Document:

ttlo_103116_Ex._10.1_Lease_Agreement

		
			Exhibit 10.1
		

		
			 
		

		
			SECOND AMENDMENT TO LEASE
		

		
			Torotel, Inc.; 550 => expanding to 520 N. Rogers Road, Olathe, KS
		

		
			 
		

		
			THIS SECOND AMENDMENT TO LEASE (“Amendment”) is made and entered into to be effective as of October 31, 2016, by and between 96-OP Prop, L.L.C., a Kansas limited liability company (“Lessor”), and Torotel, Inc., a Missouri corporation (“Lessee”), who agree as follows:
		

		
			 
		

		
			WHEREAS, Lessor and Lessee are parties to that certain Standard Industrial/Commercial Multi-Tenant Lease - Net dated as of July 23, 2010, as previously amended by First Amendment to Lease dated as of December 20, 2013 (as amended, the “Lease”), pursuant to which Lessor leases to Lessee certain premises currently identified as 550 N. Rogers Road (the “Premises”), in Building 4 (the “Building”) in the Lessor’s Lindenwood Business & Technical Center (the “Project”), Olathe, KS; andWHEREAS, Lessee desires to extend the Term of the Lease and reconfigure and expand the Premises to include an additional +/-58,251 RSF (the “Expansion Space”); and
		

		
			 
		

		
			WHEREAS, Lessor is willing to reconfigure the Premises, provide the Expansion Space, and extend the Term of the Lease, all on the terms and conditions set out in this Amendment;
		

		
			 
		

		
			NOW, THEREFORE, in consideration of the above, and for other good and valuable consideration, receipt of which is hereby acknowledged, subject to all of the terms, covenants and conditions herein and in the Lease, the parties agree that the Lease shall be and hereby is modified, amended and superseded in the following particulars:
		

		
			 
		

		
			1Definitions. Each capitalized term used in this Amendment shall have the same meaning as is ascribed to such term in the Lease, unless otherwise modified herein.
		

		
			 
		

		
			2Premises; Expansion. Effective as of November 1, 2016, the Premises shall be expanded to include the Expansion Space. As expanded, the Premises shall be deemed to include 72,388 RSF in total, comprising the areas highlighted on the Floor Plan attached as Exhibit “A” (as expanded, the “Premises”). The expanded Premises shall be readdressed to be identified as 520 N. Rogers Road, Olathe, KS (provided, however, since the expanded Premises will also continue to include the original Suite 550 Premises area, Lessor will not reassign the Suite 550 designation to another tenant space).
		

		
			 
		

		
			3Lease Term. The Term of the Lease is hereby extended to continue through and expire on December 31, 2026 (subject to earlier termination upon exercise of Lessee’s Early Termination Option or Self-Help Termination Option, or further extension pursuant to exercise of Lessee’s Extension Option(s), as provided herein below).
		

		
			 
		

		
			4Net Base Rent. Through the Lease Term, as extended, net Base Rent for the Premises shall be payable in the following monthly amounts:
		

		
			 
		

			
					
						 

					
					
						    

					
					
						Monthly
Net Rent

					
					
						    

					
					
						Annual $
per RSF

				
	
					
						through December 31, 2016* (unchanged at):

					
					
						 

					
					
						$

					
8,400.00 
					
					
						 

					
					
						$

					
1.40 
				
	
					
						January 1, 2017* - December 31, 2018:

					
					
						 

					
					
						$

					
26,843.88 
					
					
						 

					
					
						$

					
4.45 
				
	
					
						January 1, 2019 - December 31, 2019:

					
					
						 

					
					
						$

					
29,256.82 
					
					
						 

					
					
						$

					
4.85 
				
	
					
						January 1, 2020 - December 31, 2020:

					
					
						 

					
					
						$

					
32,876.22 
					
					
						 

					
					
						$

					
5.45 
				
	
					
						January 1, 2021 - December 31, 2021:

					
					
						 

					
					
						$

					
35,289.15 
					
					
						 

					
					
						$

					
5.85 
				
	
					
						January 1, 2022 - December 31, 2022:

					
					
						 

					
					
						$

					
36,495.62 
					
					
						 

					
					
						$

					
6.05 
				
	
					
						January 1, 2023 - December 31, 2024:

					
					
						 

					
					
						$

					
37,702.08 
					
					
						 

					
					
						$

					
6.25 
				
	
					
						January 1, 2025 - December 31, 2026:

					
					
						 

					
					
						$

					
38,908.55 
					
					
						 

					
					
						$

					
6.45 
				

		
			 
		

		
			*  or, if later, upon the 30th day following Substantial Completion of the Lessor’s Work, as described in the Construction Memorandum attached hereto as Exhibit “C”.
		

		
			 
		

		
			5Lessee’s Share of Common Area Operating Expenses and Taxes. As a result of the expansion, effective as of January 1, 2017, Lessee's Share will be increased to a deemed 34.7%,   and
		

		
			
		

		
			

		 

		

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			Lessee’s estimated share of Real Estate Taxes, Insurance, CAM and Central Plant charges shall be adjusted to thereafter be payable as follows:
		

		
			 
		

			
					
						 

					
					
						 

					
					
						unchanged through

					
					
						 

					
					
						as of

					
					
						 

					
					
						Annual $

					
					
						 

				
	
					
						 

					
					
						    

					
					
						12/31/2016

					
					
						    

					
					
						1/1/2017

					
					
						    

					
					
						per RSF (est.)

					
					
						 

				
	
					
						Taxes, Insurance & General CAM

					
					
						 

					
					
						$

					
1,823.21 
					
					
						*

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						General CAM:

					
					
						 

					
					
						 

					
					
						- - -

					
					
						 

					
					
						$

					
5,549.75 
					
					
						 

					
					
						$

					
0.92 
					
					
						**

				
	
					
						Insurance:

					
					
						 

					
					
						 

					
					
						- - -

					
					
						 

					
					
						$

					
965.17 
					
					
						 

					
					
						$

					
0.16 
					
					
						 

				
	
					
						Taxes:

					
					
						 

					
					
						 

					
					
						- - -

					
					
						 

					
					
						$

					
5,851.36 
					
					
						 

					
					
						$

					
0.97 
					
					
						 

				
	
					
						Central Plant (“CP”):

					
					
						 

					
					
						$

					
1,200.00 
					
					
						 

					
					
						$

					
5,500.00 
					
					
						 

					
					
						$

					
0.912 
					
					
						***

				
	
					
						Equipment PM:

					
					
						 

					
					
						$

					
561.64 
					
					
						 

					
					
						$

					
1,200.00 
					
					
						 

					
					
						$

					
0.20 
					
					
						****

				

		
			 
		

		
			* Taxes, Insurance and General CAM charge amounts estimated and payable by Lessee through December 31, 2016 shall be accepted by Lessor and Lessee as payment in full for Lessee’s Share of such charges applicable for 2016, and the parties shall deem said amounts settled based on such estimated payments.
		

		
			 
		

		
			** Notwithstanding anything to the contrary, Lessee’s 2017 Share of General CAM charges shall be fixed at the stipulated amount of $5,549.75 per month (based on a stipulated $0.92 per RSF per annum). From and after January 1, 2018, and continuing through the 7th year of the Lease Term (through December 31, 2023), Lessee’s Share of General CAM charges (including amortization) shall be artificially limited, if applicable, based on a cumulative and compounding 5% inflation cap, so that Lessee’s Share of General CAM charges will not exceed $0.966 per RSF for 2018, $1.014 per RSF for 2019, $1.065 for 2020, etc.
		

		
			 
		

		
			*** Allocation of the costs to operate and maintain the Central Plant (“CP”) shall be in accordance with Section 63 of the Lease, utilizing BTU meters, power sub-meters and/or proportionate space allocations in order to equitably allocate the CP utilities, operating and maintenance costs among the tenants that utilize such shared use equipment; provided that, for so long as Lessee is not running extended hours shifts (i.e., operating hours exceeding 45 per week that place a higher demand of wear and tear on the CP equipment) and that Lessee employs a reasonable set back routine to limit HVAC run times during off hours, then for purposes of the CP formula allocations applicable to Lessee, the CP maintenance, repair and replacement costs (including amortization but not including utilities) shall be deemed to be capped for 2017 so as not to exceed $104k ($.50 per RSF), and such expenses shall be capped each year thereafter, with such cap increasing annually by a 5% cumulative and compounding inflation factor (thus, prior to allocation of CP costs to Lessee based on use, the CP maintenance, repair and replacement costs cap will be $.50 in 2017, $.525 in 2018, $.55125 in 2019, $.5788 in 2020, etc.).
		

		
			 
		

		
			**** Allocation of costs to operate and maintain other shared use equipment serving the Premises areas (e.g., air handlers, energy management systems, compressors, access control systems, etc.) shall be proportionately allocated based on area of service and/or utilizing meters or sub-meters in order to equitablyallocate the operating and maintenance costs among the tenants that specifically utilize such shared use equipment.
		

		
			 
		

		
			6Security Deposit; Additional Surety. In concert with this Amendment, Lessee’s Security Deposit shall be increased from $12,750.00, to hereafter be $55,000.00. Lessee shall also provide Lessor with an unconditional, irrevocable letter of credit (herein the “LOC”) from a bank reasonably acceptable to Lessor, in the amount of Three Hundred Fifty Thousand Dollars ($350,000.00). The LOC shall be retained and may be drawn upon by Lessor as additional security for Lessee’s faithful performance and observance of the covenants, agreements and conditions of this Lease. The initial LOC shall not have an expiration date earlier than December 31, 2017, and shall be timely extended or replaced each year (at least 30-days prior to expiration) to continue year-to-year through the Lease Term; provided, however, if the Lessee has not been in material default of its obligations under the Lease at any time during the prior calendar year (beyond applicable grace, notice and cure periods), then beginning for the calendar year 2020, and each calendar year thereafter, the amount of the LOC may be reduced by $75k per annum (thus, a reduced LOC balance of $275k for 2020, $200k for 2021, $125k for 2022, etc.). Lessee hereby grants to Lessor a security interest in the LOC and the cash portion of the Security Deposit, which shall
		

		
			
		

		
			

		 

		

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			be held by Lessor in accordance with applicable provisions of the Lease and the provisions hereof. The LOC shall be freely assignable by Lessor to Lessor’s successors in interest (but only in connection with sale or financing of the of the Building and/or assignment or collateral assignment  of the Lease).
		

