Document:

Exhibit 10.3

 

WARREN RESOURCES, INC.

 

RESTRICTED STOCK UNIT AGREEMENT

 

THIS AGREEMENT, dated as of             , 2012 (“Grant Date”) by and between Warren Resources, Inc., a Maryland Corporation (“Corporation”), and                    (“Grantee”), is entered into as follows:

 

WHEREAS, the Corporation has established the 2010 Stock Incentive Plan, as amended from time to time (the “Plan”), a copy of which can be found on the Securities and Exchange Commission Web Site at:

 

http://www.sec.gov/Archives/edgar/data/892986/000104746910003498/a2197906zdef14a.htm

 

or by written or telephonic request to the Corporation Secretary, and which Plan is made a part hereof; and

 

WHEREAS, the Compensation Committee of the Board of Directors of the Corporation (“Committee”) determined that the Grantee be granted stock units subject to the restrictions stated below, and as hereinafter set forth;

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1.  Grant of Restricted Stock Units.

 

Subject to the terms and conditions of this Agreement and of the Plan, the Corporation hereby issues to the Grantee on the Grant Date an Award consisting of, in the aggregate,                        Restricted Stock Units (the “Restricted Stock Units”). Each Restricted Stock Unit represents the right to receive one share of Common Stock (“Shares”), subject to the terms and conditions set forth in this Agreement and the Plan. The Restricted Stock Units shall be credited to a separate account maintained on the books and records of the Corporation (“Account”). All amounts credited to the Account shall continue for all purposes to be part of the general assets of the Corporation. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan. On any date, the value of each Unit shall equal the fair market value of a share of the Corporation’s Common Stock). For purposes of this Agreement, “fair market value” shall be deemed to be the mean of the highest and lowest quoted selling prices for a share of Stock on that date as reported on The NASDAQ Stock Market, Inc.

 

2.  Vesting Schedule.

 

Except as otherwise provided herein, the interest of the Grantee in the Restricted Stock Units shall vest (net of shares withheld for applicable tax withholdings):

 

1/3rd on             , 2013,

1/3rd on             , 2014, and

1/3rd on             , 2015,

 

so as to be 100% vested on           , 2015, conditioned upon the Grantee’s continued employment with the Corporation as of each vesting date. Notwithstanding the foregoing vesting schedule, if a Change in Control (as defined in the Plan) occurs and the Grantee’s employment is terminated by

 

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the Corporation or an Affiliate within three (3) months following the Change in Control, all unvested Restricted Stock Units shall automatically become 100% vested on the Grantee’s date of termination.

 

3.  Restrictions.

 

(a)  The Restricted Stock Units granted hereunder may not be sold, pledged or otherwise transferred and may not be subject to lien, garnishment, attachment or other legal process. The period of time between the date hereof and the date the Restricted Stock Units become vested is referred to herein as the “Restriction Period.”

 

(b)  If the Grantee’s employment with the Corporation is terminated by the Corporation “for cause” or voluntarily by the Grantee, the balance of the Restricted Stock Units subject to the provisions of this Agreement which have not vested at the time of the Grantee’s termination of employment shall be forfeited by the Grantee.

 

4.  Dividends.

 

If on any date the Corporation shall pay any dividend on the Stock (other than a dividend payable in Stock), the number of Restricted Stock Units credited to the Grantee’s Account shall as of such date be increased by an amount equal to: (a) the product of the number of Restricted Stock Units credited to the Grantee’s Account as of the record date for such dividend, multiplied by the per share amount of any dividend (or, in the case of any dividend payable in property other than cash, the per share value of such dividend, as determined in good faith by the Board of Directors of the Corporation), divided by (b) the fair market value of a share of Stock on the payment date of such dividend. In the case of any dividend declared on Stock which is payable in Stock, the number of Restricted Stock Units credited to the Grantee shall be increased by a number equal to the product of (x) the aggregate number of Restricted Stock Units that have been credited to the Grantee’s Account through the related dividend record date, multiplied by (y) the number of shares of Stock (including any fraction thereof) payable as a dividend on a share of Stock.

 

5.  Changes in Stock.

 

In the event of any change in the number and kind of outstanding shares of Stock by reason of any recapitalization, reorganization, merger, consolidation, stock split or any similar change affecting the Stock (other than a dividend payable in Stock) the Corporation shall make an appropriate adjustment in the number and terms of the Restricted Stock Units credited to the Grantee’s Account so that, after such adjustment, the Restricted Stock Units shall represent a right to receive the same consideration (or if such consideration is not available, other consideration of the same value) that the Grantee would have received in connection with such recapitalization, reorganization, merger, consolidation, stock split or any similar change if he had owned on the applicable record date a number of shares of Stock equal to the number of Restricted Stock Units credited to the Grantee’s Account prior to such adjustment.

 

6.  Form and Timing of Payment.

 

On the first to occur of the following, the Corporation shall pay to the Grantee a number of shares of Stock equal to the aggregate number of vested Restricted Stock Units credited to the Grantee as of such date:

 

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(a)  On the vesting anniversaries of the Grant Date; or

(b)  The Change of Control described in Section 2 above..

