Document:

ex-10_1.htm

  

  

  

	  	
Exhibit 10.1

EXECUTION COPY

FIFTH AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN

 

AGREEMENT

 

among

 

SOVRAN SELF STORAGE, INC. and

 

SOVRAN ACQUISITION LIMITED PARTNERSHIP

 

and

 

MANUFACTURERS AND TRADERS TRUST COMPANY

 

and

 

OTHER LENDERS WHICH ARE OR MAY BECOME

 

PARTIES TO THIS CREDIT AGREEMENT

 

and

 

MANUFACTURERS AND TRADERS TRUST COMPANY,

 

AS ADMINISTRATIVE AGENT

 

with

 

MANUFACTURERS AND TRADERS TRUST COMPANY,

 

AS SOLE LEAD ARRANGER AND BOOKRUNNER

 

and each of

 

SUNTRUST BANK,

 

 

and

 WELLS FARGO BANK, NATIONAL ASSOCIATION,

AS CO-SYNDICATION AGENTS

and each of

 

PNC BANK, NATIONAL ASSOCIATION,

U.S. BANK NATIONAL ASSOCIATION,

and

HSBC BANK USA, NATIONAL ASSOCIATION,

 

AS CO-DOCUMENTATION AGENTS

 

Dated as of June 4, 2013

 

  

  

  

TABLE OF CONTENTS

 

	
§

	  	 
	  	  	  
	
§1.

	
DEFINITIONS AND RULES OF INTERPRETATION

	
 

	  	  	  	  
	  	
§1.1.

	
Definitions

	
 

	  	
§1.2.

	
Rules of Interpretation

	
 

	  	
§1.3.

	
Existing Loans

	
 

	  	  	  	 
	
§2.

	
THE REVOLVING CREDIT FACILITY

	
 

	  	  	  
	  	
§2.1.

	
Revolving Credit Loans

	
 

	  	
§2.2.

	
The Revolving Credit Notes

	
 

	  	
§2.3.

	
Interest on Revolving Credit Loans

	
 

	  	
§2.4.

	
Requests for Revolving Credit Loans

	
 

	  	
§2.5.

	
Conversion Options

	
 

	  	
§2.6.

	
Funds for Revolving Credit Loans

	
 

	  	
§2.7.

	
Repayment of the Revolving Credit Loans at Maturity

	
 

	  	
§2.8.

	
Optional Repayments of Revolving Credit Loans

	
 

	  	
§2.9.

	
Mandatory Repayments of Revolving Credit Loans

	
 

	  	
§2.10.

	
Optional Extension of Revolving Credit Loan Maturity Date

	
 

	  	
§2.11.

	
Increase of Commitment to Lend

	
 

	  	  	  	  
	
§3.

	
THE INITIAL TERM LOAN FACILITY AND DELAYED DRAW TERM LOAN FACILITY

	
 

 

	  	  	  
	  	
§3.1.

	
Commitment to Lend Initial Term Loan

	
 

	  	
§3.2.

	
Commitment to Lend Delayed Draw Term Loans

	
 

	  	
§3.3.

	
Request for Delayed Draw Term Loans

	
 

	  	
§3.4.

	
Funds for Delayed Draw Term Loans

	
 

	  	
§3.5.

	
The Term Notes

	
 

	  	
§3.6.

	
Interest on Term Loan

	
 

	  	
§3.7.

	
Conversion Options

	
 

	  	
§3.8.

	
Repayment of the Term Loan at Maturity

	
 

	  	
§3.9.

	
Mandatory Repayments of Delayed Draw Term Loans

	
 

	  	
§3.10.

	
Optional Repayments of Term Loan

	
 

	  	  	  	 
	
§4.

	
CERTAIN GENERAL PROVISIONS

	
 

	  	
§4.1.

	
Fees

	
 

	  	
§4.2.

	
Funds for Payments

	
 

	  	
§4.3.

	
Computations

	
 

	  	
§4.4.

	
Inability to Determine LIBOR Rate

	
 

	  	
§4.5.

	
Illegality

	
 

	  	
§4.6.

	
Additional Costs, Etc

	
 

	  	
§4.7.

	
Capital Adequacy

	
 

	  	
§4.8.

	
Certificate

	
 

	  	
§4.9.

	
Indemnity

	
 

	  	
§4.10.

	
Interest During Event of Default; Late Charges

	
 

	  	
§4.11.

	
Concerning Joint and Several Liability of the Borrowers

	
 

	  	
§4.12

	
Interest Limitation

	
 

	  	
§4.13.

	
Reasonable Efforts to Mitigate

	
 

	  	
§4.14.

	
Replacement of Lenders

	
 

	  	
§4.15.

	
Defaulting Lender

	
 

	  	  	  	 
	
§5.

	
LETTERS OF CREDIT

	
 

	  	  	 
	  	
§5.1.

	
Commitment to Issue Letters of Credit

	
 

	  	
§5.2.

	
Letter of Credit Applications

	
 

	  	
§5.3.

	
Terms of Letters of Credit

	
 

	  	
§5.4.

	
Reimbursement Obligations of Lenders

	
 

	  	
§5.5.

	
Participations of Lenders

	
 

	  	
§5.6.

	
Reimbursement Obligation of the Borrowers

	
 

	  	
§5.7.

	
Letter of Credit Payments

	
 

	  	
§5.8.

	
Obligations Absolute

	
 

	  	
§5.9.

	
Reliance by Issuer

	
 

	  	
§5.10.

	
Letter of Credit Fees

	
 

	  	
§5.11.

	
Cash Collateral

	
 

	  	  	  	  
	
§6.

	
GUARANTIES

	
 

	  	  	  	  
	
§7.

	
REPRESENTATIONS AND WARRANTIES

	
 

	  	  	 
	  	
§7.1.

	
Authority; Etc

	
 

	  	
§7.2.

	
Governmental Approvals

	
 

	  	
§7.3.

	
Title to Properties; Leases

	
 

	  	
§7.4.

	
Financial Statements

	
 

	  	
§7.5

	
Fiscal Year

	
 

	  	
§7.6.

	
Licenses, Permits, Franchises, Patents, Copyrights, Etc

	
 

	  	
§7.7.

	
Litigation

	
 

	  	
§7.8.

	
No Materially Adverse Contracts, Etc

	
 

	  	
§7.9.

	
Compliance With Other Instruments, Laws, Etc

	
 

	  	
§7.10.

	
Tax Status

	
 

	  	
§7.11.

	
No Event of Default; No Materially Adverse Changes

	
 

	  	
§7.12.

	
Investment Company Act

	
 

	  	
§7.13.

	
Absence of UCC Financing Statements, Etc

	
 

	  	
§7.14.

	
Absence of Liens

	
 

	  	
§7.15.

	
Certain Transactions

	
 

	  	
§7.16.

	
Employee Benefit Plans

	
 

	  	  	
§7.16.1.

	
In General

	
 

	  	  	
§7.16.2.

	
Terminability of Welfare Plans

	
 

	  	  	
§7.16.3.

	
Guaranteed Pension Plans

	
 

	  	  	
§7.16.4.

	
Multiemployer Plans

	
 

	  	
§7.17.

	
Regulations U and X

	
 

	  	
§7.18.

	
Environmental Compliance

	
 

	  	
§7.19.

	
Subsidiaries

	
 

	  	
§7.20.

	
Loan Documents

	
 

	  	
§7.21.

	
REIT Status

	
 

	  	
§7.22.

	
Solvency

	
 

	  	
§7.23.

	
Trading Status

	
 

	  	
§7.24.

	
Existing Indebtedness; Liens

	
 

	  	
§7.25.

	
Foreign Assets Control Regulations

	
 

	  	  	  	 
	
§8.

	
AFFIRMATIVE COVENANTS OF THE BORROWERS AND

THE GUARANTORS

	
 

	  	  	 
	  	
§8.1.

	
Punctual Payment

	
 

	  	
§8.2.

	
Maintenance of Office

	
 

	  	
§8.3.

	
Records and Accounts

	
 

	  	
§8.4.

	
Financial Statements, Certificates and Information

	
 

	  	
§8.5.

	
Notices

	
 

	  	
§8.6.

	
Existence of SALP, Holdings and Subsidiary Guarantors;

Maintenance of Properties

	
 

	  	
§8.7.

	
Existence of Sovran; Maintenance of REIT Status of Sovran;

Maintenance of Properties

	
 

	  	
§8.8.

	
Insurance

	
 

	  	
§8.9.

	
Taxes

	
 

	  	
§8.10.

	
Inspection of Properties and Books; Confidentiality

	
 

	  	
§8.11.

	
Compliance with Laws, Contracts, Licenses, and Permits

	
 

	  	
§8.12.

	
Use of Proceeds

	
 

	  	
§8.13.

	
Acquisition of Unencumbered Properties

	
 

	  	
§8.14.

	
Additional Guarantors; Solvency of Guarantors

	
 

	  	
§8.15.

	
Further Assurances

	
 

	  	
§8.16.

	
Intentionally Omitted

	
 

	  	
§8.17.

	
Environmental Indemnification

	
 

	  	
§8.18.

	
Response Actions

	
 

	  	
§8.19.

	
Environmental Assessments

	
 

	  	
§8.20.

	
Employee Benefit Plans

	
 

	  	
§8.21.

	
No Amendments to Certain Documents

	
 

	  	
§8.22.

	
Exclusive Credit Facility

	
 

	  	
§8.23.

	
Management

	
 

	  	
§8.24.

	
Financial Covenants under Note Purchase Agreement

	
 

	  	  	  	 
	
§9.

	
CERTAIN NEGATIVE COVENANTS OF THE BORROWERS AND THE GUARANTORS

	
 

	  	  	  
	  	
§9.1.

	
Restrictions on Indebtedness

	
 

	  	
§9.2.

	
Restrictions on Liens, Etc

	
 

	  	
§9.3.

	
Restrictions on Investments

	
 

	  	
§9.4.

	
Merger, Consolidation and Disposition of Assets

	
 

	  	
§9.5.

	
Sale and Leaseback

	
 

	  	
§9.6.

	
Compliance with Environmental Laws

	
 

	  	
§9.7.

	
Distributions

	
 

	  	
§9.8.

	
Employee Benefit Plans

	
 

	  	
§9.9.

	
Fiscal Year; Nature of Business

	
 

	  	
§9.10.

	
Negative Pledge

	
 

	  	
§9.11.

	
Transactions with Affiliates

	
 

	  	
§9.12.

	
Terrorism Sanctions Regulations

	
 

	  	  	  	 
	
§10.

	
FINANCIAL COVENANTS OF THE BORROWERS

	
 

	  	  	  
	  	
§10.1.

	
Leverage Ratio

	
 

	  	
§10.2.

	
Priority Debt

	
 

	  	
§10.3.

	
Tangible Net Worth

	
 

	  	
§10.4.

	
Debt Service Coverages

	
 

	  	
§10.5.

	
Unimproved Land

	
 

	  	
§10.6.

	
Construction-in-Process

	
 

	  	
§10.7.

	
Promissory Notes

	
 

	  	
§10.8.

	
Unimproved Land, Construction-in-Process and Notes

	
 

	  	
§10.9.

	
Joint Venture Ownership Interest

	
 

	  	
§10.10.

	
Unhedged Variable Rate Debt

	
 

	  	
§10.11.

	
Unsecured Indebtedness

	
 

	  	
§10.12.

	
Unencumbered Property Debt Service Coverage

	
 

	  	
§10.13.

	
Covenant Calculations

	
 

	  	  	  	  
	
§11.

	
CONDITIONS TO THE RESTATEMENT DATE

	
 

	  	  	  
	  	
§11.1.

	
Loan Documents

	
 

	  	
§11.2.

	
Certified Copies of Organization Documents

	
 

	  	
§11.3.

	
Resolutions

	
 

	  	
§11.4.

	
Incumbency Certificate; Authorized Signers

	
 

	  	
§11.5.

	
Note Purchase Agreement

	
 

	  	
§11.6.

	
Certificates of Insurance

	
 

	  	
§11.7.

	
Intentionally Omitted

	
 

	  	
§11.8.

	
Opinion of Counsel Concerning Organization and Loan Documents

	
 

	  	
§11.9.

	
Tax and Securities Law Compliance

	
 

	  	
§11.10.

	
Guaranties

	
 

	  	
§11.11.

	
Certifications from Government Officials

	
 

	  	
§11.12.

	
Proceedings and Documents

	
 

	  	
§11.13.

	
Fees

	
 

	  	
§11.14.

	
Compliance Certificate

	
 

	  	
§11.15.

	
Existing Indebtedness

	
 

	  	
§11.16.

	
Subsequent Guarantors

	
 

	  	
§11.17.

	
No Material Adverse Effect

	
 

	  	
§11.18.

	
Other Information

	
 

	  	  	  	 
	
§12.

	
CONDITIONS TO ALL BORROWINGS

	
 

	  	  	  
	  	
§12.1.

	
Representations True; No Event of Default; Compliance Certificate

	
 

	  	
§12.2.

	
No Legal Impediment

	
 

	  	
§12.3.

	
Governmental Regulation

	
 

	  	  	  	  
	
§13.

	
EVENTS OF DEFAULT; ACCELERATION; ETC

	
 

	  	  	  
	  	
§13.1.

	
Events of Default and Acceleration

	
 

	  	
§13.2.

	
Termination of Commitments

	
 

	  	
§13.3.

	
Remedies

	
 

	  	
§13.4.

	
Distribution of Proceeds

	
 

	  	  	  	  
	
§14.

	
SET OFF

	
 

	  	  	  
	
§15.

	
THE AGENTS

	
 

	  	  	  
	  	
§15.1.

	
Authorization

	
 

	  	
§15.2.

	
Employees and Agents

	
 

	  	
§15.3.

	
No Liability

	
 

	  	
§15.4.

	
No Representations

	
 

	  	
§15.5.

	
Payments

	
 

	  	
§15.6.

	
Holders of Notes

	
 

	  	
§15.7.

	
Indemnity

	
 

	  	
§15.8.

	
Agents as Lenders

	
 

	  	
§15.9.

	
Notification of Defaults and Events of Default

	
 

	  	
§15.10.

	
Duties in the Case of Enforcement

	
 

	  	
§15.11.

	
Successor Agents

	
 

	  	
§15.12.

	
Notices

	
 

	  	
§15.13.

	
Administrative Agent May File Proofs of Claim

	
 

	  	  	  	  
	
§16.

	
EXPENSES

	
 

	  	  	  
	
§17.

	
INDEMNIFICATION

	
 

	  	  	  
	
§18.

	
SURVIVAL OF COVENANTS, ETC

	
 

	  	  	  
	
§19.

	
ASSIGNMENT; PARTICIPATIONS; ETC

	
 

	  	  	  
	  	
§19.1.

	
Successors and Assigns Generally

	
 

	  	
§19.2.

	
Assignments by Lenders

	
 

	  	
§19.3.

	
Register

	
 

	  	
§19.4.

	
Participations

	
 

	  	
§19.5.

	
Limitation upon Participant Rights

	
 

	  	
§19.6.

	
Certain Pledges

	
 

	  	
§19.7.

	
No Registration

	
 

	  	
§19.8.

	
Disclosure

	
 

	  	
§19.9.

	
Syndication

	
 

	  	  	  	  
	
§20.

	
NOTICES, ETC

	
 

	  	  	  
	
§21.

	
GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE

	
 

	  	  	  
	
§22.

	
HEADINGS

	
 

	  	  	  
	
§23.

	
COUNTERPARTS

	
 

	  	  	  
	
§24.

	
ENTIRE AGREEMENT, ETC

	
 

	  	  	  
	
§25.

	
WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS

	
 

	  	  	  
	
§26.

	
CONSENTS, AMENDMENTS, WAIVERS, ETC

	
 

	  	  	  
	
§27.

	
INDEPENDENCE OF COVENANTS

	
 

	  	  	  
	
§28.

	
SEVERABILITY

	
 

	  	  	  
	
§29.

	
USA PATRIOT ACT NOTICE

	
 

	  	  	  
	
§30.

	
TRANSITIONAL ARRANGEMENTS

	
 

	  	  	  
	  	
§30.1.

	
Existing Credit Agreement Superseded

	
 

	  	
§30.2.

	
Return and Cancellation of Notes

	
 

	  	
§30.3.

	
No Novation

	
 

 

 

  

i

  

 

	
Schedules to Revolving Credit Agreement

 

	
SCHEDULE 1.2

	
Lenders' Commitments

	
SCHEDULE 7.1(b)

	
Capitalization

	
SCHEDULE 7.3(a)

	
Unencumbered Properties

	
SCHEDULE 7.3(c)

	
Partially Owned Real Estate Companies

	
SCHEDULE 7.7

	
Litigation

	
SCHEDULE7.15

	
Certain Transactions

	
SCHEDULE 7.18

	
Environmental Matters

	
SCHEDULE 7.19

SCHEDULE 7.24

SCHEDULE 9.2(vi)

	
Subsidiaries

Existing Indebtedness

Existing Liens

	
SCHEDULE 9.3(d)

	
Existing Investments

	  	  

 

	
EXHIBITS

 

	
A-1

	
Form of Revolving Credit Note

	
A-2

	
Form of Term Loan Note

	
B

	
Form of Subsidiary Guaranty

	
C-1

	
Form of Revolving Credit Loan Request

	
C-2

	
Form of Delayed Draw Term Loan Request

	
D-1

	
Form of Compliance Certificate (Loan Request)

	
D-2

	
Form of Compliance Certificate (Sovran Financial Statements)

	
D-3

	
Form of Compliance Certificate (SALP Financial Statements

	
D-4

	
Form of Compliance Certificate (Incurrence of Indebtedness)

	
D-5

	
Form of Compliance Certificate (Merger, Consolidation or Reorganization)

	
D-6

	
Form of Compliance Certificate (Disposition of Unencumbered Property)

	
D-7

	
Form of Compliance Certificate (Closing Condition)

	
E

	
Form of Assignment and Assumption Agreement

	
F

	
Form of Notice of Continuation/Conversion

 

 

 

 

  

ii

  

FIFTH AMENDED AND RESTATED

REVOLVING CREDIT AND TERM LOAN AGREEMENT

This FIFTH AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of the 4th day of June, 2013, by and among SOVRAN SELF STORAGE, INC., a Maryland corporation ("Sovran") and SOVRAN ACQUISITION LIMITED PARTNERSHIP, a Delaware limited partnership ("SALP", and together with Sovran, collectively referred to herein as the "Borrowers" and individually as a "Borrower"), each with a principal place of business at 6467 Main Street, Williamsville, New York 14221, MANUFACTURERS AND TRADERS TRUST COMPANY, a national banking association having a place of business at One Fountain Plaza, Buffalo, New York, 14203 (together with its successors and assigns, "M&T Bank"), and the other lending institutions listed on Schedule 1.2 hereto or which may become parties hereto pursuant to §19 (individually, a "Lender" and collectively, the "Lenders"), MANUFACTURERS AND TRADERS TRUST COMPANY, as administrative agent for itself and the other Lenders (together with its successors and assigns, the "Administrative Agent"), each of SUNTRUST BANK and WELLS FARGO BANK, NATIONAL ASSOCIATION, as co-syndication agents for itself and the other Lenders (collectively, the "Syndication Agents"), and each of PNC BANK, NATIONAL ASSOCIATION, U.S. BANK NATIONAL ASSOCIATION, and HSBC BANK USA, NATIONAL ASSOCIATION, as co-documentation agents (collectively, the "Documentation Agents").

 

PREAMBLE

 

	
A.

	
The Borrowers are primarily engaged in the business of owning, purchasing, developing, constructing, renovating and operating self-storage facilities in the United States primarily known as "Uncle Bob's Self Storage" (for purposes hereof, operation of self-storage facilities shall include owning and renting vehicles which are rented by customers in connection with moving their property to and from storage units).

 

	
B.

	
Sovran is a limited partner of SALP, holds in excess of 96% of the partnership interests in SALP, conducts all or substantially all of its business through SALP, and is qualified to elect REIT status for income tax purposes.  Sovran Holdings, Inc., a Delaware corporation ("Holdings"), is a wholly-owned Subsidiary of Sovran and the sole general partner of SALP and has agreed to guaranty the obligations of the Borrowers hereunder.

 

	
C.

	
Pursuant to that certain Fourth Amended and Restated Revolving Credit and Term Loan Agreement, by and among the Borrowers, the Administrative Agent, the certain lenders party thereto and other parties thereto, dated as of August 5, 2011 (as amended and in effect immediately prior to the Restatement Date, the "Existing Credit Agreement"), such lenders extended to the Borrowers a revolving credit facility in an aggregate principal amount not to exceed $175,000,000, a term loan facility in the aggregate principal amount of $125,000,000, and a delayed draw term loan facility in the aggregate principal amount of $100,000,000.  The Borrowers have requested that the Lenders amend and restate such revolving credit and term loan facilities, with a revolving credit facility in an aggregate principal amount not to exceed $175,000,000 (increasing up to $250,000,000 pursuant to the terms hereof), with a sublimit for letters of credit of $15,000,000, a term loan facility in an aggregate principal amount of $225,000,000 and a delayed draw term loan facility in an aggregate principal amount of $100,000,000.  The Lenders are agreeable to providing such an amended and restated revolving credit and term loan facilities to the Borrowers, with such facilities to be on the terms and conditions set forth in this Credit Agreement.

 

          NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree that on the Restatement Date, the Existing Credit Agreement shall be amended and restated as follows:

	
§1.

	
DEFINITIONS AND RULES OF INTERPRETATION.

	  	
§1.1.

	
Definitions.  The following terms shall have the meanings set forth in this §1 or elsewhere in the provisions of this Credit Agreement referred to below:

 

	  	
Accountants.  In each case, nationally-recognized, independent certified public accountants reasonably acceptable to the Administrative Agent.  The Administrative Agent hereby acknowledges that the Accountants may include Ernst & Young, LLP.

 

	  	
Adjusted Unencumbered Property NOI.  With respect to any fiscal period for any Unencumbered Property, the net income of such Unencumbered Property during such period, as determined in accordance with GAAP, before deduction of (a) gains (or losses) from debt restructurings or other extraordinary items (provided such deduction shall not include extraordinary items that include liquidated damages, compensatory damages or other obligations arising out of a Borrower's default under an agreement to purchase or lease Real Estate) relating to such Unencumbered Property and (b) income taxes relating to such Unencumbered Property; plus (x) interest expense relating to such Unencumbered Property and (y) depreciation and amortization relating to such Unencumbered Property; minus a recurring capital expense reserve equal to ten cents ($0.10) per annum per net rentable square foot multiplied by the total net rentable square feet of such Unencumbered Property.

 

	  	
Administration Fee.  See §4.1.

 

	  	
Administrative Agent.  M&T Bank acting as administrative agent for the Lenders, or any successor agent, as permitted by §15.

 

	  	
Administrative Agent's Head Office.  The Agent's office located at One Fountain Plaza, Buffalo, New York, 14203, or at such other location as the Agent may designate from time to time pursuant to §20 hereof, or the office of any successor Agent permitted under §15 hereof.

 

	  	
Affiliate.  With reference to any Person, (i) any director or executive officer of that Person, (ii) any other Person controlling, controlled by or under direct or indirect common control of that Person, (iii) any other Person directly or indirectly holding 10% or more of any class of the capital stock or other equity interests (including options, warrants, convertible securities and similar rights) of that Person and (iv) any other Person 10% or more of any class of whose capital stock or other equity interests (including options, warrants, convertible securities and similar rights) is held directly or indirectly by that Person.

 

	  	
Agents.  Collectively, the Administrative Agent, each Documentation Agent and the Syndication Agent.

 

	  	
Anti-Money Laundering Laws.  See §7.25.

 

	  	
Applicable Margin.  With respect to each Loan, the respective percentages per annum determined based on the range into which SALP's Credit Rating then falls, in accordance with the following table.  Any change in SALP's Credit Rating causing it to move to a different range on the table shall to the extent set forth below effect an immediate change in the Applicable Margin.  SALP shall notify the Administrative Agent in writing promptly after becoming aware of any change in any of its debt ratings.  SALP shall maintain Credit Ratings from at least two (2) Rating Agencies, one of which must be Moody's, S&P or Fitch so long as such Persons are in the business of providing debt ratings for the REIT industry; provided that if SALP fails to maintain at least two Credit Ratings, the Applicable Margin shall be based upon an S&P rating of less than BBB- in the table below.  In the event that SALP receives two (2) Credit Ratings that are not equivalent, the Applicable Margin shall be determined by the lower of such two (2) Credit Ratings.  In the event SALP receives more than two (2) Credit Ratings and such Credit Ratings are not equivalent, the Applicable Margin shall be determined by the higher of the two highest ratings; provided that one of such ratings shall be from S&P, Moody's or Fitch, so long as such Persons are in the business of providing debt ratings for the REIT industry.

	
 

 

 

S&P Rating

	
 

 

 

Moody's Rating

	
 

 

 

Fitch

	
Applicable Margin for Revolving Credit Loans which are LIBOR Rate Loans

	
Applicable Margin for Revolving Credit Loans which are Base Rate Loans

	
Applicable Margin for Term Loans which are LIBOR Rate Loans

	
Applicable Margin for Term Loans which are Base Rate Loans

	  	  	  	  	  	  	  
	
No rating or less than BBB-

	
No rating or less than Baa3

	
No rating or less than BBB-

	
1.75%

	
0.75%

	
1.90%

	
1.00%

	
BBB-

	
Baa3

	
BBB-

	
1.50%

	
0.50%

	
1.65%

	
0.75%

	
BBB

	
Baa2

	
BBB

	
1.25%

	
0.25%

	
1.40%

	
0.50%

	
BBB+

	
Baa1

	
BBB+

	
1.00%

	
0.00%

	
1.15%

	
0.25%

	
A- or higher

	
A3 or higher

	
A- or higher

	
0.75%

	
0.00%

	
0.90%

	
0.00%

 

	  	
Approved Fund.  Any Fund 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.

 

	  	
Assignment and Assumption.  An Assignment and Assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by §19.1), and accepted by the Administrative Agent, substantially in the form of Exhibit E or any other form approved by the Administrative Agent.

 

	  	
Availability Period.  The period from and including the Restatement Date to but excluding the earlier of the Revolving Credit Loan Maturity Date and the date of termination of the Revolving Credit Commitments.

 

	  	
Base Rate.  The highest of (a) the variable annual rate of interest designated from time to time by M&T Bank at its head office in Buffalo, New York or any successor Agent at its principal office, as its "prime rate" (which is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer) (b) one half of one percent (.50%) above the overnight federal funds effective rate as published by the Board of Governors of the Federal Reserve System, as in effect from time to time or (c) LIBOR Rate for a 30 day Interest Period, determined on a daily basis, plus one and three quarter percent (1.75%).  Any change in the Base Rate during an Interest Period shall result in a corresponding change on the same day in the rate of interest accruing from and after such day on the unpaid balance of principal of the Base Rate Loans, if any, applicable to such Interest Period, effective on the day of such change in the Base Rate.

 

	  	
Base Rate Loans.  Those Loans bearing interest calculated by reference to the Base Rate.

 

	  	
Blocked Person.  See §7.25.

 

	  	
Borrower Representative.  Sovran, acting on behalf of all of the Borrowers.  The Agents and the Lenders shall be entitled to rely, and all of the Borrowers hereby agree that the Agents and the Lenders may so rely, on any notice given or received or action taken or not taken by Sovran as being authorized by each of the Borrowers.

 

	  	
Borrowers.  As defined in the preamble hereto.

 

	  	
Budgeted Project Costs.  With respect to Construction-In-Process, the total budgeted project cost of such Construction-In-Process shown on schedules submitted by the Borrower Representative to the Administrative Agent from time to time; provided that for Construction-In-Process owned by any Partially-Owned Entity, the Budgeted Project Cost of such Construction-In-Process shall be the applicable Borrower's pro-rata share of the total budgeted project cost of such Construction-In-Process (based on the greater of (x) such Borrower's percentage equity interest in such Partially-Owned Entity or (y) the Borrower's obligation to provide, or liability for providing, funds to such Partially-Owned Entity).

 

	  	
Building.  Individually and collectively, the buildings, structures and improvements now or hereafter located on the Real Estate and intended for income production.

 

	  	
Business Day.  Any day on which banking institutions in New York, New York are open for the transaction of banking business and, in the case of LIBOR Rate Loans, also a day which is a LIBOR Business Day.

 

	  	
Capitalization Rate.  A rate equal to eight and one-quarter of one percent (8.25%); provided however, that the Capitalization Rate shall be reviewed from time to time by the Administrative Agent and shall be subject to adjustment by the Required Lenders, in their sole discretion, based upon market conditions for comparable property types; provided further that the Capitalization Rate may only be adjusted once during the term of this Credit Agreement, and may only be adjusted at such time by up to 0.50%.

 

	  	
Capitalized Leases.  Leases under which any Borrower or any of its Subsidiaries or any Partially-Owned Entity is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

 

	  	
Capitalized Unencumbered Property Value.  As of any date of determination with respect to an Unencumbered Property, an amount equal to Adjusted Unencumbered Property NOI for such Unencumbered Property for the most recent two (2) complete fiscal quarters multiplied by two (2), with the product being divided by the Capitalization Rate.  The calculation of Capitalized Unencumbered Property Value shall be adjusted as set forth in §10.13 hereof.

 

	  	
Cash and Cash Equivalents.  Collectively, unrestricted (i) cash, (ii) marketable direct obligations issued or unconditionally guaranteed by the United States government and backed by the full faith and credit of the United States government; and (iii) domestic and Eurodollar certificates of deposit and time deposits, bankers' acceptances and floating rate certificates of deposit issued by any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, any foreign bank, or its branches or agencies (fully protected against currency fluctuations), which, at the time of acquisition, are rated A-1 (or better) by S&P, P-1 (or better) by Moody's or F1 (or better) by Fitch provided that the maturities of such Cash and Cash Equivalents shall not exceed one year.

 

	  	
Cash Collateralize.  The Borrowers' pledge and deposit with, or deliver to, the Administrative Agent, for the benefit of itself and the Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent.  Cash Collateral shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

	  	
CERCLA.  See §7.18.

 

	  	
CISADA. The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, United States Public Law 111195, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

 

	  	
Code.  The Internal Revenue Code of 1986, as amended and in effect from time to time.

 

	  	
Commitment.  With respect to each Lender, its Revolving Credit Commitment, Delayed Draw Term Loan Commitment or Initial Term Commitment, as applicable.  "Commitments" shall refer, collectively, with respect to each Lender, to such Lender's Revolving Credit Commitment, Delayed Draw Term Loan Commitment and/or Initial Term Commitment, as applicable.

 

	  	
Commitment Percentage.  With respect to each Lender, its Revolving Credit Commitment Percentage, Delayed Draw Term Loan Commitment Percentage or Initial Term Commitment Percentage, as applicable.  "Commitment Percentages" shall refer collectively, with respect to each Lender, to such Lender's Revolving Credit Commitment Percentage, Delayed Draw Term Loan Commitment Percentage and/or Initial Term Commitment Percentage, as applicable.

 

	  	
Completed Delayed Draw Term Loan Request.  A loan request accompanied by all information required to be supplied under the applicable provisions of §3.3.

 

	  	
Completed Revolving Credit Loan Request.  A loan request accompanied by all information required to be supplied under the applicable provisions of §2.4.

 

	  	
Consolidated or consolidated.  With reference to any term defined herein, shall mean that term applied to the accounts of Sovran and its Subsidiaries (including the Guarantors) or SALP and its Subsidiaries, as the case may be, consolidated in accordance with GAAP.

 

	  	
Consolidated Adjusted EBITDA.  For any period, an amount equal to the consolidated net income of the Borrowers and their respective Subsidiaries for such period, as determined in accordance with GAAP, before deduction of (a) gains (or losses) from the sale of real property or interests therein, debt restructurings and other extraordinary items (provided such deduction shall not include extraordinary items that include liquidated damages, compensatory damages or other obligations arising out of a Borrower's default under an agreement to purchase or lease Real Estate), (b) minority interest attributable to a Borrower or a Guarantor and (c) income taxes; plus (x) interest expense and (y) depreciation and amortization, minus a recurring capital expense reserve in an amount equal to ten cents ($0.10) per net rentable square foot multiplied by the total net rentable square feet of all Real Estate; all after adjustments for unconsolidated partnerships, joint ventures and other entities.  The calculation of Consolidated Adjusted EBITDA shall be further adjusted as set forth in §10.13 hereof.

 

	  	
Consolidated Assumed Amortizing Unsecured Debt Service Charges.  As of any date of determination, an amount equal to the assumed interest and principal payments for an imputed six month period on all Unsecured Indebtedness of the Borrowers and their respective Subsidiaries for borrowed money or in respect of reimbursement obligations for letters of credit, guaranty obligations or Capitalized Leases, whether direct or contingent, which is outstanding on such date based upon a two hundred and forty (240) month mortgage style amortization schedule and an annual interest rate equal to the greater of (x) the sum of two percent (2%) plus the imputed ten (10) year United States Treasury bill yield as of such date based upon published quotes for Treasury bills having ten (10) years to maturity and (y) 7.5%.  For example, if the imputed ten (10) year United States Treasury bill yield as of such date were 6% and the total amount of Unsecured Indebtedness of the Borrowers and their respective Subsidiaries on such date were $100,000, Consolidated Assumed Amortizing Unsecured Debt Service Charges would be equal to $5,019 (e.g. six month period, at $10,038 per annum).

 

	  	
Consolidated Capitalized Value.  As of any date of determination, an amount equal to Revised Consolidated Adjusted EBITDA for the most recent two (2) completed fiscal quarters multiplied by two (2), with the product being divided by the Capitalization Rate.  The calculation of Consolidated Capitalized Value shall be adjusted as set forth in §10.13 hereof.

 

	  	
Consolidated Fixed Charges.  With respect to the Borrowers and their respective Subsidiaries and for any period, the sum, without duplication, of (a) Consolidated Total Interest Expense for such period plus (b) any and all scheduled repayments of principal (excluding balloon payments of principal due upon the stated maturity of an Indebtedness) during such period in respect of Indebtedness that becomes due and payable or that are to become due and payable during such period pursuant to any agreement or instrument to which the Borrowers or any of their respective Subsidiaries is a party relating to (i) the borrowing of money or the obtaining of credit, including the issuance of notes or bonds, (ii) the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business), (iii) in respect of any Synthetic Leases or any Capitalized Leases, (iv) in respect of any reimbursement obligations in respect of letters of credit due and payable during such period, and (v) Indebtedness of the type referred to above of another Person guaranteed by the Borrowers or any of their respective Subsidiaries, plus (c) Preferred Dividends for such period.  Demand obligations shall be deemed to be due and payable during any fiscal period during which such obligations are outstanding.

 

	  	
Consolidated Secured Indebtedness.  As of any date of determination, the aggregate principal amount of all Indebtedness of the Borrowers and their respective Subsidiaries for borrowed money or in respect of reimbursement obligations for letters of credit, guaranty obligations or Capitalized Leases, whether direct or contingent, which is outstanding at such date and which is secured by a Lien on properties or other assets of such Persons, without regard to Recourse.

 

	  	
Consolidated Tangible Net Worth.  As of any date of determination, Gross Asset Value minus Consolidated Total Liabilities.

 

	  	
Consolidated Total Interest Expense.  For any period, the aggregate amount of interest required to be paid or accrued by the Borrowers and their respective Subsidiaries during such period on all Indebtedness of the Borrowers and their respective Subsidiaries outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of any Capitalized Lease or any Synthetic Lease, and including commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money; provided that such fees paid in connection with the borrowing of money may be amortized over the period of the applicable loan.

 

	  	
Consolidated Total Liabilities.  As of any date of determination, all liabilities of the Borrowers and their respective Subsidiaries determined on a consolidated basis in accordance with GAAP and classified as such on the consolidated balance sheet of the Borrowers and their respective Subsidiaries, and all Indebtedness of the Borrowers and their respective Subsidiaries, whether or not so classified.  The calculation of Consolidated Total Liabilities shall be adjusted as set forth in §10.13 hereof.

 

	  	
Consolidated Unsecured Indebtedness.  As of any date of determination, the aggregate principal amount of all Unsecured Indebtedness of the Borrowers and their respective Subsidiaries for borrowed money or in respect of reimbursement obligations for letters of credit, guaranty obligations or Capitalized Leases, whether direct or contingent, which is outstanding at such date, including without limitation the aggregate principal amount of all the Obligations under this Credit Agreement as of such date determined on a consolidated basis in accordance with GAAP, without regard to Recourse.

 

	  	
Controlled Entity.  See  §7.25.

 

	  	
Construction-In-Process.  Any Real Estate for which any Borrower, any Guarantor, any of the Borrowers' Subsidiaries or any Partially-Owned Entity is actively pursuing construction, renovation, or expansion of Buildings, all pursuant to such Person's ordinary course of business.

 

	  	
Conversion Request.  A notice given by the Borrower Representative to the Administrative Agent of its election to convert or continue a Loan in accordance with §2.5 or §3.7, as applicable.

 

	  	
Credit Agreement.  This Fifth Amended and Restated Revolving Credit and Term Loan Agreement, including the Schedules and Exhibits hereto, as the same may be from time to time amended and in effect.

 

	  	
Credit Rating.  The long-term unsecured, non-credit enhanced debt ratings assigned by not less than two of the Rating Agencies (at least one of which shall be S&P, Moody's or Fitch) to SALP.

 

	  	
Debtor Relief Laws. The Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

 

	  	
default.  When used with reference to this Credit Agreement or any other Loan Document, any of the events or conditions specified in §13.1, whether or not any requirement for the giving of notice, the lapse of time or both, has been satisfied.

 

	  	
Default.  As of the relevant time of determination, an event or occurrence which:

 

	  	
(i)

	
requires notice and time to cure to become an Event of Default and as to which notice has been given to the Borrowers by the Administrative Agent; or

 

	  	
(ii)

	
has occurred and will become an Event of Default (without notice) if such event remains uncured after any grace period specified in §13.1 or, in the case of matters referred to in §13.1(k), in the other applicable Loan Document(s).

 

	  	
Defaulting Lender.   Any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower Representative in writing that such failure is the result of such Lender's determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date when due, (b) has notified the Borrower Representative or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender's obligation to fund a Loan hereunder and states that such position is based on such Lender's determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower Representative, to confirm in writing to the Administrative Agent and the Borrower Representative that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower Representative), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a governmental authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such governmental authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Borrower Representative and each Lender.

 

	  	
Delayed Draw Term Loan.  Each and every delayed draw term loan made by the Delayed Draw Term Loan Lenders to the Borrowers on a Drawdown Date pursuant to §3.2.

 

	  	
Delayed Draw Term Loan Availability Period.  The period commencing the day after (and excluding) the Restatement Date to, but excluding the earlier of the Delayed Draw Term Loan Commitment Termination Date and the date of termination of the Delayed Draw Term Loan Commitments pursuant to the terms hereof.

 

	  	
Delayed Draw Term Loan Commitment.  With respect to each Delayed Draw Term Loan Lender, the amount set forth on Schedule 1.2 attached hereto, or as set forth in any applicable Assignment and Assumption, as the case may be, as the amount of such Lender's commitment to make a portion of any Delayed Draw Term Loan to the Borrowers, as the same may be reduced from time to time pursuant to the terms hereof; or if such commitment is terminated pursuant to the provisions hereof, zero.

 

	  	
Delayed Draw Term Loan Commitment Percentage.  With respect to each Delayed Draw Term Loan Lender, the percentage set forth on Schedule 1.2 hereto or in the register held by the Administrative Agent, as the case may be, as such Lender's percentage of the Total Delayed Draw Term Commitment and any changes thereto from time to time.

 

	  	
Delayed Draw Term Loan Commitment Termination Date.  December 4, 2013.

 

	  	
Delayed Draw Term Loan Facility Fee.  The facility fee payable by the Borrowers jointly and severally to the Administrative Agent for the account of the Delayed Draw Term Loan Lenders in accordance with their respective Delayed Draw Term Loan Commitment Percentages, which facility fee shall be equal to the product of the average daily amount of the Total Delayed Draw Term Loan Commitments multiplied by 0.25%.  The Delayed Draw Term Loan Facility Fee shall be payable quarterly, in arrears, on the first Business Day of each January, April, July and October, calculated for the immediately preceding calendar quarter (or portion thereof) commencing on the first such day after the Restatement Date to, but excluding, the last day of the Delayed Draw Term Loan Availability Period.

 

	  	
Delayed Draw Term Loan Lender.  Each Lender having a Delayed Draw Term Loan Commitment or holding a Delayed Draw Term Loan.

 

	  	
Disqualifying Building Event.  Any structural or repair and maintenance matter (other than a Release) as to any Building or any Real Estate that in the Administrative Agent's reasonable opinion will require the expenditure of $250,000 or more to remedy or complete such matter and the remediation or completion of which is required by prudent real estate ownership or operation.

 

	  	
Disqualifying Environmental Event.  Any Release or threatened Release of Hazardous Substances, any violation of Environmental Laws or any other similar environmental event with respect to a Real Estate that causes (y) the occupancy or rent of such Real Estate to be adversely affected, as compared to what otherwise would have been the occupancy or rent of such Real Estate in the absence of such environmental event or (z) such Real Estate to no longer be financeable on a secured, long-term debt basis under the then generally accepted underwriting standards of national institutional lenders.

 

	  	
Disqualifying Legal Event.  Any violation or non-compliance with any applicable law, statute, rule or regulation (other than an Environmental Law) with respect to any Real Estate, which requires cure or compliance for prudent real estate ownership or operation.

	  	
Distribution.  With respect to:

 

	  	
(i)

	
SALP, any distribution of cash or other cash equivalent, directly or indirectly, to the partners or other equity interest holders of SALP; or any other distribution on or in respect of any partnership interests of SALP; and

 

	  	
(ii)

	
Sovran, the declaration or payment of any dividend or any other distribution on or in respect of any shares of any class of capital stock of Sovran, other than dividends payable solely in shares of common stock by Sovran.

	  	
Documentation Agent.  Each of PNC Bank, National Association, U.S. Bank National Association, and HSBC Bank USA, National Association, acting as co-documentation agents for the Lenders, or any successor agent, as permitted by §15.

 

	  	
Dollars or $.  Dollars in lawful currency of the United States of America.

 

	  	
Drawdown Date.  The date on which any Loan is made or is to be made, and the date on which any Loan is converted or continued in accordance with §2.5 or §3.7.

 

	  	
Eligible Assignee.  Means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent and (ii) unless a Default or Event of Default shall exist, the Borrowers (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall not include the Borrowers or any of the Borrowers' Affiliates or Subsidiaries.

 

	  	
Employee Benefit Plan.  Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by any Borrower or any ERISA Affiliate, other than a Multiemployer Plan.

 

	  	
Engagement Letter.  See §4.1.

 

	  	
Environmental Laws.  See §7.18(a).

 

	  	
ERISA.  The Employee Retirement Income Security Act of 1974, as amended and in effect from time to time.

 

	  	
ERISA Affiliate.  Any Person which is treated as a single employer with any Borrower under §414 of the Code.

 

	  	
ERISA Reportable Event.  A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder as to which the requirement of notice has not been waived.

	  	
Eurocurrency Reserve Rate.  For any day with respect to a LIBOR Rate Loan, the weighted average of the rates (expressed as a decimal) at which all of the Lenders subject thereto would be required to maintain reserves under Regulation D of the Board of Governors of the Federal Reserve System (or any successor or similar regulations relating to such reserve requirements) against "Eurocurrency Liabilities" (as that term is used in Regulation D), if such liabilities were outstanding.  The Eurocurrency Reserve Rate shall be adjusted automatically on and as of the effective date of any change in the Eurocurrency Reserve Rate.

 

	  	
Event of Default.  See §13.1.

 

	  	
Excluded Subsidiaries.  (a) A Subsidiary that  (i) has Indebtedness outstanding secured by a Lien on its Real Estate, which Indebtedness was incurred (or assumed) in connection with such Subsidiary's acquisition or improvement of such Real Estate (referred to hereinafter as "Mortgage Debt") and (ii) is prohibited pursuant to the loan or other financing documents evidencing such Mortgage Debt from guaranteeing Indebtedness of other Persons; provided that the principal amount of such Mortgage Debt may not be increased and the original scheduled maturity date thereof may not be extended (including, in each case, in connection with an amendment or modification or refinancing of such Mortgage Debt), and if there is any such increase in principal amount or extension of maturity, then such Subsidiary shall no longer be considered an Excluded Subsidiary, (b) the only property or assets owned by such entity is the HQ Land, Iskalo Land Holdings LLC and (c) a Subsidiary that is a controlled foreign corporation (as that term is defined in the Code) if providing a Guaranty by such Subsidiary with respect to the Obligations would result in adverse tax consequences to the Borrowers and their Subsidiaries. Notwithstanding the foregoing, any Subsidiary that either (i) provides a Guaranty or otherwise becomes obligated in respect of any Indebtedness (including, without limitation, Indebtedness under the Note Purchase Agreements) of any Borrower or any Subsidiary of the Borrowers or (ii) at any time owns an Unencumbered Property, shall not, or, if previously an Excluded Subsidiary, shall immediately cease to, be an "Excluded Subsidiary" hereunder.

 

	  	
Existing Credit Agreement.  As defined in the preamble.

 

	  	
Facility Fee.  The facility fee payable by the Borrowers jointly and severally to the Administrative Agent for the account of the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages, which facility fee shall be equal to the aggregate Revolving Credit Commitments multiplied by the respective percentages per annum corresponding to SALP's Credit Rating in accordance with the following table:

	
              Range of SALP's Credit Rating 

              (S&P/Moody's/Fitch

             Ratings)                                          

	

Facility Fee

(% per annum)

	
              A-/A3/A- or higher

	
0.10

	
              BBB+/Baa1/BBB+

	
0.15

	
              BBB/Baa2/BBB

	
0.15

	
              BBB-/Baa3/BBB-

	
0.20

	
              Below BBB-/Baa3/BBB- or unrated

	
0.25

	  	
The Facility Fee shall be payable quarterly, in arrears, on the first Business Day of each January, April, July and October, calculated for the immediately preceding calendar quarter (or portion thereof) commencing on the first such day after the Restatement Date.  Any change in SALP's Credit Rating causing the Applicable Margin to change as set forth in the definition thereof, shall effect a corresponding change in the Facility Fee in accordance with the foregoing table.

	  	
FATCA.  Sections 1471-1474 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 agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

	  	
Fitch.  Fitch, Inc., or any successor thereto.

 

	  	
Foreign Lender.  Any Lender that is organized under the laws of a jurisdiction other than that in which the Borrowers are a resident for tax purposes.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction

 

	  	
Fronting Exposure.  At any time there is a Defaulting Lender who is a Revolving Credit Lender, with respect to the Administrative Agent, such Defaulting Lender's Revolving Credit Commitment Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by the Administrative Agent other than L/C Obligations as to which such Defaulting Lender's participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

	  	
Fund.  Any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

	  	
Funds from Operations.  With respect to any fiscal period of the Borrowers, an amount, without double-counting, equal to the consolidated net income of the Borrowers and their respective Subsidiaries, as determined in accordance with GAAP, before deduction of real estate related depreciation and amortization, and excluding gains (or losses) from the sale of real property or interests therein (provided such deduction shall not include extraordinary items that include liquidated damages, compensatory damages or other obligations arising out of a Borrower's default under an agreement to purchase or lease Real Estate), debt restructurings or other extraordinary items, and after adjustments for unconsolidated partnerships, joint ventures or other entities (such adjustments to be calculated to reflect Funds from Operations on the same basis, to the extent that such Funds from Operations attributable to unconsolidated partnerships, joint ventures and other entities are not subject to the claims of any other Person).

 

	  	
GAAP.  Generally accepted accounting principles, consistently applied.

 

	  	
Gross Asset Value.  The sum of: (a) unrestricted Cash and Cash Equivalents, up to a maximum of $20,000,000; (b) for Real Estate owned in fee simple or subject to a Ground Lease for one fiscal quarter or more, Consolidated Capitalized Value of all such Real Estate; (c) for Real Estate owned in fee simple or leased under a Ground Lease for less than one fiscal quarter, 100% of the acquisition cost of such Real Estate; (d) 100% of the book value of any Construction-In-Process; and (e) 100% of the book value of all other non-Real Estate assets, exclusive of any goodwill and other intangible assets, related-party receivables, Other Assets (as appearing in SALP's financial statements), and prepaid expenses.  Notwithstanding the foregoing, Real Estate subject to a Ground Lease shall not exceed 10% of Gross Asset Value.

 

	  	
Ground Lease.  A ground lease containing the following terms and conditions: (a) a remaining term (exclusive of any unexercised extension options) of 40 years or more from the Restatement Date; (b) the right of the lessee to mortgage and encumber its interest in the leased property without the consent of the lessor; (c) the obligation of the lessor to give the holder of any mortgage Lien on such leased property written notice of any defaults on the part of the lessee and agreement of such lessor that such lease will not be terminated until such holder has had a reasonable opportunity to cure or complete foreclosures, and fails to do so; (d) reasonable transferability of the lessee's interest under such lease, including ability to sublease; and (e) such other rights customarily required by mortgagees making a loan secured by the interest of the holder of the leasehold estate demised pursuant to a ground lease.

 

	  	
Guaranteed Pension Plan.  Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by any Borrower or any Guarantor, as the case may be, or any ERISA Affiliate of any of them the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

 

	  	
Guaranties.  Collectively, the Holdings Guaranty and any other guaranty of the Obligations made by an Affiliate of a Borrower in favor of the Administrative Agent and the Lenders.

 

	  	
Guarantors.  Collectively, Holdings and any other Affiliate of a Borrower executing a Guaranty, provided, however, when the context so requires, Guarantor shall refer to Holdings or such Affiliate, as appropriate.  Any Guarantor that is the owner of an Unencumbered Property shall be a wholly-owned Subsidiary.

 

	  	
Guaranty.  With respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:

 

	  	
(a)

	
to purchase such Indebtedness or obligation or any property constituting security therefore primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation;

 

	  	
(b)

	
to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation;

 

	  	
(c)

	
to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or

 

	  	
(d)

	
otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof.

 

	  	
In any computation of the Indebtedness or other liabilities of the obligor under any Guaranty, the Indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor, provided that the amount of such Indebtedness outstanding for purposes of this Credit Agreement shall not be deemed to exceed the maximum amount of Indebtedness that is the subject of such Guaranty.

	  	
Hazardous Substances.  See §7.18(b).

 

	  	
Hedge Agreement.  An interest rate swap, cap or collar agreement or any arrangement similar to any of the foregoing between any Borrower and any Lender relating to indebtedness under this Credit Agreement, each as providing for the transfer or mitigation of interest rate risk either generally or under specific contingencies.

 

	  	
Holdings.  As defined in the preamble hereto.

 

	  	
Holdings Guaranty.  The Guaranty dated as of the date hereof made by Holdings in favor of the Administrative Agent and the Lenders pursuant to which Holdings guarantees to the Administrative Agent and the Lenders the unconditional payment and performance of the Obligations.

 

	  	
HQ Land.  Ten acres of vacant Real Estate near the Sovran headquarter offices in Buffalo, New York.

 

	  	
Indebtedness.  With respect to any Person, all obligations, contingent and otherwise, that in accordance with GAAP should be classified upon such Person's balance sheet as liabilities, including, without limitation:  (a) all obligations for borrowed money and similar monetary obligations, whether direct or indirect; (b) all liabilities secured by any mortgage, pledge, negative pledge, security interest, lien, charge, or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; (c) all obligations (i) under any Capitalized Lease or (ii) under any Synthetic Lease or (iii) in respect of "off-balance sheet arrangements" (as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1933, as amended from time to time, together with all rules and regulations issued thereunder); (d) all obligations to purchase, redeem, retire, or otherwise acquire for value any shares of capital stock of any class issued by such Person or any rights to acquire such shares; (e) net obligations under any Hedge Agreement, forward contract, futures contract, swap, option or other financing arrangement, the value of which is dependent upon interest rates, currency exchange rates, commodities, any such Person's present or future beneficial interest, shares or security trading value, or other indices (for purposes of this definition, collectively each a "Derivatives Contract") in each case  in an amount equal to the Derivatives Termination Value as defined immediately below; (f) the amount of payments received by such person in any forward equity transaction by which such payments are received by such Person in consideration for the sale of stock or partnership units in such Person when the delivery and/or the determination of the amount of the stock or units so sold occurs later than one (1) month after such Person receives such payment, but only to the extent that the obligation to deliver such stock or units is not payable solely in the stock or units of such Person; (g) all guarantees for borrowed money, endorsements and other contingent obligations, whether direct or indirect, in respect of indebtedness or obligations of others, including any obligation to supply funds (including partnership obligations and capital requirements) to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and the reimbursement obligations in respect of any letters of credit, bankers' acceptances or similar facilities issued for the account of such Person; (h) all obligations evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses; (i) all obligations issued or assumed as the deferred purchase price of property or services (including securities repurchase agreements but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith); (j) all sales of (i) accounts or general intangibles for money due or to become due, (ii) chattel paper, instruments or documents creating or evidencing a right to payment of money or (iii) other receivables (collectively "receivables"), whether pursuant to a purchase facility or otherwise, other than in connection with the disposition of the business operations relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement, and together with any obligation to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection therewith; and (k) all obligations in respect of Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that 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 that the terms of such Indebtedness provide that such Person is not liable therefor and such terms are enforceable under applicable law.  The calculation of Indebtedness of any Person shall be adjusted as set forth in §10.13; provided that, or purposes of clause (e) hereof, "Derivatives Termination Value" means, in respect of any one or more Derivatives Contract, after taking into account the effect of any legally enforceable netting agreement or provision relating thereto, (a) for any date on or after the date such Derivatives Contracts have been terminated or closed out, the termination amount or value determined in accordance therewith, (b) other than with respect to a Derivatives Contract entered into as a hedge against existing Indebtedness, for any date prior to the date such Derivatives Contracts have been terminated or closed out, the then-current mark-to-market value for such Derivatives Contracts, determined based upon one or more mid-market quotations or estimates provided by any recognized dealer in Derivatives Contracts (which may include the Administrative Agent, any Lender or any Affiliate of any thereof) regardless of Section 10.13(d) and (c) with respect to a Derivatives Contract entered into as a hedge against existing Indebtedness, in accordance with GAAP as modified by Section 10.13(d).

 

	  	
Indebtedness Lien.  See §9.4(b).

 

	  	
Indemnified Lender's(s') Group.  See §17.

 

	  	
Initial Term Commitment.  With respect to each Initial Term Loan Lender, the amount set forth on Schedule 1.2 attached hereto as the amount of such Lender's commitment to make a portion of the Initial Term Loan to the Borrowers.

 

	  	
Initial Term Commitment Percentage.  With respect to each Initial Term Loan Lender, the percentage set forth on Schedule 1.2 hereto as such Lender's percentage of the Total Initial Term Loan Commitment and any changes thereto from time to time.

	  	
Initial Term Loan.  The term loan made by the Initial Term Loan Lenders to the Borrowers on the Restatement Date pursuant to §3.1.

 

	  	
Initial Term Loan Lender.  A Lender having an Initial Term Loan Commitment or holding an Initial Term Loan.

 

	  	
Intercreditor Agreement.  The Second Amended and Restated Intercreditor agreement dated as of August 5, 2011 among the Administrative Agent on behalf of the Lenders and the Noteholders (as defined therein), as amended, restated, supplemented or otherwise modified from time to time.

 

	  	
Interest Payment Date.  (i) As to any Base Rate Loan, the last day of the calendar month which includes the Drawdown Date thereof; and (ii) as to any LIBOR Rate Loan in respect of which the Interest Period is (A) 3 months or less, the last day of such Interest Period and (B) more than 3 months, the date that is 3 months from the first day of such Interest Period, each date that is 3 months thereafter, and, in addition, the last day of such Interest Period.

 

	  	
Interest Period.  With respect to each Loan, (a) initially, the period commencing on the Drawdown Date of such Loan and ending on the last day of one of the following periods (as selected by the Borrowers in a Completed Revolving Credit Loan Request or as otherwise in accordance with the terms of this Credit Agreement):  (i) for any Base Rate Loan, the last day of the calendar month, and (ii) for any LIBOR Rate Loan, 1, 2, 3, or 6 months (provided that the Interest Period for LIBOR Rate Loans may be shorter than 1 month (x) for the period from the Restatement Date to July 1, 2013, or (y)  in order to consolidate 2 or more LIBOR Rate Loans); and (b) thereafter, each period commencing at the end of the last day of the immediately preceding Interest Period applicable to such Loan and ending on the last day of the applicable period set forth in (a) above as selected by the Borrowers in a Conversion Request or as otherwise expressly permitted in accordance with this Credit Agreement; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

 

	  	  	
(A)

	
if any Interest Period with respect to a Base Rate Loan would end on a day that is not a Business Day, that Interest Period shall end on the next succeeding Business Day;

 

	  	  	
(B)

	
if any Interest Period with respect to a LIBOR Rate Loan would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;

 

	  	  	
(C)

	
if the Borrowers shall fail to give notice of conversion or continuation as provided in §2.5 or §3.7, the Borrowers shall be deemed to have requested a conversion of the affected LIBOR Rate Loan into a Base Rate Loan on the last day of the then current Interest Period with respect thereto;

 

	  	  	
(D)

	
any Interest Period relating to any LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to subparagraph (E) below, end on the last Business Day of a calendar month; and

 

	  	  	
(E)

	
any Interest Period that would otherwise extend beyond the applicable Maturity Date shall end on such Maturity Date.

	  	
Investments.  All expenditures made and all liabilities incurred (contingently or otherwise, but without double-counting):  (i) for the acquisition of stock, partnership or other equity interests or Indebtedness of, or for loans, advances, capital contributions or transfers of property to, any Person; and (ii) for the acquisition of any other obligations of any Person.  In determining the aggregate amount of Investments outstanding at any particular time:  (a) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (b) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (c) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (a) may be deducted when paid; and (d) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.

 

	  	
Joint Venture Ownership Interest Value.  As of any date of determination, an amount equal to the pro rata share of Revised Consolidated Adjusted EBITDA attributable to the Borrowers from Partially-Owned Entities for the most recent two (2) completed fiscal quarters multiplied by two (2), with the product being divided by the Capitalization Rate.

 

	  	
L/C Obligations.  As at any date of determination, the Maximum Drawing Amount plus the aggregate of all Unpaid Reimbursement Obligations.  For all purposes of this Credit 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.

 

	  	
Lead Arranger.  M&T Bank acting as sole lead arranger and bookrunner for this Credit Agreement.

 

	  	
Leases.  Leases, licenses and agreements, whether written or oral, relating to the use or occupation of space in or on the Buildings or on the Real Estate by persons other than the Borrower, its Subsidiaries or any Partially-Owned Entity.

 

	  	
Lenders.  Collectively, M&T Bank, the other lending institutions listed on Schedule 1.2 hereto and any other lenders (including Delayed Draw Term Loan Lenders, Initial Term Loan Lenders, and Revolving Credit Lenders) which may provide additional commitments and become parties to this Credit Agreement, and any other Person who becomes an assignee of any rights of a Lender pursuant to §19 or a Person who acquires all or substantially all of the stock or assets of a Lender.

 

	  	
Letter of Credit.  See §5.1.

 

	  	
Letter of Credit Application.  See §5.1.

 

	  	
Letter of Credit Fee.  See §5.10.

 

	  	
Letter of Credit Participation.  See §5.4.

 

	  	
Leverage Ratio.  As at the end of any fiscal quarter or other date of measurement, the ratio, of Consolidated Total Liabilities to Gross Asset Value, expressed in percentage terms by using Gross Asset Value as the denominator and Consolidated Total Liabilities as the numerator.

 

	  	
LIBOR Breakage Costs.  With respect to any LIBOR Rate Loan to be prepaid or not drawn after elected or converted prior to the last day of the applicable Interest Period, a prepayment "breakage" fee in an amount determined by the Administrative Agent in the following manner:

 

	  	
(i)

	
First, the Administrative Agent shall determine the amount by which (a) the total amount of interest which would have otherwise accrued hereunder on each installment of principal prepaid or not so drawn, during the period beginning on the date of such prepayment or failure to draw and ending on the last day of the applicable LIBOR Rate Loan Interest Period (the "Reemployment Period"), exceeds (b) the total amount of interest which would accrue, during the Reemployment Period, on any readily marketable bond or other obligation of the United States of America designated by the Administrative Agent in its sole discretion at or about the time of such payment, such bond or other obligation of the United States of America to be in an amount equal (as nearly as may be) to the amount of principal so paid or not drawn after elected and to have maturity at the end of the Reemployment Period, and the interest to accrue thereon to take account of amortization of any discount from par or accretion of premium above par at which the same is selling at the time of designation.  Each such amount is hereinafter referred to as an "Installment Amount".

 

	  	
(ii)

	
Second, each Installment Amount shall be treated as payable on the last day of the LIBOR Rate Loan Interest Period which would have been applicable had such principal installment not been prepaid or not borrowed.

 

	  	
(iii)

	
Third, the amount to be paid on each such breakage date shall be the present value of the Installment Amount determined by discounting the amount thereof from the date on which such Installment Amount is to be treated as payable, at the same yield to maturity as that payable upon the bond or other obligation of the United States of America designated as aforesaid by the Administrative Agent.

 

	  	  	
If by reason of an Event of Default the Administrative Agent elects to declare a LIBOR Rate Loan to be immediately due and payable, then any breakage fee with respect to such LIBOR Rate Loan shall become due and payable in the same manner as though the Borrowers had exercised such right of prepayment.

 

	  	
LIBOR Business Day.  Any day on which commercial banks are open for international business (including dealings in Dollar deposits) in London or such other eurodollar interbank market as may be selected by the Administrative Agent in its sole discretion acting in good faith.

 

	  	
LIBOR Rate.  For any Interest Period with respect to a LIBOR Rate Loan, the rate of interest equal to (i) the rate determined by the Administrative Agent at which Dollar deposits for such Interest Period are offered based on information presented on Reuters Screen LIBOR01 Page (or any successor thereto or substitute therefore providing rate quotations comparable to those currently provided on such services or if such page or services ceases to display such information from such other services or method, as the Administrative Agent may select) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, as of 11:00 a.m. London time on the second LIBOR Business Day prior to the first day of such Interest Period divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve Rate.  In the event that the Administrative Agent is unable to obtain any such quotation as provided above, it will be considered that the LIBOR Rate pursuant to a LIBOR Rate Loan cannot be determined.

 

	  	
LIBOR Rate Loan(s).  Those Loans bearing interest calculated by reference to the LIBOR Rate.

 

	  	
Lien.  See §9.2.

 

	  	
Loan Documents.  Collectively, this Credit Agreement, the Notes, the Letter of Credit Applications, the Letters of Credit, the Guaranties, the Intercreditor Agreement, the Engagement Letter and any and all other agreements, instruments or documents now or hereafter evidencing or otherwise relating to the Loans and executed or delivered by or on behalf of any Borrower or its Subsidiaries or any Guarantor or its Subsidiaries in connection with the Loans, or referred to herein or therein and delivered to the Administrative Agent or the Lenders by or on behalf of any Borrower, any Guarantor or any of their respective Subsidiaries, and all schedules, exhibits and annexes hereto or thereto, as the same may from time to time be amended and in effect, and any other document identified thereon as a "Loan Document" under this Credit Agreement.

 

	  	
Loans.  The Revolving Credit Loans, the Delayed Draw Term Loans and the Initial Term Loan.

 

	  	
M&T Bank.  As defined in the preamble hereto.

 

	  	
Material Adverse Effect.  A materially adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Borrowers and their Subsidiaries taken as a whole, (b) the ability of the Borrowers to perform their respective obligations under this Credit Agreement and any of the Loan Documents, (c) the ability of any Guarantor to perform its obligations under the Guaranty to which it is a party, or (d) the validity or enforceability of this Credit Agreement, the Guaranties or any of the other Loan Documents.

 

	  	
Maturity Date.  The Revolving Credit Loan Maturity Date or the Term Maturity Date, as applicable.

 

	  	
Maximum Drawing Amount.  The maximum aggregate amount that the beneficiaries may at any time draw under outstanding Letters of Credit, as such aggregate amount may be reduced from time to time pursuant to the terms of the Letters of Credit.

 

	  	
Minimum Collateral Amount.  See §5.11.

 

	  	
Moody's.  Moody's Investors Service, Inc., and its successors.

 

	  	
Multiemployer Plan.  Any multiemployer plan within the meaning of  Section 3(37) of ERISA maintained or contributed to by any Borrower or any Guarantor as the case may be or any ERISA Affiliate.

 

	  	
Net Cash Proceeds.  The net cash proceeds received by any Person in respect of any asset sale, equity issuance or debt issuance less (i) all reasonable out-of-pocket fees, commissions and other expenses incurred in connection with such sale or issuance, including the amount (estimated in good faith by such Person) of income, franchise, sales and other applicable taxes required to be paid by such Person in connection with such sale or issuance, (ii) repayment of Indebtedness that is required to be repaid in connection with such asset sale to the extent permitted under this Credit Agreement; (iii) required amounts to be provided by the Borrowers or any Subsidiary, as the case may be, as a reserve, in accordance with generally accepted accounting principles, against any liabilities associated with such asset sale including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with any such asset sale and consented to by the Lenders or otherwise permitted hereunder.

 

	  	
Non-Defaulting Lender.  At any time, each Lender that is not a Defaulting Lender at such time.

 

	  	
Note Purchase Agreement.  Collectively or individually, as the context may require, (i) that certain Note Purchase Agreement dated as of September 4, 2003, (ii) that certain Note Purchase Agreement dated as of April 26, 2006 and (iii) that certain Note Purchase Agreement dated as of August 5, 2011, in each case, by and among the Borrowers and the note purchasers thereunder or any successors thereto, as such agreements may be amended, renewed, restated, modified replaced, refunded, or refinanced from time to time and any successor note purchase agreements.

 

	  	
Notes.  Collectively or individually, as applicable, the Revolving Credit Notes and Term Notes.

 

	  	
Obligations.  All indebtedness, obligations and liabilities of the Borrowers and their Subsidiaries to any of the Lenders and the Administrative Agent, individually or collectively, under this Credit Agreement or any of the other Loan Documents or in respect of any of the Loans made or the Reimbursement Obligations incurred, or any of the Notes, Letter of Credit Applications, Letters of Credit, or other instruments at any time evidencing any thereof, whether existing on the date of this Credit Agreement or arising or incurred hereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise.

 

	  	
OFAC.  See §7.25.

 

	  	
OFAC Listed Person.  See §7.25.

 

	  	
OFAC Sanctions Program. Any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/.

 

	  	
Operating Subsidiaries.  Any Subsidiaries of a Borrower that, at any time of reference, provide management, construction, design or other services (excluding any such Subsidiary which may provide any such services which are only incidental to that Subsidiary's ownership of one or more Real Estate).

 

	  	
Partially-Owned Entity(ies).  Any of the partnerships, joint ventures and other entities owning real estate assets in which SALP and/or Sovran collectively, directly or indirectly through its full or partial ownership of another entity, does not own a majority of the equity interests, whether or not such entity is required in accordance with GAAP to be consolidated with Sovran for financial reporting purposes.

 

	  	
PBGC.  The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

 

	  	
Permits.  All governmental permits, licenses, and approvals necessary or useful for the lawful operation and maintenance of the Real Estate.

 

	  	
Permitted Liens.  Liens, security interests and other encumbrances permitted by §9.2.

 

	  	
Person.  Any individual, corporation, partnership, trust, unincorporated association, business, or other legal entity, and any government (or any governmental agency or political subdivision thereof).

 

	  	
Preferred Dividends.  Any dividend, distribution, redemption, or payment upon liquidation paid to one class of stockholders of the capital stock of any Person in priority to that to be paid to any other class of stockholders of the capital stock of such Person, including any such dividends paid on preferred operating partnership units.

 

	  	
Priority Debt. Without duplication, the sum of (a) all Consolidated Secured Indebtedness and (b) all Indebtedness of Subsidiaries of Sovran (except Indebtedness of SALP and any Subsidiary Guarantor).

 

	  	
RCRA.  See §7.18.

 

	  	
Rating Agency.  Moody's, S&P, Fitch or another nationally-recognized rating agency reasonably satisfactory to the Administrative Agent.

 

	  	
Real Estate.  The fixed and tangible properties consisting of land, buildings and/or other improvements owned in fee simple or leased under a ground lease by any Borrower, by any Guarantor or by any other entity in which a Borrower is the holder of an equity interest at the relevant time of reference thereto, including, without limitation, (i) the Unencumbered Properties at such time of reference, and (ii) the real estate assets owned by each of the Partially-Owned Entities at such time of reference.

 

	  	
Record.  The grid attached to any Note, or the continuation of such grid, or any other similar record, including computer records, maintained by any Lender with respect to any Loan.

 

	  	
Recourse.  With reference to any obligation or liability, any liability or obligation that is not Without Recourse to the obligor thereunder, directly or indirectly.  For purposes hereof, a Person shall not be deemed to be "indirectly" liable for the liabilities or obligations of an obligor solely by reason of the fact that such Person has an ownership interest in such obligor, provided that such Person is not otherwise legally liable, directly or indirectly, for such obligor's liabilities or obligations (e.g., by reason of a guaranty or contribution obligation, by operation of law or by reason of such Person's being a general partner of such obligor).

 

	  	
Reimbursement Obligation.  The Borrowers' joint and several obligation to reimburse the Administrative Agent and the Lenders on account of any drawing under any Letter of Credit as provided in §5.6.

 

	  	
REIT.  A "real estate investment trust", as such term is defined in Section 856 of the Code.

 

	  	
Release.  See §7.18(c)(iii).

 

	  	
Required Delayed Draw Term Loan Lenders.  As of any date, one or more Lenders holding more than fifty percent (50%) of the sum of the Total Delayed Draw Term Commitments and the outstanding principal amount of the Delayed Draw Term Loans; provided that in determining such percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded.

 

	  	
Required Initial Term Loan Lenders.  As of any date, one or more Lenders holding more than fifty percent (50%) of the aggregate outstanding principal amount of the Term Loans; provided that in determining such percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded.

 

	  	
Required Lenders.  As of any date, one or more Lenders holding more than fifty percent (50%) of the sum of (a) the outstanding principal amount of the Term Loans plus (b) the amount of the Total Revolving Credit Commitments (or if the Revolving Credit Commitments have been terminated, then the outstanding principal of the Revolving Credit Loans plus aggregate participations in the Maximum Drawing Amount and all Unpaid Reimbursement Obligations) plus (c) the Total Delayed Draw Term Commitments; provided that (i) in determining such percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded, and (ii) if no principal amount of any Loan is outstanding, "Required Lenders" shall mean one or more Lenders whose aggregate Revolving Credit Commitments and Delayed Draw Term Loan Commitments constitute more than fifty percent (50%) of the sum of the Total Revolving Credit Commitment and the Total Delayed Draw Term Commitments at such time.

 

	  	
Required Revolving Credit Lenders.  As of any date, one or more Lenders holding more than fifty percent (50%) of the aggregate amount of the Total Revolving Credit Commitments (or if the Revolving Credit Commitments have been terminated, then the outstanding principal of the Revolving Credit Loans plus aggregate participations in the Maximum Drawing Amount and all Unpaid Reimbursement Obligations); provided that in determining such percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded.

 

	  	
Restatement Date.  The date on which all of the conditions set forth in §11 have been satisfied or waived in accordance with the terms of this Credit Agreement.

 

	  	
Revised Consolidated Adjusted EBITDA.  For any period, Consolidated Adjusted EBITDA for such period; plus actual general and administrative expenses of the Borrowers and their Subsidiaries for such period to the extent included in Consolidated Adjusted EBITDA, minus an implied, management fee in an amount equal to five percent (5%) of consolidated total revenues from Real Estate.

 

	  	
Revolving Credit Commitment.  With respect to each Revolving Credit Lender, the amount set forth on Schedule 1.2 attached hereto, or as set forth in any applicable Assignment and Assumption, as the case may be, as the amount of such Lender's commitment to make a portion of the Revolving Credit Loans to the Borrowers and to participate in the issuance, extension and renewal of Letters of Credit, as the same may be increased or reduced from time to time pursuant to the terms hereof; or if such commitment is terminated pursuant to the provisions hereof, zero.

 

	  	
Revolving Credit Commitment Percentage.  With respect to each Revolving Credit Lender, the percentage set forth on Schedule 1.2 hereto as such Lender's percentage of the Total Revolving Credit Commitment and any changes thereto from time to time.

 

	  	
Revolving Credit Exposure.  As to any Revolving Credit Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Loans and such Lender's participation in L/C Obligations at such time.

 

	  	
Revolving Credit Lender.  A Lender having a Revolving Credit Commitment, holding any Revolving Credit Loans or Revolving Credit Exposure.

 

	  	
Revolving Credit Loan Maturity Date.  June 4, 2018, or such later date to which it is extended pursuant to §2.10 hereof.

 

	  	
Revolving Credit Loan(s).  Each and every revolving credit loan made or to be made by the Lenders to the Borrowers pursuant to §2.

 

	  	
Revolving Credit Note Record.  A Record with respect to the Revolving Credit Notes.

 

	  	
Revolving Credit Notes.  Collectively, the separate promissory notes of the Borrowers in favor of each Lender in substantially the form of Exhibit A-1 hereto, in the aggregate principal amount of the Total Revolving Credit Commitment, dated as of the date hereof or as of such later date as any Person becomes a Lender under this Credit Agreement, and completed with appropriate insertions, as each of such notes may be amended and/or restated from time to time.

 

	  	
S&P.  Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., and its successors.

 

	  	
SALP.  As defined in the preamble hereto.

 

	  	
SARA.  See §7.18.

 

	  	
SEC.  The United States Security and Exchange Commission.

 

	  	
Sell or Sale.  See §9.4(b).

 

	  	
Sovran.  As defined in the preamble hereto.

 

	  	
Sovran Treasury Stock.   Sovran capital stock repurchased and held by Sovran as treasury stock.

 

	  	
subsidiary.  Any entity required to be consolidated with its direct or indirect parent in accordance with GAAP.

 

	  	
Subsidiary.  Any corporation, association, partnership, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes or controlling interests) of the outstanding voting interests or at least a majority of the economic interests (including, in any case, the Operating Subsidiaries and any entity required to be consolidated with its designated parent in accordance with GAAP).  Unless the context otherwise clearly requires, any reference to "Subsidiary" is a reference to the Subsidiaries of the Borrowers.

 

	  	
Subsidiary Guaranty.  The form of Guaranty to be entered into by any Subsidiary Guarantor substantially in the form of Exhibit B hereto.

 

	  	
Syndication Agent.  Each of SunTrust Bank and Wells Fargo Bank, National Association, acting as co-syndication agents for the Lenders, or any successor agent, as permitted by §15.

 

	  	
Synthetic Lease.  Any lease of goods or other property, whether real or personal, which is treated as an operating lease under GAAP and as a loan or financing for U.S. income tax purposes.

 

	  	
Term Loans.  The Delayed Draw Term Loans and the Initial Term Loan.

 

	  	
Term Maturity Date.  June 4, 2020, or such earlier date on which the Term Loans shall become due and payable pursuant to the terms hereof.

 

	  	
Term Note Record.  A Record with respect to a Term Note.

 

	  	
Term Notes.  Collectively, the separate promissory notes of the Borrowers in favor of each of the Lenders with respect to the Term Loans in substantially the form of Exhibit A-2 hereto, (1) in the aggregate principal amount of the Total Initial Term Loan Commitment dated as of the date hereof, or (ii) in the aggregate principal amount of any Delayed Draw Term Loan, dated as of the applicable Drawdown Date or, in each case, as of such later date as any Person becomes a Lender under this Credit Agreement, and completed with appropriate insertions, as each of such notes may be amended and/or restated from time to time.

 

	  	
Total Delayed Draw Term Loan Commitment.  As of any date, the sum of the then-current Delayed Draw Term Loan Commitments of the Lenders to provide the Delayed Draw Term Loans.  The Total Delayed Draw Term Loan Commitment in effect on the Restatement Date is $100,000,000.  In accordance with §3.2(a), upon funding, any portion of Total Delayed Draw Term Loan Commitment which was funded shall terminate.

 

	  	
Total Initial Term Loan Commitment.  As of any date, the sum of the then-current Initial Term Loan Commitments of the Lenders to provide the Initial Term Loan.  The Total Initial Term Loan Commitment in effect on the Restatement Date is $225,000,000.  In accordance with §3.1, upon funding, the Total Initial Term Loan Commitment shall terminate.

 

	  	
Total Revolving Credit Commitment.  As of any date, the sum of the then-current Revolving Credit Commitments of the Lenders to provide Revolving Credit Loans.  The Total Revolving Credit Commitment in effect on the Restatement Date is $175,000,000.

 

	  	
Tower Lease.  A Lease with a communication carrier or a tower development firm pursuant to which such carrier or firm will occupy a portion of a self-storage property for the purpose of using and/or constructing a monopole or tower or other structure thereon to which will be attached communications equipment and antennae, provided that any such Lease shall contain a relocation clause permitting relocation of the demised premises on the Real Estate site where the demised premises are located to allow re-use or re-development of such Real Estate site, and further provided that such relocation clause shall not be required (i) in any Tower Lease in existence as of June 25, 2008, or (ii) in any pre-existing Tower Lease on Real Estate acquired after June 25, 2008.

 

	  	
Type.  As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

 

	  	
Unanimous Lender Approval.  The written consent of each Lender that is a party to this Credit Agreement at the time of reference.

 

	  	
Unencumbered Property.  Any Real Estate owned in fee simple or subject to a Ground Lease located in the contiguous United States that on any date of determination:  (a) is not subject to any Liens (including any such Lien imposed by the organizational documents of the owner of such asset, but excluding certain Permitted Liens as set forth in §9.2), as certified by an officer of the Borrower Representative on the Restatement Date or such later date on which such Real Estate becomes an Unencumbered Property, (b) is not the subject of any matter that could reasonably be expected to have a Material Adverse Effect on the value of such Real Estate, (c) is not the subject of a Disqualifying Environmental Event, a Disqualifying Building Event or a Disqualifying Legal Event, in each case as certified by an officer of the Borrower Representative on the Restatement Date or such later date on which such Real Estate becomes an Unencumbered Property, (d) has been improved with a Building or Buildings which (1) have been issued a certificate of occupancy (where available) or is otherwise lawfully occupied for its intended use and (2) are fully operational, (e) is wholly owned by a Borrower or a Guarantor that is a wholly-owned Subsidiary and (f) has not been designated by the Borrowers in writing to the Administrative Agent as Real Estate that is not an Unencumbered Property because of a Disqualifying Environmental Event, a Disqualifying Building Event or a Disqualifying Legal Event or the Borrower's intention to subject such Unencumbered Property to an Indebtedness Lien or to Sell such Unencumbered Property, which designation shall not be permitted during the continuance of a Default (other than if such designation during a Default is made in conjunction with such Real Estate's being the subject of a Sale or Indebtedness Lien under §9.4(b)(ii) and in compliance therewith) or an Event of Default and shall be accompanied by a compliance certificate in the form of Exhibit D-6 attached hereto.

 

	  	
Unhedged Variable Rate Debt.  All Indebtedness of the Borrowers and their respective Subsidiaries for borrowed money or in respect of reimbursement obligations for letters of credit, guaranty obligations or Capitalized Leases, whether direct or contingent, including, to the extent applicable, the Obligations, which bears interest at one or more variable rates and is not subject to a Hedge Agreement or other interest rate hedging arrangement having a minimum term of one (1) year and having other terms reasonably acceptable to the Administrative Agent.

 

	  	
Uniform Customs.  See §5.3.

 

	  	
Unimproved Land.  Any Real Estate consisting of raw land which is not improved by Buildings.

 

	  	
Unpaid Reimbursement Obligations.  Any Reimbursement Obligation for which the Borrowers have not reimbursed the Administrative Agent and the Lenders on the date specified in, and in accordance with, §5.6.

 

	  	
Unsecured Indebtedness.  All Indebtedness of any Person that is not secured by a Lien on any asset of such Person.

 

	  	
wholly-owned Subsidiary.  Any Subsidiary of which Sovran and/or SALP shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes or controlling interests) of the outstanding voting interests and one hundred percent (100%) of the economic interests, of which at least ninety-nine percent (99%) of the economic interests shall be owned by SALP.

 

	  	
Without Recourse or without recourse.  With reference to any obligation or liability, any obligation or liability for which the obligor thereunder is not liable or obligated other than as to its interest in a designated Real Estate or other specifically identified asset only (which asset is not interests in another Person), subject to such limited exceptions to the non-recourse nature of such obligation or liability, such as fraud, misappropriation, misapplication and environmental indemnities, as are usual and customary in like transactions involving institutional lenders at the time of the incurrence of such obligation or liability.

	  	
§1.2.

	
Rules of Interpretation.

	  	
(i)

	
A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms or the terms of this Credit Agreement.

 

	  	
(ii)

	
The singular includes the plural and the plural includes the singular.

 

	  	
(iii)

	
A reference to any law includes any amendment or modification to such law.

