) any notice or other communication that has been received by Buyer or Contributor from any Governmental Entity in connection with the Transactions, or (e) any Proceeding commenced or, to the Knowledge of Contributor or Buyer, as applicable, threatened that (i) if pending on the Execution Date, would have been required to have been disclosed by Contributor or Buyer, as applicable, pursuant to this Agreement or (ii) otherwise relates to this Agreement or the consummation of the Transactions. No notification given by any Party pursuant to this Section 5.12, including any information uploaded to the Data Room, shall limit or otherwise affect any of the warranties, covenants, obligations, or conditions contained in this Agreement.

5.13    Trust. Upon satisfaction or waiver of the conditions set forth in Article VI and Article VII (in each case, other than those conditions that by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of those conditions) and provision of notice thereof to the Trustee (which notice Buyer shall provide to the Trustee in accordance with the terms of the Trust Agreement), in accordance with, subject to and pursuant to the Trust Agreement and the Organizational Documents of Buyer, at the Closing, Buyer (a) shall cause the documents, opinions and notices required to be delivered to the Trustee pursuant to the Trust Agreement to be so delivered and (b) shall use its commercially reasonable efforts to cause the Trustee to (i) pay as and when due all amounts payable to stockholders of Buyer holding shares of the Buyer Class A Common Stock sold in the IPO who shall have previously validly elected to redeem their shares of Buyer Class A Common Stock pursuant to Buyer’s amended and restated certificate of incorporation, and (ii) immediately thereafter, pay all remaining amounts then available in the Trust Account to Buyer for immediate use, subject to this Agreement and the Trust Agreement.

5.14    Transaction Litigation. Except as otherwise provided in Section 5.1(c), each of Buyer and Contributor shall cooperate with the other in the defense or settlement of any Proceeding relating to the Transactions which is brought or threatened in writing against (a)

 

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Buyer, any of its Affiliates, and/or any of its or their respective directors or officers, or (b) Contributor, any of its Affiliates, and/or any of its or their respective directors or officers. Such cooperation between Buyer and Contributor shall include (i) keeping each other reasonably and promptly informed of any developments in connection with any such Proceeding, (ii) utilizing counsel reasonably agreeable to both Buyer and Contributor (such agreement to counsel not to be unreasonably withheld, condition or delayed) and (iii) refraining from compromising, settling, consenting to any Order or entering into any agreement in respect of, any such Proceeding without the written consent of the other party (such consent not to be unreasonably withheld, conditioned or delayed).

ARTICLE VI

BUYER’S CONDITIONS TO CLOSING

The obligation of Buyer to consummate the Closing is subject to the fulfillment of each of the following conditions (except to the extent waived in writing by Buyer in its sole discretion, to the extent permitted by applicable Law) as of the Closing:

6.1    Contributor Warranties. The Contributor Fundamental Warranties shall (a) be true and correct in all respects on and as of the Closing Date as though made on and as of the Closing Date (other than those Contributor Fundamental Warranties expressly made as of an earlier date) and (b) in the case of Contributor Fundamental Warranties expressly made as of an earlier date, be true and correct in all respects as of such earlier date. The warranties made by Contributor in Article III (other than the Contributor Fundamental Warranties) shall, without giving effect to any materiality or Material Adverse Effect qualifier contained therein (other than for purposes of defining Real Property Leases, providing copies of the Material Agreements or Section 3.22), (y) be true and correct in all respects on and as of the Closing Date as though made on and as of the Closing Date (other than those warranties expressly made as of an earlier date), and (z) in the case of warranties expressly made as of an earlier date, be true and correct in all respects as of such earlier date, except in the case of the warranties subject to clauses (y) and (z) where the failure to be true and correct would not have a Material Adverse Effect.

6.2    Contributor and Company Covenants. Contributor and each of the Companies shall each have performed and complied in all material respects with all covenants, taken as a whole, required to be performed or complied with by them under this Agreement prior to the Closing Date, except where the failure of such performance or compliance would not or would not reasonably be expected to be materially adverse to the assets, condition (financial or otherwise), results of operations, or business of the Companies, taken as a whole.

6.3    Orders and Laws. There shall not be any Law or Order of any Governmental Entity having jurisdiction (except for any such Order issued in connection with a Proceeding instituted by Buyer or any of its Affiliates) restraining, enjoining, or otherwise prohibiting or making illegal the consummation of the Transactions.

6.4    Stockholder Approval. At the Special Meeting, the holders of a majority of the shares of Buyer Class A Common Stock and Buyer Class B Common Stock, voting together as a single class, shall have (a) approved and adopted this Agreement and the Transactions; (b) approved and adopted the amendments to Buyer’s amended and restated certificate of

 

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incorporation, attached hereto as Exhibit F (the “Amended and Restated Certificate of Incorporation”), reasonably necessary to complete the Transactions; and (c) approved, for purposes of complying with applicable listing rules of NASDAQ, (i) the issuance of Buyer Class A Common Stock and Buyer Class C Common Stock to Contributor at Closing, (ii) the future issuance of shares of Buyer Class A Common Stock to Contributor in connection with the future redemption or exchange of its Common Units or exercise of the Contribution Warrants, and (iii) the future issuance of Buyer Class A Common Stock in connection with the payment of Earn-Out Consideration, if any (collectively, the “Stockholder Proposals”).

ARTICLE VII

CONTRIBUTOR’S CONDITIONS TO CLOSING

The obligation of Contributor to consummate Closing is subject to the fulfillment of each of the following conditions (except to the extent waived in writing by Contributor in its sole discretion, to the extent permitted by applicable Law) as of the Closing:

7.1    Buyer Warranties. The Buyer Fundamental Warranties shall (a) be true and correct in all respects on and as of Closing Date as though made on and as of the Closing Date (other than those Buyer Fundamental Warranties expressly made as of an earlier date) and (b) in the case of Buyer Fundamental Warranties expressly made as of an earlier date, be true and correct in all respects as of such earlier date. The warranties made by Buyer in Article V (other than the Buyer Fundamental Warranties) shall, without giving effect to any materiality or Buyer Material Adverse Effect qualifier contained therein, (y) be true and correct in all respects on and as of the Closing Date as though made on and as the Closing Date (other than those warranties expressly made as of an earlier date) and (z) in the case of warranties expressly made as of an earlier date, be true and correct in all respects as of such earlier date, except in the case of the warranties subject to clauses (y) and (z) where the failure to be true and correct would not have a Buyer Material Adverse Effect.

7.2    Buyer Covenants. Buyer shall have performed and complied in all material respects with all covenants, taken as a whole, required to be performed or complied with by it under this Agreement prior to the Closing Date, except where the failure of such performance or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of Buyer or the KAAC Partnership to consummate any of the Transactions.

7.3    Orders and Laws. There shall not be any Law or Order of any Governmental Entity having jurisdiction (except for any such Order issued in connection with a Proceeding instituted by Contributor or any of its Affiliates) restraining, enjoining, or otherwise prohibiting or making illegal the consummation of the Transactions.

7.4    Stockholder Approval. At the Special Meeting, the holders of Buyer Common Stock shall have approved the Stockholder Proposals.

7.5    Minimum Cash. The Available Funds shall not be less than $475,000,000.

 

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7.6    Buyer Fees Cap. Buyer shall have provided Contributor with a schedule of Buyer Fees through and including the Closing and the Buyer Fees specified therein shall not have exceeded the Buyer Fees Cap.

ARTICLE VIII

TERMINATION

8.1    Termination. This Agreement may only be terminated as follows:

(a)    at any time before the Closing, by either Contributor or Buyer, by written notice to the Parties, in the event that any Law or final Order of any Governmental Entity having jurisdiction restrains, enjoins, or otherwise prohibits or makes illegal the contribution of the Contributed Interests pursuant to this Agreement;

(b)    at any time before the Closing, by Contributor, by written notice to Buyer, if (i) Buyer has breached any of its warranties, covenants, or agreements under this Agreement and such breach would or does result in the failure to fulfill any condition expressly set forth in Article VII and (ii) such breach is not capable of being cured by the Outside Date;

(c)    at any time before the Closing, by Buyer, by written notice to Contributor, if (i) Contributor has breached its warranties, covenants, or agreements under this Agreement and such breach would or does result in the failure to fulfill any condition expressly set forth in Article VI and (ii) such breach is not capable of being cured by the Outside Date;

(d)    at any time before the Closing, by Buyer or Contributor, by written notice to the Parties, if the Closing has not occurred on or before December 31, 2018 (the “Outside Date”); provided, however, that Buyer and Contributor shall not be entitled to terminate this Agreement under this Section 8.1(d) if Buyer or the KAAC Partnership (in the case of any termination by Buyer) or Contributor or any Company (in the case of any termination by Contributor), respectively, has breached any of its warranties or covenants set forth in this Agreement, and such breach resulted in the failure of the Closing to occur by the Outside Date; or

(e)    by mutual written agreement of Buyer and Contributor.

provided, however, that neither Contributor nor Buyer shall be entitled to terminate this Agreement under Section 8.1(b) or Section 8.1(c), as applicable, if Contributor or Buyer, respectively, is then in breach of any of its warranties or covenants set forth in this Agreement, and such breach would or does, assuming the Closing were to occur on the proposed date of termination, result in the failure to fulfill any condition expressly set forth in Article VI or Article VII, as applicable.

8.2    Effect of Termination. If this Agreement is validly terminated pursuant to Section 8.1, subject to the last sentence of this Section 8.2, this Agreement shall become void and of no further force or effect, provided that, notwithstanding anything herein to the contrary, Article I, Sections 5.2(b), 5.6, 5.10(f), this Article VIII, and Article X will survive any such

 

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termination. The Confidentiality Agreement shall not be affected by a termination of this Agreement. Nothing in this Section 8.2, however, shall be deemed to extinguish any right or remedy of any Party that shall have accrued hereunder prior to any such termination, or release any Party from any liability for any knowing and intentional breach by such Party of the terms and provisions of this Agreement prior to such termination.

ARTICLE IX

WAIVERS; LIMITATIONS ON LIABILITY

9.1    Survival and Waivers of other Warranties.

(a)    The warranties and covenants contemplated to be performed prior to the Closing Date of the Parties contained in this Agreement shall not survive the Closing. All covenants contemplated to be performed on or after the Closing Date shall survive the Closing until performed in accordance with their terms.

(b)    NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IT IS THE EXPLICIT INTENT OF EACH PARTY, AND THE PARTIES HEREBY AGREE, THAT NONE OF THE PARTIES OR ANY OF THEIR RESPECTIVE AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING ANY IMPLIED REPRESENTATION OR WARRANTY AS TO THE CONDITION, MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE CONTRIBUTED INTERESTS, THE COMPANIES, OR THEIR ASSETS, EXCEPT FOR THOSE WARRANTIES EXPRESSLY MADE BY CONTRIBUTOR IN ARTICLE III AND BUYER IN ARTICLE IV. IN PARTICULAR, AND WITHOUT IN ANY WAY LIMITING THE FOREGOING, NONE OF CONTRIBUTOR, THE COMPANIES, OR ANY OF ITS OR THEIR RESPECTIVE AFFILIATES OR REPRESENTATIVES MAKES ANY WARRANTY IN THIS AGREEMENT WITH RESPECT TO ANY FINANCIAL PROJECTIONS OR FINANCIAL FORECASTS RELATING TO THE COMPANIES OR THEIR ASSETS.

(c)    BUYER ACKNOWLEDGES THAT THE WARRANTIES OF CONTRIBUTOR SET FORTH IN ARTICLE III AND IN ANY CLOSING CERTIFICATE OF CONTRIBUTOR ARE THOSE ONLY OF CONTRIBUTOR AND NOT OF ANY OTHER PERSON, INCLUDING ANY AFFILIATE OR REPRESENTATIVE OF CONTRIBUTOR OR ANY COMPANY.

(d)    CONTRIBUTOR ACKNOWLEDGES THAT THE WARRANTIES OF BUYER SET FORTH IN ARTICLE IV AND IN ANY CLOSING CERTIFICATE OF BUYER ARE THOSE ONLY OF BUYER, AND NOT OF ANY OTHER PERSON, INCLUDING ANY AFFILIATE OR REPRESENTATIVE OF BUYER.

 

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9.2    Waiver of Remedies; Non-Recourse.

(a)    The Parties hereby agree that, other than in the case of claims to enforce the performance of covenants expressly required to be performed in whole or in part on or after the Closing, no Party shall, from and after the Closing, have any Liability, and no Party shall (and each Party shall cause its respective Affiliates not to) make or bring any Proceeding, for any Loss or any other matter, under this Agreement (including breach of warranty, covenant, or agreement), whether based on contract, tort, strict liability, other Laws or otherwise.

(b)    NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NO PARTY SHALL BE LIABLE UNDER THIS AGREEMENT FOR ANY UNRECOVERABLE DAMAGES, WHETHER IN TORT (INCLUDING NEGLIGENCE OR GROSS NEGLIGENCE), STRICT LIABILITY, BY CONTRACT, OR STATUTE, EXCEPT TO THE EXTENT A PARTY SUFFERS SUCH DAMAGES TO A THIRD PARTY IN CONNECTION WITH A FINALLY ADJUDICATED THIRD PARTY CLAIM, IN WHICH CASE SUCH AWARDED DAMAGES SHALL BE RECOVERABLE (TO THE EXTENT RECOVERABLE UNDER THIS AGREEMENT) WITHOUT GIVING EFFECT TO THIS SECTION 9.2(B).

(c)    Notwithstanding anything in this Agreement to the contrary, (i) no Representative or Affiliate of a Company or Contributor (nor any Representative of any such Affiliate or any Person directly or indirectly owning any interest a Company or Contributor), other than a Company or Contributor, shall have any Liability to Buyer or any other Person as a result of the breach of any warranty, covenant, agreement, or obligation of a Company or Contributor in this Agreement or in any Closing Certificate delivered by Contributor, and (ii) no Representative or Affiliate of Buyer (nor any Representative of any such Affiliate or any Person directly or indirectly owning any interest in Buyer), other than Buyer and the KAAC Partnership, shall have any Liability to a Company or Contributor or any other Person as a result of the breach of any warranty, covenant, agreement, or obligation of Buyer or the KAAC Partnership in this Agreement or in any Closing Certificate delivered by Buyer.

9.3    Waiver of Claims.

(a)    From and after Closing, Buyer hereby waives, acquits, forever discharges and releases, on behalf of itself and any past, present, or future Affiliate of Buyer (including, following the Closing, the Companies) and its and their respective past, present, or future Representatives (collectively, their respective “Buyer Related Persons”), to the fullest extent permitted by Law, any and all Proceedings, causes of action, damages, judgments, liabilities and rights against Contributor and any past, present, or future Affiliate of Contributor and its and their respective past, present, or future Representatives (collectively, their respective “Contributor Related Persons”), whether absolute or contingent, liquidated or unliquidated, known or unknown, determined, determinable or otherwise, that the Buyer Related Persons, individually or collectively, has or have ever had, may now or hereafter have arising from facts, occurrences or circumstances existing at or prior to the Closing, in each case, relating to the ownership by Contributor of the Companies or the business of Contributor or the Companies, whether in law or in equity and whether based on contract, tort, strict

 

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liability, other Laws, or otherwise, in any capacity, other than any contractual obligation arising under any written agreement between Apache Corporation or any of its Affiliates (other than Contributor or any of the Companies), on the one hand, and Contributor or any of the Companies, on the other hand, that exist prior to and on Closing and continue from and after Closing (the “Buyer Released Claims”). From and after Closing, Buyer agrees not to, and to cause the Buyer Related Persons not to, assert any Proceeding against Contributor or any of Contributor Related Persons with respect to the Buyer Released Claims.

(b)    From and after Closing, Contributor hereby waives, acquits, forever discharges and releases, on behalf of itself and any Contributor Related Person, to the fullest extent permitted by Law, any and all Proceedings, causes of action, damages, judgments, liabilities and rights against any Buyer Related Person, whether absolute or contingent, liquidated or unliquidated, known or unknown, determined, determinable or otherwise, that the Contributor Related Persons, individually or collectively, has or have ever had, may now or hereafter have arising from facts, occurrences or circumstances existing at or prior to the Closing, in each case, relating to the business of Buyer or the Companies, whether in law or in equity and whether based on contract, tort, strict liability, other Laws, or otherwise, in any capacity, other than any contractual obligation arising under any written agreement between Apache Corporation or any of its Affiliates (other than Contributor or any of the Companies), on the one hand, and Contributor or any of the Companies, on the other hand, that exist prior to and on Closing and continue from and after Closing (the “Contributor Released Claims”). From and after Closing, Contributor agrees not to, and to cause the Contributor Related Persons not to, assert any Proceeding against Buyer or any of Buyer Related Persons with respect to the Contributor Released Claims.

ARTICLE X

MISCELLANEOUS

10.1    Trust Account Waiver. Reference is made to the final prospectus of Buyer, filed with the SEC (File No. 333-216514) (the “Prospectus”), and dated as of March 29, 2017. Contributor and each Company acknowledges that it has read the Prospectus and understands that Buyer has established the Trust Account containing the proceeds of its initial public offering (the “IPO”) and from certain private placements occurring simultaneously with the IPO initially in an amount of approximately $377.3 million for the benefit of Buyer’s public stockholders and certain parties (including the underwriters of the IPO) and that Buyer may disburse monies from the Trust Account only: (a) to Buyer’s public stockholders in the event they elect to exercise their Buyer Stockholder Redemption Right, (b) to Buyer’s public stockholders if Buyer fails to consummate a Business Combination within twenty-four (24) months from the closing of the IPO, (c) to pay any income Taxes with any interest earned on the amounts held in the Trust Account, or (d) to Buyer after or concurrently with the consummation of a Business Combination. For and in consideration of Buyer entering into this Agreement with Contributor and the Companies regarding the Transactions, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Contributor and each Company hereby agrees on behalf of itself and its Affiliates that, notwithstanding any provision of this Agreement to the contrary, it does not now and shall not at any time hereafter have any right,

 

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title, interest, or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the Trust Account, regardless of whether such claim arises as a result of, in connection with, or relating in any way to, any proposed or actual business relationship between Buyer, Contributor, or any Company, this Agreement, or any other matter, and regardless of whether such claim arises based on contract, tort, equity, or any other theory of legal liability. Contributor and each Company hereby irrevocably waives any such claims it may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts, or agreements with Buyer and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of this Agreement). Contributor and each Company agrees and acknowledges that such irrevocable waiver is material to this Agreement and specifically relied upon by Buyer to induce it to enter in this Agreement, and Contributor and each Company further intends and understands such waiver to be valid, binding, and enforceable under applicable Law. To the extent Contributor or any Company commences any Proceeding based upon, in connection with, relating to, or arising out of any matter relating to Buyer, which Proceeding seeks, in whole or in part, monetary relief against Buyer, Contributor and each Company hereby acknowledges and agrees its sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit Contributor or such Company (or any party claiming on such Person’s behalf) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein; provided, that (y) nothing herein shall serve to limit or prohibit Contributor’s or any Company’s right to pursue a claim against Buyer for legal relief against assets held outside the Trust Account, for specific performance or other equitable relief, and (z) nothing herein shall serve to limit or prohibit any claims that Contributor or any Company may have in the future against Buyer’s assets or funds that are not held in the Trust Account (including any funds that have been released from the Trust Account and any assets that have been purchased or acquired with any such funds). In the event Contributor, any of the Companies or any of their respective Affiliates commences any action or proceeding permitted by this Section 10.1 based upon, in connection with, relating to or arising out of any matter relating to Buyer, which proceeding seeks, in whole or in part, relief against the Trust Account (including any distributions therefrom) or Buyer’s public stockholders, whether in the form of money damages or injunctive relief, Buyer shall be entitled to recover from Contributor or such Company, as applicable, the associated reasonable legal fees and reasonable costs in connection with any such action, in the event Buyer fully prevails in such action or Proceeding in a final, non-appealable decision.

10.2    Notices. Any notice, request, demand, and other communication required or permitted to be given or made hereunder shall be in writing and shall be deemed to have been duly given or made if (a) delivered personally, (b) transmitted by first class registered or certified mail, postage prepaid, return receipt requested, (c) delivered by prepaid overnight courier service, or (d) delivered by confirmed facsimile transmission or electronic mail to a Party at the following addresses (or at such other addresses as shall be specified by a Party by similar notice):

If to Buyer or the KAAC Partnership:

Kayne Anderson Acquisition Corp.

811 Main Street, Suite 1400

Houston, Texas 77002

 

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Attention: Terry Hart

Facsimile: (713) 655-7359

with copies to:

Latham & Watkins LLP

811 Main Street, Suite 3700

Houston, Texas 77002

Attention: William N. Finnegan IV

Telephone: (713) 546-7410

Facsimile: (713) 546-5401

E-mail: bill.finnegan@lw.com

If to Contributor or any of the Companies:

Apache Midstream LLC

2000 Post Oak Blvd., Suite 100

Houston, Texas 77056

Attention: Brian Freed

Telephone: (713) 296-6000

Facsimile: (713) 296-6459

with a copy to:

Apache Corporation

2000 Post Oak Blvd., Suite 100

Houston, Texas 77056

Attention: Anthony Lannie

Telephone: (713 296-6000

Facsimile: (713) 296-6459

Notices shall be effective (w) if delivered personally or sent by courier service, upon actual receipt by the intended recipient, (x) if mailed, upon the earlier of five (5) days after deposit in the mail or the date of delivery as shown by the return receipt therefor, (y) if sent by facsimile transmission, when confirmation of transmission is received, or (z) if sent by electronic mail, when confirmation is received.

10.3    Entire Agreement. This Agreement, the Ancillary Agreements (in each case, together with the exhibits and schedules of each of the foregoing), and the Confidentiality Agreement constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof. There are no restrictions, promises, warranties, covenants, or undertakings between the Parties, other than those expressly set forth or referred to herein or therein.

10.4    Waiver. Any Party may (a) waive any inaccuracies in the warranties of the other contained herein or in any document, certificate, or writing delivered pursuant hereto or (b)

 

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waive compliance by the other Parties with any of the other Parties’ agreements or fulfillment of any conditions to its own obligations contained herein. Any agreement on the part of a Party to any such waiver shall be valid only if set forth in an instrument in writing signed by or on behalf of such Parties. Except as specifically set forth in this Agreement, no failure or delay by a Party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.

10.5    Binding Effect. This Agreement is binding upon and shall inure to the benefit of the Parties and their respective executors, administrators, successors, and legal representatives.

