Document:

Exhibit 10.2

 

*             THE REGISTRANT HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS OF THIS EXHIBIT.  ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE SEC.  OMITTED PORTIONS ARE INDICATED BY “[REDACTED]*”.

 

 

SECOND AMENDED AND RESTATED
 LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

EUREKA HUNTER HOLDINGS, LLC

 

a Delaware limited liability company

 

[September // October] [        ], 2014

 

 

THE LIMITED LIABILITY COMPANY INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. SUCH LIMITED LIABILITY COMPANY INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE OR OTHER SECURITIES LAWS, PURSUANT TO REGISTRATION THEREUNDER OR EXEMPTION THEREFROM. IN ADDITION, TRANSFER OR OTHER DISPOSITION OF SUCH LIMITED LIABILITY COMPANY INTERESTS IS FURTHER RESTRICTED AS PROVIDED IN THIS AGREEMENT. PURCHASERS OF LIMITED LIABILITY COMPANY INTERESTS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

CERTAIN OF THE LIMITED LIABILITY COMPANY INTERESTS EVIDENCED BY THIS AGREEMENT MAY BE SUBJECT TO ONE OR MORE EQUITY AWARD AGREEMENTS, AS MAY BE AMENDED FROM TIME TO TIME, BY AND BETWEEN THE ISSUER AND OFFICERS OR EMPLOYEES OF THE ISSUER OR ITS SUBSIDIARIES.

 

 

SECOND AMENDED AND RESTATED
 LIMITED LIABILITY COMPANY AGREEMENT
 OF
 Eureka Hunter Holdings, LLC

 

a Delaware limited liability company

 

TABLE OF CONTENTS

 

	
ARTICLE 1 DEFINITIONS AND   CONSTRUCTION
    	
2
    
	
1.1
    	
Definitions
    	
2
    
	
1.2
    	
Construction
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 ORGANIZATION
    	
2
    
	
2.1
    	
Formation; Continuation
    	
2
    
	
2.2
    	
Name
    	
2
    
	
2.3
    	
Registered Office; Registered Agent; Principal Office;   Other Offices
    	
3
    
	
2.4
    	
Purposes
    	
3
    
	
2.5
    	
Foreign Qualification
    	
3
    
	
2.6
    	
Term
    	
3
    
	
2.7
    	
No State Law Partnership
    	
3
    
	
2.8
    	
Title to Company Assets
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 UNITS; MEMBERS
    	
3
    
	
3.1
    	
Units
    	
3
    
	
3.2
    	
Effective Date Transactions
    	
5
    
	
3.3
    	
Unit Transactions at the Second Closing
    	
6
    
	
3.4
    	
No Other Persons Deemed Members
    	
6
    
	
3.5
    	
No Resignation or Expulsion
    	
6
    
	
3.6
    	
Members’ Schedule
    	
6
    
	
3.7
    	
Admission of Additional Members and Substituted Members and   Creation of Additional Units
    	
6
    
	
3.8
    	
No Liability of Members
    	
8
    
	
3.9
    	
Spouses of Members
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE 4 REPRESENTATIONS   AND WARRANTIES
    	
9
    
	
4.1
    	
Representations and Warranties of Members
    	
9
    
	
4.2
    	
Additional Representations by MHR
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE 5 CAPITAL   CONTRIBUTIONS
    	
11
    
	
5.1
    	
Capital Contributions
    	
11
    
	
5.2
    	
CapEx Contributions; Issuance of Class A Common Units
    	
11
    
	
5.3
    	
CapEx Contribution Request
    	
14
    
	
5.4
    	
De Minimis Projects
    	
15
    
	
5.5
    	
MHR Catch-Up Contribution
    	
15
    
	
5.6
    	
Return of Contributions
    	
15
    
	
5.7
    	
Capital Account
    	
15
    

 

i

 

	
5.8
    	
Advances by Members
    	
16
    
	
5.9
    	
Optional Capital Contributions
    	
17
    
	
5.10
    	
No Requirement to Make Capital Contributions
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE 6 DISTRIBUTIONS AND   ALLOCATIONS
    	
17
    
	
6.1
    	
Distributions
    	
17
    
	
6.2
    	
Allocations of Profits and Losses and Other Items
    	
19
    
	
6.3
    	
Income Tax Allocations
    	
21
    
	
6.4
    	
Other Allocation Rules
    	
22
    
	
 
    	
 
    	
 
    
	
ARTICLE 7 CERTAIN COVENANTS   RELATING TO ISSUANCES AND DISPOSITIONS OF MEMBERSHIP INTERESTS AND OTHER   TRANSACTIONS
    	
23
    
	
7.1
    	
General Restrictions on, and Other Terms Relating to,   Dispositions of Membership Interests
    	
23
    
	
7.2
    	
Restrictions on Dispositions of Membership Interests
    	
24
    
	
7.3
    	
Right of First Offer
    	
24
    
	
7.4
    	
Drag-Along Rights
    	
26
    
	
7.5
    	
Tag-Along Right
    	
28
    
	
7.6
    	
Qualified Public Offering
    	
30
    
	
7.7
    	
Preemptive Rights
    	
33
    
	
7.8
    	
Registration Rights
    	
35
    
	
7.9
    	
Cooperation
    	
35
    
	
7.10
    	
Specific Performance
    	
35
    
	
7.11
    	
Termination Following IPO
    	
36
    
	
 
    	
 
    	
 
    
	
ARTICLE 8 MANAGEMENT
    	
36
    
	
8.1
    	
Management Under Direction of the Board
    	
36
    
	
8.2
    	
Board of Managers
    	
37
    
	
8.3
    	
Officers
    	
45
    
	
8.4
    	
Members
    	
46
    
	
8.5
    	
Acknowledgement Regarding Outside Businesses and   Opportunities
    	
51
    
	
8.6
    	
Amendment, Modification or Repeal
    	
53
    
	
 
    	
 
    	
 
    
	
ARTICLE 9 DUTIES;   LIMITATIONs OF LIABILITY; INDEMNIFICATION; RELATED MATTERS
    	
54
    
	
9.1
    	
Duties, Limitations of Liability and Indemnification of   Members
    	
54
    
	
9.2
    	
Duties and Indemnification of Officers and Managers
    	
56
    
	
9.3
    	
Advancement of Expenses
    	
57
    
	
9.4
    	
Multiple Rights to Indemnification
    	
57
    
	
9.5
    	
Priority of Certain Third Party Indemnification Rights
    	
57
    
	
9.6
    	
Other Related Matters
    	
58
    
	
 
    	
 
    	
 
    
	
ARTICLE 10 CERTAIN AGREEMENTS   OF THE COMPANY AND MEMBERS
    	
59
    
	
10.1
    	
Financial Reports; Access to Information; Management Rights
    	
59
    
	
10.3
    	
Accounts
    	
62
    
	
10.4
    	
Information
    	
62
    

 

ii

 

*             THE REGISTRANT HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS OF THIS EXHIBIT.  ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE SEC.  OMITTED PORTIONS ARE INDICATED BY “[REDACTED]*”.

 

	
10.5
    	
Insurance
    	
63
    
	
10.6
    	
[REDACTED]*
    	
64
    
	
10.7
    	
Qualified MLP IPO
    	
65
    
	
10.8
    	
Gas Gathering Agreement
    	
66
    
	
10.9
    	
Rogersville Facility
    	
66
    
	
10.10
    	
Employee Matters
    	
67
    
	
10.11
    	
Subject Acreage
    	
67
    
	
10.12
    	
Compliance Matters
    	
67
    
	
 
    	
 
    	
 
    
	
ARTICLE 11 TAXES
    	
67
    
	
11.1
    	
Tax Returns
    	
67
    
	
11.2
    	
Tax Partnership
    	
67
    
	
11.3
    	
Tax Elections
    	
68
    
	
11.4
    	
Tax Matters Member
    	
68
    
	
 
    	
 
    	
 
    
	
ARTICLE 12 LIQUIDATION   EVENT, SALE TRANSACTION AND TERMINATION
    	
69
    
	
12.1
    	
Dissolution
    	
69
    
	
12.2
    	
Winding-Up and Termination
    	
70
    
	
12.3
    	
Sale Transaction
    	
70
    
	
12.4
    	
Deficit Capital Accounts
    	
71
    
	
12.5
    	
Certificate of Cancellation
    	
71
    
	
 
    	
 
    	
 
    
	
ARTICLE 13 GENERAL   PROVISIONS
    	
71
    
	
13.1
    	
Offset
    	
71
    
	
13.2
    	
Notices
    	
72
    
	
13.3
    	
Entire Agreement; Supersedure
    	
72
    
	
13.4
    	
Effect of Waiver or Consent
    	
72
    
	
13.5
    	
Amendment or Restatement; Power of Attorney
    	
73
    
	
13.6
    	
Binding Effect
    	
75
    
	
13.7
    	
Governing Law; Severability; Limitation of Liability
    	
75
    
	
13.8
    	
Further Assurances
    	
76
    
	
13.9
    	
Counterparts
    	
77
    
	
13.10
    	
Savings Clause
    	
77
    

 

iii

 

EXHIBITS:

 

A                                       Defined Terms

B                                       Addendum Agreement

C                                       Equity Incentive Plan; Form of Equity Award Agreement

D                                       Transaction Agreement

E                                        GGA Amendment

 

SCHEDULES:

 

I                                           Members’ Schedule

II                                      2014 Projects

III                                 Certain Terms Relating to Registration Rights

IV                                  2014 Annual Budget

V                                       Initial Managers

VI                                  Performance Targets (Projected 4-Year Trailing EBITDA)

VII                             Delegation Policy; Other Officers

VIII                        Insurance

IX                                  Illustrative Example of Upside Sharing Percentages

 

iv

 

SECOND AMENDED AND RESTATED
 LIMITED LIABILITY COMPANY AGREEMENT
 OF
 EUREKA HUNTER HOLDINGS, LLC

 

a Delaware limited liability company

 

This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of EUREKA HUNTER HOLDINGS, LLC, a Delaware limited liability company (the “Company”), is executed and agreed to as of [September // October] [        ], 2014 (the “Effective Date”), by the Company and the parties executing this Agreement from time to time in their capacity as Members.

 

RECITALS

 

WHEREAS, the Company was formed under the Act pursuant to a Certificate of Formation filed with the Secretary of State of the State of Delaware on March 19, 2012 (the “Formation Date”).

 

WHEREAS, on the Formation Date, Magnum Hunter Resources Corporation, a Delaware corporation (“MHR”), executed that certain Limited Liability Company Agreement of the Company, effective as of March 19, 2012, as amended and restated on March 21, 2012 and as thereafter amended on April 2, 2012 and March 7, 2013 (the “Original Agreement”).

 

WHEREAS, on September [        ], 2014, Ridgeline Midstream Holdings, LLC, an Affiliate of ArcLight Energy Partners Fund V, L.P. (“ArcLight”) and the Initial MSI Member entered into that certain Unit Purchase Agreement, dated as of September [        ], 2014 (the “ArcLight UPA”), pursuant to which the Initial MSI Member purchased from ArcLight (i) 10,592,540 Series A Convertible Preferred Units and (ii) 409,024 Class A Common Units (as designated as such pursuant to the Original Agreement), which represented 100% of ArcLight’s Equity Interests in the Company.

 

WHEREAS, on the Effective Date, the Initial MSI Member and ArcLight closed the purchase and sale contemplated by the ArcLight UPA.

 

WHEREAS, in accordance with Section 14.1 of the Original Agreement, and in connection with the transactions described above, MHR, the Initial MSI Member and the other Members signatory hereto desire to amend and restate the Original Agreement in order to delineate the rights and obligations of the Members, and to provide for, among other things, (a) the management of the business and affairs of the Company and its Subsidiaries, (b) the allocation among the Members of the profits and losses of the Company and (c) the respective rights and obligations of the parties to each other with respect to the Company and its Subsidiaries.

 

1

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, this Agreement is hereby adopted, executed and agreed to by all of the Members.

 

ARTICLE 1
 DEFINITIONS AND CONSTRUCTION

 

1.1                               Definitions. Capitalized terms used in this Agreement (including the Exhibits and Schedules to this Agreement) but not defined in the body of this Agreement have the meanings ascribed to them in Exhibit A. Capitalized terms defined in the body of this Agreement are listed in Exhibit A with reference to the location of the definitions of such terms in the body of this Agreement.

 

1.2                               Construction. In this Agreement, unless a clear contrary intention appears: (a) pronouns in the masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa; (b) the term “including” shall be construed to be expansive rather than limiting in nature and to mean “including, without limitation;” (c) the words “or”, “either” and “any” are inclusive; (d) references to Articles and Sections refer to Articles and Sections of this Agreement; (e) the words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole, including the Exhibits and Schedules attached hereto, and not to any particular subdivision unless expressly so limited; (f) references in any Article or Section or definition to any clause means such clause of such Article, Section or definition; (g) references to Exhibits and Schedules are to the items identified separately in writing by the parties hereto as the described Exhibits or Schedules attached to this Agreement, each of which is hereby incorporated herein and made a part hereof for all purposes as if set forth in full herein; (h) all references to money refer to the lawful currency of the United States; (i) references to “federal” or “Federal” means U.S. federal or U.S. Federal, respectively; (j) references to the “IRS” or the “Internal Revenue Service” refer to the United States Internal Revenue Service; and (k) references to “Revenue Procedures,” or “Revenue Rulings” refer to United States Revenue Procedures or United States Revenue Rulings, respectively. The Table of Contents and the Article and Section titles and headings in this Agreement are inserted for convenience of reference only and are not intended to be a part of, or to affect the meaning or interpretation of, this Agreement.

 

ARTICLE 2
 ORGANIZATION

 

2.1                               Formation; Continuation. The Company has been organized as a Delaware limited liability company under and pursuant to the Act by the filing of the Certificate, and is being continued pursuant to the terms of this Agreement.

 

2.2                               Name. The name of the Company is “EUREKA HUNTER HOLDINGS, LLC” and all Company business must be conducted in that name or such other name or names that comply with Law and as the Board may select.

 

2

 

2.3                               Registered Office; Registered Agent; Principal Office; Other Offices. The registered office of the Company required by the Act to be maintained in Delaware shall be the office of the initial registered agent named in the Certificate or such other office (which need not be a place of business of the Company) as the Board may designate in the manner provided by Law. The registered agent of the Company in Delaware shall be the initial registered agent named in the Certificate or such other Person or Persons as the Board may designate in the manner provided by Law. The principal office of the Company shall be at such place as the Board may designate. The Company may have such other offices as the Board may designate.

 

2.4                               Purposes. The purposes of the Company are to, directly or indirectly through Subsidiaries, carry on any lawful business, purpose or activity.

 

2.5                               Foreign Qualification. The Board shall cause the Company to comply with all requirements necessary to qualify the Company as a foreign limited liability company in foreign jurisdictions if such jurisdictions require qualification. At the request of the Board, each Member shall execute, acknowledge, swear to and deliver all certificates and other instruments conforming with this Agreement that are necessary or appropriate to qualify, continue and terminate the Company as a foreign limited liability company in all such jurisdictions in which the Company may conduct business, provided that no Member shall be required to file any general consent to service of process or to qualify as a foreign limited liability company in any jurisdiction in which it is not already so qualified.

 

2.6                               Term. The Company commenced upon the effectiveness of the Certificate and shall have a perpetual existence, unless and until it is dissolved and terminated in accordance with Article 12.

 

2.7                               No State Law Partnership. The Members intend that the Company not be a partnership (including a limited partnership) or joint venture, and that no Member be a partner or joint venturer of any other Member, for any purposes other than federal and state tax purposes, and this Agreement may not be construed to suggest otherwise.

 

2.8                               Title to Company Assets. Title to the Company’s assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Company as an entity, and no Member, Manager or Officer shall have any ownership interest in such Company assets. Title to any or all of the Company assets may be held in the name of the Company or one or more of its Subsidiaries or one or more nominees, as the Board may determine. All Company assets shall be recorded as the property of the Company in its books and records, irrespective of the name in which record title to such Company assets is held.

 

ARTICLE 3
 UNITS; MEMBERS

 

3.1                               Units.

 

(a)                                       Unit Designations and Authorized Units. The Membership Interests in the Company shall be designated as “Units” and, as of the Effective Date, divided into two classes of “Common Units” referred to as the “Class A Common Units” and the “Class B

 

3

 

Common Units.” The Class A Common Units shall be further designated as series referred to as “Series A-1 Units,” and “Series A-2 Units.” On the Effective Date, after giving effect to the Effective Date Transactions, the Company has issued (i) 26,897,141 Units designated as Class A Common Units, of which (x) 15,895,577 are designated as Series A-1 Units and (y) 11,001,564 are designated as Series A-2 Units and (ii) 894,102 Units designated as Class B Common Units.(1) Subject to Section 7.7, Section 8.2 and Section 8.4(b), the Company may issue, from time to time, as many additional Units as are determined by the Board in its sole discretion, for such consideration as is determined by the Board in its sole discretion. Each Unit shall have all of the rights, privileges, preferences and obligations specifically provided for in, or permitted by, this Agreement.

 

(b)                                       Class B Common Units.

 

(i)                                     Notwithstanding anything to the contrary in this Agreement, Class B Common Units may be issued only pursuant to an Equity Award Agreement. Class B Members shall not be entitled to vote on or consent with respect to any matters submitted to a vote or requiring consent of the Members, other than on matters that adversely affect such Class B Members as a class in a manner that is disproportionate to the Class A Members as a class. Class B Common Units are intended to be treated for U.S. federal income tax purposes as a profits interest within the meaning of IRS Revenue Procedures 93-27 and 2001-43 and, accordingly, prior to the issuance of any Class B Common Units, the Board will determine, by whatever means or methods it deems appropriate, the Fair Market Value of the aggregate equity of the Company as of the date of the issuance (such value, as increased by any additional Capital Contributions after such issuance, the applicable “Baseline Value”). For the avoidance of doubt, the Baseline Value for all Class B Common Units issued prior to the Effective Date shall not be affected as a result of the Effective Date Transactions. A Class B Common Unit shall be entitled only to share in the appreciation in the Fair Market Value of the aggregate equity in the Company over and above its applicable Baseline Value. Class B Common Units issued at the same Baseline Value shall be treated as one subclass of Class B Common Units. Notwithstanding anything to the contrary contained herein, in addition to any conditions or restrictions on the Class B Common Units contained in this Agreement, the Class B Common Units may also be subject to such other conditions and restrictions (including vesting criteria) as determined by the Board and set forth in an Equity Award Agreement executed and delivered in connection with any such issuance or grant. Notwithstanding any provision contained in this Agreement or any Equity Award Agreement to the contrary, the terms and provisions of this Agreement and any Equity Award Agreement shall be interpreted consistently with the intention to treat Class B Common Units as profits interests for U.S. federal income tax purposes. In accordance with IRS Revenue Procedure 2001-43, the Company shall treat the holders of Class B Common Units as partners from the date of grant, whether or not vested, and shall file its IRS Form 1065 and issue the appropriate K-1s to such

 

(1)  Note to Draft: Capitalization to be updated in the event of additional issuances prior to the Effective Date.

 

4

 

holder, allocating to such holder its distributive share of income, gain, loss, deduction and credit as if the holder was fully vested in such Class B Common Units. Each holder of a Class Common B Unit agrees to take into account the holder’s distributive share of income, gain, loss, deduction and credit in computing the holder’s federal income tax liability. The Company and each Member agree not to claim a deduction in connection with the issuance of Class Common B Units.

 

(ii)                                  Any Class B Member that receives Class B Common Units shall make an election under Code Section 83(b) with respect to the Class B Common Units received under an Equity Award Agreement, and will deliver to the Company a completed, executed copy of such Section 83(b) election. The Class B Member agrees to file the election (or to permit the Company to file such election on the Class B Member’s behalf) within 30 days after the issue date of the Class B Common Units hereunder with the IRS Service Center at which such Class B Member files his or her personal income tax returns, and to file a copy of such election with the Class B Member’s federal income tax return for the Member’s taxable year in which the Class B Common Units are issued.

 

(iii)                               The Equity Incentive Plan provides for the issuance of up to 2,336,905 Class B Common Units and an equal number of corresponding incentive plan units (in each case, or such other amount as may be approved by the Board from time to time with Requisite Member Approval), of which 894,102 Class B Common Units (and an equal number of corresponding incentive plan units) out of the 2,336,905 total Class B Common Units (and incentive plan units) issuable pursuant to the Equity Incentive Plan have been issued as of the Effective Date.

 

(c)                                        UCC Securities. Units shall constitute “securities” governed by Article 8 of the applicable version of the Uniform Commercial Code, as amended from time to time after the Effective Date.

 

(d)                                       Fractional Units. Any fractional Units that would otherwise be issued pursuant to this Agreement shall be rounded down to the nearest whole Unit.

 

(e)                                        Certificates. Unless otherwise determined by the Board, ownership of the Units shall not be evidenced by means of unit certificates.

 

3.2                               Effective Date Transactions. As of the Effective Date, (a) the 10,592,540 Series A Convertible Preferred Units and the 409,024 Class A Common Units (as designated as such pursuant to the Original Agreement) acquired by the Initial MSI Member from ArcLight pursuant to the ArcLight UPA are hereby converted for all purposes into 11,001,564 Class A Common Units, all of which are hereby designated as Series A-2 Units, and the Initial MSI Member is the sole Series A-2 Member as of the Effective Date, (b) the 15,895,577 Class A Common Units (as designated as such pursuant to the Original Agreement) held by MHR and the Minority Owners are hereby converted for all purposes into 15,895,577 Class A Common Units, all of which are hereby designated as Series A-1 Units, and MHR and the other Persons

 

5

 

identified on Schedule I hereto as Series A-1 Members are the sole Series A-1 Members as of the Effective Date and (c) the 894,102 Class B Common Units (as designated as such pursuant to the Original Agreement) held by the Persons identified on Schedule I hereto as Class B Members are hereby converted for all purposes into 894,102 Class B Common Units, and the Persons identified on Schedule I hereto as Class B Members are the sole Class B Members as of the Effective Date (collectively, the “Effective Date Transactions”).(2)

 

3.3                               Unit Transactions at the Second Closing. If the Initial MSI Member acquires Class A Common Units from MHR pursuant to the Transaction Agreement (the date of the closing of such transaction, the “Second Closing”), all of such acquired Class A Common Units shall be designated as an equal number of Series A-2 Units and the Members’ Schedule shall be updated accordingly to reflect the Second Closing.

 

3.4                               No Other Persons Deemed Members. Unless admitted to the Company as a Member as provided in this Agreement, no Person (including an assignee of rights with respect to Membership Interests or a transferee of Membership Interests, whether voluntary, by operation of Law or otherwise) shall be, or shall be considered, a Member. The Company may elect to deal only with Persons admitted to the Company as Members as provided in this Agreement (including their duly authorized representatives). Any distribution by the Company to the Person shown on the Company’s records as a Member, or to its legal representatives, shall relieve the Company of all liability to any other Person who may have an interest in such distribution by reason of any Disposition of Membership Interests by the Member or for any other reason.

 

3.5                               No Resignation or Expulsion. A Member may not take any action to Resign voluntarily, and a Member may not be expelled or otherwise removed involuntarily as a Member, prior to the dissolution and winding up of the Company, other than as a result of a permitted Disposition of all of such Member’s Membership Interests in accordance with Article 7 and, if applicable, each of the transferees of such Membership Interests being admitted as a Substituted Member. A Member will cease to be a Member only in the manner described in Section 3.7 and Article 12.

 

3.6                               Members’ Schedule. The Company shall maintain the schedule of all of the Members from time to time, including the mailing addresses and the Membership Interests held by them (such schedule, as the same may be amended, modified or supplemented from time to time, collectively the “Members’ Schedule”). A copy of the Members’ Schedule as of the Effective Date is attached as Schedule I.

 

3.7                               Admission of Additional Members and Substituted Members and Creation of Additional Units.

 

(a)                                       Authority. Subject to the limitations set forth in this Article 3 and in Article 7, and subject to Section 8.2 and Section 8.4(b), the Company may admit Additional Members and Substituted Members and may also (i) issue additional Units or (ii) create and issue such additional classes or series of Units or other Membership

 

(2)  Note to Draft: Capitalization to be updated in the event of additional issuances prior to the Effective Date.

 

6

 

Interests (or securities convertible into or exercisable or exchangeable for Membership Interests), having such designations, preferences and relative, participating or other special rights, powers and duties as the Board shall determine in its sole discretion, including: (A) the right of any such class or series of Membership Interests to share in the Company’s distributions; (B) the allocation to any such class or series of Membership Interests of Profits (and all items included in the computation thereof) or Losses (and all items included in the computation thereof); (C) the rights of any such class or series of Membership Interests upon dissolution or liquidation of the Company; and (D) the right of any such class or series of Membership Interests to vote on matters relating to the Company and its Subsidiaries and this Agreement. Upon the issuance pursuant to and in accordance with this Article 3 of any class or series of Membership Interests, the Board may amend any provision of this Agreement in accordance with Section 13.5(a), and authorize any Person to execute, acknowledge, deliver, file and record, if required, such documents, to the extent necessary or desirable to reflect the admission of any Additional Member to the Company or the authorization and issuance of such class or series Membership Interests (or securities convertible into or exercisable or exchangeable for Membership Interests), and the related rights and preferences thereof.

 

(b)                                       Conditions. An Additional Member or Substituted Member shall be admitted to the Company with all the rights and obligations of a Member if (A) all applicable conditions of ARTICLE 7 and ARTICLE 8 are satisfied and (B) such Additional Member or Substituted Member, if not already a party to this Agreement (and such Additional Member’s or such Substituted Member’s spouse, if applicable), shall have executed and delivered to the Company (1) an Addendum Agreement in the form attached as Exhibit B (an “Addendum Agreement”) and (2) such other documents or instruments as may be required in the Board’s reasonable judgment to effect the admission or substitution. No Disposition or issuance of Membership Interests otherwise permitted or required by this Agreement shall be effective, no Member shall have the right to substitute a transferee as a Member in its place with respect to any Membership Interests acquired by such transferee in any Disposition and no purchaser of newly issued Membership Interests from the Company shall be deemed to be a Member if the foregoing conditions are not satisfied.

 

(c)                                        Rights and Obligations of Additional Members and Substituted Members. A transferee of Membership Interests who has been admitted as an Additional Member or as a Substituted Member or a purchaser or recipient of newly issued Membership Interests from the Company who has been admitted as an Additional Member in accordance with this Section 3.7 shall have all the rights and powers and be subject to all the restrictions, obligations and liabilities under this Agreement relating to a Member holding Membership Interests.

 

(d)                                       Date of Admission as Additional or Substituted Member. Admission of an Additional Member or Substituted Member shall become effective on the date such Person’s name is recorded on the books and records of the Company. Upon the admission of an Additional Member or Substituted Member, (i) the Company shall, without the need for consent of any other Person, revise the Members’ Schedule to reflect the name and

 

7

 

address of, and the number and class of Membership Interests held by, such Additional Member or Substituted Member and to eliminate or adjust, if necessary, the name, address and interest of the predecessor of such Substituted Member and (ii) to the extent of the Disposition to such Substituted Member, the Disposing Member shall be relieved of its obligations under this Agreement. Any Member who Disposed of all of such Member’s Membership Interests in one or more Dispositions permitted pursuant to this Section 3.7 and Article 7 (where each transferee was admitted as an Additional Member or a Substituted Member) shall cease to be a Member as of the date on which all transferees are admitted as Additional Members or Substituted Members; provided, that, notwithstanding anything to the contrary in this Agreement, such Member shall not be relieved of any liabilities that arise under or are incurred by such Member pursuant to the terms and conditions of this Agreement prior to the time such Member Disposes of any Membership Interests or ceases to be a Member.

 

3.8                               No Liability of Members. Except as otherwise required under the Act, the debts, liabilities, contracts and other obligations of the Company (whether arising in contract, tort or otherwise) shall be solely the debts, liabilities, contracts and other obligations of the Company, and no Member in its capacity as such shall be liable personally (a) for any debts, liabilities, contracts or other obligations of the Company, except to the extent and under the circumstances set forth in any non-waivable provision of the Act or in any separate written instrument signed by the applicable Member or (b) for any debts, liabilities, contracts or other obligations of any other Member. No Member shall have any responsibility to restore any negative balance in its Capital Account or to contribute to or in respect of the liabilities or obligations of the Company or to return distributions made by the Company, except as expressly provided herein or required by any non-waivable provision of the Act; provided, however, that each Eligible Member shall be liable for its failure to fund (i) CapEx Contributions it is required to make to the Company in exchange for Class A Common Units for Approved Projects in accordance with Section 5.2 and Section 5.3 and/or CapEx Contributions it is required to make to the Company in exchange for Class A Common Units for De Minimis Projects in accordance with Section 5.4 and/or (ii) its elections to make Optional Capital Contributions in exchange for New Securities pursuant to Section 5.9 and Section 7.7. The agreement set forth in the immediately preceding sentence shall be deemed to be a compromise with the consent of all of the Members for purposes of §18-502(b) of the Act. However, if any court of competent jurisdiction orders, holds or determines that, notwithstanding the provisions of this Agreement, any Member is obligated to restore any such negative balance, make any such contribution or make any such return, such obligation shall be the obligation of such Member and not of any other Person.

 

3.9                               Spouses of Members. Spouses of any Members who are natural Persons do not become Members as a result of such marital relationship. Each spouse of a Member that is a natural person shall execute a spousal agreement in a form reasonably requested by the Company (as directed by the Board) to evidence his or her agreement and consent to be bound by the terms and conditions of this Agreement and each other Related Document that has been or will be executed by such Member or is otherwise binding on such Member.

 

8

 

ARTICLE 4
 REPRESENTATIONS AND WARRANTIES

 

4.1                               Representations and Warranties of Members. Without in any way limiting the terms and conditions in the other Related Documents, each Member severally, but not jointly, represents and warrants to the Company and the other Members, as of the Effective Date (or, in the case of a Substituted Member or Additional Member, on the date it is admitted pursuant to Section 3.7(d)), that:

 

(a)                                       Authority. Such Member has full power and authority to execute and deliver the Related Documents to which it is a party and to perform its obligations thereunder, and the execution, delivery and performance by such Member of the Related Documents to which it is, or will be, a party has been, or will be, duly authorized by all necessary action.

 

(b)                                       Binding Obligations. Each Related Document to which such Member is, or will be, a party has been, or will be, duly and validly executed and delivered by such Member and constitutes, or shall constitute, the binding obligation of such Member enforceable against such Member in accordance with its terms, subject to Creditors’ Rights.

 

(c)                                        No Conflict. The execution, delivery and performance by such Member of the Related Documents to which it is, or will be, a party will not, with or without the giving of notice or the passage of time, or both, (i) violate any provision of Law to which such Member is subject, (ii) violate any order, judgment or decree applicable to such Member or (iii) conflict with, or result in a breach or default under (A) any term or condition of such Member’s organizational documents or (B) any other instrument to which such Member is a party or by which any property of such Member is otherwise bound or subject, except, in the case of this clause (B), where such violation, conflict, breach or default would not reasonably be expected to, individually or in the aggregate, prevent or materially delay the consummation of the transactions contemplated by the Related Documents to which such Member is, or will be, a party or to materially impair such Member’s ability to perform its obligations under the Related Documents to which it is, or will be, a party.

 

(d)                                       Investment Entirely For Own Account. The Membership Interests acquired or to be acquired by such Member will be acquired for investment for such Member’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof; such Member has no present intention of selling, granting any participation in, or otherwise distributing the same; and such Member does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Membership Interests.

 

(e)                                        Unregistered Securities. Such Member understands that the Membership Interests, at the time of issuance, will not be registered under the Securities Act or other applicable federal or state securities laws and the rules and regulations promulgated

 

9

 

thereunder. Such Member also understands that such Membership Interests are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon such Member’s representations contained in this Agreement.

 

(f)                                         Investment Experience. Such Member has such knowledge and experience in financial and business matters that such Member is capable of evaluating the merits and risks of an investment in the Membership Interests and of making an informed investment decision with respect to the purchase thereof and understands that (i) this investment is suitable only for an investor which is able to bear the economic consequences of losing such investor’s entire investment, (ii) the acquisition of the Membership Interests hereunder is a speculative investment which involves a high degree of risk of loss, which could include the loss of the Member’s entire investment and (iii) there are substantial restrictions on the transferability of, and there will be no public market for, the Membership Interests, and accordingly, it may not be possible for such Member to liquidate such Member’s investment in case of emergency.

 

(g)                                        Accredited Investor. Unless such Member is acquiring Membership Interests after the Effective Date in a transaction exempt from registration under the Securities Act pursuant to Rule 701 promulgated thereunder, such Member is an Accredited Investor.

 

(h)                                       Restricted Securities. Such Member understands that the Membership Interests acquired or to be acquired by such Member may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of either an effective registration statement covering such Membership Interests or an available exemption from registration under the Securities Act, the Membership Interests must be held indefinitely. Such Member understands that the Company has no present intention of registering the Membership Interests to be acquired by such Member. Such Member also understands that there is no assurance that any exemption from registration under the Securities Act will be available and that, even if available, such exemption may not allow such Member to transfer all or any portion of the Membership Interests to be acquired by it under the circumstances, in the amounts or at the times such Member might propose. In particular, such Member is aware that the Membership Interests may not be sold pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of Rule 144 are met. Among the conditions for use of Rule 144 may be availability of current information to the public about the Company. Such information is not now available and the Company has no plans to make such information available.

 

(i)                                           Taxes. Such Member has reviewed with its own Tax advisors the federal, state and local and the other Tax consequences of an investment in Membership Interests and the transactions contemplated by the Related Documents to which such Member is, or will be, a party. Such Member acknowledges and agrees that the Company is making no representation or warranty as to the federal, state, local or foreign Tax consequences to such Member as a result of such Member’s acquisition of Membership Interests or the transactions contemplated by the Related Documents to which such Member is, or will be,

 

10

 

a party. Such Member understands that it shall be responsible for its own Tax liability that may arise as result of such Member’s acquisition of Membership Interests.

 

4.2                               Additional Representations by MHR. Without in any way limiting the terms and conditions in the other Related Documents, on the execution date of the Transaction Agreement MHR made, and on each of the Effective Date and the Second Closing MHR shall make, the representations and warranties set forth in the Transaction Agreement.

 

ARTICLE 5
 CAPITAL CONTRIBUTIONS

 

5.1                               Capital Contributions. On or prior to the Effective Date, the Members (or their predecessors in interest) are making or have made the Capital Contributions described on Schedule I.

 

5.2                               CapEx Contributions; Issuance of Class A Common Units.

 

(a)                                       CapEx Contributions Generally.

 

(i)                                     Notwithstanding anything to the contrary in this Agreement or otherwise (and whether or not there is an Annual Budget approved by the Board with Requisite Member Approval), no Member shall be required to make a Capital Contribution except to the extent expressly required in this ARTICLE 5 or Section 7.7.

 

(ii)                                  In connection with any proposed incurrence of any capital expenditure (or series of capital expenditures relating to the same capital project) relating to growth projects and/or acquisitions (each such project and/or acquisition, a “Proposed Growth CapEx Project”), the Officers shall (except in connection with Permitted Early Stage CapEx, Permitted CapEx Overage in respect of Approved Projects or acquisitions permitted by Section 8.4(b)(xii)) present to the Board and the Eligible Members a reasonably detailed description of such Proposed Growth CapEx Project (the “CapEx Proposal”), which CapEx Proposal shall include the following information with respect to such Proposed Growth CapEx Project: (A) the amount of Sufficient Funds (if any) the Company reasonably expects to have for such Proposed Growth CapEx Project (including present calculations of the amount available under the Existing Revolver and/or other credit facility entered into in accordance with this Agreement) and whether the Company reasonably expects to need Capital Contributions for all or any portion of such Proposed Growth CapEx Project and a schedule of requested dates and amounts for Capital Contributions (if applicable), which schedule shall not propose Capital Contributions more than once per quarter, (B) the expected completion date, (C) a detailed budget, (D) the development and completion milestones, if applicable, (E) any proposed contractual arrangements, including copies of any drafts or executed agreements, (F) the projected unlevered return and (G) such other information as may be reasonably requested by the Board or any Eligible Member.

 

11

 

(iii)                               If the Company does not have Sufficient Funds for any such Proposed Growth CapEx Project (as determined by the Board), then, in connection with the consideration by the Board and the Eligible Members regarding whether to approve such Proposed Growth CapEx Project, MHR shall provide a written notice (“MHR Funding Notice”) to the Board and the other Eligible Members of whether, due to current and expected capital constraints, MHR will not be capable of making all or a portion of its Pro Rata Share of Capital Contributions relating to a Proposed Growth CapEx Project as contemplated in Section 5.3. MHR’s inability to make all or a portion of its Pro Rata Share of such CapEx Contribution as set forth in such MHR Funding Notice is referred to as a “MHR Non-Funding Event” and the amount in respect thereof is the “Unfunded MHR Amount”. In the case of a MHR Non-Funding Event, the MHR Funding Notice shall include the Unfunded MHR Amount.

 

(iv)                              In order to consent to and approve a Proposed Growth CapEx Project, the Board and the Members constituting Requisite Member Approval shall (if they, in their respective sole discretion, consent to and approve such Proposed Growth CapEx Project) execute and deliver a written consent (“Project Written Consent”), which shall include, as an attachment thereto, the following information provided by the Company with respect to such Proposed Growth CapEx Project: (A) the source of funds for such Proposed Growth CapEx Project and, if applicable, a schedule of the dates and amounts for Capital Contributions (including whether any such dates for Capital Contributions will be MHR Non-Funding Events and the Unfunded MHR Amounts with respect thereto) (the “Funding Schedule”), (B) the expected completion date (the “Expected Completion Date”), (C) the detailed budget (the “Project Budget”), (D) the development and completion milestones, if applicable (the “Project Milestones”), (E) any proposed contractual arrangements, including copies of any drafts or executed agreements, (F) the projected unlevered return (“Project Unlevered Return”) and (G) such other information as may be reasonably requested by the Board or any Eligible Member (“Other Project Information”). Each Eligible Member that executes the Project Written Consent and expressly agrees in such Project Written Consent to make Capital Contributions to the Company to fund the Proposed Growth CapEx Project shall be a “Funding Member” but in no event shall any Funding Member ever be obligated to make Capital Contributions in respect of such Proposed Growth CapEx Project in excess of the amount set forth in the Project Written Consent with respect to such Funding Member. For the avoidance of doubt, if a Project Written Consent relating to an Approved Project contemplates periodic funding (as set forth in the Project Written Consent), (x) following the execution of the Project Written Consent by a Funding Member, such Funding Member shall be obligated, subject to the conditions to funding applicable to such Funding Member as provided in Section 5.3(c), to fund its CapEx Contributions in accordance with the Project Written Consent and (y) in connection with each such funding relating to such Approved Project, there shall be a separate CapEx Contribution Request (in accordance with the Project Written Consent).

 

12

 

*             THE REGISTRANT HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS OF THIS EXHIBIT.  ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE SEC.  OMITTED PORTIONS ARE INDICATED BY “[REDACTED]*”.

 

(b)                                       Sources of Funds. With respect to each Proposed Growth CapEx Project that is both contemplated in the CapEx Budget and approved in accordance with Section 5.2(a)(iv), Section 8.1, Section 8.2 and Section 8.4(b) (an “Approved Project”), the Company shall (i) first use the Company’s cash on hand (including cash received from MHR pursuant to a MHR Catch-Up Contribution described in clause (y) of Section 5.5)), to the extent available (as such availability is determined by the Board), to fund such Approved Project and (ii) if the Company does not have such cash sufficient to fund fully such Approved Project, then the Company shall use funds available under the Existing Revolver or other credit facility entered into in accordance with this Agreement to fund such Approved Project. If the Company does not have sufficient funds as referred to in the prior sentence to fund fully such Approved Project (“Sufficient Funds”), the Board shall direct the Company to request cash Capital Contributions from the Funding Members (“Requested CapEx Contribution”) to fund the remaining amount (the amount of each such Requested CapEx Contribution, the “Requested CapEx Contribution Amount”) and on the terms and conditions set forth in this ARTICLE 5 and the Project Written Consent. Such cash Capital Contributions made by the Funding Members are referred to as “CapEx Contributions.”

 

(c)                                        Issuance of Common Units in Respect of CapEx Contributions. For each CapEx Contribution made by a Funding Member to the Company, the Company shall issue to such Funding Member a number of Class A Common Units equal to the amount of such CapEx Contribution made by such Funding Member divided by $[REDACTED]*; provided, that, the Series A-1 Members making such CapEx Contribution shall receive Series A-1 Units and the Series A-2 Members making such CapEx Contribution shall receive Series A-2 Units.

 

(d)                                       2014 Projects. The capital projects identified on Schedule II are Approved Projects (as approved, the “2014 Projects”). Subject to satisfaction of the Required Condition and receipt of the Company Certificate, the Series A-2 Members shall make the CapEx Contributions in respect of the 2014 Projects in accordance with the Funding Schedule relating to such 2014 Projects set forth on Schedule II (or as otherwise set forth in a Project Written Consent approved by the Board with Requisite Member Approval either on or after the Effective Date). In no event shall the Series A-2 Members be required to make CapEx Contributions in respect of the 2014 Projects in excess of $30 million in the aggregate (unless consented to in writing by the Series A-2 Majority).

 

(e)                                        2014 Capital Contributions. MHR may (but shall not be required to) make Capital Contributions during the Interim Period so long as (i) the request for such Capital Contribution is approved by, and at the direction of, the Board in accordance with Section 8.2 and this ARTICLE 5 and (ii) each Series A-2 Member is afforded the right to participate in such Capital Contribution in accordance with this ARTICLE 5 and the other provisions of this Agreement (including the right of each Series A-2 Member to make CapEx Contributions up to its Funding Share in respect of Approved Projects).

 

13

 

5.3                               CapEx Contribution Request.

 

(a)                                       The Company shall provide the Funding Members a notice requesting CapEx Contributions in respect of each Approved Project and the Project Written Consent relating thereto as directed by the Board in accordance with Section 5.2(b) (a “CapEx Contribution Request”), which request shall be provided not less than 20 and not more than 30 Business Days prior to the requested date of contribution, which date shall be set forth in the CapEx Contribution Request and such date shall be substantially in accordance with the Funding Schedule (the “CapEx Contribution Closing Date”). Upon notice from a Funding Member, the CapEx Contribution Closing Date shall be extended to the extent necessary to satisfy any waiting periods or other requirements under the HSR Act or other competition Laws.

 

(b)                                       A CapEx Contribution Request with respect to any Approved Project shall include (i) a reasonably detailed description of the Approved Project, (ii) a certification from the Chief Executive Officer or other senior Officer that the Required Condition is satisfied (the “Company Certificate”) and (iii) if MHR is a Funding Member with respect to such Approved Project, a certification from the chief executive officer or other senior officer of MHR that MHR is ready, willing and able to make its required CapEx Contribution in accordance with the Project Written Consent (the “MHR Certificate”). The Requested CapEx Contribution Amount shall not exceed the amount reasonably required by the Company in connection with pursuing the applicable Approved Project during the following calendar quarter, but in no event shall such amount exceed the amount set forth in the Funding Schedule for such calendar quarter unless otherwise agreed by the Funding Members in writing.

 

(c)                                        Upon the Funding Members’ receipt of a valid CapEx Contribution Request (including the Company Certificate and, if MHR is a Funding Member with respect to such Approved Project, the MHR Certificate), and subject to satisfaction of the Required Condition, each Funding Member shall be obligated to fund such Funding Member’s Funding Share of the total Requested CapEx Contribution Amount; provided, that, (i) in the case of a MHR Non-Funding Event as reflected in the Project Written Consent, each Series A-2 Member that is a Funding Member shall also fund, subject to Section 5.2 and this Section 5.3, its pro rata share of the Unfunded MHR Amount to the extent set forth in the Project Written Consent (and MHR shall not be required to fund such Unfunded MHR Amount in respect of such CapEx Contribution Request) and (ii) in the case that the CapEx Contribution Closing Date is during a MHR Catch-Up Period, (A) MHR may elect to make a MHR Catch-Up Contribution in accordance with, and subject to, Section 5.5, up to an amount equal to the lesser of (x) the MHR Shortfall Amount and (y) $40 million and (B) if MHR makes a MHR Catch-Up Contribution, the Funding Schedule shall be revised such that the obligations of the Funding Members (excluding, for the avoidance of doubt, MHR) with respect to such CapEx Contribution Request are reduced, pro rata based on the Funding Members’ (excluding, for the avoidance of doubt, MHR) Funding Share, by an amount equal to the MHR Catch-Up Contribution. On the CapEx Contribution Closing Date, each Funding Member making a CapEx Contribution shall receive Common Units in accordance with Section 5.2(c). Notwithstanding anything to the contrary set forth herein, the Series A-2 Majority may (but shall not have the obligation to) waive the condition (1) set forth in clause (H) of the

 

14

 

definition of Required Condition and the certification relating thereto and/or (2) the requirement to deliver a MHR Certificate (if applicable), in each case, on behalf of the Members and the Company by execution of a written instrument.

 

(d)                                       Notwithstanding the foregoing, (i) in the case of a De Minimis Project, the provisions of Section 5.4 shall apply and (ii) in the case of a MHR Non-Funding Event, the provisions of Section 5.5 shall apply.

 

5.4                               De Minimis Projects. Notwithstanding Section 5.3, in the case of a Proposed Growth CapEx Project proposed in accordance with Section 5.2(a)(ii) after December 31, 2014 that relates to a capital project reasonably expected to require less than $1 million in the aggregate (a “De Minimis Project”), the Board (acting with at least fifty percent (50%) of the Managers) may require all (but not less than all) Eligible Members to fund their pro rata portion such De Minimis Project, which shall (a) not exceed (i) CapEx Contributions by Eligible Members of $1 million in the aggregate with respect to each De Minimis Project and/or (ii) CapEx Contributions by Eligible Members of $15 million in the aggregate per year with respect to De Minimis Projects and (b) be made on the other terms and conditions described in Section 5.3 (including the issuance of Common Units to the Eligible Members in accordance with Section 5.2(c)). Notwithstanding anything to the contrary contained herein, the Eligible Members shall not have any obligation to fund De Minimis Projects (x) unless all other Eligible Members fund their pro rata portion of De Minimis Projects (and no Eligible Member shall have an obligation to fund any portion of another Eligible Member’s pro rata portion of a De Minimis Project) or (y) upon the expiration of the Commitment Period.

 

5.5                               MHR Catch-Up Contribution. In the event the Series A-2 Members fund all or a portion of the Unfunded MHR Amount (the amount so funded, the “MHR Shortfall Amount”), MHR may, during (but not after) the period beginning on the CapEx Contribution Closing Date that resulted in there being an MHR Shortfall Amount and ending 180 days thereafter (the “MHR Catch-Up Period”), (x) fund an amount greater than its Pro Rata Share with respect to Requested CapEx Contributions contributed during such MHR Catch-Up Period or (y) otherwise elect to make a CapEx Contribution during such MHR Catch-Up Period, up to such MHR Shortfall Amount (in the case of clauses (x) and/or (y), in the aggregate, a “MHR Catch-Up Contribution”); provided, that, MHR shall not be permitted to make MHR Catch-Up Contributions in excess of $40 million in the aggregate during such MHR Catch-Up Period.

 

5.6                               Return of Contributions. A Member is not entitled to the return of any part of its Capital Contributions or to be paid interest in respect of either its Capital Account or its Capital Contributions. An unreturned Capital Contribution is not a liability of the Company or of any Member. A Member is not required to contribute or to lend any cash or property to the Company to enable the Company to return any Member’s Capital Contributions.

 

5.7                               Capital Account.

 

(a)                                       A Capital Account shall be maintained for each Member in accordance with the requirements of Treasury Regulations Section 1.704-1(b)(2)(iv). Each Member’s Capital Account (a) shall be increased by (i) the amount of money contributed by such Member to the Company, (ii) the initial Book Value of property contributed by such

 

15

 

Member to the Company (net of liabilities secured by the contributed property that the Company is considered to assume or take subject to under Code Section 752), (iii) allocations to such Member of Profits and any other items of income or gain allocated to such Member, pursuant to Section 6.2 and (iv) in the case of a Member holding a Compensatory Membership Interest, the amount included in the Member’s compensation income under Section 83(a), 83(b) or 83(d)(2) of the Code, and (b) shall be decreased by (i) the amount of money distributed to such Member by the Company, (ii) the Book Value of property distributed to such Member by the Company (net of liabilities secured by the distributed property that such Member is considered to assume or take subject to under Code Section 752), and (iii) allocations to such Member of Losses and any other items of loss or deduction allocated to such Member pursuant to Section 6.2. On the Disposition of all or part of a Member’s Membership Interests, the Capital Account of the transferor that is attributable to the Disposed Membership Interests shall carry over to the transferee Member in accordance with the provisions of Treasury Regulation Section 1.704-1(b)(2)(iv)(l). For the avoidance of doubt, as of the close of business on the day immediately prior to the Effective Date, the Company shall conduct an interim closing of the books as required by Section 6.4 in connection with the transactions contemplated by the ArcLight UPA, and on the Effective Date, as a result of the Effective Date Transactions, the Book Value of the Company’s property shall be adjusted so that the Capital Accounts of the Members after taking into account the adjustment occurring as a result of the Effective Date Transactions are set forth on in the Members’ Schedule (“Effective Date Capital Account Balance”). Immediately following the interim closing referred to above and immediately before the Effective Date Transaction, the Rogersville Facility (as defined in the Transaction Agreement) will be deemed for Capital Account maintenance purposes to have been distributed by the Company to MHR pursuant to Section 6.2 of the Transaction Agreement. The deemed distribution pursuant to the immediately preceding sentence has been taken into account in determining MHR’s Effective Date Capital Account Balance.

 

(b)                                       The manner in which Capital Accounts are to be maintained pursuant to this Section 5.7 is intended to comply with the requirements of Section 704(b) of the Code and the Treasury Regulations promulgated thereunder. If, in the opinion of the Board, the manner in which Capital Accounts are to be maintained pursuant to the preceding provisions of this Section 5.7 should be modified in order to comply with Section 704(b) of the Code and the Treasury Regulations thereunder, then notwithstanding anything to the contrary contained in the preceding provisions of this Section 5.7, the method in which Capital Accounts are maintained shall be so modified; provided, however, that any change in the manner of maintaining Capital Accounts shall not materially alter the economic agreement and relative economic benefits between or among the Members.

 

(c)                                        Except as otherwise required in the Act, no Member shall have any liability to restore all or any portion of a deficit balance in such Member’s Capital Account.

 

5.8                               Advances by Members. If the Company does not have sufficient cash to pay its obligations, then with the approval of the Board and Requisite Member Approval, any or all of

 

16

 

the Members may (but will have no obligation to) advance all or part of the needed funds to or on behalf of the Company, which advances will constitute a loan from such Member or Members to the Company, will bear interest and be subject to such other terms and conditions as agreed between such Member or Members and the Company and will not be deemed to be a Capital Contribution.

 

5.9                               Optional Capital Contributions. In addition to Requested CapEx Contributions, the Board, with the Requisite Member Approval, may request a Capital Contribution from the Members (an “Optional Capital Call”) and the Eligible Members shall be entitled, but shall not be required, to make a Capital Contribution (an “Optional Capital Contribution”) in exchange for Membership Interests or options or other rights to acquire Membership Interests, whether through exchange, conversion or otherwise (collectively, the “New Securities”) pursuant to, and in accordance with, the terms and conditions set forth in Section 7.7.

 

5.10                        No Requirement to Make Capital Contributions. Other than each Eligible Member’s agreement to provide CapEx Contributions pursuant to Section 5.2, Section 5.3 and/or Section 5.4, and then subject to the terms and conditions of this Agreement, (i) each of the Company and each Member acknowledges and agrees that no Member is required to make any Capital Contribution and (ii) no Member has made any representation, commitment or agreement to provide or assist the Company in obtaining any financing, investment or other assistance. In addition, the Company and each Member acknowledge and agree that (a) no statements made by any Member or its representatives before, on or after the Effective Date shall create an obligation to provide or assist the Company in obtaining any financing or investment, (b) the Company shall not rely on any such statement by any Member or its representatives and (c) an obligation to provide or assist the Company in obtaining any financing or investment may only be created by a written agreement, signed by such Member and the Company, setting forth the terms and conditions of such financing or investment and stating that the parties intend for such writing to be a binding obligation or agreement.