 

7.  Taxes.

 

The Grantee shall be liable for any and all taxes, including withholding taxes, arising out of this grant or the vesting of Restricted Stock Units hereunder. Unless the Grantee makes payment of the withholding in cash, a portion of the Stock subject to each Unit having a fair market value equal to the Corporation’s withholding obligation will be withheld to cover required taxes, and the net number of shares of Stock will be paid to the Grantee.

 

8.  Application of Section 409A of the Internal Revenue Code.

 

This Agreement, including the right to receive Corporation Stock upon satisfaction of the Vesting Schedule, is intended to be exempt from the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) pursuant to the short-term deferral exemption thereunder, and this Agreement, including the right to receive Corporation Stock upon the satisfaction of the Vesting Schedule, shall be interpreted on a basis consistent with such intent.

 

Notwithstanding any provision in this Agreement to the contrary, if the Grantee is a “specified employee” (as defined in section 409A of the Code) and it is necessary to postpone the commencement of any payments otherwise payable under this Agreement to prevent any accelerated or additional tax under section 409A of the Code, then the Corporation will postpone the payment until five (5) days after the end of the six-month period following the original payment date. If the Grantee dies during the postponement period prior to the payment of postponed amount, the amounts withheld on account of section 409A of the Code shall be paid to the personal representative of the Grantee’s estate within sixty (60) days after the date of the Grantee’s death. The determination of who is a specified employee, including the number and identity of persons considered specified employees and the identification date, shall be made by the Committee in accordance with the provisions of sections 416(i) and 409A of the Code. In no event shall the Grantee, directly or indirectly, designate the calendar year of payment. This Agreement may be amended without the consent of the Grantee in any respect deemed by the Committee to be necessary in order to preserve compliance with section 409A of the Code or other applicable law

 

9.  Grant Subject to Plan; Conflict

 

This grant is subject to all the terms, conditions, limitations and restrictions contained in the Plan.  In the event of any conflict or inconsistency between the terms hereof and the terms of the Plan, the terms of the Plan shall be controlling

 

10.  Miscellaneous.

 

(a)  This grant is not a contract of employment and the terms of your employment shall not be affected hereby or by any agreement referred to herein except to the extent specifically so provided herein or therein.  Nothing herein shall be construed to impose any obligation on the Corporation, the Subsidiary or on any other subsidiary corporation or parent corporation thereof to continue your employment, and it shall not impose any obligation on your part to remain in the employ of the Subsidiary or of any subsidiary corporation or parent corporation thereof.

 

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(b)  All amounts credited to the Grantee’s Account under this Agreement, until vested, shall continue for all purposes to be a part of the general assets of the Corporation. The Grantee’s interest in the Account shall make him only a general, unsecured creditor of the Corporation.

 

(c)   The parties agree to execute such further instruments and to take such action as may reasonably be necessary to carry out the intent of this Agreement.

 

(d)  Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon delivery to the Grantee at her address then on file with the Corporation.

 

(e) You hereby represent that you have received a copy of the Plan and that you have had ample opportunity to review the Plan and ask questions with respect thereto.

 

(f)  This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof.

 

 

	
 
    	
 
    	
WARREN   RESOURCES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
AGREED   TO AND ACCEPTED:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Grantee
    	
 
    	
 
    

 

4Exhibit 10.1

 

EXECUTION COPY

 

May 17, 2012

 

DST SYSTEMS, INC.

333 W. 11th Street, Suite 500

Kansas City, Missouri 64105

Attention:                                 Kenneth V. Hager

Vice President, Chief Financial Officer and Treasurer

 

Re:                               Amended and Restated $125,000,000 Term Loan Facility

 

Ladies and Gentlemen:

 

BANK OF AMERICA, N.A. (the “Original Lender”) made available to DST Systems, Inc., a Delaware corporation (the “Borrower”), a term loan credit facility on the terms and subject to the conditions set forth in that certain Letter Loan Agreement dated as of October 28, 2011 by and between the Original Lender and the Borrower (the “Existing Letter Loan Agreement”).  The Original Lender and the Borrower have agreed to amend and restate the Existing Letter Loan Agreement on the terms and subject to the conditions set forth herein.  Terms not defined herein have the meanings assigned to them in Exhibit A hereto.

 

1.                                       The Facility.

 

(a)                                  The Term Loan.  Subject to the terms and conditions set forth herein, the Original Lender made available a term loan to the Borrower in an aggregate principal amount of ONE HUNDRED TWENTY-FIVE MILLION DOLLARS ($125,000,000) (the “Term Loan”) which is due and payable on the Maturity Date.  As of the date hereof the outstanding principal amount of the Term Loan is $125,000,000.  The Term Loan may consist of Base Rate Loans and/or Eurodollar Rate Loans, as further provided herein.  Amounts repaid on the Term Loan may not be reborrowed.

