Document:

Exhibit 10.1

 

SETTLEMENT AGREEMENT AND GENERAL RELEASE

 

This SETTLEMENT AGREEMENT AND GENERAL RELEASE (the “Agreement”) is entered into as of June 22, 2016, by and between Robert C. Gasser (“Gasser”) and Investment Technology Group, Inc. (“ITG,” and together with Gasser, the “Parties”).

 

WHEREAS, Gasser filed a Demand for Arbitration and Statement of Claim with the American Arbitration Association captioned Robert C. Gasser v. Investment Technology Group, Inc., Case No. 01-12-0005-2885 (the “Arbitration”); and

 

WHEREAS, Gasser and ITG have agreed to settle all released claims and to fully and completely settle the Arbitration, without any admission of liability or wrongdoing.

 

NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is acknowledged hereby, and in consideration of the mutual covenants and undertakings set forth herein, the Parties agree as follows:

 

1.                                      Settlement Payment.  In consideration for Gasser’s execution of this Agreement, the dismissal of the Arbitration with prejudice, and the release of claims as set forth fully below, ITG will provide, for the benefit of Gasser, a one-time lump sum payment of $5,250,000 (the “Settlement Payment”) payable in accordance with the terms and conditions set forth below.  ITG will make the Settlement Payment, or cause it to be made, within two (2) business days of the Effective Date (as defined below).  Payment of the Settlement Payment to Gasser shall constitute a full and valid discharge of ITG’s payment obligation pursuant to this Agreement.

 

(a)                                 ITG shall issue a wire or check, pursuant to instructions to be provided, made payable to “Robert C. Gasser,” in the amount of $3,958,636.00, less applicable payroll deductions, applicable payroll taxes and authorized after-tax deductions. This payment represents a settlement of Gasser’s claims asserted in the Arbitration.  ITG shall issue Gasser an IRS Form W-2 with respect to this payment, and provide a breakdown of deductions made in written form.

 

(b)                                 ITG shall issue a wire or check, pursuant to instructions to be provided, made payable to “Kaiser Saurborn & Mair, P.C.” in the amount of $1,291,364.00, from which no taxes or deductions will be withheld. This payment represents attorneys’ fees and costs incurred by Gasser in connection with the Arbitration.  ITG shall issue Gasser and Kaiser, Saurborn & Mair, P.C., respectively, an IRS Form 1099 with respect to this payment.  Kaiser, Saurborn & Mair, P.C., must provide ITG with an executed IRS Form W-9 as a condition of receiving this payment.

 

(c)                                  ITG makes no representations or warranties regarding the tax treatment, taxability, and/or non-taxability of the payment referenced in Paragraph 1(b), including the status of such payment for purposes of employment taxes including Medicare or Social Security. Gasser acknowledges that he has been advised to seek independent legal advice regarding the tax treatment, taxability, and/or non-taxability of the payment referenced in Paragraph 1(b), including the status of such payment for purposes of employment taxes including Medicare and Social Security, and has not relied upon any representation or warranty of ITG on that subject.

 

 

Gasser understands and agrees that he shall be solely and exclusively responsible for the payment of any  and all federal, state, local, and/or employment taxes, including any interest and/or penalties assessed thereon, owed with respect to the payment referenced in Paragraph 1(b).  Gasser hereby agrees to indemnify and hold harmless ITG against any tax, interest, or penalties, or any assessments, losses, fees, costs, attorneys’ fees, or damages, arising from any demand, order, or claim by any taxing or governmental authority to pay any tax, interest, or penalty owed with respect to the payment referenced in Paragraph 1(b).

 

(d)                                 Gasser acknowledges and agrees that: (i) unless he enters into this Agreement, he would not otherwise be entitled to receive the Settlement Payment, (ii) except as set forth in this Agreement, he is not entitled to receive, and shall not receive, any other payments, benefits or consideration of any kind from ITG or any of the ITG Released Parties (as defined below); (iii) the Settlement Payment and other consideration that he is receiving pursuant to this Agreement exceed anything of value to which he would otherwise be entitled, and constitute just and sufficient consideration for the waivers, releases and promises set forth herein; (iv) the consideration set forth in this Agreement constitutes full accord and satisfaction for all amounts due and owing to Gasser, including, but not limited to, all salary, draw, incentive compensation, commissions, bonuses, wages, overtime, expense reimbursements, or other payments or forms of remuneration of any kind or nature except for those matters set forth in Paragraph 5 hereof; (v) Gasser has reported to ITG any and all work-related injuries, if any, incurred during his employment; and (vi) Gasser is advised to consult with an attorney prior to executing this Agreement.

 

2.                                      Dismissal.  Within one (1) business day of the expiration of the Revocation Period (as defined below), Gasser shall dismiss with prejudice all claims in the Arbitration.  The date of the dismissal of the Arbitration shall be the “Effective Date” of this Agreement.

 

3.                                      Release by Gasser.

 

(a)                                 In exchange for the Settlement Payment described in Paragraph 1 and the release provided by ITG described in Paragraph 4, upon the Effective Date, Gasser, for himself and on behalf of his spouse, domestic partner, children, present and former representatives, agents, advisers, attorneys, predecessors, successors, insurers, administrators, heirs, executors, assigns, trusts, trustees and beneficiaries, and all others acting or purporting to act on his behalf (collectively, the “Gasser Releasing Parties”), hereby unconditionally and irrevocably waives, releases and forever discharges ITG and each of its current and former agents, advisers, representatives, predecessors, successors, assigns, parent companies, subsidiaries, affiliates, beneficiaries, executors, administrators, insurers, reinsurers, sureties, auditors, attorneys, officers, directors, stockholders, employees, and all others acting or purporting to act on their behalf, past and present (collectively, the “ITG Released Parties”), from any and all debts, demands, actions, causes of action, complaints, suits, accounts, covenants, contracts, agreements, damages, losses, judgments, executions, orders, fees, costs, and expenses, and any and all claims, demands and liabilities whatsoever of any kind, whether in law or in equity, known or unknown, suspected or unsuspected, whether sounding in tort, contract, under state or federal law or any other rule, regulation or authority, including without limitation, any claims arising out of or related to the Arbitration, which the Gasser Releasing Parties have, or ever had, against the ITG Released Parties, from the beginning of time to the date of this Agreement, except for the matters 

 

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set forth in Paragraph 5.  Without limiting the generality of the foregoing, this waiver, release, and discharge includes, but is not limited to, any claim or right based upon or arising out of or relating in any  way to Gasser’s employment relationship or any other associations with ITG or any termination thereof, including, but not limited to, any claim for wrongful discharge or any claim or right arising under any federal, state or local fair employment practices or equal opportunity laws, including, but not limited to the following federal laws and, as applicable, the laws of the state and/or city in which Gasser is or has been employed: the Age Discrimination in Employment Act (“ADEA”), the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, 42 U.S.C. Section 1981, Title VII of the Civil Rights Act of 1964, the Pregnancy Discrimination Act, the Equal Pay Act, the Family and Medical Leave Act of 1993 (29 U.S.C. Section 2601, et seq.), the Employee Retirement Income Security Act (including, but not limited to, claims for breach of fiduciary duty), the Americans with Disabilities Act, the New York State Human Rights Law, New York State Constitution, New York Labor Law, New York Civil Rights Law, New York City Human Rights Law, New York Executive Law, or any other federal, state, or local constitutions, statutes, regulations, ordinances, or laws, including, but not limited to, any and all laws or regulations prohibiting employment discrimination, harassment or retaliation.  Upon the Effective Date, any ITG Released Party may plead this Agreement as a complete defense and bar to any released claim brought in contravention hereof.

