Document:

AMERCO,
Issuer 

             

            to 

             

            U.S. BANK NATIONAL ASSOCIATION,
Trustee 

             

            _____________________

             

            TWENTY-EIGHTH SUPPLEMENTAL
INDENTURE 

             

            Dated as of
September 13, 2016

             

            TO 

             

            U-HAUL INVESTORS CLUB INDENTURE 

             

            Dated as of
February 14, 2011

             

            _____________________

             

            FIXED RATE SECURED NOTES SERIES UIC-1F and 2F

        
            

            

        

        

        

        
        
            

        

            THIS TWENTY-EIGHTH SUPPLEMENTAL INDENTURE, dated as of September 13, 2016 (the “Supplemental Indenture”), is entered into between AMERCO, a corporation duly organized and existing under the laws of the State of Nevada (hereinafter called the “Company”), having its principal executive office located at 5555 Kietzke Lane, Suite 100, Reno, Nevada 89511, and U.S. Bank National Association, a national banking association (hereinafter called the “Trustee”).  

            RECITALS

            The Company and the Trustee entered into the U-Haul Investors Club Indenture, dated as of February 14, 2011 (the “Base Indenture”, and together with the Supplemental Indenture, the “Indenture”), to provide for the issuance by the Company from time to time of its debentures, notes or other evidences of indebtedness (hereinafter called the “Securities”), unlimited as to principal amount, to bear such rates of interest, to mature at such time or times, to be issued in one or more series.  

            The Company has duly authorized, and desires to cause to be established, a series of its notes to be known as its “Fixed Rate Secured Notes Series UIC-1F and 2F” (the “Notes”), the form and substance of and the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture and this Supplemental Indenture.

             

            The Board of Directors of the Company has duly authorized the issuance of the Notes and the other amendments to the Indenture provided for in this Supplemental Indenture, and has authorized the proper officers of the Company to execute any and all appropriate documents necessary or appropriate to effect each such issuance.

            This Supplemental Indenture is being entered into pursuant to the provisions of Sections 301 and 901 of the Base Indenture.  All terms used in this Supplemental Indenture that are not otherwise defined herein will have the meanings assigned to such terms in the Base Indenture.

            The Company has requested that the Trustee execute and deliver this Supplemental Indenture, and do all things necessary to make this Supplemental Indenture a valid agreement of the Company, in accordance with its terms.

            NOW THEREFORE, in consideration of the premises and the purchase and acceptance of the Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the forms and terms of the Notes, the Company covenants and agrees, with the Trustee, as follows:

            Article one

            GENERAL TERMS AND CONDITIONS OF THE NOTES

            Section 1.01   Designation.

            The Notes, designated as the “Fixed Rate Secured Notes Series UIC-1F and 2F”, are hereby authorized and established as a series of Securities under the Indenture.

        
            

                 

            

        

        

        
        
            

        

            Section 1.02   Form and Denomination of Notes.

            The Notes will be issued as Book-entry Securities.  Therefore, the Notes will not be certificated, and will be registered in the name of the Holders in book-entry form only with the Securities Registrar.  For the avoidance of doubt, the Notes will be issued without coupons, and all references to “Global Securities”, “Bearer Securities” and “Coupons” do not apply to the Notes and will be disregarded.

            The Notes will be issued in denominations of $100 and integral multiples of $100 in excess thereof.  

            The Notes will be issued over a period of time and from time to time, in two separate series, with each series having one or more separate sub-series bearing a unique interest rate and term as provided herein.  Prospective investors shall have the opportunity to select the sub-series of the Notes for which such prospective investor is subscribing.   As sub-series of the Notes are issued, the Company shall so notify the Trustee.  Such notification shall set forth the following, with respect to each such sub-series so issued:  the issue date; the dollar-amount funded; the sub-series number; identification of the Collateral; the maturity date; and the aggregate principal amount of the Notes previously issued.   

            Section 1.03   Principal, Maturity and Interest; Payment Amortization Schedule.

            With respect to each series of the Notes, the term, interest rate and maximum principal amount to be offered, are as follows:

             

            - Series UIC-1F may be issued in multiple sub-series, and each sub-series shall have a term ranging from 4 years to 9 years, with interest rates ranging from 3.77% to 5.53%. 

             

            - Series UIC-2F may be issued in multiple sub-series, and each sub-series shall have a term ranging from 4 years to 9 years, with interest rates ranging from 3.77% to 5.53%. 

            The Notes shall have such other terms as are stated herein, in the form of definitive Notes or in the Indenture.  

             

            As Notes are offered, prospective investors shall have the opportunity to select the series and sub-series of Notes for which such prospective investor is subscribing.   Each of the series of Notes (including all sub-series of Notes issued under their respective series) shall bear a term and corresponding interest rate to be determined by Company management prior to the closing of the first subseries of Notes under such Note series, in accordance with the terms immediately above.  At that time, the initial Collateral which shall secure such series of Notes shall be selected and assigned to the series.    

            The Notes are fully amortizing.    Principal and interest on the Notes will be credited to each holder’s U-Haul Investors Club® account in arrears every three months, beginning three months from the issue date of the applicable subseries of Notes.   Interest on the Notes is calculated based upon the outstanding balance of the Notes at the time interest is due.  

             

        
            

                 

            

        

        

        
        
            

        

            The Regular Record Date for installments of principal and interest payments on the Notes is the first day of the month preceding the related Credit Date; provided, however, that if a Credit Date falls on a day that is not a Business Day, the required installment payment of principal and interest will be made on the next Business Day as if made on the applicable Credit Date, and no interest will accrue on that payment for the period from and after the applicable Credit Date to the next Business Day.

             

            Section 1.04   Limit on Amount of Series:   

            - Series UIC-1F Maximum aggregate principal amount: $1,841,000

            - Series UIC-2F Maximum aggregate principal amount: $5,752,000

            Section 1.05   Ranking.

            The Notes are the obligations of the Company only.  The Notes are not guaranteed by any of the Company’s Subsidiaries or Affiliates, and will be structurally subordinated to all of the existing and future liabilities of the Company’s Subsidiaries.  The Notes are secured in the Collateral (as defined in Section 1.06 below) and will rank equally among themselves.

            Section 1.06   Security Agreement; Events of Default.

            The Company, the Trustee and U-Haul Leasing & Sales Co., will enter into a Pledge and Security Agreement, substantially in the form attached hereto as Exhibit A (the “Pledge and Security Agreement”), concurrently with the execution of this Supplemental Indenture.  The Trustee is hereby directed to execute the Pledge and Security Agreement and to perform its duties as specified therein.  

             

            Pursuant to the Pledge and Security Agreement and related financing statements, each of the series of Notes shall be secured by the following Collateral, as the initial Collateral for such series, subject to collateral substitutions as provided herein:

             

            Subject to our right to substitute collateral as provided herein, the Notes issued under the following individual Series will be secured, respectively, by a first-priority undivided security interest and lien on specified U-Haul®  AV or RV trailer units discussed herein.  The Notes issued under UIC-1F are not cross-collateralized or cross-defaulted to the Notes issued under UIC-2F; and, similarly, the Notes issued under UIC-2F are not cross-collateralized or cross-defaulted to the Notes issued under UIC-1F.  

             

            UIC-1F  up to 1,841 specified U-Haul ® AV trailers, manufactured between 1994 and 2000

            UIC-2F  up to 3,595 specified U-Haul ® RV trailers, manufactured between 1992 and 2006

             

             

            For each $1,000 investment under Series UIC-1F, we will pledge to the Trustee, for the benefit of the noteholders, one AV Trailer.   For each $1,600 investment under Series UIC-2F, we will pledge to the Trustee, for the benefit of the noteholders, one RV Trailer

             

        
            

                 

            

        

        

        
        
            

        

            The series of Notes hereunder are not cross-defaulted or cross-collateralized to one another.  Accordingly, a default by AMERCO under one series of Notes shall not trigger a default under any other series of Notes hereunder or under any other obligation of AMERCO or its affiliates.  Additionally, the collateral pledged to secure one series of Notes hereunder shall not secure the other series of Notes hereunder.  The equity of one property or item of Collateral will not serve as security for any series of Notes other than the series of Notes under which such property or item of Collateral has been pledged.  

            As new sub-series of the Notes are issued, or as additional Notes are issued under a given sub-series of the Notes, new schedules to the Pledge and Security Agreement will be added thereto and provided to the Trustee, to identify the specific Collateral being pledged under such sub-series of the Notes.  Pursuant to the Pledge and Security Agreement, the Collateral is being pledged by Pledgor to the Trustee, for the benefit of the Holders of the Notes.  Subject to certain conditions set forth therein, the Company has the right, in its sole discretion, to make Collateral substitutions.  The Pledge and Security Agreement describes, without limitation, the Company’s right to make Collateral substitutions and the release of the Trustee’s security interest in the Collateral.  

            With respect to the Notes, “Event of Default”, in addition to the meaning given in Section 501 of the Base Indenture, shall include (i) the Company’s or Pledgor’s default in the performance, or breach of any covenant or representation and warranty in the Pledge and Security Agreement, and continuance of such default or breach (without such default or breach having been waived in accordance of the provisions of this Indenture) for a period of 90 days after there has been given, by registered or certified mail, to the Company and the Pledgor by the Trustee if it has notice or actual knowledge of such event of default or to the Company, the Pledgor and the Trustee by the Holders of at least 51% in principal amount of the Outstanding Notes a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” under the Indenture, (ii) the repudiation or disaffirmation by the Company or the Pledgor of its material obligations under the Pledge and Security Agreement, and (iii) the determination in a judicial proceeding that the Pledge and Security Agreement is unenforceable or invalid against the Pledgor for any reason with respect to a material portion of the Collateral.

            Section 1.07   Maturity Date.

            The Notes will mature the specified number of years as indicated in Section 1.03 herein following such Note’s respective issue date.  The schedules to the Pledge and Security Agreement shall set forth the different respective maturity dates of the Notes.  

            Section 1.08   Further Issues.

            Without the consent of Holders of not less than 51% of the principal amount of the outstanding Notes, the Company will not issue additional Notes secured by the Collateral.  However, the Company has the right, from time to time, without the consent of the Holders of the Notes, but in compliance with the terms of the Indenture, issue other Securities.

        
            

                 

            

        

        

        
        
            

        

            Section 1.09   Optional Redemption; Sinking Fund.

            The Notes, including any sub-series thereof and any portion of any sub-series thereof, may be redeemed by the Company in its sole discretion at any time, in whole or in part, without any penalty, premium or fee, at a price equal to 100% of the principal amount then outstanding, plus accrued and unpaid interest, if any, through the date of redemption.  A partial redemption may be on a pro rata basis or on such other basis as is determined by the company in its sole discretion.  The Company will not be obligated to redeem fractions of Notes.   In the event of a redemption, the Company will cause notices of redemption to be emailed to the email address associated with each respective Holder’s U-Haul Investors Club account in accordance with the terms and conditions set forth in the Base Indenture.

            The Notes are not subject to any sinking fund, and the Company is not obligated to repay any principal and interest due on the Notes before such payments become due.  For the avoidance of doubt, Articles XII and XIII contained in the Indenture will not be applicable to the Notes.

            Section 1.10   Payment.

            Principal and interest payments on the Notes, including without limitation the payment due on each date of Stated Maturity with respect to the Notes, will be credited to each Holder’s U-Haul Investors Club account, in U.S. dollars.  For the avoidance of doubt, Article XIV of the Indenture will not be applicable to the Notes. 

            Principal and interest payments on the Notes will be deposited by or on behalf of the Company into one or more segregated accounts maintained by Servicer (as defined in Section 1.16 below) (collectively, the “Investment Account”) with a third party financial institution.  Servicer, on behalf of the Company, will maintain sub-accounts under the Investment Account for each Holder, which are referred to as “U-Haul Investors Club accounts”.  The U-Haul Investors Club accounts are record-keeping sub-accounts under the Investment Account that are purely administrative and reflect balances and transactions concerning the funds of each Holder with respect to the Notes.  Funds in the Investment Account will always be maintained at an FDIC member financial institution.  

             

            Cash funds may remain in a Holder’s U-Haul Investors Club account indefinitely and will not earn interest.  Upon request by a Holder, made through the U-Haul Investors Club website and such Holder’s U-Haul Investors Club account, but subject to specified hold periods as disclosed in the Terms of Use, the Company will transfer, or will cause Servicer to transfer, funds in such Holder’s U-Haul Investors Club account to such Holder’s linked U.S. outside bank account, by a transfer through the ACH System, provided such funds are not already committed to the purchase of other Securities, or to offset any fees payable by such Holder, pursuant to the U-Haul Investors Club.    

            Section 1.11   Restrictions on Transfer.

            The Notes are not transferable except between members of the U-Haul Investors Club through privately negotiated transactions relating exclusively to non-qualified (non

        
            

                 

            

        

        

        
        
            

        

            -retirement/non IRA) accounts, as to which neither the Company, the Servicer, the Trustee, nor any of their respective affiliates will have any involvement.  The Notes are not being listed on any securities exchange, there is no anticipated public market for the Notes, and it is unlikely that a secondary “over-the-counter” market for the notes will develop between bond dealers or bond trading desks at investment houses.  Transfers of the notes held in qualified accounts are not permissible, other than transfers constituting Required Minimum Distributions (RMD).  

            Upon a transfer of one or more Notes following a privately negotiated transaction with another member of the Company’s U-Haul Investors Club, the transferor the transferee and must notify the Company through the U-Haul Investors Club website.  Thereafter, the Company will recognize the transfer and re-register the applicable notes in the name of the transferee.  

            Section 1.12   Fees.  

            The Company will charge a transfer fee for a Note transfer permitted by Section 1.11 of this Supplemental Indenture equal to $25.00 per transaction, assessed to the transferor.  Such fee will be automatically deducted from the funds in such Holder’s U-Haul Investor Club account.

            Section 1.13   Company and Trustee Notices.

            Holders of the Notes agree to receive all documents, communications, notices, contracts, securities offering materials, account statements, agreements and tax documents, including IRS Form 1099s, arising from the U-Haul Investors Club, or required to be delivered by the Indenture or any Security Documents applicable to the Notes, and to submit all documents, statements, communications, records and notices due from the Holders to the Company, electronically through the U-Haul Investors Club website and the Holders’ U-Haul Investors Club accounts.  In addition, the Security Registrar agrees to deliver on behalf of the Trustee, and the Holders of the Notes agree to receive, electronically through the U-Haul Investors Club website and the Holders’ U-Haul Investors Club accounts, all reports of the Trustee required to be delivered to the Holders of the Notes pursuant to the Indenture (including, without limitation, Section 703 of the Base Indenture) or any Security Documents applicable to the Notes.

            Section 1.14   Place of Payment.

            Notwithstanding anything contained in the Indenture to the contrary, no Place of Payment for the Notes shall be maintained by the Company.  The Notes may only be presented or surrendered for payment, surrendered for registration of transfer or exchange, or surrendered in connection with an optional redemption by the Company described in Section 1.09 of this Supplemental Indenture, electronically through the Company’s U-Haul Investors Club website.

            Section 1.15   Security Registrar and Paying Agent.

            The Security Registrar and Paying Agent shall be the Company’s Affiliate, U-Haul International, Inc., a Nevada corporation, or its designee (in such capacity, “Servicer”). 

            Section 1.16   Non-Applicable Provisions.