 

(b)                                 Borrowings, Conversions, Continuations. The Borrower may request that the Term Loan be (i) made as or converted to Base Rate Loans by irrevocable notice to be received by the Lender not later than 11:00 a.m. (Charlotte, North Carolina time)  on the Business Day of the borrowing or conversion, or (ii) made or continued as, or converted to, Eurodollar Rate Loans by irrevocable notice executed by a Responsible Officer of the Borrower to be received by each Lender not later than 11:00 a.m. (Charlotte, North Carolina time) three Business Days prior to the Business Day of the borrowing, continuation or conversion.  If the Borrower fails to give a notice of conversion or continuation prior to the end of any Interest Period in respect of any Eurodollar Rate Loan, or if an Event of Default exists and the Required Lenders so request, the Borrower shall be deemed to have requested that such Loan be converted to a Base Rate Loan on the last day of the applicable Interest Period.  If the Borrower requests that a Loan be continued as or converted to a Eurodollar Rate Loan, but fails to specify an Interest Period with respect thereto, the Borrower shall be deemed to have selected an Interest Period of one month.  Notices pursuant to this Section 1(b) may be given by telephone to each Lender if promptly confirmed in writing to each Lender.  The initial Term Loan made on the Original Effective Date may be a Eurodollar Rate Loan so long as the Borrower provides a funding indemnity letter in form and substance reasonably

 

 

satisfactory to the Lender (along with a completed notice of borrowing duly executed by the Borrower) at least three Business Days prior to the Original Effective Date.

 

Each Eurodollar Rate Loan and each Base Rate Loan shall be in a minimum aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof (or the remaining amount of the Term Loan).  There shall be no more than one Interest Period in effect at any time.

 

(c)                                  Interest.  At the option of the Borrower, the Loans shall bear interest at a rate per annum equal to (i) the Eurodollar Rate plus the Eurodollar Rate Margin or (ii) the Base Rate plus the Base Rate Margin.  Interest on Base Rate Loans when the Base Rate is determined by the Lender’s “prime rate” shall be calculated on the basis of a year of 365 or 366 days and actual days elapsed.  All other interest hereunder shall be calculated on the basis of a year of 360 days and actual days elapsed.

 

The Borrower promises to pay interest (i) for each Eurodollar Rate Loan (A) on the last day of the applicable Interest Period, and, if the Interest Period is longer than three months, on the respective dates that fall every three months after the beginning of the Interest Period, and (B) on the date of any conversion of such Loan to a Base Rate Loan; (ii) for Base Rate Loans, on the last Business Day of each calendar quarter; and (iii) for all Loans, on the Maturity Date. If the time for any payment is extended by operation of law or otherwise, interest shall continue to accrue for such extended period.

 

After the date any principal amount of any Loan is due and payable (whether on the Maturity Date, upon acceleration or otherwise), or after any other monetary obligation hereunder shall have become due and payable (in each case without regard to any applicable grace periods), the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on such amounts at a rate per annum equal to the Base Rate plus 2%.  Furthermore, (A) while any Event of Default pursuant to Section 5(a) exists, the Borrower shall pay interest on the principal amount of the Loans at a rate per annum equal to the otherwise applicable interest rate plus 2% and (B) while any other Event of Default exists, upon the request of the Required Lenders, the Borrower shall pay interest on the principal amount of the Loans at a rate per annum equal to the otherwise applicable interest rate plus 2%.  Accrued and unpaid interest on past due amounts shall be payable on demand.

 

In no case shall interest hereunder exceed the amount that a Lender may charge or collect under applicable law.

 

(d)                                 Evidence of Loans.  The Loans and all payments thereon shall be evidenced by each Lender’s loan accounts and records; provided, however, that upon the request of any Lender, the Loans owing to such Lender may be evidenced by a promissory note in a form reasonably satisfactory to such Lender in addition to such loan accounts and records.  Such loan accounts, records and promissory note shall be conclusive absent manifest error of the amount of the Loans and payments thereon.  Any failure to record any Loan or payment thereon or any error in doing so shall not limit or otherwise affect the obligation of the Borrower to pay any amount owing with respect to the Loans.

 

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(e)                                  Repayment.  The Borrower promises to pay the balance of the Term Loan then outstanding on the Maturity Date.  All payments to be made by the Borrower shall be made in full without condition or deduction for any counterclaim, defense, recoupment or setoff.  The Borrower shall make any payments required under this Agreement (including, without limitation, any mandatory prepayments) directly to the respective Lenders in accordance with the Lenders’ Applicable Percentages.  The Borrower shall make all payments required hereunder not later than 2:00 p.m. (Charlotte, North Carolina time) on the date of payment in same day funds in Dollars (i) in the case of the Original Lender, at the office of the Original Lender at Bank of America, N.A., 2001 Clayton Rd., Bldg. B, CA4-702-02-25, Concord, CA 94520-2405, Attn: G.K. Lapitan, Telephone: 925-675-8205 or such other address as the Original Lender may from time to time designate in writing and (ii) in the case of any other Lender at such address as such Lender, may from time to time designate in writing.