		
			 
		

		
			7Early Termination Option. Lessee shall have the right to prematurely terminate the Term of this Lease (the "Early Termination Option"), effective as of December 31, 2023 (the “Early Termination Date"), subject to the following terms and conditions:
		

		
			 
		

		
			(a)Lessee shall not be in default under this Lease (beyond applicable grace, notice and cure periods) either on the date that Lessee exercises the Early Termination Option, or on the designated Early Termination Date; and
		

		
			 
		

		
			(b)Lessee must give Lessor no less than nine (9) months advance written notice (time being of the essence) of Lessee’s election to exercise this Early Termination Option (“Lessee’s Termination Notice”); and
		

		
			 
		

		
			(c)Upon exercise of the Early Termination Option, Lessee shall pay Lessor an early termination fee (“Early Termination Fee”) in an amount equal to the sum of: (a) One Hundred Seventy Thousand Dollars ($170,000.00), plus (b) an amount computed to reimburse Lessor for all of its unamortized costs incurred in completing this Amendment and reconfiguring and preparing the expanded Premises for Lessee’s occupancy (i.e., the extension and expansion commissions payable for this Amendment to Lease and all costs incurred by Lessor to complete Lessor’s Work (as defined herein) to remodel and prepare the Premises for Lessee). Such costs will be amortized on a straight-line one hundred twenty (120) month schedule (with interest at a stipulated rate of 6.5%), starting January 1, 2017 and ending December 31, 2026. On request (after completion of remodeling construction), Lessor shall provide Lessee with a schedule summarizing said costs and an amortization schedule for the same. The Early Termination Fee shall be payable in full with delivery of the Lessee’s Termination Notice.
		

		
			 
		

		
			If Lessee properly exercises this Early Termination Option, performs all of its obligations through the designated Early Termination Date, and cleanly vacates and surrenders the Premises on or before the Early Termination Date, then Rent payable under this Lease shall be apportioned as of the Early Termination Date, the Term of this Lease shall terminate as of the Early Termination Date, and neither party shall thereafter have any further rights or obligations accruing after said Early Termination Date, except those which by the provisions of this Lease expressly survive the expiration of the Lease Term. Upon Lessee’s surrender of the Premises in accordance with the provisions of the Lease, the LOC shall be surrendered and the Security Deposit will be refunded in accordance with the provisions of Article 5.
		

		
			 
		

		
			8Options to Extend Term. Lessee shall have two (2) options (the "Extension Option(s)"), to extend the Term of this Lease for an additional five (5) years each (the "Extension Term(s)"). The Extension Options shall be subject to the following terms and conditions:
		

		
			 
		

		
			(a)Lessee shall give Lessor written notice of its election to exercise such Extension Option(s) no less than twelve (12) months in advance of the then current Term Expiration Date, time being of the essence; and
		

		
			 
		

		
			(b)Lessee may not exercise the Second Extension Option unless it has previously exercised the First Extension Option; and
		

		
			 
		

		
			(c)Lessee shall not be in default under the terms of this Lease (beyond applicable grace, notice and cure periods) either on the date that Lessee exercises the Extension Option, or, unless waived in writing by the Lessor, on the Expiration Date of the then current Term; and
		

		
			 
		

		
			(d)For years 1-2 of each Extension Term, the net base rental rate shall remain flat and unchanged from the prior end-of-Term rate. On each anniversaryfor each subsequent year of the Extension Term, the net base rate shall increase annually by $0.10 per RSF; and
		

		
			
		

		
			

		 

		

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			(e)Lessee shall continue in occupancy and accept the Premises on the commencement date of the Extension Term in its “as-is” “where is” condition and configuration, without any warranty, allowance, abatement, adjustment or credit from Lessor with respect to the condition or improvement thereof; and
		

		
			 
		

		
			(f)Promptly following Lessee’s exercise of its Extension Option, Lessor shall acknowledge said proper exercise and provide Lessee with a confirming amendment and/or estoppel certificate to document the extension of the Lease Term upon the terms and conditions provided for herein, which conforming documentation shall be executed by the parties within fifteen (15) days after the date upon which Lessee exercises its Extension Option.
		

		
			 
		

		
			Except as set forth above, or as may otherwise be inconsistent with the terms hereof, all of the terms, conditions and provisions of this Lease shall continue to apply and continue in effect during and with respect to the Extension Term.
		

		
			 
		

		
			9Condition of Premises; Expansion Space Remodeling; Lessor’s Work. Lessee occupies and is conducting its business in the current Suite 550 portion of the Premises, is familiar with the current condition and configuration of the Expansion Space, and accepts the Premises areas, as to be expanded, in “as is” “where is” condition and configuration. Notwithstanding the above, Lessor, at Lessor’s cost, shall promptly remodel the Expansion Space pursuant to mutually approved plans, to be substantially as depicted in the Schematic Drawings attached as Exhibits “C-1” and “C-2”, and in accordance with the scope-of-work detailed as the Lessor’s Work in the Construction Memorandum attached hereto as Exhibit “C”. Lessor’s Work shall be promptly initiated and scheduled to be completed in a good and workmanlike manner (targeting construction to begin in October and to progress on a time line to allow Lessee to start delivering furniture, equipment and inventoryto the Expansion Space in early December 2016). The parties acknowledge that Lessee will have possession of and will continue to occupy and be in control of the original Suite 550 portion of the Premises areas (and various portions of the Expansion Space) during the course of such remodeling work. Lessor shall be granted reasonable access to the Premises areas to allow for the efficient progress of the construction. Lessee shall, as Lessee deems reasonably appropriate, provide for the security and control of its ongoing business operations in the Premises during the course of the remodeling work.
		

		
			 
		

		
			10Lessee’s Work. Lessee shall be solely responsible, at Lessee’s cost, for design and installation of its own trade fixtures, machinery, furniture and equipment. The Premises areas are currently improved and fit out with an infrastructure that includes extensive disbursed electrical, mechanical, HVAC, and compressed air equipment. Lessee shall be entitled to utilize and reconfigure and use all such in-place infrastructure and equipment and shall be responsible, at Lessee’s costs, for reconfiguring such equipment and completing anyelectrical, ventilation, compressed air line and/or other mechanical or electrical modifications which may be required to properly power and install Lessee’s machinery, trade fixtures and equipment in the Premises.
		

		
			 
		

		
			11Building Mounted Signage. Lessee, at Lessee’s expense, may install compliant building mounted signage on the west, south and east facades of the building; such signage shall be subject to Lessor’s reasonable approval and otherwise in compliance with the requirements of Lease Section 53.
		

		
			 
		

		
			12Parking. Notwithstanding anything in the Lease to the contrary, from and after November 1, 2016, Lessee’s parking allocation shall be increased to an aggregate one-hundred fifty (150) parking spaces (allocated at 2.1 spaces per 1,000 RSF under lease), to be located in areas on the Property as may be reasonably directed and periodically adjusted by Lessor. Twenty (20) of Lessee’s allotted parking spaces shall be designated as exclusive use spaces on the West and South sides of the property, in close proximity to the Premises’ West entry point. The balance of Lessee’s allotted parking spaces shall be unreserved spaces located in the open parking lot on the East side of the Building, as depicted in the Site Plan attached hereto as Exhibit “D”. Applicable sections of Lease Exhibit “D “  are hereby amended to conform to these changes.
		

		
			 
		

		
			13Temporary Shared Access to Rest Rooms and Kitchen. Through the earlier of November 20, 2016, or the first date that access is made available to the Expansion Space, Lessee shall continue to be provided shared access to and use of the existing rest rooms and adjoining break area. Once access to the Expansion Space is made available, Lessee shall have access to and begin to utilize the rest rooms and break area located in the Expansion Space.
		

		
			
		

		
			

		 

		

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			14Expansion/Extension/Early Termination Options and Allowances. Except for the Early Termination Option, the Extension Option and the Self-Help Termination Option specifically granted in this Amendment, there are no carry-over or remaining extension options, rights of first offer, expansion options, early termination options, right of recapture and/or any other options or allowances available to Lessee or Lessor under the Lease and, to the extent that any such options or allowances may have previously been granted or were applicable or available during any prior portion of the Lease Term, they are hereby deemed inapplicable and of no further force or effect.
		

		
			 
		

		
			15Lessor’s Warranties.  Lessor warrants to Lessee that:
		

		
			 
		

		
			(a)To the Lessor’s knowledge, the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems (HVAC), loading doors, sump pumps, if any, and all such other elements in the Expansion Space (other than those elements which are planned to be removed, reconfigured, remodeled or replaced in connection with Lessor’s Work, and recognizing that certain lines, ducts, cables, etc. may have been disconnected when the prior tenant vacated the Premises and Lessee may need to modify and/or reconnect same prior to use) are in good operating condition, the structure of the roof, bearing walls and foundation of the Expansion Space are free of material defects, and the Expansion Space does not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law; and
		

		
			 
		

		
			(b)To the Lessor’s knowledge, the current improvements in the Expansion Space (excepting therefrom parts of the prior tenant’s exhaust ducts and all aspects and elements which are to be demolished and/or removed, reconfigured, remodeled or replaced in connection with Lessor’s Work, and recognizing that certain lines, ducts, cables, etc. may have been disconnected when the prior tenant vacated the Premises and Lessee may need to modify and/or reconnect same prior to use) comply with the building codes that were in effect at the time each such improvement, or portion thereof, was constructed; and
		

		
			 
		

		
			(c)All new construction modifications to be made to the Premises as part of the Lessor’s Work will be made pursuant to permitted plans, prepared to comply with currently Applicable Requirements now in effect; and
		

		
			 
		

		
			(d)Upon completion of Lessor’s Work and at all times thereafter during the Term, and subject to Lessee operating its equipment with efficient exhaust systems and maintaining good energy saving practices and environmental controls (e.g., by keeping dock areas environmentally isolated, using weather break vestibules and not operating with dock doors standing open) to limit outside air exchanges, the HVAC system for the Premises will be capable of maintaining a 74-degree temperature in the production and warehouse areas of the Premises when the outdoor temperature reaches 100 degrees, and will be capable of maintaining relative humidity in a range between a low of 30% (in winter, at an outdoor temperature of 20 degrees) and a high of 60% (in summer, at an outdoor temperature of 90 degrees) in the production and warehouse areas in the Premises.
		

		
			 
		

		
			As used herein, Lessor’s “knowledge” shall mean the current, actual knowledge, without duty of investigation or inquiry, of Nick Claussen (“NC”) and Paul Denzer (“PD”). The fact that NC and PD are named herein as such shall not subject either NC or PD to any personal liability, and only Lessor shall be liable in the event of breach of any of the foregoing representations.
		

		
			 
		

		
			16Lessor’s Maintenance Obligations. As more specifically set out and subject to the terms and conditions detailed in Lease Section 7.2, Lessor agrees that, at all times during the Term, Lessor will keep the Building exterior, roof, structural walls, HVAC and Central Plant in good condition and repair.
		

		
			 
		

		
			17Lessee’s Removal/Restoration Obligations. Lease Section 7.4(b) is hereby amended in part to delete any requirement that the original or current condition of the Premises be restored by Lessee at the expiration or upon earlier termination of the Lease.
		