        
            

                 

            

        

        

        
        
            

        

            The Notes will not (i) be convertible into and/or exchangeable for Common Stock or other securities or property, (ii) be issuable upon the exercise of warrants, or (iii) be guaranteed by any Person on the date of issuance.  The Company will not pay Additional Amounts on such Securities.  

            ARTICLE TWO

            ORIGINAL ISSUE OF NOTES

            Section 2.01   Original Issue of Notes.

            The Notes may, upon execution of this Supplemental Indenture, be issued by the Company in the form provided in Section 1.02.

            ARTICLE Three

            
MISCELLANEOUS

            Section 3.01   Arbitration.

            In the event that the Company, on the one hand, and one or more of the Holders, or the Trustee on behalf of one or more of the Holders, on the other hand, are unable to resolve any dispute, claim or controversy between them (“Dispute”) related to the Indenture, the Notes or the U-Haul Investors Club, as applicable, such parties agree to submit the Dispute to binding arbitration in accordance with the following terms:

            (a)   Any party in its reasonable discretion may give written notice to the other applicable parties that the Dispute be submitted to arbitration for final resolution.  Within fifteen (15) calendar days after receipt of such notice, the receiving parties shall submit a written response.  If the Dispute remains following the exchange of the written notice and response, the parties involved in the Dispute shall mutually select one arbitrator within fifteen (15) calendar days of receipt of the response and shall submit the matter to that arbitrator to be settled in accordance with this Section 3.01(a).  If these parties cannot mutually agree on a single arbitrator during such fifteen (15) day period, these parties shall no later than the expiration of that fifteen (15) day period jointly submit the matter to the American Arbitration Association (“AAA”) for expedited arbitration proceedings to be conducted at the AAA offices, or at another mutually agreeable location, in Phoenix, Arizona pursuant to the Association Commercial Arbitration Rules then in effect (the “Rules”).  The AAA will follow the Rules to select a single arbitrator within fifteen (15) calendar days from the date the matter is jointly submitted to the AAA.  The arbitrator (whether selected by the parties or by the AAA) shall hold a hearing within forty-five (45) calendar days following the date that the arbitrator is selected and shall provide a timeline for the parties to submit arguments and supporting materials with sufficient advance notice to enable the arbitrator to hold the hearing within that forty-five (45) day period.  The arbitrator shall issue a tentative ruling with findings of fact and law within fifteen (15) calendar days after the date of the hearing.  The arbitrator shall provide the parties an opportunity to comment on the tentative ruling within a timeframe established by the arbitrator, provided that the arbitrator shall render a final ruling within thirty (30) calendar days after the date of the hearing.  The arbitrator shall have the authority to grant any equitable and legal remedies that would be available in any

        
            

                 

            

        

        

        
        
            

        

             judicial proceeding to resolve a disputed claim, including, without limitations, the authority to impose sanctions, including attorneys’ fees and costs, to the same extent as a competent court of law or equity.

            (b)   The Company, Trustee and each of the Holders agree that judgment upon any award rendered by the arbitrator may be entered in the courts of the State of Arizona or in the United States District Courts located in Arizona.  Such court may enforce the provisions of this Section 3.01(b), and the party seeking enforcement shall be entitled to an award of all costs and fees, including reasonable attorneys’ fees, to be paid by the party against whom enforcement is ordered.  The parties involved in a Dispute may terminate any arbitration proceeding by mutually resolving any Dispute prior to the issuance of a final arbitration ruling pursuant to this Section 3.01. 

            (c)   For the avoidance of doubt, where a dispute arises related to the Indenture, the Notes, the U-Haul Investors Club or the Security Documents applicable to the Notes between (i) the Trustee and the Company (other than with respect to when the Trustee is acting on behalf of one or more of the Holders), (ii) the Trustee and one or more of the Holders, or (iii) the Trustee and any third party, then in no event will the arbitration provisions set forth in this Section 3.01 apply to such dispute.

            Section 3.02   Ratification of Indenture.

            The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture will be deemed part of the Indenture in the manner and to the extent herein and therein provided; provided that the provisions of this Supplemental Indenture apply solely with respect to the Notes and not to any other Securities that may be issued pursuant to the U-Haul Investors Club.  To the extent there is a conflict between the Indenture and this Supplemental Indenture with respect to the Notes, the terms of this Supplemental Indenture will govern.

            Section 3.03   Trustee Not Responsible for Recitals.

            The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof.  The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture, the Pledge and Security Agreement or the Collateral (as defined in the Pledge and Security Agreement).

            Section 3.04   Governing Law.

            This Supplemental Indenture and the Notes will be governed by and construed in accordance with the laws of the State of New York.

            Section 3.05   Separability.

            In case any one or more of the provisions contained in this Supplemental Indenture, the Notes will for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provisions of this Supplemental

        
            

                 

            

        

        

        
        
            

        

             Indenture or of the Notes, but this Supplemental Indenture and the Notes will be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

            Section 3.06   Counterparts.

            This Supplemental Indenture may be executed in any number of counterparts each of which will be an original; but such counterparts will together constitute but one and the same instrument.  This Supplemental Indenture will be effective when one or more counterparts has been signed by the parties hereto and delivered (including by electronic transmission) to the other parties.

            

        
            

                 

            

        

        

        

        
        
            

        

            [Signature page to Twenty-Eighth Supplemental Indenture, Series UIC-1F and 2F]

             

            IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, as of the day and year first above written.

            AMERCO, as the Company

            By:  _______________________________
Name:  Jason A. Berg
Title:  Chief Financial Officer

            U.S. BANK NATIONAL ASSOCIATION, as the Trustee

            By:  _______________________________
Name:
Title: 

        
            

                 

            

        

        

        

        
        
            

        

            EXHIBIT A TO TWENTY-EIGHTH SUPPLEMENTAL
INDENTURE 

             

             

            PLEDGE AND SECURITY AGREEMENT

            THIS PLEDGE AND SECURITY AGREEMENT (this “Agreement”) is entered into as of September 13, 2016, by and among AMERCO, a Nevada corporation (the “Company”), its affiliate identified on the signature page hereto (such affiliates, collectively, the “Pledgor”), and U.S. Bank National Association, a national banking association in its capacity as Trustee under the Indenture (the “Trustee”).

            RECITALS

            A.   Pursuant to the terms of the U-Haul Investors Club Indenture, dated as of February 14, 2011, by and between the Company and the Trustee (the “Base Indenture”), and the Twenty-Eighth Supplemental Indenture relating to the Fixed Rate Secured Notes Series UIC-1F and 2F, dated as of the date hereof, by and between the Company and the Trustee (the “Supplemental Indenture”; the Base Indenture and the Supplemental Indenture collectively the “Indenture”), the Company is authorized to issue from time to time a series of its notes to be known as its “Fixed Rate Secured Notes Series UIC-1F and 2F” (collectively the “Notes”), such Notes to be issued in sub-series over a period of time and from time to time, as determined by the Company.  Capitalized terms not defined in this Agreement shall have the meanings given to them in the Indenture.

            B.   Under the Indenture, a condition of issuance of the Notes is that the Company’s obligations under the Notes be secured by a first priority lien, equally and ratably, on specified assets owned by the applicable Pledgor (the “Collateral”).  The Collateral is described in Exhibit A hereto, as such Exhibit A shall be supplemented from time to time as provided herein.

             

            C.   The applicable Pledgor is willing to grant the Trustee, for the benefit of the holders of the Notes (the “Holders”), such first priority lien on such Collateral or portion thereof, on the terms and conditions set forth herein.

            NOW, THEREFORE, BE IT AGREED THAT:

            1.   Definitions and Terms.

            Definitions.  For purposes of this Agreement, the following terms shall have the following definitions:

            “Collateral” means (i) that portion of the property of the applicable Pledgor described in Exhibit A, as amended or supplemented from time in accordance with the terms hereof, which relates to the particular sub-series of the Notes in question, and (ii) all Proceeds of such property.

            “Company” shall include both of the named Company and any other Person at any time assuming or otherwise becoming primarily liable for all or any part of the Obligations under the Financing Documents, including the trustee and the debtor‐in‐possession in any bankruptcy or similar proceeding involving the named Company.

        
            

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            “Financing Documents” means this Agreement, the Indenture, the Notes and all other documents entered into by the Company or the Pledgor with respect to the Obligations. 

            “Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

            “Lien” means any mortgage, deed of trust, deed to secure debt, pledge, hypothecation, assignment, deposit arrangement, security interest, lien, charge, easement, encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such property or assets, conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing; provided that in no event shall an operating lease be deemed to constitute a Lien.

            “Obligations” means (i) all principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the Notes and the Indenture and all other obligations, liabilities and indebtedness of every kind, nature and description owing by the Company under the Notes and the Indenture, in each case whether now or hereafter existing, direct or indirect, absolute or contingent, due or not due, primary or secondary, liquidated or unliquidated, renewed or restructured, whether or not from time to time decreased or extinguished and later increased, including all such obligations which would become due but for the operation of the (A) automatic stay under Section 362(a) of the Bankruptcy Code, (B) Section 502(b) of the Bankruptcy Code, or (C) Section 506(b) of the Bankruptcy Code, including interest accruing under the Notes and the Indenture after the commencement of an Insolvency Proceeding, whether or not allowed or allowable as a claim in such Insolvency  Proceeding, and (ii) all other obligations, liabilities and indebtedness of every kind, nature and description owing by the Pledgor hereunder, in each case whether now or hereafter existing, direct or indirect, absolute or contingent, due or not due, primary or secondary, liquidated or unliquidated, renewed or restructured, whether or not from time to time decreased or extinguished and later increased, including all such obligations which would become due but for the operation of the (A) automatic stay under Section 362(a) of the Bankruptcy Code, (B) Section 502(b) of the Bankruptcy Code, or (C) Section 506(b) of the Bankruptcy Code, including interest accruing hereunder after the commencement of an Insolvency Proceeding, whether or not allowed or allowable as a claim in such Insolvency  Proceeding.

            “Permitted Liens” means Liens in favor of carriers, warehousemen, mechanics, suppliers, repairmen, materialmen and landlords and other similar Liens imposed by law, in each case for sums not overdue or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against the Company, and easements granted in the ordinary course of business that do not have a material adverse impact upon the property in question. 

            “Proceeds” has the meaning specified in Section 9-102(a) of the UCC.

            “Required Holders” means the Holders of not less than a majority in principal amount of the Notes.

        
            

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            “UCC” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result of such law to be applied in connection with perfection of security interests.

             

            2.   Other Terms.  All other capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. 

             

            3.   Grant of Security Interest.  As an inducement for the Holders to purchase the Notes, and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all the Obligations with respect to any given sub-series of the Notes, the Pledgor hereby unconditionally and irrevocably pledges and grants to the Trustee, for the benefit of each Holder of each individual sub-series of the Notes that may be issued from time to time, and to the Trustee, a continuing security interest in and to, and a Lien against that portion of the Collateral identified in the applicable schedule hereto with respect to the applicable sub-series of the Notes for which such Holder is an investor.  The obligations of the Company with respect to each sub-series of the Notes will be initially secured by a first-priority lien, equally and ratably, on a specified pool of assets owned by Pledgor and identified on the applicable portion of Exhibit A hereto.  As new sub-series of the Notes are issued, or as additional Notes are issued under any given sub-series of the Notes, new schedules hereto will be added, to identify the specific Units of Collateral being pledged under such sub-series or further issuance of the Notes, to the extent applicable.  The Units of Collateral securing one sub-series of the Notes or securing an additional issuance of the Notes under a given sub-series, shall not serve as Collateral for other sub-series of the Notes or other issuances of Notes under the same sub-series. 

            Once an initial investment has been made with us with respect to any individual Series of notes as specified above, we will grant and convey to the trustee, for the benefit of the noteholders, a first priority mortgage or deed of trust lien, as appropriate, on the respective individual property as identified in the table above, and such mortgage or deed of trust, as the case may be, shall be promptly recorded in the office of the county recorder of the county in which the individual property is located.

             

            Notwithstanding any provision hereof or any of the other Financing Documents, none of the Company, the Pledgor or the Trustee has any obligation to maintain and keep the Collateral in good condition, repair and working order or to replace lost, stolen, damaged or destroyed Collateral or Collateral taken through condemnation or deed in lieu of condemnation.  There shall be no obligation to repay the Notes with proceeds from any condemnation or deed in lieu of condemnation.   

             

            4.   No Recourse to Pledgor.  The Pledgor’s grant of the Lien against the Collateral secured the prompt and punctual payment of the Obligations, whether at stated maturity, by acceleration or otherwise, and is not merely a guaranty of collection from the Company.  The Pledgor has and shall have no personal liability or obligation with respect to payment of the Obligations, which are payable solely by the Company.

             

        
            

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            5.   Perfection of Security Interest.  Each Pledgor hereby authorizes the Company to file or cause the filing, from time to time, of financing statements and any other collateral documents as may be necessary or appropriate, without notice to the Pledgor, with all appropriate jurisdictions to perfect or protect the Trustee’s interest or rights hereunder.  Each Pledgor shall take all actions reasonably requested by the Company to perfect and to give notice of the Trustee’s Lien against the Collateral.  To the extent perfection of the Trustee’s interest or rights hereunder requires the modification of one or more certificates of title, if any, representing the Collateral, upon the request from time to time by the Trustee, the Pledgor shall provide the Trustee with a list of all such certificates of title issued in electronic form by the relevant governmental department, as well as any applications for such certificates of title submitted with the relevant governmental department and such other information as the Pledgor has in its possession related to such certificates of title.

             

            6.   Release of Security Interest; Substitution of Collateral.  The Trustee’s Lien against any equipment or property constituting Collateral shall be automatically released upon (i) the sale or other disposition of such equipment or property to a buyer in the ordinary course of business, in accordance with Section 9-320 of the UCC, or (ii) a casualty loss of such equipment or property, provided that the Trustee’s Lien attaches to the Proceeds, if any, of such disposition or loss.  In addition, the Company shall have the right from time to time, so long as no Event of Default exists, to have the Trustee’s Lien against any equipment, property or Proceeds constituting Collateral released by the Trustee; provided that the Company causes one or more of the Pledgor, and/or any other third parties or Affiliates of the Company (each, an “Additional Pledgor”) to pledge, in replacement of such Collateral, other equipment or property with a value, as determined by the Company in its reasonable discretion, that is not less than the value of such Collateral at the time of substitution; and provided further that if an Additional Pledgor pledges any such equipment or property in replacement thereof, then the Company, such Additional Pledgor and the Trustee shall promptly enter into separate pledge and security agreement in substantially the form of this Agreement, granting the Trustee, for the benefit of the Holders, a first priority lien, equitably and ratably, in such equipment or property, on such terms and conditions set forth therein (each, a “New Pledge and Security Agreement”).  The Company shall exercise such right by delivering to the Trustee an officers’ certificate in the form attached hereto as Exhibit B (the “Officers’ Certificate”), which shall provide the Trustee with notice of the equipment, property or Proceeds constituting Collateral for which the Trustee’s Lien is requested to be released, and shall describe the equipment or property that is requested to replace such Collateral, and which shall certify that the Company has determined, in accordance with this Section 5, that the value of such equipment or property is not less than the value of the Collateral to be released from the Trustee’s Lien at the time of substitution.  The Trustee, within five (5) days of receipt of the Company’s Officer’s Certificate, shall provide the Company and the Pledgor with a written notice acknowledging the release and substitution of equipment or property as Collateral under this Agreement and/or as collateral under a New Pledge and

        
            

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             Security Agreement, as applicable.  The Company shall have the right to amend Exhibit A to reflect each release of any such equipment or property as Collateral hereunder and each addition of equipment as Collateral hereunder pledged by the Pledgor, as applicable.  The Pledgor shall take all actions reasonably requested by the Trustee to evidence and to give effect to the addition of equipment or property as Collateral hereunder, as applicable.  The Company shall not be required to obtain any appraisal of equipment or property to be released from the Trustee’s Lien or to be added as Collateral hereunder and/or as collateral under a New Pledge and Security Agreement, in connection with the Company’s determination of the value of substitute equipment or property in accordance with this Section 5, and neither the Company nor the Pledgor shall have any liability to the Trustee or the Holders if the value of such substitute equipment or property is subsequently determined to be less than the value of the Collateral released from the Trustee’s Lien in accordance with this Section 5.  The Company’s determination as to the value of substitute equipment or property as Collateral in accordance with this Section 5 shall be final and binding on the Trustee and the Holders, and the Trustee shall have no responsibility or liability to the Holders or any other person with respect thereto.