 

(b)                                 Gasser acknowledges that he may later discover facts different from, or in addition to, those he now knows or believes to be true with respect to his employment, the separation from his employment (including the reasons for such separation), and/or the claims released in this Agreement, and agrees that the general release set forth in this Paragraph 3 shall be and remain in effect in all respects as a complete and general release as to all matters released, notwithstanding any such different or additional facts.

 

(c)                                  Gasser acknowledges and agrees, that, except as prohibited by law, he hereby waives any right that he may have to seek or to share in any relief, monetary or otherwise, relating to any claim released herein, whether such claim was initiated by him or not.  To the extent Gasser receives any such relief, ITG will be entitled to an offset for any payments made under this Agreement, except as prohibited by law.

 

4.                                      Release by ITG.  In exchange for the release provided by Gasser described in Paragraph 3 and the dismissal of the Arbitration described in Paragraph 2, upon the Effective Date, ITG, for itself and on behalf of its present and former representatives, agents, advisers, attorneys, predecessors, successors, insurers, administrators, heirs, executors, assigns, trusts, trustees and beneficiaries, and all others acting or purporting to act on its behalf (collectively, the “ITG Releasing Parties”), hereby unconditionally and irrevocably waives, releases and forever discharges Gasser and each of his current and former agents, advisers, representatives, successors, assigns, beneficiaries, executors, administrators, sureties, attorneys and all others acting or purporting to act on his behalf, past and present (collectively, the “Gasser Released Parties”), from any and all debts, demands, actions, causes of action, complaints, suits, accounts, covenants, contracts, agreements, damages, losses, judgments, executions, orders, fees, costs, and expenses, and any and all claims, demands and liabilities whatsoever of any kind, whether in law or in equity, known or unknown, suspected or unsuspected, whether sounding in tort, contract, under state or federal law or any other rule, regulation or authority, including without 

 

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limitation, any claims arising out of or related to the Arbitration, which the ITG Releasing Parties have, or ever had, against the Gasser Released Parties, from the beginning of time to the date of this Agreement, except for the matters set forth in Paragraph 5.  Upon the Effective Date, any Gasser Released  Party may plead this Agreement as a complete defense and bar to any released claim brought in contravention hereof.

 

5.                                      Non-Released Claims.  Notwithstanding anything to the contrary set forth in Paragraphs 3 and 4 herein, the following matters shall not be released:  (a) obligations created by or arising out of this Agreement; (b) any claims, defenses or liabilities against Gasser based on fraud that are presently unknown; (c) Sections 6.01 (Nondisclosure and Nonuse of Confidential Information), 7.01 (Ownership of Intellectual Property), 8.01 (Delivery of Materials Upon Termination of Employment) and 11.01-05 (General Indemnification; Advances of Expenses; Notice of Claim; Defense of Claim; and Non-exclusivity, respectively), and Articles 9 (Noncompetition and Nonsolicitation) and 10 (Equitable Relief) of the Employment Agreement between Gasser and ITG, dated April 20, 2010 (the “Employment Agreement”), which provisions are incorporated by reference and shall survive; (d) indemnification obligations of ITG to Gasser as provided by and subject to ITG’s Bylaws and Charter; (e) unemployment, state disability, and/or worker’s compensation insurance benefits pursuant to the terms of applicable law; (f) continuation of existing participation in ITG-sponsored group health benefit plans, at Gasser’s full expense, under the federal law known as “COBRA” and/or under an applicable state law counterpart(s); (g) any benefits entitlements that were vested as of August 2, 2015 pursuant to the terms of an ITG-sponsored benefit plan; (h) any claim not waivable by law; and (i) any claim or right that may arise after the Effective Date of this Agreement.

 

6.                                      Section 409A of the Internal Revenue Code.

 

(a)                                 It is intended that payments and benefits made or provided under this Agreement shall not result in penalty taxes or accelerated taxation pursuant to Section 409A of the Internal Revenue Code (the “Code”).  Any payments that qualify for the “short-term deferral” exception, the separation pay exception, legal settlements exception or another exception under Section 409A of the Code shall be paid under the applicable exception.  For purposes of Section 409A of the Code, if an amount is paid in two or more installments, each installment shall be treated as a separate payment of compensation.  In no event may Gasser, directly or indirectly, designate the calendar year of any payment under this Agreement, and to the extent required by Section 409A of the Code, any payment that may be paid in more than one taxable year (depending on the time that Gasser executes this Agreement) shall be paid in the later taxable year.

 

(b)                                 Notwithstanding anything to the contrary in this Agreement, all reimbursements and in-kind benefits provided under this Agreement that are subject to Section 409A of the Code shall be made in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during  Gasser’s lifetime (or during a shorter period of time specified in this Agreement); (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (iv) the

 

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right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

7.                                      ADEA Waiver.

 

(a)                                 Gasser acknowledges that he has been informed that he is releasing and waiving any and all rights or claims that he may have arising under the ADEA and Gasser acknowledges that for the purposes of the ADEA, he has a period of twenty-one (21) calendar days in which to consider the terms of this Agreement (the “Review Period”). If Gasser elects to sign this Agreement, the executed Agreement must be returned to ITG, c/o General Counsel, One Liberty Plaza, 165 Broadway, New York, NY 10006, no later than the last day of the Review Period. Gasser acknowledges and agrees that if he fails to return the executed Agreement to ITG within the Review Period, the entire Agreement shall be null and void and the Parties shall have no obligations under the Agreement to one another.  Any changes to this Agreement, whether material or immaterial, do not restart the running of the Review Period.

 

(b)                                 Once Gasser has signed this Agreement, he will then be permitted to revoke this Agreement at any time during the period of seven (7) calendar days following the date he signs it (the “Revocation Period”) by delivering to ITG, c/o General Counsel, One Liberty Plaza, 165 Broadway, New York, NY 10006, a written notice of revocation.  If Gasser wishes to revoke this Agreement, the notice of revocation must be received by ITG no later than the seventh calendar day following his execution of this Agreement. Gasser understands and agrees that this Agreement shall not become effective or enforceable until this seven day revocation period has expired provided that he has not revoked it during the Revocation Period.

 

8.                                      No Future Employment.  Gasser agrees that his employment and contractual relationship with ITG and any of the ITG Released Parties is severed and that neither ITG nor any of the ITG Released Parties has any obligation to re-employ him.  Gasser agrees not to seek re-employment with ITG or any of its affiliates at any time in the future.  By signing this Agreement, Gasser intends to remove himself from consideration for future employment with ITG or any of its affiliates and agrees that execution of this Agreement shall constitute good and sufficient cause to reject any application he may make for employment or to terminate any such employment he may obtain notwithstanding this Paragraph 8.  Gasser understands and agrees that he has no right to any reinstatement or re-employment by ITG or any of its affiliates at any time.

 

9.                                      Public Statements.

 

(a)                                 The Parties will not make any public statements regarding this matter, except that ITG will make the following statement in connection with its public disclosure of this Agreement on or before June 23, 2016:  “The Company is pleased to reach a resolution of this matter.  ITG recognizes Mr. Gasser’s years of service and wishes him well in the future.”