 

ARTICLE 6
 DISTRIBUTIONS AND ALLOCATIONS

 

6.1                               Distributions.

 

(a)                                       Each distribution made by the Company, regardless of the source or character of the assets to be distributed, shall be made in accordance with this Article 6 and applicable Law, including Section 18-607 of the Act.

 

(b)                                       Notwithstanding the limitations on distributions described in Section 6.1(c), on each Tax Distribution Date, the Company shall, to the extent of Available Cash, distribute to each Member in cash an amount equal to such Member’s Assumed Tax Liability, if any. The Board will make its determination of the Assumed Tax Liability based upon its good faith determination of the jurisdiction in which Members (or their owners, as may be applicable) are subject to tax with respect to the income of the Company; provided, that, for this purpose the Series A-2 Members will be treated as individual residents of New York, New York. Distributions pursuant to this Section 6.1(b) shall be treated as an advance distribution under Section 6.1(c) or Section 12.3(b) and

 

17

 

shall offset future distributions that such holder of Units would otherwise be entitled to receive pursuant to Section 6.1(c) or Section 12.3(b). If on a Tax Distribution Date there is not sufficient Available Cash on hand to distribute to each Member the full amount of such Member’s Assumed Tax Liability, distributions pursuant to this Section 6.1(b) shall be made to the Members to the extent of Available Cash in proportion to each Member’s Assumed Tax Liability, and the Company shall make future distributions as soon as funds become available to pay the remaining portion of such Member’s Assumed Tax Liability. If by reason of this Section 6.1(b) any Member receives aggregate distributions greater than it would have otherwise received in the absence hereof, then in connection with a Liquidation Event of the Company such Member shall be obligated to return such excess distributions to the Company.

 

(c)                                        Subject to Section 6.1(b), Section 6.1(d) and (with respect to distributions upon a Sale Transaction) Section 12.3, Available Cash may only be distributed by the Company to the Members in proportion to their respective Percentage Interests and at such times as is determined by the Board, with Requisite Member Approval.

 

(d)                                       Notwithstanding the foregoing or any provision in this Agreement to the contrary, the following provisions shall apply with respect to any Class B Common Unit(s) granted to a Person under any Equity Award Agreement:

 

(i)                                     No Class B Common Unit shall participate in any distributions under Section 6.1(c) or Section 12.3(b) until the cumulative amount distributed prior to the Effective Date pursuant to the Original Agreement (as previously amended) and after the Effective Date pursuant to Section 6.1(c) and/or Section 12.3(b) with respect to other Units is equal to the Baseline Value of such Class B Common Unit.

 

(ii)                                  Unless otherwise provided in the applicable Equity Award Agreement, any amount distributable to a Class B Member pursuant to Section 6.1 or Section 12.3(b) with respect to a Class B Common Unit that has not yet vested (“Unvested Class B Unit”) pursuant to the terms of the applicable Equity Award Agreement (an “Unvested Distribution Amount”) shall not be paid over to such Class B Member until such Class B Common Unit vests (“Vested Class B Unit”) in accordance with the applicable Equity Award Agreement. All Unvested Distribution Amounts shall be held by the Company in a segregated account until released to the applicable Class B Member in accordance with the terms of this Agreement and the applicable Equity Award Agreement. If any Class B Common Unit is forfeited or cancelled prior to vesting, any Unvested Distribution Amounts held by the Company with respect to such Class B Common Unit shall be forfeited and returned to the general accounts of the Company.

 

(iii)                               The Board shall have the discretion to make any determinations required under this Section 6.1(d), including as to the Baseline Value and the extent to which a Class B Common Unit is entitled to participate in distributions pursuant to Section 6.1(c) and/or Section 12.3(b) in order to achieve the

 

18

 

objectives of Section 3.1(b). The Board may amend this Section 6.1(d) upon the issuance of any subclass of Class B Common Units to reflect the respective rights of such subclass of Class B Common Units hereunder.

 

(iv)                              The holder of each such Class B Common Unit, whether or not vested, shall be treated as a partner of the Company for U.S. federal income tax purposes with respect to such Unit.

 

(e)                                        All distributions made under this Section 6.1 shall be made to the holders of record of the applicable Membership Interests on the record date established by the Board (which date may be before or after such action by the Board) or, in the absence of any such record date, to the holders of the applicable Membership Interests on the date of the distribution.

 

(f)                                         Except as otherwise provided herein, the Company may distribute securities in kind and the dollar value of securities distributed in kind shall be determined as provided in the definition of Fair Market Value.

 

(g)                                        Notwithstanding any other provision of this Agreement, the Company is authorized to take any action that may be required to comply with any withholding requirements established under the Code or any other federal, state or local law including pursuant to Sections 1441, 1442, 1445 and 1446 of the Code and any applicable non-U.S. Tax law. All amounts withheld pursuant to the Code or any provision of any state, local or foreign Tax law with respect to any allocation or distribution to any Member shall be treated as amounts distributed to such Member pursuant to this Article 6 for all purposes under this Agreement.

 

6.2                               Allocations of Profits and Losses and Other Items.

 

(a)                                       Profit and Loss Allocations. After giving effect to the allocations set forth in Section 6.2(b), Profits and Losses (and, to the extent necessary, items of income, gain, loss and deduction) for each fiscal period shall be allocated among the Members during such fiscal period, in such a manner as shall cause the Capital Accounts of the Members (as adjusted to reflect all allocations set forth in Section 6.2(b)) and all distributions through the end of such fiscal period) to equal, as nearly as possible, (i) the amount such Members would receive if all assets of the Company on hand at the end of such fiscal period were sold for cash equal to their Book Values, all liabilities of the Company were satisfied in cash in accordance with their terms (limited in the case of non-recourse liabilities to the Book Value of the property securing such liabilities), and all remaining or resulting cash (including any withheld amounts) were distributed to the Members under Section 12.3(b) minus (ii) such Member’s share of Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets, and the amount any such Member is treated as obligated to contribute to the Company, computed immediately after the hypothetical sale of assets.

 

(b)                                       Special Allocations. Notwithstanding any other provisions of this Section 6.2, the following special allocations shall be made for each taxable period:

 

19

 

(i)                                     Notwithstanding any other provision of this Section 6.2, if there is a net decrease in Minimum Gain during any taxable period, each Member shall be allocated items of Company income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), (g)(2) and (j)(2)(i). For purposes of this Section 6.2(b)(i), each Member’s Capital Account shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.2(b) with respect to such taxable period. This Section 6.2(b)(i) is intended to comply with the partnership minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.

 

(ii)                                  Notwithstanding the other provisions of this Section 6.2 (other than Section 6.2(b)(i)), if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any taxable period, any Member with a share of Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt at the beginning of such taxable period shall be allocated items of Company income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Section 1.704-2(i)(4) and (j)(2)(ii). For purposes of this Section 6.2(b)(ii), each Member’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.2(b), other than Section 6.2(b)(i), with respect to such taxable period. This Section 6.2(b)(ii) is intended to comply with the partner nonrecourse debt minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

(iii)                               In the event any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulation, the deficit balance, if any, in such Member’s Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible; provided, however, that an allocation pursuant to this Section 6.2(b)(iii) shall be made only if and to the extent that the Member would have such a deficit balance in its Adjusted Capital Account after all other allocations provided for in this Section 6.2(a) have been tentatively made as if this Section 6.2(b)(iii) were not in this Agreement. This Section 6.2(b)(iii) is intended to qualify and be construed as a “qualified income offset” within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

(iv)                              In the event any Member has a deficit balance in its Adjusted Capital Account at the end of any taxable period that is in excess of the sum of (i) the amount such Member is obligated to restore under this Agreement plus (ii) the

 

20

 

amount such Member is deemed obligated to restore pursuant to the penultimate sentence of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, however, that an allocation pursuant to this Section 6.2(b)(iv) shall be made only if and to the extent that such Member would have a deficit balance in its Capital Account in excess of such sum, after all other allocations provided in this Section 6.2 have been tentatively made as if Section 6.2(b)(iii) and this Section 6.2(b)(iv) were not in this Agreement.

 

(v)                                 Nonrecourse Deductions shall be allocated to holders of Common Units in accordance with their respective Percentage Interests.

 

(vi)                              Member Nonrecourse Deductions for any taxable period shall be allocated 100% to the Member that bears the Economic Risk of Loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704 2(i). If more than one Member bears the Economic Risk of Loss with respect to a Member Nonrecourse Debt, Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such Economic Risk of Loss.

 

(vii)                           To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of such Member’s interest in the Company, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such provisions.

 

6.3                               Income Tax Allocations.

 

(a)                                       Except as provided in this Section 6.3, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated, to the maximum extent possible, among the Members in the same manner as the corresponding items (if any) are allocated for purposes of maintaining Capital Accounts under Section 6.2.

 

(b)                                       The Members recognize that there may be a difference between the Book Value of a Company asset and the asset’s adjusted tax basis at the time of the property’s contribution or revaluation pursuant to this Agreement. In such a case, all items of tax depreciation, cost recovery, amortization, and gain or loss with respect to such asset shall be allocated among the Members to take into account the disparities between the Book Values and the adjusted tax basis with respect to such properties in accordance with the

 

21

 

provisions of Sections 704(b) and 704(c) of the Code and the Treasury Regulations under those sections; provided, that, (i) the Company shall account for any disparities relating to the contribution of property by MHR in the initial contribution of the assets of Eureka Hunter Pipeline and Eureka Hunter Land, LLC using the remedial method described in Treas. Reg. § 1.704-3(d), and (ii) the Company shall account for any disparities resulting from the Effective Date Transactions using the traditional method described in Treas. Reg. § 1.704-3(b).

 

(c)                                        All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof shall be determined without regard to any election under Section 754 of the Code which may be made by the Company; provided, however, that such allocations, once made, shall be adjusted as necessary or appropriate to take into account the adjustments permitted by Sections 734 and 743 of the Code.

 

(d)                                       If any deductions for depreciation, amortization or cost recovery are recaptured as ordinary income upon the sale or other disposition of Company properties, the ordinary income character of the gain from such sale or disposition shall be allocated among the Members in the same ratio as the deductions giving rise to such ordinary income character were allocated in accordance with Treasury Regulations § 1.1245-1.

 

(e)                                        The Members’ proportionate shares of the “excess nonrecourse liabilities” of the Company, within the meaning of Treasury Regulation Section 1.752-3(a)(3) shall be allocated to the holders of Units in accordance with their respective Percentage Interests.

 

(f)                                         Tax credits of the Company shall be allocated among the Members as provided in Treasury Regulation Sections 1.704-(b)(4)(iii) and 1.704-1(b)(4)(viii).

 

(g)                                        Allocations pursuant to this Section 6.3 are solely for purposes of federal, state, and local taxes and except as specifically provided shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items or distributions pursuant to any provision of this Agreement.

 

6.4                               Other Allocation Rules. All items of income, gain, loss, deduction and credit allocable to an interest in the Company that may have been transferred shall be allocated between the transferor and the transferee based on the portion of the fiscal year during which each was recognized as the owner of such interest, without regard to the results of Company operations during any particular portion of that calendar year and without regard to whether cash distributions were made to the transferor or the transferee during that year; provided, however, that this allocation must be made in accordance with a method permissible under Code Section 706 and the Treasury Regulations thereunder. Notwithstanding the foregoing, allocations relating to the transactions described in the ArcLight UPA shall be based on the interim closing of the books. If any Membership Interests are Disposed of or redeemed in compliance with the provisions of this Agreement, all distributions with respect to which the record date is before the date of such Disposition or redemption shall be made to the disposing Member, and all

 

22

 

distributions with respect to which the record date is after the date of such Disposition, in the case of a Disposition other than a redemption, shall be made to the transferee.

 

ARTICLE 7
 CERTAIN COVENANTS RELATING TO ISSUANCES AND DISPOSITIONS OF MEMBERSHIP INTERESTS AND OTHER TRANSACTIONS

 

7.1                               General Restrictions on, and Other Terms Relating to, Dispositions of Membership Interests.

 

(a)                                       Dispositions of Membership Interests otherwise permitted or required by this Agreement may only be made in compliance with applicable foreign, U.S. federal and state securities laws, including the Securities Act and the Act.

 

(b)                                       Except in connection with an IPO, for so long as the Company is a partnership for U.S. federal income tax purposes, in no event may any Disposition of any Membership Interests by any Member be made if such Disposition is effectuated through an “established securities market” or a “secondary market” (or the substantial equivalent thereof) within the meaning of Section 7704 of the Code or if such Disposition would otherwise result in the Company being treated as a “publicly traded partnership,” as such term is defined in Section 7704(b) of the Code and the regulations promulgated thereunder.

 

(c)                                        Dispositions of Membership Interests may only be made in strict compliance with all applicable provisions of this Agreement, and any purported Disposition of Membership Interests that does not comply with all applicable provisions of this Agreement shall be null and void and of no force or effect, and the Company shall not recognize or be bound by any such purported Disposition and shall not effect any such purported Disposition on the transfer books of the Company or Capital Accounts of the Members. The Members agree that the restrictions contained in this Article 7 are fair and reasonable and in the best interests of the Company and the Members.

 

(d)                                       Subject to the proviso at the end of this sentence, if any Person shall acquire any Series A-1 Units or Series A-2 Units, such Units shall continue to be designated as Series A-1 Units or Series A-2 Units, as the case may be, after giving effect to such acquisition; provided, however, that, notwithstanding the foregoing, if a Series A-1 Member acquires any Series A-2 Units, such Series A-2 Units shall automatically become a like number of Series A-1 Units and if a Series A-2 Member acquires any Series A-1 Units, such Series A-1 Units shall automatically become a like number of Series A-2 Units and, upon any such acquisition of Units, the Company shall update the Members’ Schedule to reflect the foregoing.

 

(e)                                        Each Member that is an entity agrees that it will not permit a Disposition of Equity Interests in such Member if any such Disposition (an “Indirect Disposition”) is made with the intent to circumvent the provisions of this ARTICLE 7; provided, that, notwithstanding the foregoing or anything to the contrary in this Agreement, the following shall not be deemed to be an Indirect Disposition subject to the provisions of this

 

23

 

Agreement: (i) any Disposition of Equity Interests in a private equity fund or affiliated funds or any Disposition to direct or indirect limited partners or other equityholders thereof, (ii) any Indirect Disposition whereby the Fair Market Value of the Membership Interests held by the Member that is the subject of the Indirect Disposition (as such Fair Market Value is determined by such Member in good faith) constitutes less than 80% of the Fair Market Value of all assets being directly or indirectly sold or otherwise transferred in connection with such Indirect Disposition, (iii) any restructuring of the Initial MSI Member (or its Affiliates) which involves the other portfolio investments of the Initial MSI Member (or its Affiliates) and/or (iv) direct or indirect Dispositions of Equity Interests of MHR. Notwithstanding the foregoing, a Member may consummate an Indirect Disposition so long as such Member provides the Eligible Members with a right of first offer substantially similar to the ROFO Right described in Section 7.3.

 

7.2                               Restrictions on Dispositions of Membership Interests.

 

(a)                                       Disposition of Membership Interests. A Disposition of Units may only be made if (1) such Disposition complies with the provisions of Section 7.1 and (2) such Disposition is:

 

(i)                                     made to a Permitted Transferee of the Disposing Member;

 

(ii)                                  made in connection with a ROFO Disposition in accordance with Section 7.3;

 

(iii)                               made in connection with a Drag-Along Transaction in accordance with Section 7.4;

 

(iv)                              made in connection with a Tag-Along Sale in accordance with Section 7.5;

 

(v)                                 made in connection with an IPO in accordance with Section 7.6, Section 10.7 or Sections 8.2 and 8.4; or

 

(vi)                              a Disposition made to the Company (or applicable transferee) pursuant to an Equity Award Agreement.

 

7.3                               Right of First Offer. If any Member desires to effect a Disposition of all or a portion of such Member’s Units (such Member, the “ROFO Offeror”) in a Disposition other than an Excluded ROFO Disposition, then each Eligible Member shall have a right of first offer (a “ROFO Right”) with respect to such Disposition (a “ROFO Disposition”) in accordance with the following provisions:

 

(a)                                       The ROFO Offeror shall deliver written notice of its desire to effect such ROFO Disposition (the “ROFO Notice”) to the Company and each Eligible Member. The last date that the ROFO Notice is received by any Eligible Member shall constitute the “ROFO Notice Date.” The ROFO Notice shall include the number of each series of Units that the ROFO Offeror desires to Dispose (the “ROFO Units”).

 

24

 

(b)                                       Following receipt of the ROFO Notice, each Eligible Member shall have the right (but not the obligation) for a period of 30 days (such period, the “ROFO Offering Period”) to propose a cash purchase price for all of the ROFO Units, along with all other terms and conditions applicable to the Disposition. Such proposed (if any) price and any such terms and conditions shall be delivered by an Eligible Member to the ROFO Offeror in a written notice (the “Offer Notice”) within the ROFO Offering Period. The delivery of an Offer Notice shall constitute an irrevocable commitment (subject to the terms and conditions set forth in the Offer Notice) for a period of 30 days following delivery of such Offer Notice (the “ROFO Commitment Period”) to purchase all ROFO Units. If the ROFO Offeror desires in its sole discretion to accept the most favorable offer (taken as a whole) and as determined by the ROFO Offeror in good faith based on purchase price and terms and conditions offered by any Eligible Member set forth in any Offer Notice (the “Offer”), the ROFO Offeror shall so notify such Eligible Member (the “Buyer Member”) of its acceptance of the Offer (the “Acceptance Notice”). The delivery of an Acceptance Notice prior to the expiration of the ROFO Commitment Period shall constitute an irrevocable commitment to sell all the ROFO Units to the Buyer Member and an irrevocable commitment by the Buyer Member to buy all the ROFO Units from the ROFO Offeror, in each case in accordance with the terms and conditions set forth in the Offer Notice. The Acceptance Notice shall include a reasonable place and time for the closing of the purchase and sale of the ROFO Units, which shall be not less than five Business Days nor more than 15 Business Days after the delivery of the Acceptance Notice (subject to extension to the extent necessary to pursue any required regulatory approvals, including to allow for the expiration or termination of all waiting periods under the HSR Act) unless otherwise agreed in writing by all of the parties to such transaction. If a Buyer Member breaches its obligation to purchase the ROFO Units, such Buyer Member and its Affiliated Members shall (without limiting the remedies of the ROFO Offeror against the Buyer Member for its breach) lose all further rights to deliver an Offer Notice with respect to any future Disposition under this Section 7.3(b).

 

(c)                                        During the period beginning on the expiration of the ROFO Offering Period (if no Acceptance Notice has been provided in accordance with Section 7.3(b)) and ending 270 days following the end of the ROFO Offering Period (the “Solicitation Period”), the ROFO Offeror may solicit offers from Third Parties for the ROFO Units. Upon receipt of an offer from a Third Party that includes a purchase price that is greater than the highest purchase price proposed in any Offer Notice received by the ROFO Offeror pursuant to Section 7.3(b) (a “Qualifying Third Party Offer”), the ROFO Offeror may Dispose all of the ROFO Units to such Third Party (the “Third Party Transferee”) within 60 days following expiration of the Solicitation Period (the “ROFO Sale Period”) at such purchase price (but not equal to or less than the highest purchase price proposed in any Offer Notice received by the ROFO Offeror pursuant to Section 7.3(b)) and under such terms and conditions as may be agreed between the ROFO Offeror and the Third Party Transferee, subject to compliance with Section 7.4. Notwithstanding the foregoing, the ROFO Offeror may not accept an offer, and such offer will not be considered a Qualifying Third Party Offer, if such offer contains provisions related to any property of the ROFO Offeror other than Units held by the ROFO Offeror. For the avoidance of doubt, for purposes of determining whether an offer from a Third Party is a Qualifying

 

25

 

Third Party Offer, all noncash consideration shall be deemed to have a dollar value equal to the Fair Market Value of such consideration as determined in accordance with the applicable provisions in the definition of Fair Market Value.

 

(d)                                       If the ROFO Units are not Disposed within the ROFO Sale Period pursuant to a Qualifying Third Party Offer or to an Eligible Member pursuant to an Acceptance Notice, the ROFO Offeror may not Dispose any of the ROFO Units without again complying in full with the provisions of this Section 7.3.

 

(e)                                        Notwithstanding anything to the contrary in this Section 7.3, in the event of any Disposition of Series A-1 Units by any Minority Owner, MHR and the Initial MSI Member shall each have the right (but not the obligation) to acquire an equal number of such Series A-1 Units for the same price per Series A-1 Unit, and on the same terms and conditions, except that (i) the Series A-1 Units acquired by MHR shall remain Series A-1 Units and (ii) the Series A-1 Units acquired by the Initial MSI Member shall be automatically converted for all purposes into an equal number of Series A-2 Units.

 

(f)                                         The ROFO Right shall not apply with respect to any of the following Dispositions (each an “Excluded ROFO Disposition”):

 

(i)                                     a Disposition made to a Permitted Transferee of the Disposing Member;

 

(ii)                                  a Disposition made in connection with a Tag-Along Sale in accordance with Section 7.5;

 

(iii)                               a Disposition made in connection with an IPO in accordance with Section 7.6, Section 10.7 or Sections 8.2 and 8.4; or

 

(iv)                              a Disposition made to the Company (or applicable transferee) pursuant to an Equity Award Agreement.

 

7.4                               Drag-Along Rights.

 

(a)                                       At any time from and after the fifth anniversary of the Effective Date (and prior to a Sale Transaction or Qualified Public Offering), the Series A-2 Majority may initiate a Sale Transaction in compliance with this Section 7.4 (“A Drag-Along Transaction”). The Series A-2 Member or Series A-2 Members initiating a Drag-Along Transaction pursuant to this Section 7.4(a) are referred to as the “Drag Initiating Members.” Any action or determination to be made by the Drag Initiating Members may be made by the one or more Drag Initiating Members that constitute a majority of the Series A-2 Units held by all Drag Initiating Members.

 

(b)                                       In connection with any Drag-Along Transaction initiated pursuant to Section 7.4(a), and subject to the terms and conditions set forth in this Section 7.4, all holders of Membership Interests entitled to consent thereto hereby (and shall promptly, if required by the Drag Initiating Members) consent in writing to and raise no objections

 

26

 

against the consummation of the Drag-Along Transaction, and if the Drag-Along Transaction is structured as (i) a consolidation, merger or other business combination, or a sale or other disposition of all or substantially all of the assets of the Company and/or its Subsidiaries, each holder of Membership Interests entitled to vote thereon shall vote in favor of the Drag-Along Transaction and shall waive any appraisal rights or similar rights in connection with such consolidation, merger, other business combination or asset sale or (ii) a sale of all or substantially all of the Membership Interests, each holder of Membership Interests hereby agrees (and, if required by the Drag Initiating Members, shall promptly agree in writing) to sell all of his or its Membership Interests that are the subject of the Drag-Along Transaction, on the terms and conditions of such Drag-Along Transaction. The holders of Membership Interests shall promptly take all necessary and desirable actions in connection with the consummation of the Drag-Along Transaction reasonably requested by the Drag Initiating Members, including the execution of such agreements and such other instruments and other actions reasonably necessary to (A) provide representations, warranties, indemnities, and escrow or holdback arrangements relating to such Drag-Along Transaction, in each case to the extent that each other holder of Membership Interests is similarly obligated; and (B) effectuate the allocation and distribution of the aggregate consideration upon the Drag-Along Transaction as set forth in Section 7.4(c) (with any noncash consideration determined as of the closing date of the Drag Along Transaction). The holders of Membership Interests shall be permitted to sell their Membership Interests pursuant to any Drag-Along Transaction without complying with any other provisions of this ARTICLE 7.

 

(c)                                        The obligations of the holders of Membership Interests pursuant to this Section 7.4 are subject to the following terms and conditions:

 

(i)                                     upon the consummation of the Drag-Along Transaction, each holder of Membership Interests shall receive the same proportion of the aggregate consideration from such Drag-Along Transaction that such holder would have received if such aggregate consideration had been distributed by the Company in complete liquidation pursuant to the rights and preferences set forth in Section 12.3(b) (i.e., net of debts and liabilities of the Company and its Subsidiaries) as in effect immediately prior to such Drag-Along Transaction;

 

(ii)                                  the Company shall bear the reasonable, documented costs incurred in connection with any Drag-Along Transaction (costs incurred by or on behalf of any holder of Membership Interests for its sole benefit will not be considered costs of the Drag-Along Transaction) unless otherwise agreed by the Company (as approved by the Board) and the acquiror, in which case no holder of Membership Interests shall be obligated to make any out-of-pocket expenditure prior to the consummation of the Drag-Along Transaction (excluding modest expenditures for postage, copies, and the like) and no holder of Membership Interests shall be obligated to pay any portion (or, if paid, shall be entitled to be reimbursed by the Company for that portion paid) that is more than its pro rata share (based upon the amount of consideration received by such holder in the Drag-Along Transaction) of reasonable expenses incurred in connection with a

 

27

 

consummated Drag-Along Transaction for the benefit of all holders of Membership Interests and are not otherwise paid by the Company or another Person; and

 

(iii)                               if some or all of the consideration received in connection with the Drag-Along Transaction is other than cash, then such consideration shall be deemed to have a dollar value equal to the Fair Market Value of such consideration as determined in accordance with the applicable provisions in the definition of Fair Market Value.

 

(d)                                       Notwithstanding anything to the contrary in this Section 7.4, if the consideration proposed to be paid to the holders of Membership Interests in a Drag-Along Transaction includes securities with respect to which no registration statement covering the issuance of such securities has been declared effective under the Securities Act, then each of the holders of Membership Interests that is not then an Accredited Investor (without regard to Rule 501(a)(4)) may be required, at the request and election of the Drag Initiating Members, to (i) at the cost of the Company, appoint a purchaser representative (as such term is defined in Rule 501 under the Securities Act) reasonably acceptable to such requesting holders or (ii) accept cash in lieu of any securities such non-Accredited Investor would otherwise receive in an amount equal to the Fair Market Value (as determined pursuant to Section 7.4(c)(iii)) of such securities.

 

7.5                               Tag-Along Right. If any Member (other than any Series A-2 Member) desires to effect a Disposition of all or a portion of such Member’s Units (such Member, the “Transferor”) in a Disposition other than an Excluded Tag Disposition, then, subject to compliance with Section 7.3 relating to the ROFO Right, each Eligible Member shall have a tag along right (a “Tag Right”) with respect to such Disposition (a “Tag-Along Sale”) in accordance with the following provisions:

 

(a)                                       The Transferor shall give notice (a “Tag-Along Notice”) to each Eligible Member of any Tag-Along Sale, setting forth the number of Common Units that the Transferor desires to Dispose (the “Tag Units”), the name and address of the Third Party Transferee, the proposed amount and form of consideration for the Tag Units and any other material terms and conditions of the Tag-Along Sale, including a copy of the executed purchase and sale agreement or other similar agreement relating to such sale (the “Tag-Along Offer”).

 

(b)                                       Each Eligible Member shall have a period of ten (10) Business Days (the “Tag Election Period”) from the date of its receipt of the Tag-Along Notice within which to elect to exercise its Tag Right (each exercising Eligible Member, a “Tag Offeree”) by delivery of an irrevocable written notice to the Transferor specifying the number of Common Units such Tag Offeree desires to include in the Tag-Along Sale (a “Tag Election Notice”), up to the total number of Common Units held by such Tag Offeree multiplied by the Transferor Requested Percentage.

 

(c)                                        Promptly following the expiration of the Tag Election Period, the following procedures shall apply:

 

28

 

(i)                                     first, the Transferor shall notify the Third Party Transferee of the number of Requested Units;

 

(ii)                                  next, the Transferor shall determine whether the Third Party Transferee is willing to purchase all of the Requested Units. If the Third Party Transferee is unwilling to purchase all of the Requested Units, then the Transferor shall determine what percentage of Requested Units such Third Party Transferee is willing to purchase in the aggregate (the “Purchased Percentage”) and the number of Requested Units that the Transferor and each of the exercising Tag Offerees otherwise would have sold shall be reduced on a pro rata basis (based on the respective total numbers of Common Units that such holders desired to sell as compared to the total numbers of Common Units to be purchased by the Third Party Transferee) so as to permit the Transferor and the Tag Offerees to sell in the aggregate a number of Common Units equal to the total number of Requested Units multiplied by the Purchased Percentage (the “Purchased Units”).

 

(d)                                       At the time (subject to extension to the extent necessary to pursue any required regulatory approvals, including to allow for the expiration or termination of all waiting periods under the HSR Act) and place provided for the closing in the Tag-Along Offer, or at such other time and place as the Tag Offerees, the Transferor and the Third Party Transferee shall agree, the Tag Offerees and the Transferor shall sell to the Third Party Transferee all of the Purchased Units.

 

(e)                                        Each Tag-Along Sale shall be upon terms and conditions, if any, not more favorable individually and in the aggregate to the purchaser than those in the Tag-Along Offer and the Tag-Along Notice and upon the consummation of such Tag-Along Sale, each holder of Purchased Units (as determined immediately prior to the consummation of such Tag-Along Sale) shall receive the consideration specified in Section 7.5(f). Each Tag Offeree shall agree (i) to make the same representations, warranties, covenants, indemnities and agreements to the Third Party Transferee as made by the Transferor in connection with the Tag-Along Sale (provided, that, a Tag Offeree shall not be required to make any covenants or agreements regarding non-competition, non-solicitation or other similar restrictions on the future business opportunities of any such Tag Offeree) and (ii) to the same terms and conditions to the Tag-Along Sale as the Transferor agrees. Notwithstanding the foregoing, however, all such representations, warranties, covenants, indemnities and agreements shall be made by the Transferor and each Tag Offeree severally and not jointly, and any liability for breach of any such representations and warranties related to the Company and its Subsidiaries shall be allocated among the Transferor and each Tag Offeree pro rata based on the relative amount of consideration received by each of them in such Tag-Along Sale, and the aggregate amount of liability for the Transferor and each Tag Offeree shall not exceed the value of the total consideration to be paid by the Third Party Transferee to the Transferor and such Tag Offeree.

 

(f)                                         Upon the consummation of a Tag-Along Sale, each holder of Purchased Units shall receive a portion of the aggregate consideration for the Purchased Units sold

 

29

 

pursuant to a Tag-Along Sale on a pro rata basis (based on the respective total number of Purchased Units that such holder sold as compared to the total number of Purchased Units purchased by the Third Party Transferee and the aggregate consideration paid in respect of such Purchased Units); provided, that, if the Tag-Along Sale is a Sale Transaction, the consideration shall be allocated in accordance with Section 12.3(b).

 

(g)                                        If any Tag Offeree, or indirect owner of a Tag Offeree, has a structure where it holds all or a portion of its Units, directly or indirectly, through one or more single purpose entities that is taxed as a corporation for United States income tax purposes and formed under the laws of the United States (a “Blocker Corporation”), at the request of any such Tag Offeree, the Company will (and the Company will cause its Subsidiaries to) use commercially reasonable efforts to structure the Tag-Along Sale in a manner that permits such Tag Offeree to Dispose of its Units through the sale of shares of the Blocker Corporation, provided that any purchase price discount resulting from a sale of interests in a Blocker Corporation will be borne solely by the owners of such Blocker Corporation.

 

(h)                                       In the event that the Company issues Units other than Common Units, the Company and Members agree to amend this Agreement to provide the Series A-2 Members an appropriate Tag Right with respect thereto.

 

(i)                                           The Tag Right shall not apply with respect to any of the following Dispositions (each an “Excluded Tag Disposition”):

 

(i)                                     a Disposition made to a Permitted Transferee of the Disposing Member;

 

(ii)                                  a Disposition made in connection with an IPO in accordance with Section 7.6, Section 10.7 or Sections 8.2 and 8.4;

 

(iii)                               a Disposition made by a Series A-2 Member; or

 

(iv)                              a Disposition made to the Company (or applicable transferee) pursuant to an Equity Award Agreement.

 

7.6                               Qualified Public Offering.

 

(a)                                       A Qualified Public Offering may be initiated with Series A-2 Approval. The Member or Members initiating a Qualified Public Offering pursuant to this Section 7.6(a) are referred to as the “IPO Initiating Members.” Any action or determination to be made by the IPO Initiating Members may be made by the one or more IPO Initiating Members that constitute a majority of the Series A-2 Units held by all IPO Initiating Members.

 

(b)                                       In connection with any proposed Qualified Public Offering approved in accordance with Section 7.6(a) of this Agreement, if required by the IPO Initiating Members, the outstanding Membership Interests may be exchanged in accordance with this Section 7.6 (the “IPO Exchange”) into equity securities of the IPO Issuer and/or its

 

30

 

general partner (“IPO Securities”) as reasonably determined by the IPO Initiating Members; provided, that, each Class A Member shall receive the same proportion of each type (e.g., class, series, etc.) of IPO Securities of the IPO Issuer and its general partner (if applicable). In connection with any IPO Exchange, each outstanding Membership Interest will be exchanged for IPO Securities such that each holder of Membership Interests will receive IPO Securities having a value equal to the amount that such holder would have received if, immediately prior to the consummation of the Qualified Public Offering, all of the Company’s assets had been sold for their Fair Market Values and the resulting amount had been distributed by the Company pursuant to the rights and preferences set forth in Section 12.3(b) as in effect immediately prior to such distribution assuming that all Unvested Class B Units were Vested Class B Units and therefor entitled to all Unvested Distribution Amounts with respect to such Unvested Class B Units. Notwithstanding the foregoing:

 

(i)                                     in making the determination of the Fair Market Value of the Company’s assets described in the second sentence in this Section 7.6(b), the IPO Initiating Members shall take into account the offering price per Publicly Offered Security in the Qualified Public Offering, net of any underwriting discounts and commissions;

 

(ii)                                  any IPO Securities issued with respect to Unvested Class B Common Units shall remain subject to any applicable vesting in accordance with, and to the extent provided in, this Agreement and the applicable Equity Award Agreements;

 

(iii)                               if the IPO Securities will include multiple classes of securities (including any subordinated interests, general partner interest or incentive distribution rights) in the IPO Issuer or its general partner, then the IPO Exchange shall be structured in a manner such that each holder of Membership Interests receives substantially the same proportionate share of the Publicly Offered Securities and of each such other class of securities, or otherwise shares proportionately the economic benefits of such class of securities, as each other holder of Membership Interests (taking into account the amount that would be received by each such holder in the hypothetical Liquidation Event described in the second sentence in this Section 7.6(b)); and

 

(iv)                              if the distribution described in the second sentence in this Section 7.6(b) would result in the holders of Class B Common Units receiving no amount upon such a hypothetical Liquidation Event, then the IPO Initiating Members may determine to have such Class B Common Units cancelled for no consideration.

 

(c)                                        If, in connection with the IPO Exchange, the IPO Initiating Members reasonably determine that it is advisable to have the holders of the Membership Interests contribute all of the Membership Interests to the IPO Issuer in one or a series of transactions pursuant to an agreement that provides for the exchange of Membership Interests into IPO Securities of such Person or Persons (with the amount of IPO Securities

 

31

 

to be received by each such holder being determined in accordance with this Section 7.6), each holder of Membership Interests agrees to participate in such an exchange. For the sake of clarity, the IPO Initiating Members may elect, in connection with a proposed Qualified Public Offering where a Subsidiary of the Company or another entity that is not the Company or its successor is the IPO Issuer, not to cause an IPO Exchange in connection therewith and, to the extent such an IPO Exchange does not occur, this Agreement may continue in effect after a Qualified Public Offering in accordance with its terms.

 

(d)                                       Notwithstanding anything to the contrary in this Agreement, at any time after the approval of a Qualified Public Offering in accordance with this Agreement, the IPO Initiating Members, shall be entitled to approve the transaction or transactions to effect the IPO Exchange and to take all such other actions as are required or necessary to facilitate the Qualified Public Offering including: (i) determining the terms of the organizational documents of the IPO Issuer and its general partner; (ii) forming any entities required or necessary in connection with the Qualified Public Offering; (iii) transferring or causing to be transferred any assets between or among the Company, the IPO Issuer and any of the Company’s Subsidiaries; and (iv) subject to Section 13.5, amending the terms of this Agreement, in each case without the consent or approval of any other Person (including the Board). If IPO Initiating Members elect to exercise rights to initiate a Qualified Public Offering under this Section 7.6, in addition to, and without limitation of, the covenants set forth in Section 7.9, each of the Members and the Board shall (and shall cause Affiliates of MHR to) (i) take such actions as may be reasonably requested in connection with consummating the IPO Exchange, including (x) such actions as are required to transfer all of the issued and outstanding Membership Interests or assets of the Company to an IPO Issuer or its general partner (including a Blocker Corporation) and (y) such actions as may be required in order to merge or consolidate the Company into or with an IPO Issuer or its general partner and (ii) use commercially reasonable efforts to (A) subject to clause (B) of this sentence, cooperate with the other Members so that the IPO Exchange is undertaken in a tax-efficient manner for the Members and (B) if any Institutional Investor or its limited partners or investors has a structure involving ownership of all or a portion of its interests in the Company, directly or indirectly, through one or more Blocker Corporations, at the request of such Institutional Investor and with Series A-2 Approval, merge its Blocker Corporation into the IPO Issuer in a transaction described in Section 351 of the Code for each Member and utilize any such Blocker Corporation as the IPO Issuer.

 

(e)                                        Each Member shall sell any fractional Publicly Offered Securities owned by such party (after taking into account all Publicly Offered Securities held by such party) to the IPO Issuer upon the request of the Company in connection with or in anticipation of the consummation of a Qualified Public Offering, for cash consideration equal to the Fair Market Value of such fractional securities.

 

(f)                                         Notwithstanding anything to the contrary in this Section 7.6, if no registration statement covering the issuance of the IPO Securities to the Members in the IPO Exchange has been declared effective under the Securities Act, then each of the

 

32

 

Members that is not then an Accredited Investor (without regard to Rule 501(a)(4)) may be required, at the request and election of the IPO Initiating Members, to (i) at the cost of the Company, appoint a purchaser representative (as such term is defined in Rule 501 under the Securities Act) reasonably acceptable to such Members or (ii) agree to accept cash in lieu of any IPO Securities such Member would otherwise receive in an amount equal to the Fair Market Value of such IPO Securities as determined in accordance with the applicable provisions in the definition of Fair Market Value.

 

(g)                                        If so requested by any Series A-2 Member, the certificate of incorporation (if the IPO Issuer is a corporation) or other organizational documents (if the IPO Issuer is a Person other than a corporation) of the IPO Issuer shall include a provision substantially the same as Section 8.5 hereof.

 

7.7                               Preemptive Rights.

 

(a)                                       Other than in respect of an Excluded Issuance, if the Board, with the Requisite Member Approval, (x) makes an Optional Capital Call or (y) proposes to issue New Securities to a proposed third party purchaser (the “Third Party Purchaser”), each Eligible Member shall have the right to purchase the number of New Securities as provided in this Section 7.7. “Excluded Issuance” means the issuance, subject to approval of the Board and Requisite Member Approval (except to the extent not required in the case of Approved Projects in accordance with Section 5.2 and Section 5.3 or De Minimis Projects in accordance with Section 5.4), of:

 

(i)                                     options to purchase Membership Interests, restricted Membership Interest awards, performance awards, phantom Membership Interests or other Membership Interest-based awards pursuant to any Equity Award Agreement;

 

(ii)                                  Membership Interests, restricted or phantom Membership Interests, profits interests or other securities issued to any Person as consideration in any acquisition or other strategic transaction (such as a joint venture, marketing or distribution arrangement, or technology transfer or development arrangement) approved in accordance with this Agreement;

 

(iii)                               Membership Interests issued or to be issued in respect of CapEx Contributions in accordance with Section 5.3, Section 5.4 and/or Section 5.5;

 

(iv)                              Membership Interests issued in connection with any split, distribution or recapitalization of the Company; or

 

(v)                                 any Equity Interests issued by the Company in an underwritten public offering pursuant to a registration statement filed under the Securities Act (or other applicable foreign securities laws governing such issuance) and approved by the IPO Initiating Members pursuant to Section 7.6 or by the Board with Requisite Member Approval.

 

33

 

(b)                                       With respect to any issuance of New Securities (including pursuant to any Optional Capital Contribution), the Company shall, not less than 15 and not more than 30 days prior to such proposed issuance of New Securities (and requested date for such Optional Capital Contribution) (the “Preemptive Rights Closing Date”), provide a written notice to each Eligible Member (the “Preemptive Rights Notice”), which notice shall set forth in reasonable detail the proposed terms and conditions of such issuance and shall offer to each Eligible Member the opportunity to purchase its Pro Rata Share (which Pro Rata Share shall be calculated as of the date of such notice) of the New Securities in accordance with this Section 7.7. If any Eligible Member wishes to exercise its preemptive rights, it must do so by delivering an irrevocable written notice to the Company within 15 days after delivery by the Company of the Preemptive Rights Notice (the “Preemptive Right Election Period”), which notice shall state the dollar amount of New Securities such Eligible Member (each a “Requesting Purchaser”) would like to purchase up to a maximum amount equal to such Eligible Member’s Pro Rata Share of the total offering amount plus the additional dollar amount of New Securities such Requesting Purchaser would like to purchase in excess of its Pro Rata Share (the “Over-Allotment Amount”), if any, if other Eligible Members do not elect to purchase their full Pro Rata Share of the New Securities. The rights of each Requesting Purchaser to purchase a dollar amount of New Securities in excess of each such Requesting Purchaser’s Pro Rata Share of the New Securities shall be allocated among those Requesting Purchasers desiring Over-Allotment Amounts in a manner determined in writing by such Requesting Purchasers (or, in the absence of agreement by such Requesting Purchasers, on a pro rata basis in relation to the Over-Allotment Amounts of the Requesting Purchasers).

 

(c)                                        In the case of a proposed issuance to a Third Party Purchaser, if not all of the New Securities are subscribed for by the Eligible Members, the Company shall have the right, but shall not be required, to issue and sell the unsubscribed portion of the New Securities to the Third Party Purchaser at any time during the 90 days following the termination of the Preemptive Right Election Period pursuant to the terms and conditions set forth in the Preemptive Rights Notice. The Board, with Requisite Member Approval, may, in its discretion, impose such other reasonable and customary terms and procedures such as setting a closing date, rounding the number of Membership Interests covered by this Section 7.7 to the nearest whole interest and requiring customary closing deliveries in connection with any preemptive rights offering.

 

(d)                                       On the Preemptive Rights Closing Date, each Requesting Purchaser (and, if applicable, Third Party Purchaser) shall make a Capital Contribution to the Company in exchange for the applicable New Securities on the same terms as such New Securities are issued to any other Requesting Purchaser (and, if applicable, Third Party Purchaser); provided, that, if all or a portion of the New Securities are Class A Common Units, (i) the Series A-1 Members and the Third Party Purchaser (to the extent such Third Party Purchaser is not a Series A-2 Member) shall receive Series A-1 Units in respect of such New Securities that are Class A Common Units and (ii) the Series A-2 Members shall receive Series A-2 Units in respect of such New Securities that are Class A Common Units.

 

34

 

7.8                               Registration Rights. At or prior to the consummation of any IPO, the Series A-2 Members, MHR and the IPO Issuer shall enter into a registration rights agreement in customary form consistent with the terms and provisions set forth in Schedule III.

 

7.9                               Cooperation. In the case of a Qualified Public Offering or a Disposition of Membership Interests by a Series A-2 Member or indirect disposition of Series A-2 Units held by any Person (the IPO Initiating Members and/or the disposing Persons, collectively, “Subject Persons”) (including pursuant to a Drag-Along Transaction, Tag-Along Sale or Qualified Public Offering), the Subject Persons shall have the right in connection with such a potential transaction (or in connection with the investigation or consideration of any such potential transaction) to require MHR and Affiliates of MHR, the Company and its Subsidiaries (and to cause their employees, service providers and advisors) to cooperate fully with such Subject Persons and potential acquirors (and their respective advisors and lenders) with respect to such potential transaction, including by expeditiously and in good faith negotiating and entering into a customary underwriting agreement, delivering lock-up letters, obtaining regulatory and other approvals and taking all customary and other actions reasonably requested by such Subject Persons or such potential acquirors and/or underwriters, including making the properties, books and records and other assets relating to the Company and its Subsidiaries reasonably available for inspection, creating and providing information about the Company and its Subsidiaries, establishing a physical or electronic data room including materials customarily made available to potential acquirors and/or underwriters or lenders in connection with such processes and making its officers and employees, service providers and consultants reasonably available for presentations, site visits, road shows, interviews, drafting sessions and other diligence activities. In addition, the IPO Initiating Members (in connection with a Qualified Public Offering) and the Drag Initiating Members (in connection with a Drag-Along Transaction) shall be entitled to take all reasonably necessary actions on behalf of the Company and its Subsidiaries with respect to such transaction, including selecting an investment bank and/or underwriters, providing confidential information, selecting the winning bidder and negotiating the requisite documentation. MHR and the Company shall (and shall cause their respective Affiliates to) promptly provide assistance with respect to these actions as reasonably requested. All costs and expenses of the Company and all reasonable, documented out-of-pocket costs and expenses of any Class A Member in connection with complying with this Section 7.9 shall be borne by the Company.

 

7.10                        Specific Performance. Each Member acknowledges that it shall be inadequate or impossible, or both, to measure in money the damage to the Company or the Members if any of them or any transferee or any legal representative of any party hereto fails to comply with any of the restrictions or obligations imposed by this Article 7, that every such restriction and obligation is material, and that in the event of any such failure, the Company or the Members shall not have an adequate remedy at law or in damages. Therefore, each Member consents to the issuance of an injunction or the enforcement of other equitable remedies against such Member at the suit of an aggrieved party without the posting of any bond or other security, to compel specific performance of all of the terms of this Article 7 and to prevent any Disposition of Membership Interests in contravention of any terms of this Article 7, and waives any defenses thereto, including the defenses of (a) failure of consideration, (b) breach of any other provision of this Agreement and (c) availability of relief in monetary damages.

 

35

 

7.11                        Termination Following IPO. Notwithstanding anything to the contrary in this Article 7, the provisions of this Article 7 (other than Sections 7.9 through this Section 7.11) shall terminate and be of no further force or effect upon the consummation of an IPO.

 

ARTICLE 8
 MANAGEMENT

 

8.1                               Management Under Direction of the Board.

 

(a)                                       General Authority. Except as otherwise expressly set forth in this Agreement that provides for voting, consent and/or other rights for any Member (and, with respect to the Members, subject to applicable regulatory limitations or requirements), the board of managers (the “Board,” and each member of the Board, a “Manager”), shall have full, exclusive and complete discretion to manage and conduct the business and affairs of the Company and its Subsidiaries, to make all decisions affecting the business and affairs of the Company and its Subsidiaries and to take all such actions as it deems necessary, advisable or appropriate to accomplish the purposes and direct the actions of the Company and its Subsidiaries as set forth in Section 2.4. Notwithstanding the foregoing, except as provided herein, no Manager in his or her individual capacity shall have the authority to manage the Company and its Subsidiaries or approve matters relating to, or otherwise to bind the Company or its Subsidiaries, such powers being reserved to the Managers acting pursuant to Section 8.2(e) through the Board and to such agents of the Company and its Subsidiaries as designated by the Board.

 

(b)                                       Budgets. The Officers shall propose to the Board at least 60 days before the beginning of each fiscal year and present to the Board, at least 30 days before the beginning of each fiscal year of the Company, in each case, ending on or after December 31, 2014, a reasonably detailed consolidated annual capital expenditure budget and operating expenditure budget of the Company and its Subsidiaries for the upcoming fiscal year. Such budgets shall be subject to approval in accordance with Section 8.2 and Section 8.4(b). The capital expenditure and operating expenditure budgets for any such fiscal year described herein, as so approved by the Board with Requisite Member Approval, are referred to as a “CapEx Budget” and an “Operating Budget”, respectively, and collectively as an “Annual Budget.” In the event that the approval of the Board and Requisite Member Approval are not obtained for a fiscal year, (i) the Operating Budget for such fiscal year shall be deemed to be the Operating Budget of the prior fiscal year, increased by 3% with respect to the operating expenses described therein (a “Deadlock Budget”) and (ii) there shall not be a CapEx Budget for such fiscal year (until such later time (if at all) that such capital expenditure budget is approved by the Board and with Requisite Member Approval). Each Operating Budget shall at a minimum include line items for (A) field operating expenses and (B) selling, general and administrative expenses ((A) and (B), each a “General OpEx Line Item”), along with such other line items determined by the Board with Requisite Member Approval. Each CapEx Budget shall include a line item for (x) Permitted Early Stage CapEx and (y) Permitted CapEx Overage, unless otherwise determined by the Board with Requisite Member Approval. The capital expenditure and operating budgets for fiscal year 2014 are set forth on Schedule IV and

 

36

 

such budgets shall constitute the Operating Budget, CapEx Budget and Annual Budget for fiscal year 2014.

 

8.2                               Board of Managers.

 

(a)                                       Composition; Initial Managers. The Board shall consist of not less than five and not more than eight Managers, with the specific number of Managers at any given time, determined as provided in this Section 8.2.

 

(i)                                     During the Interim Period, the Board shall be composed of the five individuals listed on Schedule V, three of whom shall be Series A-1 Managers designated by the Series A-1 Majority and two of whom shall be designated by the Series A-2 Majority (as set forth on Schedule V). The size of the Board shall be increased or decreased in accordance with Sections 8.2(a)(ii), (iii) and (iv).

 

(ii)                                  The Series A-1 Majority shall be entitled to designate (w) four Managers for so long as the Series A-1 Members hold at least 60% of the issued and outstanding Class A Common Units, (x) three Managers for so long as the Series A-1 Members hold less than 60% and not less than 45% of the issued and outstanding Class A Common Units, (y) two Managers for so long as the Series A-1 Members hold less than 45% and not less than 35% of the issued and outstanding Class A Common Units and (z) one Manager for so long as the Series A-1 Members hold less than 35% and not less than 20% of the issued and outstanding Class A Common Units; provided, that, notwithstanding the foregoing, so long as the MHR Affiliated Members hold not less than 20% of the Class A Common Units, the Series A-1 Majority shall be entitled to designate a minimum of three Managers.

 

(iii)                               The Series A-2 Majority shall be entitled to designate (w) four Managers for so long as the Series A-2 Members hold at least 60% of the issued and outstanding Class A Common Units, (x) three Managers for so long as the Series A-2 Members hold less than 60% and not less than 45% of the issued and outstanding Class A Common Units, (y) two Managers for so long as the Series A-2 Members hold less than 45% and not less than 35% of the issued and outstanding Class A Common Units and (z) one Manager for so long as the Series A-2 Members hold less than 35% and not less than 20% of the issued and outstanding Class A Common Units; provided, that notwithstanding the foregoing,

 

(A)                               without in any way limiting the number of Managers that the Series A-2 Majority is entitled to designate under this Section 8.2(a)(iii), so long as the Initial MSI Member and its Affiliated Members hold not less than 20% of the Class A Common Units, the Series A-2 Majority shall be entitled to designate a minimum of (x) two Managers at all times after the Effective Date and prior to the Second Closing and (y) three Managers at all times after the Second Closing (provided, that, if the Second Closing does not occur for any reason other than due to a

 

37

 

breach of the Transaction Agreement by the Initial MSI Member, the Series A-2 Majority shall be entitled to designate a minimum of three (3) Managers); and

 

(B)                               if, on December 31, 2018 or as of the end of any quarter thereafter ending on March 31, June 30, September 30 or December 31 (each, a “Performance Measurement Date”), the 4-Year Trailing EBITDA is less than or equal to 80% of the projected 4-Year Trailing EBITDA with respect to such period (a “Performance Period”) and set forth on Schedule VI (a “Performance Failure”), then the Series A-2 Majority shall be entitled to designate one additional Manager (and the size of the Board shall be automatically increased by one Manager). For the avoidance of doubt, (1) if a Performance Failure occurs, then the Series A-2 Majority shall be entitled to designate one additional Manager for the duration of this Agreement and shall not lose such right to designate such additional Manager regardless of whether the Company subsequently achieves projected 4-Year Trailing EBITDA and (2) the Series A-2 Majority shall only be entitled to designate one additional Manager for the duration of this Agreement as a result of any one or more Performance Failures, regardless of whether there is a Performance Failure on multiple Performance Measurement Dates; provided, that, for the avoidance of doubt, in the event that the Series A-2 Majority loses its right to designate an additional Manager due to a Performance Failure Certificate Cure, (x) any action taken by the Board after the Performance Failure and prior to the Performance Failure Certificate Cure shall remain binding on the Company and the Members and (y) the Series A-2 Majority shall not lose the right to designate an additional Manager in the event of a Performance Failure in respect of a subsequent Performance Period.