		
			 
		

		
			18Inducement Recapture. From and after December 31, 2021, if Lessee is not (and has not previously been) in default under the terms of the Lease (beyond applicable grace, notice and cure periods), then Lease Section 13.3 shall thereafter be deemed deleted from the Lease.  In any event,
		

		
			
		

		
			

		 

		

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			Section 13.3 shall only apply to inducements granted to Lessee under this Amendment, and not to any inducements granted to Lessee under the original Lease and the 2013 amendment thereto.
		

		
			 
		

		
			19Assignment and Subletting. The parties acknowledge that as currentlyconstituted, Lessee is a publically traded company and that as such, Section 12.1(b) of the Lease is inapplicable to the Lessee.
		

		
			 
		

		
			20Self-Help Rights and Self-Help Termination Option. Subsection 13.6 (b) of the Lease is revised and restated in its entirety, and a new subsection 13.6 (c) is hereby added to the Lease, to provide as follows:
		

		
			 
		

		
			(b)Self-Help Performance by Lessee on Behalf of Lessor. If Lessee provides written notice to Lessor as provided in Section 13.6(a), pertaining to an event or circumstance which requires the action of Lessor with respect to repair and/or maintenance of the portions of the Building for which Lessor is responsible and which event or circumstance materially adversely affects the conduct of Lessee’s business or operations from the Premises (a “Material Repair Notice”), and Lessor fails to commence corrective action within ninety (90) days after receipt of such Material Repair Notice and/or if having commenced said cure Lessor does not diligently pursue repairs to completion, then Lessee may proceed to exercise a self-help remedy to initiate the required maintenance or repairs on the terms and conditions detailed herein below and Lessee shall be entitled to prompt reimbursement by Lessor of Lessee’s reasonable out-of- pocket costs and expenses in making such repairs, along with a 10% administrative/handling fee to fairly compensate Lessee for its time and effort in addressing such matters. Prior to initiating any such self-help remedy, Lessee shall deliver an additional ten (10) days’ written notice to Lessor, specifying that Lessee will be initiating this self-help remedy, and stating in bold face letters that: “IF LESSOR FAILS TO RESPOND TO THIS NOTICE WITHIN TEN (10) BUSINESS DAYS FROM LESSOR’S RECEIPT AND EITHER COMMENCE THE REQUIRED REPAIRS OR MAINTENANCE, OR REASONABLY OBJECT TO SUCH REQUIREMENT, THEN LESSEE SHALL BE ENTITLED TO COMPLETE SUCH REPAIRS AND RECEIVE PROMPT REIMBURSEMENT BY LESSOR OF LESSEE’S REASONABLE COSTS AND EXPENSES IN MAKING SUCH REPAIRS, ALONG WITH A 10% ADMINISTRATIVE/HANDLING FEE TO COMPENSATE LESSEE FOR ITS TIME AND EFFORT IN DOING SO AS PROVIDED HEREIN.” Promptly following completion of any such maintenance or repair work by Lessee pursuant to the provisions of this Section, Lessee shall deliver a detailed invoice of the work completed, the materials used and the costs relating thereto, along with proof of payment and lien releases.  If Lessor does not deliver a detailed written objection to Lessee within  thirty(30) days after receipt of an invoice from Lessee, then Lessee shall be entitled to immediately deduct from Rent next payable by Lessee under this Lease, the amount set forth in such invoice, net of the amount thereof that would otherwise have appropriately been payable by Lessee as Lessee’s Share (i.e., net of the amount that Lessee would otherwise properly owe as its Share of the Common Area Operating Expenses, if such expenditures would properly be accounted for as Common Area Operating Expenses or CP expenses under applicable terms and conditions of this Lease). Amounts offset from Lessee’s Rent as provided herein shall thereafter be properly accounted for as Building Common Area Operating Expenses or CP expenses (as otherwise appropriately provided for in this Lease). If, however, Lessor reasonably responds to Lessee with a written objection to the payment of such invoice, setting forth with reasonable particularity Lessor’s argument that such action did not have to be taken by Lessor pursuant to the provisions of this Lease, or that the event or circumstance did not materially or adversely affect the conduct of Lessee’s business or operations from the Premises to the extent claimed by Lessee, or that the charges are excessive (in which case Lessor shall concurrently pay the amount it contends would not have been excessive), then Lessee shall not then be entitled to such deduction from Rent, but rather the matter shall be promptly submitted by the parties to arbitration for resolution. If Lessee prevails in any such arbitration proceeding, the amount of any award (which shall include Lessee’s reasonable attorneys’ fees and related costs) may then be deducted by Lessee from the Rent next due and owing under this Lease (unless Lessor pays such award within thirty(30) days after it is so awarded). Notwithstanding the foregoing, Lessee’s rights under this Section shall not apply to any repair or maintenance required to address a casualty which
		

		
			
		

		
			

		 

		

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			is covered as an Insured Loss (which matters shall be addressed as provided in Lease Section 9).
		

		
			 
		

		
			(c)Termination Right on Lessor’s Breach. In the event an alleged Lessor’s breach is (i) of such a nature that it materially and adversely affects Lessee’s ability to occupy and operate in the Premises, and (ii) the cost of reasonable repairs would exceed $500,000.00 (i.e., an amount exceeding ten (10) months’ of Lessee’s total annual Rent), and (iii) neither Lessor nor Lender cures said breach within ninety (90) days after receipt of said written notice, or if having commenced said cure they do not diligently pursue it to completion, and (iv) Lessee does not elect to pursue its self-help remedy to cure said breach under subsection (b) above, then Lessee shall have the right to terminate the Lease (the “Self-Help Termination Option”) by giving Lessor no less than three (3) months advance written notice (time being of the essence) of Lessee’s election to exercise this Self-Help Termination Option (Lessee’s “Self-Help Termination Notice”) designating therein the date Lessee will vacate and surrender the Premises (the “Self-Help Termination Date”). If Lessee properly exercises this Self-Help Termination Option, performs all of its obligations through the designated Self-Help Termination Date, and cleanly vacates and surrenders the Premises on or before the Self-Help Termination Date, then Rent payable under this Lease shall be apportioned as of the Self-Help Termination Date, the Term of this Lease shall terminate as of the Self-Help Termination Date, and neither partyshall thereafter have any further rights or obligations accruingafter said Self- Help Termination Date, except those which by the provisions of this Lease expressly survive the expiration of the Lease Term. Upon Lessee’s proper surrender of the Premises in accordance with the provisions of the Lease, the LOC shall be surrendered and the Security Deposit will be refunded in accordance with the provisions of Article 5.
		

		
			 
		

		
			21Attornment; Transfer of Security Deposit. Clause (d) of Lease Section 30.2 is hereby deleted from the Lease. Lessor agrees to pay or credit any new owner with the Security Deposit paid by Lessee to Lessor.
		

		
			 
		

		
			22Non-Disturbance Agreement. Within sixty (60) days after the mutual execution and delivery of this Amendment, Lessor will obtain and provide Lessee with a Non-Disturbance Agreement in a commerciallyreasonable form executed by Lessor’s Lender and/or a Subordination, Non-Disturbance and Attornment Agreement (“SNDA”) in a commerciallyreasonable form acceptable to Lessor’s Lender, to be promptly executed by Lessor, Lessor’s Lender and Lessee.
		

		
			 
		

		
			23Memorandum of Lease. Neither this Lease nor any abstract hereof shall be recorded by Lessee; provided, however, Lessor agrees to execute a short form Memorandum of Lease in form and content reasonably acceptable to Lessor to evidence the existence of this Lease and Lessee’s possessory rights to the Premises under the Lease. Upon the expiration or earlier termination of this Lease, Lessee shall promptly execute and deliver to Lessor a termination and release of such Memorandum of Lease. The foregoing obligation shall survive the expiration or earlier termination of this Lease.
		

		
			 
		

		
			24Ratification of Lease; Estoppel. The Lease, as hereby amended, is ratified and confirmed in its entirety and shall continue in full force and effect, subject to the terms and provisions thereof and hereof. Lessee and Lessor hereby confirm that the Lease is in full force and effect, has not been changed, modified or amended, except as summarized above, and is free from default by Lessor and/or Lessee. Lessee and Lessor are not aware of and have no notice of any claim, litigation or proceeding pending or threatened against the Lessor or relating to the Lease, and there are no claims or basis for allowances, concessions, offsets or entitlement under the Lease or against Lessor or otherwise, except as provided in this Amendment. Lessee and Lessor represent to each other that they are not aware of and have no notice of any violation of any law or statute, code, ordinance or directive relating to the use or conditions of the Building or Lessee’s operations therein.
		

		
			 
		

		
			25Authority. The undersigned parties signing on behalf of Lessor and Lessee represent and warrant to the other that each has full authority to enter into this Amendment and further agree to hold harmless, defend and indemnify the other from any claims or losses (including reasonable attorneys fees) arising from any lack of such authority.
		

		
			 
		

		
			26Broker. The parties represent to each other that they have not dealt with any real estate brokers, salespersons or finders in connection with the negotiation of this Amendment, other than
		

		
			
		

		
			

		 

		

			7

		

 

		

		
			Winbury Realty KC, LLC d/b/a Colliers International (“Colliers”) and Block Real Estate Services, LLC (“Block”), and no other persons or entities representing Lessee are entitled to any compensation or commission in connection herewith. Lessor will compensate said brokers pursuant to its separate agreement with Colliers and Block.
		

		
			 
		

		
			27Submission; Signatures. Submission of this Amendment by Lessor to Lessee for examination and/or execution shall not in any manner bind Lessor and no obligation on Lessor shall arise under this Amendment until and unless this Amendment is accepted and signed by an authorized agent of Lessor. This Amendment maybe signed in multiple counterparts, bydigital, facsimile or electronically transmitted signature, copies which when assembled together with both parties’ signatures shall be binding on the parties as originals.
		

		
			 
		

		
			28Binding Effect. The Lease, as hereby amended, shall continue in full force and effect, subject to the terms and provisions thereof and hereof. This Amendment shall be binding upon and inure to the benefit of Lessor, Lessee and their respective successors and permitted assigns.
		

		
			 
		

		
			29Conflict. Except as otherwise set forth above, or as may otherwise be inconsistent with the terms hereof, all of the terms, conditions and provisions of the Lease shall continue to apply and continue in full force and effect. In the event of any conflict between the terms of the Lease and the terms of this Amendment, the terms of this Amendment shall control.
		

		
			 
		

		
			IN WITNESS WHEREOF, the parties have executed this Amendment to be effective as of the date first set forth above.
		