 

	  	
(iv)

	
A reference to any Person includes its permitted successors and permitted assigns.

 

	  	
(v)

	
Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to which they refer.  Except as otherwise specifically provided herein, (i) all computations made pursuant to this Credit Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP.

 

	  	
(vi)

	
The words "include", "includes" and "including" are not limiting.

 

	  	
(vii)

	
All terms not specifically defined herein or by GAAP, which terms are defined in the Uniform Commercial Code as in effect in New York, have the meanings assigned to them therein.

 

	  	
(viii)

	
Reference to a particular "§" refers to that section of this Credit Agreement unless otherwise indicated.

 

	  	
(ix)

	
The words "herein", "hereof", "hereunder" and words of like import shall refer to this Credit Agreement as a whole and not to any particular section or subdivision of this Credit Agreement.

 

	  	
(x)

	
Any provision granting any right to any Borrower or any Subsidiary of a Borrower during the continuance of (a) an Event of Default shall not modify, limit, waive or estopp the rights of the Lenders during the continuance of such Event of Default, including the rights of the Lenders to accelerate the Loans under §13.1 and the rights of the Lenders under §§13.2 or 13.3, or (b) a Default, shall not extend the time for curing same or modify any otherwise applicable notice regarding same.

	  	
§1.3.

	
Existing Loans.  Prior to the Restatement Date, certain loans as described in the preamble were previously made to the Borrowers under the Existing Credit Agreement which remain outstanding as of the date of this Credit Agreement (such outstanding loans being hereinafter referred to as the "Existing Loans").  Subject to the terms and conditions set forth in this Credit Agreement, the Borrowers and each of the Lenders agree that on the Restatement Date, but subject to the satisfaction or waiver of the conditions precedent set forth in §11 and the reallocation and other transactions described in this §1.3: (i) all outstanding "Revolving Credit Loans" (as such term is defined in the Existing Credit Agreement) shall be deemed to be Revolving Credit Loans outstanding hereunder, and all outstanding "Delayed Draw Term Loans" (as such term is defined in the Existing Credit Agreement) and "Initial Term Loans" (as such term is defined in the Existing Credit Agreement) shall be deemed to be Initial Term Loans outstanding hereunder, (ii) the "Revolving Credit Commitments" (as defined in the Existing Credit Agreement) and "Revolving Credit Loans" (as defined in the Existing Credit Agreement) of each of the existing "Lenders" (as defined in the Existing Credit Agreement) and the outstanding amount of all Existing Loans shall be reallocated among the Revolving Credit Lenders in accordance with their respective Commitment Percentages (determined in accordance with the aggregate amount of their respective Revolving Credit Commitments as set forth opposite such Revolving Credit Lender's name on Schedule 1.2 attached hereto), and in order to effect such reallocations, all requisite assignments shall be deemed to be made in amounts from each existing "Lender" (as defined in the Existing Credit Agreement) to each Revolving Credit Lender, with the same force and effect as if such assignments were evidenced by the applicable Assignments and Assumptions (as defined in the Existing Credit Agreement) under the Existing Credit Agreement but without the payment of any related assignment fee, and no other documents or instruments shall be, or shall be required to be, executed in connection with such assignments (all of which such requirements are hereby waived), (iii) the "Delayed Draw Term Loans" (as defined in the Existing Credit Agreement) and the "Initial Term Loans" (as defined in the Existing Credit Agreement) of each of the existing "Lenders" (as defined in the Existing Credit Agreement) shall be reallocated among the Initial Term Loan Lenders in accordance with their respective Commitment Percentages (determined in accordance with the aggregate amount of their respective Initial Term Loan Commitments as set forth opposite such Initial Term Loan Lender's name on Schedule 1.2 attached hereto), and in order to effect such reallocations, all requisite assignments shall be deemed to be made in amounts from each existing "Lender" (as defined in the Existing Credit Agreement) to each Initial Term Loan Lender, with the same force and effect as if such assignments were evidenced by the applicable Assignments and Assumptions (as defined in the Existing Credit Agreement) under the Existing Credit Agreement but without the payment of any related assignment fee, and no other documents or instruments shall be, or shall be required to be, executed in connection with such assignments (all of which such requirements are hereby waived) and (iv) each assignee Lender shall make full cash settlement with each corresponding assignor Lender, through the Administrative Agent, as the Administrative Agent may direct (after giving effect to any netting effected by the Administrative Agent) with respect to all such assignments and reallocations.

	
§2.

	
THE REVOLVING CREDIT FACILITY.

	  	
§2.1.

	
Revolving Credit Loans.

 

	  	  	
(a)

	
Commitment to Lend Revolving Credit Loans.  Subject to the provisions of §2.4 and the other terms and conditions set forth in this Credit Agreement, each of the Revolving Credit Lenders severally agrees to lend to the Borrowers and the Borrowers may borrow, repay, and reborrow from each Revolving Credit Lender from time to time during the Availability Period upon notice by the Borrower Representative to the Administrative Agent given in accordance with §2.4 hereof, such sums as are requested by the Borrower Representative up to a maximum aggregate principal amount outstanding (after giving effect to all amounts requested) at any one time equal to such Lender's Revolving Credit Commitment minus such Lender's Revolving Credit Commitment Percentage of the L/C Obligations; provided that the sum of (x) the outstanding amount of the Revolving Credit Loans, (after giving effect to all amounts requested) plus (y) all L/C Obligations, shall not at any time exceed the Total Revolving Credit Commitment in effect at such time.

 

	  	  	
(b)

	
The Revolving Credit Loans shall be made pro rata in accordance with each Revolving Credit Lender's Revolving Credit Commitment Percentage.  Each request for a Revolving Credit Loan made pursuant to §2.4 hereof, shall constitute a representation and warranty by the Borrowers that the conditions set forth in §11 have been satisfied as of the Restatement Date, and that the conditions set forth in §12 have been satisfied on the date of such request and will be satisfied on the proposed Drawdown Date of the requested Revolving Credit Loan, provided that the making of such representation and warranty by the Borrowers shall not limit the right of any Lender not to lend if such conditions have not been met.  No Revolving Credit Loan shall be required to be made by any Lender unless all of the conditions contained in §11 have been satisfied as of the Restatement Date, and all of the conditions set forth in §12 have been met at the time of any request for a Revolving Credit Loan.

	  	
§2.2.

	
Revolving Credit Notes.  The Revolving Credit Loans shall be evidenced by the Revolving Credit Notes.  A Revolving Credit Note shall be payable to the order of each Revolving Credit Lender in an aggregate principal amount equal to such Lender's Revolving Credit Commitment.  The Borrowers irrevocably authorize each Revolving Credit Lender to make or cause to be made, at or about the time of the Drawdown Date of any Revolving Credit Loan or at the time of receipt of any payment of principal on such Lender's Revolving Credit Notes, an appropriate notation on such Lender's Revolving Credit Note Record reflecting the making of such Revolving Credit Loan or (as the case may be) the receipt of such payment.  The outstanding amount of the Revolving Credit Loans set forth on such Lender's Revolving Credit Note Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender's Revolving Credit Note Record shall not limit or otherwise affect the obligations of the Borrowers hereunder or under any Revolving Credit Note to make payments of principal of or interest on any Revolving Credit Note when due.  Upon receipt of an affidavit of an officer of any Revolving Credit Lender as to the loss, theft, destruction or mutilation of any Revolving Credit Note or any other security document which is not of public record, and, in the case of any such loss, theft, destruction or mutilation, upon surrender and cancellation of such Revolving Credit Note or other security document, the Borrowers will issue, in lieu thereof, a replacement Revolving Credit Note or other security document in the same principal amount thereof and otherwise of like tenor.

 

	  	
§2.3.

	
Interest on Revolving Credit Loans.

 

	  	  	
(a)

	
Interest on Base Rate Loans.  Except as otherwise provided in §4.10, each Revolving Credit Loan that is a Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto (unless earlier paid in accordance with §2.8) at a rate equal to the Base Rate plus the Applicable Margin for Revolving Credit Loans which are Base Rate Loans.

 

	  	  	
(b)

	
Interest on LIBOR Rate Loans.  Except as otherwise provided in §4.10, each Revolving Credit Loan that is a LIBOR Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto (unless earlier paid in accordance with §2.8) at a rate equal to the LIBOR Rate determined for such Interest Period plus the Applicable Margin for Revolving Credit Loans which are LIBOR Rate Loans.

 

	  	  	
(c)

	
Interest Payments.  The Borrowers jointly and severally unconditionally promise to pay interest on each Revolving Credit Loan in arrears on each Interest Payment Date with respect thereto.

	  	
§2.4.

	
Requests for Revolving Credit Loans.  The following provisions shall apply to each request by the Borrowers for a Revolving Credit Loan:

 

	  	  	
(a)

	
The Borrower Representative shall submit a Completed Revolving Credit Loan Request to the Administrative Agent as provided in this §2.4.  Except as otherwise provided herein, each Completed Revolving Credit Loan Request shall be in a minimum amount of $2,000,000 or an integral multiple of $100,000 in excess thereof.  Each Completed Revolving Credit Loan Request shall be irrevocable and binding on the Borrowers and shall obligate the Borrowers to accept the Revolving Credit Loans requested from the Revolving Credit Lenders on the proposed Drawdown Date, unless such Completed Revolving Credit Loan Request is withdrawn (x) in the case of a request for a Revolving Credit Loan that is a LIBOR Rate Loan, at least four (4) Business Days prior to the proposed Drawdown Date for such Revolving Credit Loan, and (y) in the case of a request for a Revolving Credit Loan that is a Base Rate Loan, at least two (2) Business Days prior to the proposed Drawdown Date for such Revolving Credit Loan.

 

	  	  	
(b)

	
Each Completed Revolving Credit Loan Request shall be delivered by the Borrower Representative to the Administrative Agent by 10:00 a.m. (New York City time) on any Business Day, and at least two (2) Business Days prior to the proposed Drawdown Date of any Base Rate Loan, and at least four (4) Business Days prior to the proposed Drawdown Date of any LIBOR Rate Loan.

 

	  	  	
(c)

	
Each Completed Revolving Credit Loan Request shall include a completed writing in the form of Exhibit C hereto specifying:  (1) the principal amount of the Revolving Credit Loan requested, (2) the proposed Drawdown Date of such Revolving Credit Loan, (3) the Interest Period applicable to such Revolving Credit Loan, and (4) the Type of such Revolving Credit Loan being requested.

 

	  	  	
(d)

	
No Lender shall be obligated to fund any Revolving Credit Loan unless:

 

	  	  	  	
(i)

	
a Completed Revolving Credit Loan Request has been timely received by the Administrative Agent as provided in subsection (i) above; and

 

	  	  	  	
(ii)

	
both before and after giving effect to the Revolving Credit Loan to be made pursuant to the Completed Revolving Credit Loan Request, all of the conditions contained in §11 shall have been satisfied as of the Restatement Date, and all of the conditions set forth in §12 shall have been met, including, without limitation, the condition under §12.1 that there be no Default or Event of Default under this Credit Agreement; and

 

	  	  	  	
(iii)

	
the Administrative Agent shall have received a certificate in the form of Exhibit D-1 hereto signed by the chief financial officer or treasurer of the Borrower Representative setting forth computations evidencing compliance with the covenants contained in §§10.1, 10.2, 10.3, 10.4 and 10.11 on a pro forma basis after giving effect to such requested Revolving Credit Loan, and, certifying that, both before and after giving effect to such requested Revolving Credit Loan, no Default or Event of Default exists or will exist under this Credit Agreement or any other Loan Document, and that after taking into account such requested Revolving Credit Loan, no default will exist as of the Drawdown Date or thereafter.

 

	  	  	
(e)

	
The Administrative Agent will use good faith efforts to cause the Completed Revolving Credit Loan Request to be delivered to each Revolving Credit Lender in accordance with §15.12 and in any event on the same day or the Business Day following the day a Completed Revolving Credit Loan Request is received by the Administrative Agent.

 

	  	
§2.5

	
Conversion Options.

 

	  	  	
(a)

	
The Borrowers may elect from time to time by written notice in the form of Exhibit F to convert any outstanding Revolving Credit Loan to a Revolving Credit Loan of another Type, provided that (i) with respect to any such conversion of a LIBOR Rate Loan to a Base Rate Loan, the Borrower Representative shall give the Administrative Agent at least four (4) Business Days prior written notice of such election; (ii) with respect to any such conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrower Representative shall give the Administrative Agent at least four (4) LIBOR Business Days prior written notice of such election; (iii) with respect to any such conversion of a LIBOR Rate Loan into a Base Rate Loan, such conversion shall only be made on the last day of the Interest Period with respect thereto unless the Borrowers pay the related LIBOR Breakage Costs at the time of such conversion and (iv) no Revolving Credit Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing.  All or any part of outstanding Revolving Credit Loans of any Type may be converted into a Revolving Credit Loan of another Type as provided herein, provided that any partial conversion shall be in an aggregate principal amount of $2,000,000 or an integral multiple of $100,000 in excess thereof.  Each Conversion Request relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by the Borrowers.

 

	  	  	
(b)

	
Any Revolving Credit Loan of any Type may be continued as such upon the expiration of the Interest Period with respect thereto (i) in the case of Base Rate Loans, automatically and (ii) in the case of LIBOR Rate Loans by compliance by the Borrower Representative with the notice provisions contained in §2.5(a); provided that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing but shall be automatically converted to a Base Rate Loan on the last day of the first Interest Period relating thereto ending during the continuance of any Default or Event of Default.  The Administrative Agent shall notify the Revolving Credit Lenders promptly when any such automatic conversion contemplated by this §2.5(b) is scheduled to occur.

 

	  	  	
(c)

	
In the event that the Borrower Representative does not notify the Administrative Agent of its election hereunder with respect to the continuation of any Revolving Credit Loan which is a LIBOR Rate Loan as such, the affected LIBOR Rate Loan shall automatically be converted to a Base Rate Loan at the end of the applicable Interest Period.

 

	  	  	
(d)

	
The Borrowers may not request or elect a LIBOR Rate Loan pursuant to §2.4, elect to convert a Base Rate Loan to a LIBOR Rate Loan pursuant to §2.5(a), or elect to continue a LIBOR Rate Loan pursuant to §2.5(b) if, after giving effect thereto, there would be greater than eight (8) LIBOR Rate Loans then outstanding (including both Revolving Credit Loans and Term Loans).  Any Completed Revolving Loan Request for a LIBOR Rate Loan that would create greater than eight (8) LIBOR Rate Loans outstanding shall be deemed to be a Completed Revolving Loan Request for a Base Rate Loan.

 

	  	  	
(e)

	
The Administrative Agent will use good faith efforts to cause any notice of continuation or conversion delivered under this §2.5 to be delivered to each Revolving Credit Lender in accordance with §15.12 and in any event on the same day or the Business Day following the day such notice is received by the Administrative Agent.

 

	  	
§2.6

	
Funds for Revolving Credit Loans.

 

	  	  	
(a)

	
Subject to the other provisions of this §2, not later than 12:00 p.m. (New York City time) on the proposed Drawdown Date of any Revolving Credit Loan, each of the Revolving Credit Lenders will make available to the Administrative Agent, at the Administrative Agent's Head Office, in immediately available funds, the amount of such Lender's Revolving Credit Commitment Percentage of the amount of the requested Revolving Credit Loan; provided that each Revolving Credit Lender shall provide notice to the Administrative Agent of its intent not to make available its Revolving Credit Commitment Percentage of any requested Revolving Credit Loan as soon as possible after receipt of any Completed Revolving Credit Loan Request, and in any event not later than 4:00 p.m. (New York City time) on (x) the Business Day prior to the Drawdown Date of any requested Revolving Credit Loan that is a Base Rate Loan and (y) the third Business Day prior to the Drawdown Date of any requested Revolving Credit Loan that is a LIBOR Rate Loan.  Upon receipt from each Revolving Credit Lender of such amount, the Administrative Agent will make available to the Borrowers in the Borrower Representative's account with the Administrative Agent the aggregate amount of such Revolving Credit Loan made available to the Administrative Agent by the Lenders.  All such funds received by the Administrative Agent by 12:00 p.m. (New York City time) on any Business Day will be made available to the Borrowers not later than 2:00 p.m. on the same Business Day.  Funds received after such time will be made available by not later than 12:00 p.m. on the next Business Day.  The failure or refusal of any Revolving Credit Lender to make available to the Administrative Agent at the aforesaid time and place on any Drawdown Date the amount of its Revolving Credit Commitment Percentage of the requested Revolving Credit Loan shall not relieve any other Lender from its several obligation hereunder to make available to the Administrative Agent the amount of its Revolving Credit Commitment Percentage of any requested Revolving Credit Loan but in no event shall the Administrative Agent (in its capacity as Administrative Agent) have any obligation to make any funding or shall any Lender be obligated to fund more than its Revolving Credit Commitment Percentage of the requested Revolving Credit Loan or to increase its Revolving Credit Commitment Percentage on account of such failure or otherwise.

 

	  	  	
(b)

	
The Administrative Agent may, unless notified to the contrary by any Revolving Credit Lender prior to a Drawdown Date, assume that such Revolving Credit Lender has made available to the Administrative Agent on such Drawdown Date the amount of such Lender's Revolving Credit Commitment Percentage of the Revolving Credit Loan to be made on such Drawdown Date, and the Administrative Agent may (but it shall not be required to), in reliance upon such assumption, make available to the Borrowers a corresponding amount.  If any Revolving Credit Lender makes available to the Administrative Agent such amount on a date after such Drawdown Date, such Lender shall pay to the Administrative Agent on demand an amount equal to the product of (i) the average, computed for the period referred to in clause (iii) below, of the weighted average interest rate paid by the Administrative Agent for federal funds acquired by the Administrative Agent during each day included in such period, multiplied by (ii) the amount of such Lender's Revolving Credit Commitment Percentage of such Revolving Credit Loan, multiplied by (iii) a fraction, the numerator of which is the number of days that elapsed from and including such Drawdown Date to the date on which the amount of such Lender's Revolving Credit Commitment Percentage of such Revolving Credit Loan shall become immediately available to the Administrative Agent, and the denominator of which is 360.  A statement of the Administrative Agent submitted to such Revolving Credit Lender with respect to any amounts owing under this paragraph shall be prima facie evidence of the amount due and owing to the Administrative Agent by such Lender.  If the amount of such Lender's Revolving Credit Commitment Percentage of such Revolving Credit Loans is not made available to the Administrative Agent by such Lender within three (3) Business Days following such Drawdown Date, the Administrative Agent shall be entitled to recover such amount from the Borrowers on demand, with interest thereon at the rate per annum applicable to the Revolving Credit Loans made on such Drawdown Date.

 

	  	
§2.7.

	
Repayment of the Revolving Credit Loans at Maturity.  The Borrowers jointly and severally promise to pay on the Revolving Credit Loan Maturity Date, and there shall become absolutely due and payable on the Revolving Credit Loan Maturity Date, all unpaid principal of the Revolving Credit Loans outstanding on such date, together with any and all accrued and unpaid interest thereon, the unpaid balance of the Facility Fee accrued through such date, and any and all other unpaid amounts due under this Credit Agreement, the Revolving Credit Notes or any other of the Loan Documents.

 

	  	
§2.8.

	
Optional Repayments of Revolving Credit Loans.  The Borrowers shall have the right, at their election, to prepay the outstanding amount of the Revolving Credit Loans, in whole or in part, at any time without penalty or premium; provided that the outstanding amount of any Revolving Credit Loans that are LIBOR Rate Loans may not be prepaid unless the Borrowers pay any LIBOR Breakage Costs for each LIBOR Rate Loan so prepaid at the time of such prepayment.  The Borrower Representative shall give the Administrative Agent, no later than 10:00 a.m., New York City time, at least two (2) Business Days' prior written notice of any prepayment pursuant to this §2.8 of any Revolving Credit Loans that are Base Rate Loans, and at least four (4) LIBOR Business Days' notice of any proposed prepayment pursuant to this §2.8 of Revolving Credit Loans that are LIBOR Rate Loans, specifying the proposed date of prepayment of Revolving Credit Loans and the principal amount to be prepaid.  Each such partial prepayment of the Revolving Credit Loans shall be in an amount of $2,000,000 or integral multiple of $500,000 in excess thereof, and the outstanding balance of the Revolving Credit Loans then being repaid, shall be accompanied by the payment of all charges outstanding on all Revolving Credit Loans so prepaid and of all accrued interest on the principal prepaid to the date of payment, and shall be applied, in the absence of instruction by the Borrower Representative, first to the principal of Revolving Credit Loans that are Base Rate Loans and then to the principal of Revolving Credit Loans that are LIBOR Rate Loans, at the Administrative Agent's option.

 

	  	
§2.9.

	
Mandatory Repayments of Revolving Credit Loans.  If at any time the sum of the outstanding amount of the Revolving Credit Loans and all L/C Obligations exceeds the lesser of (i) Total Revolving Credit Commitment and (ii) the maximum amount that permits compliance with the terms of §10 hereof, the Borrowers shall immediately pay the amount of such excess to the Administrative Agent for application:  first, to any Unpaid Reimbursement Obligations; second, to the Revolving Credit Loans (first to Base Rate Loans, then to LIBOR Rate Loans in direct order of Interest Period maturities); and third, to provide to the Administrative Agent cash collateral for Reimbursement Obligations as contemplated by §5.6(b) and (c).  Each payment of any Unpaid Reimbursement Obligations, or prepayment of Revolving Credit Loans shall be allocated among the Revolving Credit Lenders, in proportion, as nearly as practicable, to each L/C Obligation, or (as the case may be) the respective unpaid principal amount of each Lender's Revolving Credit Note, with adjustments to the extent practicable to equalize any prior payments or repayments not exactly in proportion.

 

	  	
§2.10.

	
Optional Extension of Revolving Credit Loan Maturity Date.  The Borrowers may on two (2) occasions, by written notice to the Administrative Agent given at least ninety (90) days but no more than one hundred eighty (180) days prior to the then scheduled Revolving Credit Loan Maturity Date, extend such Revolving Credit Loan Maturity Date for an additional one (1) year period, provided that (a) no Default or Event of Default shall have occurred and be continuing at the time of such notice or such extension, (b) all of the representations and warranties of the Borrowers contained in §7 of this Credit Agreement and in any other Loan Document (other than representations and warranties which expressly speak as of a different date) shall be true and correct in all material respects at the time of such request and at the time of such extension, and (c) that simultaneously with the giving of such notice, the Borrowers shall pay to the Administrative Agent, for the account of the Revolving Credit Lenders, an extension fee equal to 0.125% of the Total Revolving Credit Commitment then outstanding.

 

	  	
§2.11.

	
Increase of Commitment to Lend.  Unless a Default or an Event of Default has occurred and is continuing, the Borrowers may request, by written notice to the Administrative Agent at any time after the Restatement Date, that the Total Revolving Credit Commitment be increased by an amount less than or equal to $75,000,000 (such that the Total Revolving Credit Commitment shall at no time exceed $250,000,000) in aggregate minimum amounts of $25,000,000; provided that (a) the maturity date of such increase shall be no earlier than the Revolving Credit Loan Maturity Date, (b) the Borrower Representative shall have delivered to the Administrative Agent a certificate in the form of Exhibit D-1 hereto signed by the chief financial officer or treasurer of the Borrower Representative setting forth computations evidencing compliance with the covenants contained in §§10.1, 10.2, 10.3, 10.4, and 10.11 as of the last day of the most recently ended fiscal quarter for which financial statements are available and determined on a pro forma basis after giving effect to such requested increase (and assuming the full utilization of the increased Total Revolving Credit Commitment), and, certifying that, both before and after giving effect to such requested increase, no Default or Event of Default exists or will exist under this Credit Agreement or any other Loan Document, and that after taking into account such requested increase, no default will exist as of the effective date of such increase or thereafter, (c) such increase shall be on the same terms and conditions applicable to this Credit Agreement, (d) any Revolving Credit Lender which is a party to this Credit Agreement prior to such request for such increase, at its sole discretion, may elect to increase its Revolving Credit Commitment but shall not have any obligation to so increase its Revolving Credit Commitment, and (e) in the event that each Revolving Credit Lender does not elect to increase its Revolving Credit Commitment, the Lead Arranger shall use commercially reasonable efforts to locate additional lenders, subject to the Borrowers' approval of such lenders (such approval not to be unreasonably withheld) willing to hold commitments for the requested increase.  In the event that Revolving Credit Lenders commit to such increase, (i) the Revolving Credit Commitment of each such Lender shall be increased (or, in the case of a new lender not previously party hereto, added to the Revolving Credit Commitments), (ii) the pro rata share of each of the Revolving Credit Lenders shall be adjusted subject to the payment of any LIBOR Breakage Costs, (iii) new Revolving Credit Notes shall be issued, (iv) the Borrowers shall make such borrowings and repayments as shall be necessary to effect the reallocation of the Revolving Credit Commitments, and (v) other changes shall be made by way of supplement, amendment or restatement of any of the Loan Documents as may be necessary or desirable to reflect the aggregate amount, if any, by which Revolving Credit Lenders have agreed to increase their respective Revolving Credit Commitments or any other lenders have agreed to make new commitments pursuant to this §2.11 (including the modification of Schedule 1.2 to reflect the increase), in each case notwithstanding anything in §26 to the contrary, without the consent of any Lender other than those Lenders increasing their Revolving Credit Commitments (it being understood that the Administrative Agent shall execute any such supplement, amendment or restatement as may be reasonably requested by the Borrowers and necessary or desirable in connection with an increase in the Revolving Credit Commitment permitted pursuant to this §2.11).  The fees payable by the Borrowers upon such increase in the Revolving Credit Commitments shall be agreed upon by the Lead Arranger and the Borrowers at the time of such increase.

          Notwithstanding the foregoing, nothing in this §2.11 shall constitute or be deemed to constitute an agreement by any Lender to increase its Revolving Credit Commitment hereunder.

	
§3.

	
THE INITIAL TERM LOAN FACILITY AND DELAYED DRAW TERM LOAN FACILITY.

	  	
§3.1.

	
Commitment to Lend Initial Term Loan.  Subject to the terms and conditions set forth in this Credit Agreement, each of the Initial Term Loan Lenders severally agrees to lend to the Borrowers on the Restatement Date an amount equal to such Lender's Initial Term Commitment set forth opposite such Lender's name on Schedule 1.2 hereto.  The entire amount of the Initial Term Loan shall be borrowed on the Restatement Date and upon funding of the Initial Term Loans, the Initial Term Commitments shall terminate.

 

	  	
§3.2.

	
Commitment to Lend Delayed Draw Term Loans.

 

	  	  	
(a)

	
Subject to the provisions of §3.3 and the other terms and conditions set forth in this Credit Agreement, each of the Delayed Draw Term Loan Lenders severally agrees to lend to the Borrowers and the Borrowers may borrow from each Delayed Draw Term Loan Lender from time to time during the Delayed Draw Term Loan Availability Period upon notice by the Borrower Representative to the Administrative Agent given in accordance with §3.3(a) hereof, such sums as are requested by the Borrower Representative up to a maximum aggregate principal amount outstanding (after giving effect to all amounts requested) at any one time equal to such Lender's Delayed Draw Term Loan Commitment; provided that the amount of any Delayed Draw Term Loan shall not exceed the Total Delayed Draw Term Loan Commitment in effect at such time.  Once repaid, no Delayed Draw Term Loan may be reborrowed and upon a Lender's funding any portion of its Delayed Draw Term Loan Commitment, that portion of the Delayed Draw Term Loan Commitment of such Lender shall terminate.  In addition, whether or not funded, the Delayed Draw Term Loan Commitment of each Lender shall terminate on the Delayed Draw Term Loan Commitment Termination Date.

 

	  	  	
(b)

	
The Delayed Draw Term Loans shall be made pro rata in accordance with each Delayed Draw Term Loan Lender's Delayed Draw Term Loan Commitment Percentage.  Each request for a Delayed Draw Term Loan made pursuant to §3.3 hereof, shall constitute a representation and warranty by the Borrowers that the conditions in §12 have been satisfied on the date of such request and will be satisfied on the proposed Drawdown Date of the requested Delayed Draw Term Loan, provided that the making of such representation and warranty by the Borrowers shall not limit the right of any Lender not to lend if such conditions have not been met.  No Delayed Draw Term Loan shall be required to be made by any Lender unless all of the conditions contained in §12 have been met at the time of any request for a Delayed Draw Term Loan.

 

	  	
§3.3.

	
Request for Delayed Draw Term Loans.

 

	  	  	
(a)

	
The Borrower Representative shall submit a Completed Delayed Draw Term Loan Request to the Administrative Agent as provided in this §3.3.  Except as otherwise provided herein, each Completed Delayed Draw Term Loan Request shall be in a minimum amount of $20,000,000 or an integral multiple of $5,000,000 in excess thereof.  The Completed Delayed Draw Term Loan Request shall be irrevocable and binding on the Borrowers and shall obligate the Borrowers to accept the Delayed Draw Term Loans requested from the Lenders on the proposed Drawdown Date, unless such Completed Delayed Draw Term Loan Request is withdrawn (x) in the case of a request for a Delayed Draw Term Loan that is a LIBOR Rate Loan, at least four (4) Business Days prior to the proposed Drawdown Date for such Delayed Draw Term Loan, and (y) in the case of a request for a Delayed Draw Term Loan that is a Base Rate Loan, at least two (2) Business Days prior to the proposed Drawdown Date for such Delayed Draw Term Loan.

 

	  	  	
(b)

	
The Completed Delayed Draw Term Loan Request shall be delivered by the Borrower Representative to the Administrative Agent by 10:00 a.m. (New York City time) on any Business Day, and at least two (2) Business Days prior to the proposed Drawdown Date of any Base Rate Loan, and at least four (4) Business Days prior to the proposed Drawdown Date of any LIBOR Rate Loan.

 

	  	  	
(c)

	
The Completed Delayed Draw Term Loan Request shall include a completed writing in the form of Exhibit C-2 hereto specifying:  (1) the principal amount of the Delayed Draw Term Loan requested, (2) the proposed Drawdown Date of such Delayed Draw Term Loan, (3) the Interest Period applicable to such Delayed Draw Term Loan, and (4) the Type of such Delayed Draw Term Loan being requested.

 

	  	  	
(d)

	
No Lender shall be obligated to fund any Delayed Draw Term Loan unless:

 

	  	  	  	
(i)

	
a Completed Delayed Draw Term Loan Request has been timely received by the Administrative Agent as provided in subsection (a) above; and

 

	  	  	  	
(ii)

	
both before and after giving effect to the Delayed Draw Term Loan to be made pursuant to the Completed Delayed Draw Term Loan Request all of the conditions set forth in §12 shall have been met, including, without limitation, the condition under §12.1 that there be no Default or Event of Default under this Credit Agreement;

 

	  	  	  	
(iii)

	
the Administrative Agent shall have received a certificate in the form of Exhibit D-1 hereto signed by the chief financial officer or treasurer of the Borrower Representative setting forth computations evidencing compliance with the covenants contained in §§10.1, 10.2, 10.3, 10.4, and 10.11 on a pro forma basis after giving effect to such requested Delayed Draw Term Loan, and, certifying that, both before and after giving effect to such requested Delayed Draw Term Loan, no Default or Event of Default exists or will exist under this Credit Agreement or any other Loan Document, and that after taking into account such requested Delayed Draw Term Loan, no default will exist as of the Drawdown Date or thereafter; and

 

	  	  	  	
(iv)

	
New Term Notes shall be issued in accordance with §3.5.

 

	  	  	
(e)

	
The Administrative Agent will use good faith efforts to cause the Completed Delayed Draw Term Loan Request to be delivered to each Delayed Draw Term Loan Lender in accordance with §15.12 and in any event on the same day or the Business Day following the day a Completed Delayed Draw Term Loan Request is received by the Administrative Agent.

 

	  	
§3.4.

	
Funds for Delayed Draw Term Loans.

 

	  	  	
(a)

	
Subject to the other provisions of this §3, not later than 12:00 p.m. (New York City time) on the proposed Drawdown Date of any Delayed Draw Term Loan, each of the Delayed Draw Term Loan Lenders will make available to the Administrative Agent, at the Administrative Agent's Head Office, in immediately available funds, the amount of such Lender's Delayed Draw Term Loan Commitment Percentage of the amount of the requested Delayed Draw Term Loan; provided that each Delayed Draw Term Loan Lender shall provide notice to the Administrative Agent of its intent not to make available its Delayed Draw Term Loan Commitment Percentage of any requested Delayed Draw Term Loan as soon as possible after receipt of any Completed Delayed Draw Term Loan Request, and in any event not later than 4:00 p.m. (New York City time) on (x) the Business Day prior to the Drawdown Date of any requested Delayed Draw Term Loan that is a Base Rate Loan and (y) the third Business Day prior to the Drawdown Date of any requested Delayed Draw Term Loan that is a LIBOR Rate Loan.  Upon receipt from each Delayed Draw Term Loan Lender of such amount, the Administrative Agent will make available to the Borrowers in the Borrower Representative's account with the Administrative Agent the aggregate amount of such Delayed Draw Term Loan made available to the Administrative Agent by the Lenders.  All such funds received by the Administrative Agent by 12:00 p.m. (New York City time) on any Business Day will be made available to the Borrowers not later than 2:00 p.m. on the same Business Day.  Funds received after such time will be made available by not later than 12:00 p.m. on the next Business Day.  The failure or refusal of any Delayed Draw Term Loan Lender to make available to the Administrative Agent at the aforesaid time and place on any Drawdown Date the amount of its Delayed Draw Term Loan Commitment Percentage of the requested Delayed Draw Term Loan shall not relieve any other Lender from its several obligation hereunder to make available to the Administrative Agent the amount of its Delayed Draw Term Loan Commitment Percentage of any requested Delayed Draw Term Loan but in no event shall the Administrative Agent (in its capacity as Administrative Agent) have any obligation to make any funding or shall any Lender be obligated to fund more than its Delayed Draw Term Loan Commitment Percentage of the requested Delayed Draw Term Loan or to increase its Delayed Draw Term Loan Commitment Percentage on account of such failure or otherwise.

 

	  	  	
(b)

	
The Administrative Agent may, unless notified to the contrary by any Delayed Draw Term Loan Lender prior to a Drawdown Date, assume that such Lender has made available to the Administrative Agent on such Drawdown Date the amount of such Lender's Delayed Draw Term Loan Commitment Percentage of the Delayed Draw Term Loan to be made on such Drawdown Date, and the Administrative Agent may (but it shall not be required to), in reliance upon such assumption, make available to the Borrowers a corresponding amount.  If any Delayed Draw Term Loan Lender makes available to the Administrative Agent such amount on a date after such Drawdown Date, such Lender shall pay to the Administrative Agent on demand an amount equal to the product of (i) the average, computed for the period referred to in clause (iii) below, of the weighted average interest rate paid by the Administrative Agent for federal funds acquired by the Administrative Agent during each day included in such period, multiplied by (ii) the amount of such Lender's Delayed Draw Term Loan Commitment Percentage of such Delayed Draw Term Loan, multiplied by (iii) a fraction, the numerator of which is the number of days that elapsed from and including such Drawdown Date to the date on which the amount of such Lender's Delayed Draw Term Loan Commitment Percentage of such Delayed Draw Term Loan shall become immediately available to the Administrative Agent, and the denominator of which is 360.  A statement of the Administrative Agent submitted to such Lender with respect to any amounts owing under this paragraph shall be prima facie evidence of the amount due and owing to the Administrative Agent by such Lender.  If the amount of such Lender's Delayed Draw Term Loan Commitment Percentage of such Delayed Draw Term Loans is not made available to the Administrative Agent by such Lender within three (3) Business Days following such Drawdown Date, the Administrative Agent shall be entitled to recover such amount from the Borrowers on demand, with interest thereon at the rate per annum applicable to the Delayed Draw Term Loans made on such Drawdown Date.

 

	  	
§3.5.

	
The Term Notes.  Each Term Loan shall be evidenced by the Term Notes.  A Term Note shall be payable to the order of each Initial Term Loan Lender and each Delayed Draw Term Loan Lender in an aggregate principal amount equal to such Lender's applicable Initial Term Commitment or Delayed Draw Term Loan Commitment, as the case may be.  The Borrowers irrevocably authorize each Lender to make or cause to be made at or about the time of such Lender's receipt of any payment of principal on such Lender's Term Note an appropriate notation on such Lender's Term Note of the receipt of such payment.  The outstanding amount of the applicable Term Loan set forth on such Lender's Term Note Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender's Term Note Record shall not limit or otherwise affect the obligations of the Borrowers hereunder or under any Term Note to make payments of principal of or interest on any Term Note when due.  Upon receipt of an affidavit of an officer of any Lender as to the loss, theft, destruction or mutilation of any Term Note or any other security document which is not of public record, and, in the case of any such loss, theft, destruction or mutilation, upon surrender and cancellation of such Term Note or other security document, the Borrowers will issue, in lieu thereof, a replacement Term Note or other security document in the same principal amount thereof and otherwise of like tenor.

 

	  	
§3.6.

	
Interest on Term Loan.

 

	  	  	
(a)

	
Except as otherwise provided in §4.10, the outstanding amount of each Term Loan shall bear interest during each Interest Period relating to all or any portion of such Term Loan at the following rates:

 

	  	  	  	
(i)

	
To the extent that all or any portion of a Term Loan bears interest during such Interest Period at the Base Rate, such Term Loan or such portion shall bear interest during such Interest Period at a rate equal to the Base Rate for such Interest Period plus the Applicable Margin for Term Loans which are Base Rate Loans.

 

	  	  	  	
(ii)

	
To the extent that all or any portion of a Term Loan bears interest during such Interest Period at the LIBOR Rate, such Term Loan or such portion shall bear interest during such Interest Period at a rate equal to the LIBOR Rate for such Interest Period plus the Applicable Margin for Term Loans which are LIBOR Rate Loans.

 

	  	  	
(b)

	
Interest Payments.  The Borrowers jointly and severally unconditionally promise to pay interest on the Term Loans in arrears on each Interest Payment Date with respect thereto.

 

	  	
§3.7.

	
Conversion Options.  The provisions of §2.5 shall apply mutatis mutandis with respect to all or any portion of a Term Loan so that the Borrowers may have the same interest rate options with respect to all or any portion of a Term Loan as they would be entitled to with respect to the Revolving Credit Loans.

 

	  	
§3.8.

	
Repayment of the Term Loan at Maturity.  The Borrowers jointly and severally promise to pay on the Term Maturity Date, and there shall become absolutely due and payable on the Term Maturity Date, all unpaid principal of the Term Loans outstanding on such date, together with any and all accrued and unpaid interest thereon, and any and all other unpaid amounts due under this Credit Agreement, the Term Notes or any other of the Loan Documents in respect of the Term Loans.

 

	  	
§3.9.

	
Mandatory Repayments of Delayed Draw Term Loans.  If at any time the sum of the outstanding amount of the Delayed Draw Term Loans exceeds the lesser of (i) Total Delayed Draw Term Loan Commitment outstanding on the Restatement Date and (ii) the maximum amount that permits compliance with the terms of §10 hereof, the Borrowers shall immediately pay the amount of such excess to the Administrative Agent for application to the Delayed Draw Term Loans (first to Base Rate Loans, then to LIBOR Rate Loans in direct order of Interest Period maturities).  Each such payment of any Delayed Draw Term Loans shall be allocated among the Delayed Draw Term Loan Lenders, in proportion, as nearly as practicable, to the respective unpaid principal amount of each Lender's Delayed Draw Term Loans, with adjustments to the extent practicable to equalize any prior payments or repayments not exactly in proportion.

 

	  	
§3.10.

	
Optional Repayments of Term Loan.  The Borrowers shall have the right, at their election, to prepay the outstanding amount of a Term Loan, in whole or in part, subject to (a) the Borrower Representative having given at least fifteen (15) days' prior written notice to the Administrative Agent of such prepayment, and (b) the payment, simultaneously with such prepayment, of LIBOR Breakage Costs for such Term Loan to the extent that it is a LIBOR Rate Loan.  Each such partial prepayment of a Term Loan shall be in an amount of $2,000,000 or integral multiple of $500,000 in excess thereof and shall be accompanied by the payment of all charges outstanding on such Term Loan and of all accrued interest on the principal of such Term Loan prepaid to the date of payment, and shall be applied, in the absence of instruction by the Borrower Representative, first to the principal of such Term Loan to the extent that it is a Base Rate Loan and then to the principal of such Term Loan to the extent that it is a LIBOR Rate Loan, at the Administrative Agent's option.  No amount of such the Term Loan that is prepaid may be re-borrowed.

	
§4.

	
CERTAIN GENERAL PROVISIONS.

	  	
§4.1.

	
Fees.  The Borrowers jointly and severally agree to pay (i) to the Administrative Agent an administration fee (the "Administration Fee") and an upfront fee (the "Upfront Fee"), and the other fees payable to the Administrative Agent and the Lead Arranger, in each case as set forth in that certain letter agreement dated as of April 15, 2013, among the Borrowers and M&T Bank (the "Engagement Letter"),  (ii) to the Administrative Agent for the account of the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages as further set forth in the definition thereof, the Facility Fee and (iii) to the Administrative Agent for the account of the Delayed Draw Term Loan Lenders in accordance with their respective Delayed Draw Term Loan Commitment Percentages as further set forth in the definition thereof, the Delayed Draw Term Loan Facility Fee.

 

	  	
§4.2.

	
Funds for Payments.

 

	  	  	
(a)

	
All payments of principal, interest, fees, and any other amounts due hereunder or under any of the other Loan Documents shall be made to the Administrative Agent, for the respective accounts of the applicable Lenders or (as the case may be) the Administrative Agent, at the Administrative Agent's Head Office, in each case in Dollars and in immediately available funds.

 

	  	  	
(b)

	
All payments by the Borrowers hereunder and under any of the other Loan Documents shall be made without setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory liens, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrowers are compelled by law to make such deduction or withholding.  If any such obligation is imposed upon the Borrowers with respect to any amount payable by them hereunder or under any of the other Loan Documents (an "Indemnified Tax"), the Borrowers shall pay to the Administrative Agent, for the account of the applicable Lenders or (as the case may be) the Administrative Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the applicable Lenders to receive the same net amount which such Lenders would have received on such due date had no such obligation (including any such obligation applicable to additional sums payable under this Section) been imposed upon the Borrowers.  The Borrower Representative will deliver promptly to the Administrative Agent certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Borrowers hereunder or under such other Loan Document.

 

	  	  	
(c)

	
The Borrowers shall timely pay to the relevant governmental authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any present or future stamp, court or documentary, intangible, recording, filing or similar taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document.

 

	  	  	
(d)

	
The Borrowers shall jointly and severally indemnify each Administrative Agent or Lender, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Administrative Agent or Lender or required to be withheld or deducted from a payment to such Administrative Agent or Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified 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 Borrowers by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

	  	  	
(e)

	
Each Foreign Lender agrees that, prior to the first date on which any payment is due to it hereunder, it will deliver to the Borrower Representative and the Administrative Agent two duly completed copies of United States Internal Revenue Service Form W-8BEN or Form W-8ECI or successor applicable form, as the case may be, certifying in each case that such Foreign Lender is entitled to receive payments under this Credit Agreement and the Notes payable to it, without deduction or withholding of any United States federal income taxes.  Each Foreign Lender that so delivers a Form W-8BEN or Form W­8ECI pursuant to the preceding sentence further undertakes to deliver to each of the Borrower Representative and the Administrative Agent two further copies of Form W-8BEN or Form W-8ECI or successor applicable form, or other manner of certification, as the case may be, on or before the date that any such letter or form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Borrower Representative and the Administrative Agent, and such extensions or renewals thereof as may reasonably be requested by the Borrower Representative and the Administrative Agent, certifying in the case of a Form W-8BEN or Form W-8ECI that such Foreign Lender is entitled to receive payments under this Credit Agreement and the Notes without deduction or withholding of any United States federal income taxes, unless in any such case an event (including, without limitation, any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Foreign Lender from duly completing and delivering any such form with respect to it and such Foreign Lender advises the Borrower Representative and the Administrative Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.

 

	  	  	
(f)

	
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.

 

	  	  	
(g)

	
The Borrowers shall not be required to pay any additional amounts to any Foreign Lender in respect of United States Federal withholding tax pursuant to §4.2(b) to the extent that (i) the obligation to withhold amounts with respect to United States federal withholding tax existed on the date such Foreign Lender became a party to this Credit Agreement or, with respect to payments to a different lending office designated by the Foreign Lender as its applicable lending office (a "New Lending Office"), the date such Foreign Lender designated such New Lending Office with respect to the Loans; provided, however, that this clause (i) shall not apply to any transferee or New Lending Office as a result of an assignment, transfer or designation made at the request of the Borrowers; and provided further, however, that this clause (i) shall not apply to the extent the indemnity payment or additional amounts any transferee, or Lender through a New Lending Office, would be entitled to receive without regard to this clause (i) do not exceed the indemnity payment or additional amounts that the Person making the assignment or transfer to such transferee, or Lender making the designation of such New Lending Office, would have been entitled to receive in the absence of such assignment, transfer or designation; (ii) the obligation to pay such additional amounts would not have arisen but for a failure by such Foreign Lender to comply with the provisions of paragraph (e) above or (iii) the obligation to pay such additional amounts would not have arisen but for a failure by such Foreign Lender to comply with the provisions of paragraph (f) above.

 

	  	
§4.3.

	
Computations.  All computations of interest on the Loans and of other fees to the extent applicable shall be made on the basis of a 360-day year and the actual number of days elapsed; provided, however, interest on Base Rate Loans shall be computed on the basis of a 365-day or 366-day year, as applicable, and the actual number of days elapsed.  Except as otherwise provided in the definition of the term "Interest Period" with respect to LIBOR Rate Loans, whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension.  The outstanding amount of the Loans as reflected on the Note Records from time to time shall constitute prima facie evidence of the principal amount thereof absent manifest error; but the failure to record, or any error in so recording, any such amount on such Lender's Term Note Record shall not affect the obligations of the Borrowers hereunder or under any Term Note to make payments of principal of and interest on any Term Note when due.

 

	  	
§4.4

	
Inability to Determine LIBOR Rate.  In the event, prior to the commencement of any Interest Period relating to any LIBOR Rate Loan, the Administrative Agent shall reasonably determine that adequate and reasonable methods do not exist for ascertaining the LIBOR Rate that would otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan during any Interest Period, the Administrative Agent shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrowers) to the Borrower Representative and the Lenders.  In such event (a) any Completed Revolving Credit Loan Request with respect to LIBOR Rate Loans shall be automatically withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR Rate Loan will automatically, on the last day of the then current Interest Period thereof, become a Base Rate Loan, and (c) the obligations of the Lenders to make LIBOR Rate Loans shall be suspended until the Administrative Agent reasonably determines that the circumstances giving rise to such suspension no longer exist, whereupon the Administrative Agent shall so notify the Borrower Representative and the Lenders.

 

	  	
§4.5

	
Illegality.  Notwithstanding any other provisions herein, if any present or future law, regulation, treaty or directive or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain LIBOR Rate Loans, such Lender shall forthwith give notice of such circumstances to the Borrower Representative and the other Lenders and thereupon (a) the commitment of such Lender to make LIBOR Rate Loans or convert Base Rate Loans to LIBOR Rate Loans shall forthwith be suspended and (b) such Lender's LIBOR Rate Loans then outstanding shall be converted automatically to Base Rate Loans on the last day of each Interest Period applicable to such LIBOR Rate Loans or within such earlier period as may be required by law, all until such time as it is no longer unlawful for such Lender to make or maintain LIBOR Rate Loans.  The Borrowers hereby jointly and severally agree to promptly pay the Administrative Agent for the account of such Lender, upon demand, any additional amounts necessary to compensate such Lender for any costs incurred by such Lender in making any conversion required by this §4.5 prior to the last day of an Interest Period with respect to a LIBOR Rate Loan, including any interest or fees payable by such Lender to lenders of funds obtained by it in order to make or maintain its LIBOR Rate Loans hereunder.

 

	  	
§4.6.

	
Additional Costs, Etc. If any present or future applicable law, which expression, as used herein, includes statutes, rules and regulations thereunder and interpretations thereof by any competent court or by any governmental or other regulatory body or official charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to any Lender or the Administrative Agent by any central bank or other fiscal, monetary or other authority (whether or not having the force of law)(including, without limitation, regardless of the date enacted, adopted or issued: (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) 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:

 

	  	  	
(a)

	
subject any Lender or the Administrative Agent to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Credit Agreement, the other Loan Documents, such Lender's Commitments or the Loans (other than taxes based upon or measured by the income or profits of such Lender or the Administrative Agent), or

 

	  	  	
(b)

	
materially change the basis of taxation (except for changes in taxes on income or profits) of payments to any Lender of the principal of or the interest on any Loans or any other amounts payable to the Administrative Agent or any Lender under this Credit Agreement or the other Loan Documents, or

 

	  	  	
(c)

	
impose or increase or render applicable (other than to the extent specifically provided for elsewhere in this Credit Agreement) any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law) against assets held by, or deposits in or for the account of, or loans by, or commitments of an office of any Lender, or

 

	  	  	
(d)

	
impose on any Lender or the Administrative Agent any other conditions or requirements with respect to this Credit Agreement, the other Loan Documents, any Letters of Credit, the Loans, such Lender's Commitments, or any class of loans, or commitments of which any of the Loans or such Lender's Commitments form a part;

 

	  	  	
and the result of any of the foregoing is

	  	  	  	
(i)

	
to increase the cost to any Lender of making, funding, issuing, renewing, extending or maintaining any of the Loans or such Lender's Commitments, or any Letter of Credit, or

 

	  	  	  	
(ii)

	
to reduce the amount of principal, interest, Reimbursement Obligation or other amount payable to such Lender or the Administrative Agent hereunder on account of such Lender's Commitments or any of the Loans, or

 

	  	  	  	
(iii)

	
to require such Lender or the Administrative Agent to make any payment or to forego any interest or Reimbursement Obligation or other sum payable hereunder, the amount of which payment or foregone interest or Reimbursement Obligation or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by such Lender or the Administrative Agent from the Borrowers hereunder,

 

	  	  	
then, and in each such case, the Borrowers will, within thirty (30) days of demand made by such Lender or (as the case may be) the Administrative Agent at any time and from time to time and as often as the occasion therefor may arise, pay to such Lender such additional amounts as such Lender shall determine in good faith to be sufficient to compensate such Lender for such additional cost, reduction, payment or foregone interest or Reimbursement Obligation or other sum, provided that such Lender is generally imposing similar charges on its other similarly situated borrowers.

	  	
§4.7.

	
Capital Adequacy.  If after the date hereof any Lender or the Administrative Agent determines that (i) the adoption of or change in any law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) regarding capital requirements for banks or bank holding companies or any change in the interpretation or application thereof by a court or governmental authority with appropriate jurisdiction, or (ii) compliance by such Lender or the Administrative Agent or any Person controlling such Lender or the Administrative Agent with any law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) of any such Person regarding capital adequacy (with respect to the foregoing clauses (i) and (ii), regardless of the date enacted, adopted or issued including, without limitation: (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) 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), has the effect of reducing the return on such Lender's or the Administrative Agent's Commitments with respect to any Loans to a level below that which such Lender or the Administrative Agent could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or the Administrative Agent's then existing policies with respect to capital adequacy and assuming full utilization of such entity's capital) by any amount deemed by such Lender or (as the case may be) the Administrative Agent to be material, then such Lender or the Administrative Agent may notify the Borrower Representative of such fact.  To the extent that the amount of such reduction in the return on capital is not reflected in the Base Rate or the LIBOR Rate, the Borrowers jointly and severally agree to pay such Lender or (as the case may be) the Administrative Agent for the amount of such reduction in the return on capital as and when such reduction is determined within thirty (30) days of presentation by such Lender or (as the case may be) the Administrative Agent of a certificate in accordance with §4.8 hereof.  Each Lender shall allocate such cost increases among its customers in good faith and on an equitable basis.

 

	  	
§4.8.

	
Certificate.  A certificate setting forth any additional amounts payable pursuant to §§4.5, 4.6 or 4.7 and a brief explanation of such amounts (including the calculation thereof) which are due, submitted by any Lender or the Administrative Agent to the Borrower Representative, shall be prima facie evidence that such amounts are due and owing.

 

	  	
§4.9

	
Indemnity.  In addition to the other provisions of this Credit Agreement regarding such matters, but without duplication to the extent a Lender has been compensated pursuant thereto, the Borrowers jointly and severally agree to indemnify the Administrative Agent and each Lender and to hold the Administrative Agent and each Lender harmless from and against any loss, cost or expense (including loss of anticipated profits) that the Administrative Agent or such Lender may sustain or incur as a consequence of (a) the failure by the Borrowers to pay any principal amount of or any interest on any LIBOR Rate Loans as and when due and payable, including any such loss or expense arising from interest or fees payable by the Administrative Agent or such Lender to lenders of funds obtained by it in order to maintain its LIBOR Rate Loans, (b) the failure by the Borrowers to make a borrowing or conversion after the Borrowers have given a Completed Revolving Credit Loan Request for a LIBOR Rate Loan or a Conversion Request for a LIBOR Rate Loan, and (c) the making of any payment of a LIBOR Rate Loan or the making of any conversion of any such Loan to a Base Rate Loan on a day that is not the last day of the applicable Interest Period with respect thereto, including interest or fees payable by the Administrative Agent or a Lender to lenders of funds obtained by it in order to maintain any such LIBOR Rate Loans.

	  	
§4.10.

	
Interest During Event of Default; Late Charges.  During the continuance of an Event of Default, outstanding principal and (to the extent permitted by applicable law) interest on the Loans and all other amounts payable hereunder, including, without limitation, any fees applicable to Letters of Credit, or under any of the other Loan Documents shall bear interest at a rate per annum equal to two percent (2%) above the interest rate that would otherwise be applicable until such amount shall be paid in full (after as well as before judgment).  In addition, the Borrowers shall pay on demand a late charge equal to five percent (5%) of any amount of principal and/or interest charges on the Loans which is not paid within ten (10) days of the date when due.

 

	  	
§4.11.

	
Concerning Joint and Several Liability of the Borrowers.

 

	  	  	
(a)

	
Each of the Borrowers is accepting joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Lenders under this Credit Agreement, for the mutual benefit, directly and indirectly, of each of the Borrowers and in consideration of the undertakings of each other Borrower to accept joint and several liability for the Obligations.

 

	  	  	
(b)

	
Each of the Borrowers, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations (including, without limitation, any Obligations arising under this §4.11), it being the intention of the parties hereto that all the Obligations shall be the joint and several Obligations of each of the Borrowers without preferences or distinction among them.

 

	  	  	
(c)

	
If and to the extent that any of the Borrowers shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Borrowers will make such payment with respect to, or perform, such Obligation.

 

	  	  	
(d)

	
The Obligations of each of the Borrowers under the provisions of this §4.11 constitute full recourse Obligations of each of the Borrowers enforceable against each such Person to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Credit Agreement or any other circumstance whatsoever.

 

	  	  	
(e)

	
Except as otherwise expressly provided in this Credit Agreement, each of the Borrowers hereby waives notice of acceptance of its joint and several liability, notice of any Loans made under this Credit Agreement, notice of any action at any time taken or omitted by the Lenders under or in respect of any of the Obligations, and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Credit Agreement.  Each of the Borrowers hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by the Lenders at any time or times in respect of any default by any of the Borrowers in the performance or satisfaction of any term, covenant, condition or provision of this Credit Agreement, any and all other indulgences whatsoever by the Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any of the Borrowers.  Without limiting the generality of the foregoing, each of the Borrowers assents to any other action or delay in acting or failure to act on the part of the Lenders with respect to the failure by any of the Borrowers to comply with any of its respective Obligations, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of this §4.11, afford grounds for terminating, discharging or relieving any of the Borrowers, in whole or in part, from any of its Obligations under this §4.11, it being the intention of each of the Borrowers that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of such Borrowers under this §4.11 shall not be discharged except by performance and then only to the extent of such performance.  The Obligations of each of the Borrowers under this §4.11 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, re-construction or similar proceeding with respect to any of the Borrowers or the Lenders.  The joint and several liability of the Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of any of the Borrowers or the Lenders.

 

	  	  	
(f)

	
The provisions of this §4.11 are made for the benefit of the Lenders and their successors and assigns, and may be enforced against any or all of the Borrowers as often as occasion therefor may arise and without requirement on the part of the Lenders first to marshal any of their claims or to exercise any of their rights against any other Borrower or to exhaust any remedies available to them against any other Borrower or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy.  The provisions of this §4.11 shall remain in effect until all of the Obligations shall have been paid in full or otherwise fully satisfied.  If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by the Lenders upon the insolvency, bankruptcy or reorganization of any of the Borrowers, or otherwise, the provisions of this §4.11 will forthwith be reinstated in effect, as though such payment had not been made.

 

	  	
§4.12.

	
Interest Limitation.  All agreements between the Borrowers and the Guarantors, on the one hand, and the Lenders and the Administrative Agent, on the other hand, are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of maturity of the Loans or otherwise, shall the amount paid or agreed to be paid to the Lenders for the use or the forbearance of the Loans exceed the maximum permissible under applicable law.  As used herein, the term "applicable law" shall mean the law in effect as of the date hereof; provided, however that in the event there is a change in the law which results in a higher permissible rate of interest, then this Credit Agreement and other Loan Document shall be governed by such new law as of its effective date.  In this regard, it is expressly agreed that it is the intent of the Borrowers and the Guarantors and the Lenders and the Administrative Agent in the execution, delivery and acceptance of this Credit Agreement and the other Loan Documents to contract in strict compliance with the laws of the State of New York from time to time in effect.  If, under or from any circumstances whatsoever, fulfillment of any provision hereof or of any of the other Loan Documents at the time of performance of such provision shall involve transcending the limit of such validity prescribed by applicable law, then the obligation to be fulfilled shall automatically be reduced to the limits of such validity, and if under or from any circumstances whatsoever any Lender should ever receive as interest any amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the principal balance of the Loans and not to the payment of interest.  This provision shall control every other provision of all agreements between the Borrowers and the Guarantors and the Lenders and the Administrative Agent.

 

	  	
§4.13.

	
Reasonable Efforts to Mitigate.  Each Lender agrees that as promptly as practicable after it becomes aware of the occurrence of an event or the existence of a condition that would cause it to be affected under §§4.5, 4.6 or 4.7, such Lender will give notice thereof to the Borrower Representative, with a copy to the Administrative Agent and, to the extent so requested by the Borrower Representative and not inconsistent with regulatory policies applicable to such Lender, such Lender shall use reasonable efforts and take such actions as are reasonably appropriate (including the changing of its lending office or branch) if as a result thereof the additional moneys which would otherwise be required to be paid to such Lender pursuant to such sections would be reduced other than for de minimus amounts, or the illegality or other adverse circumstances which would otherwise require a conversion of such Loans or result in the inability to make such Loans pursuant to such sections would cease to exist, and in each case if, as determined by such Lender in its sole discretion, the taking such actions would not adversely affect such Loans.

 

	  	
§4.14.

	
Replacement of Lenders.  If any Lender (an "Affected Lender") (i) makes demand upon the Borrowers for (or if the Borrowers are otherwise required to pay) amounts pursuant to §§4.5, 4.6 or 4.7, (ii) is unable to make or maintain LIBOR Rate Loans as a result of a condition described in §4.5, or (iii) does not vote in favor of any amendment, modification or waiver to this Credit Agreement which, pursuant to §26, requires the vote of all of the Lenders or all affected Lenders, and the Required Lenders shall have voted in favor of such amendment, modification or waiver, the Borrower Representative may, within 90 days of receipt of such demand, notice or vote (or the occurrence of such other event causing the Borrowers to be required to pay such compensation or causing §4.5 to be applicable or failure to obtain unanimous consent or approval required by §26) as the case may be, by notice (a "Replacement Notice") in writing to the Administrative Agent and such Affected Lender (A) request the Affected Lender to cooperate with the Borrowers in obtaining a replacement lender satisfactory to the Administrative Agent and the Borrowers (the "Replacement Lender"); (B) request the non-Affected Lenders with Revolving Credit Commitments or Delayed Draw Term Loan Commitments, as the case may be, to acquire and assume all of the Affected Lender's Loans and Revolving Credit Commitment and/or Delayed Draw Term Loan Commitment as provided herein, but none of such Lenders shall be under an obligation to do so; or (C) designate a Replacement Lender which is an Eligible Assignee and is reasonably satisfactory to the Administrative Agent other than when an Event of Default has occurred and is continuing and absolutely satisfactory to the Administrative Agent when an Event of Default has occurred and is continuing.  If any satisfactory Replacement Lender shall be obtained, and/or any of the non-Affected Lenders shall agree to acquire and assume all of the Affected Lender's Loans, Revolving Credit Commitment and Delayed Draw Term Loan Commitment, then such Affected Lender shall assign, in accordance with §19, all of its Revolving Credit Commitment, Delayed Draw Term Loan Commitment, Loans, Letter of Credit Participations, Notes and other rights and obligations under this Credit Agreement and all other Loan Documents to such Replacement Lender or non-Affected Lenders, as the case may be, in exchange for payment of the principal amount so assigned and all interest and fees accrued on the amount so assigned, plus all other Obligations then due and payable to the Affected Lender; provided, however, that (x) such assignment shall be in accordance with the provisions of §19, shall be without recourse, representation or warranty and shall be on terms and conditions reasonably satisfactory to such Affected Lender and such Replacement Lender and/or non-Affected Lenders, as the case may be, and (y) prior to any such assignment, the Borrowers shall have paid to such Affected Lender all amounts properly demanded and unreimbursed under §§4.5, 4.6, 4.7 and 4.9.

	  	
§4.15.

	
Defaulting Lender.

 

	  	  	
(a)

	
Defaulting Lender Adjustments.  Notwithstanding anything to the contrary contained in this Credit Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

	  	  	  	
(i)

	
Waivers and Amendments.  Such Defaulting Lender's right to approve or disapprove any amendment, waiver or consent with respect to this Credit Agreement shall be restricted as set forth in the definition of Required Lenders.

 

	  	  	  	
(ii)

	
Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to §13 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to §14 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, if such Defaulting Lender is a Revolving Credit Lender, to Cash Collateralize the Administrative Agent's  Fronting Exposure with respect to such Defaulting Lender in accordance with §5.11; third, as the Borrower Representative may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Credit Agreement, as determined by the Administrative Agent; fourth, if so determined by the Administrative Agent and the Borrowers, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender's potential future funding obligations with respect to Loans under this Credit Agreement and (y) if such Defaulting Lender is a Revolving Credit Lender, to Cash Collateralize the Administrative Agent's future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Credit Agreement, in accordance with §5.11; fifth, to the payment of any amounts owing to the Lenders or the Administrative Agent as a result of any judgment of a court of competent jurisdiction obtained by any Lender or the Administrative Agent against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Credit Agreement; sixth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by a Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Credit Agreement; and seventh, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Obligations in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in §12 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders holding the applicable Commitments (or Loans of the same class) on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations without giving effect to §4.15(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this §4.15(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

	  	  	  	
(iii)

	
Certain Fees.

 

	  	  	  	  	
(A)

	
Each Defaulting Lender shall be entitled to receive a Facility Fee for any period during which that Lender is a Defaulting Lender only to extent allocable to the sum of (1) the outstanding principal amount of the Revolving Loans funded by it, and (2) its Revolving Credit Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to §5.11.

 

	  	  	  	  	
(B)

	
No Defaulting Lender shall be entitled to receive any Delayed Draw Term Loan Facility Fee for any period during which that Lender is a Defaulting Lender.

 

	  	  	  	  	
(C)

	
Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Revolving Credit Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral.

 

	  	  	  	  	
(D)

	
With respect to any Facility Fee, Delayed Draw Term Loan Facility Fee or Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (A), (B) or (C) above, the Borrowers shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender's participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the Administrative Agent, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to the Administrative Agent's Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

 

	  	  	  	
(iv)

	
Reallocation of Participations to Reduce Fronting Exposure.  All or any part of such Defaulting Lender's participation in L/C Obligations shall be reallocated among the Non-Defaulting Lenders with Revolving Credit Commitments in accordance with their respective Revolving Credit Commitment Percentages (in each case, calculated without regard to such Defaulting Lender's Revolving Credit Commitment) but only to the extent that (x) the conditions set forth in §12 are satisfied at the time of such reallocation (and, unless the Borrower Representative shall have otherwise notified the Administrative Agent at such time, the Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender's Revolving Credit Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender's increased exposure following such reallocation.

 

	  	  	  	
(v)

	
Cash Collateral.  If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to it hereunder or under law, Cash Collateralize the Administrative Agent's Fronting Exposure in accordance with the procedures set forth in §5.11.

 

	  	  	
(b)

	
Defaulting Lender Cure.  If the Borrower Representative and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit to be held pro rata by the Lenders in accordance with the applicable Commitments (without giving effect to §4.15(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender.

 

	  	  	
(c)

	
New Letters of Credit.  So long as any Lender is a Defaulting Lender, the Administrative Agent shall not be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

	
§5.

	
LETTERS OF CREDIT.

	  	
§5.1.

	
Commitment to Issue Letters of Credit.  Subject to the terms and conditions hereof and the execution and delivery by the Borrowers of a letter of credit application on the Administrative Agent's customary form (a "Letter of Credit Application"), the Administrative Agent on behalf of the Revolving Credit Lenders and in reliance upon the agreement of the Revolving Credit Lenders set forth in §5.1(d) and upon the representations and warranties of the Borrowers contained herein, agrees, in its individual capacity, to issue, extend and renew for the account of the Borrowers one or more standby letters of credit (individually, a "Letter of Credit"), in such form as may be requested from time to time by the Borrowers and agreed to by the Administrative Agent; provided, however, that, at all times, after giving effect to such request, (a) the sum of the aggregate Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not exceed $15,000,000 at any one time, and (b) the sum of (i) all L/C Obligations, and (ii) the amount of all Revolving Credit Loans outstanding shall not exceed the Total Revolving Credit Commitment at any time.  Notwithstanding the foregoing, the Administrative Agent shall have no obligation to issue any Letter of Credit to support or secure any Indebtedness of the Borrowers or any of their Subsidiaries to the extent that such Indebtedness was incurred prior to the proposed issuance date of such Letter of Credit, unless in any such case the Borrowers demonstrate to the satisfaction of the Administrative Agent that (x) such prior incurred Indebtedness was then fully secured by a prior perfected and unavoidable security interest in collateral provided by the Borrowers or such Subsidiary to the proposed beneficiary of such Letter of Credit or (y) such prior incurred Indebtedness was then secured or supported by a letter of credit issued for the account of the Borrowers or such Subsidiary and the reimbursement obligation with respect to such letter of credit was fully secured by a prior perfected and unavoidable security interest in collateral provided to the issuer of such letter of credit by the Borrowers or such Subsidiary.

 

	  	
§5.2.

	
Letter of Credit Applications.  Each Letter of Credit Application shall be completed to the satisfaction of the Administrative Agent.  In the event that any provision of any Letter of Credit Application shall be inconsistent with any provision of this Credit Agreement, then the provisions of this Credit Agreement shall, to the extent of any such inconsistency, govern.

 

	  	
§5.3.

	
Terms of Letters of Credit.  Each Letter of Credit issued, extended or renewed hereunder shall, among other things, (a) provide for the payment of sight drafts for honor thereunder when presented in accordance with the terms thereof and when accompanied by the documents described therein, and (b) have an expiry date of the earlier of (i) the date one (1) year from its date of issuance and (ii) the date which is thirty (30) days prior to the Revolving Credit Loan Maturity Date.  Each Letter of Credit so issued, extended or renewed shall be subject to the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 or any successor version thereto adopted by the Administrative Agent in the ordinary course of its business as a letter of credit issuer and in effect at the time of issuance of such Letter of Credit (the "Uniform Customs") or, in the case of a standby Letter of Credit, either the Uniform Customs or the International Standby Practices (ISP98), International Chamber of Commerce Publication No. 590, or any successor code of standby letter of credit practices among banks adopted by the Administrative Agent in the ordinary course of its business as a standby letter of credit issuer and in effect at the time of issuance of such Letter of Credit.

 

	  	
§5.4.

	
Reimbursement Obligations of Lenders.  Each Revolving Credit Lender severally agrees that it shall be absolutely liable, without regard to the occurrence of any Default or Event of Default or any other condition precedent whatsoever, to the extent of such Lender's Revolving Credit Commitment Percentage, to reimburse the Administrative Agent on demand for the amount of each draft paid by the Administrative Agent under each Letter of Credit to the extent that such amount is not reimbursed by the Borrowers pursuant to §5.6 (such agreement for a Revolving Credit Lender being called herein the "Letter of Credit Participation" of such Lender).

 

	  	
§5.5.

	
Participations of Lenders.  Each payment made by a Lender pursuant to §5.4 above shall be treated as the purchase by such Revolving Credit Lender of a participating interest in the Borrowers' Reimbursement Obligation under §5.6 in an amount equal to such payment.  Each such Lender shall share in accordance with its participating interest in any interest which accrues pursuant to §5.6.

 

	  	
§5.6.

	
Reimbursement Obligation of the Borrowers.  In order to induce the Administrative Agent to issue, extend and renew each Letter of Credit and the Revolving Credit Lenders to participate therein, the Borrowers hereby agree to reimburse or pay to the Administrative Agent, for the account of the Administrative Agent or (as the case may be) the Lenders, with respect to each Letter of Credit issued, extended or renewed by the Administrative Agent hereunder,

 

	  	  	
(a)

	
except as otherwise expressly provided in §5.6(b), on each date that any draft presented under such Letter of Credit is honored by the Administrative Agent, or the Administrative Agent otherwise makes a payment with respect thereto, (i) the amount paid by the Administrative Agent under or with respect to such Letter of Credit, and (ii) the amount of any taxes, fees, charges or other costs and expenses whatsoever incurred by the Administrative Agent or any Revolving Credit Lender in connection with any payment made by the Administrative Agent or any such Lender under, or with respect to, such Letter of Credit (it being understood that such payment to the Administrative Agent shall, subject to the satisfaction of the conditions set forth herein, be made from the proceeds of a Revolving Credit Loan made to the Borrowers pursuant to §2.4);

 

	  	  	
(b)

	
upon the reduction (but not termination) of the Total Revolving Credit Commitment to an amount less than the Maximum Drawing Amount on all Letters of Credit, an amount equal to such difference, which amount shall be held by the Administrative Agent for the ratable benefit of the Revolving Credit Lenders and the Administrative Agent as cash collateral for all L/C Obligations; and

 

	  	  	
(c)

	
upon the termination of the Total Revolving Credit Commitment, or the acceleration of the Reimbursement Obligations with respect to all Letters of Credit in accordance with §13, an amount equal to the then Maximum Drawing Amount on all Letters of Credit, which amount shall be held by the Administrative Agent for the ratable benefit of the Revolving Credit Lenders and the Administrative Agent as cash collateral for all Reimbursement Obligations.

Each such payment shall be made to the Administrative Agent at the Administrative Agent's Head Office in immediately available funds or (in the case of clause (a) of this §5.6) from the direct application of the proceeds of a Revolving Credit Loan made pursuant to §2.4 hereof.  In the event that the obligations of the Borrowers under §5.6(a) can not, in compliance with the provisions of this Credit Agreement, be satisfied in full by the making of a Revolving Credit Loan pursuant to §2.4, the Administrative Agent shall so notify the Borrowers, in which case the obligations of the Borrowers under §5.6(a) shall be immediately due and payable to the

 

  

  

Administrative Agent.  Interest on any and all amounts remaining unpaid by the Borrowers under this §5.6 at any time from the date such amounts become due and payable (whether as stated in this §5.6, by acceleration or otherwise) until payment in full (whether before or after judgment) shall be payable to the Administrative Agent on demand at the rate then in effect for overdue principal on the Revolving Credit Loans.  Notwithstanding anything contained in this Credit Agreement or any other Loan Document to the contrary, all amounts payable by the Borrowers under this §5.6 as a result of the occurrence of an Event of Default under §13.1(g) or (h) shall automatically become due and payable by the Borrowers without any notice or demand by the Administrative Agent, any Lender or any other Person.

 

	  	
§5.7.

	
Letter of Credit Payments.  If any draft shall be presented or other demand for payment shall be made under any Letter of Credit, the Administrative Agent shall notify the Borrowers of the date and amount of the draft presented or demand for payment and of the date and time when it expects to pay such draft or honor such demand for payment.  If the Borrowers fail to reimburse the Administrative Agent as provided in §5.6 on or before the date that such draft is paid or other payment is made by the Administrative Agent, the Administrative Agent may at any time thereafter notify the Revolving Credit Lenders of the amount of any such Unpaid Reimbursement Obligation.  No later than 3:00 p.m. (New York time) on the Business Day next following the receipt of such notice, each Revolving Credit Lender shall make available to the Administrative Agent, at the Administrative Agent's Head Office, in immediately available funds, such Lender's Revolving Credit Commitment Percentage of such Unpaid Reimbursement Obligation, together with an amount equal to the product of (a) the average, computed for the period referred to in clause (c) below, of the weighted average interest rate paid by the Administrative Agent for federal funds acquired by the Administrative Agent during each day included in such period, times (b) the amount equal to such Lender's Revolving Credit Commitment Percentage of such Unpaid Reimbursement Obligation, times (c) a fraction, the numerator of which is the number of days that elapse from and including the date the Administrative Agent paid the draft presented for honor or otherwise made payment to the date on which such Lender's Revolving Credit Commitment Percentage of such Unpaid Reimbursement Obligation shall become immediately available to the Administrative Agent, and the denominator of which is 360.  The responsibility of the Administrative Agent to the Borrowers and the Lenders shall be only to determine that the documents (including each draft) delivered under each Letter of Credit in connection with such presentment shall be in conformity in all material respects with such Letter of Credit.

 

	  	
§5.8.

	
Obligations Absolute.  The Borrowers' obligations under this §5 shall be absolute and unconditional under any and all circumstances and irrespective of the occurrence of any Default or Event of Default or any condition precedent whatsoever or any setoff, counterclaim or defense to payment which the Borrowers may have or have had against the Administrative Agent, any Lender or any beneficiary of a Letter of Credit.  The Borrowers further agree with the Administrative Agent and the Lenders that the Administrative Agent and the Lenders shall not be responsible for, and the Borrowers' Reimbursement Obligations under §5.6 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrowers, the beneficiary of any Letter of Credit or any financing institution or other party to which any Letter of Credit may be transferred or any claims or defenses whatsoever of the Borrowers against the beneficiary of any Letter of Credit or any such transferee.  The Administrative Agent and the Lenders shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit.  The Borrowers agree that any action taken or omitted by the Administrative Agent or any Lender under or in connection with each Letter of Credit and the related drafts and documents, if done in good faith, shall be binding upon the Borrowers and shall not result in any liability on the part of the Administrative Agent or any Lender to the Borrowers.

 

	  	
§5.9.

	
Reliance by Issuer.  To the extent not inconsistent with §5.8, the Administrative Agent shall be entitled to rely, and shall be fully protected in relying upon, any Letter of Credit, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent.  The Administrative Agent shall be fully justified in failing or refusing to take any action under this Credit Agreement unless it shall first have received such advice or concurrence of the Required Lenders as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Credit Agreement in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Lenders and all future holders of the Revolving Credit Notes or of a Letter of Credit Participation.

 

	  	
5.10.

	
Letter of Credit Fees.  The Borrowers shall pay a fee, quarterly in arrears on the first Business Day of the following quarter (a "Letter of Credit Fee"), to the Administrative Agent in respect of each Letter of Credit an amount equal to the product of (i) the Applicable Margin for Revolving Credit Loans which are LIBOR Rate Loans and (ii) the face amount of such Letter of Credit.  The Letter of Credit Fee shall be for the accounts of the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages.  The Borrowers shall pay a fee, quarterly in arrears on the first Business Day of the following quarter following the date of issuance or any extension or renewal of any Letter of Credit, equal to one-eighth of one percent (0.125%) per annum of the face amount of each Letter of Credit solely for the account of the Administrative Agent, as a fronting fee.  In respect of each Letter of Credit, the Borrowers shall also pay to the Administrative Agent for the Administrative Agent's own account, at such other time or times as such charges are customarily made by the Administrative Agent, including the Administrative Agent's customary issuance, amendment, negotiation or document examination and other administrative fees as in effect from time to time.

 

	  	
§5.11.

	
Cash Collateral.  At any time that there shall exist a Defaulting Lender with a Revolving Credit Commitment, within one Business Day following the written request of the Administrative Agent the Borrowers shall Cash Collateralize the Administrative Agent's Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to §4.15(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than 105% of the Fronting Exposure of the Administrative Agent with respect to Letters of Credit issued and outstanding at such time (the "Minimum Collateral Amount").

 

	  	  	
(a)

	
Grant of Security Interest.  The Borrowers, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of itself, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lenders' obligation to fund participations in respect of L/C Obligations, to be applied pursuant to clause (b) below.  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrowers will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

 

	  	  	
(b)

	
Application.  Notwithstanding anything to the contrary contained in this Credit Agreement, Cash Collateral provided under this §5.11 or §4.15 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender's obligation to fund participations in respect of L/C Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

	  	  	
(c)

	
Termination of Requirement.  Cash Collateral (or the appropriate portion thereof) provided to reduce the Administrative Agent's Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this §5.11 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent that there exists excess Cash Collateral; provided that, subject to §4.15 the Person providing Cash Collateral and the Administrative Agent may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations.

	
§6.

	
GUARANTIES.  Each of the Guarantors will jointly and severally guaranty all of the Obligations pursuant to its Guaranty.  The Obligations are full recourse obligations of each Borrower and each Guarantor, and all of the respective assets and properties of each Borrower and each Guarantor shall be available for the payment in full in cash and performance of the Obligations.

 

	
§7.

	
REPRESENTATIONS AND WARRANTIES.  Each of the Borrowers, for itself and for each of the other Borrowers and for each Guarantor insofar as any such statements relate to such Guarantor or its Subsidiaries represents and warrants to the Administrative Agent and the Lenders as follows:

 

	  	
§7.1

	
Authority; Etc.

 

	  	  	
(a)

	
Organization; Good Standing.

 

	  	  	  	
(i)

	
SALP is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware; Holdings is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; each of SALP and Holdings has all requisite partnership or corporate, as the case may be, power to own its respective properties and conduct its respective business as now conducted and as presently contemplated; and each of SALP and Holdings is in good standing as a foreign entity and is duly authorized to do business in the jurisdictions where the Real Estate owned by it is located and in each other jurisdiction where such qualification is necessary except where a failure to be so qualified in such other jurisdiction would not have a Material Adverse Effect.

 

	  	  	  	
(ii)

	
Sovran is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland; each Subsidiary of Sovran is duly organized, validly existing and in good standing as a corporation or partnership or other entity, as the case may be, under the laws of the state of its organization; Sovran and each of its Subsidiaries has all requisite corporate or partnership or other entity, as the case may be, power to own its respective properties and conduct its respective business as now conducted and as presently contemplated; and Sovran and each of its Subsidiaries is in good standing as a foreign entity and is duly authorized to do business in the jurisdictions where such qualification is necessary (including, as to Sovran, in the State of New York) except where a failure to be so qualified in such other jurisdiction would not have a materially adverse effect on the business, assets or financial condition of Sovran or such Subsidiary.

 

	  	  	  	
(iii)

	
As to each subsequent Guarantor, a provision similar, as applicable, to (a)(i) or (ii) above shall be included in each such subsequent Guarantor's Subsidiary Guaranty, and the Borrowers shall be deemed to make for itself and on behalf of each such subsequent Guarantor a representation and warranty as to such provision regarding such subsequent Guarantor.

 

	  	  	
(b)

	
Capitalization.

 

	  	  	  	
(i)

	
The outstanding equity of SALP is comprised of a general partner interest and limited partner interests, all of which have been duly issued and are outstanding and fully paid and non-assessable as set forth in Schedule 7.1(b) hereto.  All of the issued and outstanding general partner interests of SALP are owned and held of record by Holdings; all of the limited partner interests of SALP are owned and held of record as set forth in Schedule 7.1(b) hereto.  Except as set forth in the Agreement of Limited Partnership of SALP or as disclosed in Schedule 7.1(b) hereto, as of the Restatement Date there are no outstanding securities or agreements exchangeable for or convertible into or carrying any rights to acquire any equity interests in SALP.  Except as disclosed in Schedule 7.1(b), as of the Restatement Date there are no outstanding commitments, options, warrants, calls or other agreements (whether written or oral) binding on SALP or Sovran which require or could require SALP or Sovran to sell, grant, transfer, assign, mortgage, pledge or otherwise dispose of any equity interests of SALP.  No general partnership interests of SALP are subject to any restrictions on transfer or any partner agreements, voting agreements, trust deeds, irrevocable proxies, or any other similar agreements or interests (whether written or oral).