 

(b)                                 Gasser further agrees that, absent prior written authorization from ITG, he will not directly or indirectly initiate any publicity or public disclosure of information about ITG, its affiliates and subsidiaries, or any of their respective present or former clients, directors, executives or other employees, or legal matters and resolution thereof involving ITG, its

 

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affiliates and subsidiaries, or any of their respective present or former clients, directors, executives or other employees, or any aspects of his employment with or termination from employment with ITG, to any reporter, author, producer or similar person or entity, or take any other action likely to result in such information being made available to the general public in any form, including, without limitation, books, articles or writings of any other kind, as well as film, videotape, television or  other broadcasts, audio tape, electronic/Internet format or any other medium.  Nothing in this provision restricts Gasser from (a) disclosing or discussing biographical information about himself, such as that he worked for ITG; or (b) following the expiration of the Noncompetition Period (as defined in the Employment Agreement), engaging in legitimate and good faith competition with ITG on behalf of a business or entity with which he is employed and/or serves as an officer or director.

 

(c)                                  ITG further agrees that, absent prior written authorization from Gasser, it will not directly or indirectly initiate any publicity or public disclosure of information about Gasser, as an individual, or the termination of Gasser’s employment from ITG, to any reporter, author, producer or similar person or entity, in any form, including, without limitation, books, articles or writings of any other kind, as well as film, videotape, television or other broadcasts, audio tape, electronic/Internet format or any other medium.  Nothing in this provision restricts ITG from (a) disclosing or discussing biographical information about Gasser, such as that he worked for ITG; (b) engaging in legitimate and good faith competition with a business or entity with which Gasser is employed and/or serves as an officer or director; or (c) making any public disclosure required by applicable law, regulation, statute or fiduciary obligation.

 

10.                               Non-Disparagement.  Each current member of ITG’s Board of Directors, each Named Executive Officer (as defined in ITG’s most recent Proxy Statement, filed with the Securities and Exchange Commission on April 25, 2016), and ITG’s current corporate communications department, while they are employed in such positions, agree not to make any Disparaging statements, comments or remarks, whether written or oral, to any third party, regarding Gasser.  Gasser agrees not to make any Disparaging statements, comments or remarks, whether written or oral, to any third party, regarding ITG or any current or former members of ITG’s Board of Directors, officers, clients, or employees.  “Disparaging” statements, comments or remarks are those that are defamatory or that, directly or indirectly, impugn the character, honesty, integrity or morality or business acumen or abilities in connection with any aspect of the operation of business of the individual or entity being disparaged.

 

11.                               Return of Documents.  Gasser agrees to return to ITG any originals and copies of all documents exchanged in discovery in the Arbitration and any related Arbitration materials within five (5) business days of the Effective Date.

 

12.                               Cooperation.  Gasser agrees, upon reasonable notice from ITG, to provide truthful and reasonable cooperation, including but not limited to his appearance at interviews with ITG’s counsel, depositions and court or arbitration hearings, (a) in connection with the defense or prosecution of any and all charges, complaints, claims, liabilities, obligations, promises, agreements, demands and causes of action of any nature whatsoever, which are asserted by any person or entity concerning or related to any matter that arises out of or concerns events or occurrences during Gasser’s employment with ITG, and (b) concerning requests for information

 

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about the business of ITG or Gasser’s involvement or participation therein. ITG will reimburse Gasser for reasonable and necessary travel expenses, attorneys’ fees and other expenses which Gasser may incur at the specific request of ITG and as approved by ITG. All receipts for such expenses must be presented for reimbursement within forty-five (45) days after such expenses are incurred.  Should Gasser be served with a subpoena in any judicial, administrative or other proceeding of any kind involving or relating, directly or indirectly, to ITG, Gasser agrees to promptly, and in no event later than three (3) days after receipt thereof, notify ITG of such subpoena and, to the extent legally permissible, provide ITG with a copy thereof.

 

13.                               Permitted Conduct.  To the extent required by applicable law, nothing in this Agreement shall prohibit or restrict Gasser from exercising any legally protected whistleblower rights (including pursuant to Rule 21F under the Securities Exchange Act of 1934, as amended), filing a charge or complaint with, and/or participating in any investigation or proceeding conducted by any self-regulatory organization or governmental agency, authority or legislative body, including, but not limited to, the Securities and Exchange Commission.

 

14.                               Non-Admission of Liability.  Gasser and ITG agree that they have entered into this Agreement in compromise of disputed claims and that entry into this Agreement is not an admission of any liability or wrongdoing on the part of Gasser, ITG or any of the ITG Released Parties. ITG denies any liability, committing any wrongdoing, or violating any legal duty with respect to Gasser, Gasser’s employment, or Gasser’s separation from employment.

 

15.                               Confidentiality/Communications to Third Parties.  The terms and conditions of this Agreement and the conduct of the Arbitration are confidential, and no Party will disclose such terms and conditions or conduct to any third party except:  (a) to its attorneys, (b) by ITG as required by applicable law, regulation, statute, or fiduciary obligation, (c) by ITG to its auditors, insurers or reinsurers (and each such auditor, insurer or reinsurer may make such disclosures as are required in the ordinary course of that party’s business), and (d) as necessary to enforce its rights under this Agreement, provided, however, that each Party shall take commercially reasonable steps to ensure that such disclosure does not result in public disclosure of the terms and conditions of this Agreement or the conduct of the Arbitration, including by informing the foregoing excepted recipients of the confidentiality obligations hereunder.  The fact of the settlement caused by this Agreement and the amount of the Settlement Payment shall not be confidential.  The Parties acknowledge and agree that their respective promises to maintain the confidentiality of this Agreement is a material term of this Agreement.  The Parties represent and warrant that, as of the date they sign this Agreement, they have not had any discussion or made any disclosure contrary to their obligations under this Paragraph 15.  Notwithstanding anything to the contrary set forth in this Paragraph 15, the terms and conditions of this Agreement shall not be or remain confidential to the extent that ITG makes a public disclosure of this Agreement as required by applicable law, regulation, statute or fiduciary obligation.

 

16.                               Remedies.  The Parties both acknowledge and agree that the restrictions and agreements contained in Paragraphs 9, 10, 11, 12 and 15, in view of the nature of the business in which each is engaged, are reasonable, necessary and in the other Party’s best interests in order to protect the legitimate interests of the other Party, and that any violation thereof shall be deemed to be a material breach of this Agreement and that the non-breaching Party shall be

 

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entitled to pursue any and all remedies available to it in a court of competent jurisdiction including, but not limited to, application for temporary, preliminary, and permanent injunctive relief, without the requirement to post a bond, as well as damages, and an equitable accounting of all earnings, profits and other benefits arising from such violation.  In the event that either Party brings an action to redress a violation of Paragraphs 9, 10, 11, 12 and 15, the prevailing Party shall be entitled to  recover from the non-prevailing Party all of its reasonable attorneys’ fees and costs incurred in connection therewith.

 

17.                               Fees and Costs.  With the exception of the payment described in Paragraph 1(b) herein, each Party will bear its own legal fees and costs arising from the Arbitration and from this Agreement, and each Party agrees to bear responsibility to pay one-half (1/2) of any remaining costs or fees payable to the American Arbitration Association or the Arbitrator arising from the Arbitration.

 

18.                               Incorporation By Reference. The Parties incorporate by reference the following miscellaneous provisions of the Employment Agreement, which shall govern this Agreement: 13.01 (Dispute Resolution) (except for the fee-shifting provision in the antepenultimate and final sentences, which is excluded), 13.05 (Successors and Assigns), 13.10 (Withholding) (except to the extent it conflicts with Paragraph 1(b) herein, in which case Paragraph 1(b) shall control), and 13.11 (No Third Party Beneficiary).  For the avoidance of doubt, except for the provisions of the Employment Agreement specified in Paragraphs 5 and 18 herein, the Employment Agreement is hereby extinguished.

