Page 6 of 14 SEC Filing
Item 3. Source and Amount of Funds or Other Consideration.
The information set forth in or incorporated
by reference in Items 4, 5 and 6 of this Schedule 13D is incorporated by reference in its entirety into this Item 3.
On December 6, 2015, Enfield Holdings
entered into the Purchase Agreement with the Issuer whereby Enfield Holdings agreed to purchase, and the Issuer agreed to issue
(the “Private Placement”), 50,000,000 Series B Preferred Units for a cash purchase price of $15.00 per unit,
with an aggregate purchase price of $750,000,000 (the “Purchase Price”). The Private Placement was subject
to certain customary closing conditions. On January 7, 2016, the Private Placement closed.
The Purchase Price was funded by equity
contributions of the limited partners of Enfield Holdings.
References to and descriptions of the
Purchase Agreement set forth above in this Item 3 do not purport to be complete and are qualified in their entirety by reference
to the full text of the Purchase Agreement, which is attached as Exhibit 2 hereto and incorporated herein by this reference.
Item 4. Purpose of Transaction.
The information set forth in Items 3,
5 and 6 of this Schedule 13D is incorporated by reference in its entirety into this Item 4.
Series B Preferred Units
Under the terms of the Eighth Amended
and Restated Agreement of Limited Partnership of the Issuer, dated as of January 7, 2016 (the “Issuer LPA”),
the 50,000,000 Series B Preferred Units are convertible into Common Units on a one-for-one basis, subject to certain adjustments,
at any time from the business day following the record date established by the Issuer’s general partner for the Issuer’s
quarterly distribution for the second quarter of 2017. The Series B Preferred Units are convertible (i) in full, at the option
of the Issuer, if the daily volume-weighted average trading price of the Common Units on the national securities exchange on which
the Common Units are listed or admitted to trading is greater than 150% of the Unit Issue Price (as defined in the Issuer LPA)
for the trailing 30-day trading period ending two trading days before the Issuer’s notice of conversion or (ii) in full or
in part, at the option of Enfield Holdings. In addition, upon certain events involving a change of control of EnLink Midstream
GP, LLC (the “EnLink General Partner”) or the managing member of EnLink Midstream, LLC, all of the Series B
Preferred Units will automatically convert into a number of Common Units equal to the greater of (i) the number of Common Units
into which the Series B Preferred Units would then convert and (ii) the number of Series B Preferred Units to be converted multiplied
by an amount equal to (x) 40% of the Unit Issue Price divided by (y) the Conversion VWAP (as defined in the Issuer LPA).
Under the Issuer LPA, the Series B Preferred
Units have voting rights identical to the voting rights of the Common Units, except in the limited circumstance specified in the
Issuer LPA, and will vote with the Common Units as a single class, such that each Series B Preferred Unit is entitled to one vote
for each Common Unit into which such Series B Preferred Unit is convertible on each matter with respect to which such Common Unit
would be entitled to vote.
Commencing with the first quarter of
2016, the holders of the Series B Preferred Units, as of an applicable record date, shall be entitled to receive cumulative distributions
(each, a “Series B Quarterly Distribution”), prior to any other distributions made in respect of any other securities
of the Issuer (i) for the first quarter of 2016 and each subsequent quarter to and including the second quarter of 2017, at an
annual rate of 8.5% on the Unit Issue Price payable in-kind in additional Series B Preferred Units (prorated for the first quarter
of 2016), and (ii) for the third quarter of 2017 and thereafter, at an annual rate of 7.5% on the Unit Issue Price payable in cash
(the “Cash Distribution Component”) plus an in-kind distribution equal to the greater of (A) an annual rate
of 1.0% on the Unit Issue Price and (B) an amount equal to (x) the excess, if any, of the distribution that would have been payable
had the Series B Preferred Units converted into Common Units over the Cash Distribution Component, divided by (y) the Unit Issue
Price.
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