 

	  	  	  	
(ii)

	
As of the Restatement Date, the authorized capital stock of, or any other equity interests in Holdings are as set forth in Schedule 7.1(b), and the issued and outstanding voting and non­voting shares of the common stock of Holdings, and all of the other equity interests in Holdings, all of which have been duly issued and are outstanding and fully paid and non-assessable, are owned and held of record by Sovran.  Except as disclosed in Schedule 7.1(b), as of the Restatement Date there are no outstanding securities or agreements exchangeable for or convertible into or carrying any rights to acquire any equity interests in Holdings, and there are no outstanding options, warrants, or other similar rights to acquire any shares of any class in the capital of or any other equity interests in Holdings.  As of the Restatement Date there are no outstanding commitments, options, warrants, calls or other agreements or obligations (whether written or oral) binding on Holdings to issue, sell, grant, transfer, assign, mortgage, pledge or otherwise dispose of any shares of any class in the capital of or other equity interests in Holdings.  No shares of, or equity interests in Holdings held by Sovran are subject to any restrictions on transfer pursuant to any of Holding's applicable charter, by­laws or any shareholder agreements, voting agreements, voting trusts, trust agreements, trust deeds, irrevocable proxies or any other similar agreements or instruments (whether written or oral).

 

	  	  	
(c)

	
Due Authorization.  The execution, delivery and performance of this Credit Agreement and the other Loan Documents to which any of the Borrowers or any of the Guarantors is or is to become a party and the transactions contemplated hereby and thereby (i) are within the authority of such Borrower and such Guarantor, (ii) have been duly authorized by all necessary proceedings on the part of such Borrower or such Guarantor and any general partner or other controlling Person thereof, (iii) do not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which such Borrower or such Guarantor is subject or any judgment, order, writ, injunction, license or permit applicable to such Borrower or such Guarantor, (iv) do not conflict with any provision of the agreement of limited partnership, any certificate of limited partnership, the charter documents or by-laws of such Borrower or such Guarantor or any general partner or other controlling Person thereof, and (v) do not contravene any provisions of, or constitute a default, Default or Event of Default hereunder or a failure to comply with any term, condition or provision of, any other agreement, instrument, judgment, order, decree, permit, license or undertaking binding upon or applicable to such Borrower or such Guarantor or any of such Borrower's or such Guarantor's properties (except for any such failure to comply under any such other agreement, instrument, judgment, order, decree, permit, license, or undertaking as would not have a Material Adverse Effect) or result in the creation of any mortgage, pledge, security interest, lien, encumbrance or charge upon any of the properties or assets of any Borrower, the Operating Subsidiaries or any Guarantor.

 

	  	  	
(d)

	
Enforceability.

 

	  	  	  	
(i)

	
Each of the Loan Documents to which any of the Borrowers or any of the Guarantors is a party has been duly executed and delivered and constitutes the legal, valid and binding obligations of each such Borrower and each such Guarantor, as the case may be, subject only to applicable bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors' rights and to the fact that the availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

 

	  	  	  	
(ii)

	
The Intercreditor Agreement is in full force and effect as of the Restatement Date and the Indebtedness and each other payment Obligation hereunder or arising under any Loan Document constitute "Loans" and, consequently, "Subject Obligations" (as each such term is defined in the Intercreditor Agreement) under the Intercreditor Agreement and remain subject to the terms of the Intercreditor Agreement.

 

	  	
§7.2.

	
Governmental Approvals.  The execution, delivery and performance by each Borrower of this Credit Agreement and by each Borrower and each Guarantor of the other Loan Documents to which such Borrower or such Guarantor is or is to become a party and the transactions contemplated hereby and thereby do not require (i) the approval or consent of any governmental agency or authority other than those already obtained, or (ii) filing with any governmental agency or authority, other than filings which will be made with the SEC when and as required by law.

 

	  	
§7.3.

	
Title to Properties; Leases.  The Borrowers, the Guarantors and their respective Subsidiaries each has good title to all of its respective properties, assets and rights of every name and nature purported to be owned by it, including, without limitation, that:

 

	  	  	
(a)

	
As of the Restatement Date (with respect to Unencumbered Properties designated as such on the Restatement Date) or the date of designation as an Unencumbered Property (with respect to Unencumbered Properties acquired and/or designated as such after the Restatement Date), and in each case to the best of its knowledge thereafter, (i) a Borrower or (if after the Restatement Date) a Guarantor holds good and clear record and marketable title to the Unencumbered Properties, subject to no rights of others (except, with respect to a Ground Lease, the rights of the lessor), including any mortgages, conditional sales agreements, title retention agreements, liens or encumbrances, except for Permitted Liens, and (ii) the Unencumbered Properties satisfy the requirements for an Unencumbered Property set forth in the definition thereof.  Schedule 7.3(a) sets forth a list of all Unencumbered Properties as of the Restatement Date.

 

	  	  	
(b)

	
Each of the Borrowers and each of the then Guarantors and their respective Subsidiaries will, as of the Restatement Date, own all of the assets as reflected in the financial statements of the Borrowers described in §7.4 or acquired since the date of such financial statements (except property and assets sold or otherwise disposed of in the ordinary course of business since that date).

 

	  	  	
(c)

	
Each of the direct or indirect interests of the Borrowers or Holdings in any Partially-Owned Entity is set forth on Schedule 7.3(c) hereto, including the type of entity in which the interest is held, the percentage interest owned by such Borrower or Holdings in such entity, the capacity in which such Borrower or Holdings holds the interest, and such Borrower's or Holdings' ownership interest therein.

 

	  	
§7.4.

	
Financial Statements.  The following financial statements have been furnished to each of the Lenders:

 

	  	  	
(a)

	
The audited consolidated balance sheet of Sovran and its Subsidiaries (including, without limitation, SALP) as of December 31, 2012, and the related consolidated statement of operations, shareholders' equity and cash flows for the fiscal year ended December 31, 2012, and the audited consolidated statement of operations, shareholders' equity and cash flows for the fiscal year then ended, certified by the chief financial officer of Sovran.  Such financial statements have been prepared in accordance with GAAP and fairly present the financial condition of Sovran and its Subsidiaries as of the close of business on the dates thereof and the results of operations for the fiscal periods then ended.  There are no contingent liabilities of Sovran or any of its Subsidiaries as of such dates involving material amounts, known to the officers of the Borrowers, not disclosed in said financial statements and the related notes thereto.

 

	  	  	
(b)

	
The unaudited consolidated balance sheet of Sovran and its Subsidiaries (including, without limitation, SALP) as of March 31, 2013, and the related consolidated statement of operations and cash flows for the fiscal quarter ended March 31, 2013, and the unaudited consolidated statement of operations and cash flows for the fiscal quarter then ended, certified by the chief financial officer of Sovran.  Such financial statements have been prepared in accordance with GAAP and fairly present the financial condition of Sovran and its Subsidiaries as of the close of business on the dates thereof and the results of operations for the fiscal periods then ended (subject to changes resulting from normal year-end audit adjustments).  There are no contingent or other liabilities of Sovran or any of its Subsidiaries as of such dates involving material amounts, known to the officers of the Borrowers, not disclosed in said financial statements and the related notes thereto.

 

	  	
§7.5.

	
Fiscal Year.  The Borrowers and their respective Subsidiaries each has a fiscal year which is the twelve months ending on December 31 of each calendar year.

 

	  	
§7.6.

	
Licenses, Permits, Franchises, Patents, Copyrights, Etc.

 

	  	  	
(a)

	
Each Borrower, each Guarantor and each of their respective Subsidiaries own and possesses all franchises, patents, copyrights, trademarks, trade names, service marks, licenses, authorizations and permits, and rights in respect of the foregoing, adequate for the conduct of their respective businesses substantially as now conducted without known conflict with any rights of others, including all Permits.

 

	  	  	
(b)

	
To the best knowledge of each Borrower, no product or service of either Borrower or any Guarantor or Subsidiary infringes in any material respect any license, permit, franchise, authorization, patent, copyright, service mark, trademark, trade name or other right owned by any other Person.

 

	  	  	
(c)

	
To the best knowledge of each Borrower, there is no material violation by any Person of any right of either Borrower or any Guarantor or Subsidiary with respect to any patent, copyright, service mark, trademark, trade name or other right owned or used by either Borrower or any Guarantor or Subsidiary.

 

	  	
§7.7.

	
Litigation.  Except as stated on Schedule 7.7 there are no actions, suits, proceedings or investigations of any kind pending or threatened against any Borrower, any Guarantor or any of their respective Subsidiaries before any court, tribunal or administrative agency or board that, could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect or materially impair the right of such Borrower, such Guarantor or their respective Subsidiaries to carry on their respective businesses substantially as now conducted by them, or result in any substantial liability not adequately covered by insurance, or for which adequate reserves are not maintained, as reflected in the applicable financial statements of the Borrowers, or which question the validity of this Credit Agreement or any of the other Loan Documents, or any action taken or to be taken pursuant hereto or thereto.

 

	  	
§7.8.

	
No Materially Adverse Contracts, Etc.  None of any Borrower, any Guarantor or any of their respective Subsidiaries is subject to any charter, corporate, partnership or other legal restriction, or any judgment, decree, order, rule or regulation that has or is expected in the future to have a Material Adverse Effect.  None of any Borrower, any Guarantor or any of their respective Subsidiaries is a party to any contract or agreement that has or is expected, in the judgment of their respective officers, to have a Material Adverse Effect.

 

	  	
§7.9.

	
Compliance With Other Instruments, Laws, Etc.  None of any Borrower, any Guarantor or any of their respective Subsidiaries is in violation of any provision of its partnership agreement, charter documents, bylaws or other organizational documents, as the case may be, or any respective agreement or instrument to which it may be subject or by which it or any of its properties may be bound or any decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a manner that could result, individually or in the aggregate, in the imposition of substantial penalties or have a Material Adverse Effect.

 

	  	
§7.10.

	
Tax Status.

 

	  	  	
(a)

	
Each of the Borrowers, the Guarantors and their respective Subsidiaries (A) has timely made or filed all federal, state and local income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (B) has paid all taxes and other governmental assessments and charges shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and by appropriate proceedings, and (C) has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply, and (ii) there are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the respective officers of the Borrowers and the Guarantors and their respective Subsidiaries know of no basis for any such claim.  The federal income tax liabilities of the Borrowers and their Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended December 31, 2009.

 

	  	  	
(b)

	
To the best of the Borrowers' knowledge, each Partially-Owned Entity (i) has timely made or filed all federal, state and local income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and by appropriate proceedings, and (iii) has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  To the best of the Borrowers' knowledge, except as otherwise disclosed in writing to the Administrative Agent, there are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction from any Partially-Owned Entity, and the officers of the Borrowers know of no basis for any such claim.

 

	  	
§7.11.

	
No Event of Default; No Materially Adverse Changes.  No default, Default or Event of Default has occurred and is continuing.  Since December 31, 2012, there has occurred no materially adverse change in the businesses, assets, operations, conditions (financial or otherwise) or prospects of Sovran and its Subsidiaries or SALP and its Subsidiaries from that shown on or reflected in the audited consolidated balance sheet of Sovran and its Subsidiaries as of December 31, 2012, or the consolidated statement of income for the fiscal year then ended, other than changes in the ordinary course of business that have not had, and could not reasonably be expected to have, a Material Adverse Effect.

 

	  	
§7.12.

	
Investment Company Act.  None of any Borrower, any Guarantor or any of their respective Subsidiaries is an "investment company", or an "affiliated company" or a "principal underwriter" of an "investment company", as such terms are defined in the Investment Company Act of 1940.

 

	  	
§7.13.

	
Absence of UCC Financing Statements, Etc.  Except for Permitted Liens, there will be no financing statement, security agreement, chattel mortgage, real estate mortgage, equipment lease, financing lease, option, encumbrance or other document filed or recorded with any filing records, registry, or other public office, that purports to cover, affect or give notice of any present or possible future lien or encumbrance on, or security interest in, any Unencumbered Property.  Neither any Borrower nor any Guarantor has pledged or granted any lien on or security interest in or otherwise encumbered or transferred any of their respective interests in any Subsidiary (including in the case of Sovran, its interests in SALP, and in the case of any Borrower, its interests in the Operating Subsidiaries) or in any Partially-Owned Entity.

 

	  	
§7.14.

	
Absence of Liens.  A Borrower or a Guarantor is the owner of the Unencumbered Properties free from any lien, security interest, encumbrance and any other claim or demand, except for Permitted Liens.

 

	  	
§7.15.

	
Certain Transactions.  Except as set forth on Schedule 7.15, none of the officers, partners, directors, or employees of any Borrower or any Guarantor or any of their respective Subsidiaries is presently a party to any transaction with any Borrower, any Guarantor or any of their respective Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, partner, director or such employee or, to the knowledge of the Borrowers, any corporation, partnership, trust or other entity in which any officer, partner, director, or any such employee or natural Person related to such officer, partner, director or employee or other Person in which such officer, partner, director or employee has a direct or indirect beneficial interest has a substantial interest or is an officer, director, trustee or partner.

 

	  	
§7.16.

	
Employee Benefit Plans.

	  	
§7.16.1.

	
In General.  Each Employee Benefit Plan and each Guaranteed Pension Plan has been maintained and operated in compliance in all material respects with the provisions of ERISA and, to the extent applicable, the Code, including but not limited to the provisions thereunder respecting prohibited transactions and the bonding of fiduciaries and other persons handling plan funds as required by Section 412 of ERISA.  The Borrowers have heretofore delivered to the Administrative Agent the most recently completed annual report, Form 5500, with all required attachments, and actuarial statement required to be submitted under  Section 103(d) of ERISA, with respect to each Guaranteed Pension Plan.  The expected post-retirement benefit obligation (determined as of the last day of each Borrower's most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of each Borrower and its Subsidiaries is not material.

 

	  	
§7.16.2.

	
Terminability of Welfare Plans.  No Employee Benefit Plan, which is an employee welfare benefit plan within the meaning of Section 3(1) or Section 3(2)(B) of ERISA, provides benefit coverage subsequent to termination of employment, except as required by Title I, Part 6 of ERISA or the applicable state insurance laws.  The Borrowers may terminate each such employee welfare benefit plan at any time (or at any time subsequent to the expiration of any applicable bargaining agreement) in the discretion of the Borrowers without liability to any Person other than for claims arising prior to termination.

 

	  	
§7.16.3.

	
Guaranteed Pension Plans.  Each contribution required to be made to a Guaranteed Pension Plan, whether required to be made to avoid the incurrence of an accumulated funding deficiency, the notice or lien provisions of Section 302(f) of ERISA, or otherwise, has been timely made.  No waiver of an accumulated funding deficiency or extension of amortization periods has been received with respect to any Guaranteed Pension Plan, and neither any Borrower or any Guarantor nor any ERISA Affiliate is obligated to or has posted security in connection with an amendment to a Guaranteed Pension Plan pursuant to Section 307 of ERISA or Section 401(a)(29) of the Code.  No liability to the PBGC (other than required insurance premiums, all of which have been paid) has been incurred by any Borrower or any Guarantor or any ERISA Affiliate with respect to any Guaranteed Pension Plan and there has not been any ERISA Reportable Event (other than an ERISA Reportable Event as to which the requirement of thirty (30) days notice has been waived), or any other event or condition which presents a material risk of termination of any Guaranteed Pension Plan by the PBGC.  Based on the latest valuation of each Guaranteed Pension Plan (which in each case occurred within twelve months of the date of this representation), and on the actuarial methods and assumptions employed for that valuation, the aggregate benefit liabilities of all such Guaranteed Pension Plans within the meaning of Section 4001 of ERISA did not exceed the aggregate value of the assets of all such Guaranteed Pension Plans, disregarding for this purpose the benefit liabilities and assets of any Guaranteed Pension Plan with assets in excess of benefit liabilities, by more than $500,000.

 

	  	
§7.16.4.

	
Multiemployer Plans. Neither any Borrower nor any Guarantor nor any ERISA Affiliate has incurred any material liability (including secondary liability) to any Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan under Section 4201 of ERISA or as a result of a sale of assets described in Section 4204 of ERISA.  Neither any Borrower nor any Guarantor nor any ERISA Affiliate has been notified that any Multiemployer Plan is in reorganization or insolvent under and within the meaning of Section 4241 or Section 4245 of ERISA or is at risk of entering reorganization or becoming insolvent, or that any Multiemployer Plan intends to terminate or has been terminated under Section 4041A of ERISA.

	  	
§7.17.

	
Regulations U and X.  The proceeds of the Loans and the Letters of Credit shall be used for the purposes described in §8.12.  No portion of any Loan is to be used, and no portion of any Letter of Credit is to be obtained, for the purpose of purchasing or carrying any "margin security" or "margin stock" in violation of (and, as such terms are used in) Regulations U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

 

	  	
§7.18.

	
Environmental Compliance.  The Borrowers have caused environmental assessments to be conducted and/or taken other steps to investigate the past and present environmental condition and usage of the Real Estate and the operations conducted thereon.  Based upon such assessments and/or investigation, except as set forth on Schedule 7.18, the Borrowers represent and warrant that:

 

	  	  	
(a)

	
None of any Borrower, any Guarantor, any of their respective Subsidiaries or any operator of the Real Estate or any portion of such Real Estate, or any operations thereon is in violation, or alleged violation, of any judgment, decree, order, law, license, rule or regulation pertaining to environmental matters, including without limitation, those arising under the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any state or local statute, regulation, ordinance, order or decree relating to health, safety or the environment (hereinafter "Environmental Laws"), which violation or alleged violation has, or its remediation would have, by itself or when aggregated with all such other violations or alleged violations, a Material Adverse Effect, or constitutes a Disqualifying Environmental Event with respect to any Unencumbered Property.

 

	  	  	
(b)

	
None of any Borrower, any Guarantor or any of their respective Subsidiaries has received notice from any third party, including, without limitation, any federal, state or local governmental authority, (i) that it has been identified by the United States Environmental Protection Agency ("EPA") as a potentially responsible party under CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986), (ii) that any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) or any toxic substances, oil or hazardous materials or other chemicals or substances regulated by any Environmental Laws ("Hazardous Substances") which it has generated, transported or disposed of has been found at any site at which a federal, state or local agency or other third party has conducted or has ordered that any Borrower, any Guarantor or any of their respective Subsidiaries conduct a remedial investigation, removal or other response action pursuant to any Environmental Law, or (iii) that it is or shall be a named party to any claim, action, cause of action, complaint, or legal or administrative proceeding (in each case, contingent or otherwise) arising out of any third party's incurrence of costs, expenses, losses or damages of any kind whatsoever in connection with the release of Hazardous Substances; which event described in any such notice would have a material adverse effect on the business, assets or financial condition of any Borrower, any Guarantor or any of their respective Subsidiaries, or constitutes a Disqualifying Environmental Event with respect to any Unencumbered Property.

 

	  	  	
(c)

	
Except as set forth on Schedule 7.18, (i) no portion of the Real Estate has been used for the handling, processing, storage or disposal of Hazardous Substances except in accordance with applicable Environmental Laws; and no underground tank or other underground storage receptacle for Hazardous Substances is located on any portion of any Real Estate except in accordance with applicable Environmental Laws, (ii) in the course of any activities conducted by the Borrowers, the Guarantors, their respective Subsidiaries or the operators of their respective properties, or any ground or space tenants on any Real Estate, no Hazardous Substances have been generated or are being used on such Real Estate except in accordance with applicable Environmental Laws, (iii) there has been no present or past releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, disposing or dumping (a "Release") or threatened Release of Hazardous Substances on, upon, into or from the Real Estate, (iv) there have been no Releases on, upon, from or into any real property in the vicinity of any of the Real Estate which, through soil or groundwater contamination, may have come to be located on such Real Estate, and (v) any Hazardous Substances that have been generated on any of the Real Estate during ownership thereof by a Borrower or a Guarantor or any of their respective Subsidiaries have been transported off-site only by carriers having an identification number issued by the EPA, treated or disposed of only by treatment or disposal facilities maintaining valid permits as required under applicable Environmental Laws, which transporters and facilities have been and are, to the best of the Borrowers' knowledge, operating in compliance with such permits and applicable Environmental Laws; any of which events described in clauses (i) through (v) above would have a material adverse effect on the business, assets or financial condition of any Borrower, any Guarantor or any of their respective Subsidiaries, or constitutes a Disqualifying Environmental Event with respect to any Unencumbered Property.  Notwithstanding that the representations contained herein are limited to the knowledge of the Borrowers, any such limitation shall not affect the covenants specified in §8.11 or elsewhere in this Credit Agreement.

 

	  	  	
(d)

	
None of the Borrowers, the Guarantors, their respective Subsidiaries or the Real Estate is subject to any applicable Environmental Law requiring the performance of Hazardous Substances site assessments, or the removal or remediation of Hazardous Substances, or the giving of notice to any governmental agency or the recording or delivery to other Persons of an environmental disclosure document or statement, by virtue of the transactions set forth herein and contemplated hereby, or as a condition to the effectiveness of any other transactions contemplated hereby.

 

	  	  	
(e)

	
There has been no change in the status of the information disclosed on Schedule 7.18, that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect (after taking into account any indemnities, escrows or other similar protections provided by a third party for the matters set forth in Schedule 7.18).

 

	  	
In addition, the Borrowers represent and warrant that (i) each of (x) that certain Guaranty of Recourse Obligations of Borrower dated as of November 28, 2001by SALP for the benefit of GMAC Commercial Mortgage Corporation and (y) that certain Non-Recourse Indemnification Agreement dated as of February 12, 2002 by SALP for the benefit of PNC Bank, National Association (for purposes of this paragraph, clauses (x) and (y) collectively, the "SALP Terminated Obligations") has terminated and is of no further force and effect, and  (ii) that no Borrower nor any Guarantor or other Subsidiary has any surviving or otherwise outstanding obligations under or with respect to the SALP Terminated Obligations.

 

	  	
§7.19.

	
Subsidiaries.  Schedule 7.19 sets forth all of the respective Subsidiaries of Sovran or SALP, and Schedule 7.19 will be updated to reflect any subsequent Guarantor and its Subsidiaries, if any.

 

	  	
§7.20.

	
Loan Documents.  All of the representations and warranties of the Borrowers and the Guarantors made in this Credit Agreement and in the other Loan Documents or any document or instrument delivered to the Administrative Agent or the Lenders pursuant to or in connection with any of such Loan Documents are true and correct in all material respects and do not include any untrue statement of a material fact or omit to state a material fact required to be stated or necessary to make such representations and warranties not materially misleading.

 

	  	
§7.21.

	
REIT Status.  Sovran has not taken any action that would prevent it from maintaining its qualification as a REIT for its tax year ended December 31, 2012, or from maintaining such qualification at all times during the term of the Loans.  Sovran is not a "pension held REIT" within the meaning of §856(h)(3)(D) of the Code.

 

	  	
§7.22.

	
Solvency.  The fair value of the business and assets of each of the Borrowers and each Guarantor exceeds the amount that will be required to pay its respective liabilities (including, without limitation, contingent, subordinated, unmatured and unliquidated liabilities on existing debts, as such liabilities may become absolute and matured), in each case after giving effect to the transactions contemplated by this Credit Agreement (including, without limitation, the use of the proceeds of the Loans and the Letters of Credit issued hereunder).  Neither the Borrowers nor the Guarantors, after giving effect to the transactions contemplated by this Credit Agreement, will be engaged in any business or transaction, or about to engage in any business or transaction, for which such Person has unreasonably small assets or capital (within the meaning of the Uniform Fraudulent Transfer Act, the Uniform Fraudulent Conveyance Act and Section 548 of the Federal Bankruptcy Code), and neither the Borrowers nor any Guarantor has any intent to:

 

	  	  	
(a)

	
hinder, delay or defraud any entity to which any of them is, or will become, on or after the Restatement Date, indebted, or

 

	  	  	
(b)

	
incur debts that would be beyond any of their ability to pay as they mature.

 

	  	
§7.23.

	
Trading Status.  No security of Sovran traded on the New York Stock Exchange has been suspended from trading.

 

	  	
§7.24.

	
Existing Indebtedness; Liens.

 

	  	  	
(a)

	
Schedule 7.24 sets forth a complete and correct list of all outstanding Indebtedness of the Borrowers, the Guarantors and their respective Subsidiaries as of Restatement Date (including a description of the obligors and obligees, principal amount outstanding and collateral therefor, if any and Guaranty thereof, if any).  Neither of the Borrowers nor any Guarantor or Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Borrowers or such Guarantor or Subsidiary, and no event or condition exists with respect to any Indebtedness of the Borrowers, the Guarantors or any of their respective Subsidiaries, that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

 

	  	  	
(b)

	
Except as disclosed in Schedule 7.24, neither of the Borrowers nor any Guarantor or Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by §9.2.

 

	  	  	
(c)

	
Neither any Borrower nor any Guarantor or Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of such Person, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Borrowers, any Guarantor or any Subsidiary, except as expressly provided in §9.10.

 

	  	
§7.25.

	
Foreign Assets Control Regulations.

 

	  	  	
(a)

	
Neither any Borrower nor any Guarantor or Subsidiary or Affiliate of the Borrower or any Guarantor (each Guarantor, Subsidiary and Affiliate of the Borrower or any Guarantor, a "Controlled Entity") (i) is a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, U.S. Department of Treasury ("OFAC") (an "OFAC Listed Person") or (ii) is a department, agency or instrumentality of, or is otherwise controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (ii), a "Blocked Person") or (iii) has any investments in, or knowingly (as such term is defined in Section 101(6) of CISADA) engages in any dealings or transactions with, any Blocked Person.

 

	  	  	
(b)

	
No part of the proceeds from the Loans or Letters of Credit made or issued hereunder constitute or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used, directly by the Borrowers or indirectly through any Controlled Entity, in connection with any investment in, or any transactions or dealings with, any Blocked Person.

 

	  	  	
(c)

	
To the Borrowers' actual knowledge after making due inquiry, neither any Borrower nor any Controlled Entity (i) is under investigation by any Governmental Authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under any applicable law (collectively, "Anti-Money Laundering Laws"), (ii) has been assessed civil penalties under any Anti-Money Laundering Laws or (iii) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws. The Borrowers have taken reasonable measures appropriate to the circumstances (in any event as required by applicable law) to ensure that each Borrower and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Money Laundering Laws.

 

	  	  	
(d)

	
No part of the proceeds from the Loans or Letters of Credit made or issued hereunder will be used, directly or indirectly, for any improper payments to any governmental official or employee, political party, official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage. The Borrowers have taken reasonable measures appropriate to the circumstances (in any event as required by applicable law) to ensure that each Borrower and each Controlled Entity is and will continue to be in compliance with all applicable current and future anti-corruption laws and regulations.

	
§8.

	
AFFIRMATIVE COVENANTS OF THE BORROWERS AND THE GUARANTORS.  Each of the Borrowers for itself and on behalf of each of the Guarantors (if and to the extent expressly included in Subsections contained in this Section) covenants and agrees that, so long as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or the Lenders have any obligation to make any Loans or the Administrative Agent has any obligation to issue, extend or renew any Letters of Credit:

	  	
§8.1.

	
Punctual Payment.  The Borrowers will duly and punctually pay or cause to be paid the principal and interest on the Loans and all Reimbursement Obligations and all interest, fees, charges and other amounts provided for in this Credit Agreement and the other Loan Documents, all in accordance with the terms of this Credit Agreement and the Notes, and the other Loan Documents.

 

	  	
§8.2.

	
Maintenance of Office.  Each of the Borrowers and the Guarantors will maintain its chief executive office in Williamsville, New York, or at such other place in the contiguous United States of America as each of them shall designate upon written notice to the Administrative Agent to be delivered within five (5) days of such change, where notices, presentations and demands to or upon the Borrowers and the Guarantors, as the case may be, in respect of the Loan Documents may be given or made.

 

	  	
§8.3.

	
Records and Accounts.  Each of the Borrowers and the Guarantors will (a) keep, and cause each of its Subsidiaries to keep, true and accurate records and books of account in which full, true and correct entries will be made in accordance with GAAP and all applicable requirements of any governmental authority having legal or regulatory jurisdiction over such Borrower, such Guarantor or such Subsidiary, as the case may be, (b) maintain adequate accounts and reserves for all taxes (including income taxes), contingencies, depreciation and amortization of its properties and the properties of its Subsidiaries and (c) at all times engage Ernst & Young LLP or other Accountants as the independent certified public accountants of Sovran, SALP and their respective Subsidiaries and will not permit more than thirty (30) days to elapse between the cessation of such firm's (or any successor firm's) engagement as the independent certified public accountants of Sovran, SALP and their respective Subsidiaries and the appointment in such capacity of a successor firm as Accountants.

 

	  	
§8.4.

	
Financial Statements, Certificates and Information.  The Borrowers will deliver to the Administrative Agent:

 

	  	  	
(a)

	
as soon as practicable, but in any event not later than ninety (90) days after the end of each of its fiscal years (or such shorter period as is 15 days greater than the period applicable to the filing of Sovran's Annual Report on Form 10-K with the SEC regardless of whether Sovran is subject to the filing requirements thereof):

 

	  	  	  	
(i)

	
in the case of SALP, if prepared, the audited consolidated balance sheet of SALP and its Subsidiaries at the end of such year, and the related audited consolidated statements of operations, funds available for distribution and cash flows for the year then ended, in each case (except for cash flow statements) with supplemental consolidating schedules provided by SALP; and

 

	  	  	  	
(ii)

	
in the case of Sovran, the audited consolidated and consolidating (for Subsidiaries which own Real Estate) balance sheet of Sovran and its Subsidiaries (including, without limitation, SALP and its Subsidiaries) at the end of such year, and the related audited consolidated and consolidating (for Subsidiaries which own Real Estate) statements of operations, cash flows and shareholders' equity for the year then ended;

 

	  	
each setting forth in comparative form the figures for the previous fiscal year and all such statements to be in reasonable detail, prepared in accordance with GAAP, and, in each case, accompanied by (x) a certification by the principal financial officer of SALP or Sovran, as applicable, that the information contained in such financial statements fairly presents the financial position of SALP or Sovran (as the case may be) and its Subsidiaries on the date thereof and (y) an auditor's report prepared without qualification by the Accountants;

 

	  	  	
(b)

	
as soon as practicable, but in any event not later than forty-five (45) days after the end of each of its fiscal quarters (or such shorter period as is 15 days greater than the period applicable to the filing of Sovran's Quarterly Report on Form 10-Q with the SEC regardless of whether Sovran is subject to the filing requirements thereof) commencing with the fiscal quarter ending June 30, 2013:

 

	  	  	  	
(i)

	
in the case of SALP, if prepared, copies of the unaudited consolidated balance sheet of SALP and its Subsidiaries as at the end of such quarter, and the related unaudited consolidated statements of operations, funds available for distribution and cash flows for the portion of SALP's fiscal year then elapsed, with supplemental consolidating schedules (except with respect to cash flow statements) provided by SALP; and

 

	  	  	  	
(ii)

	
in the case of Sovran, copies of the unaudited consolidated and consolidating (for Subsidiaries which own Real Estate) balance sheet of Sovran and its Subsidiaries (including, without limitation, SALP and its Subsidiaries) as at the end of such quarter, and the related unaudited consolidated and consolidating (for Subsidiaries which own Real Estate) statements of operations and cash flows for the portion of Sovran's fiscal year then elapsed;

 

	  	
Setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, together with a certification by the principal financial officer of SALP or Sovran, as applicable, that the information contained in such financial statements fairly presents the financial position of SALP or Sovran (as the case may be) and its Subsidiaries on the date thereof (subject to year-end adjustments);

 

	  	  	
(c)

	
simultaneously with the delivery of the financial statements referred to in subsections (a) and (b) above, a statement in the form of Exhibit D-2, or Exhibit D-3, as the case may be, signed by the chief financial officer of SALP or Sovran, as applicable, and (if applicable) reconciliations to reflect changes in GAAP since March 31, 2013; and, in the case of Sovran, setting forth in reasonable detail computations evidencing compliance with the covenants contained in §10 hereof and a list of all Excluded Subsidiaries as of such date and including a description of each such Excluded Subsidiary's Real Estate and Indebtedness;

 

	  	  	
(d)

	
promptly as they become available, a copy of each report (including any so-called management letters) submitted to any Borrower or any Guarantor or any of their respective subsidiaries by the Accountants in connection with each annual audit of the books of any Borrower or any Guarantor or such subsidiary by such Accountants or in connection with any interim audit thereof pertaining to any phase of the business of any Borrower or any Guarantor or any such subsidiary;

 

	  	  	
(e)

	
contemporaneously with the filing or mailing thereof, copies of all material of a financial nature sent to the holders of any Indebtedness of any Borrower, any Guarantor or any Subsidiary (other than the Loans) for borrowed money, to the extent that the information or disclosure contained in such material refers to or could reasonably be expected to have a Material Adverse Effect;

 

	  	  	
(f)

	
contemporaneously with the filing or mailing thereof, copies of all material of a financial nature filed with the SEC or sent to the stockholders of Sovran;

 

	  	  	
(g)

	
as soon as practicable, but in any event not later than ninety (90) days after the end of each fiscal year of Sovran, copies of the Form 10-K statement filed by Sovran with the SEC for such fiscal year, and as soon as practicable, but in any event not later than forty-five (45) days after the end of each fiscal quarter of Sovran, copies of the Form 10-Q statement filed by Sovran with the SEC for such fiscal quarter;

 

	  	  	
(h)

	
within 30 days after the end of each fiscal year of Sovran and SALP, a five-year capital plan of SALP and its Subsidiaries; and

 

	  	  	
(i)

	
from time to time such other financial data and information about the Borrowers, the Guarantors, their respective Subsidiaries, the Real Estate and the Partially-Owned Entities which is prepared by such Person in the normal course of its business or is required for securities and tax law compliance as the Administrative Agent or any Lender may reasonably request, including without limitation occupancy information and insurance certificates with respect to the Real Estate (including the Unencumbered Properties) and tax returns.

	  	
§8.5.

	
Notices.

 

	  	  	
(a)     

	
Defaults.  Each Borrower will, and will cause each Guarantor, as applicable, to, promptly notify the Administrative Agent in writing of the occurrence of any default, Default or Event of Default.  If any Person shall give any notice or take any other action in respect of (x) a claimed default (whether or not constituting a Default or an Event of Default) under this Credit Agreement or (y) a claimed default by any Borrower, any Guarantor or any of their respective Subsidiaries, as applicable, under any note, evidence of Indebtedness, indenture or other obligation to which or with respect to which any of them is a party or obligor, whether as principal, guarantor or surety, and such default would permit the holder of such note or obligation or other evidence of Indebtedness to accelerate the maturity thereof or otherwise cause the entire Indebtedness to become due, such Borrower or such Guarantor, as the case may be, shall forthwith give written notice thereof to the Administrative Agent, describing the notice or action and the nature of the claimed failure to comply.

 

	  	  	
(b)

	
Environmental Events.  Each Borrower will, and will cause each Guarantor to, promptly give notice in writing to the Administrative Agent (i) upon such Borrower's or such Guarantor's obtaining knowledge of any material violation of any Environmental Law regarding any Real Estate or such Borrower's or such Guarantor's operations or the operations of any of their Subsidiaries, (ii) upon such Borrower's or such Guarantor's obtaining knowledge of any known Release of any Hazardous Substance at, from, or into any Real Estate which it reports in writing or is reportable by it in writing to any governmental authority and which is material in amount or nature or which could materially affect the value of such Real Estate, (iii) upon such Borrower's or such Guarantor's receipt of any notice of material violation of any Environmental Laws or of any material Release of Hazardous Substances in violation of any Environmental Laws or any matter that may be a Disqualifying Environmental Event, including a notice or claim of liability or potential responsibility from any third party (including without limitation any federal, state or local governmental officials) and including notice of any formal inquiry, proceeding, demand, investigation or other action with regard to (A) such Borrower's or such Guarantor's or any other Person's operation of any Real Estate, (B) contamination on, from or into any Real Estate, or (C) investigation or remediation of off-site locations at which such Borrower, such Guarantor any Subsidiary or any of their respective predecessors are alleged to have directly or indirectly disposed of Hazardous Substances, or (iv) upon such Borrower's or such Guarantor's obtaining knowledge that any expense or loss has been incurred by such governmental authority in connection with the assessment, containment, removal or remediation of any Hazardous Substances with respect to which such Borrower , such Guarantor any Subsidiary or any Partially-Owned Entity may be liable or for which a lien may be imposed on any Real Estate; any of which events described in clauses (i) through (iv) above could reasonably be expected to have a Material Adverse Effect, or constitutes a Disqualifying Environmental Event with respect to any Unencumbered Property.

 

	  	  	
(c)

	
Notification of Claims against Unencumbered Properties.  Each Borrower will, and will cause each Guarantor to, promptly upon becoming aware thereof, notify the Administrative Agent in writing of any setoff, claims, withholdings or other defenses to which any of the Unencumbered Properties are subject, which (i) could reasonably be expected to have a Material Adverse Effect or materially and adversely affect the value of such Unencumbered Property, or (ii) with respect to such Unencumbered Property, constitute a Disqualifying Environmental Event, a Disqualifying Legal Event, a Disqualifying Building Event or a Lien which is not a Permitted Lien allowed to be incurred on an Unencumbered Property in accordance with §9.2.

 

	  	  	
(d)

	
Notice of Litigation and Judgments.  Each Borrower will, and will cause each Guarantor to, and the Borrowers will cause each of their respective Subsidiaries to, give notice to the Administrative Agent in writing within ten (10) days of becoming aware of any litigation or proceedings threatened in writing or any pending litigation and proceedings an adverse determination in which could materially affect any Borrower, any Guarantor or any of their respective Subsidiaries or any Unencumbered Property or to which any Borrower, any Guarantor or any of their respective Subsidiaries is or is to become a party involving a claim against any Borrower, any Guarantor or any of their respective Subsidiaries (to the extent uninsured) that could reasonably be expected to have a Material Adverse Effect or materially affect the value or operation of the Unencumbered Properties and stating the nature and status of such litigation or proceedings.  Each Borrower will, and will cause each of the Guarantors and the Subsidiaries to, give notice to the Administrative Agent, in writing, in form and detail reasonably satisfactory to the Administrative Agent, within ten (10) days of any judgment to the extent not covered by insurance, final or otherwise, against any Borrower, any Guarantor or any of their Subsidiaries in an amount in excess of $1,000,000.

 

	  	  	
(e)

	
Acquisition and Disposition of Real Estate.  The Borrower Representative shall notify the Administrative Agent in writing within seven (7) Business Days of the acquisition and the disposition of any Real Estate by any Borrower, any Guarantor, any of their respective Subsidiaries or any Partially-Owned Entity (whether or not such acquisition was made with proceeds of the Loans), which notice shall include, with respect to such Real Estate, its owner (if other than SALP), its address, a brief description, a summary of occupancy levels, a proforma and historic (if available) income statement and a summary of the key business terms of such acquisition (including sources and uses of funds for such acquisition), a summary of the principal terms of any financing for such Real Estate, and a statement as to whether such Real Estate qualifies as an Unencumbered Property.

 

	  	  	
(f)

	
Notices Regarding Note Purchase Agreement. The Borrower Representative shall notify the Administrative Agent in writing (i) within five (5) Business Days prior to entering into any amendment of any Note Purchase Agreement and (ii) within five (5) Business Days following payment in full and satisfaction of all obligations under, or other termination of, any Note Purchase Agreement.   As and when required to be delivered  pursuant to the Note Purchase Agreement or, if earlier, simultaneously with the delivery to the holders of the notes issued pursuant to the Note Purchase Agreement, the Borrower Representative shall deliver to the Administrative Agent any notice required to be delivered to the holders under or with respect to the Note Purchase Agreement.

 

	  	  	
(g)

	
Notice to Lenders.  The Administrative Agent will use good faith efforts to cause any notice delivered under this §8.5 to be delivered to each Lender in accordance with §15.12 and in any event on the same day or the Business Day following the day such notice is received by the Administrative Agent.

	  	
§8.6.

	
Existence of SALP, Holdings and Subsidiary Guarantors; Maintenance of Properties.  SALP for itself and for Holdings and each Subsidiary Guarantor (insofar as any such statements relate to Holdings or such Subsidiary Guarantor) will do or cause to be done all things necessary to, and shall, preserve and keep in full force and effect its existence as a limited partnership, corporation or another legally constituted entity, and will do or cause to be done all things necessary to preserve and keep in full force all of its rights and franchises and those of its Subsidiaries, and will not, and will not cause or permit any of its Subsidiaries to, convert to a limited liability company or a limited liability partnership.  SALP (a) will cause all necessary repairs, renewals, replacements, betterments and improvements to be made to all Real Estate owned or controlled by it or by any of its Subsidiaries or any Subsidiary Guarantor, all as in the judgment of SALP or such Subsidiary or such Subsidiary Guarantor may be necessary so that the business carried on in connection therewith may be properly conducted at all times, subject to the terms of the applicable Leases and partnership agreements or other organizational documents, (b) will cause all of its other properties and those of its Subsidiaries and the Subsidiary Guarantors used or useful in the conduct of its business or the business of its Subsidiaries or such Subsidiary Guarantor to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment, and (c) will, and will cause each of its Subsidiaries and each Subsidiary Guarantor to, continue to engage exclusively in the business of owning and operating self storage facilities, which self storage facilities shall be known primarily as "Uncle Bob's Self Storage"; provided that nothing in this Credit Agreement shall prevent the Borrowers from entering into Tower Leases or occasional non­material Leases of retail or office space incidental to the Borrowers' owning and operating self storage facilities; and provided further that nothing in this §8.6 shall prevent any Borrower from discontinuing the operation and maintenance of any of its properties or any of those of its Subsidiaries if such discontinuance is, in the judgment of SALP, desirable in the conduct of its or their business and such discontinuance does not cause a Default or an Event of Default hereunder, could not reasonably be expected to have a Material Adverse Effect and does not in the aggregate materially adversely affect the business of the Borrowers and their respective Subsidiaries on a consolidated basis.  Holdings shall at all times be a wholly-owned Subsidiary of Sovran and the sole general partner of SALP and shall be the owner of at least 1% of the outstanding partnership interests in SALP.

 

	  	
§8.7.

	
Existence of Sovran; Maintenance of REIT Status of Sovran; Maintenance of Properties.  Sovran will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a Maryland corporation.  Sovran will at all times maintain its status as a REIT and not to take any action which could lead to its disqualification as a REIT.  Sovran shall at all times maintain its listing on the New York Stock Exchange.  Sovran will continue to operate as a fully-integrated, self-administered and self-managed real estate investment trust which, together with its Subsidiaries (including, without limitation SALP) owns and operates an improved property portfolio comprised exclusively of self-storage facilities.  Sovran will not engage in any business other than the business of acting as a REIT and serving as a limited partner of SALP and as a member, partner or stockholder of other Persons as permitted by this Credit Agreement.  Sovran shall conduct all or substantially all of its business operations through SALP, and shall not own real estate assets outside of its interests in SALP.  Sovran shall do or cause to be done all things necessary to preserve and keep in full force all of its rights and franchises and those of its Subsidiaries.  Sovran shall (a) cause all of its properties and those of its Subsidiaries used or useful in the conduct of its business or the business of its Subsidiaries to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment, (b) cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of Sovran may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times, and (c) cause SALP and each of its Subsidiaries to continue to engage exclusively in the business of owning and operating self storage facilities, which self-storage facilities shall be known primarily as "Uncle Bob's Self Storage"; provided that nothing in this §8.7 shall prevent Sovran from discontinuing the operation and maintenance of any of its properties or any of those of its Subsidiaries if such discontinuance is, in the judgment of Sovran, desirable in the conduct of its or their business and such discontinuance does not cause a Default or an Event of Default hereunder, could not reasonably be expected to have a Material Adverse Effect and does not in the aggregate materially adversely affect the business of the Borrowers and their respective Subsidiaries on a consolidated basis.

 

	  	
§8.8.

	
Insurance.  Each Borrower will, and will cause each Guarantor to, maintain with respect to its properties, and will cause each of its Subsidiaries to maintain with financially sound and reputable insurers, insurance with respect to such properties and its business against such casualties and contingencies as shall be in accordance with the general practices of businesses having similar operations and real estate portfolios in similar geographic areas and in amounts, containing such terms, in such forms and for such periods as is commercially reasonable, customary and prudent, and from time to time deliver to the Administrative Agent upon its request certificates of insurance as to all of the insurance maintained by each Borrower and their respective Subsidiaries on the Real Estate (including flood insurance if necessary) from the insurer or an independent insurance broker, identifying insurers, types of insurance, insurance limits, and policy terms.

 

	  	
§8.9.

	
Taxes.  Each Borrower will, and will cause each Guarantor and each of its Subsidiaries to, pay or cause to be paid real estate taxes, other taxes, assessments and other governmental charges against the Real Estate before the same become delinquent and will duly pay and discharge, or cause to be paid and discharged, before the same shall become overdue, all taxes, assessments and other governmental charges imposed upon its sales and activities, or any part thereof, or upon the income or profits therefrom, as well as all claims for labor, materials, or supplies that if unpaid might by law become a lien or charge upon any of the Real Estate; provided that any such tax, assessment, charge, levy or claim need not be paid if the validity or amount thereof shall currently be contested in good faith by appropriate proceedings and if such Borrower, such Guarantor or such Subsidiary shall have set aside on its books adequate reserves with respect thereto; and provided further that such Borrower, such Guarantor or such Subsidiary will pay all such taxes, assessments, charges, levies or claims forthwith upon the commencement of proceedings to foreclose any lien that may have attached as security therefor.  If requested by the Administrative Agent, the Borrowers will provide evidence of the payment of real estate taxes, other taxes, assessments and other governmental charges against the Real Estate in the form of receipted tax bills or other form reasonably acceptable to the Administrative Agent.  Each Borrower will, and will cause each Guarantor and each of its Subsidiaries to file all tax returns required to be filed in any jurisdiction unless the non-filing thereof could not reasonably be expected to have a Material Adverse Effect.

 

	  	
§8.10.

	
Inspection of Properties and Books; Confidentiality.  Each Borrower will, and will cause each Guarantor to, permit the Lenders, through the Administrative Agent or any of the Lenders' other designated representatives, to visit and inspect any of the properties of any Borrower, any Guarantor or any of their respective Subsidiaries, to examine the books of account of the Borrowers, the Guarantors and their respective Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss the affairs, finances and accounts of the Borrowers, the Guarantors and their respective Subsidiaries with, and to be advised as to the same by, its officers, all at such reasonable times and intervals as the Administrative Agent may reasonably request; provided that the Borrowers shall only be responsible for the costs and expenses incurred by the Administrative Agent in connection with such inspections after the occurrence and during the continuance of an Event of Default.  The Administrative Agent and each Lender agrees to keep any non-public information delivered or made available by the Borrowers to it confidential from anyone other than persons employed or retained by the Administrative Agent or such Lender (including, without limitation, employees, officers, attorneys and other advisors) who, in the reasonable determination of the Administrative Agent or such Lender, reasonably need to know such information and who are or are expected to become engaged in evaluating, approving, structuring or administering the Loans or rendering legal advice in connection with the Loans; provided such employees, officers, attorneys and other advisors agree to keep such information confidential in accordance with this §8.10; and provided further that nothing herein shall prevent the Administrative Agent or any Lender or persons employed or retained by the Administrative Agent or such Lender from disclosing such information (i) to any other Lender, (ii) to any other person if reasonably incidental to the administration of the Loans, (iii) upon the order of any court or administrative agency, (iv) upon the request or demand of any regulatory agency or authority, (v) which has been publicly disclosed other than as a result of a disclosure by the Administrative Agent or any Lender which is not permitted by this Credit Agreement, (vi) in connection with any litigation to which the Administrative Agent, any Lender, or their respective Affiliates may be a party, (vii) to the extent reasonably required in connection with the exercise of any remedy hereunder, (viii) to the Administrative Agent's or such Lender's Affiliates, legal counsel and independent auditors, (ix) to any actual or proposed participant or Eligible Assignee of all or part of its rights hereunder, and (x) as otherwise required by law.

 

	  	
§8.11.

	
Compliance with Laws, Contracts, Licenses, and Permits.  Each Borrower will, and will cause each Guarantor to, comply with, and will cause each of their respective Subsidiaries to comply with (a) all applicable laws and regulations now or hereafter in effect wherever its business is conducted, including, without limitation, all Environmental Laws and all applicable federal and state securities laws, (b) the provisions of its partnership agreement and certificate or corporate charter and other organizational documents, as applicable, (c) all material agreements and instruments to which it is a party or by which it or any of its properties may be bound (including the Real Estate and the Leases) and (d) all applicable decrees, orders, and judgments.  If at any time while any Loan or Note is outstanding or the Lenders have any obligation to make Loans hereunder, any Permit shall become necessary or required in order that any Borrower or any Guarantor may fulfill any of its obligations hereunder or under any other Loan Document to which it is a party, the Borrowers and the Guarantors will immediately take or cause to be taken all reasonable steps within the power of the Borrowers or the Guarantors, as applicable, to obtain such Permit and furnish the Administrative Agent with evidence thereof.  The Borrowers will, and will cause each Guarantor and each Subsidiary to, obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

	  	
§8.12.

	
Use of Proceeds.  Subject at all times to the other provisions of this Credit Agreement the Borrowers will use the proceeds of the Loans and Letters of Credit to be obtained solely to finance (a) the acquisition, renovation and construction of self-storage facilities, (b) equity interests in joint ventures which engage in the same line of business as the Borrowers and the acquisition of real and personal property in connection therewith, (c) the repayment of Indebtedness (d) stock repurchases in accordance with §9.7(a) and (e) general working capital needs; provided, however, the Delayed Draw Term Loans shall be used exclusively for the repayment of Indebtedness arising under any Note Purchase Agreement.

 

	  	
§8.13.

	
Acquisition of Unencumbered Properties.  In addition to the requirements of §8.5(e), the Borrowers shall, within seven (7) Business Days of the acquisition of an Unencumbered Property or the qualification of any Real Estate as an Unencumbered Property, deliver to the Administrative Agent a certificate from an officer of the Borrower Representative certifying that such Real Estate satisfies the requirements for an Unencumbered Property set forth in the definition thereof.

	  	
§8.14.

	
Additional Guarantors; Solvency of Guarantors.

 

	  	  	
(a)

	
The Borrowers will cause each of their Subsidiaries (other than Excluded Subsidiaries) to enter into a Subsidiary Guaranty.  Further, the Borrowers will cause each of their Subsidiaries (other than Excluded Subsidiaries) first formed or acquired after the date hereof to deliver to the Administrative Agent and the Lenders (promptly, and in any event within 30 days after the formation or acquisition of such Subsidiary) the following items:

 

	  	  	  	
(i)

	
a joinder agreement in respect of the Subsidiary Guaranty or a new Subsidiary Guaranty with respect to such Subsidiary;

 

	  	  	  	
(ii)

	
a certificate, in form and substance satisfactory to the Administrative Agent, signed by an authorized, responsible officer of the Borrowers making representations and warranties to the effect of those contained in §7 hereof, with respect to such Subsidiary and the Subsidiary Guaranty, as applicable;

 

	  	  	  	
(iii)

	
a certificate of the Secretary (or other appropriate officer) of the new Subsidiary Guarantor as to due authorization, charter documents, board resolutions and the incumbency of officers;

 

	  	  	  	
(iv)

	
an opinion of counsel (who may be in-house counsel for the Borrowers) addressed to the Administrative Agent and each Lender satisfactory to the Administrative Agent, to the effect that the Subsidiary Guaranty has been duly authorized, executed and delivered by such additional Subsidiary Guarantor and that the Subsidiary Guaranty constitutes the legal, valid and binding contract and agreement of such Subsidiary Guarantor enforceable in accordance with its terms, except as any enforcement of such terms may be limited by bankruptcy, insolvency, fraudulent conveyance and similar laws affecting the enforcement of creditors' rights generally and by general equitable principles;

 

	  	  	  	
(v)

	
a counterpart of the Intercreditor Agreement, signed by such Subsidiary Guarantor; and

 

	  	  	  	
(vi)

	
(to the extent not already a party to the Intercreditor Agreement) a joinder to the Intercreditor Agreement signed by each of the holders of Indebtedness for borrowed money of the Borrowers which is a beneficiary of a guaranty of such Subsidiary Guarantor.

 

	  	
If any Subsidiary that had previously been an Excluded Subsidiary ceases to be an Excluded Subsidiary, the Borrowers will within 30 days thereafter cause such Subsidiary to enter into the Subsidiary Guaranty and deliver to the Administrative Agent and each Lender all of the documents required in clauses (i)-(vi) of this §8.14.

 

	  	  	
(b)

	
In addition to, and without limiting the requirement in §8.14(a), the Borrowers will cause any Subsidiary which is required by the terms of any Note Purchase Agreement (or any other agreement pursuant to which Indebtedness for borrowed money of a Borrower is outstanding) to become a party to, or otherwise guarantee, Indebtedness outstanding under a Note Purchase Agreement (or the Notes relating thereto) or such other agreement, to enter into the Subsidiary Guaranty and deliver to each of the Administrative Agent and each Lender (concurrently with the incurrence of any such obligation pursuant to a Note Purchase Agreement or such other agreement) all of the documents required in clauses (i)-(vi) of paragraph (a) above.

	  	
§8.15.

	
Further Assurances.  Each Borrower will, and will cause each Guarantor to, cooperate with, and to cause each of its Subsidiaries to cooperate with, the Administrative Agent and the Lenders and execute such further instruments and documents as the Lenders or the Administrative Agent shall reasonably request to carry out to their satisfaction the transactions contemplated by this Credit Agreement and the other Loan Documents.

 

	  	
§8.16.

	
Intentionally Omitted.

 

	  	
§8.17.

	
Environmental Indemnification.  The Borrowers jointly and severally covenant and agree that they will indemnify and hold the Administrative Agent and each Lender, and each of their respective Affiliates, harmless from and against any and all claims, expense, damage, loss or liability incurred by the Administrative Agent, any Lender, or any such Affiliate (including all reasonable costs of legal representation incurred by the Administrative Agent or any Lender, but excluding, as applicable, for the Administrative Agent or a Lender any claim, expense, damage, loss or liability as a result of the gross negligence or willful misconduct of the Administrative Agent or such Lender or any of their respective Affiliates) relating to (a) any Release or threatened Release of Hazardous Substances on any Real Estate; (b) any violation of any Environmental Laws with respect to conditions at any Real Estate or the operations conducted thereon; (c) the investigation or remediation of off-site locations at which any Borrower, any Guarantor or any of their respective Subsidiaries or their predecessors are alleged to have directly or indirectly disposed of Hazardous Substances; or (d) any action, suit, proceeding or investigation brought or threatened with respect to any Hazardous Substances relating to Real Estate (including, but not limited to, claims with respect to wrongful death, personal injury or damage to property).  It is expressly acknowledged by each Borrower that this covenant of indemnification shall survive the payment of the Loans and shall inure to the benefit of the Administrative Agent and the Lenders and their respective Affiliates, their respective successors, and their respective assigns under the Loan Documents permitted under this Credit Agreement.

 

	  	
§8.18.

	
Response Actions.  Each Borrower covenants and agrees that if any Release or disposal of Hazardous Substances shall occur or shall have occurred on any Real Estate owned by it or any of its Subsidiaries, such Borrower will cause the prompt containment and removal of such Hazardous Substances and remediation of such Real Estate as necessary to comply with all Environmental Laws or to preserve the value of such Real Estate.

 

	  	
§8.19.

	
Environmental Assessments.  If the Required Lenders have reasonable grounds to believe that a Disqualifying Environmental Event has occurred with respect to any Unencumbered Property, after reasonable notice by the Administrative Agent, whether or not a Default or an Event of Default shall have occurred, the Required Lenders may determine that the affected Real Estate no longer qualifies as an Unencumbered Property; provided that prior to making such determination, the Administrative Agent shall give the Borrower Representative reasonable notice and the opportunity to obtain one or more environmental assessments or audits of such Unencumbered Property prepared by a hydrogeologist, an independent engineer or other qualified consultant or expert approved by the Administrative Agent, which approval will not be unreasonably withheld, to evaluate or confirm (i) whether any Release of Hazardous Substances has occurred in the soil or water at such Unencumbered Property and (ii) whether the use and operation of such Unencumbered Property materially complies with all Environmental Laws (including not being subject to a matter that is a Disqualifying Environmental Event).  Such assessment will then be used by the Administrative Agent to determine whether a Disqualifying Environmental Event has in fact occurred with respect to such Unencumbered Property.  All such environmental assessments shall be at the sole cost and expense of the Borrowers.

 

	  	
§8.20.

	
Employee Benefit Plans.

 

	  	  	
(a)

	
In General.  Each Employee Benefit Plan maintained by any Borrower, any Guarantor or any of their respective ERISA Affiliates will be operated in compliance in all material respects with the provisions of ERISA and, to the extent applicable, the Code, including but not limited to the provisions thereunder respecting prohibited transactions.

 

	  	  	
(b)

	
Terminability of Welfare Plans.  With respect to each Employee Benefit Plan maintained by any Borrower, any Guarantor or any of their respective ERISA Affiliates which is an employee welfare benefit plan within the meaning of Section 3(1) or Section 3(2)(B) of ERISA, such Borrower, such Guarantor, or any of their respective ERISA Affiliates, as the case may be, has the right to terminate each such plan at any time (or at any time subsequent to the expiration of any applicable bargaining agreement) without liability other than liability to pay claims incurred prior to the date of termination.

 

	  	  	
(c)

	
Unfunded or Underfunded Liabilities.  The Borrowers will not, and will not permit any Guarantor or Subsidiary to, at any time, have accruing or accrued unfunded or underfunded liabilities with respect to any Employee Benefit Plan, Guaranteed Pension Plan or Multiemployer Plan, or permit any condition to exist under any Multiemployer Plan that would create a withdrawal liability.

 

	  	
§8.21.

	
No Amendments to Certain Documents.  The Borrowers will not, and will not permit any Guarantor or Subsidiary to, at any time cause or permit its certificate of limited partnership, agreement of limited partnership, articles of incorporation, by-laws or other organizational documents, as the case may be, to be modified, amended or supplemented in any respect whatever, without (in each case) the express prior written consent or approval of the Required Lenders in their sole discretion, if such changes would affect Sovran's REIT status or could otherwise reasonably be expected to have a Material Adverse Effect.

 

	  	
§8.22.

	
Exclusive Credit Facility.  The Borrowers will at all times use this Credit Agreement as the Borrower's exclusive revolving credit agreement and will not at any time during the term of this Credit Agreement permit any other revolving credit agreement to be maintained by any Borrower or any Guarantor.

 

	  	
§8.23.

	
Management.  Except by reason of death or incapacity, at least two (2) of the Key Management Individuals (as hereinafter defined) shall remain active in the executive and/or operational management, in their current positions and with their current responsibilities (or more senior positions with requisite greater responsibilities), of Sovran; provided, however, if at least two (2) of the Key Management Individuals are not so active in such positions and with such responsibilities (except by reason of death or incapacity as aforesaid), then within ninety (90) days of the occurrence of such event, Sovran shall propose and appoint such individual(s) of comparable experience, reputation and otherwise reasonably acceptable to the Required Lenders to such position(s) such that, after such appointment, such acceptable replacement individuals, together with the Key Management Individuals remaining so active with Sovran in such positions and with such responsibilities, total at least two (2).  For purposes hereof, "Key Management Individuals" shall mean and include Robert J. Attea, Kenneth F. Myszka, David L. Rogers, Paul T. Powell, Andrew J. Gregoire and Edward F. Killeen.

 

	  	
§8.24.

	
Financial Covenants under Note Purchase Agreement.  In the event that (i) at any time, any of the financial covenants contained in any Note Purchase Agreement (the parties hereto acknowledge and agree that for purposes of this §8.24 the term "financial covenants" shall be deemed to refer to the covenants set forth in Sections 10.8 through 10.20 of each Note Purchase Agreement and any other covenant that calculates or otherwise measures the financial performance of the Borrowers, the Guarantors or their Subsidiaries) (including the defined terms relevant to such financial covenants (including, by way of example and without limitation, the condition set forth in clause (d)(3) of the definition of "Unencumbered Property" in the Note Purchase Agreement dated as of August 5, 2011, so long as such Note Purchase Agreement remains outstanding)) is more restrictive on the Borrowers and their Subsidiaries or more beneficial to the holders of the notes issued under the Note Purchase Agreement than the financial covenants set forth in §10 hereof (and the definitions relating thereto) or (ii) any additional financial covenant not set forth herein is included in any Note Purchase Agreement, then and in such event the Borrowers shall concurrently therewith provide notice to such effect to the Administrative Agent and the Administrative Agent shall promptly give such notice to the Lenders (unless the occurrence thereof is as of the Restatement Date), and the financial covenants and the defined terms relevant to such financial covenants set forth herein shall automatically be deemed amended or modified to the same effect as in the Note Purchase Agreement, or such additional financial covenants and the defined terms relevant to such financial covenants shall automatically be deemed to be incorporated into this Credit Agreement by reference.

	
§9.

	
CERTAIN NEGATIVE COVENANTS OF THE BORROWERS AND THE GUARANTORS.  Each Borrower for itself and on behalf of the Guarantors covenants and agrees that, so long as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or any of the Lenders has any obligation to make any Loans or the Administrative Agent has any obligation to issue, extend or renew any Letters of Credit:

	  	
§9.1.

	
Restrictions on Indebtedness.  The Borrowers and the Guarantors may, and may permit their respective Subsidiaries to, create, incur, assume, guarantee or be or remain liable for, contingently or otherwise, any Indebtedness other than:

 

	  	  	
(a)

	
Indebtedness (excluding the Obligations) which is incurred under a revolving credit facility or line of credit with another financial institution;

 

	  	  	
(b)

	
Indebtedness which would result in a Default or Event of Default under §10 hereof or under any other provision of this Credit Agreement;

 

	  	  	
(c)

	
An aggregate amount in excess of $1,000,000 at any one time in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies for which payment therefor is required to be made in accordance with the provisions of §8.9 and has not been timely made;

 

	  	  	
(d)

	
An aggregate amount in excess of $1,000,000 at any one time in respect of uninsured judgments or awards, with respect to which the applicable periods for taking appeals have expired, or with respect to which final and unappealable judgments or awards have been rendered; and

 

	  	  	
(e)

	
Current unsecured liabilities incurred in the ordinary course of business, which (i) are overdue for more than sixty (60) days, (ii) exceed $1,000,000 in the aggregate at any one time, and (iii) are not being contested in good faith.

 

	  	
          For the avoidance of doubt, the terms and provisions of this §9.1 are in addition to, and not in limitation of, the covenants set forth in §10 of this Credit Agreement.

 

	  	
          Notwithstanding anything contained herein to the contrary, the Borrowers and the Guarantors will not, and will not permit any Subsidiary to, incur any Indebtedness for borrowed money which, together with other Indebtedness for borrowed money incurred by any Borrower, any Guarantor, and any Subsidiary since the date of the most recent compliance certificate delivered to the Administrative Agent in accordance with this Credit Agreement, exceeds $5,000,000 in the aggregate unless the Borrowers shall have delivered a compliance certificate in the form of Exhibit D-4 hereto to the Administrative Agent evidencing covenant compliance at the time of delivery of the certificate and on a pro-forma basis after giving effect to such proposed Indebtedness.  The Administrative Agent will use good faith efforts to cause any compliance certificate delivered under this Credit Agreement to be delivered to each Lender in accordance with §15.12 and in any event on the same day or the Business Day following the day such compliance certificate is received by the Administrative Agent.

 

	  	
          To the extent not already a party to the Intercreditor Agreement, the Borrowers will cause each holder of Indebtedness for borrowed money of the Borrowers which is a beneficiary of a Guaranty by a Subsidiary Guarantor, to sign and deliver to the Administrative Agent a joinder to the Intercreditor Agreement.

	  	
§9.2.

	
Restrictions on Liens, Etc.  The Borrowers will not, and will not permit any Guarantor or any Subsidiary to:  (a) create or incur or suffer to be created or incurred or to exist any lien, encumbrance, mortgage, pledge, charge, restriction or other security interest of any kind upon any of its property or assets of any character whether now owned or hereafter acquired, or upon the income or profits therefrom; (b) transfer any of such property or assets or the income or profits therefrom for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to payment of its general creditors; (c) acquire, or agree or have an option to acquire, any property or assets upon conditional sale or other title retention or purchase money security agreement, device or arrangement; (d) suffer to exist for a period of more than thirty (30) days after the same shall have been incurred any Indebtedness or claim or demand against it that if unpaid might by law or upon bankruptcy or insolvency, or otherwise, be given any priority whatsoever over its general creditors; or (e) sell, assign, pledge or otherwise transfer any accounts, contract rights, general intangibles, chattel paper or instruments, with or without recourse (the foregoing items (a) through (e) being sometimes referred to in this §9.2 collectively as "Liens"), provided that the Borrowers, the Guarantors and any Subsidiary may create or incur or suffer to be created or incurred or to exist:

 

	  	  	  	
(i)

	
Liens securing taxes, assessments, governmental charges or levies or claims for labor, material and supplies, the Indebtedness with respect to which is not prohibited by §9.1(c);

 

	  	  	  	
(ii)

	
deposits or pledges made in connection with, or to secure payment of, worker's compensation, unemployment insurance, old age pensions or other social security obligations; and deposits with utility companies and other similar deposits made in the ordinary course of business;

 

	  	  	  	
(iii)

	
Liens (other than affecting the Unencumbered Properties) in respect of judgments or awards, the Indebtedness with respect to which is not prohibited by §9.1(d);

 

	  	  	  	
(iv)

	
encumbrances on properties consisting of easements, rights of way, covenants, restrictions on the use of real property and defects and irregularities in the title thereto; landlord's or lessor's Liens under Leases to which any Borrower, any Guarantor, or any Subsidiary is a party or bound; purchase options granted at a price not less than the market value of such property; and other minor Liens or encumbrances on properties, none of which interferes materially and adversely with the use of the property affected in the ordinary conduct of the business of the owner thereof, and which matters (x) do not individually or in the aggregate have a Material Adverse Effect or (y) do not make title to such property unmarketable by the conveyancing standards in effect where such property is located;

 

	  	  	  	
(v)

	
any Leases (excluding Synthetic Leases) entered into good faith with Persons that are not Affiliates; provided that Leases with Affiliates on market terms and with monthly market rent payments required to be paid are Permitted Liens;

 

	  	  	  	
(vi)

	
Liens and other encumbrances or rights of others which exist on the Restatement Date, are described in Schedule 9.2(vi) hereto and do not otherwise constitute a breach of this Credit Agreement; provided that nothing in this clause (vi) shall be deemed or construed to permit an Unencumbered Property to be subject to a Lien to secure Indebtedness;

 

	  	  	  	
(vii)

	
as to Real Estate which is acquired after the Restatement Date, Liens and other encumbrances or rights of others which exist on the date of acquisition and which do not otherwise constitute a breach of this Credit Agreement; provided that nothing in this clause (vii) shall be deemed or construed to permit an Unencumbered Property to be subject to a Lien to secure Indebtedness;

 

	  	  	  	
(viii)

	
Liens affecting the Unencumbered Properties in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal, so long as execution is not levied thereunder or in respect of which, at the time, a good faith appeal or proceeding for review is being prosecuted, and in respect of which a stay of execution shall have been obtained pending such appeal or review; provided that the Borrowers shall have obtained a bond or insurance with respect thereto to the Administrative Agent's reasonable satisfaction, and, provided further, such Lien does not constitute a Disqualifying Environmental Event, a Disqualifying Building Event or a Disqualifying Legal Event;

 

	  	  	  	
(ix)

	
Liens securing Indebtedness for the purchase price of capital assets (other than Real Estate but including Indebtedness in respect of Capitalized Leases for equipment and other equipment leases) to the extent not otherwise prohibited by §9.1; and

 

	  	  	  	
(x)

	
other Liens (other than affecting the Unencumbered Properties) in connection with any Indebtedness permitted under §9.1 which do not otherwise result in a Default or Event of Default under this Credit Agreement; provided that notwithstanding the foregoing, no Borrower, Guarantor or any Subsidiary shall in any event secure any Indebtedness outstanding under any Note Purchase Agreement within the provisions of this §9.2 unless concurrently therewith such Borrower, Guarantor or Subsidiary shall equally and ratably secure the Obligations upon terms and conditions reasonably satisfactory to the Administrative Agent.

 

	  	
          Notwithstanding the foregoing provisions of this §9.2, the failure of any Unencumbered Property to comply with the covenants set forth in this §9.2 shall result in such Unencumbered Property's disqualification as an Unencumbered Property under this Credit Agreement, but such disqualification shall not by itself constitute a Default or Event of Default, unless such disqualification causes a Default or an Event of Default under another provision of this Credit Agreement.

	  	
§9.3.

	
Restrictions on Investments.  The Borrowers will not, and will not permit any Guarantor or any Subsidiary to, permit to exist or to remain outstanding any Investment except Investments in:

 

	  	  	
(a)

	
marketable direct or guaranteed obligations of the United States of America that mature within one (1) year from the date of purchase;

 

	  	  	
(b)

	
demand deposits, certificates of deposit, bankers acceptances and time deposits of United States banks having total assets in excess of $1,000,000,000;

	  	  	
(c)

	
securities commonly known as "commercial paper" issued by a corporation organized and existing under the laws of the United States of America or any state thereof that at the time of purchase have been rated and the ratings for which are not less than "P 1" if rated by Moody's, not less than "A -1" if rated by S&P and not less than "F1" if rated by Fitch;

 

	  	  	
(d)

	
Investments existing on the Restatement Date and listed on Schedule 9.3(d) hereto;

 

	  	  	
(e)

	
So long as no Default or Event of Default has occurred and is continuing or would occur after giving effect thereto, acquisitions of Real Estate consisting of self storage facilities, warehouses and mini-warehouses and the equity of Persons whose primary operations consist of the ownership, development, operation and management of self storage facilities, warehouses and mini-warehouses; provided, however that (i) the Borrowers shall not, and shall not permit any Guarantor or any of its Subsidiaries to, acquire any such Real Estate without the prior written consent of the Administrative Agent if the environmental investigation for such Real Estate determines that the potential environmental remediation costs and other environmental liabilities associated with such Real Estate exceed $200,000; and (ii) the Borrowers shall not permit any of their Subsidiaries which is not a Borrower or a Guarantor, or which does not become a Borrower or a Guarantor, to acquire any Unencumbered Property, and in all cases such Guarantor shall be a wholly-owned Subsidiary of SALP or Sovran;

 

	  	  	
(f)

	
any Investments now or hereafter made in any Guarantor and, so long as no Default or Event of Default has occurred and is continuing hereunder, Investments now or hereafter made in any other Subsidiary;

 

	  	  	
(g)

	
Investments in respect of (i) equipment, inventory and other tangible personal property acquired in the ordinary course of business, (ii) current trade and customer accounts receivable for services rendered in the ordinary course of business and payable in accordance with customary trade terms, (iii) advances to employees for travel expenses, drawing accounts and similar expenditures, and (iv) prepaid expenses made in the ordinary course of business;

 

	  	  	
(h)

	
any other Investments made in the ordinary course of business and consistent with past business practices in an aggregate amount not to exceed $10,000,000 outstanding at any time;

 

	  	  	
(i)

	
a Hedge Agreement or other interest rate hedges in connection with Indebtedness;

 

	  	  	
(j)

	
shares of so-called "money market funds" registered with the SEC under the Investment Company Act of 1940 which maintain a level per-share value, invest principally in marketable direct or guaranteed obligations of the United States of America and agencies and instrumentalities thereof, and have total assets in excess of $50,000,000;

 

	  	  	
(k)

	
Investments consisting of Distributions permitted under §9.7(a) hereof;

 

	  	  	
(l)

	
Investments consisting of the Sovran Treasury Stock not to exceed 25% (by value) of the consolidated assets of Sovran, for purposes of Regulations U and X of the Board of Governors of the Federal Reserve System (as referred to in §7.17 hereof).  For the avoidance of doubt, Sovran Treasury Stock shall not be deemed to constitute an asset of the Borrowers for any other purpose hereunder.

	  	
§9.4.

	
Merger, Consolidation and Disposition of Assets.  The Borrowers will not, and will not permit any Guarantor or Subsidiary to:

 

	  	  	
(a)

	
Become a party to any merger, consolidation or reorganization without the prior written consent of the Lenders, except that so long as no Default or Event of Default has occurred and is continuing, or would occur after giving effect thereto, the merger, consolidation or reorganization of one or more Persons with and into such Borrower, such Guarantor, or such Subsidiary, shall be permitted if such action is not hostile, any Borrower, any Guarantor, or any Subsidiary, as the case may be, is the surviving entity and such merger, consolidation or reorganization does not cause a breach of §8.14; provided that (i) for any such merger, consolidation or reorganization (other than (w) the merger or consolidation of one or more Subsidiaries of SALP with and into SALP, (x) the merger or consolidation of two or more Subsidiaries of SALP, (y) the merger or consolidation of one or more Subsidiaries of Sovran with and into Sovran, or (z) the merger or consolidation of two or more Subsidiaries of Sovran), the Borrowers shall provide to the Administrative Agent a statement in the form of Exhibit D-5 hereto signed by the chief financial officer or treasurer of the Borrower Representative and setting forth in reasonable detail computations evidencing compliance with the covenants contained in §10 hereof and certifying that no Default or Event of Default has occurred and is continuing, or would occur and be continuing after giving effect to such merger, consolidation or reorganization and all liabilities, fixed or contingent, pursuant thereto and (ii) for any such merger, consolidation or reorganization (x) involving a Borrower, a Borrower shall be the survivor and (y) involving a Guarantor, a Guarantor shall be the survivor;

 

	  	  	
(b)

	
Sell, transfer or otherwise dispose of (collectively and individually, "Sell" or a "Sale") or grant a Lien to secure Indebtedness (an "Indebtedness Lien") on any of its now owned or hereafter acquired assets without obtaining the prior written consent of the Required Lenders except for:

 

	  	  	  	
(i)

	
the Sale of or granting of an Indebtedness Lien on any Unencumbered Property so long as no Default or Event of Default has then occurred and is continuing, or would occur and be continuing after giving effect to such Sale or Indebtedness Lien; provided, that prior to any Sale of any Unencumbered Property or the granting of an Indebtedness Lien on any Unencumbered Property under this clause (i), the Borrowers shall provide to the Administrative Agent a certificate in the form of Exhibit D-6 hereto signed by the chief financial officer or treasurer of the Borrower Representative and setting forth in reasonable detail computations evidencing compliance with the covenants contained in §10 hereof and certifying that no Default or Event of Default has occurred and is continuing, or would occur and be continuing after giving effect to such proposed Sale or Indebtedness Lien and all liabilities, fixed or contingent, pursuant thereto; and

 

	  	  	  	
(ii)

	
the Sale of or the granting of an Indebtedness Lien on any of its now owned or hereafter acquired assets (other than any Unencumbered Property) so long as no Event of Default has then occurred and is continuing and no Default or Event of Default would occur and be continuing after giving effect to such Sale or Indebtedness Lien and all other Sales (to be) made and Indebtedness Liens (to be) granted under this clause (ii); provided, that (x) if such Sale or Indebtedness Lien is made or granted under this clause (ii) while a Default is continuing, such Sale or Indebtedness Lien (together with other Sales and Indebtedness Liens under this clause (ii)) cures (or would cure) such Default before it becomes an Event of Default, (y) if multiple Sales or grantings of Indebtedness Liens are undertaken pursuant to the foregoing subclause (x) to cure a Default, the Borrowers shall apply the net proceeds of each such Sale or Indebtedness Lien remaining after application to such cure to the repayment of the Loans until such Default has been fully cured, and (z) prior to the Sale of any asset or the granting of an Indebtedness Lien on any asset under this clause (ii), the Borrowers shall provide to the Administrative Agent a statement in the form of Exhibit D-6 hereto signed by the chief financial officer or treasurer of the Borrower Representative and setting forth in reasonable detail computations evidencing compliance with the covenants contained in §10 hereof and certifying that no Default or Event of Default would occur and be continuing after giving effect to all such proposed Sales or Indebtedness Liens and all liabilities, fixed or contingent, pursuant thereto.

 

	  	
          For the avoidance of doubt, (i) the terms and provisions of this §9.4 are in addition to, and not in limitation of, the covenants set forth in §9.2 of this Credit Agreement and (ii) no Borrower, Guarantor or any Subsidiary shall in any event secure any Indebtedness outstanding under any Note Purchase Agreement within the provisions of this §9.4 unless concurrently therewith such Borrower, Guarantor or Subsidiary shall equally and ratably secure the Obligations upon terms and conditions reasonably satisfactory to the Administrative Agent.

 

	  	
§9.5.

	
Sale and Leaseback.  The Borrowers will not, and will not permit any Guarantor or any of their respective Subsidiaries to, enter into any arrangement, directly or indirectly, whereby any Borrower, any Guarantor or any of their respective Subsidiaries shall sell or transfer any property owned by it in order then or thereafter to lease such property.

 

	  	
§9.6.

	
Compliance with Environmental Laws.  The Borrowers will not, and will not permit any Guarantor or Subsidiary to, do any of the following:  (a) use any of the Real Estate or any portion thereof as a facility for the handling, processing, storage or disposal of Hazardous Substances except for quantities of Hazardous Substances used in the ordinary course of business and in compliance with all applicable Environmental Laws, (b) cause or permit to be located on any of the Real Estate any underground tank or other underground storage receptacle for Hazardous Substances except in full compliance with Environmental Laws, (c) generate any Hazardous Substances on any of the Real Estate except in full compliance with Environmental Laws, or (d) conduct any activity at any Real Estate or use any Real Estate in any manner so as to cause a Release or a violation of any Environmental Law; provided that a breach of this covenant shall result in the exclusion of the affected Real Estate from the calculation of the covenants set forth in §10, but shall only constitute an Event of Default under §13.1(c) hereof if such breach has a material adverse effect on the Borrowers and their Subsidiaries, taken as a whole, or materially impairs the ability of the Borrowers to fulfill their obligations to the Lenders under this Credit Agreement.

 

	  	
§9.7.

	
Distributions.

 

	  	  	
(a)

	
The Borrowers will not in any period of four (4) consecutive completed fiscal quarters make (i) any Distributions in such period in excess of 95% of Funds from Operations for such period, or (ii) any Distributions during any period when any Default or Event of Default has occurred and is continuing; provided, however, that the Borrowers may at all times make Distributions to the extent (after taking into account all available funds of Sovran from all other sources) required in order to enable Sovran to continue to qualify as a REIT; and provided further that subject to the requirements of Section 9.3(l), the Borrowers will not at any time during the term of this Credit Agreement make Distributions in connection with the purchase, redemption or retirement of capital stock of such Borrower that exceed (x) $10,000,000 in the aggregate in any fiscal quarter, (y) $20,000,000 in the aggregate in any fiscal year or (z) the sum of $50,000,000 plus an amount equal to 12 1⁄2% of the Net Cash Proceeds received by Sovran resulting from the sale of any equity securities of Sovran in the aggregate during the term of this Credit Agreement.  Such repurchased capital stock of such Borrower shall be then held by such Borrower as treasury stock, reissued or cancelled.

	  	  	
(b)

	
Sovran will not, during any period when any Event of Default has occurred and is continuing, make any Distributions in excess of the Distributions required to be made by Sovran in order to maintain its status as a REIT.

 

	  	
§9.8.

	
Employee Benefit Plans.  None of any Borrower, any Guarantor or any ERISA Affiliate will:

 

	  	  	
(a)

	
engage in any "prohibited transaction" within the meaning of §406 of ERISA or §4975 of the Code which could result in a material liability for any Borrower, any Guarantor or any of their respective Subsidiaries; or

 

	  	  	
(b)

	
[reserved]

 

	  	  	
(c)

	
fail to contribute to any Guaranteed Pension Plan to an extent which, or terminate any Guaranteed Pension Plan in a manner which, could result in the imposition of a lien or encumbrance on the assets of any Borrower, any Guarantor or any of their respective Subsidiaries pursuant to Section 302(f) or Section 4068 of ERISA; or

 

	  	  	
(d)

	
amend any Guaranteed Pension Plan in circumstances requiring the posting of security pursuant to Section 307 of ERISA or Section 401(a)(29) of the Code; or

 

	  	  	
(e)

	
permit or take any action which would result in the aggregate benefit liabilities (with the meaning of Section 4001 of ERISA) of all Guaranteed Pension Plans exceeding the value of the aggregate assets of such Plans, disregarding for this purpose the benefit liabilities and assets of any such Plan with assets in excess of benefit liabilities.

 

	  	
§9.9.

	
Fiscal Year; Nature of Business.  The Borrowers will not, and will not permit the Guarantors or any of their respective Subsidiaries to, change the date of the end of its fiscal year from that set forth in §7.5.  The Borrowers will not, and will not permit any Guarantor or any Subsidiary to, engage in any business, if, as a result, when taken as a whole, the general nature of the business of the Borrowers, the Guarantors and their respective Subsidiaries would be substantially changed from the general nature of the business of the Borrowers, the Guarantors and their respective Subsidiaries on the date of this Credit Agreement.

 

	  	
§9.10.