 

19.                               Entire Agreement; Modification.  This Agreement constitutes the entire agreement between the Parties and overrides and replaces all prior negotiations and terms proposed or discussed, whether in writing or orally, about the subject matter hereof, including the previous Settlement Agreement entered into on June 19, 2016 between the Parties.  No modification of this Agreement will be valid unless it is in writing identified as an amendment to the Agreement and is signed by the Parties hereto.

 

20.                               Acknowledgements.  Each Party acknowledges that it has read and understands this Agreement and that it has had the opportunity to consult with its attorneys before signing this Agreement.

 

21.                               Governing Law.  This Agreement is governed by and shall be construed in accordance with the laws of the State of New York (or United States federal law, to the extent applicable), including any applicable statutes of limitation, without regard to any otherwise applicable principles of conflicts of law or choice of law rules (whether of the State of New York or any other jurisdiction) that would result in the application of the substantive or procedural rules or law of any other jurisdiction.

 

22.                               Remedies for Breach.

 

(a)                                 In the event that Gasser or any Gasser Releasing Party brings an action against ITG or any ITG Released Party based on any released claims, or in the event that Gasser breaches this Agreement, ITG and any ITG Released Party may, at its option and as applicable 

 

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(i) plead this Agreement in bar to any such action; and (ii) seek any and all remedies available at law or in equity, including injunctive relief and monetary damages, costs and reasonable attorneys’ fees, including pursuant to arbitration as provided for in Paragraph 23.

 

(b)                                 In the event that ITG or any ITG Releasing Party brings an action against Gasser or any Gasser Released Party based on any released claims, or in the event that ITG breaches this Agreement, Gasser or any Gasser Released Party may, at its option and as applicable (i) plead this Agreement in bar to any such action; and (ii) seek any and all remedies available at law or in equity, including injunctive relief and monetary damages, costs and reasonable attorneys’ fees, including pursuant to arbitration as provided for in Paragraph 23.

 

23.                               Alternative Dispute Resolution.  Pursuant to Paragraph 18 herein, the Parties specifically incorporate Section 13.01 (Dispute Resolution) of the Employment Agreement with respect to the resolution of any dispute arising out of or relating to this Agreement, except for the fee-shifting provision in the antepenultimate and final sentences of Section 13.01, which is excluded and extinguished.

 

24.                               Construction.  No provision of this Agreement shall be interpreted or construed against any Party because that Party or its legal representative drafted that provision.  The captions and headings of the Paragraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.  Unless the context of this Agreement clearly requires otherwise:  (a) references to the plural include the singular, the singular the plural, and the part the whole, (b) references to one gender include all genders, (c) “or” has the inclusive meaning frequently identified with the phrase “and/or,” (d) “including” has the inclusive meaning frequently identified with the phrase “including but not limited to” or “including without limitation,” (e) references to “hereunder,” “herein” or “hereof” relate to this Agreement as a whole, and (f) the terms “dollars” and “$” refer to United States dollars.  Section, subsection, exhibit and paragraph references are to this Agreement as originally executed unless otherwise specified.  Any reference herein to any statute, rule, regulation or agreement, including this Agreement, shall be deemed to include such statute, rule, regulation or agreement as it may be modified, varied, amended or supplemented from time to time.  Any reference herein to any person shall be deemed to include the heirs, legal representatives, successors, executors, administrators and permitted assigns of such person.

 

25.                               Counterparts. This Agreement may be executed in multiple counterparts (including via facsimile or electronic mail), which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

26.                               Binding Effect.  Upon execution by the Parties, this Agreement is binding upon and shall inure to the benefit of the Parties, their successors, assigns, heirs, executors, legal representatives and administrators.

 

27.                               Representations and Warranties.  Each Party represents and warrants that:

 

(a)                                 Each of the undersigned has the full legal right and capacity to enter into this Agreement and perform its obligations hereunder, including any third party authorization necessary to release the claims it is releasing hereunder. This Agreement has been duly and validly

 

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executed and delivered by such Party and, assuming due authorization, execution and delivery by the other Party, constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to laws of general application relating to bankruptcy,  insolvency, and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.

 

(b)                                 The execution and delivery by such Party of this Agreement, the performance by such Party of its obligations hereunder and the consummation of the transactions contemplated hereby, will not (i) result in the violation by such Party of any statute, law, rule, regulation or ordinance or any judgment, decree, order, writ, permit or license of any governmental or regulatory authority applicable to such Party, or (ii) require such Party to obtain any consent, approval or action of, make any filing with or give any notice to any person which action has not already been undertaken by such Party, except any such filing required by applicable law, regulation, statute or fiduciary obligation.

 

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IN WITNESS WHEREOF, the Parties have signed this Agreement as of the date referenced below with the intent to be bound by its terms and conditions.

 

	
ROBERT C. GASSER
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/   Robert C. Gasser
    	
 
    
	
BY:   Robert C. Gasser, in his individual capacity
    	
 
    
	
DATE:   June 22, 2016
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
INVESTMENT   TECHNOLOGY GROUP, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/   Angelique F.M. DeSanto
    	
 
    
	
BY:   Angelique F.M. DeSanto
    	
 
    
	
TITLE:   General Counsel
    	
 
    
	
DATE:   June 22, 2016
    	
 
    

 

11Exhibit

Exhibit 10.1
Execution Version

Second Amendment, Consent and Waiver to
Amended and Restated Credit Agreement
and First Amendment to
Guaranty and Collateral Agreement

This Second Amendment, Consent and Waiver to Amended and Restated Credit Agreement and First Amendment to Guaranty and Collateral Agreement (this “Second Amendment”), dated as of June 17, 2016, is by and among Exterran Energy Solutions, L.P., a limited partnership formed under the laws of the state of Delaware (the “Borrower”), Exterran Corporation, a corporation formed under the laws of the state of Delaware (“Parent”), the Guarantors party hereto, the Lenders listed on the signature pages attached hereto and Wells Fargo Bank, National Association, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”). 
R E C I T A L S
A.    The Borrower, Parent, the Administrative Agent and the financial institutions from time to time party thereto (each, a “Lender” and collectively, the “Lenders”) are parties to that certain Amended and Restated Credit Agreement, dated as of October 5, 2015 (as amended by the First Amendment (as defined below) and as further amended, restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”);  
B.    The Guarantors are parties to that certain Guaranty and Collateral Agreement, dated as of November 3, 2015 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Guaranty and Collateral Agreement”);  
C.    The Borrower and Parent have informed the Lenders that, as a result of certain events more particularly described on the Disclosure Schedule attached hereto (the “Disclosure Schedule”), the Audit Committee of Parent’s Board of Directors (the “Audit Committee”) has concluded that the previously issued audited consolidated financial statements and other financial information contained in Parent’s Annual Report on Form 10-K for the Fiscal Year ended December 31, 2015 (the “2015 Audited Report”) should no longer be relied upon. In connection therewith, (a) the Company’s earnings releases and other financial communications for the Fiscal Year ended December 31, 2015 (collectively with the 2015 Audited Report, the “Prior 2015 Financial Information”) may no longer be able to be relied upon and (b) there is a possibility that certain financial information related to the prior fiscal periods of EXH should no longer be relied upon (collectively with the Prior 2015 Financial Information, the “Prior Financial Information”);
D.    The Borrower and Parent have informed the Lenders that management is working to determine the adjustments required to be made to the Prior 2015 Financial Information and, upon completion of such process, will restate or modify the 2015 Audited Report and, if applicable, the other Prior Financial Information (collectively, the “Replacement Financial Information”);
E.    Pursuant to Sections 8.01(b) of the Credit Agreement, Parent timely delivered a Compliance Certificate to the Administrative Agent with respect to the Parent’s compliance with 