		
			 
		

			
					
						Lessor:

					
					
						 

					
					
						Lessee:

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						96-OP Prop, L.L.C.,

					
					
						 

					
					
						Torotel, Inc.,

				
	
					
						a Kansas limited liability company

					
					
						 

					
					
						a Missouri corporation

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						 

					
					
						 

					
					
						By:

					
					
						 

				
	
					
						Paul P. Denzer, its Manager

					
					
						 

					
					
						Herb Sizemore, its President

				

		
			 
		

		
			
		

		
			

		 

		

			8

		

 

		

		
			Exhibit "A"
		

		
			Floor Plan of Building
		

		
			Torotel, Inc. - 520 N. Rogers Road, Olathe, KS
		

		
			 
		

		
			(showing approximate location and conceptual layout of the Premises Areas, as expanded)
		

		
			 
		

		
			
		

		
			 
		

		
			
		

		
			
		

		
			

		 

		

			9

		

 

		

		
			Exhibit "C"
		

		
			Construction Memorandum
		

		
			Torotel, Inc. - 520 N. Rogers Road, Olathe, KS
		

		
			 
		

		
			This Construction Memorandum supplements the Second Amendment (the “Amendment”) to Lease for Torotel, Inc., 520 N. Rogers Road, Olathe, KS. The terms used herein shall have the same meanings as set forth in the Lease (as amended), unless such meanings are expressly contradicted herein.
		

		
			 
		

		
			1.Tenant Improvements. Subject only to the remodeling improvements to be made by Lessor as described herein (“Lessor’s Work”), Lessee accepts the Expanded Premises in “as is” “where is” condition and configuration. Lessor shall construct and install (collectively, “construct”) the remodeling improvements to the Premises as set forth herein (the “Tenant Improvements”) pursuant to plans and specifications to be prepared by an architectural or space planning firm approved by Lessor (the “Architect”). “Lessor’s Work” will include the following:
		

		
			 
		

		
			(a)       Demise the area of the Premises;
		

		
			(b)       Construct new offices, rest rooms, break rooms and production areas pursuant to the mutually approved Final Plans (as defined below), which will be developed, refined and finalized with reference to the conceptual floor plan Schematics attached as Exhibit Schedules “C-1” and “C-2”;
		

		
			(c)         Construct a new Premises entry approach pursuant to mutually approved Final Plans, to be designed, refined and finalized with reference to the conceptual Schematics attached as Exhibit Schedule “C-3”;
		

		
			(d)           Install two high wall windows in the prior ventilation openings on the south production wall (between the office area and the first potting room), and install three clerestory style windows in the east break area wall;
		

		
			(e)         Reconfigure building standard ceiling and lighting in the newly constructed and remodeled areas, and repair and/or replace any damaged areas of ceiling grid and/or ceiling tile;
		

		
			(f)         Rearrange and/or install additional building standard florescent lighting as appropriate for the reconfigured areas;
		

		
			(g)         Relocate fire sprinkler heads as appropriate for the new layout (any special changes to sprinkler heads required to accommodate special tenant machinery, fixture or equipment requirements shall be at Lessee’s cost);
		

		
			(h)         Install +/-10’ of standard kitchen cabinetry (fit out with a kitchen sink) in the break area, and an additional +/-12’ of counter top, with appropriate plumbing and power hook ups for Lessee’s refrigerators, microwaves, ice makers, dishwashers, etc.;
		

		
			(i)         Paint all newly constructed walls (with a neutral primary color) as approved by Lessee and Lessor to coordinate with existing paint colors (allowance will be for two coats of paint to cover);
		

		
			(j)          Install building standard carpeting over the existing concrete floors in the new below-mezzanine open office area; clean existing carpeting in all existing carpeted office areas;
		

		
			(k)         Paint the floors in the new rest room areas (existing concrete floors to remain as-is in break room, production and shipping areas);
		

		
			(l)         Test and repair emergency light fixtures, as may be required;
		

		
			(m)       Verify fire extinguisher maintenance is up to date; repair and/or replace components as necessary; and
		

		
			(n)         Install additional sub-meters and/or reconfigure existing meters and adjust allocation formulas based on RSF and/or appropriate utilization formulas as may be reasonably required to be able to track and account for utility, equipment and Central Plant costs allocable to the expanded Premises.
		

		
			 
		

		
			2.Plans and Specifications.
		

		
			 
		

		
			2.1Schematic Drawings. Conceptual drawings depicting the planned layout of the Premises and the location of the Tenant Improvements therein (the “Schematic Drawing(s)”) have been approved by Lessor and Lessee and are attached hereto as Exhibits “C-1”, “C-2” and “C-3”.
		

		
			
		

		
			

		 

		

			10

		

 

		

		
			2.2  Final Plans. Lessor shall engage the Architect to prepare final plans and specifications and working drawings, including finish specifications (collectively, the “Final Plans”) based upon the Schematic Drawings and addressing the scope of Lessor’s Work outlined in Section 1 above. Upon completion of the Final Plans, same shall be submitted to Lessor and Lessee for approval. Within five (5) days after Lessee’s receipt of the Final Plans, Lessee shall notify Lessor and the Architect of any changes which Lessee desires to make to such Final Plans, which notice shall be in writing and shall identify with specificity the changes which Lessee desires to make and shall attach a copy of the Final Plans initialed by Lessee and showing the desired changes (the “Lessee’s Change Notice”). Within a reasonable time following Lessor’s receipt of the Final Plans and Lessee’s Change Notice (if any), Lessor shall approve or disapprove thereof. If Lessor disapproves, the Final Plans shall be revised by the Architect to reflect those changes described in Lessee’s Change Notice which are not disapproved by Lessor and such other items needed to satisfy Lessor’s objections thereto. The improvements depicted on the Final Plans, as so revised, shall constitute the “Tenant Improvements.” At Lessor’s request, upon completion of the revised Final Plans, Lessee shall initial same and deliver them to Lessor, thereby acknowledging the form of such Final Plans.
		

		
			 
		

		
			2.3Standard of Review by Lessee. Lessee agrees that any changes which it desires to make as set forth in Lessee’s Change Notice shall be reasonable and made in good faith. In the event Lessor and Lessee have any differences with respect to changes each desires to make to the Schematic Drawings or Final Plans, Lessor and Lessee shall promptly meet and use good faith efforts to resolve the differences.
		

		
			 
		

		
			2.4Accuracy of Plans and Specifications. Notwithstanding the fact that Lessor shall review and denote revisions to the Schematic Drawings and Final Plans, and that Lessor shall have designated or approved of the Architect, Lessor shall not be liable in any way to Lessee or any other person or entity for any deficiencies in the Schematic Drawings or Final Plans, delays in the preparation and/or delivery thereof, or any errors or omissions by the Architect, nor shall same constitute a warranty or guaranty that the Final Plans are complete or accurate, or that the improvements depicted therein will comply with any laws, or are sufficient for Lessee’s use or business.
		

		
			 
		

		
			3.Permits. As soon as practicable following completion of the Final Plans, the GC or the Architect shall submit the Final Plans to appropriate governmental authorities, pay the appropriate filing fees, and attempt to obtain the permits and approvals (the “Permits”) necessary or appropriate to allow the construction of the Tenant Improvements. If, as part of the procedure of obtaining or attempting to obtain Permits, any governmental agencies or authorities request changes in the Final Plans, the Final Plans shall be modified to incorporate such changes unless Lessor or Lessee do not reasonablely approve thereof, which approval shall not be unreasonablywithheld. The Architect shall promptlyrevise the Final Plans as required by such governmental agencies or authorities unless such required revisions are reasonably disapproved of by Lessor or Lessee.
		

		
			 
		

		
			4.Construction. Lessor, at Lessor’s expense, shall engage a general contractor (herein the “GC”) to construct the Tenant Improvements in accordance with the Final Plans for which Permits are issued. Such general contractor shall commence and thereafter complete the construction of the Tenant Improvements in a reasonably diligent manner; provided, however, neither Lessor nor the general contractor shall be obligated to incur overtime premium wage rates or be obligated to construct any improvements not set forth in such Final Plans.
		

		
			 
		

		
			5.Costs of Construction; Lessor’s Work. Lessor, at Lessor’s expense, will provide a full build- to-suit (“turnkey”) construction of the Lessor’s Work.
		

		
			 
		

		
			Notwithstanding anything to the contrary, the parties’ agree that the Lessor’s Work, as depicted in the attached Schematic Drawings, has already incorporated various plan changes requested by Lessee (i.e., to add three additional offices on the production floor, configure the 2nd potting room area and safety room, construct the moms/wellness room and kitchenette, build four “phone booths”, etc.) (collectively, “Change Order #1”). Lessee shall fund $35,000.00 as its stipulated contribution towards the costs of the Change Order #1 additions and Lessor shall otherwise cover the costs to include and construct the Change Order #1 items as part of Lessor’s turnkey construction commitment.
		

		
			 
		

		
			6.Disclaimers; Exclusions. All dimensions in the Schematic Drawings are approximate for conceptualization, and are subject to field verification.  Except as otherwise specified, finishes will be
		

		
			
		

		
			

		 

		

			11

		

 

		

		
			building standard. Any furniture and/or cubicle work station locations and/or furniture and/or equipment depictions are approximate and are included for conceptual convenience only. No cubicle work station furniture or equipment or furniture installation is included in the construction package. Data communications and telephone wiring and modifications to the electronic access control and/or alarm systems, telephones, data, cameras and sound is excluded from the Lessor’s construction package and will be provided by Lessee or Lessee’s designated vendors. Customization of mechanical and/or electrical systems and/or installation of special ventilation for Lessee’s equipment will be at Lessee’s cost. Construction materials maybe re-used from existing building inventoryor acquired from contractor or ownership inventoryitems when in good and functional condition. Lessor’s “Construction Costs” shall include, without limitation, all architectural costs, permit fees, costs of material and labor and the fee normally paid to Lessor (or one of its affiliates) for supervising, managing and constructing the Tenant Improvements within the scope of work described immediately below and as may be incorporated into the Final Plans.
		

		
			 
		

		
			Notwithstanding anything to the contrary above, Lessee, at Lessee’s expense, will be responsible for modifications required to properly install andsetup Lessee’smachinery and equipment, to include, but not be limited to any required reconfiguration of or modifications to the existing lighting, electrical circuitry, bus bars or installation of other required power drops sufficient for Lessee to power its machinery and equipment, and installation of any required/customized power, compressed air lines, ventilation or life safety equipment required for proper set up and operation of Lessee’s machinery and equipment.
		

		
			 
		

		
			7.Change Orders. Lessor shall not be obligated to consent to, or make, any changes or additions requested by Lessee to the Final Plans. Any such changes or additions requested by Lessee and consented to by Lessor (“Change Orders”) shall be at the sole cost and expense of Lessee, and the increased cost of construction of the Tenant Improvements, including such Change Orders, shall be the responsibility of Lessee. In addition, Lessee shall also be responsible for all costs and expenses resulting from or arising out of any delay in completing the Tenant Improvements as a result of such Change Orders. The rent commencement date shall not be delayed by, nor shall Rent abate as a result of, any delays in substantial completion of the Tenant Improvements as a result of or occurring in connection with any Change Orders. The costs and expenses for which Lessee is responsible relating to such Change Orders shall be payable by Lessee to Lessor monthly, in advance, based on Lessor’s estimate of the Change Order work expected to be completed in the next thirty (30) days and shall be made even though Lessee has not occupied the Premises and may never occupy the Premises. The balance, if any, of all costs and expenses of such Change Orders shall be paid upon completion of construction of the Change Order work.
		