	
Negative Pledge.  Except for Section 10.2 of the Note Purchase Agreement as in effect on August 5, 2011, neither any Borrower nor any Guarantor will, and will not permit any Subsidiary to, enter into any agreement containing any provision prohibiting the creation or assumption of any Lien upon its properties (other than prohibitions on liens for particular assets (other than an Unencumbered Property) set forth in a security instrument in connection with Indebtedness for such assets and the granting or effect of such liens does not otherwise constitute a Default or Event of Default), revenues or assets, whether now owned or hereafter acquired, or restricting the ability of the Borrowers or the Guarantors to amend or modify this Credit Agreement or any other Loan Document.

 

	  	
§9.11.

	
Transactions with Affiliates.  The Borrowers will not, and will not permit any Guarantor or any Subsidiary to, enter into, directly or indirectly, any transaction or group of related transactions (including, without limitation, the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Borrower or a Guarantor), except in the ordinary course and pursuant to the reasonable requirements of such Borrower's, Guarantor's or such Subsidiary's business and upon fair and reasonable terms no less favorable to such Borrower, Guarantor or such Subsidiary than would be obtainable in a comparable arm's-length transaction with a Person not an Affiliate.

 

	  	
§9.12.

	
Terrorism Sanctions Regulations.  The Borrowers will not, and will not permit any Controlled Entity to (i) become a Blocked Person or (ii) have any investments in, or knowingly (as such term is defined in Section 101(6) of CISADA) engage in any dealings or transactions with, any Blocked Person.

	
§10.

	
FINANCIAL COVENANTS OF THE BORROWERS.  Each of the Borrowers covenants and agrees that, so long as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or the Lenders have any obligation to make any Loans or the Administrative Agent has any obligation to issue, extend or renew any Letters of Credit:

	  	
§10.1.

	
Leverage Ratio.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit the Leverage Ratio to exceed 60%.

 

	  	
§10.2.

	
Priority Debt.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit Priority Debt to exceed 35% of Gross Asset Value.

 

	  	
§10.3.

	
Tangible Net Worth.  As at the end of any fiscal quarter or any other date of measurement, the Borrowers shall not permit Consolidated Tangible Net Worth to be less than the sum of (a) $740,000,000, plus (b) 80% of the sum of (i) the Net Cash Proceeds received by Sovran in connection with any offering of stock in Sovran and (ii) the aggregate value of operating units issued by SALP in connection with asset or stock acquisitions (valued at the time of issuance by reference to the terms of the agreement pursuant to which such units are issued), in each case after the Restatement Date and on or prior to the date such determination of Consolidated Tangible Net Worth is made.

 

	  	
§10.4.

	
Debt Service Coverages.

 

	  	  	
(a)

	
Debt Service Coverage.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit Consolidated Adjusted EBITDA for the two (2) most recent, complete, consecutive fiscal quarters to be less than two (2) times the difference between Consolidated Fixed Charges and Preferred Dividends for such period.

 

	  	  	
(b)

	
Fixed Charge Coverage.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit Consolidated Adjusted EBITDA for the two (2) most recent, complete, consecutive fiscal quarters to be less than (i) one and one half (1.50) times (ii) Consolidated Fixed Charges for the two (2) most recent, complete, consecutive fiscal quarters.

 

	  	
§10.5.

	
Unimproved Land.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit the book value of Unimproved Land to exceed 10% of Gross Asset Value.

 

	  	
§10.6.

	
Construction-in-Process.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit the aggregate Budgeted Project Costs of all Construction-in-Process to exceed 10% of Gross Asset Value.

 

	  	
§10.7.

	
Promissory Notes.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit the book value of Indebtedness of third parties to the Borrowers or their Subsidiaries or the pro-rata share allocable to Partially-Owned Entities for borrowed money or other cash or cash equivalents, whether secured or unsecured, to exceed 10% of Gross Asset Value.

 

	  	
§10.8.

	
Unimproved Land, Construction-in-Process and Notes.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit (a) the sum of (i) the book value of Unimproved Land, plus (ii) the aggregate Budgeted Project Costs of all Construction-in-Process, plus (iii) the book value of Indebtedness of third parties to the Borrowers or their Subsidiaries or the pro-rata share allocable to Partially-Owned Entities for borrowed money or other cash or cash equivalents, whether secured or unsecured, to exceed (b) 20% of Gross Asset Value.

 

	  	
§10.9.

	
Joint Venture Ownership Interest.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit Joint Venture Ownership Interest Value to exceed 20% of Gross Asset Value.

 

	  	
§10.10.

	
Unhedged Variable Rate Debt.  As at the end of any two consecutive fiscal quarters and any other date of measurement, the Borrowers shall not permit the value of Unhedged Variable Rate Debt to exceed 30% of Gross Asset Value.

 

	  	
§10.11.

	
Unsecured Indebtedness.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit Consolidated Unsecured Indebtedness to exceed 60% of aggregate Capitalized Unencumbered Property Value for all Unencumbered Properties.  For purposes of this calculation, to the extent that the aggregate Capitalized Unencumbered Property Value attributable to Unencumbered Properties subject to Ground Leases exceeds 10% of the Capitalized Unencumbered Property Value for all Unencumbered Properties, such excess shall be excluded.

 

	  	
§10.12.

	
Unencumbered Property Debt Service Coverage.  As at the end of any fiscal quarter or other date of measurement, the Borrowers shall not permit the aggregate Adjusted Unencumbered Property NOI for all Unencumbered Properties for the two (2) most recent, complete, consecutive fiscal quarters to be less than two (2) times Consolidated Assumed Amortizing Unsecured Debt Service Charges. For purposes of this calculation, to the extent that the aggregate Adjusted Unencumbered Property NOI attributable to Unencumbered Properties subject to Ground Leases exceeds 10% of the Adjusted Unencumbered Property NOI for all Unencumbered Properties, such excess shall be excluded.

 

	  	
§10.13.

	
Covenant Calculations.

 

	  	  	
(a)

	
For purposes of the calculations to be made pursuant to §§10.1-10.12 (and the defined terms relevant thereto, including, without limitation, those relating to "fixed charges" or "debt service"), references to Indebtedness or liabilities of the Borrowers shall mean Indebtedness or liabilities (including, without limitation, Consolidated Total Liabilities) of the Borrowers, plus (but without double-counting):

 

	  	  	  	
(i)

	
all Indebtedness or liabilities of the Operating Subsidiaries, the Guarantors and any Subsidiary (excluding any such Indebtedness or liabilities owed to the Borrowers or any Guarantor),

 

	  	  	  	
(ii)

	
all Indebtedness or liabilities of each Partially-Owned Entity (including Capitalized Leases), but only to the extent, if any, that said Indebtedness or liability (or a portion thereof) is Recourse to any of the Borrowers, the Guarantors or their respective Subsidiaries or any of their respective assets (other than their respective interests in such Partially-Owned Entity), and

 

	  	  	  	
(iii)

	
Indebtedness or liabilities of each Partially-Owned Entity to the extent of the pro-rata share of such Indebtedness or liability allocable to any of the Borrowers, the Guarantors or their respective Subsidiaries, if the Indebtedness or liability of such Partially-Owned Entity (or a portion thereof) is Without Recourse to such Person or its assets (other than its interest in such Partially-Owned Entity).

	  	  	
(b)

	
For purposes of §10 hereof, Consolidated Adjusted EBITDA and Adjusted Unencumbered Property NOI (and all defined terms and calculations using such terms) shall be adjusted to (i) deduct the actual results of any Real Estate disposed of by a Borrower, a Guarantor or any of their respective Subsidiaries during the relevant fiscal period, and (ii) include the pro forma results of any Real Estate acquired by a Borrower, a Guarantor or any of their respective Subsidiaries during the relevant fiscal period, with such pro forma results being calculated by (x) using the Borrowers' pro forma projections for such acquired property, subject to the Administrative Agent's reasonable approval, if such property has been owned by a Borrower, a Guarantor or any of their respective Subsidiaries for less than one complete fiscal quarter or (y) using the actual results for such acquired property and adjusting such results for the appropriate period of time required by the applicable financial covenant, if such property has been owned by a Borrower, a Guarantor or any of their respective Subsidiaries for at least one complete fiscal quarter.

 

	  	  	
(c)

	
For purposes of §§10.1-10.12 hereof, Consolidated Adjusted EBITDA (and the defined terms and calculations using such term) shall be adjusted, to the extent applicable, to include the pro rata share of results attributable to the Borrowers from unconsolidated Subsidiaries of the Borrowers and their respective Subsidiaries and from unconsolidated Partially-Owned Entities.

 

	  	  	
(d)

	
For purposes of the calculations to be made pursuant to §§10.1-10.12 (and the defined terms relevant thereto, including, without limitation, those relating to "fixed charges" or "debt service"), any election to measure an item of Indebtedness using fair value (as permitted by Statement of Financial Accounting Standards No. 159 or any similar accounting standard) shall be disregarded and such determination shall be made instead using the par value of such Indebtedness.

	
§11.

	
CONDITIONS TO THE RESTATEMENT DATE.  The obligations of the Lenders to make the Term Loan and the initial Revolving Credit Loans, and the Administrative Agent to issue any Letters of Credit, shall be subject to the satisfaction of the following conditions precedent:

	  	
§11.1.

	
Loan Documents.  Each of the Loan Documents shall have been duly executed and delivered by the respective parties thereto and shall be in full force and effect.

	  	
§11.2.

	
Certified Copies of Organization Documents.  The Administrative Agent shall have received from each Borrower, Holdings and each Subsidiary Guarantor a copy, certified as of the Restatement Date by a duly authorized officer of such Person (or its general partner, in the case of SALP), to be true and complete, of each of its certificate of limited partnership, agreement of limited partnership, incorporation documents, by-laws, and/or other organizational documents as in effect on the Restatement Date, along with any other organization documents of any Borrower (and its general partner, in the case of SALP), Holdings or a Subsidiary Guarantor, as the case may be, and each as in effect on the date of such certification.

 

	  	
§11.3.

	
Resolutions.  All action on the part of the Borrowers, Holdings and the Subsidiary Guarantors necessary for the valid execution, delivery and performance by the Borrowers and Holdings of this Credit Agreement and the other Loan Documents to which any of them is or is to become a party shall have been duly and effectively taken, and evidence thereof satisfactory to the Lenders shall have been provided to the Administrative Agent.

 

	  	
§11.4.

	
Incumbency Certificate; Authorized Signers.  The Administrative Agent shall have received from each of the Borrowers, Holdings and the Subsidiary Guarantors an incumbency certificate, dated as of the Restatement Date, signed by a duly authorized officer such Person and giving the name of each individual who shall be authorized:  (a) to sign, in the name and on behalf of such Person, each of the Loan Documents to which such Person is or is to become a party; (b) in the case of the Borrower Representative, to make Completed Revolving Credit Loan Requests and Conversion Requests on behalf of the Borrowers; and (c) in the case of the Borrower Representative, to give notices and to take other action on behalf of the Borrowers and the Guarantors under the Loan Documents.

 

	  	
§11.5.

	
Note Purchase Agreement.  The Administrative Agent shall have received a certificate signed by a duly authorized officer of the Borrower Representative certifying that (i) none of the Note Purchase Agreements previously delivered to the Administrative Agent under the Existing Credit Agreement has been amended, restated, supplemented, or otherwise modified since August 5, 2011, and that each is in full force and effect as of the Restatement Date, or if any of the foregoing has been amended, restated supplemented, or otherwise modified, attaching a copy of the foregoing thereto certified as true, correct, and complete and (ii) neither the Borrower nor any Guarantor has made any new notes offerings since August 5, 2011, or if new notes have been issued, a copy of each fully executed note purchase agreement certified as true, correct, and complete.

 

	  	
§11.6.

	
Certificates of Insurance.  The Administrative Agent shall have received (a) current certificates of insurance as to all of the insurance maintained by each Borrower and their respective Subsidiaries on the Real Estate (including flood insurance if necessary) from the insurer or an independent insurance broker, identifying insurers, types of insurance, insurance limits, and policy terms; and (b) such further information and certificates from the Borrowers, their insurers and insurance brokers as the Administrative Agent may reasonably request.

 

	  	
§11.7.

	
Intentionally Omitted.

 

	  	
§11.8.

	
Opinion of Counsel Concerning Organization and Loan Documents.  Each of the Lenders and the Agents shall have received favorable opinions addressed to the Lenders and the Agents in form and substance satisfactory to the Lenders and the Agents from Phillips Lytle LLP, as counsel to the Borrowers and their respective Subsidiaries with respect to New York law and certain matters of Delaware corporate law and Maryland corporate law.

 

	  	
§11.9.

	
Tax and Securities Law Compliance.  Each of the Lenders and the Agents shall also have received from Phillips Lytle LLP, as counsel to the Borrowers, a favorable opinion addressed to the Lenders and the Agents, in form and substance satisfactory to each of the Lenders and the Agents, with respect to the qualification of Sovran as a REIT and certain other tax and securities laws matters.

 

	  	
§11.10.

	
Guaranties.  Each of the Guaranties to be executed and delivered on the Restatement Date shall have been duly executed and delivered by the Guarantor thereunder.

 

	  	
§11.11.

	
Certifications from Government Officials.  The Administrative Agent shall have received certifications from government officials evidencing the legal existence, good standing and foreign qualification of each Borrower and each Guarantor, along with a certified copy of the certificate of limited partnership, certificate of incorporation or other comparable organizational document of each Borrower and each Guarantor, all as of the most recent practicable date.

 

	  	
§11.12.

	
Proceedings and Documents.  All proceedings in connection with the transactions contemplated by this Credit Agreement, the other Loan Documents and all other documents incident thereto shall be satisfactory in form and substance to each of the Lenders and to the Administrative Agent's counsel, and the Administrative Agent, each of the Lenders and such counsel shall have received all information and such counterpart originals or certified or other copies of such documents as the Administrative Agent may reasonably request.

 

	  	
§11.13.

	
Fees.  The Borrowers shall have paid to the Administrative Agent, for the accounts of the Lenders or for its own account, as applicable, all of the fees and expenses that are due and payable as of the Restatement Date in accordance with this Credit Agreement and the Engagement Letter.

 

	  	
§11.14.

	
Compliance Certificate.  The Borrowers shall have delivered a compliance certificate in the form of Exhibit D-7 hereto evidencing compliance with the covenants set forth in §10 hereof after giving pro forma effect to the transactions contemplated by this Credit Agreement.

 

	  	
§11.15.

	
Existing Indebtedness.  The existing of record indebtedness of the Borrowers under the Existing Credit Agreement shall have been reallocated with the proceeds of the Initial Term Loan and the initial Revolving Credit Loan.

 

	  	
§11.16.

	
Subsequent Guarantors.  As a condition to the effectiveness of any subsequent Guaranty, each subsequent Guarantor shall deliver such documents, agreements, instruments and opinions as the Administrative Agent shall require as to such Guarantor and the Unencumbered Property owned by such Guarantor that are analogous to the deliveries made by the Guarantors as of the Restatement Date pursuant to §11.2 through §11.8, §11.10 and §11.11.

 

	  	
§11.17.

	
No Material Adverse Effect.  Since December 31, 2012, there shall not have occurred or become known to the Administrative Agent or any of the Lenders any event, condition, change, circumstance, effect or state of facts that, individually or in the aggregate has had or could reasonably be expected to have a Material Adverse Effect.

 

	  	
§11.18.

	
Other Information.  The Administrative Agent shall have received such other documents, agreements and instruments as the Administrative Agent on behalf of the Lenders may reasonably request.

	
§12.

	
CONDITIONS TO ALL BORROWINGS.  The obligations of the Lenders to make any Loan, including the Revolving Credit Loan and the Term Loans, and of the Administrative Agent to issue, extend or renew any Letter of Credit, in each case whether on or after the Restatement Date, shall also be subject to the satisfaction of the following conditions precedent:

	  	
§12.1.

	
Representations True; No Event of Default; Compliance Certificate.  Each of the representations and warranties of the Borrowers and the Guarantors contained in this Credit Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with this Credit Agreement shall be true as of the date as of which they were made and shall also be true at and as of the time of the making of each Loan or the issuance, extension or renewal of such Letter of Credit, with the same effect as if made at and as of that time (except to the extent that such representations and warranties relate expressly to an earlier date); and no Default or Event of Default under this Credit Agreement shall have occurred and be continuing on the date of any Completed Revolving Credit Loan Request, Completed Delayed Draw Term Loan Request or on the Drawdown Date of any Loan or on the date of the issuance, extension or renewal of such Letter of Credit.  The Administrative Agent shall have received a certificate of the Borrowers signed by an authorized officer of the Borrower Representative as provided in §2.4(d)(iii) or §3.3(d)(iii), as the case may be.

 

	  	
§12.2.

	
No Legal Impediment.  No change shall have occurred in any law or regulations thereunder or interpretations thereof that in the reasonable opinion of the Administrative Agent or any Lender would make it illegal for any Lender to make such Loan or to participate in the issuance, extension or renewal of such Letter of Credit.

 

	  	
§12.3.

	
Governmental Regulation.  Each Lender shall have received such statements in substance and form reasonably satisfactory to such Lender as such Lender shall require for the purpose of compliance with any applicable regulations of the Comptroller of the Currency or the Board of Governors of the Federal Reserve System.

	
§13.

	
EVENTS OF DEFAULT; ACCELERATION; ETC.

	  	
§13.1.

	
Events of Default and Acceleration.  If any of the following events ("Events of Default") shall occur:

 

	  	  	
(a)

	
the Borrowers shall fail to pay any principal of the Loans or any Reimbursement Obligation when the same shall become due and payable, whether at the stated date of maturity or any accelerated date of maturity or at any other date fixed for payment (including, without limitation, amounts due under §2.7 and §3.8);

 

	  	  	
(b)

	
the Borrowers shall fail to pay any interest on the Loans, or any other sums due hereunder or under any of the other Loan Documents (including, without limitation, amounts due under §8.17) when the same shall become due and payable, whether at the stated date of maturity or any accelerated date of maturity or at any other date fixed for payment, and such failure continues for five (5) days;

 

	  	  	
(c)

	
any Borrower or any Guarantor or any of their respective Subsidiaries shall fail to comply with any of their respective covenants contained in §§8.1, 8.6, 8.7, 8.8, 8.9, 8.12, 8.21, 8.22, 8.23, 9 or 10;

 

	  	  	
(d)

	
any Borrower or any Guarantor or any of their respective Subsidiaries shall fail to perform any other term, covenant or agreement contained herein or in any other Loan Document (other than those specified elsewhere in this §13) and such failure continues for thirty (30) days;

 

	  	  	
(e)

	
any representation or warranty of any Borrower or any Guarantor or any of their respective Subsidiaries in this Credit Agreement or any of the other Loan Documents or in any other document or instrument delivered pursuant to or in connection with this Credit Agreement shall prove to have been false in any material respect upon the date when made or deemed to have been made or repeated;

 

	  	  	
(f)

	
any Borrower or any Guarantor or any of their respective Subsidiaries shall (i) fail to pay at maturity, or within any applicable period of grace, any obligation for borrowed money or credit received or in respect of any Capitalized Leases (x) in respect of any Recourse obligations or credit or (y) in respect of any Without Recourse obligations or credit which total in an aggregate amount in excess of $10,000,000; or (ii) fail to observe or perform any material term, covenant or agreement contained in any agreement by which it is bound, evidencing or securing borrowed money or credit received or in respect of any Capitalized Leases (x) in respect of any Recourse obligations or credit or (y) in respect of any Without Recourse obligations or credit in an aggregate amount in excess of $10,000,000, in either case for such period of time (after the giving of appropriate notice if required) as would permit the holder or holders thereof or of any obligations issued thereunder to accelerate the maturity thereof, or an "Event of Default" shall occur and be continuing under the Note Purchase Agreement that permits acceleration; or (iii) default in any payment obligation under a Hedge Agreement, and such default shall continue after any applicable grace period contained in such Hedge Agreement or any other agreement or instrument relating thereto; or (iv) becomes obligated to purchase or repay Indebtedness (other than the Obligations) before its regular maturity or before its regularly scheduled dates of payment in an aggregate principal amount of at least $10,000,000, as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests or the exercise by either Borrower or any Subsidiary of a contractual right to prepay such Indebtedness).

 

	  	  	
(g)

	
any Borrower, any Guarantor or any of their respective Subsidiaries shall make an assignment for the benefit of creditors, or admit in writing its inability to pay or generally fail to pay its debts as they mature or become due, or shall petition or apply for the appointment of a trustee or other custodian, liquidator or receiver of any Borrower, any Guarantor or any of their respective Subsidiaries or of any substantial part of the properties or assets of any Borrower, any Guarantor or any of their respective Subsidiaries or shall commence any case or other proceeding relating to any Borrower, any Guarantor or any of their respective Subsidiaries under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect, or shall take any action to authorize or in furtherance of any of the foregoing, or if any such petition or application shall be filed or any such case or other proceeding shall be commenced against any Borrower, any Guarantor or any of their respective Subsidiaries and (i) any Borrower, any Guarantor or any of their respective Subsidiaries shall indicate its approval thereof, consent thereto or acquiescence therein or (ii) any such petition, application, case or other proceeding shall continue undismissed, or unstayed and in effect, for a period of sixty (60) days;

 

	  	  	
(h)

	
a decree or order is entered appointing any trustee, custodian, liquidator or receiver or adjudicating any Borrower, any Guarantor or any of their respective Subsidiaries bankrupt or insolvent, or approving a petition in any such case or other proceeding, or a decree or order for relief is entered in respect of any Borrower, any Guarantor or any of their respective Subsidiaries in an involuntary case under federal bankruptcy laws as now or hereafter constituted;

 

	  	  	
(i)

	
there shall remain in force, undischarged, unsatisfied and unstayed, for more than thirty (30) days, whether or not consecutive, any uninsured final judgment against any Borrower, any Guarantor or any of their respective Subsidiaries that, with other outstanding uninsured final judgments, undischarged, unsatisfied and unstayed, against any Borrower, any Guarantor or any of their respective Subsidiaries exceeds in the aggregate $5,000,000;

 

	  	  	
(j)

	
any of the Loan Documents or any material provision of any Loan Documents shall be cancelled, terminated, revoked or rescinded otherwise than in accordance with the terms thereof or with the express prior written agreement, consent or approval of the Required Lenders (or all Lenders if required under §26), or any Guaranty shall be cancelled, terminated, revoked or rescinded at any time or for any reason whatsoever, or any action at law, suit or in equity or other legal proceeding to make unenforceable, cancel, revoke or rescind any of the Loan Documents shall be commenced by or on behalf of any Borrower or any of its Subsidiaries or any Guarantor or any of its Subsidiaries, or any court or any other governmental or regulatory authority or agency of competent jurisdiction shall make a determination that, or issue a judgment, order, decree or ruling to the effect that, any one or more of the Loan Documents is illegal, invalid or unenforceable as to any material terms thereof;

 

	  	  	
(k)

	
any "Event of Default" or default (after notice and expiration of any period of grace, to the extent provided, and if none is specifically provided, then for a period of thirty (30) days after notice), as defined or provided in any of the other Loan Documents, shall occur and be continuing;

 

	  	  	
(l)

	
any Borrower or any ERISA Affiliate incurs any liability to the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an aggregate amount exceeding $1,000,000, or any Borrower or any ERISA Affiliate is assessed withdrawal liability pursuant to Title IV of ERISA by a Multiemployer Plan requiring aggregate annual payments exceeding $1,000,000, or any of the following occurs with respect to a Guaranteed Pension Plan:  (i) an ERISA Reportable Event, or a failure to make a required installment or other payment (within the meaning of Section 302 and Section 303 of ERISA), provided that the Administrative Agent determines in its reasonable discretion that such event (A) could be expected to result in liability of any Borrower or any of their respective Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000, and (B) could constitute grounds for the termination of such Guaranteed Pension Plan by the PBGC, for the appointment by the appropriate United States District Court of a trustee to administer such Guaranteed Pension Plan or for the imposition of a lien in favor of such Guaranteed Pension Plan; or (ii) the appointment by a United States District Court of a trustee to administer such Guaranteed Pension Plan; or (iii) the institution by the PBGC of proceedings to terminate such Guaranteed Pension Plan; or

 

	  	  	
(m)

	
(i) any person or group of persons (within the meaning of Sections 13 or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act) of (a) 20% or more of the outstanding shares of common stock of Sovran, or (b) 33% or more in the aggregate of the outstanding limited partnership interests of SALP (other than by Sovran and its wholly-owned Subsidiaries); (ii) Holdings ceasing to be the sole general partner and sole investment manager of SALP; (iii) Sovran and its wholly-owned Subsidiaries cease to beneficially own 100% of the capital stock of Holdings; or (iv) during any period of twelve consecutive calendar months, individuals who were directors of Sovran on the first day of such period (together with directors whose election by the Board of Directors or whose nomination for election by Sovran's stockholders was approved by a vote of at least two-thirds of the members of the Board of Directors then in office who either were members of the Board of Directors on the Restatement Date or whose election or nomination for election was previously so approved) shall cease to constitute a majority of the board of directors of Sovran;

 

	  	
then, and in any such event, so long as the same may be continuing, the Administrative Agent may, and upon the request of the Required Lenders shall, by notice in writing to the Borrowers, declare all amounts owing with respect to this Credit Agreement, the Notes and the other Loan Documents to be, and they shall thereupon forthwith become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by each Borrower and each Guarantor; provided that in the event of any Event of Default specified in §13.1(g) or §13.1(h), all such amounts shall become immediately due and payable automatically and without any requirement of notice from any of the Lenders or the Administrative Agent or action by the Lenders or the Administrative Agent.

	  	
§13.2.

	
Termination of Commitments.  If any one or more Events of Default specified in §13.1(g) or §13.1(h) shall occur, any unused portion of the Commitments hereunder shall forthwith terminate and the Lenders shall be relieved of all obligations to make Loans to the Borrowers.  If any other Event of Default shall have occurred and be continuing, whether or not the Lenders shall have accelerated the maturity of the Loans pursuant to §13.1, the Administrative Agent may, and upon the request of the Required Revolving Credit Lenders or the Required Delayed Draw Term Loan Lenders, as the case may be, shall, by notice to the Borrowers, terminate the unused portion of the credit hereunder, and upon such notice being given such unused portion of the credit hereunder shall terminate immediately and each of the Lenders shall be relieved of all further obligations to make Loans.  No such termination of the credit hereunder shall relieve any Borrower or any Guarantor of any of the Obligations or any of its existing obligations to the Lenders arising under other agreements or instruments.

 

	  	
§13.3.

	
Remedies.  In the event that one or more Events of Default shall have occurred and be continuing, whether or not the Lenders shall have accelerated the maturity of the Loans pursuant to §13.1, the Required Lenders if owed any Obligations may direct the Administrative Agent to proceed to protect and enforce the rights and remedies of the Administrative Agent and the Lenders under this Credit Agreement, the Notes, any or all of the other Loan Documents or under applicable law by suit in equity, action at law or other appropriate proceeding (including for the specific performance of any covenant or agreement contained in this Credit Agreement or the other Loan Documents or any instrument pursuant to which the Obligations are evidenced and the obtaining of the appointment of a receiver) and, if any amount shall have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right or remedy of the Administrative Agent and the Lenders under the Loan Documents or applicable law.  No remedy herein conferred upon the Lenders or the Administrative Agent or the holder of any Note or purchaser of any Letter of Credit Participation is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under any of the other Loan Documents or now or hereafter existing at law or in equity or by statute or any other provision of law.

 

	  	
§13.4.

	
Distribution of Proceeds.  In the event that, following the occurrence or during the continuance of any Default or Event of Default, the Administrative Agent or any Lender, as the case may be, receives any monies from the Borrowers or in connection with the enforcement of any the Guaranties, such monies shall be distributed for application as follows:

 

	  	  	
(a)

	
First, to the payment of, or (as the case may be) the reimbursement of the Administrative Agent for or in respect of all reasonable costs, expenses, disbursements and losses which shall have been incurred or sustained by the Administrative Agent in connection with the collection of such monies by the Administrative Agent, for the exercise, protection or enforcement by the Administrative Agent of all or any of the rights, remedies, powers and privileges of the Administrative Agent or the Lenders under this Credit Agreement or any of the other Loan Documents or in support of any provision of adequate indemnity to the Administrative Agent against any taxes or liens which by law shall have, or may have, priority over the rights of the Administrative Agent to such monies;

 

	  	  	
(b)

	
Second, to payment of any fees, expenses or reimbursements owed to the Administrative Agent (including in its capacity as issuer of Letters of Credit);

 

	  	  	
(c)

	
Third, to payments of fees and interest on all the Loans, to be applied for the ratable benefit of the Lenders, pro rata based on the proportion of the Lenders' interest in such Obligations;

 

	  	  	
(d)

	
Fourth, to payments of principal of the Loans and to cash collateralize L/C Obligations, to be applied for the ratable benefit of the Lenders, pro rata based on the proportion of the Lenders' interest in such Obligations;

 

	  	  	
(e)

	
Fifth, to all other Obligations pro rata based on the proportion of the obligation holder's interest in such Obligations; provided, however, that the Administrative Agent may in its discretion make proper allowance to take into account any Obligations not then due and payable; and

 

	  	  	
(f)

	
Sixth, the excess, if any, shall be returned to the Borrowers or to such other Persons as are entitled thereto.

	
§14.

	
SET OFF.  Borrowers and each Guarantor hereby grants to the Administrative Agent, for the ratable benefit of the Lenders, a continuing lien, security interest and right of setoff as security for all liabilities and obligations to the Lenders, whether now existing or hereafter arising, upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of the Administrative Agent or any entity under the control of M&T Bank and its successors and assigns or in transit to any of them.  Without demand or notice to the extent permitted by applicable law, during the continuance of any Event of Default, any deposits (general or specific, time or demand, provisional or final, regardless of currency, maturity, or the branch at which such deposits are held, but specifically excluding tenant security deposits, other fiduciary accounts and other segregated escrow accounts required to be maintained by any of the Borrowers for the benefit of any third party) or other sums credited by or due from any of the Lenders to any of the Borrowers or any other property of any of the Borrowers in the possession of the Administrative Agent or a Lender may be applied to or set off against the payment of the Obligations.  ANY AND ALL RIGHTS TO REQUIRE THE ADMINISTRATIVE AGENT OR ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOANS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF ANY BORROWER OR GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.  Each of the Lenders agrees with each other Lender that (a) if pursuant to any agreement between such Lender and any Borrower (other than this Credit Agreement or any other Loan Document), an amount to be set off is to be applied to Indebtedness of any Borrower to such Lender, other than with respect to the Obligations, such amount shall be applied ratably to such other Indebtedness and to the Obligations, and (b) if such Lender shall receive from any Borrower, whether by voluntary payment, exercise of the right of setoff, counterclaim, cross action, enforcement of the Obligations by proceedings against such Borrower at law or in equity or by proof thereof in bankruptcy, reorganization, liquidation, receivership or similar proceedings, or otherwise, and shall retain and apply to the payment of the Note or Notes held by such Lender any amount in excess of its ratable portion of the payments received by all of the Lenders with respect to the Notes held by, and Reimbursement Obligations owed to, all of the Lenders, such Lender will make such disposition and arrangements with the other Lenders with respect to such excess, either by way of distribution, pro tanto assignment of claims, subrogation or otherwise, as shall result in each Lender receiving in respect of the Notes held by it or Reimbursement Obligations owed it, its proportionate payment as contemplated by this Credit Agreement; provided that if all or any part of such excess payment is thereafter recovered from such Lender, such disposition and arrangements shall be rescinded and the amount restored to the extent of such recovery, but without interest.  Notwithstanding the foregoing, no Lender shall exercise a right of setoff if such exercise would limit or prevent the exercise of any other remedy or other recourse against any Borrower, and in any event, without the consent of the Administrative Agent.

 

	
§15.

	
THE AGENTS.

	  	
§15.1.

	
Authorization.

 

	  	  	
(a)

	
The Administrative Agent is authorized to take such action on behalf of each of the Lenders and to exercise all such powers as are hereunder and under any of the other Loan Documents and any related documents delegated to the Administrative Agent, together with such powers as are reasonably incident thereto, including, without limitation, to enter into the Intercreditor Agreement (or any amendment thereto) as agent for the Lenders (to which the Lenders agree to be bound), provided that no duties or responsibilities not expressly assumed herein or therein shall be implied to have been assumed by the Administrative Agent.  The relationship between the Administrative Agent and the Lenders is and shall be that of agent and principal only, and nothing contained in this Credit Agreement or any of the other Loan Documents shall be construed to constitute the Administrative Agent as a trustee or fiduciary for any Lender.

 

	  	  	
(b)

	
Each Borrower and each Guarantor, without further inquiry or investigation, shall, and is hereby authorized by the Lenders to, assume that all actions taken by the Administrative Agent hereunder and in connection with or under the Loan Documents are duly authorized by the Lenders.  The Lenders shall notify the Borrowers of any successor to Administrative Agent by a writing signed by Required Lenders, which successor shall be reasonably acceptable to the Borrowers so long as no Default or Event of Default has occurred and is continuing.

 

	      	
§15.2.

	
Employees and Agents.  The Administrative Agent may exercise its powers and execute its duties by or through employees or agents and shall be entitled to take, and to rely on, advice of counsel concerning all matters pertaining to its rights and duties under this Credit Agreement and the other Loan Documents.  The Administrative Agent may utilize the services of such Persons as the Administrative Agent in its sole discretion may reasonably determine, and all reasonable fees and expenses of any such Persons shall be paid by the Borrowers if so provided in §16 hereof.

 

	  	
§15.3.

	
No Liability.  Neither the Administrative Agent, nor any of its shareholders, directors, officers or employees nor any other Person assisting them in their duties nor any agent or employee thereof, shall be liable for any waiver, consent or approval given or any action taken, or omitted to be taken, in good faith by it or them hereunder or under any of the other Loan Documents, or in connection herewith or therewith, or be responsible for the consequences of any oversight or error of judgment whatsoever, except that the Administrative Agent may be liable for losses due to its willful misconduct or gross negligence.

 

	  	
§15.4.

	
No Representations.  The Administrative Agent shall not be responsible for the execution or validity or enforceability of this Credit Agreement, the Notes, or any of the other Loan Documents or for the validity, enforceability or collectability of any such amounts owing with respect to the Notes, or for any recitals or statements, warranties or representations made herein or in any of the other Loan Documents or in any certificate or instrument hereafter furnished to it by or on behalf of any Guarantor or any Borrower or any of their respective Subsidiaries, or be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements in this Credit Agreement or the other Loan Documents.  The Administrative Agent shall not be bound to ascertain whether any notice, consent, waiver or request delivered to it by any Borrower or any Guarantor or any holder of any of the Notes shall have been duly authorized or is true, accurate and complete.  The Administrative Agent has not made nor does it now make any representations or warranties, express or implied, nor does it assume any liability to the Lenders, with respect to the credit worthiness or financial condition of any Borrower or any of its Subsidiaries or any Guarantor or any of the Subsidiaries or any tenant under a Lease or any other entity.  Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based upon such information and documents as it has deemed appropriate, made its own credit analysis and decision to enter into this Credit Agreement.

 

	  	
§15.5.

	
Payments.

 

	  	  	
(a)

	
A payment by the Borrowers to the Administrative Agent hereunder or any of the other Loan Documents for the account of any Lender shall constitute a payment to such Lender.  The Administrative Agent agrees to distribute to each applicable Lender such Lender's pro rata share of payments received by the Administrative Agent for the account of the Lenders, as provided herein or in any of the other Loan Documents.  All such payments shall be made on the date received, if before 1:00 p.m., and if after 1:00 p.m., on the next Business Day.  If payment is not made on the day received, interest thereon at the overnight federal funds effective rate shall be paid pro rata to the Lenders entitled to such payments.

 

	  	  	
(b)

	
If in the reasonable opinion of the Administrative Agent the distribution of any amount received by it in such capacity hereunder, under the Notes or under any of the other Loan Documents might involve it in material liability, it may refrain from making distribution until its right to make distribution shall have been adjudicated by a court of competent jurisdiction, provided that interest thereon at the overnight federal funds effective rate shall be paid pro rata to the Lenders who would otherwise be entitled to such distribution.  If a court of competent jurisdiction shall adjudge that any amount received and distributed by the Administrative Agent is to be repaid, each Person to whom any such distribution shall have been made shall either repay to the Administrative Agent its proportionate share of the amount so adjudged to be repaid or shall pay over the same in such manner and to such Persons as shall be determined by such court.

 

	  	
§15.6.

	
Holders of Notes.  As provided in §19.3, the Administrative Agent may deem and treat the payee of any Notes or the purchaser of any Letter of Credit Participation as the absolute owner or purchaser thereof for all purposes hereof until it shall have been furnished in writing with a different name by such payee or by a subsequent holder, assignee or transferee.

 

	  	
§15.7.

	
Indemnity.  The Lenders ratably and severally agree hereby to indemnify and hold harmless each Agent and its Affiliates from and against any and all claims, actions and suits (whether groundless or otherwise), losses, damages, costs, expenses (including any expenses for which such Agent has not been reimbursed by the Borrowers as required by §16), and liabilities of every nature and character arising out of or related to this Credit Agreement, the Notes, or any of the other Loan Documents or the transactions contemplated or evidenced hereby or thereby, or such Agent's or any Affiliate's actions taken hereunder or thereunder, except to the extent that any of the same shall be directly caused by such Agent's or any Affiliate's willful misconduct or gross negligence.  Nothing in this §15.7 shall limit any indemnification obligations of the Borrowers hereunder.

 

	  	
§15.8.

	
Agents as Lenders.  In its individual capacity as a Lender, M&T Bank shall have the same obligations and the same rights, powers and privileges in respect to its Commitments and the Loans made by it, and as the holder of any of the Notes and as the purchaser of any Letter of Credit Participations, as it would have were it not also an Agent.

 

	  	
§15.9.

	
Notification of Defaults and Events of Default.  Each Lender hereby agrees that, upon learning of the existence of a default, Default or an Event of Default, it shall (to the extent notice has not previously been provided) promptly notify the Administrative Agent thereof.  The Administrative Agent hereby agrees that upon receipt of any notice under this §15.9 it shall promptly notify the other Lenders of the existence of such default, Default or Event of Default.

 

	  	
§15.10.

	
Duties in the Case of Enforcement.  In case one or more Events of Default have occurred and shall be continuing, and whether or not acceleration of the Obligations shall have occurred, the Administrative Agent shall, if (a) so requested by the Required Lenders and (b) the Lenders have provided to the Administrative Agent such additional indemnities and assurances against expenses and liabilities as the Administrative Agent may reasonably request, proceed to enforce the provisions of this Credit Agreement and exercise all or any such other legal and equitable and other rights or remedies as it may have in respect of enforcement of the Lenders' rights against the Borrowers and the Guarantors under this Credit Agreement and the other Loan Documents.  The Required Lenders may direct the Administrative Agent in writing as to the method and the extent (other than when such direction requires Unanimous Lender Approval under §26) of any such enforcement, the Lenders (including any Lender which is not one of the Required Lenders) hereby agreeing to ratably and severally indemnify and hold the Administrative Agent harmless from all liabilities incurred in respect of all actions taken or omitted in accordance with such directions, provided that the Administrative Agent need not comply with any such direction to the extent that the Administrative Agent reasonably believes the Administrative Agent's compliance with such direction to be unlawful or commercially unreasonable in any applicable jurisdiction.

 

	  	
§15.11.

	
Successor Agents.  M&T Bank, or any successor Administrative Agent, may resign as Administrative Agent at any time by giving written notice thereof to the Lenders and to the Borrowers.  In addition, the Required Lenders may remove the Administrative Agent in the event of the Administrative Agent's gross negligence or willful misconduct.  Any such resignation or removal shall be effective upon appointment and acceptance of a successor Administrative Agent, as hereinafter provided.  Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent, which is a Lender under this Credit Agreement, provided that so long as no Default or Event of Default has occurred and is continuing the Borrowers shall have the right to approve any successor Administrative Agent, which approval shall not be unreasonably withheld.  If, in the case of a resignation by the Administrative Agent, no successor Administrative Agent shall have been so appointed by the Required Lenders and approved by the Borrowers, if applicable, and shall have accepted such appointment, within thirty (30) days after the retiring Administrative Agent's giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint any one of the other Lenders as a successor Administrative Agent.  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Administrative Agent, and the retiring or removed Administrative Agent shall be discharged from all further duties and obligations as Administrative Agent under this Credit Agreement.  After any Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this §15 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Credit Agreement.

 

	  	
§15.12.

	
Notices.  Any notices or other information required hereunder to be provided to the Administrative Agent which the Administrative Agent is required hereunder to provide to the Lenders, shall be forwarded by the Administrative Agent to each of the Lenders on the same day (if practicable) and, in any case, on the next Business Day following the Administrative Agent's receipt thereof.

 

	  	
§15.13.

	
Administrative Agent May File Proofs of Claim.

 

	  	  	
(a)

	
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial, administrative or like proceeding or any assignment for the benefit of creditors relative to the Borrowers or any of their Subsidiaries, the Administrative Agent (irrespective of whether the principal of any Loan, Reimbursement Obligation or Unpaid Reimbursement Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrowers) shall be entitled and empowered, by intervention in such proceeding, under any such assignment or otherwise:

 

	  	  	  	
(i)

	
to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, Reimbursement Obligations or Unpaid Reimbursement Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under §§2.3, 3.3, 4.1, 5.10, and 16) allowed in such proceeding or under any such assignment; and

 

	  	  	  	
(ii)

	
for itself and for the ratable benefit of the Lenders, to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same in accordance with the provisions of this Credit Agreement.

 

	  	  	
(b)

	
Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding or under any such assignment is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, nevertheless to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under §§2.3, 3.3, 4.1, 5.10, and 16.

 

	  	  	
(c)

	
Nothing contained herein shall authorize the Administrative Agent to consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations owed to such Lender or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding or under any such assignment.

	
§16.

	
EXPENSES.  The Borrowers jointly and severally agree to pay (a) the reasonable costs of producing and reproducing this Credit Agreement, the other Loan Documents and the other agreements and instruments mentioned herein, (b) the reasonable fees, expenses and disbursements of the Administrative Agent's outside counsel, any local counsel or internal counsel to the Administrative Agent incurred in connection with the preparation, administration or interpretation of the Loan Documents and other instruments mentioned herein, each closing hereunder, and amendments, modifications, approvals, consents or waivers hereto or hereunder, (c) the reasonable fees, expenses and disbursements of the Administrative Agent incurred by the Administrative Agent in connection with the preparation, administration or interpretation of the Loan Documents and other instruments mentioned herein (including, without limitation, the Letters of Credit), any amendments, modifications, approvals, consents or waivers hereto or hereunder, or the cancellation of any Loan Document upon payment in full in cash of all of the Obligations or pursuant to any terms of such Loan Document for providing for such cancellation, including, without limitation, the reasonable fees and disbursements of the Administrative Agent's counsel in preparing the documentation, (d) the reasonable fees, costs, expenses and disbursements of each of the Agents and its Affiliates incurred in connection with the syndication and/or participations of the Loans, including, without limitation, costs of preparing syndication materials and photocopying costs, which syndication costs and expenses shall be payable by the Borrowers regardless of whether the Loans are ultimately syndicated, (e) all reasonable expenses (including reasonable attorneys' fees and costs, which attorneys may be employees of any Lender or the Administrative Agent, and the fees and costs of appraisers, auditors, consultants, engineers, investment bankers, surveyors or other experts retained by any Lender or the Administrative Agent in connection with any such enforcement proceedings) incurred by any Lender or the Administrative Agent in connection with (i) the enforcement of or preservation of rights under any of the Loan Documents against any Borrower or any of its Subsidiaries or any Guarantor or the administration thereof after the occurrence and during the continuance of a Default or Event of Default (including, without limitation, expenses incurred in any restructuring and/or "workout" of the Loans), and (ii) subject to the limitation set forth in §17 hereof, any litigation, proceeding or dispute whether arising hereunder or otherwise, in any way related to any Lender's or the Administrative Agent's relationship with any Borrower or any of its Subsidiaries or any Guarantor, (f) all reasonable fees, expenses and disbursements of the Administrative Agent incurred in connection with UCC searches and (g) all costs incurred by the Administrative Agent in the future in connection with its inspection of the Unencumbered Properties after the occurrence and during the continuance of an Event of Default.  The covenants of this §16 shall survive payment or satisfaction of payment of amounts owing with respect to the Notes.

 

	
§17.

	
INDEMNIFICATION.  The Borrowers jointly and severally agree to indemnify and hold harmless each of the Agents and Lenders and the shareholders, directors, agents, counsel, professional advisors, officers, subsidiaries and Affiliates of each of the Agents and Lenders (each group consisting of an Agent or a Lender and its respective shareholders, directors, agents, counsel, professional advisors, officers, subsidiaries and Affiliates being an "Indemnified Lender's Group") from and against any and all claims, actions and suits, whether groundless or otherwise, and from and against any and all liabilities, losses, settlement payments, obligations, damages and expenses of every nature and character, arising out of this Credit Agreement or any of the other Loan Documents or the transactions contemplated hereby or thereby or which otherwise arise in connection with the financing, including, without limitation, (a) any actual or proposed use by any Borrower or any of its Subsidiaries of the proceeds of any of the Loans, (b) any Borrower or any of its Subsidiaries or any Guarantor entering into or performing this Credit Agreement or any of the other Loan Documents or the transactions contemplated by this Credit Agreement or any of the other Loan Documents, or (c) pursuant to §8.17 hereof, in each case including, without limitation, the reasonable fees and disbursements of counsel and allocated costs of internal counsel incurred in connection with any such investigation, litigation or other proceeding, provided, however, that the Borrowers shall not be obligated under this §17 to indemnify any Person for liabilities to the extent arising from the gross negligence or willful misconduct of such Person or of any other Person in the Indemnified Lender's Group of which such Person is a member (but such indemnification shall continue to apply to all other Persons including all other Indemnified Lender's Groups).  Each Person to be indemnified under this §17 shall give the Borrowers notice of any claim as to which it is seeking indemnification under this §17 promptly after becoming aware of the same (which shall constitute notice for all Indemnified Lender's Groups), but such Person's failure to give prompt notice shall not affect the obligations of the Borrowers under this §17 unless such failure prejudices the legal rights of the Borrowers regarding such indemnity.  In litigation, or the preparation therefor, the Borrowers shall be entitled to select counsel reasonably acceptable to the Required Lenders, and the Lenders (as approved by the Required Lenders) shall be entitled to select their own supervisory counsel and, in addition to the foregoing indemnity, the Borrowers agree to pay promptly the reasonable fees and expenses of each such counsel if (i) in the reasonable opinion of the Agent, use of counsel of the Borrowers' choice could reasonably be expected to give rise to a conflict of interest, (ii) the Borrowers shall not have employed counsel reasonably satisfactory to the Agent and the Lenders within a reasonable time after notice of the institution of any such litigation or proceeding or (iii) the Borrower Representative authorizes each Agent and Lender to employ separate counsel at the Borrowers' expense.  If and to the extent that the obligations of the Borrowers under this §17 are unenforceable for any reason, the Borrowers hereby agree to make the maximum contribution to the payment in satisfaction of such obligations which is permissible under applicable law.  The provisions of this §17 shall survive the repayment of the Loans and the termination of the obligations of the Lenders hereunder and shall continue in full force and effect as long as the possibility of any such claim, action, cause of action or suit exists.

 

	
§18.

	
SURVIVAL OF COVENANTS, ETC.  All covenants, agreements, representations and warranties made herein, in the Notes, in any of the other Loan Documents or in any documents or other papers delivered by or on behalf of any Borrower or any of its Subsidiaries or any Guarantor pursuant hereto shall be deemed to have been relied upon by the Lenders and the Agents, notwithstanding any investigation heretofore or hereafter made by any of them, and shall survive the making by the Lenders of any of the Loans, as herein contemplated, and shall continue in full force and effect so long as any Letter of Credit or any amount due under this Credit Agreement or the Notes or any of the other Loan Documents remains outstanding or any Lender has any obligation to make any Loans or the Administrative Agent has any obligation to issue, extend or renew any Letter of Credit, and for such further time as may be otherwise expressly specified in this Credit Agreement.  The indemnification obligations of the Borrowers provided herein and in the other Loan Documents shall survive the full repayment of amounts due and the termination of the obligations of the Lenders hereunder and thereunder to the extent provided herein and therein.  All statements contained in any certificate or other paper delivered to any Lender or Agent at any time by or on behalf of any Borrower or any of its Subsidiaries or any Guarantor pursuant hereto or in connection with the transactions contemplated hereby shall constitute representations and warranties by such Borrower or such Subsidiary or such Guarantor hereunder.

 

	
§19.

	
ASSIGNMENT; PARTICIPATIONS: ETC.

	  	
§19.1.

	
Successors and Assigns Generally.  The provisions of this Credit Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrowers may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of their respective rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of §19.2, (ii) by way of participation in accordance with the provisions of §19.4 or (iii) by way of pledge or assignment of a security interest subject to the restrictions of §19.6 (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Credit Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in §19.4 and, to the extent expressly contemplated hereby, the Affiliates and the partners, directors, officers, employees, agents and advisors of the Administrative Agent and the Lenders and of their respective Affiliates) any legal or equitable right, remedy or claim under or by reason of this Credit Agreement.

 

	  	
§19.2.

	
Assignments by Lenders.  Any Lender may at any time assign to one or more assignees (an "Assignee") all or a portion of its rights and obligations under this Credit Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

	  	  	
(a)

	
Minimum Amounts.

 

	  	  	  	
(i)

	
in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

	  	  	  	
(ii)

	
in any case not described in the immediately preceding subsection (i), the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the 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 or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000 in the case of any assignment in respect of a Revolving Credit Commitment, or $1,000,000 in the case of any assignment in respect of a Term Loan, unless each of the Administrative Agent and, so long as no Default or Event of Default shall exist, the Borrowers otherwise consent (each such consent not to be unreasonably withheld or delayed).

 

	  	  	
(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 Credit Agreement with respect to the Loan or the Commitment assigned.

	  	  	
(c)

	
No consent shall be required for any assignment except to the extent required by clause (ii) of the immediately preceding subsection (a) and, in addition:

 

	  	  	  	
(i)

	
the consent of the Borrowers (such consent not to be unreasonably withheld or delayed) shall be required unless (x) a Default or Event of Default shall exist at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrowers shall be deemed to have consented to any such assignment unless the Borrower Representative shall object thereto by written notice to the Administrative Agent within 5 Business Days after having received notice thereof; and

 

	  	  	  	
(ii)

	
the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (x) a Revolving Credit Commitment if such assignment is to a Person that is not already a Lender with a Revolving Credit Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (y) a Term Loan to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund.

 

	  	  	
(d)

	
No such assignment shall be made to the Borrowers, any of the Borrowers' Affiliates or Subsidiaries or any Defaulting Lender.

 

	  	  	
(e)

	
No such assignment shall be made to a natural person.

 

	  	
Subject to acceptance and recording thereof by the Administrative Agent pursuant to §19.3, from and after the effective date specified in each Assignment and Assumption and upon delivery to the Administrative Agent of a processing and recordation fee of $3,500, the assignee thereunder shall be a party to this Credit Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Credit 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 Credit Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Credit Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of §4.6, §16 and §17 and the other provisions of this Credit Agreement and the other Loan Documents as provided in with respect to facts and circumstances occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of rights or obligations under this Credit Agreement that does not comply with this paragraph Subject to acceptance and recording thereof by the Administrative Agent pursuant to §19.3, from and after the effective date specified in each Assignment and Assumption and upon delivery to the Administrative Agent of a processing and recordation fee of $3,500, the assignee thereunder shall be a party to this Credit Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Credit 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 Credit Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Credit Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of §4.6, §16 and §17 and the other provisions of this Credit Agreement and the other Loan Documents as provided in with respect to facts and circumstances occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of rights or obligations under this Credit Agreement that does not comply with this paragraph shall be treated for purposes of this Credit Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with §19.4.

	  	
§19.3.

	
Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent's Head Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans 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 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 Credit Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

	  	
§19.4.

	
Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrowers or any Affiliate or Subsidiary of any Borrower) (each, a "Participant") in all or a portion of such Lender's rights and/or obligations under this Credit Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender's obligations under this Credit Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Credit 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 Credit Agreement and to approve any amendment, modification or waiver of any  provision of this Credit 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 of any provision of any Loan Document described in §26 that adversely affects such Participant.  Subject to §19.5, the Borrowers agree that each Participant shall be entitled to the benefits of §4.6 and §4.7 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to §19.7.  To the extent permitted by Applicable Law, each Participant also shall be entitled to the benefits of §14 as though it were a Lender, provided such Participant agrees to be subject to §14 as though it were a Lender.  Upon request from the Administrative Agent, a Lender shall notify the Administrative Agent and the Borrower Representative of the sale of any participation hereunder.

 

	  	
§19.5.

	
Limitation upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under §4.6 and §4.7 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrowers' prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of §4.2 unless the Borrower Representative is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers and the Administrative Agent, to comply with §4.2(c) as though it were a Lender.

 

	  	
§19.6.

	
Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Credit Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

	  	
§19.7.

	
No Registration.  Each Lender agrees that, without the prior written consent of the Borrowers and the Administrative Agent, it will not make any assignment hereunder in any manner or under any circumstances that would require registration or qualification of, or filings in respect of, any Loan or Note under the Securities Act or any other securities laws of the United States of America or of any other jurisdiction.

 

	  	
§19.8.

	
Disclosure.  The Borrowers agree that, in addition to disclosures made in accordance with standard banking practices, any Lender may disclose information obtained by such Lender pursuant to this Credit Agreement to assignees or Participants and potential assignees or Participants hereunder; provided that such assignees or potential assignees shall be Eligible Assignees.  Any such disclosed information shall be treated by any assignee or Participant with the same standard of confidentiality set forth in §8.10 hereof.

 

	  	
§19.9.

	
Syndication.  The Borrowers acknowledge that the Administrative Agent intends, and shall have the right, by itself or through its Affiliates, to syndicate or enter into co-lending arrangements with respect to the Loans and the Total Revolving Credit Commitment pursuant to this §19, and the Borrowers agree to cooperate with the Administrative Agent's and its Affiliate's syndication and/or co-lending efforts, such cooperation to include, without limitation, the provision of information reasonably requested by potential syndicate members.

	
§20.

	
NOTICES, ETC.  Except as otherwise expressly provided in this Credit Agreement, all notices and other communications made or required to be given pursuant to this Credit Agreement or the Notes or any Letter of Credit Applications shall be in writing and shall be delivered in hand, mailed by United States registered or certified first class mail, postage prepaid, sent by overnight courier, or sent by facsimile and confirmed by delivery via courier or postal service, addressed as follows:

	  	  	
(a)

	
if to any Borrower or any Guarantor, to the Borrower Representative at Sovran Self Storage, Inc., 6467 Main Street, Williamsville, New York 14221, Attention:  Mr. Andrew J. Gregoire, Chief Financial Officer, with a copy to Phillips Lytle LLP, 3400 HSBC Center, Buffalo, New York 14203, Attention:  Raymond H. Seitz, or to such other address for notice as the Borrower Representative or any Guarantor shall have last furnished in writing to the Administrative Agent;

 

	  	  	
(b)

	
if to the Administrative Agent, Manufacturers and Traders Trust Company, 25 S. Charles Street, 12th Floor, Baltimore, Maryland 21201, Attention:  Hugh Giorgio, or such other address for notice as the Administrative Agent shall have last furnished in writing to the Borrowers, with a copy to Deanna Kashdan, Esq., Alston & Bird LLP, 1201 West Peachtree Street, Atlanta, Georgia 30309-3424, or at such other address for notice as the Administrative Agent shall last have furnished in writing to the Person giving the notice; and additionally, for any Completed Revolving Credit Loan Request, to Manufacturers and Traders Trust Company, One Fountain Plaza, Buffalo, New York 14203; and

 

	  	  	
(c)

	
if to any Lender, at such Lender's address set forth on Schedule 1.2 hereto, or such other address for notice as such Lender shall have last furnished in writing to the Person giving the notice.

 

	  	
          Any such notice or demand shall be deemed to have been duly given or made and to have become effective (i) if delivered by hand, overnight courier or facsimile to the party to which it is directed, at the time of the receipt thereof by such party or the sending of such facsimile with electronic confirmation of receipt and (ii) if sent by registered or certified first-class mail, postage prepaid, on the fifth Business Day following the mailing thereof.

	
§21.

	
GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.  THIS CREDIT AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).  EACH OF THE BORROWERS AND THE GUARANTORS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK, NEW YORK OR ANY FEDERAL COURT SITTING IN NEW YORK, NEW YORK AND CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS OR THE GUARANTORS BY MAIL AT THE ADDRESS SPECIFIED IN §20.  THE BORROWERS AND EACH OF THE GUARANTORS HEREBY WAIVES ANY OBJECTION THAT EITHER OF THEM MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

 

	
§22.

	
HEADINGS.  The captions in this Credit Agreement are for convenience of reference only and shall not define or limit the provisions hereof.

 

	
§23.

	
COUNTERPARTS.  This Credit Agreement and any amendment hereof may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument.  In proving this Credit Agreement it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought.  Delivery of an executed counterpart of a signature page of this Credit Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Credit Agreement.

 

	
§24.

	
ENTIRE AGREEMENT, ETC.  The Loan Documents and any other documents executed in connection herewith or therewith express the entire understanding of the parties with respect to the transactions contemplated hereby and supersede any and all previous agreements and understandings, oral or written, relating to the transactions contemplated hereby.  Neither this Credit Agreement nor any term hereof may be changed, waived, discharged or terminated, except as provided in §26.

 

	
§25.

	
WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.  EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, EACH OF THE BORROWERS, EACH OF THE GUARANTORS, THE AGENT AND EACH OF THE LENDERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS CREDIT AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, EACH OF THE BORROWERS AND EACH OF THE GUARANTORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT ANY OF THEM MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.  EACH OF THE BORROWERS AND THE GUARANTORS (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER OR THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER OR THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGE THAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

 

	
§26.

	
CONSENTS, AMENDMENTS, WAIVERS, ETC.  Except as otherwise expressly provided in this Credit Agreement, any consent or approval required or permitted by this Credit Agreement may be given, and any term of this Credit Agreement or of any of the other Loan Documents may be amended, and the performance or observance by any Borrower or any Guarantor of any terms of this Credit Agreement or the other Loan Documents or the continuance of any default, Default or Event of Default may be waived (either generally or in a particular instance and either retroactively or prospectively) with, but only with, the written consent of the Required Lenders.

 

	  	
          Notwithstanding the foregoing, the written consent of each Lender directly and adversely affected thereby (or the Administrative Agent at the written direction of such Lenders) shall be required for any amendment, waiver, modification or consent that does any of the following:

 

	  	  	  	
(i)

	
reduces or forgives any principal of any unpaid Loan or Reimbursement Obligations or any interest thereon (including any interest "breakage" costs) or any fees due any Lender hereunder; or

 

	  	  	  	
(ii)

	
changes the unpaid principal amount of any Loan or reduces the rate of interest on any Loan; or

 

	  	  	  	
(iii)

	
changes the date fixed for any payment of principal of or interest on any Loan (including, without limitation, any extension of any Maturity Date, except for the two one-year extensions thereof as permitted under §2.10 hereof) or any fees payable hereunder; or

 

	  	  	  	
(iv)

	
changes the amount of such Lender's Commitment (other than pursuant to an assignment permitted under §19.1 hereof), extends the expiration date of such Lender's Commitment or increases the amount of the Total Revolving Credit Commitment or Delayed Draw Term Loan Commitment (except for the increases in the Total Revolving Credit Commitment to an amount not to exceed $250,000,000 as provided in §2.11); or

	  	  	  	
(v)

	
with respect to the Lenders under the Term Loan makes any alteration to §3.8 hereof;

 

	  	  	  	
(vi)

	
changes the definition of "Required Revolving Credit Lenders", "Required Delayed Draw Term Loan Lenders", or "Required Initial Term Loan Lenders";

 

	  	
provided that Unanimous Lender Approval shall be required for any amendment, modification or waiver of this Credit Agreement that:

	  	  	  	  	
(1)

	
releases or reduces the liability of any Guarantor pursuant to its Guaranty other than as provided in §6; or

 

	  	  	  	  	
(2)

	
modifies this §26 or any other provision herein or in any other Loan Document which by the terms thereof expressly requires Unanimous Lender Approval; or

 

	  	  	  	  	
(3)

	
changes the definitions of Required Lenders or Unanimous Lender Approval.

 

	  	
Provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior written consent of the Administrative Agent; provided further that changes adversely affecting the rights of one class of Lenders differently from any other class of Lenders will require the consent of the Required Revolving Credit Lenders, the Required Delayed Draw Term Loan Lenders and/or the Required Initial Term Loan Lenders, as the case may be.

 

	  	
No waiver shall extend to or affect any obligation not expressly waived or impair any right consequent thereon.  No course of dealing or delay or omission on the part of the Administrative Agent or the Lenders or any Lender in exercising any right shall operate as a waiver thereof or otherwise be prejudicial to such right or any other rights of the Administrative Agent or the Lenders.  No notice to or demand upon any Borrower shall entitle any Borrower to other or further notice or demand in similar or other circumstances.

	
§27.

	
INDEPENDENCE OF COVENANTS.  All covenants hereunder shall be given in any jurisdiction independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.

 

	
§28.

	
SEVERABILITY.  The provisions of this Credit Agreement are severable, and if any one clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction, and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Credit Agreement in any jurisdiction.

 

	
§29.

	
USA PATRIOT ACT NOTICE.  Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the names and addresses of the Borrowers and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrowers in accordance with the Act.

 

	
§30.

	
TRANSITIONAL ARRANGEMENTS.

	  	
§30.1.

	
Existing Credit Agreement Superseded.  This Credit Agreement shall on the Restatement Date supersede the Existing Credit Agreement in its entirety, except as provided in this §30.  On the Restatement Date, the rights and obligations of the parties evidenced by the Existing Credit Agreement shall be evidenced by this Credit Agreement and the other Loan Documents, the "Loans" as defined in the Existing Credit Agreement shall be converted to Loans as defined herein as provided in §1.3.

 

	  	
§30.2.

	
Return and Cancellation of Notes.  As soon as reasonably practicable after its receipt of its Notes hereunder on the Restatement Date, each Lender hereunder which was a lender under the Existing Credit Agreement, will promptly return to the Borrowers, marked "Substituted" or "Cancelled", as the case may be, any promissory notes of the Borrowers held by such Lender pursuant to the Existing Credit Agreement.

 

	  	
§30.3.

	
No Novation.  Upon this Credit Agreement becoming effective pursuant to §11 and the reallocation and other transactions described in §1.3, from and after the Restatement Date (i) all terms and conditions of the Existing Credit Agreement and any other "Loan Document" as defined therein, as amended by this Credit Agreement and the other Loan Documents being executed and delivered on the Restatement Date, shall be and remain in full force and effect, as so amended, and shall constitute the legal, valid, binding and enforceable obligations of the parties thereto; (ii) the terms and conditions of the Existing Credit Agreement shall be amended as set forth herein and, as so amended, shall be restated in their entirety, but shall be amended only with respect to the rights, duties and obligations among the Borrowers, Lenders and Administrative Agent accruing from and after the Restatement Date; (iii) this Credit Agreement shall not in any way release or impair the rights, duties, Obligations or Liens, if any, created pursuant to the Existing Credit Agreement or any other Loan Document or affect the relative priorities thereof, in each case to the extent in force and effect thereunder as of the Restatement Date, except as modified hereby or as modified hereafter in accordance with the terms hereof or by documents, instruments and agreements executed and delivered in connection herewith, and all of such rights, duties, Obligations and Liens, if any, are assumed, ratified and affirmed by the Borrowers; (iv) all indemnification obligations of the Borrowers and their Subsidiaries under the Existing Credit Agreement and any other Loan Documents shall survive the execution and delivery of this Credit Agreement and shall continue in full force and effect for the benefit of Lenders, Administrative Agent, and any other Person indemnified under the Existing Credit Agreement or any other Loan Document at any time prior to the Restatement Date; (v) the Obligations incurred under the Existing Credit Agreement shall, to the extent outstanding on the Restatement Date, continue outstanding under this Credit Agreement to the extent and as set forth in §1.3 hereof and shall not be deemed to be paid, released, discharged or otherwise satisfied by the execution of this Credit Agreement, and this Credit Agreement shall not constitute a refinancing, substitution or novation of such Obligations or any of the other rights, duties and obligations of the parties hereunder; (vi) the execution, delivery and effectiveness of this Credit Agreement shall not operate as a waiver of any right, power or remedy of Lenders or Administrative Agent under the Existing Credit Agreement, nor constitute a waiver of any covenant, agreement or obligation under the Existing Credit Agreement, except to the extent that any such covenant, agreement or obligation is no longer set forth herein or is modified hereby; and (vii) any and all references in the Loan Documents to the Existing Credit Agreement shall, without further action of the parties, be deemed a reference to the Existing Credit Agreement, as amended and restated by this Credit Agreement, and as this Credit Agreement shall be further amended or amended and restated from time to time hereafter.

 

[Remainder of page intentionally left blank]

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned have duly executed this Credit Agreement as a sealed instrument as of the date first set forth above.

 

	  	
SOVRAN SELF STORAGE, INC.

 

 

By:   /s/ Andrew J. Gregoire               

Name:  Andrew J. Gregoire

Title:  Chief Financial Officer and Secretary

 

 

 

	  	
SOVRAN ACQUISITION LIMITED

          PARTNERSHIP

 

By: Sovran Holdings, Inc., its general partner

 

 

By:   /s/ Andrew J. Gregoire                

Name:  Andrew J. Gregoire

Title:  Chief Financial Officer and Secretary

 

 

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
MANUFACTURERS AND TRADERS

          TRUST COMPANY

 

 

By:   /s/ Susan Freed-Oestreicher           

Name:  Susan Freed-Oestreicher

Title:  Vice President

 

 

 

[Signatures Continue on Next Page]

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
SUNTRUST BANK

 

 

By:   /s/ W. John Wendler                 

Name:  W. John Wendler

Title:  Senior Vice President

 

 

 

[Signatures Continue on Next Page]

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
WELLS FARGO BANK,

NATIONAL ASSOCIATION

 

 

By:   /s/ Wayne N. Keller                 

Name:  Wayne N. Keller

Title:  Senior Vice President

 

 

 

[Signatures Continue on Next Page]

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
PNC BANK, NATIONAL ASSOCIATION

 

 

By:   /s/ Gregory J. Fedorko                 

Name:  Gregory J. Fedorko

Title:  Vice President

 

 

 

[Signatures Continue on Next Page]

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
U.S. BANK, NATIONAL ASSOCIATION

 

 

By:   /s/ Bruce A. Ostrom                 

Name:  Bruce A. Ostrom

Title:  Senior Vice President

 

 

 

[Signatures Continue on Next Page]

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
HSBC BANK USA,

NATIONAL ASSOCIATION

 

 

By:   /s/ Bryan R. DeBroka                 

Name:  Bryan R. DeBroka

Title:  Senior Relationship Manager

 

 

 

[Signatures Continue on Next Page]

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
BRANCH BANKING AND TRUST

COMPANY

 

 

By:   /s/ Ahaz Armstrong                 

Name:  Ahaz Armstrong

Title:  AssistantVice President

 

 

 

[Signatures Continue on Next Page]

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
CAPITAL ONE, N.A.

 

 

By:   /s/Frederick H. Denecke              

Name:  Frederick H. Denecke

Title:  Vice President

 

 

 

[Signatures Continue on Next Page]

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
FIRST NIAGARA BANK, N.A.

 

 

By:   /s/James A. Rahill                 

Name:  James A. Rahill

Title:  Vice President

 

 

 

[Signatures Continue on Next Page]

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
KEYBANK NATIONAL ASSOCIATION

 

 

By:   /s/ Jane E. McGrath                 

Name:  Jane E. McGrath

Title:  Vice President

 

 

 

[Signatures Continue on Next Page]

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

	  	
MEGA INTERNATIONAL

COMMERCIAL BANK CO., LTD.

NEW YORK BRANCH

 

 

By:   /s/ Luke Hwang                      

Name:  Luke Hwang

Title:  VP & Deputy GM

 

 

 

Signature Page to Fifth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

Schedule 1.2

Lenders' Commitments

	
 

Lender

	
 

Revolving

Credit

Commitment

	
Revolving

Credit

Commitment Percentage

	
 

Term

Commitment

	
 

Term

Commitment Percentage

	
 

Delayed Draw

Term Loan

Commitment

	
Delayed Draw Term Loan

Commitment Percentage

	
Manufacturers and Traders Trust Company

	
$24,500,000

	
14.000000000%

	
$31,500,000

	
14.000000000%

	
$14,000,000

	
14.000000000%

	
SunTrust Bank

	
$21,175,000

	
12.100000000%

	
$27,225,000

	
12.100000000%

	
$12,100,000

	
12.100000000%

	
Wells Fargo Bank, National Association

	
$21,175,000

	
12.100000000%

	
$27,225,000

	
12.100000000%

	
$12,100,000

	
12.100000000%

	
PNC Bank, National Association

	
$21,175,000

	
12.100000000%

	
$27,225,000

	
12.100000000%

	
$12,100,000

	
12.100000000%

	
U.S. Bank National Association

	
$21,175,000

	
12.100000000%

	
$27,225,000

	
12.100000000%

	
$12,100,000

	
12.100000000%

	
HSBC Bank USA, National Association

	
$21,175,000

	
12.100000000%

	
$27,225,000

	
12.100000000%

	
$12,100,000

	
12.100000000%

	
Branch Banking and Trust Company

	
$16,100,000

	
9.200000000%

	
$20,700,000

	
9.200000000%

	
$9,200,000

	
9.200000000%

	
Capital One, N.A.

	
$10,150,000

	
5.800000000%

	
$13,050,000

	
5.800000000%

	
$5,800,000

	
5.800000000%

	
First Niagara Bank, N.A.

	
$8,750,000

	
5.000000000%

	
$11,250,000

	
5.000000000%

	
$5,000,000

	
5.000000000%

	
Key Bank National Association

	
$7,000,000

	
4.000000000%

	
$9,000,000

	
4.000000000%

	
$4,000,000

	
4.000000000%

	
Mega International Commercial Bank Co., Ltd. New York Branch

	
$2,625,000

	
1.500000000%

	
$3,375,000

	
1.500000000%

	
$1,500,000

	
1.500000000%

	
TOTAL:

	
$175,000,000

	
100%

	
$225,000,000

	
100%

	
$100,000,000

	
100%

  

  

  

Schedule 7.1(b)

Capitalization; Outstanding Securities

SALP and Holdings

	
A.

 

	
Sovran Acquisition Limited Partnership

	  	  
	  	
 

Partner's Names and Addresses

	
Number

of Units

	
Percentage Interest

in the Partnership

 

	  	
1.

	
General Partner:

 

Sovran Holdings, Inc.

6467 Main Street

Williamsville, NY  14221

 

	
 

 

316,144.65

	
 

 

1.0000

	  	
2.

	
Limited Partners:

 

Sovran Self Storage, Inc.

6467 Main Street

Williamsville, NY  14221

 

	
 

 

31,099,157.35

	
 

 

98.3700

	  	  	
Harold Samloff and Judy Samloff,

Co-Trustees of the Samloff

Revocable Trust,

Dated May 16, 2011

10040 E. Happy Valley Road, #2026

Scottsdale, AZ 85255

 

	
25,000.000

	
0.0791

	  	  	
Laurence C. Glazer

1 S. Washington Street, Suite 200

Rochester, NY  14614

 

	
6,357.425

	
0.0201

	  	  	
Rhonda Billick

145 Cheerywood Drive

Williamsville, NY 14221

 

	
1,025.000

	
0.0033

	  	  	
Morgan S. Whiteley Revocable

Living Trust

11714 Amkin Drive

Clifton, VA  20124

 

	
7,000.000

	
0.0221

  

  

  

	  	
 

Partner's Names and Addresses

	
Number

of Units

	
Percentage Interest

in the Partnership

 

	  	  	
Marlene F. Whiteley Revocable

Living Trust

11714 Amkin Drive

Clifton, VA  20124

 

	
7,000.000

	
0.0221

	  	  	
Survivor Trust u/Waldner Family

Wealth Trust

160 Sago Palm Road

Vero Beach, FL  32963

 

	
143,821.35

	
0.4550

	  	  	
Marjorie W. Waldner, Trustee of

The Waldner Non-Exempt

Family Trust u/Waldner Family

Wealth Trust

160 Sago Palm Road

Vero Beach, FL  32963

 

 

 

	
8,959.58

	
0.0283

	
B.

	
Sovran Holdings, Inc.

	  	  	  	  	  
	  	
Authorized Shares:          1,500

Shares Issued:          100

 

	  	
Shares owned by Sovran Self Storage Inc.:          100

Percentage of Issued Shares owned by Sovran Self Storage Inc.:          100%

 

  

  

  

Schedule 7.3(a)

Unencumbered Properties

See attached listing.