10.6    Governing Law; Consent to Jurisdiction; Severability; Waiver of Jury Trial.

(a)    This Agreement shall be governed by and construed and enforced in accordance with the Laws of the State of Delaware without regard to the principles of conflicts of Law; provided, however, that no Law, theory, or public policy shall be given effect which would undermine, diminish, or reduce the effectiveness of the waiver of damages provided in Article IX, it being the express intent, understanding, and agreement of the Parties that such waiver is to be given the fullest effect, notwithstanding the negligence (whether sole, joint, or concurrent), gross negligence, willful misconduct, strict liability, or other legal fault of any Party.

(b)    The Parties hereby irrevocably submit to the jurisdiction of the courts of the State of Delaware and the federal courts of the United States of America located in Delaware over any dispute between or among the Parties arising out of this Agreement, and the Parties irrevocably agree that all such claims in respect of such dispute shall be heard and determined in such courts. The Parties hereby irrevocably waive, to the fullest extent permitted by Law, any objection which they may now or hereafter have to the venue of any such dispute arising out of this Agreement brought in such court or any defense of inconvenient forum for the maintenance of such dispute. The Parties agree that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.

(c)    Should any term or provision of this Agreement for any reason be declared invalid or unenforceable, such decision shall not affect the validity or enforceability of any of the other terms or provisions of this Agreement, which other terms and provisions shall remain in full force and effect and the application of such invalid or unenforceable term or provision to Persons or circumstances other than those as to which it is held invalid or unenforceable shall be valid and be enforced to the fullest extent permitted by Law. If a final judgment of a court of competent jurisdiction declares that any term or provision of this Agreement is invalid or unenforceable, the Parties agree that the court making such determination shall have the power to limit such term or provision, to delete specific words or phrases or to replace such term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and that this Agreement shall be valid and enforceable as so modified.

 

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(d)    EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS.

10.7    Amendments. This Agreement may not be amended except by an instrument in writing signed by or on behalf of both Parties. If a provision or a defined term incorporated by reference into this Agreement is amended, supplemented, or modified in the agreement from which such provision or defined term is incorporated, such amendment, supplement, or modification shall have no effect on such provision or defined term as used in this Agreement unless such amendment, supplement, or modification is approved as provided in this Section 10.7.

10.8    Further Assurances. From time to time following the Closing, at the reasonable request of any Party and without further consideration, the other Parties shall execute and deliver to such requesting Party such instruments and documents and take such other action (but without incurring any material financial obligation) as may reasonably be required to consummate more fully and effectively the Transactions.

10.9    Disclosure Schedules. Certain information set forth in the Disclosure Schedules or the Data Room is included solely for informational purposes, is not an admission of liability with respect to the matters covered by the information, and may not be required to be disclosed pursuant to this Agreement, and such disclosures shall not be deemed to enlarge or enhance any of the warranties in this Agreement or otherwise alter the terms of this Agreement. The specification of any dollar amount in the warranties contained in this Agreement, or the inclusion of any specific item in the Disclosure Schedules or the Data Room, is not intended to imply that such amounts (or higher or lower amounts) are or are not material, and no Party shall use the fact of the setting of such amounts or the fact of the inclusion of any such item in the Disclosure Schedules or the Data Room in any dispute or controversy between the Parties as to whether any obligation, item, or matter not described herein or included in a Disclosure Schedule or in the Data Room is or is not material for purposes of this Agreement. The information and disclosures disclosed in any section of the Disclosure Schedules or in the Data Room shall be deemed to be disclosed with respect to any other section of this Agreement to the extent that it is reasonably apparent on the face of such disclosure that such disclosure is applicable notwithstanding the omission of a reference or cross reference thereto.

10.10    Assignment and Successors and Assigns.

(a)    The rights and obligations contained in this Agreement shall not be assigned by any Party without the prior written consent of the other Parties to this Agreement, and any such action without the required consent shall be void ab initio; provided, however, that Contributor may assign its rights and obligations contained in this Agreement to an Affiliate of Contributor without Buyer’s prior written consent.

(b)    This Agreement shall bind and inure to the benefit of the Parties and any permitted successors or assigns to the original Parties to this Agreement, but such assignment shall not relieve any Party of any obligations incurred prior to such assignment.

 

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10.11    Counterparts. This Agreement may be executed in counterparts, all of which together shall constitute an agreement binding on the Parties, notwithstanding that all Parties are not signatories to the original or the same counterpart. Facsimile copies of signatures shall constitute original signatures for all purposes of this Agreement and any enforcement hereof.

10.12     Legal Representation and Privilege.

(a)    Upon execution and delivery of a counterpart to this Agreement, each Party shall be deemed to acknowledge as follows: (i) Contributor has retained Bracewell LLP in connection with the Transactions and may retain Bracewell LLP as legal counsel in connection with Contributor’s investment in Buyer and the KAAC Partnership and (ii) unless otherwise specifically set forth in a written engagement letter with Bracewell LLP, Bracewell LLP is not representing Buyer or the KAAC Partnership or any stockholder of Buyer or partner of the KAAC Partnership (other than, in each case, Contributor) in connection with the Transactions, and if any Person wishes counsel on the Transactions, such Person shall retain its own independent counsel.

(b)     Buyer, the KAAC Partnership, and the KAAC General Partner agree, on their own behalf and on behalf of their respective Affiliates (including the Companies following Closing) that, following the Closing, Bracewell LLP may serve as counsel to Contributor and its Affiliates in connection with any matters related to this Agreement and the Transactions, including any dispute arising out of or relating to this Agreement and the Transactions, notwithstanding any representation by Bracewell LLP of any of the Companies prior to the Closing Date. Buyer, the KAAC Partnership, and the KAAC General Partner each hereby (i) consent to Bracewell LLP’s representation of Contributor and its Affiliates in connection with any matters related to this Agreement and the Transactions and (ii) waive any claim it has or may have that Bracewell LLP has a conflict of interest or is otherwise prohibited from engaging in such representation of Contributor, including any claim based on any representation by Bracewell LLP of Contributor or any of the Companies prior to the Closing.

(c)    Each of Buyer and the KAAC Partnership waives and will not assert, and agrees to cause its Affiliates, including, following the Closing, the Companies, to waive and not assert, any attorney-client or other applicable legal privilege or protection with respect to any communication between any legal counsel and Contributor, its Affiliates, or its or their respective Representatives occurring in connection with this Agreement, the Ancillary Agreements, or the Transactions, including in connection with a dispute with Buyer or its Affiliates (including, following the Closing, any Company), it being the intention of the Parties that all such rights to such attorney-client and other applicable legal privilege or protection and to control such attorney-client and other applicable legal privilege or protection shall be retained by Contributor and that Contributor, and not Buyer or its Affiliates, including, following the Closing, the Companies, shall have the sole right to decide whether or not to waive any attorney-client or other applicable legal privilege or protection. Accordingly, from and after Closing, none of Buyer or its

 

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Affiliates, including the Companies, shall have any access to any such communications, all of which shall be and remain the property of Contributor and not of Buyer or its Affiliates, including the Companies, or to internal counsel relating to such engagement, and none of Buyer or its Affiliates, including the Companies, or any Person acting or purporting to act on their behalf shall seek to obtain the same by any process on the grounds that the privilege and protection attaching to such communications and files belongs to Buyer or its Affiliates, including the Companies, or does not belong to Contributor.

10.13    No Third Party Beneficiary. Except for the provisions of Section 5.2(b) and Section 5.10(f) (each of which is intended to be for the benefit of the Persons identified therein), the terms and provisions of this Agreement are intended solely for the benefit of the Parties and their respective successors or permitted assigns, and it is not the intention of the Parties to confer third party beneficiary rights upon any other Person.

[Signature pages follow]

 

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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.

 

CONTRIBUTOR:
APACHE MIDSTREAM LLC
By:  

/s/ Brian W. Freed

Name:   Brian W. Freed
Title:   Senior Vice President

(Signature Pages Continue)

 

Signature Page to Contribution Agreement


BUYER:
KAYNE ANDERSON ACQUISITION CORP.
By:  

/s/ Robert S. Purgason

Name:   Robert S. Purgason
Title:   Chief Executive Officer
KAAC PARTNERSHIP:
ALTUS MIDSTREAM LP
By:   ALTUS MIDSTREAM GP LLC,
  its General Partner
By:  

/s/ Robert S. Purgason

Name:   Robert S. Purgason
Title:   Chief Executive Officer

(Signature Pages Continue)

 

Signature Page to Contribution Agreement


GENERAL PARTNER:
ALPINE HIGH SUBSIDIARY GP LLC
By:  

/s/ Brian W. Freed

Name:   Brian W. Freed
Title:   Senior Vice President

(Signature Pages Continue)

 

Signature Page to Contribution Agreement


PARTNERSHIPS:
ALPINE HIGH GATHERING LP
By: Alpine High Subsidiary GP LLC, its general partner
By:  

/s/ Brian W. Freed

Name:   Brian W. Freed
Title:   Senior Vice President
ALPINE HIGH PIPELINE LP
By: Alpine High Subsidiary GP LLC, its general partner
By:  

/s/ Brian W. Freed

Name:   Brian W. Freed
Title:   Senior Vice President
ALPINE HIGH PROCESSING LP
By: Alpine High Subsidiary GP LLC, its general partner
By:  

/s/ Brian W. Freed

Name:   Brian W. Freed
Title:   Senior Vice President
ALPINE HIGH NGL PIPELINE LP
By: Alpine High Subsidiary GP LLC, its general partner
By:  

/s/ Brian W. Freed

Name:   Brian W. Freed
Title:   Senior Vice President

(Signature Pages Concluded)

 

Signature Page to Contribution Agreement

EX-10.1

Exhibit 10.1

Execution Version

August 8, 2018

Apache Midstream LLC

2000 Post Oak Blvd., Suite 100

Houston, TX 77056

Re: Option Agreements

Ladies and Gentlemen:

Reference is made to the following agreements: (1) the Equity Purchase Option Agreement dated as of December 20, 2017 by and between Kinder Morgan Texas Pipeline LLC and Apache Midstream LLC (“Apache Midstream”) (the “GCX Option Agreement”); (2) the Shin Oak Pipeline Equity Option Agreement dated as of May 23, 2018 and entered into by and between Enterprise Products Operating LLC and Apache Midstream (the “Shin Oak Option Agreement”); (3) the Option Agreement to Purchase Partners Interest in EPIC Crude Holdings, LP dated as of May 10, 2018 and entered into by and among EPIC Midstream Holdings, LP, EPIC Crude Holdings, LP, EPIC Crude Holdings GP, LLC, and Apache Midstream (the “EPIC Option Agreement” and, together with the GCX Option Agreement and the Shin Oak Option Agreement, the “Option Agreements”); and (4) the Contribution Agreement entered into as of even date hereof by and among Apache Midstream, Kayne Anderson Acquisition Corp. (“Kayne”), and the Companies (as such term is defined in the Contribution Agreement) (the “Contribution Agreement”). Kayne, Apache Corporation (“Apache”), with respect to Sections 2(a)(ii), 2(b) and 2(c) only, and Apache Midstream are each sometimes herein referred to individually as a “Party” and sometimes collectively referred to as the “Parties.” For purposes of this letter agreement and Apache Midstream’s and Apache’s obligations hereunder, “commercially reasonable efforts” means Apache Midstream’s and Apache’s efforts in accordance with reasonable commercial practice and without incurrence of unreasonable expense, and provided always that “commercially reasonable efforts” shall not require Apache Midstream or Apache to provide, or to cause any of their respective affiliates to provide, any guaranty or credit support or to take any actions or incur any expenses not required or set forth in the Option Agreements.

Kayne, Apache, with respect to Sections 2(a)(ii), 2(b) and 2(c) only, and Apache Midstream hereby agree as follows:

 

  1.

Apache Midstream Obligations. Apache Midstream shall comply in all material respects with the terms and conditions of each of the Option Agreements and use commercially reasonable efforts to preserve the ability of Kayne or its designated subsidiaries to exercise the options from and after the closing of the transactions contemplated by the Contribution Agreement (“Closing”) in accordance with the terms set forth in the Option Agreements.

 

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  2.

Option Agreements. In furtherance, but not in limitation, of the obligations set forth in Section 1 of this letter agreement:

 

  a.

GCX Option Agreement.

(i) Apache Midstream shall use commercially reasonable efforts to cause Kayne’s designated subsidiary to be determined an Eligible Person (as such term is defined in the Amended and Restated Limited Liability Company Agreement of Gulf Coast Express Pipeline LLC, dated as of December 19, 2017 (the “LLC Agreement”)) at the time such designated subsidiary is proposed to be admitted as a Member of the Company (as such term is defined in the LLC Agreement). If Kayne’s designated subsidiary is not determined to be an Eligible Person at the time such designated subsidiary is proposed to be admitted as a Member of the Company, then (A) prior to the expiration of the option set forth in the GCX Option Agreement, Apache Midstream shall exercise in full the option set forth in the GCX Option Agreement within the time specified for such exercise in the GCX Option Agreement and (B) as soon as reasonably practicable thereafter and provided that Apache Midstream is admitted as a Member (as such term is defined in the LLC Agreement) in accordance with the LLC Agreement, (1) Apache Midstream shall transfer and assign to Kayne’s designated subsidiary the equity interests in the Company that Apache Midstream received upon the exercise of such option and (2) Kayne shall reimburse Apache Midstream for any capital costs incurred by Apache Midstream in connection with the exercise of such option.

(ii) To the extent within Apache’s control and until the earlier of Kayne’s designated subsidiary’s admission as a Member of the Company under Section 2(a)(i) or December 31, 2018, Apache shall use commercially reasonable efforts to not cause the termination of any of the Transportation Agreements (as such term is defined in the GCX Option Agreement); provided, however, that this Section 2(a)(ii) does not apply to any Apache termination right in any Transportation Agreement (as such term is defined in the GCX Option Agreement), and nothing in this Section 2(a)(ii) shall prevent or prohibit Apache from exercising any such termination right pursuant to any or all of such Transportation Agreements (as such term is defined in the GCX Option Agreement), and the Parties agree that any such termination shall not, in any circumstances, be a breach of this Section 2(a)(ii).

 

  b.

Shin Oak Option Agreement. To the extent within Apache’s control, Apache shall use commercially reasonable efforts to not cause the failure of the condition precedent set forth in Section 3(g)(iii) of the Shin Oak Option Agreement or termination of the NGL Purchase Agreement (as such term is defined in the Shin Oak Option Agreement).

 

  c.

EPIC Option Agreement. Apache shall (i) to the extent within Apache’s control, use commercially reasonable efforts to ensure that no Event of Default has occurred and is continuing to occur in the Transportation Agreement (as such terms are defined in the EPIC Option Agreement) and (ii) use commercially reasonable efforts to provide any necessary equity commitment letter pursuant to and as required, if applicable, under Section 3(l)(ii) of the EPIC Option Agreement.

 

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  3.

Repurchase of the Option Interests:

 

  a.

GCX Option: If, (i) as a result of Apache Midstream breaching its obligations set forth in Section 1 or Section 2a(i) of this letter agreement (ii) Apache breaching its obligations set forth in Section 2(a)(ii) of this letter agreement, or (iii) Apache exercising a termination right under the Transportation Agreements (as such term is defined in the GCX Option Agreement) as permitted under Section 2(a)(ii) of this letter agreement, Kayne or its designated subsidiary is unable to exercise the option set forth in the GCX Option Agreement or acquire the equity interest in the Company on the same economic terms and on the same timeframe as specified in the GCX Option Agreement (either pursuant to an assignment in accordance with Section 2a of this letter agreement or otherwise) and (ii) Closing (as defined in the Contribution Agreement) has occurred, then Apache Midstream shall forfeit 16,500,000 Common Units (as such term is defined in the Contribution Agreement) and a corresponding number of shares of Buyer Class C Common Stock (as defined in the Contribution Agreement), and Kayne shall transfer, or shall cause the transfer of, the GCX Option to Apache Midstream or one of Apache Midstream’s designated affiliates. Upon such forfeiture by Apache Midstream, (i) Kayne agrees that it shall have no further recourse, cause of action, claim, or other redress whatsoever against Apache Midstream or any affiliate of Apache Midstream in respect of the GCX Option Agreement or this letter agreement as it relates to the GCX Option Agreement, and (ii) Kayne waives any and all other potential claims against, and releases from all other liability, Apache Midstream or any of Apache Midstream’s affiliates with respect to any matters relating to or arising from the GCX Option Agreement or this letter agreement as it relates to the GCX Option Agreement.

 

  b.

Shin Oak Option. If, (i) as a result of Apache Midstream breaching its obligations set forth in Section 1 of this letter agreement or Apache breaching its obligations set forth in Section 2b of this letter agreement, Kayne or its designated subsidiary is unable to exercise the option set forth in the Shin Oak Option Agreement and (ii) Closing (as defined in the Contribution Agreement) has occurred, then Apache Midstream shall forfeit 18,500,000 Common Units and a corresponding number of shares of Buyer Class C Common Stock, and Kayne shall transfer, or shall cause the transfer of, the Shin Oak Option to Apache Midstream or one of Apache Midstream’s designated affiliates. Upon such forfeiture by Apache Midstream, (i) Kayne agrees that it shall have no further recourse, cause of action, claim, or other redress whatsoever against Apache Midstream or any affiliate of Apache Midstream in respect of the Shin Oak Option Agreement or this letter Agreement as it relates to the Shin Oak Option Agreement, and (ii) Kayne waives any and all other potential claims against, and releases from all other liability, Apache Midstream or any of Apache Midstream’s affiliates with respect to any matters relating to or arising from the Shin Oak Option Agreement or this letter agreement as it relates to the Shin Oak Option Agreement.

 

  c.

EPIC Option. If, (i) as a result of Apache Midstream breaching its obligations set forth in Section 1 of this letter agreement or Apache breaching its obligations set forth in Section 2c of this letter agreement, Kayne or its designated subsidiary is unable to exercise the option set forth in the EPIC Option Agreement and (ii) Closing (as defined in the

 

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  Contribution Agreement) has occurred, then Apache Midstream shall forfeit 5,000,000 Common Units and a corresponding number of shares of Buyer Class C Common Stock, and Kayne shall transfer, or shall cause the transfer of, the EPIC Option to Apache Midstream or one of Apache Midstream’s designated affiliates. Upon such forfeiture by Apache Midstream, (i) Kayne agrees that it shall have no further recourse, cause of action, claim, or other redress whatsoever against Apache Midstream or any affiliate of Apache Midstream in respect of the EPIC Option Agreement or this letter agreement as it relates to the EPIC Option Agreement, and (ii) Kayne waives any and all other potential claims against, and releases from all other liability, Apache Midstream or any of Apache Midstream’s affiliates with respect to any matters relating to or arising from the EPIC Option Agreement or this letter agreement as it relates to the EPIC Option Agreement.

 

  d.

Sole and Exclusive Remedy. Kayne agrees that the forfeiture of Common Units and Buyer Class C Common Stock set out in Sections 3(a)-3(c) of this letter agreement shall be the sole and exclusive remedy for any breach by Apache or Apache Midstream, as applicable, of any covenant, undertaking, agreement, or other obligation made pursuant to Section 1 or Sections 2(a)-2(c), as applicable, or any other provision of this letter agreement.

 

  4.

Common Units and Buyer Class C Common Stock. From and after Closing and until this letter agreement is terminated in accordance with Section 6 of this letter agreement, Apache Midstream shall at all times hold a number of Common Units and shares of Buyer Class C Common Stock sufficient to fulfill its obligations under Section 3 of this letter agreement.

 

  5.

Miscellaneous. The following provisions of the Contribution Agreement shall apply to this letter agreement mutatis mutandis: Section 9.2(b) (Waiver of Unrecoverable Damages); Section 10.5 (Binding Effect), Section 10.6 (Governing Law; Consent to Jurisdiction; Severability; Waiver of Jury Trial), Section 10.7 (Amendments), Section 10.10 (Assignment and Successors and Assigns), and Section 10.11 (Counterparts).

 

  6.

Termination. With respect to each Option Agreement, this letter agreement shall continue in full force until the sooner to occur of (i) the expiration of such Option Agreement and (ii) the termination of the Contribution Agreement in accordance with its terms.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this letter agreement to be executed by their respective, duly authorized representatives effective as of the date first written above.

 

APACHE CORPORATION, as a party hereto for Sections 2(a)(ii), 2(b) and 2(c) only
By:  

/s/ Stephen J. Riney

Name:   Stephen J. Riney
Title: Chief Financial Officer and Executive Vice President
APACHE MIDSTREAM LLC
By:  

/s/ Brian W. Freed

Name:   Brian W. Freed
Title:   Senior Vice President

 

[Signature Page to Side Letter re: Option Agreements]


KAYNE ANDERSON ACQUISITION CORP.
By:  

/s/ Robert S. Purgason

Name:   Robert S. Purgason
Title:   Chief Executive Officer

 

[Signature Page to Side Letter re: Option Agreements]

EX-10.2

Exhibit 10.2

Execution Version

SUBSCRIPTION AGREEMENT

This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into this 8th day of August, 2018, by and among Kayne Anderson Acquisition Corp., a Delaware corporation (the “Issuer”), and the subscriber party set forth on the signature page hereto (“Subscriber”).