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Sections 9.10(a), 9.10(b) and 9.10(c) of the Credit Agreement as of December 31, 2015 (the “Q4 2015 Compliance Certificate”);
F.    A Default or Event of Default may exist or arise under Section 10.01(c) of the Credit Agreement in respect of Section 8.01(b) of the Credit Agreement due to the fact that the information contained in the Q4 2015 Compliance Certificate was based on the Prior 2015 Financial Information, which should no longer be relied upon (the “Compliance Certificate Potential Default”);
G.    Pursuant to Section 8.02(a) of the Credit Agreement, Parent is required to keep its books of record and account and the books of record and account of its Consolidated Subsidiaries in accordance with GAAP;
H.    A Default or Event of Default may exist or arise under Section 10.01(d)(iii) of the Credit Agreement as a result of the potential failure by Parent to keep books of record and account in accordance with GAAP as required by Section 8.02(a) of the Credit Agreement in connection with the Prior Financial Information (the “Books of Record Potential Default”); 
I.    Parent and the Borrower have made, or have been deemed to make, from time to time the representations and warranties set forth in Section 7.11 with respect to the accuracy of all or a portion of the Prior Financial Information as and when required by the Loan Documents (collectively, the “Specified Representation”), including pursuant to Section 6.03 in connection with the making of Loans by the Lenders on the occasion of any Borrowing and the issuance, amendment, renewal or extension of any Letter of Credit by the Issuing Bank (any date on which the Specified Representation is made or deemed made, a “Representation Date”);
J.    A Default or Event of Default may exist or arise under Section 10.01(c) of the Credit Agreement as a result of the potential for the Specified Representation to have been false or misleading in any material respect when made or deemed made on one or more Representation Dates (the “Representation Potential Defaults”, and together with the Compliance Certificate Potential Default and the Books of Record Potential Default, the “Specified Potential Defaults”);
K.    Additional related Defaults or Events of Default may exist or arise (i) under Section 10.01(c) of the Credit Agreement in the event that any representation or warranty made or deemed made as to the absence of a Default or Event of Default under the Loan Documents was false or misleading in any material respect on any Representation Date, in any such case solely as a result of the existence of the Specified Potential Defaults on such Representation Date; (ii) under Section 10.01(d)(i) of the Credit Agreement due to the failure to notify the Administrative Agent of any Specified Potential Default promptly after a Responsible Officer of Parent or the Borrower obtains actual knowledge thereof, as required by Section 8.01(e) of the Credit Agreement; and (iii) under Section 10.01(d) of the Credit Agreement due to the taking of any action conditioned upon the absence of a Default or Event of Default solely due to the presence of a Specified Potential Default at such time (collectively, the “Related Potential Defaults”);
L.    Section 8.01(a)(ii) of the Credit Agreement requires that Parent deliver to the Administrative Agent a copy of the quarterly report filed by Parent with the SEC pursuant to Section 13 or 15(d) of the Exchange Act for the Fiscal Quarter ended March 31, 2016 (the “Q1 2016 Quarterly Report”) within 30 days after the same is required to be filed with the SEC (but in any event within 60 days after the end of such Fiscal Quarter);

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M.    Section 8.01(b) of the Credit Agreement requires that Parent cause to be delivered to the Administrative Agent a Compliance Certificate within ten Business Days of any delivery or deemed delivery of any quarterly report delivered by Parent pursuant to Section 8.01(a) of the Credit Agreement;
N.    The Borrower and Parent had previously requested that the Lenders consent to a one-time extension (the “Original Q1 2016 Quarterly Report Extension”) of the periods set forth in Sections 8.01(a) and 8.01(b) of the Credit Agreement for delivery of the Q1 2016 Quarterly Report and the related Compliance Certificate to the earlier of (i) within ten Business Days following the date Parent files its quarterly report with the SEC for the Fiscal Quarter ended March 31, 2016 and (ii) June 30, 2016;
O.    Pursuant to that certain First Amendment, Consent and Waiver to Amended and Restated Credit Agreement, dated as of April 22, 2016 (the “First Amendment”), among the Borrower, Parent, the Administrative Agent and the Lenders, the Lenders agreed to (i) waive any and all Specified Potential Defaults and Related Potential Defaults until June 30, 2016 (the “Waiver Termination Date”) unless on or prior to such date, Parent shall have delivered to the Administrative Agent the Financial Information Deliverables (as defined in the First Amendment) and (ii) consent to the Original Q1 2016 Quarterly Report Extension;
P.    Section 8.01(a)(ii) of the Credit Agreement requires that Parent deliver to the Administrative Agent a copy of the quarterly report filed by Parent with the SEC pursuant to Section 13 or 15(d) of the Exchange Act for the Fiscal Quarter ended June 30, 2016 (the “Q2 2016 Quarterly Report”) within 30 days after the same is required to be filed with the SEC (but in any event within 60 days after the end of such Fiscal Quarter);
Q.    Section 8.01(b) of the Credit Agreement requires that Parent cause to be delivered to the Administrative Agent a Compliance Certificate within ten Business Days of any delivery or deemed delivery of any quarterly report delivered by Parent pursuant to Section 8.01(a) of the Credit Agreement;
R.    The Borrower and Parent have requested that the Lenders consent to a one-time extension (the “Q2 2016 Quarterly Report Extension”) of the periods set forth in Sections 8.01(a) and 8.01(b) of the Credit Agreement for delivery of the Q2 2016 Quarterly Report and the related Compliance Certificate to the earlier of (i) within ten Business Days following the date Parent files its quarterly report with the SEC for the Fiscal Quarter ended June 30, 2016 and (ii) August 31, 2016; 
S.    The Borrower and Parent have requested that the Lenders consent to (i) an extension of the Waiver Termination Date until August 31, 2016, (ii) an extension of the Original Q1 2016 Quarterly Report Extension until the earlier of (x) within ten Business Days following the date Parent files its quarterly report with the SEC for the Fiscal Quarter ended March 31, 2016 and (y) August 31, 2016 (the “Amended Q1 2016 Quarterly Report Extension”) and (iii) the Q2 2016 Quarterly Report Extension; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

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Section 1.Defined Terms.  Each capitalized term used herein but not otherwise defined herein has the meaning given to such term in the Credit Agreement.  Unless otherwise indicated, all references to Sections, Articles, Annexes and Schedules in this Second Amendment refer to Sections, Articles, Annexes and Schedules of the Credit Agreement.

Section 2.Amendments to Credit Agreement.