 

(f)                                    Prepayments.

 

(i)                                     Voluntary.  The Borrower may voluntarily prepay the Loans in accordance with and subject to the provisions of Section 2.05(a) of the Incorporated Agreement.  Amounts prepaid may not be reborrowed.

 

(ii)                                  Mandatory.  (x) Immediately upon receipt by the Borrower or any of its Subsidiaries of Net Cash Proceeds from the incurrence of additional Indebtedness (excluding any borrowings under revolving credit facilities in effect as of the Original Effective Date up to the maximum commitment of such facilities in effect as of the Original Effective Date) in an aggregate amount in excess of $25,000,000 over the term of this Agreement (the “Trigger Amount”) (excluding (A) Indebtedness under the Incorporated Agreement, (B) purchase money Indebtedness and capital lease financings incurred in the ordinary course of business, (C) Indebtedness incurred to replace and refinance the Bank of the West Real Estate Loan in accordance with the provisions of Section 4(b) and (D) Indebtedness incurred to replace and refinance any of the existing Indebtedness set forth on Schedule 1 attached hereto which by its terms as of the Original Effective Date has a stated maturity prior to October 28, 2013 or which by its terms is payable on demand and such demand is made by the lender thereof prior to October 28, 2013), the Borrower shall prepay the Loans in an aggregate amount equal to 100% of such Net Cash Proceeds of such additional Indebtedness actually received by the Borrower or its Subsidiaries that are in excess of the Trigger Amount.  (y) In addition, the Borrower shall immediately prepay the Loans in full if the ALPS Acquisition has not been consummated in accordance with the ALPS Merger Agreement on or prior to November 4, 2011.

 

Any prepayment of a Eurodollar Rate Loan hereunder shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05 of the Incorporated Agreement (as incorporated pursuant to Section 6(a) hereof).

 

(g)                                 Application of Facility.  The proceeds of Term Loan established hereby shall be used by the Borrower and its Subsidiaries solely to consummate the ALPS Acquisition.

 

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2.                                       Conditions Precedent to Closing of the Existing Letter Loan Agreement.

 

The Original Lender received the following from the Borrower in form satisfactory to the Original Lender as a condition precedent to the extension of credit under the Existing Letter Loan Agreement:

 

(i)                                     the Existing Letter Loan Agreement duly executed and delivered on behalf of the Borrower;

 

(ii)                                  evidence that a material adverse change had not occurred since December 31, 2010 in the business, assets, liabilities (actual or contingent), operations or financial condition of the Borrower and its Subsidiaries taken as a whole;

 

(iii)                               copies of the Organization Documents of the Borrower certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation or organization, where applicable, and certified by a secretary or assistant secretary of the Borrower to be true and correct as of the Original Effective Date;

 

(iv)                              such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of the Borrower as the Original Lender required to evidence the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which the Borrower is a party;

 

(iv)                              such documents and certifications as the Original Lender reasonably required to evidence that the Borrower is duly organized or formed, and is validly existing, in good standing and qualified to engage in business in (A) the jurisdiction of its incorporation or organization and (B) each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

 

(vi)                              evidence that no Default or Event of Default had occurred and was continuing;

 

(vii)                           (a) a legal opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special New York counsel for the Borrower and (b) a legal opinion of Randall D. Young, general counsel for the Borrower, in each case dated as of the Original Effective Date;

 

(viii)                        a certificate executed by a Responsible Officer of the Borrower as of the Original Effective Date regarding the Solvency of the Borrower;

 

(ix)                                a certificate or certificates executed by a Responsible Officer of the Borrower as of the Original Effective Date, stating that (A) the conditions specified in Section 2 have been satisfied, (B) the Borrower is in compliance with all existing material financial obligations and (C) all governmental, shareholder and third party consents and approvals, if any, with respect to the Loan Documents and the transactions contemplated thereby have been obtained (and attaching copies thereof); and

 

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(x)                                   payment of all Attorney Costs of the Original Lender to the extent invoiced prior to or on the Original Effective Date, plus such additional amounts of Attorney Costs as constituted its reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings of the Existing Letter Loan Agreement (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Original Lender with respect to the Existing Letter Loan Agreement).

 

(xi)                                a notice of borrowing executed by the Borrower and delivered to the Original Lender; and

 

(xii)                             evidence that each representation and warranty set forth in Section 3 below was true and correct in all material respects as if made on the date of such borrowing (except to the extent such representations and warranties expressly relate to an earlier date in which case such representations and warranties were true and correct in all material respects as of such earlier date).

 

2A                                Conditions Precedent to this Agreement.