		
			 
		

		
			8.Substantial Completion; The terms “Substantial Completion” and “Readyfor Occupancy” shall mean the date on which substantial completion of the Lessor’s Work has occurred. Substantial completion shall be deemed to have occurred on the date the work has been completed in substantial accordance with the Final Plans, except for matters not adversely affecting Lessee’s use or occupancy of the Premises and except for punch list items (i.e., minor details of construction, mechanical adjustments or decorations which do not materially interfere with Lessee’s use of the Premises). The parties acknowledge that construction of the new exterior SW entry features may require additional lead time for materials and construction, so that portion of the Lessor’s work is not required to be completed for Substantial Completion of the Premises. The Premises shall be deemed Substantially Complete and Ready for Occupancy even though Lessee’s furniture, telephones, telexes, facsimiles, photocopy machines, computers and other business machines or equipment have not been installed, the purchase and installation of which shall be Lessee’s sole responsibility. If any action or inaction of Lessee or Lessees parties causes or results in a delay in the date the Lessor’s Work would have been substantially completed, same shall be deemed to be a “Lessee Delay,” and the date of substantial completion of the work shall be deemed to have occurred earlier by the number of days of such Lessee Delays. Lessee agrees that it shall fully cooperate with Lessor, the Architect and the general contractor, if any, to the extent necessary to assure substantial completion of the work as soon as is reasonably possible.
		

		
			 
		

		
			9.Punch List. Lessee agrees to deliver to Lessor, in writing, a “punch list” identifying with specificity all defects in the Tenant Improvements (including, without limitation, identification of all areas where the Lessor’s Work does not conform with the Final Plans for which Permits were issued) as modified by Change Orders. Such punch list shall be delivered to Lessor, if at all, within fifteen (15) days following Substantial Completion. Lessee shall be deemed to have accepted the Premises and approved of the construction if Lessee does not deliver such punch list to Lessor within said number of days or, if Lessee so delivers such punch list to Lessor, then Lessee shall be deemed to have accepted the Premises and approved of the construction of Lessor’s Work to the extent of all portions of the work which are not described with specificity as defective in such punch list. Lessor agrees to complete such punch list items within forty-five (45) days of Lessor’s receipt of such punch list from Lessee, if such punch list is delivered as provided herein.
		

		
			

		 

		

			12

		

 

		

		
			Exhibit “C-1" - Schematic Drawing
		

		
			Torotel, Inc. - 520 N. Rogers Road, Olathe, KS
		

		
			 
		

		
			(conceptual layout for upper office area of the Premises)
		

		
			 
		

		
			
		

		
			
		

		
			

		 

		

			13

		

 

		

		
			Exhibit “C-2" - Schematic Drawing
		

		
			Torotel, Inc. - 520 N. Rogers Road, Olathe, KS
		

		
			 
		

		
			(conceptual layout for the Production Floor area of the Premises)
		

		
			 
		

		
			
		

		
			
		

		
			

		 

		

			14

		

 

		

		
			Exhibit “C-3" - Schematic Drawing
		

		
			Torotel, Inc. - 520 N. Rogers Road, Olathe, KS
		

		
			 
		

		
			(conceptual schematic for new Premises entry)
		

		
			 
		

		
			
		

		
			 
		

		
			
		

		
			 
		

		
			
		

		
			

		 

		

			15

		

 

		

		
			Exhibit “D" - Site Plan
		

		
			Torotel, Inc. - 520 N. Rogers Road, Olathe, KS
		

		
			 
		

		
			(conceptual parking schematic)
		

		
			 
		

		
			
		

		
			 
		

		 

		

			16Exhibit 4.2

 

Execution Version

 

	
 
    

 

EQT MIDSTREAM PARTNERS, LP

 

as Issuer

 

and

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

 

as Trustee

 

 

Second Supplemental Indenture

 

Dated as of November 4, 2016

 

 

to the Indenture
 Dated as of August 1, 2014

 

 

4.125% Senior Notes due 2026

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1 
    	
SUPPLEMENT OF THE   ORIGINAL INDENTURE
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 1.01
    	
Supplement to   Article I of the Original Indenture
    	
1
    
	
SECTION 1.02
    	
Supplement to   Article IV of the Original Indenture
    	
4
    
	
SECTION 1.03
    	
Effect of   Article 1
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 
    	
THE NOTES
    	
7
    
	
 
    	
 
    	
 
    
	
SECTION 2.01
    	
Form and Terms
    	
7
    
	
SECTION 2.02
    	
Designation, Amount,   etc.
    	
7
    
	
SECTION 2.03
    	
Payment of Principal   and Interest
    	
8
    
	
SECTION 2.04
    	
Future Subsidiary   Guarantors
    	
8
    
	
SECTION 2.05
    	
Legends
    	
9
    
	
SECTION 2.06
    	
Redemption at the   Option of the Issuer
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 
    	
REPRESENTATIONS OF THE   ISSUER
    	
9
    
	
 
    	
 
    	
 
    
	
SECTION 3.01
    	
Authority of the Issuer
    	
9
    
	
SECTION 3.02
    	
Truth of Recitals and   Statements
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE 4 
    	
CONCERNING THE TRUSTEE
    	
9
    
	
 
    	
 
    	
 
    
	
SECTION 4.01
    	
Acceptance of Trusts
    	
9
    
	
SECTION 4.02
    	
No Responsibility of   Trustee for Recitals, Etc.
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE 5 
    	
MISCELLANEOUS   PROVISIONS
    	
10
    
	
 
    	
 
    	
 
    
	
SECTION 5.01
    	
Relation to the   Original Indenture
    	
10
    
	
SECTION 5.02
    	
Meaning of Terms
    	
10
    
	
SECTION 5.03
    	
Counterparts of   Supplemental Indenture
    	
10
    
	
SECTION 5.04
    	
Governing Law
    	
10
    
				

 

Exhibit A                                             Form of Note

 

This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions.

 

i

 

THIS SECOND SUPPLEMENTAL INDENTURE, dated as of November 4, 2016, is between EQT Midstream Partners, LP, a Delaware limited partnership (the “Issuer”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) under the Indenture (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer has duly authorized the issuance from time to time of its debentures, notes, bonds or other evidences of indebtedness (the “Securities”), which are to be issued in one or more series, and the Issuer and certain Subsidiaries of the Issuer party thereto have heretofore made, executed and delivered to the Trustee an Indenture dated as of August 1, 2014 (the “Original Indenture”) pursuant to which the Securities are issuable;

 

WHEREAS, Sections 2.01, 2.03 and 9.01 of the Original Indenture provide that the form or terms of any series of Securities may be established in a supplemental indenture, and the Issuer desires to establish in this Second Supplemental Indenture both the form and terms of a separate series of Securities designated as its 4.125% Senior Notes due 2026 (the “Notes”); and

 

WHEREAS, all things necessary to authorize the execution and delivery of this Second Supplemental Indenture, to establish the Notes as provided for in this Second Supplemental Indenture, and to make the Original Indenture, as supplemented with respect to the Notes by this Second Supplemental Indenture and as it may otherwise be supplemented thereafter with applicability to the Notes (the Original Indenture, as so supplemented, being sometimes referred to herein as the “Indenture”), a valid agreement of the Issuer, in accordance with its terms, have been done;

 

NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH that, for and in consideration of the premises and the purchase of the Notes by the Holders, the Issuer and the Trustee mutually covenant and agree, solely for the equal and proportionate benefit of the respective Holders from time to time of Notes, as follows:

 

ARTICLE 1
 SUPPLEMENT OF THE ORIGINAL INDENTURE

 

SECTION 1.01                                      Supplement to Article I of the Original Indenture.  Section 1.01 of the Original Indenture is supplemented or superseded with respect to the Notes, in the case of definitional paragraphs that may be inconsistent, by inserting therein, in alphabetical order, the following definitional paragraphs:

 

“AVC Lease” means the Allegheny Valley Connector Facilities Lease Agreement, dated December 17, 2013, by and between Equitrans, LP and Allegheny Valley Connector, LLC, as amended, restated or replaced from time to time.

 

“Comparable Treasury Issue” means the U.S. Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes, determined as if the Notes matured on the Par Call Date (the “Remaining Life”), that would be utilized, at the time of selection and in accordance with customary financial 

 

1

 

practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life of the Notes.

 

“Comparable Treasury Price” means, with respect to any Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations; or (ii) if the Quotation Agent is unable to obtain at least four such Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations obtained by the Quotation Agent.

 

“Consolidated Net Tangible Assets” means, at any date of determination, the total amount of consolidated assets of the Issuer and its Subsidiaries after deducting therefrom (1) all current liabilities (excluding (a) any current liabilities that by their terms are extendable or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed and (b) current maturities of long-term debt), and (2) the value (net of any applicable reserves) of all goodwill, trade names, trademarks, patents and other like intangible assets, all as set forth, or on a pro forma basis would be set forth, on the consolidated balance sheet of the Issuer and its Subsidiaries for the most recently completed fiscal quarter, prepared in accordance with GAAP.

 

“Debt” of any Person at any date means any obligation created or assumed by such Person for the repayment of borrowed money and, without duplication, any guarantee by such Person of any such obligation of others.

 

“Indenture” has the meaning specified in the recitals.

 

“Issue Date” means November 4, 2016, the date on which the Notes are first authenticated and delivered under the Indenture.  For the avoidance of doubt, the words “date of the Indenture” have the same meaning.

 

“Lien” means, with respect to any asset, any mortgage, lien, security interest, pledge, charge or other encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law.

 

“Notes” has the meaning specified in the recitals.

 

“Original Indenture” has the meaning specified in the recitals.

 

“Par Call Date” means September 1, 2026.

 

“Principal Property” means, whether currently owned or leased or subsequently acquired, any pipeline, gathering system, terminal, storage facility, processing plant or other plant or facility located in the United States owned or leased by the Issuer or any of its Subsidiaries and used in transporting, distributing, terminalling, gathering, treating, processing, marketing or storing natural gas, natural gas liquids or other hydrocarbons, except (1) any property or asset consisting of inventories, furniture, office fixtures and equipment (including data processing equipment), vehicles and equipment used on, or

 

2

 

useful with, vehicles (but excluding vehicles that generate transportation revenues) and (2) any such pipeline or other plant or facility that, in the good faith opinion of the Board of Directors of the Issuer as evidenced by a Board Resolution, is not material in relation to the activities of the Issuer and its Subsidiaries, taken as a whole.

 

“Principal Subsidiary” means any of the Issuer’s Subsidiaries that owns or leases, directly or indirectly, a Principal Property.

 

“Quotation Agent” means a Reference Treasury Dealer selected by the Issuer.