            In addition, the Trustee’s Lien against any equipment or property constituting Collateral shall be released upon the repayment in full of all Obligations and the delivery by the Company to the Trustee of an officer’s certificate substantially in the form of Exhibit C hereto.   

            7.   Termination of Security Interest.  In addition to the provisions of Section 5 above, if this Agreement is terminated, the Trustee’s Lien in the Collateral with respect to any given sub-series of the Notes shall continue until the Obligations under such sub-series of the Notes are repaid in full.  Upon the crediting in full of the Obligations to each Holder’s U-Haul Investors Club account with respect to any given sub-series or any additional issuance of the Notes under any given sub-series, and the termination of such sub-series or additional issuance of the Notes and payment to the Trustee of all amounts due and owing to it, the Trustee shall, at the Pledgor’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to the Pledgor.  

             

            8.   The Trustee’s Rights.  The Pledgor authorizes the Trustee, without giving notice to the Pledgor or obtaining the Pledgor’s consent and without affecting the Pledgor’s liability for the Obligations to the extent described herein, from time to time, to:

            a.   compromise, settle, renew, extend the time for payment, change the manner or terms of payment, discharge the performance of, decline to enforce, or release all or any of the Obligations; grant other indulgences to the Company in respect thereof; or modify in any manner any documents (other than this Agreement) relating to the Obligations, in each case (other than with respect to decisions not to enforce and to grant indulgences) in accordance with Financing Documents;

            b.   declare all Obligations due and payable upon the occurrence of an Event of Default;

        
            

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            c.   take and hold security for the performance of the Obligations and exchange, enforce, waive and release any such security; 

            d.   apply and reapply such security and direct the order or manner of sale thereof as the Trustee, in its sole discretion, may determine;

            e.   release, surrender or exchange any deposits or other property securing the Obligations or on which the Trustee at any time may have a Lien; release, substitute or add any one or more endorsers or guarantors of the Obligations; or compromise, settle, renew, extend the time for payment, discharge the performance of, decline to enforce, or release all or any obligations of any such endorser or the Pledgor or other Person who is now or may hereafter be liable on any Obligations or release, surrender or exchange any deposits or other property of any such Person; and

            f.   apply payments received by the Trustee from the Company, if any, to any Obligations, in such order as the Trustee shall determine, in its sole discretion. 

            9.   The Pledgor’s Waivers.

            The Pledgor waives:

            a.   any defense based upon any legal disability or other defense of the Company, or by reason of the cessation or limitation of the Company’s liability from any cause (other than full payment of all Obligations), including failure of consideration, breach of warranty, statute of frauds, statute of limitations, accord and satisfaction, and usury;

            b.   any defense based upon any legal disability or other defense of any other Person;

            c.   any defense based upon any lack of authority of the officers, directors or agents acting or purporting to act on behalf of the Company or any defect in the formation of the Company;

            d.  any defense based upon the application by the Company of the proceeds of the Notes for purposes other than the purposes represented by the Company to the Trustee or the Holders;

            e.   any defense based on the Pledgor’s rights, under statute or otherwise, to require the Trustee to sue the Company or otherwise to exhaust its rights and remedies against the Company or any other Person or against any other collateral before seeking to enforce this Agreement;

            f.   any defense based on the Trustee’s failure at any time to require strict performance by the Company of any provision of the Financing Documents or by the Pledgor of this Agreement.  The Pledgor agrees that no such failure shall waive, alter or diminish any right of the Trustee thereafter to demand strict compliance and performance therewith.  Nothing contained herein shall prevent the Trustee from foreclosing on the Lien of any other security

        
            

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             agreement, or exercising any rights available to the Trustee thereunder, and the exercise of any such rights shall not constitute a legal or equitable discharge of the Pledgor; 

            g.   any defense arising from any act or omission of the Trustee which changes the scope of the Pledgor’s risks hereunder;

            h.   any defense based upon the Trustee’s election of any remedy against the Pledgor or the Company or both; any defense based on the order in which the Trustee enforces its remedies;

            i.   any defense based on (A) the Trustee’s surrender, release, exchange, substitution, dealing with or taking any additional collateral, (B) the Trustee’s abstaining from taking advantage of or realizing upon any Lien or other guaranty, and (C) any impairment of collateral securing the Obligations, including, but not limited to, the Company’s failure to perfect, or maintain the perfection or priority of, a Lien in such collateral;

            j.   any defense based upon the Trustee’s failure to disclose to the Pledgor any information concerning the Company’s financial condition or any other circumstances bearing on the Company’s ability to pay the Obligations;

            k.   any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other respects more burdensome than that of a principal; 

            l.   any defense based upon the Trustee’s election, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code or any successor statute; 

            m.   any defense based upon any borrowing or any grant of a Lien under Section 364 of the Bankruptcy Code; 

            n.   any defense based on the Trustee’s failure to be diligent or to act in a commercially reasonable manner, or to satisfy any other standard imposed on a secured party, in exercising rights with respect to collateral securing the Obligations;

            o.   notice of acceptance hereof; notice of the existence, creation or acquisition of any Obligation; notice of any Event of Default; notice of the amount of the Obligations outstanding from time to time; notice of any other fact which might increase the Pledgor’s risk; diligence; presentment; demand of payment; protest; filing of claims with a court in the event of the Company’s Insolvency Proceeding and all other notices and demands to which the Pledgor might otherwise be entitled (and agrees the same shall not have to be made on the Company as a condition precedent to the Pledgor’s obligations hereunder);

            p.   any defense based on the Trustee’s failure to seek relief from stay or adequate protection in the Company’s Insolvency Proceeding or any other act or omission by the Trustee which impairs Pledgor’s prospective subrogation rights;

        
            

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            q.   any defense based on legal prohibition of the Trustee’s acceleration of the maturity of the Obligations during the occurrence of an Event of Default or any other legal prohibition on enforcement of any other right or remedy of the Trustee with respect to the Obligations and the security therefor; and 

            r.   the benefit of any statute of limitations affecting the Pledgor’s liability hereunder or the enforcement hereof.

            The Pledgor agrees that the payment of all sums payable under the Financing Documents or any part thereof or other act which tolls any statute of limitations applicable to the Financing Documents shall similarly operate to toll the statute of limitations applicable to Pledgor’s liability hereunder.

            10.   Subrogation.  The Pledgor shall not exercise any rights which it may acquire by reason of any payment of the Obligations made hereunder through enforcement of the Lien against any of the Collateral, whether by way of subrogation, reimbursement or otherwise, until (i) the prior payment, in full and in cash, of all Obligations and (ii) the termination of the Notes.  

            11.   The Pledgor’s Representations and Warranties.  The Pledgor represents and warrants to the Trustee that:

            a.   Each Pledgor’s name as of the date hereof as it appears in official filings in the state of its incorporation is as set forth on the applicable signature page hereto with respect to such Pledgor.   

            b.   the Pledgor’s execution, delivery and performance of this Agreement (i) do not contravene any law or any contractual restriction binding on or affecting the Pledgor or by which the Pledgor’s assets may be affected; and (ii) do not require any authorization or approval or other action by, or any notice to or filing with, any other Person except such as have been obtained or made;

            c.   there are no conditions precedent to the effectiveness of this Agreement, and this Agreement shall be in full force and effect and binding on the Pledgor as of the date hereof, regardless of whether the Trustee or the Holders obtain collateral or any guaranties from other Persons or takes any other action contemplated by the Pledgor; 

            d.   this Agreement constitutes the legal, valid and binding obligation of the Pledgor, enforceable in accordance with its terms, except as the enforceability thereof may be subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights of creditors generally and by general principles of equity; and

            e.   the Pledgor has established adequate means of obtaining from sources other than the Trustee, on a continuing basis, financial and other information pertaining to the Company’s financial condition and the status of Company’s performance of obligations imposed by the Financing Documents, and the Pledgor agrees to keep adequately informed from such means of any facts, events or circumstances which might in any way affect the Pledgor’s risks

        
            

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             hereunder and neither the Trustee nor any of the Holders has made any representation or warranty to the Pledgor as to any such matters.

            12.   The Pledgor’s and Company’s Covenants.  The Pledgor covenants with the Trustee that:

            a.   The Pledgor shall not change its name or jurisdiction of organization without giving thirty (30) days’ prior written notice to the Trustee; and 

            b.   The Collateral will not become subject to any Lien other than Permitted Liens and the Trustee’s Lien.  

            c.   During the continuance of an Event of Default, the proceeds payable under any liability policy, to the extent that they relate to the Collateral, shall be payable to the Trustee on account of the Obligations.  The foregoing notwithstanding, so long as no Event of Default has occurred and is continuing, the Pledgor shall have the option, but not the obligation, of applying such proceeds toward the replacement or repair of destroyed or damaged Collateral; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral, as determined by the Company in its reasonable judgment in accordance with Section 5, and (ii) shall be deemed Collateral in which the Trustee has been granted a first priority Lien.

            d.   The Pledgor shall notify the Trustee and the Company in writing promptly, but in no event more than two business days after the occurrence of an event which constitutes a breach of its obligations or duties under this Agreement.  

            (e)   The Company covenants with the Trustee that it will notify the Trustee and the Pledgor in writing promptly of an event which constitutes an Event of Default.  

            13.   The Trustee’s and Holders’ Rights, Duties and Liabilities.

            a.   Each Holder, by acceptance of its Note, appoints the Trustee to act as its agent under this Agreement.  Each Holder hereby irrevocably authorizes the Trustee to take such action on its behalf under the provisions of this Agreement and the other documents relating to the Collateral (together with this Agreement, the “Security Documents”) and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Trustee by the terms hereof and thereof and such other powers as are reasonably incidental thereto and the Trustee shall hold all Collateral, charges and collections received pursuant to this Agreement, for the ratable benefit of the Holders.  The Trustee may perform any of its duties hereunder by or through its agents or employees or a co-trustee.  As to any matters not expressly provided for by this Agreement the Trustee shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Holders, and such instructions shall be binding; provided, however, that the Trustee shall not be required to take any action which in the Trustee’s reasonable discretion exposes it to liability or which is contrary to this Agreement, the Indenture or the other Security Documents or applicable law unless the Trustee is furnished with an indemnification by the Holders acceptable to the Trustee in its sole discretion with respect thereto and the Trustee shall not be responsible for any

        
            

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             misconduct or negligence on the part of any of the agents appointed with due care by the Trustee.  The Trustee shall have no duties or responsibilities except those expressly set forth in this Agreement.  The Trustee shall not be under any obligation to any Holder to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any of the other Security Documents.  The Trustee shall not have by reason of this Agreement a fiduciary relationship in respect of any Holder; and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon the Trustee any obligations in respect of this Agreement except as expressly set forth herein.

            b.   The Pledgor assumes all responsibility and liability arising from or relating to the use, sale, license or other disposition of the Collateral.  The Obligations shall not be affected by any failure to take any steps to perfect the Trustee’s Liens or to collect or realize upon the Collateral, nor shall loss of or damage to the Collateral release the Company from any of the Obligations or the Pledgor from its obligations hereunder.  

            c.   The Pledgor shall remain liable under each of its contracts and each of its licenses relating to the Collateral.  Neither the Trustee nor any Holder shall have any obligation or liability under any such contract or license by reason of or arising out of this Agreement.  Neither the Trustee nor any Holder shall be required or obligated in any manner to perform or fulfill any of the Pledgor’s obligations under or pursuant to any such contract or license or to enforce any of the Pledgor’s rights under or pursuant to any contract or license.

            d.   In no event shall the Trustee or any Holder be responsible or liable for 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 action.

            e.   In acting hereunder, the Trustee shall be entitled to all of the rights, protections, privileges and immunities afforded to the Trustee under the Indenture, and all such rights, protections, privileges and immunities are incorporated by reference herein and shall inure to the benefit of the trustee herein.

            f.   No provision of this Agreement 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 any exercise of any rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not reasonably assured to it and none of the provisions contained in this Agreement shall require the Trustee to perform or be responsible for the performance of any of the obligations of the Company or the Pledgor.  

            g.   The Trustee shall not be deemed to have notice of any matter including without limitation any default or Event of Default or any breach by the Pledgor or the Company unless one of its Responsible Officers has actual knowledge thereof or written notice thereof is received by the trustee and such notice references this Agreement or the Indenture.

            (h)   For the avoidance of doubt, notwithstanding anything herein or in the Indenture to the contrary, the Trustee shall only be liable to the extent of obligations specifically

        
            

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             imposed upon and undertaken by the trustee as pledgee hereunder and the Trustee shall only be liable to the extent of its gross negligence or willful misconduct in connection with its duties hereunder.  