  

  

  

	
Schedule 7.3(a)

	  	  	  
	  	  	  	  	  
	
Store #

	
Street

	
City

	
State

	
Zip

	  	  	  	  	  
	
001

	
1471 Center Street Extension

	
Mt. Pleasant

	
SC

	
29464

	
002

	
4400 US Highway 98 N

	
Lakeland

	
FL

	
33809

	
003

	
550 Cox Road

	
Gastonia

	
NC

	
28054

	
005

	
500 Frenchtown Road

	
E. Greenwich

	
RI

	
02818

	
006

	
942 Capital Circle S.W.

	
Tallahassee

	
FL

	
32304

	
007

	
3690 LeHarps Road

	
Austintown

	
OH

	
44515

	
009

	
24940 Detroit Road

	
Westlake

	
OH

	
44145

	
010

	
1501 Capital Circle N.W.

	
Tallahassee

	
FL

	
32303

	
011

	
8531 South U.S. Hwy. 1

	
Port Saint Lucie

	
FL

	
34952

	
012

	
3075 Enterprise Road

	
Debary

	
FL

	
32713

	
013

	
36 Industrial Drive

	
Middletown

	
NY

	
10941

	
014

	
40 Leo Place

	
Cheektowaga

	
NY

	
14225

	
015

	
1270 Jefferson Road

	
Rochester

	
NY

	
14623

	
020

	
7657 103rd Street

	
Jacksonville

	
FL

	
32210

	
021

	
2648 Two Notch Road

	
Columbia

	
SC

	
29204

	
023

	
2585 Brighton Henrietta Town Line Rd

	
Rochester

	
NY

	
14623

	
025

	
10901 Abercorn Extension

	
Savannah

	
GA

	
31419

	
026

	
3511 South Holden Road

	
Greensboro

	
NC

	
27407

	
027

	
2701 McNeil Street

	
Raleigh

	
NC

	
27608

	
028

	
30 Stillman Road

	
North Haven

	
CT

	
06473

	
029

	
2655 Langford Road

	
Norcross

	
GA

	
30071

	
030

	
303 Highway 138

	
Riverdale

	
GA

	
30274

	
031

	
8161 Main Street

	
Williamsville

	
NY

	
14221

	
032

	
2401 South Wilmington Street

	
Raleigh

	
NC

	
27603

	
033

	
7403 Parklane Road

	
Columbia

	
SC

	
29223

	
034

	
5311A Bush River Road

	
Columbia

	
SC

	
29212

	
035

	
10020 Two Notch Road

	
Columbia

	
SC

	
29223

	
036

	
1375 Commerce Road

	
Morrow

	
GA

	
30260

	
037

	
11955 South Orange Blossom Trail

	
Orlando

	
FL

	
32837

	
039

	
230 Snyder Road

	
Hermitage

	
PA

	
16148

	
040

	
10300 Northwest 55th Street

	
Sunrise

	
FL

	
33351

	
041

	
7363 Lake Worth Road

	
Lake Worth

	
FL

	
33467

	
042

	
1987 Canton Road Northeast

	
Marietta

	
GA

	
30066

	
043

	
1525 Williams Drive

	
Marietta

	
GA

	
30066

	
044

	
7604 Highway 85

	
Riverdale

	
GA

	
30274

	
045

	
720 Veteran's Memorial Highway SW

	
Mableton

	
GA

	
30126

	
046

	
1195 Gresham Road

	
Marietta

	
GA

	
30062

	
047

	
1212 West Patrick Street

	
Frederick

	
MD

	
21703

	
048

	
26 West Diamond Avenue (Rte 117)

	
Gaithersburg

	
MD

	
20877

	
051

	
6005 North Wickham Road

	
Melbourne

	
FL

	
32940

	
052

	
10429 Jefferson Avenue

	
Newport News

	
VA

	
23605

	
053

	
195 East Fairfield Drive

	
Pensacola

	
FL

	
32503

	
055

	
269 Oakwood Drive

	
Glastonbury

	
CT

	
06033

	
056

	
2090 Clay Road

	
Austell

	
GA

	
30106

	
057

	
6457 General Green Way

	
Alexandria

	
VA

	
22312

	
058

	
980 North Navy Boulevard

	
Pensacola

	
FL

	
32507

	
059

	
1923 North Wickham Road

	
Melbourne

	
FL

	
32935

	
060

	
1395 South Street

	
Suffield

	
CT

	
06078

	
061

	
5725 Old National Highway

	
College Park

	
GA

	
30349

	
062

	
1213 East Brambleton Avenue

	
Norfolk

	
VA

	
23504

	
064

	
2630 Center Point Road

	
Birmingham

	
AL

	
35215

	
065

	
3625 Lorna Road

	
Hoover

	
AL

	
35216

	
066

	
2895 Vaughn Plaza Road

	
Montgomery

	
AL

	
36116

	
067

	
918 Blanding Boulevard

	
Orange Park

	
FL

	
32065

	
068

	
2807 West Michigan Avenue

	
Pensacola

	
FL

	
32526

	
069

	
801 East Nine Mile Road

	
Pensacola

	
FL

	
32514

	
070

	
2295 West Michigan Avenue

	
Pensacola

	
FL

	
32526

	
071

	
3000 West Columbus Drive

	
Tampa

	
FL

	
33607

	
072

	
404 Seminole Boulevard

	
Largo

	
FL

	
33770

	
073

	
1844 North Belcher Road

	
Clearwater

	
FL

	
33765

	
074

	
6011 I-55 North

	
Jackson

	
MS

	
39213

	
075

	
2947 McDowell Road Extension

	
Jackson

	
MS

	
39204

	
076

	
1210 Bentley Street

	
Richmond

	
VA

	
23227

	
077

	
4066 Silver Star Road

	
Orlando

	
FL

	
32808

	
078

	
50 Ward Way

	
Birmingham

	
AL

	
35209

	
080

	
3271 Fulling Mill Road

	
Middletown

	
PA

	
17057

	
081

	
191 Salem Church Road

	
Mechanicsburg

	
PA

	
17050

	
082

	
6523 Basile Rowe

	
E. Syracuse

	
NY

	
13057

	
083

	
3780 Central Avenue

	
Fort Myers

	
FL

	
33901

	
084

	
4400 Solomon Boulevard

	
Fort Myers

	
FL

	
33901

	
085

	
473 J. Clyde Morris Boulevard

	
Newport News

	
VA

	
23601

	
086

	
2632 Spruce Street

	
Montgomery

	
AL

	
36107

	
087

	
422 Old Trolley Road

	
Summerville

	
SC

	
29485

	
088

	
7550 West Waters Avenue

	
Tampa

	
FL

	
33615

	
089

	
1105 North Little School Road

	
Arlington

	
TX

	
76017

	
090

	
1061 Duncan Perry Road

	
Arlington

	
TX

	
76011

	
091

	
4820 Western Center Boulevard

	
Fort Worth

	
TX

	
76137

	
092

	
8025 Culebra Road

	
San Antonio

	
TX

	
78251

	
093

	
6015 Tezel Road

	
San Antonio

	
TX

	
78250

	
094

	
7266 Henry Clay Boulevard

	
Liverpool

	
NY

	
13088

	
095

	
1201 Coliseum Boulevard

	
Montgomery

	
AL

	
36110

	
096

	
3770 Lantana Road

	
Lantana

	
FL

	
33462

	
097

	
1320 River Road

	
North Fort Myers

	
FL

	
33903

	
099

	
1005 South Alexander Street

	
Plant City

	
FL

	
33563

	
0H2

	
140 Neponset Valley Parkway

	
Readville

	
MA

	
02136

	
0H3

	
81 Main Street

	
Weymouth

	
MA

	
02188

	
0H4

	
800 Narragansett Park Drive

	
E. Providence

	
RI

	
02916

	
100

	
511 Springfield Street (Rt. 147)

	
Feeding Hills

	
MA

	
01030

	
101

	
6600 Industrial Drive

	
Fort Myers

	
FL

	
33912

	
102

	
11378 Springfield Pike

	
Springdale

	
OH

	
45246

	
103

	
1830 Needmore Road

	
Dayton

	
OH

	
45414

	
104

	
2929 Pennsy Drive

	
Landover

	
MD

	
20785

	
105

	
1515 Manotak Avenue

	
Jacksonville

	
FL

	
32210

	
106

	
3858 Old Sunbeam Road

	
Jacksonville

	
FL

	
32257

	
108

	
9914 San Jose Boulevard

	
Jacksonville

	
FL

	
32257

	
109

	
1400 Orchard Lake Drive

	
Charlotte

	
NC

	
28270

	
110

	
6720 East W.T. Harris Boulevard

	
Charlotte

	
NC

	
28215

	
111

	
130 Concord Drive

	
Casselberry

	
FL

	
32707

	
112

	
1180 University Avenue

	
Rochester

	
NY

	
14607

	
113

	
446 Boardman-Canfield Road

	
Youngstown

	
OH

	
44512

	
115

	
1455 Broadway Ave

	
Bedford

	
OH

	
44146

	
116

	
4976 West 130th Street

	
Brook Park

	
OH

	
44135

	
117

	
19200 Neff Road

	
Cleveland

	
OH

	
44119

	
118

	
15101 McCracken Road

	
Cleveland

	
OH

	
44128

	
119

	
24560 Sperry Drive

	
Westlake

	
OH

	
44145

	
120

	
1100 Erie Road

	
Eastlake

	
OH

	
44095

	
121

	
8650 East Avenue

	
Mentor

	
OH

	
44060

	
127

	
3343 Southwest Military Drive

	
San Antonio

	
TX

	
78211

	
128

	
2500 Pat Booker Road

	
Universal City

	
TX

	
78148

	
129

	
9665 Marbach Road

	
San Antonio

	
TX

	
78245

	
130

	
8020 Eastex Freeway

	
Beaumont

	
TX

	
77708

	
131

	
9999 Highway 69

	
Port Arthur

	
TX

	
77640

	
132

	
6970 College Street

	
Beaumont

	
TX

	
77707

	
133

	
2637 Lakeside Drive

	
Lynchburg

	
VA

	
24501

	
134

	
8117 Timberlake Road

	
Lynchburg

	
VA

	
24502

	
135

	
4107 South Amherst Highway

	
Madison Heights

	
VA

	
24572

	
136

	
390 Bell Road

	
Christiansburg

	
VA

	
24073

	
137

	
2703 South Battlefield Blvd.

	
Chesapeake

	
VA

	
23322

	
139

	
2650 West 25th Street

	
Sanford

	
FL

	
32771

	
140

	
1099 South Congress Avenue

	
Delray Beach

	
FL

	
33445

	
141

	
5207 Montgomery Street

	
Savannah

	
GA

	
31405

	
142

	
551 South Congress Avenue

	
Delray Beach

	
FL

	
33445

	
143

	
38390 Chester Road

	
Avon

	
OH

	
44011

	
145

	
140 Centennial Boulevard

	
Richardson

	
TX

	
75081

	
147

	
9450 Hargrove Dr.

	
Dallas

	
TX

	
75220

	
149

	
9940 Jones Bridge Road

	
Alpharetta

	
GA

	
30022

	
150

	
1725 Roswell Road

	
Marietta

	
GA

	
30062

	
151

	
4427 Tilly Mill Road

	
Doraville

	
GA

	
30360

	
152

	
4207 Hilltop Road

	
Greensboro

	
NC

	
27407

	
153

	
118 Stage Coach Trail

	
Greensboro

	
NC

	
27409

	
154

	
11670 Airline Highway

	
Baton Rouge

	
LA

	
70816

	
155

	
7375 Airline Highway

	
Baton Rouge

	
LA

	
70805

	
156

	
958 Peiffers Lane

	
Harrisburg

	
PA

	
17109

	
157

	
3248 South Military Highway

	
Chesapeake

	
VA

	
23323

	
158

	
517 Volvo Parkway

	
Chesapeake

	
VA

	
23320

	
159

	
4929 Shell Road

	
Virginia Beach

	
VA

	
23455

	
160

	
597 Central Drive

	
Virginia Beach

	
VA

	
23454

	
161

	
385 S. Naval Base Road

	
Norfolk

	
VA

	
23505

	
162

	
6010 East Hillsborough Avenue

	
Tampa

	
FL

	
33610

	
163

	
872 Church Street Extension

	
Northbridge

	
MA

	
01534

	
164

	
97 Maher Lane

	
Harriman

	
NY

	
10926

	
165

	
5812 High Point Road Bldg. E

	
Greensboro

	
NC

	
27407

	
166

	
22195 Timberlake Road

	
Lynchburg

	
VA

	
24502

	
167

	
1903 Garden Street

	
Titusville

	
FL

	
32796

	
168

	
435 Highland Avenue

	
Salem

	
MA

	
01970

	
170

	
6601 Lee Highway

	
Chattanooga

	
TN

	
37421

	
171

	
4429 Highway 58

	
Chattanooga

	
TN

	
37416

	
172

	
1013 Battlefield Parkway

	
Fort Oglethorpe

	
GA

	
30742

	
173

	
6604 Walt Drive

	
Birmingham

	
AL

	
35242

	
174

	
2771 South County Trail

	
E. Greenwich

	
RI

	
02818

	
175

	
4417 Hillsborough Road

	
Durham

	
NC

	
27705

	
176

	
1200 East Cornwallis Road

	
Durham

	
NC

	
27713

	
178

	
134 South Policy Street

	
Salem

	
NH

	
03079

	
180

	
3787 Elm Road Northeast

	
Warren

	
OH

	
44483

	
181

	
3942 Youngstown Road

	
Warren

	
OH

	
44484

	
183

	
111 Tomahawk Drive

	
Indian Harbour

	
FL

	
32937

	
184

	
5961 I-55 North

	
Jackson

	
MS

	
39213

	
185

	
3433 North Fry Road

	
Katy

	
TX

	
77449

	
186

	
7901 Sheridan Street

	
Hollywood

	
FL

	
33024

	
187

	
1799 West Atlantic Boulevard

	
Pompano Beach

	
FL

	
33069

	
188

	
1500 West Sample Road

	
Pompano Beach

	
FL

	
33064

	
189

	
9900 Southwest 18th Street

	
Boca Raton

	
FL

	
33428

	
190

	
1655 10th Avenue

	
Vero Beach

	
FL

	
32960

	
191

	
1701 FM 1960 Bypass Rd E

	
Humble

	
TX

	
77338

	
192

	
10114 Katy Freeway

	
Houston

	
TX

	
77043

	
193

	
16650 State Highway 3

	
Webster

	
TX

	
77598

	
194

	
2300 Old Denton Road

	
Carrollton

	
TX

	
75006

	
195

	
1109 North 21st Avenue

	
Hollywood

	
FL

	
33020

	
196

	
1620 S Interstate 35

	
San Marcos

	
TX

	
78666

	
197

	
5547 McNeil Drive

	
Austin

	
TX

	
78729

	
198

	
10307 FM 2222

	
Austin

	
TX

	
78730

	
202

	
1151 West Euless Boulevard

	
Euless

	
TX

	
76040

	
203

	
5575 Davis Boulevard

	
N Richland Hills

	
TX

	
76180

	
204

	
1105 Old State Rt. 74

	
Batavia

	
OH

	
45103

	
205

	
4000 North West Street

	
Jackson

	
MS

	
39206

	
206

	
5110 Franz Road

	
Katy

	
TX

	
77493

	
207

	
5 James P Murphy Ind Hwy.

	
West Warwick

	
RI

	
02893

	
208

	
2310 West Pinhook Road

	
Lafayette

	
LA

	
70508

	
209

	
2207 West Pinhook Road

	
Lafayette

	
LA

	
70508

	
210

	
3636 Ambassador Caffery Parkway

	
Lafayette

	
LA

	
70503

	
211

	
2888 N.E. Evangeline Thruway

	
Lafayette

	
LA

	
70507

	
212

	
313 Guilbeau Road

	
Lafayette

	
LA

	
70506

	
213

	
375 East Elliot Road

	
Gilbert

	
AZ

	
85234

	
214

	
13902 North 59th Avenue

	
Glendale

	
AZ

	
85306

	
215

	
1356 East Baseline Road

	
Mesa

	
AZ

	
85204

	
216

	
837 East Broadway Road

	
Mesa

	
AZ

	
85204

	
217

	
545 West Broadway Road

	
Mesa

	
AZ

	
85210

	
218

	
139 North Greenfield Road

	
Mesa

	
AZ

	
85205

	
219

	
3641 West Camelback Road

	
Phoenix

	
AZ

	
85019

	
220

	
1928 East Bell Road

	
Phoenix

	
AZ

	
85022

	
221

	
20001 North 35th Avenue

	
Phoenix

	
AZ

	
85027

	
222

	
576 Bridgton Road

	
Westbrook

	
ME

	
04092

	
223

	
801 North Cocoa Boulevard (US-1)

	
Cocoa

	
FL

	
32922

	
224

	
150 North Clark Road

	
Cedar Hill

	
TX

	
75104

	
225

	
1111 Route 17M

	
Monroe

	
NY

	
10950

	
226

	
1171 Turnpike Street (Route 114)

	
N. Andover

	
MA

	
01845

	
227

	
3400 Bayport Blvd (Hwy 146)

	
Seabrook

	
TX

	
77586

	
228

	
5605 West Sunrise Boulevard

	
Plantation

	
FL

	
33313

	
229

	
3551 Bessemer Super Highway

	
Bessemer

	
AL

	
35020

	
230

	
1639 Route 22

	
Brewster

	
NY

	
10509

	
231

	
8227 North Lamar Blvd

	
Austin

	
TX

	
78753

	
232

	
2410 East Main Street

	
League City

	
TX

	
77573

	
233

	
800 Abrams Boulevard

	
Lehigh Acres

	
FL

	
33971

	
234

	
73 Pleasant Street

	
Dracut

	
MA

	
01826

	
235

	
114 Pleasant Valley Street

	
Methuen

	
MA

	
01844

	
236

	
7437 Garners Ferry Road

	
Columbia

	
SC

	
29209

	
237

	
600 Cannon Road

	
Myrtle Beach

	
SC

	
29577

	
238

	
1320 Highway 40 East

	
Kingsland

	
GA

	
31548

	
239

	
6 Industrial Park Road

	
Saco

	
ME

	
04072

	
240

	
55 Holman Road

	
Plymouth

	
MA

	
02360

	
241

	
6 Washington Circle

	
Sandwich

	
MA

	
02563

	
242

	
430 Spencer Street

	
Syracuse

	
NY

	
13204

	
248

	
15300 Kuykendahl Road

	
Houston

	
TX

	
77090

	
251

	
2233 Franklin Drive

	
Mesquite

	
TX

	
75150

	
252

	
1606 Plantation Road

	
Dallas

	
TX

	
75235

	
253

	
3540 Hunt Lane

	
San Antonio

	
TX

	
78227

	
254

	
5250 FM 1960 East

	
Humble

	
TX

	
77346

	
255

	
6402 Fairmont Parkway

	
Pasadena

	
TX

	
77505

	
256

	
2280 East Main Street

	
League City

	
TX

	
77573

	
257

	
15261 Highway 105 West

	
Montgomery

	
TX

	
77356

	
259

	
3800 South Highway 6

	
Houston

	
TX

	
77082

	
260

	
188 South LHS Drive

	
Lumberton

	
TX

	
77657

	
261

	
99-4 Mariner Drive

	
Southampton

	
NY

	
11968

	
262

	
59 Mariner Drive

	
Southampton

	
NY

	
11968

	
263

	
173 West Montauk Highway

	
Hampton Bays

	
NY

	
11946

	
264

	
9 Hardscrabble Court

	
E. Hampton

	
NY

	
11937

	
265

	
1010 E. Highway 67

	
Duncanville

	
TX

	
75137

	
266

	
4640 Harry Hines Blvd.

	
Dallas

	
TX

	
75235

	
267

	
280 Fairfield Avenue

	
Stamford

	
CT

	
06902

	
268

	
23355 State Highway 249

	
Tomball

	
TX

	
77375

	
269

	
2828 FM 1488

	
Conroe

	
TX

	
77384

	
270

	
8625 Spring Cypress

	
Spring

	
TX

	
77379

	
271

	
5415 Bissonnet St.

	
Houston

	
TX

	
77081

	
272

	
1238  FM 1462

	
Alvin

	
TX

	
77511

	
273

	
1426 N. McMullen Booth Rd.

	
Clearwater

	
FL

	
33759

	
274

	
4717 Cartwright Road

	
Missouri City

	
TX

	
77459

	
275

	
4121 Hixson Pike

	
Chattanooga

	
TN

	
37415

	
276

	
2830 South A.W. Grimes Blvd.

	
Round Rock

	
TX

	
78664

	
278

	
8239 Thompson Rd

	
Cicero

	
NY

	
13039

	
279

	
110 Saxon Ave.

	
Bay Shore

	
NY

	
11706

	
280

	
40 Congress St

	
Springfield

	
MA

	
01104

	
281

	
649 Hope St.

	
Stamford

	
CT

	
06907

	
282

	
9145 Jones Rd.

	
Houston

	
TX

	
77065

	
283

	
3650 Richard Rd.

	
Montgomery

	
AL

	
36111

	
284

	
90 Main St

	
Oxford

	
MA

	
01540

	
285

	
9717 US Hwy 290E

	
Austin

	
TX

	
78724

	
286

	
10260 Marbach Rd

	
San Antonio

	
TX

	
78245

	
287

	
6509 South 1st Street

	
Austin

	
TX

	
78745

	
288

	
32777 State Highway 249

	
Pinehurst

	
TX

	
77362

	
289

	
3150 Austell Rd.

	
Marietta

	
GA

	
30008

	
290

	
4756 Florida Blvd.

	
Baton Rouge

	
LA

	
70806

	
291

	
7400 Barker Cypress

	
Cypress

	
TX

	
77433

	
293

	
2216 S Interstate 35

	
San Marcos

	
TX

	
78666

	
294

	
455 W. Cedar Bayou-Lynchburg Rd.

	
Baytown

	
TX

	
77521

	
295

	
1280 Creek St

	
Webster

	
NY

	
14580

	
296

	
13033 Jones Rd.

	
Houston

	
TX

	
77070

	
298

	
300 Westgate Rd.

	
Lafayette

	
LA

	
70506

	
299

	
203 Albertson's Pkwy.

	
Broussard

	
LA

	
70518

	
301

	
1902 Wellington Rd.

	
Manchester

	
NH

	
03104

	
302

	
120 Spit Brook Rd.

	
Nashua

	
NH

	
03062

	
303

	
10833 Seminole Blvd

	
Seminole

	
FL

	
33778

	
304

	
10700 US Highway 19 N

	
Pinellas Park

	
FL

	
33782

	
305

	
41524 US Highway 19 N

	
Tarpon Springs

	
FL

	
34689

	
306

	
3200 General DeGaulle Dr.

	
New Orleans

	
LA

	
70114

	
307

	
301 Meramec Station Rd.

	
Ballwin

	
MO

	
63021

	
308

	
11540 St. Charles Rock Rd.

	
Bridgeton

	
MO

	
63044

	
309

	
940 Shackelford Rd.

	
Florissant

	
MO

	
63031

	
310

	
450 W. Washington St.

	
Florissant

	
MO

	
63031

	
311

	
6355 Howdershell Rd.

	
Hazelwood

	
MO

	
63042

	
312

	
3535 Lemay Ferry Rd.

	
Saint Louis

	
MO

	
63125

	
313

	
6557 Manchester Rd.

	
Saint Louis

	
MO

	
63139

	
314

	
4320 Little Rd.

	
Arlington

	
TX

	
76016

	
315

	
13575 Goldmark Dr.

	
Dallas

	
TX

	
75240

	
316

	
2305 Manana Dr.

	
Dallas

	
TX

	
75220

	
317

	
8555 Manderville Lane

	
Dallas

	
TX

	
75231

	
318

	
6050 Granbury Rd.

	
Fort Worth

	
TX

	
76133

	
319

	
88 Grapevine Hwy.

	
Hurst

	
TX

	
76054

	
320

	
20202 Blanco Rd.

	
San Antonio

	
TX

	
78258

	
321

	
2300 Broadway St.

	
San Antonio

	
TX

	
78215

	
322

	
11947 Huebner Rd.

	
San Antonio

	
TX

	
78230

	
323

	
6103 Lee Highway

	
Chattanooga

	
TN

	
37421

	
324

	
2860 N.E. Evangeline Thruway

	
Lafayette

	
LA

	
70507

	
325

	
2650 East South Boulevard

	
Montgomery

	
AL

	
36116

	
326

	
3951 Pepperell Pkwy.

	
Opelika

	
AL

	
36801

	
327

	
1231 Gatewood Dr.

	
Auburn

	
AL

	
36830

	
328

	
3153 Williams Rd.

	
Columbus

	
GA

	
31909

	
329

	
4249 Miller Rd.

	
Columbus

	
GA

	
31909

	
330

	
4510 Armour Rd.

	
Columbus

	
GA

	
31904

	
331

	
909 Amber Dr.

	
Columbus

	
GA

	
31907

	
332

	
11 Integra Dr.

	
Concord

	
NH

	
03301

	
333

	
300 Langner Rd.

	
West Seneca

	
NY

	
14224

	
334

	
2802 Transit Rd.

	
West Seneca

	
NY

	
14224

	
335

	
4445 Lake Ave.

	
Blasdell

	
NY

	
14219

	
336

	
3154 Union Rd.

	
Cheektowaga

	
NY

	
14227

	
337

	
2681 Niagara Falls Blvd.

	
Amherst

	
NY

	
14228

	
338

	
521 Young St.

	
Tonawanda

	
NY

	
14150

	
339

	
1275 Sheridan Dr.

	
Buffalo

	
NY

	
14217

	
340

	
6104 S. Transit Rd.

	
Lockport

	
NY

	
14094

	
341

	
860 Phillips Rd.

	
Webster

	
NY

	
14580

	
342

	
2201 East Reed Rd.

	
Greenville

	
MS

	
38703

	
343

	
9595 Highway 69

	
Port Arthur

	
TX

	
77640

	
344

	
250 S. Dowlen Rd.

	
Beaumont

	
TX

	
77707

	
345

	
11607 S. Memorial Pkwy.

	
Huntsville

	
AL

	
35803

	
346

	
8036 Madison Blvd.

	
Madison

	
AL

	
35758

	
347

	
3610 Bienville Blvd.

	
Ocean Springs

	
MS

	
39564

	
348

	
7015 Highway 72 West

	
Huntsville

	
AL

	
35806

	
349

	
8781 Airport Blvd.

	
Mobile

	
AL

	
36608

	
350

	
13130 Highway 49

	
Gulfport

	
MS

	
39503

	
351

	
8778 Highway 72 West

	
Madison

	
AL

	
35758

	
352

	
7775 State Highway 59 South

	
Foley

	
AL

	
36535

	
353

	
1600 West Nine Mile Road

	
Pensacola

	
FL

	
32534

	
354

	
2020 S. College St.

	
Auburn

	
AL

	
36832

	
355

	
1932 Popps Ferry Rd.

	
Biloxi

	
MS

	
39532

	
356

	
9113 West Highway 98

	
Pensacola

	
FL

	
32506

	
357

	
115 S. Arrowhead Dr.

	
Montgomery

	
AL

	
36117

	
358

	
1925 McLemore Rd..

	
Montgomery

	
AL

	
36117

	
359

	
3615 N. Foster Road

	
San Antonio

	
TX

	
78244

	
360

	
1655 S. Major Dr.

	
Beaumont

	
TX

	
77707

	
361

	
421 Classic Dr.

	
Hattiesburg

	
MS

	
39402

	
362

	
4059 Ginger Dr.

	
D'Iberville

	
MS

	
39540

	
363

	
7905 State Highway 59 South

	
Foley

	
AL

	
36535

	
364

	
130 Centre St.

	
Ridgeland

	
MS

	
39157

	
365

	
5111 I-55 North

	
Jackson

	
MS

	
39206

	
366

	
2950 Robertson Ave.

	
Cincinnati

	
OH

	
45209

	
367

	
3830 N. Bailey Bridge Road

	
Midlothian

	
VA

	
23112

	
368

	
5000 Atlantic Ave.

	
Raleigh

	
NC

	
27616

	
369

	
7209 Wallace Ln.

	
Charlotte

	
NC

	
28212

	
370

	
302 Davis Grove Circle

	
Cary

	
NC

	
27519

	
371

	
9225 Westmoreland Rd.

	
Cornelius

	
NC

	
28031

	
372

	
3617 Matthews Weddington Rd.

	
Matthews

	
NC

	
28105

	
373

	
5738 Dillard Dr.

	
Cary

	
NC

	
27518

	
374

	
13125 Zeb Morris Way

	
Mint Hill

	
NC

	
28227

	
375

	
445 Wagaraw Rd.

	
Fair Lawn

	
NJ

	
07410

	
376

	
480 Allen St.

	
Elizabeth

	
NJ

	
07202

	
377

	
115 Jacqueline Lane

	
High Ridge

	
MO

	
63049

	
378

	
2910 N. Decatur Rd.

	
Decatur

	
GA

	
30033

	
379

	
19415 Pinehurst Trail Drive

	
Humble

	
TX

	
77346

	
380

	
2905 Crystal Springs Street

	
Bedford

	
TX

	
76021

	
381

	
7610 Highway 6 North

	
Houston

	
TX

	
77095

	
382

	
309 South Bell Boulevard

	
Cedar Park

	
TX

	
78613

	
383

	
2499 South Mason Road

	
Katy

	
TX

	
77450

	
384

	
3321 Center Street

	
Deer Park

	
TX

	
77536

	
385

	
13300 W. Little York Road

	
Houston

	
TX

	
77041

	
386

	
4155 Fairway Plaza Drive

	
Pasadena

	
TX

	
77505

	
387

	
4333 FM 2351 Road

	
Friendswood

	
TX

	
77546

	
388

	
6911 Louetta Road

	
Spring

	
TX

	
77379

	
389

	
7835 W. Sam Houston Pkwy. N.

	
Houston

	
TX

	
77040

	
390

	
12835 Pond Springs Road

	
Austin

	
TX

	
78729

	
391

	
3411 Rayford Road

	
Spring

	
TX

	
77386

	
392

	
550 S. IH-35

	
Round Rock

	
TX

	
78681

	
393

	
1435 Silverado Drive

	
Houston

	
TX

	
77077

	
394

	
11220 Hwy. 6 South

	
Sugar Land

	
TX

	
77498

	
395

	
12711 Westheimer Road

	
Houston

	
TX

	
77077

	
396

	
2010 Wilcrest Drive

	
Houston

	
TX

	
77042

	
397

	
4455 Panther Creek Pines

	
The Woodlands

	
TX

	
77381

	
398

	
7951 Alden Bend Drive

	
The Woodlands

	
TX

	
77382

	
399

	
5425 Katy Freeway

	
Houston

	
TX

	
77007

	
401

	
701 Brick Kiln Blvd.

	
Newport News

	
VA

	
23602

	
402

	
5060 North Palafox St.

	
Pensacola

	
FL

	
32505

	
403

	
6820 SW 81st Terrace

	
Miami

	
FL

	
33143

	
404

	
1400 S. Skokie Hwy.

	
Lake Forest

	
IL

	
60045

	
405

	
1401 N. Plum Grove Rd.

	
Schaumburg

	
IL

	
60173

	
406

	
1806 East Little Creek Road

	
Norfolk

	
VA

	
23518

	
407

	
680 14th Street NW

	
Atlanta

	
GA

	
30318

	
408

	
1709 Blanding Blvd

	
Middleburg

	
FL

	
32068

	
409

	
600 Blanding Blvd

	
Orange Park

	
FL

	
32073

	
410

	
4800 US Highway 1 South

	
St. Augustine

	
FL

	
32086

	
411

	
1890 Briarwood Road NE

	
Atlanta

	
GA

	
30329

	
412

	
1125 Roberts Boulevard NW

	
Kennesaw

	
GA

	
30144

	
413

	
875 Marathon Parkway

	
Lawrenceville

	
GA

	
30046

	
414

	
42 Sycamore Lane

	
Woodstock

	
GA

	
30188

	
415

	
160 Havensite Court

	
Cary

	
NC

	
27513

	
416

	
20765 W. Grass Lake Road

	
Lindenhurst

	
IL

	
60046

	
417

	
11525 184th Place

	
Orland Park

	
IL

	
60467

	
418

	
5305 Manatee Ave. W

	
Bradenton

	
FL

	
34209

	
419

	
3111 Cleveland Ave

	
Fort Myers

	
FL

	
33901

	
420

	
2180 Drew Street

	
Clearwater

	
FL

	
33765

	
421

	
111 North Myrtle Ave

	
Clearwater

	
FL

	
33755

	
422

	
232 South Lake Street

	
Aurora

	
IL

	
60506

	
423

	
2924 N. 83rd Ave

	
Phoenix

	
AZ

	
85033

	
424

	
2051 North Austin Ave

	
Chicago

	
IL

	
60639

	
425

	
345 North Western Ave

	
Chicago

	
IL

	
60612

	
426

	
615 West Pershing Road

	
Chicago

	
IL

	
60609

	
427

	
3997 FM 1431

	
Round Rock

	
TX

	
78681

	
428

	
101 East Hoffman Avenue

	
Lindenhurst

	
NY

	
11757

	
429

	
2715 Sam Bass Road

	
Round Rock

	
TX

	
78681

	
430

	
2101 Double Creek Dr

	
Round Rock

	
TX

	
78664

	
431

	
9403 Marbach Road

	
San Antonio

	
TX

	
78245

	
432

	
3626 North Broadway Avenue

	
Chicago

	
IL

	
60613

	
433

	
51 McGrath Hwy.

	
Somerville

	
MA

	
02143

  

  

  

Schedule 7.3(c)

Partially Owned Entities

	  	
Sovran Acquisition Limited Partnership owns a 49% interest in Iskalo Office Holdings, LLC as a Member, a 20% interest in Sovran HHF Storage Holdings LLC as a Member, and a 15% interest in Sovran HHF Storage Holdings II LLC, as a Member.

 

  

  

  

Schedule 7.7

 

Litigation

None.

  

  

  

Schedule 7.15

 

Certain Transactions

	
1.

	
Charles E. Lannon, a director of Sovran Holdings, Inc., rents an office from Sovran Acquisition Limited Partnership ("SALP") at the headquarters of SALP on a month-to-month basis at a market rate ($1,000 per month).

	  	  
	
2.

	
Frederick G. Attea is an Assistant Secretary of Sovran Self Storage, Inc. and is a partner in Phillips Lytle LLP, the law firm which represents Sovran Self Storage, Inc., Sovran Holdings, Inc., SALP and certain of their subsidiaries and affiliates including The Locke Group LLC, Uncle Bob's Management, LLC, Sovran Grapevine, LLC, Sovran Meramac, LLC, Sovran Washington, LLC, Sovran Shackleford, LLC, Sovran Manchester, LLC, Sovran Seminole, LLC, Sovran DeGaulle, LLC, Sovran Little Road, LLC, Sovran Granbury, LLC, Sovran Huebner, LLC, Locke Sovran I L.L.C., Locke Sovran II L.L.C. and Sovran Jones Road, LLC.

 

  

  

  

Schedule 7.18

 

Environmental Matters

 

None.

  

  

  

Schedule 7.19

Subsidiaries

 

	
A.

	
Subsidiaries of Sovran Self Storage, Inc. (all Delaware Entities):

	  	  	  
	  	  	
Sovran Holdings, Inc. – 100% Owned

	  	  	
Sovran Acquisition Limited Partnership – 98.37% Limited Partnership Interest

	  	  	  
	
B.

	
Subsidiaries of Sovran Acquisition Limited Partnership:

	  	  
	  	
100% Owned Delaware Entities

	
100% Owned New York Entities

	  	  
	  	
Sovran Jones Road, LLC

Sovran Cameron, LLC

Sovran Congress, LLC

Sovran Huebner, LLC

Sovran Little Road, LLC

Sovran Granbury, LLC

Sovran Shackelford, LLC

Sovran Manchester, LLC

Sovran DeGaulle, LLC

Sovran Grapevine, LLC

Sovran Washington, LLC

Sovran Meramac, LLC

Sovran Seminole, LLC

The Locke Group LLC

 

	
Iskalo Land Holdings LLC

Locke Sovran I L.L.C.

Locke Sovran II L.L.C.

Uncle Bob's Management, LLC (fka    Locke Leasing LLC)

 

 

	
C.

	
Guarantors:

	  	
Sovran Holdings, Inc.

Sovran Jones Road, LLC

Sovran Huebner, LLC

Sovran Little Road, LLC

Sovran Granbury, LLC

Sovran Shackelford, LLC

Sovran Manchester, LLC

Sovran DeGaulle, LLC

Sovran Grapevine, LLC

Sovran Washington, LLC

Sovran Meramac, LLC

Sovran Seminole, LLC

The Locke Group LLC

Locke Sovran I L.L.C.

Locke Sovran II L.L.C.

Uncle Bob's Management, LLC (fka Locke Leasing LLC)

  

  

  

Schedule 7.24

 

Existing Indebtedness

 

As of June 4, 2013

 

	
A.

	
Notes

          The Borrowers are the co-obligors on $80,000,000 principal amount of 6.26% Senior Guaranteed Notes, Series A, due September 4, 2013, and $20,000,000 principal amount of Floating Rate Senior Guaranteed Notes, Series B, due September 4, 2013, issued pursuant to the Note Purchase Agreement dated as of September 4, 2003, among Sovran, SALP, and the several Purchasers identified therein, as amended prior to the date hereof (the "2003 NPA").  All of the indebtedness under the 2003 NPA is guaranteed by Holdings, Locke LLC, Uncle Bob's Management LLC and each of the following entities (collectively, the "Designated Subsidiaries"):  Sovran Grapevine, LLC, Sovran Meramac, LLC, Sovran Washington, LLC, Sovran Shackleford, LLC, Sovran Manchester, LLC, Sovran Seminole, LLC, Sovran DeGaulle, LLC, Sovran Little Road, LLC, Sovran Granbury, LLC, Sovran Huebner, LLC, Locke Sovran I L.L.C., Locke Sovran II L.L.C. and Sovran Jones Road, LLC.

 

          The Borrowers are the co-obligors on $150,000,000 principal amount of  6.38% Senior Guaranteed Notes, Series C, due April 26, 2016, issued pursuant to the Note Purchase Agreement dated as of April 26, 2006, among Sovran, SALP, and the several Purchasers identified therein, as amended prior to the date hereof (the "2006 NPA").  Holdings, Locke LLC, Uncle Bob's Management LLC and each of the Designated Subsidiaries guaranty all of the indebtedness under the 2006 NPA.

 

          The Borrowers are the co-obligors on $100,000,000 principal amount of 5.54% Senior Guaranteed Notes, Series D, due August 5, 2021, issued pursuant to the Note Purchase Agreement dated as of August 5, 2011, among Sovran, SALP, and the several Purchasers identified therein (the "2011 NPA").  Holdings, Locke LLC, Uncle Bob's Management LLC and each of the Designated Subsidiaries guaranty all of the indebtedness under the 2011 NPA.

 

	
B.

	
Indemnity and Guaranty Agreements

          SALP and Locke Sovran I L.L.C. are co-indemnitors under an Environmental Indemnity Agreement dated as of November 28, 2001 in favor of GMAC Commercial Mortgage Corporation in connection with a $30,500,000 securitized loan which has been fully repaid.

 

          Locke Sovran II L.L.C. is an indemnitor under an Environmental Indemnity Agreement dated as of February 12, 2002 in favor of PNC Bank, National Association in connection with a $48,000,000 securitized loan which has been fully repaid.

 

          SALP is an indemnitor under a Loan Assumption Agreement and Amendment of Loan Documents dated as of April 13, 2006 in favor of Wells Fargo Bank, N.A. in connection with 

  

  

  

a $1,100,000 securitized loan to Sovran Cameron, L.L.C. by Wells Fargo Bank, N.A. ("Wells") dated as of April 13, 2006 secured by a mortgage granted by Sovran Cameron, L.L.C. to Wells.

          SALP is an indemnitor under a Loan Assumption Agreement and Amendment of Loan Documents dated as of April 13, 2006 in favor of Wells in connection with a $1,200,000 securitized loan to Sovran Congress, L.L.C. by Wells, dated as of April 13, 2006 secured by a mortgage granted by Sovran Congress, L.L.C. to Wells.

 

          SALP is a co-indemnitor with SH 729-744 LLC under an Environmental Indemnity Agreement dated as of July 13, 2011 in favor of PNC in connection with a $74,600,000 securitized loan (the "SH 729-744 Securitized Loan") from PNC to SH 729-744 LLC secured by mortgages granted by SH 729-744 LLC to PNC.  SALP is also a guarantor under a Guaranty of Recourse Obligations of Borrower dated as of July 13, 2011 in connection with the SH 729-744 Securitized Loan.

 

          SALP is a co-indemnitor with each of SH 726 LLC, SH 727 LLC and SH 728 LLC in connection with the assumption of their respective securitized loans in the principal amounts of $6,040,884.60, $3,480,344.61 and $4,433,296.74 (collectively, the "SH 726-728 Securitized Loans") from U.S. Bank National Association, as Trustee, Successor-in-Interest to Bank of America, N.A. as Trustee, Successor to Wells Fargo Bank, N.A. as Trustee, for the Registered Holders of CN 2006 - CN2 Commercial Mortgage Pass-through Certificates (the "Lender") dated as of August 1, 2011 and separately secured by mortgages granted by each of SH 726 LLC, SH 727 LLC and SH 728 LLC to the Lender.

 

          SALP is an indemnitor under a Loan Assumption Agreement and Amendment of Loan Documents dated September 22, 2011 in favor of Sun Life Assurance Company of Canada ("Sun Life") in connection with a $3,000,000 securitized loan to SALP by Sun Life dated as of September 22, 2011 secured by a mortgage on property on Nassau Road, Webster, Texas.

 

          SALP is a co-indemnitor with SH 746-755 LLC under a loan agreement dated as of March 28, 2012 in favor of PNC in connection with a $16,620,000 securitized loan (the "SH 746-755 Securitized Loan") from PNC to SH 746-755 LLC secured by mortgages granted by SH 746-755 LLC to PNC.  SALP is also a guarantor under a Guaranty of Recourse Obligations of Borrower dated as of March 28, 2012 in connection with the SH 746-755 Securitized Loan.

 

          SALP and/or certain of the Designated Subsidiaries (as defined in this Schedule 7.24) are indemnitors under certain environmental indemnity agreements made in connection with certain securitized loans which have been fully repaid.

 

          Certain joint ventures in which SALP has a minority interest have entered into securitized loan transactions secured by mortgage loans on property owned by the joint ventures or special purpose entities owned by the joint ventures, and non-recourse guaranty agreements and environmental indemnities have been provided or assumed in connection with such securitized loans.

 

	
C.

	
Swap Agreements

          Interest rate swap agreement made by Sovran and SALP with SunTrust Bank dated June 25, 2008, as amended, with a current notional amount of $75,000,000.

 

          Interest rate swap agreement made by Sovran and SALP with Bank of America, N.A. with an effective date of September 4, 2005 with a notional amount of $20,000,000.

 

          Interest rate swap agreement made by Sovran and SALP with HSBC Bank USA, National Association dated August 31, 2011 with a notional amount of $50,000,000.

 

          Interest rate swap agreement made by Sovran and SALP with U.S. Bank, National Association dated as of September 19, 2011 with a notional amount of $50,000,000.

          Interest rate swap agreement made by Sovran and SALP with First Niagara Bank, N.A. dated September 19, 2011 with a notional amount of $250,000.00.

 

  

  

  

Schedule 9.2(vi)

 

Existing Liens

 

None.

  

  

  

Schedule 9.3(d)

 

Existing Investments

49% membership interest in Iskalo Office Holdings LLC

 

20% membership interest in Sovran HHF Storage Holdings LLC

 

15% membership interest in Sovran HHF Storage Holdings II LLC

  

  

  

	  	
Exhibit A-1

[Form of Revolving Credit Note]

REVOLVING CREDIT NOTE

	
$                  

	
                 , 20  

          FOR VALUE RECEIVED, the undersigned SOVRAN SELF STORAGE, INC., a Maryland corporation ("Sovran"), and the undersigned SOVRAN ACQUISITION LIMITED PARTNERSHIP, a Delaware limited partnership ("SALP" and together with Sovran, collectively referred to herein as the "Borrowers" and individually as a "Borrower"), hereby jointly and severally promise to pay to the order of _______________, [a national banking association] (the "Lender") at the Administrative Agent's Head Office (as defined in the Credit Agreement defined below):

	  	  	
 

	  	

          (a)  prior to or on the Revolving Credit Loan Maturity Date the principal amount of _________________ Dollars ($_______________) or, if less, the aggregate unpaid principal amount of Revolving Credit Loans advanced by the Lender to the Borrowers pursuant to the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among the Borrowers, Manufacturers and Traders Trust Company and the other lending  institutions which are or may become parties thereto pursuant to §19 thereof (the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents; and

 

	  	
          (b)  interest on the principal balance hereof from time to time outstanding at the timesand at the rate provided in the Credit Agreement.

	  	  

          This Revolving Credit Note, together with the other Revolving Credit Notes issued as of the date hereof under the Credit Agreement (collectively, the "Substitute Revolving Credit Notes"), are issued in substitution for the unpaid principal balances outstanding under all of the Revolving Credit Notes previously issued by the Borrower under the Fourth Amended and Restated Revolving Credit and Term Loan Agreement dated as of August 5, 2011 (the "2011 Revolving Credit Notes"), which 2011 Revolving Credit Notes are outstanding as of the date hereof.  Up to the full amount of the principal balances of the Substitute Revolving Credit Notes, the principal balances outstanding under the 2011 Revolving Credit Notes shall continue in all respects to be outstanding under the Substitute Revolving Credit Notes, and this Revolving Credit Note shall not be deemed to evidence a novation or payment and refunding of any part of

  

  

  

the outstanding principal balances under the 2011 Revolving Credit Notes.  Notwithstanding the date of this Revolving Credit Note, the Substitute Revolving Credit Notes carry all of the rights to unpaid interest that were carried by the 2011 Revolving Credit Notes such that no loss of interest shall result from any such substitution.

          This Revolving Credit Note evidences borrowings under and has been issued by the Borrowers in accordance with the terms of the Credit Agreement.  The Lender and any holder hereof pursuant to the Credit Agreement or by operation of law is entitled to the benefits of the Credit Agreement and the other Loan Documents, and may enforce the agreements of the Borrower contained therein, and any holder hereof may exercise the respective remedies provided for thereby or otherwise available in respect thereof, all in accordance with the respective terms thereof.  All capitalized terms used in this Revolving Credit Note and not otherwise defined herein shall have the same meanings herein as in the Credit Agreement.

          The Borrowers irrevocably authorize the Lender to make or cause to be made, at or about the time of the Drawdown Date of any Revolving Credit Loan or at the time of receipt of any payment of principal of this Revolving Credit Note, an appropriate notation on the grid attached to this Revolving Credit Note, or the continuation of such grid, or any other similar record, including computer records, reflecting the making of such Revolving Credit Loan or (as the case may be) the receipt of such payment.  The outstanding amount of the Revolving Credit Loans set forth on the grid attached to this Revolving Credit Note, or the continuation of such grid, or any other similar record, including computer records, maintained by the Lender with respect to any Revolving Credit Loans shall be prima facie evidence of the principal amount thereof owing and unpaid to the Lender, but the failure to record, or any error in so recording, any such amount on any such grid, continuation or other record shall not limit or otherwise affect the obligation of the Borrowers hereunder or under the Credit Agreement to make payments of principal of and interest on this Revolving Credit Note when due to the extent of the unpaid principal and interest amount as of any date of determination.

          The Borrowers have the right in certain circumstances and the obligation under certain other circumstances to prepay the whole or part of the principal of this Revolving Credit Note on the terms and conditions specified in the Credit Agreement.

          If any one or more of the Events of Default shall occur, the entire unpaid principal amount of this Revolving Credit Note and all of the unpaid interest accrued thereon and any other charges or amounts due under any of the Loan Documents may become or be declared due and payable in the manner and with the effect provided in the Credit Agreement.

          No delay or omission on the part of the Lender or any holder hereof in exercising any right hereunder shall operate as a waiver of such right or of any other rights of the Lender or such holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar or waiver of the same or any other right on any further occasion.

          The Borrowers and every endorser and guarantor of this Revolving Credit Note or the obligation represented hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of

  

  

  

this Revolving Credit Note, and assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of collateral and to the addition or release of any other party or person primarily or secondarily liable.

          THIS REVOLVING CREDIT NOTE AND THE OBLIGATIONS OF THE BORROWERS HEREUNDER SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).  EACH OF THE BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS REVOLVING CREDIT NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK, NEW YORK OR ANY FEDERAL COURT SITTING IN NEW YORK, NEW YORK AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN §20 OF THE CREDIT AGREEMENT.  EACH OF THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

          This Revolving Credit Note shall be deemed to take effect as a sealed instrument under the laws of the State of New York.

 

[Remainder of Page Intentionally Left Blank]

  

  

  

          IN WITNESS WHEREOF, each of the undersigned has caused this Revolving Credit Note to be sealed and signed in its corporate or partnership name by its duly authorized officer as of the day and year first above written.

	
 

WITNESS:

 

 

                                       

	
SOVRAN SELF STORAGE, INC.

 

 

 

By:                                                              

Name:

Title:

	  	  
	
 

 

 

WITNESS:

 

 

                                       

	
SOVRAN ACQUISITION LIMITED

PARTNERSHIP

 

By:  Sovran Holdings, Inc., its general partner

 

 

By:                                                              

Name:

Title:

  

  

  

	
 

 

Date

	
 

Amount

of Loan

	
Amount of

Principal Paid

or Prepaid

	
Balance of

Principal

Unpaid

	
 

Notation

Made By:

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

  

  

  

	  	
Exhibit A-2

[Form of Term Loan Note]

TERM NOTE

	
$                          

	
                        , 20  

          FOR VALUE RECEIVED, the undersigned SOVRAN SELF STORAGE, INC., a Maryland corporation ("Sovran"), and the undersigned SOVRAN ACQUISITION LIMITED PARTNERSHIP, a Delaware limited partnership ("SALP" and together with Sovran, collectively referred to herein as the "Borrowers" and individually as a "Borrower"), hereby jointly and severally promise to pay to the order of , [a national banking association] (the "Lender") at the Administrative Agent's Head Office (as defined in the Credit Agreement defined below):

	  	
          (a)  prior to or on the Term Maturity Date the principal amount of          Dollars ($__________) which principal amount is the portion of the [Initial Term Loan][Delayed Draw Term Loan] advanced by the Lender to the Borrowers pursuant to the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among the Borrowers, Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents;

	  	  
	  	

          (b)  the principal outstanding hereunder from time to time at the times provided in the Credit Agreement; and

	  	  
	  	

          (c)  interest from the date hereof on the principal balance hereof from time to time outstanding at the times and at the rate or rates provided in the Credit Agreement and any other sums or fees due thereunder, all in accordance with the Credit Agreement.

	  	  

          [This Term Note, together with the other Term Notes issued as of the date hereof under the Credit Agreement (collectively, the "Substitute Term Notes"), are issued in substitution for the unpaid principal balances outstanding under all of the Term Notes previously issued by the Borrower under the Fourth Amended and Restated Revolving Credit and Term Loan Agreement

  

  

  

dated as of August 5, 2011 (the "2011 Term Notes"), which 2011 Term Notes are outstanding as of the date hereof.  Up to the full amount of the principal balances of the Substitute Term Notes, the principal balances outstanding under the 2011 Term Notes shall continue in all respects to be outstanding under the Substitute Term Notes, and this Term Note shall not be deemed to evidence a novation or payment and refunding of any part of the outstanding principal balances under the 2011 Term Notes.  Notwithstanding the date of this Term Note, the Substitute Term Notes carry all of the rights to unpaid interest that were carried by the 2011 Term Notes such that no loss of interest shall result from any such substitution.]1

          This Term Note evidences [Initial Term Loan] [Delayed Draw Term Loan] borrowings under and has been issued by the Borrowers in accordance with the terms of the Credit Agreement.  The Lender and any holder hereof pursuant to the Credit Agreement or by operation of law is entitled to the benefits of the Credit Agreement and the other Loan Documents, and may enforce the agreements of the Borrower contained therein, and any holder hereof may exercise the respective remedies provided for thereby or otherwise available in respect thereof, all in accordance with the respective terms thereof.  All capitalized terms used in this Term Note and not otherwise defined herein shall have the same meanings herein as in the Credit Agreement.

          The Borrowers irrevocably authorize the Lender to make or cause to be made, at or about the time of the Drawdown Date of the [Initial Term Loan][Delayed Draw Term Loan] or at the time of receipt of any payment of principal of this Term Note, an appropriate notation on the grid attached to this Term Note, or the continuation of such grid, or any other similar record, including computer records, reflecting the making of such [Initial Term Loan][Delayed Draw Term Loan] or (as the case may be) the receipt of such payment.  The outstanding amount of the [Initial Term Loan][Delayed Draw Term Loan] set forth on the grid attached to this Term Note, or the continuation of such grid, or any other similar record, including computer records, maintained by the Lender with respect to the [Initial Term Loan][Delayed Draw Term Loan] shall be prima facie evidence of the principal amount thereof owing and unpaid to the Lender, but the failure to record, or any error in so recording, any such amount on any such grid, continuation or other record shall not limit or otherwise affect the obligation of the Borrowers hereunder or under the Credit Agreement to make payments of principal of and interest on this Term Note when due to the extent of the unpaid principal and interest amount as of any date of determination.

          The Borrowers have the right in certain circumstances and the obligation under certain other circumstances to prepay the whole or part of the principal of this Term Note on the terms and conditions specified in the Credit Agreement.

          If any one or more of the Events of Default shall occur, the entire unpaid principal amount of this Term Note and all of the unpaid interest accrued thereon and any other charges or amounts due under any of the Loan Documents may become or be declared due and payable in the manner and with the effect provided in the Credit Agreement.

  

	
  

	
1 Note: To be used with respect to the Initial Term Loan.

 

  

  

  

          No delay or omission on the part of the Lender, or any holder hereof in exercising any right hereunder shall operate as a waiver of such right or of any other rights of the Lender or such holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar or waiver of the same or any other right on any further occasion.

          The Borrowers and every endorser and guarantor of this Term Note or the obligations represented hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Term Note, and assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of collateral and to the addition or release of any other party or person primarily or secondarily liable.

          THIS TERM NOTE AND THE OBLIGATIONS OF THE BORROWERS HEREUNDER SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).  EACH OF THE BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS TERM NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK, NEW YORK OR ANY FEDERAL COURT SITTING IN NEW YORK, NEW YORK AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN §20 OF THE CREDIT AGREEMENT.  EACH OF THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

          This Term Note shall be deemed to take effect as a sealed instrument under the laws of the State of New York.

 

[Remainder of Page Intentionally Left Blank]

  

  

  

          IN WITNESS WHEREOF, each of the undersigned has caused this Term Note to be sealed and signed in its corporate or partnership name by its duly authorized officer as of the day and year first above written.

	
 

WITNESS:

 

 

                                       

	
SOVRAN SELF STORAGE, INC.

 

 

 

By:                                                              

Name:

Title:

	  	  
	
 

 

 

WITNESS:

 

 

                                       

	
SOVRAN ACQUISITION LIMITED

PARTNERSHIP

 

By:  Sovran Holdings, Inc., its general partner

 

 

By:                                                              

Name:

Title:

  

  

  

	
 

 

Date

	
 

Amount

of Loan

	
Amount of

Principal Paid

or Prepaid

	
Balance of

Principal

Unpaid

	
 

Notation

Made By:

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

  

  

  

	  	
Exhibit B

[FORM OF SUBSIDIARY GUARANTY]

GUARANTY

         This Guaranty, dated as of                   , 20   by                           , a                                 (the "Guarantor"), is made in favor of Manufacturers and Traders Trust Company, as administrative agent (in such capacity, together with its successors and assigns, the "Administrative Agent") for itself and the Lenders (as defined herein) under the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among Sovran Self Storage, Inc., a Maryland corporation ("Sovran"), Sovran Acquisition Limited Partnership, a Delaware limited partnership (together with Sovran, collectively referred to herein as the "Borrowers"), Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), the Administrative Agent, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  Capitalized terms used herein without definition shall have the meanings ascribed to them in the Credit Agreement.

         WHEREAS, the Borrowers, the Administrative Agent, and the Lenders have entered into the Credit Agreement;

         WHEREAS, the Borrowers and the Guarantor are members of a group of related entities, the success of either one of which is dependent in part on the success of the other members of such group;

         WHEREAS, the Guarantor expects to receive substantial direct and indirect benefits from the extensions of credit to the Borrowers by the Lenders pursuant to the Credit Agreement (which benefits are hereby acknowledged);

         WHEREAS, it is a condition precedent to the Administrative Agent's and the Lenders' willingness to extend, and to continue to extend, credit to the Borrowers under the Credit Agreement that the Guarantor execute and deliver this Guaranty; and

         WHEREAS, the Guarantor wishes to guaranty the Borrowers' obligations to the Lenders and the Administrative Agent under and in respect of the Credit Agreement as herein provided.

         NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

	
1.

	
Guaranty of Payment and Performance of Obligations.  In consideration of the Lenders' extending credit or otherwise in their discretion giving time, financial or banking facilities or accommodations to the Borrowers, the Guarantor hereby unconditionally guarantees to the Administrative Agent and each Lender that the Borrowers will duly and punctually pay or perform, at the place specified therefor, or if no place is specified, at the Administrative Agent's Head Office, (i) all Obligations and all indebtedness, obligations and liabilities of the Borrowers to any of the Lenders and the Administrative Agent, individually or collectively, under the Credit Agreement or any of the other Loan Documents or in respect of any of the Loans or the Notes or other instruments at any time evidencing any thereof, whether existing on the date of the Credit Agreement or arising or incurred thereafter, direct or indirect, secured or unsecured, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, arising by contract, operation of law or otherwise; and (ii) without limitation of the foregoing, all reasonable fees, costs and expenses incurred by the Administrative Agent or the Lenders in attempting to collect or enforce any of the foregoing, accrued in each case to the date of payment hereunder (collectively the "Obligations" and individually an "Obligation").  This Guaranty is an absolute, unconditional and continuing guaranty of the full and punctual payment and performance by the Borrowers of the Obligations and not of their collectibility only and is in no way conditioned upon any requirement that any Lender or the Administrative Agent first attempt to collect any of the Obligations from the Borrowers or resort to any security or other means of obtaining payment of any of the Obligations which any Lender or the Administrative Agent now has or may acquire after the date hereof or upon any other contingency whatsoever.  Upon any Event of Default which is continuing by the Borrowers in the full and punctual payment and performance of the Obligations, the liabilities and obligations of the Guarantor hereunder shall, at the option of the Administrative Agent, become forthwith due and payable to the Administrative Agent and to the Lender or Lenders owed the same without demand or notice of any nature, all of which are expressly waived by the Guarantor, except for notices required to be given to the Borrowers under the Loan Documents.  Payments by the Guarantor hereunder may be required by any Lender or the Administrative Agent on any number of occasions.

	  	  
	
2.

	
Guarantor's Further Agreements to Pay.  The Guarantor further agrees, as the principal obligor and not as a guarantor only, to pay to each Lender and the Administrative Agent forthwith upon demand, in funds immediately available to such Lender or the Administrative Agent, all costs and expenses (including court costs and legal fees and expenses) incurred or expended by the Administrative Agent or such Lender in connection with this Guaranty and the enforcement hereof, together with interest on amounts recoverable under this Guaranty from the time after such amounts become due at the default rate of interest set forth in the Credit Agreement; provided that if such interest exceeds the maximum amount permitted to be paid under applicable law, then such interest shall be reduced to such maximum permitted amount.

	  	  
	
3.

	
Payments.  The Guarantor covenants and agrees that the Obligations will be paid strictly in accordance with their respective terms regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Administrative Agent or any Lender with respect thereto.  Without limiting the generality of the foregoing, the Guarantor's obligations hereunder with respect to any Obligation shall not be discharged by a payment in a currency other than the currency in which the Obligation is denominated (the "Obligation Currency") or at a place other than the place specified for the payment of the Obligation, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on conversion to the Obligation Currency and transferred to New York, New York, U.S.A., under normal banking procedures does not yield the amount of Obligation Currency due thereunder.

	  	  
	
4.

	
Taxes.

	  	  
	  	
     (a)  All payments hereunder shall be made without any counterclaim or set-off, free and clear of, and without reduction by reason of, any taxes, levies, imposts, charges and withholdings, restrictions or conditions of any nature ("Taxes"), which are now or may hereafter be imposed, levied or assessed by the United States or any political subdivision or taxing authority thereof (or any non-United States jurisdiction in which there is Real Estate) on payments hereunder, all of which will be for the account of and paid by the Guarantor.  Subject to paragraph (b), if for any reason, any such reduction is made or any Taxes are paid by the Administrative Agent or any Lender (except for taxes on income or profits of such Administrative Agent or Lender), Guarantor will pay to the Administrative Agent or such Lender such additional amounts as may be necessary to ensure that the Administrative Agent or such Lender receives the same net amount which it would have received had no reduction been made or Taxes paid.

	  	  
	  	
     (b)  Guarantor shall not be required to pay any additional amounts to any Lender that is not incorporated or organized under the laws of the United States of America or a state thereof or the District of Columbia (a "Non-U.S. Lender") in respect of United States Federal withholding tax to the extent that (i) the obligation to withhold amounts with respect to United States Federal withholding tax existed on the date such Non-U.S. Lender became a party to the Credit Agreement or, with respect to payments to a different lending office designated by the Non-U.S. Lender as its applicable lending office (a "New Lending Office"), the date such Non-U.S. Lender designated such New Lending Office with respect to the Loans (as defined in the Credit Agreement); provided, however, that this clause (i) shall not apply to any transferee or New Lending Office as a result of an assignment, transfer or designation made at the request of the Borrowers; and provided further, however, that this clause (i) shall not apply to the extent the indemnity payment or additional amounts any transferee, or Lender through a New Lending Office, would be entitled to receive without regard to this clause (i) do not exceed the indemnity payment or additional amounts that the entity making the assignment or transfer to such transferee, or Lender making the designation of such New Lending Office, would have been entitled to receive in the absence of such assignment, transfer or designation; or (ii) the obligation to pay such additional amounts would not have arisen but for a failure by such Non-U.S. Lender to deliver completed copies of United States Internal Revenue Service Form 1001 or 4224 or to comply with all the other requirements of §4.2(c) of the Credit Agreement.

 

	
5.

	
Consent to Jurisdiction.  The Guarantor agrees that any suit for the enforcement of this Guaranty or any of the other Loan Documents may be brought in the courts of the State of New York sitting in New York, New York or any federal court sitting in New York, New York and consents to the non-exclusive jurisdiction of such courts and the service of process in any such suit being made upon the Guarantor by mail at the address specified herein.  Except to the extent such waiver is expressly prohibited by law, the Guarantor hereby waives any objection that it may now or hereafter have to the venue of any such suit or any such court or that such suit is brought in an inconvenient court.

	  	  
	
6.

	
Liability of the Guarantor.  The Administrative Agent and each Lender have and shall have the absolute right to enforce the liability of the Guarantor hereunder without resort to any other right or remedy including any right or remedy under any other guaranty, and the release or discharge of any guarantor of any Obligations shall not affect the continuing liability of the Guarantor hereunder.

	  	  
	
7.

	
Representations and Warranties; Covenants.  The Guarantor hereby makes and confirms the representations and warranties made on its behalf by the Borrowers pursuant to §7 of the Credit Agreement, as if such representations and warranties were set forth herein.  The Guarantor hereby agrees to perform the covenants set forth in §§8 and 9 of the Credit Agreement (to the extent such covenants expressly apply to the Guarantor) as if such covenants were set forth herein.  The Guarantor acknowledges that it is, on a collective basis with the Borrowers and all other "Guarantors" (as defined in the Credit Agreement), bound by the covenants set forth in §9 of the Credit Agreement.  The Guarantor hereby confirms that it shall be bound by all acts or omissions of the Borrower Representative pursuant to the Credit Agreement.

	  	  
	
8.

	
Effectiveness.  The obligations of the Guarantor under this Guaranty shall continue in full force and effect and shall remain in operation until all of the Obligations shall have been paid in full or otherwise fully satisfied, and continue to be effective or be reinstated, as the case may be, if at any time payment or other satisfaction of any of the Obligations is rescinded or must otherwise be restored or returned upon the bankruptcy, insolvency, or reorganization of the Borrowers, or otherwise, as though such payment had not been made or other satisfaction occurred.  No invalidity, irregularity or unenforceability of the Obligations by reason of applicable bankruptcy laws or any other similar law, or by reason of any law or order of any government or agency thereof purporting to reduce, amend or otherwise affect the Obligations, shall impair, affect, be a defense to or claim against the obligations of the Guarantor under this Guaranty.

	  	  
	
9.

	
Freedom of Lender to Deal with Borrowers and Other Parties.  The Administrative Agent and each Lender shall be at liberty, without giving notice to or obtaining the assent of the Guarantor and without relieving the Guarantor of any liability hereunder, to deal with the Borrowers and with each other party who now is or after the date hereof becomes liable in any manner for any of the Obligations, in such manner as the Administrative Agent or such Lender in its sole discretion deems fit, and to this end the Guarantor gives to the Administrative Agent and each Lender full authority in its sole discretion to do any or all of the following things: (a) extend credit, make loans and afford other financial accommodations to the Borrowers at such times, in such amounts and on such terms as the Administrative Agent or such Lender may approve, (b) vary the terms and grant extensions of any present or future indebtedness or obligation of the Borrowers or of any other party to the Administrative Agent or such Lender, (c) grant time, waivers and other indulgences in respect thereto, (d) vary, exchange, release or discharge, wholly or partially, or delay in or abstain from perfecting and enforcing any security or guaranty or other means of obtaining payment of any of the Obligations which the Administrative Agent or any Lender now has or may acquire after the date hereof, (e) accept partial payments from the Borrowers or any such other party, (f) release or discharge, wholly or partially, any endorser or guarantor, and (g) compromise or make any settlement or other arrangement with the Borrowers or any such other party.

	  	  
	
10.

	
Unenforceability of Obligations Against Borrowers; Invalidity of Security or Other Guaranties.  If for any reason the Borrowers have no legal existence or are under no legal obligation to discharge any of the Obligations undertaken or purported to be undertaken by it or on its behalf, or if any of the moneys included in the Obligations have become irrecoverable from the Borrowers by operation of law or for any other reason, this Guaranty shall nevertheless be binding on the Guarantor to the same extent as if the Guarantor at all times had been the principal debtor on all such Obligations.  This Guaranty shall be in addition to any other guaranty or other security for the Obligations, and it shall not be prejudiced or rendered unenforceable by the invalidity of any such other guaranty or security.

	  	  
	
11.

	
Waivers by Guarantor.  The Guarantor waives notice of acceptance hereof, notice of any action taken or omitted by the Administrative Agent or any Lender in reliance hereon, and any requirement that the Administrative Agent or any Lender be diligent or prompt in making demands hereunder, giving notice of any default by the Borrowers or asserting any other rights of the Administrative Agent or any Lender hereunder.  The Guarantor also irrevocably waives, to the fullest extent permitted by law, all defenses in the nature of suretyship that at any time may be available in respect of the Guarantor's obligations hereunder by virtue of any statute of limitations, valuation, stay, moratorium law or other similar law now or hereafter in effect.

	  	  
	
12.

	
Waiver of Subrogation Rights.  Notwithstanding any other provision to the contrary contained herein or provided by applicable law, unless and until all of the Obligations have been indefeasibly paid in full in cash and satisfied in full, the Guarantor hereby irrevocably waives any and all rights it may have at any time (whether arising directly or indirectly, by operation of law or by contract) to assert any claim against the Borrowers on account of payments made under this Guaranty, including, without limitation, any and all rights of or claims for subrogation, contribution, reimbursement, exoneration and indemnity, and further waives any benefit of and any right to participate in any collateral which may be held by the Administrative Agent or any Lender or any affiliate of the Administrative Agent or any Lender.  In addition, the Guarantor will not claim any set-off or counterclaim against the Borrowers in respect of any liability it may have to the Borrowers unless and until all of the Obligations have been indefeasibly paid in full in cash and satisfied in full.

	  	  
	
13.

	
Demands.  Any demand on or notice made or required to be given pursuant to this Guaranty shall be in writing and shall be delivered in hand, mailed by United States registered or certified first class mail, postage prepaid, return receipt requested, sent by overnight courier, or sent by telegraph, telecopy, telefax or telex and confirmed by delivery via courier or postal service, addressed as follows:

	  	  

 

	  	
(a)  if to the Guarantor, at

 

Sovran Self Storage, Inc.

6467 Main Street

Williamsville, New York  14221

Attention:  Mr. David L. Rogers

 

or at such other address for notice as the Guarantor shall last have furnished in writing to the Administrative Agent with a copy to:

	  	  
	  	
Phillips Lytle LLP

3400 HSBC Center

Buffalo, New York  14203

Attention:  Raymond H. Seitz, Esq.

 

or at such other address for notice as the Guarantor shall last have furnished in writing to the Administrative Agent; and

	  	  
	  	
(b)  if to the Administrative Agent, at

 

Manufacturers and Traders Trust Company

25 S. Charles Street, 12th Floor

Baltimore, Maryland  21201

Attention:  Hugh Giorgio

 

or such other address for notice as the Administrative Agent shall last have furnished in writing to the Guarantor, with a copy to:

	  	  
	  	
Alston & Bird LLP

1201 West Peachtree Street

Atlanta, Georgia  30309-3424

Attention:  Deanna Kashdan, Esq.

or at such other address for notice as the Administrative Agent shall last have furnished in writing to the Guarantor; and

	  	  
	  	
(c)  if to any Lender, at such Lender's address as set forth in Schedule 1.2 to the Credit Agreement or as shall have last been furnished in writing to the Person giving the notice.

	  	  

  

  

  

         Any such notice or demand shall be deemed to have been duly given or made and to have become effective (i) if delivered by hand, overnight courier or facsimile to the party to which it is directed, at the time of the receipt thereof by such party or the sending of such facsimile with electronic confirmation of receipt or (ii) if sent by registered or certified first-class mail, postage prepaid, return receipt requested, on the fifth Business Day following the mailing thereof.

	
14.

	
Amendments, Waivers, Etc.  No provision of this Guaranty can be changed, waived, discharged or terminated except by an instrument in writing signed by the Administrative Agent and the Guarantor expressly referring to the provision of this Guaranty to which such instrument relates; and no such waiver shall extend to, affect or impair any right with respect to any Obligation which is not expressly dealt with therein.  No course of dealing or delay or omission on the part of the Administrative Agent or the Lenders or any of them in exercising any right shall operate as a waiver thereof or otherwise be prejudicial thereto.

	  	  
	
15.

	
Further Assurances.  The Guarantor at its sole cost and expense agrees to do all such things and execute, acknowledge and deliver all such documents and instruments as the Administrative Agent from time to time may reasonably request in order to give full effect to this Guaranty and to perfect and preserve the rights and powers of the Administrative Agent and the Lenders hereunder.

	  	  
	
16.

	
Miscellaneous Provisions.  This Guaranty is intended to take effect as a sealed instrument to be governed by and construed in accordance with the laws of the State of New York and shall inure to the benefit of the Administrative Agent, each Lender and its respective successors in title and assigns permitted under the Credit Agreement, and shall be binding on the Guarantor and the Guarantor's successors in title, assigns and legal representatives.  The rights and remedies herein provided are cumulative and not exclusive of any remedies provided by law or any other agreement.  The invalidity or unenforceability of any one or more sections of this Guaranty shall not affect the validity or enforceability of its remaining provisions.  Captions are for ease of reference only and shall not affect the meaning of the relevant provisions.  The meanings of all defined terms used in this Guaranty shall be equally applicable to the singular and plural forms of the terms defined.

	  	  
	
17.

	
WAIVER OF JURY TRIAL.  EXCEPT TO THE EXTENT SUCH WAIVER IS EXPRESSLY PROHIBITED BY LAW, THE GUARANTOR HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY JURISDICTION AND IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS GUARANTY, THE OBLIGATIONS, OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT HERETO OR THERETO OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING, AMONG THE GUARANTOR, THE BORROWERS, THE ADMINISTRATIVE AGENT AND/OR THE LENDERS.  THIS WAIVER OF JURY TRIAL SHALL BE EFFECTIVE FOR EACH AND EVERY DOCUMENT EXECUTED BY THE GUARANTOR, THE ADMINISTRATIVE AGENT OR THE LENDERS AND DELIVERED TO THE ADMINISTRATIVE AGENT OR THE LENDERS, AS THE CASE MAY BE, WHETHER OR NOT SUCH DOCUMENTS SHALL CONTAIN SUCH A WAIVER OF JURY TRIAL.  THE GUARANTOR CONFIRMS THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.

	  	  
	
18.

	
Effect on Existing Guaranty.

	  	  

	  	
(a)  Existing Guaranty.  Upon the execution of this Guaranty by the Guarantors party hereto, this Guaranty shall exclusively control and govern the mutual rights and obligations of the parties hereto with respect to that certain Guaranty dated August 5, 2011 (the "Existing Guaranty") by Guarantor in favor of Administrative Agent, and the Existing Guaranty shall be superseded by this Guaranty in all respects.

	  	  
	  	
(b)  NO NOVATION.  THE PARTIES HERETO HAVE ENTERED INTO THIS GUARANTY SOLELY TO AMEND AND RESTATE THE TERMS OF, AND THE OBLIGATIONS OWING UNDER AND IN CONNECTION WITH, THE EXISTING GUARANTY. THE PARTIES DO NOT INTEND THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS GUARANTY AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY ANY GUARANTOR UNDER OR IN CONNECTION WITH THE EXISTING GUARANTY.

	  	  

[Remainder of Page Intentionally Left Blank]

  

  

  

          IN WITNESS WHEREOF, the Guarantor has executed and delivered this Guaranty as of the date first above written.

	  	
GUARANTOR:

 

 

                                                            

 

 

By:                                                      

Name:

Title:

  

  

  

	  	
Exhibit C-1

[Form of Revolving Credit Loan Request]

Manufacturers and Traders Trust Company

One Fountain Plaza

Buffalo, New York 14203

Attention:                                        

REVOLVING CREDIT LOAN REQUEST

          This Revolving Credit Loan Request (this "Loan Request") is made pursuant to §2.4 of the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among Sovran Self Storage, Inc., a Maryland corporation ("Sovran"), Sovran Acquisition Limited Partnership, a Delaware limited partnership ("SALP" and together with Sovran, collectively referred to herein as the "Borrowers" and individually as a "Borrower"), Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  Unless otherwise defined herein, the terms used in this Loan Request have the meanings given them in the Credit Agreement.

	
1.

	
Sovran, as Borrower Representative, hereby requests a Revolving Credit Loan in the principal amount of $              .

	  	  
	
2.

	
The proposed Drawdown Date of the Revolving Credit Loan is:

 

                         , 20__  .

	  	  
	
3.

	
The Interest Period requested for the Revolving Credit Loan requested in this Loan Request (if any) is:

 

                          

	  	  
	
4.

	
The Type of Revolving Credit Loan being requested in this Loan Request is:

 

	  	
            

	
Base Rate Loan

	  	
            

	
LIBOR Rate Loan

	  	  	  

          Sovran, as Borrower Representative, hereby certifies to the Administrative Agent and the

  

  

  

Lenders that (i) each of the representations and warranties of the Borrowers and the Guarantors contained in the Credit Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with the Credit Agreement are true as of the date hereof (except to the extent that such representations and warranties relate expressly to an earlier date), (ii) no Default or Event of Default under the Credit Agreement has occurred and is continuing on the date hereof, and (iii) the Borrowers have concurrently furnished to the Administrative Agent a Compliance Certificate pursuant to §2.4(d)(iii) of the Credit Agreement.

[Signature on following page.]

  

  

  

          WITNESS my hand this ___ day of _______, 20__.

	  	
SOVRAN SELF STORAGE, INC.

 

 

By:                                                        

Name:  

Title:  

  

  

  

	  	
Exhibit C-2

[Form of Delayed Draw Term Loan Request]

Manufacturers and Traders Trust Company

One Fountain Plaza

Buffalo, New York 14203

Attention:                                        

DELAYED DRAW TERM LOAN REQUEST

                     This Delayed Draw Term Loan Request (this "Loan Request") is made pursuant to §3.3 of the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among Sovran Self Storage, Inc., a Maryland corporation ("Sovran"), Sovran Acquisition Limited Partnership, a Delaware limited partnership ("SALP" and together with Sovran, collectively referred to herein as the "Borrowers" and individually as a "Borrower"), Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  Unless otherwise defined herein, the terms used in this Loan Request have the meanings given them in the Credit Agreement.

	
1.

	
Sovran, as Borrower Representative, hereby requests a Delayed Draw Term Loan in the principal amount of $_______________.

	  	  
	
2.

	
The proposed Drawdown Date of the Delayed Draw Term Loan is:

 

                                 , 20  

	  	  
	
3.

	
The Interest Period requested for the Delayed Draw Term Loan requested in this Loan Request (if any) is:

 

                                 

	  	  
	
4.

	
The Type of Delayed Draw Term Loan being requested in this Loan Request is:

	  	  
	  	  	
          Base Rate Loan

	  	  	
           LIBOR Rate Loan

	  	  	  

  

  

  

          Sovran, as Borrower Representative, hereby certifies to the Administrative Agent and the Lenders that (i) each of the representations and warranties of the Borrowers and the Guarantors contained in the Credit Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with the Credit Agreement are true as of the date hereof (except to the extent that such representations and warranties relate expressly to an earlier date), (ii) no Default or Event of Default under the Credit Agreement has occurred and is continuing on the date hereof, and (iii) the Borrowers have concurrently furnished to the Administrative Agent a Compliance Certificate pursuant to §3.3(d)(iii) of the Credit Agreement.

[Signature on following page.]

  

  

  

          WITNESS my hand this ___ day of _______, 20__.

	  	
SOVRAN SELF STORAGE, INC.

 

 

By:                                                         

Name:  

Title:  

  

  

  

	  	
Exhibit D-1

[Form of Compliance Certificate]

COMPLIANCE CERTIFICATE OF

[CHIEF FINANCIAL OFFICER][TREASURER]

(Loan Request)

          The undersigned [Chief Financial Officer][Treasurer] of Sovran Self Storage, Inc., a Maryland corporation ("Sovran"), as the Borrower Representative (as defined in the Credit Agreement defined below) HEREBY CERTIFIES THAT:

          This compliance certificate is furnished pursuant to [§2.4(d)(iii), §2.11] [§3.3(d)(iii)] and/or §12.1 of the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among Sovran, Sovran Acquisition Limited Partnership, a Delaware limited partnership (together with Sovran, collectively referred to herein as the "Borrowers"), Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  Unless otherwise defined herein, the terms used in this Compliance Certificate and Schedule 1 attached hereto have the meanings given them in the Credit Agreement.

          Schedule 1 attached hereto sets forth the financial data and computations evidencing the Borrowers' compliance with the covenants contained in §10.1, §10.2, §10.3, §10.4, and §10.11 of the Credit Agreement on a pro forma basis after giving effect to the requested [Revolving Credit Loan][Delayed Draw Term Loan][increase of the Total Revolving Credit Commitment], all of which data and computations, to the knowledge and belief of the [Chief Financial Officer][Treasurer] executing and delivering this Compliance Certificate on behalf of Sovran, as Borrower Representative, are true, complete and correct.

          Pursuant to §8.24 of the Credit Agreement, to the extent that (i) any "financial covenant" in the Note Purchase Agreement is more restrictive on the Borrowers and their Subsidiaries or more beneficial to the holders of the notes issued under the Note Purchase Agreement than the financial covenants set forth in §10 of the Credit Agreement (and the definitions relating thereto) or (ii) any additional financial covenant not set forth in the Credit Agreement is included in any Note Purchase Agreement, attached hereto as Schedule 2 are financial data and computations evidencing the Borrowers' compliance with the such "financial covenants."

          The activities of the Borrowers, each Guarantor and their respective Subsidiaries and subsidiaries since the date of the last Compliance Certificate submitted by the Borrowers to 

  

  

  

the Administrative Agent have been reviewed by the [Chief Financial Officer][Treasurer] and/or by employees or agents under his/her immediate supervision.  Based upon such review, to the knowledge and belief of the [Chief Financial Officer][Treasurer], both before and after giving effect to the requested [Revolving Credit Loan][Delayed Draw Term Loan] [increase of the Total Revolving Credit Commitment], (1) no Default or Event of Default exists on the date hereof or will exist under the Credit Agreement or any other Loan Document on the [Drawdown Date of such Loan][effective date of such increase], and (2) after taking into account [such requested Loan][such requested increase], no Default or Event of Default will exist as of the [Drawdown Date of such Loan][effective date of such increase] or thereafter.

          To the knowledge and belief of the [Chief Financial Officer][Treasurer], each of the representations and warranties of the Borrowers and each Guarantor contained in the Credit Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with the Credit Agreement was true as of the date as of which they were made, is true at and as of the date hereof, and will be true at and as of the time of the [making of the requested Loan][increase of the Total Revolving Credit Commitment], with the same effect as if made at and as of that time.

          The [Chief Financial Officer][Treasurer] certifies that he/she is authorized to execute and deliver this compliance certificate on behalf of Sovran, as Borrower Representative.

[Remainder of Page Intentionally Left Blank]

  

  

  

          Executed as of this __ day of ___________, 20__.

	  	
SOVRAN SELF STORAGE, INC.

 

 

By:                                                              

Name:

Title:

  

  

  

	  	
Exhibit D-2

[Form of Compliance Certificate]

COMPLIANCE CERTIFICATE

OF CHIEF FINANCIAL OFFICER

(Sovran Financial Statements)

          The undersigned Chief Financial Officer of Sovran Self Storage, Inc., a Maryland corporation ("Sovran"), HEREBY CERTIFIES THAT:

          This compliance certificate is furnished pursuant to §8.4(c) of the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among Sovran, Sovran Acquisition Limited Partnership, a Delaware limited partnership (together with Sovran, collectively referred to herein as the "Borrowers"), Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  Unless otherwise defined herein, the terms used in this Compliance Certificate and Schedule 1 attached hereto have the meanings given them in the Credit Agreement.

          As required by §8.4(c) of the Credit Agreement, the consolidated (and consolidating, if required under the Credit Agreement) financial statements of Sovran and its respective subsidiaries (as defined in the Credit Agreement) for the [year] [quarter] ended ______, 20__ (the "Financial Statements"), prepared in accordance with GAAP (subject, in the case of quarterly statements, to year-end adjustments none of which are anticipated to be materially adverse, except as specifically disclosed in this compliance certificate) accompany this Compliance Certificate.  The Financial Statements present fairly the financial position of Sovran and its subsidiaries as at the date thereof and the results of operations of Sovran and its subsidiaries for the period covered thereby.

          Schedule 1 attached hereto sets forth (i) the financial data and computations evidencing the Borrowers' compliance with the covenants contained in §10 of the Credit Agreement and (ii) a list of all Excluded Subsidiaries as of the date hereof together with a description of each such Excluded Subsidiaries' Real Estate and Indebtedness, all of which data, computations, and descriptions to the knowledge and belief of the Chief Financial Officer executing and delivering this Compliance Certificate on behalf of Sovran, as Borrower Representative, are true, complete and correct.

          Pursuant to §8.24 of the Credit Agreement, to the extent that (i) any "financial covenant" in the Note Purchase Agreement is more restrictive on the Borrowers and their Subsidiaries or

  

  

  

more beneficial to the holders of the notes issued under the Note Purchase Agreement than the financial covenants set forth in §10 of the Credit Agreement (and the definitions relating thereto) or (ii) any additional financial covenant not set forth in the Credit Agreement is included in any Note Purchase Agreement, attached hereto as Schedule 2 are financial data and computations evidencing the Borrowers' compliance with the such "financial covenants."

          The activities of Sovran and its subsidiaries during the period covered by the Financial Statements have been reviewed by the Chief Financial Officer and/or by employees or agents under his immediate supervision.  Based upon such review, during the period covered by the Financial Statements, and as of the date of this Certificate, no Default or Event of Default has occurred and is continuing, except as specifically disclosed in this compliance certificate.

          The Chief Financial Officer certifies that he is authorized to execute and deliver this Compliance Certificate on behalf of Sovran, as Borrower Representative.

  

  

  

          Executed as of this __ day of ___________, 20__.

	  	
SOVRAN SELF STORAGE, INC.

 

 

 

By:                                                                 

Name:  

Title:    Chief Financial Officer

	  	  

  

  

  

	  	
Exhibit D-3

[Form of Compliance Certificate]

COMPLIANCE CERTIFICATE

OF CHIEF FINANCIAL OFFICER

(SALP Financial Statements)

          The undersigned Chief Financial Officer of Sovran Acquisition Limited Partnership, a Delaware limited partnership ("SALP"), HEREBY CERTIFIES THAT:

          This compliance certificate is furnished pursuant to §8.4(c) of the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among SALP, Sovran Self Storage, Inc., a Maryland corporation (together with SALP, collectively referred to herein as the "Borrowers"), Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  Unless otherwise defined herein, the terms used in this Compliance Certificate and Schedule 1 attached hereto have the meanings given them in the Credit Agreement.

          As required by §8.4(c) of the Credit Agreement, attached hereto as Schedule 1 are financial statements of SALP and its subsidiaries (as defined in the Credit Agreement) for the [year] [quarter] ended ______, 20__ (the "Financial Statements") prepared in accordance with GAAP (subject, in the case of quarterly statements, to year-end adjustments none of which are anticipated to be materially adverse, except as specifically disclosed in this compliance certificate).  The Financial Statements delivered herewith present fairly the financial position of SALP and its subsidiaries as at the date thereof and the results of operations of SALP and its subsidiaries for the period covered thereby.

          The activities of SALP and its subsidiaries during the period covered by the Financial Statements have been reviewed by the chief financial officer of SALP and/or by employees or agents under his immediate supervision.  Based upon such review, during the period covered by the Financial Statements, and as of the date of this compliance certificate, no Default or Event of Default has occurred and is continuing, except as specifically disclosed in this compliance certificate.

[Remainder of Page Intentionally Left Blank]

  

  

  

          The undersigned Chief Financial Officer of SALP certifies that he is authorized to execute and deliver this compliance certificate on behalf of SALP.

          Executed as of this __ day of ___________, 20__.

	  	
SOVRAN ACQUISITION LIMITED PARTNERSHIP

 

By: Sovran Holdings, Inc., its general partner

 

 

By:                                                                

Name:  

Title:  Chief Financial Officer

  

  

  

	  	
Exhibit D-4

[Form of Compliance Certificate]

COMPLIANCE CERTIFICATE

OF CHIEF FINANCIAL OFFICER

(Incurrence of Indebtedness)

          The undersigned, being the Chief Financial Officer of Sovran Self Storage, Inc. a Maryland corporation ("Sovran" and together with Sovran Acquisition Limited Partnership, a Delaware limited partnership, collectively referred to herein as the "Borrowers"), HEREBY CERTIFIES THAT:

          This compliance certificate is furnished pursuant to §9.1 of the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among the Borrowers, Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  Unless otherwise defined herein, the terms used in this compliance certificate and Schedule 1 attached hereto have the meanings given them in the Credit Agreement.

          The Borrowers hereby give the Administrative Agent notice that a Borrower, a Guarantor or a Subsidiary plans to incur Indebtedness for borrowed money which will cause the aggregate amount of Indebtedness for borrowed money incurred since delivery of the most recent compliance certificate to exceed $5,000,000.

          Schedule 1 attached hereto sets forth the financial data and computations evidencing the Borrowers' compliance with the covenants contained in §10 of the Credit Agreement on a pro forma basis after giving effect to such Indebtedness for borrowed money, all of which data and computations, to the best knowledge and belief of the Chief Financial Officer executing and delivering this compliance certificate on behalf of Sovran, as Borrower Representative, are true, complete and correct.

          Pursuant to §8.24 of the Credit Agreement, to the extent that (i) any "financial covenant" in the Note Purchase Agreement is more restrictive on the Borrowers and their Subsidiaries or more beneficial to the holders of the notes issued under the Note Purchase Agreement than the financial covenants set forth in §10 of the Credit Agreement (and the definitions relating thereto) or (ii) any additional financial covenant not set forth in the Credit Agreement is included in any Note Purchase Agreement, attached hereto as Schedule 2 are financial data and computations evidencing the Borrowers' compliance with the such "financial covenants."

  

  

  

          The activities of the Borrower, the Guarantor or the Subsidiary, as applicable, have been reviewed by the Chief Financial Officer and/or by employees or agents under his immediate supervision.  The Chief Financial Officer certifies that he is authorized to execute and deliver this compliance certificate on behalf of Sovran, as Borrower Representative.

  

  

  

          Executed as of this __ day of ___________, 20__.

	  	
SOVRAN SELF STORAGE, INC.

 

 

By:                                                                

Name:  

Title:  Chief Financial Officer

  

  

  

	  	
Exhibit D-5

[Form of Compliance Certificate]

COMPLIANCE CERTIFICATE OF

[CHIEF FINANCIAL OFFICER][TREASURER]

(Merger, Consolidation or Reorganization)

          The undersigned, being the [Chief Financial Officer][Treasurer] of Sovran Self Storage, Inc., a Maryland corporation ("Sovran"), HEREBY CERTIFIES THAT:

          This compliance certificate is furnished pursuant to §9.4(a) of the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among Sovran, Sovran Acquisition Limited Partnership, a Delaware limited partnership ("SALP" and together with Sovran, collectively referred to herein as the "Borrowers"), Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  Unless otherwise defined herein, the terms used in this compliance certificate and Schedule 1 attached hereto have the meanings given them in the Credit Agreement.