2.1    Additional Definitions.  Section 1.02 of the Credit Agreement is hereby amended to add thereto in alphabetical order the following definitions which shall read in full as follows:
“Second Amendment” means that certain Second Amendment, Consent and Waiver to Amended and Restated Credit Agreement and First Amendment to Guaranty and Collateral Agreement dated as of June 17, 2016, by and among the Borrower, Parent, the Lenders party thereto and the Administrative Agent.
“Second Amendment Effective Date” means June 17, 2016.
2.2    Amendment and Restatement of Definitions.  Section 1.02 of the Credit Agreement is hereby amended by amending and restating the following definitions in their entireties to read in full as follows:
“Loan Documents” means this Agreement, the First Amendment, the Second Amendment, the Notes, the Letter of Credit Agreements, the Commitment Increase Certificates, the Additional Revolving Lender Certificates, the Letters of Credit, the Fee Letters, the Security Instruments, any Term Loan Refinancing Intercreditor Agreement and each consent, waiver, subordination agreement, intercreditor agreement, Compliance Certificate, Borrowing Request, Letter of Credit Request or Interest Election Request executed by the Borrower pursuant to this Agreement.
“Required Financial Information” means, collectively, (a) the Financial Information Deliverables (as defined in the Second Amendment), (b) the Q1 2016 Quarterly Report (as defined in the Second Amendment) and the related Compliance Certificate, and (c) and the Q2 2016 Quarterly Report (as defined in the Second Amendment) and the related Compliance Certificate. 
2.3    Amendments to Definition of “Applicable Margin”.  
(a)Section 1.02 of the Credit Agreement is amended hereby by amending and restating the first sentence of the last paragraph of the definition “Applicable Margin” to read in full as follows:

“Notwithstanding the foregoing, for purposes of determining the Applicable Margin for the period commencing on the First Amendment Effective Date and ending on the earlier to occur of (x) the date the Required Financial Information is delivered to the Administrative Agent and (y) August 31, 2016, the Total Leverage Ratio will be deemed to be that which corresponds to Level VI.”
(b)Section 1.02 of the Credit Agreement is hereby amended by inserting “after August 31, 2016” immediately following “for any period” in the last paragraph of the definition of “Applicable Margin”.

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Section 3.Amendment to Guaranty and Collateral Agreement.  Section 6.01 of the Guaranty and Collateral Agreement is hereby amended by inserting a new clause (d) at the end of such Section to read in full as follows:

“(d)    Notwithstanding anything to the contrary herein, in any other Loan Document, or in any Account Control Agreement entered into pursuant to the requirements of the Loan Documents, Administrative Agent hereby agrees that it will not deliver any “Access Termination Notice” or “Disposition Instructions” or any equivalent notice of exclusive control, or otherwise exercise any equivalent rights, in each case under any Account Control Agreement unless, in any such case, an Event of Default has occurred and is continuing.”
Section 4.Waiver of Specified Potential Defaults and Related Potential Defaults.  Subject to the occurrence of the Second Amendment Effective Date (as defined below), the Majority Lenders hereby waive, solely in respect of the matters expressly described in the Disclosure Schedule, (x) any and all Specified Potential Defaults and Related Potential Defaults to the extent now existing or hereafter arising and (y) any requirement that Parent or the Borrower make any representations and warranties after the date hereof as to any Prior Financial Information; provided that the waiver and agreements set forth in this Section 4 shall terminate on August 31, 2016 unless on or prior to such date, Parent shall have delivered to the Administrative Agent the following (collectively, the “Financial Information Deliverables”):  

(a)the Replacement Financial Information in respect of the 2015 Audited Report; provided that delivery of such Replacement Financial Information shall be deemed to be made by Parent if Parent shall have made available a restated or modified copy of the 2015 Audited Report on “EDGAR” (or any successor thereto) and/or on its home page on the worldwide web by such date; and 

(b)a replacement Compliance Certificate delivered for the Fiscal Year ended December 31, 2015 that demonstrates that Parent was in compliance with each of the covenants set forth in Sections 9.10(a), 9.10(b) and 9.10(c) of the Credit Agreement as of such date and certifies that as of such date there were no Defaults that had occurred and were continuing (other than the Specified Potential Defaults and Related Potential Defaults).

Section 5.Consent.

5.1     Subject to the occurrence of the Second Amendment Effective Date, the Majority Lenders hereby consent to the Amended Q1 2016 Quarterly Report Extension and the Q2 2016 Quarterly Report Extension for delivery of the Q1 2016 Quarterly Report and Q2 2016 Quarterly Report, respectively, and the respective related Compliance Certificates, and no Default or Event of Default shall arise under the Loan Documents with respect to such delayed delivery so long as the Q1 2016 Quarterly Report and the Q2 2016 Quarterly Report and the respective related Compliance Certificates are delivered on or prior to the earlier of (i) (A) with respect to the Q1 2016 Quarterly Report, ten Business Days following the date Parent files its quarterly report with the SEC for the Fiscal Quarter ended March 31, 2016 and (B) with respect to the Q2 2016 Quarterly Report, ten Business Days following the date Parent files its quarterly report with the SEC for the Fiscal Quarter ended June 30, 2016 and (ii) August 31, 2016, in each case in conformity with the 

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terms of Section 8.01 of the Credit Agreement.  The failure to deliver the Q1 2016 Quarterly Report, the Q2 2016 Quarterly Report and the respective related Compliance Certificates in conformity with the terms of Section 8.01 of the Credit Agreement as required by this Section 5.1 shall constitute an immediate Event of Default under the Credit Agreement.  

5.2    The consents set forth in this Section 5 are limited to the extent described herein and shall not be construed to be a consent to the modification of any other terms of the Credit Agreement or of the other Loan Documents, except as required to implement the consent set forth in this Section 5.

Section 6.Covenants Regarding Financial Statements, etc.  From and after the Second Amendment Effective Date, each of Parent and the Borrower covenants and agrees that:

(a)if Parent shall have not yet delivered the Replacement Financial Information and the Q1 2016 Quarterly Report and the Q2 2016 Quarterly Report and the respective related Compliance Certificates, Parent shall deliver, or shall cause to be delivered, to the Administrative Agent: 

(1)     as soon as available, but in any event not later than August 15, 2016, (A) the unaudited consolidated balance sheet of Parent and its Consolidated Subsidiaries for the Fiscal Quarter ended June 30, 2016 and the related unaudited consolidated statements of operations and of cash flows for such Fiscal Quarter, and with respect to the unaudited consolidated statements of operations and of cash flows, such statements shall set forth in comparative form the figures as of the end of and for the corresponding period in the previous year, in each case in accordance with GAAP, subject to normal year-end audit adjustments, the absence of footnotes and adjustments required to be made as a result of Disclosure Schedule Matters (as defined in the First Amendment), and (B) calculations of the financial covenants set forth in Section 9.10, in each case certified by a Responsible Officer as being prepared in good faith based on the financial information available to Parent at such time, but subject in all respects to adjustments required to be made as a result of the Disclosure Schedule Matters; and 
(2)     as soon as available, but in any event not later than August 31, 2016, the unaudited consolidated balance sheet of Parent and its Consolidated Subsidiaries as of July 31, 2016 and the related unaudited consolidated statement of operations for the calendar month of July 2016, certified by a Responsible Officer as being prepared in good faith consistent with Parent’s internal monthly reporting processes, but subject in all respects to normal quarter-end adjustments and adjustments required to be made as a result of the Disclosure Schedule Matters.
(b)The parties hereto hereby agree that, notwithstanding anything to the contrary contained in any Loan Document, neither Parent nor the Borrower nor any other Loan Party shall make any representation and warranty (including the representation and warranty contained in Section 7.11 of the Credit Agreement) with respect to any of the financial information described in this Section 6, except to the extent expressly set forth in any written certification required to be delivered to the Administrative Agent pursuant to this Section 6.

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Section 7.Conditions Precedent.  This Second Amendment shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 12.02 of the Credit Agreement) (the “Second Amendment Effective Date”):

7.1    The Administrative Agent shall have received from the Majority Lenders, the Borrower, and each Guarantor counterparts (in such number as may be requested by the Administrative Agent) of this Second Amendment signed on behalf of such Persons.