            14.   Remedies and Rights During Event of Default. 

            a.   In addition to all other rights and remedies granted to it under this Agreement, the Indenture, and under any other instrument or agreement securing, evidencing or relating to any of the Obligations, during the continuance of any Event of Default, the Trustee may exercise all rights and remedies of a secured party under the UCC.  Without limiting the generality of the foregoing, the Pledgor expressly agrees that in any such event the Trustee or any agent acting on behalf of the Trustee, without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon the Pledgor or any other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the maximum extent permitted by the UCC and other applicable law), may forthwith enter upon the premises of the Pledgor where any Collateral is located through self-help, without judicial process, without first obtaining a final judgment or giving the Pledgor or any other Person notice and opportunity for a hearing on the Trustee’s claim or action and may collect, receive, assemble, process, appropriate and realize upon the Collateral, or any part thereof, and may forthwith sell, lease, license, assign, give an option or options to purchase, or sell or otherwise dispose of and deliver the Collateral (or contract to do so), or any part thereof, in one or more parcels at a public or private sale or sales, at any exchange at such prices as it may deem acceptable, for cash or on credit or for future delivery without assumption of any credit risk.  The Trustee or any Holder shall have the right but not the obligation upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Trustee and Holders, the whole or any part of the Collateral so sold, free of any right or equity of redemption, which equity of redemption the Pledgor hereby releases.  Such sales may be adjourned and continued from time to time with or without notice.  The Trustee shall have the right to conduct such sales on the Pledgor’s premises or elsewhere and shall have the right to use the Pledgor’s premises without charge for such time or times as the Trustee reasonably deems necessary or advisable.

            b.   The Pledgor further agrees, at the Trustee’s request, to provide such information as may be needed to enable the Trustee to assemble the Collateral and, to the extent required by the UCC, to make it available to the Trustee at a place or places designated by the Trustee which are reasonably convenient to the Trustee and the Pledgor, whether at the Pledgor’s premises or elsewhere.  Until the Trustee is able to effect a sale, lease, or other disposition of Collateral, the Trustee shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by the Trustee.  The Trustee shall have no obligation to the Pledgor to maintain or preserve the rights of the Pledgor as against third parties with respect to Collateral while Collateral is in the Trustee’s possession.  The Trustee may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Trustee’s remedies (for the benefit of the Trustee and the Holders), with respect to such appointment without prior notice or hearing as to such appointment.  The Trustee shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale to the Obligations as provided herein and in the Indenture, and only after so paying over such net

        
            

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             proceeds, and after the payment by the Trustee of any other amount required by any provision of law, need the Trustee account for the surplus, if any, to the Pledgor.  To the maximum extent permitted by applicable law, the Pledgor waives all claims, damages, and demands against the Trustee or any Holder arising out of the repossession, retention or sale of the Collateral except such as determined by a court of competent jurisdiction in a final nonappealable judgment to have resulted primarily from the gross negligence or willful misconduct of the Trustee or such Holder.  The Pledgor agrees that ten (10) days’ prior written notice by the Trustee of the time and place of any public sale or of the time after which a private sale may take place is reasonable notification of such matters.  The Company shall remain liable for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all Obligations, including any reasonable attorneys’ fees or other out-of-pocket expenses actually incurred by the Trustee or any Holder to collect such deficiency. 

            c.   Except as otherwise specifically provided herein, the Pledgor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Agreement or any Collateral.

            d.   To the extent that applicable law imposes duties on the Trustee to exercise remedies in a commercially reasonable manner, the Pledgor acknowledges and agrees that it is not commercially unreasonable for the Trustee (i) to fail to incur expenses reasonably deemed significant by the Trustee to prepare Collateral for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to remove Liens on or any adverse claims against Collateral, (iv) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (v) to contact other Persons, whether or not in the same business as the Pledgor, for expressions of interest in acquiring all or any portion of such Collateral, (vi) to hire one or more professional auctioneers to assist in the disposition of Collateral, (vii) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (viii) to dispose of Collateral  in wholesale rather than retail markets, (ix) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (x) to purchase insurance to insure the Trustee against risks of loss, collection or disposition of Collateral or to provide to the Trustee a guaranteed return from the disposition of Collateral, or (xi) to the extent deemed appropriate by the Trustee, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Trustee in the collection or disposition of any of the Collateral.  The Pledgor acknowledges that the purpose of this Section 13(d) is to provide non-exhaustive indications of what actions or omissions by the Trustee would not be commercially unreasonable in the Trustee’s exercise of remedies against the Collateral and that other actions or omissions by the Trustee shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 13(d).  Without limitation upon the foregoing, nothing contained in this Section 13(d) shall be construed to grant any rights to the Pledgor or to impose any duties on the Trustee that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section 13(d).

        
            

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            (e)   Notwithstanding any provision to the contrary contained in this Agreement, the Trustee shall not be required to obtain title to any Collateral that constitutes real property as a result of or in lieu of foreclosure or otherwise acquire possession of, or take any other action with respect to, any such Collateral if, as a result of any such action, the Trustee for itself or on behalf of the Holders would be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of such Collateral within the meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the Trustee has previously determined based on its reasonable judgment and a report prepared by an independent Person who regularly conducts environmental audits using customary industry standards, that:

            (i)   such Collateral is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Holders to take such actions as are necessary to bring the Collateral into compliance therewith; and

            (ii)   there are no circumstances present at such Collateral relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials for which  investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Holders to take such actions with respect to the affected Collateral.

            The cost of the environmental audit report contemplated by this Section shall be advanced by the Company.

            During the continuance of an Event of Default, if the Trustee determines that it is in the best economic interest of the Holders to take such actions as are necessary to bring any such Collateral into compliance with applicable environmental laws, or to take such action with respect to the containment, clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such Collateral, then the Trustee shall take such action as it deems to be in the best economic interest of the Holders.  The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Company.

             

            15.   Power of Attorney.  The Pledgor hereby irrevocably appoints the Trustee as its lawful attorney-in-fact, exercisable during the continuance of an Event of Default, to: (a) make, settle, and adjust all claims under the Pledgor’s insurance policies with respect to the Collateral, if any; (b) pay, contest or settle any Lien or adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (c) transfer the Collateral into the name of the Trustee or a third party as the UCC permits.  The Pledgor hereby appoints the Company as its lawful attorney-in-fact to sign the Pledgor’s name on any documents necessary to perfect or continue the perfection of any security interest regardless of whether an Event of Default has occurred until all Obligations have been satisfied in full, in cash, and the Notes have terminated.  The Company’s foregoing appointment as the Pledgor’s attorney in fact, and all of the Company’s rights and powers, coupled with an interest, are irrevocable until all Obligations have been satisfied in full, in cash and the Notes have terminated.

        
            

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            16.   Cost and Expenses; Indemnification.

            The Company agrees to pay to the Trustee, for its benefit, on demand, (i) all fees, costs and expenses that the Trustee pays or incurs as provided in that fee letter dated January 26, 2011 between the Company and the Trustee, as the same may be amended from time to time; and (ii) sums paid or incurred to pay any amount or take any action required of the Pledgor under this Agreement that the Pledgor fails to pay or take; and (iii) costs and expenses of preserving and protecting the Collateral or taking any other action contemplated or required by this Agreement or the other Security Documents.  The foregoing shall not be construed to limit any other directly contrary provisions of this Agreement regarding costs and expenses to be paid by the Pledgor or the Company.

            (b)   The Company will save, indemnify and keep the Trustee, and the Trustee’s officers, employees, directors and agents, and the Holders harmless from and against all expense (including reasonable attorneys’ fees and expenses), loss, claim, liability or damage arising out of their actions or inaction hereunder or in connection with the Collateral, the Indenture or any Security Document, except to the extent such expense, loss, claim, liability or damage is determined by a court of competent jurisdiction in a final nonappealable judgment to have resulted from the gross negligence or willful misconduct of the Trustee or the Holders as finally determined by a court of competent jurisdiction.  This Section 15(b) shall be expressly construed to include, but not be limited to, such indemnities, compensation, expenses, disbursements, advances, losses, liabilities, damages and the like, as may pertain or relate to any environmental law or environmental matter.

             

            The benefits of this Section 15 shall survive the termination of this Agreement or the removal or resignation of the Trustee.

            17.   Limitation on the Trustee’s and the Holders’ Duties with Respect to the Collateral.

            Neither the Trustee nor any Holder shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Trustee or such Holder.

            The Trustee shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral.  The Trustee shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any agent or bailee selected by the Trustee in good faith.

            The Trustee shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, for the validity or sufficiency of the Collateral or any agreement or

        
            

                14

            

        

        

        
        
            

        

             assignment contained therein, for the validity of the title of the Pledgor to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral.

            The Pledgor bears all risk of loss for damage or destruction of the Collateral.

            18.   No Waiver; Remedies Cumulative.  The Trustee’s failure, at any time or times, to require strict performance by the Pledgor of any provision of this Agreement or any other Financing Document shall not waive, affect, or diminish any right of the Trustee thereafter to demand strict performance and compliance herewith or therewith.  No waiver hereunder shall be effective unless signed by the Trustee and then is only effective for the specific instance and purpose for which it is given.  The Trustee’s rights and remedies under this Agreement and the other Financing Documents are cumulative.  The Trustee has all rights and remedies provided under the UCC, by law, or in equity.  The Trustee’s exercise of one right or remedy is not an election, and the Trustee’s waiver of any Event of Default is not a continuing waiver.  The Trustee’s delay in exercising any remedy is not a waiver, election, or acquiescence.

            19.   Marshaling of Assets.  The Trustee shall be under no obligation to marshal any assets in favor of Pledgor, the Company or any other Person liable for the Obligations or against or in payment of any Obligations.

            20.   Independent Obligations.  This Agreement is independent of the Company’s obligations under the Financing Documents.  The Trustee may bring a separate action to enforce the provisions hereof against the Pledgor without taking action against the Company or any other Person or joining the Company or any other Person as a party to such action.

            21.   Term; Revival.  

            a.   This Agreement is irrevocable by the Pledgor.  It shall terminate only upon the full satisfaction of the Obligations and termination of the Notes.  If, notwithstanding the foregoing, the Pledgor shall have any nonwaivable right under applicable law or otherwise to terminate or revoke this Agreement, the Pledgor agrees that such termination or revocation shall not be effective until the Trustee receives written notice of such termination or revocation.  Such notice shall not affect the Trustee’s right and power to enforce rights arising prior to receipt thereof.    

            b.   The Pledgor’s pledge hereunder of the Collateral shall be reinstated and revived, and the Trustee’s rights shall continue, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made.  If any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

            22.   Notices.  Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other party, or whenever any of the parties

        
            

                15

            

        

        

        
        
            

        

             desire to give and serve upon the other party any communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and, in the case of the Company and the Trustee, shall be given in the manner, and deemed received, as provided for in the Indenture and in the case of the Pledgor shall be mailed, first-class postage prepaid, to the Pledgor’s Treasurer at the address of its principal office specified below its signature block herein or at any other address previously furnished in writing to the Trustee by the Pledgor. 

            23.   Miscellaneous.

            (a)   Arbitration.  In the event that the Company or the Pledgor, on the one hand, and one or more of the Holders, or the Trustee as pledgee on behalf of one or more of the Holders, on the other hand, are unable to resolve any dispute, claim or controversy between them (“Dispute”) related to this Agreement, such parties agree to submit the Dispute to binding arbitration in accordance with the following terms:

            (i)   Any party in its reasonable discretion may give written notice to the other applicable parties that the Dispute be submitted to arbitration for final resolution.  Within fifteen (15) calendar days after receipt of such notice, the receiving parties shall submit a written response.  If the Dispute remains following the exchange of the written notice and response, the parties involved in the Dispute shall mutually select one arbitrator within fifteen (15) calendar days of receipt of the response and shall submit the matter to that arbitrator to be settled in accordance with this Section 22(a).  If these parties cannot mutually agree on a single arbitrator during such fifteen (15) day period, these parties shall no later than the expiration of that fifteen (15) day period jointly submit the matter to the American Arbitration Association (“AAA”) for expedited arbitration proceedings to be conducted at the AAA offices, or at another mutually agreeable location, in Phoenix, Arizona pursuant to the Association Commercial Arbitration Rules then in effect (the “Rules”).  The AAA will follow the Rules to select a single arbitrator within fifteen (15) calendar days from the date the matter is jointly submitted to the AAA.  The arbitrator (whether selected by the parties or by the AAA) shall hold a hearing within forty-five (45) calendar days following the date that the arbitrator is selected and shall provide a timeline for the parties to submit arguments and supporting materials with sufficient advance notice to enable the arbitrator to hold the hearing within that forty-five (45) day period.  The arbitrator shall issue a tentative ruling with findings of fact and law within fifteen (15) calendar days after the date of the hearing.  The arbitrator shall provide the parties an opportunity to comment on the tentative ruling within a timeframe established by the arbitrator, provided that the arbitrator shall render a final ruling within thirty (30) calendar days after the date of the hearing.  The arbitrator shall have the authority to grant any equitable and legal remedies that would be available in any judicial proceeding to resolve a disputed claim, including, without limitations, the authority to impose sanctions, including attorneys’ fees and costs, to the same extent as a competent court of law or equity.

            (ii)   The Company, the Pledgor, Trustee and each of the Holders agree that judgment upon any award rendered by the arbitrator may be entered in the courts of the State of Arizona or in the United States District Courts located in Arizona.  Such court may enforce the provisions of this Section 22(a)(ii), and the party seeking enforcement shall be entitled to an award of all costs and fees, including reasonable attorneys’ fees, to be paid by the party against whom enforcement is ordered.  The

        
            

                16

            

        

        

        
        
            

        

             parties involved in a Dispute may terminate any arbitration proceeding by mutually resolving any Dispute prior to the issuance of a final arbitration ruling pursuant to this Section 22(a). 

            (iii)   For the avoidance of doubt, where a dispute arises related to this Pledge and Security Agreement between (x) the Trustee and the Company or the Pledgor, (y) the Trustee and one or more of the Holders, or (z) the Trustee and any third party, then in no event will the arbitration provisions set forth in this Section 22 apply to such dispute.

             

            24.   No Waiver; Cumulative Remedies.  Neither the Trustee nor any Holder shall by any act, delay or omission or otherwise be deemed to have waived any of its rights or remedies hereunder, and no waiver shall be valid unless in writing, signed by the Trustee and then only to the extent therein set forth.  A waiver by the Trustee of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Trustee would otherwise have had on any future occasion.  No failure to exercise nor any delay in exercising on the part of the Trustee or any Holder, any right, power or privilege hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or future exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies hereunder provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights and remedies provided by law.  

            25.   Limitation by Law.  All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Agreement invalid, unenforceable, in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable law.

            26.   Headings.  All headings appearing in this Agreement are for convenience only and shall be disregarded in construing this Agreement.

            27.   Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made or instruments entered into and, in each case, performed in said State.  Perfection and enforcement of the security interest to be granted pursuant to the terms hereof, shall be governed by and construed in accordance with the laws of the state in which the applicable real property is located.  

            28.   Waiver of Jury Trial.  EACH OF THE PLEDGOR, THE COMPANY 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 AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

            29.   Successor Person Substituted for the Pledgor.  Upon any consolidation by the Pledgor with or merger of the Pledgor into any other Person or any sale, assignment, transfer,

        
            

                17

            

        

        

        
        
            

        

             lease or conveyance of all or substantially all of the properties and assets of the Pledgor to any Person in accordance with Section 801 of the Base Indenture, the successor Person formed by such consolidation or into which the Pledgor is merged or to which such sale, assignment, transfer, lease or other conveyance is made shall succeed to, and be substituted for, and may exercise every right and power of, the Pledgor under this Agreement with the same effect as if such successor Person had been named as the Pledgor herein; and thereafter the predecessor Person shall be released from all obligations and covenants under this Agreement.

            30.   Assignment; Binding Effect.  Except as provided in Section 22(g), the Pledgor may not assign this Agreement without the Trustee’s prior written consent.  This Agreement shall be binding upon the Pledgor, its successors, permitted transferees and permitted assigns, and shall inure to the benefit of the Trustee and its successors, transferees and assigns under the Indenture.

            31.   Entire Agreement; Modifications.  This Agreement is intended by the Pledgor, the Company and the Trustee to be the final, complete, and exclusive expression of the agreement among them with respect to the subject matter hereof.  This Agreement supersedes all prior and contemporaneous oral and written agreements relating to such subject matter.  No modification, rescission, waiver, release, or amendment of any provision of this Agreement shall be made, except by a written agreement signed by the Pledgor, the Company and the Trustee; provided, however, that the Trustee may not enter into any such written agreement except with the written consent of the Required Holders, by Act of such Holders delivered to the Company, the Pledgor and the Trustee (such restriction shall not apply to the Trustee’s right to amend Exhibit A in accordance with Section 5).

            32.   Severability.  If any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that portion shall be deemed severed from this Agreement and the remaining parts shall remain in full force as though the invalid, illegal or unenforceable portion had never been part of this Agreement.

            33.   Incorporation by Reference.  All of the rights, protections, immunities and privileges granted to the Trustee under the Indenture are incorporated by reference herein and shall inure to the benefit of the Trustee herein.