 

(iv)                              To the extent that the Series A-1 Majority or Series A-2 Majority is no longer entitled to designate one or more Managers pursuant to Section 8.2(a)(ii) or (iii) (the “Subject Series”), (w) the size of the Board shall be reduced automatically by the number of Managers the Subject Series is no longer entitled to designate, (y) the aggregate number of votes that may be cast by the Managers designated by the Subject Series shall be reduced to reflect the reduced size of the Board and (z) if the number of Managers of the Subject Series is so reduced, the Subject Series shall immediately designate which of its Managers have been removed as a Manager and, if the Subject Series fails to remove the applicable number of Managers, the Series A-2 Majority or Series A-1 Majority (as applicable) shall have the right to designate which Manager or Managers previously designated by the Subject Series have been removed.

 

(v)                                 Each Manager shall serve in such capacity until such Manager’s successor has been elected and qualified or until such individual’s death, resignation or removal.

 

38

 

(b)                                       Removal. Any Manager may be removed with or without cause only by consent of the Members entitled to designate such Manager; provided that (i) in the event of a reduction in the size of the Board in accordance with Section 8.2(a) or (ii) if at any time the Series A-1 Members or Series A-2 Members lose the right to designate one or more Managers under Section 8.2(a), then the applicable Manager or Managers no longer entitled to be designated to the Board shall be removed from the Board pursuant to clause (z) of Section 8.2(a)(iv).

 

(c)                                        Resignations. A Manager may resign at any time. Such resignation shall be in writing and shall take effect at the time specified in such writing or, if no time is specified, at the time of its receipt by the Company. The acceptance of a resignation shall not be necessary to make it effective unless expressly so provided in the resignation.

 

(d)                                       Vacancies. In the event that a vacancy is created on the Board by the death, disability, retirement, resignation or removal of any Manager designated pursuant to Section 8.2(a), such vacancy shall be filled only by consent of the Member or Members then entitled to designate such Manager pursuant to Section 8.2(a).

 

(e)                                        Votes per Manager; Quorum; Required Vote for Board Action.

 

(i)                                     Subject to Section 8.2(r), each Manager shall have one vote; provided, however, that:

 

(A)                               any Series A-2 Manager shall be entitled to cast more than one vote under the following circumstances: (x) if any of the Series A-2 Managers are not present at such meeting, then the Series A-2 Manager or Series A-2 Managers present at the meeting shall be given an aggregate number of additional votes equal to the number of Series A-2 Managers absent (and such absent Series A-2 Manager or Series A-2 Managers shall be deemed to have given a proxy to vote at such meeting to any other Series A-2 Manager who is present at such meeting and is designated by the Series A-2 Majority) or (y) if there are any vacancies in the Series A-2 Managers, then the designated Series A-2 Manager or Series A-2 Managers shall be given an aggregate number of additional votes equal to the number of vacancies of the Series A-2 Managers (for example, if the Series A-2 Majority has only designated one of two Managers it is entitled to designate, then that one Series A-2 Manager may cast a total of two votes on matters presented to the Board). A single Series A-2 Manager shall, for quorum purposes, count as a number of votes equal to the number of Series A-2 Managers that the Series A-2 Majority is entitled to designate; and

 

(B)                               any Series A-1 Manager shall be entitled to cast more than one vote under the following circumstances: (x) if any of the Series A-1 Managers are not present at such meeting, then the Series A-1 Manager or Series A-1 Managers present at the meeting shall be given an aggregate number of additional votes equal to the number of Series A-1 Managers

 

39

 

absent (and such absent Series A-1 Manager or Series A-1 Managers shall be deemed to have given a proxy to vote at such meeting to any other Series A-1 Manager who is present at such meeting and is designated by the Series A-1 Majority) or (y) if there are any vacancies in the Series A-1 Managers, then the designated Series A-1 Manager or Series A-1 Managers shall be given an aggregate number of additional votes equal to the number of vacancies of the Series A-1 Managers (for example, if the Series A-1 Majority has only designated one of two Managers it is entitled to designate, then that one Series A-1 Manager may cast a total of two votes on matters presented to the Board). A single Series A-1 Manager shall, for quorum purposes, count as a number of votes equal to the number of Series A-1 Managers that the Series A-1 Majority is entitled to designate.

 

(ii)                                  Unless otherwise required by this Agreement, Managers having greater than 50% of votes then entitled to be cast by the total number of Managers then entitled to be designated to the Board, either present (in person or by teleconference) or represented by proxy, shall constitute a quorum for the transaction of business at a meeting of the Board; provided, that, the Board, acting with the approval of all Series A-1 Managers but without the requirement of having the approval of any Series A-2 Manager or Series A-2 Member (except for any such approval as expressly provided in Section 10.7, which shall in no way be limited by this Section 8.2(e)(ii)), may direct the Company (under the supervision and control of the Board) to initiate and complete a Qualified MLP IPO in accordance with, and subject to, Section 10.7. Except as provided in Section 8.2(r) or in the proviso at the end of the prior sentence, actions by the Board shall require the vote or consent of at least a majority of the votes cast on such matter.

 

(f)                                         Place of Meetings; Order of Business. The Board may hold its meetings and may have an office and keep the books of the Company, except as otherwise provided by Law, in such place or places, within or without the State of Delaware, as the Board may from time to time determine by resolution; provided, that, unless the Series A-2 Majority agrees otherwise, Board meetings shall be held in Houston, Texas, Dallas, Texas, New York, New York or Marietta, Ohio. At all meetings of the Board, business shall be transacted in such order as shall from time to time be determined by resolution of the Board.

 

(g)                                        Regular Meetings. Regular meetings of the Board shall be held at such times and places as shall be designated from time to time by resolution of the Board and at such meetings the Company shall report to the Board on, among other things, its business activities, prospects and financial position; provided, that, the Board shall use its reasonable efforts to meet no less frequently than quarterly (and, in any event, not less than four (4) times per year). Notice of such regular meetings shall not be required if held at the times and places set forth in the relevant resolution and such resolution has been provided to each Manager.

 

40

 

(h)                                       Special Meetings. Special meetings of the Board may be called by any Manager or Managers having at least two votes on at least 24 hours personal, written, telegraphic, cable, wireless or electronic notice to each Manager, which notice must include appropriate dial-in information to permit each Manager to participate in such meeting by means of telephone conference. Such notice need not state the purpose or purposes of such meeting, except as may otherwise be required by Law.

 

(i)                                           Compensation. All of the Managers shall be entitled to reimbursement for reasonable out-of-pocket expenses in attending meetings of the Board. Managers may be entitled to receive such other fees or compensation for their services as Managers as are determined by the Board with Requisite Member Approval.

 

(j)                                          Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by the number of Managers that would otherwise be required to approve such action at a regular or special meeting of the Board duly called and held for such purpose. Prompt notice of any action so taken by consent in writing without a meeting shall be given by the Company to those Managers, if any, who do not join in such written consent; provided, that, any such action by written consent shall require the signature of all Managers.

 

(k)                                       Telephonic Conference Meeting. Subject to the requirement for notice of meetings, Managers may participate in a meeting by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such a meeting shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

 

(l)                                           Waiver of Notice Through Attendance. Attendance of a Manager at any meeting of the Board (including by telephone) shall constitute a waiver of notice of such meeting, except where such Manager attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened and notifies the other Managers at such meeting of such purpose.

 

(m)                                   Reliance on Books, Reports and Records. Each Manager shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or reports made to the Company by any of the Officers or by an independent certified public accountant or by an appraiser selected with reasonable care by the Board, or in relying in good faith upon other records of the Company.

 

(n)                                       Committees. The Board may appoint or create any committees of the Board with Requisite Member Approval.

 

(o)                                       Subsidiary Board of Managers or Board of Directors. The Company and each Member agrees to take any action necessary to (i) ensure that the governing documents with respect to the Subsidiaries of the Company contain provisions necessary

 

41

 

to implement the provisions of this Agreement and permit each Member to receive the rights and benefits to which each such Member is entitled to under this Agreement and (ii) cause each Subsidiary of the Company to be member managed by the Company (or other parent of such Subsidiary of the Company) and/or cause each Subsidiary of the Company to be managed in a manner consistent with the management of the Company pursuant to this Agreement. Without limiting the foregoing, any action with respect to a Subsidiary of the Company that, if taken by Company, would require the consent of the Board or one or more Members shall require such consent or consents of the Board and/or Members.

 

(p)                                       Certain Decisions Requiring Board Approval. Notwithstanding anything to the contrary set forth herein, the taking of any Specified Action by the Company or any of its Subsidiaries shall require the approval of the Board in accordance with Section 8.2(e) and Requisite Member Approval in accordance with Section 8.4, except that neither the approval of the Board nor Series A-1 Approval shall be required (and only Series A-2 Approval or the approval of the Series A-2 Managers, as the case may be, shall be required) (i) with respect to any determination or action taken pursuant to a Drag-Along Transaction in accordance with Section 7.4 or (ii) to the extent provided in Section 8.2(r) or Section 8.4(d). In addition, subject to the immediately preceding sentence, the following matters shall require the approval of the Board in accordance with Section 8.2(e): (A) approval of any operating expenditure budget and/or capital expenditure budget for any fiscal year, (B) subject to Section 8.4(b)(xii)(B), incurrence of any capital expenditure, whether or not provided for in an Annual Budget (other than (1) a De Minimis Project and then subject to the limitations set forth in Section 5.4 and in any event not to involve CapEx Contributions in excess of $15 million in the aggregate per year, (2) Permitted Early Stage CapEx and (3) Permitted CapEx Overage), (C) making any calls for Capital Contributions or making any calls for contributions for any of the Company’s Subsidiaries (other than (x) capital contributions provided by the Company in any CapEx Budget, (y) CapEx Contributions in respect of Approved Projects in accordance with Section 5.2 and Section 5.3 or (z) CapEx Contributions in respect of De Minimis Projects in accordance with Section 5.4), (D) any distribution (other than any Tax distribution pursuant to Section 6.1(b)), (E) the incurrence of any Indebtedness for borrowed money (other than Indebtedness pursuant to borrowings under the Existing Revolver in the ordinary course of business), (F) the modification, amendment, replacement or termination of any insurance policy (other than endorsements or immaterial ordinary course changes that do not directly or indirectly adversely affect the Company or any of its Subsidiaries) for the benefit of, or otherwise relating to, the Company or any of its Subsidiaries, (G) the hiring of, or offering to hire, any employees by the Company or any of its Subsidiaries prior to the Employee Transfer, (H) any voluntary change in accounting policies or tax classification, (I) the formation of any Subsidiary of the Company and (J) the entry into or modification, waiver, amendment or termination of any Affiliate Agreement.

 

42

 

(q)                                       Board Deadlocks.

 

(i)                                     In the event that the Board fails to consent to or reject any matter requiring the consent of the Board (a “Board Deadlock”), each Electing Member will meet, either in person or telephonically, and attempt to resolve the Board Deadlock. If such Persons fail to resolve the Board Deadlock within 21 days following the date that the Board fails to consent to or reject the matter subject to the Board Deadlock (the “Deadlock Resolution Period”), the Board Deadlock will be referred to a non-binding mediation process. Each Electing Member will ensure that appropriately senior representatives with the authority to settle the Board Deadlock participate in the mediation process and that the relevant senior representatives will, in good faith, seek to resolve the Board Deadlock. The Electing Members will agree upon the identity of a mediator within ten days of the end of the Deadlock Resolution Period. Failing agreement within such period, a mediator with substantial knowledge of and experience with the oil and gas midstream services industry will be appointed by the American Arbitration Association (“AAA”), and the mediation will be conducted under the AAA Rules and Procedures, provided that the AAA shall appoint a replacement mediator only if it determines that the party objecting to the appointment of the original mediator appointed by the AAA has reasonable grounds for doing so. In either case:

 

(A)                               the mediation will conclude within 45 days after the date of the appointment of the mediator, unless the Electing Members agree to extend this time period (such time period, as may be extended, the “Mediation Period”);

 

(B)                               the date on which the mediation hearings will commence will not be later than twenty (20) days after the date of the appointment of the mediator;

 

(C)                               the Electing Members will prepare and provide to each other (and the mediator) summaries of their positions regarding the Board Deadlock (together with all supporting documentation) at least ten (10) days prior to the date the mediation hearings commence;

 

(D)                               each Electing Member will ensure that the relevant senior representatives of such Electing Member attend the mediation hearing and, in good faith, seek to resolve the Board Deadlock. The format of the mediation hearings will be determined by the mediator and the costs of the mediator and, if applicable, the AAA administrative expenses will be borne by the Company; and

 

(E)                                if a Board Deadlock is not resolved by the Board prior to the expiration of the Mediation Period, the Board shall be deemed to have not consented to such matter in question and such matter shall be subject to the arbitration provisions in Section 8.2(q)(ii).

 

43

 

(ii)                                  Arbitration. The Members irrevocably consent and agree that (A) binding arbitration pursuant to this Section 8.2(q)(ii) shall be the sole and exclusive remedy for the resolution of any Board Deadlock that is not resolved by mutual agreement of the Board prior to the expiration of the Mediation Period, (B) any Electing Member may demand arbitration of any Board Deadlock (but not any other dispute other than the Board Deadlock) by providing written notice to each of the other Electing Members at any time within 30 days after the end of the Mediation Period, (C) following such demand, such Board Deadlock will be fully and finally resolved by binding arbitration administered by the AAA in accordance with its Commercial Arbitration Rules then in effect and (D) this agreement to arbitrate shall be specifically enforceable. The Members agree that Dallas, Texas shall be the seat of the arbitration and that one (1) arbitrator shall be used. The Electing Members shall use their reasonable efforts to appoint an arbitrator with substantial knowledge of and experience with the oil and gas midstream services industry and any such arbitrator shall not have a prior relationship or affiliation with the Company, MHR or their respective Affiliates or any Member or its Affiliates. The decision of the arbitrator shall be binding and the arbitrator shall only have the power to determine whether the Board shall consent to or reject the matter subject to the Board Deadlock (but, for the avoidance of doubt, the arbitrator’s decision shall not relate to any term or condition relating to such Board Deadlock unless expressly presented to such arbitrator for its determination). The decision or remedy granted by the arbitrator may be appealed pursuant to the AAA’s Optional Appellate Arbitration Rules (“Appellate Rules”). Appeals must be initiated within thirty (30) days of receipt of a binding arbitration decision by filing a Notice of Appeal with any AAA office. Such decision made by the arbitrator shall be considered final if no appeal is filed before the expiration of the time for filing the notice of appeal pursuant to the Appellate Rules. A decision that is final or, following the appeal process, the decision rendered by the appeal tribunal, may be entered in any court having jurisdiction thereof. The Company shall be responsible for any and all costs and fees incurred by each Member in connection with any arbitration pursuant to this Section 8.2(q)(ii). The Federal Arbitration Act shall govern all proceedings brought hereunder. Each Member agrees that service of any process, summons, notice or document by U.S. certified or registered mail to such Member’s respective address set forth on the Members’ Schedule shall be effective service of process in any action, suit or proceeding arising from or relating to this Agreement or the Company. This agreement to arbitrate relates solely to resolving Board Deadlocks and shall not be construed as a consent to arbitrate or a waiver of the provisions of Section 13.7 for any other disputes arising under this Agreement.

 

(iii)                               For the avoidance of doubt, (A) the provisions of Section 8.2(q)(i) and (ii) shall only apply to approval of matters requiring consent of the Board and shall in no event apply to approval of matters requiring consent of the Members (including under Section 8.4(b)) and (B) if a Board Deadlock subject to Section 8.2(q)(i) and (ii) is resolved under Section 8.2(q)(ii), such matter shall be deemed

 

44

 

to have been decided by the Board, but shall be subject in all respects to the foregoing clause (A) and shall not limit any consent rights of the Members or the need to obtain Requisite Member Approval.

 

(r)                                          Series A-2 Manager Rights. Notwithstanding anything in this Agreement to the contrary, (i) only the approval of the Series A-2 Managers shall be required in order to remove any Person who is serving as an Officer or terminate the Company’s or any Subsidiary’s employment of such Person if such Person (A) is or was employed by any Series A-1 Member or any of its Affiliates and (B) such removal or termination is for Cause and (ii) the Series A-2 Managers shall be entitled to act on behalf of the Company and its Subsidiaries in order to take any actions relating to the foregoing clause (i); provided, that, in the event that (x) the Series A-2 Managers seek to exercise such termination rights and fail to also obtain Series A-1 Approval (where the Series A-1 Members hold at least 20% of the Class A Common Units), (y) the Series A-1 Majority challenges whether such Officer’s actions (or inactions) constituted Cause by written notice to the Series A-2 Members within 15 days after receiving notice from the Series A-2 Members regarding such termination for Cause and (z) such Officer has not admitted in writing that Cause exists, then (1) the determination of whether Cause has occurred shall be resolved in accordance with arbitration procedures consistent with those described in Section 8.2(q)(ii) as if such matter were a Board Deadlock and (2) such Officer shall not be removed or terminated for Cause under this Section 8.2(r) with respect to such Officer’s actions (or inactions) that are the subject of such dispute until such time as the arbitrator determines that such Officer’s actions (or inactions) constituted Cause.

 

8.3                               Officers.

 

(a)                                       Generally. The Company and its Subsidiaries may have such Officers as the Board in its discretion may appoint with Requisite Member Approval. The Board may (subject to Section 8.4) remove any Officer with or without cause at any time; provided, however, that such removal shall be without prejudice to the contractual rights, if any, of the Officer so removed. Election or appointment of an Officer shall not of itself create contractual rights. Any such Officers may, subject to the general direction of the Board and, unless otherwise modified or revoked by the Board, have responsibility for the management of the normal and customary day-to-day operations of the Company and its Subsidiaries and act as “agents” of the Company and its Subsidiaries in carrying out such activities. The Officers shall be compensated if they are employees of the Company or its Subsidiaries, and the terms and conditions of their employment with the Company or a Subsidiary (as applicable) shall be as provided in their respective Employment Agreements, if any. Any Officer may resign at any time. Such resignation shall be in writing and shall take effect at the time specified therein or, if no time is specified, at the time of its receipt by the Board. The acceptance of a resignation shall not be necessary to make it effective unless expressly so provided in the resignation.

 

(b)                                       Initial Officers. As of the Effective Date, Gary C. Evans is appointed as Chief Executive Officer, Joseph C. Daches is appointed as Chief Financial Officer, Christopher T. Akers is appointed as Chief Operating Officer of the Company and the

 

45

 

other Officers listed on Schedule VII are appointed in the capacity described therein, in each case with such powers, authority and duties as specified in writing from time to time by the Board but such delegation shall be subject to the other provisions of this Agreement, including Section 8.2(r) and Section 8.4(b).

 

(c)                                        General Authority of Officers. Subject to any limitations set forth in this Agreement and the direction of the Board, including Section 8.2 and Section 8.4(b), the Officers shall have such duties and powers as are customarily incident to his or her office in a Delaware corporation and such duties and powers as may be delegated from time to time by the Board in writing. The policy for the delegation of authority to the Officers, as of the Effective Date (as amended, modified or replaced from time to time, the “Delegation Policy”), is attached hereto as Schedule VII, which policy (i) may not be amended, modified or replaced during the Interim Period and (ii) may be amended, modified or replaced from time to time thereafter by the Board with Requisite Member Approval.

 

8.4                               Members.

 

(a)                                       Except as otherwise provided in this Agreement, the Members in their capacity as Members shall not have any power or authority to manage the business or affairs of the Company or its Subsidiaries or to bind the Company or its Subsidiaries or enter into agreements on behalf of the Company or its Subsidiaries. To the fullest extent permitted by Law and notwithstanding any provision of any Related Document to the contrary, no Member in its capacity as a Member shall have any duty, fiduciary or otherwise, to the Company or any other Member in connection with the business and affairs of the Company or any consent or approval given or withheld pursuant to any Related Document. The foregoing sentence will not be deemed to alter the contractual obligations of a Member to another Member or the Company pursuant to the Related Documents or to alter any obligations of any Member in such Member’s capacity as an Officer. Except as otherwise expressly provided in this Agreement, Members shall have no voting rights or rights of approval, veto or consent or similar rights over any actions of the Company or its Subsidiaries and any references in this Agreement to any of the foregoing terms shall be deemed to include each other term. Any matter requiring the consent or approval of any of the Members pursuant to this Agreement may be taken without a meeting, without prior notice and without a vote, by a consent in writing, setting forth such consent or approval, and signed by the holders of not less than the number of outstanding Membership Interests necessary to consent to or approve such action. Prompt notice of such consent or approval shall be given by the Company to those Members who have not joined in such consent or approval.

 

(b)                                       Notwithstanding anything in this Agreement to the contrary but subject to Section 8.4(c) below, in addition to any other approvals required pursuant to this Agreement, prior to a Non-MLP IPO, the following actions by the Company or any of its Subsidiaries (the “Specified Actions”) shall require Requisite Member Approval:

 

46

 

(i)                                     (A) on or after the expiration of the Interim Period, the approval of any operating expenditure budget and/or capital expenditure budget for any fiscal year (such budgets approved by the Board with Requisite Member Approval shall constitute the CapEx Budget, Operating Budget and, together, the Annual Budget), (B) on or after the expiration of the Interim Period, the incurrence of any capital expenditure, whether or not provided for in an Annual Budget (other than (x) a De Minimis Project and then subject to the limitations set forth in Section 5.4 and in any event not to involve CapEx Contributions in excess of $15 million in the aggregate per year and (y) ordinary course expenses incurred in connection with early stage exploration of potential Proposed Growth CapEx Projects, not to exceed $500,000 per potential Proposed Growth CapEx Project or $2 million in the aggregate per year for all potential Proposed Growth CapEx Projects (this clause (y), “Permitted Early Stage CapEx”)), (C) the incurrence of any expenditure not provided for in any Operating Budget and/or (D) incurring any costs or otherwise taking any action that results or is or would be reasonably likely to result in noncompliance with Section 8.4(b)(i)(B) or Section 8.4(b)(i)(C) above; provided, that, (1) variances not greater than 10% of any budget pertaining to any Approved Project (this clause (1), “Permitted CapEx Overage”) or (2) variances not greater than 10% of any General OpEx Line Item in any Operating Budget shall be permitted (this clause (2), “Permitted OpEx Overage”);

 

(ii)                                  (A) disposing of assets of the Company or any of its Subsidiaries in which the total transaction value (as reasonably determined by the Board) exceeds $5,000,000 or greater than $20,000,000 in the aggregate for dispositions in any year or (B) the transfer of assets between or among the Company or any of its Subsidiaries;

 

(iii)                               on or after the expiration of the Interim Period, making any calls for Capital Contributions or making any calls for contributions for any of the Company’s Subsidiaries (other than (A) capital contributions provided by the Company in any CapEx Budget, (B) CapEx Contributions in respect of Approved Projects in accordance with Section 5.2 and Section 5.3 or (C) CapEx Contributions in respect of De Minimis Projects in accordance with Section 5.4);

 

(iv)                              (A) the creation, authorization or issuance of a new series of Units or other Equity Interests of the Company, (B) the issuance of Units, other than issuances pursuant to (1) CapEx Contributions in respect of Approved Projects in accordance with Section 5.2 and Section 5.3, (2) CapEx Contributions in respect of De Minimis Projects in accordance with Section 5.4 or (3) Equity Award Agreements, in the form attached as Exhibit C, solely to the extent such issuance is for Class B Common Units that are (x) currently reserved for issuance in the Equity Incentive Plan and (y) not in excess of 500,000 Class B Common Units in the aggregate in any year, (C) the issuance of Equity Interests of any of the Company’s Subsidiaries (other than issuances to the Company or its wholly-owned Subsidiaries) or disposition of any Equity Interests of any of the

 

47

 

Company’s Subsidiaries (other than a disposition of 100% of the Equity Interests of a Subsidiary pursuant to, and in compliance with, Section 8.4(b)(ii)) and (D) without in any way limiting any additional requirements set forth in Section 13.5, any amendment, modification, supplement, restatement or waiver of this Agreement or the organizational documents of any of the Company’s Subsidiaries, except amending or otherwise modifying the Certificate or this Agreement to reflect any Disposition made in accordance with this Agreement or other administrative or immaterial changes and similar changes to the organizational document of any of the Company’s Subsidiaries;

 

(v)                                 (A) any distribution to the holders of Units or other Membership Interests (other than (x) any Tax distribution pursuant to Section 6.1(b) or (y) any distribution to Common Members during the Interim Period if, and only if, such distribution is made to all Common Members in accordance with Section 6.1(c) and, after giving effect to such distribution, the Company has Available Cash (as determined by the Board) of not less than $10 million) or (B) any repurchase, redemption or other acquisition of any Units or other Equity Interests of the Company or any of its Subsidiaries, other than redemptions or repurchases of Class B Common Units required to be made by the Company pursuant to an Equity Award Agreement;

 

(vi)                              (A) during the Interim Period, the incurrence of any Indebtedness which would result in the Company’s aggregate Indebtedness being in excess of $50 million or (B) on or after the expiration of the Interim Period, other than Indebtedness pursuant to borrowings under the Existing Revolver in the ordinary course of business, the incurrence of any Indebtedness;

 

(vii)                           (A) during the Interim Period, the entry into or modification, amendment or termination of any Material Contract, other than the entry into a Material Contract that is on arms-length terms and competitive market rates and (B) on or after the expiration of the Interim Period, the entry into or modification, amendment or termination of any Material Contract;

 

(viii)                        on or after the expiration of the Interim Period, the modification, amendment, replacement or termination of any insurance policy (other than endorsements or immaterial ordinary course changes that do not directly or indirectly adversely affect the Company or any of its Subsidiaries) for the benefit of, or otherwise relating to, the Company or any of its Subsidiaries (including any insurance policy described on Schedule VIII), including (A) in respect of the underwriters and brokers thereof and/or claims relating thereto and (B) replacement of any blanket insurance policy maintained by MHR or any of its Affiliates (other than the Company and its Subsidiaries) for the benefit of the Company or any of its Subsidiaries (provided, that, (x) the Company shall not be deemed to breach this clause (viii) in the event any such insurance policy is involuntarily terminated due to circumstances outside of the Company’s or its Subsidiaries’ control and (y) in such event, or in the event that any such insurance

 

48

 

policy becomes cost prohibitive, the Members constituting Requisite Member Approval shall reasonably cooperate with the Company in connection with replacing such insurance policy);

 

(ix)                              except as provided in Section 8.2(r) or Section 8.4(b)(iv)(B)(3), the election or removal or determination of (or change in) compensation of, or payment of bonus to, Officers (other than bonus payments to the Chief Executive Officer, Chief Financial Officer and/or Chief Operating Officer in accordance with the terms of any such Contract or arrangement with such Officer in existence prior to the Effective Date); entering into or amending any employment or severance agreement (other than ordinary course severance payments not in excess of an amount equal to 2 weeks of a terminated employee’s base pay); or the adoption of any employee benefit or welfare plans;

 

(x)                                 on or after the expiration of the Interim Period, the Company or any of its Subsidiaries hiring or offering to hire any employees prior to the Employee Transfer;

 

(xi)                              any commencement or settlement of any litigation, investigation, proceeding or governmental or regulatory action, except for the commencement of any of the foregoing to pursue claims against third parties (or settlements with respect thereto or with respect to claims against the Company or its Subsidiaries) that arise in the normal course of business where the amount in controversy is $1,000,000 or less;

 

(xii)                           any material change in the nature, or principal line of business, of the Company or any of its Subsidiaries, including (A) any voluntary change in accounting policies or tax classification, (B) any merger, consolidation, acquisition (other than one or more acquisitions not in excess of $1,000,000 per year (in the aggregate) or De Minimis Projects) or other business combination or any conversion to another type or form of business entity, (C) the formation of any Subsidiary of the Company (other than a wholly-owned Subsidiary), (D) any IPO (other than a Qualified MLP IPO, but subject to Section 10.7) or (E) any Sale Transaction; provided, that, notwithstanding the foregoing, during the Interim Period, the foregoing shall not apply to any voluntary change in accounting policies or tax classification or the formation of any Subsidiary of the Company;

 

(xiii)                        the entry into or modification, waiver, amendment or termination of any Contract (or series of related Contracts) (A) between the Company or any of its Subsidiaries, on the one hand, and (B) any Member, Affiliate of the Company or any of their respective Related Parties (in each case, other than the Company or any of its Subsidiaries), on the other hand (an “Affiliate Agreement”), except for Interim Period Affiliate Agreements and Affiliate Agreements that are on arm’s length terms and involve aggregate annual payments not greater than $250,000 and for a term of not greater than one year (provided, that, for the avoidance of doubt, this clause (xiii) shall not be deemed a

 

49

 

*             THE REGISTRANT HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS OF THIS EXHIBIT.  ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE SEC.  OMITTED PORTIONS ARE INDICATED BY “[REDACTED]*”.

 

prohibition of actions that were taken prior to the Effective Date with respect to the Affiliate Agreements, as described on Schedule 4.12 of the Transaction Agreement with respect to the Affiliate Agreements described on such schedule);

 

(xiv)                       adoption of a plan or proposal for a complete or partial liquidation, reorganization or recapitalization or commencement of any case, proceeding or action seeking relief under any laws relating to bankruptcy, insolvency, conservatorship or relief of debtors, or applying for or consenting to the appointment of a receiver, trustee, custodian, conservator or similar official, or filing an answer admitting the material allegations of a petition filed against the Company or any of its Subsidiaries in any such proceeding, or making a general assignment for the benefit of creditors, or admitting in writing its inability or failing generally to pay its debts as they become due; or

 

(xv)                          any agreement or other commitment to do any of the foregoing.

 

(c)                                        Notwithstanding anything in this Agreement to the contrary, neither the approval of the Board nor Series A-1 Approval shall be required (and only Series A-2 Approval or the approval of the Series A-2 Managers, as the case may be, shall be required) (i) with respect to any determination or action taken pursuant to a Drag-Along Transaction in accordance with Section 7.4 or a Qualified Public Offering in accordance with Section 7.6 or (ii) to the extent provided in Section 8.2(r) or Section 8.4(d).

 

(d)                                       Notwithstanding anything to the contrary set forth in this Agreement, without limiting any rights and/or remedies that a Series A-2 Member may have:

 

(i)                                     in the event that MHR and/or the Company fail to take any actions required pursuant to Section 10.6, the Series A-2 Members (acting with Series A-2 Approval) shall have the right, but shall not be required, on behalf of the Company and its Subsidiaries, to take any and all actions with respect to the [REDACTED]* that the Series A-2 Majority deems appropriate (at the Company’s expense) to accomplish the actions contemplated by Section 10.6;

 

(ii)                                  the Series A-2 Members (acting with Series A-2 Approval) shall have the right, but shall not be required, on behalf of the Company and its Subsidiaries, to take any and all actions relating to the exercise and/or enforcement of any rights and/or remedies under, any Related Document or Affiliate Agreement; and

 

(iii)                               the Series A-2 Members (acting with Series A-2 Approval) shall (upon 30 days’ prior written notice) have the right, but shall not be required, on behalf of the Company and its Subsidiaries, to (A) cancel or terminate any modification or amendment to, or termination of, any capital expenditure or operating budget entered into, modified, amended or terminated during the Interim Period without Series A-2 Approval, (B) cancel or terminate any modification or amendment to, or termination of, any Material Contract entered into, modified, amended or terminated during the Interim Period without Series

 

50

 

A-2 Approval, (C) cancel or terminate any modification or amendment of, or replacement or termination to, any insurance policy (or reinstate or replace any such policy) entered into, modified, amended, replaced or terminated during the Interim Period without Series A-2 Approval, (D) terminate any employee hired by (or offered a position with) the Company or any of its Subsidiaries during the Interim Period without Series A-2 Approval, (E) liquidate any Subsidiary formed during the Interim Period without Series A-2 Approval, (F) cancel or terminate any Interim Period Affiliate Agreement entered into without Series A-2 Approval and/or (G) cancel or terminate any modification or amendment to, or termination of, any Affiliate Agreement entered into, modified, amended or terminated between [        ], 2014(3) and the Effective Date without the written approval of MSI (as defined in the Transaction Agreement).

 

8.5                               Acknowledgement Regarding Outside Businesses and Opportunities.

 

(a)                                       Non-MHR Members.

 

(i)                                     Notwithstanding anything in any Related Document or Affiliate Agreement or otherwise, each of the Company and each Subsidiary and each Member (on its behalf and on behalf of its Affiliates) acknowledges and agrees that each Non-MHR Member and its Related Parties (i) have or may have made, prior to the date of this Agreement, and are expected to make, on and after the date of this Agreement, investments (by way of capital contributions, loans or otherwise), and (ii) have engaged or may have engaged, prior to the date of this Agreement, and are expected to engage, on and after the date of this Agreement, in other transactions with and with respect to, in each case, Persons engaged in businesses that directly or indirectly compete with the business of the Company and/or its Subsidiaries as conducted from time to time or as may be conducted from time to time. The Company and each Subsidiary and each Member (on its behalf and on behalf of its Affiliates) agree that any involvement, engagement or participation of the Non-MHR Members and such Related Parties in such investments, transactions and businesses, even if competitive with the Company and its Subsidiaries, shall not be deemed wrongful or improper or to violate any duty express or implied under any Related Document, applicable Law or otherwise. For the avoidance of doubt, no Non-MHR Member shall be deemed to violate any provision of this Agreement if it or any of its Related Parties shall invest in a fund or other Person (whether or not a Non-MHR Member or any of its Related Parties Controls such fund or other Person) that makes an investment that directly or indirectly competes with the Company or its Subsidiaries.

 

(ii)                                  Each of the Company and each Subsidiary and each Member (on its behalf and on behalf of its Affiliates) hereby agrees that any claims against, actions, rights to sue, other remedies or other recourse to or against any Non-MHR Member or any of its Related Parties for or in connection with any such

 

(3)  Note to Draft: To be the date of execution of the Transaction Agreement.

 

51

 

investment activity or other transaction activity, whether arising in common law or equity or created by rule of law, statute, constitution, Contract (including this Agreement, any other Related Document or other Contract) or otherwise, are expressly released and waived by each of the Company, each Subsidiary and each Member (on its behalf and on behalf of its Affiliates), in each case to the fullest extent permitted by Law; provided, however, that this Section 8.5(a)(ii) shall not constitute a release or waiver by the Company of any violation of Section 10.4 by a Member.

 

(iii)                               Notwithstanding anything to the contrary in any Related Document, Affiliate Agreement or otherwise, each of the Company, each Subsidiary and each Member (on its behalf and on behalf of its Affiliates) acknowledges and agrees that each Non-MHR Member and its Related Parties have obtained, or may in the future obtain, confidential information from other Persons in connection with the activities and transactions described in Section 8.5 or otherwise. Each of the Company, each Subsidiary and each Member (on its behalf and on behalf of its Affiliates) hereby agrees that (i) neither the Non-MHR Members nor any of their respective Related Parties has any obligation to use any such confidential information in connection with the business, operations, management or other activities of the Company or any of its Subsidiaries or to furnish to the Company, any of its Subsidiaries or any Member any such confidential information and (ii) that any claims against, actions, rights to sue, other remedies or other recourse to or against any Non-MHR Members or its Related Parties or in connection with any such failure to use or to furnish such confidential information, whether arising in common law or equity or created by rule of law, statute, constitution, contract (including this Agreement or any other Related Document) or otherwise, are expressly released and waived by each of the Company, each Subsidiary and each Member (on its behalf and on behalf of its Affiliates), to the fullest extent permitted by Law.

 

(b)                                       MHR.

 

(i)                                     Each MHR Affiliated Member represents and warrants (for itself and not for any other MHR Affiliated Member) to the Company and each Series A-2 Member that, as of the Effective Date, other than (A) with respect to the Company or the Company’s Subsidiaries or (B) passive investments not to exceed, directly or indirectly, 5% of the common Equity Interests of a Person listed on a national securities exchange, such MHR Affiliated Member (and its Affiliates (other than the Company and its Subsidiaries)) does not have, directly or indirectly, any Equity Interest in any Person that is engaged in the oil, natural gas and/or natural gas liquids midstream business in the Subject Area.

 

(ii)                                  Prior to a Qualified Public Offering, each MHR Affiliated Member covenants (for itself and not for any other MHR Affiliated Member) to the Company and each Series A-2 Member that it shall not, and it shall cause its Affiliates (other than the Company and its Subsidiaries) not to, directly or

 

52

 

indirectly, engage or otherwise participate in the acquisition, ownership, management, development, financing or operation of any oil, natural gas and/or natural gas liquids midstream business or assets in the Subject Area (including gathering, treating, transporting and processing oil, natural gas and/or natural gas liquids) other than (A) subject to Section 8.5(b)(iii) below, Declined Opportunities and (B) passive investments not to exceed, directly or indirectly, 5% of the common Equity Interests of a Person listed on a national securities exchange.

 

(iii)                               Prior to a Qualified Public Offering, each MHR Affiliated Member covenants (for itself and not for any other MHR Affiliated Member) to the Company and each Series A-2 Member that it will (and that it will cause its Affiliates to) promptly disclose and consult with the Board and the Series A-2 Members regarding any opportunities of which such MHR Affiliated Member (or Affiliate) may become aware with respect to investments in the oil, natural gas and/or natural gas liquids midstream sector in the Subject Area (a “Business Opportunity”). In the event that the Officers present a CapEx Proposal to the Eligible Members with respect to a Business Opportunity in accordance with Section 5.2(a)(i) and (ii) the Company does not pursue such Proposed Growth CapEx Project solely due to the failure to obtain Series A-2 Approval (a “Declined Opportunity”), then MHR may pursue such Declined Opportunity independently of the Company (including through one or more of MHR’s Subsidiaries but not through the Company or any of the Company’s Subsidiaries) on materially the same terms and conditions as set forth in the CapEx Proposal; provided, that, if such terms and conditions change in any material respect, MHR shall be required to present such Business Opportunity in accordance with the first sentence in this Section 8.5(b)(iii).

 

(iv)                              MHR covenants that it will (and will cause its Affiliates to) provide each Series A-2 Member (and/or its designees) with a right of first negotiation to participate with MHR regarding any midstream activities in the continental United States and not subject to Section 8.5(b)(iii) above (“Other Midstream Opportunities”), if such Other Midstream Opportunity may reasonably be expected to require aggregate third party equity capital commitments or funding of not less than $100 million. The foregoing shall not be deemed to require MHR to consummate Other Midstream Opportunities with any Series A-2 Member.

 

8.6                               Amendment, Modification or Repeal. Any amendment, modification or repeal of Section 8.4, Section 8.5 or this Section 8.6 or any provision thereof shall be prospective only and shall not in any way affect the limitations on the liability of the applicable Members or any of their respective Affiliates under such provisions as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

53

 

ARTICLE 9

DUTIES; LIMITATIONS OF LIABILITY; INDEMNIFICATION; RELATED

MATTERS

 

9.1                               Duties, Limitations of Liability and Indemnification of Members.

 

(a)                                       Duties. Notwithstanding anything in this Agreement or any other Related Document to the contrary, each of the Company and the Members acknowledges and agrees that each Member, in its capacity as a Member, may decide or determine any matter subject to such Member’s approval pursuant to any provision of this Agreement in such Member’s sole and absolute discretion, and in making such decision or determination such Member shall have no duty, fiduciary or otherwise, to any other Member or to the Company, it being the intent of all Members that each Member, in its capacity as a Member, have the right to make such determination solely on the basis of such Member’s own interests. To the maximum extent permitted by applicable Law, whenever a Member is permitted or required to make a decision or take an action or omit to take an action in such Person’s capacity as a Member (including wherever in this Agreement that any Member is permitted or required to make, grant or take a determination, a decision, a consent, a vote, a judgment or other action at its “discretion,” “sole discretion” or under a grant of similar authority or latitude), such Member shall be entitled to consider only such interests and factors, including its own, as it desires, and shall have no duty or obligation to give any consideration to any other interest or factors whatsoever.

 

(b)                                       Acknowledgement and Release. Subject to Section 9.6(e), each of the Company and the Members hereby agrees that any claims against, actions, rights to sue, other remedies or other recourse to or against the Members or any of their respective Related Parties for or in connection with any decision or determination referred to in Section 9.1(a) above in each case whether arising in common law or equity or created by rule of law, statute, constitution, contract (including this Agreement or any other Related Document) or otherwise, are in each case expressly released and waived by the Company and each Member, to the fullest extent permitted by Law, as a condition of, and as part of the consideration for, the execution of this Agreement and the other Related Documents, and the incurring by the Members of the obligations provided in such agreements; provided, however, that nothing contained in this Agreement shall release or otherwise prevent any Member from asserting a claim against another Member with respect to a violation of the contractual covenant of good faith and fair dealing implied by the Act.

 

(c)                                        Limitation of Liability. To the maximum extent permitted by applicable Law, no Member Covered Person shall be liable to the Company or any of its Subsidiaries, to any other Member or to any other Person for Liabilities incurred as a result of any act or omission (in relation to the Company or any of its Subsidiaries, any transaction, any investment or any business decision or action, including for breach of duties including fiduciary duties (including any duty of disclosure)) taken or omitted by such Member Covered Person (in such Person’s capacity as a Member Covered Person (excluding, for the avoidance of doubt, Liabilities in respect of any Excluded Claims), unless there has been a final and non-appealable judgment entered by a court of competent

 

54

 

jurisdiction determining that, in respect of such act or omission, and taking into account the acknowledgments and agreements set forth in this Agreement, such Member Covered Person engaged in fraud, willful misconduct or a bad faith violation of the contractual covenant of good faith and fair dealing or, in the case of a criminal matter, acted with knowledge that such Member Covered Person’s conduct was unlawful. Notwithstanding anything to the contrary set forth herein, this Section 9.1(c) does not apply to any Member Covered Person in such Member Covered Person’s capacity as a party to an Affiliate Agreement or the breach of any Affiliate Agreement or Related Document.

 

(d)                                       Indemnification. Each Member Covered Person shall be indemnified and held harmless by the Company (but only to the extent of the Company’s assets), to the fullest extent permitted under applicable Law, from and against any and all loss, liability and expense (including taxes; penalties; judgments; fines; amounts paid or to be paid in settlement; costs of investigation and preparations; and fees, expenses and disbursements of attorneys, whether or not the dispute or proceeding involves the Company or any Manager or Member) (collectively, “Liabilities”) incurred or suffered by any such Member Covered Person in connection with the activities of the Company or its Subsidiaries (excluding, for the avoidance of doubt, Liabilities in respect of any Excluded Claims); provided that, such Member Covered Person shall not be so indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which such Member Covered Person is seeking indemnification or seeking to be held harmless hereunder, and taking into account the acknowledgments and agreements set forth in this Agreement, such Member Covered Person engaged in fraud, willful misconduct or a bad faith violation of the contractual covenant of good faith and fair dealing or, in the case of a criminal matter, acted with knowledge that such Member Covered Person’s conduct was unlawful. A Member Covered Person shall not be denied indemnification in whole or in part under this Section 9.1(d) because such Member Covered Person had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement. Notwithstanding anything to the contrary set forth herein, this Section 9.1(d) does not apply to any Member Covered Person in such Member Covered Person’s capacity as a party to an Affiliate Agreement or the breach of any Affiliate Agreement or Related Document.

 

(e)                                        Reliance on Records. Each Member Covered Person may rely, and shall incur no Liability in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, paper, document, signature or writing reasonably believed by it to be genuine, and may rely on a certificate signed by an officer, agent or representative of any Person in order to ascertain any fact with respect to such Person or within such Person’s knowledge, in each case unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of such reliance, action or inaction, such Member Covered Person engaged in fraud, willful misconduct or a bad faith violation of the contractual covenant of good faith and fair dealing or, in the case of a criminal matter, acted with knowledge that such Member Covered Person’s conduct was unlawful.

 

55

 

9.2                               Duties and Indemnification of Officers and Managers.

 

(a)                                       Duties.

 

(i)                                     (A) Each Officer (in such Person’s capacity as an Officer) and (B) prior to the expiration of the Interim Period, each Series A-1 Manager (in such Person’s capacity as a Manager), shall have the same fiduciary and other duties (including with respect to investments, transactions and businesses that are or may be considered competitive with the Company or its Subsidiaries) that an officer of the Company would have if the Company were a corporation organized under the Laws of the State of Delaware (which had not adopted language specifically modifying or renouncing applicable duties with respect to corporate or business opportunities).

 

(ii)                                  Each Manager designated by a Member pursuant to Section 8.2(a) (each, a “Member Board Designee”) shall serve in such capacity to represent the interests of the Member or Members that designated such Manager and shall be entitled to consider only such interests (including the interests of the Member or Members that designated such Manager) and factors specified by the Member or Members that designated such Manager, and, except with respect to the fiduciary and other duties of the Series A-1 Managers prior to the expiration of the Interim Period (as described in Section 9.2(a)(i)), shall have no fiduciary or other duties (including any duty of disclosure) to the Company, any other Member, any other Manager or any other Person that is a party to or is otherwise bound by this Agreement, other than the contractual covenant of good faith and fair dealing; provided, that, for the avoidance of doubt, nothing in this Section 9.2, including this clause (ii), shall limit the fiduciary duties of a Series A-1 Manager (A) prior to the expiration of the Interim Period or (B) in such Series A-1 Manager’s capacity (if any) as an Officer.

 

(b)                                       Indemnification. Each M&O Covered Person shall be indemnified and held harmless by the Company (but only to the extent of the Company’s assets), to the fullest extent permitted under the Act (and shall be entitled to the same defenses and exculpations to the fullest extent permitted by law), from and against any and all Liabilities incurred or suffered by any such M&O Covered Person in connection with the activities of the Company or its Subsidiaries (excluding, for the avoidance of doubt, Liabilities in respect of any Excluded Claims) unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that such M&O Covered Person engaged in fraud, willful misconduct or in a bad faith violation of the contractual covenant of good faith and fair dealing or, in the case of a criminal matter, acted with knowledge that such M&O Covered Person’s conduct was unlawful. An M&O Covered Person shall not be denied indemnification in whole or in part under this Section 9.2(b) because such M&O Covered Person had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement. Notwithstanding anything to the contrary set forth herein, (i) this Section 9.2(b) does not apply to any M&O Covered Person in such M&O Covered

 

56

 

Person’s capacity as a party to an Affiliate Agreement or the breach of any Affiliate Agreement or Related Document and (ii) MHR shall be primarily and fully responsible for any breach of fiduciary and/or other duties as described in Section 9.2(a) above by a Series A-1 Manager prior to the expiration of the Interim Period.

 

(c)                                        Reliance on Records. Each M&O Covered Person may rely, and shall incur no Liability in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, paper, document, signature or writing reasonably believed by it to be genuine, and may rely on a certificate signed by an officer, agent or representative of any Person in order to ascertain any fact with respect to such Person or within such Person’s knowledge, in each case unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that such M&O Covered Person engaged in fraud, willful misconduct or a bad faith violation of the contractual covenant of good faith and fair dealing or, in the case of a criminal matter, acted with knowledge that such M&O Covered Person’s conduct was unlawful.

 

9.3                               Advancement of Expenses. Reasonable, documented expenses incurred by a Covered Person for which such Covered Person could reasonably be expected to be entitled to indemnification under this Agreement in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Company in advance of the final disposition of such action, suit or proceeding; provided, however, that any such advance shall only be made if the Covered Person delivers a written affirmation by such Covered Person of its good faith belief that it is entitled to indemnification hereunder and agrees to repay promptly all amounts so advanced if it shall ultimately be determined that such Covered Person is not entitled to be indemnified hereunder.

 

9.4                               Multiple Rights to Indemnification. If any Person is both a Member Covered Person and a M&O Covered Person with respect to any Liabilities (excluding, for the avoidance of doubt, Liabilities in respect of any Excluded Claims), such Person shall be entitled to be indemnified for such Liabilities to the greatest extent that either a Member Covered Person or a M&O Covered Person is entitled to indemnification for such matters under this Agreement.

 

9.5                               Priority of Certain Third Party Indemnification Rights. The Company and each of the Members hereby acknowledges that certain of the Covered Persons (“Applicable Indemnitees”) have certain rights to indemnification, advancement of expenses or insurance provided by the Members or certain of their Affiliates (collectively, the “Other Indemnitors”). The Company hereby agrees, and the Members hereby acknowledge, that (a) to the extent legally permitted and as required by the terms of this Agreement and the Certificate (or by the terms of any other agreement between the Company and an Applicable Indemnitee), (i) the Company is the indemnitor of first resort (i.e., its obligations to each Applicable Indemnitee are primary and any obligation of the Other Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by any Applicable Indemnitee are secondary) and (ii) the Company shall be required to advance the full amount of expenses incurred by an Applicable Indemnitee and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement, without regard to any rights that an Applicable Indemnitee may have

 

57

 

against the Other Indemnitors and (b) the Company irrevocably waives, relinquishes and releases the Other Indemnitors from any and all claims for contribution, subrogation or any other recovery of any kind in respect of any of the matters described in clause (a) of this sentence for which any Applicable Indemnitee has received indemnification or advancement from the Company. The Company further agrees that no advancement or payment by the Other Indemnitors on behalf of any Applicable Indemnitee with respect to any claim for which an Applicable Indemnitee has sought indemnification from the Company shall affect the foregoing and that the Other Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Applicable Indemnitee against the Company. The Company and each Member agree that the Other Indemnitors are express third party beneficiaries of the terms of this Section 9.5.

 

9.6                               Other Related Matters.

 

(a)                                       The provisions of this Agreement and any other Related Document, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Members to replace, to the fullest extent permitted by applicable Law, such other duties and liabilities of such Covered Person.

 

(b)                                       Notwithstanding anything to the contrary under this Agreement or pursuant to any duty (fiduciary or otherwise) or otherwise applicable provision of Law or equity, a Member may enter into voting agreements or arrangements with one or more other Members regarding, among other things, the voting by such Member or by Managers designated by such Member. Without limiting the scope of any such voting agreement or arrangement permitted hereunder, a voting agreement or arrangement may provide that Members may act in concert and that Managers may act in concert.

 

(c)                                        The rights to indemnification and advancement of expenses provided by this Article 9 shall be in addition to any other rights to which a Covered Person may be entitled under any agreement, as a matter of Law or otherwise, both as to actions in such Covered Person’s capacity as a Covered Person hereunder and as to actions in any other capacity, and shall continue as to a Covered Person who has ceased to serve in such capacity as a Covered Person and shall inure to the benefit of the heirs, successors, assigns and administrators of such Covered Person.

 

(d)                                       The obligations of the Company to the Covered Persons provided in the Related Documents, including any indemnification obligations under this Article 9, shall be satisfied from and limited to Company assets, including insurance proceeds, if any, or arising under Law are solely the obligations of the Company, and no personal liability whatsoever shall attach to, or be incurred by, any Member or other Covered Person for such obligations, to the fullest extent permitted by Law. Where the foregoing provides that no personal liability shall attach to or be incurred by a Covered Person, any claims against or recourse to such Covered Person for or in connection with such liability, whether arising in common law or equity or created by rule of law, statute, constitution, contract or otherwise, are expressly released and waived under the Related Documents, to the fullest

 

58

 

extent permitted by Law, as a condition of, and as part of the consideration for, the execution of the Related Documents and any related agreement, and the incurring by the Company or such Member of the obligations provided in such agreements.