7.2    The Borrower shall have paid to the Administrative Agent all other fees and other amounts due and payable on or prior to the Second Amendment Effective Date, including, to the extent invoiced, reimbursement or payment of all reasonable and documented out-of-pocket costs and expenses required to be reimbursed or paid by the Borrower under the Credit Agreement.

7.3    No Default or Event of Default shall have occurred and be continuing as of the date hereof after giving effect to the terms of this Second Amendment. 

7.4    The Administrative Agent shall have received such other documents as the Administrative Agent (or its counsel) may reasonably request relating to the transactions contemplated by the Amendment.

Section 8.Miscellaneous.

8.1    Confirmation.  The provisions of the Credit Agreement, except as specifically waived or consented to above, or as amended by this Second Amendment, shall remain in full force and effect following the effectiveness of this Second Amendment.  The amendments contemplated hereby shall not limit or impair any Liens granted by the Borrower or any other Loan Party to secure the Secured Obligations, each of which are hereby ratified, affirmed and extended to secure the Secured Obligations as they may be extended pursuant hereto.

8.2    Representations and Warranties.  
(a)Ratification and Affirmation. The Borrower hereby: (i) acknowledges the terms of this Second Amendment; (ii) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect, except as expressly amended hereby, after giving effect to the amendments contained herein; (iii) agrees that, from and after the Second Amendment Effective Date, each reference to the Credit Agreement in the Security Instruments and the other Loan Documents shall be deemed to be a reference to the Credit Agreement, as amended by this Second Amendment; and (iv) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Second Amendment, including the waivers and consents contained herein: (A) all of the representations and warranties made by the Borrower contained in each Loan Document to which it is a party are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representation or warranty that is already qualified or modified by materiality in the text thereof) on and as of the date hereof, except to the extent such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties 

7

are true and correct in all material respects as of such specified earlier date; provided that no representations and warranties are made herein as to any Prior Financial Information; and (B) other than any Default or Event of Default with respect to the Specified Potential Defaults and Related Potential Defaults, no Default or Event of Default has occurred and is continuing.  
(b)Corporate Authority; Enforceability; No Conflicts.  The Borrower hereby represents and warrants to the Lenders that (i) it has all necessary power and authority to execute, deliver and perform its obligations under this Second Amendment; (ii) the execution, delivery and performance by the Borrower of this Second Amendment has been duly authorized by all necessary action on its part; (iii) this Second Amendment has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditor’s rights and by equitable principles (regardless of whether enforcement is sought in equity or at law); (iv) the execution and delivery of this Second Amendment by the Borrower and the performance of its obligations hereunder require no authorizations, approvals or consents of, or registrations or filings with, any Governmental Authority, except for those that have been obtained or made and are in effect; and (v) neither the execution and delivery of this Second Amendment nor the transactions contemplated hereby will (A) contravene, or result in a breach of, the Organization Documents of the Borrower, (B) violate any Governmental Requirement applicable to or binding upon the Borrower or any of its Properties, except to the extent that any such violation, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect, or (C) violate or result in a default under any agreement or instrument to which the Borrower is a party (other than any agreement or instrument the contravention of which or breach of which could not reasonably be expected to be materially adverse to any Secured Party) or by which it is bound or to which its Properties are subject, except to the extent that any such violation or default, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

(c)Compliance with Financial Covenants.  The Borrower hereby represents and warrants to Administrative Agent, the Issuing Banks and the Lenders that, notwithstanding the occurrence of the Disclosure Schedule Matters and any restatement or adjustments to the Prior Financial Information, to the best knowledge of any Financial Officer of the Borrower as of the date this representation and warranty is made, Parent is in compliance with the financial covenants contained in Section 9.10 as of the last day of the Testing Period ended December 31, 2015 and as of the last day of the Testing Period ended March 31, 2016.

8.3    No Waiver.    Neither the execution by the Administrative Agent or the Lenders of this Second Amendment, nor any other act or omission by the Administrative Agent or the Lenders or their officers in connection herewith, shall be deemed a waiver by the Administrative Agent or the Lenders of any Default or Event of Default which may exist, which may have occurred prior to the date of the effectiveness of this Second Amendment or which may occur in the future under the Credit Agreement and/or the other Loan Documents, except to the extent expressly set forth in this Second Amendment.  Similarly, nothing contained in this Second Amendment shall directly or indirectly in any way whatsoever: (a) except for the waivers set forth herein, impair, prejudice or otherwise adversely affect the Administrative Agent’s or any Lender’s right at any time to exercise 

8

any right, privilege or remedy in connection with the Loan Documents with respect to any Default or Event of Default; (b) except as expressly provided herein, amend or alter any provision of the Credit Agreement, the other Loan Documents, or any other contract or instrument; or (c) constitute any course of dealing or other basis for altering any obligation of the Borrower or any right, privilege or remedy of the Administrative Agent or the Lenders under the Credit Agreement, the other Loan Documents or any other contract or instrument.

8.4    Loan Document.  This Second Amendment is a “Loan Document” as defined and described in the Credit Agreement and all of the terms and provisions of the Credit Agreement relating to Loan Documents shall apply hereto.

8.5    Parties in Interest.  All of the terms and provisions of this Second Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.

8.6    Counterparts.  This Second Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of this Second Amendment by facsimile transmission or electronic transmission (e.g., PDF) shall be effective as delivery of a manually executed counterpart hereof.

8.7    No Oral Agreement.  This Second Amendment, the Credit Agreement and the other Loan Documents executed in connection herewith and therewith represent the final agreement AMONG the parties RELATING to the SUBJECT MATTER HEREOF AND THEREOF and may not be contradicted by evidence of prior, contemporaneous or unwritten oral agreements of the parties.  There are no oral agreements between the parties.

8.8    GOVERNING LAW.  THIS SECOND AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

8.9    Release.  FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, EACH LOAN PARTY, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, FULLY AND WITHOUT RESERVE, HEREBY WAIVES, RELEASES, ACQUITS, AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT, EACH ISSUING BANK AND EACH LENDER, THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS, ADVISORS AND AFFILIATES (COLLECTIVELY THE “RELEASED PARTIES” AND INDIVIDUALLY A “RELEASED PARTY”) FROM ANY AND ALL ACTIONS, CLAIMS, CAUSES OF ACTION, JUDGMENTS, SUITS OR LIABILITIES OF ANY KIND AND NATURE WHATSOEVER, DIRECT AND/OR INDIRECT, AT LAW OR IN EQUITY, WHETHER NOW EXISTING OR HEREAFTER ASSERTED, WHETHER ABSOLUTE OR CONTINGENT, WHETHER DUE OR TO BECOME DUE, WHETHER DISPUTED OR UNDISPUTED, IN EACH CASE THAT ARE KNOWN TO SUCH LOAN PARTY AS OF THE DATE HEREOF (INCLUDING, WITHOUT LIMITATION, ANY CROSS-CLAIMS, OFFSETS, REDUCTIONS, REBATEMENT, CLAIMS OF USURY OR CLAIMS WITH RESPECT TO THE NEGLIGENCE OF ANY RELEASED PARTY IN EACH CASE THAT ARE KNOWN TO SUCH LOAN PARTY AS OF THE DATE HEREOF) (COLLECTIVELY, THE “RELEASED CLAIMS”), FOR OR 

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BECAUSE OF ANY MATTERS OR THINGS OCCURRING, EXISTING OR ACTIONS DONE, OMITTED TO BE DONE, OR SUFFERED TO BE DONE BY ANY OF THE RELEASED PARTIES, IN EACH CASE, ON OR PRIOR TO THE DATE HEREOF  BUT ONLY TO THE EXTENT DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY CONNECTED TO ANY OF THIS SECOND AMENDMENT, THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (COLLECTIVELY, THE “RELEASED MATTERS”). THE PROVISIONS OF THIS SECTION 8.9 SHALL SURVIVE THE TERMINATION OF THIS SECOND AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS AND PAYMENT IN FULL OF THE SECURED OBLIGATIONS.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed as of the date first written above.

