Document:

Exhibit 10.1

 

FIRST AMENDMENT TO AMENDED AND
 RESTATED CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is entered into as of May 2, 2011 by and among each of the persons listed on the signature pages hereto as lenders (the “Lenders”), Crosstex Energy, L.P., a Delaware limited partnership (the “Borrower”), and Bank of America, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and L/C Issuer.

 

ARTICLE I

 

BACKGROUND

 

A.            The Lenders, the Administrative Agent, the L/C Issuer and the Borrower are parties to that certain Amended and Restated Credit Agreement dated as of February 10, 2010, (as amended, supplemented or restated, the “Credit Agreement”).  Terms defined in the Credit Agreement and not otherwise defined herein have the same meanings when used herein.

 

B.            The Borrower has requested, and the Lenders have agreed to amend the Credit Agreement as provided for herein and on the terms and conditions set forth herein.

 

ARTICLE II

 

AGREEMENT

 

NOW THEREFORE, in consideration of the covenants, conditions and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are all hereby acknowledged, the parties hereto covenant and agree as follows:

 

Section 1.               Amendments to the Credit Agreement.  The Credit Agreement is hereby amended as follows:

 

(a)           Section 1.01 of the Credit Agreement is hereby amended by restating the following definitions to read in their entirety as follows:

 

“Applicable Rate” means, from time to time, as of any date of determination, the following percentages determined as a function of the Consolidated Leverage Ratio for the Borrower and its Subsidiaries:

 

	
Pricing
   Level
    	
 
    	
Consolidated
   Leverage Ratio
    	
 
    	
Eurodollar
   Rate Loans
    	
 
    	
Base Rate
   Loans
    	
 
    	
Commitment
   Fees
    	
 
    	
Letter of Credit Fees
    	
 
    
	
1
    	
 
    	
> 4.50
    	
 
    	
3.00
    	
%
    	
2.00
    	
%
    	
0.50
    	
%
    	
3.00
    	
%
    
	
2
    	
 
    	
> 4.00 and <4.50
    	
 
    	
2.75
    	
%
    	
1.75
    	
%
    	
0.50
    	
%
    	
2.75
    	
%
    
	
3
    	
 
    	
> 3.50 and <4.00
    	
 
    	
2.50
    	
%
    	
1.50
    	
%
    	
0.50
    	
%
    	
2.50
    	
%
    
	
4
    	
 
    	
> 3.00 and <3.50
    	
 
    	
2.25
    	
%
    	
1.25
    	
%
    	
0.50
    	
%
    	
2.25
    	
%
    
	
5
    	
 
    	
< 3.00
    	
 
    	
2.00
    	
%
    	
1.00
    	
%
    	
0.375
    	
%
    	
2.00
    	
%
    

 

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The foregoing ratio shall be determined from the Compliance Certificate of the Borrower and its Subsidiaries most recently delivered pursuant to Section 6.02(a).  Any increase or decrease in the Applicable Rate shall be effective upon the first Business Day immediately following the date of delivery of the Compliance Certificate required by such Section; provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then, upon the request of the Required Lenders Pricing Level 1 shall apply, in each case as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the date on which such Compliance Certificate is delivered.  Beginning on the First Amendment Effective Date until delivery of the Compliance Certificate for the period ending March 31, 2011, the Applicable Rate shall be at the Pricing Level associated with the Consolidated Leverage Ratio reflected on the Compliance Certificate delivered for the period ended December 31, 2010.

 

“Consolidated EBITDA” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) the provision for Federal, state, local and foreign income taxes payable by the Borrower and its Subsidiaries for such period, (iii) depreciation and amortization expense, (iv) non-cash items of the Borrower and its Subsidiaries reducing such Consolidated Net Income, (v) other non-recurring items of the Borrower and its Subsidiaries reducing such Consolidated Net Income, and (vi) without duplication, the Transaction Costs properly allocated to such period, if applicable, and minus (b) the following to the extent included in calculating such Consolidated Net Income:  (i) Federal, state, local and foreign income tax credits of the Borrower and its Subsidiaries for such period and (ii) all non-cash items increasing Consolidated Net Income for such period; provided, however, notwithstanding the foregoing, (A) net income attributable to Subsidiaries that are not Guarantors shall not be considered in calculating Consolidated EBITDA, but actual cash distributions to the Borrower or any of its Subsidiaries by such Subsidiaries that are not Guarantors shall be included in calculating Consolidated EBITDA and (B) actual cash distributions to the Borrower and its Subsidiaries by any Persons that are not Subsidiaries shall be included in calculating Consolidated EBITDA.

 

For purposes of calculating the Consolidated Leverage Ratio, Consolidated Senior Leverage Ratio and Consolidated Interest Coverage Ratio, Consolidated EBITDA shall be calculated, on a pro forma basis, after giving effect to, without duplication, any permitted Acquisition occurring during the period commencing on the first day of such period to and including the date of such Acquisition (the “Reference Period”), as if such Acquisition occurred on the first day of the Reference Period.  In

 

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making the calculation contemplated by the preceding sentence, EBITDA generated or to be generated by such acquired Person or by such acquired Property shall be determined in good faith by the Borrower based on reasonable assumptions and may take into account pro forma expenses that would have been incurred by the Borrower and its Subsidiaries in the operation of such acquired Person or acquired Property, during such period computed on the basis of personnel expenses for employees retained or to be retained by the Borrower and its Subsidiaries in the operation of such acquired Person or acquired Property and non-personnel costs and expenses incurred by the Borrower and its Subsidiaries in the operation of the Borrower’s and its Subsidiaries’ business at similarly situated facilities of the Borrower or any of its Subsidiaries; provided, however, that such pro forma calculations shall be reasonably acceptable to the Administrative Agent if the Borrower does not provide the Administrative Agent with an Approved Consultant’s Report supporting such pro forma calculations.

 

For purposes of calculating the Consolidated Leverage Ratio, Consolidated Senior Leverage Ratio and the Consolidated Interest Coverage Ratio, Consolidated EBITDA shall be calculated by deducting, to the extent previously included in the calculation for any relevant period, Consolidated EBITDA attributable to a particular asset subject to a Disposition prepayment required by Section 2.05(a) after giving effect to such Disposition occurring during the period commencing on the first day of such period to and including the date of such Disposition (the “Disposition Reference Period”), as if such Disposition occurred on the first day of the Disposition Reference Period.

 

Notwithstanding any provision of this Agreement which may otherwise be to the contrary, if any lease pursuant to the Eunice Lease Documents is treated under GAAP as a capital lease, then, for all computations of Consolidated EBITDA hereunder, such lease shall be treated as an operating lease and Consolidated Net Income, Consolidated Interest Charges, provision for Federal, state, local and foreign taxes, depreciation, amortization and other non cash items, for all purposes of determining Consolidated EBITDA under this Agreement for any period, shall be adjusted as though such lease was accounted for as an operating lease.