WHEREAS, the Issuer intends to enter into a Contribution Agreement (the “Contribution Agreement”) with (a) Apache Midstream LLC, a Delaware limited liability company (“Apache”), (b) Altus Midstream LP, a Delaware limited partnership (“OpCo”), (c)(i) Alpine High Gathering LP, a Delaware limited partnership (f/k/a Alpine High Gathering LLC) (“Alpine High Gathering”), (ii) Alpine High Pipeline LP, a Delaware limited partnership (f/k/a Alpine High Pipeline LLC) (“Alpine High Pipeline”), (iii) Alpine High Processing LP, a Delaware limited partnership (f/k/a Alpine High Processing LLC) (“Alpine High Processing”), and (iv) Alpine High NGL Pipeline LP, a Delaware limited partnership (f/k/a Alpine High NGL Pipeline LLC) (together with Alpine High Gathering, Alpine High Pipeline, and Alpine High Processing, the “Contributed Companies”), and (d) Alpine High Subsidiary GP LLC, a Delaware limited liability company, pursuant to which, among other things, (i) the Issuer will contribute to OpCo cash in exchange for common units representing limited partner interests in OpCo (the “Common Units”); and (ii) Apache will contribute to OpCo, among other things, all of the equity interests of the Contributed Companies, in exchange for Common Units and shares of the Issuer’s Class C common stock, par value $0.0001 per share (the foregoing transactions being referred to herein as the “Transactions”);

WHEREAS, as of July 27, 2018, to finance a portion of the Transactions, the Issuer entered into separate subscription agreements (the “Private PIPE Subscription Agreements”) with certain “accredited investors” (as such term is defined in Rule 501 under the Securities Act of 1933, as amended (the “Securities Act”)), on terms substantially similar to those set forth in this Subscription Agreement, pursuant to which such investors have agreed to purchase an aggregate of 33,155,123 shares of the Issuer’s Class A common stock, par value $0.0001 per share (the “Class A Shares”), on the Closing Date (the “Private PIPE Transactions”);

WHEREAS, to finance a portion of the Transactions, Subscriber desires to subscribe for and purchase from the Issuer that number of Class A Shares set forth on the signature page hereto (the “Acquired Shares”) for a purchase price of $10.00 per share and an aggregate purchase price set forth on the signature page hereto (the “Purchase Price”), and the Issuer desires to issue and sell to Subscriber the Acquired Shares in consideration of the payment of the Purchase Price by or on behalf of Subscriber to the Issuer on or prior to the Closing (as defined below); and

WHEREAS, to finance a portion of the Transactions, certain other “accredited investors” or “qualified institutional buyers” (as defined in Rule 144A under the Securities Act), have (severally and not jointly) entered into separate subscription agreements (the “Other Subscription Agreements”) with the Issuer on terms and conditions substantially the same as set forth in this Subscription Agreement, pursuant to which such investors have agreed to purchase Class A Shares on the Closing Date (as defined below) (collectively and, together with the Subscription (as defined below) and one or more other private placements for the purpose of funding the Transactions, the “Marketed PIPE Transactions” and, together with the Private PIPE Transactions, the “PIPE Transactions”).


NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

1.    Subscription. Subject to the terms and conditions hereof, Subscriber hereby agrees to subscribe for and purchase, and the Issuer hereby agrees to issue and sell to Subscriber, upon the payment of the Purchase Price, the Acquired Shares (such subscription and issuance, the “Subscription”).

2.    Closing.

(a)    Subject to the satisfaction or waiver of the conditions set forth in Section 3, the closing of the purchase and sale of the Acquired Shares contemplated hereby (the “Closing”) shall occur on the date of (the “Closing Date”) and substantially concurrently with the closing of the Transactions. Not less than three (3) business days prior to the scheduled Closing Date (the “Scheduled Closing Date”), the Issuer shall deliver written notice to Subscriber specifying the Scheduled Closing Date (the “Closing Notice”).

(b)    Subject to the satisfaction or waiver of the conditions set forth in Section 3 (other than those conditions that by their nature are to be satisfied at Closing, but without affecting the requirement that such conditions be satisfied or waived at Closing), Subscriber shall deliver to the Issuer on or prior to 8:00 A.M. eastern time (or as soon as practicable after the Issuer or its transfer agent provides a screenshot evidencing the issuance to Subscriber of the Acquired Shares on and as of the Closing Date) on the Closing Date specified in the Closing Notice to Subscriber the Purchase Price for the Acquired Shares by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice against delivery by the Issuer to Subscriber of (i) the Acquired Shares in book entry form or to a custodian designated by Subscriber, as applicable, and (ii) written notice from the Issuer or its transfer agent evidencing the issuance to Subscriber of the Acquired Shares on and as of the Closing Date. In the event that the Closing does not occur within one (1) business day after the Scheduled Closing Date specified in the Closing Notice, the Issuer shall promptly (but in no event later than two (2) business days after the Scheduled Closing Date specified in the Closing Notice) return the funds so delivered by Subscriber to the Issuer by wire transfer of United States dollars in immediately available funds to the account specified by Subscriber.

(c)    On the Closing Date, subject to the satisfaction or waiver of the conditions set forth in Section 3, the Issuer shall deliver (or cause to be delivered) to Subscriber the Acquired Shares in book-entry form against payment by Subscriber to the Issuer of the Purchase Price as provided in Section 2(b).

 

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(d)    Each book entry for the Acquired Shares shall contain a notation, and each certificate (if any) evidencing the Acquired Shares shall be stamped or otherwise imprinted with a legend, in substantially the following form:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.”

(e)    At the Closing, the parties hereto shall execute and deliver such additional documents and take such additional actions as the parties reasonably may deem to be practical and necessary in order to consummate the Closing as contemplated by this Subscription Agreement.

3.    Closing Conditions

(a)    The obligations of each of the Issuer and Subscriber to consummate the Closing are subject to the satisfaction on the Closing Date, or the waiver by each of the Issuer and Subscriber, of each of the following conditions:

(i)    all conditions precedent to the closing of the Transactions provided for in the Contribution Agreement shall have been satisfied or waived (other than those conditions that by their nature may only be satisfied at the closing of the Transactions, but subject to satisfaction of such conditions as of the closing of the Transactions and provided that any such waiver does not materially adversely affect Subscriber; provided, however, the Parties agree that for the purposes of this Agreement, Available Funds (as defined in the Contribution Agreement) of at least $400 million shall not be deemed to materially adversely affect Subscriber) by the applicable party or parties thereto, and the closing of the Transactions shall occur, in accordance with the terms of the Contribution Agreement; and

(ii)    there shall not be any law or order of any governmental authority having jurisdiction (except for any such order issued in connection with a proceeding action instituted by Subscriber or any of its affiliates) restraining, enjoining or otherwise prohibiting or making illegal the consummation of the transactions contemplated by this Subscription Agreement.

(b)    In addition to the conditions set forth in Section 3(a), the obligation of Subscriber to consummate the Closing is subject to the satisfaction on the Closing Date, or the waiver by Subscriber, of the following conditions:

(i)     the representations and warranties of the Issuer set forth in Section 4 shall be true and correct in all material respects at and as of the Closing Date (other than those representations and warranties expressly made as of an earlier date, which shall be true and correct in all material respects as of such earlier date);

(ii)    the Issuer shall have performed and complied in all material respects with all covenants, taken as a whole, required by this Subscription Agreement to be performed or complied with by it prior to the Closing, except where the failure of such performance or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of Issuer to consummate the Closing; and

 

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(iii)    the Contribution Agreement shall not have been amended to materially adversely affect Subscriber; it being acknowledged that any amendment to increase the Contribution Price (as defined in the Contribution Agreement) shall be deemed to materially adversely affect Subscriber.

(c)    In addition to the conditions set forth in Section 3(a), the obligation of the Issuer to consummate the Closing is subject to the satisfaction on the Closing Date, or the waiver by the Issuer, of the following condition: the representations and warranties of Subscriber set forth in Section 5 shall be true and correct in all material respects at and as of the Closing Date (other than those representations and warranties expressly made as of an earlier date, which shall be true and correct in all material respects as of such earlier date).

4.     Issuer Representations and Warranties. The Issuer represents and warrants to Subscriber that:

(a)    The Issuer has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement.

(b)    The Acquired Shares have been duly authorized and, when issued and delivered to Subscriber against full payment for the Acquired Shares in accordance with the terms of this Subscription Agreement and registered with the Transfer Agent, the Acquired Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s certificate of incorporation (the “Certificate of Incorporation”) and bylaws (“Bylaws”) or under the laws of the State of Delaware.

(c)    This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.

(d)    The execution, delivery and performance of this Subscription Agreement, including the issuance and sale of the Acquired Shares and the consummation of the other transactions contemplated hereby, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the properties or assets of the Issuer pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of its property or assets is subject; (ii) the organizational documents of the Issuer; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a material adverse effect on the business, properties, assets, liabilities, operations, condition (including financial condition), stockholders’ equity or results of operations of the Issuer or materially and adversely affect the validity of the Acquired Shares or the legal authority or ability of the Issuer to perform in any material respects its obligations hereunder (a “Material Adverse Effect”).

 

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(e)    Other than rights relating to the Issuer’s Class B common stock, par value $0.0001 per share (the “Class B Shares”), all of which have been or will be waived with respect to the Transactions, pursuant to the terms of the Certificate of Incorporation, there are no securities or instruments issued by or to which the Issuer is a party containing anti-dilution or similar provisions that will be triggered by the issuance of (i) the Acquired Shares or (ii) the Class A Shares to be issued in connection with the PIPE Transactions.

(f)    The Issuer is not in default or violation (and no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or provision of (i) the organizational documents of the Issuer, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, permit, franchise or license to which, as of the date of this Subscription Agreement, the Issuer is a party or by which the Issuer’s properties or assets are bound or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties, except, in the case of clauses (ii) and (iii), for defaults or violations that have not had and would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect.

(g)    The Issuer is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance by the Issuer of this Subscription Agreement (including, without limitation, the issuance of the Acquired Shares), other than (i) the filing with the Securities and Exchange Commission (the “Commission”) of the Registration Statement (as defined below), (ii) filings required by applicable state securities laws, (iii) the filing of a Notice of Exempt Offering of Securities on Form D with the Commission under Regulation D of the Securities Act, (iv) those required by NASDAQ, including with respect to obtaining approval of the Issuer’s stockholders, and (v) the failure of which to obtain would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect.

(h)    As of the date of this Subscription Agreement, the authorized capital stock of the Issuer consists of 220,000,000 shares of common stock of the Issuer, par value $0.0001 per share (“Common Stock”), including (x) 200,000,000 Class A Shares and (y) 20,000,000 Class B Shares, and 1,000,000 shares of preferred stock of the Issuer, par value $0.0001 per share (“Preferred Stock”). As of August 6, 2018: (i) 37,732,112 Class A Shares, 9,433,028 Class B Shares, and no shares of Preferred Stock were issued and outstanding; (ii) 18,941,651 warrants (the “Warrants”), each entitling the holder thereof to purchase one Class A Share at an exercise price of $11.50 per Class A Share were issued and outstanding; and (iii) no shares of Common Stock were subject to issuance upon exercise of outstanding options.

(i)    The Issuer has not received any written communication from a governmental entity that alleges that the Issuer is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

 

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(j)    The issued and outstanding Class A Shares are registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are listed for trading on NASDAQ under the symbol “KAAC.” There is no suit, action, proceeding or investigation pending or, to the Issuer’s knowledge, threatened against the Issuer by NASDAQ or the Commission with respect to any intention by such entity to deregister the Class A Shares or prohibit or terminate the listing of the Class A Shares on NASDAQ. The Issuer has taken no action that is designed to terminate the registration of the Class A Shares under the Exchange Act.

(k)    Assuming the accuracy of Subscriber’s representations and warranties set forth in Section 5 of this Subscription Agreement, no registration under the Securities Act is required for the offer and sale of the Acquired Shares by the Issuer to Subscriber.

(l)    Neither the Issuer nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) in connection with any offer or sale of the Acquired Shares.

(m)    The Issuer has made available to Subscriber (including via the Commission’s EDGAR system) a copy of each form, report, statement, schedule, prospectus, proxy, registration statement and other document, if any, filed by the Issuer with the Commission since its initial registration of the Class A Shares (the “SEC Documents”). As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act applicable to the Issuer and the rules and regulations of the Commission promulgated thereunder applicable to the SEC Documents. None of the SEC Documents filed under the Exchange Act contained, when filed or, if amended, as of the date of such amendment with respect to those disclosures that are amended, any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, that the Issuer makes no such representation or warranty with respect to any information relating to the Contributed Companies or any of its affiliates included in any SEC Document or filed as an exhibit thereto. The Issuer has timely filed each report, statement, schedule, prospectus, and registration statement that the Issuer was required to file with the Commission since its inception. There are no material outstanding or unresolved comments in comment letters from the Commission Staff with respect to any of the SEC Documents.

(n)    Except for such matters as have not had and would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect, there is no proceeding pending, or, to the Issuer’s knowledge, threatened against the Issuer or any judgment, decree, injunction, ruling or order of any governmental entity or arbitrator outstanding against the Issuer.

(o)    Except for placement fees payable to each Financial Advisor (as defined herein), the Issuer has not paid, and is not obligated to pay, any brokerage, finder’s or other fee or commission in connection with its issuance and sale of the Acquired Shares, including, for the avoidance of doubt, any fee or commission payable to any stockholder or affiliate of the Issuer.

(p)    Except as provided in this Subscription Agreement, the Other Subscription Agreements and the Private PIPE Subscription Agreements, none of the Issuer, its subsidiaries or

 

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any of their affiliates, nor any person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the Acquired Shares under the Securities Act, whether through integration with prior offerings or otherwise.

(q)    The Issuer and its board of directors (the “Board”) have taken all necessary action, if any, in order to render inapplicable any control share acquisition, interested shareholder, business combination, poison pill (including, without limitation, any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its formation which is or could become applicable to Subscriber as a result of the Issuer’s issuance of the Acquired Shares and Subscriber’s ownership of the Acquired Shares. The Issuer has not adopted a shareholder rights plan or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Issuer or any of its subsidiaries.

(r)    Neither the Issuer nor any of its subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Issuer or any subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Issuer and its subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes hereof, “Insolvent” means, with respect to any person, (i) the present fair saleable value of such person’s assets is less than the amount required to pay such person’s total indebtedness, (ii) such person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, (iii) such person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature or (iv) such person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.

(s)    The operations and activities of the Issuer and its subsidiaries, affiliates, or agents are and have been conducted at all times in compliance with, as applicable to the Issuer or its subsidiaries, affiliates, or agents: (i) anti-money laundering compliance requirements, including relevant recordkeeping and reporting requirements, such as, in the United States, the Currency and Foreign Transactions Reporting Act of 1970 (also known as the Bank Secrecy Act), as amended, and the regulations of the U.S. Treasury Department’s Financial Crimes Enforcement Network; (ii) criminal and other prohibitions on engaging in money laundering or terrorism financing; and (iii) any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”). No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Issuer or any of its subsidiaries, affiliates, or agents with respect to the Anti-Money Laundering Laws is pending or, to the actual knowledge of the Issuer or any of its subsidiaries, affiliates, or agents, the subject of investigation or threatened.

 

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(t)    None of the Issuer nor any of its subsidiaries, affiliates, or agents, or to the actual knowledge of the Issuer, the directors, officers, agents, employees or affiliates of the Issuer, is currently the target of, or otherwise subject to restrictions under, any sanctions administered or enforced by the United States, including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Department of State; the United Nations Security Council; Canada; the European Union; the United Kingdom; or other government authority with jurisdiction over the parties (collectively, “Sanctions”). None of the Issuer or any of its subsidiaries, affiliates, or agents is located, organized or resident in a country or territory that is the subject or target of country- or territory-wide Sanctions, including, without limitation, Crimea, Cuba, Iran, North Korea or Syria (each, a “Sanctioned Country”). The Issuer and its subsidiaries, affiliates, or agents will not directly or indirectly use the proceeds from the Acquired Shares, or lend, or knowingly contribute or otherwise make available such proceeds: (i) to fund or facilitate any activities of or business with any person that is the target of, or otherwise subject to restrictions under, any Sanctions; (ii) to fund or facilitate any activities of or business in any Sanctioned Country; or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, initial purchaser, advisor, investor or otherwise) of Sanctions. In the past five years, none of the Issuer nor any of its subsidiaries, affiliates, or agents have engaged in or are now engaged in any dealings or transactions: (i) with, or involving the interests or property of, any person that, at the time of the dealing or transaction, was or is subject to restrictions imposed by any Sanctions or located, organized or resident in a Sanctioned Country; or (ii) that are otherwise prohibited by Sanctions.

(u)    The Issuer has not entered into any side letter or similar agreement with any investor in connection with such investor’s direct or indirect investment in the Issuer other than (i) the Contribution Agreement and the other agreements contemplated thereby, (ii) the Other Subscription Agreements and (iii) the Private PIPE Subscription Agreements, and, in the case of clauses (ii) and (iii), such agreements have not been amended in any material respect following the date of this Agreement.

5.    Subscriber Representations and Warranties. Subscriber represents and warrants that:

(a)    Subscriber has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation, with power and authority to enter into, deliver and perform its obligations under this Subscription Agreement.

(b)    This Subscription Agreement has been duly authorized, executed and delivered by Subscriber and is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.

(c)    The execution, delivery and performance by Subscriber of this Subscription Agreement, including the consummation of the transactions contemplated hereby, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or

 

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encumbrance upon any of the property or assets of Subscriber or any of its subsidiaries pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber or any of its subsidiaries is a party or by which Subscriber or any of its subsidiaries is bound or to which any of the property or assets of Subscriber or any of its subsidiaries is subject; (ii) the organizational documents of Subscriber; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Subscriber or any of its subsidiaries or any of their respective properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a material adverse effect on the legal authority or ability of the Subscriber to perform in any material respects its obligations hereunder.

(d)    Subscriber (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) satisfying the applicable requirements set forth on Schedule A, (ii) is acquiring the Acquired Shares only for its own account and not for the account of others, or if Subscriber is subscribing for the Acquired Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Acquired Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and shall provide the requested information on Schedule A following the signature page hereto). Subscriber is not an entity formed for the specific purpose of acquiring the Acquired Shares, unless such newly formed entity is an entity in which all of the equity owners are “accredited investors” (within the meaning of Rule 501(a) under the Securities Act.

(e)    Subscriber understands that the Acquired Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Acquired Shares have not been registered under the Securities Act. Subscriber understands that the Acquired Shares may not be resold, transferred, pledged or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and, in each of cases (i) and (iii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates or book entry notation representing the Acquired Shares shall contain a legend to such effect. Subscriber acknowledges that the Acquired Shares will not be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. Subscriber understands and agrees that the Acquired Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, Subscriber may not be able to readily resell the Acquired Shares and may be required to bear the financial risk of an investment in the Acquired Shares for an indefinite period of time. Subscriber understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Acquired Shares.

 

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(f)    Subscriber understands and agrees that Subscriber is purchasing the Acquired Shares directly from the Issuer. Subscriber further acknowledges that there have been no representations, warranties, covenants and agreements made to Subscriber by the Issuer or any of its officers, directors or representatives, expressly or by implication, other than those representations, warranties, covenants and agreements included in this Subscription Agreement.

(g)    Subscriber represents and warrants that its acquisition and holding of the Acquired Shares will not constitute or result in a non-exempt prohibited transaction under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or any applicable similar law.

(h)    In making its decision to purchase the Acquired Shares, Subscriber represents that it has relied solely upon independent investigation made by Subscriber. Subscriber acknowledges and agrees that Subscriber has received such information as Subscriber deems necessary in order to make an investment decision with respect to the Acquired Shares, including with respect to the Issuer and the Transactions. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and such Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Acquired Shares. Subscriber acknowledges and agrees that it has not relied on any Financial Advisor or any Financial Advisor’s affiliates with respect to its decision to purchase the Acquired Shares.

(i)    Subscriber became aware of this offering of the Acquired Shares solely by means of direct contact between Subscriber and the Issuer or by means of contact from Citigroup Global Markets Inc., Barclays Capital Inc. or Credit Suisse Securities (USA) LLC, each acting as financial advisor for the Issuer (each, a “Financial Advisor”), and the Acquired Shares were offered to Subscriber solely by direct contact between Subscriber and the Issuer or by contact between Subscriber and a Financial Advisor. Subscriber did not become aware of this offering of the Acquired Shares, nor were the Acquired Shares offered to Subscriber, by any other means. Subscriber acknowledges that the Issuer represents and warrants that the Acquired Shares (i) were not offered by any form of general advertising or, to its knowledge, general solicitation and (ii) to its knowledge, are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.

(j)    Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Acquired Shares. Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Acquired Shares, and Subscriber has sought such accounting, legal and tax advice as Subscriber has considered necessary to make an informed investment decision.

(k)    Subscriber represents and acknowledges that Subscriber has adequately analyzed and fully considered the risks of an investment in the Acquired Shares and determined that the Acquired Shares are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in the Issuer. Subscriber acknowledges specifically that a possibility of total loss exists.

 

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(l)    Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Acquired Shares or made any findings or determination as to the fairness of this investment.

(m)    Subscriber represents and warrants that Subscriber is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons, the Executive Order 13599 List, the Foreign Sanctions Evaders List, or the Sectoral Sanctions Identification List, each of which is administered by OFAC, or any other Executive Order issued by the President of the United States and administered by OFAC (collectively “OFAC Lists”), (ii) owned or controlled by, or acting on behalf of, a person, that is named on an OFAC List; (iii) organized, incorporated, established, located, resident or born in, or a citizen, national, or the government, including any political subdivision, agency, or instrumentality thereof, of any Sanctioned Country, or any other country or territory embargoed or subject to substantial trade restrictions by the United States, (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank. Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that Subscriber is permitted to do so under applicable law. Subscriber represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. section 5311 et seq.) (the “BSA”), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”), and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Subscriber also represents that, to the extent required, it maintains policies and procedures reasonably designed to ensure compliance with OFAC-administered sanctions programs, including for the screening of its investors against the OFAC Lists. Subscriber further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by Subscriber and used to purchase the Acquired Shares were legally derived.

(n)    If Subscriber is an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Code or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws”), or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, Subscriber represents and warrants that (i) neither Issuer, nor any of its respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Acquired Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Acquired

 

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Shares; (ii) the decision to invest in the Acquired Shares has been made at the recommendation or direction of an “independent fiduciary” (“Independent Fiduciary”) within the meaning of US Code of Federal Regulations 29 C.F.R. section 2510.3 21(c), as amended from time to time (the “Fiduciary Rule”) who is (1) independent of the Transaction Parties; (2) is capable of evaluating investment risks independently, both in general and with respect to particular transactions and investment strategies (within the meaning of the Fiduciary Rule); (3) is a fiduciary (under ERISA and/or section 4975 of the Code) with respect to Subscriber’s investment in the Acquired Shares and is responsible for exercising independent judgment in evaluating the investment in the Acquired Shares; and (4) is aware of and acknowledges that (A) none of the Transaction Parties is undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the purchaser’s or transferee’s investment in the Acquired Shares, and (B) the Transaction Parties have a financial interest in the purchaser’s investment in the Acquired Shares on account of the fees and other remuneration they expect to receive in connection with transactions contemplated by this Subscription Agreement.

(o)    Subscriber has, and at the Closing will have, sufficient funds to pay the Purchase Price pursuant to Section 2(b).