	
				
	 
	EXTERRAN ENERGY SOLUTIONS, L.P., a 

	 
	Delaware limited partnership, as the Borrower

	 
	 
	 
	 

	 
	By:
	/s/ Jon C. Biro
	 

	 
	Name:
	Jon C. Biro
	 

	 
	Title:
	Senior Vice President and Chief Financial Officer
	 

	
				
	 
	EXTERRAN CORPORATION, a Delaware

	 
	corporation, as Parent 

	 
	 
	 
	 

	 
	By:
	/s/ Jon C. Biro
	 

	 
	Name:
	Jon C. Biro
	 

	 
	Title:
	Senior Vice President and Chief Financial Officer
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	WELLS FARGO BANK, NATIONAL 

	 
	ASSOCIATION, as Administrative Agent and 

	 
	as a Lender

	 
	 
	 
	 

	 
	By:
	/s/ T. Alan Smith
	 

	 
	Name:
	T. Alan Smith
	 

	 
	Title:
	Managing Director
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	CRÉDIT AGRICOLE CORPORATE AND

	 
	INVESTMENT BANK, as a Lender and Issuing Bank

	 
	 

	 
	By:
	/s/ Michael Willis
	 

	 
	Name:
	Michael Willis
	 

	 
	Title:
	Managing Director
	 

	 
	 
	 
	 

	 
	By:
	/s/ Dixon Schultz
	 

	 
	Name:
	Dixon Schultz
	 

	 
	Title:
	Managing Director
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	BANK OF AMERICA, N.A., as a Lender and

	 
	Issuing Bank 

	 
	 
	 
	 

	 
	By:
	/s/ Tyler Ellis
	 

	 
	Name:
	Tyler Ellis
	 

	 
	Title:
	Senior Vice President
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	ROYAL BANK OF CANADA, as a Lender and

	 
	Issuing Bank

	 
	 
	 
	 

	 
	By:
	/s/ Evans Swann, Jr.
	 

	 
	Name:
	Evans Swann, Jr.
	 

	 
	Title:
	Authorized Signatory
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	CITIBANK, N.A., as a Lender and Issuing Bank

	 
	 

	 
	 
	 
	 

	 
	By:
	/s/ Ivan Davey
	 

	 
	Name:
	Ivan Davey
	 

	 
	Title:
	Vice President
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	THE BANK OF NOVA SCOTIA, as a Lender and

	 
	Issuing Bank

	 
	 
	 
	 

	 
	By:
	/s/ Mark Sparrow
	 

	 
	Name:
	Mark Sparrow
	 

	 
	Title:
	Director
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	SUMITOMO MITSUI BANKING CORPORATION, 

	 
	as a Lender

	 
	 
	 
	 

	 
	By:
	/s/ David Kee
	 

	 
	Name:
	David Kee
	 

	 
	Title:
	Managing Director
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	GOLDMAN SACHS BANK USA, as a Lender

	 
	 

	 
	 
	 
	 

	 
	By:
	/s/ Jerry Li
	 

	 
	Name:
	Jerry Li
	 

	 
	Title:
	Authorized Signatory
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	HSBC BANK USA, N.A, as a Lender

	 
	 

	 
	 
	 
	 

	 
	By:
	/s/ Michael Bustios
	 

	 
	Name:
	Michael Bustios
	 

	 
	Title:
	Vice President, 20556
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	SANTANDER BANK, N.A., as a Lender

	 
	 

	 
	 
	 
	 

	 
	By:
	/s/ Aidan Lanigan
	 

	 
	Name:
	Aidan Lanigan
	 

	 
	Title:
	Senior Vice President
	 

	 
	 
	 
	 

	 
	By:
	/s/ Puiki Lok
	 

	 
	Name:
	Puiki Lok
	 

	 
	Title:
	Vice President
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	TRUSTMARK NATIONAL BANK, as a Lender

	 
	 

	 
	 
	 
	 

	 
	By:
	/s/ Jeff Deutsch
	 

	 
	Name:
	Jeff Deutsch
	 

	 
	Title:
	Senior Vice President
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	BRANCH BANKING AND TRUST COMPANY,

	 
	as a Lender

	 
	 
	 
	 

	 
	By:
	/s/ DeVon J. Lang
	 

	 
	Name:
	DeVon J. Lang
	 

	 
	Title:
	Senior Vice President
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

	
				
	 
	CATERPILLAR FINANCIAL SERVICES

	 
	CORPORATION, as a Lender

	 
	 
	 
	 

	 
	By:
	/s/ Adam Brown
	 

	 
	Name:
	Adam Brown
	 

	 
	Title:
	Credit Manager
	 

Signature Page to Second Amendment – Exterran Energy Solutions, L.P.

REAFFIRMATION AND RATIFICATION: Each Guarantor hereby (a) acknowledges the terms of this Second Amendment; (b) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Loan Document to which it is a party, including the Guaranty and Collateral Agreement, as amended by the Second Amendment, and agrees that each Loan Document to which it is a party, including the Guaranty and Collateral Agreement, as amended by the Second Amendment, remains in full force and effect as expressly amended hereby; and (c) represents and warrants to the Lenders that, as of the date hereof, after giving effect to the terms of this Second Amendment: (i) all of the representations and warranties made by such Guarantor contained in each Loan Document to which such Guarantor is a party, including the Guaranty and Collateral Agreement, as amended by the Second Amendment, are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representation or warranty that is already qualified or modified by materiality in the text thereof) as though made on and as of the Second Amendment Effective Date (unless such representations and warranties are stated to relate to a specific earlier date, in which case, such representations and warranties shall be true and correct in all material respects as of such earlier date) and (ii) no Default or Event of Default has occurred and is continuing.

	
				
	ACKNOWLEDGED AND RATIFIED:
	   EXTERRAN CORPORATION

	 
	 
	 
	 

	 
	 
	 
	 

	 
	By:
	/s/ Jon C. Biro
	 

	 
	Name:
	Jon C. Biro
	 

	 
	Title:
	Senior Vice President and Chief Financial Officer
	 

Reaffirmation and Ratification 
Second Amendment – Exterran Energy Solutions, L.P.

Disclosure Schedule

Parent is reviewing whether certain costs and expense estimates made in connection with certain projects undertaken by Belleli Energy S.r.l. and its Subsidiaries (collectively, the “Belleli Entities”) were either under-reported or reported during incorrect periods.  The Belleli Entities are Restricted Subsidiaries of Parent.

The Belleli Entities account for their projects using the cost-to-total cost percentage-of-completion method of accounting. Based on preliminary results of an internal investigation, Parent has determined that it is likely that the costs and expenses referred to above should have been recognized in prior periods, and that the percentage-of-completion estimate of revenue on such projects will need to be adjusted to lower amounts in such prior periods
The amount and timing of such costs and expenses, and the related adjustments to revenue for prior periods, are under review and cannot yet be quantified.

Reaffirmation and Ratification 
Second Amendment – Exterran Energy Solutions, L.P.

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