            34.   Counterparts.  This Agreement may be authenticated in any number of separate counterparts, each of which shall collectively and separately constitute one and the same agreement.  This Agreement may be authenticated by manual signature, facsimile or, if approved in writing by the Trustee, electronic means, all of which shall be equally valid.

            [Signature Pages Follow]

        
            

                18

            

        

        

        

        
        
            

        

            [Signature page to Pledge and Security Agreement, Series UIC-1F and 2F]

             

            IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned as of the date first written above.

             

            AMERCO, a Nevada corporation, as the Company

             

             

            By:  _________________________________________

            Jason A. Berg, Chief Financial Officer

             

             

            U-Haul Leasing & Sales Co., a Nevada corporation, as a Pledgor

             

            By:  ____________________________________

            Jennifer M. Settles, Secretary  

             

             

             

             

             

             

             

            Address for Notices:

            c/o U-Haul International, Inc.

            2727 N. Central Avenue 

            Phoenix, AZ  85004 

            Attn:  Legal Department 

             

             

            U.S. BANK NATIONAL ASSOCIATION, as the Trustee

             

             

             

            By:  ____________________________________

            Name:  __________________________________

            Title:  ___________________________________

             

             

            

        
            

                 

            

        

        

        

        
        
            

        

            EXHIBIT A TO PLEDGE AND SECURITY AGREEMENT SERIES UIC-1F and 2F

            COLLATERAL - To be supplemented with additional Schedules from time to time, as new sub-series of Notes are issued.  

             

             

             

             

             

             

             

             

             

             

        
            

                 

            

        

        

        
        
            

        

            EXHIBIT B

             

            FORM OFFICERS’ CERTIFICATE – COLLATERAL SUBSTITUTION

             

            The undersigned, _________________________, _________________________ of AMERCO, a Nevada corporation (the “Company”), hereby certifies to U. S. Bank National Association, as trustee under the U-Haul Investors Club Base Indenture dated as of February 14, 2011 (the “Base Indenture”), as follows:

             

            1.Pursuant to Section 5 of the Pledge Agreement dated as of ___________________ (“Pledge Agreement”), the equipment, property or Proceeds constituting Collateral under the _______ Supplemental Indenture dated as of _________________ to the Base Indenture (the “_______ Supplement”) and identified on Exhibit A hereto (“Initial Collateral”) is to be released from the Lien created pursuant to  the Pledge Agreement, such release to be effective as of ______________________ (such date, the “Date of Substitution”).  

             

            2.The equipment, property or other asset identified on Exhibit B hereto (“Replacement Collateral”) shall replace such Initial Collateral, pursuant to Section 5 of the Pledge Agreement.  

             

            3.The Company has determined, in accordance with Section 5 of the Pledge Agreement, that the value of such Replacement Collateral is not less than the value of the Initial Collateral as of the Date of Substitution.   

             

            4.I have read the conditions set forth in the Pledge Agreement and the _________ Supplement relating to the substitution of Collateral, and all conditions thereto have been satisfied. In my opinion, I have made such examination and investigation as is necessary to enable me to express an informed opinion with respect thereto.  

             

            IN WITNESS WHEREOF, the undersigned executes this Officer’s Certificate as of __________________________________.

             

             

             

             

            AMERCO, a Nevada corporation

             

            By: _____________________________________

             

            Its: _____________________________________

             

        
            

                 

            

        

        

        
        
            

        

            EXHIBIT C

             

            FORM OF OFFICER’S CERTIFICATE - LIEN RELEASE UPON REPAYMENT IN FULL

             

            The undersigned, _________________________, _________________________ of AMERCO, a Nevada corporation (the “Company”), hereby certifies to U. S. Bank National Association, as trustee under the U-Haul Investors Club Base Indenture dated as of February 14, 2011 (the “Base Indenture”), as follows:

             

            1.All conditions precedent set forth in the Base Indenture and in the _______ Supplemental Indenture thereto dated ____________________ (the “Indenture Supplement”) to the release of the Trustee’s Lien on the Collateral securing the obligations under the Indenture Supplement have been satisfied.  

             

            2.To the extent the Collateral includes box trucks or trailers evidenced by certificates of title, such Collateral is identified by VIN on the attachment hereto and the certificates of title with respect to such Collateral shall be sent by you to the following address: ______________________________________________________.

             

            We acknowledge that the Trustee is not responsible for determining whether the conditions to the release of Liens on the Collateral have been satisfied.  

             

             

            IN WITNESS WHEREOF, the undersigned executes this Officer’s Certificate as of __________________________________.

             

             

             

             

            AMERCO, a Nevada corporation

             

            By: _____________________________________

             

            Its: _____________________________________Exhibit 4.1

 

Execution Copy

 

	
 
    

 

 

ANTERO MIDSTREAM PARTNERS LP,
 ANTERO MIDSTREAM FINANCE CORPORATION

 

AND EACH OF THE GUARANTORS PARTY HERETO

 

 

INDENTURE

 

Dated as of September 13, 2016

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

Trustee

 

 

5.375% SENIOR NOTES DUE 2024

 

	
 
    

 

 

CROSS-REFERENCE TABLE*

 

	
Trust Indenture
   Act Section
    	
 
    	
Indenture Section
    
	
310(a)(1)
    	
 
    	
7.10
    
	
(a)(2)
    	
 
    	
7.10
    
	
(a)(3)
    	
 
    	
N.A.
    
	
(a)(4)
    	
 
    	
N.A.
    
	
(a)(5)
    	
 
    	
7.10
    
	
(b)
    	
 
    	
7.10
    
	
(c)
    	
 
    	
N.A.
    
	
311(a)
    	
 
    	
7.11
    
	
(b)
    	
 
    	
7.11
    
	
(c)
    	
 
    	
N.A.
    
	
312(a)
    	
 
    	
2.05
    
	
(b)
    	
 
    	
12.03
    
	
(c)
    	
 
    	
12.03
    
	
313(a)
    	
 
    	
7.06
    
	
(b)(1)
    	
 
    	
N.A.
    
	
(b)(2)
    	
 
    	
7.06; 7.07
    
	
(c)
    	
 
    	
7.06; 12.02
    
	
(d)
    	
 
    	
7.06
    
	
314(a)
    	
 
    	
4.03; 12.02; 12.05
    
	
(b)
    	
 
    	
N.A.
    
	
(c)(1)
    	
 
    	
12.04
    
	
(c)(2)
    	
 
    	
12.04
    
	
(c)(3)
    	
 
    	
N.A.
    
	
(d)
    	
 
    	
N.A.
    
	
(e)
    	
 
    	
12.05
    
	
(f)
    	
 
    	
N.A.
    
	
315(a)
    	
 
    	
7.01
    
	
(b)
    	
 
    	
7.05; 12.02
    
	
(c)
    	
 
    	
7.01
    
	
(d)
    	
 
    	
7.01
    
	
(e)
    	
 
    	
6.11
    
	
316(a) (last sentence)
    	
 
    	
2.09
    
	
(a)(1)(A)
    	
 
    	
6.05
    
	
(a)(1)(B)
    	
 
    	
6.04
    
	
(a)(2)
    	
 
    	
N.A.
    
	
(b)
    	
 
    	
6.07
    
	
(c)
    	
 
    	
2.12
    
	
317(a)(1)
    	
 
    	
6.08
    
	
(a)(2)
    	
 
    	
6.09
    
	
(b)
    	
 
    	
2.04
    
	
318(a)
    	
 
    	
12.01
    
	
(b)
    	
 
    	
N.A.
    
	
(c)
    	
 
    	
12.01
    

 

N.A. means not applicable.

 

* This Cross Reference Table is not part of the Indenture.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 1
    	
 
    	
 
    
	
DEFINITIONS AND   INCORPORATION
    	
 
    	
 
    
	
BY REFERENCE
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Definitions
    	
 
    	
1
    
	
Section 1.02
    	
Other Definitions
    	
 
    	
26
    
	
Section 1.03
    	
Incorporation by Reference of Trust Indenture Act
    	
 
    	
27
    
	
Section 1.04
    	
Rules of Construction
    	
 
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
 
    	
 
    
	
THE NOTES
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 2.01
    	
Form and Dating
    	
 
    	
28
    
	
Section 2.02
    	
Execution and Authentication
    	
 
    	
28
    
	
Section 2.03
    	
Registrar and Paying Agent
    	
 
    	
29
    
	
Section 2.04
    	
Paying Agent to Hold Money in Trust
    	
 
    	
29
    
	
Section 2.05
    	
Holder Lists
    	
 
    	
29
    
	
Section 2.06
    	
Transfer and Exchange
    	
 
    	
30
    
	
Section 2.07
    	
Replacement Notes
    	
 
    	
42
    
	
Section 2.08
    	
Outstanding Notes
    	
 
    	
42
    
	
Section 2.09
    	
Treasury Notes
    	
 
    	
42
    
	
Section 2.10
    	
Temporary Notes
    	
 
    	
42
    
	
Section 2.11
    	
Cancellation
    	
 
    	
43
    
	
Section 2.12
    	
Defaulted Interest
    	
 
    	
43
    
	
Section 2.13
    	
Trustee, Paying Agent, Registrar Not Responsible for   Depositary
    	
 
    	
43
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 3
    	
 
    	
 
    
	
REDEMPTION AND   PREPAYMENT
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 3.01
    	
Notices to Trustee
    	
 
    	
43
    
	
Section 3.02
    	
Selection of Notes to Be Redeemed
    	
 
    	
44
    
	
Section 3.03
    	
Notice of Redemption
    	
 
    	
44
    
	
Section 3.04
    	
Effect of Notice of Redemption
    	
 
    	
45
    
	
Section 3.05
    	
Deposit of Redemption or Purchase Price
    	
 
    	
45
    
	
Section 3.06
    	
Notes Redeemed or Purchased in Part
    	
 
    	
46
    
	
Section 3.07
    	
Optional Redemption
    	
 
    	
46
    
	
Section 3.08
    	
Mandatory Redemption
    	
 
    	
47
    
	
Section 3.09
    	
Offer to Purchase by Application of Excess Proceeds
    	
 
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 4
    	
 
    	
 
    
	
COVENANTS
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.01
    	
Payment of Notes
    	
 
    	
49
    
	
Section 4.02
    	
Maintenance of Office or Agency
    	
 
    	
49
    
	
Section 4.03
    	
Reports
    	
 
    	
50
    
	
Section 4.04
    	
Compliance Certificate
    	
 
    	
51
    
	
Section 4.05
    	
Taxes
    	
 
    	
51
    
	
Section 4.06
    	
Stay, Extension and Usury Laws
    	
 
    	
51
    
	
Section 4.07
    	
Restricted Payments
    	
 
    	
52
    
	
Section 4.08
    	
Dividend and Other Payment Restrictions Affecting   Subsidiaries
    	
 
    	
55
    
	
Section 4.09
    	
Incurrence of Indebtedness and Issuance of   Disqualified Equity
    	
 
    	
57
    

 

i

 

	
Section 4.10
    	
Asset Sales
    	
 
    	
61
    
	
Section 4.11
    	
Transactions with Affiliates
    	
 
    	
62
    
	
Section 4.12
    	
Liens
    	
 
    	
64
    
	
Section 4.13
    	
Limitations on Finance Corp. Activities
    	
 
    	
65
    
	
Section 4.14
    	
Corporate Existence
    	
 
    	
65
    
	
Section 4.15
    	
Offer to Repurchase Upon Change of Control
    	
 
    	
65
    
	
Section 4.16
    	
[Reserved.]
    	
 
    	
67
    
	
Section 4.17
    	
[Reserved.]
    	
 
    	
67
    
	
Section 4.18
    	
Additional Guarantees
    	
 
    	
67
    
	
Section 4.19
    	
Designation of Restricted and Unrestricted   Subsidiaries
    	
 
    	
68
    
	
Section 4.20
    	
Termination of Covenants
    	
 
    	
68
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 5
    	
 
    	
 
    
	
SUCCESSORS
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 5.01
    	
Merger, Consolidation or Sale of Assets
    	
 
    	
69
    
	
Section 5.02
    	
Successor Corporation Substituted
    	
 
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 6
    	
 
    	
 
    
	
DEFAULTS AND REMEDIES
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 6.01
    	
Events of Default
    	
 
    	
70
    
	
Section 6.02
    	
Acceleration
    	
 
    	
72
    
	
Section 6.03
    	
Other Remedies
    	
 
    	
73
    
	
Section 6.04
    	
Waiver of Past Defaults
    	
 
    	
73
    
	
Section 6.05
    	
Control by Majority
    	
 
    	
73
    
	
Section 6.06
    	
Limitation on Suits
    	
 
    	
73
    
	
Section 6.07
    	
Rights of Holders of Notes to Receive Payment
    	
 
    	
74
    
	
Section 6.08
    	
Collection Suit by Trustee
    	
 
    	
74
    
	
Section 6.09
    	
Trustee May File Proofs of Claim
    	
 
    	
74
    
	
Section 6.10
    	
Priorities
    	
 
    	
74
    
	
Section 6.11
    	
Undertaking for Costs
    	
 
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 7
    	
 
    	
 
    
	
TRUSTEE
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.01
    	
Duties of Trustee
    	
 
    	
75
    
	
Section 7.02
    	
Rights of Trustee
    	
 
    	
76
    
	
Section 7.03
    	
Individual Rights of Trustee
    	
 
    	
77
    
	
Section 7.04
    	
Trustee’s Disclaimer
    	
 
    	
77
    
	
Section 7.05
    	
Notice of Defaults
    	
 
    	
77
    
	
Section 7.06
    	
Reports by Trustee to Holders of the Notes
    	
 
    	
77
    
	
Section 7.07
    	
Compensation and Indemnity
    	
 
    	
77
    
	
Section 7.08
    	
Replacement of Trustee
    	
 
    	
78
    
	
Section 7.09
    	
Successor Trustee by Merger, etc.
    	
 
    	
79
    
	
Section 7.10
    	
Eligibility; Disqualification
    	
 
    	
79
    
	
Section 7.11
    	
Preferential Collection of Claims Against the   Issuers
    	
 
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 8
    	
 
    	
 
    
	
LEGAL DEFEASANCE AND   COVENANT DEFEASANCE
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 8.01
    	
Option to Effect Legal Defeasance or Covenant   Defeasance
    	
 
    	
80
    
	
Section 8.02
    	
Legal Defeasance and Discharge
    	
 
    	
80
    
	
Section 8.03
    	
Covenant Defeasance
    	
 
    	
80
    
	
Section 8.04
    	
Conditions to Legal or Covenant Defeasance
    	
 
    	
81
    

 

ii

 

	
Section 8.05
    	
Deposited Money and Government Securities to be Held   in Trust; Other Miscellaneous Provisions
    	
 
    	
82
    
	
Section 8.06
    	
Repayment to the Issuers
    	
 
    	
82
    
	
Section 8.07
    	
Reinstatement
    	
 
    	
83
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 9
    	
 
    	
 
    
	
AMENDMENT, SUPPLEMENT   AND WAIVER
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 9.01
    	
Without Consent of Holders of Notes
    	
 
    	
83
    
	
Section 9.02
    	
With Consent of Holders of Notes
    	
 
    	
84
    
	
Section 9.03
    	
Revocation and Effect of Consents
    	
 
    	
85
    
	
Section 9.04
    	
Notation on or Exchange of Notes
    	
 
    	
85
    
	
Section 9.05
    	
Trustee to Sign Amendments, etc.
    	