          The undersigned hereby gives the Administrative Agent notice that a Borrower, a Guarantor, or a Subsidiary plans to become a party to a merger, consolidation or reorganization requiring a compliance certificate under §9.4(a) of the Credit Agreement.

          Schedule 1 attached hereto sets forth the financial data and computations evidencing the Borrowers' compliance with the covenants contained in §10 of the Credit Agreement on a pro forma basis, all of which data and computations, to the best knowledge and belief of the [Chief Financial Officer][Treasurer] executing and delivering this compliance certificate, are true, complete and correct.  Furthermore, the undersigned certifies that no Default or Event of Default has occurred and is continuing, or would occur and be continuing after giving effect to such merger, consolidation or reorganization and all liabilities, fixed or contingent, pursuant thereto;

          Pursuant to §8.24 of the Credit Agreement, to the extent that (i) any "financial covenant" in the Note Purchase Agreement is more restrictive on the Borrowers and their Subsidiaries or more beneficial to the holders of the notes issued under the Note Purchase Agreement than the financial covenants set forth in §10 of the Credit Agreement (and the definitions relating thereto) or (ii) any additional financial covenant not set forth in the Credit Agreement is included in any Note Purchase Agreement, attached hereto as Schedule 2 are financial data and computations evidencing the Borrowers' compliance with the such "financial covenants."

  

  

  

          The activities of the Borrower, the Guarantor, the Operating Subsidiary or the wholly-owned Subsidiary, as applicable, have been reviewed by the [Chief Financial Officer][Treasurer] and/or by employees or agents under his immediate supervision.  The [Chief Financial Officer][Treasurer] certifies that he is authorized to execute and deliver this compliance certificate on behalf of the Borrower Representative.

  

  

  

          Executed as of this __ day of ___________, 20__.

	  	
SOVRAN SELF STORAGE, INC.

 

 

By:                                                                 

Name:  

Title:  

  

  

  

	  	
Exhibit D-6

[Form of Compliance Certificate]

COMPLIANCE CERTIFICATE OF

[CHIEF FINANCIAL OFFICER][TREASURER]

(Disposition of Unencumbered Property)

          The undersigned [Chief Financial Officer][Treasurer] of Sovran Self Storage, Inc., a Maryland corporation ("Sovran"), HEREBY CERTIFIES THAT:

          This compliance certificate is furnished pursuant to §9.4(b)(i) or §9.4(b)(ii) of the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among Sovran, Sovran Acquisition Limited Partnership, a Delaware limited partnership (together with Sovran, collectively referred to herein as the "Borrowers"), Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  Sovran, as Borrower Representative hereby gives the Administrative Agent notice of the intention of a Borrower, a Guarantor, or a Subsidiary to Sell or to grant an Indebtedness Lien on an Unencumbered Property or other asset pursuant to §9.4(b)(i) or §9.4(b)(ii) of the Credit Agreement.  Unless otherwise defined herein, the terms used in this Compliance Certificate and Schedule 1 attached hereto have the meanings described in the Credit Agreement.

          Schedule 1 attached hereto sets forth the financial data and computations evidencing the Borrowers' compliance with the covenants contained in §10 of the Credit Agreement on a pro forma basis after giving effect to such proposed Sale or Indebtedness Lien and all liabilities, fixed or contingent, pursuant thereto, all of which data and computations, to the knowledge and belief of the [Chief Financial Officer][Treasurer] executing and delivering this compliance certificate on behalf of Sovran, are true, complete and correct.

          Pursuant to §8.24 of the Credit Agreement, to the extent that (i) any "financial covenant" in the Note Purchase Agreement is more restrictive on the Borrowers and their Subsidiaries or more beneficial to the holders of the notes issued under the Note Purchase Agreement than the financial covenants set forth in §10 of the Credit Agreement (and the definitions relating thereto) or (ii) any additional financial covenant not set forth in the Credit Agreement is included in any Note Purchase Agreement, attached hereto as Schedule 2 are financial data and computations evidencing the Borrowers' compliance with the such "financial covenants."

          The activities of the Borrowers, the Guarantor, or the Subsidiaries, as applicable, have been reviewed by the [Chief Financial Officer][Treasurer] and/or by employees or agents under

  

  

  

his immediate supervision.  Based upon such review, to the best knowledge and belief of the [Chief Financial Officer][Treasurer], both before and after giving effect to the proposed Sale or Indebtedness Lien and all liabilities, fixed or contingent, pursuant thereto, no Default or Event of Default exists or will exist under any Loan Document.

          The [Chief Financial Officer][Treasurer] certifies that he is authorized to execute and deliver this Compliance Certificate on behalf of Sovran, as Borrower Representative.

  

  

  

          Executed as of this __ day of ___________, 20__.

	  	
SOVRAN SELF STORAGE, INC.

 

 

By:                                                                 

Name:  

Title:  

  

  

  

	  	
Exhibit D-7

[Form of Compliance Certificate]

COMPLIANCE CERTIFICATE

OF CHIEF FINANCIAL OFFICER

(Closing Condition)

          Each of the undersigned, being the Chief Financial Officers of Sovran Self Storage, Inc., a Maryland corporation ("Sovran"), and Sovran Acquisition Limited Partnership, a Delaware limited partnership ("SALP" and together with Sovran, collectively referred to herein as the "Borrowers"), HEREBY CERTIFIES THAT:

          This Compliance Certificate is furnished pursuant to §11.14 of the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among the Borrowers, Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  Unless otherwise defined herein, the terms used in this Compliance Certificate and Schedule 1 attached hereto have the meanings given them in the Credit Agreement.

          Schedule 1 attached hereto sets forth the financial data and computations evidencing the Borrowers' compliance with the covenants contained in §10 of the Credit Agreement after giving pro forma effect to the transactions contemplated therein, all of which data and computations, to the best knowledge and belief of each Chief Financial Officers executing and delivering this compliance certificate on behalf of the Borrowers, are true, complete and correct.

          Pursuant to §8.24 of the Credit Agreement, to the extent that (i) any "financial covenant" in the Note Purchase Agreement is more restrictive on the Borrowers and their Subsidiaries or more beneficial to the holders of the notes issued under the Note Purchase Agreement than the financial covenants set forth in §10 of the Credit Agreement (and the definitions relating thereto) or (ii) any additional financial covenant not set forth in the Credit Agreement is included in any Note Purchase Agreement, attached hereto as Schedule 2 are financial data and computations evidencing the Borrowers' compliance with the such "financial covenants."

          Each of the Chief Financial Officers hereby certifies, in accordance with the provisions of §11.14 of the Credit Agreement, that the representations and warranties of the Borrowers contained in the Credit Agreement and in each document and instrument delivered pursuant to or in connection therewith are true as of the date hereof and that no Default or Event of Default has occurred and is continuing on the date hereof.

  

  

  

          Each of the Chief Financial Officers certifies that he is authorized to execute and deliver this compliance certificate on behalf of Sovran or SALP, as the case may be.

  

  

  

          Executed as of this __ day of ___________, 20__.

	
SOVRAN SELF STORAGE, INC.

 

 

 

 

By:                                                                

Name:  

Title:  Chief Financial Officer

	
SOVRAN ACQUISITION LIMITED PARTNERSHIP

 

By: Sovran Holdings, Inc., its general partner

 

By:                                                                 

Name:  

Title:  Chief Financial Officer

  

  

  

	  	
Exhibit E

[Form of Assignment and Assumption Agreement]

ASSIGNMENT AND ASSUMPTION AGREEMENT

          This Assignment and Assumption Agreement (the "Assignment and Assumption") is dated as of the Effective Date set forth below and is entered into by and between [the][each] Assignor identified in item 1 below ([the][each, an] "Assignor") and [the][each]2 Assignee identified in item 2 below ([the][each, an] "Assignee").  [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]3  hereunder are several and not joint.]4  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), receipt of a copy of which is hereby acknowledged by [the][each] 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][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor's][the respective Assignors'] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] 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][the respective Assignors] under the respective facilities identified below (including without limitation any Letters of Credit and Guarantees included in such facilities), and (ii) 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)][the respective Assignors (in their respective capacities as Lenders)] 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, but not limited to, 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 (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] "Assigned Interest").  Each such sale and assignment is without recourse to

  

	
  

	
2  For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language.  If the assignment is to multiple Assignees, choose the second bracketed language.

 

  

	
  

	
3  Select as appropriate.

 

  

	
  

	
4  Include bracketed language if there are either multiple Assignors or multiple Assignees.

 

  

  

  

[the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

	
1.

	
Assignor[s]:

	
                                              

                                               

	  	
[Assignor [is] [is not] a Defaulting Lender]

	  	  
	
2.

	
Assignee[s]:

	
                                               

 

                                              

	  	
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]

	  	  
	
3.

	
Borrowers:

	
Sovran Self Storage, Inc., a Maryland corporation, and Sovran Acquisition Limited Partnership, a Delaware limited partnership

	  	  	  
	
4.

	
Administrative Agent:

	
Manufacturers and Traders Trust Company, as the Administrative Agent under the Credit Agreement

	  	  	  
	
5.

	
Credit Agreement:

	
That certain Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013, among Sovran Self Storage, Inc., a Maryland corporation, Sovran Acquisition Limited Partnership, a Delaware limited partnership, Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof, Manufacturers and Traders Trust Company, as administrative agent for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents

	  	  	  
	
6.

	
Assigned Interest[s]:

	  

	
 

 

Assignor[s]

	
 

 

Assignee[s]

	
 

 

Facility Assigned5

	
Aggregate Amount of 

Commitment/Loans 

for all Lenders

	
Amount of 

Commitment/

Loans Assigned

	
Percentage 

Assigned of 

Commitment/Loans

	  	  	  	
$

	
$

	
%

	  	  	  	
$

	
$

	
%

	  	  	  	
$

	
$

	
%

	
7.

	
Trade Date:

	
                             6

  

5  appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g., “Revolving Loans,” etc.)

  

6  To be completed if the Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date.

  

  

  

          Effective Date:   _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

	  	
ASSIGNOR[S]

[NAME OF ASSIGNOR]

 

 

By:                                                               

  Title:  

	  	  
	  	
[NAME OF ASSIGNOR]

 

 

By:                                                             

  Title:  

	  	  
	  	
ASSIGNEE[S]

[NAME OF ASSIGNEE]

 

 

By:                                                            

  Title:

	  	  
	  	
[NAME OF ASSIGNEE]

 

 

 

By:                                                          

  Title:  

  

  

  

[Consented to and]7 and Accepted:

	
MANUFACTURES AND TRADERS TRUST COMPANY,

acting in its capacity as Administrative

Agent

 

 

By:                                                                             

     Name:  

     Title:  

	  
	  	  
	
[Consented to:]8

 

SOVRAN SELF STORAGE, INC.

 

 

By:                                                                             

     Name:  

     Title:  

	  
	  	  
	
[Consented to:]9

 

SOVRAN ACQUISITION LIMITED PARTNERSHIP

 

 

By:  Sovran Holdings Inc., its general partner

 

 

By:                                                                              

     Name:  

     Title:  

	  

  

	
  

	
7  To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.

 

  

8  To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.

  

9  To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.

  

  

  

	  	
ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

	
1.

	
Representations and Warranties.

	  	  
	  	
     1.1  Assignor[s].  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (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 (iv) it is [not] a Defaulting Lender; 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, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrowers, any of their Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrowers, any of their Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

	  	  
	  	
     1.2  Assignee[s].  [The][Each] 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 and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an Eligible Assignee as defined in the Credit Agreement (subject to such consents, if any, as may be required under the Credit Agreement), (iii) from and after the Effective Date specified for this Assignment and Assumption, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 7.4 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent, the Assignor 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 Assignment and Assumption and to purchase [the][such] Assigned Interest; and (vii) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, [the][any] 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 Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents 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][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignee whether such amounts have accrued prior to, on or after the Effective Date.  The Assignor[s] and the Assignee[s] shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to such 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, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy 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 law of the State of New York.

  

  

  

	  	
Exhibit F

[Form of Notice of Continuation/Conversion]

                      , 20  

Manufacturers and Traders Trust Company

One Fountain Plaza

Buffalo, New York 14203

Attention:                                  

Ladies and Gentlemen:

     Reference is made to that certain Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2013 (such agreement, as it may be or may have been amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"; capitalized terms used herein without definition shall have the respective meanings assigned to those terms in the Credit Agreement), among Sovran Self Storage, Inc., a Maryland corporation, Sovran Acquisition Limited Partnership, a Delaware limited partnership, Manufacturers and Traders Trust Company and the other lending institutions which are or may become parties thereto pursuant to §19 thereof (collectively, the "Lenders"), Manufacturers and Traders Trust Company, as administrative agent (together with its successors and assigns, the "Administrative Agent") for the Lenders, and each of SunTrust Bank and Wells Fargo Bank, National Association, as co-syndication agents, and each of PNC Bank, National Association, U.S. Bank National Association and HSBC Bank USA, National Association, as co-documentation agents (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement").  The Borrowers hereby give you notice pursuant to [§2.5] [§3.7] of the Credit Agreement for the [Revolving Credit Loans] [Term  Loans] specified below that they elect to:

	
1.

	
[Continue [Revolving Credit Loans] [the Initial Term Loan] [Delayed Draw Term Loans] as LIBOR Rate Loans, and the aggregate principal amount of the [Revolving Credit Loans] [Initial Term Loans] [Delayed Draw Term Loans] subject to the requested continuation is $                         and was originally borrowed by the Borrowers on                      , 201_, the current Interest Period of which ends on            , 20__.]

 

	  	  
	
2.

	
[Convert [Revolving Credit Loans] [the Initial Term Loan] [Delayed Draw Term Loans] to [Base Rate Loans] [LIBOR Rate Loans] and the aggregate principal amount of the [Revolving Credit Loans] [Term Loans] subject to the requested conversion is $                        and was originally borrowed by the Borrowers on                   , 20__the current Interest Period of which ends on                      , 20__.

	  	  
	
3.

	
The date for such [continuation] [conversion] shall be                         .

	  	  
	
4.

	
[The Interest Period for such continued or converted (as applicable) LIBOR Rate Loans is requested to be a [1][2][3][6] month period].

	  	  

     The Borrower Representative hereby certifies to the Administrative Agent and each of the Lenders on behalf of each Borrower that it is authorized to execute this notice on behalf of the Borrowers, no Default or Event of Default has occurred and is continuing, on the date hereof there are no other prohibitions under the Credit Agreement to the requested [conversion][continuation], no such prohibitions will exist on the date of the requested [conversion][continuation], and the requested [conversion][continuation] is in accordance with the provisions of [§2.5] [§3.7] of the Credit Agreement.

     Executed as of this         day of             , 20  .

	  	
SOVRAN SELF STORAGE, INC.

 

 

 

By:                                                           

Name:  

Title:    

	  	  
	  	
SOVRAN ACQUISITION LIMITED

PARTNERSHIP

 

By:  Sovran Holdings Inc., its general partner

 

 

By:                                                           

Name:  

Title:Exhibit 4.2

 

EXECUTION VERSION

	
 
    

 

ATHLON HOLDINGS LP

 

and

 

ATHLON FINANCE CORP.

 

as Issuers

 

and the Subsidiary Guarantors party hereto from time to time

 

73/8% Senior Notes due 2021

 

 

INDENTURE

 

Dated as of April 17, 2013

 

 

and

 

Wells Fargo Bank, National Association
 as Trustee

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I
    
	
 
    	
 
    	
 
    
	
DEFINITIONS AND   INCORPORATION BY REFERENCE
    
	
 
    	
 
    	
 
    
	
SECTION 1.01
    	
Definitions
    	
1
    
	
SECTION 1.02
    	
Other Definitions
    	
44
    
	
SECTION 1.03
    	
Rules of Construction
    	
46
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    
	
 
    	
 
    	
 
    
	
THE   NOTES
    
	
 
    	
 
    	
 
    
	
SECTION 2.01
    	
Amount of Notes
    	
47
    
	
SECTION 2.02
    	
Form and Dating
    	
48
    
	
SECTION 2.03
    	
Execution and Authentication
    	
48
    
	
SECTION 2.04
    	
Registrar and Paying Agent
    	
49
    
	
SECTION 2.05
    	
Paying Agent to Hold Money in Trust
    	
49
    
	
SECTION 2.06
    	
Holder Lists
    	
50
    
	
SECTION 2.07
    	
Transfer and Exchange
    	
50
    
	
SECTION 2.08
    	
Replacement Notes
    	
51
    
	
SECTION 2.09
    	
Outstanding Notes
    	
51
    
	
SECTION 2.10
    	
Cancellation
    	
52
    
	
SECTION 2.11
    	
Defaulted Interest
    	
52
    
	
SECTION 2.12
    	
CUSIP Numbers, ISINs, Etc.
    	
52
    
	
SECTION 2.13
    	
Calculation of Principal Amount of Notes
    	
52
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    
	
 
    	
 
    	
 
    
	
REDEMPTION
    
	
 
    	
 
    	
 
    
	
SECTION 3.01
    	
Redemption
    	
53
    
	
SECTION 3.02
    	
Applicability of Article
    	
53
    
	
SECTION 3.03
    	
Notices to Trustee
    	
53
    
	
SECTION 3.04
    	
Selection of Notes to Be Redeemed
    	
53
    
	
SECTION 3.05
    	
Notice of Optional Redemption
    	
54
    
	
SECTION 3.06
    	
Effect of Notice of Redemption
    	
54
    
	
SECTION 3.07
    	
Deposit of Redemption Price
    	
55
    
	
SECTION 3.08
    	
Notes Redeemed in Part
    	
55
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    
	
 
    	
 
    	
 
    
	
COVENANTS
    
	
 
    	
 
    	
 
    
	
SECTION 4.01
    	
Payment of Notes
    	
55
    
	
SECTION 4.02
    	
Reports and Other Information
    	
55
    
	
SECTION 4.03
    	
Limitation on Incurrence of Indebtedness and Issuance of   Disqualified Stock and Preferred Stock
    	
58
    
	
SECTION 4.04
    	
Limitation on Restricted Payments
    	
65
    
	
SECTION 4.05
    	
Dividend and Other Payment Restrictions Affecting   Subsidiaries
    	
71
    
				

 

ii

 

TABLE OF CONTENTS
 (cont’d)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 4.06
    	
Asset Sales
    	
73
    
	
SECTION 4.07
    	
Transactions with Affiliates
    	
77
    
	
SECTION 4.08
    	
Change of Control
    	
80
    
	
SECTION 4.09
    	
Compliance Certificate
    	
82
    
	
SECTION 4.10
    	
Further Instruments and Acts
    	
83
    
	
SECTION 4.11
    	
Future Subsidiary Guarantors
    	
83
    
	
SECTION 4.12
    	
Liens
    	
83
    
	
SECTION 4.13
    	
[Intentionally Omitted]
    	
84
    
	
SECTION 4.14
    	
Maintenance of Office or Agency
    	
84
    
	
SECTION 4.15
    	
Covenant Suspension
    	
84
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    
	
 
    	
 
    	
 
    
	
SUCCESSOR   COMPANY
    
	
 
    	
 
    	
 
    
	
SECTION 5.01
    	
When Issuers May Merge   or Transfer Assets
    	
85
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    
	
 
    	
 
    	
 
    
	
DEFAULTS   AND REMEDIES
    
	
 
    	
 
    	
 
    
	
SECTION 6.01
    	
Events of Default
    	
88
    
	
SECTION 6.02
    	
Acceleration
    	
90
    
	
SECTION 6.03
    	
Other Remedies
    	
90
    
	
SECTION 6.04
    	
Waiver of Past Defaults
    	
90
    
	
SECTION 6.05
    	
Control by Majority
    	
91
    
	
SECTION 6.06
    	
Limitation on Suits
    	
91
    
	
SECTION 6.07
    	
Rights of the Holders to Receive Payment
    	
91
    
	
SECTION 6.08
    	
Collection Suit by Trustee
    	
91
    
	
SECTION 6.09
    	
Trustee May File Proofs of Claim
    	
92
    
	
SECTION 6.10
    	
Priorities
    	
92
    
	
SECTION 6.11
    	
Undertaking for Costs
    	
92
    
	
SECTION 6.12
    	
Waiver of Stay or Extension Laws
    	
93
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    
	
 
    	
 
    	
 
    
	
TRUSTEE
    
	
 
    	
 
    	
 
    
	
SECTION 7.01
    	
Duties of Trustee
    	
93
    
	
SECTION 7.02
    	
Rights of Trustee
    	
94
    
	
SECTION 7.03
    	
Individual Rights of Trustee
    	
96
    
	
SECTION 7.04
    	
Trustee’s Disclaimer
    	
96
    
	
SECTION 7.05
    	
Notice of Defaults
    	
96
    
	
SECTION 7.06
    	
Reports by Trustee to the Holders
    	
97
    
	
SECTION 7.07
    	
Compensation and Indemnity
    	
97
    
	
SECTION 7.08
    	
Replacement of Trustee
    	
98
    
	
SECTION 7.09
    	
Successor Trustee by Merger
    	
99
    
				

 

iii

 

TABLE OF CONTENTS
 (cont’d)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 7.10
    	
Eligibility; Disqualification
    	
99
    
	
SECTION 7.11
    	
Preferential Collection of Claims Against the Issuers
    	
99
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII
    
	
 
    	
 
    	
 
    
	
DISCHARGE OF INDENTURE; DEFEASANCE
    
	
 
    	
 
    	
 
    
	
SECTION 8.01
    	
Discharge of Liability on   Notes; Defeasance
    	
100
    
	
SECTION 8.02
    	
Conditions to Defeasance
    	
101
    
	
SECTION 8.03
    	
Application of Trust Money
    	
102
    
	
SECTION 8.04
    	
Repayment to Issuer
    	
103
    
	
SECTION 8.05
    	
Indemnity for U.S. Government Obligations
    	
103
    
	
SECTION 8.06
    	
Reinstatement
    	
103
    
	
 
    	
 
    	
 
    
	
ARTICLE IX
    
	
 
    	
 
    	
 
    
	
AMENDMENTS   AND WAIVERS
    
	
 
    	
 
    	
 
    
	
SECTION 9.01
    	
Without Consent of the   Holders
    	
103
    
	
SECTION 9.02
    	
With Consent of the Holders
    	
104
    
	
SECTION 9.03
    	
Revocation and Effect of Consents and Waivers
    	
105
    
	
SECTION 9.04
    	
Notation on or Exchange of Notes
    	
106
    
	
SECTION 9.05
    	
Trustee to Sign Amendments
    	
106
    
	
SECTION 9.06
    	
Additional Voting Terms; Calculation of Principal Amount
    	
106
    
	
SECTION 9.07
    	
Compliance with the Trust Indenture Act
    	
107
    
	
 
    	
 
    	
 
    
	
ARTICLE X
    
	
 
    	
 
    	
 
    
	
[INTENTIONALLY   OMITTED]
    
	
 
    	
 
    	
 
    
	
ARTICLE XI
    
	
 
    	
 
    	
 
    
	
[INTENTIONALLY   OMITTED]
    
	
 
    	
 
    	
 
    
	
ARTICLE XII
    
	
 
    	
 
    	
 
    
	
GUARANTEE
    
	
 
    	
 
    	
 
    
	
SECTION 12.01
    	
Guarantee
    	
107
    
	
SECTION 12.02
    	
Limitation on Liability
    	
109
    
	
SECTION 12.03
    	
[Intentionally Omitted]
    	
110
    
	
SECTION 12.04
    	
Successors and Assigns
    	
110
    
	
SECTION 12.05
    	
No Waiver
    	
110
    
	
SECTION 12.06
    	
Modification
    	
110
    
	
SECTION 12.07
    	
Execution of Supplemental Indenture for Future Guarantors
    	
111
    
	
SECTION 12.08
    	
Non-Impairment
    	
111
    
				

 

iv

 

TABLE OF CONTENTS
 (cont’d)

 

	
 
    	
Page
    
	
 
    
	
ARTICLE XIII
    
	
 
    
	
[INTENTIONALLY   OMITTED]
    
	
 
    
	
ARTICLE XIV
    
	
 
    
	
MISCELLANEOUS
    
	
 
    	
 
    
	
SECTION 14.01
    	
Trust Indenture Act   Controls
    	
111
    
	
SECTION 14.02
    	
Notices
    	
111
    
	
SECTION 14.03
    	
Communication by the Holders with Other Holders
    	
113
    
	
SECTION 14.04
    	
Certificate and Opinion as to Conditions Precedent
    	
113
    
	
SECTION 14.05
    	
Statements Required in Certificate or Opinion
    	
113
    
	
SECTION 14.06
    	
When Notes Disregarded
    	
114
    
	
SECTION 14.07
    	
Rules by Trustee, Paying Agent and Registrar
    	
114
    
	
SECTION 14.08
    	
Legal Holidays
    	
114
    
	
SECTION 14.09
    	
GOVERNING LAW
    	
114
    
	
SECTION 14.10
    	
No Recourse Against Others
    	
114
    
	
SECTION 14.11
    	
Successors
    	
114
    
	
SECTION 14.12
    	
Multiple Originals
    	
114
    
	
SECTION 14.13
    	
Table of Contents; Headings
    	
114
    
	
SECTION 14.14
    	
Indenture Controls
    	
115
    
	
SECTION 14.15
    	
Severability
    	
115
    
	
SECTION 14.16
    	
Waiver of Jury Trial
    	
115
    
	
 
    	
 
    	
 
    
	
Appendix A
    	
—            Provisions   Relating to Initial Notes and Additional Notes
    	
 
    
	
 
    	
 
    
	
EXHIBIT INDEX
    
	
 
    	
 
    	
 
    
	
Exhibit A      —
    	
Form of Initial Note
    	
 
    
	
Exhibit B      —
    	
Form of Exchange Note
    	
 
    
	
Exhibit C      —
    	
Form of Transferee Letter of   Representation
    	
 
    
	
Exhibit D      —
    	
Form of Supplemental Indenture
    	
 
    
	
Exhibit E      —
    	
Form of Notation of Subsidiary   Guarantee
    	
 
    
				

 

v

 

CROSS-REFERENCE TABLE

 

	
TIA
    	
 
    	
 
    	
Indenture
    
	
Section
    	
 
    	
 
    	
Section
    
	
310
    	
(a)(1)
    	
 
    	
7.10
    
	
 
    	
(a)(2)
    	
 
    	
7.10
    
	
 
    	
(a)(3)
    	
 
    	
7.10
    
	
 
    	
(a)(4)
    	
 
    	
7.10
    
	
 
    	
(b)
    	
 
    	
7.08; 7.10
    
	
 
    	
(c)
    	
 
    	
N.A.
    
	
311
    	
(a)
    	
 
    	
7.11
    
	
 
    	
(b)
    	
 
    	
7.11
    
	
 
    	
(c)
    	
 
    	
N.A.
    
	
312
    	
(a)
    	
 
    	
2.06
    
	
 
    	
(b)
    	
 
    	
14.03
    
	
 
    	
(c)
    	
 
    	
14.03
    
	
313
    	
(a)
    	
 
    	
7.06
    
	
 
    	
(b)(1)
    	
 
    	
7.06
    
	
 
    	
(b)(2)
    	
 
    	
7.06
    
	
 
    	
(c)
    	
 
    	
7.06
    
	
 
    	
(d)
    	
 
    	
7.06
    
	
314
    	
(a)
    	
 
    	
4.02; 4.09
    
	
 
    	
(b)
    	
 
    	
N.A.
    
	
 
    	
(c)(1)
    	
 
    	
14.04
    
	
 
    	
(c)(2)
    	
 
    	
14.04
    
	
 
    	
(c)(3)
    	
 
    	
N.A.
    
	
 
    	
(d)
    	
 
    	
N.A.
    
	
 
    	
(e)
    	
 
    	
14.05
    
	
 
    	
(f)
    	
 
    	
4.10
    
	
315
    	
(a)
    	
 
    	
7.01
    
	
 
    	
(b)
    	
 
    	
7.05
    
	
 
    	
(c)
    	
 
    	
7.01
    
	
 
    	
(d)
    	
 
    	
7.01
    
	
 
    	
(e)
    	
 
    	
6.11
    
	
316
    	
(a) (last sentence)
    	
 
    	
14.06
    
	
 
    	
(a)(1)(A)
    	
 
    	
6.05
    
	
 
    	
(a)(1)(B)
    	
 
    	
6.04
    
	
 
    	
(a)(2)
    	
 
    	
N.A.
    
	
 
    	
(b)
    	
 
    	
6.07
    
	
317
    	
(a)(1)
    	
 
    	
6.08
    
	
 
    	
(a)(2)
    	
 
    	
6.09
    
	
 
    	
(b)
    	
 
    	
2.05
    
	
318
    	
(a)
    	
 
    	
14.01
    

 

N.A. Means Not Applicable.
 Note:      This Cross-Reference Table shall not, for any purposes, be deemed to be part of this Indenture.

 

vi

 

INDENTURE, dated as of April 17, 2013, among ATHLON HOLDINGS LP, a Delaware limited partnership (together with its successors and assigns, “Holdings”), ATHLON FINANCE CORP., a Delaware corporation (together with its successors and assigns, the “Co-Issuer” and, together with Holdings, the “Issuers”), the Subsidiary Guarantors party hereto from time to time (as defined below) and Wells Fargo Bank, National Association, as trustee (the “Trustee”).

 

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the holders of (i) $500,000,000 aggregate principal amount of the Issuers’ 73/8% Senior Notes due 2021 issued on the date hereof (the “Initial Notes”), (ii) Exchange Notes (as defined below) issued in exchange for the Initial Notes and (iii) Additional Notes issued from time to time (together with the Initial Notes and the Exchange Notes, the “Notes”):

 

ARTICLE I

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01     Definitions.

 

“Acquired Indebtedness” means, with respect to any specified Person:

 

(1)           Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and

 

(2)           Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

 

Acquired Indebtedness will be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of such assets.

 

“Additional Assets” means:

 

(1)           any properties or assets used or useful in the Oil and Gas Business;

 

(2)           capital expenditures by Holdings or a Restricted Subsidiary in the Oil and Gas Business;

 

(3)           the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Holdings or another Restricted Subsidiary; or

 

(4)           Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

 

 

provided, however, that, in the case of clauses (3) and (4), such Restricted Subsidiary is primarily engaged in the Oil and Gas Business.

 

“Additional Notes” means the Notes issued under the terms of this Indenture subsequent to the Issue Date.

 

“Additional Refinancing Amount” means, in connection with the Incurrence of any Refinancing Indebtedness, the aggregate principal amount of additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in respect thereof.

 

“Adjusted Consolidated Net Tangible Assets” means (without duplication), as of the date of determination, the remainder of:

 

(a)           the sum of:

 

(i)            estimated discounted future net revenues from proved oil and natural gas reserves of Holdings and its Restricted Subsidiaries calculated in accordance with SEC guidelines before any provincial, territorial, state, federal or foreign income taxes, as estimated by Holdings in a reserve report prepared as of the end of Holdings’ most recently completed fiscal year for which audited financial statements are available, as increased by, as of the date of determination, the estimated discounted future net revenues from (A) estimated proved oil and natural gas reserves acquired since such year end, which reserves were not reflected in such year end reserve report, and (B) estimated oil and natural gas reserves attributable to upward revisions of estimates of proved oil and natural gas reserves (including the impact to discounted future net revenues related to development costs previously estimated in the last year end reserve report, but only to the extent such costs were actually incurred since the date of the last year end reserve report) since such year end due to exploration, development, exploitation or other activities, increased by the accretion of discount from the date of the last year end reserve report to the date of determination and decreased by, as of the date of determination, the estimated discounted future net revenues from (C) estimated proved oil and natural gas reserves included in the last year end reserve report that shall have been produced or disposed of since such year end, and (D) estimated oil and natural gas reserves included therein that are subsequently removed from the proved oil and natural gas reserves of Holdings and its Restricted Subsidiaries as so calculated due to downward revisions of estimates of proved oil and natural gas reserves since such year end due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions, provided, that (x) in the case of such year end reserve report and any adjustments since such year end pursuant to clauses (A), (B) and (D), the estimated discounted future net revenues from proved oil and natural gas reserves shall be determined in their entirety using oil, natural gas and other hydrocarbon prices and costs that are either (1) calculated in accordance with SEC guidelines and, with respect to such adjustments under clauses (A), (B) or (D), calculated with such prices and costs as if the end of the most recent fiscal quarter preceding the date of determination for which such information is available to Holdings were year end or (2) if Holdings so elects at any time, calculated in accordance with the foregoing clause (1), except that when pricing of

 

2

 

future net revenues of proved oil and natural gas reserves under SEC guidelines is not based on a contract price and is instead based upon benchmark, market or posted pricing, the pricing for each month of estimated future production from such proved oil and natural gas reserves not subject to contract pricing shall be based upon NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity applicable to such production month (adjusted for energy content, quality and basis differentials, with such basis differentials determined as provided in the definition of “Borrowing Base” and giving application to the last sentence of such definition hereto), as such forward prices are published as of the year end date of such reserve report or, with respect to post-year end adjustments under clauses (A), (B) or (D), the last day of the most recent fiscal quarter preceding the date of determination, (y) the pricing of estimated proved reserves that have been produced or disposed since year end as set forth in clause (D) shall be based upon the applicable pricing elected for the prior year end reserve report as provided in clause (x), and (z) in each case as estimated by Holdings’ petroleum engineers or any independent petroleum engineers engaged by Holdings for that purpose;

 

(ii)           the capitalized costs that are attributable to Oil and Gas Properties of Holdings and its Restricted Subsidiaries to which no proved oil and natural gas reserves are attributable, based on Holdings’ books and records as of a date no earlier than the date of Holdings’ latest annual or quarterly consolidated financial statements;

 

(iii)          the Net Working Capital on a date no earlier than the date of Holdings’ latest annual or quarterly consolidated financial statements;

 

(iv)          assets related to commodity risk management activities less liabilities related to commodity risk management activities, in each case to the extent that such assets and liabilities arise in the ordinary course of the Oil and Gas Business, provided that such net value shall not be less than zero; and

 

(v)           the greater of (A) the net book value of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings’ latest annual or quarterly consolidated financial statements, and (B) the Fair Market Value, as estimated by Holdings, of other tangible assets (including, without limitation, investments in unconsolidated Restricted Subsidiaries and mineral rights held under lease or other contractual arrangement) of Holdings and its Restricted Subsidiaries, as of a date no earlier than the date of Holdings’ latest audited consolidated financial statements (it being understood that Holdings shall not be required to obtain any appraisal of any assets); minus

 

(b)           the sum of:

 

(i)            any amount included in clauses (a)(i) through (a)(v) above that is attributable to minority interests;

 

3

 

(ii)           any net natural gas balancing liabilities of Holdings and its Restricted Subsidiaries reflected in Holdings’ latest audited consolidated financial statements;

 

(iii)          to the extent included in clause (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing the prices and costs as provided in clause (a)(i)), attributable to reserves which are required to be delivered to third parties to fully satisfy the obligations of Holdings and its Restricted Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using the schedules specified with respect thereto); and

 

(iv)          to the extent included in clause (a)(i) above, the estimated discounted future net revenues, calculated in accordance with SEC guidelines (utilizing prices and costs as provided in clause (a)(i)), attributable to reserves subject to Dollar-Denominated Production Payments which, based on the estimates of production and price assumptions included in determining the estimated discounted future net revenues specified in clause (a)(i) above, would be necessary to fully satisfy the payment obligations of Holdings and its Restricted Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if applicable, using the schedules specified with respect thereto).

 

If Holdings changes its method of accounting from the full cost method of accounting to the successful efforts or a similar method, “Adjusted Consolidated Net Tangible Assets” will continue to be calculated as if Holdings were still using the full cost method of accounting.

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

 

“Applicable Premium” means, with respect to any Note on any applicable redemption date, as determined by the Issuers, the greater of:

 

(1)           1% of the then outstanding principal amount of the Note; and

 

(2)           the excess of:

 

(a)           the present value at such redemption date of (i) the redemption price of the Note, at April 15, 2016 (such redemption price being set forth in Paragraph 5 of the Note) plus (ii) all required interest payments due on the Note through April 15, 2016 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

 

(b)           the then outstanding principal amount of the Note.

 

4

 

“Asset Sale” means:

 

(1)           the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of Production Payments and Reserve Sales and Sale/ Leaseback Transactions) (other than an operating lease entered into in the ordinary course of the Oil and Gas Business) outside the ordinary course of business of Holdings or any Restricted Subsidiary (each referred to in this definition as a “disposition”); or

 

(2)           the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to Holdings or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions),

 

in each case other than:

 

(a)           a disposition of Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business;

 

(b)           the disposition of all or substantially all of the assets of Holdings in a manner permitted pursuant to Section 5.01 or any disposition that constitutes a Change of Control;

 

(c)           any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.04;

 

(d)           any disposition of assets of Holdings or any Restricted Subsidiary or issuance or sale of Equity Interests of Holdings or any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value (as determined in good faith by Holdings) of less than $50.0 million;

 

(e)           any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to Holdings or by Holdings or a Restricted Subsidiary to a Restricted Subsidiary;

 

(f)            any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;

 

(g)           foreclosure or any similar action with respect to any property or other asset of Holdings or any of the Restricted Subsidiaries;

 

(h)           any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

 

5

 

(i)            the lease, assignment or sublease of, or any transfer related to a “reverse build to suit” or similar transaction in respect of, any real or personal property in the ordinary course of business;

 

(j)            any sale of inventory or other assets in the ordinary course of business;

 

(k)           any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;

 

(l)            in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of Holdings and the Restricted Subsidiaries as a whole, as determined in good faith by Holdings;

 

(m)          a transfer of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;

 

(n)           any financing transaction with respect to property built or acquired by Holdings or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by this Indenture;

 

(o)           dispositions in connection with Permitted Liens;

 

(p)           any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than Holdings or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;

 

(q)           the sale of any property in a Sale/Leaseback Transaction within twelve months of the acquisition of such property;

 

(r)            dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

 

(s)            any surrender, expiration or waiver of contract rights or oil and natural gas leases or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;

 

(t)            a disposition of Hydrocarbons or mineral products inventory in the ordinary course of business;

 

6

 

(u)           any Production Payments and Reserve Sales; provided that any such Production Payments and Reserve Sales, other than incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to an Issuer or a Restricted Subsidiary, shall have been created, incurred, issued, assumed or guaranteed in connection with the financing of, and within 60 days after the acquisition of, the property that is subject thereto;

 

(v)           the abandonment, farm-out pursuant to a Farm-Out Agreement, lease or sublease of developed or underdeveloped Oil and Gas Properties owned or held by an Issuer or any Restricted Subsidiary in the ordinary course of business or which are usual and customary in the Oil and Gas Business generally or in the geographic region in which such activities occur; and

 

(w)          a disposition (whether or not in the ordinary course of business) of any Oil and Gas Property or interest therein to which no proved reserves are attributable at the time of such disposition.

 

“Bank Indebtedness” means any and all amounts payable under or in respect of (a) the Credit Agreement and the other Credit Agreement Documents, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Holdings whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof and (b) whether or not the Indebtedness referred to in clause (a) remains outstanding, if designated by Holdings to be included in this definition, one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

 

“Board of Directors” means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof. In the case of Holdings, the Board of Directors of Holdings shall be deemed to include the Board of Directors of Holdings or any direct or indirect parent of Holdings, as appropriate.

 

7

 

“Borrowing Base” means, at any date of determination, an amount equal to the amount of (a) 75% of the net present value discounted at 8% of proved developed producing (PDP) reserves, plus (b) 50% of the net present value discounted at 8% of proved developed non-producing (PDNP) reserves, plus (c) 50% of the net present value discounted at 8% of proven undeveloped (PUD) reserves, plus (d) 65% of the positive net present value discounted at 8% of the future receipts expected to be paid to or by Holdings and its Restricted Subsidiaries under commodity hedging agreements (other than basis differential commodity hedging agreements), netted against the price described below, plus (e) 65% of the positive net present value discounted at 8% of the future receipts expected to be paid to or by Holdings and its Restricted Subsidiaries under basis differential commodity hedging agreements, in each case for Holdings and its Restricted Subsidiaries, and (i) for purposes of clauses (a) through (d) above, as estimated by Holdings in a reserve report prepared by Holdings’ petroleum engineers applying the relevant NYMEX (or successor) published forward prices for the most comparable hydrocarbon commodity adjusted for relevant energy content, quality and basis differentials (before any state or federal or other income tax) and (ii) for purposes of clauses (d) and (e) above, as estimated by Holdings applying, if available, the relevant NYMEX (or successor) published forward basis differential or, if such NYMEX (or successor) forward basis differential is unavailable, in good faith based on historical basis differential (before any state or federal or other income tax). For any months beyond the term included in published NYMEX (or successor) forward pricing, the price used will be equal to the last published contract escalated at 3.0% per annum.

 

“Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the place of payment.

 

“Capital Stock” means:

 

(1)           in the case of a corporation, corporate stock or shares;

 

(2)           in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)           in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

 

(4)           any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP; provided that any obligations of Holdings or its Restricted Subsidiaries, or of a special purpose or other entity not consolidated with Holdings and its Restricted Subsidiaries, either existing on the Issue Date or created prior to any recharacterization described below (or any refinancings thereof) (i) that were not included on the

 

8

 

consolidated balance sheet of Holdings as capital lease obligations and (ii) that are subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with Holdings and its Restricted Subsidiaries, due to a change in accounting treatment or otherwise, shall for all purposes not be treated as Capitalized Lease Obligations or Indebtedness.

 

“Capitalized Software Expenditures” shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of such Person and such Restricted Subsidiaries.

 

“Cash Equivalents” means:

 

(1)           U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or such local currencies held by an entity from time to time in the ordinary course of business;

 

(2)           securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;

 

(3)           certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

 

(4)           repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

 

(5)           commercial paper issued by a corporation (other than an Affiliate of Holdings) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;

 

(6)           readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

 

(7)           Indebtedness issued by Persons (other than the Sponsors or any of their Affiliates) with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s (or

 

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reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and

 

(8)           investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above.

 

“CFC” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

 

“Change of Control” means the occurrence of either of the following:

 

(1)           the sale, lease or transfer (other than by way of merger or consolidation, including any merger or consolidation involving an Affiliate of Holdings solely for the purpose of reorganizing either of the Issuers in another jurisdiction to realize tax or other benefits), in one or a series of related transactions, of all or substantially all the assets of Holdings and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or

 

(2)           Holdings becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of Holdings.

 

In addition, a Change of Control shall not occur as a result of the IPOCo Formation Transactions, the Qualified IPO, and the transactions relating thereto, including, without limitation, (i) the contribution of the Issuers to IPOCo and (ii) any transaction in which Holdings remains a subsidiary of IPOCo but one or more intermediate holding companies between Holdings and IPOCo are added, liquidated, merged or consolidated out of existence.

 

“Change of Control Triggering Event” means (a) at any time on or prior to July 15, 2014, the occurrence of both a Change of Control and a Rating Event and (b) at any time on or after July 16, 2014, the occurrence of a Change of Control. Notwithstanding the foregoing, no Change of Control Triggering Event will be deemed to have occurred in connection with any particular Change of Control unless and until such Change of Control has actually been consummated.

 

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

 

“Consolidated Depreciation, Depletion and Amortization Expense” means, with respect to any Person for any period, the total amount of depreciation, depletion and amortization expense, including the amortization of intangible assets, deferred financing fees and Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains

 

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and losses related to pensions and other post-employment benefits, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

 

“Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication, of:

 

(1)           consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding Additional Interest in respect of the Notes, amortization of deferred financing fees, any interest attributable to Dollar-Denominated Production Payments, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Hedging Obligations or other derivatives (in each case permitted hereunder) under GAAP); plus

 

(2)           consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus

 

(3)           commissions, discounts, yield and other fees and charges Incurred in connection with any Receivables Financing which are payable to Persons other than Holdings and the Restricted Subsidiaries; minus

 

(4)           interest income for such period.

 

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

 

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis; provided, however, that:

 

(1)           any net after-tax extraordinary, nonrecurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses or charges, any severance expenses, relocation expenses, curtailments or modifications to pension and post-retirement employee benefit plans, any expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternate uses and fees, expenses or charges relating to facilities closing costs, acquisition integration costs, facilities opening costs, project start-up costs, business optimization costs, signing, retention or completion bonuses, expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or issuance, repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or not successful), and any fees, expenses, charges or change in control payments related to the offer and sale of the Notes, the IPOCo Formation Transactions, the Qualified IPO and transactions related thereto, in each case, shall be excluded;

 

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(2)           effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded;

 

(3)           the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

 

(4)           any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets shall be excluded;

 

(5)           any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of Holdings) shall be excluded;

 

(6)           any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness, Hedging Obligations or other derivative instruments shall be excluded;

 

(7)           the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;

 

(8)           solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of “Cumulative Credit,” the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;

 

(9)           an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with Section 4.04(b)(xii) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;

 

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(10)         any impairment charges or asset write-offs, in each case pursuant to GAAP, the amortization of intangibles arising pursuant to GAAP, and any impairment charges, asset write-offs or write-down, including ceiling test write-downs, on Oil and Gas Properties under GAAP or SEC guidelines shall be excluded;

 

(11)         any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights shall be excluded;

 

(12)         any (a) non-cash compensation charges, (b) costs and expenses after the Issue Date related to employment of terminated employees, or (c) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Issue Date of officers, directors, managers and employees, in each case of such Person or any Restricted Subsidiary, shall be excluded;

 

(13)         accruals and reserves that are established or adjusted within 12 months after the Issue Date and that are so required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;

 

(14)         (a) the Net Income of any Person and its Restricted Subsidiaries shall be calculated without deducting the income attributable to, or adding the losses attributable to, the minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties and (b) any ordinary course dividend, distribution or other payment paid in cash and received from any Person in excess of amounts included in clause (7) above shall be included;

 

(15)         (a)(i) the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;

 

(16)         any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded;

 

(17)         (a) to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (i) not denied by the applicable carrier in writing within 180 days and (ii) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded and

 

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(b) amounts estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption shall be included (with a deduction for amounts actually received up to such estimated amount to the extent included in Net Income in a future period);

 

(18)         Capitalized Software Expenditures shall be excluded; and

 

(19)         Non-cash charges for deferred tax asset valuation allowances shall be excluded (except to the extent reversing a previously recognized increase to net income).

 

Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries or Restricted Subsidiaries to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under Section 4.04 pursuant to clauses (4) and (5) of the definition of “Cumulative Credit.”

 

“Consolidated Non-Cash Charges” means, with respect to any Person for any period, the non-cash expenses (other than Consolidated Depreciation, Depletion and Amortization Expense) of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP, provided that if any such non-cash expenses represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA in such future period to the extent paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period.

 

“Consolidated Taxes” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, state, franchise, property and similar taxes, foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) and any Tax Distributions taken into account in calculating Consolidated Net Income.

 

“Consolidated Total Indebtedness” means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate principal amount of all outstanding Indebtedness of Holdings and the Restricted Subsidiaries (excluding any undrawn letters of credit) consisting of Capitalized Lease Obligations, bankers’ acceptances and Indebtedness for borrowed money, plus (2) the aggregate amount of all outstanding Disqualified Stock of Holdings and the Restricted Subsidiaries and all Preferred Stock of Restricted Subsidiaries, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, in each case determined on a consolidated basis in accordance with GAAP.

 

“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

 

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(1)           to purchase any such primary obligation or any property constituting direct or indirect security therefor,

 

(2)           to advance or supply funds:

 

(a)           for the purchase or payment of any such primary obligation; or

 

(b)           to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

 

(3)           to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

 

“Corporate Trust Office” means the designated office of the Trustee in the United States of America at which at any time its corporate trust business shall be administered, or such other address as the Trustee may designate from time to time by notice to the holders and the Issuers, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the holders and the Issuers).

 

“Credit Agreement” means (i) that certain amended and restated credit agreement dated as of March 19, 2013 among Holdings, the guarantors named therein, the financial institutions named therein and Bank of America, N.A. as administrative agent, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by Holdings to be included in the definition of “Credit Agreement,” one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

 

“Credit Agreement Documents” means the collective reference to any Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified, in whole or in part, from time to time.

 

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“Cumulative Credit” means the sum of (without duplication):

 

(1)           50% of the Consolidated Net Income of Holdings for the period from January 1, 2013 to the end of Holdings’ most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (taken as one accounting period, the “Reference Period”) (or in case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus

 

(2)           100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash, received by Holdings after the Issue Date (other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.03(b)(xiii)) from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (excluding Refunding Capital Stock (as defined below), Designated Preferred Stock, Excluded Contributions, and Disqualified Stock), including Equity Interests issued upon exercise of warrants or options (other than an issuance or sale to Holdings or a Restricted Subsidiary), plus

 

(3)           100% of the aggregate amount of contributions to the capital of Holdings received in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash after the Issue Date (other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, and Disqualified Stock and other than contributions to the extent such contributions have been used to Incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to Section 4.03(b)(xiii)), plus

 

(4)           100% of the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of Holdings or any Restricted Subsidiary issued after the Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings (provided in the case of any such parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus

 

(5)           100% of the aggregate amount received by Holdings or any Restricted Subsidiary in cash and the Fair Market Value (as determined in good faith by Holdings) of property other than cash received by Holdings or any Restricted Subsidiary from:

 

(A)          the sale or other disposition (other than to Holdings or a Restricted Subsidiary) of Restricted Investments made by Holdings and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from Holdings and the Restricted Subsidiaries by any Person (other than Holdings or any Restricted Subsidiary) and from repayments of loans or advances, and releases of guarantees, which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to Section 4.04(b)(vii)),

 

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(B)          the sale (other than to Holdings or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or

 

(C)          a distribution or dividend from an Unrestricted Subsidiary, plus

 

(6)           in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Holdings or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by Holdings) of the Investment of Holdings or the Restricted Subsidiaries in such Unrestricted Subsidiary (which, if the Fair Market Value of such investment shall exceed $25.0 million, shall be determined by the Board of Directors of Holdings) at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to Section 4.04(b)(vii) or constituted a Permitted Investment).

 

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

 

“Designated Non-cash Consideration” means the Fair Market Value (as determined in good faith by Holdings) of non-cash consideration received by Holdings or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

 

“Designated Preferred Stock” means Preferred Stock of Holdings or any direct or indirect parent of Holdings (other than Disqualified Stock), that is issued for cash (other than to Holdings or any of its Subsidiaries or an employee stock ownership plan or trust established by Holdings or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers’ Certificate, on the issuance date thereof.

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:

 

(1)           matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale),

 

(2)           is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or

 

(3)           is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),

 

in each case prior to 91 days after the earlier of the maturity date of the Notes or the date the Notes are no longer outstanding; provided, however, that only the portion of Capital Stock which

 

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so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of Holdings or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided, further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

 

“Dollar-Denominated Production Payments” means production payment obligations recorded as liabilities in accordance with GAAP, together with all undertakings and obligations in connection therewith.

 

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

 

“EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Restricted Subsidiaries for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:

 

(1)           Consolidated Taxes; plus

 

(2)           Fixed Charges; plus

 

(3)           Consolidated Depreciation, Depletion and Amortization Expense; plus

 

(4)           Consolidated Non-Cash Charges; plus

 

(5)           any expenses or charges (other than Consolidated Depreciation, Depletion and Amortization Expense) related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the Incurrence or repayment of Indebtedness permitted to be Incurred by this Indenture (including a refinancing thereof) (whether or not successful), including (i) such fees, expenses or charges related to (a) the IPCo Formation Transactions, the Qualified IPO and the transactions relating thereto, (b) the Notes or (c) any Bank Indebtedness, (ii) any amendment or other modification of the Notes or other Indebtedness, (iii) any Additional Interest in respect of the Notes and (iv) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Receivables Financing; plus

 

(6)           business optimization expenses and other restructuring charges, reserves or expenses (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, facility closures, facility consolidations, retention, systems establishment costs, contract termination costs, future lease commitments and excess pension charges); plus

 

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(7)           the amount of loss on sale of receivables and related assets to a Receivables Subsidiary in connection with a Qualified Receivables Financing; plus

 

(8)           any costs or expense Incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of Holdings or a Subsidiary Guarantor or net cash proceeds of an issuance of Equity Interests of Holdings (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit; plus

 

(9)           the amount of any management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Sponsors (or any accruals relating to such fees and related expenses) during such period to the extent otherwise permitted by Section 4.07, including, if applicable, the amount of any termination fees paid pursuant to clause (xxi) thereof; plus

 

(10)         all adjustments of the nature used in connection with the calculation of “Adjusted EBITDA” as set forth in “Summary Consolidated Financial, Reserve and Operating Data—Non-GAAP Financial Measures—Adjusted EBITDA” under “Offering Memorandum Summary” in the Offering Memorandum to the extent such adjustments, without duplication, continue to be applicable to such period; plus

 

(11)         the amount of any loss attributable to a new plant or facility until the date that is 12 months after completing construction of or acquiring such plant or facility, as the case may be; provided that (A) such losses are reasonably identifiable and factually supportable and certified by a responsible officer of such Person and (B) losses attributable to such plant or facility after 12 months from the date of completing construction of or acquisition of such plant or facility, as the case may be, shall not be included in this clause (11), plus

 

(12)         if such Person accounts for its oil and natural gas operations using the successful efforts or a similar method of accounting, consolidated exploration expense of such Person and its Restricted Subsidiaries, and

 

less, without duplication, to the extent the same increased Consolidated Net Income,

 

(13)         the sum of (x) the amount of deferred revenues that are amortized during such period and are attributable to reserves that are subject to Volumetric Production Payments and (y) amounts recorded in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments; and

 

(14)         non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period).

 

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“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

“Equity Offering” means any public or private sale after the Issue Date of common Capital Stock or Preferred Stock of Holdings or any direct or indirect parent of Holdings, as applicable (other than Disqualified Stock), other than:

 

(1)           public offerings with respect to Holdings’ or such direct or indirect parent’s common stock registered on Form S-4 or Form S-8;

 

(2)           issuances to any Subsidiary of Holdings; and

 

(3)           any such public or private sale that constitutes an Excluded Contribution.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Exchange Notes” means the Notes of the Issuers issued pursuant to this Indenture in exchange for, and in an aggregate principal amount equal to or not in excess of, the Initial Notes or any Additional Notes, if applicable, in compliance with the terms of the Registration Rights Agreement.

 

“Exchange Offer Registration Statement” means the registration statement filed with the SEC in connection with the Registered Exchange Offer.

 

“Excluded Contributions” means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by Holdings) received by Holdings after the Issue Date from:

 

(1)           contributions to its common equity capital, and

 

(2)           the sale (other than to a Subsidiary of Holdings or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of Holdings,

 

in each case designated as Excluded Contributions pursuant to an Officers’ Certificate on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be.

 

“Excluded Subsidiary” means (a) any Unrestricted Subsidiary, (b) any Subsidiary that is not a Wholly Owned Subsidiary, (c) any Foreign Subsidiary, (d) any Domestic Subsidiary (i) that owns no material assets (directly or through its Subsidiaries) other than equity interests of one or more Foreign Subsidiaries that are CFCs or (ii) that is a direct or indirect Subsidiary of a Foreign Subsidiary, (e) any Receivables Subsidiary and (f) any Subsidiary (other than a Significant Subsidiary) that (i) did not, as of the last day of the fiscal quarter of Holdings most recently ended, have assets with a value in excess of 5.0% of the Total Assets or revenues

 

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representing in excess of 5.0% of total revenues of Holdings and the Restricted Subsidiaries on a consolidated basis as of such date and (ii) taken together with all other such Subsidiaries as of the last day of the fiscal quarter of Holdings most recently ended, did not have assets with a value in excess of 10.0% of the Total Assets or revenues representing in excess of 10.0% of total revenues of Holdings and the Restricted Subsidiaries on a consolidated basis as of such date.

 

“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

 

“Farm-In Agreement” means an agreement whereby a Person agrees to pay all or a share of the drilling, completion or other expenses of one or more exploratory or development wells (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interests therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well or wells as all or a part of the consideration provided in exchange for an ownership interest in an Oil and Gas Property.

 

“Farm-Out Agreement” means a Farm-In Agreement, viewed from the standpoint of the party that transfers an ownership interest to another.

 

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that Holdings or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of any Qualified Receivables Financing, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period; provided that Holdings may elect pursuant to an Officers’ Certificate delivered to the Trustee to treat all or any portion of the commitment under any Indebtedness as being Incurred at such time, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.

 

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes that Holdings or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers,

 

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amalgamations, consolidations, discontinued operations and other operational changes (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into Holdings or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation or operational change, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or operational change had occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such designation had occurred at the beginning of the applicable four-quarter period.

 

For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Holdings. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of Holdings as set forth in an Officers’ Certificate, to reflect (1) operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event, and (2) all adjustments of the nature used in connection with the calculation of “Adjusted EBITDA” as set forth in “Summary Consolidated Financial, Reserve and Operating Data —Non-GAAP Financial Measures—Adjusted EBITDA” under “Offering Memorandum Summary” in the Offering Memorandum to the extent such adjustments, without duplication, continue to be applicable to such four-quarter period.

 

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 Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as Holdings may designate.

 

For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the

 

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most recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.

 

“Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of: (1) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, and (2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.

 

“Foreign Subsidiary” means a Restricted Subsidiary that is (i) not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia and (ii) has 50% or more of its consolidated assets located outside the United States or any territory thereof.

 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of this Indenture, the term “consolidated” with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.

 

“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

 

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under:

 

(1)           currency exchange, interest rate or commodity swap agreements (including commodity swaps, commodity options, forward commodity contracts, basis differential swaps, spot contracts, fixed-price physical delivery contracts or other similar agreements or arrangements in respect of Hydrocarbons), currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

 

(2)           other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

 

Notwithstanding the foregoing, agreements or obligations to physically sell any commodity at any index-based price shall not be considered Hedging Obligations.

 

“holder” or “noteholder” means the Person in whose name a Note is registered on the Registrar’s books.

 

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“Holdings” means Athlon Holdings LP, together with its successors or assigns.

 

“Hydrocarbons” means oil, natural gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all constituents, elements or compounds thereof and products refined or processed therefrom.

 

“Incur” means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

 

“Indebtedness” means, with respect to any Person:

 

(1)           the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that constitutes (i) a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course of business), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

 

(2)           to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

 

(3)           to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by Holdings) of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

 

provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations Incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) Obligations under or in respect of Qualified Receivables Financing; (5)  Production Payments and Reserve Sales; (6) any obligation of a Person in respect of a Farm-In Agreement or similar arrangement whereby such Person agrees to pay all or a share of the

 

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drilling, completion or other expenses of an exploratory or development well (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interest therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well in exchange for an ownership interest in an oil or natural gas property; (7) any obligations under Hedging Obligations; provided that such agreements are entered into for bona fide hedging purposes of Holdings or its Restricted Subsidiaries (as determined in good faith by the Board of Directors or senior management of Holdings, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of Holdings or its Restricted Subsidiaries entered into in the ordinary course of business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of Holdings or its Restricted Subsidiaries Incurred without violation of this Indenture; (8) obligations in respect of surety and bonding requirements of Holdings and its Restricted Subsidiaries; and (9) in-kind obligations relating to net oil, natural gas liquids or natural gas balancing positions arising in the ordinary course of business.

 

Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Financial Accounting Standards Board Accounting Standards Codification 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.

 

“Indenture” means this Indenture as amended or supplemented from time to time.

 

“Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is, in the good faith determination of Holdings, qualified to perform the task for which it has been engaged.

 

“Interest Payment Date” has the meaning set forth in Exhibit A hereto.

 

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

 

“Investment Grade Securities” means:

 

(1)                                 securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),

 

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(2)                                 securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s and BBB- (or equivalent) by S&P, but excluding any debt securities or loans or advances between and among Holdings and its Subsidiaries,

 

(3)                                 investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and

 

(4)                                 corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

 

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.04:

 

(1)                                 “Investments” shall include the portion (proportionate to Holdings’ equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of a Subsidiary of Holdings at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, Holdings shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

 

(a)                                 Holdings’ “Investment” in such Subsidiary at the time of such redesignation less

 

(b)                                 the portion (proportionate to Holdings’ equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Holdings) of the net assets of such Subsidiary at the time of such redesignation; and

 

(2)                                 any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value (as determined in good faith by Holdings) at the time of such transfer, in each case as determined in good faith by the Board of Directors of Holdings.

 

“IPOCo” means a Person formed to acquire, directly or indirectly, Equity Interests of Holdings in order to undertake an initial public offering of such Person’s Capital Stock.

 

“IPOCo Formation Transactions” means the transactions in connection with the initial creation and capitalization of IPOCo prior to and in connection with the Qualified IPO,

 

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including, without limitation, (1) the legal formation of IPOCo and one or more subsidiaries of the Permitted Holders to own interests therein, (2) the contribution, directly or indirectly, of the Issuers and other subsidiaries of Holdings to IPOCo, or the other acquisition by IPOCo thereof, (3) the distribution by Holdings to the Permitted Holders of any proceeds from the offering of the Notes and cash generated from operations, (4) the issuance of Capital Stock to the public and the use of proceeds by IPOCo to pay transaction expenses, distribute funds as a reimbursement for capital expenditures, and other purposes approved by the Permitted Holders, (5) the execution, delivery and performance of customary documentation (and amendments to existing documentation) governing the relations between and among Holdings, IPOCo, the Permitted Holders and their respective Subsidiaries, including, without limitation, the execution, delivery and performance of a tax receivables agreement among IPOCo, Holdings and the Permitted Holders, and (6) any other transactions and documentation related to the foregoing or necessary or appropriate in the view of the Permitted Holders in connection with the Qualified IPO.

 

“Issue Date” means the date on which the Notes are originally issued.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event shall an operating lease be deemed to constitute a Lien.

 

“Management Group” means the group consisting of the directors, managers, executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as the case may be, on the Issue Date together with (1) any new directors or managers whose election by such boards of directors or managers or whose nomination for election by the equity holders of Holdings or any direct or indirect parent of Holdings, as applicable, was approved by a vote of a majority of the directors or managers of Holdings or any direct or indirect parent of Holdings, as applicable, then still in office who were either directors or managers on the Issue Date or whose election or nomination was previously so approved and (2) executive officers and other management personnel of Holdings or any direct or indirect parent of Holdings, as applicable, hired at a time when the directors or managers on the Issue Date together with the directors or managers so approved constituted a majority of the directors or managers of Holdings or any direct or indirect parent of Holdings, as applicable.

 

“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

 

“Net Income” means, with respect to any Person, the net income (loss) of such Person and its Restricted Subsidiaries, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

 

“Net Proceeds” means the aggregate cash proceeds received by Holdings or any Restricted Subsidiary in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash

 

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Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (including Tax Distributions and after taking into account any available tax credits or deductions and any tax sharing arrangements related solely to such disposition), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)(i)) to be paid as a result of such transaction, amounts paid in connection with the termination of Hedging Obligations related to Indebtedness repaid with such proceeds or hedging oil, natural gas and natural gas liquid production in notional volumes corresponding to the Oil and Gas Properties subject to such Asset Sale, and any deduction of appropriate amounts to be provided by Holdings as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by Holdings after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

 

“Net Working Capital” means (a) all current assets of Holdings and its Restricted Subsidiaries, except current assets from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business less (b) all current liabilities of Holdings and its Restricted Subsidiaries, except current liabilities (i) associated with asset retirement obligations relating to Oil and Gas Properties, (ii) included in Indebtedness and (iii) any current liabilities from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business, in each case as set forth in the consolidated financial statements of Holdings prepared in accordance with GAAP.

 

“Notes Obligations” means Obligations in respect of the Notes and this Indenture, including, for the avoidance of doubt, Obligations in respect of Exchange Notes and guarantees thereof.

 

“NYMEX” means the New York Mercantile Exchange.

 

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnifications in favor of third parties other than the Trustee and the holders of the Notes.

 

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“Offering Memorandum” means the offering memorandum, dated April 12, 2013, relating to the issuance of the Initial Notes.

 

“Officer” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of Holdings.

 

“Officers’ Certificate” means a certificate signed on behalf of Holdings by two Officers of Holdings, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of Holdings, which meets the requirements set forth in this Indenture.

 

“Oil and Gas Business” means:

 

(1)                                 the business of acquiring, exploring, exploiting, developing, producing, operating and disposing of interests in oil, natural gas, natural gas liquids, liquefied natural gas and other Hydrocarbons and mineral properties or products produced in association with any of the foregoing;

 

(2)                                 the business of gathering, marketing, distributing, treating, processing, storing, refining, selling and transporting of any production from such interests or properties and products produced in association therewith and the marketing of oil, natural gas, other Hydrocarbons and minerals obtained from unrelated Persons;

 

(3)                                 any other related energy business, including power generation and electrical transmission business, directly or indirectly, from oil, natural gas and other Hydrocarbons and minerals produced substantially from properties in which Holdings or its Restricted Subsidiaries, directly or indirectly, participate;

 

(4)                                 any business relating to oil field sales and service; and

 

(5)                                 any business or activity relating to, arising from, or necessary, appropriate, incidental or ancillary to the activities described in the foregoing clauses (1) through (4) of this definition.

 

“Oil and Gas Properties” means all properties, including equity or other ownership interests therein, owned by a Person which contain or are believed to contain oil and natural gas reserves or other reserves of Hydrocarbons.

 

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to Holdings.

 

“Pari Passu Indebtedness” means:  (a) with respect to an Issuer, the Notes and any Indebtedness which ranks pari passu in right of payment to the Notes; and (b) with respect to any Subsidiary Guarantor, its Subsidiary Guarantee and any Indebtedness which ranks pari passu in right of payment to such Subsidiary Guarantor’s Subsidiary Guarantee.

 

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“Permitted Business Investment” means any Investment and/or expenditure of a nature that is or shall have become customary in the Oil and Gas Business generally or in the geographic region in which such activities occur, including investments or expenditures for actively exploiting, exploring for, acquiring, developing, producing, processing, gathering, marketing, distributing, storing, or transporting oil, natural gas or other Hydrocarbons and minerals (including with respect to plugging and abandonment) through agreements, transactions, interests or arrangements which permit one to share risks or costs, comply with regulatory requirements regarding local ownership or satisfy other objectives customarily achieved through the conduct of the Oil and Gas Business jointly with third parties, including:

 

(1)                                 Investments in ownership interests (including equity or other ownership interests) in oil, natural gas, other Hydrocarbons and minerals properties, liquefied natural gas facilities, processing facilities, gathering systems, pipelines, storage facilities or related systems or ancillary real property interests;

 

(2)                                 Investments in the form of or pursuant to operating agreements, working interests, royalty interests, mineral leases, processing agreements, Farm-In Agreements, Farm-Out Agreements, contracts for the sale, transportation or exchange of oil, natural gas, other Hydrocarbons and minerals, production sharing agreements, participation agreements, development agreements, area of mutual interest agreements, unitization agreements, pooling agreements, joint bidding agreements, service contracts, joint venture agreements, partnership agreements (whether general or limited), subscription agreements, stock purchase agreements, stockholder agreements and other similar agreements (including for limited liability companies) with third parties; and

 

(3)                                 Investments in direct or indirect ownership interests in drilling rigs and related equipment, including, without limitation, transportation equipment.

 

“Permitted Holders” means, at any time, each of (i) the Sponsors, (ii) the Management Group, (iii) any Person that has no material assets other than the Capital Stock of Holdings and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of Holdings, and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any of the other Permitted Holders specified in clauses (i) and (ii) above, holds more than 50% of the total voting power of the Voting Stock thereof and (iv) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders specified in clauses (i) and (ii) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of Holdings (a “Permitted Holder Group”), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member and (2) no Person or other “group” (other than Permitted Holders specified in clauses (i) and (ii) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

 

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“Permitted Investments” means:

 

(1)                                 any Investment in Holdings or any Restricted Subsidiary;

 

(2)                                 any Investment in Cash Equivalents or Investment Grade Securities;

 

(3)                                 any Investment by Holdings or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Holdings or a Restricted Subsidiary;

 

(4)                                 any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to Section 4.06 or any other disposition of assets not constituting an Asset Sale;

 

(5)                                 any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; provided that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under this Indenture;

 

(6)                                 advances to employees, taken together with all other advances made pursuant to this clause (6), not to exceed $10.0 million at any one time outstanding;

 

(7)                                 any Investment acquired by Holdings or any Restricted Subsidiary (a) in exchange for any other Investment or accounts receivable held by Holdings or such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of Holdings of such other Investment or accounts receivable, or (b) as a result of a foreclosure by Holdings or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

(8)                                 Hedging Obligations permitted under Section 4.03(b)(x);

 

(9)                                 any Investment by Holdings or any Restricted Subsidiary in a Similar Business having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (9) that are at that time outstanding, not to exceed the greater of (x) $75.0 million and (y) 7.5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (9) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be Holdings or a Restricted Subsidiary;

 

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(10)                          additional Investments by Holdings or any Restricted Subsidiary having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of (x) $75.0 million and (y) 7.5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (10) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as such Person continues to be Holdings or a Restricted Subsidiary;

 

(11)                          loans and advances to officers, directors, managers or employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such person’s purchase of Equity Interests of Holdings or any direct or indirect parent of Holdings;

 

(12)                          Investments the payment for which consists of Equity Interests of Holdings (other than Disqualified Stock) or any direct or indirect parent of Holdings, as applicable; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the definition of “Cumulative Credit”;

 

(13)                          any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.07(b) (except transactions described in clauses (ii), (iv), (vi), (ix)(B) and (xvi) of Section 4.07(b));

 

(14)                          Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

 

(15)                          (x) guarantees issued in accordance with Section 4.03 and Section 4.11 including, without limitation, any guarantee or other obligation issued or Incurred under the Credit Agreement in connection with any letter of credit issued for the account of Holdings or any of its Subsidiaries (including with respect to the issuance of, or payments in respect of drawings under, such letters of credit) and (y) guarantees of performance or other obligations (other than Indebtedness) arising in the ordinary course in the Oil and Gas Business, including obligations under Hydrocarbon exploration, development, joint operating and related agreements and licenses, concessions or operating leases related to the Oil and Gas Business;

 

(16)                          Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of intellectual property;

 

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(17)                          any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness;

 

(18)                          any Investment in an entity which is not a Restricted Subsidiary to which a Restricted Subsidiary sells accounts receivable pursuant to a Receivables Financing;

 

(19)                          additional Investments in joint ventures not to exceed, at any one time in the aggregate outstanding under this clause (19), $75.0 million (with the Fair Market Value of each Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (19) is made in any Person that is not Holdings or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes Holdings or a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (19) for so long as such Person continues to be Holdings or a Restricted Subsidiary;

 

(20)                          Investments of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with Holdings or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

 

(21)                          any Investment in any Subsidiary of Holdings or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business; and

 

(22)                          Permitted Business Investments.

 

“Permitted Liens” means, with respect to any Person:

 

(1)                                 pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure plugging and abandonment obligations or public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

 

(2)                                 Liens imposed by law, such as landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction or other like Liens securing obligations that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards

 

33

 

against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;

 

(3)                                 Liens for taxes, assessments or other governmental charges not yet due or payable or that are being contested in good faith by appropriate proceedings;

 

(4)                                 Liens (A) in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business and (B) securing other obligations in respect of surety and bonding requirements;

 

(5)                                 minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

 

(6)                                 (A)                               Liens on assets of the Issuers or any Restricted Subsidiary securing Credit Agreements and other Obligations permitted to be Incurred pursuant to Section 4.03; and

 

(B)                               Liens securing Indebtedness permitted to be Incurred pursuant to clause (iv), (xii), (xvi) or (xx) of Section 4.03(b) (provided that in the case of clause (xx), such Lien does not extend to the property or assets of any Subsidiary of Holdings other than a Restricted Subsidiary that is not a Subsidiary Guarantor);

 

(7)                                 Liens existing on the Issue Date (other than Liens in favor of the lenders under the Credit Agreement);

 

(8)                                 Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, however, that such Liens may not extend to any other property owned by Holdings or any Restricted Subsidiary;

 

(9)                                 Liens on assets or property at the time Holdings or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into Holdings or any Restricted Subsidiary; provided, however, that such Liens (other than Liens to secure Indebtedness Incurred pursuant to Section 4.03(b)(xvi)) are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that the Liens (other than Liens to secure Indebtedness Incurred pursuant to Section 4.03(b)(xvi)) may not extend to any other property owned by Holdings or any Restricted Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);

 

34

 

(10)                          Liens securing Indebtedness or other obligations of Holdings or a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary permitted to be Incurred in accordance with Section 4.03;

 

(11)                          Liens securing Hedging Obligations not Incurred in violation of this Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;

 

(12)                          Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

(13)                          leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of Holdings or any of the Restricted Subsidiaries;

 

(14)                          Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by Holdings and the Restricted Subsidiaries in the ordinary course of business;

 

(15)                          Liens in favor of Holdings or any Subsidiary Guarantor;

 

(16)                          Liens on accounts receivable and related assets of the type specified in the definition of “Receivables Financing” Incurred in connection with a Qualified Receivables Financing;

 

(17)                          deposits made in the ordinary course of business to secure liability to insurance carriers;

 

(18)                          Liens on the Equity Interests of Unrestricted Subsidiaries;

 

(19)                          grants of software and other technology licenses in the ordinary course of business;

 

(20)                          Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10), (11) and (15); provided, however, that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11) and (15) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

 

35

 

(21)                          Liens on equipment of Holdings or any Restricted Subsidiary granted in the ordinary course of business to Holdings’ or such Restricted Subsidiary’s client at which such equipment is located;

 

(22)                          judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

 

(23)                          Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

 

(24)                          Liens (A) Incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business and (B) on cash and Cash Equivalents and letters of credit securing any surety and bonding requirements;

 

(25)                          other Liens securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens Incurred under this clause (25) that are at that time outstanding, exceed the greater of $75.0 million and 7.5% Adjusted Consolidated Net Tangible Assets at the time of Incurrence;

 

(26)                          any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

 

(27)                          any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of Holdings or any Restricted Subsidiary, under any indenture issued in escrow pursuant to customary escrow arrangements pending the release thereof, or under any indenture pursuant to customary discharge, redemption or defeasance provisions;

 

(28)                          Liens arising by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary or financial institution;

 

(29)                          Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with any appeal or other proceedings for review;

 

(30)                          Liens (i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers;

 

(31)                          Liens in respect of Production Payments and Reserve Sales;

 

(32)                          Liens arising under Farm-Out Agreements, Farm-In Agreements, division orders, contracts for the sale, purchase, exchange, transportation, gathering or processing of Hydrocarbons, unitizations and pooling designations, declarations, orders and agreements, development agreements, joint venture agreements, partnership agreements,

 

36

 

operating agreements, royalties, royalty trusts, master limited partnerships, working interests, net profits interests, joint interest billing arrangements, participation agreements, production sales contracts, area of mutual interest agreements, natural gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, and other agreements which are customary in the Oil and Gas Business; provided, however, in all instances that such Liens are limited to the assets that are the subject of the relevant agreement, program, order, trust, partnership or contract;

 

(33)                          Liens on pipelines or pipeline facilities that arise by operation of law; and

 

(34)                          any (a) interest or title of a lessor or sublessor under any lease, liens reserved in oil, natural gas or other Hydrocarbons, minerals, leases for bonus, royalty or rental payments and for compliance with the terms of such leases; (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to (including, without limitation, ground leases or other prior leases of the demised premises, mortgages, mechanics’ liens, tax liens and easements); or (c) subordination of the interest of the lessee or sublessee under such lease to any restrictions or encumbrance referred to in the preceding clause (b).

 

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

 

“Preferred Stock” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

 

“Production Payments and Reserve Sales” means the grant or transfer by Holdings or a Restricted Subsidiary to any Person of a royalty, overriding royalty, net profits interest, production payment (whether volumetric or dollar-denominated), partnership or other interest in Oil and Gas Properties, reserves or the right to receive all or a portion of the production or the proceeds from the sale of production attributable to such properties where the holder of such interest has recourse solely to such production or proceeds of production, subject to the obligation of the grantor or transferor to operate and maintain, or cause the subject interests to be operated and maintained, in a reasonably prudent manner or other customary standard or subject to the obligation of the grantor or transferor to indemnify for environmental, title or other matters customary in the Oil and Gas Business, including any such grants or transfers.

 

“Qualified IPO” means an initial offer and sale of Equity Interests of Holdings, IPOCo or other direct or indirect parent of Holdings in an underwritten public offering for cash pursuant to a registration statement that has been declared effective by the Commission pursuant to the Securities Act (other than a registration statement on Form S-4 or Form S-8 or otherwise relating to Equity Interests of IPOCo or such other parent issuable under any employee benefit plan).

 

37

 

“Qualified Receivables Financing” means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

 

(1)                                 the Board of Directors of Holdings shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to Holdings and the Receivables Subsidiary;

 

(2)                                 all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by Holdings); and

 

(3)                                 the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by Holdings) and may include Standard Securitization Undertakings.

 

The grant of a security interest in any accounts receivable of Holdings or any Restricted Subsidiary (other than a Receivables Subsidiary) to secure Bank Indebtedness, Indebtedness in respect of the Notes or any Refinancing Indebtedness with respect to the Notes shall not be deemed a Qualified Receivables Financing.

 

“Rating Agency” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the Notes for reasons outside of Holdings’ control, a “nationally recognized statistical rating organization” within the meaning of Rule 15cs-1(c)(2)(vi)(F) under the Exchange Act selected by Holdings or any direct or indirect parent of Holdings as a replacement agency for Moody’s or S&P, as the case may be.

 

“Rating Event” means, with respect to the Notes, (i) the rating of such Notes is lowered by each Rating Agency on any day during the period (the “Trigger Period”) commencing on the earlier of (a) the occurrence of a Change of Control and (b) the first public notice of Holdings’ intention to effect a Change of Control, and ending 60 days following consummation of such Change of Control, and (ii) each Rating Agency assigns the Notes a rating that is not an Investment Grade Rating on any day during the Trigger Period; provided that a Rating Event will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a Rating Event for purposes of the definition of Change of Control Triggering Event) if each Rating Agency making the reduction in rating does not publicly announce or confirm or inform the Trustee in writing at our request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the Change of Control (whether or not the applicable Change of Control has occurred at the time of the Rating Event). If a Rating Agency is not providing a rating for the Notes at the commencement of, or ceases to provide a rating for the Notes during, such period, the Notes will be deemed to have been assigned a rating that is an Investment Grade Rating by such Rating Agency during such period.

 

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

 

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“Receivables Financing” means any transaction or series of transactions that may be entered into by Holdings or any of its Subsidiaries pursuant to which Holdings or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by Holdings or any of its Subsidiaries); and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of Holdings or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by Holdings or any such Subsidiary in connection with such accounts receivable.

 

“Receivables Repurchase Obligation” means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

 

“Receivables Subsidiary” means a Wholly Owned Restricted Subsidiary (or another Person formed for the purposes of engaging in Qualified Receivables Financing with Holdings in which Holdings or any Subsidiary of Holdings makes an Investment and to which Holdings or any such Subsidiary transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of Holdings and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of Holdings (as provided below) as a Receivables Subsidiary and:

 

(a)                                 no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by Holdings or any other Subsidiary of Holdings (excluding guarantees of obligations (other than the principal of and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates Holdings or any other Subsidiary in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of Holdings or any other Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

 

(b)                                 with which neither Holdings nor any Subsidiary has any material contract, agreement, arrangement or understanding other than on terms which Holdings reasonably believes to be no less favorable to Holdings or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Holdings; and

 

(c)                                  to which neither Holdings nor any Subsidiary has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

 

39

 

Any such designation by the Board of Directors of Holdings shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of Holdings giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing conditions.

 

“Record Date” has the meaning specified in Exhibit A hereto.

 

“Registration Rights Agreement” means (a) with respect to the Initial Notes issued on the Issue Date, the Registration Rights Agreement dated the Issue Date, among the Issuers and the Initial Purchasers, and (b) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Issuers, any Subsidiary Guarantors and the Persons purchasing such Additional Notes under the related purchase agreement.

 

“Restricted Investment” means an Investment other than a Permitted Investment.

 

“Restricted Subsidiary” means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of Holdings.

 

“S&P” means Standard & Poor’s Ratings Group or any successor to the rating agency business thereof.

 

“Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired by Holdings or a Restricted Subsidiary whereby Holdings or such Restricted Subsidiary transfers such property to a Person and Holdings or such Restricted Subsidiary leases it from such Person, other than leases between Holdings and a Restricted Subsidiary or between Restricted Subsidiaries.

 

“SEC” means the Securities and Exchange Commission.

 

“Secured Indebtedness” means any Consolidated Total Indebtedness secured by a Lien.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of Holdings within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (or any successor provision).