 

As a condition precedent to the amendment and restatement of the Existing Letter Loan Agreement pursuant to the terms of this Agreement, the Original Lender must receive the following from the Borrower in form satisfactory to the Original Lender:

 

(i)                                     this Agreement duly executed and delivered on behalf of the Borrower;

 

(ii)                                  a certificate executed by a Responsible Officer of the Borrower as of the Amended Effective Date stating that (x) there has not occurred a material adverse change since December 31, 2010 in the business, assets, liabilities (actual or contingent), operations or financial condition of the Borrower and its Subsidiaries taken as a whole; (b) no Default or Event of Default has occurred and is continuing; and (c) each representation and warranty set forth in Section 3 below is true and correct in all material respects as if made on the Amended Effective Date (except to the extent such representations and warranties expressly relate to an earlier date in which case such representations and warranties are true and correct in all material respects as of such earlier date).

 

3.                                       Representations and Warranties.  The Borrower hereby represents and warrants that the Term Loan established hereby has been and shall be used by the Borrower and its Subsidiaries solely in connection with the ALPS Acquisition.  The Borrower hereby further agrees that the representations and warranties contained in Article V of the Incorporated Agreement (the “Incorporated Representations”) are hereby incorporated by reference and shall be as binding on the Borrower as if fully set forth herein.  Notwithstanding the above, with respect to the Incorporated Provisions, (i) the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Incorporated Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Incorporated Agreement and (ii) the references to the “Closing Date” in Sections 5.03, 5.05(c), 5.22 and 5.23 of the Incorporated Agreement shall be deemed to refer to the Original Effective Date.

 

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4.                                       Covenants.

 

(a)                                  So long as principal of and interest on any Loan or any other amount payable hereunder or under any other Loan Document remains unpaid or unsatisfied, the Borrower hereby agrees that the covenants and agreements applicable to it contained in Article VI (Affirmative Covenants) (except for the covenant contained in Section 6.11 of the Incorporated Agreement) and Article VII (Negative Covenants) of the Incorporated Agreement including, for purposes of this Section 4 each Additional Incorporated Agreement Covenant (collectively, the “Incorporated Covenants”), are hereby (or, in the case of each Additional Incorporated Agreement Covenant, shall, upon its effectiveness, be) incorporated by reference and shall be as binding on the Borrower as if fully set forth herein.

 

Any financial statements, certificates or other documents received by any Lender under the Incorporated Agreement shall be deemed delivered hereunder.  Furthermore, the Borrower agrees to deliver directly to any Lender hereunder which is not a lender under the Incorporated Agreement at such time, any financial statements, certificates or other documents that are delivered to the lenders under the Incorporated Agreement (or to the Administrative Agent (as defined in the Incorporated Agreement) for delivery to the lenders under the Incorporated Agreement) at the same time as such documents are required to be provided to the lenders under the Incorporated Agreement (or to the Administrative Agent (as defined in the Incorporated Agreement) for delivery to the lenders under the Incorporated Agreement).

 

(b)                                 In addition to the Incorporated Covenants, so long as principal of and interest on any Loan or other amount payable hereunder or under any other Loan Document remains unpaid or unsatisfied, the Borrower and its Subsidiaries shall not (i) make any voluntary prepayments of the Bank of the West Real Estate Loan (other than in connection with a refinancing thereof by Bank of the West or one or more lenders in which the Bank of the West Real Estate Loan is paid in full and such refinancing indebtedness has a stated maturity date beyond October 28, 2013) and (ii) make any cash payments on or in connection with the exercise by the Borrower of its right, per the terms of Section 7 of the Series C Debentures, to redeem for cash all or part of the Series C Debentures.  For the avoidance of doubt, payments that are required under the Bank of the West Real Estate Credit Agreement (for reasons other than a default thereunder) in connection with the sale or conveyance of portions of the real estate described therein or in connection with the receipt of condemnation or casualty insurance proceeds shall not be considered “voluntary” prepayments as referred to above in clause (i) hereof.

 

(c)                                  The Original Lender acknowledges that the Borrower, in compliance with the Existing Letter Loan Agreement, previously delivered to the Original Lender, a certificate executed by a Responsible Officer of the Borrower dated as of the closing date of the ALPS Acquisition, in form and substance reasonably satisfactory to the Lender, certifying that the ALPS Acquisition was permitted pursuant to Section 7.02(i) of the Incorporated Agreement.

 

(d)                                 The Borrower shall, on or before the date it is required to deliver the Compliance Certificate pursuant to Section 6.02(b) of the Incorporated Agreement as incorporated

 

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pursuant to Section 4(a), deliver to each Lender a detailed calculation of any additional Indebtedness required by the terms of Section 1(f)(ii) hereof to be applied toward the calculation of the Trigger Amount as of the end of such fiscal period then ended.