6.    Registration Rights.

(a)    The Issuer agrees that, within thirty (30) calendar days after the closing of the Contribution Agreement (the “Filing Date”), the Issuer will file with the Commission (at the Issuer’s sole cost and expense) a registration statement registering the resale of the Acquired Shares (the “Registration Statement”), and the Issuer shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 90th calendar day (or 120th calendar day if the Commission notifies the Issuer that it will “review” the Registration Statement) following the Closing and (ii) the tenth (10th) business day after the date the Issuer is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Date”); provided, however, that the Issuer’s obligations to include the Acquired Shares in the Registration Statement are contingent upon Subscriber furnishing in writing to the Issuer such information regarding Subscriber, the securities of the Issuer held by Subscriber and the intended method of disposition of the Acquired Shares as shall be reasonably requested by the Issuer to effect the registration of the Acquired Shares, and Subscriber shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling stockholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement during any customary blackout or similar period or as permitted hereunder; provided that Subscriber shall not in connection with the foregoing be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction with the Issuer on the ability to transfer the Acquired Shares. Any failure by the Issuer to file the Registration Statement by the Filing Date or to effect such Registration Statement by the Effectiveness Date shall not otherwise relieve the Issuer of its obligations to file or effect the Registration Statement as set forth above in this Section 6.

 

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(b)    The Issuer further agrees that, in the event that (i) the Registration Statement has not been declared effective by the Commission by the Effectiveness Date due to the Issuer failing to use commercially reasonable efforts, (ii) after such Registration Statement is declared effective by the Commission, (A) such Registration Statement ceases for any reason (including by reason of a stop order, or the Issuer’s failure to update the Registration Statement) to remain continuously effective as to all Acquired Shares for which it is required to be effective or (B) Subscriber is not permitted to utilize the Registration Statement to resell the Acquired Shares (in each case of (A) and (B), (x) other than within the time period(s) permitted by this Subscription Agreement and (y) excluding by reason of a post-effective amendment required in connection with the Issuer’s filing of an amendment thereto (a “Special Grace Period”) (which Special Grace Period shall not be treated as a Registration Default (as defined below)), or (iii) after the date one year following the Closing Date, and only in the event the Registration Statement is not effective or available to sell all Acquired Shares, the Issuer fails to file with the Commission any required reports under Section 13 or Section 15(d) of the Exchange Act such that it is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable), as a result of which Subscribers who are not affiliates of the Issuer are unable to sell the Acquired Shares without restriction under Rule 144 (“Rule 144”) (or any successor thereto) (each such event referred to in clauses (i) through (ii), a “Registration Default” and, for purposes of such clauses, the date on which such Registration Default occurs, a “Default Date”), then in addition to any other rights Subscriber may have hereunder or under applicable law, on each such Default Date and on each monthly anniversary of each such Default Date (if the applicable Registration Default shall not have been cured by such anniversary date) until the applicable Registration Default is cured the Issuer shall pay to each Subscriber an amount in cash, as liquidated damages and not as a penalty (“Liquidated Damages”), equal to 0.50% of the aggregate Purchase Price paid by Subscriber pursuant to this Subscription Agreement for any Acquired Shares which may not be disposed by Subscriber without restriction on the Default Date; provided, however, that if Subscriber fails to provide the Issuer with any information requested by the Issuer that is required to be provided in such Registration Statement with respect to Subscriber as set forth herein, then, for purposes of this Section 6, the Filing Date for a Registration Statement with respect to Subscriber shall be extended until two (2) business days following the date of receipt by the Issuer of such required information from Subscriber; and in no event shall the Issuer be required hereunder to pay to Subscriber pursuant to this Subscription Agreement an aggregate amount that exceeds 5.0% of the aggregate Purchase Price paid by Subscriber for any Acquired Shares which may not be disposed by Subscriber without restriction as of the Effectiveness Date. The Liquidated Damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of a Registration Default following the Effectiveness Date. The Issuer shall deliver the cash payment to Subscriber with respect to any Liquidated Damages by the fifth (5th) business day after the date payable. If the Issuer fails to pay said cash payment to Subscriber in full by the fifth business day after the date payable, the Issuer will pay interest thereon at a rate of 5.0% per annum (or such lesser maximum amount that is permitted to be paid by applicable law, and calculated on the basis of a year consisting of 360 days) to such Subscriber, accruing daily from the date such Liquidated Damages are due until such amounts, plus all such interest thereon, are paid in full. Notwithstanding the foregoing, nothing shall preclude any Subscriber from pursuing or obtaining any available remedies at law, specific performance or other equitable relief with respect to this Section 6 in accordance with applicable law. The parties agree that notwithstanding anything to the contrary herein, no Liquidated

 

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Damages shall be payable to Subscriber with respect to any period during which all of such Subscriber’s Acquired Shares may be sold by Subscriber without volume or manner of sale restrictions under Rule 144 and the Issuer is in compliance with the current public information requirements under Rule 144(c)(1) (or Rule 144(i)(2), if applicable).

(c)    In the case of the registration, qualification, exemption or compliance effected by the Issuer pursuant to this Subscription Agreement, the Issuer shall, upon reasonable request, inform Subscriber as to the status of such registration, qualification, exemption and compliance. At its expense the Issuer shall:

(i)    except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to keep such registration, and any qualification, exemption or compliance under state securities laws which the Issuer determines to obtain, continuously effective with respect to Subscriber, and to keep the applicable Registration Statement or any subsequent shelf registration statement free of any material misstatements or omissions, until the earlier of the following: (i) Subscriber ceases to hold any Acquired Shares, (ii) the date all Acquired Shares held by Subscriber may be sold without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions which may be applicable to affiliates under Rule 144 and without the requirement for the Issuer to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), or (iii) two (2) years from the Effective Date of the Registration Statement. The period of time during which the Issuer is required hereunder to keep a Registration Statement effective is referred to herein as the “Registration Period”;

(ii)    advise Subscriber within five (5) business days:

(1)    when a Registration Statement or any amendment thereto has been filed with the Commission and when such Registration Statement or any post-effective amendment thereto has become effective;

(2)    of any request by the Commission for amendments or supplements to any Registration Statement or the prospectus included therein or for additional information;

(3)    of the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose;

(4)    of the receipt by the Issuer of any notification with respect to the suspension of the qualification of the Acquired Shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and

(5)    subject to the provisions in this Subscription Agreement, of the occurrence of any event that requires the making of any changes in any Registration Statement or prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading.

 

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Notwithstanding anything to the contrary set forth herein, the Issuer shall not, when so advising Subscriber of such events, provide Subscriber with any material, nonpublic information regarding the Issuer other than to the extent that providing notice to Subscriber of the occurrence of the events listed in (1) through (5) above constitutes material, nonpublic information regarding the Issuer;

(iii)    use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable;

(iv)    upon the occurrence of any event contemplated above, except for such times as the Issuer is permitted hereunder to suspend, and has suspended, the use of a prospectus forming part of a Registration Statement, the Issuer shall use its commercially reasonable efforts to as soon as reasonably practicable prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Acquired Shares included therein, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(v)    use its commercially reasonable efforts to cause all Acquired Shares to be listed on each securities exchange or market, if any, on which the Class A Shares issued by the Issuer have been listed; and

(vi)    use its commercially reasonable efforts to take all other steps necessary to effect the registration of the Acquired Shares contemplated hereby and to enable Subscriber to sell the Acquired Shares under Rule 144.

(d)    Notwithstanding anything to the contrary in this Subscription Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require Subscriber not to sell under the Registration Statement or to suspend the effectiveness thereof, if the negotiation or consummation of a transaction by the Issuer or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event that the Board reasonably believes, upon the advice of legal counsel, would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable determination of the Board, upon the advice of legal counsel, to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension Event”); provided, however, that the Issuer may not delay or suspend the Registration Statement on more than two occasions or for more than sixty (60) consecutive calendar days, or more than one hundred and twenty (120) total calendar days, in each case during any twelve-month period. Upon receipt of any written notice from the Issuer of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration

 

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Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, Subscriber agrees that (i) it will immediately discontinue offers and sales of the Acquired Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until Subscriber receives copies of a supplemental or amended prospectus (which the Issuer agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in such written notice delivered by the Issuer unless otherwise required by law or subpoena. If so directed by the Issuer, Subscriber will deliver to the Issuer or, in Subscriber’s sole discretion destroy, all copies of the prospectus covering the Acquired Shares in Subscriber’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Acquired Shares shall not apply (i) to the extent Subscriber is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (ii) to copies stored electronically on archival servers as a result of automatic data back-up.

(e)    Indemnification.

(i)    The Issuer agrees to indemnify, except if such transaction is consummated during a Suspension Event, to the extent permitted by law the Subscriber, its directors and officers and agents and each person who controls the Subscriber (within the meaning of the Securities Act) against all losses, claims, damages, liabilities, and expenses (including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, prospectus included in any Registration Statement (“Prospectus”) or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Issuer by such Subscriber expressly for use therein.

(ii)    In connection with any Registration Statement in which a Subscriber is participating, such Subscriber shall furnish to the Issuer in writing such information and affidavits as the Issuer reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Issuer, its directors and officers and agents and each person who controls the Issuer (within the meaning of the Securities Act) against any losses, claims, damages, liabilities, and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, Prospectus, preliminary Prospectus, or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Subscriber expressly for use therein; provided, however, that the liability of each such Subscriber shall be several and not joint and shall be in proportion to and limited to the net proceeds received by such Subscriber from the sale of Acquired Shares pursuant to such Registration Statement.

 

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(iii)    Any person entitled to indemnification herein shall (1) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (2) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who elects not to assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one (1) counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

(iv)    The indemnification provided for under this Subscription Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. The Issuer and each Subscriber participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Issuer’s or such Subscriber’s indemnification is unavailable for any reason.

(v)    If the indemnification provided under this Section 6(e) from the indemnifying party is unavailable to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 6(e)(i), (ii) and (iii) above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to indemnification pursuant to this Section 6(e) from any person who was not guilty of such fraudulent misrepresentation.

 

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7.    Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of (a) such date and time as the Contribution Agreement is terminated in accordance with its terms, (b) if any of the conditions to Closing set forth in Section 3 of this Subscription Agreement are not satisfied or waived on or prior to the Closing and, as a result thereof, the transactions contemplated by this Subscription Agreement are not consummated at the Closing, or (c) the Outside Date (as defined in the Contribution Agreement); provided, that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. The Issuer shall notify Subscriber of the termination of the Contribution Agreement promptly after the termination of such agreement.

8.    Trust Account Waiver. Reference is made to the final prospectus of the Issuer, filed with the Commission (File No. 333-216514) (the “IPO Prospectus”), and dated as of March 29, 2017. Subscriber hereby acknowledges that it has read the IPO Prospectus and understands that the Issuer has established a trust account (the “Trust Account”) containing the proceeds of its initial public offering (the “IPO”) and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the Issuer’s public stockholders (the “Public Stockholders”) and certain other parties (including the underwriters of the IPO), and that, except as otherwise described in the IPO Prospectus, the Issuer may disburse monies from the Trust Account only: (a) to the Public Stockholders in the event they elect to redeem their Issuer shares in connection with the consummation of the Issuer’s initial business combination (as such term is used in the IPO Prospectus) (the “Business Combination”), (b) to the Public Stockholders if the Issuer fails to consummate a Business Combination within twenty-four (24) months after the closing of the IPO, (c) with respect to any interest earned on the amounts held in the Trust Account, as necessary to pay taxes, if any, or (d) to the Issuer after or concurrently with the consummation of a Business Combination. For and in consideration of the Issuer entering into this Subscription Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Subscriber hereby agrees on behalf of itself and its Representatives that, notwithstanding anything to the contrary in this Subscription Agreement, it and its Representatives do not now and shall not at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, and shall not make any claim against the Trust Account (including any distributions therefrom), regardless of whether such claim arises as a result of, in connection with or relating in any way to this Subscription Agreement or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively referred to hereafter as the “Released Claims”). Subscriber, on behalf of itself and its Representatives, hereby irrevocably waives any Released Claims that Subscriber or its Representatives may have against the Trust Account now (including any distributions therefrom) or in the future as a result of, or arising out of, any negotiations, contracts or agreements with the Issuer or its Representatives and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of any agreement with the Issuer or its affiliates). Subscriber agrees and acknowledges that such irrevocable waiver is material to this Subscription Agreement and specifically relied upon by the Issuer and its affiliates to induce the Issuer to enter in this Subscription Agreement, and

 

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Subscriber further intends and understands such waiver to be valid, binding and enforceable against Subscriber and each of its Representatives under applicable law. To the extent Subscriber or any of its Representatives commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to the Issuer or its Representatives, which proceeding seeks, in whole or in part, monetary relief against the Issuer or its Representatives, Subscriber hereby acknowledges and agrees that Subscriber’s and its Representatives’ sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit Subscriber or its Representatives (or any person claiming on any of their behalves or in lieu of any of them) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. In the event Subscriber or any of its Representatives commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to the Issuer or its Representatives, which proceeding seeks, in whole or in part, relief against the Trust Account (including any distributions therefrom) or the Public Stockholders, whether in the form of monetary damages or injunctive relief, the Issuer and its Representatives, as applicable, shall be entitled to recover from Subscriber the associated legal fees and costs in connection with any such action, in the event the Issuer or its Representatives, as applicable, prevails in such action or proceeding. For purposes of this Subscription Agreement, “Representatives” with respect to any person shall mean such person’s affiliates and its and its affiliate’s respective directors, officers, employees, consultants, advisors, agents and other representatives.

9.    Issuer’s Covenants.

(a)    Except as contemplated herein, Issuer, its subsidiaries, their respective affiliates shall not, and shall cause any person acting on behalf of any of the foregoing to not, take any action or steps that would require registration of the issuance of any of the Acquired Shares under the Securities Act.

(b)    With a view to making available to Subscriber the benefits of Rule 144 or any other similar rule or regulation of the Commission that may at any time permit Subscriber to sell securities of the Issuer to the public without registration, the Issuer agrees, until the Acquired Shares are registered for resale under the Securities Act, to:

(i)    make and keep public information available, as those terms are understood and defined in Rule 144;

(ii)    file with the Commission in a timely manner all reports and other documents required of the Issuer under the Securities Act and the Exchange Act so long as the Issuer remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

(iii)    furnish to Subscriber so long as it owns Acquired Shares, promptly upon request, (x) an electronic statement by the Issuer, if true, that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (y) an electronic copy of the most recent annual or quarterly report of the Issuer and such other reports and documents so filed by the Issuer (if not available via the Commission’s EDGAR) and (z) such other information as may be reasonably requested to permit Subscriber to sell such securities pursuant to Rule 144 without registration.

 

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(c)    The Issuer will use the proceeds from the sale of the Acquired Shares and the shares issued and sold pursuant to the Other Subscription Agreements and the Private PIPE Subscription Agreements solely to finance the Transactions.

(d)    The legend described in Section 2(d) shall be removed and the Issuer shall issue a certificate without such legend to the holder of the Acquired Shares upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at The Depository Trust Company (“DTC”), if (i) such Acquired Shares are registered for resale under the Securities Act, (ii) in connection with a sale, assignment or other transfer, such holder provides the Issuer with an opinion of counsel, in a form reasonably acceptable to the Issuer, to the effect that such sale, assignment or transfer of the Acquired Shares may be made without registration under the applicable requirements of the Securities Act, or (iii) the Acquired Shares can be sold, assigned or transferred pursuant to Rule 144. The Issuer shall be responsible for the fees of its transfer agent and all DTC fees associated with such issuance.

10.    Additional Subscriber Agreements. Subscriber hereby agrees that neither it, nor any person or entity acting on its behalf or pursuant to any understanding with it, will engage in any Short Sales with respect to securities of the Issuer prior to the Closing. For purposes of this Section 10, “Short Sales” shall include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, and all types of direct and indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps, and similar arrangements (including on a total return basis), and sales and other transactions through non-U.S. broker dealers or foreign regulated brokers.

11.    Miscellaneous.

(a)    Subscriber acknowledges that the Issuer and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, Subscriber agrees to promptly notify the Issuer if any of the acknowledgments, understandings, agreements, representations and warranties of Subscriber set forth herein are no longer accurate in all material respects.

(b)    Each of the Issuer and Subscriber is entitled to rely upon this Subscription Agreement and is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. The Financial Advisors are entitled to rely upon the representations and warranties made by Subscriber in this Subscription Agreement.

(c)    This Subscription Agreement and any of Subscriber’s rights and obligations hereunder may be assigned to any fund or account managed by the same investment manager as the Subscriber, without the prior consent of the Issuer, provided that such assignee(s) agrees to be bound by the terms hereof. Upon such assignment by a Subscriber, the assignee(s) shall become Subscriber hereunder and have the rights and obligations provided for herein to the extent of such assignment. Neither this Subscription Agreement nor any rights that may accrue to the Issuer hereunder or any of Issuer’s obligations may be transferred or assigned.

 

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(d)    All the agreements made by each party hereto in this Subscription Agreement shall survive only until the Closing; provided, that representations and warranties made by each party hereto in this Subscription Agreement shall survive for six (6) months following the Closing; and provided, further, that the covenants in this Subscription Agreement that contemplate performance after the Closing or expressly by their terms survive the Closing shall survive the Closing in accordance with their respective terms or until fully performed.

(e)    The Issuer may request from Subscriber such additional information as the Issuer may deem reasonably necessary to evaluate the eligibility of Subscriber to acquire the Acquired Shares, and Subscriber shall provide such information as may be reasonably requested, to the extent readily available and to the extent consistent with its internal policies and procedures.

(f)    This Subscription Agreement may not be modified, waived or terminated except by an instrument in writing, signed by the party against whom enforcement of such modification, waiver, or termination is sought.

(g)    This Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties with respect to the subject matter hereof. This Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successor and assigns.

(h)    Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.

(i)    If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.

(j)    This Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.

(k)    Subscriber shall pay all of its own expenses in connection with this Subscription Agreement and the transactions contemplated by this Subscription Agreement.

 

21


(l)    Any notice or communication required or permitted hereunder shall be in writing and either delivered personally, emailed or telecopied, sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, and shall be deemed to be given and received (a) when so delivered personally, (b) upon receipt of an appropriate electronic answerback or confirmation when so delivered by telecopy (to such number specified below or another number or numbers as such person may subsequently designate by notice given hereunder), (c) when sent, with no mail undeliverable or other rejection notice, if sent by email, or (d) five (5) business days after the date of mailing to the address below or to such other address or addresses as such person may hereafter designate by notice given hereunder:

if to Subscriber, to such address or addresses set forth on the signature page hereto;

if to the Issuer, to:

Kayne Anderson Acquisition Corp

811 Main Street, Suite 1400

Houston, Texas 77002

Attention: Terry Hart

Facsimile: (713) 655-7359

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

Latham & Watkins LLP

811 Main Street, Suite 3700

Houston, Texas 77002

Attention: William N. Finnegan IV

Telephone: (713) 546-7410

Facsimile: (713) 546-5401

E-mail: bill.finnegan@lw.com

(m)    The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise.

(n)    This Subscription Agreement, and any claim or cause of action hereunder based upon, arising out of or related to this Subscription Agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of this Subscription Agreement, shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to the principles of conflicts of laws thereof.

 

22


THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, THE SUPREME COURT OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF NEW YORK SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS SUBSCRIPTION AGREEMENT AND THE DOCUMENTS REFERRED TO IN THIS SUBSCRIPTION AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR ANY SUCH DOCUMENT THAT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS SUBSCRIPTION AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED BY SUCH A NEW YORK STATE OR FEDERAL COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 11(l) OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS SUBSCRIPTION AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS SUBSCRIPTION AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 11(n).

 

23


IN WITNESS WHEREOF, the Issuer and Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date set forth below.

 

KAYNE ANDERSON ACQUISITION CORP.
By:  

                                                                   

  Name:   Terry Hart                    
  Title:   Chief Financial Officer and Secretary

Date:    August 8, 2018

 

Signature Page to

Subscription Agreement

 


SUBSCRIBER:    
Signature of Subscriber:     Signature of Joint Subscriber, if applicable:
By:  

                                                                                               

    By:  

                                                                                                   

Name:       Name:  
Title:       Title:  

Date:             , 2018

 

Signature of Subscriber:     Signature of Joint Subscriber, if applicable:

 

   

 

(Please print. Please indicate name and

capacity of person signing above)

   

(Please print. Please indicate name and

capacity of person signing above)

 

   

Name in which securities are to be registered

(if different)

   
Email Address:    
If there are joint investors, please check one:    

☐   Joint Tenants with Rights of Survivorship

   

☐   Tenants-in-Common

   

☐   Community Property

   
Subscriber’s EIN:                                                                                             Joint Subscriber’s EIN:
   

 

Business Address-Street:     Mailing Address-Street (if different):

 

   

 

 

   

 

City, State, Zip:     City, State, Zip:
Attn:     Attn:
Telephone No.:                                                                                                 Telephone No.:                                                                                                 
Facsimile No.:                                                                                                   Facsimile No.:                                                                                                  

 

Signature Page to

Subscription Agreement

 


Aggregate Number of Acquired Shares subscribed for:

 

Aggregate Purchase Price:

$             .

You must pay the Purchase Price by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice.

 

Signature Page to

Subscription Agreement

 


SCHEDULE A

ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER

 

A.

QUALIFIED INSTITUTIONAL BUYER STATUS

(Please check the applicable subparagraphs):

 

  1.

☐ We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act (a “QIB”)).

 

  2.

☐ We are subscribing for the Acquired Shares as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB.

*** OR ***

 

B.

INSTITUTIONAL ACCREDITED INVESTOR STATUS

(Please check the applicable subparagraphs):

 

  1.

☐ We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) or an entity in which all of the equity holders are accredited investors within the meaning of Rule 501(a) under the Securities Act, and have marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an “accredited investor.”

 

  2.

☐ We are not a natural person.

 

***

AND ***

 

C.

AFFILIATE STATUS

(Please check the applicable box)

SUBSCRIBER:

 

 

is:

 

 

is not:

an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.

Schedule A should be completed by Subscriber

and constitutes a part of the Subscription Agreement.

 

Schedule A


Schedule A-1

Rule 501(a), in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Subscriber has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”

☐ Any bank as defined in section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;

☐ Any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934;

☐ Any insurance company as defined in section 2(a)(13) of the Securities Act;

☐ Any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act;

☐ Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958;

☐ Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

☐ Any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

☐ Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

☐ Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; or

☐ Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in § 230.506(b)(2)(ii).

Schedule A-1 should be completed by Subscriber

and constitutes a part of the Subscription Agreement.

