Item 1.01Entry into a Material Definitive Agreement.
Stonepeak Warrant Amendment
As previously disclosed, on August 2, 2019, Evolve Transition Infrastructure LP (“Evolve”) issued that certain Warrant Exercisable for Junior Securities to Stonepeak Catarina Holdings LLC (“Stonepeak”), which was amended by Amendment No. 1 to Warrant Exercisable for Junior Securities, dated February 24, 2021, Amendment No. 2 to Warrant Exercisable for Junior Securities, dated May 4, 2021, Amendment No. 3 to Warrant Exercisable for Junior Securities, dated August 2, 2021, Amendment No. 4 to Warrant Exercisable for Junior Securities, dated November 5, 2021, Amendment No. 5 to Warrant Exercisable for Junior Securities, dated November 9, 2021, and Amendment No. 6 to Warrant Exercisable for Junior Securities, dated February 1, 2022 (as amended, the “Warrant”). The Warrant may be exercised at any time and from time to time until the later of August 2, 2026 and the date 30 days after the date on which all of the Class C Preferred Units representing limited partner interests in Evolve (“Class C Preferred Units”) have been redeemed for a number of Junior Securities (as defined in the Warrant) equal to 10% of each applicable class of Junior Securities Deemed Outstanding (as defined in the Warrant) as of the exercise date.
As previously disclosed, on November 16, 2020, Evolve and Stonepeak entered into a letter agreement (the “Stonepeak Letter Agreement”), and in accordance with the Stonepeak Letter Agreement, on April 28, 2022, Evolve received written notice of Stonepeak’s election to receive distributions on the Class C Preferred Units for the quarter ended March 31, 2022 in common units representing limited partner interests in Evolve (“Common Units”). In accordance with the Stonepeak Letter Agreement, Evolve will issue 24,721,910 Common Units (the “Q122 Stonepeak Units”) to Stonepeak on May 20, 2022, subject to approval of the supplemental listing application by the NYSE American.
As previously disclosed, Evolve’s Long-Term Incentive Plan, effective March 6, 2015 (the “LTIP”), provides that upon the issuance of additional Common Units from time to time, the maximum number of Common Units that may be delivered or reserved for delivery with respect to the LTIP shall be automatically increased (such increase, the “LTIP Increase”) by a number of Common Units equal to the lesser of (i) fifteen percent (15%) of such additional Common Units, or (ii) such lesser number of Common Units as determined by the board of directors (the “Board”) of Evolve Transition Infrastructure GP LLC, the sole general partner of Evolve (the “General Partner”).
On April 29, 2022, the Board determined that the LTIP Increase with respect to the Q122 Stonepeak Units will be fifteen percent (15%), resulting in an additional 3,708,287 Common Units being reserved for delivery with respect to the LTIP.
On April 29, 2022, but effective as of May 2, 2022, Evolve and Stonepeak entered into Amendment No. 7 to Warrant Exercisable for Junior Securities (“Stonepeak Warrant Amendment No. 7”) to exclude from the Warrant the 3,708,287 Common Units included in the LTIP Increase resulting from the issuance of the Q122 Stonepeak Units.
The foregoing description of Stonepeak Warrant Amendment No. 7 does not purport to be complete and is qualified in its entirety by the full text of Stonepeak Warrant Amendment No. 7, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
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Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