 

“Maturity Date” means May 2, 2016, provided, however, that if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

 

“Material Subsidiary” shall mean a Wholly-Owned Subsidiary of the Borrower having:  either (a) 2.5% or more of consolidated EBITDA for the four fiscal quarter period ending as of the most recent fiscal quarter for which the Borrower has delivered financial statements pursuant to

 

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Section 6.01(a) or (b); or (b) 1% of the book value of the consolidated assets of the Borrower and its Subsidiaries as of the end of the most recent fiscal quarter for which the Borrower has delivered financial statements pursuant to Section 6.01(a) or (b); provided, however, to the extent that executing a Guaranty would result in adverse tax consequences with respect to any non-operating Subsidiary (as reasonably determined by the Borrower), such non-operating Subsidiary shall not be considered a “Material Subsidiary” unless such non-operating Subsidiary has either (i) 5% or more of consolidated EBITDA for the four fiscal quarter period ending as of the most recent fiscal quarter for which the Borrower has delivered financial statements pursuant to Section 6.01(a) or (b) or (ii) 5% or more of the book value of the consolidated assets of the Borrower and its Subsidiaries as of the end of the most recent fiscal quarter for which the Borrower has delivered financial statements pursuant to Section 6.01(a) or (b).

 

“Swap Contract” means (a) 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, 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 (b) any and all transactions of any kind, including physical trades of Hydrocarbons, 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. or the North American Energy Standards Board, any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Threshold Amount” means $30,000,000.

 

“Transaction Costs” means all (a) upfront, original issue discount, legal, professional and advisory fees paid by the Borrower (whether or not incurred by the Borrower) in connection with the negotiation and execution, delivery and performance of the Borrower’s obligations under (i) this Agreement (including any amendments, supplements or restatements), (ii) the Indenture (and the Borrower’s issuance of Indebtedness governed thereby) and (iii) the 2010 Equity Issuance, (b) payments made by the Borrower to any counterparty to any Swap Contract

 

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in connection with the termination of such Swap Contract as a result of the transactions contemplated by this Agreement (including any amendments, supplements or restatements) and the Indenture, and (c) make-whole amounts, prepayment premiums and interest paid in kind with respect to Indebtedness prepaid on or before the Closing Date with the proceeds of the Indebtedness incurred pursuant to this Agreement and the Indenture.

 

(b)           Section 1.01 of the Credit Agreement is hereby amended by adding the following new defined terms to Section 1.01 in alphabetical order:

 

“Consolidated Net Tangible Assets” means, with respect to any Person at any date of determination, the aggregate amount of total assets included in such Person’s most recent quarterly or annual consolidated balance sheet prepared in accordance with GAAP, less applicable reserves reflected in such balance sheet, after deducting the following amounts:  (a) all current liabilities reflected in such balance sheet, and (b) all goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles reflected in such balance sheet.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

 

“First Amendment Effective Date” means May 2, 2011.

 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“Permitted Business” means either (a) gathering, transporting, compressing, treating, processing, marketing, distributing, storing or otherwise handling Hydrocarbons, or activities or services reasonably related or ancillary thereto including entering into Hydrocarbon Hedge Agreements and Swap Contracts in the ordinary course of business and not for speculative purposes to support these businesses and the development, manufacture and sale of equipment or technology related to these activities, or (b) any other business that generates gross income that constitutes “qualifying income” under Section 7704(d) of the Code.

 

“Wholly-Owned” means, in respect of any Person, any Subsidiary of such Person, all of the Equity Interests of which (other than director’s qualifying shares and/or other nominal amount of Equity Interests required to be held by Persons other than the Borrower and its Subsidiaries under applicable law) is owned by such Person, either directly or indirectly through one or more Wholly-Owned Subsidiaries thereof.

 

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(c)           Section 2.14(a) of the Credit Agreement is hereby amended by deleting “$100,000,000” and substituting “$150,000,000” in lieu thereof.

 

(d)           Section 5.06(b) of the Credit Agreement is hereby restated in its entirety to read as follows:

 

(b) except as specifically disclosed in Schedule 5.06, as to which there is a reasonable possibility of an adverse determination that, if determined adversely, could reasonably be expected to have a Material Adverse Effect, and there has been no adverse change in the status, or financial effect on any Loan Party or any Subsidiary thereof of the matters described on Schedule 5.06, that could reasonably be expected to have a Material Adverse Effect.

 

(e)           Section 6.12 of the Credit Agreement is hereby restated in its entirety to read as follows:

 

6.12         Additional Material Subsidiaries; Additional Security.  (a) Upon the formation or Acquisition of any new direct or indirect Material Subsidiary (including any Subsidiary that becomes a Material Subsidiary) by any Loan Party, then the Borrower shall, at the Borrower’s expense:

 

(i)            subject to subsection (c) below, within 30 Business Days (or such longer period as permitted by the Administrative Agent in its sole discretion) after such formation or Acquisition or such Subsidiary becoming a Material Subsidiary, cause such Subsidiary to duly execute and deliver to the Administrative Agent a supplement to the Guaranty substantially in the form attached thereto;

 

(ii)           subject to subsection (c) below, within 30 Business Days (or such longer period as permitted by the Administrative Agent in its sole discretion) after such formation or Acquisition or such Subsidiary becoming a Material Subsidiary, cause such Subsidiary to duly execute and deliver to the Administrative Agent Collateral Documents, as specified by and in form and substance reasonably satisfactory to the Administrative Agent securing payment of all the Secured Obligations of such Subsidiary under the Loan Documents; and

 

(iii)          within 30 Business Days (or such longer period as permitted by the Administrative Agent in its sole discretion) after such formation or Acquisition or such Subsidiary becoming a Material Subsidiary, cause, subject to subsection (c) below, 100% of the Equity Interests of each such Subsidiary owned by the Borrower or a Guarantor to be subject to a first priority, perfected Lien (subject only to Permitted Liens) in favor of the Administrative Agent pursuant to the terms and conditions of the Collateral Documents.

 

(b)           At any time upon the request of the Administrative Agent, the Borrower shall promptly execute and deliver or, subject to subsection (c) below, cause its Subsidiaries to execute and deliver any and all further instruments and

 

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documents and take all such other action as the Administrative Agent may reasonably deem necessary or desirable in order to perfect, protect, and preserve the Liens of, such Collateral Documents.  In connection with the delivery of any Mortgages to the Administrative Agent as required under this Agreement, as promptly as practicable after the reasonable request of the Administrative Agent, the Borrower shall deliver to the Administrative Agent real property title reports, surveys and engineering, and environmental assessment reports, each in scope, form and substance reasonably satisfactory to Administrative Agent.

 

(c)           In the event the Borrower provides evidence satisfactory to the Administrative Agent in its reasonable discretion that, with respect to a Foreign Subsidiary, (i) a pledge of more than 66% of the Equity Interests in such Foreign Subsidiary or (ii) execution of a supplement to the Guaranty substantially in the form attached hereto by such Foreign Subsidiary, in either such case would cause the undistributed earnings of such Foreign Subsidiary as determined for United States federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s United States parent for United States federal income tax purposes, then the Borrower will cause, and will cause each of its Subsidiaries that is a Domestic Subsidiary to cause 66% of the Equity Interests in such Foreign Subsidiary owned by the Borrower and/or its Domestic Subsidiaries to be subject to a first priority, perfected Lien (subject only to Permitted Liens) in favor of the Administrative Agent pursuant to the terms and conditions of the Collateral Documents, and, notwithstanding anything to the contrary contained herein or in any other Loan Document, such Foreign Subsidiary shall not be required to execute a supplement to the Guaranty in accordance with Section 6.12(a)(i) or any Collateral Documents.