 

(e)                                        Nothing in this Article 9 shall be deemed to limit or waive any rights that any Person has for breach of the terms of the Related Documents or Affiliate Agreements or with respect to any employment relationship with the Company or any of its Subsidiaries (collectively, “Excluded Claims”).

 

(f)                                         Without in any way limiting Section 10.5, the Company may maintain insurance (including directors’ and officers’ insurance), at its expense, to protect each Manager and Officer, and the Company may maintain such insurance to protect itself and any Covered Person or other Member of the Company, in each case against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under the Act.

 

(g)                                        The rights to indemnification and advancement of expenses provided by this Article 9 shall be deemed to be separate contract rights between the Company and each Covered Person. Any amendment, modification or repeal of this Article 9 or any provision hereof shall be prospective only and shall not in any way affect the limitations on liability of the Covered Persons, or terminate, reduce or impair the right of Covered Person, under and in accordance with the provisions of this Article 9 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

ARTICLE 10
 CERTAIN AGREEMENTS OF THE COMPANY AND MEMBERS

 

10.1                        Financial Reports; Access to Information; Management Rights.

 

(a)                                       Subject to Section 10.1(a)(xi) and Section 10.4(b), each Member that, together with its Affiliated Members, holds at least 10% of the issued and outstanding Common Units (a “10% Holder”) shall be entitled to receive the following information from the Company:

 

(i)                                     Within 90 days after the end of each fiscal year (or such longer period of time not in excess of 180 days after the end of the fiscal year as is approved by the Board), an audited balance sheet as of the end of such fiscal year and the related income statement, statement of members’ equity and statement of cash flows for such fiscal year prepared in accordance with GAAP, consistently applied, and a signed audit letter from the Company’s auditors who shall be an accounting firm approved by the Board (provided, that, until removed by the Board, BDO Seidman shall be the Company’s approved accounting firm);

 

(ii)                                  Within 30 days after the end of each month, (A) a monthly management report, including an unaudited balance sheet as of the end of such

 

59

 

month and an unaudited related income statement and statement of cash flows for such month prepared in accordance with GAAP (with the exception of normal year-end adjustments and absence of footnotes), consistently applied, together with a comparison of such statements to the Annual Budget for such periods and (B) a monthly lost time incident report with respect to such month;

 

(iii)                               Within 45 days after the end of each fiscal quarter, an unaudited balance sheet as of the end of such quarter and an unaudited related income statement, and statement of cash flows for such quarter prepared in accordance with GAAP (with the exception of normal year-end adjustments and absence of footnotes), consistently applied, together with a comparison of such statements to the Annual Budget for such periods;

 

(iv)                              Contemporaneously with the provision of (A) the financial statements described in Section 10.1(a)(i), a comparison of such financial statements to the Annual Budget for the periods covered thereby and (B) the management report and lost time incident report described in Section 10.1(a)(ii), a meeting (which may be by teleconference) with the Officers and other members of the Company’s and its Subsidiaries’ management regarding the performance of the Company and its Subsidiaries (and any proposed Affiliate Agreements or other matters posing a potential conflict of interest);

 

(v)                                 Promptly following the approval of the capital expenditure and operating expenditure budgets for any fiscal year, a copy of such Operating Budget, CapEx Budget and Annual Budget;

 

(vi)                              Promptly following the adoption of any strategic plan for any fiscal year (or other period of measurement), a copy of such strategic plan;

 

(vii)                           Promptly after the occurrence of any material event (other than any event or series of related events which are reasonably expected to solely involve assets or liabilities (including contingent liabilities) not in excess of $1 million (in the aggregate for such event or series of related events)), notice of such event together with a summary describing the nature of the event and its impact on the Company and its Subsidiaries;

 

(viii)                        Promptly following (A) any incident or emergency that could cause, or has caused: material injury; loss of life; material damage to property; or pollution or damage to the environment which could reasonably be expected to result in liabilities, damages, losses, fines and/or penalties in excess of $100,000, each report or notice relating to such incident or emergency and (B) any litigation, investigation, proceeding and/or governmental or regulatory action with respect to the Company or any of its Subsidiaries or assets, notice of such event (other than as provided in clause (A) or any civil litigation or civil proceeding not reasonably expected to involve in excess of $500,000);

 

60

 

(ix)                              Within (A) 60 days after the end of each Performance Measurement Date ending on December 31 and (B) 40 days after the end of each Performance Measurement Date ending on March 31, June 30 and September 30, a certification from the Chief Financial Officer as to the 4-Year Trailing EBITDA and whether a Performance Failure has occurred (provided, that, if such certification is not provided within such time period, a Performance Failure shall automatically be deemed to have occurred for all purposes, unless and until the Chief Financial Officer delivers such certification prior to or within 30 days after the delivery of a notice by the Series A-2 Majority to the Company and MHR regarding such failure to timely provide such certification (and such certification is true and correct in respect of such Performance Period)(a “Performance Failure Certificate Cure”);

 

(x)                                 Within seven (7) days following the entry into or modification, waiver, amendment or termination of any Affiliate Agreement (whether or not Requisite Member Approval is required), a copy of such Affiliate Agreement or modification, waiver, amendment or notice of termination thereof; and

 

(xi)                              Such other information as a Series A-2 Member or its advisors may reasonably request (so long as such Series A-2 Member and its Affiliated Members hold at least 15% of the Class A Common Units).

 

(b)                                       Prior to the consummation of an IPO and for so long as TransTex is a Member holding the Series A-1 Units it holds as of the Effective Date, the Company shall provide to TransTex the information described in Section 10.1(a)(i) and 10.1(a)(iii).

 

(c)                                        The Company shall permit the 10% Holders or their respective representatives, at the sole risk and cost of such Persons, to visit and inspect any of the properties of the Company and its Subsidiaries, including its books of account and other records (and make copies of and take extracts from such books and records), and to discuss all aspects of its business, affairs, finances and accounts with the Company’s and its Subsidiaries’ officers and its independent public accountants, all at such reasonable times during the Company’s and such Subsidiaries’ usual business hours and as often as any such Person may reasonably request, and to consult with and advise management of the Company and its Subsidiaries, upon reasonable notice at reasonable times from time to time, on all matters relating to the operation of the Company and its Subsidiaries. Any information received by a Member pursuant to this Section 10.1 shall be subject to the provisions of Section 10.4.

 

10.2                        Maintenance of Books. The Company shall keep or cause to be kept at its principal office(s) complete and accurate books and records of the Company and its Subsidiaries, supporting documentation of the transactions with respect to the conduct of the business of Company and its Subsidiaries and minutes of the proceedings of the Board (and comparable governing body of each Subsidiary) and any of the Members. The Company’s and its Subsidiaries’ financial books and records shall be maintained on a full cost accounting basis unless otherwise agreed by the Board. The records shall include complete and accurate

 

61

 

information regarding the state of the business and financial condition of the Company and its Subsidiaries; a copy of the Certificate and this Agreement and all amendments thereto; a current list of the names and last known business, residence or mailing addresses of all Members; and the Company’s and its Subsidiaries’ federal, state and local tax returns for the six most recent tax years.

 

10.3                        Accounts. The Company shall establish one or more separate bank and investment accounts and arrangements for the Company and its Subsidiaries, which shall be maintained in the name of the Company or appropriate Subsidiary with financial institutions and firms that the Board may determine. The Company may not commingle the Company’s and its Subsidiaries’ funds with the funds of any Member.

 

10.4                        Information.

 

(a)                                       No Member shall be entitled to obtain any information relating to the Company or its Subsidiaries except as expressly provided in this Agreement or to the extent required by the Act; and to the extent a Member is so entitled to, or otherwise receives, any such information, such Member shall be subject to the provisions of Section 10.4(b).

 

(b)                                       Each Member agrees that all Confidential Information shall be kept confidential by such Member and shall not be disclosed by such Member in any manner whatsoever or used except in connection with such Member’s investment in the Company; provided, however, that any of such Confidential Information may be disclosed (i) to such Member’s Affiliates, to Persons who are (or who are prospective) direct or indirect purchasers of Membership Interests and/or lenders to Members, their respective Affiliates and/or direct or indirect purchasers of Membership Interests and to managers, directors, officers, employees and authorized representatives (including attorneys, accountants, consultants, bankers and financial advisors) of each such Member and of such Member’s respective Affiliates (collectively, for purposes of this Section 10.4(b), “Representatives”), and each Member shall ensure its Representatives comply with the provisions of this Section 10.4(b) or substantially similar terms, and that such Member shall be responsible for any noncompliance with this Section 10.4(b) by any of its Representatives as if such Representative was a party hereto; (ii) to the extent to which the Company (with Requisite Member Approval) consents in writing; (iii) to the extent not in violation of applicable Law or this Agreement, if disclosure is with respect to the terms of a Member’s investment in the Company pursuant to this Agreement and the performance of that investment (whether in such Member’s or its Affiliates’ fundraising materials or otherwise); (iv) by a Member or any of its Representatives to the extent reasonably necessary in connection with such Member’s enforcement of its rights under this Agreement or any other Related Document; or (v) by any Member or its Affiliates or their respective Representatives to the extent that the Member or such Affiliate or any such Representative has received advice from its counsel that it is legally compelled to do so (including pursuant to the rules of an applicable stock exchange), provided, that, (A) MHR may describe the Related Documents and file the forms thereof in filings with the Securities and Exchange Commission or any stock exchange and may describe the Related Documents and the

 

62

 

transactions contemplated thereby in any press release issued by MHR (provided that MHR shall provide the Series A-2 Members a reasonable opportunity to review and comment upon such filings or press releases in advance of making such filings or press releases (and to seek in good faith to incorporate such comments as are reasonably appropriate in respect of such filings, and not to make any press release (x) describing or referring to the Series A-2 Members or any of their respective Affiliates without the prior written consent of the Series A-2 Members or (y) describing the Related Documents or the transaction contemplated thereby without the prior written consent of the Series A-2 Members, which shall not be unreasonably conditioned, withheld or delayed, and the Series A-2 Members shall use reasonable best efforts to promptly provide such consent following its receipt of the proposed final form of such press release; it being understood by the parties hereto that the Series A-2 Members and MHR are coordinating mutually agreeable forms of press releases to be released in connection with the Effective Date, and MHR and the Series A-2 Members shall continue to coordinate in good faith in respect of such press releases) and shall seek confidential treatment of those commercially sensitive portions of Related Documents in such filings upon the written request of the Series A-2 Members, assuming that there is a good faith basis therefor) and (B) with respect to disclosures other than those described in clause (A), prior to making such disclosure, the Member or any of its Representatives, as the case may be, uses reasonable efforts to preserve the confidentiality of the Confidential Information, including consulting with the Company regarding such disclosure and, if reasonably requested by the Company, assisting the Company, at the Company’s expense, in seeking a protective order to prevent the requested disclosure.

 

(c)                                        The obligations of a Member pursuant to this Section 10.4 will continue following the time such Person ceases to be a Member, but thereafter such Person will not have the right to enforce the provisions of this Agreement. Each Member acknowledges that disclosure or use of Confidential Information in violation of this Section 10.4 may cause irreparable damage to the Company and the Members for which monetary damages are inadequate, difficult to compute, or both. Accordingly, each Member consents to the issuance of an injunction or the enforcement of other equitable remedies against such Member at the suit of an aggrieved party without the posting of any bond or other security, in order to compel specific performance of all of the terms of this Section 10.4.

 

10.5                        Insurance.

 

(a)                                       Unless the Board otherwise determines, acting with Requisite Member Approval, the Company and its Subsidiaries shall procure and maintain such insurance as is required by Law or Contract (including this Agreement) and which are usual and customary for Persons engaged in a similar business as the Company in the United States.

 

(b)                                       Schedule VIII contains an accurate and complete list of all existing blanket insurance policies of MHR or any of its Affiliates (other than the Company and its Subsidiaries) maintained for the benefit of the Company or any of its Subsidiaries (as such policies are modified or replaced from time to time, including by policies of the Company and/or its Subsidiaries, the “Insurance Policies”). Unless the Board otherwise determines,

 

63

 

*             THE REGISTRANT HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS OF THIS EXHIBIT.  ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE SEC.  OMITTED PORTIONS ARE INDICATED BY “[REDACTED]*”.

 

acting with Requisite Member Approval, the Company and its Subsidiaries shall maintain at all times, but subject to the exceptions described in Section 8.4(b)(viii)) the insurance coverages and limits described on Schedule VIII.

 

(c)                                        MHR shall use commercially reasonable efforts to promptly cause the Insurance Policies to be modified to include the Initial MSI Member (and/or its Affiliated Members) as a named insured under the Insurance Policies.

 

(d)                                       Any Insurance Policy that is a blanket liability insurance of MHR or any of its Affiliates (other than the Company and its Subsidiaries) shall be deemed primary to any contingent liability coverage maintained by the Company or any of its Subsidiaries or the Initial MSI Member or any of its Affiliates.

 

(e)                                        On the Effective Date, MHR has provided, and, on each renewal of an Insurance Policy or at such other times upon the Initial MSI Member’s request, MHR shall provide, the Initial MSI Member: (i) a certification that the Company is in compliance with the insurance requirements of this Agreement, (ii) copies of all Insurance Policies and (iii)(A) a list of all assets (including total insured value by asset) of the Company and/or its Subsidiaries covered by any Insurance Policy that is a MHR blanket insurance policy and (B) a categorical list of all assets (including total insured value by category) of all other Persons and assets covered by any Insurance Policy that is a MHR blanket insurance policy.

 

(f)                                         Without limiting the obligation to obtain Series A-2 Approval, the Company and MHR shall promptly (but in any event within ten (10) Business Days) provide the Series A-2 Members notice of (i) receipt of any notice of any cancellation or modification of any Insurance Policy or (ii) any material claim (as reasonably determined by the Officers in good faith) under any Insurance Policy.

 

10.6                        [REDACTED]* Matters.

 

(a)                                       At the Company’s cost, MHR and the Company shall (and shall cause the Company’s Subsidiaries to) [REDACTED]*

 

(b)                                       At the Company’s cost, MHR and the Company shall (and shall cause the Company’s Subsidiaries to) use commercially reasonable efforts to [REDACTED]*

 

(c)                                        At the Company’s cost, MHR and the Company shall (and shall cause the Company’s Subsidiaries to) use commercially reasonable efforts to [REDACTED]*

 

64

 

*             THE REGISTRANT HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS OF THIS EXHIBIT.  ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE SEC.  OMITTED PORTIONS ARE INDICATED BY “[REDACTED]*”.

 

[REDACTED]*

 

(d)                                       At the Company’s cost, MHR and the Company shall (and shall cause the Company’s Subsidiaries to) use commercially reasonable efforts to [REDACTED]*

 

(e)                                        At the Company’s cost, MHR and the Company shall (and shall cause the Company’s Subsidiaries to) use commercially reasonable efforts to [REDACTED]*

 

(f)                                         Until the consummation of [REDACTED]*, MHR and the Company shall keep each Series A-2 Member apprised (at the Company’s expense) from time-to-time (and in any event, no less frequently than monthly) of the status of (i) the foregoing matters relating to Section 10.6(a)-(e) and (ii) all other material matters relating to [REDACTED]* that MHR and the Company reasonably deem appropriate to accomplish the actions contemplated by Section 10.6.

 

10.7                        Qualified MLP IPO.

 

(a)                                       Subject to Section 10.7(b), the Board (acting with the approval of all Series A-1 Managers in accordance with the proviso at the end of the first sentence of Section 8.2(e)(ii)) may direct the Company (under the supervision and control of the Board) to initiate and complete a MLP IPO on or prior to December 31, 2016 if the IPO Threshold is met (a “Qualified MLP IPO”). The “IPO Threshold” shall mean a MLP IPO that is a Qualified Public Offering and pursuant to which the Fair Market Value of the cash and IPO Securities of the IPO Issuer (i.e., the limited partner interests of the IPO Issuer) to be distributed to the Series A-2 Members in connection with such MLP IPO (together, without duplication, with the Series A-2 Cash Distributions prior to such MLP IPO) are not less than (i) an amount equal to the product of 1.35 multiplied by the aggregate Series A-2 Capital Investments, with respect to a MLP IPO completed on or prior to December 31, 2015, (ii) an amount equal to the product of 1.5 multiplied by the aggregate Series A-2 Capital Investments, with respect to a MLP IPO completed after December 31, 2015 and on or prior to June 30, 2016 or (iii) an amount equal to the product of 1.7 multiplied by the aggregate Series A-2 Capital Investments, with respect to a MLP IPO completed after June 30, 2016 and on or prior to December 31, 2016.

 

(b)                                       Notwithstanding the foregoing or anything to the contrary set forth herein, the Company shall only be permitted to initiate or complete a Qualified MLP IPO if

 

65

 

(x) each Class A Member receives the same proportion of each type (e.g., class, series, etc.) of IPO Securities of the IPO Issuer and its general partner (if applicable), based upon their respective Percentage Interests in the Company prior to the consummation of the Qualified MLP IPO and (y) the Series A-2 Members (i) receive the governance and consent rights in the general partner of the IPO Issuer that are equivalent to those provided to the Series A-2 Members in this Agreement (including in Section 8.2 and Section 8.4) (provided, that, the board or other governing body of the general partner of the IPO Issuer (A) shall include a number of directors or managers designated by the Series A-1 Members and Series A-2 Members not less than the number of Series A-1 Managers and Series A-1 Managers prior to giving effect to the closing of the Qualified MLP IPO and (B) may include independent directors or managers in addition to directors or managers designated by the Series A-1 Member and Series A-2 Members as required by Law or the rules of the applicable stock exchange), (ii) receive the registration rights as contemplated by Section 7.8 and described on Schedule III, except that in the event of a Qualified MLP IPO, the Series A-2 Members shall receive priority with respect to Dispositions of IPO Securities in any secondary offering over any other Member and (iii) consent and agree to the structure of such Qualified MLP IPO (such consent not to be unreasonably withheld).

 

(c)                                        In connection with a Qualified MLP IPO, the Series A-1 Managers shall be entitled, subject to Section 10.7(a) and Section 10.7(b) (including the requirement that the Series A-2 Majority consent and agree to the structure of such Qualified MLP IPO), to the rights and other terms and provisions (subject to the obligation) substantially similar to those provided to the IPO Initiating Member in Section 7.6 and Section 7.9.

 

10.8                        Gas Gathering Agreement. MHR covenants that it shall not, and it shall cause its Affiliates not to, exercise any remedies under the Gas Gathering Agreement relating to breach by the Company or any of its Subsidiaries of the Gas Gathering Agreement arising out of or relating to the willful misconduct of any employee of MHR or any of its Affiliates. MHR and the Company shall enter into an amendment to the Gas Gathering Agreement on or prior to the Effective Date in the form attached as Exhibit E hereto (the “GGA Amendment”).

 

10.9                        Rogersville Facility. At the request of MHR, the Company will (or will cause its Subsidiaries to) assign to MHR or an Affiliate thereof (provided, that in respect of any assignment to such Affiliate, MHR shall contemporaneously therewith execute and deliver a parent guaranty in respect of such Affiliate’s assumption of any obligations arising from or relating to the Rogersville Facility as required by this Section 10.9, in form and substance reasonably satisfactory to the Series A-2 Majority), all of the Company’s and its Subsidiaries’ right, title and interest in and to the Rogersville Facility, pursuant to a form of deed or assignment and assumption agreement, acceptable to the Company and approved by the Series A-2 Majority in writing (such approval not to be unreasonably withheld, conditioned or delayed) and by the Company’s and its Subsidiaries’ lenders under the Existing Revolver (and/or such other credit facility of the Company or any of its Subsidiaries). Any consent required by the Company’s and/or its Subsidiaries’ lenders under the Credit Agreement or other credit facility or indentures to be executed and delivered by the Company and/or any of its Subsidiaries shall be in form and substance reasonably satisfactory to the Series A-2 Majority. For the avoidance of doubt, such assignment and assumption agreement shall expressly disclaim any representations

 

66

 

or warranties by the Company or any of its Subsidiaries, and MHR shall assume all obligations or liabilities of the Company or its Subsidiaries related to the Rogersville Facility, whether arising in or relating to the past, present or future upon giving effect to such assignment. None of the Company, any of its Subsidiaries or any Series A-2 Member (or any Affiliate of any Series A-2 Member) shall incur any costs or expenses in connection with such assignment and any such costs or expenses shall be borne by MHR only, and MHR shall indemnify and hold harmless the Company, its Subsidiaries and each Series A-2 Member (and each Affiliate of any Series A-2 Member) for any such costs or expenses.

 

10.10                 Employee Matters. Upon the request of the Series A-2 Majority, MHR, MH Services and their respective Affiliates shall promptly (but in any event on or prior to March 31, 2015, unless the Series A-2 Majority has, in its sole discretion, agreed in writing to a later date or postponement), (i) transfer or cause to be transferred the employment of all or a portion of the Subject Employees to the Company or one of its Subsidiaries, in each case as designated by the Series A-2 Majority in such request, (ii) ensure that all required notices are provided to such Subject Employees in connection with such transfer and that the compensation and benefits of such Subject Employees are not adversely affected in any material respect in connection with such transfer and (iii) on or before the effective date of any such transfer, take all necessary actions, if any, to fully vest as of such date such Subject Employees’ account balances and other benefits under all Plans that are intended to be qualified under Section 401(a) of the Code or that provide nonqualified deferred compensation benefits (collectively, the “Employee Transfer”).

 

10.11                 Subject Acreage. MHR, on behalf of itself and its Affiliates, hereby grants to the Company and its Subsidiaries a right of first offer to provide midstream services with respect to the Subject Acreage, including gathering, processing, treating or compression services in respect of any Hydrocarbons produced from or by the Subject Acreage.

 

10.12                 Compliance Matters. The Company has, on or prior to the Effective Date, adopted an anti-corruption compliance policy substantially in form and substance reasonably satisfactory to the Initial MSI Member and MHR, together with any amendments agreed among the Initial MSI Member, MHR, and the Company from time to time.

 

ARTICLE 11
 TAXES

 

11.1                        Tax Returns. The Company shall prepare and timely file all U.S. federal, state and local and foreign tax returns required to be filed by the Company. Unless otherwise agreed by the Board, any income tax return of the Company shall be prepared by an independent public accounting firm of recognized national standing selected by the Board. Each Member shall furnish to the Company all pertinent information in its possession relating to the Company’s operations that is necessary to enable the Company’s tax returns to be timely prepared and filed.

 

11.2                        Tax Partnership. It is the intention of the Members that the Company be classified as a partnership for U.S. federal income tax purposes. Unless otherwise approved in accordance with Section 8.2 and Section 8.4(b), neither the Company nor any Member shall make an election for the Partnership to be excluded from the application of the provisions of subchapter K of chapter 1 of subtitle A of the Code or any similar provisions of applicable state

 

67

 

Law or to be classified as other than a partnership pursuant to Treasury Regulation Section 301.7701-3.

 

11.3                        Tax Elections. The Company shall make the following elections on the appropriate forms or tax returns:

 

(a)                                       to adopt the calendar year as the Company’s fiscal year, if permitted under the Code;

 

(b)                                       to adopt the accrual method of accounting;

 

(c)                                        to elect to amortize the organizational expenses of the Company as permitted by Code Section 709(b);

 

(d)                                       to elect, pursuant to section 754 of the Code, to apply the basis adjustment rules contained in sections 734(b) and 743(b) of the Code; and

 

(e)                                        except as otherwise specifically provided in this Agreement, any other election the Board may deem appropriate and in the best interests of the Members.

 

11.4                        Tax Matters Member.

 

(a)                                       The tax matters partner of the Company pursuant to Code Section 6231(a)(7) shall be a Member designated, and subject to replacement, from time to time with Requisite Member Approval. Any Member who is designated as the tax matters partner is referred to herein as the “Tax Matters Member”. The Tax Matters Member on the Effective Date is MHR. The Tax Matters Member shall take such action as may be necessary to cause to the extent possible each other Member to become a notice partner within the meaning of Code Section 6231(a)(8). The Tax Matters Member shall inform each other Member of all significant matters that may come to its attention in its capacity as Tax Matters Member by giving notice thereof on or before the fifth Business Day after becoming aware thereof and, within that time, shall forward to each other Member copies of all significant written communications it may receive in that capacity.

 

(b)                                       Any cost or expense incurred by the Tax Matters Member in connection with its duties, including the preparation for or pursuance of administrative or judicial proceedings, shall be paid by the Company.

 

(c)                                        The Tax Matters Member shall not enter into any extension of the period of limitations for making assessments on behalf of the Members without first obtaining the consent of the Board. The Tax Matters Member shall not bind any Member to a settlement agreement without obtaining the written consent of such Member. Any Member that enters into a settlement agreement with respect to any Company item (within the meaning of Code Section 6231(a)(3)) shall notify the other Members in writing of such settlement agreement and its terms within 90 days from the date of the settlement.

 

68

 

(d)                                       No Member shall file a request pursuant to Code Section 6227 for an administrative adjustment of Company items for any taxable year without first notifying the other Members. If the Board consents to the requested adjustment, the Tax Matters Member shall file the request for the administrative adjustment on behalf of the Members. If such consent is not obtained within 30 days from such notice, or within the period required to timely file the request for administrative adjustment, if shorter, any Member, including the Tax Matters Member, may file a request for administrative adjustment on its own behalf. Any Member intending to file a petition under Code Sections 6226 or 6228 or any other Code Section with respect to any item involving the Company shall notify the other Members of such intention and the nature of the contemplated proceeding. In the case where the Tax Matters Member is the Member intending to file such petition on behalf of the Company, such notice shall be given within a reasonable period of time to allow the other Members to participate in the choosing of the forum in which such petition will be filed.

 

(e)                                        No Member shall file a notice of inconsistent treatment under Code Section 6222(b).

 

ARTICLE 12
 LIQUIDATION EVENT, SALE TRANSACTION AND TERMINATION

 

12.1                        Dissolution.

 

(a)                                       Subject to Section 12.1(b), the Company shall be liquidated and its affairs shall be wound up on the first to occur of the following events (each a “Liquidation Event”) and no other event shall cause the Company’s dissolution:

 

(i)                                     the consent of the Board and Requisite Member Approval in accordance with Article 8;

 

(ii)                                  at any time when there are no Members; and

 

(iii)                               entry of a decree of judicial dissolution of the Company under Section 18-802 of the Act.

 

(b)                                       If the Liquidation Event described in Section 12.1(a)(ii) shall occur, the Company shall not be dissolved, and the business of the Company shall be continued, if the requirements of Section 18-801 of the Act for the avoidance of dissolution are satisfied (a “Continuation Election”).

 

(c)                                        Except as otherwise provided in this Section 12.1, to the maximum extent permitted by the Act, the death, retirement, Resignation, expulsion, Bankruptcy or dissolution of a Member or the commencement or consummation of separation proceedings shall not constitute a Liquidation Event and, notwithstanding the occurrence of any such event or circumstance, the business of the Company shall be continued without dissolution.

 

69

 

12.2                        Winding-Up and Termination. On the occurrence of a Liquidation Event, unless a Continuation Election is made, the Board may select one or more Persons to act as liquidator or may itself act as liquidator. The liquidator shall proceed diligently to wind up the affairs of the Company and make final distributions as provided herein and in the Act. The costs of winding up shall be borne as a Company expense, including reasonable compensation to the liquidator if approved by the Board. Until final distribution, the liquidator shall continue to operate the Company properties with all of the power and authority of the Board. The steps to be accomplished by the liquidator are as follows:

 

(a)                                       as promptly as possible after dissolution and again after final winding up, the liquidator shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Company’s assets, liabilities and operations;

 

(b)                                       the liquidator shall pay, satisfy or discharge from Company funds all of the debts, liabilities and obligations of the Company (including all expenses incurred in winding up) or otherwise make adequate provision for payment and discharge thereof (including the establishment of a cash escrow fund for contingent liabilities in such amount and for such term as the liquidator may reasonably determine); and

 

(c)                                        the liquidator shall distribute all remaining assets of the Company to the Members in accordance with Section 12.3 and those distributions shall be made by the end of the taxable year of the Company during which the liquidation of the Company occurs (or, if later, 90 days after the date of the liquidation).

 

All distributions in kind to the Members shall be made subject to the liability of each distributee for costs, expenses and liabilities theretofore incurred or for which the Company has committed prior to the date of termination and those costs, expenses and liabilities shall be allocated to the distributee pursuant to this Section 12.2. The distribution of cash or property to the Members in accordance with the provisions of this Section 12.2 constitutes a complete return to such Member of its Capital Contributions and a complete distribution to the Members of its Membership Interests and all the Company’s property and constitutes a compromise to which all Members have consented within the meaning of Section 18-502(b) of the Act. To the extent that a Member returns funds to the Company, it has no claim against any other Member for those funds.

 

12.3                        Sale Transaction. Upon a Sale Transaction or IPO, the proceeds of such Sale Transaction or IPO shall be distributed as follows:

 

(a)                                       to the extent required by applicable Law or the structure of such Sale Transaction or IPO, to the satisfaction of debts and liabilities (including expenses of liquidation) of the Company (whether by payment or reasonable provision for payment thereof), in order of priority according to the terms of the instruments evidencing such debt and liabilities and as provided by law;

 

(b)                                       to the Members as follows:

 

70

 

(i)                                     with respect to a Sale Transaction or IPO prior to January 1, 2017, to the Common Members in accordance with their respective Percentage Interests; or

 

(ii)                                  with respect to a Sale Transaction or IPO on or after January 1, 2017, (x) first, to the Common Members, pro rata in accordance with their respective Percentage Interests, until the Series A-2 Members have received cumulative distributions from the Company sufficient to achieve a Series A-2 IRR of 21% and (y) thereafter, to the Common Members in accordance with their Upside Sharing Percentages; provided, that,

 

notwithstanding the foregoing clause (ii) of this Section 12.3(b), if the amount distributable to the Series A-2 Members pursuant to Section 12.3(b)(ii)(x) is not sufficient to result in cumulative distributions to the Series A-2 Members sufficient to result in a Series A-2 IRR of at least 10%, then Section 12.3(b)(ii)(x) and (y) shall not be applicable, and instead amounts distributable pursuant to this Section 12.3(b) shall be distributed to the Series A-2 Members until the Series A-2 Members achieve a Series A-2 IRR of 10%, with the remainder distributed to the other Common Members (excluding the Series A-2 Members) in accordance with their respective Percentage Interests.

 

12.4                        Deficit Capital Accounts. No Member shall be required to pay to the Company, to any other Member or to any third party any deficit balance which may exist from time to time in the Member’s Capital Account.

 

12.5                        Certificate of Cancellation. On completion of the distribution of Company assets as provided in this Agreement, the Board (or such other Person or Persons as the Act may require or permit) shall file a Certificate of Cancellation with the Secretary of State of Delaware, cancel any other filings made pursuant to Section 2.5, and take such other actions as may be necessary to terminate the existence of the Company. Upon the effectiveness of the Certificate of Cancellation, the existence of the Company shall cease, except as may be otherwise provided by the Act or other applicable Law.

 

ARTICLE 13
 GENERAL PROVISIONS

 

13.1                        Offset. Whenever the Company is to pay or distribute any amount to any Member, any amounts that such Member, in its capacity as a Member, owes the Company, whether pursuant to any Related Document (other than an Employment Agreement) or otherwise, may be deducted from the amount to be paid or distributed to such Member before payment or distribution.

 

71

 

13.2                        Notices.

 

(a)                                       Except as expressly set forth to the contrary in this Agreement, all notices, requests or consents provided for or required to be given hereunder shall be in writing and shall be deemed to be duly given if personally delivered, sent by telecopy or electronic mail and confirmed, or mailed by certified mail, return receipt requested, or nationally recognized overnight delivery service with proof of receipt maintained, at the following addresses (or any other address that any such party may designate by written notice to the other parties in accordance with this Section 13.2):

 

(i)                                     if to the Company, at the address of its principal executive offices;

 

(ii)                                  if to a Member as of the Effective Date, to the address given for the Member on Schedule I; and

 

(iii)                               if to an Additional Member, Substituted Member or a holder of Membership Interests that has not been admitted as a Member, to the address given for such Member or holder in an Addendum Agreement.

 

Any such notice shall, if delivered personally, be deemed received upon delivery; shall, if delivered by telecopy or electronic mail, be deemed received on the Business Day of confirmation; shall, if delivered by certified mail, be deemed received upon actual receipt thereof or three Business Days after the date of deposit in the United States mail, as the case may be; and shall, if delivered by nationally recognized overnight delivery service, be deemed received the Business Day after the date of deposit with the delivery service.

 

(b)                                       Whenever any notice is required to be given by Law, the Certificate or this Agreement, a written waiver thereof, signed by the Person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

 

13.3                        Entire Agreement; Supersedure. This Agreement (including the Exhibits and Schedules) constitutes the entire agreement of the Members relating to the subject matter hereof and supersedes all prior contracts or agreements with respect to the Company, whether oral or written, but nothing herein is, or shall be deemed to be, a limitation on the terms and provisions of the Transaction Agreement.

 

13.4                        Effect of Waiver or Consent. A waiver or consent, express or implied, to or of any breach or default by any Person in the performance by that Person of its obligations with respect to the Company is not a consent or waiver to or of any other breach or default in the performance by that Person of the same or any other obligations of that Person with respect to the Company. Failure on the part of a Person to complain of any act of any Person or to declare any Person in default with respect to the Company, irrespective of how long that failure continues, does not constitute a waiver by that Person of its rights with respect to that default until the applicable statute-of-limitations period has run.

 

72

 

13.5                        Amendment or Restatement; Power of Attorney.

 

(a)                                       Notwithstanding anything to the contrary in this Agreement, in addition to the approvals required under Section 8.2 and/or Section 8.4(b), any amendment, modification, supplement or restatement of this Agreement (including any Exhibit or Schedule hereto) or the Certificate and any waiver of any provision thereof shall also require approval of the Class A Members representing 50% of the Class A Common Units; provided, however, that:

 

(i)                                     any such amendment, modification, supplement, restatement or waiver in connection with any creation, authorization or issuance of a new series of Units or other Equity Interests of the Company by the Board pursuant to the authority contained in Section 3.7(a) shall only require the approval of the Board and Requisite Member Approval;

 

(ii)                                  any such amendment, modification, supplement, restatement or waiver in connection with any IPO only require the approval of the Board and Requisite Member Approval;

 

(iii)                               any such amendment, modification, supplement, restatement or waiver in connection with (A) any Qualified Public Offering shall only require the approval of the Series A-2 Majority, (B) any Qualified MLP IPO shall only require the approval of all Series A-1 Managers or (B) any IPO (other than pursuant to clauses (A) or (B)) shall only require the approval of the Board and Requisite Member Approval;

 

(iv)                              any such amendment, modification, supplement, restatement or waiver that would alter or change the rights, obligations, powers or preferences of one or more Members in the capacity as a holder of a specific series of Membership Interests in a disproportionate and adverse manner (other than in a de minimis, non-economic respect, compared to other Members in their capacities as holders of the same series of Membership Interests) shall also require the prior written consent of Members holding greater than 50% of the Membership Interests so disproportionately and adversely affected (for the avoidance of doubt, with respect to an amendment that affects the Class B Members in a disproportionate and adverse manner as compared to the Class A Members, only the prior written consent of Class B Members holding greater than 50% of the Class B Common Units shall be required);

 

(v)                                 any such amendment, modification, supplement, restatement or waiver to reflect a Disposition made in accordance with this Agreement or other administrative or immaterial changes shall only require the approval of the Board (and the Board shall approve the necessary amendment or modification, to reflect a Disposition made in accordance with this Agreement); and

 

73

 

(vi)                              any such amendment to Schedule VIII to reflect the delegation or revocation of duties to any one or more Officers shall only require the approval of the Board in accordance with Section 8.2 and Section 8.3(c).

 

(b)                                       Notwithstanding anything to the contrary in this Section 13.5, if the amendments to Treasury Regulations §§ 1.704-1 and 1.704-3 proposed on January 22, 2003 (and corrected on March 28, 2003) are adopted as final (or temporary) rules (the “New Rules”), the Board is authorized to make such amendments to this Agreement (including provision for any safe harbor election authorized by the New Rules) as the Board may determine to be necessary or advisable to comply with or reflect the New Rules; provided that such amendments do not materially alter the economic rights of the Members under this Agreement other than the timing of distributions pursuant to Section 6.1(b).

 

(c)                                        Except as required by Law, no amendment, modification, supplement, discharge or waiver of or under this Agreement shall require the consent of any Person not a party to this Agreement.

 

(d)                                       Each Member irrevocably makes, constitutes and appoints each Manager, acting individually or collectively, as its true and lawful agent and attorney-in-fact, with full power of substitution and full power and authority in its name, place and stead, to make, execute, sign, acknowledge, swear to, record and file (i) any amendment, modification, supplement, restatement or waiver of any provision of this Agreement that has been approved in accordance with this Agreement, (ii) all other instruments, certificates, filings or papers not inconsistent with the terms of this Agreement which may be necessary or advisable in the determination of the Board to evidence an amendment, modification, supplement, restatement or waiver of, or relating to, this Agreement (including changes to the Members’ Schedule), (iii) all instruments required or necessary to admit Additional Members and Substituted Members to the Company and to issue additional Units or other Membership Interests (or securities convertible into or exercisable or exchangeable for Membership Interests) as provided in this Agreement, (iv) all conveyances and other instruments or papers required or necessary, to effect the dissolution and termination of the Company pursuant to the provisions of this Agreement; and (v) all other instruments or papers not inconsistent with the terms of this Agreement which may be required to give effect or carry out another provision of this Agreement or which may be required by Law to be filed on behalf of the Company or required to permit the Company to become or continue to be a limited liability company in each jurisdiction where the Company may be doing business.

 

(e)                                        With respect to each Member and each Additional Member or Substituted Member, the foregoing power of attorney referred to in clause (d) above (i) is coupled with an interest and given to secure a proprietary interest, shall be irrevocable and shall survive the incapacity or Bankruptcy of such Member, (ii) may be exercised by the Board through any Manager either by signing separately as attorney-in-fact for such Member or, after listing all of the Members executing an instrument, by a single signature of such Manager acting as attorney-in-fact for all of them and (iii) shall survive the Disposition by

 

74

 

such Member of all or any portion of the Membership Interests held by such Member; except that, where the assignee of the whole of such Member’s interest has been approved in accordance with the terms hereof for admission to the Company as an Additional Member or Substituted Member, the power of attorney of the assignor shall survive the delivery of such assignment for the sole purpose of enabling the Company to execute, swear to, acknowledge and file any instrument necessary or appropriate to effect such substitution.

 

13.6                        Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the Company and each Member and their respective heirs, permitted successors, permitted assigns, permitted distributees and legal representatives; and by their signatures hereto, the Company and each Member intends to and does hereby become bound. Each Member may bring a claim against any other Member or the Company for breaches of this Agreement or any other Related Document by a Member, the Company or other applicable Person, including the making or defending any claim on behalf of the Company. Except as set forth in Section 8.5(a) or Section 9.1(d), nothing expressed or mentioned in this Agreement is intended or shall be construed to give any Person other than the parties hereto and their respective successors and permitted assigns any legal or equitable right, remedy or claim under, in or in respect of this Agreement or any provision of this Agreement. The rights under this Agreement may be assigned by a Member to a transferee of all or a portion of such Member’s Membership Interests Disposed of in accordance with this Agreement (and shall be assigned to the extent this Agreement requires such assignment), but only to the extent of such Membership Interests so Disposed; it being understood that the assignment of any rights under this Agreement shall not constitute admission to the Company as a Member unless and until such transferee is duly admitted as a Member in accordance with this Agreement.

 

13.7                        Governing Law; Severability; Limitation of Liability.

 

(a)                                       THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.

 

(b)                                       Except as set forth in Section 8.2(q) or Section 8.2(r), and then solely relating to a Board Deadlock or termination of an Officer for Cause, and then subject to the provisions and other limitation set forth therein, the parties hereto hereby irrevocably submit to the exclusive jurisdiction of the Delaware Chancery Courts located in Wilmington, Delaware, or, if such court shall not have jurisdiction, any federal court of the United States of or other Delaware state court located in Wilmington, Delaware, and appropriate appellate courts therefrom, over any dispute arising out of or relating to this Agreement or the other Related Documents or any of the transactions contemplated hereby or thereby, and each party hereby irrevocably agrees that all claims in respect of such dispute may be heard and determined in such courts. The parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection which they may now or hereafter have to the laying of venue of any dispute arising out of or relating to this Agreement or the other Related Documents or any of the transactions contemplated

 

75

 

hereby or thereby brought in such courts or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. This consent to jurisdiction is being given solely for purposes of this Agreement and the other Related Documents and is not intended to, and shall not, confer consent to jurisdiction with respect to any other dispute in which a party to this Agreement or any other Related Document may become involved. Each of the parties hereto hereby consents to process being served by any party to this Agreement in any suit, action, proceeding or counterclaim of the nature specified in this subsection (b) by the mailing of a copy thereof in the manner specified by the provisions of Section 13.2. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OR ANY OTHER RELATED DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

(c)                                        In the event of a direct conflict between the provisions of this Agreement and (i) any provision of the Certificate or (ii) any mandatory, non-waivable provision of the Act, such provision of the Certificate or the Act shall control. If any provision of the Act provides that it may be varied or superseded in the agreement of a limited liability company (or otherwise by agreement of the members or managers of a limited liability company), such provision shall be deemed superseded and waived in its entirety if this Agreement contains a provision addressing the same issue or subject matter.

 

(d)                                       If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future Laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of each such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

 

13.8                        Further Assurances. In connection with this Agreement and the transactions contemplated hereby, the Company and each Member shall execute and deliver all such future instruments and take such other and further action as may be reasonably necessary or appropriate to carry out the provisions of this Agreement and the intention of the parties as expressed in this Agreement.

 

76

 

13.9                        Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original of the Agreement and all of which, when taken together, will be deemed to constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission or scanned and e-mailed transmission will constitute effective execution and delivery of this Agreement and may be used in lieu of the original Agreement for all purposes. At the request of any party to this Agreement, the other parties to this Agreement will confirm facsimile or scanned and emailed transmission by signing a duplicate original document.

 

13.10                 Savings Clause. With respect to any interest rate referenced in this Agreement (relating to any loan or other indebtedness or Units or other Equity Interests), if such interest rate exceeds the maximum interest rate permitted by applicable Law, such interest rate shall be automatically reduced to the maximum interest rate permitted by applicable Law.

 

[Signature page follows]

 

77

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

	
 
    	
EUREKA   HUNTER HOLDINGS, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

	
 
    	
MSIP   II BUFFALO HOLDINGS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:   Morgan Stanley Infrastructure II, Inc., its Manager
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

	
 
    	
MAGNUM   HUNTER RESOURCES CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

	
 
    	
TT   TRANSITION, LP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

	
 
    	
FIVE   TALENTS OIL & GAS LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
 
    
	
 
    	
Name:   Gary C. Evans
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
AJAE   Limited Partnership
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Gary C. Evans
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Christopher T. Akers
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Donald L. Kirkendall
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Daniel A. McCormick
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Everett Gabriel Scott
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Darren C. Espey
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Ronald J. Huffman
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Shawn E. Davis
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Phillip T. Greene
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Brianne L. Dylla
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Collin R. Moe
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Stephen L. Daggett
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Cynthia M. James
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of the date first set forth above.

 

 

	
 
    	
CLASS B   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Cynthia M. James
    

 

SIGNATURE PAGE TO

EUREKA HUNTER HOLDINGS, LLC

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

 

EXHIBIT A

DEFINED TERMS

 

“2014 Projects” has the meaning assigned in Section 5.2(d).

 

“4-Year Trailing EBITDA” means, as of a Performance Measurement Date, the EBITDA of the Company and its Subsidiaries during the four (4)-year period ending on such Performance Measurement Date.

 

“10% Holder” has the meaning assigned in Section 10.1(a).

 

“AAA” has the meaning assigned in Section 8.2(q)(i).

 

“Acceptance Notice” has the meaning assigned in Section 7.3(b).

 

“Accredited Investor” has the meaning assigned to such term in the regulations promulgated under the Securities Act.

 

“Act” means the Delaware Limited Liability Company Act and any successor statute, as amended from time to time.

 

“Addendum Agreement” has the meaning assigned in Section 3.7(b).

 

“Additional Member” means any Person that is not already a Member who acquires (a) a portion of the Membership Interests held by a Member from such Member or (b) newly issued Membership Interests from the Company and, in each case, is admitted to the Company as a Member pursuant to the provisions of Section 3.7.

 

“Adjusted Capital Account” means the Capital Account maintained for each Member, (a) increased by any amounts that such Member is obligated to restore or is treated as obligated to restore under Treasury Regulation Sections 1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5) and (b) decreased by any amounts described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) with respect to such Member.

 

“Affiliate” means, when used with respect to a specified Person, any Person which directly or indirectly Controls, is Controlled by or is Under Common Control with such specified Person; provided, that, GreenHunter Resources, Inc. and its Subsidiaries shall not be deemed Affiliates of any MHR Affiliated Member for purposes of Section 8.5(b).

 

“Affiliate Agreement” has the meaning assigned in Section 8.4(b)(xiii). For the avoidance of doubt, without limiting the scope of the defintion of Affiliate Agreement, the Gas Gathering Agreement, the Services Agreement and the other Contracts set forth on Schedule 4.12 of the Transaction Agreement are Affiliate Agreements.

 

“Affiliated Members” means, as to any Member, each other Member that is an Affiliate of such Member.

 

 

“Aggregate Remaining Percentage Interest” means the sum of (i) 100% less (ii) the Aggregate Series A-2 Percentage Interest.

 

“Aggregate Series A-2 Percentage Interest” means the sum of the Percentage Interest of all Series A-2 Members.

 

“Agreement” means this Second Amended and Restated Limited Liability Company Agreement of the Company, as it may be amended, restated or otherwise modified from time to time in accordance with the terms hereof.

 

“Annual Budget” has the meaning assigned in Section 8.1(b).

 

“Appellate Rules” has the meaning assigned in Section 8.2(q)(ii).

 

“Applicable Indemnitees” has the meaning assigned in Section 9.5.

 

“Approved Project” has the meaning assigned in Section 5.2(b).

 

“ArcLight” has the meaning assigned in the recitals.

 

“ArcLight UPA” has the meaning assigned in the recitals.

 

“Assumed Tax Liability” of each Member means, as of each Tax Distribution Date, an amount equal to (i) the cumulative amount of federal, state and local income Taxes (including any applicable estimated Taxes), determined taking into account the character of income and loss allocated as it affects the applicable Tax rate, that the Board estimates would be due from such Member as of such Tax Distribution Date, (x) assuming such Member were an individual who earned solely the items of income, gain, deduction, loss, and/or credit allocated to such Member pursuant to Section 6.3 (after reflecting any adjustments thereto by reason of Code Section 732(d), 734 or 743), (y) after taking proper account of loss carryforwards available to individual taxpayers resulting from losses allocated to the Members by the Company, to the extent not taken into account in prior periods and (z) assuming that such Member is subject to Tax at the highest applicable rate, reduced by (ii) all previous distributions made to such Member pursuant to Section 6.1.

 

“Available Cash” means, as of any date of determination, the aggregate amount of cash on hand of the Company and its Subsidiaries which the Board determines in good faith is available for distribution, taking into account all debts, liabilities and obligations of the Company and its Subsidiaries, contractually-obligated cash reserves of the Company and its Subsidiaries, reserves for any expenditures, working capital needs or other capital requirements (including capital expenditures) or contingencies.

 

“Bankruptcy” or “Bankrupt” means (a) with respect to any Person, that such Person: (i) makes a general assignment for the benefit of creditors; (ii) files a voluntary bankruptcy petition; (iii) becomes the subject of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvency proceedings; (iv) files a petition or answer seeking for such Person a reorganization, arrangement with creditors, composition with creditors, readjustment, liquidation, dissolution or similar relief under any Law; (v) files an answer or other pleading

 

 

admitting or failing to contest the material allegations of a petition filed against such Person in a proceeding of the type described in clauses (i) through (iv) of this clause (a); or (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of such Person or of all or any substantial part of such Person’s properties; or (b) a proceeding seeking reorganization, arrangement with creditors, composition with creditors, readjustment, liquidation, dissolution or similar relief under any Law has been commenced against such Person and 120 days have expired without dismissal thereof or with respect to which, without such Person’s consent or acquiescence, a trustee, receiver or liquidator of such Person or of all or any substantial part of such Person’s properties has been appointed and 90 days have expired without the appointment having been vacated or stayed, or 90 days have expired after the date of expiration of a stay, if the appointment has not previously been vacated.

 

“Baseline Value” has the meaning assigned in Section 3.1(b).

 

“Blocker Corporation” has the meaning assigned in Section 7.5(g).

 

“Board” has the meaning assigned in Section 8.1(a).

 

“Board Deadlock” has the meaning assigned in Section 8.2(q)(i).

 

“Book Liability Value” means with respect to any liability of the Company described in Treasury Regulation Section 1.752-7(b)(3)(i), the amount of cash that a willing assignor would pay to a willing assignee to assume such liability in an arm’s length transaction. The Book Liability Value of each liability of the Company described in Treasury Regulation Section 1.752-7(b)(3)(i) shall be adjusted at such times as provided in this Agreement for an adjustment to Book Value; provided, that, such adjustments shall be made only if the Board reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company.

 

“Book Value” means, with respect to any property of the Company, such property’s adjusted basis for federal income tax purposes, except as follows:

 

(a)                                 The initial Book Value of any property contributed by a Member to the Company shall be the fair market value of such property as of the date of contribution as reasonably determined by the Board;

 

(b)                                 The Book Values of all properties shall be adjusted to equal their respective fair market values as reasonably determined by the Board in connection with (i) the consummation of the Effective Date Transactions, (ii) the acquisition of an interest (or additional interest) in the Company by any new or existing Member in exchange for more than a de minimis capital contribution to the Company, (iii) the distribution by the Company to a Member of more than a de minimis amount of property as consideration for an interest in the Company, (iv) the liquidation of the Company within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g)(1) (other than pursuant to Section 708(b)(1)(B) of the Code), (v) the acquisition of an interest in the Company by any new or existing Member upon the exercise of a noncompensatory option or warrant, (vi) the acquisition of an interest in the Company by any new or existing Member as consideration for the provision of services to or for the benefit of the Company (including

 

 

*             THE REGISTRANT HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS OF THIS EXHIBIT.  ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE SEC.  OMITTED PORTIONS ARE INDICATED BY “[REDACTED]*”.

 

any Compensatory Membership Interests) or (vii) any other event to the extent determined by the Board to be permitted and necessary to properly reflect Book Values in accordance with the standards set forth in Treasury Regulation Section 1.704-1(b)(2)(iv)(q); provided that adjustments pursuant to clauses (ii) and (iii) above shall be made only if the Board reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company. If any noncompensatory options or warrants are outstanding upon the occurrence of an event described in this paragraph (b)(i) through (b)(vii), the Company shall adjust the Book Values of its properties in accordance with Treasury Regulation Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2);

 

(c)                                  The Book Value of property distributed to a Member shall be adjusted to equal the fair market value of such property as of the date of distribution as reasonably determined by the Board;

 

(d)                                 The Book Value of all property shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such property pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) and clause (g) of the definition of Profits and Losses or Section 6.2(b)(vii); provided, however, that Book Value shall not be adjusted pursuant to this clause (d) to the extent the Board reasonably determines that an adjustment pursuant to clause (b) of this definition is necessary or appropriate in connection with the transaction that would otherwise result in an adjustment pursuant to this clause (d);

 

(e)                                  If the Book Value of property has been determined or adjusted pursuant to clause (b) or (d) of this definition, such Book Value shall thereafter be adjusted by the Depreciation taken into account with respect to such property for purposes of computing Profits and Losses and other items allocated pursuant to Article 6.