 

5.                                       Events of Default.  The following are “Events of Default:”

 

(a)                                  The Borrower fails to pay any principal of the Term Loan as and on the date when due; or

 

(b)                                 The Borrower fails to pay (i) any interest on any Loan, or any portion thereof, or (ii) any other fee or amount payable to any Lender under any Loan Document, or any portion thereof, and such default shall continue unremedied for three (3) Business Days after the earlier of a Responsible Officer becoming aware of such default or written notice thereof has been given to the Borrower by any Lender; or

 

(c)                                  The Borrower fails to comply with any covenant or agreement incorporated herein by reference pursuant to Section 4 above, subject to any applicable grace period and/or notice requirement set forth in Article VIII of the Incorporated Agreement (it being understood and agreed that any such notice requirement shall be met by a Lender’s giving the applicable notice to the Borrower hereunder); or

 

(d)                                 The Borrower (x) fails to perform or observe any term, covenant or agreement contained in Section 4(b) hereof or (y) fails to perform or observe any term, covenant or agreement contained herein (other than those specified in subsection (a), (b), (c) or (d)(x) of this Section 5) and such default shall continue unremedied for five Business Days; or

 

(e)                                  Any representation or warranty in any Loan Document or in any certificate, agreement, instrument or other document made or delivered by the Borrower pursuant to or in connection with any Loan Document proves to have been incorrect or misleading in any material respect when made or deemed made; or

 

(f)                                    Any “Event of Default” specified in Section 8.01 of the Incorporated Agreement (including for purposes of this Section 5(f) each Additional Incorporated Agreement Event of Default) (the “Incorporated Events of Default”) occurs and is continuing, without giving effect to any subsequently waiver or amendment thereof pursuant to the Incorporated Agreement, it being agreed that each such “Event of Default” shall survive any termination, cancellation, discharge or replacement of the Incorporated Agreement.

 

Upon the occurrence of an Event of Default, the Required Lenders may, upon written notice to the Borrower, declare all sums outstanding hereunder, including all interest thereon, to be immediately due and payable, whereupon the same shall become and be immediately due and payable, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or other notices or demands of any kind or character, all of which are hereby expressly waived; provided, however, that upon the occurrence of any event specified in Sections 8.01(f) and (g) of the Incorporated Agreement, the Term Loan shall automatically terminate, and all sums outstanding hereunder, including all interest thereon, shall become and be immediately due and payable, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or other notices or demands of any kind or character, all of which are hereby expressly waived.

 

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6.                                       Other Provisions Relating to the Term Loan; Miscellaneous.

 

(a)                                  The parties hereto hereby agree that the provisions set forth in Sections 1.02 1.03, 1.04, 1.05 and 2.05(a), Article III (other than Section 3.06) and Article X (other than Sections 10.01, 10.06, 10.13 and 10.14) of the Incorporated Agreement (the “Additional Incorporated Provisions”) are incorporated by reference (with such adjustments or modifications as necessary to maintain the substance of the provisions contained therein) and shall be binding on the parties hereto as if set forth fully herein.  The incorporation by reference to the Incorporated Agreement of the Incorporated Representations, the Incorporated Covenants, the Incorporated Events of Default, the Additional Incorporated Provisions and the Incorporated Definitions shall survive the termination of the Incorporated Agreement.  The Incorporated Representations, the Incorporated Covenants, the Incorporated Events of Default, the Additional Incorporated Provisions and the Incorporated Definitions (including all exhibits, schedules and defined terms referred to therein) are hereby incorporated herein by reference as if set forth in full herein with appropriate substitutions, including the following (with such adjustments or modifications as necessary to maintain the substance of the provisions contained therein):  (a) all references to “this Credit Agreement” shall be deemed to be references to this Agreement; (b) all references to “the Administrative Agent” shall be deemed to be references to the Lenders, collectively, or each Lender, individually as applicable in the context provided, (c) all references to “the Lenders” shall be deemed to be references to the Lenders, (d) all references to “the Required Lenders” shall be deemed to be references to the Required Lenders as defined herein; (e) all references to “Default” and “Event of Default” shall be deemed to be references to a Default and an Event of Default, respectively; (f) all references to “the Loans” shall be deemed to be references to the Term Loan; (g) all references to “Committed Loans” shall be deemed to be references to the Term Loan; (h) all references to “Eurodollar Rate Loan” shall be deemed to be references to Eurodollar Rate Loan as defined herein; and (i) all references as to “Loan Document” or “Loan Documents” or any similar reference shall be deemed refer to this Agreement as well as the other Loan Documents.

 

(b)                                 No amendment or waiver of any provision of this Agreement (including any provision of the Incorporated Agreement incorporated herein by reference pursuant to Section 4 above and any waiver of Section 5(e) or Section 5(f) above) or of any other Loan Document and no consent by the Lenders to any departure therefrom by the Borrower shall be effective unless such amendment, waiver or consent shall be in writing and signed by a duly authorized officer of each of the Required Lenders and the Borrower, and any such amendment, waiver or consent shall then be effective only for the period and on the conditions and for the specific instance specified in such writing; provided, however, that no such amendment, waiver or consent shall:

 

(i)                                     extend the Maturity Date without the written consent of each Lender;

 

(ii)                                  postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

 

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(iii)                               reduce the principal of, or the rate of interest specified herein on, any Loan or any fees or other amounts payable hereunder or under any other Loan Document  without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder; provided that any such amendment with respect to which a substantially similar amendment is not being concurrently made to the Incorporated Agreement shall require the written consent of each Lender;

 

(iv)                              change Section 6(j) hereof in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender; or

 

(v)                                 change any provision of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to (a) amend, waive or otherwise modify any rights hereunder or (b) make any determination or grant any consent hereunder, without the written consent of each Lender.