 

“Reference Treasury Dealer” means each of Deutsche Bank Securities Inc. (and its successors), Merrill Lynch, Pierce, Fenner & Smith Incorporated (and its successors) and one primary U.S. government securities dealer (a “Primary Treasury Dealer”) selected by MUFG Securities Americas Inc. (and its successors) and one Primary Treasury Dealer selected by the Issuer; provided, however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the Issuer will substitute therefor another Primary Treasury Dealer.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date for the Notes, an average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue for the Notes (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.

 

“Sale-Leaseback Transaction” means the sale or transfer by the Issuer or any Principal Subsidiary of any Principal Property to a Person (other than the Issuer or a Principal Subsidiary) and the taking back by the Issuer or any Principal Subsidiary, as the case may be, of a lease of such Principal Property.

 

“Swap Contract” means (1) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, futures contracts traded on or subject to the rules of a designated contract market, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (2) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, any North American Energy Standard Board Master Agreement, or any other master agreement, including any such obligations or liabilities under any master agreement.

 

3

 

“Treasury Rate” means, with respect to any Redemption Date for the Notes, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date; provided, however, that if no maturity is within three months before or after the Par Call Date, yields for the two published maturities most closely corresponding to such United States Treasury security will be determined and the Treasury Rate will be interpolated or extrapolated from those yields on a straight line basis rounding to the nearest month.  The Treasury Rate will be calculated by the Quotation Agent on the third Business Day preceding the Redemption Date.

 

SECTION 1.02                                      Supplement to Article IV of the Original Indenture.  Article IV of the Original Indenture is supplemented with respect to the Notes by inserting the following new Sections at the end thereof:

 

SECTION 4.08                                      Limitation on Liens.

 

While any of the Notes remain outstanding, the Issuer shall not, and shall not permit any of its Principal Subsidiaries to, create, or permit to be created or to exist, any Lien upon any Principal Property of the Issuer or any of its Principal Subsidiaries, or upon any equity interests of any Principal Subsidiary, whether such Principal Property is, or equity interests are, owned on or acquired after the date of the Indenture, to secure any Debt, unless the Notes then outstanding are equally and ratably secured by such Lien for so long as any such Debt is so secured, other than:

 

(1)                              purchase money mortgages, or other purchase money Liens of any kind upon property acquired by the Issuer or any Principal Subsidiary after the date of the Indenture, or Liens of any kind existing on any property or any equity interests at the time of the acquisition thereof (including Liens that exist on any property or any equity interests of a Person that is consolidated with or merged with or into the Issuer or any Principal Subsidiary or that transfers or leases all or substantially all of its properties or assets to the Issuer or any Principal Subsidiary), or conditional sales agreements or other title retention agreements and leases in the nature of title retention agreements with respect to any property acquired after the date of the Indenture, so long as no such Lien shall extend to or cover any other property of the Issuer or such Principal Subsidiary;

 

(2)                                 Liens upon any property of the Issuer or any Principal Subsidiary or any equity interests of any Principal Subsidiary existing as of the Issue Date or upon the property or any equity interests of any Person, which Liens existed at the time such Person became a Subsidiary of the Issuer;

 

(3)                                 Liens for taxes or assessments or other governmental charges or levies relating to amounts that are not yet delinquent or are being contested in good faith;

 

(4)                                 pledges or deposits to secure: (a) any other governmental charges or levies; (b) obligations under workers’ compensation laws, unemployment insurance and other social security legislation; (c) performance in connection with bids, tenders, 

 

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contracts (other than contracts for the payment of money) or leases to which the Issuer or any Principal Subsidiary is a party; (d) public or statutory obligations of the Issuer or any Principal Subsidiary; and (e) surety, stay, appeal, indemnity, customs, performance or return-of-money bonds or pledges or deposits in lieu thereof;

 

(5)                                 statutory or governmental Liens or Liens arising by operation of law, or builders’, materialmen’s, mechanics’, carriers’, warehousemen’s, workers’, repairmen’s, operators’, landlords’ or other similar Liens, in the ordinary course of business;

 

(6)                                 Liens created by or resulting from any litigation or proceeding that at the time is being contested in good faith by appropriate proceedings, including Liens relating to judgments thereunder as to which the Issuer or any Principal Subsidiary has not exhausted its appellate rights;

 

(7)                                 Liens on deposits required by any Person with whom the Issuer or any Principal Subsidiary enters into forward contracts, futures contracts, Swap Contracts or other commodities contracts in the ordinary course of business and in accordance with established risk management policies;

 

(8)                                 Liens in connection with leases (other than capital leases) made, or existing on property acquired, in the ordinary course of business; and Liens, if any, in connection with the AVC Lease or any similar lease;

 

(9)                                 easements (including, without limitation, reciprocal easement agreements and utility agreements), zoning restrictions, rights-of-way, covenants, consents, reservations, encroachments, variations and other restrictions on the use of property or minor irregularities in title thereto, charges or encumbrances (whether or not recorded) affecting the use of real property and which are incidental to, and do not materially impair the use of such property in the operation of the business of the Issuer and its Subsidiaries, taken as a whole, or the value of such property for the purpose of such business;

 

(10)                          Liens in favor of the United States of America, any State, any foreign country or any department, agency or instrumentality or political subdivision of any such jurisdiction, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the property subject to such Liens, including, without limitation, Liens to secure Debt of the pollution control, industrial development or similar revenue bond type;

 

(11)                          Liens of any kind upon any property acquired, constructed, developed or improved by the Issuer or any Principal Subsidiary (whether alone or in association with others) after the date of the Indenture that are created prior to, at the time of, or within 12 months after such acquisition (or in the case of property constructed, developed or improved, after the completion of such construction, development or improvement and commencement of full commercial operation of such property, whichever is later) to secure or provide for the payment of any part of the purchase price or cost thereof; 

 

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provided that in the case of such construction, development or improvement the Liens shall not apply to any property theretofore owned by the Issuer or any Principal Subsidiary other than theretofore unimproved real property;

 

(12)                          Liens upon any additions, improvements, replacements, repairs, fixtures, appurtenances or component parts thereof attaching to or required to be attached to property or assets pursuant to the terms of any mortgage, pledge agreement, security agreement or other similar instrument, creating a Lien upon such property or assets permitted by clauses (1) through (11) above;

 

(13)                          Liens in favor of the Issuer, one or more Principal Subsidiaries, one or more wholly owned Subsidiaries of the Issuer or any of the foregoing in combination;

 

(14)                          the replacement, extension or renewal (or successive replacements, extensions or renewals), as a whole or in part, of any Lien, or of any agreement, referred to in the clauses above, or the replacement, extension or renewal of the Debt secured thereby (not exceeding the principal amount of Debt secured thereby, other than to provide for the payment of any underwriting or other fees related to any such replacement, extension or renewal, as well as any premiums owed on and accrued and unpaid interest payable in connection with any such replacement, extension or renewal); provided that such replacement, extension or renewal is limited to all or a part of the same property that secured the Lien replaced, extended or renewed (plus improvements thereon or additions or accessions thereto);

 

(15)                          Liens resulting from the deposit of moneys or evidence of indebtedness in trust for the purpose of defeasing any Debt of the Issuer or any Principal Subsidiary; or

 

(16)                          any Lien not excepted by the foregoing clauses (1) through (15); provided that immediately after the creation or assumption of such Lien the aggregate principal amount of Debt of the Issuer or any Principal Subsidiary secured by all Liens created or assumed under the provisions of this clause (16), together with all net sale proceeds from any Sale-Leaseback Transactions (reduced by the amounts applied pursuant to Section 4.09(1) and Section 4.09(3)(a)) shall not exceed an amount equal to 15% of the Consolidated Net Tangible Assets for the fiscal quarter that was most recently completed prior to the creation or assumption of such Lien.

 

Notwithstanding the foregoing, for purposes of making the calculation set forth in clause (16) of this Section 4.08, with respect to any such secured Debt of a non-wholly-owned Principal Subsidiary of the Issuer with no recourse to the Issuer or any wholly-owned Principal Subsidiary thereof, only that portion of the aggregate principal amount of such secured Debt reflecting the Issuer’s pro rata ownership interest in such non-wholly-owned Principal Subsidiary shall be included in calculating compliance herewith.

 

SECTION 4.09              Limitation on Sale/Leaseback Transactions

 

While any of the Notes remain outstanding, the Issuer shall not, and shall not permit any of its Principal Subsidiaries to, engage in a Sale-Leaseback Transaction, unless:

 

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(1)           the Sale-Leaseback Transaction occurs within one year from the date of acquisition of the relevant Principal Property or the date of the completion of construction, development or substantial repair or improvement, or commencement of full operations on such Principal Property, whichever is later, and the Issuer has elected to designate, as a credit against (but not exceeding) the purchase price or cost of construction, development, repair or improvement of such Principal Property, an amount equal to all or a portion of the net sale proceeds from such Sale-Leaseback Transaction (with any such amount not being so designated to be applied as set forth in clause (3) below); 

 

(2)           the Issuer or such Principal Subsidiary would be entitled to incur Debt secured by a Lien on the Principal Property subject to the Sale-Leaseback Transaction in a principal amount equal to or exceeding the net sale proceeds from such Sale-Leaseback Transaction without equally and ratably securing the Notes; or 

 

(3)           the Issuer or such Principal Subsidiary, within a 270-day period after such Sale-Leaseback Transaction, applies or causes to be applied an amount not less than the net sale proceeds from such Sale-Leaseback Transaction to (a) the prepayment, repayment, redemption or retirement of any unsubordinated Debt of the Issuer or any of its Subsidiaries or (b) the investment in another Principal Property.

 

SECTION 1.03             Effect of Article 1.  The supplements to the Original Indenture set forth in Article 1 of this Second Supplemental Indenture affect only the provisions of the Original Indenture as such provisions relate to the Notes, the series of Securities comprised of the Notes and the rights, remedies and obligations of the Issuer, the Holders of Notes, the Trustee and other Persons set forth in the Original Indenture as such rights, remedies and obligations relate to the Notes.

 

ARTICLE 2
 THE NOTES

 

SECTION 2.01             Form and Terms.  The Notes shall be issued upon original issuance in whole in the form of one or more Global Securities (the “Global Notes”).  The Depository Trust Company and the Trustee are hereby designated as the Depositary and the Security Custodian, respectively, for the Global Notes under the Indenture.  The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto (the “Form of Note”).  The terms of the Notes set forth on Exhibit A hereto are incorporated by reference herein as if set forth herein in their entirety.

 

SECTION 2.02             Designation, Amount, etc.

 

(a)           The Notes shall be entitled the “4.125% Senior Notes due 2026” of the Issuer.  The Notes shall be separate series of Securities under the Indenture.