 

(f)            Section 7.01(m) of the Credit Agreement is hereby restated in its entirety to read as follows:

 

(m)          Liens incurred in the ordinary course of business of the Borrower or any Subsidiary with respect to obligations (other than Indebtedness for borrowed money) that do not exceed $25,000,000 at any one time outstanding;

 

(g)           Section 7.02(f) of the Credit Agreement is hereby restated in its entirety to read as follows:

 

(f)            other Investments not included in subsection (e) herein in an amount not to exceed (individually in or in the aggregate) (i) $60,000,000 during any twelve (12) consecutive months, and (ii) $100,000,000 during the term of this Agreement;

 

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(h)           Section 7.03(e) of the Credit Agreement is hereby restated in its entirety to read as follows:

 

(e)           Indebtedness in respect of capital leases, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets within the limitations set forth in Section 7.01(k); provided, however, that the aggregate amount equivalent to principal of all such Indebtedness at any one time outstanding shall not exceed the greater of (i) $75,000,000 and (ii) five percent (5.0%) of the Borrower’s Consolidated Net Tangible Assets;

 

(i)            Section 7.07 of the Credit Agreement is hereby restated in its entirety to read as follows:

 

Engage in any business other than a Permitted Business, except to such extent as would not be material to the Borrower and its Subsidiaries taken as a whole.

 

(j)            Section 7.11 of the Credit Agreement is hereby restated in its entirety to read as follows:

 

7.11         Financial Covenants.

 

(a)           Consolidated Interest Coverage Ratio.  Permit the Consolidated Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less than the ratio set forth below opposite such fiscal quarter:

 

	
Fiscal Quarters Ending
    	
 
    	
Minimum
   Consolidated
   Interest Coverage
   Ratio
    
	
March 31,   2011 and June 30, 2011
    	
 
    	
2.00 to 1.00
    
	
September 30,   2011, December 31, 2011, March 31, 2012 and June 30, 2012
    	
 
    	
2.25 to 1.00
    
	
September 30,   2012 and each fiscal quarter thereafter
    	
 
    	
2.50 to 1.00
    

 

(b)           Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of the Borrower set forth below to be greater than the ratio set forth below opposite such period:

 

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Fiscal Quarters Ending
    	
 
    	
Maximum
   Consolidated
   Leverage Ratio
    
	
March 31,   2011 and June 30, 2011
    	
 
    	
5.00 to 1.00
    
	
September 30,   2011 and each fiscal quarter thereafter
    	
 
    	
4.75 to 1.00
    

 

(c)           Consolidated Senior Leverage Ratio.  Permit the Consolidated Senior Leverage Ratio as of the end of any fiscal quarter of the Borrower, commencing with the fiscal quarter ending March 31, 2011, to be greater than 2.75 to 1.00.

 

(k)           Section 7.16 of the Credit Agreement is hereby restated in its entirety to read as follows:

 

7.16         Prepayments and Modifications of Certain Indebtedness.  Make any optional or scheduled payments or prepayments on account of principal (whether by redemption, purchase, retirement, defeasance, set-off or otherwise) of any Indebtedness permitted by Section 7.03(h) or Section 7.03(i) prior to the Maturity Date, except, provided that no Default has occurred and is continuing or would result from such payment, (a) prepayments, redemptions or purchases of up to 35% of the original principal amount of such Indebtedness with Equity Issuance Proceeds, (b) other prepayments, redemptions, purchases and defeasances of such Indebtedness in an aggregate amount not to exceed $75,000,000 during the term of this Agreement, and (c) other prepayments, redemptions and repurchases with the proceeds of Indebtedness permitted by Section 7.03.  The Borrower shall not amend, supplement or otherwise modify the terms of any Indebtedness permitted by Section 7.03(h) or Section 7.03(i) if such amendment, supplement or other modification would not be permitted by the terms of Section 7.03(i) without the prior written consent of the Required Lenders, which consent will not be unreasonably withheld.

 

(l)            Section 7.17(b) of the Credit Agreement is hereby restated in its entirety to read as follows:

 

(b)           Swap Contracts that are (i) consistent with the Borrower’s risk management policies and historical practices, which risk management policies shall at all times prohibit maintaining an “open” position in natural gas or other commodities or goods, or in any derivative of any thereof and (ii) not speculative in nature.

 

(m)          Schedule 2.01 to the Credit Agreement is hereby substituted with the Schedule 2.01 attached hereto for all purposes under the Credit Agreement and any

 

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reference to Schedule 2.01 in the Loan Documents shall refer to the Schedule 2.01 attached hereto.

 

Section 2.               Conditions Precedent.  This Amendment shall become effective as of the date first set forth above upon the satisfaction of the following conditions precedent:

 

(a)           The Administrative Agent shall have received each of the following:

 

(1)           this Amendment, duly executed by the Borrower, each Lender, and the Administrative Agent;

 

(2)           the acknowledgment attached to this Amendment, duly executed by each Guarantor;

 

(3)           such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of the Borrower and each Guarantor as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment and the other Loan Documents to which the Borrower and such Guarantor is a party or is to be a party;

 

(4)           such documents and certifications as the Administrative Agent may reasonably require to evidence that the Borrower and each Guarantor is duly organized or formed, and that the Borrower and each Guarantor is validly existing, in good standing and qualified to engage in business;

 

(5)           the Administrative Agent shall have received payment or evidence of payment of (i) all reasonable fees and expenses owed by the Borrower to the Administrative Agent including, without limitation, the reasonable fees and expenses of Winstead PC, counsel to the Administrative Agent; and (ii) all other fees agreed to be paid by the Borrower;

 

(6)           the Administrative Agent shall have received for the account of each Lender executing this Amendment an amendment fee and/or an upfront fee, as applicable; and

 

(7)           the Administrative Agent shall have received such other documents, instruments and certificates as reasonably requested by the Administrative Agent and the Lenders.

 

(b)           The representations and warranties set forth in Section 3 of this Amendment shall be true and correct on and as of the date hereof.

 

Section 3.               Representations and Warranties.

 

(a)           The Borrower represents and warrants to the Lenders and the Administrative Agent as set forth below:

 

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(1)           The Borrower (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, and (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to execute, deliver and perform its obligations under this Amendment.

 

(2)           The execution, delivery and performance by the Borrower of this Amendment have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of the Borrower’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under (other than Liens created under the Loan Documents), or require any payment to be made (other than payments required under any Loan Document) under (i) any Contractual Obligation to which the Borrower is a party or affecting the Borrower or its properties or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Borrower or its property is subject; or (c) violate any Law; except in each case referred to in clause (b), to the extent that such conflict, breach, contravention or violation could not reasonably be expected to have a Material Adverse Effect.

 

(3)           No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower of this Amendment, except for such approvals, consents, exemptions, authorizations, other actions, notices and filings as have been obtained, taken, given or made and are in full force and effect and with which the Borrower and its Subsidiaries are in compliance in all material respects or which the failure to have would not result in a Material Adverse Effect.

 

(4)           This Amendment has been duly executed and delivered by the Borrower and acknowledged by each Guarantor.  This Amendment constitutes the legal, valid and binding obligation of the Borrower, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally or by general principles of equity (regardless of whether such enforceability is considered in any proceeding in law or in equity).

 

(5)           The execution, delivery and performance of this Amendment do not adversely affect the enforceability of any Lien of the Collateral Documents.