 

No failure or delay by the Lender in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other rights, power or privilege.

 

(c)                                  This Agreement shall inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign its rights and obligations hereunder.  Any Lender may at any time (i) assign all or any part of its rights and obligations hereunder to any other Person with the prior written consent of the Borrower, such consent not to be unreasonably withheld, provided that no such consent shall be required if the assignment is to an affiliate of the Lender or if a Default exists, and (ii) grant to any other Person participating interests in all or part of its rights and obligations hereunder without notice to the Borrower.  The Borrower agrees to execute any documents reasonably requested by a Lender in connection with any such assignment.  All information provided by or on behalf of the Borrower to the Lender or its affiliates may be furnished by the Lender to its affiliates and to any actual or proposed assignee or participant.  Notwithstanding the foregoing, no such assignment or participation by any Lender shall result in the Original Lender owning and holding less than 51% of the outstanding Term Loan without the prior written consent of the Borrower (which consent the Borrower may grant or deny in the Borrower’s sole discretion).

 

(d)                                 GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(e)                                  SUBMISSION TO JURISDICTION.  EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS

 

9

 

PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF SUCH STATE, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(f)                                    WAIVER OF VENUE.  EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (c) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(g)                                 SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02 OF THE INCORPORATED AGREEMENT.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

(h)                                 Each Lender hereby notifies the Borrower 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 Borrower, which information includes the name and address of the Borrower and other information that will allow the Lender to identify the Borrower in accordance with the Act.  The Borrower shall, promptly following a request by a Lender, provide all documentation and other information that such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

 

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(i)                                     THIS AGREEMENT AND THE OTHER LOAN DOCUMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

(j)                                     If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on the Term Loan resulting in such Lender’s receiving payment of a proportion of the aggregate principal amount of Term Loan and accrued interest thereon greater than its pro rata share thereof as provided herein, then the  Lender receiving such greater proportion shall (a) notify the other Lenders of such fact, and (b) purchase (for cash at face value) participations in the Term Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Term Loans and other amounts owing them, provided that:

 

(i)                                     if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

(ii)                                  the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Term Loan to any assignee or participant, other than an assignment to the Borrower or any Subsidiary or Affiliate  thereof (as to which the provisions of this Section shall apply).

 

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

 

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Please indicate your acceptance of the Term Loan on the foregoing terms and conditions by returning an executed copy of this Agreement to the undersigned.

 

	
 
    	
BANK   OF AMERICA, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Aileen Supeña
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Aileen   Supeña
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Director
    

 

DST Systems, Inc.
 Amended and Restated Letter
 Loan Agreement

 

 

Accepted and Agreed to as of the date first written above:

 

	
BORROWER:
    	
 
    	
DST   SYSTEMS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Kenneth C. Hager
    
	
 
    	
 
    	
Name:
    	
Kenneth   V. Hager
    
	
 
    	
 
    	
Title:
    	
Vice   President, Chief Financial
    
	
 
    	
 
    	
 
    	
Officer   and Treasurer
    

 

DST Systems, Inc.
 Amended and Restated Letter 
 Loan Agreement

 

 

EXHIBIT A

 

DEFINITIONS

 

The parties hereto hereby agree that all capitalized terms not otherwise defined herein shall have the respective meanings assigned to such terms in the Incorporated Agreement, as in effect as of the date hereof (the “Incorporated Definitions”) and such Incorporated Definitions are hereby incorporated by reference and shall be as binding on the parties as if set forth fully herein.

 

	
Additional   Incorporated Agreement Covenant:
    	
 
    	
A   covenant or agreement that is added to Article VI (Affirmative   Covenants) or VII (Negative Covenants) of the Incorporated Agreement after   the date hereof, as such covenant or agreement may be amended, supplemented   or modified from time to time in any amendment, supplement or modification of   the Incorporated Agreement.
    
	
 
    	
 
    	
 
    
	
Additional   Incorporated Agreement Event of Default:
    	
 
    	
An   “Event of Default” that is added to Article VIII of the Incorporated   Agreement after the date hereof, as such “Event of Default” may be amended,   supplemented or modified from time to time in any amendment, supplement or   modification of the Incorporated Agreement.
    
	
 
    	
 
    	
 
    
	
ALPS   Acquisition:
    	
 
    	
The   Acquisition of ALPS Holdings by the Borrower on terms and conditions and   pursuant to the Merger Agreement dated July 19, 2011 (the “ALPS   Merger Agreement”) disclosed in the Borrower’s July 21, 2011   Form 8-K filing.
    
	
 
    	
 
    	
 
    
	
ALPS   Holdings:
    	
 
    	
ALPS   Holdings, Inc., a Delaware corporation.
    