 
    	
86
    
	
Section 9.06
    	
Compliance with TIA
    	
 
    	
86
    
	
Section 9.07
    	
Effect of Supplemental indentures
    	
 
    	
86
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 10
    	
 
    	
 
    
	
NOTE GUARANTEES
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 10.01
    	
Guarantee
    	
 
    	
86
    
	
Section 10.02
    	
Limitation on Guarantor Liability
    	
 
    	
87
    
	
Section 10.03
    	
Execution and Delivery of Notation of Note Guarantee
    	
 
    	
87
    
	
Section 10.04
    	
Guarantors May Consolidate, etc., on   Certain Terms
    	
 
    	
88
    
	
Section 10.05
    	
Releases
    	
 
    	
88
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 11
    	
 
    	
 
    
	
SATISFACTION AND   DISCHARGE
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 11.01
    	
Satisfaction and Discharge
    	
 
    	
89
    
	
Section 11.02
    	
Application of Trust Money
    	
 
    	
90
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 12
    	
 
    	
 
    
	
MISCELLANEOUS
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 12.01
    	
TIA Controls
    	
 
    	
91
    
	
Section 12.02
    	
Notices
    	
 
    	
91
    
	
Section 12.03
    	
Communication by Holders of Notes with Other Holders   of Notes
    	
 
    	
92
    
	
Section 12.04
    	
Certificate and Opinion as to Conditions Precedent
    	
 
    	
92
    
	
Section 12.05
    	
Statements Required in Certificate or Opinion
    	
 
    	
93
    
	
Section 12.06
    	
Rules by Trustee and Agents
    	
 
    	
93
    
	
Section 12.07
    	
No Personal Liability of Directors, Officers,   Employees and Unitholders
    	
 
    	
93
    
	
Section 12.08
    	
Governing Law
    	
 
    	
93
    
	
Section 12.09
    	
No Adverse Interpretation of Other Agreements
    	
 
    	
93
    
	
Section 12.10
    	
Successors
    	
 
    	
93
    
	
Section 12.11
    	
Severability
    	
 
    	
94
    
	
Section 12.12
    	
Counterpart Originals
    	
 
    	
94
    
	
Section 12.13
    	
Table of Contents, Headings, etc.
    	
 
    	
94
    
	
Section 12.14
    	
Payment Date Other Than a Business Day
    	
 
    	
94
    
	
Section 12.15
    	
Evidence of Action by Holders
    	
 
    	
94
    
	
Section 12.16
    	
U.S.A. Patriot Act
    	
 
    	
94
    
	
Section 12.17
    	
Force Majeure
    	
 
    	
95
    
	
Section 12.18
    	
Waiver of Jury Trial
    	
 
    	
95
    

 

iii

 

EXHIBITS

 

	
Exhibit A
    	
FORM OF NOTE
    	
 
    	
 
    
	
Exhibit B
    	
FORM OF   CERTIFICATE OF TRANSFER
    	
 
    	
 
    
	
Exhibit C
    	
FORM OF   CERTIFICATE OF EXCHANGE
    	
 
    	
 
    
	
Exhibit D
    	
FORM OF   CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
    	
 
    	
 
    
	
Exhibit E
    	
FORM OF NOTATION   OF GUARANTEE
    	
 
    	
 
    
	
Exhibit F
    	
FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED   BY SUBSEQUENT GUARANTORS
    

 

iv

 

THIS INDENTURE dated as of September 13, 2016, is among Antero Midstream Partners LP, a Delaware limited partnership (“Antero Midstream Partners”), and Antero Midstream Finance Corporation, a Delaware corporation (“Finance Corp.” and, together with Antero Midstream Partners, the “Issuers”), the Guarantors (as defined) and Wells Fargo Bank, National Association, a national banking association, as trustee.

 

The Issuers, the Guarantors and the Trustee (as defined) agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the 5.375% Senior Notes due 2024 (the “Notes”):

 

ARTICLE 1
 DEFINITIONS AND INCORPORATION
 BY REFERENCE

 

Section 1.01          Definitions.

 

“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 144A.

 

“Acquired Debt” means, with respect to any specified Person:

 

(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person, but excluding Indebtedness which is extinguished, retired or repaid in connection with such Person merging with or becoming a Subsidiary of such specific Person; and

 

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

 

“Additional Interest” means the interest payable as a consequence of the failure to effectuate in a timely manner the exchange offer or shelf registration procedures set forth in a Registration Rights Agreement. All references to “interest” in this Indenture shall be deemed to include any Additional Interest that may be payable on the Notes.

 

“Additional Notes” means additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes.

 

“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,” 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. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

 

“Agent” means any Registrar or Paying Agent.

 

“Antero Midstream Partners” has the meaning assigned to it in the preamble to this Indenture, and includes any successors thereto.

 

1

 

“Applicable Premium” means, with respect to any Note at the time of determination, the greater of:

 

(1) 1.00% of the principal amount of the Note; or

 

(2) the excess of:  (a) the present value at such time of (i) the redemption price of the Note at September 15, 2019 (such redemption price being set forth in the table appearing in Section 3.07 hereof) plus (ii) all required interest payments due on the Note through September 15, 2019 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the principal amount of the Note, if greater.

 

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

 

“Asset Sale” means:

 

(1) the sale, lease, conveyance or other disposition of any properties or assets; provided that the sale, lease, conveyance or other disposition of all or substantially all of the properties or assets of Antero Midstream Partners and its Restricted Subsidiaries taken as a whole will be governed by Section 4.15 hereof or Section 5.01 hereof and not by Section 4.10 hereof; and

 

(2) the issuance of Equity Interests in any of Antero Midstream Partners’ Restricted Subsidiaries or the sale of Equity Interests in any of its Restricted Subsidiaries.

 

Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:

 

(1) any sale, assignment, lease, license, transfer, abandonment or other disposition of (A) damaged, worn-out, unserviceable or other obsolete or excess equipment or other property or (B) other property no longer necessary for the proper conduct of the business of Antero Midstream Partners or any of its Restricted Subsidiaries;

 

(2) any single transaction or series of related transactions that: (a) involves assets having a Fair Market Value of less than $30.0 million or (b) results in net proceeds to Antero Midstream Partners and its Restricted Subsidiaries of less than $30.0 million;

 

(3) a transfer of properties or assets between or among Antero Midstream Partners and its Restricted Subsidiaries;

 

(4) an issuance of Equity Interests by a Restricted Subsidiary of Antero Midstream Partners to Antero Midstream Partners or to a Restricted Subsidiary of Antero Midstream Partners;

 

(5) the sale or other disposition of products, services or accounts receivable in the ordinary course of business;

 

(6) the sale or other disposition of cash or Cash Equivalents, Hedging Obligations or other financial instruments in the ordinary course of business;

 

2

 

(7) a Restricted Payment that does not violate Section 4.07 hereof or a Permitted Investment;

 

(8) any trade or exchange by Antero Midstream Partners or any Restricted Subsidiary of properties or assets of any type for properties or assets of any type owned or held by another Person, provided that the Fair Market Value of the properties or assets traded or exchanged by Antero Midstream Partners or such Restricted Subsidiary (together with any cash or Cash Equivalents plus the amount of any liabilities assumed) is reasonably equivalent to the Fair Market Value of the properties or assets to be received by Antero Midstream Partners or such Restricted Subsidiary (together with any cash or Cash Equivalents plus the amount of any liabilities assumed); and provided further that any cash received must be applied in accordance with Section 4.10 hereof;

 

(9) the creation or perfection of a Lien that is not prohibited by Section 4.12 hereof;

 

(10) surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind;

 

(11) the grant in the ordinary course of business of any non-exclusive license of patents, trademarks, registrations therefor and other similar intellectual property;

 

(12) any sale or other disposition of Equity Interests in, or other securities of, an Unrestricted Subsidiary; and

 

(13) any disposition of defaulted receivables that arose in the ordinary course of business for collection.

 

“Attributable Debt” in respect of a sale-and-leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale-and-leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended.  As used in the preceding sentence, “net rental payments” under any lease for any such period shall mean the sum of rental and other payments required to be paid with respect to such period by the lessee thereunder, excluding any amounts required to be paid by such lessee on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges.  In the case of any lease that is terminable by the lessee upon payment of penalty, such net rental payment shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.  For purposes of this definition, present value shall be calculated using a discount rate equal to the rate of interest implicit in the subject transaction, determined in accordance with GAAP; provided, however, that if such sale-and-leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capital Lease Obligation.”

 

“Available Cash” has the meaning assigned to such term in the Partnership Agreement, as in effect on the Issue Date.

 

“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that

 

3

 

term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time.  The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning. For purposes of this definition, a Person shall be deemed not to Beneficially Own securities that are the subject of a stock or unit purchase agreement, merger agreement or similar agreement until consummation of the transactions or, as applicable, series of related transactions contemplated thereby.

 

“Board of Directors” means:

 

(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

 

(2) with respect to a partnership, the board of directors or board of managers of the general partner of the partnership, including in the case of Antero Midstream Partners, the board of directors of its General Partner, Antero Resources Midstream Management LLC, or any committee thereof duly authorized to act on behalf of such board;

 

(3) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and

 

(4) with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Broker-Dealer” has the meaning set forth in the applicable Registration Rights Agreement.

 

“Business Day” means any day other than a Legal Holiday.

 

“Capital Lease Obligation” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be, 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 on a balance sheet in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

 

“Capital Stock” means:

 

(1) in the case of a corporation, corporate stock;

 

(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 interests (whether general or limited) or membership interests; 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, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

 

4

 

“Cash Equivalents” means:

 

(1) securities issued or fully guaranteed or insured by the United States government or any agency thereof having maturities of not more than twenty-four (24) months from the date of acquisition thereof;

 

(2) time deposits with, certificates of deposit, bankers’ acceptances or Eurodollar time deposits of, any commercial bank that is a lender under the Credit Agreement or (a) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia or any United States branch of a foreign bank, and is a member of the Federal Reserve System, (b) issues long term securities with a rating of at least A- (or then equivalent grade, in each case with a stable outlook) by S&P and A3 (or then equivalent grade, in each case with a stable outlook) by Moody’s at the time of acquisition and (c) has combined capital and surplus of at least $500,000,000, in each case with maturities of not more than twenty-four (24) months from the date of acquisition thereof;

 

(3) commercial paper of an issuer rated at least “A-2” (or the then equivalent grade) by S&P or “P-2” (or the then equivalent grade) by Moody’s at the time of acquisition or guaranteed by a letter of credit issued by a financial institution rated at least A- (or then equivalent grade, in each case with stable outlook) by S&P and A3 (or then equivalent grade, in each case with stable outlook) by Moody’s at the time of acquisition and such financial institution otherwise meets the requirements of subsections (a) and (c) of clause (2) of this definition, in each case having a tenor of not more than 270 days;

 

(4) taxable and tax-exempt municipal securities rated at least A- (or then equivalent grade) by S&P and A3 (or then equivalent grade) by Moody’s, including variable rate municipal securities, having maturities or put rights of not more than twenty-four (24) months from the date of acquisition;

 

(5) corporate or bank debt of an issuer rated at least A- (or then equivalent grade, in each case with a stable outlook) by S&P and A3 (or then equivalent grade, in each case with stable outlook) by Moody’s at the time of acquisition and having maturities of not more than twenty-four (24) months from the date of acquisition;

 

(6) repurchase agreements relating to any of the investments listed in clauses (1) through (5) above with a market value at least equal to the consideration paid in connection therewith, with any Person who regularly engages in the business of entering into repurchase agreements and has a combined capital and surplus of not less than $500,000,000 whose long term securities are rated at least A- (or then equivalent grade) by S&P and A3 (or then equivalent grade) by Moody’s at the time of acquisition;

 

(7) asset-backed securities having as the underlying asset securities issued or guaranteed by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association rated at least A- (or then equivalent grade, in each case with stable outlook) by S&P and A3 (or then equivalent grade, in each case with case with stable outlook) by Moody’s at the time of acquisition and having maturities of not more than twenty-four (24) months from the date of acquisition; and

 

5

 

(8) Investments, classified in accordance with GAAP as current assets of Antero Midstream Partners or any of its Subsidiaries, in money market mutual or similar funds having assets in excess of $100,000,000, at least 95% of the assets of which are comprised of assets specified in clauses (1) through (7) above of this definition.

 

“Change of Control” means the occurrence of any of the following:

 

(1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of Antero Midstream Partners and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) of the Exchange Act), which occurrence is followed by a Rating Decline;

 

(2) the adoption of a plan relating to the liquidation or dissolution of Antero Midstream Partners or the removal of the General Partner by the limited partners of Antero Midstream Partners; or

 

(3) the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any “person” (as defined above), other than a Qualified Owner, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the General Partner or of Antero Resources Investment LLC, measured by voting power rather than number of shares or member interests, which occurrence is followed by a Rating Decline.

 

Notwithstanding the preceding, (a) a conversion of Antero Midstream Partners from a limited partnership to a corporation, limited liability company or other form of entity or an exchange of all of the outstanding limited partnership interests for capital stock in a corporation, for member interests in a limited liability company or for Equity Interests in such other form of entity shall not constitute a Change of Control, so long as following such conversion or exchange the “persons” (as defined above) who Beneficially Owned the Capital Stock of Antero Midstream Partners immediately prior to such transactions continue to Beneficially Own in the aggregate more than 50% of the Voting Stock of such entity, or continue to Beneficially Own sufficient Equity Interests in such entity to elect a majority of its directors, managers, trustees or other persons serving in a similar capacity for such entity and (b) a “person” or “group” shall not be deemed to Beneficially Own securities subject to a stock or asset purchase agreement, merger agreement or similar agreement (or voting or option of similar agreement related thereto) until the consummation of the transactions contemplated by such agreement.

 

“Clearstream” means Clearstream Banking, S.A.

 

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

 

“Consolidated Cash Flow” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:

 

(1) an amount (to the extent not included in Consolidated Net Income) equal to the dividends or distributions paid during such period in cash or Cash Equivalents to such Person or any of its Restricted Subsidiaries by a Person that is not a Restricted Subsidiary of such Person; plus

 

(2) an amount equal to any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale or the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or

 

6

 

any of its Restricted Subsidiaries to the extent such loss was deducted in computing such Consolidated Net Income; plus

 

(3) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus

 

(4) the Fixed Charges of such Person and its Restricted Subsidiaries for such period(together with items excluded from the definition of “Fixed Charges” pursuant to Hedging Obligations), to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus

 

(5) depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; minus

 

(6) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business,

 

in each case, on a consolidated basis and determined in accordance with GAAP.

 

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

 

(1) the aggregate Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person;

 

(2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by 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, partners or members;

 

(3) the cumulative effect of a change in accounting principles will be excluded;

 

(4) unrealized losses and gains under derivative instruments included in the determination of Consolidated Net Income, including, without limitation those resulting from the application of the Financial Accounting Standards Board’s Accounting Standards Codification No. 815 will be excluded;

 

(5) any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with (a) any Asset Sale (including dispositions pursuant to sale-and-leaseback transactions) or (b) the disposition of any securities by such Person or the extinguishment of any Indebtedness of such Person shall be excluded;

 

7

 

(6) any impairment charge or asset write-off pursuant to the Financial Accounting Standards Board’s Accounting Standards Codification No. 350 “Goodwill and Other Intangible Assets” shall be excluded;

 

(7) any non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards shall be excluded;

 

(8) any unusual or nonrecurring gain, loss or charge, together with any related provision for taxes on such unusual or nonrecurring gain, loss or charge, shall be excluded; and

 

(9) any non-cash or other charges relating to any premium or penalty paid, write-off of deferred finance costs or other charges in connection with redeeming or retiring any Indebtedness prior to its Stated Maturity shall be excluded.