 

(6)           Except as disclosed in Schedule 5.06 to the Credit Agreement, there is no pending or, to the knowledge of the Borrower, threatened action or proceeding affecting the Borrower or any Subsidiary before any Governmental Authority, referee or arbitrator that could reasonably be expected to have a Material Adverse Effect.

 

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(7)           The representations and warranties made by the Borrower and the Guarantors contained in Article V of the Credit Agreement and in each of the other Loan Documents are true and correct in all material respects on and as of the date hereof, as though made on and as of such date, other than any such representations or warranties that, by the their terms, refer to a specific date, in which case such representation or warranties are true and correct in all material respects as of such earlier specific date.

 

(8)           No event has occurred and is continuing, or would result from the effectiveness of this Amendment, which constitutes a Default.

 

(9)           As of the date hereof, the Borrower has no (a) Material Subsidiaries other than those listed on Schedule 3(a) and (b) non-Material Subsidiaries other than those listed on Schedule 3(b).

 

Section 4.               Reference to and Effect on the Credit Agreement.

 

(a)           On and after the effective date of this Amendment each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Credit Agreement as amended by this Amendment, and each reference in the other Loan Documents to “the Credit Agreement,” “thereunder,” “thereof,” “therein” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended by this Amendment.

 

(b)           Except as specifically amended above, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.  Without limiting the generality of the foregoing, the Collateral Documents and all of the Collateral described therein do and shall continue to secure the payment of all obligations stated to be secured thereby under the Loan Documents.

 

(c)           Except as expressly set forth herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under any of the Loan Documents or constitute a waiver of any provision of any of the Loan Documents.

 

Section 5.               Execution in Counterparts.  This Amendment may be executed in any number of counterparts and by the parties hereto in separate counterparts, each which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument.  Delivery of an executed counterpart of a signature page to this Amendment by telecopier or other electronic imaging means shall be effective as delivery of an originally executed counterpart of this Amendment.

 

Section 6.               Governing Law; Binding Effect.  This Amendment shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, and shall be binding upon the Borrower, the Administrative Agent, the L/C Issuer, each Lender and their respective successors and assigns.

 

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Section 7.               Costs and Expenses.  The Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities hereunder and thereunder.

 

THIS WRITTEN AMENDMENT AND THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Remainder of this page blank; signature pages follow]

 

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Executed as of the date first set forth above.

 

	
 
    	
CROSSTEX   ENERGY, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
Crosstex   Energy GP, LLC,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Michael J. Garberding
    
	
 
    	
 
    	
 
    	
Name:   Michael J. Garberding
    
	
 
    	
 
    	
 
    	
Title:   Senior Vice President – Finance
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

Each of the undersigned, as guarantors under the Amended and Restated Guaranty dated as of February 10, 2010 (the “Guaranty”), hereby (a) consents to this Amendment, and (b) confirms and agrees that the Guaranty is and shall continue to be in full force and effect and is ratified and confirmed in all respects, except that, on and after the effective date of the Amendment each reference in the Guaranty to “the Credit Agreement,” “thereunder,” “thereof,” “therein” or any other expression of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as modified by this Amendment.

 

 

	
ADDRESS   FOR ALL
   GUARANTORS:
    	
CROSSTEX   ENERGY SERVICES, L.P.
    
	
 
    	
By:
    	
Crosstex   Operating GP, LLC,
    
	
2501   Cedar Springs
    	
 
    	
its   general partner
    
	
Suite 100
    	
 
    	
 
    
	
Dallas,   Texas 75201
    	
 
    	
 
    
	
Attention:   General Counsel
    	
By:
    	
/s/   Michael J. Garberding
    
	
 
    	
 
    	
Name:   Michael J. Garberding
    
	
 
    	
 
    	
Title:   Vice President – Finance
    

 

 

	
 
    	
CROSSTEX   OPERATING GP, LLC
    
	
 
    	
CROSSTEX   ENERGY SERVICES GP, LLC
    
	
 
    	
CROSSTEX   LIG, LLC
    
	
 
    	
CROSSTEX   TUSCALOOSA, LLC
    
	
 
    	
CROSSTEX   LIG LIQUIDS, LLC
    
	
 
    	
CROSSTEX   PROCESSING SERVICES, LLC
    
	
 
    	
CROSSTEX   PELICAN, LLC
    
	
 
    	
CROSSTEX   EUNICE, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael J. Garberding
    
	
 
    	
 
    	
Name:   Michael J. Garberding
    
	
 
    	
 
    	
Title:   Vice President — Finance
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
CROSSTEX   GULF COAST MARKETING LTD.
    
	
 
    	
CROSSTEX   CCNG PROCESSING LTD.
    
	
 
    	
CROSSTEX   NORTH TEXAS PIPELINE, L.P.
    
	
 
    	
CROSSTEX   NORTH TEXAS GATHERING, L.P.
    
	
 
    	
CROSSTEX   NGL MARKETING, L.P.
    
	
 
    	
CROSSTEX   NGL PIPELINE, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
Crosstex   Energy Services GP, LLC,
    
	
 
    	
 
    	
general   partner of each above limited
    
	
 
    	
 
    	
partnership
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael J. Garberding
    
	
 
    	
 
    	
Name:   Michael J. Garberding
    
	
 
    	
 
    	
Title:   Vice President – Finance
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SABINE   PASS PLANT FACILITY JOINT VENTURE
    
	
 
    	
 
    
	
 
    	
By:
    	
Crosstex   Processing Services, LLC,
    
	
 
    	
 
    	
as   general partner, and
    
	
 
    	
By:
    	
Crosstex   Pelican, LLC,
    
	
 
    	
 
    	
as   general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael J. Garberding
    
	
 
    	
 
    	
Name:   Michael J. Garberding
    
	
 
    	
 
    	
Title:   Vice President – Finance
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
BANK   OF AMERICA, N.A.,
    
	
 
    	
as   Administrative Agent,
    
	
 
    	
a   Lender and L/C Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffrey H. Rathkamp
    
	
 
    	
 
    	
Name:   Jeffrey H. Rathkamp
    
	
 
    	
 
    	
Title:   Managing Director
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
BNP PARIBAS
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Larry Robinson
    
	
 
    	
 
    	
Name:   Larry Robinson
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Andrew Ostrov
    
	
 
    	
 
    	
Name:   Andrew Ostrov
    
	
 
    	
 
    	
Title:   Director
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
COMERICA   BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John S. Lesikar
    
	
 
    	
 
    	
Name:   John S. Lesikar
    
	
 
    	
 
    	
Title:   Assistant Vice President
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
COMPASS   BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Greg Determann
    
	
 
    	
 
    	
Name:   Greg Determann
    
	
 
    	
 
    	
Title:   Senior Vice President
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
ROYAL   BANK OF CANADA
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jason S. York
    
	
 
    	
 
    	
Name:   Jason S. York
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
SUMITOMO   MITSUI BANKING  CORP., NEW YORK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Masakazu Hasegawa
    
	
 
    	
 
    	
Name:   Masakazu Hasegawa
    
	
 
    	
 
    	
Title:   General Manager
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Daniel K. Hansen
    
	
 
    	
 
    	
Name:   Daniel K. Hansen
    
	
 
    	
 
    	
Title:   Vice President
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
WELLS   FARGO BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   David C. Brooks
    