 

Schedule A-1


Schedule A-2

☐ Any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000. For purposes of calculating a natural person’s net worth: (a) the person’s primary residence must not be included as an asset; (b) indebtedness secured by the person’s primary residence up to the estimated fair market value of the primary residence must not be included as a liability (except that if the amount of such indebtedness outstanding at the time of calculation exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess must be included as a liability); and (c) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the residence must be included as a liability;

☐ Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

☐ Any entity in which all of the equity owners are accredited investors meeting one or more of the above tests.

Schedule A-2 should be completed by Subscriber

and constitutes a part of the Subscription Agreement.

 

Schedule A-2

EX-10.3

Exhibit 10.3

Execution Version

SPONSOR FORFEITURE AGREEMENT

August 8, 2018

Kayne Anderson Acquisition Corp.

811 Main Street, 14th Floor

Houston, Texas 77002

Apache Midstream LLC

2000 Post Oak Boulevard, Suite 100

Houston, Texas 77056

Re: Forfeiture of Founder Shares and Private Placement Warrants

Ladies and Gentlemen:

Reference is made to that certain Contribution Agreement (the “Contribution Agreement”), dated as of the date hereof, by and among Kayne Anderson Acquisition Corp., a Delaware corporation (the “Company”), Apache Midstream LLC, a Delaware limited liability company (the “Contributor”), and the other parties thereto. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Contribution Agreement.

In order to induce the Contributor and the Company to enter into the Contribution Agreement and to proceed with the transactions contemplated therein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Contributor, the Company, and Kayne Anderson Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), hereby agree, pursuant to this letter agreement (this “Letter Agreement”), for the benefit of the Company, as follows:

 

  1.

Immediately prior to (and contingent upon) the Closing, the Sponsor shall forfeit to the Company 3,182,140 of the whole warrants the Sponsor acquired in connection with the Company’s initial public offering pursuant to that certain Sponsor Warrants Purchase Agreement, dated as of January 4, 2017 between the Sponsor and the Company (such warrants, the “Forfeited Private Placement Warrants”, and such forfeiture, the “Warrant Forfeiture”).

 

  2.

Immediately prior to (and contingent upon) the Closing, the Sponsor shall forfeit to the Company (a) 1,862,606 shares of Buyer Class B Common Stock plus (b) a number of shares of Buyer Class B Common Stock equal to the product of (i) the number of shares of Buyer Class A Common Stock redeemed pursuant to exercise of the Buyer Stockholder Redemption Right minus 2,000,000 and (ii) 26.6% (such shares described in (a) and (b) together, the “Forfeited Founder Shares”, and such forfeiture, the “Share Forfeiture”); provided, however, that the number of Forfeited Founder Shares shall in no event be less than zero nor greater than 5,450,422.

 

  3.

To effect the Warrant Forfeiture and the Share Forfeiture (together, the “Forfeitures”), immediately prior to (and contingent upon) the Closing: (a) the Sponsor shall surrender the Forfeited Private Placement Warrants and the Forfeited Founder Shares (together, the “Forfeited Interests”) to the Company for cancellation and in exchange for no consideration; (b) the Company shall immediately retire and cancel all of the Forfeited Interests (and shall direct the Company’s transfer agent (or such other intermediaries as appropriate) to take any and all such actions incident thereto); and (c) the Sponsor and the Company each shall take such actions as are necessary to cause the Forfeited Interests to be retired and canceled, after which the Forfeited Interests shall no longer be issued, outstanding, convertible, or exercisable, and the Sponsor shall provide the Company and the Contributor with evidence that such retirement and cancellation has occurred.

 

1


  4.

At the Closing, the Company shall issue and contribute to Altus Midstream LP, a Delaware limited partnership (the “KAAC Partnership”), (a) such number of shares of Buyer Class A Common Stock equal to the number of Forfeited Founder Shares and (b) the Contribution Warrants, all of which will immediately thereafter be distributed by the KAAC Partnership to the Contributor in accordance with, and subject to, the terms and conditions of the Contribution Agreement and the A&R LP Agreement.

 

  5.

Prior to the Closing, the Sponsor shall not, directly or indirectly, transfer or otherwise dispose of any of the shares of Buyer Class B Common Stock or the Forfeited Private Placement Warrants held by it, other than pursuant to the Forfeitures.

 

  6.

The Sponsor hereby represents and warrants to the Company and the Contributor, as of the date hereof and as of the Closing, that the Sponsor owns, and holds of record, all of the Forfeited Interests, free and clear of all Liens and other obligations in respect of the Forfeited Interests.

 

  7.

No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of each of the other parties hereto. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on the Sponsor, the Company, and Contributor and their respective successors and assigns.

 

  8.

Any notice, consent, or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or facsimile transmission.

 

  9.

This Letter Agreement shall immediately terminate, without any further action by the parties hereto, at such time, if at all, that the Contribution Agreement is terminated in accordance with its terms.

 

  10.

Section 10.3 (Entire Agreement), Section 10.4 (Waiver), Section 10.6 (Governing Law; Consent to Jurisdiction; Severability; Waiver of Jury Trial), Section 10.7 (Amendments), Section 10.8 (Further Assurances), and Section 10.11 (Counterparts) of the Contribution Agreement are hereby incorporated into this Letter Agreement, mutatis mutandis, as though set out in their entirety in this Paragraph 10.

[Signature pages follow]

 

2


IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by each Party as of the date first above written.

 

SPONSOR:
  KAYNE ANDERSON SPONSOR, LLC
    By: Kayne Anderson Capital Advisors, L.P.,
    Managing Member
  By:  

/s/ David Shladovsky

  Name:   David Shladovsky
  Title:   General Counsel
COMPANY:
  KAYNE ANDERSON ACQUISITION CORP.
  By:  

/s/ Terry A. Hart

  Name:  

Terry A. Hart

  Title:   Chief Financial Officer

(signature pages continue)

 

[Signature Page to Sponsor Forfeiture Agreement]


CONTRIBUTOR:
  APACHE MIDSTREAM LLC
  By:  

/s/ Brian W. Freed

  Name:   Brian W. Freed
  Title:   Senior Vice President

 

[Signature Page to Sponsor Forfeiture Agreement]

EX-99.1

Exhibit 99.1

 

LOGO   LOGO   NEWS RELEASE

APACHE CORPORATION AND KAYNE ANDERSON ACQUISITION CORP. ANNOUNCE AGREEMENT TO

CREATE ALTUS MIDSTREAM COMPANY, A $3.5 BILLION PURE-PLAY, PERMIAN BASIN MIDSTREAM

C-CORP; COMPANIES TO CO-HOST CONFERENCE CALL TO DISCUSS TRANSACTION

AT 4 PM CENTRAL TIME AUG. 8

 

   

Anchored by Apache’s gathering, processing and transportation assets at Alpine High, Altus Midstream will be a publicly traded, pure-play, Permian Basin midstream C-corp.

 

   

Altus Midstream will also own options for equity participation in five planned pipelines from the Permian Basin to various points along the Texas Gulf Coast.

 

   

Kayne Anderson Acquisition Corp. is contributing $952 million in cash, which comprises $380 million in proceeds raised in its initial public offering and $572 million in proceeds raised in a private placement of Class A shares.

 

   

The new company will have no debt at closing and cash on-hand will be used to fund ongoing midstream investments.

 

   

Gross volumes projected to approach more than 1 billion cubic feet (Bcf) per day of gas, producing approximately 100,000 barrels per day of NGLs by the end of 2020.

 

   

Long-term growth opportunities for Altus Midstream driven by Alpine High upstream development, investments in long-haul pipelines and third-party gathering and processing volumes.

 

   

Apache will own approximately 71 percent of Altus Midstream with the ability to increase to approximately 74 percent subject to performance earn outs.

 

   

Upon expected closing of the transaction in the fourth quarter of 2018, Kayne Anderson Acquisition Corp. will change its name to Altus Midstream Company.

HOUSTON, Aug. 8, 2018 – Apache Corporation (NYSE, NASDAQ: APA) and Kayne Anderson Acquisition Corp. (NASDAQ: KAAC, KAACU, KAACW) have announced an agreement pursuant to which Apache will contribute its midstream assets at Alpine High to Altus Midstream LP, a partnership jointly owned by Apache and KAAC. At closing, KAAC will be renamed Altus Midstream Company (together with Altus Midstream LP, “Altus Midstream” or the “company”). Altus Midstream will be structured as a C-corporation anchored by substantially all of Apache’s gathering, processing and transportation assets at Alpine High, a world-class, unconventional resource play in the Delaware Basin. The company will also own options for equity participation in five gas, NGL and crude oil pipeline projects from the Permian Basin to various points along the Texas Gulf Coast.

 

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LOGO   LOGO   NEWS RELEASE

 

“The transaction with Kayne Anderson Acquisition Corp. creates a premier midstream enterprise to service Alpine High, an enormous, highly economic upstream resource base in the Permian Basin, the most active oil and gas region in the world. Alpine High contains more than 5,000 feet of vertical hydrocarbon bearing formations across approximately 340,000 contiguous net acres,” said John Christmann IV, chief executive officer and president of Apache.

“For Apache, this is a very strategic transaction with a world-class partner at an attractive valuation. Since our discovery of Alpine High, we have invested nearly $1 billion in an extensive network of fit-for-purpose infrastructure to meet the current and future processing and transport needs of the play. Today’s announcement is a strong endorsement of the quality of investment we have made to date.

“This transaction facilitates the allocation of Apache’s capital to the development of the vast Alpine High upstream resource base. In turn, focused capital development in the upstream should bring significant growth to Altus Midstream for many years to come,” concluded Christmann.

Kevin McCarthy, chairman of the board of directors of KAAC, stated, “We are very excited to partner with Apache to form Altus Midstream. This transaction fits all the criteria we outlined at the time of KAAC’s initial public offering and creates a pure-play, Permian-focused midstream c-corp. We

 

2


LOGO   LOGO   NEWS RELEASE

 

believe investors will appreciate the clear alignment of interests between Altus Midstream and Apache as well as the company’s investor-friendly structure. Altus Midstream does not have incentive distribution rights and is well positioned to execute on its growth plans. We look forward to working with our partners to create value for Altus Midstream’s shareholders.”

Brian Freed, Apache’s senior vice president, Midstream and Marketing, who will become the chief executive officer of the new company, said, “We are launching Altus Midstream with the support and financial strength of Apache and Kayne Anderson, two highly respected industry leaders. We have a strong growth platform at Alpine High with a large, contiguous acreage dedication in a proven play, infrastructure in-place to accommodate a significant ramp in volume, and options for equity participation in five planned pipelines that will provide connectivity from the Permian Basin to the Texas Gulf Coast.

“Altus Midstream expects to have more than $900 million of cash and no debt at closing and is projected to be free-cash-flow positive by 2021. With this strong financial position, the company will have substantial borrowing capacity to accommodate its growth plans. We see great opportunities to expand our asset base in Alpine High, in surrounding areas of the Delaware Basin, and elsewhere in the Permian Basin. We will have the financial capacity to expand our footprint both in terms of our physical asset base as well as the ability to access volumes from third-party operators outside of Alpine High,” concluded Freed.

 

3


LOGO   LOGO   NEWS RELEASE

 

Altus Midstream assets

The Altus Midstream assets include rich-gas processing plants with inlet capacity of 380 million cubic feet (MMcf) per day, lean-gas treating and compression plants with inlet capacity of 400 MMcf per day, 123 miles of gathering pipelines, and 55 miles of processed gas pipelines with three market connections. By the end of 2020, Altus Midstream plans to add 1 Bcf per day of cryogenic, rich-gas processing.

Additionally, Altus Midstream will hold options to purchase equity ownership in five planned pipelines, including:

 

   

Gulf Coast Express: Option for up to 15 percent interest in a natural gas pipeline to Agua Dulce; operated by Kinder Morgan, expected in-service date in October 2019.

 

   

Salt Creek NGL Line: Option for 50 percent interest in an NGL header from Alpine High to Waha; operated by Salt Creek Midstream, expected in-service date in the first quarter of 2019.

 

   

EPIC Crude: Option for up to 15 percent interest in a crude oil pipeline to Corpus Christi; operated by EPIC Midstream Holdings, expected in-service date in the second half of 2019.

 

   

Shin Oak: Option for up to 33 percent interest in a long-haul NGL line to Mont Belvieu; operated by Enterprise Products Partners, expected in-service date in the second-quarter 2019.

 

4


LOGO   LOGO   NEWS RELEASE

 

   

Permian Highway: Option for up to 33 percent interest in a proposed natural gas pipeline to Katy / Agua Dulce (subject to agreement on definitive documentation); to be operated by Kinder Morgan, expected in-service date in late 2020.

Other transaction details

Altus Midstream will have an estimated market capitalization of $3.5 billion at formation, assuming 354.4 million common shares outstanding at a $10 share price. Apache will receive 251.9 million shares and own 71.1 percent of Altus Midstream. KAAC will contribute approximately $952 million in cash at formation, which is composed of proceeds from KAAC’s initial public offering of $380 million and proceeds from the private placement of Class A shares of $572 million. These proceeds (net of transaction expenses) will be used to fund ongoing midstream investments. Apache will have the ability to earn an additional 37.5 million shares if certain share price and operational thresholds are met over the next five years.

KAAC has entered into agreements to sell approximately 57.2 million shares of its Class A common stock at a price of $10 per share in a private placement. This private placement was anchored by accounts managed by Kayne Anderson Capital Advisors and other leading institutional investors, including Advisory Research, Inc.; certain funds managed or advised by Capital Research and Management Company, Cushing Asset Management, LP; Magnetar Capital, Salient Partners and Tortoise Capital Advisors, LLC. Directors, management and employees of both Kayne Anderson and Apache are investing $28 million in the private placement.

 

5


LOGO   LOGO   NEWS RELEASE

 

Altus Midstream will be structured as a C-corp with no incentive distribution rights. Cash-on-hand, additional follow-on funding, and future internally generated cash will be used to fund the ongoing build-out of midstream infrastructure at Alpine High and potential investment in long-haul pipelines.

With a planned effective date of Oct. 1, 2018, the transaction funds Apache’s projected fourth-quarter 2018 Alpine High midstream capital spend of approximately $170 million and provides future midstream capital funding for Apache at Alpine High.

Upon closing, Apache and Altus Midstream will enter into an agreement pursuant to which Apache will provide construction, operations and maintenance services for Altus Midstream.

The transaction is subject to approval by KAAC shareholders, as well as other customary closing conditions. Closing is expected in the fourth quarter of 2018, at which time KAAC will trade on the NASDAQ under the name Altus Midstream Company with a new ticker symbol to be determined.

Transaction advisors

Barclays Capital Inc. and Tudor, Pickering, Holt & Co. acted as financial advisors and Bracewell LLP acted as legal advisor to Apache on the transaction. Citigroup acted as financial advisor and Latham & Watkins LLP acted as legal advisor to KAAC. Citigroup, Barclays and Credit Suisse acted as placement agents on the private placement of Class A shares.

 

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LOGO   LOGO   NEWS RELEASE

 

Conference call and additional materials

Apache and KAAC will host a conference call to discuss the transaction at 4 p.m. Central time, Wednesday, Aug. 8. The conference call will be webcast from Apache’s website at www.apachecorp.com and investor.apachecorp.com and on KAAC’s website at www.kaynespac.com. A replay of the conference call will be available for seven days following the call. The number for the replay is (855) 859-2056 or (404) 537-3406 for international calls. The conference access code is 6678757. Sign up for email alerts to be reminded of the webcast at http://investor.apachecorp.com/alerts/email-alerts-subscription.

Additional materials including a supporting presentation for Altus Midstream are also available for download on Apache’s website at www.apachecorp.com and investor.apachecorp.com and on KAAC’s website at www.kaynespac.com.

About Apache

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Egypt and the United Kingdom. Apache posts announcements, operational updates, investor information and press releases on its website, www.apachecorp.com, and on its Media and Investor Center mobile application, which is available for free download from the Apple App Store and the Google Play store.

 

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About Kayne Anderson Acquisition Corp.

Kayne Anderson Acquisition Corp. was formed by Kayne Anderson Capital Advisors for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. For more information, please visit www.kaynespac.com.

About Kayne Anderson Capital Advisors, L.P.

Kayne Anderson, founded in 1984, is an alternative investment management firm. As of June 30, 2018, Kayne Anderson had approximately $28 billion under management, and of that amount, $17 billion was invested in energy companies. Kayne Anderson is a leading investor in the midstream industry with a 20-year track record of investments in MLPs and other midstream companies. For more information, please visit www.kaynecapital.com.

Forward-looking statements

This news release includes certain statements that may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,”

 

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“could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include, for example, statements about Apache’s and KAAC’s ability to effect the transactions discussed in this news release; the benefits of the transactions; the future financial performance of Altus Midstream following the transactions; changes in Altus Midstream’s or Apache’s strategy, future operations, financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management. These forward-looking statements are based on information available as of the date of this news release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing Apache’s or KAAC’s views as of any subsequent date, and neither Apache nor KAAC undertakes any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, Apache’s and Altus Midstream’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: (i) the occurrence of any event, change or other

 

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circumstances that could delay the transactions or give rise to the termination of the definitive agreements relating to the transactions; (ii) the outcome of any legal proceedings that may be instituted against Apache or KAAC following announcement of the proposed transactions; (iii) the inability to complete the transactions due to the failure to obtain approval of the stockholders of KAAC, or other conditions to closing in the definitive agreements relating to the transactions; (iv) the risk that the proposed transactions disrupts current plans and operations of KAAC or Apache as a result of the announcement and consummation of the proposed transactions; (v) KAAC’s and Apache’s ability to realize the anticipated benefits of the transactions, which may be affected by, among other things, competition and the ability of Altus Midstream to grow and manage growth profitably following the transactions; (vi) costs related to the transactions; (vii) changes in applicable laws or regulations; and (viii) the possibility that Altus Midstream or Apache may be adversely affected by other economic, business, and/or competitive factors.

No offer or solicitation

This news release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the proposed transactions or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

 

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Important information for investors and stockholders

In connection with the proposed transaction, KAAC intends to file a proxy statement with the SEC. The definitive proxy statement and other relevant documents will be sent or given to the stockholders of KAAC and will contain important information about the proposed transaction and related matters. KAAC’s stockholders and other interested persons are advised to read, when available, the proxy statement in connection with KAAC’s solicitation of proxies for the meeting of stockholders to be held to approve the transaction because the proxy statement will contain important information about the proposed transaction. When available, the definitive proxy statement will be mailed to KAAC’s stockholders as of a record date to be established for voting on the transaction. Stockholders will also be able to obtain copies of the proxy statement, without charge, once available, at the SEC’s website at www.sec.gov.

Participants in the solicitation

KAAC and its directors and officers may be deemed participants in the solicitation of proxies of KAAC’s stockholders in connection with the proposed transaction. KAAC stockholders and other interested persons may obtain, without charge, more detailed information regarding the directors and officers of KAAC in its Annual Report on Form 10-K for the year ended Dec. 31, 2017 filed with the SEC on March 27, 2018. Additional information will be available in the definitive proxy statement when it becomes available.

 

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Contacts

Apache Corp.

Investor:

(281) 302-2286    Gary Clark

Media:

(713) 296-7276    Castlen Kennedy

Website:

www.apachecorp.com

Kayne Anderson Acquisition Corp.