	
 
    	
 
    	
 
    
	
Agreement:
    	
 
    	
This   letter agreement, as amended, restated, extended, supplemented or otherwise   modified in writing from time to time.
    
	
 
    	
 
    	
 
    
	
Amended   Effective Date:
    	
 
    	
May 17,   2012
    
	
 
    	
 
    	
 
    
	
Applicable   Percentage:
    	
 
    	
Means,   with respect to any Lender at any time, the percentage (carried out to the   ninth decimal place) that the outstanding principal amount of the Term Loan   held by such Lender bears to the aggregate outstanding principal amount of   the Term Loan.
    
	
 
    	
 
    	
 
    
	
Bank   of the West Real Estate Credit Agreement:
    	
 
    	
That   certain Credit Agreement dated as of September 16, 2008 among DST   Realty, Inc., Westside Industrial Park, L.L.C., DST Realty of   California, Inc., DST Realty Connecticut, Inc., the various   financial institutions from time to time party thereto and Bank of the West,   as administrative agent, as may be further amended, supplemented or modified   from time to time.
    
	
 
    	
 
    	
 
    
	
Bank   of the West Real Estate Loan:
    	
 
    	
Loans   in the original principal amount of $115,000,000 made pursuant to the Bank of   the West Real Estate Credit Agreement.
    
	
 
    	
 
    	
 
    
	
Base   Rate Loan:
    	
 
    	
A   Loan bearing interest based on the Base Rate.
    
	
 
    	
 
    	
 
    
	
Base   Rate Margin:
    	
 
    	
The   greater of (x) 0.25% and (y) the Applicable Rate for Base Rate   Loans under the Incorporated Agreement at such time less 50 bps.
    
	
 
    	
 
    	
 
    
	
Default:
    	
 
    	
Any   event that, with the giving of any notice, the passage of time, or both,   would be an Event of Default.
    

 

 

	
Eurodollar   Rate Loan:
    	
 
    	
A   Loan that bears interest at a rate based on clause (a) of the definition   of “Eurodollar Rate.”
    
	
 
    	
 
    	
 
    
	
Eurodollar   Rate Margin:
    	
 
    	
The   greater of (x) 1.25% and (y) the Applicable Rate for Eurodollar   Rate Loans under the Incorporated Agreement at such time less 50 bps.
    
	
 
    	
 
    	
 
    
	
Event   of Default:
    	
 
    	
Has   the meaning set forth in Section 5.
    
	
 
    	
 
    	
 
    
	
Incorporated   Agreement:
    	
 
    	
The   Credit Agreement, dated as of April 16, 2010 among the Borrower, the   Lender, as agent, and various financial institutions, including the Lender,   as amended by that certain First Amendment to Credit Agreement dated as of   August 9, 2010, that certain Second Amendment to Credit Agreement dated   as of June 30, 2011, that certain Third Amendment to Credit Agreement   dated as of December 12, 2011 and as may be further amended,   supplemented or modified from time to time.
    
	
 
    	
 
    	
 
    
	
Lender   or Lenders:
    	
 
    	
Shall   mean, individually and collectively, the Original Lender and any other Person   that becomes a Lender hereunder.
    
	
 
    	
 
    	
 
    
	
Loans   or Loan:
    	
 
    	
Shall   mean the Base Rate Loans and/or the Eurodollar Rate Loans comprising the term   loan made hereunder.
    
	
 
    	
 
    	
 
    
	
Loan   Documents:
    	
 
    	
This   Agreement and the promissory note (if requested by a Lender) delivered in   connection with this Agreement.
    
	
 
    	
 
    	
 
    
	
Maturity   Date:
    	
 
    	
The   earliest to occur of (i) October 28, 2013 and (ii) the   Springing Maturity Date.
    
	
 
    	
 
    	
 
    
	
Net   Cash Proceeds:
    	
 
    	
The   aggregate cash proceeds received by the Borrower or any of its Subsidiaries   in respect of any issuance of Indebtedness referred to in Section 1(f)(x),   net of (a) direct costs incurred in connection therewith (including,   without limitation, legal, accounting and investment banking fees, and sales   commissions) and (b) taxes paid or payable as a result thereof.
    
	
 
    	
 
    	
 
    
	
Original   Effective Date:
    	
 
    	
October 28,   2011.
    
	
 
    	
 
    	
 
    
	
Person:
    	
 
    	
Means   any natural person, corporation, limited liability company, trust, joint   venture, association, company, partnership, governmental authority or   instrumentality or any other entity.
    
	
 
    	
 
    	
 
    
	
Required   Lenders:
    	
 
    	
Means,   at any time, Lenders holding in the aggregate more than 50% of the   outstanding Term Loan.
    
	
 
    	
 
    	
 
    
	
Springing   Maturity Date:
    	
 
    	
September 13,   2013; provided that, there shall be no Springing Maturity Date if   (a) the Bank of the West Real Estate Loan is no longer outstanding at   such time or (b) the stated maturity date of the Bank of the West Real   Estate Loan has been extended to a date later than October 28, 2013.

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