	
 
    	
 
    	
Name:   David C. Brooks
    
	
 
    	
 
    	
Title:   Director
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
WACHOVIA   BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   David C. Brooks
    
	
 
    	
 
    	
Name:   David C. Brooks
    
	
 
    	
 
    	
Title:   Director
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
BANK   OF MONTREAL
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Gumaro Tijerina
    
	
 
    	
 
    	
Name:   Gumaro Tijerina
    
	
 
    	
 
    	
Title:   Director
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
CAPITAL   ONE, NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Wesley Fontana
    
	
 
    	
 
    	
Name:   Wesley Fontana
    
	
 
    	
 
    	
Title:   Vice President
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
GOLDMAN   SACHS BANK USA
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Mark Walton
    
	
 
    	
 
    	
Name:   Mark Walton
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
MORGAN   STANLEY BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Sherrese Clarke
    
	
 
    	
 
    	
Name:   Sherrese Clarke
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

	
 
    	
CITIBANK,   N.A.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Todd J. Mogil
    
	
 
    	
 
    	
Name:   Todd J. Mogil
    
	
 
    	
 
    	
Title:   Vice President
    

 

FIRST AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT – Signature Page

 

 

SCHEDULE 2.01

 

COMMITMENTS

AND APPLICABLE PERCENTAGES

 

	
Lender
    	
 
    	
Commitment
    	
 
    	
Applicable
   Percentage
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Bank of America, N.A.
    	
 
    	
$
    	
50,000,000
    	
 
    	
10.31
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
BNP Paribas
    	
 
    	
$
    	
50,000,000
    	
 
    	
10.31
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Royal Bank of Canada
    	
 
    	
$
    	
50,000,000
    	
 
    	
10.31
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Bank of Montreal
    	
 
    	
$
    	
50,000,000
    	
 
    	
10.31
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Citibank, N.A.
    	
 
    	
$
    	
50,000,000
    	
 
    	
10.31
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
U.S. Bank National Association
    	
 
    	
$
    	
45,000,000
    	
 
    	
9.28
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Capital One, National Association
    	
 
    	
$
    	
35,000,000
    	
 
    	
7.22
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Comerica Bank
    	
 
    	
$
    	
35,000,000
    	
 
    	
7.22
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Wachovia Bank, N.A.
    	
 
    	
$
    	
29,982,371
    	
 
    	
6.18
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Morgan Stanley Bank, N.A.
    	
 
    	
$
    	
25,000,000
    	
 
    	
5.15
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Wells Fargo Bank, N.A.
    	
 
    	
$
    	
20,017,629
    	
 
    	
4.13
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Compass Bank
    	
 
    	
$
    	
20,000,000
    	
 
    	
4.12
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sumitomo Mitsui Banking Corporation
    	
 
    	
$
    	
15,000,000
    	
 
    	
3.09
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Goldman Sachs Bank USA
    	
 
    	
$
    	
10,000,000
    	
 
    	
2.06
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
$
    	
485,000,000
    	
 
    	
100.000000000
    	
%
    

 

 

SCHEDULE 3(a)

 

MATERIAL SUBSIDIARIES

 

Crosstex Energy Services, L.P. (DE)

Crosstex Operating GP, LLC (DE)*

Crosstex Energy Services GP, LLC (DE)*

Crosstex LIG, LLC (LA)

Crosstex Tuscaloosa, LLC (LA)*

Crosstex LIG Liquids, LLC (LA)

Crosstex Gulf Coast Marketing Ltd. (TX)*

Crosstex CCNG Processing Ltd. (TX)

Crosstex North Texas Pipeline, L.P. (TX)

Crosstex North Texas Gathering, L.P. (TX)

Crosstex NGL Pipeline, L.P. (TX)

Crosstex NGL Marketing, L.P. (TX)

Crosstex Processing Services, LLC (DE)

Crosstex Pelican, LLC (DE)

Sabine Pass Plant Facility Joint Venture (TX)

Crosstex Eunice, LLC (LA)

 

*Indicates entity has previously been treated as a Material Subsidiary (e.g., it pledged assets and is a Guarantor) but does not technically meet the definition of a “Material Subsidiary” as of the date of this Amendment.

 

 

SCHEDULE 3(b)

 

NON-MATERIAL SUBSIDIARIES

 

Crosstex Louisiana Energy, L.P. (Delaware)

Crosstex Louisiana Gathering, LLC (Louisiana)

Crosstex DC Gathering Company, J.V. (Texas)

Crosstex Energy Finance Corporation (Delaware)EXHIBIT 10.4C

 

MB FINANCIAL BANK, N.A.

 

Change In Control Severance Agreement

 

THIS SEVERANCE AGREEMENT, (the “Agreement”) is entered into as of February     , 2011 (the “Effective Date”), by and between MB Financial Bank, N.A., a national banking association (the “Company”) and the undersigned officer (the “Executive”);

 

WITNESSETH THAT:

 

WHEREAS, the Executive is employed by the Company, and the Company desires to provide protection to Executive in connection with any change in control of the Company.

 

NOW, THEREFORE, it is hereby agreed by and between the parties, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, as follows:

 

ARTICLE I

 

ESTABLISHMENT AND PURPOSE

 

1.1          Term of the Agreement.  Unless expired earlier as provided in Section 1.3 or terminated by the Company pursuant to Section 2.4, this Agreement will commence on the Effective Date and remain in effect for an initial term of three years which will be automatically extended for one year on each anniversary of the Effective Date. In addition, if a Change in Control occurs while this Agreement is effective, this Agreement will remain irrevocably in effect for the greater of twenty four months from the date of the Change in Control or until all benefits have been paid to the Executive hereunder, and will then expire.

 

1.2          Purpose of the Agreement.  The purpose of this Agreement is to advance the interests of the Company by providing the Executive with an assurance of equitable treatment, in terms of compensation and economic security, in the event of an acquisition or other Change in Control of the Company.  An assurance of equitable treatment will enable the Executive to maintain productivity and focus during a period of significant uncertainty that is inherent in an acquisition or other Change in Control.  Further, the Company believes that agreements of this kind will aid it in attracting and retaining the highly qualified, high performing professionals who are essential to its success.

 

1.3          Contractual Right to Benefits.  This Agreement establishes and vests in the Executive a contractual right to the benefits to which he or she is entitled hereunder, enforceable by the Executive against the Company.  However, nothing in this Agreement will require or be deemed to require the Company to segregate, earmark, or otherwise set aside any funds or other assets to provide for any payments to be made under it.

 

Subject to Section 3.2, the Company will retain the right to terminate the Executive’s employment at any time prior to a Change in Control of the Company.  If the Executive’s employment is terminated prior to a Change in Control of the Company, this Agreement will no longer be applicable to the Executive, and any and all rights and obligations of the Company and the Executive under this Agreement will cease.  Notwithstanding the foregoing, if the effective date of a Change in Control occurs within six months following the effective date of an involuntary termination without Just Cause, the Executive’s termination may be deemed to be a Qualifying Termination pursuant to Section 3.2 of this Agreement as of the date of the Change in Control.

 

ARTICLE II

 

DEFINITIONS AND CONSTRUCTION

 

2.1          Definitions.  Whenever used in the Agreement, the following terms have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized.