 

(b)           The initial limit upon the aggregate principal amount of the Notes that may be authenticated and delivered under the Indenture (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.08, 2.09, 2.12, 2.17, 3.07 or 9.05 of the Indenture and except for any Notes which,

 

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pursuant to Section 2.04 or 2.17 of the Indenture, are deemed never to have been authenticated and  delivered thereunder) is $500,000,000; provided, however, that the authorized aggregate principal amount of the Notes may be increased before or after the issuance of any Notes by a Board Resolution (or action pursuant to a Board Resolution) to such effect.  The Notes issued on the Issue Date and any such additional Notes subsequently issued shall be treated as a single series for all purposes under the Indenture, including, without limitation, waivers, amendments and redemptions.

 

(c)           The Notes shall not be entitled to the benefit of Section 4.03(b) of the Original Indenture (and shall not constitute Rule 144A Securities).

 

SECTION 2.03             Payment of Principal and Interest.

 

(a)           The date on which the principal of the Notes is payable shall be December 1, 2026.

 

(b)           The rate at which the Notes shall bear interest shall be 4.125% per annum.  Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.  The Interest Payment Dates on which such interest shall be payable shall be June 1 and December 1 of each year, commencing June 1, 2017.  The record dates for the interest payable on the Notes on any Interest Payment Date shall be the May 15 and November 15, as the case may be, next preceding such Interest Payment Date.

 

(c)           No Additional Amounts with respect to the Notes shall be payable.

 

(d)           The place or places where the principal of, premium (if any) on and interest on the Notes shall be payable shall be the office or agency of the Issuer maintained for that purpose, initially the office of the Trustee in The City of New York, and any other office or agency maintained by the Issuer for such purpose.  Payments in respect of Global Notes (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Holder of such Notes.  In all other cases, at the option of the Issuer, payment of interest may be made by check mailed to the address of the person entitled thereto as such address shall appear in the register of the Notes maintained by the Registrar.

 

(e)           The Paying Agent and Registrar for the Notes initially shall be the Trustee.

 

SECTION 2.04             Future Subsidiary Guarantors.

 

(a)           The Notes initially shall not be entitled to the benefits of any Guarantee of any Subsidiary Guarantor contemplated by Article X of the Original Indenture.

 

(b)           If any Subsidiary of the Issuer that is not then a Subsidiary Guarantor provides a guarantee under the Credit Facility, then the Issuer shall cause such Subsidiary to promptly execute and deliver to the Trustee a supplemental indenture in accordance with Section 10.02 of the Original Indenture to evidence its Guarantee set forth in Section 10.01 of the

 

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Original Indenture and such Subsidiary shall be named as a Subsidiary Guarantor with respect to the Notes.

 

SECTION 2.05             Legends. Each Global Note shall bear the legend set forth on the face of the Form of Note.

 

SECTION 2.06             Redemption at the Option of the Issuer.

 

(a)           The Notes are subject to redemption, in whole at any time and in part from time to time, at the option of the Issuer, in principal amounts of $1,000 and integral multiples of $1,000 above such amount (provided that the unredeemed portion of any Note redeemed in part may not be less than $2,000), upon not less than 30 nor more than 60 days’ prior notice as provided in the Indenture, at a Redemption Price equal to (i) if the Redemption Date is prior to the Par Call Date, the greater of (1) 100% of the principal amount of the Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on such Notes that would have been due if the Notes matured on the Par Call Date (exclusive of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 37.5 basis points; or (ii) if the Redemption Date is on or after the Par Call Date, 100% of the principal amount of the Notes to be redeemed; plus, in each of clauses (i) and (ii), accrued and unpaid interest, if any, on the principal amount being redeemed to such Redemption Date.

 

(b)           The Issuer shall have no obligation to redeem, purchase or repay Notes pursuant to any sinking fund or analogous provision or at the option of a Holder thereof.

 

ARTICLE 3
 REPRESENTATIONS OF THE ISSUER

 

SECTION 3.01             Authority of the Issuer.  The Issuer is duly authorized to execute and deliver this Second Supplemental Indenture, and all partnership action on its part required for the execution and delivery of this Second Supplemental Indenture has been duly and effectively taken.

 

SECTION 3.02             Truth of Recitals and Statements.  The Issuer warrants that the recitals of fact and statements contained in this Second Supplemental Indenture are true and correct, and that the recitals of fact and statements contained in all certificates and other documents furnished thereunder will be true and correct.

 

ARTICLE 4
 CONCERNING THE TRUSTEE

 

SECTION 4.01             Acceptance of Trusts.  The Trustee accepts the trusts hereunder and agrees to perform the same, but only upon the terms and conditions set forth in the Original Indenture and in this Second Supplemental Indenture, to all of which the Issuer and the respective Holders of the Notes at any time hereafter outstanding agree by their acceptance thereof.

 

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SECTION 4.02             No Responsibility of Trustee for Recitals, Etc.  The recitals and statements contained in this Second Supplemental Indenture shall be taken as the recitals and statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same.  The Trustee makes no representations as to the validity or sufficiency of this Second Supplemental Indenture, except that the Trustee is duly authorized by all necessary corporate actions to execute and deliver this Second Supplemental Indenture.

 

ARTICLE 5
 MISCELLANEOUS PROVISIONS

 

SECTION 5.01             Relation to the Original Indenture.  The provisions of this Second Supplemental Indenture shall become effective immediately upon the execution and delivery hereof.  This Second Supplemental Indenture and all the terms and provisions herein contained shall form a part of the Original Indenture as fully and with the same effect as if all such terms and provisions had been set forth in the Original Indenture; provided, however, such terms and provisions shall be so included in this Second Supplemental Indenture solely for the benefit of the Issuer, the Trustee and the Holders of the Notes.  The Original Indenture is hereby ratified and confirmed and shall remain and continue in full force and effect in accordance with the terms and provisions thereof, as supplemented by this Second Supplemental Indenture, and the Original Indenture and this Second Supplemental Indenture shall be read, taken and construed together as one instrument.

 

SECTION 5.02             Meaning of Terms.  Any term used in this Second Supplemental Indenture which is defined in the Original Indenture shall have the meaning specified in the Original Indenture, unless the context shall otherwise require.

 

SECTION 5.03             Counterparts of Supplemental Indenture. This Second Supplemental Indenture may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

 

SECTION 5.04             Governing Law.  THIS SECOND SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed as of the day and year first above written.

 

	
 
    	
EQT   MIDSTREAM PARTNERS, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
EQT Midstream Services,   LLC,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Robert J. McNally
    
	
 
    	
 
    	
Name:
    	
Robert   J. McNally
    
	
 
    	
 
    	
Title:
    	
Senior   Vice President and Chief Financial Officer
    

 

Signature Page to Second Supplemental Indenture

 

 

	
 
    	
THE BANK OF NEW YORK   MELLON TRUST COMPANY, N.A., as Trustee
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ R. Tarnas
    
	
 
    	
Name: 
    	
R. Tarnas
    
	
 
    	
Title: 
    	
Vice President
    

 

Signature Page to Second Supplemental Indenture

 

 

*        To be included only if the Security is a Global Security.

 

Exhibit A

 

[FORM OF FACE OF SECURITY]

 

[Unless and until it is exchanged in whole or in part for Securities in definitive form, this Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.  The Depository Trust Company (55 Water Street, New York, New York), a New York corporation (“DTC”), shall act as the Depositary until a successor shall be appointed by the Issuer and the Registrar.  Unless this certificate is presented by an authorized representative of DTC to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.]*

 

EQT MIDSTREAM PARTNERS, LP

 

4.125% SENIOR NOTE DUE 2026

 

CUSIP No.              

	
No.       
    	
$               
    

 

EQT Midstream Partners, LP, a Delaware limited partnership (the “Issuer,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, promises to pay to              or registered assigns, the principal sum of                        Dollars [, or such greater or lesser amount as indicated on the Schedule of Exchanges of Securities hereto,]* on December 1, 2026.

	
 
    	
 
    	
 
    
	
 
    	
Interest   Payment Dates:
    	
June 1 and   December 1
    
	
 
    	
 
    	
 
    
	
 
    	
Record   Dates:
    	
May 15 and   November 15
    
	
 
    	
 
    

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

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IN WITNESS WHEREOF, the Issuer has caused this Security to be signed manually or by facsimile by its duly authorized officers.

 

	
Dated:
    	
 
    
	
 
    	
 
    
	
 
    	
EQT   MIDSTREAM PARTNERS, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
EQT Midstream Services,   LLC,
    
	
 
    	
 
    	
its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Certificate of Authentication:

 

This is one of the Securities of the series
 designated therein referred to in the within-
 mentioned Indenture.

 

	
THE BANK OF NEW YORK   MELLON
    	
 
    
	
TRUST COMPANY, N.A., as Trustee
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Officer
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    

 

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[FORM OF REVERSE OF SECURITY]

 

EQT MIDSTREAM PARTNERS, LP

 

4.125% SENIOR NOTE DUE 2026

 

This Security is one of a duly authorized issue of 4.125% Senior Notes due 2026 (the “Securities”) of EQT Midstream Partners, LP, a Delaware limited partnership (the “Issuer”).

 

1.             Interest.  The Issuer promises to pay interest on the principal amount of this Security at 4.125% per annum.  The Issuer will pay interest semiannually on June 1 and December 1 of each year (each an “Interest Payment Date”), or if any such day is not a Business Day, on the next succeeding Business Day.  Interest on the Securities will accrue from the most recent Interest Payment Date on which interest has been paid or, if no interest has been paid, from November 4, 2016; provided that if there is no existing Default in the payment of interest, and if this Security is authenticated between a record date referred to on the face hereof (each, a “Record Date”) and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be June 1, 2017.  The Issuer shall pay interest on overdue principal and premium (if any) from time to time at a rate equal to the interest rate then in effect; it shall pay interest on overdue installments of interest (without regard to any applicable grace periods) from time to time at the same rate to the extent lawful.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.

 

2.             Method of Payment.  The Issuer will pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the Record Date next preceding the Interest Payment Date, even if such Securities are canceled after such Record Date and on or before such Interest Payment Date.  The Holder must surrender this Security to a Paying Agent to collect principal payments.  The Issuer will pay the principal of, premium (if any) on and interest on the Securities in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.  Such amounts shall be payable at the offices of the Trustee (as defined below); provided that, at the option of the Issuer, the Issuer may pay such amounts (1) by wire transfer with respect to Global Securities or (2) by check payable in such money mailed to a Holder’s registered address with respect to any Securities.

 

3.             Paying Agent and Registrar.  Initially, The Bank of New York Mellon Trust Company, N.A. (the “Trustee”), the trustee under the Indenture (as defined below), will act as Paying Agent and Registrar.  The Issuer may change any Paying Agent or Registrar without notice to any Holder.  The Issuer or any Subsidiary of the Issuer may act in any such capacity.