 

“Consolidated Net Tangible Assets” means, at any date of determination, the aggregate amount of total assets included in the most recent quarterly or annual consolidated balance sheet of Antero Midstream Partners prepared in accordance with GAAP less applicable reserves reflected in such balance sheet, after deducting the following amounts: (a) all current liabilities reflected in such balance sheet, and (b) all goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles reflected in such balance sheet, with such pro forma adjustments to total assets, reserves, current liabilities, goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio.”

 

“continuing” means, with respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.

 

“Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in Section 12.02 hereof (except with respect to payments on the Notes, in which case this address will be Wells Fargo Bank, National Association, 150 East 42nd Street, 40th Floor, New York, New York 10017) or such other address as to which the Trustee may give notice to the Issuers.

 

“Credit Agreement” means that certain Credit Agreement, dated as of November 10, 2014, among Antero Midstream Partners, each lender and L/C Issuer from time to time party thereto and Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender and L/C Issuer, providing for revolving credit borrowings and letters of credit, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.

 

“Credit Facilities” means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities or Debt Issuances, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders, other financiers or to special purpose entities formed to borrow from (or sell such receivables to) such lenders or other financiers against such receivables), letters of credit, bankers’ acceptances, other borrowings or Debt Issuances, in each case, as amended, restated, modified, renewed, extended, refunded, replaced or refinanced (in each case, without limitation as to amount), in whole or in part from time to time (including through one or more Debt Issuances) and any agreements and related documents governing Indebtedness or Obligations incurred to refinance amounts then outstanding or permitted to be outstanding, whether or not with the original administrative agent, lenders, investment banks, insurance companies, mutual funds, other lenders, investors or any of the

 

8

 

foregoing and whether provided under the original agreement, indenture or other documentation relating thereto.

 

“Custodian” means the Trustee, as custodian for the Depositary with respect to the Notes in global form, or any successor entity thereto.

 

“Customary Recourse Exceptions” means, with respect to any Non-Recourse Debt of an Unrestricted Subsidiary or Joint Venture, exclusions from the exculpation provisions with respect to such Non-Recourse Debt for fraud, misapplication of cash, waste, willful destruction, bad faith and other circumstances customarily excluded by lenders from exculpation provisions or included in separate indemnification agreements in non-recourse financings.

 

“Debt Issuances” means, with respect to Antero Midstream Partners or any of its Restricted Subsidiaries, one or more issuances after the Issue Date of Indebtedness evidenced by the notes, debentures, bonds or other similar securities or instruments.

 

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

 

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

 

“Disqualified Equity” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Equity Interest), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Equity Interest, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature, except such Equity Interest that is solely redeemable with, or solely exchangeable for, any Equity Interest of such Person that is not Disqualified Equity. Notwithstanding the preceding sentence, any Equity Interest that would constitute Disqualified Equity solely because the holders of the Equity Interest have the right to require Antero Midstream Partners to repurchase such Equity Interest upon the occurrence of a change of control or an asset sale will not constitute Disqualified Equity if the terms of such Equity Interest provide that Antero Midstream Partners may not repurchase or redeem any such Equity Interest pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 hereof.

 

“Domestic Subsidiary” means any Restricted Subsidiary of Antero Midstream Partners that was formed under the laws of the United States or any state of the United States or the District of Columbia.

 

“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 of Equity Interests (other than Disqualified Equity) made for cash on a primary basis by Antero Midstream Partners after the Issue Date, the net

 

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proceeds from which have not been applied to redeem, prepay or refinance any other Indebtedness (other than the temporary repayment of Indebtedness under a revolving facility).

 

“Euroclear” means Euroclear Bank SA/NV, as operator of the Euroclear system.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exchange Notes” means the Notes issued in an Exchange Offer pursuant to Section 2.06(f) hereof.

 

“Exchange Offer” has the meaning set forth in the applicable Registration Rights Agreement.

 

“Exchange Offer Registration Statement” has the meaning set forth in the applicable Registration Rights Agreement.

 

“Existing Indebtedness” means the aggregate principal amount of Indebtedness of Antero Midstream Partners and its Subsidiaries (other than Indebtedness under the Credit Agreement) in existence on the Issue Date, until such amounts are repaid.

 

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by (a) an executive officer of the General Partner if the value is less than $50.0 million or (b) the Board of Directors of Antero Midstream Partners if the value is $50.0 million or more.

 

“FERC Subsidiary” means a Restricted Subsidiary that is subject to the regulatory jurisdiction of the Federal Energy Regulatory Commission (or any successor thereto) as a natural gas company (as defined in Section 2(6) of the Natural Gas Act of 1938, as amended).

 

“Finance Corp.” has the meaning assigned to it in the preamble to this Indenture, and includes any successors thereto.

 

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than revolving credit borrowings not constituting a permanent commitment reduction that are used to fund working capital) or issues, repurchases or redeems Disqualified Equity subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of Disqualified Equity, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable Reference Period.

 

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

 

(1) acquisitions (including, without limitation, a single asset, a division or segment or an entire company) that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers, asset purchase transactions or consolidations and including any related financing transactions during the Reference Period or subsequent to such Reference Period and on or prior to the Calculation Date will be given pro forma effect as if they had

 

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occurred on the first day of the Reference Period, including any Consolidated Cash Flow and any pro forma expense and cost reductions that have occurred or are reasonably expected to occur, in the reasonable judgment of the chief financial or accounting officer of Antero Midstream Partners (regardless of whether those cost savings or operating improvements could then be reflected in pro forma financial statements in accordance with Regulation S-X promulgated under the Securities Act or any other regulation or policy of the SEC related thereto);

 

(2) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;

 

(3) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;

 

(4) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the average rate in effect from the beginning of the applicable period to the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months); and

 

(5) if any Indebtedness is incurred under a revolving credit facility and is being given pro forma effect, the interest on such indebtedness shall be calculated based on the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro forma calculation.

 

“Fixed Charges” means, with respect to any specified Person for any period, (A) the sum, without duplication, of:

 

(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, discounts and other fees and charges incurred in respect of letters of credit or bankers’ acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates; plus

 

(2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus

 

(3) any interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus

 

(4) an amount equal to all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Equity of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of Antero Midstream Partners (other than Disqualified Equity) or to Antero Midstream Partners or a Restricted Subsidiary of Antero Midstream Partners (such amount, the “Disqualified Dividend Amount”); provided that, in the event such Person is not treated as a partnership or other pass-through entity

 

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for U.S. federal income tax purposes, the amount included in Fixed Charges as a result of this clause (4) shall be the product of (i) the Disqualified Dividend Amount, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with GAAP; minus

 

(B) to the extent included in (A) above, write-off of non-recurring deferred financing costs of such Person and its Restricted Subsidiaries during such period and any charge related to, or any premium or penalty paid in connection with, paying any Indebtedness of such Person and its Restricted Subsidiaries prior to its Stated Maturity,

 

in each case, on a consolidated basis and determined in accordance with GAAP.

 

“GAAP” means generally accepted accounting principles in the United States, which are in effect from time to time. Notwithstanding the foregoing, the characterization of leases as operating or capital leases shall be determined in accordance with GAAP as in effect on the date of entry into the applicable lease.

 

If there occurs a change in generally accepted accounting principles relating to revenue recognition resulting from the joint revenue recognition standard of the Financial Accounting Standards Board and the International Accounting Standards Board, and such change would cause a change in the method of calculation of standards or terms as determined in good faith by Antero Midstream Partners (an “Accounting Change), then Antero Midstream Partners may elect, as evidenced by a written notice of Antero Midstream Partners to the Trustee, that such standards or terms shall be calculated as if such Accounting Change has not occurred. Any such election with respect to such Accounting Change may not thereafter be changed.

 

“General Partner” means Antero Resources Midstream Management LLC, a Delaware limited liability company, and its successors and permitted assigns as general partner of Antero Midstream Partners or as the business entity with the ultimate authority to manage the business and operations of Antero Midstream Partners.

 

“Global Note Legend” means the legend set forth in Section 2.06(g)(2) hereof, which is required to be placed on all Global Notes issued under this Indenture.

 

“Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depositary or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.

 

“Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States of America is pledged.

 

“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, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness, and the term “Guaranteed” has a correlative meaning.

 

“Guarantors” means each of:

 

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(1) Antero Midstream LLC, Antero Water LLC and Antero Treatment LLC;

 

(2) each of the Restricted Subsidiaries of Antero Midstream Partners that becomes a guarantor of the Notes pursuant to Section 4.18 hereof; and

 

(3) each other Person executing a supplemental indenture in which such Person agrees to be a Guarantor of the Notes and to be bound by the terms of this Indenture

 

provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its Note Guarantee is released in accordance with the terms of this Indenture.

 

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person incurred in the ordinary course of business and not for speculative purposes under:

 

(1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements entered into with one or more financial institutions and designed to reduce costs of borrowing or to protect the Person or any of its Restricted Subsidiaries entering into the agreement against fluctuations in interest rates with respect to Indebtedness incurred;

 

(2) other agreements or arrangements designed to manage interest rates or interest rate risk; and

 

(3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.

 

“Holder” means a Person in whose name a Note is registered.

 

“IAI Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes transferred to Institutional Accredited Investors.

 

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:

 

(1) in respect of borrowed money;

 

(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

 

(3) in respect of banker’s acceptances;

 

(4) representing Capital Lease Obligations or Attributable Debt in respect of sale and leaseback transactions;

 

(5) representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or

 

(6) representing any Hedging Obligations,

 

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if and to the extent any of the preceding items (other than letters of credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset (other than Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any Joint Venture owned by Antero Midstream Partners or any Restricted Subsidiary of Antero Midstream Partners, in each case, securing Indebtedness of such Unrestricted Subsidiary or Joint Venture, as applicable) of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. The term “Indebtedness” excludes, however, any repayment or reimbursement obligation of such Person or any of its Restricted Subsidiaries with respect to Customary Recourse Exceptions, unless and until an event or circumstance occurs that triggers the Person’s or such Restricted Subsidiary’s direct repayment or reimbursement obligation (as opposed to contingent or performance obligations) to the lender or other Person to whom such obligation is actually owed, in which case the amount of such direct payment or reimbursement obligation shall constitute Indebtedness.

 

Notwithstanding the foregoing, the following shall not constitute “Indebtedness”:

 

(1) accrued expenses and trade accounts payable arising in the ordinary course of business;

 

(2) any Indebtedness which has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash or Government Securities (in an amount sufficient to satisfy all such Indebtedness at Stated Maturity or redemption, as applicable, and all payments of interest and premium, if any) in a trust or account created or pledged for the sole benefit of the holders of such Indebtedness and subject to no other Liens, and the other applicable terms of the instrument governing such Indebtedness;

 

(3) any obligation 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, however, that such obligation is extinguished within five Business Days of its incurrence; and

 

(4) any obligation arising from any agreement providing for indemnities, Guarantees, purchase price adjustments, holdbacks, contingency payment obligations based on the performance of the acquired or disposed assets or similar obligations (other than Guarantees of Indebtedness) incurred by any Person in connection with the acquisition or disposition of assets.

 

“Indenture” means this Indenture, as amended or supplemented from time to time.

 

“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

 

“Initial Notes” means the first $650.0 million in aggregate principal amount of Notes issued under this Indenture on the date hereof.

 

“Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.

 

“Investment Grade Rating” of the notes, means that the notes shall have been assigned a Moody’s rating of Baa3 or higher and an S&P rating of BBB- or higher, or if one of such rating agencies shall not make a rating on the notes publicly available for reasons outside the control of the Issuers, then “Investment Grade Rating” shall mean that the notes shall have been assigned such a rating by one of

 

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such rating agencies and an equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” registered under Section 15E of the Exchange Act selected by the Issuers.

 

“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances (excluding advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender and commission, travel and similar advances to officers and employees made in the ordinary course of business), or capital contributions, purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If Antero Midstream Partners or any Subsidiary of Antero Midstream Partners sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of Antero Midstream Partners such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of Antero Midstream Partners, Antero Midstream Partners will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of Antero Midstream Partners’ Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in Section 4.07(b) hereof.

 

“Issue Date” means the first date on which the Notes are issued, authenticated and delivered under this Indenture.

 

“Joint Venture” means any Person that is not a direct or indirect Subsidiary of Antero Midstream Partners in which Antero Midstream Partners or any of its Restricted Subsidiaries makes any Investment.

 

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at another place of payment are authorized by law, regulation or executive order to remain closed.  If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.

 

“Letter of Transmittal” means the letter of transmittal to be prepared by the Issuers and for use by Holders of the Notes or beneficial interests therein in connection with an Exchange Offer.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or 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, other than a precautionary financing statement respecting a lease not intended as a security agreement. In no event shall a right of first refusal be deemed to constitute a Lien.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor to the rating agency business thereof.

 

“Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however: any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries.

 

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“Net Proceeds” means the aggregate cash proceeds received by Antero Midstream Partners or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of:

 

(1) the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale,

 

(2) taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements,

 

(3) amounts required to be applied to the repayment of Indebtedness, other than Indebtedness under a Credit Facility, secured by a Lien on the asset or assets that were the subject of such Asset Sale and all distributions and payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Sale, and

 

(4) any amounts to be set aside in any reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such properties or assets or for liabilities associated with such Asset Sale and retained by Antero Midstream Partners or any of its Restricted Subsidiaries until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reversed or the amount returned to Antero Midstream Partners or its Restricted Subsidiaries from such escrow arrangement, as the case may be.

 

“Non-Recourse Debt” means Indebtedness:

 

(1)  as to which neither Antero Midstream Partners nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, except for Customary Recourse Exceptions, or (c) constitutes the lender;

 

(2) as to which the lenders will not have any recourse to the assets of Antero Midstream Partners or any of its Restricted Subsidiaries, except as contemplated by clause (13) of the definition of “Permitted Liens” and except for Customary Resource Exceptions; and

 

(3)  no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of Antero Midstream Partners or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity.

 

“Non-U.S. Person” means a Person who is not a U.S. Person.

 

“Note Guarantee” means the Guarantee by each Guarantor of the Issuers’ obligations under this Indenture and the Notes, which may be evidenced by a notation thereof executed pursuant to the provisions of this Indenture.

 

“Notes” has the meaning assigned to it in the preamble to this Indenture.  The Initial Notes, any Additional Notes and any Exchange Notes shall be treated as a single series for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offer to purchase, and

 

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unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes and Exchange Notes.

 

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

 

“Offering Memorandum” means the final Offering Memorandum of the Issuers, dated September 8, 2016 with respect to the Notes.

 

“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person (or, if such Person is a limited partnership, the general partner of such Person).

 

“Officers’ Certificate” means a certificate signed on behalf of Antero Midstream Partners by two Officers of Antero Midstream Partners or the General Partner, one of whom in the case of any Officers’ Certificate delivered to the Trustee pursuant to Section 4.04(a), must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of Antero Midstream Partners, that meets the requirements of Section 12.05 hereof.

 

“Operating Surplus” has the meaning assigned to such term in the Partnership Agreement, as in effect on the Issue Date.