 

 

(a)           “Average  Annual  Bonus” means the Executive’s actual average annual bonus earned over the two complete fiscal years prior to the Effective Date of Termination, or, if shorter, over the Executive’s entire period of employment.  However, if the Executive’s period of employment is less than one year, the average bonus will be considered zero.

 

(b)           “Base  Salary” means the base rate of compensation paid to the Executive as annual salary, excluding amounts received under incentive or other bonus plans, as in effect as of the Effective Date of Termination.  Notwithstanding the foregoing, if the Executive’s Base Salary was reduced within twenty-four months of the Effective Date of Termination, then “Base Salary” will mean the Executive’s annual Base Salary as in effect immediately prior to the reduction.

 

(c)           “Beneficial Owner” has the meaning ascribed to that term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act, namely, any person, who directly or indirectly, through any contract, arrangement, understanding or otherwise, has or shares voting power, which includes the power to vote or direct the voting of securities, and/or investment power, which includes the power to dispose of, or direct the disposition of, a security.

 

(d)           “Beneficiary” means the persons or entities designated or deemed designated by the  Executive pursuant to Section 8.2 herein.

 

(e)           “Board” means the Board of Directors of the Company.

 

(f)            The term “Change in Control” means (1) any Person is or becomes the Beneficial Owner directly or indirectly of securities of the Parent or the Company representing 35% or more of the combined voting power of the Parent’s or the Company’s outstanding securities entitled to vote generally in the election of directors; (2) individuals who were members of the Parent Board on the Effective Date (the “Incumbent Parent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a member of the Parent Board subsequent to the Effective Date (a) whose appointment as a director by the Parent Board was approved by a vote of at least three quarters of the directors comprising the Incumbent Parent Board, or (b) whose nomination for election as a member of the Parent Board by the Corporation’s stockholders was approved by the Incumbent Parent Board or recommended by the nominating committee serving under the Incumbent Parent Board, shall be considered a member of the Incumbent Parent Board; (3) consummation of a plan of reorganization, merger or consolidation involving the Parent or the Company or the securities of either, other than (a) in the case of the Parent, a transaction at the completion of which the stockholders of the Parent immediately preceding completion of the transaction hold more than 60% of the outstanding securities of the resulting entity entitled to vote generally in the election of its directors or (b) in the case of the Company, a transaction at the completion of which the Parent holds more than 50% of the outstanding securities of the resulting institution entitled to vote generally in the election of its directors; (4) consummation of a sale or other disposition to an unaffiliated third party or parties of all or substantially all of the assets of the Parent or the Company or approval by the stockholders of the Parent or the Company of a plan of complete liquidation or dissolution of the Parent or the Company; provided that for purposes of clause (1), the term “Person” shall not include the Parent, any employee benefit plan of the Parent or the Company, or any corporation or other entity owned directly or indirectly by the stockholders of the Parent in substantially the same proportions as their ownership of stock of the Parent.  Each event comprising a “Change in Control” is intended to constitute a “change in ownership or effective control,” or a “change in the ownership of a substantial portion of the assets,” of the Parent or the Company as such terms are defined for purposes of Section 409A of the Code and “Change in Control” as used herein shall be interpreted consistently therewith.

 

(g)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(h)           “Company” means MB Financial Bank, N.A., a national banking association, or any successor thereto that adopts the Agreement, as provided in Section 8.1 herein.

 

(i)            “Compensation  Committee” means the Compensation Committee of the Board of Directors of the Parent Company.

 

(j)            “Director” means a member of the Board or of the Parent Board, as the case may be.

 

 

(k)           “Disability” means a physical or mental condition that would entitle the Executive to benefits under the Company’s long-term disability plan, or if the Company maintains no such plan, then under the federal Social Security laws.

 

(l)            “Effective  Date  of  Termination” means the date on which a Qualifying Termination occurs which triggers Severance Benefits hereunder.

 

(m)          “Exchange  Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor to it.

 

(n)           “Expiration  Date” means the date the Agreement expires, as provided in Section 1.1 herein.

 

(o)           “Good  Reason” means (i) the occurrence of a ten percent or greater reduction in the aggregate value of the Executive’s annual Base Salary, bonus opportunity, and benefits excluding profit sharing; (ii) the assignment to the Executive of any duties inconsistent with, and commonly (in the banking industry) considered beneath, the Executive’s position, or a change in the Executive’s status, offices, titles and reporting relationships, authority, duties or responsibilities, or any other action by the Company, in each case if the assignment, change or action results in a significant diminution in the Executive’s position, authority, duties or responsibility; or (iii) a required relocation of the Executive to a location more than fifty miles from the Executive’s then existing job location to which the Executive does not consent to in writing.  In determining whether an assignment, change or action described in clause (ii) above constitutes Good Reason, due consideration will be given to the size of the organization and other facts and circumstances surrounding the Executive’s situation before and after the assignment, change or action.  For example, if the Executive is moved to a position that carries a title generally considered to be of a lower degree, but he or she is working in a larger division or company than before the change, has more employees reporting to him or her, or has authority for projects controlling more dollars, or if other circumstances exist that suggest the Executive’s new position is not a demotion, then Good Reason will not exist for the Executive to terminate his or her employment.

 

(p)           “Just Cause” means a termination of the Executive’s employment by the Company, for which no Severance Benefits are payable, as provided in Article IV.

 

(q)           “Parent” means MB Financial, Inc., a Maryland corporation, or any direct parent of a successor of the Company that adopts the Agreement as provided in Section 8.1.

 

(r)            “Parent Board” means the Board of Directors of the Parent.

 

(s)           “Person” means a natural person, company, or government, or a political subdivision, agency, or instrumentality of a government, including a “group” as defined in Section 13(d) of the Exchange Act.  When two or more persons act as a partnership, limited partnership, syndicate or other group for the purpose of acquiring the securities of the Company, they will be deemed a Person for purposes of the Agreement.  “Person” will be construed in the same manner as under Section 3(a)(9) of the Exchange Act, and “group” will be construed in the same manner as under Section 13(d) of the Exchange Act.

 

(t)            “Qualifying Termination” means any of the events described in Section 3.2, the occurrence of which triggers the payment of Severance Benefits.

 

(u)           “Severance Benefit” means the payment of severance compensation as provided in Article III.

 

2.2          Gender and Number.  Except where otherwise indicated by the context, any masculine term used herein also includes the feminine, the plural includes the singular, and the singular includes the plural.

 

2.3          Severability.  If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of this Agreement, and this Agreement will be construed and enforced as if the illegal or invalid provision had not been included.

 

 

2.4          Amendment or Termination.  The provisions of this Agreement may be amended by written agreement between the Company and the Executive, with any material amendment approved by the Compensation Committee or the Board.  Subject to the final sentence of Section 1.1, the Company may terminate this Agreement by written resolution of the Compensation Committee or the Board, effective as of a date at least twelve months following the date the Company gives written notice to the Executive of its intent to terminate the Agreement.

 

2.5          Applicable Law.  To the extent not preempted by the laws of the United States, the laws of the State of Illinois, without regard to its conflict of laws provisions, will be the controlling law in all matters relating to this Agreement.