 

“Similar Business” means a business, the majority of whose revenues are derived from the activities of Holdings and its Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary thereto or a reasonable extension, development or expansion thereof or ancillary thereto.

 

40

 

“Sponsor Management Agreement” means the Services Agreement, dated August 23, 2010, between Holdings and the Sponsors.

 

“Sponsors” means (i) the Apollo Funds, Apollo Global Management, LLC and any of their respective Affiliates other than any portfolio companies (collectively, the “Equity Investor”) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with the Equity Investor; provided that the Equity Investor (x) owns a majority of the voting power and (y) controls a majority of the Board of Directors of Holdings.

 

“Standard Securitization Undertakings” means representations, warranties, covenants, indemnities and guarantees of performance entered into by Holdings or any Subsidiary thereof which Holdings has determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.

 

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

 

“Subordinated Indebtedness” means (a) with respect to an Issuer, any Indebtedness of such Issuer which is by its terms subordinated in right of payment to the Notes, and (b) with respect to any Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor which is by its terms subordinated in right of payment to its Subsidiary Guarantee.

 

“Subsidiary” means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

 

“Subsidiary Guarantee” means any guarantee of the obligations of the Issuers under this Indenture and the Notes by any Subsidiary Guarantor in accordance with the provisions of this Indenture.

 

41

 

“Subsidiary Guarantor” means any Subsidiary that Incurs a Subsidiary Guarantee; provided that upon the release or discharge of such Person from its Subsidiary Guarantee in accordance with this Indenture, such Subsidiary ceases to be a Subsidiary Guarantor.

 

“Suspension Period” means the period of time between a Covenant Suspension Event and the related Reversion Date.

 

“Tax Distributions” means any distributions described in Section 4.04(b)(xii).

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture.

 

“Total Assets” means the total consolidated assets of Holdings and the Restricted Subsidiaries, as shown on the most recent balance sheet of Holdings, without giving effect to any amortization of the amount of intangible assets since December 31, 2012, calculated on a pro forma basis after giving effect to any subsequent acquisition or disposition of a Person or business.

 

“Treasury Rate” means, as of the applicable redemption date, as determined by the Issuers, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to either, at the sole discretion of the Issuers, (a) such redemption date or (b) the date a notice of redemption is delivered (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to April 15, 2016; provided, however, that if the period from such redemption date to April 15, 2016, as applicable, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

“Trust Officer” means:

 

(1)                                 any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject, and

 

(2)                                 who shall have direct responsibility for the administration of this Indenture.

 

“Trustee” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

 

“Uniform Commercial Code” or “UCC” means the New York Uniform Commercial Code as in effect from time to time.

 

42

 

“Unrestricted Subsidiary” means:

 

(1)                                 any Subsidiary of Holdings that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Holdings in the manner provided below; and

 

(2)                                 any Subsidiary of an Unrestricted Subsidiary;

 

Holdings may designate any Subsidiary of Holdings (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, Holdings or any other Subsidiary of Holdings that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of Holdings or any of the Restricted Subsidiaries (other than pursuant to customary Liens on related arrangements under any oil and natural gas royalty trust or master limited partnership); provided, further, however, that either:

 

(a)                                 the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

 

(b)                                 if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04.

 

Holdings may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation:

 

(x)                                 (1) Holdings could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a) or (2) the Fixed Charge Coverage Ratio of Holdings and its Restricted Subsidiaries would be no less than such ratio immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

 

(y)                                 no Event of Default shall have occurred and be continuing.

 

Any such designation by Holdings shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors or any committee thereof of Holdings giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

 

“U.S. Government Obligations” means securities that are:

 

(1)                                 direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or

 

(2)                                 obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which

 

43

 

is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

 

which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depositary receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depositary receipt.

 

“Volumetric Production Payments” means production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertaking and obligations in connection therewith.

 

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

 

“Wholly Owned Restricted Subsidiary” is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

 

“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares required pursuant to applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

 

SECTION 1.02              Other Definitions.

 

	
Term
    	
 
    	
Section
    
	
$
    	
 
    	
 
    	
1.03(j)
    
	
Additional Interest
    	
 
    	
Appendix A
    
	
Alternate Offer
    	
 
    	
4.08(f)
    
	
Affiliate Transaction
    	
 
    	
4.07(a)
    
	
Agent Members
    	
 
    	
Appendix A
    
	
Asset Sale Offer
    	
 
    	
4.06(b)(iii)
    
	
Bankruptcy Law
    	
 
    	
6.01
    
	
Change of Control Offer
    	
 
    	
4.08(b)
    
	
Change of Control Payment
    	
 
    	
4.08(a)
    
	
Co-Issuer
    	
 
    	
Preamble
    
				

 

44

 

	
Term
    	
 
    	
Section
    
	
covenant defeasance option
    	
 
    	
8.01(b)
    
	
Covenant Suspension Event
    	
 
    	
4.15
    
	
Custodian
    	
 
    	
6.01
    
	
Definitive Note
    	
 
    	
Appendix A
    
	
Depositary
    	
 
    	
Appendix A
    
	
Event of Default
    	
 
    	
6.01
    
	
Excess Proceeds
    	
 
    	
4.06(b)(iii)
    
	
Global Notes
    	
 
    	
Appendix A
    
	
Global Notes Legend
    	
 
    	
Appendix A
    
	
Holdings
    	
 
    	
Preamble
    
	
IAI
    	
 
    	
Appendix A
    
	
Increased Amount
    	
 
    	
4.12(d)
    
	
Initial Notes
    	
 
    	
Preamble
    
	
Initial Purchasers
    	
 
    	
Appendix A
    
	
Issuers
    	
 
    	
Preamble
    
	
legal defeasance option
    	
 
    	
8.01(b)
    
	
Notes
    	
 
    	
Preamble
    
	
Notes Custodian
    	
 
    	
Appendix A
    
	
Notice of Default
    	
 
    	
6.01
    
	
Offer Period
    	
 
    	
4.06(d)
    
	
Paying Agent
    	
 
    	
2.04(a)
    
	
protected purchaser
    	
 
    	
2.08
    
	
QIB
    	
 
    	
Appendix A
    
	
Refinancing Indebtedness
    	
 
    	
4.03(b)(xv)
    
	
Refunding Capital Stock
    	
 
    	
4.04(b)(ii)
    
	
Registered Exchange Offer
    	
 
    	
Appendix A
    
	
Registrar
    	
 
    	
2.04(a)
    
	
Regulation S
    	
 
    	
Appendix A
    
	
Regulation S Global Notes
    	
 
    	
Appendix A
    
	
Regulation S Notes
    	
 
    	
Appendix A
    
	
Restricted Notes Legend
    	
 
    	
Appendix A
    
	
Restricted Payments
    	
 
    	
Section 4.04(a)
    
	
Restricted Period
    	
 
    	
Appendix A
    
	
Retired Capital Stock
    	
 
    	
4.04(b)(ii)
    
	
Reversion Date
    	
 
    	
4.15
    
	
Rule 144A
    	
 
    	
Appendix A
    
	
Rule 144A Global Notes
    	
 
    	
Appendix A
    
	
Rule 144A Notes
    	
 
    	
Appendix A
    
	
Rule 501
    	
 
    	
Appendix A
    
	
Second Commitment
    	
 
    	
4.06(b)(iii)
    
	
Shelf Registration Statement
    	
 
    	
Appendix A
    
	
Subsidiary Guaranteed Obligations
    	
 
    	
12.01(a)
    
	
Successor Holdco
    	
 
    	
5.01(a)(i)
    
	
Successor Subsidiary Guarantor
    	
 
    	
5.01(b)(i)
    
	
Suspended Covenants
    	
 
    	
4.15
    

 

45

 

	
Term
    	
 
    	
Section
    
	
Transfer
    	
 
    	
5.01(b)(ii)
    
	
Transfer Restricted Definitive Notes
    	
 
    	
Appendix A
    
	
Transfer Restricted Global Notes
    	
 
    	
Appendix A
    
	
Transfer Restricted Notes
    	
 
    	
Appendix A
    
	
U.S. dollars
    	
 
    	
1.03(j)
    
	
Unrestricted Definitive Notes
    	
 
    	
Appendix A
    
	
Unrestricted Global Notes
    	
 
    	
Appendix A
    

 

SECTION 1.03              Rules of Construction.  Unless the context otherwise requires:

 

(a)                                 a term has the meaning assigned to it;

 

(b)                                 an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(c)                                  “or” is not exclusive;

 

(d)                                 “including” means including without limitation;

 

(e)                                  words in the singular include the plural and words in the plural include the singular;

 

(f)                                   unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;

 

(g)                                  the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP;

 

(h)                                 the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater;

 

(i)                                     unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP;

 

(j)                                    “$” and “U.S. dollars” each refer to United States dollars, or such other money of the United States of America that at the time of payment is legal tender for payment of public and private debts; and

 

(k)                                 whenever in this Indenture or the Notes there is mentioned, in any context, principal, interest or any other amount payable under or with respect to any Notes, such mention shall be deemed to include mention of the payment of Additional Interest, to the extent that, in such context, Additional Interest is, was or would be payable in respect thereof.

 

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ARTICLE II

 

THE NOTES

 

SECTION 2.01              Amount of Notes.  The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture on the Issue Date is $500,000,000.

 

The Issuers may from time to time after the Issue Date issue Additional Notes under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.03 and (ii) such Additional Notes are issued in compliance with the other applicable provisions of this Indenture.  With respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.07, 2.08, 2.09, 3.06, 4.06(e), 4.08(c) or Appendix A), there shall be (a) established in or pursuant to a resolution of the Board of Directors and (b) (i) set forth or determined in the manner provided in an Officers’ Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:

 

(1)                                 the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture;

 

(2)                                 the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shall accrue;

 

(3)                                 if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.2 of Appendix A in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof; and

 

(4)                                 if applicable, that such Additional Notes that are not Transfer Restricted Notes shall not be issued in the form of Initial Notes as set forth in Exhibit A hereto but shall be issued in the form of Exchange Notes as set forth in Exhibit B hereto.

 

If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of Holdings and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate or an indenture supplemental hereto setting forth the terms of the Additional Notes.

 

The Initial Notes, including any Additional Notes, may, at the Issuers’ option, be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.

 

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SECTION 2.02              Form and Dating.  Provisions relating to the Initial Notes and the Exchange Notes are set forth in Appendix A, which is hereby incorporated in and expressly made a part of this Indenture.  The (i) Initial Notes and the Trustee’s certificate of authentication and (ii) any Additional Notes (if issued as Transfer Restricted Notes) and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture.  The (i) Exchange Notes and the Trustee’s certificate of authentication and (ii) any Additional Notes issued other than as Transfer Restricted Notes and the Trustee’s certificate of authentication shall each be substantially in the form set forth in Exhibit B hereto, which is hereby incorporated in and expressly made a part of this Indenture.  The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuers or any Subsidiary Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuer).  Each Note shall be dated the date of its authentication.  The Notes shall be issuable only in registered form without interest coupons and in denominations of $2,000 and any integral multiples of $1,000 in excess thereof, provided that Notes may be issued in denominations of less than $2,000 solely to accommodate book-entry positions that have been created by the Depositary in denominations of less than $2,000.

 

SECTION 2.03              Execution and Authentication.  The Trustee shall authenticate and make available for delivery upon a written order of the Issuers signed by one Officer of each Issuer (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $500,000,000, (b) subject to the terms of this Indenture, Additional Notes in an aggregate principal amount to be determined at the time of issuance and specified therein and (c) the Exchange Notes for issue in a Registered Exchange Offer pursuant to the Registration Rights Agreement for a like principal amount of Initial Notes exchanged pursuant thereto or otherwise pursuant to an effective registration statement under the Securities Act.  Such order shall specify the amount of separate Note certificates to be authenticated, the principal amount of each of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated, whether the Notes are to be Initial Notes, Additional Notes or Exchange Notes, the registered holder of each of the Notes and delivery instructions.  Notwithstanding anything to the contrary in this Indenture or Appendix A, any issuance of Additional Notes after the Issue Date shall be in a principal amount of at least $2,000 and integral multiples of $1,000 in excess thereof.

 

One Officer shall sign the Notes for each of the Issuers by manual or facsimile signature.

 

If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

 

A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note.  The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

 

The Trustee may appoint one or more authenticating agents reasonably acceptable to Holdings to authenticate the Notes.  Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to Holdings.  Unless

 

48

 

limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

 

SECTION 2.04              Registrar and Paying Agent.

 

(a)                                 The Issuers shall maintain (i) an office or agency where Notes may be presented for registration of transfer or for exchange (the “Registrar”) and (ii) an office or agency where Notes may be presented for payment (the “Paying Agent”).  The Registrar shall keep a register of the Notes and of their transfer and exchange.  The Issuers may have one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any co-registrars.  The term “Paying Agent” includes the Paying Agent and any additional paying agents.  The Issuers initially appoint the Trustee as Registrar, Paying Agent and the Notes Custodian with respect to the Global Notes.

 

(b)                                 The Issuers may enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisions of this Indenture that relate to such agent.  Holdings shall notify the Trustee in writing of the name and address of any such agent.  If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07.  Holdings or any of its domestically organized Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

 

(c)                                  The Issuers may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuers and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above.  The Registrar or Paying Agent may resign at any time upon written notice to the Issuers and the Trustee; provided, however, that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.

 

SECTION 2.05              Paying Agent to Hold Money in Trust.  Prior to each due date of the principal of and interest on any Note, the Issuers shall deposit with each Paying Agent (or if Holdings or a Wholly Owned Subsidiary is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due.  The Issuers shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of holders or the Trustee all money held by a Paying Agent for the payment of principal of and interest on the Notes, and shall notify the Trustee of any default by the Issuers in making any such payment.  If Holdings or a Wholly Owned Subsidiary of Holdings acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it in trust for the benefit of the Persons entitled thereto.  The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent.  Upon complying with

 

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this Section, a Paying Agent shall have no further liability for the money delivered to the Trustee.

 

SECTION 2.06              Holder Lists.  The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of holders.  If the Trustee is not the Registrar, Holdings shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of holders.

 

SECTION 2.07              Transfer and Exchange.  The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A.  When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met.  When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met.  To permit registration of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate Notes at the Registrar’s request.  The Issuers may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section.  The Issuers shall not be required to make, and the Registrar need not register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or of any Notes for a period of 15 days before a selection of Notes to be redeemed.

 

Prior to the due presentation for registration of transfer of any Note, the Issuers, the Subsidiary Guarantors, the Trustee, the Paying Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuers, the Subsidiary Guarantors, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

 

Any holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by (a) the holder of such Global Note (or its agent) or (b) any holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry.

 

All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

 

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants or beneficial owners of interests in any Global Note) other than to

 

50

 

require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

None of the Trustee, Registrar or Paying Agent shall have any responsibility for any actions taken or not taken by the Depositary.

 

SECTION 2.08              Replacement Notes.  If a mutilated Note is surrendered to the Registrar or if the holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the holder (a) satisfies the Issuers and the Trustee within a reasonable time after such holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuers and the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other reasonable requirements of the Issuers and the Trustee.  If required by the Trustee or the Issuers, such holder shall furnish an indemnity bond sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee, the Paying Agent and the Registrar from any loss or liability that any of them may suffer if a Note is replaced and subsequently presented or claimed for payment.  The Issuers and the Trustee may charge the holder for their expenses in replacing a Note (including without limitation, attorneys’ fees and disbursements in replacing such Note).  In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuers in their discretion may pay such Note instead of issuing a new Note in replacement thereof.

 

Every replacement Note is an additional obligation of the Issuers.

 

The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.

 

SECTION 2.09              Outstanding Notes.  Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding.  Subject to Section 14.06, a Note does not cease to be outstanding because one of the Issuers or an Affiliate of one of the Issuers holds the Note.

 

If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuers receive proof satisfactory to them that the replaced Note is held by a protected purchaser.  A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08.

 

If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable

 

51

 

on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, and no Paying Agent is prohibited from paying such money to the holders on that date pursuant to the terms of this Indenture, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

 

SECTION 2.10              Cancellation.  The Issuers at any time may deliver Notes to the Trustee for cancellation.  The Registrar and each Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures.  The Issuers may not issue new Notes to replace Notes they have redeemed, paid or delivered to the Trustee for cancellation.  The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.

 

SECTION 2.11              Defaulted Interest.  If the Issuers default in a payment of interest on the Notes, the Issuers shall pay the defaulted interest then borne by the Notes (plus interest on such defaulted interest to the extent lawful) in any lawful manner.  The Issuers may pay the defaulted interest to the Persons who are holders on a subsequent special record date.  The Issuers shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail or cause to be mailed to each affected holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

 

SECTION 2.12              CUSIP Numbers, ISINs, Etc.  The Issuers in issuing the Notes may use CUSIP numbers, ISINs and “Common Code” numbers (if then generally in use), and the Trustee shall use any such CUSIP numbers, ISINs and “Common Code” numbers in notices of redemption as a convenience to holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Notes or as contained in any notice of a redemption that reliance may be placed only on the other identification numbers printed on the Notes and that any such redemption shall not be affected by any defect in or omission of such numbers.  The Issuers shall advise the Trustee of any change in any such CUSIP numbers, ISINs and “Common Code” numbers.

 

SECTION 2.13              Calculation of Principal Amount of Notes.  The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination.  With respect to any matter requiring consent, waiver, approval or other action of the holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.09 and Section 14.06 of this Indenture.  Any calculation of the Applicable Premium or made pursuant to this Section 2.13 shall be made by Holdings and delivered to the Trustee pursuant to an Officers’ Certificate.

 

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ARTICLE III

 

REDEMPTION

 

SECTION 3.01              Redemption.  The Notes may be redeemed, in whole or from time to time in part, subject to the conditions and at the redemption prices set forth in Paragraph 5 of the forms of Notes set forth in Exhibits A and B hereto, which are hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date.

 

SECTION 3.02              Applicability of Article.  Redemption of Notes at the election of the Issuers or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article III.

 

SECTION 3.03              Notices to Trustee.  If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Paragraph 5 of the Note, Holdings shall notify the Trustee in an Officers’ Certificate of (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price.  Holdings shall give notice to the Trustee provided for in this paragraph at least 30 days but not more than 60 days before a redemption date if the redemption is an optional redemption pursuant to Paragraph 5 of the Note.  Holdings, subject to Section 3.05(b) may also include a request in such Officers’ Certificate that the Trustee give the notice of redemption in the Issuers’ name and at their expense and setting forth the information to be stated in such notice as provided in Section 3.05.  Any such notice may be canceled at any time prior to notice of such redemption being mailed to any holder or otherwise delivered in accordance with the applicable procedures of the Depositary and shall thereby be void and of no effect. The Issuers shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Notes to be redeemed pursuant to Section 3.04.

 

SECTION 3.04              Selection of Notes to Be Redeemed.  In the case of any partial redemption, selection of the Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed, or if the Notes are not so listed, on a pro rata basis to the extent practicable or by lot or by such other method the Trustee shall deem fair and appropriate (and, in such manner that complies with the applicable legal requirements and the requirements of the Depositary, if applicable); provided that no Notes of $2,000 (and integral multiples of $1,000 in excess thereof) or less shall be redeemed in part.  The Trustee shall make the selection from outstanding Notes not previously called for redemption.  The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $2,000.  Notes and portions of them the Trustee selects shall be in amounts of $2,000 or integral multiples of $1,000 in excess thereof.  Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.  The Trustee shall notify the Issuers promptly of the Notes or portions of Notes to be redeemed.

 

53

 

SECTION 3.05              Notice of Optional Redemption.

 

(a)                                 At least 30 but not more than 60 days before a redemption date pursuant to Paragraph 5 of the Note, the Issuers shall mail or cause to be mailed by first-class mail, or otherwise deliver in accordance with the procedures of the Depositary, a notice of redemption to each holder whose Notes are to be redeemed at its registered address (with a copy to the Trustee), except that redemption notices may be mailed or otherwise delivered more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Article VIII.

 

Any such notice shall identify the Notes to be redeemed and shall state:

 

(i)                                     the redemption date;

 

(ii)                                  the redemption price and the amount of accrued interest to, but excluding, the redemption date;

 

(iii)                               the name and address of the Paying Agent;

 

(iv)                              that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price, plus accrued and unpaid interest and Additional Interest, if any;

 

(v)                                 if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed, the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption;

 

(vi)                              that, unless the Issuers default in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;

 

(vii)                           the CUSIP number, ISIN and/or “Common Code” number, if any, printed on the Notes being redeemed; and

 

(viii)                        that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN and/or “Common Code” number, if any, listed in such notice or printed on the Notes.

 

(b)                                 At Holdings’ request, the Trustee shall deliver the notice of redemption in the Issuers’ name and at the Issuers’ expense.  In such event, Holdings shall notify the Trustee of such request at least three (3) Business Days prior to the date such notice is to be provided to holders.  Such notice may not be canceled once delivered to holders of Notes.

 

SECTION 3.06              Effect of Notice of Redemption.  Once notice of redemption is mailed or otherwise delivered in accordance with Section 3.05, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice, except as provided in the final sentence of Paragraph 5 of the Notes.  Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus

 

54

 

accrued and unpaid interest and Additional Interest, if any, to, but not including, the redemption date; provided, however, that if the redemption date is after a regular Record Date and on or prior to the Interest Payment Date, the accrued interest shall be payable to the holder of the redeemed Notes registered on the relevant Record Date.  Failure to give notice or any defect in the notice to any holder shall not affect the validity of the notice to any other holder.

 

SECTION 3.07              Deposit of Redemption Price.  With respect to any Notes, prior to 10:00 a.m., New York City time, on the redemption date, the Issuers shall deposit with the Paying Agent (or, if Holdings or a Wholly Owned Subsidiary of Holdings is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued and unpaid interest and Additional Interest, if any, on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuers to the Trustee for cancellation.  On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuers have deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest and Additional Interest, if any, on, the Notes to be redeemed, unless the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture.

 

SECTION 3.08              Notes Redeemed in Part.  If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed.  Upon surrender of a Note that is redeemed in part, the Issuers shall execute and the Trustee shall authenticate for the holder (at the Issuers’ expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

 

ARTICLE IV

 

COVENANTS

 

SECTION 4.01              Payment of Notes.  The Issuers shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture.  An installment of principal of or interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds as of 12:00 p.m. New York City time money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the holders on that date pursuant to the terms of this Indenture.

 

The Issuers shall pay interest on overdue principal at the rate specified therefor in the Notes, and it shall pay interest on overdue installments of interest at the same rate borne by the Notes to the extent lawful.

 

SECTION 4.02              Reports and Other Information.

 

(a)                                 Notwithstanding that Holdings may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, Holdings will furnish to the holders of Notes or cause the

 

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Trustee to furnish to holders of Notes (or file or furnish, as applicable, with the SEC for public availability):

 

(i)                                     within the time period specified in the SEC’s rules and regulations for non-accelerated filers, annual reports containing the information that would have been required to be contained in an annual report on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form), except to the extent permitted to be excluded by the SEC;

 

(ii)                                  within the time period specified in the SEC’s rules and regulations for non-accelerated filers, quarterly reports containing the information that would have been required to be contained in a quarterly report on Form 10-Q (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form), except to the extent permitted to be excluded by the SEC;

 

(iii)                               promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified in the SEC’s rules and regulations), such other current reports containing the information that would have been required to be contained in a current report on Form 8-K (or any successor or comparable form); and

 

(iv)                              subject to the foregoing, any other information, documents and other reports which Holdings would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

 

provided, however, if the SEC does not permit such filing, Holdings will make available such information to the Trustee and the holders within 15 days after the time Holdings would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act, subject, in the case of any such information, certificates or reports provided prior to the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, to exceptions and exclusions consistent with the presentation of financial and other information in the Offering Memorandum (including with respect to any periodic reports provided prior to effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, the omission of financial information required by Rule 3-10 under Regulation S-X promulgated by the SEC (or any successor provision)). In addition to providing such information to the Trustee, Holdings shall make available to the holders, prospective investors, market makers affiliated with any initial purchaser of the Notes and securities analysts the information required to be provided pursuant to the foregoing clauses (i), (ii) or (iii), by posting such information to its website or on IntraLinks or any comparable online data system or website.

 

In the event that IPOCo or any other direct or indirect parent company of Holdings becomes a guarantor of the Notes, Holdings may satisfy its obligations under this covenant by furnishing financial information relating to such entity; provided that such financial statements are accompanied by consolidating financial information for such parent, Athlon, the

 

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Subsidiary Guarantors and the Subsidiaries of Holdings that are not Subsidiary Guarantors in the manner prescribed by the SEC.

 

While IPOCo is in registration with respect to a Qualified IPO, Holdings shall not be required to disclose any information or take any actions which, in the view of Holdings, would violate the securities laws or the SEC’s “gun-jumping” rules or otherwise have an adverse effect on the Qualified IPO.

 

If Holdings has designated any of its Subsidiaries as an Unrestricted Subsidiary and if any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, would constitute a Significant Subsidiary of Holdings, then the annual and quarterly information required to be provided by clauses (i) and (ii) of this Section 4.02(a) shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of Holdings and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries.

 

(b)                                 Notwithstanding the foregoing, Holdings will not be required to furnish any information, certificates or reports required by Items 307 or 308 of Regulation S-K prior to the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, as applicable.

 

(c)                                  In the event that:

 

(i)                                     the rules and regulations of the SEC permit Holdings and any direct or indirect parent of Holdings to report at such parent entity’s level on a consolidated basis and such parent entity is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the capital stock of Holdings, or

 

(ii)                                  any direct or indirect parent of Holdings is or becomes a guarantor of the Notes,

 

consolidated reporting at such parent entity’s level in a manner consistent with that described in this Section 4.02 for Holdings will satisfy this Section 4.02, and Holdings is permitted to satisfy its obligations in this Section 4.02 with respect to financial information relating Holdings by furnishing financial information relating to such direct or indirect parent; provided that such financial information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such direct or indirect parent and any of its Subsidiaries other than Holdings and its Subsidiaries, on the one hand, and the information relating to Holdings, the Subsidiary Guarantors and the other Subsidiaries of Holdings on a standalone basis, on the other hand. In addition, Holdings will make such information available to prospective investors upon request.

 

(d)                                 In addition, Holdings shall, for so long as any Notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to Rule 12g3-2(b) of the Exchange Act, furnish to the holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the

 

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Securities Act. Holdings will also hold quarterly conference calls, beginning with the first full fiscal quarter ending after the Issue Date, for all holders and securities analysts to discuss such financial information no later than five business days after the distribution of such information required by Sections 4.02(a)(i) and (ii) and prior to the date of each such conference call, announcing the time and date of such conference call and either including all information necessary to access the call or informing holders of Notes, prospective investors, market makers affiliated with any initial purchaser of the Notes and securities analysts how they can obtain such information, including, without limitation, the applicable password or other login information.

 

(e)                                  Notwithstanding the foregoing, Holdings will be deemed to have furnished the reports referred to in this Section 4.02 to the Trustee and the holders if Holdings has filed such reports with the SEC via the EDGAR filing system and such reports are publicly available. In addition, the requirements of this Section 4.02 shall be deemed satisfied prior to the commencement of the Registered Exchange Offer or the effectiveness of the Shelf Registration Statement by (1) the filing with the SEC of the Exchange Offer Registration Statement and/or Shelf Registration Statement in accordance with the provisions of such Registration Rights Agreement, and any amendments thereto, if such registration statement and/or amendments thereto are filed at times that otherwise satisfy the time requirements set forth in Section 4.02(a) and/or (2) the posting of reports that would be required to be provided to the Trustee and the holders on Holdings’ website (or that of any of Holdings’ parent companies).

 

(f)                                   Delivery of such reports, information and documents to the Trustee pursuant to this Section 4.02 is for informational purposes only, and the Trustee’s receipt thereof shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuers’ compliance with any of their covenants under this Indenture (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

SECTION 4.03              Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.

 

(a)                                 (i) Holdings shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) Holdings shall not permit any of the Restricted Subsidiaries (other than a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided, however, that Holdings may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of Holdings for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.

 

(b)                                 The limitations set forth in Section 4.03(a) shall not apply to:

 

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(i)                                     the Incurrence by Holdings or any Restricted Subsidiary of Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder up to an aggregate principal amount outstanding at any time that does not exceed the greatest of (1) $550.0 million, (2) the sum of (x) $200.0 million and (y) 35.0% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence and (3) the Borrowing Base at the time of Incurrence;

 

(ii)                                  the Incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness represented by the Notes and the Subsidiary Guarantees (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) , as applicable (not including any Additional Notes but including Exchange Notes and related guarantees thereof);

 

(iii)                               Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b));

 

(iv)                              Indebtedness (including Capitalized Lease Obligations) Incurred by Holdings or any Restricted Subsidiary, Disqualified Stock issued by Holdings or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 270 days after) the acquisition, lease, construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (iv), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed the greater of $75.0 million and 7.5% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);

 

(v)                                 Indebtedness Incurred by Holdings or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;

 

(vi)                              Indebtedness arising from agreements of Holdings or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with any acquisition or disposition of any business, assets or a Subsidiary in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

 

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(vii)                           Indebtedness of Holdings to a Restricted Subsidiary; provided that (except in respect of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Issuers under the Notes; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (vii);

 

(viii)                        shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);

 

(ix)                              Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not an Issuer or a Subsidiary Guarantor (except in respect of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Holdings and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);

 

(x)                                 Hedging Obligations that are not Incurred for speculative purposes but (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales (including, without limitation, any commodity Hedging Obligation that is intended in good faith, at inception of execution, to hedge or manage any of the risks related to existing and/or forecasted Hydrocarbon production (whether or not contracted)) and, in each case, extensions or replacements thereof;

 

(xi)                              obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and

 

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completion guarantees provided by Holdings or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;

 

(xii)                           Indebtedness or Disqualified Stock of Holdings or Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed the greater of $50.0 million and 5.0% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which Holdings, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));

 

(xiii)                        Indebtedness or Disqualified Stock of Holdings or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference at any time outstanding not greater than 100.0% of the net cash proceeds received by Holdings and its Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (which proceeds are contributed to Holdings or its Restricted Subsidiary) or cash contributed to the capital of Holdings (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, Holdings or any of its Subsidiaries) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);

 

(xiv)                       any guarantee by Holdings or any Restricted Subsidiary of Indebtedness or other obligations of Holdings or any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that (A) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Subsidiary Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Subsidiary Guarantee, as applicable and (B) if such guarantee is of Indebtedness of Holdings, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11, solely to the extent Section 4.11 is applicable;

 

(xv)                          the Incurrence by Holdings or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that

 

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serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii), (iv), (xii), (xiii), (xv) and (xvi) of this Section 4.03(b) up to the outstanding principal amount (or, if applicable, the liquidation preference face amount, or the like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock was issued pursuant to Section 4.03(a) or clauses (ii), (iii), (iv), (xii), (xiii), (xv) and (xvi) of this Section 4.03(b), or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:

 

(1)                                 has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date (provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness);

 

(2)                                 to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Notes or a Subsidiary Guarantee, as applicable, such Refinancing Indebtedness is junior to the Notes or the Subsidiary Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock; and

 

(3)                                 shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of an Issuer or a Subsidiary Guarantor, or (y) Indebtedness of an Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;

 

(xvi)                       Indebtedness, Disqualified Stock or Preferred Stock of (A) Holdings or any Restricted Subsidiary Incurred to finance an acquisition or (B) Persons that are acquired by Holdings or any Restricted Subsidiary or merged, consolidated or amalgamated with or into Holdings or any Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, consolidation or amalgamation, either:

 

(1)                                 Holdings would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or

 

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(2)                                 the Fixed Charge Coverage Ratio of Holdings would be no less than immediately prior to such acquisition or merger, consolidation or amalgamation;

 

(xvii)                    Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Holdings or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);

 

(xviii)                 Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its Incurrence;

 

(xix)                       Indebtedness of Holdings or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Bank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;

 

(xx)                          Indebtedness of Restricted Subsidiaries that are not Subsidiary Guarantors and Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of Holdings and any Restricted Subsidiary; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of $50.0 million and 5.0% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (it being understood that any Indebtedness Incurred pursuant to this clause (xx) shall cease to be deemed Incurred or outstanding for purposes of this clause (xx) but shall be deemed Incurred for the purposes of Section 4.03(a) from and after the first date on which such Restricted Subsidiary could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xx));

 

(xxi)                       Indebtedness of Holdings or any Restricted Subsidiary consisting of (A) the financing of insurance premiums or (B) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and

 

(xxii)                    Indebtedness consisting of Indebtedness issued by Holdings or a Restricted Subsidiary to current or former officers, directors, managers and employees thereof or any direct or indirect parent thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings to the extent described in Section 4.04(b)(iv).

 

For purposes of determining compliance with this Section 4.03:

 

(1)                                 in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxii) of Section 4.03(b) above or is entitled to be Incurred pursuant to Section 4.03(a), then Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of

 

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Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.03;

 

(2)                                 at the time of Incurrence, Holdings will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 4.03(a) and (b) without giving pro forma effect to the Indebtedness Incurred pursuant to Section 4.03(b) when calculating the amount of Indebtedness that may be Incurred pursuant to Section 4.03(a);

 

(3)                                 if any Indebtedness denominated in U.S. dollars is exchanged, converted or refinanced into Indebtedness denominated in a foreign currency, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (i) through (xxii) of Section 4.03(b) above with respect to such exchange, conversion or refinancing shall be deemed to be the amount of such foreign currency, as applicable, into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing; and

 

(4)                                 if any Indebtedness denominated in a foreign currency is exchanged, converted or refinanced into Indebtedness denominated in U.S. dollars, then (in connection with such exchange, conversion or refinancing, and thereafter), the U.S. dollar amount limitations set forth in any of clauses (i) through (xxii) of Section 4.03(b) with respect to such exchange, conversion or refinancing shall be deemed to be the amount of U.S. dollars into which such Indebtedness has been exchanged, converted or refinanced at the time of such exchange, conversion or refinancing.

 

Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable, amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.

 

For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness other than as provided in clauses (3) and (4) above, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt.

 

Notwithstanding any other provision of this Section 4.03, the maximum amount of Indebtedness that Holdings and its Restricted Subsidiaries may Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies.

 

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SECTION 4.04              Limitation on Restricted Payments.

 

(a)                                 Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(i)                                     declare or pay any dividend or make any distribution on account of any of Holdings’ or any of the Restricted Subsidiaries’ Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving Holdings (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of Holdings; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, Holdings or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

 

(ii)                                  purchase or otherwise acquire or retire for value any Equity Interests of Holdings or any direct or indirect parent of Holdings;

 

(iii)                               make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of an Issuer or any Subsidiary Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (vii) and (ix) of Section 4.03(b)); or

 

(iv)                              make any Restricted Investment

 

(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless, at the time of such Restricted Payment:

 

(1)                                 no Default shall have occurred and be continuing or would occur as a consequence thereof;

 

(2)                                 immediately after giving effect to such transaction on a pro forma basis, Holdings could Incur $1.00 of additional Indebtedness under Section 4.03(a); and

 

(3)                                 such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Holdings and the Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (i), (ii) (with respect to the payment of dividends on Refunding Capital Stock (as defined below) pursuant to clause (C) thereof), (vi)(C), (viii) and (xiii)(B) of Section 4.04(b), but excluding all other Restricted Payments permitted by Section 4.04(b)), is less than the amount equal to the Cumulative Credit.

 

(b)                                 The provisions of Section 4.04(a) shall not prohibit:

 

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(i)                                     the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration thereof, if at the date of declaration or the giving notice of such irrevocable redemption, as applicable, such payment would have complied with the provisions of this Indenture;

 

(ii)                                  (A)                               the redemption, repurchase, retirement or other acquisition of any Equity Interests (“Retired Capital Stock”) or Subordinated Indebtedness of Holdings, any direct or indirect parent of Holdings or any Subsidiary Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of, Equity Interests of Holdings or any direct or indirect parent of Holdings or contributions to the equity capital of Holdings (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of Holdings) (collectively, including any such contributions, “Refunding Capital Stock”),

 

(B)                               the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of Holdings) of Refunding Capital Stock, and

 

(C)                               if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (vi) of this Section 4.04(b) and not made pursuant to clause (ii)(B), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of Holdings) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;

 

(iii)                               the redemption, repurchase, defeasance, or other acquisition or retirement of Subordinated Indebtedness of an Issuer or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of an Issuer or a Subsidiary Guarantor which is Incurred in accordance with Section 4.03 so long as:

 

(A)                               the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, any tender premiums, plus any defeasance costs, fees and expenses Incurred in connection therewith),

 

(B)                               such Indebtedness is subordinated to the Notes or the related Subsidiary Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,

 

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(C)                               such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the last maturity date of any Notes then outstanding, and

 

(D)                               such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date;

 

(iv)                              a Restricted Payment to pay for the repurchase, retirement or other acquisition for value of Equity Interests of Holdings or any direct or indirect parent of Holdings held by any future, present or former employee, director, manager or consultant of Holdings or any direct or indirect parent of Holdings or any Subsidiary of Holdings pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however, that the aggregate Restricted Payments made under this clause (iv) do not exceed $15.0 million in any calendar year (which shall increase to $30.0 million subsequent to the consummation of an underwritten public Equity Offering), with unused amounts in any calendar year being permitted to be carried over to succeeding calendar years subject to a maximum of $30.0 million in any calendar year (which shall increase to $60.0 million subsequent to the consummation of an underwritten public Equity Offering); provided, further, however, that such amount in any calendar year may be increased by an amount not to exceed:

 

(A)                               the cash proceeds received by Holdings or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) to members of management, directors, managers or consultants of Holdings and the Restricted Subsidiaries or any direct or indirect parent of Holdings that occurs after the Issue Date (provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under Section 4.04(a)(iii)), plus

 

(B)                               the cash proceeds of key man life insurance policies received by Holdings or any direct or indirect parent of Holdings (to the extent contributed to Holdings) or the Restricted Subsidiaries after the Issue Date;

 

provided that Holdings may elect to apply all or any portion of the aggregate increase contemplated by clauses (A) and (B) above in any calendar year; and provided, further, that cancellation of Indebtedness owing to Holdings or any Restricted Subsidiary from any present or former employees, directors, managers, officers or consultants of

 

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Holdings, any Restricted Subsidiary or the direct or indirect parents of Holdings in connection with a repurchase of Equity Interests of Holdings or any of its direct or indirect parents will not be deemed to constitute a Restricted Payment for purposes of this Section 4.04 or any other provision of this Indenture;

 

(v)                                 the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of Holdings or any Restricted Subsidiary issued or Incurred in accordance with Section 4.03;

 

(vi)                              (A)                               the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

 

(B)                               a Restricted Payment to any direct or indirect parent of Holdings, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of Holdings issued after the Issue Date; provided that the aggregate amount of dividends declared and paid pursuant to this clause (B) does not exceed the net cash proceeds actually received by Holdings from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; and

 

(C)                               the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to Section 4.04(b)(ii);

 

provided, however, in the case of each of clauses (A) and (C) above of this clause (vi), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis (including a pro forma application of the net proceeds therefrom), Holdings would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

 

(vii)                           Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Investments made pursuant to this clause (vii) that are at that time outstanding, not to exceed the greater of $75.0 million and 7.5% of Adjusted Consolidated Net Tangible Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

 

(viii)                        the payment of dividends after a public offering of Capital Stock of Holdings or any direct or indirect parent of Holdings on Holdings’ Capital Stock (or a Restricted Payment to any such direct or indirect parent of Holdings to fund the payment by such direct or indirect parent of Holdings of dividends on such entity’s Capital Stock) of up to 6% per annum of the total market capitalization of Holdings or any such direct or indirect parent of Holdings as of the date of such public offering, other than public

 

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offerings with respect to Holdings’ (or such direct or indirect parent’s) Capital Stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

 

(ix)                              Restricted Payments in an amount not to exceed the aggregate amount of Excluded Contributions;

 

(x)                                 other Restricted Payments in an aggregate amount, when taken together with all other Restricted Payments made pursuant to this clause (x) that are at that time outstanding, not to exceed the greater of $30.0 million and 3.0% of Adjusted Consolidated Net Tangible Assets at the time made;

 

(xi)                              the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to Holdings or a Restricted Subsidiary by, Unrestricted Subsidiaries;

 

(xii)                           (A) with respect to any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined, affiliated, unitary or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of Holdings is the common parent, or for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes that is wholly-owned (directly or indirectly) by a C-corporation for U.S. federal and/or applicable state or local income tax purposes, distributions to any direct or indirect parent of Holdings in an amount not to exceed the amount of any U.S. federal, state and/or local income taxes that Holdings and/or its Subsidiaries, as applicable, would have paid for such taxable period had Holdings and/or its Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group, and (B) with respect to any taxable period ending after the Issue Date for which Holdings is a partnership or disregarded entity for U.S. federal income tax purposes (other than a partnership or disregarded entity described in clause (A)), distributions to any direct or indirect parent of Holdings in an amount necessary to permit such direct or indirect parent of Holdings to make a pro rata distribution to its owners such that each direct or indirect owner of Holdings receives an amount from such pro rata distribution sufficient to enable such owner to pay its U.S. federal, state and/or local income taxes (as applicable) attributable to its direct or indirect ownership of Holdings and its Subsidiaries with respect to such taxable period (assuming that each owner is subject to tax at the highest combined marginal federal, state, and/or local income tax rate applicable to any owner for such taxable period and taking into account the deductibility of state and local income taxes for U.S. federal income tax purposes (and any limitations thereon), the alternative minimum tax, any cumulative net taxable loss of Holdings for prior taxable periods ending after the Issue Date to the extent such loss is of a character that would allow such loss to be available to reduce taxes in the current taxable period (taking into account any limitations on the utilization of such loss to reduce such taxes and assuming such loss had not already been utilized) and the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income);

 

(xiii)                        any Restricted Payment, if applicable:

 

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(A)                               in amounts required for any direct or indirect parent of Holdings or IPOCo to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of Holdings and general corporate operating and overhead expenses of any direct or indirect parent of Holdings or IPOCo in each case to the extent such fees and expenses are attributable to the ownership or operation of Holdings, if applicable, and its Subsidiaries;

 

(B)                               in amounts required for any direct or indirect parent of Holdings or IPOCo, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to Holdings or any Restricted Subsidiary and that has been guaranteed by, or is otherwise considered Indebtedness of, Holdings Incurred in accordance with Section 4.03; and

 

(C)                               in amounts required for any direct or indirect parent of Holdings or IPOCo to pay fees and expenses related to any successful or unsuccessful equity or debt offering of such parent or IPOCo, as the case may be;

 

(xiv)                       repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

 

(xv)                          purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees;

 

(xvi)                       Restricted Payments by Holdings or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;

 

(xvii)                    the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to provisions similar to those described in Section 4.06 and Section 4.08; provided that all Notes tendered by holders of the Notes in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;

 

(xviii)                 payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of all or substantially all of the assets of Holdings and the Restricted Subsidiaries, taken as a whole, that complies with Section 5.01; provided that as a result of such consolidation, amalgamation, merger or transfer of assets, Holdings shall have made a Change of Control Offer (if required by this Indenture) and that all Notes tendered by holders in connection with such Change of Control Offer have been repurchased, redeemed or acquired for value; and

 

(xix)                       the IPOCo Formation Transactions, the Qualified IPO and the transactions related thereto, and the payment of all fees and expenses Incurred in connection therewith

 

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or owed by Holdings or any direct or indirect parent of Holdings or Restricted Subsidiaries of Holdings to Affiliates, and any other payments made, including any such payments made to the Permitted Holders or any direct or indirect parent of Holdings to enable the consummation of the IPOCo Formation Transactions, the Qualified IPO and the transactions related thereto, whether payable on the Issue Date or thereafter, in each case to the extent permitted by Section 4.07;

 

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (vi)(B), (vii), (x), (xi) and (xiii)(B) of this Section 4.04(b), no Default shall have occurred and be continuing or would occur as a consequence thereof; provided, further that any Restricted Payments made with property other than cash shall be calculated using the Fair Market Value (as determined in good faith by Holdings) of such property.

 

(c)                                  For purposes of determining compliance with this “Restricted Payments” covenant, if a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in clauses (i) — (xix) of Section 4.04, the Issuers will be permitted to divide or classify (or later divide, classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this covenant.

 

(d)                                 As of the Issue Date, all of the Subsidiaries of Holdings will be Restricted Subsidiaries. Holdings will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by Holdings and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.”  Such designation will only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

 

SECTION 4.05              Dividend and Other Payment Restrictions Affecting Subsidiaries.  Holdings shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of Holdings or such Restricted Subsidiary to:

 

(a)                                 (i) pay dividends or make any other distributions to Holdings or any Restricted Subsidiary on its Capital Stock; or (ii) pay any Indebtedness owed to Holdings or any Restricted Subsidiary;

 

(b)                                 make loans or advances to Holdings or any Restricted Subsidiary; or

 

(c)                                  sell, lease or transfer any of its properties or assets to Holdings or any Restricted Subsidiary;

 

except in each case for such encumbrances or restrictions existing under or by reason of:

 

(1)                                 (A) contractual encumbrances or restrictions in effect on the Issue Date and (B) contractual encumbrances or restrictions pursuant to the Credit Agreement and 

 

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the other Credit Agreement Documents and, in each case, any similar contractual encumbrances effected by any amendments, modifications, restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments;

 

(2)                                 this Indenture, the Notes (and any Exchange Notes) or the Subsidiary Guarantees;

 

(3)                                 applicable law or any applicable rule, regulation or order;

 

(4)                                 any agreement or other instrument of a Person acquired by Holdings or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;

 

(5)                                 contracts or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;

 

(6)                                 Secured Indebtedness otherwise permitted to be Incurred pursuant to Section 4.03 and Section 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness;

 

(7)                                 restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

 

(8)                                 customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;

 

(9)                                 purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired;

 

(10)                          customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;

 

(11)                          in the case of clause (c) above, any encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license or similar contract, or the assignment or transfer of any such lease (including leases governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to leasehold interests in Oil and Gas Properties), license (including, without limitation, licenses of intellectual property) or other contracts;

 

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(12)                          any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided, however, that such restrictions apply only to such Receivables Subsidiary;

 

(13)                          other Indebtedness, Disqualified Stock or Preferred Stock (a) of Holdings or any Restricted Subsidiary that is the Co-Issuer, a Subsidiary Guarantor or a Foreign Subsidiary or (b) of any Restricted Subsidiary that is not the Co-Issuer, a Subsidiary Guarantor or a Foreign Subsidiary so long as such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuers’ ability to make anticipated principal or interest payments on the Notes (as determined in good faith by Holdings), provided that in the case of each of clauses (a) and (b), such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred subsequent to the Issue Date pursuant to Section 4.03;

 

(14)                          any Restricted Investment not prohibited by Section 4.04 and any Permitted Investment;

 

(15)                          any customary encumbrances or restrictions imposed pursuant to any agreement of the type described in the definition of “Permitted Business Investment”; or

 

(16)                          any encumbrances or restrictions of the type referred to in Section 4.05(a), (b) or (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (15) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Holdings, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

 

For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to Holdings or a Restricted Subsidiary to other Indebtedness Incurred by Holdings or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

 

SECTION 4.06              Asset Sales.

 

(a)                                 Holdings shall not, and shall not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) Holdings or any Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by Holdings) of the assets sold or otherwise disposed of, and (y) at least 75% of the consideration therefor received by Holdings or such Restricted Subsidiary, 

 

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as the case may be, is in the form of Cash Equivalents or Additional Assets; provided that the amount of:

 

(i)                                     any liabilities (as shown on Holdings’ or a Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of Holdings or a Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets or that are otherwise cancelled or terminated in connection with the transaction with such transferee,

 

(ii)                                  any notes or other obligations or other securities or assets received by Holdings or such Restricted Subsidiary from such transferee that are converted by Holdings or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received),

 

(iii)                               with respect to any Asset Sale of Oil and Gas Properties by Holdings or any Restricted Subsidiary, the costs and expenses related to the exploration, development, completion or production of such Oil and Gas Properties and activities related thereto agreed to be assumed by the transferee (or an Affiliate thereof),

 

(iv)                              Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Sale, to the extent that Holdings and each other Restricted Subsidiary are released from any guarantee of payment of such Indebtedness in connection with the Asset Sale,

 

(v)                                 consideration consisting of Indebtedness of Holdings (other than Subordinated Indebtedness) received after the Issue Date from Persons who are not Holdings or any Restricted Subsidiary in connection with the Asset Sale and that is cancelled, and

 

(vi)                              any Designated Non-cash Consideration received by Holdings or any Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by Holdings), taken together with all other Designated Non-cash Consideration received pursuant to this Section 4.06(a)(vi) that is at that time outstanding, not to exceed the greater of 10.0% of Adjusted Consolidated Net Tangible Assets and $100.0 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value),

 

shall be deemed to be Cash Equivalents for the purposes of this Section 4.06(a).

 

(b)                                 Within 365 days after Holdings’ or any Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, Holdings or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option:

 

(i)                                     to repay (A) Indebtedness constituting Bank Indebtedness and other Pari Passu Indebtedness that is secured by a Lien permitted under this Indenture, (B) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor,

 

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(C) Obligations under the Notes or (D) other Pari Passu Indebtedness (provided that if an Issuer or any Subsidiary Guarantor shall so reduce Obligations under unsecured Pari Passu Indebtedness, the Issuers will equally and ratably reduce Obligations under the Notes pursuant to Section 3.01) through open-market purchases (provided that such purchases are at or above 100% of the principal amount thereof or, in the event that the Notes were issued with significant original issue discount, 100% of the accreted value thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price equal to 100% of the principal amount thereof (or, in the event that the Notes were issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any, the pro rata principal amount of Notes, in each case other than Indebtedness owed to Holdings or an Affiliate of Holdings;

 

(ii)                                  to make an Investment in any one or more businesses (provided that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary), assets, or property or capital expenditures, in each case (A) used or useful in a Similar Business or (B) that replace the properties and assets that are the subject of such Asset Sale; or

 

(iii)                               to invest in Additional Assets.

 

In the case of Section 4.06(b)(ii), a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment until the 18-month anniversary of the date of the receipt of such Net Proceeds; provided that in the event such binding commitment is later canceled or terminated for any reason before such Net Proceeds are so applied, then such Net Proceeds shall constitute Excess Proceeds unless Holdings or such Restricted Subsidiary enters into another binding commitment (a “Second Commitment”) within six months of such cancellation or termination of the prior binding commitment; provided, further, that Holdings or such Restricted Subsidiary may only enter into a Second Commitment under the foregoing provision one time with respect to each Asset Sale and to the extent such Second Commitment is later cancelled or terminated for any reason before such Net Proceeds are applied or are not applied within 180 days of such Second Commitment, then such Net Proceeds shall constitute Excess Proceeds.

 

Pending the final application of any such Net Proceeds, Holdings or such Restricted Subsidiary may invest such Net Proceeds in any manner not prohibited by this Indenture. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the first sentence of this Section 4.06(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (i) of this Section 4.06(b), shall be deemed to have been invested whether or not such offer is accepted) will be deemed to constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds exceeds $25.0 million, the Issuers shall make an offer to all holders of Notes (and, at the option of the Issuers, to holders of any Pari Passu Indebtedness) (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes (and such Pari Passu Indebtedness), that is at least $2,000 and an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event the Notes or such Pari Passu Indebtedness was issued with

 

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significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Section 4.06. The Issuers will commence an Asset Sale Offer with respect to Excess Proceeds within ten (10) Business Days after the date that Excess Proceeds exceeds $25.0 million by mailing the notice required pursuant to the terms of Sections 3.05 and 4.06(f), with a copy to the Trustee. To the extent that the aggregate amount of Notes (and such Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, Holdings may use any remaining Excess Proceeds for any purpose that is not prohibited by this Indenture. If the aggregate principal amount of Notes (and such Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased in the manner described in Section 4.06(e). Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

 

(c)                                  The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuers will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

 

(d)                                 Not later than the date upon which written notice of an Asset Sale Offer is delivered to the Trustee as provided above, Holdings shall deliver to the Trustee an Officers’ Certificate as to (i) the amount of the Excess Proceeds, (ii) the allocation of the Net Proceeds from the Asset Sales pursuant to which such Asset Sale Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.06(b).  On such date, the Issuers shall also irrevocably deposit with the Trustee or with a paying agent (or, if an Issuer or a Wholly Owned Restricted Subsidiary is acting as the Paying Agent, segregate and hold in trust) an amount equal to the Excess Proceeds to be invested in Cash Equivalents, as directed in writing by Holdings and to be held for payment in accordance with the provisions of this Section 4.06.  Upon the expiration of the period for which the Asset Sale Offer remains open (the “Offer Period”), the Issuers shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted by the Issuers.  The Trustee (or the Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering holder in the amount of the purchase price.  In the event that the Excess Proceeds delivered by the Issuers to the Trustee are greater than the purchase price of the Notes tendered, the Trustee shall deliver the excess to the Issuers immediately after the expiration of the Offer Period for application in accordance with this Section 4.06.

 

(e)                                  Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date.  Holders shall be entitled to withdraw their election if the Trustee or an Issuer receives not later than one Business Day prior to the purchase date, a facsimile or electronic transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered by the holder for purchase and a statement that such holder is withdrawing his election to have such Note purchased.  If at the end

 

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of the Offer Period more Notes (and such Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer than the Issuers are required to purchase, selection of such Notes for purchase shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed, or if such Notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be purchased in part.  Selection of such Pari Passu Indebtedness shall be made pursuant to the terms of such Pari Passu Indebtedness.

 

(f)                                   Notices of an Asset Sale Offer shall be mailed by first class mail, postage prepaid, at least 30 but not more than 60 days before the purchase date to each holder of Notes at such holder’s registered address. If any Note is to be purchased in part only, any notice of purchase that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased.

 

SECTION 4.07              Transactions with Affiliates.

 

(a)                                 Holdings shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Holdings (each of the foregoing, an “Affiliate Transaction”) involving aggregate consideration in excess of $15.0 million, unless:

 

(i)                                     such Affiliate Transaction is on terms that are not materially less favorable to Holdings or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by Holdings or such Restricted Subsidiary with an unrelated Person; and

 

(ii)                                  with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $30.0 million, Holdings delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of Holdings, approving such Affiliate Transaction and set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (i) above.

 

(b)                                 The provisions of Section 4.07(a) shall not apply to the following:

 

(i)                                     transactions between or among Holdings and/or any of the Restricted Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of such transaction) and any merger, consolidation or amalgamation of Holdings and any direct parent of Holdings; provided that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of Holdings and such merger, consolidation or amalgamation is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;

 

(ii)                                  Restricted Payments permitted by Section 4.04 and Permitted Investments;

 

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(iii)                               the payment of customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, managers, employees or consultants of Holdings, any Restricted Subsidiary, or any direct or indirect parent of Holdings;

 

(iv)                              transactions in which Holdings or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Holdings or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (i) of Section 4.07(a);

 

(v)                                 payments or loans (or cancellation of loans) to officers, directors, managers, employees or consultants which are approved by a majority of the Board of Directors of Holdings in good faith;

 

(vi)                              any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the holders of the Notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by Holdings;

 

(vii)                           the existence of, or the performance by Holdings or any Restricted Subsidiary of its obligations under the terms of any stockholders or limited liability company agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any transaction, agreement or arrangement described in the Offering Memorandum and, in each case, any amendment thereto or similar transactions, agreements or arrangements which it may enter into thereafter; provided, however, that the existence of, or the performance by Holdings or any Restricted Subsidiary of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Issue Date shall only be permitted by this clause (vii) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the holders of the Notes in any material respect than the original transaction, agreement or arrangement as in effect on the Issue Date;

 

(viii)                        any transactions with or among Holdings, IPOCo, their respective Restricted Subsidiaries and the Permitted Holders in connection with the IPOCo Formation Transactions, the Qualified IPO and the transactions relating thereto, and the payment of all fees and expenses related thereto, including fees paid to the Sponsors;

 

(ix)                              (A) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to Holdings and the Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of Holdings, or are on terms at least as favorable as might reasonably have

 

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been obtained at such time from an unaffiliated party or (B) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business and consistent with past practice or industry custom;

 

(x)                                 any transaction effected as part of a Qualified Receivables Financing;

 

(xi)                              the issuance of Equity Interests (other than Disqualified Stock) of Holdings to any Person;

 

(xii)                           the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of Holdings or any direct or indirect parent of Holdings or of a Restricted Subsidiary, as appropriate, in good faith;

 

(xiii)                        the entering into of any tax sharing agreement or arrangement that complies with Section 4.04(b)(xii);

 

(xiv)                       any contribution to the capital of Holdings;

 

(xv)                          transactions permitted by, and complying with, Section 5.01;

 

(xvi)                       transactions between Holdings or any Restricted Subsidiary and any Person, a director of which is also a director or manager of Holdings or any direct or indirect parent of Holdings; provided, however, that such director or manager abstains from voting as a director or manager of Holdings or such direct or indirect parent, as the case may be, on any matter involving such other Person;

 

(xvii)                    transactions with a Person that is an Affiliate of Holdings or IPOCo solely because Holdings or IPOCo, as the case may be, owns, directly or through a Restricted Subsidiary, an Investment in, or controls, such Person;

 

(xviii)                 pledges of Equity Interests of Unrestricted Subsidiaries;

 

(xix)                       the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business;

 

(xx)                          any employment agreements entered into by Holdings or any Restricted Subsidiary in the ordinary course of business;

 

(xxi)                       the payment of management, consulting, monitoring and advisory fees and related expenses (including indemnification and other similar amounts) to the Sponsors pursuant to the Sponsor Management Agreement (plus any unpaid management, consulting, monitoring, advisory and other fees and related expenses (including indemnification and other similar amounts) accrued in any prior year) and the termination fees pursuant to the Sponsor Management Agreement, in each case as in effect on the Issue Date or any amendment or modification thereto (so long as, in the good faith

 

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judgment of the Board of Directors of Holdings, any such amendment or modification is not more disadvantageous, taken as a whole, to holders in any material respect as compared to the Sponsor Management Agreement in effect on the Issue Date);

 

(xxii)                    payments by Holdings or any of its Restricted Subsidiaries to any of the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are approved by a majority of the Board of Directors of Holdings in good faith;

 

(xxiii)                 transactions undertaken in good faith (as certified by a responsible financial or accounting officer of Holdings in an Officers’ Certificate) for the purpose of improving the consolidated tax efficiency of Holdings and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture;

 

(xxiv)                investments by the Sponsors in securities of Holdings or any Restricted Subsidiary (and payment of reasonable out-of-pocket expenses Incurred by the Sponsors in connection therewith) so long as (i) the investment is being generally offered to other investors on the same or more favorable terms and (ii) the investment constitutes less than 5% of the proposed or outstanding issue amount of such class of securities; and

 

(xxv)                   customary agreements and arrangements with oil and natural gas royalty trusts and master limited partnership agreements that comply with the affiliate transaction provisions of such royalty trust or master limited partnership agreement.

 

SECTION 4.08              Change of Control.

 

(a)                                 Upon the occurrence of a Change of Control Triggering Event, each holder shall have the right to require the Issuers to repurchase all or any part of such holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (the “Change of Control Payment”) (subject to the right of the holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the terms contemplated in this Section 4.08; provided, however, that notwithstanding the occurrence of a Change of Control Triggering Event, the Issuer shall not be obligated to purchase any Notes pursuant to this Section 4.08 in the event that it has exercised its right to redeem such Notes in accordance with Article III of this Indenture. In the event that at the time of such Change of Control Triggering Event, the terms of the Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to this Section 4.08, then prior to the mailing of the notice to the holders provided for in Section 4.08(b) but in any event within 30 days following any Change of Control Triggering Event, the Issuers shall (i) repay in full all Bank Indebtedness or, if doing so will allow the purchase of Notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender and/or noteholder who has accepted such offer, or (ii) obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the Notes as provided for in Section 4.08(b).

 

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(b)                                 Within 30 days following any Change of Control Triggering Event, except to the extent that the Issuers have exercised their right to redeem the Notes in accordance with Article III of this Indenture, the Issuers shall mail a notice (a “Change of Control Offer”) to each holder with a copy to the Trustee (or deliver a notice pursuant to the procedures of DTC) stating:

 

(i)                                     that a Change of Control Triggering Event has occurred and that such holder has the right to require the Issuers to repurchase such holder’s Notes for the Change of Control Payment (subject to the right of the holders of record on the relevant Record Date to receive interest on the relevant Interest Payment Date);

 

(ii)                                  the circumstances regarding such Change of Control;

 

(iii)                               the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

 

(iv)                              the instructions determined by the Issuers, consistent with this Section 4.08, that a holder must follow in order to have its Notes purchased.

 

(c)                                  Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date.  The holders shall be entitled to withdraw their election if the Trustee or the Issuers receive not later than one Business Day prior to the purchase date a facsimile or electronic transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered for purchase by the holder and a statement that such holder is withdrawing his election to have such Note purchased.  Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.

 

(d)                                 On the purchase date, all Notes purchased by the Issuers under this Section 4.08 shall be delivered to the Trustee for cancellation, and the Issuers shall pay the purchase price plus accrued and unpaid interest to the holders entitled thereto.

 

(e)                                  A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

 

(f)                                   Notwithstanding the foregoing provisions of this Section 4.08, the Issuers shall not be required to make a Change of Control Offer upon a Change of Control Triggering Event if (i) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.08 applicable to a Change of Control Offer made by the Issuers and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer; (ii) notice of redemption of all outstanding Notes has been given pursuant to Section 3.05, unless and until there is a default in payment of the applicable redemption price; or (iii) in connection with or in contemplation of any Change of Control, the Issuers have made an offer to purchase (an “Alternate Offer”) any and all Notes validly tendered at a cash price equal to or higher than the Change of Control Payment and have purchased all Notes properly tendered in accordance with the terms of the Alternate Offer.

 

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(g)                                  Notes repurchased by the Issuers pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Issuers.  Notes purchased by a third party pursuant to the preceding clause (f) will have the status of Notes issued and outstanding.

 

(h)                                 If Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuers, or any third party making a Change of Control Offer in lieu of the Issuers as set forth in this Section 4.08, purchase all of the Notes validly tendered and not withdrawn by such Holders, the Issuers or such third party will have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer as set forth in this Section 4.08, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to the Change of Control Payment.

 

(i)                                     At the time the Issuers deliver Notes to the Trustee which are to be accepted for purchase, Holdings shall also deliver an Officers’ Certificate stating that such Notes are to be accepted by the Issuers pursuant to and in accordance with the terms of this Section 4.08.  A Note shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering holder.

 

(j)                                    Prior to any Change of Control Offer, Holdings shall deliver to the Trustee an Officers’ Certificate stating that all conditions precedent contained herein to the right of the Issuers to make such offer have been complied with.

 

(k)                                 The Issuers shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section.  To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under this Section by virtue of such compliance.

 

SECTION 4.09              Compliance Certificate.  Holdings shall deliver to the Trustee within 120 days after the end of each fiscal year of Holdings, beginning with the fiscal year ending on December 31, 2013, an Officers’ Certificate stating that in the course of the performance by the signers of their duties as Officers of Holdings they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period.  If any Officer does, the certificate shall describe the Default, its status and what action the Issuers are taking or propose to take with respect thereto.  The Issuers also shall comply with Section 314(a)(4) of the TIA.  Except with respect to receipt of payments of principal and interest on the Notes and any Default or Event of Default information contained in the Officers’ Certificate delivered to it pursuant to this Section 4.09, the Trustee shall have no duty to review, ascertain or confirm the Issuers’ compliance with or the breach of any representation, warranty or covenant made in this Indenture.

 

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SECTION 4.10              Further Instruments and Acts.  Upon request of the Trustee, the Issuers shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

SECTION 4.11              Future Subsidiary Guarantors.  Holdings shall cause each Wholly Owned Restricted Subsidiary that is not an Excluded Subsidiary and that guarantees any Indebtedness of an Issuer or any of the Subsidiary Guarantors to execute and deliver to the Trustee a supplemental indenture within 45 days of the date on which it guaranteed such Indebtedness substantially in the form of Exhibit D hereto pursuant to which such Wholly Owned Restricted Subsidiary will guarantee the Issuers’ Obligations under the Notes and this Indenture.

 

SECTION 4.12              Liens.

 

(a)                                 Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien (except Permitted Liens) on any asset or property of Holdings or such Restricted Subsidiary securing Indebtedness of Holdings or a Restricted Subsidiary unless the Notes are equally and ratably secured with (or on a senior basis to, in the case of obligations subordinated in right of payment to the Notes) the obligations so secured until such time as such obligations are no longer secured by a Lien.

 

(b)                                 Section 4.12(a) shall not require Holdings or any of its Restricted Subsidiaries to secure the Notes if the Lien consists of a Permitted Lien. Any Lien that is granted to secure the Notes or any Subsidiary Guarantee under Section 4.12(a) shall be automatically released and discharged at the same time as the release of the Lien that gave rise to the obligation to secure the Notes or such Subsidiary Guarantee under such Section 4.12(a).

 

(c)                                  For purposes of determining compliance with this Section 4.12, (i) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens described in the definition of “Permitted Liens” or pursuant to Section 4.12(a) but may be permitted in part under any combination thereof and (ii) in the event that a Lien securing an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens described in the definition of “Permitted Liens” or pursuant to Section 4.12(a), Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will only be required to include the amount and type of such Lien or such item of Indebtedness secured by such Lien in one of the clauses of the definition of “Permitted Liens” and such Lien securing such item of Indebtedness will be treated as being Incurred or existing pursuant to only one of such clauses or pursuant to Section 4.12(a).

 

(d)                                 With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The “Increased Amount” of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in

 

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the form of common stock of Holdings, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of “Indebtedness.”

 

SECTION 4.13              [Intentionally Omitted].

 

SECTION 4.14              Maintenance of Office or Agency.

 

(a)                                 The Issuers shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be surrendered for registration of transfer or for exchange.  The Issuers shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations and surrenders may be made at the Corporate Trust Office of the Trustee as set forth in Section 14.01.

 

(b)                                 The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve an Issuer of its obligation to maintain an office or agency for such purposes.  The Issuers shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

(c)                                  The Issuers hereby designates the Corporate Trust Office of the Trustee or its agent as such office or agency of the Issuers in accordance with Section 2.04.

 

SECTION 4.15              Covenant Suspension.  If on any date following the Issue Date, (i) the Notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing under this Indenture, then, beginning on that day (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “Covenant Suspension Event”), and subject to the provisions of the following paragraph, the Issuers and the Restricted Subsidiaries shall not be subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11 and 5.01(a)(iv) (collectively the “Suspended Covenants”).

 

In the event that Holdings and its Restricted Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time as a result of the foregoing, and on any subsequent date (the “Reversion Date”) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then Holdings and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events.  No Default, Event of Default or breach of any kind shall be deemed to exist under this Indenture, the Notes or the Subsidiary Guarantees with respect to the Suspended Covenants based on, and neither Holdings nor any of its Subsidiaries shall bear any liability for, any actions taken or events occurring during the Suspension Period, or any actions taken at any time pursuant to any

 

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contractual obligation arising during the Suspension Period, regardless of whether such actions or events would have been permitted if the applicable Suspended Covenants remained in effect during such period.

 

On each Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified as having been Incurred or issued pursuant to Sections 4.03(a) and (b) (to the extent such Indebtedness or Disqualified Stock or Preferred Stock would be permitted to be Incurred or issued thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred or issued prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to Sections 4.03(a) and (b), such Indebtedness or Disqualified Stock or Preferred Stock will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under Section 4.03(b)(iii). Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.04 will be made as though Section 4.04 had been in effect since the Issue Date and prior to, but not during, the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under Section 4.04(a).  As described above, however, no Default or Event of Default will be deemed to have occurred on the Reversion Date as a result of any actions taken by Holdings or its Restricted Subsidiaries during the Suspension Period. Within 30 days of such Reversion Date, the Issuers must comply with the terms of Section 4.11.

 

For purposes of Section 4.06, on the Reversion Date, the unutilized Excess Proceeds amount will be reset to zero.

 

ARTICLE V

 

SUCCESSOR COMPANY

 

SECTION 5.01              When Issuers May Merge or Transfer Assets.

 

(a)                                 Holdings may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not Holdings is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:

 

(i)                                     Holdings is the surviving person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than Holdings) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (Holdings or such Person, as the case may be, being herein called the “Successor Holdco”); provided that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation;

 

(ii)                                  the Successor Holdco (if other than Holdings) expressly assumes all the obligations of Holdings under this Indenture pursuant to supplemental indentures;

 

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(iii)                               immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Holdco, or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Holdco, or such Issuer or such Restricted Subsidiary at the time of such transaction) no Default shall have occurred and be continuing;

 

(iv)                              immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Holdco, or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Holdco, or such Restricted Subsidiary at the time of such transaction), either

 

(1)                                 the Successor Holdco would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or

 

(2)                                 the Fixed Charge Coverage Ratio for the Successor Holdco and its Restricted Subsidiaries would be no less than such ratio for Holdings and its Restricted Subsidiaries immediately prior to such transaction;

 

(v)                                 if Holdings is not the Successor Holdco, each Subsidiary Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

 

(vi)                              the Successor Holdco shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures (if any) comply with this Indenture.

 

The Successor Holdco (if other than Holdings) will succeed to, and be substituted for, Holdings under this Indenture and the Notes, and in such event Holdings will automatically be released and discharged from its obligations under this Indenture and the Notes. Notwithstanding the foregoing clauses (iii) and (iv) of this Section 5.01, (a) Holdings or any Restricted Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to Holdings or to a Restricted Subsidiary, and (b) Holdings may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating Holdings in another state of the United States, the District of Columbia or any territory of the United States or may convert into a corporation, partnership or limited liability company, so long as the amount of Indebtedness of Holdings and the Restricted Subsidiaries is not increased thereby. This Article V will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among Holdings and the Restricted Subsidiaries.

 

(b)                                 Subject to the provisions of Section 12.02(b)(i), no Subsidiary Guarantor shall, and Holdings shall not permit any Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving 

 

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Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

 

(i)                                     either (A) such Subsidiary Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a company, corporation, partnership or limited liability company (in the case of such Subsidiary Guarantor) or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the “Successor Subsidiary Guarantor”) and the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) expressly assumes all the obligations of such Subsidiary Guarantor under this Indenture and the Notes or the Subsidiary Guarantee, as applicable, pursuant to a supplemental indenture, or (B) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.06; and

 

(ii)                                  the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.

 

Except as otherwise provided in this Indenture, the Successor Subsidiary Guarantor (if other than such Subsidiary Guarantor) will succeed to, and be substituted for, such Subsidiary Guarantor under this Indenture and the Notes or the Subsidiary Guarantee, as applicable, and such Subsidiary Guarantor will automatically be released and discharged from its obligations under this Indenture and its Subsidiary Guarantee. Notwithstanding the foregoing, (1) a Subsidiary Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Subsidiary Guarantor in another state of the United States, the District of Columbia or any territory of the United States or may convert into a limited liability company, corporation, partnership or similar entity organized or existing under the laws of another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness of such Subsidiary Guarantor is not increased thereby and (2) a Subsidiary Guarantor may merge, amalgamate or consolidate with Holdings or another Subsidiary Guarantor.

 

In addition, notwithstanding the foregoing, a Subsidiary Guarantor may consolidate, amalgamate or merge with or into or wind up into, liquidate, dissolve, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “Transfer”) to Holdings or any Subsidiary Guarantor.

 

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ARTICLE VI

 

DEFAULTS AND REMEDIES

 

SECTION 6.01              Events of Default.  An “Event of Default” occurs with respect to Notes if:

 

(a)                                 there is a default in any payment of interest (including any Additional Interest) on any Note when the same becomes due and payable, and such default continues for a period of 30 days,

 

(b)                                 there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,

 

(c)                                  there is a failure by Holdings for 180 days after receipt of written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the Notes then outstanding (with a copy to the Trustee) to comply with any of its obligations, covenants or agreements in Section 4.02,

 

(d)                                 there is a failure by Holdings or any Restricted Subsidiary for 60 days after written notice given by the Trustee or the holders of not less than 30% in principal amount of the Notes then outstanding (with a copy to the Trustee) to comply with its other obligations, covenants or agreements (other than a default referred to in clauses (a), (b) and (c) above) contained in the Notes or this Indenture,

 

(e)                                  there is a failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay any Indebtedness (other than Indebtedness owing to Holdings or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $75.0 million or its foreign currency equivalent,

 

(f)                                   Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) pursuant to or within the meaning of any Bankruptcy Law:

 

(i)                                     commences a voluntary case;

 

(ii)                                  consents to the entry of an order for relief against it in an involuntary case;

 

(iii)                               consents to the appointment of a Custodian of it or for any substantial part of its property; or

 

(iv)                              makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency,

 

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(g)                                  a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(i)                                     is for relief against Holdings or any Significant Subsidiary in an involuntary case;

 

(ii)                                  appoints a Custodian of Holdings or any Significant Subsidiary or for any substantial part of its property; or

 

(iii)                               orders the winding up or liquidation of Holdings or any Significant Subsidiary;

 

or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days,

 

(h)                                 there is a failure by Holdings or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $75.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days, or

 

(i)                                     the Subsidiary Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) with respect to the Notes ceases to be in full force and effect (except as contemplated by the terms thereof) or an Issuer or any Subsidiary Guarantor that qualifies as a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) denies or disaffirms its obligations under this Indenture or any Subsidiary Guarantee with respect to the Notes and such Default continues for 10 days.

 

The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

 

However, a default under clause (c) or (d) above shall not constitute an Event of Default until the Trustee or the holders of 30% in principal amount of outstanding Notes notify the Issuers of the default and the Issuers do not cure such default within the time specified in clauses (c) or (d) hereof after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”  Holdings shall deliver to the Trustee, within five Business Days after the occurrence thereof, written notice in the form of an Officers’ Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuers are taking or propose to take with respect thereto.

 

The term “Bankruptcy Law” means Title 11, United States Code, or any similar Federal or state law for the relief of debtors.  The term “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

 

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SECTION 6.02              Acceleration.  If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) hereof with respect to Holdings) occurs with respect to the Notes and is continuing, the Trustee or the holders of at least 30% in principal amount of outstanding Notes (with a copy to the Trustee) by notice to the Issuers may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(f) or (g) with respect to Holdings occurs, the principal of, premium, if any, and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.

 

In the event of any Event of Default specified in Section 6.01(e), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of the Notes, if within 20 days after such Event of Default arose Holdings delivers an Officers’ Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events.

 

SECTION 6.03              Other Remedies.  If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes, this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other remedy.  To the extent required by law, all available remedies are cumulative.

 

SECTION 6.04              Waiver of Past Defaults.  Provided the Notes are not then due and payable by reason of a declaration of acceleration, the holders of a majority in principal amount of the Notes by written notice to the Trustee may waive an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Note, (b) a Default arising from the failure to redeem or purchase any Note when required pursuant to the terms of this Indenture or (c) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each holder affected.  When a Default is waived, it is deemed cured and the Issuers, the Trustee and the holders will be restored to their former positions and rights under this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.

 

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SECTION 6.05              Control by Majority.  The holders of a majority in principal amount of Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, if the Trustee, being advised by counsel, determines that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith shall determine that the action or proceeding so directed would involve the Trustee in personal liability or expense for which it is not adequately indemnified, or subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability.  Prior to taking any action under this Indenture, the Trustee shall be entitled to indemnification satisfactory to it against all losses and expenses caused by taking or not taking such action.

 

SECTION 6.06              Limitation on Suits.

 

(a)                                 No holder may pursue any remedy with respect to this Indenture unless:

 

(i)                                     such holder has previously given the Trustee written notice that an Event of Default is continuing,

 

(ii)                                  holders of at least 30% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy,

 

(iii)                               such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense,

 

(iv)                              the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and

 

(v)                                 the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

 

(b)                                 A holder may not use this Indenture to prejudice the rights of another holder or to obtain a preference or priority over another holder.

 

SECTION 6.07              Rights of the Holders to Receive Payment.  Notwithstanding any other provision of this Indenture, the right of any holder to receive payment of principal of and interest on the Notes held by such holder, on or after the respective due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder.

 

SECTION 6.08              Collection Suit by Trustee.  If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuers or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue principal and (to the 

 

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extent lawful) on any unpaid interest at the rate provided for in the Notes) and the amounts provided for in Section 7.07.

 

SECTION 6.09              Trustee May File Proofs of Claim.  The Trustee may file such proofs of claim, statements of interest and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems necessary, advisable or appropriate)) and the holders allowed in any judicial proceedings relative to the Issuers, the Subsidiary Guarantors, their creditors or their property, shall be entitled to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any holder, or to authorize the Trustee to vote in respect of the claim of any holder in any such proceeding.

 

SECTION 6.10              Priorities.  Any money or property collected by the Trustee pursuant to this Article VI and any other money or property distributable in respect of the Issuers’ or any Subsidiary Guarantor’s obligations under this Indenture after an Event of Default shall be applied in the following order:

 

FIRST:  to the Trustee for amounts due hereunder;

 

SECOND:  to the holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest, respectively; and

 

THIRD:  to the Issuers or, to the extent the Trustee collects any amount for any Subsidiary Guarantor, to such Subsidiary Guarantor.

 

The Trustee may fix a record date and payment date for any payment to the holders pursuant to this Section 6.10.  At least 15 days before such record date, the Trustee shall mail to each holder and the Issuers a notice that states the record date, the payment date and the amount to be paid.

 

SECTION 6.11              Undertaking for Costs.  In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess 

 

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reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.  This Article VI does not apply to a suit by the Trustee, a suit by a holder pursuant to Section 6.07 or a suit by holders of more than 10% in principal amount of the Notes.

 

SECTION 6.12              Waiver of Stay or Extension Laws.  Neither the Issuers nor any Subsidiary Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuers and the Subsidiary Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

 

ARTICLE VII

 

TRUSTEE

 

SECTION 7.01              Duties of Trustee.

 

(a)                                 The Trustee, prior to the occurrence of an Event of Default with respect to the Notes and after the curing or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture.  If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)                                 Except during the continuance of an Event of Default:

 

(i)                                     the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee (it being agreed that the permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty); and

 

(ii)                                  in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture.  The Trustee shall be under no duty to make any investigation as to any statement contained in any such instance, but may accept the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinions.  However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

 

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(c)                                  The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(i)                                     this paragraph does not limit the effect of paragraph (b) of this Section;

 

(ii)                                  the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;

 

(iii)                               the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05; and

 

(iv)                              no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise Incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.

 

(d)                                 Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

 

(e)                                  The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.

 

(f)                                   Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)                                  Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01(c) and the TIA.

 

SECTION 7.02              Rights of Trustee.

 

(a)                                 The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person.  The Trustee need not investigate any fact or matter stated in the document.

 

(b)                                 Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both.  The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.

 

(c)                                  The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d)                                 The Trustee shall not be responsible or liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers.

 

(e)                                  The Trustee may consult with counsel of its own selection and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall

 

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be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(f)                                   The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the holders of not less than a majority in principal amount of the Notes at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuers, personally or by agent or attorney, at the expense of the Issuers and shall Incur no liability of any kind by reason of such inquiry or investigation.

 

(g)                                  The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the holders pursuant to this Indenture, unless such holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be Incurred by it in compliance with such request or direction.

 

(h)                                 The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

 

(i)                                     The Trustee shall not be responsible or liable for any action taken or omitted by it in good faith at the direction of the holders of not less than a majority in principal amount of the Notes as to the time, method and place of conducting any proceedings for any remedy available to the Trustee or the exercising of any power conferred by this Indenture.

 

(j)                                    Any action taken, or omitted to be taken, by the Trustee in good faith pursuant to this Indenture upon the request or authority or consent of any person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding upon future holders of Notes and upon Notes executed and delivered in exchange therefor or in place thereof.

 

(k)                                 The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

 

(l)                                     The Trustee may request that the Issuers deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any Person authorized to sign an Officers’ Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.

 

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(m)                             The Trustee shall not be responsible or liable for punitive, special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of actions.

 

(n)                                 The Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers under this Indenture.

 

(o)                                 The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunction of utilities, computer (hardware or software) or communication services; accidents; labor disputes; and acts of civil or military authorities and governmental action.

 

SECTION 7.03              Individual Rights of Trustee.  The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee.  Any Paying Agent or Registrar may do the same with like rights.  However, the Trustee must comply with Section 7.10 and 7.11.

 

SECTION 7.04              Trustee’s Disclaimer.  The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Subsidiary Guarantees or the Notes, it shall not be accountable for the Issuers’ use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuers or any Subsidiary Guarantor in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication.  The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e), (f), (g), (h) or (i) or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received written notice thereof in accordance with Section 14.02 hereof from the Issuers, any Subsidiary Guarantor or any holder.  In accepting the trust hereby created, the Trustee acts solely as Trustee under this Indenture and not in its individual capacity and all persons, including without limitation the holders of Notes and the Issuers having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein.

 

SECTION 7.05              Notice of Defaults.  If a Default occurs and is continuing and is actually known to a Trust Officer or the Trustee, the Trustee shall mail to each holder of the Notes notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice if it is received by the Trustee.  Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Note, the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the noteholders.  Holdings is required to deliver to the Trustee, annually, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. Holdings also is required to deliver to the 

 

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Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action Holdings is taking or proposes to take in respect thereof.