Investor:

(877) 657-3863

Website:

www.kaynespac.com

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EX-99.2

Exhibit 99.2 August 2018 Altus Midstream Company Exhibit 99.2 August 2018 Altus Midstream Company


Disclaimer FORWARD LOOKING STATEMENTS The information in this presentation and the oral statements made in connection therewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), 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 presentation, regarding Apache Corporation’s (“Apache”) business, operations, and future financial and operating performance and forecasts, and Kayne Anderson Acquisition Corp.’s (“KAAC”) proposed business combination transaction with a wholly owned subsidiary of Apache involving certain midstream assets currently owned by Apache (the “business combination”), KAAC’s ability to consummate the business combination, the benefits of the business combination, and KAAC’s future financial performance following the business combination, as well as KAAC’s strategy, future operations and financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, including any oral statements made in connection therewith, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, KAAC and Apache disclaim 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 presentation. KAAC and Apache caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of KAAC and Apache, incident to the development, production, gathering, transportation and sale of oil, natural gas and natural gas liquids. These risks include, but are not limited to, commodity price volatility, low prices for oil and/or natural gas, global economic conditions, inflation, increased operating costs, lack of availability of drilling and production equipment, supplies, services and qualified personnel, processing volumes and pipeline throughput, uncertainties related to new technologies, geographical concentration of operations, environmental risks, weather risks, security risks, drilling and other operating risks, regulatory changes, regulatory risks (including if KAAC were to become an investment company in the future), the uncertainty inherent in estimating oil and natural gas reserves and in projecting future rates of production, reductions in cash flow, lack of access to capital, KAAC’s ability to satisfy future cash obligations, restrictions in existing or future debt agreements or structured or other financing arrangements, the timing of development expenditures, managing growth and integration of acquisitions, and failure to realize expected value creation from acquisitions. Should one or more of the risks or uncertainties described in this presentation and the oral statements made in connection therewith occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact KAAC’s operations and projections can be found in its periodic filings with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2017. KAAC’s SEC filings are available publicly on the SEC’s website at www.sec.gov. NO OFFER OR SOLICITATION This presentation is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the proposed business combination or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. RESERVE INFORMATION Reserve engineering is a process of estimating underground accumulations of hydrocarbons that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data, and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing, and production activities may justify revisions of estimates that were made previously. If significant, such revisions could impact Apache’s strategy and change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered. Estimated Ultimate Recoveries, or “EURs,” refers to estimates of the sum of total gross remaining proved reserves per well as of a given date and cumulative production prior to such given date for developed wells. These quantities do not necessarily constitute or represent reserves as defined by the SEC and are not intended to be representative of all anticipated future well results. USE OF PROJECTIONS This presentation contains projections for Apache and KAAC, including with respect to its EBITDA, capital expenditures and distributable cash flow. KAAC’s independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the projections for the purpose of their inclusion in this presentation, and accordingly, have not expressed an opinion or provided any other form of assurance with respect thereto for the purpose of this presentation. These projections are for illustrative purposes only and should not be relied upon as being necessarily indicative of future results. In this presentation, certain of the above-mentioned projected information has been repeated for purposes of providing comparisons with historical data. The assumptions and estimates underlying the projected information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projected information. Even if the assumptions and estimates are correct, projections are inherently uncertain due to a number of factors outside KAAC’s control. Accordingly, there can be no assurance that the projected results are indicative of the future performance of KAAC after completion of the business combination or that actual results will not differ materially from those presented in the projected information. Inclusions of the projected information in this presentation should not be regarded as a representation by any person that the results contained in the projected information will be achieved. 2 Disclaimer FORWARD LOOKING STATEMENTS The information in this presentation and the oral statements made in connection therewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), 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 presentation, regarding Apache Corporation’s (“Apache”) business, operations, and future financial and operating performance and forecasts, and Kayne Anderson Acquisition Corp.’s (“KAAC”) proposed business combination transaction with a wholly owned subsidiary of Apache involving certain midstream assets currently owned by Apache (the “business combination”), KAAC’s ability to consummate the business combination, the benefits of the business combination, and KAAC’s future financial performance following the business combination, as well as KAAC’s strategy, future operations and financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, including any oral statements made in connection therewith, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, KAAC and Apache disclaim 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 presentation. KAAC and Apache caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of KAAC and Apache, incident to the development, production, gathering, transportation and sale of oil, natural gas and natural gas liquids. These risks include, but are not limited to, commodity price volatility, low prices for oil and/or natural gas, global economic conditions, inflation, increased operating costs, lack of availability of drilling and production equipment, supplies, services and qualified personnel, processing volumes and pipeline throughput, uncertainties related to new technologies, geographical concentration of operations, environmental risks, weather risks, security risks, drilling and other operating risks, regulatory changes, regulatory risks (including if KAAC were to become an investment company in the future), the uncertainty inherent in estimating oil and natural gas reserves and in projecting future rates of production, reductions in cash flow, lack of access to capital, KAAC’s ability to satisfy future cash obligations, restrictions in existing or future debt agreements or structured or other financing arrangements, the timing of development expenditures, managing growth and integration of acquisitions, and failure to realize expected value creation from acquisitions. Should one or more of the risks or uncertainties described in this presentation and the oral statements made in connection therewith occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact KAAC’s operations and projections can be found in its periodic filings with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2017. KAAC’s SEC filings are available publicly on the SEC’s website at www.sec.gov. NO OFFER OR SOLICITATION This presentation is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the proposed business combination or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. RESERVE INFORMATION Reserve engineering is a process of estimating underground accumulations of hydrocarbons that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data, and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing, and production activities may justify revisions of estimates that were made previously. If significant, such revisions could impact Apache’s strategy and change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered. Estimated Ultimate Recoveries, or “EURs,” refers to estimates of the sum of total gross remaining proved reserves per well as of a given date and cumulative production prior to such given date for developed wells. These quantities do not necessarily constitute or represent reserves as defined by the SEC and are not intended to be representative of all anticipated future well results. USE OF PROJECTIONS This presentation contains projections for Apache and KAAC, including with respect to its EBITDA, capital expenditures and distributable cash flow. KAAC’s independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the projections for the purpose of their inclusion in this presentation, and accordingly, have not expressed an opinion or provided any other form of assurance with respect thereto for the purpose of this presentation. These projections are for illustrative purposes only and should not be relied upon as being necessarily indicative of future results. In this presentation, certain of the above-mentioned projected information has been repeated for purposes of providing comparisons with historical data. The assumptions and estimates underlying the projected information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projected information. Even if the assumptions and estimates are correct, projections are inherently uncertain due to a number of factors outside KAAC’s control. Accordingly, there can be no assurance that the projected results are indicative of the future performance of KAAC after completion of the business combination or that actual results will not differ materially from those presented in the projected information. Inclusions of the projected information in this presentation should not be regarded as a representation by any person that the results contained in the projected information will be achieved. 2


Disclaimer USE OF NON-GAAP FINANCIAL MEASURES This presentation includes non-GAAP financial measures, including EBITDA and distributable cash flow of KAAC. KAAC believes EBITDA and distributable cash flow are useful because they allow KAAC to more effectively evaluate its operating performance and compare the results of its operations from period to period and against its peers without regard to financing methods or capital structure. KAAC does not consider these non-GAAP measures in isolation or as an alternative to similar financial measures determined in accordance with GAAP. The computations of EBITDA and distributable cash flow may not be comparable to other similarly titled measures of other companies. KAAC excludes certain items from net (loss) income in arriving at EBITDA and distributable cash flow because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. EBITDA and distributable cash flow should not be considered an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as indicators of operating performance. Certain items excluded from EBITDA and distributable cash flow are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of EBITDA or distributable cash flow. KAAC’s presentation of EBITDA and distributable cash flow should not be construed as an inference that its results will be unaffected by unusual or non-recurring terms. INDUSTRY AND MARKET DATA This presentation has been prepared by KAAC and Apache and includes market data and other statistical information from sources believed by KAAC and Apache to be reliable, including independent industry publications, governmental publications or other published independent sources. Some data is also based on the good faith estimates of KAAC and Apache, which are derived from their review of internal sources as well as the independent sources described above. Although KAAC and Apache believe these sources are reliable, they have not independently verified the information and cannot guarantee its accuracy and completeness. TRADEMARKS AND TRADE NAMES KAAC and Apache own or have rights to various trademarks, service marks, and trade names that they use in connection with the operation of their respective businesses. This presentation also contains trademarks, service marks, and trade names of third parties, which are the property of their respective owners. The use or display of third parties’ trademarks, service marks, trade names, or products in this presentation is not intended to, and does not imply, a relationship with KAAC or Apache, or an endorsement or sponsorship by or of KAAC or Apache. Solely for convenience, the trademarks, service marks, and trade names referred to in this presentation may appear without the ®, TM, or SM symbols, but such references are not intended to indicate, in any way, that KAAC or Apache will not assert, to the fullest extent under applicable law, their rights or the right of the applicable licensor to these trademarks, service marks, and trade names. “ALPINE HIGH” and are trademarks of Apache Corporation. IMPORTANT INFORMATION FOR INVESTORS AND STOCKHOLDERS In connection with the proposed business combination, KAAC intends to file a proxy statement with the SEC. The definitive proxy statement and other relevant documents will be sent or given to the stockholders of KAAC and will contain important information about the proposed business combination and related matters. KAAC stockholders and other interested persons are advised to read, when available, the proxy statement in connection with KAAC’s solicitation of proxies for the special meeting of stockholders to be held to approve the business combination because the proxy statement will contain important information about the proposed business combination. When available, the definitive proxy statement will be mailed to KAAC stockholders as of a record date to be established for voting on the business combination. Stockholders will also be able to obtain copies of the proxy statement, without charge, once available, at the SEC’s website at www.sec.gov. In addition, stockholders will be able to obtain free copies of the proxy statement by directing a request to: Kayne Anderson Acquisition Corp., 811 Main Street, Suite 1400, Houston, Texas 77002, email: thart@kaynecapital.com, Attn: Terry Hart. PARTICIPANTS IN SOLICITATION KAAC, Apache and their respective directors and officers may be deemed participants in the solicitation of proxies of KAAC’s stockholders in connection with the proposed business combination. KAAC stockholders and other interested persons may obtain, without charge, more detailed information regarding the directors and officers of KAAC in KAAC’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 27, 2018 and the proposed directors and officers of KAAC in KAAC’s preliminary proxy statement, when it becomes available. Additional information will be available in the definitive proxy statement when it becomes available. 3 Disclaimer USE OF NON-GAAP FINANCIAL MEASURES This presentation includes non-GAAP financial measures, including EBITDA and distributable cash flow of KAAC. KAAC believes EBITDA and distributable cash flow are useful because they allow KAAC to more effectively evaluate its operating performance and compare the results of its operations from period to period and against its peers without regard to financing methods or capital structure. KAAC does not consider these non-GAAP measures in isolation or as an alternative to similar financial measures determined in accordance with GAAP. The computations of EBITDA and distributable cash flow may not be comparable to other similarly titled measures of other companies. KAAC excludes certain items from net (loss) income in arriving at EBITDA and distributable cash flow because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. EBITDA and distributable cash flow should not be considered an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as indicators of operating performance. Certain items excluded from EBITDA and distributable cash flow are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of EBITDA or distributable cash flow. KAAC’s presentation of EBITDA and distributable cash flow should not be construed as an inference that its results will be unaffected by unusual or non-recurring terms. INDUSTRY AND MARKET DATA This presentation has been prepared by KAAC and Apache and includes market data and other statistical information from sources believed by KAAC and Apache to be reliable, including independent industry publications, governmental publications or other published independent sources. Some data is also based on the good faith estimates of KAAC and Apache, which are derived from their review of internal sources as well as the independent sources described above. Although KAAC and Apache believe these sources are reliable, they have not independently verified the information and cannot guarantee its accuracy and completeness. TRADEMARKS AND TRADE NAMES KAAC and Apache own or have rights to various trademarks, service marks, and trade names that they use in connection with the operation of their respective businesses. This presentation also contains trademarks, service marks, and trade names of third parties, which are the property of their respective owners. The use or display of third parties’ trademarks, service marks, trade names, or products in this presentation is not intended to, and does not imply, a relationship with KAAC or Apache, or an endorsement or sponsorship by or of KAAC or Apache. Solely for convenience, the trademarks, service marks, and trade names referred to in this presentation may appear without the ®, TM, or SM symbols, but such references are not intended to indicate, in any way, that KAAC or Apache will not assert, to the fullest extent under applicable law, their rights or the right of the applicable licensor to these trademarks, service marks, and trade names. “ALPINE HIGH” and are trademarks of Apache Corporation. IMPORTANT INFORMATION FOR INVESTORS AND STOCKHOLDERS In connection with the proposed business combination, KAAC intends to file a proxy statement with the SEC. The definitive proxy statement and other relevant documents will be sent or given to the stockholders of KAAC and will contain important information about the proposed business combination and related matters. KAAC stockholders and other interested persons are advised to read, when available, the proxy statement in connection with KAAC’s solicitation of proxies for the special meeting of stockholders to be held to approve the business combination because the proxy statement will contain important information about the proposed business combination. When available, the definitive proxy statement will be mailed to KAAC stockholders as of a record date to be established for voting on the business combination. Stockholders will also be able to obtain copies of the proxy statement, without charge, once available, at the SEC’s website at www.sec.gov. In addition, stockholders will be able to obtain free copies of the proxy statement by directing a request to: Kayne Anderson Acquisition Corp., 811 Main Street, Suite 1400, Houston, Texas 77002, email: thart@kaynecapital.com, Attn: Terry Hart. PARTICIPANTS IN SOLICITATION KAAC, Apache and their respective directors and officers may be deemed participants in the solicitation of proxies of KAAC’s stockholders in connection with the proposed business combination. KAAC stockholders and other interested persons may obtain, without charge, more detailed information regarding the directors and officers of KAAC in KAAC’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 27, 2018 and the proposed directors and officers of KAAC in KAAC’s preliminary proxy statement, when it becomes available. Additional information will be available in the definitive proxy statement when it becomes available. 3


Introduction to Altus Midstream Company ► Leading independent E&P company with 64-year ► Leading investor in the energy industry ($17 billion in (1) operating history and global footprint energy investments) with a 20-year track record of investing in MLPs and other midstream companies ► State of the art midstream system being built to facilitate development of Alpine High – a world-class ► Formed Kayne Anderson Acquisition Corp. (“KAAC”) in resource play 2017 to target midstream opportunities Overview of the Company’s Assets Gathering & Processing Joint Venture Pipelines ► Rich Processing: 380 MMcf/d in service today; ~1 ► Option Agreements: Option to acquire equity interests Bcf/d of cryos expected in service by end of 2020 in 5 joint venture pipelines ► Lean Treating / Compression: 400 MMcf/d of lean ► Natural Gas: 2 long-haul pipelines (Permian to Gulf gas treating and compression Coast) ► Gathering Pipelines: 123 miles in service today; over ► NGLs: 1 regional pipeline and 1 long-haul pipeline 200 miles expected in service by end of 2020 (Permian to Mont Belvieu) ► Residue Pipelines / Market Connections: 55 miles in ► Crude Oil: 1 long-haul pipeline (Permian to Corpus service today with 3 market connections (4 market Christi) connections expected by end of 2020) 4 (1) As of June 30, 2018. Introduction to Altus Midstream Company ► Leading independent E&P company with 64-year ► Leading investor in the energy industry ($17 billion in (1) operating history and global footprint energy investments) with a 20-year track record of investing in MLPs and other midstream companies ► State of the art midstream system being built to facilitate development of Alpine High – a world-class ► Formed Kayne Anderson Acquisition Corp. (“KAAC”) in resource play 2017 to target midstream opportunities Overview of the Company’s Assets Gathering & Processing Joint Venture Pipelines ► Rich Processing: 380 MMcf/d in service today; ~1 ► Option Agreements: Option to acquire equity interests Bcf/d of cryos expected in service by end of 2020 in 5 joint venture pipelines ► Lean Treating / Compression: 400 MMcf/d of lean ► Natural Gas: 2 long-haul pipelines (Permian to Gulf gas treating and compression Coast) ► Gathering Pipelines: 123 miles in service today; over ► NGLs: 1 regional pipeline and 1 long-haul pipeline 200 miles expected in service by end of 2020 (Permian to Mont Belvieu) ► Residue Pipelines / Market Connections: 55 miles in ► Crude Oil: 1 long-haul pipeline (Permian to Corpus service today with 3 market connections (4 market Christi) connections expected by end of 2020) 4 (1) As of June 30, 2018.


Transaction Overview ► KAAC has entered into an agreement with Apache Corporation to create Altus Midstream Company (1) (“Altus”, “Altus Midstream” or the “Company”) § Company will own Apache’s Alpine High related midstream assets and JV pipelines ► As part of the transaction, Altus has raised $572 million through a common equity PIPE at $10 per share § The PIPE offering was anchored by funds and accounts managed by Kayne Anderson and other leading institutional investors including Advisory Research, Inc., Capital Research and Management Company, Cushing Asset Management, LP, Magnetar Capital, Salient Partners and Tortoise Capital Advisors, LLC (2) ► The Company will have an equity value of ~$3.5 billion § Apache Corporation (“APA”) will receive ~$2.5 billion of common equity and will own ~71% of Altus Midstream • APA will have the ability to earn an additional 37.5 million shares if certain share price and (3) operational thresholds are met ► KAAC will contribute ~$920 million of cash (net of expenses), which will be retained at Altus and used to pre-fund capex § ~$380 million from KAAC’s IPO together with the PIPE offering (1) These defined terms collectively refer to Altus Midstream Company and Altus Midstream LP, as Altus will be structured using an Up-C format. See page 35 for additional detail. (2) Based on $10 share price. 5 (3) Earn-Out Consideration consists of three separate tranches (12.5 million each) – two tranches are based on share price performance ($14.00 and $16.00) and one is based on operating performance (volumes gathered). See page 36 for more detail on the earn-out shares. Transaction Overview ► KAAC has entered into an agreement with Apache Corporation to create Altus Midstream Company (1) (“Altus”, “Altus Midstream” or the “Company”) § Company will own Apache’s Alpine High related midstream assets and JV pipelines ► As part of the transaction, Altus has raised $572 million through a common equity PIPE at $10 per share § The PIPE offering was anchored by funds and accounts managed by Kayne Anderson and other leading institutional investors including Advisory Research, Inc., Capital Research and Management Company, Cushing Asset Management, LP, Magnetar Capital, Salient Partners and Tortoise Capital Advisors, LLC (2) ► The Company will have an equity value of ~$3.5 billion § Apache Corporation (“APA”) will receive ~$2.5 billion of common equity and will own ~71% of Altus Midstream • APA will have the ability to earn an additional 37.5 million shares if certain share price and (3) operational thresholds are met ► KAAC will contribute ~$920 million of cash (net of expenses), which will be retained at Altus and used to pre-fund capex § ~$380 million from KAAC’s IPO together with the PIPE offering (1) These defined terms collectively refer to Altus Midstream Company and Altus Midstream LP, as Altus will be structured using an Up-C format. See page 35 for additional detail. (2) Based on $10 share price. 5 (3) Earn-Out Consideration consists of three separate tranches (12.5 million each) – two tranches are based on share price performance ($14.00 and $16.00) and one is based on operating performance (volumes gathered). See page 36 for more detail on the earn-out shares.


New Way to Invest in Midstream…and it’s in the Permian! Sponsor controls production & development Super-system with large contiguous acreage dedication Pure-play Permian Integrated Permian to Gulf Coast midstream value chain JV pipelines provide diversity and long term contracts C-corp structure with an alignment of interests Conservative balance sheet; self-financing 6 New Way to Invest in Midstream…and it’s in the Permian! Sponsor controls production & development Super-system with large contiguous acreage dedication Pure-play Permian Integrated Permian to Gulf Coast midstream value chain JV pipelines provide diversity and long term contracts C-corp structure with an alignment of interests Conservative balance sheet; self-financing 6


Altus Midstream Overview 7 Altus Midstream Overview 7


Investment Merits ► Independent E&P with 64-year operating history and global footprint Premier E&P ► Dedicated to long-term development plan for Alpine High Sponsor ► Transaction achieves Apache’s desire to create a fully integrated midstream company (1) ► ~340,000 contiguous net acres; multi-decade inventory of drilling locations Exposure to World-Class ► More than 5,000 vertical feet of stacked pay Resource at Alpine High ► Alpine High expected to comprise 30-35% of Apache’s total production by 2020 ► Pure-play Permian public midstream company Unique Public Investment ► Exposure to full midstream value chain from Permian to the Gulf Coast Opportunity ► Depth of upstream inventory supports decades of robust cash flow growth ► Clear alignment of interests (C-corp governance / no incentive distribution rights) Differentiated, Simplified ► No leverage at formation; no need to issue common equity Corporate Structure ► Retaining and reinvesting cash flow in the business through 2020 8 (1) Acreage as of July 1, 2018. Investment Merits ► Independent E&P with 64-year operating history and global footprint Premier E&P ► Dedicated to long-term development plan for Alpine High Sponsor ► Transaction achieves Apache’s desire to create a fully integrated midstream company (1) ► ~340,000 contiguous net acres; multi-decade inventory of drilling locations Exposure to World-Class ► More than 5,000 vertical feet of stacked pay Resource at Alpine High ► Alpine High expected to comprise 30-35% of Apache’s total production by 2020 ► Pure-play Permian public midstream company Unique Public Investment ► Exposure to full midstream value chain from Permian to the Gulf Coast Opportunity ► Depth of upstream inventory supports decades of robust cash flow growth ► Clear alignment of interests (C-corp governance / no incentive distribution rights) Differentiated, Simplified ► No leverage at formation; no need to issue common equity Corporate Structure ► Retaining and reinvesting cash flow in the business through 2020 8 (1) Acreage as of July 1, 2018.


Apache’s Vision for Alpine High ► Alpine High is a multi-decade growth platform for Apache § Resource in place (as of October 2017) of ~3 billion barrels of oil and ~75 Tcf of gas in Barnett and Woodford formations alone § Apache has invested >$1.6 billion on E&P activities and >$900 million on midstream infrastructure in Alpine High through Q2 2018 § Alpine High E&P activities projected to represent ~30% of Apache’s capital budget for 2018-2020 ► By the end of 2020, gross production from Alpine High is expected to approach >1 Bcf/d of wellhead gas and ~100 MBbl/d of NGLs (1) Apache’s Alpine High Production (Net) 200 160-180 Alpine High % of Apache Production 180 160 2020E 30-35% 140 120 85-100 100 80 60 32 40 9 20 0 2017 Q2 2018 2019E 2020E Alpine High is the #1 priority for Apache 9 (1) Based on 75% NRI, on average. (MBoe/d) Apache’s Vision for Alpine High ► Alpine High is a multi-decade growth platform for Apache § Resource in place (as of October 2017) of ~3 billion barrels of oil and ~75 Tcf of gas in Barnett and Woodford formations alone § Apache has invested >$1.6 billion on E&P activities and >$900 million on midstream infrastructure in Alpine High through Q2 2018 § Alpine High E&P activities projected to represent ~30% of Apache’s capital budget for 2018-2020 ► By the end of 2020, gross production from Alpine High is expected to approach >1 Bcf/d of wellhead gas and ~100 MBbl/d of NGLs (1) Apache’s Alpine High Production (Net) 200 160-180 Alpine High % of Apache Production 180 160 2020E 30-35% 140 120 85-100 100 80 60 32 40 9 20 0 2017 Q2 2018 2019E 2020E Alpine High is the #1 priority for Apache 9 (1) Based on 75% NRI, on average. (MBoe/d)


Significant Scale In the Delaware Delaware Basin Planned Processing Capacity (MMcf/d) Publicly Traded Private Midstream Companies Midstream Companies (MMcf/d) Only pure-play 1,500 Permian midstream (1) 1,380 company that is publicly traded Private Midstream Companies Catalyst JV 1,000 500 0 ETE WES EPD Altus TRGP Private Private Private Private Private Private Private Private Company #1 Company #2 Company #3 Company #4 Company #5 Company #6 Company #7 Company #8 10 Sources: Company filings and investor relations materials. (1) 1 Bcf/d of cryogenic processing capacity planned through 2020 plus 380 MMcf/d of existing MRU capacity. Significant Scale In the Delaware Delaware Basin Planned Processing Capacity (MMcf/d) Publicly Traded Private Midstream Companies Midstream Companies (MMcf/d) Only pure-play 1,500 Permian midstream (1) 1,380 company that is publicly traded Private Midstream Companies Catalyst JV 1,000 500 0 ETE WES EPD Altus TRGP Private Private Private Private Private Private Private Private Company #1 Company #2 Company #3 Company #4 Company #5 Company #6 Company #7 Company #8 10 Sources: Company filings and investor relations materials. (1) 1 Bcf/d of cryogenic processing capacity planned through 2020 plus 380 MMcf/d of existing MRU capacity.


Fully Integrated Midstream Company ► Altus is world-class midstream business – “wellhead to water” connectivity § Growing G&P business with fixed fee, market-based rates and acreage dedication contract terms • 1 Bcf/d of cryogenic processing capacity expected to be in place by the end of 2020 § Equity interests in five JV pipelines (GCX, Shin Oak, Salt Creek, EPIC and Permian Highway) (2) Large-Scale, Master-Planned G&P Buildout Long-Haul Pipelines (1) Premier, vertically integrated midstream company 11 (1) Acreage footprint depicted on map is as of July 1, 2018. (2) Does not include Permian Highway Pipeline. Fully Integrated Midstream Company ► Altus is world-class midstream business – “wellhead to water” connectivity § Growing G&P business with fixed fee, market-based rates and acreage dedication contract terms • 1 Bcf/d of cryogenic processing capacity expected to be in place by the end of 2020 § Equity interests in five JV pipelines (GCX, Shin Oak, Salt Creek, EPIC and Permian Highway) (2) Large-Scale, Master-Planned G&P Buildout Long-Haul Pipelines (1) Premier, vertically integrated midstream company 11 (1) Acreage footprint depicted on map is as of July 1, 2018. (2) Does not include Permian Highway Pipeline.