 

“Business” means the Company’s and its Subsidiaries’ (a) ownership and operation of a natural gas gathering system in West Virginia and Ohio (including, as of the date of the execution of the Transaction Agreement, the Initial System) and further development of such natural gas gathering system and (b) the sale and leasing of natural gas treating facilities and equipment to third party producers.

 

“Business Day” means, with respect to the recipient of any notice, any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close. Any action required to be taken on a day that is not a Business Day shall be taken on the next succeeding Business Day.

 

“Business Opportunity” has the meaning assigned in Section 8.5(b)(iii).

 

“Buyer Member” has the meaning assigned in Section 7.3(b).

 

[REDACTED]*

 

 

“CapEx Budget” has the meaning assigned in Section 8.1(b).

 

“CapEx Contribution Closing Date” has the meaning assigned in Section 5.3(a).

 

“CapEx Contribution Request” has the meaning assigned in Section 5.3(a)

 

“CapEx Contributions” has the meaning assigned in Section 5.2(b).

 

“CapEx Proposal” has the meaning assigned in Section 5.2(a)(i).

 

“Capital Account” means the account to be maintained by the Company for each Member pursuant to Section 5.7.

 

“Capital Contribution” means with respect to any Member, the amount of money and the initial Book Value of any property (other than money) contributed to the Company by such Member. Any reference in this Agreement to the Capital Contribution of a Member shall include a Capital Contribution of such Member’s predecessors in interest.

 

“Cause” means, with respect to the removal or termination of a person as an Officer or the termination of employment as provided in Section 8.2(r), (x) the meaning assigned to such term in the applicable Employment Agreement (entered into with Requisite Member Approval) or (y) if not defined therein or such Officer or other employee does not have an Employment Agreement, the following: (i) such person being convicted of, or plea of nolo contendere to, a felony or other crime involving moral turpitude, the misappropriation of funds or other material property of the Company or any of its Subsidiaries or any other act of embezzlement or actual fraud against the Company, any of its Subsidiaries, (ii) substantial and repeated failure to perform material duties as reasonably directed by the Board or (iii) any gross negligence or material willful misconduct or any material breach of fiduciary duty with respect to the Company or any of its Subsidiaries.

 

“Certificate” means the Certificate of Formation of the Company, as amended from time to time.

 

“Class A Common Units” has the meaning assigned in Section 3.1(a).

 

“Class A Members” means, collectively, the Series A-1 Members and Series A-2 Members.

 

“Class B Common Units” has the meaning assigned in Section 3.1(a).

 

“Class B Members” means a holder of issued and outstanding Class B Common Units who is executing this Agreement as a Class B Member or is hereafter admitted to the Company as a Class B Member as provided in this Agreement, but does not include any Person who has ceased to be a Member.

 

“Code” means the United States Internal Revenue Code of 1986, as amended from time to time. All references herein to sections of the Code shall include any corresponding provision or provisions of succeeding Law.

 

 

“Commitment Period” means the period beginning on the Effective Date and ending on the earliest to occur of (i) three (3) years following the Effective Date, (ii) the occurrence of a Material Adverse Effect, (iii) the occurrence of a MHR Default and (iv) the occurrence of a Sale Transaction or IPO.

 

“Common Members” means, collectively, the Class A Members and Class B Members.

 

“Common Units” has the meaning assigned in Section 3.1(a).

 

“Company” has the meaning assigned in the opening paragraph to this Agreement.

 

“Company Certificate” has the meaning assigned in Section 5.3(b).

 

“Compensatory Membership Interest” means a Membership Interest that is described in Proposed Treasury Regulation Section 1.721-1(b)(3), or any successor provision.

 

“Confidential Information” means all confidential and proprietary information concerning the Company and/or any of its Subsidiaries (irrespective of the form of communication) obtained by or on behalf of a Member from MHR or any of its Affiliates, the Company, its Subsidiaries or any of their respective representatives, other than information which (a) was or becomes generally available to the public other than as a result of a breach of this Agreement by such Member, (b) was or becomes available to such Member on a non-confidential basis prior to disclosure to the Member by the Company, its Subsidiaries or any of their respective representatives, (c) was or becomes lawfully available to the Member on a non-confidential basis from sources other than the Company its Subsidiaries or any of their respective representatives, provided, that, such Member does not know that such sources are prohibited by contractual, legal or fiduciary obligation from transmitting the information, or (d) is independently developed by such Member without the use of or reference to any such information received under this Agreement; provided, that any information developed by MHR or its Affiliates concerning the Company or any of its Subsidiaries shall not be subject to this clause (d) and such information shall be shared with the other Members and shall constitute Confidential Information.

 

“Continuation Election” has the meaning assigned in Section 12.1(b).

 

“Contract” means, with respect to any Person, any contract, agreement, consulting arrangement, lease and sublease (including any lease and sublease of real property), license, commitment, sale and purchase order and other undertaking of any kind, whether written or oral, to which such Person is a party, under which such Person is otherwise entitled to benefits or by which such Person otherwise is bound.

 

“Control,” including the correlative terms “Controlling,” “Controlled by” and “Under Common Control with” means possession, directly or indirectly (through one or more intermediaries), of the power to direct or cause the direction of management or policies (whether through ownership of securities or any partnership or other ownership interest, by Contract or otherwise) of a Person.

 

“Covered Person” means any M&O Covered Person or Member Covered Person.

 

 

“Creditors’ Rights” means applicable bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights and remedies generally and to general equitable principles.

 

“De Minimis Project” has the meaning assigned in Section 5.4.

 

“Deadlock Budget” has the meaning assigned in Section 8.1(b).

 

“Deadlock Resolution Period” has the meaning assigned in Section 8.2(q)(i).

 

“Declined Opportunity” has the meaning assigned in Section 8.5(b)(iii).

 

“Delegation Policy” has the meaning assigned in Section 8.3(c).

 

“Depreciation” means, for each taxable year or other taxable period, an amount equal to the depreciation, amortization or other cost recovery deduction (excluding depletion) allowable for federal income tax purposes with respect to property for such taxable period, except that (a) with respect to any property the Book Value of which differs from its adjusted tax basis for federal income tax purposes and which difference is being eliminated by use of the remedial allocation method pursuant to Treasury Regulation Section 1.704-3(d), Depreciation for such taxable period shall be the amount of book basis recovered for such taxable period under the rules prescribed by Treasury Regulation Section 1.704-3(d)(2), and (b) with respect to any other property the Book Value of which differs from its adjusted tax basis at the beginning of such taxable period, Depreciation shall be an amount which bears the same ratio to such beginning Book Value as the federal income tax depreciation, amortization or other cost recovery deduction for such taxable period bears to such beginning adjusted tax basis; provided that, if the adjusted tax basis of any property at the beginning of such taxable period is zero, Depreciation with respect to such property shall be determined with reference to such beginning value using any reasonable method selected by the Board.

 

“Disposition,” including the correlative terms “Dispose”, “Disposed” or “Disposing”, means any direct disposition, transfer, assignment, sale, pledge, hypothecation, mortgage or other disposition (whether voluntary or involuntary) of Membership Interests or other Equity Interests to another Person.

 

“Drag-Along Transaction” has the meaning assigned in Section 7.4(a).

 

“Drag Initiating Members” has the meaning assigned in Section 7.4(a).

 

“EBITDA” means, for any measurement period,

 

(a) the sum, without duplication, of the amounts for such measurement period of (i) consolidated net income of the Company for such measurement period plus (ii) solely to the extent deducted in arriving at such consolidated net income:

 

(A) all interest paid or accrued during such period on Indebtedness (including amortization of original issue discount and the interest component of any deferred payment obligations and capital lease obligations) that was deducted in determining such consolidated net income;

 

 

(B) total depreciation expense;

 

(C) total amortization expense, including the amortization of deferred financing fees and any amortization of the fair value of intangible assets reflected in, or offset against, revenues or operating expenses in the calculation of consolidated net income;

 

(D) any non-cash loss attributable to the mark-to-market movement and/or hedge accounting in the valuation of derivative instruments pursuant to GAAP;

 

(E) any reasonable and customary expenses or charges incurred in connection with any issuance of debt or equity;

 

(F) any reasonable fees, transfer or mortgage recording taxes and other out-of-pocket costs and expenses incurred as a result of the transactions contemplated by this Agreement;

 

(G) any impairment charge or asset write-off pursuant to GAAP and the amortization of intangibles arising pursuant to GAAP;

 

(H) any losses from the early extinguishment of Indebtedness;

 

(I) any non-cash losses that result from the application of lease accounting under GAAP;

 

(J) any losses from any sale, lease (as lessor) sale and leaseback, assignment, conveyance, exclusive license (as licensor), transfer or other disposition of property;

 

(K) all income taxes that were deducted in determining such consolidated net income;

 

(L) any other non-cash charge or losses decreasing consolidated net income for such measurement period, but excluding any such change that represents an accrual or reserve for a cash expenditure for a future period;

 

(b) less the sum of the amounts for such measurement period of:

 

(A) any non-cash gains increasing consolidated net income for such measurement period, other than the accrual of revenues or expenses in the ordinary course of business;

 

(B) any non-cash gain attributable to the mark-to-market movement and/or hedge accounting in the valuation of derivative instruments pursuant to GAAP;

 

(C) any gains from the early extinguishment of Indebtedness;

 

(D) any gains from any sale, lease (as lessor) sale and leaseback, assignment, conveyance, exclusive license (as licensor), transfer or other disposition of property; and

 

(E) any non.-cash gains that result from the application of lease accounting under GAAP.

 

 

“Economic Risk of Loss” has the meaning assigned to that term in Treasury Regulation Section 1.752-2(a).

 

“Effective Date” has the meaning assigned in the opening paragraph.

 

“Effective Date Capital Account Balance” has the meaning assigned in Section 5.7(a).

 

“Effective Date Transactions” has the meaning assigned in Section 3.2.

 

“Electing Member” means, as applicable, (i) in the case of the Series A-1 Members, one or more Members constituting the Series A-1 Majority entitled to elect Managers pursuant to Section 8.2(a)(ii) and (ii) in the case of the Series A-2 Members, one or more Members constituting the Series A-2 Majority entitled to elect Managers pursuant to Section 8.2(a)(iii).

 

“Eligible Member” means each Class A Member; provided, that, (i) no Class A Member shall be an Eligible Member for purposes of exercising rights to acquire Membership Interests from a ROFO Offeror pursuant to a ROFO Disposition, unless such Class A Member is an Accredited Investor and demonstrates to the reasonable satisfaction of the ROFO Offeror that it has the financial wherewithal to acquire such Membership Interests, (ii) only Class A Members holding (together with its Affiliated Members) at least 10% of the Class A Common Units shall be deemed Eligible Members in connection with a proposed CapEx Contribution (including Capital Contributions in respect of De Minimis Projects), (iii) the ROFO Offeror shall not be deemed an Eligible Member in a ROFO Disposition, (iv) only Series A-2 Members shall be deemed Eligible Members in a Tag-Along Sale and (v) the MHR Affiliated Members shall not be Eligible Members for purposes of exercising rights to acquire Membership Interests from a ROFO Offeror pursuant to a ROFO Disposition if, at the time in question, there exists a MHR Default.

 

“Employee Transfer” has the meaning assigned to such term in Section 10.10.

 

“Employment Agreement” means any employment agreement between any Person and the Company or any of its Subsidiaries, in each case in such form as may be approved by the Board and Requisite Member Approval.

 

“Equity Award Agreement” means any grant agreement or plan (including the Equity Incentive Plan and any award agreement with respect to Class B Common Units issued pursuant to the Equity Incentive Plan and, if applicable, any Employment Agreement) that the Company or any of its Subsidiaries enters into regarding the issuance of Class B Common Units or other Membership Interests or securities of any such Subsidiary to directors, officers, managers, employees or consultants of the Company or its Subsidiaries, in such form as may be approved by the Board and Requisite Member Approval.

 

“Equity Incentive Plan” means the Eureka Hunter Holdings, LLC Management Incentive Compensation Plan, a copy of which is attached as Exhibit C hereto, the award of incentive plan units thereunder and the award of Class B Common Units of the Company pursuant to the terms of an Equity Award Agreement, in the form attached as Exhibit C hereto, and the Original Agreement or this Agreement, as the foregoing may be amended from time to time after the date hereof with the approval of the Board and Requisite Member Approval.

 

 

“Equity Interests” means (a) capital stock, member interests, partnership interests, other equity interests, rights to profits or revenue and any other similar interest in any corporation, partnership, limited liability company or other business entity, (b) any security or other interest convertible into or exchangeable or exercisable for any of the foregoing, whether at the time of issuance or upon the passage of time or the occurrence of some future event and (c) any warrant, option or other right (contingent or otherwise) to acquire any of the foregoing.

 

“Excluded Claims” has the meaning assigned in Section 9.6(e).

 

“Excluded Issuance” has the meaning assigned in Section 7.7(a).

 

“Excluded ROFO Disposition” has the meaning assigned in Section 7.3(f).

 

“Excluded Tag Disposition” has the meaning assigned in Section 7.5(i).

 

“Existing Revolver” means that certain syndicated revolving credit facility, dated as of March 28, 2014, by and among Eureka Hunter Pipeline, LLC, ABN AMRO Capital USA LLC as Administrative Agent, sole Lead Arranger and LC Issuer, and the lenders and other parties thereto

 

“Expected Completion Date” has the meaning assigned in Section 5.2(a)(iv).

 

“Fair Market Value” means, as of any date of determination, (a) with respect to a particular security that is (i) listed or admitted to trading on any national securities exchange, the last reported sale price regular way or, in case no such reported sale takes place on such day, the average of the last closing bid and asked prices regular way, in either case on the principal national securities exchange on which such security is listed or admitted to trading or (ii) not listed or admitted to trading on any national securities exchange but for which bid and asked prices are available from members of the Financial Industry Regulatory Authority, the average of the closing bid and asked prices as furnished by two members of the Financial Industry Regulatory Authority selected from time to time by the Board for that purpose; provided, however, that notwithstanding anything to the contrary in the foregoing provisions of this clause (a), if the date for which the Fair Market Value is to be determined is the first day when trading for such security is reported on a national securities exchange, the Fair Market Value shall be the “price to public” or equivalent set forth in the cover page for the final prospectus relating to the initial public offering of such security or (b) with respect to any security or other asset not described in clause (a) of this definition (i) in the case of determining the value of such security or other asset with respect to an offer from a Third Party in a ROFO Disposition, the fair market value of such asset as of such date determined by an independent appraiser (other than one of the “Big Four” accounting firms) experienced in valuing securities or assets jointly selected by the ROFO Offeror, on the one hand, and the Buyer Member(s), on the other hand, which determination shall be conclusive and binding for all purposes (provided, that, if the ROFO Offeror and the Buyer Member(s) fail to so agree on an independent appraiser within five Business Days after the request by the ROFO Offeror or the Buyer Member(s), then the ROFO Offeror, on the one hand, and the Buyer Member(s), on the other hand, shall each select one independent appraiser and such independent appraisers shall jointly select a third independent appraiser (other than one of the “Big Four” accounting firms) to resolve the disputed

 

 

matters, which determination shall be conclusive and binding for all purposes; provided, further, that if the ROFO Offeror, on the one hand, or the Buyer Member(s), on the other hand, fails to select an independent appraiser contemplated in the immediately preceding proviso within five Business Days following receipt of notice from the Buyer Member(s) or the ROFO Offeror, respectively, of such other Person’s independent appraiser, then such other Person’s independent appraiser shall resolve the disputed matters, and such independent appraiser’s determination shall be conclusive and binding for all purposes), (ii) in the case of determining the value of such security or other asset with respect to a Drag-Along Transaction, the fair market value of such asset as of such date determined by the Drag Initiating Members in their discretion acting in good faith, which determination shall be conclusive and binding for all purposes, (iii) in the case of determining the value of such security or other asset with respect to a Qualified Public Offering pursuant to Section 7.6, the fair market value of such asset as of such date determined by the IPO Initiating Members in their discretion acting in good faith, which determination shall be conclusive and binding for all purposes, (v) in the case determining the value of IPO Securities with respect to a MLP IPO pursuant to Section 10.7, the value of such IPO Securities based on the per share net offering price in such MLP IPO as shown on the cover of the final prospectus delivered to potential investors or (iv) in all other cases, the fair market value of such asset as of such date determined by the Board, in its discretion acting in good faith, which determination shall be conclusive and binding for all purposes.

 

“Formation Date” has the meaning assigned in the recitals.

 

“Funding Member” has the meaning assigned in Section 5.2(a)(iv).

 

“Funding Schedule” has the meaning assigned in Section 5.2(a)(iv).

 

“Funding Share” means, as of any time with respect to any Funding Member for any Approved Project, a fraction (expressed as a percentage), the numerator of which equals the aggregate amount of Requested CapEx Contributions of such Funding Member for such Approved Project and the denominator of which equals the aggregate amount of Requested CapEx Contributions of all Funding Members for such Approved Project, in each case, as such Funding Shares are set forth in the Project Written Consent.

 

“GAAP” means United States generally accepted accounting principles.

 

“Gas Gathering Agreement” means that certain Amended and Restated Gas Gathering Services Agreement, dated as of March 21, 2012, between Eureka Hunter Pipeline, LLC, Triad Hunter, LLC and MHR, as amended by the GGA Amendment, and as such agreement may be amended from time to time hereafter in accordance with its terms and with Requisite Member Approval.

 

“General OpEx Line Items” has the meaning assigned Section 8.1(b).

 

“GGA Amendment” has the meaning assigned in Section 10.8.

 

“HSR Act” means the Hart Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

 

“Hydrocarbons” shall mean oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom.

 

“Indebtedness” means, without duplication, as of any date of measurement, the Company’s and its Subsidiaries’ (i) indebtedness for borrowed money, (ii) liabilities or obligations evidenced by a note, bond, debenture or similar instrument or upon which interest charges are traditionally paid, (iii) liabilities or obligations under leases that are capitalized (or required to be capitalized in accordance with GAAP), (iv) liabilities or obligations for earnout or similar payments that are reasonably likely to become payable within the 12 months following the applicable date of measurement, (v) reimbursement obligations, contingent or otherwise, in respect of outstanding letters of credit, acceptances and similar obligations and (vi) all Indebtedness (as defined in any other clauses of this definition) of others guaranteed by the Company or any of its Subsidiaries.

 

“Initial MSI Member” means MSIP II Buffalo Holdings, LLC.

 

“Initial System” has the meaning assigned in the Transaction Agreement.

 

“Institutional Investor” means the Initial MSI Member and any Member that is designated an “Institutional Investor” by the Series A-2 Majority, and each of their respective Affiliates (other than the Company and its Subsidiaries).

 

“Insurance Policies” has the meaning assigned in Section 10.5(b).

 

“Interim Period” means the period beginning on the Effective Date and ending on the earlier to occur of (x) the Second Closing and (y) January 1, 2015.

 

“Interim Period Affiliate Agreements” means each Affiliate Agreement (i) entered into during the Interim Period, (ii) on arms-length terms and competitive market rates and (iii) discussed at the monthly teleconference required pursuant to Section 10.1(a)(iv).

 

“IPO” means an initial public offering by the IPO Issuer of Equity Interests pursuant to an effective registration statement under the Securities Act or the consummation of a similar initial public offering by the IPO Issuer pursuant to a comparable process under applicable foreign securities laws.

 

“IPO Exchange” has the meaning assigned in Section 7.6(b).

 

“IPO Initiating Members” has the meaning assigned in Section 7.6(a).

 

“IPO Issuer” means the Company or an Affiliate of the Company (or a Subsidiary of the Company) that will be the issuer in an IPO as determined by the Board with Requisite Member Approval.

 

“IPO Securities” has the meaning assigned in Section 7.6(b).

 

 

*             THE REGISTRANT HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS OF THIS EXHIBIT.  ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE SEC.  OMITTED PORTIONS ARE INDICATED BY “[REDACTED]*”.

 

“Law” means any applicable constitutional provision, statute, act, code (including the Code), law, regulation, rule, ordinance, order, decree, ruling, proclamation, resolution, judgment, decision, declaration, or interpretative or advisory opinion or letter of a domestic, foreign, tribal or international governmental authority or any political subdivision thereof and shall include, for the avoidance of doubt, the Act.

 

“Liabilities” has the meaning assigned in Section 9.1(d).

 

“Liquidation Event” has the meaning assigned in Section 12.1(a).

 

“M&O Covered Person” means (a) each current and former Manager (solely in such Person’s capacity as a Manager), (b) each current and former Officer (solely in such Person’s capacity as an Officer) and (c) each Person not identified in clause (a) or (b) of this definition who is or was a director, officer or employee of any subsidiary of the Company and who the Board expressly designates as a M&O Covered Person in a written resolution.

 

[REDACTED]*

 

“Manager” has the meaning assigned in Section 8.1(a).

 

“Material Adverse Effect” means a material adverse effect has occurred or is reasonably likely to occur with respect to the assets or condition (financial or otherwise) or results of operations of the Company and its Subsidiaries, taken as a whole.

 

“Material Contract” means any Contract (or series of related Contracts):

 

(i) pursuant to which the Company or any of its Subsidiaries are to pay or receive, or are reasonably expected to pay or receive, an aggregate amount in excess of $1,000,000 in any 12-month period (a “Material Operating Contract”);

 

(ii) that limits the ability of the Company or any Subsidiary to compete in any line of business in any geographic area; and/or

 

(iii) pursuant to which the Company or any Subsidiary guarantees the obligations of another Person (other than the Company or any Subsidiary).

 

“Material Operating Contract” has the meaning assigned above.

 

“Mediation Period” has the meaning assigned in Section 8.2(q)(i)(A).

 

“Member” means any Person executing this Agreement as of the date of this Agreement as a member or hereafter admitted to the Company as a member as provided in this Agreement, but such term does not include any Person who has ceased to be a member in the Company.

 

“Member Board Designee” has the meaning assigned in Section 9.2(a)(ii).

 

 

“Member Covered Person” means (a) each Member (including any Member in its capacity as Tax Matters Member, if applicable), (b) each Member’s officers, directors, liquidators, partners, equityholders, managers and members, (c) each Member’s Affiliates (other than the Company and its Subsidiaries) and each of their respective officers, directors, liquidators, partners, equityholders, managers and members and (d) any representatives, agents or employees of any Person identified in clauses (a)-(c) of this definition whom the Board (with Requisite Member Approval) expressly designates as a Member Covered Person in a written resolution; provided, that, the Officers and other employees of the Company or its Subsidiaries shall not be Member Covered Persons (in their capacities as Officers or other employees of the Company or its Subsidiaries).

 

“Member Nonrecourse Debt” has the meaning assigned to the term “partner nonrecourse debt” in Treasury Regulation Section 1.704-2(b)(4).

 

“Member Nonrecourse Debt Minimum Gain” has the meaning assigned to the term “partner nonrecourse debt minimum gain” in Treasury Regulation Section 1.704-2(i)(2).

 

“Member Nonrecourse Deductions” has the meaning assigned to the term “partner nonrecourse deductions” in Treasury Regulation Section 1.704-2(i)(1).

 

“Members’ Schedule” has the meaning assigned in Section 3.6.

 

“Membership Interest” means the interest of a Member in the Company, which may be evidenced by Units or other interests, including rights to distributions (liquidating or otherwise), allocations, notices and information, and all other rights, benefits and privileges enjoyed by that Member (under the Act, the Certificate, this Agreement or otherwise) in its capacity as a Member, and all obligations, duties and liabilities imposed on that Member (under the Act, the Certificate, this Agreement, or otherwise) in its capacity as a Member.

 

“MH Services” means Magnum Hunter Services, LLC, a Delaware limited liability company.

 

“MHR” has the meaning assigned in the opening paragraph.

 

“MHR Affiliated Members” means each of MHR and its Affiliates and each of the Class B Members, in each case only if such Person is a Member; provided, that, for purposes of Section 8.5(b), a Class B Member shall only be a MHR Affiliated Member while such person is an employee or other service provider of MHR, the Company or any of their respective Affiliates.

 

“MHR Catch-Up Contribution” has the meaning assigned in Section 5.5.

 

“MHR Catch-Up Period” has the meaning assigned in Section 5.5.

 

“MHR Certificate” has the meaning assigned in Section 5.3(b).

 

“MHR Default” means any of the following:

 

 

*             THE REGISTRANT HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS OF THIS EXHIBIT.  ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE SEC.  OMITTED PORTIONS ARE INDICATED BY “[REDACTED]*”.

 

(i) so long as MHR and its Affiliates represent not less than 10% of the Company’s and its Subsidiaries’ total throughput for the Pipeline System, a payment breach or breaches by MHR or any of its Affiliates of greater than $2 million in the aggregate under the Gas Gathering Agreement, which breach or breaches have not been cured within 3 months after the occurrence of such breach or breaches;

 

(ii) a material breach or breaches of the representations and warranties in the Transaction Agreement (or any closing certificate delivered thereunder) where (a) MHR had knowledge of such breach or breaches at the time such representations and warranties were made and (b) such breach or breaches result in Losses (as defined in the Transaction Agreement) greater than $10 million in the aggregate (determined without regard to the indemnification obligations of any Person);

 

(iii) (A) a material ultra vires act or breach by any Officer under this Agreement where (x) such Officer is (or was at the time of such ultra vires act or breach) an employee of MHR or its Affiliates (other than the Company or its Subsidiaries) and (y) such Officer is (or was at the time of such ultra vires act or breach) a Series A-1 Manager and (B) where, at the time such act was taken or such breach occurred, such Officer knew or reasonably should have known, based on the express terms and conditions set forth in this Agreement, that such act was ultra vires or in breach of this Agreement or knew or should have known such breach occurred; and/or

 

(iv) a failure of the Second Closing to occur due to a breach of the Transaction Agreement by MHR or any of its Affiliates.

 

“MHR Funding Notice” has the meaning assigned in Section 5.2(a)(iii).

 

“MHR Non-Funding Event” has the meaning assigned in Section 5.2(a)(iii).

 

“MHR Party” means any (i) Person that is a party to any Related Document or Affiliate Agreement and/or (ii) holder of a direct or indirect Equity Interest of any Person referenced in clause (i), but excluding from clause (i) and (ii), any Series A-2 Member or any Affiliate of any Series A-2 Member.

 

“MHR Shortfall Amount” has the meaning assigned in Section 5.5.

 

“Minimum Gain” has the meaning assigned to that term in Treasury Regulation Section 1.704-2(d).

 

“Minority Owners” means, collectively, the following Persons, in their capacity as Series A-1 Members: (i) TransTex, (ii) Five Talents Oil & Gas, LLC, a Texas limited liability company, (iii) Gary C. Evans and (iv) AJAE Limited Partnership, a Texas limited partnership.

 

“MLP IPO” means an IPO consummated as a master limited partnership approved by (i) the IPO Initiating Members pursuant to Section 7.6, (ii) the Board pursuant Section 10.7 or (iii) the Board with Requisite Member Approval.

 

[REDACTED]*

 

 

*             THE REGISTRANT HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS OF THIS EXHIBIT.  ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE SEC.  OMITTED PORTIONS ARE INDICATED BY “[REDACTED]*”.

 

[REDACTED]*

 

[REDACTED]*

 

“New Rules” has the meaning assigned in Section 13.5(b).

 

“New Securities” has the meaning assigned in Section 5.9.

 

“Non-MHR Member” means each Member other than any MHR Affiliated Members.

 

“Non-MLP IPO” means an IPO other than an MLP IPO.

 

“Nonrecourse Deductions” has the meaning assigned that term in Treasury Regulation Section 1.704-2(b).

 

“Offer” has the meaning assigned in Section 7.3(b).

 

“Offer Notice” has the meaning assigned in Section 7.3(b).

 

“Officers” means the officers of the Company and its Subsidiaries appointed by the Board with Requisite Member Approval; provided, that, such officers so appointed may be legally employed by MHR or its Affiliates pursuant to the terms of the Services Agreement.

 

“Operating Budget” has the meaning assigned in Section 8.1(b).

 

“Optional Capital Call” has the meaning assigned in Section 5.9.

 

“Optional Capital Contribution” has the meaning assigned in Section 5.9.

 

“Original Agreement” has the meaning assigned in the recitals.

 

“Other Indemnitors” has the meaning assigned in Section 9.5.

 

“Other Midstream Opportunities” has the meaning assigned in Section 8.5(b)(iv).

 

“Other Project Information” has the meaning assigned in Section 5.2(a)(iv).

 

“Over-Allotment Amount” has the meaning assigned in Section 7.7(b).

 

“Percentage Interest” means with respect to a holder of Common Units, the quotient of (i) the number of outstanding Common Units held by such holder, divided by (ii) the total number of outstanding Common Units.

 

“Performance Failure” has the meaning assigned in Section 8.2(a)(iii).

 

“Performance Failure Certificate Cure” has the meaning assigned in Section 10.1(a)(ix).

 

“Performance Measurement Date” has the meaning assigned in Section 8.2(a)(iii).

 

 

“Performance Period” has the meaning assigned in Section 8.2(a)(iii).

 

“Permitted CapEx Overage” has the meaning assigned in Section 8.4(b)(i).

 

“Permitted Early Stage CapEx” has the meaning assigned in Section 8.4(b)(i).

 

“Permitted Opex Overage” has the meaning assigned in Section 8.4(b)(i).

 

“Permitted Transferee” means, with respect to any Member, an Affiliate of such Member.

 

“Person” means any natural person, firm, limited partnership, general partnership, association, corporation, limited liability company, company, trust, other organization (whether or not a legal entity), public body or government or agency or political subdivision thereof.

 

“Pipeline System” has the meaning assigned in the Transaction Agreement.

 

“Preemptive Right Election Period” has the meaning assigned in Section 7.7(b).

 

“Preemptive Rights Closing Date” has the meaning assigned in Section 7.7(b).

 

“Preemptive Rights Notice” has the meaning assigned in Section 7.7(b).

 

“Pro Rata Share” means, as of any time, with respect to any Eligible Member, a fraction (expressed as a percentage), the numerator of which equals the number of Common Units held by such Eligible Member as of such time and the denominator of which equals the total number of Common Units held by all Eligible Members as of such time.

 

“Profits” or “Losses” means, for each taxable year or other taxable period, each item of income, gain, loss and deduction entering into the Company’s taxable income or loss for such taxable period, determined in accordance with Code Section 703(a) (including, for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1)), with the following adjustments (without duplication):

 

(a)                                 Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits and Losses pursuant to this definition shall be added to such taxable income or loss;

 

(b)                                 Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be subtracted from such taxable income or loss;

 

(c)                                  In the event the Book Value of any asset is adjusted pursuant to clause (b) or clause (c) of the definition of Book Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Book Value of the asset) or an item of loss (if the adjustment decreases the Book Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses;

 

 

(d)                                 Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Book Value;

 

(f)                                   In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such taxable year;

 

(g)                                  To the extent an adjustment to the adjusted tax basis of any asset pursuant to Code Section 734(b) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Account balances as a result of a distribution other than in liquidation of a Membership Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or an item of loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses;

 

(h)                                 In the event the Book Liability Value of any liability of the Company described in Treasury Regulation Section 1.752-7(b)(3)(i) is adjusted as required by this Agreement, the amount of such adjustment shall be treated as an item of loss (if the adjustment increases the Book Liability Value of such liability of the Company) or an item of gain (if the adjustment decreases the Book Liability Value of such liability of the Company) and such items, and any other items relating to Book Liability Values determined by the Board to be appropriate in determining Capital Accounts, shall be taken into account for purposes of computing Profits or Losses; and

 

(i)                                     Any items that are allocated pursuant to Sections 6.2(a) shall be determined by applying rules analogous to those set forth in clauses (a) through (h) of this definition but shall not be taken into account in computing Profits and Losses.

 

“Project Budget” has the meaning assigned in Section 5.2(a)(iv).

 

“Project Milestones” has the meaning assigned in Section 5.2(a)(iv).

 

“Project Unlevered Return” has the meaning assigned in Section 5.2(a)(iv).

 

“Project Written Consent” has the meaning assigned in Section 5.2(a)(iv).

 

“Proposed Growth CapEx Project” has the meaning assigned in Section 5.2(a)(i).

 

“Publicly Offered Securities” means equity securities of the IPO Issuer of the class or series offered or proposed to be offered to the public in an IPO.

 

“Purchased Percentage” has the meaning assigned in Section 7.5(c)(ii).

 

“Purchased Units” has the meaning assigned in Section 7.5(c)(ii).

 

 

“Qualified Public Offering” means any underwritten initial public offering by the IPO Issuer of Equity Interests pursuant to an effective registration statement under the Securities Act or the consummation of a similar initial public offering by the IPO Issuer pursuant to a comparable process under applicable foreign securities Laws for which aggregate cash proceeds to be received by the IPO Issuer from such offering (without deducting underwriting discounts, expenses and commissions) are at least $25,000,000 and which results in Equity Interests of the IPO Issuer being listed on a national securities exchange in the U.S. or another country.

 

“Qualified MLP IPO” has the meaning assigned in Section 10.7(a).

 

“Qualifying Third Party Offer” has the meaning assigned in Section 7.3(c).

 

“Related Documents” means this Agreement, the Transaction Agreement and the closing certificates contemplated by the Transaction Agreement

 

“Related Parties” means, with respect to any Member, such Member’s Affiliates and such Member’s and its Affiliates’ respective direct and indirect owners officers, directors, managers, employees and other agents and representatives.

 

“Representatives” has the meaning assigned in Section 10.4(b).

 

“Requested CapEx Contribution” has the meaning assigned in Section 5.2(b).

 

“Requested CapEx Contribution Amount” has the meaning assigned in Section 5.2(b).

 

“Requested Tag-Along Percentage” means, as of a specified date, with respect to any series of Units, the percentage determined by dividing (a) the Requested Units of such series of Units by (b) the total number of outstanding Units of such series of Units held by the Eligible Members.

 

“Requested Units” means (a) the aggregate number of Common Units requested to be included in a Tag-Along Sale by all Tag Offerees exercising their Tag Rights plus (b) the number of Common Units that the Transferor proposes to sell in such Tag-Along Sale.

 

“Requesting Purchaser” has the meaning assigned in Section 7.7(b).

 

“Required Condition” means, with respect to a CapEx Contribution Request for an Approved Project and the Project Written Consent relating thereto, the satisfaction of each of the following conditions (as evidenced by supporting data reasonably required by any Funding Member): (A) the information in the Project Written Consent is true and correct in all material respects, (B) the expected completion date of such Approved Project is reasonably expected to be not more than 10% later than the Expected Completion Date, (C) the Approved Project is reasonably expected to be completed in accordance with the Project Budget and at an aggregate cost not greater than 110% of the aggregate cost set forth in the Project Budget, (D) all prior Project Milestones have been met in all material respects, (E) there are no material changes to the contractual arrangements relating to such Approved Project, (F) the projected unlevered return is reasonably expected to be no less than the Project Unlevered Return, (G) there has been

 

 

no material adverse change in respect of the Approved Project, (H) there is no MHR Default and (I) the absence of any Material Adverse Effect.

 

“Requisite Member Approval” means (a) Series A-1 Approval (but only if at the time in question the component of Series A-1 Approval is satisfied) and (b) Series A-2 Approval (but only if at the time in question the component of Series A-2 Approval is satisfied); provided, however, that, Requisite Member Approval does not require (i) any approval of any Series A-1 Member if, at the time in question, the component of Series A-1 Approval is not satisfied or (ii) any approval of any Series A-2 Member if, at the time in question, the component of Series A-2 Approval is not satisfied. Without limiting Section 8.4(d), during the Interim Period, any references to Requisite Member Approval shall be read consistently with Section 8.4(b).

 

“Resign” or “Resignation” means the resignation, withdrawal or retirement of a Member from the Company as a Member.

 

“ROFO Commitment Period” has the meaning assigned in Section 7.3(b).

 

“ROFO Disposition” has the meaning assigned in Section 7.3.

 

“ROFO Notice” has the meaning assigned in Section 7.3(a).

 

“ROFO Notice Date” has the meaning assigned in Section 7.3(a).

 

“ROFO Offering Period” has the meaning assigned in Section 7.3(b).

 

“ROFO Offeror” has the meaning assigned in Section 7.3.

 

“ROFO Right” has the meaning assigned in Section 7.3.

 

“ROFO Sale Period” has the meaning assigned in Section 7.3(c).

 

“ROFO Units” has the meaning assigned in Section 7.3(a).

 

“Rogersville Facility” means the natural gas processing plant jointly owned by Eureka Hunter Pipeline, LLC and Seminole Gas Company, LLC (or its Affiliates) near Rogersville, Tennessee.

 

“Sale Transaction” means (i) the acquisition of the Company by another Person by means of any transaction or series of related transactions (including any stock acquisition, reorganization, merger or consolidation), other than a transaction or series of related transactions in which the Class A Members immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of the Common Units held by such Class A Members prior to such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Company or such other surviving or resulting entity (or if the Company or such other surviving or resulting entity is a wholly-owned Subsidiary immediately following such acquisition, its parent) following such transaction or series of related transactions, (ii) a sale, lease or other disposition of all or substantially all of the assets of the Company and its

 

 

Subsidiaries taken as a whole (which need not include a sale of the equity of the Subsidiaries if all or substantially all of the other assets of the Subsidiaries are included in any disposition) by means of any transaction or series of related transactions, except where such sale, lease or other disposition is to a wholly-owned Subsidiary of the Company or (iii) a Liquidation Event.

 

“Second Closing” has the meaning assigned in Section 3.3.

 

“Securities Act” means the Securities Act of 1933, as amended, and any successor statute thereto and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

 

“Series A-1 Approval” means approval of the Series A-1 Majority in the case where the Series A-1 Members hold not less than 20% of the Class A Common Units.

 

“Series A-1 Majority” means approval of one or more of the Series A-1 Members holding not less than a majority of the then-outstanding Series A-1 Units.

 

“Series A-1 Manager” means each Manager designated by the Series A-1 Majority.

 

“Series A-1 Member” means a holder of issued and outstanding Series A-1 Units who is executing this Agreement as a Series A-1 Member or is hereafter admitted to the Company as a Series A-1 Member as provided in this Agreement, but does not include any Person who has ceased to be a Member.

 

“Series A-1 Percentage Interest” means with respect to a Series A-1 Member, the quotient of (i) the number of outstanding Series A-1 Units held by such Series A-1 Member, divided by (ii) the total number of outstanding Series A-1 Units.

 

“Series A-1 Units” has the meaning assigned in Section 3.1(a).

 

“Series A-2 Approval” means approval of the Series A-2 Majority in the case where the Series A-2 Members hold not less than 20% of the Class A Common Units.

 

“Series A-2 Capital Investments” means, as of any date of determination, the sum, without duplication, of (i) all amounts paid by the Series A-2 Members to other Persons to acquire Membership Interests (including pursuant to the ArcLight UPA and the Transaction Agreement) plus (ii) all Capital Contributions and other amounts contributed by the Series A-2 Members to the Company and/or its Subsidiaries after Effective Date. As of the Effective Date, the aggregate Series A-2 Capital Investments equals the amount set forth on Schedule I.

 

“Series A-2 Cash Distributions” means, as of any date of determination, the amount of cash distributions made to the Series A-2 Members pursuant to Section 6.1(c), but, for the avoidance of doubt, shall exclude any and all fees, indemnity payments and/or expense reimbursements.

 

“Series A-2 IRR” means, as of any date of determination, the annual interest rate (using annual compounding) which, when used to calculate the net present value of the Series A-2 Capital Investments as of such date of determination and the Series A-2 Cash Distributions as of

 

 

such date of determination, causes the difference between such net present value amounts to equal zero. The Series A-2 IRR shall be determined reasonably and in good faith by the Series A-2 Members and calculated using Microsoft Excel using the date specific XIRR function (taking into account the date of purchase, the number of Membership Interests of the Company or any of its Subsidiaries purchased, the price paid for such Membership Interests (including any further Capital Contributions made in respect of such Membership Interests) and the date of measurement). In determining the Series A-2 IRR, the Series A-2 IRR shall be measured after giving effect to all Series A-2 Cash Distributions (including the Series A-2 Cash Distributions contemplated at the time of such determination) as if each Series A-2 Cash Distribution was made at the end of the calendar quarter in which such Series A-2 Cash Distribution was actually made.

 

“Series A-2 Majority” means approval of one or more of the Series A-2 Members holding not less than a majority of the then-outstanding Series A-2 Units.

 

“Series A-2 Manager” means each Manager designated by the Series A-2 Majority.

 

“Series A-2 Member” means a holder of issued and outstanding Series A-2 Units who is executing this Agreement as a Series A-2 Member or is hereafter admitted to the Company as a Series A-2 Member as provided in this Agreement, but does not include any Person who has ceased to be a Member.

 

“Series A-2 Percentage Interest” means with respect to a Series A-2 Member, the quotient of (i) the number of outstanding Series A-2 Units held by such Series A-2 Member, divided by (ii) the total number of outstanding Series A-2 Units.

 

“Series A-2 Units” has the meaning assigned in Section 3.1(a).

 

“Services Agreement” has the meaning assigned in the Transaction Agreement (including as such agreement is amended on the Effective Date).

 

“Solicitation Period” has the meaning assigned in Section 7.3(c).

 

“Specified Actions” has the meaning assigned in Section 8.4(b).

 

“Subject Acreage” means the acreage that Triad Hunter, LLC (a wholly-owned Subsidiary of MHR) has acquired or has the right to acquire pursuant to that certain asset purchase agreement, dated as of August 12, 2013, between MNW Energy, LLC, an Ohio limited liability company, and Triad Hunter, LLC.

 

“Subject Area” means West Virginia, Ohio and Pennsylvania.

 

“Subject Employees” means all employees of MHR, MH Services or their respective Affiliates that devote substantially all of their time to the Business, and the Subject Employees are all of the employees whose job responsibilities consist primarily of providing services in connection with the Business.

 

“Subject Persons” has the meaning assigned in Section 7.9.

 

 

“Subject Series” has the meaning assigned in Section 8.2(a)(iv).

 

“Subsidiary” means: (a) any corporation, partnership, limited liability company or other entity a majority of the Equity Interests of which having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions is at the time owned, directly or indirectly, with power to vote, by the Company or any direct or indirect Subsidiary of the Company; (b) a partnership in which the Company or any direct or indirect Subsidiary is a general partner; or (c) a limited liability company in which the Company or any direct or indirect Subsidiary is a managing member or manager.

 

“Substituted Member” means any Person who acquires all of the Membership Interests held by a Member from that Member or its successors in interest and is admitted to the Company as a Member pursuant to the provisions of Section 3.7.

 

“Sufficient Funds” has the meaning assigned in Section 5.2(b).

 

“Tag Election Notice” has the meaning assigned in Section 7.5(b).

 

“Tag Election Period” has the meaning assigned in Section 7.5(b).

 

“Tag Offeree” has the meaning assigned in Section 7.5(b).

 

“Tag Right” has the meaning assigned in Section 7.5.

 

“Tag Units” has the meaning assigned in Section 7.5(a).

 

“Tag-Along Notice” has the meaning assigned in Section 7.5(a).

 

“Tag-Along Offer” has the meaning assigned in Section 7.5(a).

 

“Tag-Along Sale” has the meaning assigned in Section 7.5.

 

“Tax Matters Member” has the meaning assigned in Section 11.4(a).

 

“Tax” or “Taxes” means any tax, charge, fee, levy, deficiency or other assessment of whatever kind or nature, including but not limited to, any net income, gross income, profits, gross receipts, profits, excise, or withholding tax imposed by or on behalf of any government authority, together with any interest, penalties or additions to tax.

 

“Tax Distribution Date” means any date that is two (2) Business Days prior to the date on which estimated income Tax payments are required to be made by calendar year individual taxpayers and each due date for the income tax return of an individual calendar year taxpayer (without regard to extensions).

 

“Tax Matters Member” has the meaning assigned in Section 11.4(a).

 

“Third Party” means, with respect to any Member, any other Person (whether or not another Member) that is not a Permitted Transferee with respect to such Member.

 

 

“Third Party Purchaser” has the meaning assigned in Section 7.7(a).

 

“Third Party Transferee” has the meaning assigned in Section 7.3(c).

 

“Transaction Agreement” means that certain Transaction Agreement, dated as of September [        ], 2014, by and among the Company, the Initial MSI Member, MHR and the other parties named therein, an executed copy of which is attached as Exhibit D.

 

“Transferor” has the meaning assigned in Section 7.5.

 

“Transferor Requested Percentage” means the percentage determined by dividing (a) the aggregate number of Common Units that the Transferor proposes to sell in a Tag-Along Sale by (b) the aggregate number of outstanding Common Units held by the Transferor.

 

“TransTex” means TransTex Gas Services LP, a Delaware limited partnership, and its successor, TT Transition LP, a Delaware limited partnership.

 

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

 

“Unfunded MHR Amount” has the meaning assigned in Section 5.2(a)(iii).

 

“Unit” means a unit representing a fractional part of the Membership Interests of all of the Members and includes all types, classes and series of units.

 

“Unvested Class B Unit” has the meaning assigned in Section 6.1(d)(ii).

 

“Unvested Distribution Amount” has the meaning assigned in Section 6.1(d)(ii).

 

“Upside Sharing Percentages” means (i) with respect to each Series A-2 Member, such Series A-2 Member’s Percentage Interest multiplied by 0.5 and (ii) with respect to each Series A-1 Member and each Class B Member, (a) such Member’s Percentage Interest plus (b) an amount equal to (x) such Member’s pro rata portion of the Aggregate Remaining Percentage Interest multiplied by (y) the Aggregate Series A-2 Percentage Interest multiplied by (y) 0.5. An illustrative example of the calculation of distributions pursuant to Section 12.3(b) is set forth on Schedule IX.

 

“Vested Class B Unit” has the meaning assigned in Section 6.1(d)(ii)Exhibit 10.21

 

	
 
    

 

CREDIT AGREEMENT

 

dated as of

 

September 15, 2014,

 

among

 

KEYSIGHT TECHNOLOGIES, INC.,

as Borrower

 

AGILENT TECHNOLOGIES, INC.,

as Parent

 

The LENDERS Party Hereto,

 

CITIBANK, N.A.,

as Administrative Agent,

 

CITIBANK, N.A. and BANK OF AMERICA, N.A.,

as Syndication Agents

 

and

 

CITIGROUP GLOBAL MARKETS INC.,

BNP PARIBAS SECURITIES CORP.,

and

MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED,

as Joint Lead Arrangers and Joint Bookrunners

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I
    
	
 
    
	
DEFINITIONS
    
	
 
    
	
SECTION 1.01.
    	
Defined Terms
    	
1
    
	
SECTION 1.02.
    	
Classification of Loans and Borrowings
    	
24
    
	
SECTION 1.03.
    	
Terms Generally
    	
24
    
	
SECTION 1.04.
    	
Accounting Terms; GAAP
    	
24
    
	
SECTION 1.05.
    	
Currency Translation
    	
25
    
	
SECTION 1.06.
    	
Incorporation by Reference
    	
25
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    
	
 
    
	
THE CREDITS
    
	
 
    
	
SECTION 2.01.
    	
Commitments
    	
26
    
	
SECTION 2.02.
    	
Loans and Borrowings
    	
26
    
	
SECTION 2.03.
    	
Requests for Borrowings
    	
26
    
	
SECTION 2.04.
    	
[Reserved]
    	
27
    
	
SECTION 2.05.
    	
Letters of Credit
    	
27
    
	
SECTION 2.06.
    	
Funding of Borrowings
    	
34
    
	
SECTION 2.07.
    	
Interest Elections
    	
34
    
	
SECTION 2.08.
    	
Termination, Reduction and Increase of Commitments
    	
36
    
	
SECTION 2.09.
    	
Extension of Maturity Date
    	
37
    
	
SECTION 2.10.
    	
Repayment of Loans; Evidence of Debt
    	
39
    
	
SECTION 2.11.
    	
Prepayment of Loans
    	
39
    
	
SECTION 2.12.
    	
Fees
    	
40
    
	
SECTION 2.13.
    	
Interest
    	
41
    
	
SECTION 2.14.
    	
Alternate Rate of Interest
    	
42
    
	
SECTION 2.15.
    	
Increased Costs
    	
43
    
	
SECTION 2.16.
    	
Break Funding Payments
    	
44
    
	
SECTION 2.17.
    	
Taxes
    	
45
    
	
SECTION 2.18.
    	
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
    	
48
    
	
SECTION 2.19.
    	
Mitigation Obligations; Replacement of Lenders
    	
50
    
	
SECTION 2.20.
    	
[Reserved]
    	
51
    
	
SECTION 2.21.
    	
Defaulting Lenders
    	
51
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    
	
 
    
	
REPRESENTATIONS AND WARRANTIES
    
	
 
    
	
SECTION 3.01.
    	
Organization; Powers
    	
53
    
	
SECTION 3.02.
    	
Authorization; Enforceability
    	
53
    

 

 

	
SECTION 3.03.
    	
Governmental Approvals; No Conflicts
    	
53
    
	
SECTION 3.04.
    	
Financial Condition; No Material Adverse Change
    	
54
    
	
SECTION 3.05.
    	
Litigation and Environmental Matters
    	
54
    
	
SECTION 3.06.
    	
Compliance with Laws and Agreements
    	
55
    
	
SECTION 3.07.
    	
Investment Company Status
    	
55
    
	
SECTION 3.08.
    	
Properties
    	
55
    
	
SECTION 3.09.
    	
Federal Reserve Regulations
    	
55
    
	
SECTION 3.10.
    	
Taxes
    	
55
    
	
SECTION 3.11.
    	
ERISA
    	
56
    
	
SECTION 3.12.
    	
Disclosure
    	
56
    
	
SECTION 3.13.
    	
AML Laws; Anti-Corruption Laws and Sanctions
    	
56
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    
	
 
    
	
CONDITIONS
    
	
 
    
	
SECTION 4.01.
    	
Effective Date
    	
56
    
	
SECTION 4.02.
    	
Conditions Precedent to Availability Date
    	
58
    
	
SECTION 4.03.
    	
Each Credit Event
    	
58
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    
	
 
    
	
AFFIRMATIVE COVENANTS
    
	
 
    
	
SECTION 5.01.
    	
Financial Statements and Other Information
    	
59
    
	
SECTION 5.02.
    	
Notices of Material Events
    	
60
    
	
SECTION 5.03.
    	
Existence
    	
61
    
	
SECTION 5.04.
    	
Businesses and Properties
    	
61
    
	
SECTION 5.05.
    	
Payment of Taxes
    	
61
    
	
SECTION 5.06.
    	
Insurance
    	
61
    
	
SECTION 5.07.
    	
Books and Records; Inspection Rights
    	
61
    
	
SECTION 5.08.
    	
Compliance with Laws
    	
62
    
	
SECTION 5.09.
    	
Use of Proceeds
    	
62
    
	
SECTION 5.10.
    	
Affirmative Covenants of the Parent
    	
62
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    
	
 
    
	
NEGATIVE COVENANTS
    
	
 
    
	
SECTION 6.01.
    	
Subsidiary Indebtedness
    	
62
    
	
SECTION 6.02.
    	
Liens
    	
63
    
	
SECTION 6.03.
    	
Sale and Leaseback Transactions
    	
65
    
	
SECTION 6.04.
    	
Fundamental Changes
    	
65
    
	
SECTION 6.05.
    	
Transactions with Affiliates
    	
66
    
	
SECTION 6.06.
    	
Restrictive Agreements
    	
66
    
	
SECTION 6.07.
    	
Financial Covenants
    	
67
    
	
SECTION 6.08.
    	
Use of Proceeds
    	
68
    

 

ii

 

	
SECTION 6.09.
    	
Separation
    	
68
    
	
SECTION 6.10.
    	
Negative Covenants of the Parent
    	
68
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    
	
 
    
	
EVENTS OF DEFAULT
    
	
 
    
	
ARTICLE VIII
    
	
 
    
	
THE ADMINISTRATIVE AGENT
    
	
 
    
	
SECTION 8.01.
    	
Appointment and Authority
    	
71
    
	
SECTION 8.02.
    	
Rights as a Lender
    	
71
    
	
SECTION 8.03.
    	