 

ARTICLE III

 

SEVERANCE BENEFITS

 

3.1          Right to Severance Benefits.  Subject to the provisions hereof, the Executive will be entitled to receive from the Company Severance Benefits as described in Section 3.3 if there has been a Change in Control of the Company and if any of the events designated within Section 3.2 occur.  The Executive will not be entitled to receive Severance Benefits if his or her employment with the Company ends due to death, disability, voluntary retirement, a voluntary termination by the Executive without Good Reason, or due to an involuntary termination by the Company for Just Cause.

 

3.2          Qualifying Terminations.  The occurrence of any one of the following events within twenty four calendar months after a Change in Control of the Company will trigger the payment of Severance Benefits under this Agreement:

 

(a)           an involuntary termination of the Executive’s employment without Just Cause;

 

(b)           a voluntary termination of the Executive’s employment with the Company for Good Reason;

 

(c)           the failure or refusal of a successor company (including, but not limited to, an individual, corporation, association, or partnership) to assume the Company’s obligations under this Agreement, as required by Section 8.1; and

 

(d)           a breach by the Company or any successor company of any of the provisions of this Agreement.

 

In addition, an involuntary termination without Just Cause will trigger the payment of Severance Benefits under this Agreement if the Executive’s employment is terminated by the Company without Just Cause within six months prior to a Change in Control that actually occurs during the term of this Agreement and either (i) the termination was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control, or (ii) the Executive reasonably demonstrates that the termination is otherwise in connection with or in anticipation of the Change in Control.

 

3.3          Description of Severance Benefits.  If the Executive becomes entitled to receive Severance Benefits, as provided in Sections 3.1 and 3.2, the Company will pay to the Executive and provide him or her with the following:

 

(a)           an amount equal to the Executive’s annual Base Salary multiplied by two;

 

(b)           an amount equal to the Executive’s Average Annual Bonus multiplied by two;

 

(c)           immediate vesting of the Executive’s benefits, if any, under any and all non-qualified retirement plans of the Company (or its affiliates) in which the Executive participates; and

 

(d)           continuation of the welfare benefits of medical, dental or other health coverage, long term disability, and group term life insurance at the same premium cost to the Executive and at the same coverage level as

 

 

in effect as of the Executive’s Effective Date of Termination until the second anniversary of the Effective Date of Termination, without regard to the federal income tax consequences of that continuation.

 

The treatment of any options or other stock-based awards held by the Executive will be subject to the terms of the plan or plans under which they were granted.  Benefits under subsection 3.3(d) will be discontinued prior to the end of the second anniversary of the Effective Date of Termination if the Executive receives substantially similar benefits in the aggregate from a subsequent employer, as determined by the Compensation Committee.  Continued medical, dental or other health benefits under subsection 3.3(d) will count toward any COBRA continuation coverage period that may apply to the Executive.

 

ARTICLE IV

 

JUST CAUSE OR RETIREMENT

 

4.1          Just Cause.  Nothing in this Agreement will be construed to prevent the Company from terminating the Executive’s employment for Just Cause.  If the Company does so, no Severance Benefits will be payable to the Executive under this Agreement.

 

Just Cause will be defined to include, but will not be limited to, willful, malicious conduct by the Executive that is prejudicial to the best interests of the Company, including theft, embezzlement, the conviction of a criminal act, disclosure of trade secrets, a gross dereliction of duty, or other grave misconduct on the part of the Executive that is injurious to the Company.

 

4.2          Retirement.  If the Executive’s employment with the Company ends due to voluntary retirement, the Executive: (i) will not be entitled to receive Severance Benefits under this Agreement; and (ii) will not be eligible to participate in a Company-sponsored severance plan or arrangement at any time following his or her retirement.

 

ARTICLE V

 

FORM AND TIMING OF SEVERANCE BENEFITS

 

5.1          Form and Timing of Severance Benefits.  Subject to Article XII below, the Severance Benefits described in Sections 3.3(a) and (b) will be paid in cash to the Executive in a single lump sum as soon as practicable following the Effective Date of Termination, but in no event more than thirty days after the Effective Date of Termination.  The vesting of benefits under Section 3.3(c) shall occur on the Effective Date of Termination.

 

The Severance Benefits described in subsection 3.3(d) will be provided by the Company to the Executive immediately upon the Effective Date of Termination and will continue to be provided until the second anniversary of the Effective Date of Termination.  However, the Severance Benefits described in subsection 3.3(d) will be discontinued prior to the end of the  two-year period immediately upon the Executive’s receiving similar benefits from a subsequent employer, as determined by the Compensation Committee.

 

5.2          Withholding of Taxes.  The Company will withhold from any amounts payable under this Agreement all Federal, state, city, or other taxes that are legally required.

 

ARTICLE VI

 

REDUCTION OF PAYMENTS IN

CERTAIN CIRCUMSTANCES

 

6.1          No Excise Tax Gross-Up; Possible Reduction in Payments.   Any provision of this Agreement or any other compensation plan, program or agreement to which Executive is a party or under which Executive is covered to the contrary notwithstanding, Executive will not be entitled to any gross-up or other payment for golden parachute excise taxes Executive may owe pursuant to Section 4999 of the Internal Revenue Code.  In the event that any Severance Benefits or other payments or benefits otherwise payable to Executive (a) constitute “parachute payments” within the meaning of Section 280G of the Code, and (b) but for this Section 6.1 would be subject to the excise tax imposed by Section 4999 of the Code, then such Severance Benefits payable under this Agreement and

 

 

under such other plans, programs and agreements shall be either (i) delivered in full, or (ii) delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999 of the Code (and any equivalent state or local excise taxes), results in the receipt by Executive, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.  Any reduction in payments and/or benefits required by this Section 6.1 shall occur in the following order: (1) reduction of Severance Benefits or other cash payments, beginning with payments scheduled to occur soonest; (2) reduction of vesting acceleration of equity awards (in reverse order of the date of the grant); and (3) reduction of other benefits paid or provided to Executive..

 

ARTICLE VII

 

OTHER RIGHTS AND BENEFITS NOT AFFECTED

 

7.1          Other Benefits.  Except as provided in this Section below, neither the provisions of this Agreement nor the Severance Benefits provided for hereunder will reduce any amounts otherwise payable, or in any way diminish the Executive’s rights as an employee of the Company, whether existing now or hereafter, under any benefit, incentive, retirement, stock option, stock bonus, stock purchase plan, or any employment agreement, or other Agreement or arrangement.  Notwithstanding the foregoing, if the Executive is also a covered employee under a severance plan of the Company or one of its affiliates, the Executive will be entitled to receive the Severance Benefits provided under this Agreement in lieu of any severance pay or other benefits provided under that severance plan.  Benefits provided under this Agreement will not increase any amounts otherwise payable under any other arrangement, if that other arrangement does not provide that severance benefits will be taken into account in determining benefits.

 

7.2          Employment Status.  This Agreement does not constitute a contract of employment or impose on the Executive or the Company any obligation to retain the Executive as an employee, to change the status of the Executive’s employment, or to change the Company’s policies regarding termination of employment.

 

ARTICLE VIII

 

SUCCESSORS

 

8.1          Successors.  The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) of all or substantially all of the business and/or assets of the Company or of any division or subsidiary thereof to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  Failure of the Company to obtain such an assumption and agreement prior to the effectiveness of any such succession will be a breach of this Agreement and will entitle the Executive to compensation from the Company in the same amount and on the same terms as he or she would be entitled hereunder if terminated voluntarily for Good Reason, except that, for the purposes of implementing the foregoing, the date on which any succession becomes effective will be deemed the Effective Date of Termination.