 

4.             Indenture.  The Issuer issued the Securities under an Indenture, dated as of August 1, 2014 (the “Base Indenture”), among the Issuer, certain Subsidiaries of the Issuer party thereto and the Trustee, as amended and supplemented with respect to the Securities by the Second Supplemental Indenture thereto, dated as of November 4, 2016 and as it may otherwise be amended and supplemented thereafter with applicability to the Securities (the Base Indenture,

 

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as so amended and supplemented, the “Indenture”).  The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”), as in effect on the date of execution of the Indenture.  The Securities are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms and for the definitions of capitalized terms used but not defined herein.  The Securities are unsecured general obligations of the Issuer limited to $500,000,000 in aggregate principal amount; provided, however, that the authorized aggregate principal amount of the Securities may be increased before or after the issuance of any Securities by a Board Resolution (or action pursuant to a Board Resolution) to such effect.  The Base Indenture provides for the issuance of other series of debt securities (including the Securities, the “Debt Securities”) thereunder.

 

5.             Denominations, Transfer, Exchange.  The Securities are in registered form without coupons in minimum denominations of $2,000 and any integral multiples of $1,000.  The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture.  Neither the Issuer, the Trustee nor the Registrar shall be required to register the transfer or exchange of (a) any Security selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part, or (b) any Security during the period beginning 15 Business Days before the giving of notice of redemption of Securities to be redeemed and ending at the close of business on the day of transmission.

 

6.             Persons Deemed Owners.  The registered Holder of a Security shall be treated as its owner for all purposes.

 

7.             Redemption.  The Securities are subject to redemption, in whole at any time and in part from time to time, at the option of the Issuer, in principal amounts of $1,000 and integral multiples of $1,000 above such amount (provided that the unredeemed portion of any Security redeemed in part may not be less than $2,000), upon not less than 30 nor more than 60 days’ prior notice as provided in the Indenture, at a Redemption Price equal to (i) if the Redemption Date is prior to the Par Call Date, the greater of (1) 100% of the principal amount of the Securities to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on such Securities that would have been due if the Securities matured on the Par Call Date (exclusive of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 37.5 basis points; or (ii) if the Redemption Date is on or after the Par Call Date, 100% of the principal amount of the Securities to be redeemed; plus, in each of clauses (i) and (ii), accrued and unpaid interest, if any, on the principal amount being redeemed to such Redemption Date.

 

8.             Amendments and Waivers.  Subject to certain exceptions and limitations, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of a majority in principal amount of the then outstanding Debt Securities of all series affected by such amendment or supplement (acting as one class), and any existing or past Default or Event of Default under, or compliance with any provision of, the Indenture may be waived (other than any continuing Default or Event of Default in the payment of the principal of, premium (if any)

 

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on or interest on the Securities) by the Holders of a majority in principal amount of the then outstanding Debt Securities of any series or of all series (acting as one class) in accordance with the terms of the Indenture.  Without the consent of any Holder, the Issuer, the Subsidiary Guarantors, if any, and the Trustee may amend or supplement the Indenture or the Securities or waive any provision of either: (i) to cure any ambiguity, omission, defect or inconsistency; (ii) if required, to provide for the assumption of the obligations of the Issuer or any Subsidiary Guarantor under the Indenture in the case of the merger, consolidation or sale, lease, conveyance, transfer or other disposition of all or substantially all of the assets of the Issuer or such Subsidiary Guarantor; (iii) to provide for uncertificated Securities in addition to or in place of certificated Securities; (iv) to provide any security for, or to add any guarantees of or additional obligors on, the Securities or any related Guarantees; (v) to comply with any requirement in order to effect or maintain the qualification of the Indenture under the TIA; (vi) to add to the covenants of the Issuer or any Subsidiary Guarantor for the benefit of the Holders of the Securities, or to surrender any right or power conferred by the Indenture upon the Issuer or any Subsidiary Guarantor; (vii) to add any additional Events of Default with respect to all or any series of the Debt Securities; (viii) to change or eliminate any of the provisions of the Indenture, provided that no outstanding Security is adversely affected in any material respect; (ix) to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of the Securities pursuant to the Indenture; or (x) to evidence and provide for the acceptance of appointment under the Indenture by a successor Trustee with respect to the Securities and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one Trustee, pursuant to the requirements of the Indenture.

 

The right of any Holder to participate in any consent required or sought pursuant to any provision of the Indenture (and the obligation of the Issuer or any Subsidiary Guarantor to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Issuer or such Subsidiary Guarantor in a notice furnished to Holders in accordance with the terms of the Indenture.

 

Without the consent of each Holder affected, an amendment, supplement or waiver may not (i) reduce the amount of Debt Securities whose Holders must consent to an amendment, supplement or waiver; (ii) reduce the rate of or change the time for payment of interest, including default interest, on any Security; (iii) reduce the principal of or premium on, or change the Stated Maturity of, any Security; (iv) reduce the premium, if any, payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed; (v) change the coin or currency in which any Security or any premium or interest with respect thereto is payable; (vi) impair the right to institute suit for the enforcement of any payment of principal of or premium (if any) or interest on any Security, except as provided in the Indenture; (vii) make any change in the percentage of principal amount of Debt Securities necessary to waive compliance with certain provisions of the Indenture or make any change in the provision for modification; or (viii) waive a continuing Default or Event of Default in the payment of principal of or premium (if any) or interest on the Securities.

 

A supplemental indenture that changes or eliminates any covenant or other provision of the Base Indenture, as supplemented from time to time, which has expressly been

 

A-5

 

included solely for the benefit of one or more particular series of Debt Securities under the Base Indenture, or which modifies the rights of the Holders of Debt Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under the Indenture of the Holders of Debt Securities of any other series.

 

9.             Defaults and Remedies.  Events of Default are defined in the Indenture and generally include: (i) default for 30 days in payment of any interest on the Securities; (ii) default in any payment of principal of or premium, if any, on the Securities as and when due and payable; (iii) default by the Issuer or any Subsidiary Guarantor in compliance with any of its other covenants or agreements in, or provisions of, the Securities or in the Indenture which shall not have been remedied within 90 days after written notice by the Trustee or by the holders of at least 25% in principal amount of the Securities then outstanding (or, in the event that other Debt Securities issued under the Base Indenture are also affected by the default, then 25% in principal amount of all outstanding Debt Securities so affected); (iv) certain events involving bankruptcy, insolvency or reorganization of the Issuer or any Subsidiary Guarantor that is a Significant Subsidiary or (v) any Guarantee by a Subsidiary Guarantor that is a Significant Subsidiary ceases to be in full force and effect with respect to Securities (except as otherwise provided in the Indenture) or is declared null and void in a judicial proceeding, or any such Subsidiary Guarantor denies or disaffirms its obligations under the Indenture or such Guarantee.  If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Securities (or, in the case of an Event of Default described in clause (iii) above, if outstanding Debt Securities of other series are affected by such Default, then at least 25% in principal amount of the then outstanding Debt Securities so affected), may declare the principal of and interest on all the Securities (or such Debt Securities) to be immediately due and payable, except that in the case of an Event of Default described in clause (iv) above, all outstanding Debt Securities under the Base Indenture become due and payable immediately without further action or notice.  The amount due and payable upon the acceleration of any Security is equal to 100% of the principal amount thereof plus accrued interest to the date of payment.  Holders may not enforce the Indenture or the Securities except as provided in the Indenture.  The Trustee may require security or indemnity satisfactory to it before it enforces the Indenture or the Securities.  Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Securities (or affected Debt Securities) may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders notice of any continuing default (except a default in payment of principal, premium or interest) if it determines that withholding notice is in their interests.  The Issuer must furnish annual compliance certificates to the Trustee.

 

10.          Discharge Prior to Maturity.  The Indenture with respect to the Securities shall be discharged and canceled upon the payment of all of the Securities and shall be discharged except for certain obligations upon the irrevocable deposit with the Trustee of any combination of funds and Government Obligations sufficient for such payment.

 

11.          Trustee Dealings with Issuer.  The Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and may make loans to, accept deposits from, and perform services for the Issuer or any of its Affiliates, and may otherwise deal with the Issuer or any such Affiliates, as if it were not Trustee.

 

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12.          No Recourse Against Others. Obligations of the Issuer and any Subsidiary Guarantor under the Indenture, the Securities and any related Guarantees are non-recourse to the General Partner and its Affiliates (other than the Issuer and such Subsidiary Guarantor), and payable only out of cash flow and assets of the Issuer and such Subsidiary Guarantor.  The Trustee, and each Holder of a Security by its acceptance hereof, will be deemed to have agreed in the Indenture that (1) the General Partner and its assets (and any of its Affiliates other than the Issuer and a Subsidiary Guarantor) shall not be liable for any of the obligations of the Issuer and a Subsidiary Guarantor under the Indenture, the Securities or any related Guarantees, and (2) no director, manager, member, officer, employee, stockholder, partner, unitholder or other owner of the Issuer, any Subsidiary Guarantor, the Trustee, the General Partner or any Affiliate of the foregoing entities shall have any liability in respect of the obligations of the Issuer and a Subsidiary Guarantor under the Indenture, the Securities or any related Guarantees by reason of his, her or its status.  Each Holder by accepting a Security waives and releases all such liability.  The waiver and release is part of the consideration for the issuance of the Securities.

 

13.          Authentication.  This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

14.          CUSIP Numbers.  Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Securities as a convenience to the Holders of the Securities.  No representation is made as to the accuracy of such numbers as printed on the Securities and reliance may be placed only on the other identification numbers printed thereon.

 

15.          Abbreviations.  Customary abbreviations may be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

A-7

 

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture.  Request may be made to:

 

EQT Midstream Services, LLC

625 Liberty Avenue, Suite 1700

Pittsburgh, Pennsylvania 15222

Attn:  General Counsel

 

A-8

 

SCHEDULE OF EXCHANGES OF SECURITIES*

 

The following exchanges of a part of this Global Security for other Securities have been made:

 

	
Date of Exchange
    	
 
    	
Amount of
   Decrease in
   Principal Amount
   of this Global Security
    	
 
    	
Amount of
   Increase in
   Principal Amount
   of this Global Security
    	
 
    	
Principal Amount
   of this Global
   Security Following
   Such Decrease
   or Increase
    	
 
    	
Signature of
   Authorized Officer
   of Trustee or
   Security Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

A-9

 

ASSIGNMENT FORM

 

To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to:

 

	
 
    
	
(Insert assignee’s social security or tax I.D. number)
    
	
 
    
	
 
    
	
 
    
	
 
    
	
(Print or type assignee’s name, address and zip code)
    

 

and irrevocably appoint                                                                                   as agent to transfer this Security on the books of the Issuer.  The agent may substitute another to act for him.

 

	
Date:
    	
 
    	
 
    	
Your   Signature:
    	
 
    
	
 
    	
 
    	
 
    	
(Sign exactly as your name appears on the face of this Security)
    
	
 
    	
 
    	
 
    
	
Signature Guarantee:
    	
 
    
	
(Participant in a   Recognized Signature
    
	
Guarantee Medallion   Program)
    
						

 

A-10

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