Pipeline JVs Add Size, Integration and Customer Diversity ► Altus Midstream will own options to participate in five joint venture pipelines § KMI’s Gulf Coast Express (15% interest in natural gas pipeline to Agua Dulce) § KMI’s Permian Highway Pipeline (up to 33% interest in natural gas pipeline to Katy / (1) Agua Dulce) § Salt Creek NGL Line (50% interest in NGL header from Alpine High to Waha) § EPD’s Shin Oak Pipeline (33% interest in long-haul NGL line to Mont Belvieu) § EPIC Crude (15% interest in crude pipeline to Corpus Christi) ► Pipelines expected to be placed in service during 2019 and 2020 § Expect to invest ~$1.5 - $1.8 billion of capital at cost § Very attractive projects for Altus (~7x multiple of EBITDA, on average) JV Pipelines expected to comprise ~50% of Altus Midstream’s EBITDA by 2020 12 (1) Permian Highway Pipeline is a project announced by Kinder Morgan, EagleClaw and Apache in June 2018. The parties have entered into a letter of intent on this project. Crude NGL Nat Gas Pipeline JVs Add Size, Integration and Customer Diversity ► Altus Midstream will own options to participate in five joint venture pipelines § KMI’s Gulf Coast Express (15% interest in natural gas pipeline to Agua Dulce) § KMI’s Permian Highway Pipeline (up to 33% interest in natural gas pipeline to Katy / (1) Agua Dulce) § Salt Creek NGL Line (50% interest in NGL header from Alpine High to Waha) § EPD’s Shin Oak Pipeline (33% interest in long-haul NGL line to Mont Belvieu) § EPIC Crude (15% interest in crude pipeline to Corpus Christi) ► Pipelines expected to be placed in service during 2019 and 2020 § Expect to invest ~$1.5 - $1.8 billion of capital at cost § Very attractive projects for Altus (~7x multiple of EBITDA, on average) JV Pipelines expected to comprise ~50% of Altus Midstream’s EBITDA by 2020 12 (1) Permian Highway Pipeline is a project announced by Kinder Morgan, EagleClaw and Apache in June 2018. The parties have entered into a letter of intent on this project. Crude NGL Nat Gas


Growth Profile EBITDA ($ in millions) Growth profile based on Alpine High G&P G&P JV Pipelines assets and JV pipelines $500 - $600 $350 - $420 $120 - $140 2019E 2020E 2021E Additional Avenues for Growth Strategic Relationship with Apache Third Party Growth ► Altus has ROFO on other midstream assets at Alpine High ► Leverage asset footprint for additional third party volumes (crude and water) ► Third party M&A ► Altus has ROFO on any new long-haul pipelines / Gulf Coast assets ► Size and scale to pursue large organic growth projects Altus is well positioned to deliver “top-tier” growth well into the next decade 13 (1) Based on midpoint of guidance. Growth Profile EBITDA ($ in millions) Growth profile based on Alpine High G&P G&P JV Pipelines assets and JV pipelines $500 - $600 $350 - $420 $120 - $140 2019E 2020E 2021E Additional Avenues for Growth Strategic Relationship with Apache Third Party Growth ► Altus has ROFO on other midstream assets at Alpine High ► Leverage asset footprint for additional third party volumes (crude and water) ► Third party M&A ► Altus has ROFO on any new long-haul pipelines / Gulf Coast assets ► Size and scale to pursue large organic growth projects Altus is well positioned to deliver “top-tier” growth well into the next decade 13 (1) Based on midpoint of guidance.


Alpine High Overview 14 Alpine High Overview 14


Alpine High: A World-Class Resource Play (1) Alpine High Acreage Map ► Unprecedented hydrocarbon column >5,000 feet ► Vertically stacked oil, rich gas, and lean gas Ward fairways Scale (1) ► ~340,000 contiguous net acres ► 5,000+ locations identified as of October Reeves 2017 ► 3 billion bbls / 75 Tcf of resource in place ► Significant ramp up in production from May 2017 midstream in-service date to 54 Mboe/d by July 2018 ► 2018 wells projected to be placed on Execution production are nearly double those producing at year-end 2017 ► 2019 production expected to trend to the Jeff Davis Pecos upper end of 85 to 100 Mboe/d guidance ► Highly economic rich gas play; proven oil upside Economics ► Liquids uplift combined with low F&D and operating costs – strong recycle ratios 15 (1) Acreage as of July 1, 2018. Alpine High: A World-Class Resource Play (1) Alpine High Acreage Map ► Unprecedented hydrocarbon column >5,000 feet ► Vertically stacked oil, rich gas, and lean gas Ward fairways Scale (1) ► ~340,000 contiguous net acres ► 5,000+ locations identified as of October Reeves 2017 ► 3 billion bbls / 75 Tcf of resource in place ► Significant ramp up in production from May 2017 midstream in-service date to 54 Mboe/d by July 2018 ► 2018 wells projected to be placed on Execution production are nearly double those producing at year-end 2017 ► 2019 production expected to trend to the Jeff Davis Pecos upper end of 85 to 100 Mboe/d guidance ► Highly economic rich gas play; proven oil upside Economics ► Liquids uplift combined with low F&D and operating costs – strong recycle ratios 15 (1) Acreage as of July 1, 2018.


Stacked Pay From 11 Landing Zones rd 3 BONE SPRINGS High frequency, rapidly rising and falling sea level 11 environment landing WOLFCAMP zones so far; PENNSYLVANIAN UNCONFORMITY >5,000 vertical feet BARNETT Tranquil marine environment, gradually rising worldwide sea WOODFORD level conditions ORGANIC SHALE PARASEQUENCE CARBONATE DEBRIS FLOW DEVONIAN ORGANIC SHALE rd Woodford + Barnett + Penn 3 Bone Springs + Wolfcamp ► Thick, laterally continuous deposition ► Higher variability with sweet spots ► Oil, rich gas and lean gas windows ► Oil and rich gas windows ► Minimal in-situ water ► Water wet rock ► Indigenous, organic shale ► Indigenous shale and migrated hydrocarbons 16 Source Rock Parasequences Source Rock Parasequences Stacked Pay From 11 Landing Zones rd 3 BONE SPRINGS High frequency, rapidly rising and falling sea level 11 environment landing WOLFCAMP zones so far; PENNSYLVANIAN UNCONFORMITY >5,000 vertical feet BARNETT Tranquil marine environment, gradually rising worldwide sea WOODFORD level conditions ORGANIC SHALE PARASEQUENCE CARBONATE DEBRIS FLOW DEVONIAN ORGANIC SHALE rd Woodford + Barnett + Penn 3 Bone Springs + Wolfcamp ► Thick, laterally continuous deposition ► Higher variability with sweet spots ► Oil, rich gas and lean gas windows ► Oil and rich gas windows ► Minimal in-situ water ► Water wet rock ► Indigenous, organic shale ► Indigenous shale and migrated hydrocarbons 16 Source Rock Parasequences Source Rock Parasequences


Superior to Established Resource Plays Alpine High SCOOP Marcellus Eagle Ford Parameter (Woodford/Barnett) (Woodford) (Rich Gas) (Condensate) TOC (weight %) 4%-10% 4%-10% 1%-5% 1%-7% Primary Mineralogy Silicate Silicate Silicate Carbonate Clay Content 10%-20% 20%-35% 20%-35% 10%-40% Total Porosity 8%-12% 4%-10% 6%-11% 4%-11% Pressure (psi) 5,000-9,000 7,700-10,500 3,500-4,200 4,875-10,000 Thickness (ft) 550-1,100 80-200 50-200 50-350 Depth (ft) 10,000-13,000 11,000-15,000 5,000-8,000 11,000-14,000 Low clay content, high porosity and thickness distinguish Alpine High from other domestic resource plays and drive favorable well economics 17 Superior to Established Resource Plays Alpine High SCOOP Marcellus Eagle Ford Parameter (Woodford/Barnett) (Woodford) (Rich Gas) (Condensate) TOC (weight %) 4%-10% 4%-10% 1%-5% 1%-7% Primary Mineralogy Silicate Silicate Silicate Carbonate Clay Content 10%-20% 20%-35% 20%-35% 10%-40% Total Porosity 8%-12% 4%-10% 6%-11% 4%-11% Pressure (psi) 5,000-9,000 7,700-10,500 3,500-4,200 4,875-10,000 Thickness (ft) 550-1,100 80-200 50-200 50-350 Depth (ft) 10,000-13,000 11,000-15,000 5,000-8,000 11,000-14,000 Low clay content, high porosity and thickness distinguish Alpine High from other domestic resource plays and drive favorable well economics 17


Measured Approach to Optimization ► Apache has taken a very methodical approach so far § Focus on delineation, not optimization § Delineation phase completion design allows isolation of geologic Delineation / variations Science • Short laterals • Light proppant volumes • Lots of room for improvement….by design ► 2018 is the first year that Apache is testing different development alternatives § Optimized completions – longer laterals and higher proppant Optimization volumes Testing § Multiple landing zones (testing up to 3 zones in the Woodford) § Spacing tests Apache believes it can substantially improve well performance via optimization 18 Measured Approach to Optimization ► Apache has taken a very methodical approach so far § Focus on delineation, not optimization § Delineation phase completion design allows isolation of geologic Delineation / variations Science • Short laterals • Light proppant volumes • Lots of room for improvement….by design ► 2018 is the first year that Apache is testing different development alternatives § Optimized completions – longer laterals and higher proppant Optimization volumes Testing § Multiple landing zones (testing up to 3 zones in the Woodford) § Spacing tests Apache believes it can substantially improve well performance via optimization 18


Alpine High: Where Do Things Stand? ► Apache has taken a long-term view to developing Alpine High with careful planning and methodical execution ► Focus on reducing costs, increasing efficiency and maximizing recovery 2014 - 2016 2016 - 2017 2018 and Beyond Formulation of concept, Transition to full field development Areal and vertical concept testing and § Further Drilling Efficiencies delineation confirmation + = § Water Recycling § Optimized completions § Section / Pad Optimization Apache is poised to transition from delineation to full-field development 19 Alpine High: Where Do Things Stand? ► Apache has taken a long-term view to developing Alpine High with careful planning and methodical execution ► Focus on reducing costs, increasing efficiency and maximizing recovery 2014 - 2016 2016 - 2017 2018 and Beyond Formulation of concept, Transition to full field development Areal and vertical concept testing and § Further Drilling Efficiencies delineation confirmation + = § Water Recycling § Optimized completions § Section / Pad Optimization Apache is poised to transition from delineation to full-field development 19


Significant Production Ramp Underway at Alpine High Key Statistics ► Averaged 8 rigs and ~2 frac crews in 2Q 2018 ► ~92 wells expected to be placed on production in 2018 § Total during 2018 is nearly double the amount placed online in 2016 and 2017 ► Net production averaged ~32 MBoe/d in 2Q 2018, up more than 20% from 1Q 2018 ► Net production increased to ~54 MBoe/d by end of July 2018 ► Guiding 2019 Alpine High volumes to the upper end of 85-100 MBoe/d range; 2018 tracking to 45 MBoe/d guidance Alpine High 2018 Wells Placed on Production 60 50 50 40 30 16 20 8 10 6 6 4 2 0 Jan Feb Mar Apr May Jun Jul - Dec (Est) 20 Significant Production Ramp Underway at Alpine High Key Statistics ► Averaged 8 rigs and ~2 frac crews in 2Q 2018 ► ~92 wells expected to be placed on production in 2018 § Total during 2018 is nearly double the amount placed online in 2016 and 2017 ► Net production averaged ~32 MBoe/d in 2Q 2018, up more than 20% from 1Q 2018 ► Net production increased to ~54 MBoe/d by end of July 2018 ► Guiding 2019 Alpine High volumes to the upper end of 85-100 MBoe/d range; 2018 tracking to 45 MBoe/d guidance Alpine High 2018 Wells Placed on Production 60 50 50 40 30 16 20 8 10 6 6 4 2 0 Jan Feb Mar Apr May Jun Jul - Dec (Est) 20


Alpine High: Attractive Economics ► Outlined below are the fully burdened economics for the rich gas wells (4,400’ lateral) Typical Well Upper Range Well EUR (Bcfe) 9 - 15 EUR (Bcfe) 16 - 21 Well Cost ($MM) $4 - $6 Well Cost ($MM) $4 - $6 Product Mix Product Mix % Oil 3% - 15% % Oil 0% - 8% % NGL 51% - 56% % NGL 41% - 54% Fully Burdened Economics @ $65 WTI / $3.00 HH Fully Burdened Economics @ $65 WTI / $3.00 HH BTAX NPV-10 ($MM) $7 - $9 BTAX NPV-10 ($MM) $6 - $13 BTAX IRR % 50% - 100% BTAX IRR % 78% - 300% Fully Burdened Economics @ $50 WTI / $2.50 HH Fully Burdened Economics @ $50 WTI / $2.50 HH BTAX NPV-10 ($MM) $4 - $6 BTAX NPV-10 ($MM) $3 - $9 BTAX IRR % 29% - 66% BTAX IRR % 38% - 158% Single Well Economic Assumptions: • Prices: $65 WTI / $3.00 Henry Hub / NGL($/GAL) C2: $0.28, C3: $0.83, C4: $0.94, C5: $1.42 • $50 WTI / $2.50 Henry Hub / NGL($/GAL) C2: $0.28, C3: $0.75, C4: $0.90, C5: $1.22 • Waha basis / Transport to US Gulf Coast markets = $0.50/MMbtu; midstream fee = $0.87/Mcf • Crude basis: $2.25 • NGL yields and midstream fees assume cryogenic processing • Economics include overhead, workover, abandonment and E&P facility burdens 21 Alpine High: Attractive Economics ► Outlined below are the fully burdened economics for the rich gas wells (4,400’ lateral) Typical Well Upper Range Well EUR (Bcfe) 9 - 15 EUR (Bcfe) 16 - 21 Well Cost ($MM) $4 - $6 Well Cost ($MM) $4 - $6 Product Mix Product Mix % Oil 3% - 15% % Oil 0% - 8% % NGL 51% - 56% % NGL 41% - 54% Fully Burdened Economics @ $65 WTI / $3.00 HH Fully Burdened Economics @ $65 WTI / $3.00 HH BTAX NPV-10 ($MM) $7 - $9 BTAX NPV-10 ($MM) $6 - $13 BTAX IRR % 50% - 100% BTAX IRR % 78% - 300% Fully Burdened Economics @ $50 WTI / $2.50 HH Fully Burdened Economics @ $50 WTI / $2.50 HH BTAX NPV-10 ($MM) $4 - $6 BTAX NPV-10 ($MM) $3 - $9 BTAX IRR % 29% - 66% BTAX IRR % 38% - 158% Single Well Economic Assumptions: • Prices: $65 WTI / $3.00 Henry Hub / NGL($/GAL) C2: $0.28, C3: $0.83, C4: $0.94, C5: $1.42 • $50 WTI / $2.50 Henry Hub / NGL($/GAL) C2: $0.28, C3: $0.75, C4: $0.90, C5: $1.22 • Waha basis / Transport to US Gulf Coast markets = $0.50/MMbtu; midstream fee = $0.87/Mcf • Crude basis: $2.25 • NGL yields and midstream fees assume cryogenic processing • Economics include overhead, workover, abandonment and E&P facility burdens 21


Alpine High: Premium Capital Efficiency Typical Well Upper Range Well $/BOE Top-tier recycle ratios highlight APA’s ability to generate cash and re-invest 30 30 580% recycle ratio 24.78 433% 10.49 25 25 recycle ratio 21.16 OIL $62.75 9.79 20 20 $62.75 14.29 15 15 $21.51 NGL $24.33 11.37 10 10 5 5 3.30 $2.81 GAS $2.84 1.96 - - Revenue Opex Cash Margin F&D Revenue Opex Cash Margin F&D Highly prolific wells and low costs result in impressive recycle ratios Assumptions: • Prices: $65 WTI; $3.00 Henry Hub; Waha basis ($0.50); NGL($/GAL) C2: $0.28, C3: $0.83, C4: $0.94, C5+: $1.42 • Opex includes LOE, Gathering, Transportation & Processing, and Production taxes 22 • F&D reflects drilling, completion, and equipping • Recycle Ratio: Cash Margin/F&D Alpine High: Premium Capital Efficiency Typical Well Upper Range Well $/BOE Top-tier recycle ratios highlight APA’s ability to generate cash and re-invest 30 30 580% recycle ratio 24.78 433% 10.49 25 25 recycle ratio 21.16 OIL $62.75 9.79 20 20 $62.75 14.29 15 15 $21.51 NGL $24.33 11.37 10 10 5 5 3.30 $2.81 GAS $2.84 1.96 - - Revenue Opex Cash Margin F&D Revenue Opex Cash Margin F&D Highly prolific wells and low costs result in impressive recycle ratios Assumptions: • Prices: $65 WTI; $3.00 Henry Hub; Waha basis ($0.50); NGL($/GAL) C2: $0.28, C3: $0.83, C4: $0.94, C5+: $1.42 • Opex includes LOE, Gathering, Transportation & Processing, and Production taxes 22 • F&D reflects drilling, completion, and equipping • Recycle Ratio: Cash Margin/F&D


Recent Results Demonstrate First Steps of Optimization Optimization Strategic Pad / Well Description Results (gross) Implications Test • Recent production of 102 Increase Woodford (1) MMcf/d and 200 Bopd 12-well pad Multi-zone Pad landing zones from 2 to Blackfoot • Rates still rising on clean up 3 ~1200 Btu gas • Minimal-to-no interference after more than 180 days on- 6-well pad in dry Reduce spacing from Tighter Well Spacing line Dogwood gas area 925-foot to 660-foot • Cumed 10.9 Bcf to date • Still producing 48 MMcf/d • Recent production of 19 Increased lateral MMcf/d and 321 Bopd 3-well pad Longer Laterals lengths from 4,400’ to > Fox State • Rates still rising on clean up 7,000’ • ~1300 Btu gas • Currently producing 9.4 Mohican Additional zones MMcf/d and 420 Bopd Single well New Landing Zone (Barnett) • Rates still rising on clean up #201 • ~1300 Btu gas Production data as of July 30, 2018 23 (1) As of August 2, 2018. Recent Results Demonstrate First Steps of Optimization Optimization Strategic Pad / Well Description Results (gross) Implications Test • Recent production of 102 Increase Woodford (1) MMcf/d and 200 Bopd 12-well pad Multi-zone Pad landing zones from 2 to Blackfoot • Rates still rising on clean up 3 ~1200 Btu gas • Minimal-to-no interference after more than 180 days on- 6-well pad in dry Reduce spacing from Tighter Well Spacing line Dogwood gas area 925-foot to 660-foot • Cumed 10.9 Bcf to date • Still producing 48 MMcf/d • Recent production of 19 Increased lateral MMcf/d and 321 Bopd 3-well pad Longer Laterals lengths from 4,400’ to > Fox State • Rates still rising on clean up 7,000’ • ~1300 Btu gas • Currently producing 9.4 Mohican Additional zones MMcf/d and 420 Bopd Single well New Landing Zone (Barnett) • Rates still rising on clean up #201 • ~1300 Btu gas Production data as of July 30, 2018 23 (1) As of August 2, 2018.


Financial Overview 24 Financial Overview 24


Financial Philosophy ► Altus Midstream’s simple structure is a key point of differentiation vs. its midstream peers § No debt at closing and undrawn revolver provide strong liquidity § No incentive distribution rights ► The Company will have ~$920 million of cash on hand at closing ► Altus expects to begin borrowing during 2019 to finance growth § Debt/EBITDA projected to be less than 3x throughout forecast ► No dividends expected through 2020 as cash flow ramps § Expect to institute a dividend during 2021 (subject to board approval) § Expect dividend policy to be similar to high quality midstream peer group ► Altus can execute on its current growth plans without issuing common equity 25 Financial Philosophy ► Altus Midstream’s simple structure is a key point of differentiation vs. its midstream peers § No debt at closing and undrawn revolver provide strong liquidity § No incentive distribution rights ► The Company will have ~$920 million of cash on hand at closing ► Altus expects to begin borrowing during 2019 to finance growth § Debt/EBITDA projected to be less than 3x throughout forecast ► No dividends expected through 2020 as cash flow ramps § Expect to institute a dividend during 2021 (subject to board approval) § Expect dividend policy to be similar to high quality midstream peer group ► Altus can execute on its current growth plans without issuing common equity 25


Financial Guidance (1) (2) Altus Midstream Gathered Volumes Altus Midstream Growth Capex (MMcf/d) ($ in millions) % Attributable to JV Pipelines 1,470 - 1,800 35% - 40% 75% - 85% 40% - 50% 0% $1,450 - $1,750 1,030 - 1,260 600 - 730 $550 - $650 $400 - $500 $260 - $320 Q4 2018E 2019E 2020E 2021E 2019E 2020E 2021E (2) Altus Midstream EBITDA Altus Midstream Revenue per Mcf ($ in millions) ($/Mcf) % Attributable to JV Pipelines 30% - 35% 40% - 45% 45% - 50% 45% - 50% 45% - 50% $0.93 $0.91 $500 - $600 $0.86 $475 - $550 $350 - $420 $0.44 $240 - $300 $0.43 $0.43 $120 - $140 2019E 2020E 2021E 2019E Q4 2019E 2020E Q4 2020E 2021E Annualized Annualized Rich Gas Lean Gas (1) Altus volume forecast through 2020 includes Apache volume assumptions consistent with Apache’s public guidance for Alpine High production (average royalty interest is 25%). 26 Altus volume expectation for Apache volume in 2021 does not represent Apache guidance. (2) Assumes exercise of all five options for JV pipelines. Financial Guidance (1) (2) Altus Midstream Gathered Volumes Altus Midstream Growth Capex (MMcf/d) ($ in millions) % Attributable to JV Pipelines 1,470 - 1,800 35% - 40% 75% - 85% 40% - 50% 0% $1,450 - $1,750 1,030 - 1,260 600 - 730 $550 - $650 $400 - $500 $260 - $320 Q4 2018E 2019E 2020E 2021E 2019E 2020E 2021E (2) Altus Midstream EBITDA Altus Midstream Revenue per Mcf ($ in millions) ($/Mcf) % Attributable to JV Pipelines 30% - 35% 40% - 45% 45% - 50% 45% - 50% 45% - 50% $0.93 $0.91 $500 - $600 $0.86 $475 - $550 $350 - $420 $0.44 $240 - $300 $0.43 $0.43 $120 - $140 2019E 2020E 2021E 2019E Q4 2019E 2020E Q4 2020E 2021E Annualized Annualized Rich Gas Lean Gas (1) Altus volume forecast through 2020 includes Apache volume assumptions consistent with Apache’s public guidance for Alpine High production (average royalty interest is 25%). 26 Altus volume expectation for Apache volume in 2021 does not represent Apache guidance. (2) Assumes exercise of all five options for JV pipelines.