 

This Agreement will inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.  If the Executive dies while any amount would still be payable to him or her hereunder had he or she continued to live, any such amount, unless otherwise provided herein, will be paid in accordance with the terms of this Agreement, to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.

 

8.2          Beneficiaries.  The Executive’s beneficiary under the qualified defined contribution plan of the Company or an affiliate in which the Executive participates will be his or her Beneficiary under this Agreement, unless the Executive otherwise designates a Beneficiary in the form of a signed writing acceptable to the Compensation Committee.  The Executive may make or change such a designation at any time.

 

 

ARTICLE IX

 

ADMINISTRATION

 

9.1          Administration.  This Agreement will be administered by the Compensation Committee.  In that capacity, the Compensation Committee, to the extent not contrary to the express provisions of the Agreement, is authorized in its discretion to interpret this Agreement, to prescribe and rescind rules and regulations, to provide conditions and assurances deemed necessary and advisable, to protect the interests of the Company, and to make all other determinations necessary or advisable for the administration of this Agreement and similar Agreements.

 

In fulfilling its administrative duties hereunder, the Compensation Committee may rely on outside counsel, independent accountants, or other consultants to render advice or assistance.

 

9.2          Indemnification and Exculpation.  The members of the Board and the Parent Board, its agents and officers, directors, and employee of the Company and its affiliates will be indemnified and held harmless by the Company against and from any and all loss, cost, liability, or expense that may be imposed upon or reasonably incurred by them in connection with or resulting from any claim, action, suit, or proceeding to which they may be a party or in which they may be involved by reason of any action taken or failure to act under this Agreement and against and from any and all amounts paid by them in settlement (with the Company’s written approval) or paid by them in satisfaction of a judgment in any such action, suit, or proceeding.  The foregoing provision will not apply to any person if the loss, cost, liability, or expense is due to that person’s gross negligence or willful misconduct.

 

ARTICLE X

 

LEGAL FEES AND ARBITRATION

 

10.1        Legal Fees and Expenses.  The Company (or, in the event of the acquisition of substantially all of the assets of the Company, the acquirer of those assets) will pay all legal fees, costs of litigation, and expenses directly related to legal fees and costs of litigation incurred in good faith by the Executive as a result of the Company’s refusal to provide the Severance Benefits to which the Executive becomes entitled under this Agreement, or as a result of the Company’s contesting the validity, enforceability, or interpretation of this Agreement, but in each case only if the Executive ultimately prevails in litigation conducted as a result of the refusal or contest.

 

10.2        Arbitration.  The Executive and the Company will have the right and option to elect (in lieu of litigation) to have any dispute or controversy arising under or in connection with this Agreement settled by arbitration, conducted before a panel of three arbitrators sitting in a location selected by the Executive within fifty miles from the location of his or her job, in accordance with rules of the American Arbitration Association then in effect.  Judgment may be entered on the award of the arbitrator in any court having jurisdiction.  All expenses of arbitration, including the fees and expenses of the counsel for the Executive, will be split between the Company and the Executive, unless the Executive prevails, in which case the Company will bear the expenses of the arbitration.  Notwithstanding the right of the Executive or the Company to elect to enter into arbitration, the Company and the Executive may mutually agree to resolve any dispute or controversy arising under or in connection with the Agreement in a court of law, in lieu of arbitration.

 

ARTICLE XI

 

EXCLUSIVITY OF SEVERANCE BENEFITS

 

11.1        Exclusivity of Severance Benefits.  Subject to Section 7.1, if the Company is contractually obligated to pay to the Executive any severance benefits pursuant to another agreement, plan, program, policy, or any other change of control agreement,  the terms and provisions of the program under which the aggregate level of severance benefits is the highest (as determined by the Executive) will operate to completely replace and supersede the terms and provisions of this Agreement and/or all other programs that provide for the payment of severance benefits.

 

 

ARTICLE XII

 

CODE SECTION 409A; TARP

 

12.1        Code Section 409A.  The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  If the Executive notifies the Company (with specificity as to the reason therefore) that the Executive believes that any provision of this Agreement would cause the Executive to incur any additional tax or interest under Code Section 409A and the Company concurs with such belief or the Company (without any obligation whatsoever to do so) independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to try to comply with Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A.  To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Code Section 409A.

 

If the Executive is deemed on the date of “separation from service” to be a “specified Executive” within the meaning of such terms under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is specified as subject to this Section, such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Executive, and (B) the date of the Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 12.1 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.  Whenever a payment is to be made promptly after a date, it shall be made within sixty (60) days thereafter.

 

With regard to any provision herein that provides for reimbursement of expenses or in-kind benefits: (i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not effect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year, provided that the foregoing shall not be violated with regard to expenses covered by Code Section 105(h) that are subject to a limit related to the period in which the arrangement is in effect.  Any expense or other reimbursement payment made pursuant to this Agreement or any plan, program, agreement or arrangement of the Company referred to herein, shall be made on or before the last day of the taxable year following the taxable year in which such expense or other payment to be reimbursed is incurred.

 

12.2        TARP.  Notwithstanding anything in this Agreement or in any compensation plan, program or arrangement maintained by the Company which covers Executive or to which Executive is a party or in which Executive participates, as of the date hereof, or of any compensation plan, program, arrangement or agreement which may become applicable to Executive or to which Executive may become a party hereinafter (collectively, the “Compensation Arrangements”), each provision of this Agreement and the Compensation Arrangements is amended and any amounts payable hereunder and thereunder are hereby amended and modified with respect to Executive, if and to the extent necessary, for the Company to comply with any requirements of the Emergency Economic Stabilization Act of 2008 (“EESA”) and/or the TARP Capital Purchase Program (“CPP”) (and the guidance or regulations issued thereunder by the United States Treasury Department at 31 CFR Part 30, and any interpretations, amendments or modifications thereof (the “CPP Guidance”) which may become applicable to the Company, including, but not limited to, provisions prohibiting the Company from making any “golden parachute payments,” providing the Company may recover (“clawback”) bonus and executive compensation to in certain circumstances, and precluding bonus and incentive arrangements that encourage unnecessary or excessive risks that threaten the value of the Company, in each case within the meaning of EESA and the CPP Guidance and only to the extent applicable to the Company and Executive.  For purposes of this Section 12.2, references to “Company” means MB Financial, Inc. and any entities treated as a single employer with MB Financial, Inc. under the CPP Guidance.  Executive hereby agrees to execute such documents, agreements or waivers as the Company deems necessary or appropriate to effect such amendments to this Agreement or the Compensation Arrangements or to

 

 

facilitate the participation of the Company in the TARP Capital Purchase Program or any other programs under EESA.

 

The application of this Section 12.2 is intended to, and shall be interpreted, administered and construed to, comply with Section 111 of EESA and the CPP Guidance and, to the maximum extent consistent with this Section 12.2 and such statute and regulations, to permit the operation of this Agreement and the Compensation Arrangements in accordance with their terms before giving effect to the provisions of this Section 12.2, EESA and the CPP Guidance.

 

IN WITNESS WHEREOF, the Executive has executed this Agreement and the Company has caused this Agreement to be executed by a resolution of the Board, as of the day and year first above written.

 

	
MB FINANCIAL BANK, N.A.
    	
 
    	
EXECUTIVE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
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