Exculpatory Provisions
    	
71
    
	
SECTION 8.04.
    	
Reliance by Administrative Agent
    	
72
    
	
SECTION 8.05.
    	
Delegation of Duties
    	
72
    
	
SECTION 8.06.
    	
Resignation of Administrative Agent
    	
73
    
	
SECTION 8.07.
    	
Non-Reliance on Administrative Agent and Other Lenders
    	
74
    
	
SECTION 8.08.
    	
No Other Duties, Etc.
    	
74
    
	
 
    	
 
    	
 
    
	
ARTICLE IX
    
	
 
    
	
GUARANTEE
    
	
 
    
	
ARTICLE X
    
	
 
    
	
MISCELLANEOUS
    
	
 
    
	
SECTION 10.01.
    	
Notices
    	
76
    
	
SECTION 10.02.
    	
Waivers; Amendments
    	
77
    
	
SECTION 10.03.
    	
Expenses; Indemnity; Damage Waiver
    	
78
    
	
SECTION 10.04.
    	
Successors and Assigns
    	
80
    
	
SECTION 10.05.
    	
Survival
    	
83
    
	
SECTION 10.06.
    	
Counterparts; Integration; Effectiveness
    	
84
    
	
SECTION 10.07.
    	
Severability
    	
84
    
	
SECTION 10.08.
    	
Right of Setoff
    	
84
    
	
SECTION 10.09.
    	
Governing Law; Jurisdiction; Consent to Service of Process
    	
85
    
	
SECTION 10.10.
    	
WAIVER OF JURY TRIAL
    	
85
    
	
SECTION 10.11.
    	
Headings
    	
85
    
	
SECTION 10.12.
    	
Confidentiality; Non-Public Information
    	
86
    
	
SECTION 10.13.
    	
Interest Rate Limitation
    	
87
    
	
SECTION 10.14.
    	
Conversion of Currencies
    	
87
    
	
SECTION 10.15.
    	
USA Patriot Act
    	
88
    
	
SECTION 10.16.
    	
No Fiduciary Relationship
    	
88
    

 

iii

 

	
Schedules:
    	
 
    
	
Schedule 2.01
    	
— Commitments
    
	
Schedule 6.01
    	
— Existing   Subsidiary Indebtedness
    
	
Schedule 6.02
    	
— Existing Liens
    
	
Schedule 6.03
    	
— Existing Sale   and Leaseback Transactions
    
	
Schedule 6.06
    	
— Existing   Restrictive Agreements
    
	
 
    	
 
    
	
Exhibits:
    	
 
    
	
Exhibit A
    	
— Form of   Accession Agreement
    
	
Exhibit B
    	
— Form of   Assignment and Assumption
    
	
Exhibit C
    	
— Form of   Maturity Date Extension Request
    
	
Exhibit D
    	
— Form of Tax   Certificates
    

 

iv

 

CREDIT AGREEMENT dated as of September 15, 2014 (the “Agreement”), among KEYSIGHT TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”), AGILENT TECHNOLOGIES, INC., a Delaware corporation (the “Parent”), the LENDERS party hereto, CITIBANK, N.A., as Administrative Agent.

 

The parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01.            Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

 

“Accession Agreement” means an Accession Agreement substantially in the form of Exhibit A among an Increasing Lender, the Borrower and the Administrative Agent.

 

“Acquisition” means any transaction, or series of related transactions, in which the Borrower or any Subsidiary acquires (a) equity interests in any Person if, after giving effect thereto, such Person will become a Subsidiary or (b) any business or assets comprising all or substantially all the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of) any Person (whether through purchase of assets, merger or otherwise).

 

“Acquisition Indebtedness” means, with respect to any Acquisition, any Indebtedness incurred during the Acquisition Period with respect to such Acquisition and identified by the Borrower to the Administrative Agent as Indebtedness incurred for the purpose of financing such Acquisition (including any repayment or prepayment of Indebtedness of the Person or assets acquired thereby and payment of related fees and expenses); provided that (a) at all times during the Acquisition Period with respect to such Acquisition, all the net proceeds of such Indebtedness constitute Unrestricted Cash that is segregated in a separate deposit or securities account of the Borrower and held to be applied for such purpose upon consummation of such Acquisition (it being understood that, in the event any such net proceeds cease to be Unrestricted Cash or are not so segregated and held during the Acquisition Period with respect to such Acquisition (including as a result of having been used for any other purpose), the aggregate principal amount of such Indebtedness equal to the principal amount thereof that has yielded such net proceeds shall cease to be “Acquisition Indebtedness” hereunder) and (b) the aggregate principal amount of such Indebtedness does not exceed the aggregate amount of funds required by the Borrower to finance such Acquisition (including any repayment or prepayment of Indebtedness of the Person or assets acquired thereby and payment of related fees and expenses).

 

“Acquisition Period” means, with respect to any Acquisition, the period (a) commencing on the date on which the Borrower or a Subsidiary enters into a definitive agreement providing for the consummation of such Acquisition and (b) ending on the date that is

 

 

the earliest of (i) the date such Acquisition is consummated, (ii) the date such definitive agreement is terminated or such Acquisition is otherwise abandoned by the Borrower or such Subsidiary and (iii) the date that is nine months after the commencement of such period under clause (a) above.

 

“Adjusted Consolidated Total Indebtedness” means, at any time, (a) the aggregate amount of all Indebtedness of the Borrower and the Subsidiaries at such time, all determined on a consolidated basis in accordance with GAAP, but excluding therefrom, during the Acquisition Period with respect to any Acquisition, the Acquisition Indebtedness relating to such Acquisition, minus (b) all Indebtedness at such time consisting of obligations of the Borrower and the Subsidiaries as account parties in respect of letters of credit and letters of guaranty that do not support Indebtedness, all determined on a consolidated basis in accordance with GAAP.  In the event that the Borrower or any Subsidiary shall have completed since any date as of which Adjusted Consolidated Total Indebtedness is to be determined an acquisition or disposition of any Person, division or business unit for which the Borrower is required to file pro forma financial statements with the SEC, Adjusted Consolidated Total Indebtedness shall be determined (and if the Borrower is not so required to file such financial statements, Adjusted Consolidated Total Indebtedness may, at the election of the Borrower exercised in good faith (and so long as such election is also made with respect to the Consolidated EBITDA), be determined) on a Pro Forma Basis as if such acquisition or disposition, and any related incurrence or repayment of Indebtedness, had occurred on such date.

 

“Adjusted LIBO Rate” means (a) with respect to any LIBOR Borrowing denominated in US Dollars for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1.00%) equal to the product of (i) the LIBO Rate for US Dollars for such Interest Period multiplied by (ii) the Statutory Reserve Rate and (b) with respect to any LIBOR Borrowing denominated in any Alternative Currency (other than Euros) for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1.00%) equal to the LIBO Rate for such currency for such Interest Period.

 

“Administrative Agent” means Citibank, N.A., in its capacity as administrative agent for the Lenders hereunder and under the other Loan Documents, and its successors in such capacity as provided in Article VIII.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Agreement” has the meaning assigned to such term in the heading hereto.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1.00% and (c) the Adjusted LIBO Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in US Dollars with a

 

2

 

maturity of one month plus 1.00%.  For purposes of clause (c) above, the Adjusted LIBO Rate on any day shall be based on the Screen Rate at approximately 11:00 a.m., London time, on such day for deposits in US Dollars with a maturity of one month.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

 

“Alternative Currency” means Canadian Dollars, Euro, Sterling, Yen and any other currency, other than US Dollars, (a) that is freely available, freely transferable and freely convertible into US Dollars, (b) in which dealings in deposits are carried on in the London interbank market and (c) that has been designated by the Administrative Agent as an Alternative Currency at the request of the Borrower, and with the consent of each Lender.

 

“AML Laws” means all laws, rules, and regulations of any jurisdiction applicable to any Lender, the Borrower or the Borrower’s Subsidiaries from time to time concerning or relating to anti-money laundering.

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or the Borrower’s Subsidiaries from time to time concerning or relating to bribery or corruption.

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment.  If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.

 

“Applicable Rate” means, for any day, with respect to any LIBOR Loan, EURIBOR Loan, ABR Loan or the facility fees payable hereunder, the applicable rate per annum set forth below under the caption “LIBOR/EURIBOR Margin”, “ABR Margin” or “Facility Fee”, as the case may be, based upon the ratings by S&P and Moody’s, respectively, applicable on such date to the Index Debt:

 

	
 
    	
 
    	
Ratings
   (S&P/Moody’s)
    	
 
    	
Facility Fee (% per
   annum)
    	
 
    	
LIBOR/
   EURIBOR
   Margin (%
   per annum)
    	
 
    	
ABR Margin (% per
   annum)
    	
 
    
	
Category   1
    	
 
    	
BBB+/Baa1   or above
    	
 
    	
0.125
    	
%
    	
1.000
    	
%
    	
0.000
    	
%
    
	
Category   2
    	
 
    	
BBB/Baa2
    	
 
    	
0.150
    	
%
    	
1.100
    	
%
    	
0.100
    	
%
    
	
Category   3
    	
 
    	
BBB-/Baa3
    	
 
    	
0.200
    	
%
    	
1.300
    	
%
    	
0.300
    	
%
    
	
Category   4
    	
 
    	
BB+/Ba1
    	
 
    	
0.300
    	
%
    	
1.450
    	
%
    	
0.450
    	
%
    
	
Category   5
    	
 
    	
BB/Ba2   or below
    	
 
    	
0.350
    	
%
    	
1.650
    	
%
    	
0.650
    	
%
    

 

Until the earlier of (i) the date on which the Borrower obtains ratings from Moody’s and S&P with respect to its Index Debt, and (ii) 30 days following the Effective Date, the Borrowing shall be deemed to have a rating in Category 3; provided that, if the Borrower does not obtain such ratings within 30 days following the Effective Date, the Borrower shall be

 

3

 

deemed to have a rating in Category 5 until such time as such ratings are obtained.  For purposes of the foregoing, (a) if either Moody’s or S&P shall not have in effect a rating for the Index Debt (other than by reason of the circumstances referred to in the last sentence of this definition), then such rating agency shall be deemed to have established a rating in Category 5; (b) if the ratings established or deemed to have been established by Moody’s and S&P for the Index Debt shall fall within different Categories, the Applicable Rate shall be based on the higher of the two ratings unless one of the two ratings is two or more Categories lower than the other, in which case the Applicable Rate shall be determined by reference to the Category next below that of the higher of the two ratings; and (c) if the ratings established or deemed to have been established by Moody’s and S&P for the Index Debt shall be changed (other than as a result of a change in the rating system of Moody’s or S&P), such change shall be effective as of the date on which it is first publicly announced by the applicable rating agency.  Each change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.  If the rating system of Moody’s or S&P shall change, or if either such rating agency shall cease to be in the business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be determined by reference to the rating most recently in effect prior to such change or cessation.

 

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Arrangers” means Citigroup Global Markets Inc., BNP Paribas Securities Corp., and Merrill Lynch, Pierce, Fenner & Smith Incorporated, in their capacities as joint lead arrangers and joint bookrunners for the credit facility established hereunder.

 

“Assignment and Assumption” means an Assignment and Assumption entered into by a Lender and an assignee (with the consent of any Person whose consent is required by Section 10.04), and accepted by the Administrative Agent, in the form of Exhibit B or any other form approved by the Administrative Agent.

 

“Attributable Debt” means, with respect to any Sale-Leaseback Transaction, the present value (discounted at the rate set forth or implicit in the terms of the lease included in such Sale-Leaseback Transaction) of the total obligations of the lessee for rental payments (other than amounts required to be paid on account of taxes, maintenance, repairs, insurance, assessments, utilities, operating and labor costs and other items that do not constitute payments for property rights) during the remaining term of the lease included in such Sale-Leaseback Transaction (including any period for which such lease has been extended).  In the case of any lease that is terminable by the lessee upon payment of a penalty, the Attributable Debt shall be the lesser of the Attributable Debt determined assuming termination on the first date such lease may be terminated (in which case the Attributable Debt shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date

 

4

 

upon which it may be so terminated) or the Attributable Debt determined assuming no such termination.

 

“Availability Date” means the date on which each of the conditions set forth in Section 4.02 has been satisfied (or waived in accordance with Section 10.02).

 

“Availability Period” means the period from and including the Availability Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

 

“Bankruptcy Event” means, with respect to any Person, that such Person has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in, any such proceeding or appointment; provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority; provided, however, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States of America (or any other applicable jurisdiction) or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any agreements made by such Person.

 

“Board of Governors” means the Board of Governors of the Federal Reserve System of the United States of America.

 

“Borrower” has the meaning assigned to such term in the heading of this Agreement.

 

“Borrowing” means Loans of the same Type and denominated in the same currency, made, converted or continued on the same date and, in the case of LIBOR Loans or EURIBOR Loans, as to which a single Interest Period is in effect.

 

“Borrowing Minimum” means (a) in the case of a Borrowing denominated in US Dollars, US$5,000,000 and (b) in the case of a Borrowing denominated in any Alternative Currency, the smallest amount of such Alternative Currency that is a multiple of 1,000,000 units of such currency that has a US Dollar Equivalent of US$5,000,000 or more.

 

“Borrowing Multiple” means (a) in the case of a Borrowing denominated in US Dollars, US$1,000,000 and (b) in the case of a Borrowing denominated in any Alternative Currency, 1,000,000 units of such currency.

 

“Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided, that (a) when used in connection with a LIBOR Loan, the term “Business Day” shall

 

5

 

also exclude any day on which banks in London are not open for general business and (b) when used in connection with a EURIBOR Loan, the term “Business Day” shall also exclude any day on which banks in London are not open for general business and any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system is not open for the settlement of payments in Euros.

 

“Canadian Dollars” means the lawful currency of Canada.

 

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property (or a combination thereof), which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP as in effect on the date of this Agreement, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP as in effect on the date of this Agreement.  For purposes of Section 6.02, a Capital Lease Obligation shall be deemed to be secured by a Lien on the property being leased and such property shall be deemed to be owned by the lessee.

 

“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the SEC thereunder as in effect on the date hereof), of shares representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the Borrower; or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed by directors so nominated.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption of any rule, regulation, treaty or other law, (b) any change in any rule, regulation, treaty or other law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) of any Governmental Authority; provided that, notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted, promulgated or issued.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateralized Letter of Credit” means a Letter of Credit that has been irrevocably cash collateralized by the Borrower pursuant to arrangements reasonably satisfactory to the Issuing Bank that issued such Letter of Credit.

 

“Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans and to acquire participations in Letters of Credit hereunder, expressed as

 

6

 

an amount representing the maximum aggregate amount of such Lender’s Credit Exposure hereunder, as such commitment may be reduced or increased from time to time pursuant to Section 2.08 or pursuant to assignments by or to such Lender pursuant to Section 10.04.  The initial amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption or Accession Agreement pursuant to which such Lender shall have assumed or acquired its Commitment, as applicable.  The initial aggregate amount of the Lenders’ Commitments is US$300,000,000.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Consenting Lender” has the meaning assigned to such term in Section 2.09.

 

“Consolidated EBITDA” means, for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense for such period, (ii) consolidated income tax expense for such period, (iii) all amounts attributable to depreciation for such period and amortization of intangible assets for such period, (iv) non-cash charges for such period (including non-cash charges for impairment of goodwill and non-cash charges associated with employee compensation for such period, but excluding, for the avoidance of doubt, any additions to bad debt reserves or bad debt expense), (v) extraordinary or non-recurring cash charges or expenses (including, without limitation, cash charges or expenses in connection with dispositions or restructurings) in an aggregate amount for any period of four consecutive fiscal quarters not to exceed US$75,000,000 and (vi) any charges, fees, costs and expenses for such period relating to the Separation Transaction, in an aggregate amount under this clause (vi) not to exceed US$40,000,000; provided, that, for all periods prior to the consummation of the Separation Transaction, Consolidated EBITDA of the Borrower shall be determined by reference to the audited historical condensed combined financial data of the Subject Business, as reported in the Form 10, minus (b) without duplication and to the extent included in determining such Consolidated Net Income, the sum of (i) all extraordinary gains for such period, (ii) equity in net income of unconsolidated affiliates and other minority interest net income for such period (except to the extent actually distributed or paid to the Borrower or a Subsidiary), (iii) interest income for such period, (iv) all cash payments in such period in respect of items that were reflected in any prior period as non-cash charges of the sort referred to in clause (a)(iv) above and (v) noncash items of income for such period that represent the reversal of any accrual for anticipated cash charges made in a prior period, but only to the extent such accrual did not reduce Consolidated EBITDA for such prior period, all determined on a consolidated basis in accordance with GAAP.  In the event that the Borrower or any Subsidiary shall have completed since the beginning of the relevant period an acquisition or disposition of any Person, division or business unit for which the Borrower is required to file pro forma financial statements with the SEC, Consolidated EBITDA shall be determined (and if the Borrower is not so required to file such financial statements, Consolidated EBITDA may, at the election of the Borrower exercised in good faith (and so long as such election is also made with respect to the Adjusted Consolidated Total Indebtedness) be determined) for such period on a Pro Forma Basis as if such acquisition or disposition, and any related incurrence or repayment of Indebtedness, had occurred at the beginning of such period.

 

7

 

“Consolidated Group” means (a) prior to the Separation Date, the Parent and its Subsidiaries and (b) following the Separation Date, the Borrower and its Subsidiaries.

 

“Consolidated Net Income” means, for any period, the net income or loss of the Borrower and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP (but excluding therefrom any portion thereof attributable to any noncontrolling interest in any Subsidiary); provided that, to the extent included therein, there shall be excluded the net income or loss attributable to any discontinued operations of the Borrower and the Subsidiaries.

 

“Consolidated Stockholders’ Equity” means, at any time, the stockholders’ equity of the Borrower at the end of the then most recent period of four consecutive fiscal quarters for which consolidated financial statements of the Borrower have been delivered pursuant to Section 5.01(a) or 5.01(b) or, prior to the delivery of any such financial statements, at the Separation Date, determined on a consolidated basis in accordance with GAAP.

 

“Contribution” means the transfer of the Subject Business to the Borrower and its Subsidiaries.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Exposure” means, with respect to any Lender at any time, the sum at such time, without duplication, of (a) the sum of the US Dollar Equivalents of the principal amounts of such Lender’s outstanding Loans and (b) the amount of such Lender’s LC Exposure.

 

“Credit Party” means the Administrative Agent, each Issuing Bank and each other Lender.

 

“Declining Lender” has the meaning assigned to such term in Section 2.09.

 

“Default” means any event or condition that constitutes, or upon notice or lapse of time or both would become, an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, (i) to fund any portion of its Loans, (ii) to fund any portion of its participations in Letters of Credit or (iii) to pay to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified in such writing, including, if applicable, by reference to a specific Default) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement, to the effect that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good-faith determination that a condition precedent (specifically identified in such writing, including, if applicable, by reference to a specific Default) to funding a Loan cannot be

 

8

 

satisfied), (c) has failed, within three Business Days after request by a Credit Party made in good faith to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Letters of Credit, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

 

“Distribution” means the distribution on a pro rata basis to the equityholders of the Parent of all of the shares of equity interests of the Borrower, which shall only be common stock (with cash in lieu of any fractional shares).

 

“Effective Date” means the date on which each of the conditions set forth in Section 4.01 has been satisfied (or waived in accordance with Section 10.02).

 

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund and (d) any other Person, other than, in each case, a natural person or the Borrower, any Subsidiary or any other Affiliate of the Borrower.

 

“Environmental Laws” means all material laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA and, on and after the effectiveness of Title I of the Pension Act, any failure by any Plan to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan), whether or not waived; (c) the filing pursuant to

 

9

 

Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or Multiemployer Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA (or, after the effectiveness of Title II of the Pension Act, that it is in endangered or critical status, within the meaning of Section 305 of ERISA); or (h) on and after the effectiveness of Title I of the Pension Act, a determination that any Plan is or is expected to be, in “at-risk” status (as defined in Section 303(i)(4)(A) of ERISA or Section 430(i)(4)(A) of the Code).

 

“EURIBO Rate” means, with respect to any EURIBOR Borrowing for any Interest Period, the applicable Screen Rate as of 11:00 a.m., Brussels time, on the Quotation Day.

 

“EURIBOR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted EURIBO Rate.

 

“Euro” or “€” means the single currency unit of the member States of the European Community that adopt or have adopted the Euro as their lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.

 

“Events of Default” has the meaning assigned to such term in Article VII.

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Exchange Rate” means, on any day, for purposes of determining the US Dollar Equivalent of any Alternative Currency, the rate at which such Alternative Currency may be exchanged into US Dollars at the time of determination on such day as set forth on the OANDA website for such currency; provided that in the event that such rate does not appear on the OANDA website, the Administrative Agent may use any reasonable method it reasonably deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal withholding Taxes imposed on

 

10

 

amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan (other than pursuant to an assignment request by the Borrower under Section 2.19(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f) and (d) any U.S. Federal withholding Taxes imposed under FATCA.

 

“Existing Maturity Date” has the meaning assigned to such term in Section 2.09.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1.00%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1.00%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

 

“Financial Officer” means, with respect to any Loan Party, the chief executive officer, the chief financial officer, the principal accounting officer, the treasurer, any assistant treasurer or the controller of such Loan Party.

 

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than the United States of America, a State thereof or the District of Columbia.

 

“Foreign Subsidiary” means any Subsidiary of the Borrower that is organized under the laws of a jurisdiction other than the United States of America, a State thereof or the District of Columbia.

 

“Form 10” means the Form 10 filed with the SEC on March 5, 2014, Amendment No. 1 thereto filed with the SEC on April 18, 2014, Amendment No. 2 thereto filed with the SEC on May 23, 2014, Amendment No. 3 thereto filed with the SEC on June 17, 2014, Amendment No. 4 thereto filed with the SEC on July 18, 2014 and Amendment 5 thereto filed with the SEC on August 13, 2014, as the same may from time to time be amended after the date hereof, provided that the term “Form 10” shall only give effect to any amendment after the date hereof if (A) such amendment is in form and substance reasonably satisfactory to the Administrative Agent, (B) such amendment has been filed to provide modifications requested by the SEC, or to update disclosure or financial statements to reflect events, or periods, prior to those reflected in

 

11

 

the Form 10 prior to such amendment or (C) such amendment does not reflect changes in the business, assets or liabilities of the Borrower and its Subsidiaries, taken as a whole, that would be materially adverse to the Lenders as compared to the Form 10 prior to giving effect to such amendment.

 

“GAAP” means generally accepted accounting principles in the United States of America.

 

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other similar governmental entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank).

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.  The amount, as of any date of determination, of any Guarantee shall be the principal amount outstanding on such date of the Indebtedness or other obligation guaranteed thereby (or, in the case of (i) any Guarantee the terms of which limit the monetary exposure of the guarantor or (ii) any Guarantee of an obligation that does not have a principal amount, the maximum monetary exposure as of such date of the guarantor under such Guarantee (as determined, in the case of clause (i), pursuant to such terms or, in the case of clause (ii), in good faith by a Financial Officer of the Borrower)).

 

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedge Termination Value” means, in respect of any one or more Hedging Agreements, after taking into account the effect of any legally enforceable netting agreements relating to such Hedging Agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and termination values determined in accordance therewith

 

12

 

(but not yet paid), such termination values, and (b) for any date prior to the date referenced in clause (a), the mark-to-market values for such Hedging Agreements, determined based on one or more mid-market or other readily available quotations provided by any recognized dealer in Hedging Agreements of such type (which may include a Lender or any Affiliate of a Lender).

 

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

 

“Increasing Lender” has the meaning assigned to such term in Section 2.08(d).

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding (i) accounts payable incurred in the ordinary course of business and (ii) earn-outs, hold-backs and similar deferred payment of consideration in acquisitions (but only to the extent that no payment is then owed thereunder)), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all Securitization Transactions of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (k) all Repurchase Obligations.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

 

“Indemnitee” has the meaning assigned to such term in Section 10.03(b).

 

“Index Debt” means senior, unsecured, long-term indebtedness for borrowed money of the Borrower that is not guaranteed by any other Person or subject to any other credit enhancement.

 

“Information Memorandum” means the Confidential Information Memorandum dated August 2014 relating to the Borrower and the Transactions.

 

“Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.07.

 

13

 

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each March, June, September and December and (b) with respect to any LIBOR Loan or EURIBOR Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a LIBOR Borrowing or EURIBOR Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

 

“Interest Period” means, with respect to any LIBOR Borrowing or EURIBOR Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one week or one, two, three or six months (or, if agreed to by each Lender, twelve months) thereafter, as the Borrower may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of any Interest Period that is a multiple of months, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period that is a multiple of months pertaining to a LIBOR Borrowing or EURIBOR Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

 

“Issuing Bank” means Citibank N.A. and BNP Paribas and each other Lender that shall have become an Issuing Bank hereunder as provided in Section 2.05(j) (other than any Person that shall have ceased to be an Issuing Bank as provided in Section 2.05(k)), each in its capacity as an issuer of Letters of Credit hereunder.  Each Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate (it being agreed that such Issuing Bank shall, or shall cause such Affiliate to, comply with the requirements of Section 2.05 with respect to such Letters of Credit).

 

“LC Disbursement” means a payment made by any Issuing Bank in respect of a Letter of Credit.

 

“LC Expiration Date” has the meaning assigned to such term in Section 2.05(c).

 

“LC Exposure” means, at any time, (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time (expressed in Dollars in the amount of the US Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency) plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the applicable Borrowers at such time (expressed in Dollars in the amount of the US Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency); provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any documentation related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the US Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving effect to all such

 

14

 

increases, whether or not such maximum stated amount is in effect at such time.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the aggregate LC Exposure at such time.

 

“Lender Parent” means, with respect to any Lender, any Person in respect of which such Lender is a subsidiary.

 

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption or an Accession Agreement, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

 

“Letter of Credit” means any letter of credit issued and outstanding under this Agreement.

 

“LIBO Rate” means, with respect to any LIBOR Borrowing denominated in any currency for any Interest Period, the applicable Screen Rate at approximately 11:00 a.m., London time or, in the case of a LIBOR Borrowing denominated in Canadian Dollars, at approximately 10:00 a.m. Toronto time, on the Quotation Date for such currency for such Interest Period, as the rate for deposits of such currency with a maturity comparable to such Interest Period.

 

“LIBOR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

 

“Lien” means (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing), (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities and (d) any assignment or sale of any income or revenues (including accounts receivable) or rights in respect thereof.

 

“Loan Documents” means this Agreement, each Accession Agreement, each agreement referred to in Section 2.05(j) and each promissory note delivered pursuant to this Agreement.

 

“Loan Party” means, until the Separation Date, the Parent and the Borrower and, from and after the Separation Date, the Borrower.

 

“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

 

“Material Adverse Effect” means (a) a materially adverse effect on the business, assets, operations or financial condition of the Consolidated Group, taken as a whole, (b) a

 

15

 

material impairment of the ability of any Loan Party to perform its obligations hereunder or (c) a material impairment of the rights or remedies available to the Lenders or the Administrative Agent hereunder.

 

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and the Subsidiaries in an aggregate principal amount exceeding US$100,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of any Loan Party or any Subsidiary in respect of (a) any Hedging Agreements at any time shall be the Hedge Termination Value thereof at such time and (b) any Securitization Transaction shall be determined as set forth in the definition of such term.

 

“Material Subsidiary” means any Subsidiary (a) the consolidated assets of which equal 5.00% or more of the consolidated assets of the Borrower and the Subsidiaries as of the last day of the most recent fiscal quarter of the Borrower or (b) the consolidated revenues of which equal 5.00% or more of the consolidated revenues of the Borrower and the Subsidiaries for the most recent period of four consecutive fiscal quarters; provided that if at the end of the most recent fiscal quarter or for the most recent period of four consecutive fiscal quarters the consolidated assets or consolidated revenues of all Subsidiaries that under clauses (b) and (c) above would not constitute Material Subsidiaries shall have exceeded 15% of the consolidated assets or 15% of the consolidated revenues of the Borrower and the Subsidiaries, then one or more of such excluded Subsidiaries shall for all purposes of this Agreement be deemed to be Material Subsidiaries in descending order based on the amounts of their consolidated assets until such excess shall have been eliminated.

 

“Maturity Date” means (a) December 31, 2014, if the Separation Date has not occurred on or prior to such date or (b) the fifth anniversary of the Separation Date, as such date may be extended pursuant to Section 2.09.

 

“Maturity Date Extension Request” means a request by the Borrower, substantially in the form of Exhibit C hereto or such other form as shall be approved by the Administrative Agent, for the extension of the Maturity Date pursuant to Section 2.09.

 

“MNPI” means material information concerning the Borrower and the other Subsidiaries and their securities that has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD under the United States Securities Act of 1933 and the Exchange Act.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor by merger or consolidation to its ratings agency business.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA which the Borrower or any ERISA Affiliate (other than any Person considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414) has maintained, sponsored, contributed to or accrued an obligation to contribute to, or has within any of the preceding six plan years maintained, sponsored, contributed to or accrued an obligation to contribute.

 

16

 

“Non-Consenting Lender” means any Lender that withholds its consent to any proposed amendment, modification or waiver that cannot become effective without the consent of such Lender under Section 10.02, and that has been consented to by the Required Lenders.

 

“Non-Defaulting Lender” means, at any time, any Lender that is not a Defaulting Lender at such time.

 

“Obligations” means, with respect to the Borrower, the due and punctual payment of (a) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans made to the Borrower, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (b) each payment required to be made by the Borrower under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of LC Disbursements, interest thereon and obligations to provide cash collateral, and (c) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Borrower under this Agreement.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Lender or Issuing Bank and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan Document).

 

“Other Taxes” means any and all present or future stamp court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19).

 

“Parent” has the meaning assigned to such term in the heading of this Agreement.

 

“Parent Credit Agreement” means the Credit Agreement dated as of September 15, 2014 among the Parent, the lenders parties thereto and BNP Paribas, as administrative agent, as in effect on the date hereof.

 

“Participant” has the meaning assigned to such term in Section 10.04(c).

 

“Participant Register” has the meaning assigned to such term in Section 10.04(c).

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

 

17

 

“Pension Act” shall mean the Pension Protection Act of 2006.

 

“Permitted Liens” means:

 

(a)                                 Liens imposed by law for Taxes that are not yet due and payable or are being contested in compliance with Section 5.05;

 

(b)                                 statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen and suppliers, and similar Liens imposed by Law, in each case incurred in the ordinary course of business for sums not yet delinquent by more than 30 days or being contested in good faith;

 

(c)                                  Liens incurred and pledges and deposits made in the ordinary course of business in connection with workers’ compensation, disability or unemployment insurance, old-age pensions, retiree health benefits and other similar plans or programs and other social security laws or regulations;

 

(d)                                 deposits to secure the performance of (or to secure letters of credit or letters of guarantee that secure the performance of) bids, trade contracts, leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

 

(e)                                  leases, licenses, subleases or sublicenses granted to others (other than as security for Indebtedness) not interfering in any material respect with the ordinary conduct of the business of the Borrower and the Subsidiaries, taken as a whole;

 

(f)                                   (i) easements, covenants, conditions, restrictions, zoning restrictions, building codes, land use laws, leases, subleases, licenses, rights of way, minor irregularities in, or lack of, title and similar encumbrances affecting real property, (ii) with respect to any lessee’s or licensee’s interest in real or personal property, mortgages, liens, rights and obligations and other encumbrances arising by, through or under any owner, lessor or licensor thereof and (iii) leases, licenses, rights and obligations in connection with patents, copyrights, trademarks, tradenames and other intellectual property, in each case that do not secure the payment of Indebtedness to the extent, in the case of each of clauses (i), (ii) and (iii), that the Liens referred to therein do not, in the aggregate, materially detract from the value of the affected property as used by the Borrower or any Subsidiary in the ordinary course of business or interfere in any material respect with the ordinary conduct of the business of the Borrower and the Subsidiaries, taken as a whole;

 

(g)                                  judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII, and deposits securing appeal or other surety bonds related to such judgments;

 

(h)                                 Liens in favor of any Governmental Authority (i) to secure partial progress, advance or other payments pursuant to any contract or statute or (ii) to secure any Indebtedness incurred for the purpose of financing all or part of the purchase price or cost of constructing or improving the property subject to such Liens;

 

18

 

(i)                                     Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

 

(j)                                    customary landlords’ Liens under leases to which such Person is a party;

 

(k)                                 Liens arising under short-term repurchase agreements or reverse repurchase agreements with respect to US Treasury securities or other cash equivalent investments, short-term securities lending and securities borrowing agreements and similar transactions employed in connection with the management of cash and cash equivalents and short-term investments;

 

(l)                                     normal and customary rights of setoff, banker’s Liens and similar rights in respect of deposits of cash, or in respect of investment securities accounts, in favor of banks or other depository institutions; and

 

(m)                             sales, assignments, transfers or dispositions of accounts receivable in the ordinary course of business for purposes of collection (but not as part of any Securitization Transaction or factoring arrangement).

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Platform” has the meaning assigned to such term in Section 10.12(c).

 

“Prime Rate” means the rate of interest per annum publicly announced from time to time by Citibank, N.A. as its base rate in effect at its principal office in New York City.  Each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

 

“Private Side Lender Representatives” means, with respect to any Lender, representatives of such Lender that are not Public Side Lender Representatives.

 

“Pro Forma Basis”, when used in reference to any computations, means that such computations are to be made on a basis that gives effect to the applicable acquisition or disposition as if such acquisition or disposition had occurred on the date specified, in a manner consistent with the requirements of the SEC for pro forma financial information set forth in Article 11 of Regulation S-X under the Exchange Act.  If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Hedging Agreement applicable to such Indebtedness if such Hedging Agreement has a remaining term in excess of 12 months).

 

19

 

“Public Side Lender Representatives” means, with respect to any Lender, representatives of such Lender that do not wish to receive MNPI.

 

“Quotation Day” means (a) with respect to any currency (other than Sterling and Euro) for any Interest Period, two Business Days prior to the first day of such Interest Period, (b) with respect to Sterling for any Interest Period, the first day of such Interest Period and (c) with respect to Euro for any Interest Period, the day two TARGET Days before the first day of such Interest Period, in each case unless market practice differs in the Relevant Interbank Market for any currency, in which case the Quotation Day for such currency shall be determined by the Administrative Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day shall be the last of those days).

 

“Recipient” means (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank, as applicable.

 

“Register” has the meaning assigned to such term in Section 10.04(b)(iv).

 

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, members, partners, employees, agents and advisors of such Person and such Person’s Affiliates.

 

“Relevant Interbank Market” means (a) with respect to any currency other than Euros, the London interbank market and (b) with respect to Euros, the European interbank market.

 

“Repurchase Obligations” means, at any time, the aggregate amount of all accrued, absolute or contingent repurchase obligations (including repurchase obligations that become due on a future date) of the Borrower and the Subsidiaries at such time, in each case to the extent such amounts would be shown as liabilities on a consolidated balance sheet of the Borrower as of such time prepared in accordance with GAAP.

 

“Required Lenders” means, at any time, Lenders having Credit Exposures and unused Commitments representing more than 50% of the aggregate Credit Exposures and unused Commitments at such time.

 

“Sale-Leaseback Transaction” means any arrangement whereby the Borrower or a Subsidiary shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred; provided that any such arrangement entered into within 180 days after the acquisition or construction of the subject property shall not be deemed to be a “Sale-Leaseback Transaction”.

 

“Sanctions” means economic or financial sanctions or trade embargoes or restrictive measures enacted, imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or the U.S. Department of

 

20

 

Commerce (b) the United Nations Security Council; (c) the European Union or any of its member states; (d) Her Majesty’s Treasury; (e) Switzerland; or (f) any other relevant authority.

 

“Sanctioned Country” means, at any time, a country or territory which is, or whose government is, the subject or target of any Sanctions broadly restricting or prohibiting dealings with such country, territory or government (currently, Cuba, Iran, Sudan, and Syria).

 

“Sanctioned Person” means, at any time, any Person with whom dealings are restricted or prohibited under Sanctions, including (a) any Person listed in any Sanctions-related list of designated Persons maintained by the United States (including by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or the U.S. Department of Commerce), the United Nations Security Council, the European Union or any of its member states, Her Majesty’s Treasury, Switzerland or any other relevant authority, (b) any Person located, organized or resident in, or any Governmental Entity or governmental instrumentality of, a Sanctioned Country or (c) any Person 25% or more directly or indirectly owned by, controlled by, or acting for the benefit or on behalf of, any Person, individually, or Persons, together, described in clauses (a) or (b) hereof.

 

“Screen Rate” means (a) in respect of the LIBO Rate for any Interest Period for a Revolving Loan denominated in a currency other than Canadian Dollars, the ICE Benchmark Administration Settlement Rate for such Interest Period as set forth on the applicable Reuters screen (and if such service ceases to be available, another service displaying the appropriate rate designated by the Administrative Agent), (b) in respect of the LIBO Rate for any Interest Period for a Revolving Loan denominated in Canadian Dollars, the Canadian Dealer Offered Rate as set forth on the Reuters Screen CDOR Page and (c) in respect of the EURIBO Rate for any Interest Period, the percentage per annum determined by the Banking Federation of the European Union for such Interest Period as set forth on the applicable Reuters screen (and if such services ceases to be available, another service displaying the appropriate rate designated by the Administrative Agent).

 

“SEC” means the United States Securities and Exchange Commission.

 

“Securitization Transaction” means any transfer by the Borrower or any Subsidiary of accounts receivable or interests therein (a) to a trust, partnership, corporation or other entity, which transfer is funded in whole or in part, directly or indirectly, by the incurrence or issuance by the transferee or successor transferee of indebtedness or other securities that are to receive payments from, or that represent interests in, the cash flow derived from such accounts receivable or interests therein, or (b) directly to one or more investors or other purchasers.  The “amount” or “principal amount” of any Securitization Transaction shall be deemed at any time to be the aggregate principal or stated amount of the Indebtedness or other securities referred to in the first sentence of this definition or, if there shall be no such principal or stated amount, the uncollected amount of the accounts receivables or interests therein transferred pursuant to such Securitization Transaction net of any such accounts receivables or interests therein that have been written off as uncollectible.

 

21

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor by merger or consolidation to its rating agency business.

 

“Separation Date” means the date on which the Distribution is consummated,

 

“Separation Transaction” means each of the Contribution, the Distribution and each of the other transactions ancillary to the foregoing as set forth in the material agreements (along with schedules and exhibits relating thereto), as amended from time to time, entered into in connection with the Contribution and the Distribution, in each case in accordance with, in all material respects, the Form 10.

 

“Separation Tax Opinion” means the tax opinion of counsel to the Parent subject to customary assumptions and limitations confirming the tax-free status of the Separation Transaction for U.S. federal income tax.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board of Governors to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board of Governors).  Such reserve percentages shall include those imposed pursuant to such Regulation D.  LIBOR Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

“Sterling” means the lawful currency of the United Kingdom.

 

“Subject Business” means the assets, liabilities and operations of the electronic measurement business of the Parent and its Subsidiaries.

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

 

“Subsidiary” means any subsidiary of the Borrower.

 

22

 

“Syndication Agents” means Citibank, N.A.  and Bank of America, N.A., in their capacities as syndication agents with respect to the credit facility established hereunder.

 

“TARGET Day” means any day on which both (a) the TARGET payment system (or, if such payment system ceases to be operative, such other payment system, if any, determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro and (b) banks in London are open for general business.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings (including backup withholding) imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Transactions” means the execution, delivery and performance by the Parent and the Borrower of this Agreement, the borrowing of Loans, the use of proceeds thereof and the issuance of Letters of Credit hereunder.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to (a) the Adjusted LIBO Rate or the Alternate Base Rate, in the case of Loans denominated in US Dollars, (b) the Adjusted LIBO Rate, in the case of Loans denominated in Alternative Currencies (other than Euros) or (c) the EURIBO Rate, in the case of Loans denominated in Euros.

 

“Unreimbursed Amount” has the meaning assigned to such term in Section 2.05(e).

 

“Unrestricted Cash” means cash and cash equivalents that are not subject to any Lien other than any Lien permitted under clause (a) or (l) of the definition of the term “Permitted Lien”.

 

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 2.17(f)(ii)(B)(3).

 

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

 

“US Dollar Equivalent” means, on any date of determination, (a) with respect to any amount in US Dollars, such amount, and (b) with respect to any amount in any Alternative Currency, the equivalent in US Dollars of such amount, determined by the Administrative Agent pursuant to Section 1.05 using the Exchange Rate with respect to such Alternative Currency at the time in effect under the provisions of such Section.

 

“US Dollars” or “US$” means the lawful currency of the United States of America.

 

23

 

“US Subsidiary” means any Subsidiary that is organized under the laws of the United States of America, any State thereof or the District of Columbia.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

“Withholding Agent” means any Loan Party or the Administrative Agent.

 

“Yen” means the lawful currency of Japan.

 

SECTION 1.02.                                   Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a “LIBOR Loan”).  Borrowings also may be classified and referred to by Type (e.g., a “LIBOR Borrowing”).

 

SECTION 1.03.                                   Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders, writs and decrees, of all Governmental Authorities.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein (including this Agreement) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restriction on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real and personal tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

SECTION 1.04.                                   Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that (a) if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower

 

24

 

that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith, and (b) notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159, The Fair Value Option for Financial Assets and Financial Liabilities, or any successor thereto (including pursuant to the Accounting Standards Codification), to value any Indebtedness of the Borrower or any Subsidiary at “fair value”, as defined therein, or to any other accounting principle, if in each case, such election or such other accounting principle results in the amount of such Indebtedness being below or above the stated principal amount of such Indebtedness.

 

SECTION 1.05.                                   Currency Translation.  The Administrative Agent shall determine the US Dollar Equivalent of any Borrowing denominated in an Alternative Currency two Business Days prior to the initial Interest Period therefor and as of the date two Business Days prior to the commencement of each subsequent Interest Period therefor, in each case using the Exchange Rate in effect on the date of determination, and each such amount shall, except as provided in the next sentence, be the US Dollar Equivalent of such Borrowing until the next required calculation thereof pursuant to this Section.  The Administrative Agent may also determine the US Dollar Equivalent of any Borrowing denominated in an Alternative Currency as of such other dates as the Administrative Agent shall determine, in each case using the Exchange Rate in effect on the date of determination, and each such amount shall be the US Dollar Equivalent of such Borrowing until the next calculation thereof pursuant to this Section.  The Administrative Agent shall notify the Borrower and the applicable Lenders of each determination of the US Dollar Equivalent of each Borrowing.

 

SECTION 1.06.                                   Incorporation by Reference.  Certain provisions of the Parent Credit Agreement (including all defined terms used in such incorporated provisions and exhibits and schedules to the Parent Credit Agreement referred to in such incorporated provisions, but only to the extent so used or referred) are specifically incorporated in this Agreement by reference, and shall have the same force and effect as if the same were set out in this Agreement in full.  Except as otherwise provided herein, all references in such incorporated provisions to the “Administrative Agent”, a “Lender”, the “Lenders” or the “Required Lenders” or words of similar import or to “this Agreement”, “hereof”, “hereto” or “hereunder” or words of similar import or to any “Loan Document”, “thereof”, “thereto” or “thereunder” or words of similar import shall, without further reference, mean and refer to the Administrative Agent, a Lender, the Lenders and the Required Lenders under this Agreement and to this Agreement, respectively; and all references in such incorporated provisions to a “Loan” or the “Loans” or words of similar import shall, without further reference, mean and refer to a Loan or the Loans, as appropriate, hereunder.  The incorporation by reference into this Agreement of the terms and conditions of the Parent Credit Agreement is for convenience only, and this Agreement and the Parent Credit Agreement shall at all times be, and be deemed to be and treated as, separate and distinct loan obligations.  The incorporation by reference into this Agreement of the terms and conditions of

 

25

 

the Parent Credit Agreement shall not be affected or impaired by any subsequent expiration or termination of the Parent Credit Agreement.

 

ARTICLE II

 

THE CREDITS

 

SECTION 2.01.                                   Commitments.  Subject to the terms and conditions set forth herein, each Lender agrees to make Loans to the Borrower, denominated in US Dollars or Alternative Currencies, from time to time during the Availability Period in an aggregate principal amount at any time outstanding that will not result in (a) such Lender’s Credit Exposure exceeding its Commitment or (b) the sum of the total Credit Exposures exceeding the total Commitments.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.

 

SECTION 2.02.                                   Loans and Borrowings.  (a)  Each Loan shall be made as part of a Borrowing consisting of Loans denominated in the same currency and made by the Lenders ratably in accordance with their respective Commitments.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

 

(b)                                 Subject to Section 2.14, (i) each Borrowing denominated in US Dollars shall be comprised entirely of ABR Loans or LIBOR Loans, as the Borrower may request in accordance herewith, (ii) each Borrowing denominated in Euros shall be comprised entirely of EURIBOR Loans and (iii) each Borrowing denominated in an Alternative Currency (other than Euros) shall be comprised entirely of LIBOR Loans.  Each Lender at its option may make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

 

(c)                                  At the commencement of each Interest Period for any LIBOR Borrowing or EURIBOR Borrowing, and at the time each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e).  Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of 10 LIBOR Borrowings and EURIBOR Borrowings outstanding.

 

(d)                                 Notwithstanding any other provision of this Agreement, the Borrowers shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

 

SECTION 2.03.                                   Requests for Borrowings.  To request a Borrowing, the Borrower shall notify the Administrative Agent (a) in the case of a LIBOR Borrowing

 

26

 

denominated in US Dollars, not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Borrowing, (b) in the case of a LIBOR Borrowing denominated in an Alternative Currency or a EURIBOR Borrowing, not later than 12:00 noon, New York City time, four Business Days before the proposed Borrowing and (c) in the case of an ABR Borrowing, not later than 12:00 p.m., New York City time, on the date of the proposed Borrowing.  Each such Borrowing Request shall be irrevocable and shall be made by hand delivery or fax to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by a Financial Officer of the Borrower (or, in the case of any Borrowing denominated in US Dollars, by telephone notification, confirmed promptly by hand delivery or fax to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by a Financial Officer of the Borrower).  Each such telephonic or written Borrowing Request shall specify the following information in compliance with Section 2.02:

 

(a)                                 the currency (which shall be US Dollars or an Alternative Currency) and the principal amount of such Borrowing;

 

(b)                                 the date of such Borrowing, which shall be a Business Day;

 

(c)                                  if such Borrowing is denominated in US Dollars, the Type of such Borrowing;

 

(d)                                 in the case of a LIBOR Borrowing or a EURIBOR Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

 

(e)                                  the location and number of the account to which funds are to be disbursed or, in the case of any ABR Borrowing requested to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e), the identity of the Issuing Bank that made such LC Disbursement.

 

If no currency is specified with respect to any requested Borrowing, then the Borrower shall be deemed to have selected US Dollars.  If no election as to the Type of Borrowing denominated in US Dollars is specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested LIBOR Borrowing or a EURIBOR Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

SECTION 2.04.                                   [Reserved].

 

SECTION 2.05.                                   Letters of Credit.  (a)  General.  Subject to the terms and conditions set forth herein, the Borrower may request any Issuing Bank to issue Letters of Credit (or to amend, renew or extend outstanding Letters of Credit) denominated in US Dollars or any Alternative Currency for its own account or, so long as the Borrower is a joint and several co-applicant with respect thereto, for the account of any Subsidiary, in a form reasonably acceptable to the Administrative Agent and the applicable Issuing Bank, at any time and from

 

27

 

time to time from and including the Effective Date to but excluding the fifth Business Day prior to the Maturity Date.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, an Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.  The Borrower unconditionally and irrevocably agrees that, in connection with any Letter of Credit issued for the account of any Subsidiary as provided in the first sentence of this paragraph, the Borrower will be fully responsible for the reimbursement of LC Disbursements, the payment of interest thereon and the payment of fees due under Section 2.12(b) to the same extent as if it were the sole account party in respect of such Letter of Credit (the Borrower hereby irrevocably waiving any defenses that might otherwise be available to it as a guarantor of the obligations of any Subsidiary that shall be an account party in respect of any such Letter of Credit).

 

(b)                                 Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit, other than an automatic renewal permitted pursuant to paragraph (c) of this Section), the Borrower shall deliver (or transmit by electronic communication, if arrangements for doing so have been approved by the recipient) to the applicable Issuing Bank and the Administrative Agent, reasonably in advance of the requested date of issuance, amendment, renewal or extension, a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount and currency of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be reasonably necessary to enable the applicable Issuing Bank to prepare, amend, renew or extend such Letter of Credit.  If requested by the applicable Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed US$25,000,000 and (ii) the total Credit Exposures will not exceed the total Commitments and (iii) in the event the Existing Maturity Date shall have been extended as provided in Section 2.09, the sum of the LC Exposure attributable to Letters of Credit expiring after any Existing Maturity Date shall not exceed the total Commitments that shall have been extended to a date after the latest expiration date of such Letters of Credit.  Notwithstanding the foregoing, no Issuing Bank shall be under any obligation to issue any Letter of Credit if (i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing the Letter of Credit, or any law applicable to such Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Bank shall prohibit, or request that such Issuing Bank refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon such Issuing Bank with respect to the Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which such Issuing Bank in good faith deems material to it,

 

28

 

(ii) the issuance of the Letter of Credit would violate one or more policies of such Issuing Bank applicable to letters of credit generally or (iii) such Issuing Bank does not as of the issuance date of the requested Letter of Credit issue Letters of Credit in the requested currency.

 

(c)                                  Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) except as set forth below with respect to Collateralized Letters of Credit, the date that is five Business Days prior to the Maturity Date (the “LC Expiration Date”); provided that at the request of the Borrower, any Letter of Credit may provide for automatic renewals for additional periods of up to one year subject to a right on the part of the applicable Issuing Bank to prevent any such renewal from occurring by giving notice to the beneficiary during a specified period in advance of any such renewal, and the failure of such Issuing Bank to give such notice by the end of such period shall for all purposes hereof be deemed an extension of such Letter of Credit; provided further that in no event shall any Letter of Credit, as extended from time to time, expire on any date following the LC Expiration Date.  Notwithstanding clause (ii) of the preceding sentence, (A) any Collateralized Letter of Credit may, with the consent of the Issuing Bank that issued such Collateralized Letter of Credit, expire on any date following the LC Expiration Date and (B) any Letter of Credit that contains a customary “evergreen” provision may renew pursuant to such evergreen provision to an expiration date following the LC Expiration Date if such Letter of Credit becomes a Collateralized Letter of Credit at least 15 Business Days prior to the latest date upon which the applicable Issuing Bank would be entitled to terminate such Letter of Credit prior to its automatic renewal pursuant to such “evergreen” provision.

 

(d)                                 Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or the Lenders, the Issuing Bank that issued such Letter of Credit hereby grants to each Lender, and each Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage from time to time of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of such Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason.  Subject to paragraph (m) of this Section, each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Lender further acknowledges and agrees that, in issuing, amending, renewing or extending any Letter of Credit, the applicable Issuing Bank shall be entitled to rely, and shall not incur any liability for relying, upon the representation and warranty of the Borrower deemed made pursuant to Section 4.03, unless, at least one Business Day prior to the time such Letter of Credit is issued, amended, renewed or extended (or, in the case of an automatic renewal permitted pursuant to paragraph (c) of this Section, at

 

29

 

least one Business Day prior to the latest date upon which the applicable Issuing Bank would be entitled to terminate such Letter of Credit prior to its automatic renewal), the Required Lenders shall have notified the applicable Issuing Bank (with a copy to the Administrative Agent) in writing that, as a result of one or more events or circumstances described in such notice, one or more of the conditions precedent set forth in Section 4.03 would not be satisfied if such Letter of Credit were then issued, amended, renewed or extended (it being understood and agreed that, in the event any Issuing Bank shall have received any such notice, no Issuing Bank shall have any obligation to issue, amend, renew or extend any Letter of Credit until and unless it shall be satisfied that the events and circumstances described in such notice shall have been cured or otherwise shall have ceased to exist).