Conservative Financial Plan ► Altus Midstream will have no debt at closing and is expected to have a run-rate leverage ratio of less than 3x by year-end 2020 (assuming growth capex financed with free cash flow and borrowings) § Pipeline JV interests provide additional financing flexibility (asset level financing) ► Expect all five JV pipelines to be in service by Q4 2020 ► In 2021 and beyond, Altus expects to finance capex using free cash flow and borrowings (1) Illustrative Financing Plan Through 2020 ($ in millions) Growth Capex (10/1/18 - 12/31/20) $2,490 Less: Operating Cash Flow (10/1/18 - 12/31/20) (390) Externally Funded Capital (10/1/18 - 12/31/20) $2,100 Less: Cash Balance at Transaction Close (920) Implied Debt / Other Borrowings $1,180 Q4 2020 EBITDA (Annualized) $513 Run-Rate Leverage Ratio at Year-End 2020 2.3x 27 (1) Uses midpoint of guidance ranges. Conservative Financial Plan ► Altus Midstream will have no debt at closing and is expected to have a run-rate leverage ratio of less than 3x by year-end 2020 (assuming growth capex financed with free cash flow and borrowings) § Pipeline JV interests provide additional financing flexibility (asset level financing) ► Expect all five JV pipelines to be in service by Q4 2020 ► In 2021 and beyond, Altus expects to finance capex using free cash flow and borrowings (1) Illustrative Financing Plan Through 2020 ($ in millions) Growth Capex (10/1/18 - 12/31/20) $2,490 Less: Operating Cash Flow (10/1/18 - 12/31/20) (390) Externally Funded Capital (10/1/18 - 12/31/20) $2,100 Less: Cash Balance at Transaction Close (920) Implied Debt / Other Borrowings $1,180 Q4 2020 EBITDA (Annualized) $513 Run-Rate Leverage Ratio at Year-End 2020 2.3x 27 (1) Uses midpoint of guidance ranges.


Valuation Overview Calculation of Forward EV / EBITDA ► Distributable cash flow per share CAGR that is unrivaled by Day 1 Equity Value $3,544 peers Plus: Debt -- § Expect this to continue beyond guidance period Less: Cash (920) Day 1 Enterprise Value $2,624 ► Trades “cheaper” than peer averages on 2-year forward EV/EBITDA Plus: Externally Funded Capital (10/1/18 - 12/31/20) 2,100 Adjusted 12/31/20 Enterprise Value $4,724 § Trades at a modest premium 1-year forward Annualized Q4 2020 EBITDA (Midpoint of Guidance) 513 § Trades in line based on 2020 multiples Enterprise Value / 2020 Run-Rate EBITDA 9.2x (1) (2) 2019 – 2021 DCF per Share / Unit CAGR EV / EBITDA: Altus vs. Public Peers (3) 15.3x 120% 16x 85% - 105% 12.9x 12.6x 100% 12.2x 12.0x 12x 80% 9.2x 60% 8x 40% 4x 20% 9% 0x 0% (4) Q4 2019 Annualized 2020 Q4 2020 Annualized Altus Public Peers Altus (Midpoint of Guidance) Public Peers Source: Wall Street Research. Peers include: AM, EPD, OKE, PSXP, SHLX, TRGP, WES and WMB. (1) For C-corps, cash available for dividend per share. For MLPs, distributable cash flow attributable to LP unitholders per LP unit. (2) Enterprise value calculations include externally financed capex. Assumes $10 share price. Metrics as of July 24, 2018. 28 (3) Excludes capex and EBITDA associated with Permian Highway Pipeline, as the pipeline does not contribute EBITDA in 2019. (4) EV includes capex through Q4 2020 compared to Q4 2020 annualized EBITDA. Valuation Overview Calculation of Forward EV / EBITDA ► Distributable cash flow per share CAGR that is unrivaled by Day 1 Equity Value $3,544 peers Plus: Debt -- § Expect this to continue beyond guidance period Less: Cash (920) Day 1 Enterprise Value $2,624 ► Trades “cheaper” than peer averages on 2-year forward EV/EBITDA Plus: Externally Funded Capital (10/1/18 - 12/31/20) 2,100 Adjusted 12/31/20 Enterprise Value $4,724 § Trades at a modest premium 1-year forward Annualized Q4 2020 EBITDA (Midpoint of Guidance) 513 § Trades in line based on 2020 multiples Enterprise Value / 2020 Run-Rate EBITDA 9.2x (1) (2) 2019 – 2021 DCF per Share / Unit CAGR EV / EBITDA: Altus vs. Public Peers (3) 15.3x 120% 16x 85% - 105% 12.9x 12.6x 100% 12.2x 12.0x 12x 80% 9.2x 60% 8x 40% 4x 20% 9% 0x 0% (4) Q4 2019 Annualized 2020 Q4 2020 Annualized Altus Public Peers Altus (Midpoint of Guidance) Public Peers Source: Wall Street Research. Peers include: AM, EPD, OKE, PSXP, SHLX, TRGP, WES and WMB. (1) For C-corps, cash available for dividend per share. For MLPs, distributable cash flow attributable to LP unitholders per LP unit. (2) Enterprise value calculations include externally financed capex. Assumes $10 share price. Metrics as of July 24, 2018. 28 (3) Excludes capex and EBITDA associated with Permian Highway Pipeline, as the pipeline does not contribute EBITDA in 2019. (4) EV includes capex through Q4 2020 compared to Q4 2020 annualized EBITDA.


Appendix 29 Appendix 29


Executive Officers Brian Freed – Chief Executive Officer Ben Rodgers – Chief Financial Officer ► SVP of Midstream & Marketing at Apache ► VP & Treasurer at Apache ► Selected previous experience: ► Selected previous experience: § SVP of Western US Commercial Operations at § SVP at EIG Global Energy Partners Crestwood Midstream § VP of Commodities & Midstream, Treasurer at § VP of Business Development at Rangeland Concho Resources Energy § VP of Syndicated and Leveraged Finance at J.P. § CEO of Energy Solutions International Morgan § President & CEO of Entessa § Senior Consultant in Advisory Services at Ernst & Young ► Served with honor and distinction as a field artillery officer in the United States Army, achieving the rank of Captain 30 Executive Officers Brian Freed – Chief Executive Officer Ben Rodgers – Chief Financial Officer ► SVP of Midstream & Marketing at Apache ► VP & Treasurer at Apache ► Selected previous experience: ► Selected previous experience: § SVP of Western US Commercial Operations at § SVP at EIG Global Energy Partners Crestwood Midstream § VP of Commodities & Midstream, Treasurer at § VP of Business Development at Rangeland Concho Resources Energy § VP of Syndicated and Leveraged Finance at J.P. § CEO of Energy Solutions International Morgan § President & CEO of Entessa § Senior Consultant in Advisory Services at Ernst & Young ► Served with honor and distinction as a field artillery officer in the United States Army, achieving the rank of Captain 30


Anticipated Transaction Timeline Date Event August 8 ► Transaction announced Late August ► Preliminary Proxy Materials Filed with the SEC September / October ► SEC Review Period October ► Mail Final Proxy Materials to Shareholders November ► Hold Shareholder Vote and Close Transaction 31 Anticipated Transaction Timeline Date Event August 8 ► Transaction announced Late August ► Preliminary Proxy Materials Filed with the SEC September / October ► SEC Review Period October ► Mail Final Proxy Materials to Shareholders November ► Hold Shareholder Vote and Close Transaction 31


Forecast Key Assumptions ► Certain projected metrics throughout this presentation are based on the following assumptions: § “Effective Date” for transaction closing of September 30, 2018 (actual closing date currently expected to be in November 2018) § ~$920 million of cash and no borrowings at close § Financing plan does not include future issuances of common equity § No dividend expected to be paid through 2020 § Altus gathering and processing (“G&P”) volumes are based on (i) Apache’s public guidance for Alpine High production in 2019-2020, (ii) Altus assumptions for Apache volume in 2021, which is based on Earn-Out consideration target of ~1.57 Bcf/d and (iii) Altus assumptions around third party volumes on the system § Expect 60%-70% of volumes to be rich gas and 30%-40% to be lean gas • Rich gas at higher end of the range in 2019, trending towards lower end by 2021 § G&P EBITDA margin of 45%-55% for full year 2019, trending toward 60%-70% in 2020 and beyond § Revenue per mcf increase in 2020 vs 2019 for rich gas is primarily attributable to an incremental high pressure gathering fee which takes effect as cryogenic processing plants come online § Guidance for joint venture pipelines is based on (i) expected in-service dates and assumed option exercise dates for the five joint venture pipelines and (ii) projections for each joint venture pipeline provided by each operator, as adjusted by Altus for its contribution to each pipeline 32 Forecast Key Assumptions ► Certain projected metrics throughout this presentation are based on the following assumptions: § “Effective Date” for transaction closing of September 30, 2018 (actual closing date currently expected to be in November 2018) § ~$920 million of cash and no borrowings at close § Financing plan does not include future issuances of common equity § No dividend expected to be paid through 2020 § Altus gathering and processing (“G&P”) volumes are based on (i) Apache’s public guidance for Alpine High production in 2019-2020, (ii) Altus assumptions for Apache volume in 2021, which is based on Earn-Out consideration target of ~1.57 Bcf/d and (iii) Altus assumptions around third party volumes on the system § Expect 60%-70% of volumes to be rich gas and 30%-40% to be lean gas • Rich gas at higher end of the range in 2019, trending towards lower end by 2021 § G&P EBITDA margin of 45%-55% for full year 2019, trending toward 60%-70% in 2020 and beyond § Revenue per mcf increase in 2020 vs 2019 for rich gas is primarily attributable to an incremental high pressure gathering fee which takes effect as cryogenic processing plants come online § Guidance for joint venture pipelines is based on (i) expected in-service dates and assumed option exercise dates for the five joint venture pipelines and (ii) projections for each joint venture pipeline provided by each operator, as adjusted by Altus for its contribution to each pipeline 32


Details on Joint Venture Pipelines Gulf Coast Salt Creek (1) EPIC Shin Oak Permian Highway Express NGL Line Product Natural Gas Crude NGL NGL Natural Gas Salt Creek Operator Kinder Morgan EPIC Enterprise Products Kinder Morgan Midstream Pipeline Cost $1.75 billion NA $100 million NA $2.0 billion Altus Option % 15% 15% 50% 33% Up to 33% Origin Waha Orla Alpine High Waha Waha Terminus Agua Dulce Corpus Christi Waha Mont Belvieu Gulf Coast Miles of Pipeline 447 730 NA 658 430 Pipeline Capacity 2.0 Bcf/d 590 Mb/d 445 Mb/d 550 Mb/d 2.0 Bcf/d In-Service Date Q4 2019 2H 2019 Q1 2019 Q2 2019 Late 2020 Other Owners KMI, DCP, TRGP NBL, FANG None EPD KMI, EagleClaw Contract Type Firm Capacity Volume-Based Volume-Based Volume-Based Firm Capacity 33 (1) Permian Highway Pipeline is a project announced by Kinder Morgan, EagleClaw and Apache in June 2018. The parties have entered into a letter of intent on this project. Details on Joint Venture Pipelines Gulf Coast Salt Creek (1) EPIC Shin Oak Permian Highway Express NGL Line Product Natural Gas Crude NGL NGL Natural Gas Salt Creek Operator Kinder Morgan EPIC Enterprise Products Kinder Morgan Midstream Pipeline Cost $1.75 billion NA $100 million NA $2.0 billion Altus Option % 15% 15% 50% 33% Up to 33% Origin Waha Orla Alpine High Waha Waha Terminus Agua Dulce Corpus Christi Waha Mont Belvieu Gulf Coast Miles of Pipeline 447 730 NA 658 430 Pipeline Capacity 2.0 Bcf/d 590 Mb/d 445 Mb/d 550 Mb/d 2.0 Bcf/d In-Service Date Q4 2019 2H 2019 Q1 2019 Q2 2019 Late 2020 Other Owners KMI, DCP, TRGP NBL, FANG None EPD KMI, EagleClaw Contract Type Firm Capacity Volume-Based Volume-Based Volume-Based Firm Capacity 33 (1) Permian Highway Pipeline is a project announced by Kinder Morgan, EagleClaw and Apache in June 2018. The parties have entered into a letter of intent on this project.


Transaction Sources & Uses / Capitalization Sources ($ in millions) Ownership (shares in millions) Sources At Close Ownership At Close Equity to Apache $2,519 Public Investors 95 (1) KAAC Cash in Trust 380 Apache 252 PIPE Issuance Cash Proceeds 572 Kayne Sponsor 8 (2) Kayne Sponsor Shares 76 Total 354 Total Sources $3,547 Ownership At Close (%) Public Investors 27% Apache 71% Kayne Sponsor 2% Total 100% Uses ($ in millions) Capitalization at Close ($ in millions, except per share) Uses At Close Capitalization at Close Equity to Apache $2,519 Share Price $10.00 Cash to Apache 0 Shares Outstanding 354 Equity Value $3,544 Cash to Altus Midstream Company 920 (2) Kayne Sponsor Shares 76 Less: Cash on Balance Sheet (920) Estimated Fees & Expenses 33 Plus: Debt 0 Total Uses $3,547 Enterprise Value $2,624 (1) $377 million raised in IPO and an estimated ~$3 million interest earnings since KAAC’s IPO closing date. 34 (2) Net of 1.9 million shares transferred to APA as part of this Transaction. Includes 120,000 shares held by KAAC’s current independent directors. Transaction Sources & Uses / Capitalization Sources ($ in millions) Ownership (shares in millions) Sources At Close Ownership At Close Equity to Apache $2,519 Public Investors 95 (1) KAAC Cash in Trust 380 Apache 252 PIPE Issuance Cash Proceeds 572 Kayne Sponsor 8 (2) Kayne Sponsor Shares 76 Total 354 Total Sources $3,547 Ownership At Close (%) Public Investors 27% Apache 71% Kayne Sponsor 2% Total 100% Uses ($ in millions) Capitalization at Close ($ in millions, except per share) Uses At Close Capitalization at Close Equity to Apache $2,519 Share Price $10.00 Cash to Apache 0 Shares Outstanding 354 Equity Value $3,544 Cash to Altus Midstream Company 920 (2) Kayne Sponsor Shares 76 Less: Cash on Balance Sheet (920) Estimated Fees & Expenses 33 Plus: Debt 0 Total Uses $3,547 Enterprise Value $2,624 (1) $377 million raised in IPO and an estimated ~$3 million interest earnings since KAAC’s IPO closing date. 34 (2) Net of 1.9 million shares transferred to APA as part of this Transaction. Includes 120,000 shares held by KAAC’s current independent directors.


Up-C Structure (1) Commentary Structure Chart ► Entity will be structured using Up-C format Kayne KAAC IPO PIPE Apache Sponsor Investors Investors Corp. (2) § Operating assets will be held at Altus Shares Midstream LP (“OpCo”) 29% 71% § Management of OpCo and all governance (Class A) (Class C) will take place at Altus Midstream Company ► At closing, Apache receives an equal number of OpCo units and Class C shares in Altus Altus Midstream Company Midstream Company (NASDAQ: [ ]) § Class C shares vote as a single class with Class A share and Apache will 29% 71% control with its 71% voting interest ► OpCo units are exchangeable into Altus (3) Midstream Company Class A shares Altus Midstream LP (“OpCo”) (1) Percentages based on effective ownership of OpCo at close. Percentages include all common equity at $10/share / unit (does not include warrant and/or contingent share dilution). 35 (2) Includes 7.6 million Class B shares that will convert to Class A shares upon close of the Transaction (net of 1.9 million Class B shares transferred to APA as part of this Transaction). (3) Subject to 180-day lock-up period. Up-C Structure (1) Commentary Structure Chart ► Entity will be structured using Up-C format Kayne KAAC IPO PIPE Apache Sponsor Investors Investors Corp. (2) § Operating assets will be held at Altus Shares Midstream LP (“OpCo”) 29% 71% § Management of OpCo and all governance (Class A) (Class C) will take place at Altus Midstream Company ► At closing, Apache receives an equal number of OpCo units and Class C shares in Altus Altus Midstream Company Midstream Company (NASDAQ: [ ]) § Class C shares vote as a single class with Class A share and Apache will 29% 71% control with its 71% voting interest ► OpCo units are exchangeable into Altus (3) Midstream Company Class A shares Altus Midstream LP (“OpCo”) (1) Percentages based on effective ownership of OpCo at close. Percentages include all common equity at $10/share / unit (does not include warrant and/or contingent share dilution). 35 (2) Includes 7.6 million Class B shares that will convert to Class A shares upon close of the Transaction (net of 1.9 million Class B shares transferred to APA as part of this Transaction). (3) Subject to 180-day lock-up period.


Description of Earn-Out Consideration ► In addition to the 252 million shares issued to Apache at closing, Apache can potentially be issued 37.5 million additional shares in Altus if certain thresholds are met (the “Earn-Out Shares”) ► 12.5 million shares when Altus Midstream’s share price equals or exceeds $14.00 per share for any 20 trading days within a 30-trading day period within five years of closing ► 12.5 million shares when Altus Midstream’s share price equals or exceeds $16.00 per share for any 20 trading days within a 30-trading day period within five years of closing ► 12.5 million shares when, during 2021, volume from Apache’s area of dedication to Altus Midstream equals or exceeds ~574.4 Bcf (~1.57 Bcf/d) 36 Description of Earn-Out Consideration ► In addition to the 252 million shares issued to Apache at closing, Apache can potentially be issued 37.5 million additional shares in Altus if certain thresholds are met (the “Earn-Out Shares”) ► 12.5 million shares when Altus Midstream’s share price equals or exceeds $14.00 per share for any 20 trading days within a 30-trading day period within five years of closing ► 12.5 million shares when Altus Midstream’s share price equals or exceeds $16.00 per share for any 20 trading days within a 30-trading day period within five years of closing ► 12.5 million shares when, during 2021, volume from Apache’s area of dedication to Altus Midstream equals or exceeds ~574.4 Bcf (~1.57 Bcf/d) 36


Illustrative Fully Diluted Share Count and Ownership Illustrative Altus Midstream Company Share Price $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 IPO Shares 37.7 37.7 37.7 37.7 37.7 37.7 37.7 37.7 37.7 Apache Shares 251.9 251.9 251.9 251.9 251.9 251.9 251.9 251.9 251.9 (1) Apache Earn Out-Shares (stock price based) 0.0 0.0 0.0 0.0 12.5 12.5 25.0 25.0 25.0 PIPE Shares 57.2 57.2 57.2 57.2 57.2 57.2 57.2 57.2 57.2 (2) Kayne Sponsor Shares 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 (3) Shares from Warrant Dilution 0.0 0.0 0.8 2.2 3.4 4.4 5.3 6.1 6.8 Total Fully Diluted Shares Outstanding 354.4 354.4 355.2 356.6 370.3 371.3 384.7 385.5 386.2 (4) Plus: Apache Earn-Out Shares (Volume-Based) 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 Total Including Volume-Based Earn-Out 366.9 366.9 367.7 369.1 382.8 383.8 397.2 398.0 398.7 (1) Includes 25 million Earn-Out Shares that are based on Altus Midstream’s stock price ($14/share and $16/share). (2) Includes 7.6 million Class B shares that will convert to Class A shares upon closing of the Transaction (net of 1.9 million Class B shares transferred to Apache as part of this Transaction). (3) Warrants include 12.6 million warrants issued to purchasers in KAAC’s IPO, 3.2 million warrants held by Kayne Anderson and 3.2 million warrants held by Apache. Assumed cashless 37 exercise of warrants (treasury stock method). (4) An additional 12.5 million shares will be granted to Apache to the extent Apache’s volumes gathered by Altus Midstream Company equal or exceed ~574.4 Bcf during 2021. Illustrative Fully Diluted Share Count and Ownership Illustrative Altus Midstream Company Share Price $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 IPO Shares 37.7 37.7 37.7 37.7 37.7 37.7 37.7 37.7 37.7 Apache Shares 251.9 251.9 251.9 251.9 251.9 251.9 251.9 251.9 251.9 (1) Apache Earn Out-Shares (stock price based) 0.0 0.0 0.0 0.0 12.5 12.5 25.0 25.0 25.0 PIPE Shares 57.2 57.2 57.2 57.2 57.2 57.2 57.2 57.2 57.2 (2) Kayne Sponsor Shares 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 (3) Shares from Warrant Dilution 0.0 0.0 0.8 2.2 3.4 4.4 5.3 6.1 6.8 Total Fully Diluted Shares Outstanding 354.4 354.4 355.2 356.6 370.3 371.3 384.7 385.5 386.2 (4) Plus: Apache Earn-Out Shares (Volume-Based) 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 Total Including Volume-Based Earn-Out 366.9 366.9 367.7 369.1 382.8 383.8 397.2 398.0 398.7 (1) Includes 25 million Earn-Out Shares that are based on Altus Midstream’s stock price ($14/share and $16/share). (2) Includes 7.6 million Class B shares that will convert to Class A shares upon closing of the Transaction (net of 1.9 million Class B shares transferred to Apache as part of this Transaction). (3) Warrants include 12.6 million warrants issued to purchasers in KAAC’s IPO, 3.2 million warrants held by Kayne Anderson and 3.2 million warrants held by Apache. Assumed cashless 37 exercise of warrants (treasury stock method). (4) An additional 12.5 million shares will be granted to Apache to the extent Apache’s volumes gathered by Altus Midstream Company equal or exceed ~574.4 Bcf during 2021.