 

SECTION 7.06              Reports by Trustee to the Holders.  As promptly as practicable after each November 1 beginning with the November 1 following the date of this Indenture, and in any event prior to December 1 in each year, the Trustee shall mail to each holder a brief report dated as of such November 1 that complies with Section 313(a) of the TIA if and to the extent required thereby.  The Trustee shall also comply with Section 313(b) of the TIA.

 

Pursuant to Section 313(d) of the TIA, a copy of each report at the time of its mailing to the holders shall be filed with the SEC and each stock exchange (if any) on which the Notes are listed if the Notes are listed.  Holdings agrees to notify promptly the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof. All reports pursuant to this Section 7.06 shall be provided in accordance with Section 313(c) of the TIA.

 

SECTION 7.07              Compensation and Indemnity.  The Issuers shall pay to the Trustee from time to time compensation for the Trustee’s acceptance of this Indenture and its services hereunder.  The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Issuers shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses Incurred or made by it, including costs of collection, in addition to the compensation for its services.  Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts.  The Issuers and the Subsidiary Guarantors, jointly and severally, shall indemnify the Trustee or any predecessor Trustee and their directors, officers, employees and agents against any and all loss, liability, claim, damage or expense (including reasonable attorneys’ fees and expenses and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) Incurred by or in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture or Subsidiary Guarantee against any Issuer or any Subsidiary Guarantor (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by any Issuer, any Subsidiary Guarantor, any holder or any other Person).  The obligation to pay such amounts shall survive the payment in full or defeasance of the Notes or the removal or resignation of the Trustee.  The Trustee shall notify the Issuers of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Issuers shall not relieve any Issuer or any Subsidiary Guarantor of its indemnity obligations hereunder.  The Issuers shall defend the claim and the indemnified party shall provide reasonable cooperation at the Issuers’ expense in the defense.  Such indemnified parties may have separate counsel and the Issuers and such Subsidiary Guarantor, as applicable, shall pay the fees and expenses of such counsel; provided, however, that the Issuers shall not be required to pay such fees and expenses if it assumes such indemnified parties’ defense and, in such indemnified parties’ reasonable judgment, there is no actual or potential conflict of interest between the Issuers and the Subsidiary Guarantor, as applicable, and such parties in connection with such defense.  The Issuers need not reimburse any expense or indemnify against any loss, liability or expense Incurred by an indemnified party through such party’s own willful misconduct, negligence or bad faith.

 

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To secure the Issuers’ and the Subsidiary Guarantors’ payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.

 

The Issuers’ and the Subsidiary Guarantors’ payment obligations pursuant to this Section 7.07 shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee.  Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee Incurs expenses after the occurrence of a Default specified in Section 6.01(f) or (g) with respect to the Issuers, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.

 

No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise Incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if repayment of such funds or adequate indemnity against such risk or liability is not assured to its satisfaction.

 

SECTION 7.08              Replacement of Trustee.

 

(a)                                 The Trustee may resign at any time by so notifying the Issuer.  The holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee.  The Issuers shall remove the Trustee if:

 

(i)                                     the Trustee fails to comply with Section 7.10;

 

(ii)                                  the Trustee is adjudged bankrupt or insolvent;

 

(iii)                               a receiver or other public officer takes charge of the Trustee or its property; or

 

(iv)                              the Trustee otherwise becomes incapable of acting.

 

(b)                                 If the Trustee resigns, is removed by the Issuers or by the holders of a majority in principal amount of the Notes and such holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly appoint a successor Trustee.

 

(c)                                  A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers.  Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of its succession to the holders.  The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07.

 

(d)                                 If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the holders of 10% in principal amount of 

 

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the Notes may petition at the expense of the Issuers any court of competent jurisdiction for the appointment of a successor Trustee.

 

(e)                                  If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as provided in Section 310(b) of the TIA, any holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(f)                                   Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuer’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.

 

SECTION 7.09              Successor Trustee by Merger.  If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.

 

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.

 

SECTION 7.10              Eligibility; Disqualification.  The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA.  The Trustee shall have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition.  The Trustee shall comply with Section 310(b) of the TIA, subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the TIA any series of securities issued under this Indenture and any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuers are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met.

 

SECTION 7.11              Preferential Collection of Claims Against the Issuers.  The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA.  A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated.

 

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ARTICLE VIII

 

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.01              Discharge of Liability on Notes; Defeasance.

 

(a)                                 This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights and immunities of the Trustee and rights of registration or of transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes when:

 

(i)                                     either (A) all the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuers and thereafter repaid to the Issuers or discharged from such trust) have been delivered to the Trustee for cancellation or (B) all of the Notes (1) have become due and payable, (2) will become due and payable at their stated maturity within one year or (3) if redeemable at the option of the Issuers, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers, and the Issuers have irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit together with irrevocable instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be; provided that if such redemption is made as provided in the second paragraph of Paragraph 5 of the Note (x) the amount of cash in U.S. dollars, non-callable Cash Equivalents, or a combination thereof, that must be irrevocably deposited will be determined using an assumed Applicable Premium calculated as of the date of such deposit and (y) the depositor must irrevocably deposit or cause to be deposited additional money in trust on the redemption date as necessary to pay the Applicable Premium as determined by such date;

 

(ii)                                  the Issuers and/or the Subsidiary Guarantors have paid all other sums payable under this Indenture; and

 

(iii)                               the Issuers have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.

 

(b)                                 Subject to Sections 8.01(c) and 8.02, the Issuers at any time may terminate (i) all of their obligations under the Notes and this Indenture with respect to the holders of the Notes (“legal defeasance option”), and (ii) their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.11, 4.12 and 4.15 and the operation of Section 5.01 for the benefit of the holders of the Notes, and Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (in the case of Sections 6.01(f) and 6.01(g) with respect to Significant Subsidiaries of the Issuers only), 6.01(h) and 6.01(i) (“covenant defeasance option”). The Issuers may exercise their legal defeasance 

 

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option notwithstanding their prior exercise of their covenant defeasance option.  In the event that the Issuers terminate all of their obligations under the Notes and this Indenture (with respect to such Notes) by exercising their legal defeasance option or their covenant defeasance option, the obligations of each Subsidiary Guarantor with respect to its Subsidiary Guarantee shall be terminated simultaneously with the termination of such obligations.

 

If the Issuers exercises their legal defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default.  If the Issuers exercise their covenant defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default specified in Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries of Holdings only), 6.01(h) and 6.01(i) or because of the failure of Holdings to comply with Section 5.01.

 

Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate.

 

(c)                                  Notwithstanding clauses (a) and (b) above, the Issuers’ obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08 and 2.09 and Article VII, including, without limitation, Sections 7.07, 7.08 and 7.09, and in this Article VIII and the rights and immunities of the Trustee under this Indenture shall survive until the Notes have been paid in full.  Thereafter, the Issuers’ obligations in Sections 7.07, 7.08, 8.05 and 8.06 and the rights and immunities of the Trustee under this Indenture shall survive such satisfaction and discharge.

 

SECTION 8.02              Conditions to Defeasance.

 

(a)                                 The Issuers may exercise their legal defeasance option or their covenant defeasance option only if:

 

(i)                                     the Issuers irrevocably deposit in trust with the Trustee cash in U.S. Dollars, U.S. Government Obligations or a combination thereof sufficient, or a combination thereof sufficient, to pay the principal of and premium (if any) and interest on the Notes when due at maturity or redemption, as the case may be; provided that if such redemption is made as provided in the second paragraph of Paragraph 5 of the Note (x) the amount of cash in U.S. dollars, non-callable Cash Equivalents, or a combination thereof, that must be irrevocably deposited will be determined using an assumed Applicable Premium calculated as of the date of such deposit and (y) the depositor must irrevocably deposit or cause to be deposited additional money in trust on the redemption date as necessary to pay the Applicable Premium as determined by such date;

 

(ii)                                  the Issuers deliver to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal, premium, if any, and interest when due on all the Notes to maturity or redemption, as the case may be;

 

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(iii)                               no Default specified in Section 6.01(f) or (g) with respect to the Issuers shall have occurred or is continuing on the date of such deposit;

 

(iv)                              the deposit does not constitute a default under any other material agreement or instrument binding on the Issuers;

 

(v)                                 in the case of the legal defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date of this Indenture there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred.  Notwithstanding the foregoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of the Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer;

 

(vi)                              such exercise does not impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holder’s Notes on or after the due dates therefore or to institute suit for the enforcement of any payment on or with respect to such holder’s Notes;

 

(vii)                           in the case of the covenant defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that the holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and

 

(viii)                        the Issuers deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes to be so defeased and discharged as contemplated by this Article VIII have been complied with.

 

(b)                                 Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for the redemption of such Notes at a future date in accordance with Article III.

 

SECTION 8.03              Application of Trust Money.  The Trustee shall hold in trust money or U.S. Government Obligations (including proceeds thereof) deposited with it pursuant to this Article VIII.  The Trustee shall apply the deposited money and the money from U.S. Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes so discharged or defeased.

 

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SECTION 8.04              Repayment to Issuer.  Each of the Trustee and each Paying Agent shall promptly turn over to the Issuers upon request any money or U.S. Government Obligations held by it as provided in this Article VIII that, in the written opinion of a nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article VIII.

 

Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Issuers upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, holders entitled to the money must look to the Issuers for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies.

 

SECTION 8.05              Indemnity for U.S. Government Obligations.  The Issuers shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

 

SECTION 8.06              Reinstatement.  If the Trustee or any Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers’ obligations under this Indenture and the Notes so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or any Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided, however, that, if the Issuers have made any payment of principal of, or interest on, any such Notes because of the reinstatement of its obligations, the Issuers shall be subrogated to the rights of the holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or any Paying Agent.

 

ARTICLE IX

 

AMENDMENTS AND WAIVERS

 

SECTION 9.01              Without Consent of the Holders.

 

(a)                                 The Issuers and the Trustee may amend this Indenture, the Notes and the Subsidiary Guarantees without notice to or consent of any holder:

 

(i)                                     to cure any ambiguity, omission, defect or inconsistency;

 

(ii)                                  to provide for the assumption by a Successor (with respect to an Issuer) of the obligations of an Issuer under this Indenture and the Notes;

 

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(iii)                               to provide for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under this Indenture and its Subsidiary Guarantee;

 

(iv)                              to provide for uncertificated Notes in addition to or in place of certificated Notes, provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;

 

(v)                                 to conform the text of this Indenture, the Notes or the Subsidiary Guarantees to any provision of the “Description of Notes” in the Offering Memorandum to the extent that such provision in this Indenture, the Notes or the Subsidiary Guarantees was intended by the Issuers to be verbatim recitation of a provision in the “Description of Notes” in the Offering Memorandum;

 

(vi)                              to add a guarantee or other obligor with respect to the Notes,

 

(vii)                           [intentionally omitted];

 

(viii)                        to release a Subsidiary Guarantee as permitted by this Indenture;

 

(ix)                              [intentionally omitted];

 

(x)                                 to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers;

 

(xi)                              to comply with any requirement of the SEC in connection with qualifying, or maintaining the qualification of, this Indenture under the TIA;

 

(xii)                           to make any change that does not adversely affect the rights of any holder; or

 

(xiii)                        to provide for the issuance of Additional Notes or Exchange Notes, which shall have terms substantially identical in all material respects to the Initial Notes, and which shall be treated, together with any outstanding Initial Notes, as a single issue of securities.

 

(b)                                 [Intentionally Omitted].

 

(c)                                  After an amendment under this Section 9.01 becomes effective, the Issuers shall mail, or otherwise deliver in accordance with the procedures of the Depositary, to the holders a notice briefly describing such amendment.  The failure to give such notice to all holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01.

 

SECTION 9.02              With Consent of the Holders.  The Issuers and the Trustee may amend this Indenture, the Notes and the Subsidiary Guarantees with the consent of the Issuers and the holders of at least a majority in principal amount of the Notes then outstanding

 

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voting as a single class (including consents obtained in connection with a tender offer or exchange for the Notes).  However, without the consent of each holder of an outstanding Note affected, an amendment may not:

 

(1)                                 reduce the amount of Notes whose holders must consent to an amendment,

 

(2)                                 reduce the rate of or extend the time for payment of interest on any Note,

 

(3)                                 reduce the principal of or change the Stated Maturity of any Note,

 

(4)                                 reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed in accordance with Article III,

 

(5)                                 make any Note payable in money other than that stated in such Note,

 

(6)                                 expressly subordinate the Notes or any related Subsidiary Guarantee to any other Indebtedness of an Issuer or any Subsidiary Guarantor,

 

(7)                                 impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder’s Notes, or

 

(8)                                 make any change in the amendment provisions which require each holder’s consent or in the waiver provisions.

 

Except as expressly provided by this Indenture, without the consent of holders of at least 66.67% in aggregate principal amount of Notes then outstanding, no amendment may modify or release the Subsidiary Guarantee of any Significant Subsidiary in any manner adverse to the holders of the Notes.

 

It shall not be necessary for the consent of the holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.

 

After an amendment under this Section 9.02 becomes effective, the Issuers shall mail, or otherwise deliver in accordance with the procedures of the Depositary, to the holders a notice briefly describing such amendment.  The failure to give such notice to all holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.

 

SECTION 9.03              Revocation and Effect of Consents and Waivers.

 

(a)                                 A consent to an amendment or a waiver by a holder of a Note shall bind the holder and every subsequent holder of that Note or portion of the Note that evidences the same debt as the consenting holder’s Note, even if notation of the consent or waiver is not made on the Note.  However, any such holder or subsequent holder may revoke the consent or waiver as to such holder’s Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers’ Certificate from Holdings certifying that the requisite principal amount of Notes have consented.  After an amendment or waiver 

 

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becomes effective, it shall bind every holder.  An amendment or waiver becomes effective upon the (i) receipt by the Issuers or the Trustee of consents by the holders of the requisite principal amount of securities, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuers and the Trustee.

 

(b)                                 The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture.  If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be holders after such record date.  No such consent shall be valid or effective for more than 120 days after such record date.

 

SECTION 9.04              Notation on or Exchange of Notes.  If an amendment, supplement or waiver changes the terms of a Note, the Issuers may require the holder of the Note to deliver it to the Trustee.  The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the holder.  Alternatively, if the Issuers or the Trustee so determine, the Issuers in exchange for the Note shall issue and, upon written order of each Issuer signed by an Officer, the Trustee shall authenticate a new Note that reflects the changed terms.  Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment, supplement or waiver.

 

SECTION 9.05              Trustee to Sign Amendments.  The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may but need not sign it.  In signing such amendment, the Trustee shall be entitled to receive indemnity satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, (i) an Officers’ Certificate, (ii) an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuers and any Subsidiary Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof, (iii) a copy of the resolution of the Board of Directors, certified by the Secretary or Assistant Secretary of Holdings, authorizing the execution of such amendment, supplement or waiver and (iv) if such amendment, supplement or waiver is executed pursuant to Section 9.02, evidence reasonably satisfactory to the Trustee of the consent of the holders required to consent thereto.

 

SECTION 9.06              Additional Voting Terms; Calculation of Principal Amount.  All Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class and no Notes will have the right to vote or consent as a separate class on any matter.  Determinations as to whether holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article IX and Section 2.13.

 

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SECTION 9.07              Compliance with the Trust Indenture Act.  From the date on which this Indenture is qualified under the TIA, every amendment, waiver or supplement to this Indenture or the Notes shall comply with the TIA as then in effect.

 

ARTICLE X

 

[INTENTIONALLY OMITTED]

 

ARTICLE XI

 

[INTENTIONALLY OMITTED]

 

ARTICLE XII

 

GUARANTEE

 

SECTION 12.01       Guarantee.

 

(a)                                 Each Subsidiary Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, on a senior unsecured basis from the Issue Date, as a primary obligor and not merely as a surety, to each holder and to the Trustee and its successors and assigns (i) the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuers under this Indenture and the Notes, whether for payment of principal of, premium, if any, or interest on the Notes and all other monetary obligations of the Issuers under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuers whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the “Subsidiary Guaranteed Obligations”).  Each Subsidiary Guarantor further agrees that the Subsidiary Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from any Subsidiary Guarantor, and that each Subsidiary Guarantor shall remain bound under this Article XII notwithstanding any extension or renewal of any Subsidiary Guaranteed Obligation.

 

(b)                                 Each Subsidiary Guarantor waives presentation to, demand of payment from and protest to the Issuers of any of the Subsidiary Guaranteed Obligations and also waives notice of protest for nonpayment.  Each Subsidiary Guarantor waives notice of any default under the Notes or the Subsidiary Guaranteed Obligations.  The obligations of each Subsidiary Guarantor hereunder shall not be affected by (i) the failure of any holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuers or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (iv) the release of any security held by any holder or the Trustee for the Subsidiary Guaranteed Obligations or each Subsidiary Guarantor; (v) the failure of any holder or Trustee to exercise any right or remedy against any other guarantor of the Subsidiary Guaranteed Obligations; or (vi) any change in the ownership of each Subsidiary Guarantor, except as provided in Section 12.02(b). Each Subsidiary Guarantor hereby waives any right to which it 

 

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may be entitled to have its obligations hereunder divided among the Subsidiary Guarantors, such that such Subsidiary Guarantor’s obligations would be less than the full amount claimed.

 

(c)                                  Each Subsidiary Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuers first be used and depleted as payment of the Issuers’ or such Subsidiary Guarantor’s obligations hereunder prior to any amounts being claimed from or paid by such Subsidiary Guarantor hereunder.  Each Subsidiary Guarantor hereby waives any right to which it may be entitled to require that the Issuers be sued prior to an action being initiated against such Subsidiary Guarantor.

 

(d)                                 Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any holder or the Trustee to any security held for payment of the Subsidiary Guaranteed Obligations.

 

(e)                                  The Subsidiary Guarantee of each Subsidiary Guarantor is, to the extent and in the manner set forth in Article XII, equal in right of payment to all existing and future Pari Passu Indebtedness, senior in right of payment to all existing and future Subordinated Indebtedness of such Subsidiary Guarantor and subordinated and subject in right of payment to the prior payment in full of the principal of and premium, if any, and interest on all Secured Indebtedness of the relevant Subsidiary Guarantor and is made subject to such provisions of this Indenture.

 

(f)                                   Except as expressly set forth in Sections 8.01(b), 12.02 and 12.06, the obligations of each Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Subsidiary Guaranteed Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of each Subsidiary Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Subsidiary Guarantor or would otherwise operate as a discharge of any Subsidiary Guarantor as a matter of law or equity.

 

(g)                                  Each Subsidiary Guarantor agrees that its Subsidiary Guarantee shall remain in full force and effect until payment in full of all the Subsidiary Guaranteed Obligations.  Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Subsidiary Guaranteed Obligation is rescinded or must otherwise be restored by any holder or the Trustee upon the bankruptcy or reorganization of the Issuers or otherwise.

 

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(h)                                 In furtherance of the foregoing and not in limitation of any other right which any holder or the Trustee has at law or in equity against any Subsidiary Guarantor by virtue hereof, upon the failure of the Issuers to pay the principal of or interest on any Subsidiary Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Subsidiary Guaranteed Obligation, each Subsidiary Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Subsidiary Guaranteed Obligations, (ii) accrued and unpaid interest on such Subsidiary Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuers to the holders and the Trustee.

 

(i)                                     Each Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the holders in respect of any Subsidiary Guaranteed Obligations guaranteed hereby until payment in full of all Subsidiary Guaranteed Obligations.  Each Subsidiary Guarantor further agrees that, as between it, on the one hand, and the holders and the Trustee, on the other hand, (i) the maturity of the Subsidiary Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of the Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Subsidiary Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Subsidiary Guaranteed Obligations as provided in Article VI, such Subsidiary Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantors for the purposes of this Section 12.01.

 

(j)                                    Each Subsidiary Guarantor also agrees to pay any and all costs and expenses (including reasonable out-of-pocket attorneys’ fees and expenses) Incurred by the Trustee or any holder in enforcing any rights under this Section 12.01.

 

(k)                                 Upon request of the Trustee, each Subsidiary Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

SECTION 12.02       Limitation on Liability.

 

(a)                                 Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Subsidiary Guaranteed Obligations guaranteed hereunder by each Subsidiary Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the applicable Subsidiary Guarantor without rendering this Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally or capital maintenance or corporate benefit rules applicable to guarantees for obligations of affiliates.

 

(b)                                 A Subsidiary Guarantee as to any Restricted Subsidiary that is a party hereto on the date hereof or that executes a supplemental indenture in accordance with Section 4.11 hereof and provides a guarantee shall terminate and be of no further force or effect 

 

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and such Subsidiary Guarantee shall be deemed to be released from all obligations under this Article XII upon:

 

(i)                                     the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), of the applicable Subsidiary Guarantor if such sale, disposition, exchange or other transfer is made in a manner not in violation of this Indenture;

 

(ii)                                  the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the provisions of Section 4.04 and the definition of “Unrestricted Subsidiary”;

 

(iii)                               the release or discharge of the guarantee by such Subsidiary Guarantor of the Credit Agreement or other Indebtedness or the guarantee of any other Indebtedness which resulted in the obligation to guarantee the Notes;

 

(iv)                              the Issuers’ exercise of their legal defeasance option or covenant defeasance option under Article VIII or if the Issuers’ obligations under this Indenture are discharged in accordance with the terms of this Indenture;

 

(v)                                 such Restricted Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof; and

 

(vi)                              the occurrence of a Covenant Suspension Event.

 

SECTION 12.03       [Intentionally Omitted].

 

SECTION 12.04       Successors and Assigns.  This Article XII shall be binding upon each Subsidiary Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the holders and, in the event of any transfer or assignment of rights by any holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.

 

SECTION 12.05       No Waiver.  Neither a failure nor a delay on the part of either the Trustee or the holders in exercising any right, power or privilege under this Article XII shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege.  The rights, remedies and benefits of the Trustee and the holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article XII at law, in equity, by statute or otherwise.

 

SECTION 12.06       Modification.  No modification, amendment or waiver of any provision of this Article XII, nor the consent to any departure by any Subsidiary Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the 

 

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Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice to or demand on any Subsidiary Guarantor in any case shall entitle any Subsidiary Guarantor to any other or further notice or demand in the same, similar or other circumstances.

 

SECTION 12.07       Execution of Supplemental Indenture for Future Guarantors.  Each Subsidiary which is required to become a Subsidiary Guarantor of the Notes pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit D hereto pursuant to which such Subsidiary shall become a Subsidiary Guarantor under this Article XII and shall guarantee the Notes.  Concurrently with the execution and delivery of such supplemental indenture, Holdings shall deliver to the Trustee an Opinion of Counsel and an Officers’ Certificate certifying that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors’ rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Subsidiary Guarantee of such Subsidiary Guarantor is a valid and binding obligation of such Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in accordance with its terms and/or to such other matters as the Trustee may reasonably request.

 

SECTION 12.08       Non-Impairment.  The failure to endorse a Subsidiary Guarantee on any Note shall not affect or impair the validity thereof.

 

ARTICLE XIII

 

[INTENTIONALLY OMITTED]

 

ARTICLE XIV

 

MISCELLANEOUS

 

SECTION 14.01       Trust Indenture Act Controls.  If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an “incorporated provision”) included in this Indenture by operation of, Sections 310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision shall control.

 

SECTION 14.02       Notices.

 

(a)                                 Any notice or communication required or permitted hereunder shall be in writing and delivered in person, via facsimile or mailed by first-class mail addressed as follows:

 

if to the Issuers or a Subsidiary Guarantor:

 

Athlon Holdings LP

420 Throckmorton Street, Suite 1200

Fort Worth, Texas 76102

Facsimile: 817-984-8217

 

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Attention: Robert C. Reeves

 

with copies to:

 

c/o Apollo Management, L.P.

9 West 57th Street, 43rd Floor

New York, NY 10019

Attention:  Sam Oh and Chief Legal Officer

Fax:  646-417-6651

 

and

 

Latham & Watkins LLP

811 Main Street, Suite 3700

Houston, TX 77025

Attention:  Sean Wheeler

Fax:  (713) 546-5400

 

if to the Trustee:

 

Wells Fargo Bank, National Association

750 N. St. Paul Place, Suite 1750

MAC T9263-170

Dallas, TX 75201

Attention:  Corporate Trust, Municipal and Escrow Services

Fax:  (214) 756-7401

 

The Issuers or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

 

(b)                                 Any notice or communication mailed to a holder shall be mailed, first class mail, to the holder at the holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

 

(c)                                  Failure to mail a notice or communication to a holder or any defect in it shall not affect its sufficiency with respect to other holders.  If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received.

 

The Trustee may, in its sole discretion, agree to accept and act upon instructions or directions pursuant to this Indenture sent by e-mail, facsimile transmission or other similar electronic methods.  If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from 

 

112

 

the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

 

Notwithstanding anything to the contrary contained herein, as long as the Notes are in the form of a Global Note, notice to the holders shall be made electronically in accordance with procedures of the Depositary and shall be sufficiently given if so made in accordance with such procedures.

 

SECTION 14.03       Communication by the Holders with Other Holders.  The holders may communicate pursuant to Section 312(b) of the TIA with other holders with respect to their rights under this Indenture or the Notes.  The Issuers, the Trustee, the Registrar and other Persons shall have the protection of Section 312(c) of the TIA.

 

SECTION 14.04       Certificate and Opinion as to Conditions Precedent.  Upon any request or application by the Issuers to the Trustee to take or refrain from taking any action under this Indenture, the Issuers shall furnish to the Trustee at the request of the Trustee:

 

(a)                                 an Officers’ Certificate in form reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(b)                                 an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

 

SECTION 14.05       Statements Required in Certificate or Opinion.  Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include:

 

(a)                                 a statement that the individual making such certificate or opinion has read such covenant or condition;

 

(b)                                 a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(c)                                  a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(d)                                 a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or certificates of public officials.

 

113

 

SECTION 14.06       When Notes Disregarded.  In determining whether the holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuers, the Subsidiary Guarantors or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuers or the Subsidiary Guarantors shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the Trustee actually knows are so owned shall be so disregarded.  Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.

 

SECTION 14.07       Rules by Trustee, Paying Agent and Registrar.  The Trustee may make reasonable rules for action by or a meeting of the holders.  The Registrar and a Paying Agent may make reasonable rules for their functions.

 

SECTION 14.08       Legal Holidays.  If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period.  If a regular Record Date is not a Business Day, the Record Date shall not be affected.

 

SECTION 14.09       GOVERNING LAW.  THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

SECTION 14.10       No Recourse Against Others.  No director, officer, employee, manager, incorporator or holder of any Equity Interests in Holdings or of any Subsidiary Guarantor or any direct or indirect parent companies, as such, shall have any liability for any obligations of the Issuers or any Subsidiary Guarantor under the Notes, the Subsidiary Guarantees or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each holder of Notes by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for issuance of the Notes.

 

SECTION 14.11       Successors.  All agreements of the Issuers and the Subsidiary Guarantors in this Indenture and the Notes shall bind such person’s successors.  All agreements of the Trustee in this Indenture shall bind its successors.

 

SECTION 14.12       Multiple Originals.  The parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this Indenture.

 

SECTION 14.13       Table of Contents; Headings.  The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

 

114

 

SECTION 14.14       Indenture Controls.  If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of this Indenture, such provision of this Indenture shall control.

 

SECTION 14.15       Severability.  In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

 

SECTION 14.16       Waiver of Jury Trial.  EACH OF THE ISSUERS, THE SUBSIDIARY GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

 

[Remainder of page intentionally left blank.]

 

115

 

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

 

	
 
    	
ATHLON HOLDINGS LP
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William B. D. Butler
    
	
 
    	
Name:
    	
William B. D. Butler
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
ATHLON FINANCE CORP.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William B. D. Butler
    
	
 
    	
Name:
    	
William B. D. Butler
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
ATHLON ENERGY LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William B. D. Butler
    
	
 
    	
Name:
    	
William B. D. Butler
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
ATHLON ENERGY LP
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William B. D. Butler
    
	
 
    	
Name:
    	
William B. D. Butler
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    

 

[Signature Page to Indenture]

 

 

	
 
    	
ATHLON FE ENERGY LP
    
	
 
    	
 
    
	
 
    	
By:   Athlon Energy LLC, its general partner
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William B. D. Butler
    
	
 
    	
Name:
    	
William B. D. Butler
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
ATHLON ENERGY OPERATING LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William B. D. Butler
    
	
 
    	
Name:
    	
William B. D. Butler
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
ATHLON FE OPERATING LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William B. D. Butler
    
	
 
    	
Name:
    	
William B. D. Butler
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
				

 

[Signature Page to Indenture]

 

 

	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ John C. Stohlmann
    
	
 
    	
 
    	
Name:
    	
John C. Stohlmann
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to Indenture]

 

 

APPENDIX A

 

PROVISIONS RELATING TO INITIAL NOTES, ADDITIONAL NOTES
 AND EXCHANGE NOTES

 

1.                                      Definitions.

 

1.1                               Definitions.

 

For the purposes of this Appendix A the following terms shall have the meanings indicated below:

 

“Additional Interest” has the meaning set forth in the Registration Rights Agreement.

 

“Definitive Note” means a certificated Initial Note, Additional Note or Exchange Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not include the Global Notes Legend.

 

“Depositary” means The Depository Trust Company, its nominees and their respective successors.

 

“Global Notes Legend” means the legend set forth under that caption in the applicable Exhibit to this Indenture.

 

“IAI” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

“Initial Purchasers” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC, Credit Agricole Securities (USA) Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets, LLC, UBS Securities LLC, Apollo Global Securities, LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Mitsubishi UFJ Securities (USA), Inc. and Scotia Capital (USA) Inc.

 

“Notes Custodian” means the custodian with respect to a Global Note (as appointed by the Depositary) or any successor person thereto, who shall initially be the Trustee.

 

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

“Registered Exchange Offer” means the offer by the Issuers, pursuant to the Registration Rights Agreement, to certain holders of Initial Notes, to issue and deliver to such holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act.

 

“Regulation S” means Regulation S under the Securities Act.

 

“Regulation S Notes” means all Initial Notes offered and sold outside the United States in reliance on Regulation S.

 

Appendix A-1

 

“Restricted Notes Legend” means the legend set forth in Section 2.2(f)(i) herein.

 

“Restricted Period,” with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Notes are first offered to persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Issuers to the Trustee, and (b) the Issue Date, and with respect to any Additional Notes that are Transfer Restricted Notes, it means the comparable period of 40 consecutive days.

 

“Rule 501” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

“Rule 144A” means Rule 144A under the Securities Act.

 

“Rule 144A Notes” means all Initial Notes offered and sold to QIBs in reliance on Rule 144A.

 

“Shelf Registration Statement” means the registration statement filed by the Issuers in connection with the offer and sale of Initial Notes pursuant to the Registration Rights Agreement.

 

“Transfer Restricted Definitive Notes” means Definitive Notes that bear or are required to bear or are subject to the Restricted Notes Legend.

 

“Transfer Restricted Global Notes” means Global Notes that bear or are required to bear or are subject to the Restricted Notes Legend.

 

“Transfer Restricted Notes” means the Transfer Restricted Definitive Notes and Transfer Restricted Global Notes.

 

“Unrestricted Definitive Notes” means Definitive Notes that are not required to bear, or are not subject to, the Restricted Notes Legend.

 

“Unrestricted Global Notes” means Global Notes that are not required to bear, or are not subject to, the Restricted Notes Legend.

 

1.2                               Other Definitions.

 

	
Term:
    	
 
    	
Defined in Section:
    
	
Agent Members
    	
 
    	
2.1(b)
    
	
Global Notes
    	
 
    	
2.1(b)
    
	
Regulation S Global Notes
    	
 
    	
2.1(b)
    
	
Rule 144A Global Notes
    	
 
    	
2.1(b)
    

 

Appendix A-2

 

2.                                      The Notes.

 

2.1                               Form and Dating; Global Notes.

 

(a)                                 The Initial Notes issued on the date hereof will be (i) privately placed by the Issuers pursuant to the Offering Memorandum and (ii) sold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S.  Such Initial Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and, except as set forth below, IAIs in accordance with Rule 501.  Additional Notes offered after the date hereof may be offered and sold by the Issuers from time to time pursuant to one or more agreements in accordance with applicable law.

 

(b)                                 Global Notes.  (i)  Except as provided in clause (d) below, Rule 144A Notes initially shall be represented by one or more Notes in definitive, fully registered, global form without interest coupons (collectively, the “Rule 144A Global Notes”).

 

Regulation S Notes initially shall be represented by one or more Notes in fully registered, global form without interest coupons (collectively, the “Regulation S Global Notes”), which shall be registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream.

 

The term “Global Notes” means the Rule 144A Global Notes and the Regulation S Global Notes.  The Global Notes shall bear the Global Note Legend.  The Global Notes initially shall (i) be registered in the name of the Depositary or the nominee of such Depositary, in each case for credit to an account of an Agent Member, (ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear the Restricted Notes Legend.

 

Members of, or direct or indirect participants in, the Depositary (collectively, the “Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, or the Trustee as its custodian, or under the Global Notes.  The Depositary may be treated by the Issuers, the Trustee and any agent of the Issuers or the Trustee as the absolute owner of the Global Notes for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary, or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any Note.

 

(ii)                                  Transfers of Global Notes shall be limited to transfer in whole, but not in part, to the Depositary, its successors or their respective nominees.  Interests of beneficial owners in the Global Notes may be transferred or exchanged for Definitive Notes only in accordance with the applicable rules and procedures of the Depositary and the provisions of Section 2.2.  In addition, a Global Note shall be exchangeable for Definitive Notes if (x) the Depositary (1) notifies the Issuers that it is unwilling or unable to continue as depositary for such Global Note and the Issuers thereupon fail to appoint a successor Depositary or (2) has ceased to be a clearing agency registered under the Exchange Act or (y) there shall have occurred and be continuing an Event of Default with respect to such Global Note and a request has been made for such exchange; provided that in no

 

Appendix A-3

 

event shall the Regulation S Global Note be exchanged by the Issuers for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act.  In all cases, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary in accordance with its customary procedures.

 

(iii)                               In connection with the transfer of a Global Note as an entirety to beneficial owners pursuant to subsection (i) of this Section 2.1(b), such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuers shall execute, and, upon written order of each Issuer signed by an Officer, the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by the Depositary in writing in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations.

 

(iv)                              Any Transfer Restricted Note delivered in exchange for an interest in a Global Note pursuant to Section 2.2 shall, except as otherwise provided in Section 2.2, bear the Restricted Notes Legend.

 

(v)                                 Notwithstanding the foregoing, through the Restricted Period, a beneficial interest in a Regulation S Global Note may be held only through Euroclear or Clearstream unless delivery is made in accordance with the applicable provisions of Section 2.2.

 

(vi)                              The holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Indenture or the Notes.

 

2.2                               Transfer and Exchange.

 

(a)                                 Transfer and Exchange of Global Notes.  A Global Note may not be transferred as a whole except as set forth in Section 2.1(b).  Global Notes will not be exchanged by the Issuers for Definitive Notes except under the circumstances described in Section 2.1(b)(ii).  Global Notes also may be exchanged or replaced, in whole or in part, as provided in Section 2.08 of this Indenture.  Beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.2(b).

 

(b)                                 Transfer and Exchange of Beneficial Interests in Global Notes.  The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the applicable rules and procedures of the Depositary.  Beneficial interests in Transfer Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act.  Beneficial interests in Global Notes shall be transferred or exchanged only for beneficial interests in Global Notes.  Transfers and exchanges of beneficial interests in the

 

Appendix A-4

 

Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

 

(i)                                     Transfer of Beneficial Interests in the Same Global Note.  Beneficial interests in any Transfer Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Transfer Restricted Global Note in accordance with the transfer restrictions set forth in the Restricted Notes Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in a Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person.  A beneficial interest in an Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note.  No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.2(b)(i).

 

(ii)                                  All Other Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and exchanges of beneficial interests in any Global Note that is not subject to Section 2.2(b)(i), the transferor of such beneficial interest must deliver to the Registrar (1) a written order from an Agent Member given to the Depositary in accordance with the applicable rules and procedures of the Depositary directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the applicable rules and procedures of the Depositary containing information regarding the Agent Member account to be credited with such increase.  Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note pursuant to Section 2.2(i).

 

(iii)                               Transfer of Beneficial Interests to Another Restricted Global Note.  A beneficial interest in a Transfer Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Transfer Restricted Global Note if the transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:

 

(A)                               if the transferee will take delivery in the form of a beneficial interest in a Rule 144A Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note; and

 

(B)                               if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note.

 

(iv)                              Transfer and Exchange of Beneficial Interests in a Transfer Restricted Global Note for Beneficial Interests in an Unrestricted Global Note.  A beneficial interest in a Transfer Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes

 

Appendix A-5

 

delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:

 

(A)                               if the holder of such beneficial interest in a Transfer Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note; or

 

(B)                               if the holder of such beneficial interest in a Transfer Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note,

 

and, in each such case, if the Issuers or the Registrar so request or if the applicable rules and procedures of the Depositary so require, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.  If any such transfer or exchange is effected pursuant to this subparagraph (iv) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an written order of Holdings in the form of an Officers’ Certificate in accordance with Section 2.01, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred or exchanged pursuant to this subparagraph (iv).

 

(v)                                 Transfer and Exchange of Beneficial Interests in an Unrestricted Global Note for Beneficial Interests in a Transfer Restricted Global Note.  Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Note.

 

(c)                                  Transfer and Exchange of Beneficial Interests in Global Notes for Definitive Notes.  A beneficial interest in a Global Note may not be exchanged for a Definitive Note except under the circumstances described in Section 2.1(b)(ii).  A beneficial interest in a Global Note may not be transferred to a Person who takes delivery thereof in the form of a Definitive Note except under the circumstances described in Section 2.1(b)(ii).  In any case, beneficial interests in Global Notes shall be transferred or exchanged only for Definitive Notes.

 

(d)                                 Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes.  Transfers and exchanges of Definitive Notes for beneficial interests in the Global Notes also shall require compliance with either subparagraph (i), (ii) or (iii) below, as applicable:

 

(i)                                     Transfer Restricted Definitive Notes to Beneficial Interests in Transfer Restricted Global Notes.  If any holder of a Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for a beneficial interest in a Transfer Restricted Global Note or to transfer such Transfer Restricted Definitive Note to

 

Appendix A-6

 

a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

 

(A)                               if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Note for a beneficial interest in a Transfer Restricted Global Note, a certificate from such holder in the form attached to the applicable Note;

 

(B)                               if such Transfer Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate from such holder in the form attached to the applicable Note;

 

(C)                               if such Transfer Restricted Definitive Note is being transferred to a Non U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate from such holder in the form attached to the applicable Note;

 

(D)                               if such Transfer Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate from such holder in the form attached to the applicable Note;

 

(E)                                if such Transfer Restricted Definitive Note is being transferred to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate from such holder in the form attached to the applicable Note, including the certifications, certificates and Opinion of Counsel, if applicable; or

 

(F)                                 if such Transfer Restricted Definitive Note is being transferred to Holdings or a Subsidiary thereof, a certificate from such holder in the form attached to the applicable Note;

 

the Trustee shall cancel the Transfer Restricted Definitive Note, and increase or cause to be increased the aggregate principal amount of the appropriate Transfer Restricted Global Note.

 

(ii)                                  Transfer Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A holder of a Transfer Restricted Definitive Note may exchange such Transfer Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note or transfer such Transfer Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:

 

(A)                               if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note; or

 

Appendix A-7

 

(B)                               if the holder of such Transfer Restricted Definitive Notes proposes to transfer such Transfer Restricted Definitive Note to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note,

 

and, in each such case, if the Issuers or the Registrar so request or if the applicable rules and procedures of the Depositary so require, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.  Upon satisfaction of the conditions of this subparagraph (ii), the Trustee shall cancel the Transfer Restricted Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.  If any such transfer or exchange is effected pursuant to this subparagraph (ii) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an written order of Holdings in the form of an Officers’ Certificate, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of Transfer Restricted Notes transferred or exchanged pursuant to this subparagraph (ii).

 

(iii)                               Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A holder of an Unrestricted Definitive Note may exchange such Unrestricted Definitive Note for a beneficial interest in an Unrestricted Global Note or transfer such Unrestricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time.  Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.  If any such transfer or exchange is effected pursuant to this subparagraph (iii) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an written order of Holdings in the form of an Officers’ Certificate, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of Unrestricted Definitive Notes transferred or exchanged pursuant to this subparagraph (iii).

 

(iv)                              Unrestricted Definitive Notes to Beneficial Interests in Transfer Restricted Global Notes.  An Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Note.

 

(e)                                  Transfer and Exchange of Definitive Notes for Definitive Notes.  Upon request by a holder of Definitive Notes and such holder’s compliance with the provisions of this Section 2.2(e), the Registrar shall register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or exchange, the requesting holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such holder or by its attorney, duly authorized in writing.  In addition, the requesting holder shall provide any additional

 

Appendix A-8

 

certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.2(e).

 

(i)                                     Transfer Restricted Definitive Notes to Transfer Restricted Definitive Notes.  A Transfer Restricted Note may be transferred to and registered in the name of a Person who takes delivery thereof in the form of a Transfer Restricted Definitive Note if the Registrar receives the following:

 

(A)                               if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Note;

 

(B)                               if the transfer will be made pursuant to Rule 903 or Rule 904 under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Note;

 

(C)                               if the transfer will be made pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate in the form attached to the applicable Note;

 

(D)                               if the transfer will be made to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (A) through (D) above, a certificate in the form attached to the applicable Note; and

 

(E)                                if such transfer will be made to Holdings or a Subsidiary thereof, a certificate in the form attached to the applicable Note.

 

(ii)                                  Transfer Restricted Definitive Notes to Unrestricted Definitive Notes.  Any Transfer Restricted Definitive Note may be exchanged by the holder thereof for an Unrestricted Definitive Note or transferred to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:

 

(A)                               if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for an Unrestricted Definitive Note, a certificate from such holder in the form attached to the applicable Note; or

 

(B)                               if the holder of such Transfer Restricted Definitive Note proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form attached to the applicable Note,

 

and, in each such case, if the Issuers or the Registrar so request, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.

 

Appendix A-9

 

(iii)                               Unrestricted Definitive Notes to Unrestricted Definitive Notes.  A holder of an Unrestricted Definitive Note may transfer such Unrestricted Definitive Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note at any time.  Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the holder thereof.

 

(iv)                              Unrestricted Definitive Notes to Transfer Restricted Definitive Notes.  An Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a Transfer Restricted Definitive Note.

 

At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

(f)                                   Legend.

 

(i)                                     Except as permitted by the following paragraph (iii), (iv) or (v), each Note certificate evidencing the Global Notes and any Definitive Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ (AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT) (B) IT IS A NON-U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF

 

Appendix A-10

 

REGULATION S PROMULGATED UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO IT IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, OR (C) IT IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144 PROMULGATED UNDER THE SECURITIES ACT ONLY (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO IT IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF REGULATION D THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S, OR REGISTRAR’S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C), (D) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER

 

Appendix A-11

 

SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR REGISTRAR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144.”

 

Each Transfer Restricted Note offered in reliance on Regulation S shall bear the folowing additional legend:

 

BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.

 

Each Temporary Global Note offered in reliance on Regulation S shall bear the folowing additional legend during the Restricted Period:

 

THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR A REGULATION S PERMANENT GLOBAL NOTE, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.

 

Each Definitive Note shall bear the following additional legend:

 

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

 

(ii)                                  Upon any sale or transfer of a Transfer Restricted Definitive Note, the Registrar shall permit the holder thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Definitive Note if the holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Note).

 

(iii)                               Upon a sale or transfer after the expiration of the Restricted Period of any Initial Note acquired pursuant to Regulation S, all requirements that such Initial Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Initial Note be issued in global form shall continue to apply.

 

Appendix A-12

 

(iv)                              After a transfer of any Initial Notes during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes, all requirements pertaining to the Restricted Notes Legend on any such Initial Note will cease to apply, the requirements requiring that any such Initial Note issued to certain holders be issued in global form will continue to apply, and an Initial Note or an Initial Note in global form, in each case without restrictive transfer legends, will be available to the transferee of the holder of such Initial Notes upon exchange of such transferring holder’s certificated Initial Note or directions to transfer such holder’s interest in the Global Note, as applicable.

 

(v)                                 Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes pursuant to which holders of such Initial Notes are offered Exchange Notes in exchange for their Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain holders be issued in global form will still apply with respect to holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form, in each case without the Restricted Notes Legend, will be available to holders that exchange such Initial Notes in such Registered Exchange Offer.

 

(vi)                              Any Additional Notes sold in a registered offering shall not be required to bear the Restricted Notes Legend.

 

(g)                                  Cancellation or Adjustment of Global Note.  At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.10 of this Indenture.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

(h)                                 Obligations with Respect to Transfers and Exchanges of Notes.

 

(i)                                     To permit registrations of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrar’s request.

 

(ii)                                  No service charge shall be made for any registration of transfer or exchange, but the Issuers may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other

 

Appendix A-13

 

than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this Indenture).

 

(iii)                               Prior to the due presentation for registration of transfer of any Note, the Issuers, the Trustee, a Paying Agent or the Registrar may deem and treat the person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuers, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

 

(iv)                              All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

 

(i)                                     No Obligation of the Trustee.

 

(i)                                     The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes.  All notices and communications to be given to the holders and all payments to be made to the holders under the Notes shall be given or made only to the registered holders (which shall be the Depositary or its nominee in the case of a Global Note).  The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary.  The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

 

(ii)                                  The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

Appendix A-14

 

EXHIBIT A

 

[FORM OF FACE OF INITIAL NOTE]

 

[Global Notes Legend]

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

[Restricted Notes Legend for Notes Offered in Reliance on Regulation S]

 

BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.

 

[Restricted Notes Legend for Temporary Global Notes Offered in Reliance on Regulation S]

 

THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR A REGULATION S PERMANENT GLOBAL NOTE, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.

 

[Restricted Notes Legend]

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR

 

Exhibit A-1

 

UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ (AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT) (B) IT IS A NON-U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO IT IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, OR (C) IT IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144 PROMULGATED UNDER THE SECURITIES ACT ONLY (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO IT IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF REGULATION D THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S, OR REGISTRAR’S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C), (D) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR REGISTRAR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144.

 

[Definitive Notes Legend]

 

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO

 

A-2

 

CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

 

A-3

 

[FORM OF INITIAL NOTE]

 

ATHLON HOLDINGS LP
 ATHLON FINANCE CORP.

 

	
No. [     ]
    	
144A CUSIP No. 047478 AA0
    
	
 
    	
 
    
	
 
    	
144A ISIN No. US047478AA02
    
	
 
    	
 
    
	
 
    	
REG S CUSIP No. U04793 AA0
    
	
 
    	
 
    
	
 
    	
REG S ISIN No. USU04793AA04
    
	
 
    	
 
    
	
 
    	
$[     ]
    

 

73/8% Senior Note due 2021

 

ATHLON HOLDINGS LP, a Delaware limited partnership, and ATHLON FINANCE CORP., a Delaware corporation, jointly and severally, promise to pay to Cede & Co., or registered assigns, the principal sum set forth on the Schedule of Increases or Decreases in Global Note attached hereto on April 15, 2021.

 

Interest Payment Dates:  April 15 and October 15, commencing October 15, 2013

 

Record Dates: April 1 and October 1

 

Additional provisions of this Note are set forth on the other side of this Note.

 

A-4

 

IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.

 

	
 
    	
ATHLON HOLDINGS LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ATHLON FINANCE CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

Dated:

 

A-5

 

TRUSTEE’S CERTIFICATE OF
 AUTHENTICATION

 

WELLS FARGO BANK, NATIONAL ASSOCIATION
 as Trustee, certifies that this is
 one of the Notes 
 referred to in the Indenture.

 

	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    
	
 
    	
 
    	
 
    

Dated:

 

*/                                     If the Note is to be issued in global form, add the Global Notes Legend and the attachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL NOTES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE.”

 

A-6

 

[FORM OF REVERSE SIDE OF INITIAL NOTE]

 

73/8% Senior Note Due 2021

 

1.                                      Interest

 

ATHLON HOLDINGS LP, a Delaware limited partnership (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called “Holdings”), and ATHLON FINANCE CORP., a Delaware corporation (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Co-Issuer” and, together with Holdings, the “Issuers”), jointly and severally, promise to pay interest on the principal amount of this Note at the rate per annum shown above.  The Issuers shall pay interest semiannually on April 15 and October 15 of each year (each an “Interest Payment Date”), commencing October 15, 2013.  Interest on the Notes shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from April 17, 2013, until the principal hereof is due.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.  The Issuers shall pay interest on overdue principal at the rate borne by the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

 

2.                                      Method of Payment

 

The Issuers shall pay interest on the Notes (except defaulted interest) to the Persons who are registered holders at the close of business on April 1 and October 1 (each a “Record Date”) immediately preceding the Interest Payment Date even if Notes are canceled after the Record Date and on or before the Interest Payment Date (whether or not a Business Day).  Holders must surrender Notes to the Paying Agent to collect principal payments.  The Issuers shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.  Payments in respect of the Notes represented by a Global Note (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company (“DTC”) or any successor depositary.  The Issuers shall make all payments in respect of a certificated Note (including principal, premium, if any, and interest) at the office of the Paying Agent, except that, at the option of the Issuers, payment of interest may be made by mailing a check to the registered address of each holder thereof; provided, however, that payments on the Notes may also be made, in the case of a holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such holder elects payment by wire transfer by giving written notice to the Trustee or Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

 

3.                                      Paying Agent and Registrar

 

Initially, Wells Fargo Bank, National Association, as trustee under the Indenture (the “Trustee”), will act as Paying Agent and Registrar.  The Issuers may appoint and change any 

 

A-7

 

Paying Agent or Registrar without notice.  The Issuers or any of their domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

 

4.                                      Indenture

 

The Issuers issued the Notes under an Indenture dated as of April 17, 2013 (the “Indenture”), among the Issuers, the Subsidiary Guarantors and the Trustee.  Capitalized terms used herein are used as defined in the Indenture, unless otherwise indicated.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  The Notes are subject to all terms and provisions of the Indenture, and the holders (as defined in the Indenture) are referred to the Indenture for a statement of such terms and provisions. If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall control.

 

The Notes are senior unsecured obligations of the Issuers.  This Note is one of the Initial Notes referred to in the Indenture.  The Notes include the Initial Notes and any Additional Notes.  The Initial Notes and any Additional Notes are treated as a single class of securities under the Indenture.  The Indenture imposes certain limitations on the ability of Holdings and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, Incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of capital stock of Holdings and such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or Incur Liens and make Asset Sales.  The Indenture also imposes limitations on the ability of each Issuer and each Subsidiary Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property.

 

To guarantee the due and punctual payment of the principal and interest on the Notes and all other amounts payable by the Issuers under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, the Subsidiary Guarantors have unconditionally guaranteed the Subsidiary Guaranteed Obligations pursuant to the terms of the Indenture and any Subsidiary Guarantor that executes a Subsidiary Guarantee will unconditionally guarantee the Subsidiary Guaranteed Obligations, which such Subsidiary Guarantees shall be on a senior unsecured basis from the Issue Date, pursuant to the terms of the Indenture.

 

5.                                      Redemption

 

On or after April 15, 2016 the Issuers may redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest 

 

A-8

 

Payment Date), if redeemed during the 12-month period commencing on April 15 of the years set forth below:

 

	
Period
    	
 
    	
Redemption Price
    	
 
    
	
2016 
    	
 
    	
105.531
    	
%
    
	
2017 
    	
 
    	
103.688
    	
%
    
	
2018 
    	
 
    	
101.844
    	
%
    
	
2019 and   thereafter 
    	
 
    	
100.000
    	
%
    

 

In addition, prior to April 15, 2016, the Issuers may redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, but excluding, the applicable redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

 

Notwithstanding the foregoing, at any time and from time to time on or prior to April 15, 2016, the Issuers may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with an amount equal to the net cash proceeds of one or more Equity Offerings (1) by Holdings or (2) by any direct or indirect parent of Holdings to the extent the net cash proceeds thereof are contributed to the common equity capital of Holdings or are used to purchase Capital Stock (other than Disqualified Stock) of Holdings, at a redemption price (expressed as a percentage of principal amount thereof) of 107.375%, plus accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that at least 50% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) must remain outstanding after each such redemption; provided, further, that such redemption shall occur within 180 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed to each holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

 

If a Change of Control occurs at any time on or prior to July 15, 2014, the Issuers may, at their option, redeem all, but not less than all, of the Notes, at a redemption price equal to 110.0% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the rights of holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date). If the Issuers elect to exercise this redemption right, they must do so by mailing a redemption notice to each holder with a copy to the Trustee within 60 days following the Change of Control (or, at the Issuers’ option, prior to such Change of Control but after the transaction giving rise to such Change of Control is publicly announced).  Any such redemption may be conditioned upon the Change of Control occurring if the notice is mailed prior to the Change of Control. If the Issuers exercise 

 

A-9

 

this Change of Control redemption right, they may elect not to make the Change of Control Offer described under Section 4.08 unless they default in payments due upon redemption.

 

6.                                      Mandatory Redemption

 

The Issuers will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

 

7.                                      Notice of Redemption

 

Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date, to each holder of Notes to be redeemed at its registered address (with a copy to the Trustee) or otherwise in accordance with the procedures of DTC, except that redemption notices may be mailed more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture pursuant to Article VIII thereof.  If money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date, interest ceases to accrue on such Notes (or such portions thereof) called for redemption.

 

8.                                      Repurchase of Notes at the Option of the Holders upon Change of Control and Asset Sales

 

Upon the occurrence of a Change of Control Triggering Event, each holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuers to repurchase all or any part of such holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture.

 

In accordance with Section 4.06 of the Indenture, the Issuers will be required to offer to purchase Notes upon the occurrence of certain events.

 

9.                                      [Intentionally Omitted]

 

10.                               Denominations; Transfer; Exchange

 

The Notes are in registered form, without coupons, in denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof.  A holder shall register the transfer of or exchange of the Notes in accordance with the Indenture.  Upon any registration of transfer or exchange, the Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture.  The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or to transfer or exchange any Notes for a period of 15 days prior to a selection of Notes to be redeemed.

 

A-10

 

11.                               Persons Deemed Owners

 

The registered holder of this Note shall be treated as the owner of it for all purposes.

 

12.                               Unclaimed Money

 

If money for the payment of principal or interest remains unclaimed for two years, the Trustee and a Paying Agent shall pay the money back to the Issuers at their written request unless an abandoned property law designates another Person.  After any such payment, the holders entitled to the money must look to the Issuers for payment as general creditors and the Trustee and a Paying Agent shall have no further liability with respect to such monies.

 

13.                               Discharge and Defeasance

 

Subject to certain conditions, the Issuers at any time may terminate some of or all their obligations under the Notes and the Indenture if the Issuers deposit with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.

 

14.                               Amendment; Waiver

 

Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Notes may be amended with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding Notes and (ii) any past default or compliance with any provisions may be waived with the written consent of the holders of at least a majority in principal amount of the outstanding Notes.  Subject to certain exceptions set forth in the Indenture, without the consent of any holder, the Issuers and the Trustee may amend the Indenture, the Notes or the Subsidiary Guarantees (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to provide for the assumption by a Successor (with respect to an Issuer) of the obligations of an Issuer under the Indenture and the Notes; (iii) to provide for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under the Indenture and its Subsidiary Guarantee; (iv) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code; (v) to conform the text of the Indenture, the Notes or the Subsidiary Guarantees to any provision of the “Description of Notes” in the Offering Memorandum to the extent that such provision in this Indenture, the Notes or the Subsidiary Guarantees was intended by the Issuers to be verbatim recitation of a provision in the “Description of Notes” in the Offering Memorandum; (vi) to add a guarantee or obligor with respect to the Notes; (vii) to release a Subsidiary Guarantee as permitted by the Indenture; (viii) to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers; (ix) to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of the Indenture under the TIA; (x) to make any change that does not adversely affect the rights of any holder; or (xi) to make certain changes to the Indenture to provide for the issuance of Additional Notes.

 

A-11

 

15.                               Defaults and Remedies

 

If an Event of Default (other than a Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer) occurs and is continuing, the Trustee or the holders of at least 30% in principal amount of outstanding Notes by notice to the Issuers may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuers occurs, the principal of, premium, if any, and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.

 

If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders unless such holders have offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense and certain other conditions are complied with.  No holder may pursue any remedy with respect to the Indenture unless (i) such holder has previously given the Trustee notice that an Event of Default is continuing, (ii) holders of at least 30% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy, (iii) such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and (v) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification reasonably satisfactory to it against all losses and expenses caused by taking or not taking such action.

 

16.                               Trustee Dealings with the Issuers

 

Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuers or their Affiliates and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee.

 

17.                               No Recourse Against Others

 

No director, officer, employee, manager, incorporator or holder of any Equity Interests in an Issuer or any Subsidiary Guarantor or any direct or indirect parent companies, as

 

A-12

 

such, will have any liability for any obligations of an Issuer or any Subsidiary Guarantor under the Notes, the Indenture or the Subsidiary Guarantees, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each holder of Notes by accepting a Note waives and releases all such liability.

 

18.                               Authentication

 

This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.

 

19.                               Abbreviations

 

Customary abbreviations may be used in the name of a holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

 

20.                               Holders Compliance with Registration Rights Agreement

 

Each holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the holders with respect to a registration and the indemnification of the Issuers to the extent provided therein.

 

21.                               Governing Law

 

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

22.                               CUSIP Numbers; ISINs

 

The Issuers have caused CUSIP numbers and ISINs to be printed on the Notes and have directed the Trustee to use CUSIP numbers and ISINs in notices of redemption as a convenience to the holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

The Issuers will furnish to any holder of Notes upon written request and without charge to the holder a copy of the Indenture which has in it the text of this Note.

 

A-13

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to:

	
 
    
	
 
    	
(Print or type assignee’s name, address and   zip code)
    
	
 
    
	
 
    
	
 
    	
(Insert assignee’s soc. sec. or tax I.D.   No.)
    

 

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

 

	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    
	
 
    

Sign exactly as your name appears on the other side of this Note.

 

Signature Guarantee:

 

	
Date:
    	
 
    	
 
    	
 
    
	
Signature must be guaranteed by a   participant in a recognized signature guaranty medallion program or other   signature guarantor program reasonably acceptable to the Trustee
    	
 
    	
Signature of Signature Guarantee
    

 

A-14

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

 

REGISTRATION OF TRANSFER RESTRICTED NOTES

 

This certificate relates to $                   principal amount of Notes held in (check applicable space)          book-entry or            definitive form by the undersigned.

 

The undersigned (check one box below):

 

o                                    has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above);

 

o                                    has requested the Trustee by written order to exchange or register the transfer of a Note or Notes.

 

In connection with any transfer of any of the Notes evidenced by this certificate occurring while this Note is still a Transfer Restricted Definitive Note or a Transfer Restricted Global Note, the undersigned confirms that such Notes are being transferred in accordance with its terms:

 

CHECK ONE BOX BELOW

 

	
(1)
    	
o
    	
to the Issuers; or
    
	
 
    	
 
    	
 
    
	
(2)
    	
o
    	
to the Registrar for registration in the   name of the holder, without transfer; or
    
	
 
    	
 
    	
 
    
	
(3)
    	
o
    	
pursuant to an effective registration   statement under the Securities Act of 1933; or
    
	
 
    	
 
    	
 
    
	
(4)
    	
o
    	
inside the United States to a “qualified   institutional buyer” (as defined in Rule 144A under the Securities   Act of 1933) that purchases for its own account or for the account of a   qualified institutional buyer to whom notice is given that such transfer is   being made in reliance on Rule 144A, in each case pursuant to and in   compliance with Rule 144A under the Securities Act of 1933; or
    
	
 
    	
 
    	
 
    
	
(5)
    	
o
    	
outside the United States in an offshore   transaction within the meaning of Regulation S under the Securities Act in   compliance with Rule 904 under the Securities Act of 1933 and such Note   shall be held immediately after the transfer through Euroclear or Clearstream   until the expiration of the Restricted Period (as defined in the Indenture);   or
    
	
 
    	
 
    	
 
    
	
(6)
    	
o
    	
to an institutional “accredited investor”   (as defined in Rule 501(a)(1), (2), (3) or (7) under the   Securities Act of 1933) that has furnished to the Trustee a signed letter   containing certain representations and agreements; or
    
	
 
    	
 
    	
 
    
	
(7)
    	
o
    	
pursuant to another available exemption from   registration provided by Rule 144 under the Securities Act of 1933.
    

 

A-15

 

Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered holder thereof; provided, however, that if box (5), (6) or (7) is checked, the Issuers or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuers or the Trustee have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

 

	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

Sign exactly as your name appears on the other side of this Note.

 

Signature Guarantee:

 

	
Date:
    	
 
    	
 
    	
 
    
	
Signature must be guaranteed by a   participant in a recognized signature guaranty medallion program or other   signature guarantor program reasonably acceptable to the Trustee
    	
 
    	
Signature of Signature Guarantee
    

 

A-16

 

TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

 

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
NOTICE: To be executed by an executive   officer
    

 

A-17

 

[TO BE ATTACHED TO GLOBAL NOTES]

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

 

The initial principal amount of this Global Note is $                            .  The following increases or decreases in this Global Note have been made:

 

	
Date of Exchange
    	
 
    	
Amount of decrease in
   Principal Amount of this
   Global Note
    	
 
    	
Amount of increase in
   Principal Amount of this
   Global Note
    	
 
    	
Principal amount of this
   Global Note following
   such decrease or
   increase
    	
 
    	
Signature of authorized
   signatory of Trustee or
   Notes Custodian
    	
 
    

 

 

A-18

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box:

 

	
Asset Saleo
    	
Change of Control o
    

 

If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, state the amount ($2,000 or any integral multiple of $1,000 in excess thereof):

 

$

 

	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
 
    	
(Sign exactly as your name appears on the
    
	
 
    	
 
    	
 
    	
other side of this Note)
    

 

	
Signature Guarantee:
    	
 
    
	
 
    	
Signature must be guaranteed by a   participant in a
    
	
 
    	
recognized signature guaranty medallion program
    
	
 
    	
or other signature guarantor program   reasonably
    
	
 
    	
acceptable to the Trustee
    

 

A-19

 

EXHIBIT B

 

[FORM OF FACE OF EXCHANGE NOTE*/]

 

*/ If the Note is to be issued in global form, add the Global Notes Legend from Exhibit A and the attachment from such Exhibit A captioned “[TO BE ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE.”

 

B-1

 

[FORM OF EXCHANGE NOTE]

 

ATHLON HOLDINGS LP
 ATHLON FINANCE CORP.

 

	
No. [     ]
    	
CUSIP No. [ · ]
    
	
 
    	
 
    
	
 
    	
ISIN No. [ · ]
    
	
 
    	
 
    
	
 
    	
$[     ]
    

 

73/8% Senior Note due 2021

 

ATHLON HOLDINGS LP, a Delaware limited partnership, and ATHLON FINANCE CORP., a Delaware corporation, jointly and severally, promise to pay to Cede & Co., or registered assigns, the principal sum set forth on the Schedule of Increases or Decreases in Global Note attached hereto on April 15, 2021.

 

Interest Payment Dates:  April 15 and October 15, commencing October 15, 2013

 

Record Dates: April 1 and October 1

 

Additional provisions of this Note are set forth on the other side of this Note.

 

B-2

 

IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.

 

	
 
    	
ATHLON HOLDINGS LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ATHLON FINANCE CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

Dated:

 

B-3

 

TRUSTEE’S CERTIFICATE OF
 AUTHENTICATION

 

WELLS FARGO BANK, NATIONAL ASSOCIATION
 as Trustee, certifies that this is
 one of the Notes 
 referred to in the Indenture.

 

	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    

 

Dated:

 

B-4

 

[FORM OF REVERSE SIDE OF EXCHANGE NOTE]

 

73/8% Senior Note Due 2021

 

1.                                      Interest

 

ATHLON HOLDINGS LP, a Delaware limited partnership (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called “Holdings”), and ATHLON FINANCE CORP., a Delaware corporation (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Co-Issuer” and, together with Holdings, the “Issuers”), jointly and severally, promise to pay interest on the principal amount of this Note at the rate per annum shown above.  The Issuers shall pay interest semiannually on April 15 and October 15 of each year (each an “Interest Payment Date”), commencing October 15, 2013.  Interest on the Notes shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from April 17, 2013, until the principal hereof is due.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.  The Issuers shall pay interest on overdue principal at the rate borne by the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

 

2.                                      Method of Payment

 

The Issuers shall pay interest on the Notes (except defaulted interest) to the Persons who are registered holders at the close of business on April 1 and October 1 (each a “Record Date”) immediately preceding the Interest Payment Date even if Notes are canceled after the Record Date and on or before the Interest Payment Date (whether or not a Business Day).  Holders must surrender Notes to the Paying Agent to collect principal payments.  The Issuers shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.  Payments in respect of the Notes represented by a Global Note (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company (“DTC”) or any successor depositary.  The Issuers shall make all payments in respect of a certificated Note (including principal, premium, if any, and interest) at the office of the Paying Agent, except that, at the option of the Issuers, payment of interest may be made by mailing a check to the registered address of each holder thereof; provided, however, that payments on the Notes may also be made, in the case of a holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such holder elects payment by wire transfer by giving written notice to the Trustee or Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

 

3.                                      Paying Agent and Registrar

 

Initially, Wells Fargo Bank, National Association, as trustee under the Indenture (the “Trustee”), will act as Paying Agent and Registrar.  The Issuers may appoint and change any 

 

B-5

 

Paying Agent or Registrar without notice.  The Issuers or any of their domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

 

4.                                      Indenture

 

The Issuers issued the Notes under an Indenture dated as of April 17, 2013 (the “Indenture”), among the Issuers, the Subsidiary Guarantors and the Trustee.  Capitalized terms used herein are used as defined in the Indenture, unless otherwise indicated.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  The Notes are subject to all terms and provisions of the Indenture, and the holders (as defined in the Indenture) are referred to the Indenture for a statement of such terms and provisions. If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall control.

 

The Notes are senior unsecured obligations of the Issuers.  This Note is one of the Initial Notes referred to in the Indenture.  The Notes include the Initial Notes and any Additional Notes.  The Initial Notes and any Additional Notes are treated as a single class of securities under the Indenture.  The Indenture imposes certain limitations on the ability of Holdings and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, Incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of capital stock of Holdings and such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or Incur Liens and make Asset Sales.  The Indenture also imposes limitations on the ability of each Issuer and each Subsidiary Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property.

 

To guarantee the due and punctual payment of the principal and interest on the Notes and all other amounts payable by the Issuers under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, the Subsidiary Guarantors have unconditionally guaranteed the Subsidiary Guaranteed Obligations pursuant to the terms of the Indenture and any Subsidiary Guarantor that executes a Subsidiary Guarantee will unconditionally guarantee the Subsidiary Guaranteed Obligations, which such Subsidiary Guarantees shall be on a senior unsecured basis from the Issue Date, pursuant to the terms of the Indenture.

 

5.                                      Redemption

 

On or after April 15, 2016 the Issuers may redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest 

 

B-6

 

Payment Date), if redeemed during the 12-month period commencing on April 15 of the years set forth below:

 

	
Period
    	
 
    	
Redemption Price
    	
 
    
	
2016
    	
 
    	
105.531
    	
%
    
	
2017
    	
 
    	
103.688
    	
%
    
	
2018
    	
 
    	
101.844
    	
%
    
	
2019 and   thereafter
    	
 
    	
100.000
    	
%
    

 

In addition, prior to April 15, 2016, the Issuers may redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, but excluding, the applicable redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

 

Notwithstanding the foregoing, at any time and from time to time on or prior to April 15, 2016, the Issuers may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with an amount equal to the net cash proceeds of one or more Equity Offerings (1) by Holdings or (2) by any direct or indirect parent of Holdings to the extent the net cash proceeds thereof are contributed to the common equity capital of Holdings or are used to purchase Capital Stock (other than Disqualified Stock) of Holdings, at a redemption price (expressed as a percentage of principal amount thereof) of 107.375%, plus accrued and unpaid interest and Additional Interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that at least 50% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) must remain outstanding after each such redemption; provided, further, that such redemption shall occur within 180 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed to each holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

 

If a Change of Control occurs at any time on or prior to July 15, 2014, the Issuers may, at their option, redeem all, but not less than all, of the Notes, at a redemption price equal to 110.0% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the rights of holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date). If the Issuers elect to exercise this redemption right, they must do so by mailing a redemption notice to each holder with a copy to the Trustee within 60 days following the Change of Control (or, at the Issuers’ option, prior to such Change of Control but after the transaction giving rise to such Change of Control is publicly announced).  Any such redemption may be conditioned upon the Change of Control occurring if the notice is mailed prior to the Change of Control. If the Issuers exercise 

 

B-7

 

this Change of Control redemption right, they may elect not to make the Change of Control Offer described under Section 4.08 unless they default in payments due upon redemption.

 

6.                                      Mandatory Redemption

 

The Issuers will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

 

7.                                      Notice of Redemption

 

Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date, to each holder of Notes to be redeemed at its registered address (with a copy to the Trustee) or otherwise in accordance with the procedures of DTC, except that redemption notices may be mailed more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture pursuant to Article VIII thereof.  If money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date, interest ceases to accrue on such Notes (or such portions thereof) called for redemption.

 

8.                                      Repurchase of Notes at the Option of the Holders upon Change of Control and Asset Sales

 

Upon the occurrence of a Change of Control Triggering Event, each holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuers to repurchase all or any part of such holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture.

 

In accordance with Section 4.06 of the Indenture, the Issuers will be required to offer to purchase Notes upon the occurrence of certain events.

 

9.                                      [Intentionally Omitted]

 

10.                               Denominations; Transfer; Exchange

 

The Notes are in registered form, without coupons, in denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof.  A holder shall register the transfer of or exchange of the Notes in accordance with the Indenture.  Upon any registration of transfer or exchange, the Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture.  The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or to transfer or exchange any Notes for a period of 15 days prior to a selection of Notes to be redeemed.

 

B-8

 

11.                               Persons Deemed Owners

 

The registered holder of this Note shall be treated as the owner of it for all purposes.

 

12.                               Unclaimed Money

 

If money for the payment of principal or interest remains unclaimed for two years, the Trustee and a Paying Agent shall pay the money back to the Issuers at their written request unless an abandoned property law designates another Person.  After any such payment, the holders entitled to the money must look to the Issuers for payment as general creditors and the Trustee and a Paying Agent shall have no further liability with respect to such monies.

 

13.                               Discharge and Defeasance

 

Subject to certain conditions, the Issuers at any time may terminate some of or all their obligations under the Notes and the Indenture if the Issuers deposit with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.

 

14.                               Amendment; Waiver

 

Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Notes may be amended with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding Notes and (ii) any past default or compliance with any provisions may be waived with the written consent of the holders of at least a majority in principal amount of the outstanding Notes.  Subject to certain exceptions set forth in the Indenture, without the consent of any holder, the Issuers and the Trustee may amend the Indenture, the Notes or the Subsidiary Guarantees (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to provide for the assumption by a Successor (with respect to an Issuer) of the obligations of an Issuer under the Indenture and the Notes; (iii) to provide for the assumption by a Successor Subsidiary Guarantor (with respect to any Subsidiary Guarantor), as the case may be, of the obligations of a Subsidiary Guarantor under the Indenture and its Subsidiary Guarantee; (iv) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code; (v) to conform the text of the Indenture, the Notes or the Subsidiary Guarantees to any provision of the “Description of Notes” in the Offering Memorandum to the extent that such provision in this Indenture, the Notes or the Subsidiary Guarantees was intended by the Issuers to be verbatim recitation of a provision in the “Description of Notes” in the Offering Memorandum; (vi) to add a guarantee or obligor with respect to the Notes; (vii) to release a Subsidiary Guarantee as permitted by the Indenture; (viii) to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers; (ix) to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of the Indenture under the TIA; (x) to make any change that does not adversely affect the rights of any holder; or (xi) to make certain changes to the Indenture to provide for the issuance of Additional Notes.

 

B-9

 

15.                               Defaults and Remedies

 

If an Event of Default (other than a Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer) occurs and is continuing, the Trustee or the holders of at least 30% in principal amount of outstanding Notes by notice to the Issuers may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuers occurs, the principal of, premium, if any, and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.

 

If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders unless such holders have offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense and certain other conditions are complied with.  No holder may pursue any remedy with respect to the Indenture unless (i) such holder has previously given the Trustee notice that an Event of Default is continuing, (ii) holders of at least 30% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy, (iii) such holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and (v) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification reasonably satisfactory to it against all losses and expenses caused by taking or not taking such action.

 

16.                               Trustee Dealings with the Issuers

 

Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuers or their Affiliates and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee.

 

17.                               No Recourse Against Others

 

No director, officer, employee, manager, incorporator or holder of any Equity Interests in an Issuer or any Subsidiary Guarantor or any direct or indirect parent companies, as 

 

B-10

 

such, will have any liability for any obligations of an Issuer or any Subsidiary Guarantor under the Notes, the Indenture or the Subsidiary Guarantees, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each holder of Notes by accepting a Note waives and releases all such liability.

 

18.                               Authentication

 

This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.

 

19.                               Abbreviations

 

Customary abbreviations may be used in the name of a holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

 

20.                               Governing Law

 

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

21.                               CUSIP Numbers; ISINs

 

The Issuers have caused CUSIP numbers and ISINs to be printed on the Notes and have directed the Trustee to use CUSIP numbers and ISINs in notices of redemption as a convenience to the holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

The Issuers will furnish to any holder of Notes upon written request and without charge to the holder a copy of the Indenture which has in it the text of this Note.

 

B-11

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to:

 

	
 
    

(Print or type assignee’s name, address and zip code)

 

	
 
    

(Insert assignee’s soc. sec. or tax I.D. No.)

 

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

 

	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    

 

	
 
    

Sign exactly as your name appears on the other side of this Note.

 

Signature Guarantee:

 

	
Date:
    	
 
    	
 
    	
 
    
	
Signature must be guaranteed by a   participant in a recognized signature guaranty medallion program or other   signature guarantor program reasonably acceptable to the Trustee
    	
 
    	
Signature of Signature Guarantee
    

 

B-12

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box:

 

Asset Saleo                                                                             Change of Control o

 

If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, state the amount ($2,000 or any integral multiple of $1,000 in excess thereof):

 

$

 

	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
 
    	
(Sign exactly as your name appears on the other   side of this Note)
    

 

	
Signature Guarantee:
    	
 
    	
 
    
	
 
    	
Signature must be guaranteed by a   participant in a recognized signature guaranty medallion program or other   signature guarantor program reasonably acceptable to the Trustee
    	
 
    

 

B-13

 

EXHIBIT C

 

[FORM OF TRANSFEREE LETTER OF REPRESENTATION]

 

TRANSFEREE LETTER OF REPRESENTATION

 

[ATHLON HOLDINGS LP]
 [ATHLON FINANCE CORP.]
 c/o Wells Fargo Bank, National Association
 Corporate Client Services
 [ · ]
 [ · ], [ · ] [ · ]

 

Ladies and Gentlemen:

 

This certificate is delivered to request a transfer of $[      ] principal amount of the 73/8% Senior Notes due 2021 (the “Notes”) of [ATHLON HOLDINGS LP] and [ATHLON FINANCE CORP.] (collectively with their successors and assigns, the “Issuers”).

 

Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

 

	
Name:
    	
 
    	
 
    
	
 
    	
 
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    
	
Taxpayer ID Number:
    	
 
    	
 
    
					

 

 

The undersigned represents and warrants to you that:

 

1.                                      We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”)), purchasing for our own account or for the account of such an institutional “accredited investor” at least $100,000 principal amount of the Notes, and we are acquiring the Notes not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act.  We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase securities similar to the Notes in the normal course of our business.  We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.

 

2.                                      We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence.  We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is two years after the later of the date of original issue and the last date on which either of the Issuers or any affiliate of such Issuers was the owner of such Notes (or any predecessor thereto) (the “Resale Restriction Termination Date”) only (a) in the United States to a person whom we reasonably believe is a qualified institutional buyer (as defined in rule 144A under the Securities Act) in a

 

C-1

 

transaction meeting the requirements of Rule 144A, (b) outside the United States in an offshore transaction in accordance with Rule 904 of Regulation S under the Securities Act, (c) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if applicable) or (d) pursuant to an effective registration statement under the Securities Act, in each of cases (a) through (d) in accordance with any applicable securities laws of any state of the United States.  In addition, we will, and each subsequent holder is required to, notify any purchaser of the Note evidenced hereby of the resale restrictions set forth above.  The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date.  If any resale or other transfer of the Notes is proposed to be made to an institutional “accredited investor” prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuers and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act.  Each purchaser acknowledges that the Issuers and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause 1(b), 1(c) or 1(d) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuers and the Trustee.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TRANSFEREE:                                         ,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    

 

C-2

 

EXHIBIT D

 

[FORM OF SUPPLEMENTAL INDENTURE]

 

SUPPLEMENTAL INDENTURE

 

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of [DATE], among [SUBSIDIARY GUARANTOR] (the “New Subsidiary Guarantor”), a subsidiary of ATHLON HOLDINGS LP (or its successor), a Delaware limited partnership (“Holdings”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee under the indenture referred to below (the “Trustee”).

 

W I T N E S S E T H :

 

WHEREAS Holdings, Athlon Finance Corp. (or its successor), a Delaware corporation (the “Co-Issuer” and, together with Holdings, the “Issuers”), certain Subsidiary Guarantors and the Trustee have heretofore executed an indenture, dated as of April 17, 2013 (as amended, supplemented or otherwise modified, the “Indenture”), providing for the issuance of the Issuers’ 73/8% Senior Notes due 2021 ( the “Notes”), initially in the aggregate principal amount of $500,000,000;

 

WHEREAS Sections 4.11 and 12.07 of the Indenture provide that under certain circumstances Holdings is required to cause the New Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Subsidiary Guarantor shall unconditionally guarantee all the Issuers’ Obligations under the Notes and the Indenture pursuant to a Subsidiary Guarantee on the terms and conditions set forth herein; and

 

WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee and the Issuers are authorized to execute and deliver this Supplemental Indenture;

 

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Subsidiary Guarantor, the Issuers and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows:

 

1.                                      Defined Terms.  As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “holders” in this Supplemental Indenture shall refer to the term “holders” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such holders.  The words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular Section hereof.

 

2.                                      Agreement to Guarantee.  The New Subsidiary Guarantor hereby agrees, jointly and severally with all existing Subsidiary Guarantors (if any), to unconditionally guarantee the Issuers’ Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article XII of the Indenture and to be bound by all other applicable

 

D-1

 

provisions of the Indenture and the Notes and to perform all of the obligations and agreements of a Subsidiary Guarantor under the Indenture.

 

3.                                      Notices.  All notices or other communications to the New Subsidiary Guarantor shall be given as provided in Section 14.02 of the Indenture.

 

4.                                      Ratification of Indenture; Supplemental Indentures Part of Indenture.  Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.  This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.

 

5.                                      Governing Law.  THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

6.                                      Trustee Makes No Representation.  The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.

 

7.                                      Counterparts.  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.

 

8.                                      Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction thereof.

 

[Remainder of page intentionally left blank.]

 

D-2

 

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

 

	
 
    	
[ATHLON HOLDINGS LP]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[ATHLON FINANCE CORP.]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[SUBSIDIARY GUARANTOR]   , as a Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name: [     ]
    
	
 
    	
 
    	
Title: [     ]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name: [     ]
    
	
 
    	
 
    	
Title: [     ]
    

 

D-3

 

EXHIBIT E

 

[FORM OF NOTATION OF SUBSIDIARY GUARANTEE]

 

For value received, each Subsidiary Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in and subject to the provisions in the Indenture dated as of April 17, 2013 (the “Indenture”) among Athlon Holdings LP, a Delaware limited partnership (together with its successors and assigns, “Holdings”), Athlon Finance Corp., a Delaware corporation (together with its successors and assigns, the “Co-Issuer” and, together with Holdings, the “Issuers”), the Subsidiary Guarantors party thereto from time to time (as defined below) and Wells Fargo Bank, National Association, as trustee (the “Trustee”), (a) the due and punctual payment of the principal of, premium on, if any, interest and Additional Interest, if any, on, the Notes, whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of, premium on, if any, interest and Additional Interest, if any, on, the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Company to the holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.  The obligations of the Subsidiary Guarantors to the holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth in Article 12 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Subsidiary Guarantee.  Each holder of a Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee, on behalf of such holder, to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such holder for such purpose; provided, however, that the Indebtedness evidenced by this Subsidiary Guarantee shall cease to be so subordinated and subject in right of payment upon any defeasance of this Note in accordance with the provisions of the Indenture.

 

Capitalized terms used but not defined herein have the meanings given to them in the Indenture.

 

	
 
    	
[NAME   OF SUBSIDIARY GUARANTOR(S)]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

E-1

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