 

(e)                                  Reimbursement.  Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable Issuing Bank shall notify the applicable Borrower and the Administrative Agent thereof.  In the case of a Letter of Credit denominated in an Alternative Currency, the applicable Borrower shall reimburse the applicable Issuing Bank in such Alternative Currency, unless such Issuing Bank (at its option) shall have specified in such notice that it will require reimbursement in US Dollars.  In the case of any such reimbursement in US Dollars of a drawing under a Letter of Credit denominated in an Alternative Currency, the applicable Issuing Bank shall notify the applicable Borrower of the US Dollar Equivalent of the amount of the drawing promptly following the determination thereof The Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 3:00 p.m., New York City time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 3:00 p.m., New York City time, on (i) the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that if the amount to be reimbursed is denominated in US Dollars, the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 that such payment be financed with an ABR Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Borrowing.  If the Borrower fails to make such payment when due, the applicable Issuing Bank shall notify the Administrative Agent of such failure in accordance with paragraph (l) of this Section, and the Administrative Agent shall in turn notify each Lender of the applicable LC Disbursement, the amount of the payment then due from the Borrower in respect thereof (expressed in US Dollars in the amount of the US Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency) (the “Unreimbursed Amount”) and such Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the Unreimbursed Amount, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders pursuant to this paragraph), and the Administrative Agent shall promptly pay to such Issuing Bank the amounts so received by it from the Lenders.  Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the

 

30

 

extent that Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank, as their interests may appear.  Any payment made by a Lender pursuant to this paragraph to reimburse any Issuing Bank for any LC Disbursement (other than the funding of ABR Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

 

(f)                                   Obligations Absolute.  The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the applicable Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not strictly comply with the terms of such Letter of Credit or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.  None of the Administrative Agent, the Lenders, the Issuing Banks or any of their Related Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any other event or circumstance; provided that nothing in this Section shall be construed to excuse any Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of any Issuing Bank (such absence to be presumed unless otherwise determined by a final, non- appealable judgment of a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

 

(g)                                  Disbursement Procedures.  The applicable Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit issued by it.  The applicable Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by fax) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder;

 

31

 

provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Lenders of their obligations with respect to any such LC Disbursement.

 

(h)                                 Interim Interest.  If an Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement at the rate per annum then applicable to ABR Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(d) shall apply.  Interest accrued pursuant to this paragraph shall be paid to the Administrative Agent for the account of the applicable Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse such Issuing Bank shall be for the account of such Lender to the extent of such payment, and shall be payable on demand or, if no demand has been made, on the date on which the Borrower reimburses the applicable LC Disbursement in full.

 

(i)                                     Cash Collateralization.  If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposures representing more than 50% of the aggregate amount of LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in respect of each outstanding Letter of Credit issued for the Borrower’s account (or with respect to which it is a co-applicant), in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders and the applicable Issuing Bank, an amount in US Dollars equal to the portion of the LC Exposure attributable to such Letter of Credit as of such date plus any accrued and unpaid interest thereon; provided that the obligation to cash collateralize shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VII.  The Borrower also shall deposit cash collateral in accordance with this paragraph as and to the extent required by Section 2.11(b) or Section 2.21.  Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account.  Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account.  Monies in such account shall be applied by the Administrative Agent to reimburse the applicable Issuing Banks for LC Disbursements for which they have not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to (i) the consent of Lenders with LC Exposures representing more than 50% of the aggregate amount of LC Exposure and (ii) in the case of any such application at a time when any Lender is a Defaulting Lender (but only if, after giving effect thereto, the remaining cash collateral shall be less than the aggregate LC Exposure of all the Defaulting Lenders), the consent of each Issuing Bank), be applied to satisfy other

 

32

 

obligations of the Borrower under this Agreement.  If the Borrower is required to provide cash collateral hereunder as a result of the occurrence of an Event of Default, such cash collateral (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.  If the Borrower is required to provide an amount of cash collateral hereunder pursuant to Section 2.11(b), such amount (to the extent not applied as aforesaid) shall be returned to the Borrower as promptly as practicable, to the extent that, after giving effect to such return, the aggregate Credit Exposure would not exceed the aggregate Commitments and no Event of Default shall have occurred and be continuing.  If the Borrower is required to provide an amount of cash collateral hereunder pursuant to Section 2.21, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower as promptly as practicable, to the extent that, after giving effect to such return, no Issuing Bank shall have any exposure in respect of any outstanding Letter of Credit that is not fully covered by the Commitments of the Non-Defaulting Lenders and/or the remaining cash collateral and no Event of Default shall have occurred and be continuing.

 

(j)                                    Designation of Additional Issuing Banks.  From time to time, the Borrower may by notice to the Administrative Agent and the Lenders designate as additional Issuing Banks one or more Lenders that agree to serve in such capacity as provided below.  The acceptance by a Lender of any appointment as an Issuing Bank hereunder shall be evidenced by an agreement, which shall be in a form satisfactory to the Borrower and the Administrative Agent, executed by such Lender, the Borrower and the Administrative Agent and, from and after the effective date of such agreement, (i) such Lender shall have all the rights and obligations of an Issuing Bank under this Agreement and (ii) references herein to the term “Issuing Bank” shall be deemed to include such Lender in its capacity as an Issuing Bank.

 

(k)                                 Termination of an Issuing Bank.  The Borrower may terminate the appointment of any Issuing Bank as an “Issuing Bank” hereunder by providing a written notice thereof to such Issuing Bank and the Administrative Agent.  Any such termination shall become effective upon the earlier of (i) such Issuing Bank acknowledging receipt of such notice and (ii) the 10th Business Day following the date of the delivery thereof.  At the time any such termination shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the terminated Issuing Bank pursuant to Section 2.12(b).  From and after the effective date of any such termination, the terminated Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not issue additional Letters of Credit.

 

(l)                                     Issuing Bank Reports.  Unless otherwise agreed by the Administrative Agent, each Issuing Bank shall report in writing to the Administrative Agent (i) on or prior to each Business Day on which such Issuing Bank issues, amends, renews or extends any Letter of Credit, the date of such issuance, amendment, renewal or extension, and the face amounts of the Letters of Credit issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension (and whether the amounts thereof shall have changed), it being understood that such Issuing Bank shall not affect any issuance, renewal, extension or amendment resulting in an increase in the aggregate amount of the Letters of Credit issued by it without first obtaining written confirmation from the Administrative Agent that such increase is then permitted under this Agreement, (ii) on any Business Day on which such Issuing

 

33

 

Bank makes any LC Disbursement, the date and amount of such LC Disbursement, (iii) on any Business Day on which the Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on such day, the date of such failure and the amount of such LC Disbursement and (iv) on any other Business Day, such other information as the Administrative Agent shall reasonably request as to the Letters of Credit issued by such Issuing Bank.

 

(m)                             Collateralized Letters of Credit.  Notwithstanding anything to the contrary in this Section, the obligations of the Lenders to acquire participations in Letters of Credit and to reimburse any Issuing Bank for Unreimbursed Amounts (other than Unreimbursed Amounts arising from LC Disbursements made prior to the Maturity Date) shall terminate with respect to any Collateralized Letter of Credit on the Maturity Date (it being understood that the Lenders shall continue to participate in, and shall be required to reimburse in accordance with this Section, any LC Disbursement made prior to the Maturity Date).  Any participation held by any Lender in a Collateralized Letter of Credit on the Maturity Date (other than in respect of any Unreimbursed Amounts arising from LC Disbursements made prior to the Maturity Date) shall be deemed to have been assigned on the Maturity Date to the Issuing Bank that issued such Collateralized Letter of Credit.

 

SECTION 2.06.                                   Funding of Borrowings.  (a)  Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 3:00 p.m., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders.  The Administrative Agent will make such Loans available to the Borrower by promptly remitting the amounts so received, in like funds, to the account designated by the Borrower in the applicable Borrowing Request; provided that ABR Loans identified by the Borrower in the applicable Borrowing Request to be made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be remitted by the Administrative Agent to the applicable Issuing Bank.

 

(b)                                 Unless the Administrative Agent shall have received notice from a Lender prior to the proposed time of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the rate reasonably determined by the Administrative Agent to be the cost to it of funding such amount or (ii) in the case of the Borrower, the interest rate applicable to the subject Loan pursuant to Section 2.13 (it being understood that nothing in this paragraph shall require the Borrower to pay any interest in duplication of the interest payable under such Section).

 

SECTION 2.07.                                   Interest Elections.  (a)  Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request or as otherwise provided in Section 2.03 and, in the case of a LIBOR Borrowing or a EURIBOR Borrowing, shall have an initial Interest

 

34

 

Period as specified in such Borrowing Request or as otherwise provided in Section 2.03.  Thereafter, the Borrower may elect to convert such Borrowing (if denominated in US Dollars) to a Borrowing of a different Type or to continue such Borrowing and, in the case of a LIBOR Borrowing or a EURIBOR Borrowing, may elect Interest Periods therefor, all as provided in this Section and on terms consistent with the other provisions of this Agreement.  The Borrower may elect different options with respect to different portions of an affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing and the Loans resulting from an election made with respect to any such portion shall be considered a separate Borrowing.

 

(b)                                 To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type, and in the currency, resulting from such election to be made on the effective date of such election.  Each such Interest Election Request shall be irrevocable and shall be made by hand delivery or fax to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by a Financial Officer on behalf of the Borrower (or, in the case of any Borrowing denominated in US Dollars, by telephonic notification, confirmed promptly by hand delivery or fax to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by a Financial Officer on behalf of the Borrower).  Notwithstanding any other provision of this Section, the Borrower shall not be permitted to change the currency of any Borrowing or to elect an Interest Period for LIBOR Loans or EURIBOR Loans that does not comply with Section 2.02(d).

 

(c)                                  Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

 

(i)                                     the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing;

 

(ii)                                  the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

 

(iii)                               the Type of the resulting Borrowing, which shall comply with Section 2.02(b); and

 

(iv)                              if the resulting Borrowing is to be a LIBOR Borrowing or a EURIBOR Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a LIBOR Borrowing or EURIBOR Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

 

35

 

(d)                                 Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

 

(e)                                  If the Borrower fails to deliver a timely Interest Election Request with respect to a LIBOR Borrowing or EURIBOR Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period, (i) in the case of a LIBOR Borrowing denominated in US Dollars, such Borrowing shall be converted to an ABR Borrowing and (ii) in the case of any other LIBOR Borrowing or a EURIBOR Borrowing, such Borrowing shall be continued as a Borrowing of the applicable Type and currency for an Interest Period of one month.

 

(f)                                   Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower (provided that no such notice shall be required in the case of any Event of Default under clause (h) or (i) of Article VII with respect to the Borrower), then, so long as an Event of Default is continuing (i) in the case of Borrowings denominated in US Dollars, no outstanding Borrowing may be converted to or continued as a LIBOR Borrowing and, unless repaid, each LIBOR Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto and (ii) in the case of Borrowings denominated in Alternative Currencies, unless repaid, each LIBOR Borrowing and EURIBOR Borrowing shall be continued as a LIBOR Borrowing or a EURIBOR Borrowing, as applicable, with an Interest Period of one month.

 

SECTION 2.08.                                   Termination, Reduction and Increase of Commitments.  (a)  Unless previously terminated, the Commitments shall terminate on the Maturity Date.

 

(b)                                 The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of US$1,000,000 and not less than US$10,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect thereto and any concurrent prepayment of the Loans in accordance with Section 2.11, the total Credit Exposures would exceed the total Commitments.

 

(c)                                  The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

 

36

 

(d)                                 After the Separation Date, the Borrower may from time to time, by written notice to the Administrative Agent (which shall promptly deliver a copy to each of the Lenders) executed by the Borrower and one or more financial institutions (which may include any Lender) that are willing to extend a Commitment or, in the case of any such financial institution that is already a Lender, to increase its Commitment (any such financial institution referred to in this Section being called an “Increasing Lender”), cause the total Commitments to be increased by such new or incremental Commitments of the Increasing Lenders, in an amount for each Increasing Lender as set forth in such notice; provided that (i) the aggregate principal amount of any increase in the total Commitments made pursuant to this Section shall not be less than US$25,000,000 and the aggregate principal amount of all such increases shall not exceed US$150,000,000, (ii) each Increasing Lender, if not already a Lender hereunder, shall be subject to the prior written approval of the Administrative Agent and each Issuing Bank (which approval shall not be unreasonably withheld) and (iii) each Increasing Lender, if not already a Lender hereunder, shall become a party to this Agreement by completing and delivering to the Administrative Agent a duly executed Accession Agreement.  New Commitments and increases in Commitments created pursuant to this Section shall become effective (A) in the case of an Increasing Lender already a Lender under this Agreement, on the date specified in the applicable notice delivered pursuant to this Section and (B) in the case of an Increasing Lender not already a Lender under this Agreement, on the effective date of the applicable Accession Agreement.  Upon the effectiveness of any Accession Agreement to which any Increasing Lender is a party, such Increasing Lender shall thereafter be deemed to be a party to this Agreement and shall be entitled to all rights, benefits and privileges accorded a Lender hereunder and subject to all obligations of a Lender hereunder.  Notwithstanding the foregoing, no increase in the aggregate Commitments (or in the Commitment of any Lender) shall become effective under this Section unless (1) the Administrative Agent shall have received documents consistent with those delivered under Sections 4.01(b) and 4.01(c) as to the corporate power and authority of the Borrower to borrow hereunder after giving effect to such increase and (2) on the date of such increase, the conditions set forth in Sections 4.03(a) and 4.03(b) shall be satisfied (with all references in such Sections to a Borrowing being deemed to be references to such increase and without giving effect to the parenthetical in Section 4.03(a)) and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer of the Borrower.  Following any extension of a new Commitment or increase of a Lender’s Commitment pursuant to this paragraph, any Loans outstanding prior to the effectiveness of such increase or extension shall continue outstanding until the ends of the respective Interests Periods applicable thereto, and shall then be repaid and, if the Borrower shall so elect, refinanced with new Loans made pursuant to Section 2.01 ratably in accordance with the Commitments in effect following such extension or increase.

 

SECTION 2.09.                                   Extension of Maturity Date.  After the Separation Date, the Borrower may, by delivery of a Maturity Date Extension Request to the Administrative Agent (which shall promptly deliver a copy to each of the Lenders) not less than 45 days and not more than 75 days prior to any anniversary of the Availability Date, request that the Lenders extend the Maturity Date for an additional period of one year.  Each Lender shall, by notice to the Borrower and the Administrative Agent given not later than the 20th day after the date of the Administrative Agent’s receipt of the Maturity Date Extension Request from the Borrower, advise the Borrower whether or not it agrees to the requested extension (each Lender agreeing to a requested extension being called a “Consenting Lender”, and each Lender declining to agree to

 

37

 

a requested extension being called a “Declining Lender”).  Any Lender that has not so advised the Borrower and the Administrative Agent by such day shall be deemed to have declined to agree to such extension and shall be a Declining Lender.  If Lenders constituting the Required Lenders shall have agreed to a Maturity Date Extension Request, then the Maturity Date shall, as to the Consenting Lenders, be extended to the first anniversary of the Maturity Date theretofore in effect.  The decision to agree or withhold agreement to any Maturity Date Extension Request shall be at the sole discretion of each Lender.  The Commitment of any Declining Lender shall terminate on the Maturity Date in effect prior to giving effect to any such extension (such Maturity Date being called the “Existing Maturity Date”).  The principal amount of any outstanding Loans made by Declining Lenders, together with any accrued interest thereon and any accrued fees and other amounts payable to or for the account of such Declining Lenders hereunder, shall be due and payable on the Existing Maturity Date, and on the Existing Maturity Date the Borrower shall also make such other prepayments of their Loans pursuant to Section 2.11 as shall be required in order that, after giving effect to the termination of the Commitments of, and all payments to, Declining Lenders pursuant to this sentence, the total Credit Exposures would not exceed the total Commitments.  Notwithstanding the foregoing provisions of this paragraph, the Borrower shall have the right, pursuant to and in accordance with Section 2.19(b), at any time prior to the Existing Maturity Date, to replace a Declining Lender with a Lender or other financial institution that will agree to the applicable Maturity Date Extension Request, and any such replacement Lender shall for all purposes constitute a Consenting Lender.  Notwithstanding the foregoing, (a) the Availability Period and the Maturity Date (without taking into consideration any extension pursuant to this Section 2.09), as such terms are used in reference to any Issuing Bank or any Letters of Credit issued by such Issuing Banks, may not be extended without the prior written consent of such Issuing Bank (it being understood and agreed that, in the event any Issuing Bank shall not have consented to any such extension, (i) such Issuing Bank shall continue to have all the rights and obligations of an Issuing Bank hereunder through the Existing Maturity Date (or the Availability Period determined on the basis thereof, as applicable), and thereafter shall have no obligation to issue, amend, extend or renew any Letter of Credit (but shall, in each case, continue to be entitled to the benefits of Sections 2.05, 2.15, 2.17, 10.03 and 10.09, as applicable, as to Letters of Credit issued prior to such time), and (ii) the Borrower shall cause the LC Exposure attributable to Letters of Credit issued by such Issuing Bank to be zero no later than the day on which such LC Exposure would have been required to have been reduced to zero in accordance with the terms hereof without giving effect to any effectiveness of the extension of the applicable Existing Maturity Date pursuant to this paragraph (and, in any event, no later than the Existing Maturity Date)) and (b) no extension of the Maturity Date pursuant to this paragraph shall become effective unless on the anniversary of the Availability Date that immediately follows the date on which the Borrower delivers the applicable Maturity Date Extension Request, the conditions set forth in Section 4.03 shall be satisfied (with all references in such Section to a Borrowing being deemed to be references to such extension and without giving effect to the parenthetical in Section 4.03(a)) and, if reasonably requested by the Administrative Agent, the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer of the Borrower as well as documents consistent with those delivered under Sections 4.01(b) and 4.01(c) as to the corporate power and authority of the Borrower to borrow hereunder after giving effect to such extension.

 

38

 

SECTION 2.10.                                   Repayment of Loans; Evidence of Debt.  (a)  The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Loan made to the Borrower on the Maturity Date (in the case of any Declining Lender, without giving effect to the extension thereof pursuant to Section 2.09).

 

(b)                                 Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

 

(c)                                  The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type and currency thereof and, if applicable, the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

(d)                                 The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein absent manifest error; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans or pay any other amounts due hereunder in accordance with the terms of this Agreement.

 

(e)                                  Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Borrower and the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 10.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

 

SECTION 2.11.                                   Prepayment of Loans.  (a)  The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (d) of this Section.

 

(b)                                 If the total Credit Exposures shall exceed the total Commitments, then (i) if any Borrowings are outstanding, (A) on the last day of any Interest Period for any LIBOR Borrowing or EURIBOR Borrowing and (B) on each other day on which any ABR Borrowing shall be outstanding, the Borrower shall prepay Borrowings in an aggregate amount equal to the lesser of (x) the amount necessary to eliminate such excess (after giving effect to any other prepayment of Loans on such day) and (y) the amount of the applicable Borrowings referred to in clause (A) or (B), as applicable, and (ii) if no Borrowings are outstanding, deposit US Dollars as cash collateral in an account with the Administrative Agent pursuant to Section 2.05(i) in an aggregate amount equal to the lesser of (A) the amount equal to such excess and (B) the

 

39

 

aggregate amount of the LC Exposures.  If the total Credit Exposure on the last day of any month shall exceed 105% of the total Commitments, then the Borrower shall, not later than the next Business Day, prepay one or more Borrowings (and, if no Borrowings are outstanding, deposit US Dollars as cash collateral in an account with the Administrative Agent pursuant to Section 2.05(i)) in the amount necessary to eliminate such excess.

 

(c)                                  Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (d) of this Section.

 

(d)                                 The Borrower shall notify the Administrative Agent by a written notice signed by a Financial Officer on behalf of the Borrower of any prepayment of a Borrowing hereunder (i) in the case of a LIBOR Borrowing denominated in US Dollars, not later than 12:00 noon, New York City time, three Business Days before the date of such prepayment (or, in the case of a prepayment under paragraph (b) above, as soon thereafter as practicable), (ii) in the case of a LIBOR Borrowing denominated in an Alternative Currency or a EURIBOR Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of such prepayment (or, in the case of a prepayment under paragraph (b) above, as soon thereafter as practicable) and (iii) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, on the date of such prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of optional prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.08(c), then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.08(c).  Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each optional partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type and currency as provided in Section 2.02.  Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.

 

SECTION 2.12.                                   Fees.  (a)  The Borrower agrees to pay to the Administrative Agent for the account of each Lender a facility fee, which shall accrue at the Applicable Rate on the daily amount of the Commitment of such Lender (whether used or unused) during the period from and including the date that is the earlier of (i) 30 days after the Effective Date or (ii) the Availability Date, to but excluding the date on which such Commitment terminates; provided that if such Lender continues to have any Credit Exposure after its Commitment terminates, then such facility fee shall continue to accrue on the daily amount of such Lender’s Credit Exposure from and including the date on which its Commitment terminates to but excluding the date on which such Lender ceases to have any Credit Exposure.  Accrued facility fees shall be payable in arrears on the last day of March, June, September and December of each year, commencing on the first such date to occur after the date that is the earlier of (i) 30 days after the Effective Date or (ii) the Availability Date, and on the date on which the Commitments shall have terminated and the Lenders shall have no Credit Exposure; provided that facility fees accruing after the Commitments shall have terminated shall be payable on demand.  All facility fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

40

 

(b)                                 The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to LIBOR Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank a fronting fee, which shall accrue at 0.125% per annum on the average daily amount of the LC Exposure attributable to Letters of Credit issued by such Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as such Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Accrued participation fees and fronting fees shall be payable in arrears on the last day of March, June, September and December of each year, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand.  Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

(c)                                  The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

 

(d)                                 All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Banks, in the case of fees payable to it) for distribution, in the case of facility fees and Letter of Credit participation fees, to the Persons entitled thereto.  Fees paid shall not be refundable under any circumstances.

 

SECTION 2.13.                                   Interest.  (a)  The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate set forth under the caption “ABR Margin” in the definition of such term.

 

(b)                                 The Loans comprising each LIBOR Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate set forth under the caption “LIBOR/EURIBOR Margin” in the definition of such term.

 

(c)                                  The Loans comprising each EURIBOR Borrowing shall bear interest at the EURIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate set forth under the caption “LIBOR/EURIBOR Margin” in the definition of such term.

 

(d)                                 Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as

 

41

 

well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2.00% per annum plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2.00% per annum plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.

 

(e)                                  Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion or continuation of any LIBOR Loan or any EURIBO Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion or continuation.  All interest shall be payable in the currency in which the applicable Loan is denominated.

 

(f)                                   All interest hereunder shall be computed on the basis of a year of 360 days, except that (a) interest on Borrowings denominated in Sterling shall be computed on the basis of a year of 365 days and (b) interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Adjusted LIBO Rate, EURIBO Rate or Alternate Base Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

SECTION 2.14.                                   Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a LIBOR Borrowing or a EURIBOR Borrowing:

 

(a)                                 the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the EURIBO Rate, as the case may be, for such Interest Period; or

 

(b)                                 the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or EURIBO Rate, as the case may be, for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining the Loans included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or fax as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, an affected LIBOR Borrowing or EURIBOR Borrowing, as the case may be, shall be ineffective, (ii) any affected LIBOR Borrowing shall (A) if denominated in US Dollars, be continued as an ABR Borrowing, or (B) otherwise, bear interest, from and after the end of the immediately preceding Interest Period applicable thereto, at a rate equal to the rate per annum determined by the Administrative Agent to be representative of the

 

42

 

Lenders’ cost of funding the applicable Loans (with the Borrower and each Lender agreeing that the Administrative Agent may make such determination in any manner it determines is reasonable, and that such determination shall be conclusive) plus the Applicable Rate set forth under the caption “LIBOR/EURIBOR Margin” in the definition of such term, (iii) any affected EURIBOR Borrowing shall bear interest, from and after the end of the immediately preceding Interest Period applicable thereto, at a rate equal to the rate per annum determined by the Administrative Agent to be representative of the Lenders’ cost of funding the applicable Loans (with the Borrower and each Lender agreeing that the Administrative Agent may make such determination in any manner it determines is reasonable, and that such determination shall be conclusive) plus the Applicable Rate set forth under the caption “LIBOR/EURIBOR Margin” in the definition of such term and (iv) any Borrowing Request for an affected LIBOR Borrowing or EURIBOR Borrowing shall (A) in the case of a Borrowing denominated in US Dollars, be deemed to be a request for an ABR Borrowing or (B) in all other cases, be ineffective.

 

SECTION 2.15.                                   Increased Costs.  (a)  If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate or the EURIBO Rate) or any Issuing Bank;

 

(ii)                                  impose on any Lender, any Issuing Bank or the London or European interbank market any other condition (other than Taxes) affecting this Agreement or LIBOR Loans, EURIBOR Loans or any Letter of Credit or participations therein; or

 

(iii)                               subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any LIBOR Loan or EURIBOR Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)                                 If any Lender or Issuing Bank determines in good faith that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or Issuing Bank’s capital or on the capital of such Lender’s or Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or Issuing Bank or such Lender’s or

 

43

 

Issuing Bank’s holding company would have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Bank’s policies and the policies of such Lender’s or Issuing Bank’s holding company with respect to capital adequacy or liquidity), then from time to time the Borrower will pay to such Lender or Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company for any such reduction suffered.

 

(c)                                  A certificate of a Lender or Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b)  of this Section and the manner in which such amount or amounts have been determined, shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

 

(d)                                 Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or Issuing Bank, as the case may be, notifies the Borrower of the Change in Law or other circumstance giving rise to such increased costs or reductions and of such Lender’s or Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law or other circumstance giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

SECTION 2.16.                                   Break Funding Payments.  In the event of (a) the payment of any principal of any LIBOR Loan or EURIBOR Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or an optional prepayment of Loans), (b) the conversion of any LIBOR Loan or EURIBOR Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Loan on the date or in the amount specified in any notice delivered pursuant hereto or (d) the assignment of any LIBOR Loan or EURIBOR Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense (but not for any anticipated profits) attributable to such event, including, if any of the foregoing Loans are denominated in any Alternative Currency, the actual costs and expenses of such Lender attributable to the premature unwinding of any hedging agreement entered into by such Lender in respect of the foreign currency exposure attributable to such Loan.  In the case of a LIBOR Loan or EURIBOR Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate or the EURIBO Rate, as applicable, that would have been applicable to such Loan (and, for avoidance of doubt, without giving effect to any Applicable Rate that would otherwise have been applicable thereto), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such

 

44

 

Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate that such Lender would bid were it to bid, at the commencement of such period, for deposits of a comparable amount and period from other banks in the London interbank market.  The Borrower shall also compensate each Lender for the loss, cost or expense attributable to any failure by the Borrower to deliver a timely Interest Election Request with respect to a LIBOR Borrowing or a EURIBOR Borrowing.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

 

SECTION 2.17.                                   Taxes.  (a)  Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made free and clear of and without deduction for Taxes except as required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) required the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

(b)                                 In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)                                  The Borrower shall indemnify each Recipient, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by such Recipient on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or an Issuing Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive absent manifest error.

 

(d)                                 As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(e)                                  Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for

 

45

 

such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

 

(f)                                   (i)  Any Lender that is entitled to an exemption from or reduction of withholding Tax under the law of the jurisdiction in which the Borrower is resident or located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by law or reasonably requested by the Borrower or the Administrative Agent, as will permit such payments to be made without withholding or at a reduced rate; provided that such Lender has received written notice from the Borrower advising it of the availability of such exemption or reduction and containing all applicable documentation (together, if requested by such Lender, with a certified English translation thereof).  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(ii)                                  Without limiting the generality of the foregoing,

 

(A)                               any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;

 

(B)                               any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time

 

46

 

thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

 

(1)                                 in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(2)                                 executed originals of IRS Form W-8ECI;

 

(3)                                 in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit G-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

 

(4)                                 to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or Exhibit G-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-4 on behalf of each such direct and indirect partner;

 

(C)                               any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

 

47

 

(D)                               if a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(g)                                  If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, under this Section with respect to Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of the indemnified party, agrees to repay the amount paid pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event the indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.  This Section shall not be construed to require the Administrative Agent, any Issuing Bank or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

 

SECTION 2.18.                                   Payments Generally; Pro Rata Treatment; Sharing of Set-offs.  (a)  The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements or otherwise) prior to the time required hereunder for such payment or, if no such time is expressly required, prior to 1:00 p.m., New York City time, on the date when due, in immediately available funds, without any defense, set-off, recoupment or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent for the account of the applicable Lenders to such account as the Administrative Agent shall from time to time specify in one or more notices delivered to the Borrower, except that payments to be made directly to an Issuing Bank as provided herein shall

 

48

 

be so directly made and payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder and under each other Loan Document of principal or interest in respect of any Loan shall be made in the currency of such Loan; all other payments hereunder and under each other Loan Document shall be made in US Dollars.  Any payment required to be made by the Administrative Agent hereunder shall be deemed to have been made by the time required if the Administrative Agent shall, at or before such time, have taken the necessary steps to make such payment in accordance with the regulations or operating procedures of the clearing or settlement system used by the Administrative Agent to make such payment.

 

(b)                                 If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.

 

(c)                                  If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans or LC Disbursements to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including pursuant to Section 2.09) or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

 

49

 

(d)                                 Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of any Lenders or Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the applicable Lenders or Issuing Bank, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each applicable Lender or Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

(e)                                  If any Lender shall fail to make any payment required to be made by it hereunder to or for the account the Administrative Agent or any Issuing Bank, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations in respect of such payment until all such unsatisfied obligations have been discharged or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender pursuant to this Agreement (including pursuant to Sections 2.05(e), 2.06(b), 2.18(d) or 10.03(c)), in each case in such order as shall be determined by the Administrative Agent in its discretion.

 

SECTION 2.19.                                   Mitigation Obligations; Replacement of Lenders.  (a)  If any Lender requests any payments under Section 2.15, or if any Loan Party is required to pay Indemnified Taxes or any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign and delegate its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment and delegation (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment and delegation.

 

(b)                                 If (i) any Lender requests any payments under Section 2.15, (ii) any Loan Party is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, (iii) any Lender becomes a Defaulting Lender, (iv) any Lender becomes a Declining Lender or (v) any Lender becomes a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.04, with the Borrower or the replacement Lender paying any applicable processing or recordation fees), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (A) the Borrower shall have received the prior written consent of the

 

50

 

Administrative Agent and each Issuing Bank (which consent shall not unreasonably be withheld), (B) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), (C) in the case of any such assignment and delegation resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments, (D) in the case of any such assignment and delegation resulting from the status of such Lender as a Declining Lender, the assignee shall have agreed to the applicable Maturity Date Extension Request and (E) in the case of any such assignment and delegation resulting from the status of such Lender as a Non-Consenting Lender, such assignment, together with any assignments by other Non-Consenting Lenders, will enable the Borrower to obtain sufficient consents to cause the applicable amendment, modification or waiver to become effective.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.  Each party hereto agrees that an assignment and delegation required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee and that the Lender required to make such assignment and delegation need not be a party thereto.

 

SECTION 2.20.                                   [Reserved].

 

SECTION 2.21.                                   Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

 

(a)                                 facility fees shall continue to accrue on the amount of the Commitment of such Defaulting Lender pursuant to Section 2.12(a) only to the extent of the Credit Exposure of such Defaulting Lender (excluding any portion thereof constituting LC Exposure of such Defaulting Lender that is subject to reallocation under clause (c)(i) below);

 

(b)                                 the Commitment and the Credit Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders or any other requisite Lenders have taken or may take any action hereunder or under any other Loan Document (including any consent to any amendment, waiver or other modification pursuant to Section 10.02); provided that any amendment, waiver or other modification requiring the consent of all Lenders or all Lenders affected thereby shall, except as otherwise provided in Section 10.02, require the consent of such Defaulting Lender in accordance with the terms hereof;

 

(c)                                  if any LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

 

(i)                                     the LC Exposure of such Defaulting Lender (other than any portion thereof attributable to unreimbursed LC Disbursements with respect to which

 

51

 

such Defaulting Lender shall have funded its participation as contemplated by Sections 2.05(e) and 2.05(f)) shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent that (x) the sum of all Non-Defaulting Lenders’ Credit Exposures plus such Defaulting Lender’s LC Exposure (in each case, excluding the portion thereof referred to above) does not exceed the sum of all Non-Defaulting Lenders’ Commitments and (y) each Non-Defaulting Lenders’ Credit Exposure does not exceed its Commitment;

 

(ii)                                  if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent or an Issuing Bank (provided that such Issuing Bank shall immediately also notify the Administrative Agent) cash collateralize for the benefit of the Issuing Banks the portion of such Defaulting Lender’s LC Exposure that has not been reallocated as set forth in such clause in accordance with the procedures set forth in Section 2.05(i) for so long as such LC Exposure is outstanding;

 

(iii)                               if the Borrower cash collateralize any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay participation fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such portion of such Defaulting Lender’s LC Exposure for so long as such Defaulting Lender’s LC Exposure is cash collateralized;

 

(iv)                              if any portion of the LC Exposure of such Defaulting Lender is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.12(b) shall be adjusted to give effect to such reallocation;

 

(v)                                 if all or any portion of such Defaulting Lender’s LC Exposure that is subject to reallocation pursuant to clause (i) above is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of any Issuing Bank or any other Lender hereunder, all facility fees that otherwise would have been payable to such Defaulting Lender with respect to such portion of its LC Exposure, and all participation fees payable under Section 2.12(b) with respect to such portion of its LC Exposure, shall be payable to the Issuing Banks (and allocated among them ratably based on the amount of such portion of the LC Exposure of such Defaulting Lender attributable to Letters of Credit issued by each Issuing Bank) until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

 

(d)                                 so long as such Lender is a Defaulting Lender, no Issuing Bank shall be required to issue, amend, renew or extend any Letter of Credit, unless in each case it is satisfied that the related exposure and the Defaulting Lender’s then outstanding LC Exposure will be fully covered by the Commitments of the Non-Defaulting Lenders and/or cash collateral provided by the Borrower in accordance with clause (c) above, and participating interests in any such issued, amended, renewed or extended Letter of Credit

 

52

 

will be allocated among the Non-Defaulting Lenders in a manner consistent with clause (c)(i) above (and such Defaulting Lender shall not participate therein).

 

(e)                                  In the event that (i) a Bankruptcy Event with respect to a Lender Parent shall have occurred following the date hereof and for so long as such Bankruptcy Event shall continue or (ii)  any Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, no Issuing Bank shall be required to issue, amend, renew or extend any Letter of Credit, unless such Issuing Bank shall have entered into arrangements with the Borrower or such Lender satisfactory to such Issuing Bank to defease any risk to it in respect of such Lender hereunder.

 

(f)                                   In the event that the Administrative Agent, the Borrower and each Issuing Bank each agree that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Each Loan Party represents and warrants to the Lenders and the Issuing Banks that:

 

SECTION 3.01.                                   Organization; Powers.  Each of such Loan Party and its Subsidiaries is duly organized, validly existing and in good standing (to the extent such concept is recognized in the jurisdiction of organization thereof) under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, would not be materially likely to have a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

 

SECTION 3.02.                                   Authorization; Enforceability.  The Transactions are within each Loan Party’s corporate powers and have been duly authorized by all necessary corporate and, if required, stockholder action.  This Agreement has been duly executed and delivered by each Loan Party and constitutes a legal, valid and binding obligation of each Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

SECTION 3.03.                                   Governmental Approvals; No Conflicts.  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b) will not violate the charter, by-laws or other organizational documents of such

 

53

 

Loan Party or any of its Subsidiaries, (c) will not violate any applicable law, rule or regulation or any order of any Governmental Authority, (d) will not violate or result in a default under any indenture, agreement or other instrument binding upon such Loan Party or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by such Loan Party or any of its Subsidiaries, and (e) will not result in the creation or imposition of any Lien on any asset of such Loan Party or any of its Subsidiaries pursuant to the terms of any indenture, agreement or other instrument binding on such Loan Party or any of its Subsidiaries, except in each case (other than in the case of clause (b) or (e)), where the absence of such consent or approval, or the failure to make such registration or filing, or take such other action, or such violation, default or payment would not be materially likely, individually or in the aggregate, to have a Material Adverse Effect.

 

SECTION 3.04.                                   Financial Condition; No Material Adverse Change.  (a)  The Parent has heretofore furnished to the Lenders (i) its consolidated balance sheets and statements of operations, stockholders equity and cash flows as of the end of and for the fiscal year ended October 31, 2013, reported on by PricewaterhouseCoopers LLP, an independent registered public accounting firm, and (ii) its consolidated balance sheet and statement of operations and cash flows as of the end of and for the fiscal quarters ended January 31, 2014, April 30, 2014 and July 31, 2014, in each case certified by a Financial Officer of the Parent (which certification requirement shall be deemed satisfied by the execution by a Financial Officer of the certification required to be filed by the SEC pursuant to Item 601 of Regulation S-K).  Such financial statements present fairly, in all material respects, the consolidated financial position and results of operations and cash flows of the Parent and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject, in the case of such quarterly financial statements, to normal year-end adjustments and the absence of footnotes.

 

(b)                                 The balance sheet of the Subject Business as at October 31, 2013, and the related statements of operations and cash flows of such business for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP, an independent registered public accounting firm, and the balance sheet and statement of operations and cash flows of such business as of the end of and for the fiscal quarter ended July 31, 2014, certified by a Financial Officer of the Parent, copies of which have been furnished to each Lender, fairly present, in all material respects, the financial position and results of operations and cash flows of the Subject Business as at such dates and the results of such business for the periods ended on such dates, all in accordance with GAAP (subject, in the case of the balance sheet as at April 30, 2013 and the related statements of income and cash flows, to the absence of footnotes and year-end audit adjustments).

 

(c)                                  Since October 31, 2013, there has been no material adverse change in the business, assets, operations or financial condition of the Consolidated Group, taken as a whole.

 

SECTION 3.05.                                   Litigation and Environmental Matters.  (a)  There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of such Loan Party, threatened against or affecting such Loan Party or any of its Subsidiaries (i) that would be materially likely, individually or in the aggregate, to have a Material Adverse Effect or (ii) that involve this Agreement or the Transactions.

 

54

 

(b)                                 Except with respect to any matters that, individually or in the aggregate, would not be materially likely to have a Material Adverse Effect, neither such Loan Party nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

 

SECTION 3.06.                                   Compliance with Laws and Agreements.  Each of such Loan Party and its Subsidiaries is in compliance with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, has not resulted and would not be materially likely to have a Material Adverse Effect.  No Default has occurred and is continuing.

 

SECTION 3.07.                                   Investment Company Status.  Neither such Loan Party nor any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

 

SECTION 3.08.                                   Properties.  (a)  Each of such Loan Party and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business, except where the failure to have such title or such leasehold interests, individually or in the aggregate, has not resulted in and would not be materially likely to have a Material Adverse Effect.

 

(b)                                 Each of such Loan Party and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by such Loan Party, except for any such infringements that, individually or in the aggregate, would not be materially likely to have a Material Adverse Effect.

 

SECTION 3.09.                                   Federal Reserve Regulations.  No part of the proceeds of any Loan or any Letter of Credit will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of the regulations of the Board of Governors, including Regulation U or Regulation X.  Not more than 25% of the value of the assets of such Loan Party individually, or of such Loan Party and the Subsidiaries on a consolidated basis, subject to any provision of this Agreement under which the sale, pledge or disposition of assets is restricted (within the meaning of Regulation U), will consist of margin stock (as defined in Regulation U).

 

SECTION 3.10.                                   Taxes.  Such Loan Party and its Subsidiaries have timely filed or caused to be filed all Tax returns and reports required to have been filed and have paid or caused to be paid all Taxes required to have been paid by them pursuant to said Tax returns or pursuant to any assessment received by them, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books adequate reserves (to the extent required by GAAP) or

 

55

 

(b) to the extent that the failure to do so would not, individually or in the aggregate, be materially likely to have a Material Adverse Effect.

 

SECTION 3.11.                                   ERISA.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, would be materially likely to be expected to have a Material Adverse Effect.

 

SECTION 3.12.                                   Disclosure.  Neither the Information Memorandum nor any of the other reports, financial statements, certificates or other information (taken as a whole) furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, such Loan Party represents only that such information was prepared in good faith based upon assumptions believed by them to be reasonable at the time made and at the time so furnished.

 

SECTION 3.13.                                   AML Laws; Anti-Corruption Laws and Sanctions.  Such Loan Party has implemented and maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws, applicable AML Laws and applicable Sanctions.  None of (a) such Loan Party, any Subsidiary or any of their respective directors or officers, or, to the knowledge of such Loan Party, any of their respective employees or Affiliates, or (b) to the knowledge of such Loan Party, any agent of such Loan Party, or any Subsidiary or other Affiliate that will act in any capacity in connection with or benefit from the credit facility established hereby, (i) is a Sanctioned Person, or (ii) is in violation of AML Laws, Anti-Corruption Laws, or Sanctions.  No Borrowing or Letter of Credit, use of proceeds or other transaction contemplated by this Agreement will cause a violation of AML Laws, Anti-Corruption Laws or applicable Sanctions by any person participating in the transactions contemplated by this Agreement, whether as lender, borrower, guarantor, agent, or otherwise.  Such Loan Party represents that, except as disclosed to the Administrative Agent and the Lenders prior to the date of this Agreement, neither it nor any of its Subsidiaries, nor its parent company, or, to the knowledge of such Loan Party, any other Affiliate has engaged in or intends to engage in any dealings or transactions with, or for the benefit of, any Sanctioned Person or with or in any Sanctioned Country.

 

ARTICLE IV

 

CONDITIONS

 

SECTION 4.01.                                   Effective Date.  Upon the satisfaction of the following conditions precedent (or waiver in accordance with Section 10.02), the Effective Date shall occur:

 

56

 

(a)                                 The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic image scan transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

 

(b)                                 The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent, the Lenders and the Issuing Banks and dated the Effective Date) of (i) Marie Huber, Senior Vice President and General Counsel of the Parent, (ii) Stephen Williams, Senior Vice President and General Counsel of the Borrower, and (iii) Fenwick & West LLP, counsel for the Parent and the Borrower, covering such matters relating to the Parent, the Borrower, this Agreement or the Transactions as the Administrative Agent shall reasonably request.

 

(c)                                  The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Loan Party, the authorization of the Transactions and any other legal matters relating to each Loan Party, this Agreement or the Transactions, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

 

(d)                                 The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of each Loan Party, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.03.

 

(e)                                  The Administrative Agent shall have received financial projections for the Borrower for the fiscal years ended in 2014, 2015, 2016 and 2017, in each case after giving pro forma effect to the consummation of the Separation Transaction and the incurrence of Indebtedness in connection with the Separation Transaction.

 

(f)                                   The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Loan Parties hereunder.

 

(g)                                  The Administrative Agent and Lenders shall have received, at least five Business Days prior to the Effective Date, all documentation and other information relating to the Parent or the Borrower requested by them for purposes of ensuring compliance with applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act.

 

The Administrative Agent shall notify the Parent, the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, this Agreement shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 10.02) on or prior to September 22, 2014.

 

57

 

SECTION 4.02.                                   Conditions Precedent to Availability Date.  After the Effective Date and upon the satisfaction of the following conditions precedent (or waiver in accordance with Section 10.02), the Availability Date shall occur:

 

(a)                                 The Administrative Agent shall have received a certificate, dated the Availability Date and signed by the President, a Vice President or a Financial Officer of the Parent, confirming that:

 

(i)                                     all conditions to the Distribution and the Contribution have been satisfied or waived on or prior to the Availability Date;

 

(ii)                                  the Distribution and the Contribution have been consummated on or prior to the Availability Date in a manner substantially consistent with the description thereof in the Form 10.

 

(iii)                               the Borrower is in pro forma compliance with the covenants set forth in Section 6.07 after giving effect to the Separation Transaction, as of the most recently ended four fiscal quarter period for which financial statements were delivered in accordance with Section 5.01(a) or (b);

 

(iv)                              the Parent and the Borrower have received (A) all governmental consents and approvals necessary in connection with the Distribution and the Contribution, including the declaration by the SEC of the effectiveness of the Form 10 (and no stop orders or other restrictions of any type shall be in existence relating to the Form 10) and (B) final approval of the Separation Transactions from the Board of Directors of the Parent; and

 

(v)                                 all actions necessary to consummate the Distribution and the Contribution in such a manner have occurred or are expected to be taken on the Availability Date.

 

(b)                                 The Administrative Agent shall have received a certificate, dated the Availability Date and signed by the President, a Vice President or a Financial Officer of each Loan Party, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.03.

 

(c)                                  The Parent shall have received the Separation Tax Opinion and a copy of which shall have been provided to the Administrative Agent.

 

SECTION 4.03.                                   Each Credit Event.  The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of each Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

 

(a)                                 The representations and warranties of the Borrower set forth in this Agreement (other than, with respect to any Borrowing occurring after the Availability Date, the representations set forth in Sections 3.04(c) and 3.05(a)) shall be true and correct on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable.

 

58

 

(b)                                 At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

 

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, all LC Disbursements have been reimbursed and all Letters of Credit have expired or been terminated, the Parent (prior to the Separation Date and not thereafter, and other than in Section 5.02 through Section 5.09) and the Borrower (other than in Section 5.10) covenants and agrees with the Lenders that:

 

SECTION 5.01.                                   Financial Statements and Other Information.  Such Loan Party will furnish to the Administrative Agent and each Lender:

 

(a)                                 within 90 days after the end of each fiscal year of, prior to the Separation Date, the Parent (and to the extent publicly available, the Borrower) and thereafter, the Borrower (or, if earlier, the date on which such Loan Party files the same with the SEC), a copy of its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, accompanied by a report of PricewaterhouseCoopers LLP or other independent registered public accounting firm of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of the related audit) to the effect that such consolidated financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Consolidated Group on a consolidated basis in accordance with GAAP consistently applied;

 

(b)                                 within 60 days after the end of each of the first three fiscal quarters of each fiscal year of, prior to the Separation Date, the Parent (and to the extent publicly available, the Borrower) and thereafter, the Borrower (or, if earlier, the date on which such Loan Party files the same with the SEC), a copy of its consolidated balance sheet and related statements of operations as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year and its related statement of cash flows for the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly, in all material respects, the financial position and results of operations and cash flows of the Consolidated Group on a consolidated basis in accordance with

 

59

 

GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes (which certification requirement shall be deemed satisfied by the execution by a Financial Officer of the certification required to be filed with the SEC pursuant to Item 601 of Regulation S-K);

 

(c)                                  concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate signed by a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and is continuing and, if a Default has occurred and is continuing, specifying the details thereof and any action taken or proposed to be taken with respect thereto and (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.07 (including whether any Acquisition Indebtedness has been excluded from the calculation of Adjusted Consolidated Total Indebtedness);

 

(d)                                 promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Consolidated Group with the SEC, or distributed by the Borrower to its stockholders generally, as the case may be; and

 

(e)                                  promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Consolidated Group, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender (acting through the Administrative Agent) may reasonably request.

 

Information required to be delivered pursuant to this Section shall be deemed to have been delivered if such information, or one or more annual or quarterly reports containing such information, shall have been posted by the Administrative Agent on an DebtDomain or similar site to which the Lenders have been granted access or shall be available on the website of the SEC at http://www.sec.gov or the website of the Borrower at http://www.keysight.com and a confirming notice of such posting or availability shall have been delivered to the Administrative Agent (it being agreed that such notice may be delivered by electronic communication to an e-mail address provided by the Administrative Agent to the Borrower for such purpose, as such e-mail address may be modified by the Administrative Agent from time to time).  Information required to be delivered pursuant to this Section may also be delivered by electronic communications pursuant to procedures approved by the Administrative Agent.

 

SECTION 5.02.                                   Notices of Material Events.  The Borrower will furnish to the Administrative Agent prompt written notice of the following:

 

(a)                                 the occurrence of any Default;

 

(b)                                 the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against the Borrower or any Subsidiary that would be materially likely to have a Material Adverse Effect;

 

(c)                                  the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would be materially likely to be expected to result in liability of the Borrower and the Subsidiaries in an aggregate amount exceeding US$100,000,000; and

 

60

 

(d)                                 any other development that has had, or in the judgment of the Borrower would be materially likely to have, a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer setting forth the details of the event or development requiring such notice (or referring to a description of such event or development in the publicly available SEC filings of the Borrower) and any action taken or proposed to be taken with respect thereto.

 

SECTION 5.03.                                   Existence.  The Borrower will, and will cause each Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, except as otherwise permitted by Section 6.04; provided that this Section shall not require the preservation of the legal existence of any Subsidiary (other than the Borrower) if the Borrower shall determine that the preservation of such existence is no longer necessary or desirable in the conduct of the business of the Borrower and the Subsidiaries taken as a whole.

 

SECTION 5.04.                                   Businesses and Properties.  Except as otherwise permitted by Section 6.04 or where the failure to do so would not be materially likely to have a Material Adverse Effect, the Borrower will, and will cause each Subsidiary to, at all times (a) do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect the rights, licenses, permits, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business and (b) maintain, preserve and protect all property material to the conduct of such business.

 

SECTION 5.05.                                   Payment of Taxes.  The Borrower will, and will cause each of the Subsidiaries to, pay its Tax liabilities before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith, (b) the Borrower or the applicable Subsidiary has set aside on its books adequate reserves with respect thereto to the extent required by GAAP and (c) the failure to make payment pending such contest would not be materially likely to be expected to have a Material Adverse Effect.

 

SECTION 5.06.                                   Insurance.  The Borrower will, and will cause its Subsidiaries, as appropriate, to, maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations; provided, that the Borrower and its Subsidiaries may self-insure up to the same extent as other companies of similar size engaged in comparable businesses.

 

SECTION 5.07.                                   Books and Records; Inspection Rights.  The Borrower will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities, to the extent required by GAAP.  The Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, at reasonable times and upon reasonable prior notice (given through the Administrative Agent), to visit and inspect its properties, to examine and make extracts from its books and records and to discuss its affairs, finances and condition with its officers and independent accountants (it being agreed that, the foregoing, with respect to any Subsidiary, will be coordinated through the Borrower).

 

61

 

SECTION 5.08.                                   Compliance with Laws.  The Borrower will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority, including Environmental Laws and ERISA, applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  In addition, the Borrower will maintain in effect policies and procedures designed to promote compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws, applicable AML Laws and applicable Sanctions.

 

SECTION 5.09.                                   Use of Proceeds.  The Borrower will use the proceeds of the Loans and the Letters of Credit only for general corporate purposes of the Borrower and the Subsidiaries, including to finance repurchases of the outstanding common stock of the Borrower and acquisitions.  The Borrower will not permit the proceeds of any Loan or any Letter of Credit to be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of the regulations of the Board of Governors, including Regulation U or Regulation X.  The Borrower will not permit more than 25% of the value of the assets of the Borrower individually, or of the Borrower and the Subsidiaries on a consolidated basis, that are subject to any provision of this Agreement under which the sale, pledge or disposition of assets is restricted (within the meaning of Regulation U) to consist of margin stock (as defined in Regulation U).

 

SECTION 5.10.                                   Affirmative Covenants of the Parent.  Until the Separation Date, the Parent will comply with each of the covenants set forth in Article V of the Parent Credit Agreement (other than Section 5.09 of the Parent Credit Agreement), each of which is hereby incorporated by this reference.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, all LC Disbursements have been reimbursed and all Letters of Credit have expired or been terminated, the Parent (prior to the Separation Date and not thereafter, and other than in Section 6.01 through Section 6.08) and the Borrower (other than in Section 6.09 and Section 6.10) covenants and agrees with the Lenders that:

 

SECTION 6.01.                                   Subsidiary Indebtedness.  The Borrower will not permit any Subsidiary to create, incur, assume or permit to exist any Indebtedness or permit to exist any preferred stock or other preferred equity interests, except:

 

(a)                                 Indebtedness under this Agreement;

 

(b)                                 Indebtedness, preferred stock or other preferred equity interests existing on the date hereof and set forth on Schedule 6.01 and extensions, renewals or replacements of any such Indebtedness that do not increase the outstanding principal amount thereof;

 

62

 

(c)                                  Indebtedness, preferred stock or preferred equity interests of Subsidiaries existing at the time they become Subsidiaries and not incurred or issued or sold in contemplation of their becoming Subsidiaries and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof;

 

(d)                                 Indebtedness of any Subsidiary incurred to finance the acquisition, construction or improvement by such Subsidiary of any fixed or capital assets, including Capital Lease Obligations, provided that such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof;

 

(e)                                  Indebtedness of any Subsidiary to the Borrower or any other Subsidiary, or any preferred stock or other preferred equity interests of any Subsidiary held by the Borrower or any other Subsidiary; provided that no such Indebtedness, preferred stock or other preferred equity interests shall be assigned to, or subjected to any Lien in favor of, a Person other than the Borrower or a Subsidiary;

 

(f)                                   Indebtedness of any Subsidiary as an account party in respect of letters of credit or letters of guarantee, in each case backing obligations that do not constitute Indebtedness of any Subsidiary;

 

(g)                                  Indebtedness consisting of industrial development, pollution control or other revenue bonds or similar instruments issued or guaranteed by any Governmental Authority; and

 

(h)                                 other Indebtedness and preferred stock and other preferred equity interests not expressly permitted by clauses (a) through (g) above; provided that the sum, without duplication, of (i) the aggregate principal amount of the outstanding Indebtedness, and the aggregate liquidation preference value of the outstanding preferred stock and other preferred equity interests, permitted by this clause (h), (ii) the aggregate principal amount of the outstanding Indebtedness secured by Liens (including Liens deemed to exist in connection with Securitization Transactions) permitted by Section 6.02(j) and (iii) the Attributable Debt in respect of Sale-Leaseback Transactions permitted by Section 6.03(b) does not at any time exceed the greater of (A) US$400,000,000 and (B) 10% of Consolidated Stockholders’ Equity.

 

SECTION 6.02.                                   Liens.  The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, except:

 

(a)                                 Permitted Liens;

 

(b)                                 Liens created under this Agreement, and Liens on cash collateral provided by the Borrower to an Issuing Bank in respect of Collateralized Letters of Credit as contemplated by Section 2.05(m);

 

63

 

(c)                                  Liens existing on the date hereof and set forth on Schedule 6.02 and any extensions, renewals or replacements thereof; provided that (i) no such Lien shall apply to any other assets of the Borrower or any Subsidiary, other than improvements and accessions to the subject assets and proceeds thereof, and (ii) no such Lien shall secure obligations other than those that it secured on the date hereof and permitted extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

 

(d)                                 Liens on assets existing at the time such assets are acquired by the Borrower or a Subsidiary and any extensions, renewals or replacements thereof; provided that (i) no such Lien is created in contemplation of or in connection with any such acquisition, (ii) no such Lien shall apply to any other assets of the Borrower or any Subsidiary, other than improvements and accessions to the subject assets and proceeds thereof, and (iii) no such Lien shall secure obligations other than those that it secures on the date of such acquisition and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof (other than by the amount of any fees, costs and expenses in connection with such extension, renewal or replacement and any accrued interest on such obligation);

 

(e)                                  Liens on assets of any Person at the time such Person becomes a Subsidiary and any extensions, renewals and replacements thereof; provided that (i) no such Lien is created in contemplation of or in connection with such Person becoming a Subsidiary, (ii) no such Lien shall apply to any other assets of the Borrower or any Subsidiary, other than improvements and accessions to the subject assets and proceeds thereof, and (iii) no such Lien shall secure obligations other than those that it secures on the date such Person becomes a Subsidiary and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof (other than by the amount of any fees, costs and expenses in connection with such extension, renewal or replacement and any accrued interest on such obligation);

 

(f)                                   Liens securing Indebtedness incurred to finance the acquisition, construction or improvement of any fixed or capital assets (including Liens deemed to exist in connection with Capital Lease Obligations) acquired after the date hereof to the extent such Liens are created at the time of or within 180 days after the acquisition, or the completion of such construction or improvement, of such fixed or capital assets, and any Liens securing extensions, refinancings or replacements of such Indebtedness that do not increase the outstanding principal amount thereof; provided that no such Lien shall apply to any assets of the Borrower or any Subsidiary, other than the subject fixed or capital assets, improvements and accessions thereto and proceeds thereof;

 

(g)                                  customary Liens arising from or created in connection with the issuance of trade letters of credit for the account of the Borrower or any Subsidiary supporting obligations not constituting Indebtedness; provided that such Liens encumber only the raw materials, inventory, machinery or equipment in connection with the purchase of which such letters of credit are issued;

 

64

 

(h)                                 Liens on assets of Subsidiaries securing obligations owed to the Borrower or one or more other Subsidiaries;

 

(i)                                     Liens on cash collateral or government securities to secure obligations under Hedging Agreements; provided that the aggregate value of any collateral so pledged does not exceed US$30,000,000 in the aggregate at any time; and

 

(j)                                    other Liens securing or deemed to exist in connection with Indebtedness and sales of accounts receivable and interests therein pursuant to Securitization Transactions; provided that the sum, without duplication, of (i) the aggregate principal amount of the outstanding Indebtedness secured by Liens or deemed to exist in connection with Securitization Transactions permitted by this clause (j), (ii) the aggregate principal amount of the outstanding Indebtedness and the aggregate liquidation preference value of the outstanding preferred stock and other preferred equity interests permitted by Section 6.01(h) and (iii) the Attributable Debt in respect of Sale-Leaseback Transactions permitted by Section 6.03(b) does not at any time exceed the greater of (A) US$400,000,000 and (B) 10% of Consolidated Stockholders’ Equity.

 

SECTION 6.03.                                   Sale and Leaseback Transactions.  The Borrower will not, and will not permit any Subsidiary to, enter into or be a party to any Sale-Leaseback Transaction, except:

 

(a)                                 Sale-Leaseback Transactions existing on the date hereof and set forth on Schedule 6.03 and extensions, renewals or replacements of any such Sale- Leaseback Transaction; provided that the assets subject to any such extended, renewed or replaced Sale-Leaseback Transaction shall include only the assets subject thereto on the date hereof, improvements and accessions thereto and proceeds thereof; and

 

(b)                                 other Sale-Leaseback Transactions; provided that the sum, without duplication, of (i) the aggregate Attributable Debt in respect of Sale-Leaseback Transactions permitted by this clause (b), (ii) the aggregate principal amount of the outstanding Indebtedness, and the aggregate liquidation preference value of the outstanding preferred stock and other preferred equity interests, permitted by Section 6.01(h) and (iii) the aggregate principal amount of the outstanding Indebtedness secured by Liens (including Liens deemed to exist in connection with Securitization Transactions) permitted by Section 6.02(j) does not at any time exceed the greater of (A) US$400,000,000 and (B) 10% of Consolidated Stockholders’ Equity.

 

SECTION 6.04.                                   Fundamental Changes.  (a)  The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) assets representing all or substantially all the consolidated assets of the Borrower and the Subsidiaries (whether now owned or hereafter acquired), or liquidate or dissolve, except that if at the time thereof and immediately after giving pro forma effect thereto (as if the relevant transaction and any related incurrence or repayment of Indebtedness had occurred at the beginning of the most recent period of four fiscal quarters for which financial statements have been delivered pursuant to Sections 5.01(a) or 5.01(b) or, prior

 

65

 

to the delivery of any such financial statements, at July 31, 2014) no Default shall have occurred and be continuing (i) any Person may merge into the Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Person may merge with any Subsidiary in a transaction in which the surviving entity is a Subsidiary and (iii) any Subsidiary may liquidate or dissolve or, so long as such transaction does not constitute a transfer or other disposition (in one transaction or in a series of transactions) of all or substantially all the consolidated assets of the Borrower and the Subsidiaries (whether now owned or hereafter acquired), merge with or into any other Person.

 

(b)                                 The Borrower will not, and will not permit any Subsidiary to, engage to any extent material to the Borrower and the Subsidiaries on a consolidated basis in any business other than the Subject Business as described in the Form 10 and businesses reasonably related or complementary thereto.

 

SECTION 6.05.                                   Transactions with Affiliates.  The Borrower will not, and will not permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties; (b) transactions between or among the Borrower and the Subsidiaries (or between or among two or more Subsidiaries) not involving any other Affiliate; (c) transactions with Parent and its Subsidiaries described in the Form 10; and (d) compensation arrangements for directors or executive officers approved by the Board of Directors of the Borrower or the compensation committee of such Board of Directors; provided that nothing contained in this Section shall prevent the Borrower from paying dividends or making other cash distributions to its stockholders.

 

SECTION 6.06.                                   Restrictive Agreements.  The Borrower will not, and will not permit any Subsidiary to, enter into any agreement that (a) prohibits the Borrower or any Subsidiary from creating or permitting to exist any Lien that secures the Obligations outstanding under this Agreement or (b) restricts the ability of any Subsidiary to pay dividends or other distributions to the Borrower or other Subsidiaries or to make loans or advances to the Borrower or other Subsidiaries or to repay loans or advances made by the Borrower or other Subsidiaries to it or to Guarantee the Obligations outstanding under this Agreement; provided that the foregoing shall not apply to:

 

(a)                                 restrictions or conditions imposed by law or by this Agreement;

 

(b)                                 restrictions or conditions existing on the date hereof and set forth in Schedule 6.06 (or to any extension, amendment, modification, renewal or replacement thereof not expanding the scope of any such restriction or condition) to the extent such restrictions and conditions apply only to such Subsidiary and not to any other Subsidiary;

 

(c)                                  restrictions or conditions that are binding on a Subsidiary at the time such Subsidiary first becomes a Subsidiary, so long as such restrictions or conditions were not entered into in contemplation of such Person becoming a Subsidiary;

 

66

 

(d)                                 restrictions or conditions in agreements that represent or secure Indebtedness of a Foreign Subsidiary, provided that such restrictions or conditions apply solely to such Foreign Subsidiary;

 

(e)                                  restrictions or conditions that are customary provisions in joint venture agreements and other similar agreements applicable to joint ventures and applicable solely to such joint ventures;

 

(f)                                   restrictions or conditions on Liens in favor of any holder of Indebtedness permitted under Section 6.01 and 6.02 but solely to the extent any negative pledge or other restriction on Liens relates to the property financed by such Indebtedness, and negative pledge clauses in favor of any holder of Indebtedness permitted under this Agreement that restrict Liens unless the holder of such Indebtedness is equally and ratably secured thereby;

 

(g)                                  customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or of any assets pending such sale to the extent that such restrictions and conditions apply only to the Subsidiary or assets that is or are to be sold and such sale is permitted hereunder;

 

(h)                                 restrictions and conditions imposed upon any project finance, securitization or other special purpose Subsidiary in connection with any incurrence by it of Indebtedness permitted hereunder if (i) the principal obligations arising under such transaction are solely obligations of such Subsidiary and are non-recourse to the Borrower or any other Subsidiary and (ii) such restrictions apply only to such Subsidiary and not to any other Subsidiary;

 

(i)                                     restrictions and conditions imposed on the transfer of licensed intellectual property and customary provisions in leases, licenses or other agreements that restrict the assignment, sublease or sublicense of such agreements or any rights thereunder;

 

(j)                                    customary financial covenants affecting the maintenance or retention of assets or capital by a Subsidiary; and

 

(k)                                 restrictions or conditions imposed by any agreement relating to secured Indebtedness that is permitted under Section 6.01 and 6.02, to the extent that such restrictions apply only to the property or assets securing such Indebtedness.

 

The Borrower will not permit any restrictive agreements under this Section 6.06 that, individually or in the aggregate, would limit the ability of the Subsidiaries, taken as a whole, to pay dividends or make distributions to the Borrower to the extent that such dividends or distributions are required in order to enable the Borrower to perform its obligations under this Agreement.

 

SECTION 6.07.                                   Financial Covenants.  (a)  The Borrower will not at any time permit the ratio of (i) Adjusted Consolidated Total Indebtedness at such time to (ii) Consolidated EBITDA for the most recently ended period of four consecutive fiscal quarters to be greater than 3.50 to 1.00; and

 

67

 

(b)                                 The Borrower will not at any time permit the ratio of (i) Consolidated EBITDA to (ii) consolidated interest expense, in each case for the most recently ended period of four fiscal quarters, to be less than 3.00 to 1.00.

 

SECTION 6.08.                                   Use of Proceeds.  The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees, Affiliates and agents shall not use, directly or indirectly, the proceeds of any Borrowing or Letter of Credit, or lend, contribute or otherwise make available such proceeds to any Subsidiary, other Affiliate, joint venture partner or other Person, (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws or AML Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or involving any goods originating in or with a Sanctioned Person or Sanctioned Country, or (C)  in any manner that would result in the violation of  any Sanctions by any Person (including any Person participating in the transactions contemplated hereunder, whether as underwriter, advisor lender, investor or otherwise).

 

SECTION 6.09.                                   Separation.  The Parent will not consummate the Distribution unless the Separation will be consummated in accordance with, in all material respects, (i) the Form 10; and (ii) the Separation Tax Opinion.

 

SECTION 6.10.                                   Negative Covenants of the Parent.  Until the Separation Date, the Parent will not violate any of the covenants set forth in Article VI of the Parent Credit Agreement (other than Section 6.08 of the Parent Credit Agreement), each of which is hereby incorporated by this reference.

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

If any of the following events (“Events of Default”) shall occur:

 

(a)                                 the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

 

(b)                                 the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days;

 

(c)                                  any representation or warranty made or deemed made by or on behalf of any Loan Party in or in connection with this Agreement or any amendment or modification hereof or waiver hereunder, or in any report, certificate, financial statement

 

68

 

or other document furnished pursuant to or in connection with this Agreement or any amendment or modification hereof or waiver hereunder, shall prove to have been materially incorrect when made or deemed made;

 

(d)                                 any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to the Borrower’s existence) or 5.09 or, prior to the Separation Date, Section 5.03 of the Parent Credit Agreement, as incorporated herein by reference (with respect to the Parent’s existence), or in Article VI;

 

(e)                                  any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to the Parent or the Borrower (which notice will be given at the request of any Lender);

 

(f)                                   the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest) in respect of any Material Indebtedness, when and as the same shall become due and payable or within any applicable cure period;

 

(g)                                  any event or condition occurs that results in any Material Indebtedness becoming due or being terminated or required to be prepaid, repurchased, redeemed or defeased prior to its scheduled maturity, or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness (or, in the case of any Securitization Transaction, the purchasers or lenders thereunder or, in the case of any Hedging Agreement, the counterparties thereto) or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to terminate or require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of property or assets;

 

(h)                                 an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Material Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

 

(i)                                     the Borrower or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,

 

69

 

conservator or similar official for the Borrower or any Material Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

 

(j)                                    the Borrower or any Material Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

 

(k)                                 one or more judgments for the payment of money in an aggregate amount in excess of US$100,000,000 (net of any available insurance provided by a solvent and unaffiliated insurer that has not disputed coverage) shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or a judgment creditor shall have attached or levied upon any assets of the Borrower or any Subsidiary to enforce any such judgment (but only if such attachment or levy shall not be effectively stayed);

 

(l)                                     an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, would be materially likely to result in liability of the Borrower and the Subsidiaries in an aggregate amount in excess of US$100,000,000;

 

(m)                             prior to the Separation Date, the guarantee of the Parent hereunder shall cease to be, or shall be asserted by the Parent not to be, a legal, valid or binding obligation of the Parent;

 

(n)                                 a Change in Control shall occur; or

 

(o)                                 prior to the Separation Date, an “Event of Default” as defined in the Parent Credit Agreement shall have occurred and be continuing;

 

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times:  (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder,

 

70

 

shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

 

ARTICLE VIII

 

THE ADMINISTRATIVE AGENT

 

SECTION 8.01.                                   Appointment and Authority.  Each of the Lenders and the Issuing Banks hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors to serve as Administrative Agent under the Loan Documents, and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Banks, and neither the Parent nor the Borrower shall have rights as a third-party beneficiary of any of such provisions.  It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

 

SECTION 8.02.                                   Rights as a Lender.  Any Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender or an Issuing Bank as any other Lender or Issuing Bank and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with any member of the Consolidated Group or other Affiliate thereof as if it were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders or Issuing Banks.

 

SECTION 8.03.                                   Exculpatory Provisions.  The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature.  Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in Section 10.02), provided that no Agent shall be required to take any action that, in its opinion or the opinion of its counsel, could expose the Administrative Agent to liability or to be contrary to any Loan Document or applicable law, rule or regulation, including for the avoidance of doubt any action that may be in violation of the automatic stay under any debtor relief law or

 

71

 

that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any debtor relief law, and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by any of them or any of their Affiliates in any capacity.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in Section 10.02) or in the absence of their own gross negligence or willful misconduct (such absence to be presumed unless otherwise determined by a final, non-appealable judgment of a court of competent jurisdiction).  The Administrative Agent shall be deemed to have no knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or the occurrence of any Default, (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.  Notwithstanding anything herein to the contrary, the Administrative Agent shall not have any liability arising from any confirmation of the Credit Exposure or the component amounts thereof, any Exchange Rate or any US Dollar Equivalent.

 

SECTION 8.04.                                   Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or Issuing Bank prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

SECTION 8.05.                                   Delegation of Duties.  The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by it.  The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The

 

72

 

exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

 

SECTION 8.06.                                   Resignation of Administrative Agent.  (a)  The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Banks and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that in no event shall any such successor Administrative Agent be a Defaulting Lender.  Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

 

(b)                                 If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the Borrower and such Person remove such Person as Administrative Agent and, in consultation with the Borrower, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

 

(c)                                  With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (ii) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and Issuing Bank directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents.  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 10.03 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of

 

73

 

any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

 

(d)                                 Any resignation pursuant to this Section 8.06 by a Person acting as Administrative Agent shall, unless such Person shall notify the Borrower and the Lenders otherwise, also act to relieve such Person and its Affiliates of any obligation to issue new, or extend existing, Letters of Credit where such issuance or extension is to occur on or after the effective date of such resignation.  Upon the acceptance of a successor Administrative Agent’s appointment as Administrative Agent hereunder, (i) such successor Administrative Agent shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Bank, (ii) the retiring Issuing Bank shall be discharged from all of its duties and obligations hereunder, and (iii) the successor Issuing Bank shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangement satisfactory to the retiring Issuing Bank to effectively assume the obligations of the retiring Issuing Bank with respect to such Letters of Credit.

 

SECTION 8.07.                                   Non-Reliance on Administrative Agent and Other Lenders.  Each Lender and each Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent, any Arranger or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent, any Arranger or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.

 

SECTION 8.08.                                   No Other Duties, Etc.  The parties agree that none of the Arrangers or Syndication Agents referred to on the cover page of this Agreement shall, in its capacity as such, have any duties or responsibilities under this Agreement or any other Loan Document.

 

ARTICLE IX

 

GUARANTEE

 

In order to induce the Lenders and the Issuing Banks to enter into this Agreement, the Parent hereby irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, the payment when and as due of the Obligations of the Borrower.  The Parent further agrees that the due and punctual payment of such Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee hereunder notwithstanding any such extension or renewal of any such Obligation.

 

The Parent waives presentment to, demand of payment from and protest to the Borrower of any of the Obligations, and also waives notice of acceptance of its obligations and notice of protest for nonpayment.  The obligations of the Parent hereunder shall not be affected by (a) the failure of the Administrative Agent, any Lender or any Issuing Bank to assert any

 

74

 

claim or demand or to enforce any right or remedy against the Borrower under the provisions of this Agreement or otherwise; (b) any extension or renewal of any of the Obligations; (c) any rescission, waiver, amendment or modification of, or release from, any of the terms or provisions of this Agreement, or any other agreement; (d) any default, failure or delay, willful or otherwise, in the performance of any of the Obligations; or (e) any other act, omission or delay to do any other act which may or might in any manner or to any extent vary the risk of the Parent or otherwise operate as a discharge of a guarantor as a matter of law or equity or which would impair or eliminate any right of the Parent to subrogation.

 

The Parent further agrees that its agreement hereunder constitutes a guarantee of payment when due (whether or not any bankruptcy or similar proceeding shall have stayed the accrual or collection of any of the Obligations or operated as a discharge thereof) and not merely of collection, and waives any right to require that any resort be had by the Administrative Agent, any Lender or any Issuing Bank to any balance of any deposit account or credit on the books of the Administrative Agent, such Lender or such Issuing Bank in favor of the Borrower or any other Person.

 

The obligations of the Parent hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever, by reason of the invalidity, illegality or unenforceability of any of the Obligations, any impossibility in the performance of any of the Obligations or otherwise.

 

The Parent further agrees that its obligations hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Administrative Agent, any Lender or any Issuing Bank upon the bankruptcy or reorganization of the Borrower or otherwise.

 

In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent, any Lender or any Issuing Bank may have at law or in equity against the Parent by virtue hereof, upon the failure of the Borrower to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Parent hereby promises to and will, upon receipt of written demand by the Administrative Agent, any Lender or any Issuing Bank, forthwith pay, or cause to be paid, to the Administrative Agent, such Lender or such Issuing Bank in cash an amount equal to the unpaid principal amount of such Obligation then due, together with accrued and unpaid interest thereon.  The Parent further agrees that if payment in respect of any Obligation shall be due in a currency other than US Dollars and/or at a place of payment other than New York and if, by reason of any Change in Law, disruption of currency or foreign exchange markets, war or civil disturbance or other event, payment of such Obligation in such currency or at such place of payment shall be impossible or, in the reasonable judgment of the Administrative Agent or any Lender, not consistent with the protection of its rights or interests, then, at the election of the Administrative Agent, the Parent shall make payment of such Obligation in US Dollars (based upon the applicable Exchange Rate in effect on the date of payment) and/or in New York, and shall indemnify the Administrative Agent and each Lender against any losses or reasonable out-of-pocket expenses that it shall sustain as a result of such alternative payment.

 

75

 

Upon payment by the Parent of any sums as provided above, all rights of the Parent against the Borrower arising as a result thereof by way of right of subrogation or otherwise shall in all respects be subordinated and junior in right of payment to the prior indefeasible payment in full of all the Obligations owed by the Borrower to the Administrative Agent, the Issuing Banks and the Lenders.

 

Prior to the Separation Date, nothing shall discharge or satisfy the liability of the Parent hereunder except the full and indefeasible performance and payment of the Obligations.  Notwithstanding anything to the contrary provided herein or in any other Loan Document, upon the occurrence of the Separation Date, the Parent shall be released from all of its obligations under this Article IX, shall have no further liability or obligation whatsoever hereunder or under any other Loan Document, shall no longer constitute a guarantor for any purpose under the Loan Documents, and each of the provisions applicable to the Parent set forth in each of the Loan Documents (including the subordination provisions in the preceding paragraph) shall automatically cease to apply thereto.

 

ARTICLE X

 

MISCELLANEOUS

 

SECTION 10.01.                            Notices.  (a)  Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) of this Section), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax, as follows:

 

(i)                                     if to the Parent, to it at Agilent Technologies, Inc., 5301 Stevens Creek Blvd., Santa Clara, California, Attention of Treasurer (Fax No. (408) 553-3417), with a copy to the Attention of Assistant Treasurer (Fax No. (408) 553-7516);

 

(ii)                                  if to the Borrower prior to the Separation Date, to it in care of the Parent as provided in paragraph (a) above and if to the Borrower from and after the Separation Date, to it at Keysight Technologies, Inc., 1400 Fountaingrove Parkway, Santa Rosa, California 95403 (fax: 707-540-6490 ), Attention: Treasurer, with a copy to Keysight Technologies, Inc., 1400 Fountaingrove Parkway, Santa Rosa, California 95403 (fax: 707-540-6494), Attention: General Counsel;

 

(iii)                               if to the Administrative Agent or Citibank, N.A., in its capacity as an Issuing Bank, to Citibank, N.A., 1615 Brett Road, Building #3, New Castle, Delaware 19720, Attention:  Bank Loan Syndications (Fax No. (212) 994-0961); and

 

(iv)                              if to any other Issuing Bank or Lender, to it at its address (or fax number) set forth in its Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by fax shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business

 

76

 

day for the recipient); and notices delivered through electronic communications to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.

 

(b)                                 Notwithstanding anything herein to the contrary, notices and other communications to the Lenders and Issuing Banks hereunder may be delivered or furnished by electronic communications (including email and Internet and intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices under Article II to any Lender or Issuing Bank if such Lender or Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  Any notices or other communications to the Administrative Agent, the Borrower or the Parent may be delivered or furnished by electronic communications pursuant to procedures approved by the recipient thereof prior thereto; provided that approval of such procedures may be limited or rescinded by any such Person by notice to each other such Person.

 

(c)                                  Any party hereto may change its address or fax number for notices and other communications hereunder by notice to the other parties hereto.

 

(d)                                 (i)  Each Loan Party agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Issuing Banks and the other Lenders by posting the Communications on the Platform.

 

(i)                                     The Platform is provided “as is” and “as available.”  The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications.  No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Parent or the Borrower, any Lender or any other Person or entity for damages of any kind, including, without limitation, direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of any Loan Party’s or the Administrative Agent’s transmission of communications through the Platform.  “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Administrative Agent, any Lender or any Issuing Bank by means of electronic communications pursuant to this Section, including through the Platform.

 

SECTION 10.02.                            Waivers; Amendments.  (a)  No failure or delay by the Administrative Agent, any Issuing Bank or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent, the Issuing Banks and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have.

 

77

 

No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  Without limiting the generality of the foregoing, the execution and delivery of this Agreement, the making of a Loan or the issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time.

 

(b)                                 Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon (other than as a result of any waiver of any increase in the interest rate applicable to any Loan pursuant to Section 2.13(d)), or reduce any fees payable hereunder, without the written consent of each Lender adversely affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, in each case, without the written consent of each Lender adversely affected thereby, (iv) change Section 2.08(c) or Section 2.18(b) or 2.18(c) in a manner that would alter the pro rata sharing of Commitment reductions or payments required thereby, as the case may be, without the written consent of each Lender adversely affected thereby, (v) change any of the provisions of this Section or the percentage set forth in the definition of the term “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender or (vi) release the Parent from, or limit or condition, its Obligations under Article IX without the written consent of each Lender; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or any Issuing Bank hereunder without the prior written consent of the Administrative Agent or such Issuing Bank, as the case may be.  Notwithstanding anything else in this Section to the contrary (A) any amendment of the definition of the term “Applicable Rate” pursuant to the last sentence of such definition shall require only the written consent of the Borrower and the Required Lenders and (B) no consent with respect to any waiver, amendment or modification of this Agreement or any other Loan Document shall be required of any Defaulting Lender, except with respect to any waiver, amendment or other modification referred to in clause (i), (ii) or (iii) of the first proviso of this paragraph and then only in the event such Defaulting Lender shall be adversely affected by such amendment, waiver or other modification.

 

SECTION 10.03.                            Expenses; Indemnity; Damage Waiver.  (a)  The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Arrangers and their respective Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions

 

78

 

contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Banks in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Issuing Bank or any Lender, including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent, any Issuing Bank or any Lender, in connection with the lawful enforcement of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

 

(b)                                 The Borrower shall indemnify the Administrative Agent, each Arranger, each Syndication Agent and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by an Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by a member of the Consolidated Group, or any Environmental Liability related in any way to any member of the Consolidated Group, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto or whether brought by any third party or by the Borrower or any of its Affiliates; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

 

(c)                                  To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent (or any agent thereof) or any Issuing Bank, or any Related Party of any of the foregoing, under paragraph (a) or (b) of this Section (and without limiting its obligation to do so), each Lender severally agrees to pay to the Administrative Agent (or such sub-agent), such Issuing Bank, or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or such sub-agent) or such Issuing Bank in its capacity as such, or against any Related Party of any of the foregoing for the Administrative Agent (or any such sub-agent) or any Issuing Bank in connection with such capacity.

 

(d)                                 To the extent permitted by applicable law, no Loan Party shall assert, and each Loan Party hereby waives, any claim against any Indemnitee, on any theory of liability, for

 

79

 

(i) any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet) or (ii) special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

 

(e)                                  All amounts due under this Section shall be payable promptly after written demand therefor.

 

SECTION 10.04.                            Successors and Assigns.  (a)  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), except that neither the Parent nor the Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues Letters of Credit), Participants (to the extent provided in paragraph (c) of this Section), the Arrangers, the Syndication Agents and, to the extent expressly contemplated hereby, the sub-agents of the Administrative Agent and the Related Parties of each of the Administrative Agent, the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 (i)  Any Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

 

(A)                               the Borrower; provided that no consent of the Borrower shall be required (1) for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund and (2) if an Event of Default has occurred or is continuing, for any other assignment; provided further that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten Business Days after having received notice thereof at the address and fax number specified in Section 10.01(a) hereof (as the same may be changed by the Borrower pursuant to Section 10.01(c));

 

(B)                               the Administrative Agent; provided that no consent of the Administrative Agent shall be required for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund; and

 

(C)                               each Issuing Bank.

 

80

 

(ii)           Assignments shall be subject to the following additional conditions:

 

(A)          except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consents; provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing; provided further that the Borrower shall be deemed to have consented to any such amount unless it shall object thereto by written notice to the Administrative Agent within five Business Days after having received notice thereof;

 

(B)          each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

 

(C)          the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, provided that only one such processing and recordation fee shall be payable in the event of simultaneous assignments from any Lender or its Approved Funds to one or more other Approved Funds of such Lender; and

 

(D)          the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate- level information (which may contain MNPI) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable law, including Federal, State and foreign securities laws.

 

(iii)          Subject to acceptance and recording thereof pursuant to paragraph (b)(v) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 10.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a

 

81

 

participation in such rights and obligations in accordance with paragraph (e) of this Section.

 

(iv)          The Administrative Agent shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and records of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Banks and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower, any Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(v)           Upon receipt by the Administrative Agent of an Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder) and the processing and recordation fee referred to in this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that the Administrative Agent shall not be required to accept such Assignment and Assumption or so record the information contained therein if the Administrative Agent reasonably believes that such Assignment and Assumption lacks any written consent required by this Section or is otherwise not in proper form, it being acknowledged that the Administrative Agent shall have no duty or obligation (and shall incur no liability) with respect to obtaining (or confirming the receipt) of any such written consent or with respect to the form of (or any defect in) such Assignment and Assumption, any such duty and obligation being solely with the assigning Lender and the assignee.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph, and following such recording, unless otherwise determined by the Administrative Agent (such determination to be made in the sole discretion of the Administrative Agent, which determination may be conditioned on the consent of the assigning Lender and the assignee), shall be effective notwithstanding any defect in the Assignment and Assumption relating thereto.  Each assigning Lender and the assignee, by its execution and delivery of an Assignment and Assumption, shall be deemed to have represented to the Administrative Agent that all written consents required by this Section with respect thereto (other than the consent of the Administrative Agent) have been obtained and that such Assignment and Assumption is otherwise duly completed and in proper form, and each assignee, by its execution and delivery of an Assignment and Assumption, shall be deemed to have represented to the assigning Lender and the Administrative Agent that such assignee is an Eligible Assignee.

 

(c)           Any Lender may, without the consent of the Borrower, the Administrative Agent or any Issuing Bank, sell participations to one or more Eligible Assignees (“Participants”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely

 

82

 

responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 10.02(b) that affects such Participant or requires the approval of all the Lenders.  The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (x) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this Section and (y) shall not be entitled to receive any greater payment under Section 2.15 or 2.17, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.18(c) as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant to which it has sold a participation and the principal amounts (and stated interest) of each such Participant’s interest in the Loans or other rights and obligations of such Lender under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Loans or other rights and obligations under any this Agreement) except to the extent that such disclosure is necessary to establish that such Loan or other right or obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

 

(d)           Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or other central bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

SECTION 10.05.         Survival.  All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by

 

83

 

the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any Arranger, any Syndication Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee, LC Disbursement or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17 and 10.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

 

SECTION 10.06.         Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic image scan transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 10.07.         Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 10.08.         Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender and each Issuing Bank and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender, Issuing Bank or Affiliate to or for the credit or the account of any Loan Party against any of and all the obligations then due of such Loan Party now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender or Issuing Bank shall have made any demand under this Agreement.  The rights of each Lender, each Issuing Bank and each of their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, Issuing Bank or Affiliate may have.

 

84

 

SECTION 10.09.         Governing Law; Jurisdiction; Consent to Service of Process.  (a)  This Agreement shall be construed in accordance with and governed by the law of the State of New York.

 

(b)           Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each Loan Party hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding brought by it or any of its Affiliates shall be brought, and shall be heard and determined, exclusively in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that the Administrative Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against any Loan Party or any of its respective properties in the courts of any jurisdiction.

 

(c)           The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)           Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.01.  Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

SECTION 10.10.         WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 10.11.         Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

 

85

 

SECTION 10.12.         Confidentiality; Non-Public Information.  (a)  The Administrative Agent, each Issuing Bank and each Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any Governmental Authority or any other regulatory authority purporting to have jurisdiction over it or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process (but only after giving prompt written notice to the Borrower, to the extent permitted by law, of any such requirement or request (except with respect to any audit or examination conducted by any Governmental Authority) so that the Borrower may seek a protective order or other appropriate remedy and/or waive compliance with this Section), (iv) to any other party to this Agreement, (v) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating the enforcement of rights hereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (y) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and their obligations, this Agreement or payments hereunder; (vii) on a confidential basis to (x) any rating agency in connection with rating the Borrower or its Subsidiaries or their Obligations under this Agreement or (y) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to this Agreement; (viii) with the consent of the Borrower; or (ix) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section, or (B) becomes available to the Administrative Agent, any Issuing Bank, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.  In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Agents and the Lenders in connection with the administration of this Agreement, the other Loan Documents, and the Commitments.  For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

(b)           Each Lender acknowledges that all information, including requests for waivers and amendments, furnished by the Borrower or the Administrative Agent pursuant to or in connection with, or in the course of administering, this Agreement will be syndicate-level information, which may contain MNPI.  Each Lender represents to the Borrower and the Administrative Agent that (i) it has developed compliance procedures regarding the use of MNPI

 

86

 

and that it will handle MNPI in accordance with such procedures and applicable law, including Federal, state and foreign securities laws, and (ii) it has identified in its Administrative Questionnaire a credit contact who may receive information that may contain MNPI in accordance with its compliance procedures and applicable law, including Federal, state and foreign securities laws.

 

(c)           The Borrower and each Lender acknowledge that, if information furnished by the Borrower pursuant to or in connection with this Agreement is being distributed by the Administrative Agent through DebtDomain or another website or other information platform (the “Platform”), (i) the Administrative Agent may post any information that the Borrower has indicated as containing MNPI solely on that portion of the Platform as is designated for Private Side Lender Representatives and (ii) if the Borrower has not indicated whether any information furnished by it pursuant to or in connection with this Agreement contains MNPI, the Administrative Agent reserves the right to post such information solely on that portion of the Platform as is designated for Private Side Lender Representatives.  The Borrower agrees to clearly designate all information provided to the Administrative Agent by or on behalf of the Borrower that is suitable to be made available to Public Side Lender Representatives, and the Administrative Agent shall be entitled to rely on any such designation by the Borrower without liability or responsibility for the independent verification thereof.

 

SECTION 10.13.         Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

 

SECTION 10.14.         Conversion of Currencies.  (a)  If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one currency into another currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could be purchased with such other currency on the Business Day immediately preceding the day on which final judgment is given.

 

(b)           The obligations of the Borrower in respect of any sum due to any party hereto or any holder of the obligations owing hereunder (the “Applicable Creditor”) shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than the currency in which such sum is stated to be due hereunder (the “Agreement Currency”), be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance

 

87

 

with normal banking procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Creditor in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss.  The obligations of the Borrower contained in this Section shall survive the termination of this Agreement and the payment of all other amounts owing hereunder.

 

SECTION 10.15.         USA Patriot Act.  Each Lender hereby notifies each Loan Party that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the USA Patriot Act.

 

SECTION 10.16.         No Fiduciary Relationship.  The Borrower, on behalf of itself and its Subsidiaries, agrees that in connection with all aspects of the transactions contemplated hereby and any communications in connection therewith, the Borrower, its Subsidiaries and their Affiliates, on the one hand, and the Administrative Agent, the Arrangers, the Lenders, the Issuing Banks and their Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of the Administrative Agent, any Arranger, any Lender, any Issuing Bank or any of their Affiliates, and no such duty will be deemed to have arisen in connection with any such transactions or communications.  The Administrative Agent, the Arrangers, the Lenders, the Issuing Banks and their Affiliates may be engaged, for their own accounts or the accounts of customers, in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and none of the Administrative Agent, the Arrangers, the Lenders, the Issuing Banks or their Affiliates has any obligation to disclose any of such interests to the Borrower or its Affiliates.  To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it or any of its Affiliates may have against the Administrative Agent, the Arrangers, the Lenders, the Issuing Banks and their Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

[The remainder of this page has been left blank intentionally]

 

88

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

 

	
 
    	
KEYSIGHT   TECHNOLOGIES, INC.,
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jason Kary
    
	
 
    	
 
    	
Name:   Jason Kary
    
	
 
    	
 
    	
Title:   VP of IR, Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
AGILENT   TECHNOLOGIES, INC.,
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Guillermo Gualino
    
	
 
    	
 
    	
Name:   Guillermo Gualino
    
	
 
    	
 
    	
Title:   Treasurer
    

 

[Signature Page to Keysight Credit Agreement]

 

 

	
 
    	
CITIBANK,   N.A., individually and as
   Administrative Agent and an Issuing Bank,
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Susan M. Olsen
    
	
 
    	
 
    	
Name: Susan M. Olsen
    
	
 
    	
 
    	
Title: Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Susan M. Olsen
    
	
 
    	
 
    	
Name: Susan M. Olsen
    
	
 
    	
 
    	
Title: Authorized Signatory
    

 

[Signature Page to Keysight Credit Agreement]

 

 

 

	
 
    	
SIGNATURE PAGE TO
    
	
 
    	
KEYSIGHT TECHNOLOGIES, INC.
    
	
 
    	
CREDIT AGREEMENT
    
	
 
    	
 
    
	
 
    	
BNP PARIBAS, individually and as an   Issuing Bank
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Nicole Rodriguez
    
	
 
    	
 
    	
Name:   Nicole Rodriguez
    
	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ade Adedeji
    
	
 
    	
 
    	
Name:   Ade Adedeji
    
	
 
    	
 
    	
Title:   Vice President
    

 

[Signature Page to Keysight Credit Agreement]

 

 

	
 
    	
SIGNATURE PAGE TO
    
	
 
    	
KEYSIGHT TECHNOLOGIES, INC.
    
	
 
    	
CREDIT AGREEMENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BANK   OF AMERICA N.A.,
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Prayes Majmudar
    
	
 
    	
 
    	
Name:   Prayes Majmudar
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Keysight Credit Agreement]

 

 

	
 
    	
SIGNATURE PAGE TO
    
	
 
    	
KEYSIGHT TECHNOLOGIES, INC.
    
	
 
    	
CREDIT AGREEMENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BARCLAYS   BANK PLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   M. Sutton
    
	
 
    	
 
    	
Name:   M. Sutton 
    
	
 
    	
 
    	
Title: Vice President
    

 

[Signature Page to Keysight Credit Agreement]

 

 

	
 
    	
SIGNATURE PAGE TO
    
	
 
    	
KEYSIGHT TECHNOLOGIES, INC.
    
	
 
    	
CREDIT AGREEMENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CREDIT   SUISSE AG, CAYMAN ISLANDS BRANCH
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Christopher Day
    
	
 
    	
 
    	
Name:   Christopher Day
    
	
 
    	
 
    	
Title: Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Samuel Miller
    
	
 
    	
 
    	
Name:   Samuel Miller
    
	
 
    	
 
    	
Title: Authorized Signatory
    

 

 

[Signature Page to Keysight Credit Agreement]

 

 

	
 
    	
SIGNATURE PAGE TO
    
	
 
    	
KEYSIGHT TECHNOLOGIES, INC.
    
	
 
    	
CREDIT AGREEMENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DEUTSCHE   BANK AG NEW YORK BRANCH.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ming K. Chu
    
	
 
    	
 
    	
Name:   Ming K. Chu
    
	
 
    	
 
    	
Title: Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Heidi Sandquist
    
	
 
    	
 
    	
Name:   Heidi Sandquist
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Keysight Credit Agreement]

 

 

	
 
    	
SIGNATURE PAGE TO
    
	
 
    	
KEYSIGHT TECHNOLOGIES, INC.
    
	
 
    	
CREDIT AGREEMENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Dhiren Desai
    
	
 
    	
 
    	
Name:   Dhiren Desai
    
	
 
    	
 
    	
Title: Vice President
    

 

[Signature Page to Keysight Credit Agreement]

 

 

SCHEDULE 2.01

 

COMMITMENTS

 

	
 
    	
Lender
    	
 
    	
Commitment
    	
 
    	
 
    
	
 
    	
Citibank, N.A. 
    	
 
    	
$
    	
55,000,000
    	
 
    	
 
    
	
 
    	
BNP Paribas
    	
 
    	
$
    	
55,000,000
    	
 
    	
 
    
	
 
    	
Bank of America, N.A.
    	
 
    	
$
    	
55,000,000
    	
 
    	
 
    
	
 
    	
Barclays Bank PLC
    	
 
    	
$
    	
37,500,000
    	
 
    	
 
    
	
 
    	
Credit Suisse AG,   Cayman Islands Branch
    	
 
    	
$
    	
37,500,000
    	
 
    	
 
    
	
 
    	
Deutsche Bank AG   New York Branch
    	
 
    	
$
    	
30,000,000
    	
 
    	
 
    
	
 
    	
Wells Fargo Bank,   National Association
    	
 
    	
$
    	
30,000,000
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
TOTAL:
    	
 
    	
$
    	
300,000,000.00
    	
 
    	
 
    

 

 

SCHEDULE 6.01

 

EXISTING SUBSIDIARY INDEBTEDNESS

 

Loan in the amount of $35,000,000 to Keysight Technologies India Private Limited from Citibank N.A, New Delhi Branch pursuant to unsecured working capital credit facilities.

 

 

SCHEDULE 6.02

 

LIENS

 

None

 

 

SCHEDULE 6.03

 

EXISTING SALE AND LEASEBACK TRANSACTIONS

 

None

 

 

SCHEDULE 6.06

 

EXISTING RESTRICTIVE AGREEMENTS

 

None

 

 

EXHIBIT A

 

[FORM OF] ACCESSION AGREEMENT dated as of [ ] (this “Agreement”), among [NAME OF INCREASING LENDER] (the “Increasing Lender”), KEYSIGHT TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”), AGILENT TECHNOLOGIES, INC., a Delaware corporation (the “Parent”), and CITIBANK, N.A., as Administrative Agent.

 

Reference is hereby made to the Credit Agreement dated as of September 15, 2014 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Parent, the Lenders from time to time party thereto and Citibank, N.A., as Administrative Agent.  Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

 

Pursuant to Section 2.08(d) of the Credit Agreement, the Borrower has invited the Increasing Lender, and the Increasing Lender desires, to become a party to the Credit Agreement and to assume the obligations of a Lender thereunder.  The Increasing Lender is entering into this Agreement in accordance with the provisions of the Credit Agreement in order to become a Lender thereunder.

 

Accordingly, the Increasing Lender, the Borrower and the Administrative Agent agree as follows:

 

SECTION 1.  Accession to the Credit Agreement.  (a) The Increasing Lender, as of the Effective Date (as defined below), hereby accedes to the Credit Agreement and shall thereafter have all rights, benefits and privileges accorded to a Lender under the Credit Agreement and shall be subject to all obligations under the Credit Agreement.

 

(b)           The Commitment of the Increasing Lender shall equal to (or, if the Increasing Lender is a Lender under the Credit Agreement prior to giving effect hereto, shall be increased by) the amount set forth opposite its signature hereto.

 

SECTION 2.  Representations and Warranties, Agreements of Increasing Lender, etc.  The Increasing Lender (a) represents and warrants that it has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to become a Lender under the Credit Agreement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 of the Credit Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement independently and without reliance on the Administrative Agent or any other Lender; (c) confirms that it will independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; and (d) agrees that it will perform, in accordance with the terms of the Credit Agreement, all the obligations that by the terms of the Credit Agreement are required to be performed by it as a Lender.

 

SECTION 3.  Effectiveness.  This Agreement shall become effective as of [      ] (the “Effective Date”), subject to the Administrative Agent’s receipt of (a) counterparts of this

 

 

Agreement duly executed on behalf of the Increasing Lender and the Borrower, (b) evidence of approval of the Increasing Lender by each Issuing Bank, (c) the documents required to be delivered by the Borrower under the penultimate sentence of Section 2.08(d) of the Credit Agreement, (d) an Administrative Questionnaire duly completed by the Increasing Lender and (e) if the Increasing Lender is a U.S. Person, executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax, and if the Increasing Lender is a Foreign Lender, any documentation required to be delivered by it pursuant to Section 2.17 of the Credit Agreement.

 

SECTION 4.  Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic image scan transmission shall be as effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 5.  Governing Law.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 6.  Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 7.  Notices.  All communications and notices hereunder shall be in writing and given as provided in Section 10.01 of the Credit Agreement.  All communications and notices hereunder to the Increasing Lender shall be given to it at the address set forth in its Administrative Questionnaire.

 

A-2

 

IN WITNESS WHEREOF, the Increasing Lender, the Borrower and the Administrative Agent have duly executed this Agreement as of the day and year first above written.(1)

 

	
Commitment
    	
[INCREASING   LENDER],
    
	
$[          ]
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
KEYSIGHT   TECHNOLOGIES, INC.,
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
CITIBANK, N.A.,
    
	
 
    	
as Administrative Agent,
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

(1)         The Increasing Lender shall have received the prior written approval of each Issuing Bank.

 

A-3

 

EXHIBIT B

 

[FORM OF] ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between the Assignor (as defined below) and the Assignee (as defined below).  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below, receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions referred to below and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below, (a) all the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the credit facility provided for under the Credit Agreement (including any Letters of Credit and Guarantees, included in such credit facility) and (b) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity, related to the rights and obligations sold and assigned pursuant to clause (a) above (the rights and obligations sold and assigned pursuant to clauses (a) and (b) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

	
1.
    	
Assignor:
    
	
 
    	
 
    
	
2.
    	
Assignee:
    	
 
    
	
 
    	
 
    	
[and is an Affiliate/Approved Fund of [Identify   Lender]](1)
    
	
 
    	
 
    
	
3.
    	
Borrower:   Keysight Technologies, Inc.
    
	
 
    	
 
    
	
4.
    	
Administrative   Agent: Citibank, N.A.
    
	
 
    	
 
    
	
5.
    	
Credit   Agreement: The Credit Agreement dated as of September 15, 2014, among   Keysight Technologies, Inc., Agilent Technologies, Inc., the   Lenders parties thereto and Citibank, N.A., as Administrative Agent.
    

 

(1)         Select as applicable.

 

 

	
6.
    	
Assigned   Interest:
    

 

	
Aggregate Amount of
   Commitments/Loans
   of all Lenders
    	
 
    	
Principal Amount of
   the Commitment
   Assigned(2)
    	
 
    	
Principal Amount of
   Outstanding Loans
   Assigned(3)
    	
 
    	
Commitment
   Assigned as a
   Percentage of
   Aggregate
   Commitments(4)
    	
 
    
	
$/[Currency]
    	
 
    	
$/[Currency]
    	
 
    	
$/[Currency]
    	
 
    	
 
    	
%
    

 

Effective Date:                       , 20     [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR].

 

The Assignee, if not already a Lender, agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain MNPI about the Borrower, the Subsidiaries and their securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

 

(2)         Must comply with the minimum assignment amounts set forth in Section 10.04 of the Credit Agreement.

(3)         Must comply with the minimum assignment amounts set forth in Section 10.04 of the Credit Agreement.

(4)         Set forth, to at least 9 decimals, as a percentage of the aggregate Commitments of all Lenders.

 

B-2

 

	
The   terms set forth above are hereby agreed to:
    	
 
    	
[Consented   to and](5) Accepted:
    
	
 
    	
 
    	
 
    
	
                          ,   as Assignor,
    	
 
    	
CITIBANK,   N.A., as
   Administrative Agent,
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
Name:
    
	
 
    	
Title:
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
                          ,   as Assignee, (6)
    	
 
    	
Consented   to:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
[KEYSIGHT   TECHNOLOGIES, INC.,
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
Name:
    
	
 
    	
Title:
    	
 
    	
 
    	
Title:](7)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
CITIBANK,   N.A., as an Administrative Agent,
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
CITIBANK,   N.A., as an Issuing Bank,
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
BANK   OF AMERICA, N.A., as an Issuing Bank,
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    

 

(5)         No consent of the Administrative Agent is required for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund.

(6)         The Assignee must deliver to the Borrower all applicable Tax forms required to be delivered by:  it under Section 2.17(f) of the Credit Agreement.

(7)         No consent of the Borrower is required for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or, if an Event of Default has occurred and is continuing, for any other assignment.

 

B-3

 

	
 
    	
 
    	
 
    	
[NAME OF EACH ISSUING BANK],
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    

 

B-4

 

ANNEX 1
 TO ASSIGNMENT AND ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR
 ASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

1.1.  Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, other than statements made by it herein, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other Loan Document, (iii) the financial condition of the Borrower, any of their Subsidiaries or other Affiliates or any other Person obligated in respect of the Credit Agreement or (iv) the performance or observance by the Borrower, any of their Subsidiaries or other Affiliates or any other Person of any of their respective obligations under the Credit Agreement or any other Loan Document.

 

1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption, to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an eligible assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest independently and without reliance on the Administrative Agent or any other Lender, (v) if it’s a Lender that is a U.S. Person, attached hereto is an executed original of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax and (vi) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

 

2.             Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal,

 

B-5

 

interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to or on or after the Effective Date.  The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.

 

3.  General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts (and by different parties hereto on different counterparts), which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by facsimile or other electronic image scan transmission shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by and construed in accordance with the laws of the State of New York.

 

B-6

 

EXHIBIT C

 

[FORM OF MATURITY DATE EXTENSION REQUEST]

 

Citibank, N.A.,

as Administrative Agent

1615 Brett Road, Building #3

New Castle, Delaware 19720

 

[Date]

 

Re:  Extension of Maturity Date

 

Ladies and Gentlemen:

 

Reference is made to the Credit Agreement dated as of September 15, 2014 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Keysight Technologies, Inc., the Lenders from time to time party thereto and Citibank, N.A., as Administrative Agent.  Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

 

In accordance with Section 2.09 of the Credit Agreement, the undersigned hereby requests an extension of the Maturity Date from September [  ], 20[19] to September [  ], 20[20].

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
KEYSIGHT   TECHNOLOGIES, INC.,
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

EXHIBIT G-1

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of September 15, 2014 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Keysight Technologies, Inc., a Delaware corporation (the “Borrower”), Agilent Technologies, Inc., each Lender from time to time party thereto and Citibank, N.A., as Administrative Agent.

 

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Date:                     , 20[  ]

 

 

EXHIBIT G-2

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of September 15, 2014 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Keysight Technologies, Inc., a Delaware corporation (the “Borrower”), Agilent Technologies, Inc., each Lender from time to time party thereto and Citibank, N.A., as Administrative Agent.

 

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
[NAME OF PARTICIPANT]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Date:                     , 20[  ]

 

 

EXHIBIT G-3

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of September 15, 2014 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Keysight Technologies, Inc., a Delaware corporation (the “Borrower”), Agilent Technologies, Inc., each Lender from time to time party thereto and Citibank, N.A., as Administrative Agent.

 

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption:  (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
[NAME OF PARTICIPANT]
    
	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Date:                     , 20[  ]

 

 

EXHIBIT G-4

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of September 15, 2014 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Keysight Technologies, Inc., a Delaware corporation (the “Borrower”), Agilent Technologies, Inc., each Lender from time to time party thereto and Citibank, N.A., as Administrative Agent.

 

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to the Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption:  (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
[NAME OF LENDER]
    
	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Date:                     , 20[  ]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00235-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00235-of-00352.parquet"}]]