 

“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.  The counsel may be an employee of or counsel to Antero Midstream Partners, the General Partner, any Subsidiary of Antero Midstream Partners or the General Partner or the Trustee.

 

“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

 

“Partnership Agreement” means the Agreement of Limited Partnership dated as of November 10, 2014, by and between Antero Resources Midstream Management LLC, as the General Partner, and Antero Resources Corporation, as the Organizational Limited Partner, as amended by Amendment No. 1 to the Agreement of Limited Partnership of Antero Midstream Partners LP, dated as of February 23, 2016, as such may be further amended, modified or supplemented from time to time.

 

“Permitted Acquisition Indebtedness” means Indebtedness or Disqualified Equity of Antero Midstream Partners or any of its Restricted Subsidiaries to the extent such Indebtedness or Disqualified Equity was Indebtedness or Disqualified Equity of (i) a Subsidiary prior to the date on which such Subsidiary became a Restricted Subsidiary or (ii) a Person that merged with or consolidated with Antero Midstream Partners or a Restricted Subsidiary; provided that on the date such Subsidiary became a Restricted Subsidiary or the date such Person was merged with or consolidated with Antero Midstream Partners or a Restricted Subsidiary, as applicable, after giving pro forma effect thereto, (a) Antero Midstream Partners would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under Section 4.09(a) hereof or (b) the Fixed Charge Coverage Ratio for Antero Midstream Partners would be equal to or greater than the Fixed Charge Coverage Ratio for Antero Midstream Partners immediately prior to such transaction; provided that such Indebtedness was not incurred in contemplation of, or in connection with, such acquisition, merger or consolidation.

 

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“Permitted Business” means (1) midstream transportation of crude oil, natural gas or other hydrocarbons, including gathering, compression, processing, transporting and fractionating, (2) fresh water distribution and waste water treatment services, (3) any other business that generates gross income at least 90% of which constitutes “qualifying income” under Section 7704(d) of the Internal Revenue Code of 1986, as amended, or (4) any activity that is ancillary, complementary or incidental to or necessary or appropriate for the activities described in clauses (1), (2) and (3) of this definition, including entering into Hedging Obligations related to any of these activities.

 

“Permitted Business Investments” means Investments by Antero Midstream Partners or any of its Restricted Subsidiaries in any Unrestricted Subsidiary of Antero Midstream Partners or in any Joint Venture, provided that:

 

(1) either (a) at the time of such Investment and immediately thereafter, Antero Midstream Partners could incur $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (b) such Investment does not exceed the aggregate amount of Incremental Funds (as defined in Section 4.07 hereof) not previously expended at the time of making such Investment;

 

(2) if such Unrestricted Subsidiary or Joint Venture has outstanding Indebtedness at the time of such Investment, either (a) all such Indebtedness is Non-Recourse Debt or is owed to Antero Midstream Partners or one of its Restricted Subsidiaries or (b) any such Indebtedness of such Unrestricted Subsidiaries or Joint Venture that is recourse to Antero Midstream Partners or any of its Restricted Subsidiaries could, at the time such Investment is made, be incurred at that time by Antero Midstream Partners and its Restricted Subsidiaries under Section 4.09(a) hereof; and

 

(3) such Unrestricted Subsidiary’s or Joint Venture’s activities are not outside the scope of the Permitted Business.

 

“Permitted Investments” means:

 

(1) any Investment in Antero Midstream Partners or in a Restricted Subsidiary of Antero Midstream Partners;

 

(2) any Investment in Cash Equivalents;

 

(3) any Investment by Antero Midstream Partners or any Restricted Subsidiary of Antero Midstream Partners in a Person, if as a result of such Investment:

 

(a) such Person becomes a Restricted Subsidiary of Antero Midstream Partners; or

 

(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its properties or assets to, or is liquidated into, Antero Midstream Partners or a Restricted Subsidiary of Antero Midstream Partners;

 

(4) any Investment made as a result of the receipt of non-cash consideration from:

 

(a) an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof; or

 

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(b) a disposition of assets deemed not to be an Asset Sale under the definition of “Asset Sale”;

 

(5) any Investment in any Person solely in exchange for the issuance of Equity Interests (other than Disqualified Equity) of Antero Midstream Partners;

 

(6) any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of Antero Midstream Partners or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer, or as a result of a foreclosure, perfection or enforcement by Antero Midstream Partners or any of its Restricted Subsidiaries with respect to any secured Investment in default; or (B) litigation, arbitration or other disputes with Persons who are not Affiliates;

 

(7) Investments represented by Hedging Obligations permitted to be incurred;

 

(8) loans or advances to employees made in the ordinary course of business of Antero Midstream Partners or any Restricted Subsidiary of Antero Midstream Partners in an aggregate principal amount not to exceed $2.5 million at any one time outstanding;

 

(9) repurchases of the Notes;

 

(10) any Investments in prepaid expenses, negotiable instruments held for collection and lease, utility, workers’ compensation and performance and other similar deposits and prepaid expenses made in the ordinary course of business;

 

(11) Permitted Business Investments; and

 

(12) other Investments in any Person having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (12) that are at the time outstanding not to exceed the greater of (a) $100.0 million and (b) 5.0% of Antero Midstream Partners’ Consolidated Net Tangible Assets; provided, however, that any Investment pursuant to this clause (12) made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes 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 be made pursuant to this clause (12) for so long as such Person continues to be a Restricted Subsidiary;

 

provided, however,  that with respect to any Investment, Antero Midstream Partners may, in its sole discretion, allocate all or any portion of any Investment and later re-allocate all or any portion of any investment to one or more of the above clauses (1) through (12) so that the entire Investment would be a Permitted Investment.

 

“Permitted Liens” means:

 

(1) Liens securing any Indebtedness under any of the Credit Facilities and all Obligations and Hedging Obligations relating to such Indebtedness;

 

(2) Liens in favor of Antero Midstream Partners or the Guarantors;

 

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(3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with Antero Midstream Partners or any Subsidiary of Antero Midstream Partners; provided that such Liens were in existence prior to such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with Antero Midstream Partners or the Subsidiary;

 

(4) Liens on property existing at the time of acquisition of the property by Antero Midstream Partners or any Restricted Subsidiary of Antero Midstream Partners; provided that such Liens were in existence prior to, such acquisition, and not incurred in contemplation of, such acquisition;

 

(5) Liens and deposits to secure the performance of statutory obligations, surety or appeal bonds, workers compensation obligations, reimbursement obligations owed to insurers, bids, performance bonds, true leases, other types of social security or other obligations of a like nature incurred in the ordinary course of business (including Liens to secure letters of credit issued to assure payment of such obligations);

 

(6) Liens existing on the Issue Date (other than Liens securing the Credit Facilities);

 

(7) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

 

(8) Liens imposed by law, such as carriers’, warehousemen’s, landlord’s, repairman’s, mechanics’ and other like Liens, in each case, incurred in the ordinary course of business;

 

(9) defects, irregularities and deficiencies in title of any rights of way, survey exceptions, 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 property that were not incurred in connection with Indebtedness and that 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;

 

(10) inchoate Liens arising under the Employee Retirement Income Security Act of 1974, and any amendments thereto (“ERISA”);

 

(11) Liens created for the benefit of (or to secure) the Notes (or the Note Guarantees);

 

(12) Liens on any property or asset acquired, constructed or improved by Antero Midstream Partners or any of its Restricted Subsidiaries (a “Purchase Money Lien”), which (a) are in favor of the seller of such property or assets, in favor of the Person developing, constructing, repairing or improving such asset or property, or in favor of the Person that provided the funding for the acquisition, development, construction, repair or improvement cost, as the case may be, of such asset or property, (b) are created within 360 days after the acquisition, development, construction, repair or improvement, (c) secure the purchase price or development, construction, repair or improvement cost, as the case may be, of such asset or property in an amount up to 100% of the Fair Market Value of such acquisition, construction or improvement of such asset or property, and (d) are limited to the asset or property so acquired, constructed or improved (including the proceeds thereof, accessions thereto and upgrades thereof);

 

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(13) Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any Joint Venture owned by Antero Midstream Partners or any Restricted Subsidiary of Antero Midstream Partners to the extent securing Non-Recourse Debt or other Indebtedness of such Unrestricted Subsidiary or Joint Venture;

 

(14) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of Antero Midstream Partners or any of its Restricted Subsidiaries on deposit with or in possession of such bank;

 

(15) Liens securing performance of Hedging Obligations or Treasury Management Arrangements of Antero Midstream Partners or any of its Restricted Subsidiaries;

 

(16) Liens securing any insurance premium financing under customary terms and conditions, provided that no such Lien may extend to or cover any assets or property other than the insurance being acquired with such financing, the proceeds thereof and any unearned or refunded insurance premiums related thereto;

 

(17) Liens incurred in the ordinary course of business of Antero Midstream Partners or any Restricted Subsidiary of Antero Midstream Partners with respect to obligations that at any one time outstanding do not exceed the greater of (a) $100.0 million and (b) 5.0% of Consolidated Net Tangible Assets;

 

(18) judgment Liens not giving rise to an Event of Default so long as any appropriate legal proceedings that may have been initiated for the review of such judgment shall not have been finally terminated or the period within which such legal proceedings may be initiated shall not have expired;

 

(19) Liens resulting from the deposit of money or other cash equivalents in trust for the purpose of defeasing Indebtedness of Antero Midstream Partners or any of its Restricted Subsidiaries;

 

(20) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under the indenture; provided, however, that:

 

(a) the new Lien is limited to all or part of the same property or assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and

 

(b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;

 

(21) Liens relating to future escrow arrangements securing Indebtedness incurred in accordance with this Indenture; and

 

(22) Liens renewing, extending, refinancing or refunding a Lien permitted by clauses (1) through (21) above; provided that (a) the principal amount of Indebtedness secured by such Lien does not exceed the principal amount of such Indebtedness outstanding immediately prior to the

 

21

 

renewal, extension, refinance or refund of such Lien, plus all accrued interest on the Indebtedness secured thereby and the amount of all fees, expenses and premiums incurred in connection therewith, and (b) no assets encumbered by any such Lien other than the assets permitted to be encumbered immediately prior to such renewal, extension, refinance or refund are encumbered thereby.

 

“Permitted Refinancing Indebtedness” means any Indebtedness of Antero Midstream Partners or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge other Indebtedness of Antero Midstream Partners or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

 

(1) the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);

 

(2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged;

 

(3) if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes or the Note Guarantees, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes or the Note Guarantees, on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and

 

(4) such Indebtedness is not incurred by a Restricted Subsidiary (other than Finance Corp. or a Guarantor) if Antero Midstream Partners or a Guarantor is the issuer or the primary obligor of the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.

 

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

 

“Private Placement Legend” means the legend set forth in Section 2.06(f)(1) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

 

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

“Qualified Owner” means each of (i) Warburg Pincus & Co.; (ii) Paul M. Rady (“Rady”); (iii) Glen C. Warren, Jr. (“Warren”); (iv) Rady’s wife or Warren’s wife; (v) any lineal descendant of either Rady or Warren; (vi) the guardian or other legal representative of either Rady or Warren; (vii) the estate of either Rady or Warren; (viii) any trust of which at least one of the trustees is either Rady or Warren, or the principal beneficiaries of which are any one or more of the Persons referred to in the preceding clauses (ii) through (vii); (ix) any Person that is controlled by any one or more of the Persons in the preceding clauses (i) through (viii); (x) any group (within the meaning of the Exchange Act) that includes one or more of the Persons described in the preceding clauses (i) through (ix), provided that such Persons described in the preceding clauses (i) through (ix) control more than 50% of the total voting power of such group; (xi) Antero Resources Corporation; and (xii) Antero Resources Investment LLC. Any

 

22

 

“person” (as that term is used in Section 13(d)(3) of the Exchange Act) whose acquisition of Beneficial Ownership of any Voting Stock of the General Partner or of Antero Resources Investment LLC constitutes a Change of Control in respect of which a Change of Control Offer or an Alternate Offer is made in accordance with the requirements of the indenture will thereafter, together with its Affiliates, constitute an additional Qualifying Owner.

 

“Rating Agencies” means Moody’s and S&P.

 

“Rating Categories” means:

 

(1)   with respect to S&P, any of the following categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories); and

 

(2)   with respect to Moody’s, any of the following categories:  Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories).

 

“Rating Decline” means the occurrence of a decrease in the rating of the Notes by one or more gradations by each of Moody’s and S&P (including gradations within the rating categories, as well as between categories), within 60 days before or after the earlier of (x) a Change of Control, (y) the date of public notice of the occurrence of a Change of Control or (z) public notice of the intention of Antero Midstream Partners to effect a Change of Control (which 60-day period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Moody’s or S&P); provided, however, that a Rating Decline otherwise arising by virtue of a particular reduction in rating will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a Rating Decline for purposes of the definition of Change of Control) unless each of Moody’s and S&P making the reduction in rating to which this definition would otherwise apply announces or publicly confirms or informs the Trustee in writing at the request of Antero Midstream Partners or the Trustee 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 applicable Change of Control (whether or not the applicable Change of Control has occurred at the time of the Rating Decline).

 

“Redemption Date” means the date on which any Notes are to be redeemed in accordance with Article 3 hereof.

 

“Reference Period” means, with respect to any date of determination, the four most recent fiscal quarters of Antero Midstream Partners for which internal financial statements are available.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of  the Issue Date, among the Issuers, the Guarantors and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time and, with respect to any Additional Notes, one or more registration rights agreements among the Issuers, the Guarantors and the other parties thereto, as any such agreement may be amended, modified or supplemented from time to time, relating to rights given by the Issuers and the Guarantors to the purchasers of Additional Notes to register such Additional Notes under the Securities Act.

 

“Regulation S” means Regulation S promulgated under the Securities Act.

 

“Regulation S Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, initially issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 903 of Regulation S.

 

23

 

“Responsible Officer,” when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

 

“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

 

“Restricted Global Note” means a Global Note bearing the Private Placement Legend.

 

“Restricted Investment” means an Investment other than a Permitted Investment.

 

“Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.

 

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. References to Restricted Subsidiaries are to Restricted Subsidiaries of Antero Midstream Partners unless otherwise indicated.

 

“Rule 144” means Rule 144 promulgated under the Securities Act.

 

“Rule 144A” means Rule 144A promulgated under the Securities Act.

 

“Rule 904” means Rule 904 promulgated under the Securities Act.

 

“S&P” means S&P Global Ratings, a division of S&P Global, Inc., or any successor to the rating agency business thereof.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Senior Indebtedness” means with respect to any Person, Indebtedness of such Person, unless the instrument creating or evidencing such Indebtedness provides that such Indebtedness is subordinate in right of payment to the Notes or the Note Guarantee of such Person, as the case may be.

 

“Shelf Registration Statement” means the Shelf Registration Statement as defined in the applicable Registration Rights Agreement.

 

“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date.

 

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the Issue Date, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

 

“Subsidiary” means, with respect to any specified Person:

 

(1) any corporation, association or other business entity (other than a partnership or limited liability company) of which more than 50% of the total voting power of shares of the

 

24

 

Voting Stock is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

 

(2) any partnership (whether general or limited) or limited liability company (a) the sole general partner or managing member of which is such Person or a Subsidiary of such Person, or (b) if there are more than a single general partner or member, either (x) the only general partners or managing members of which are such Person or one or more Subsidiaries of such Person (or any combination thereof) or (y) such Person owns or controls, directly or indirectly, a majority of the outstanding general partner interests, member interests or other Voting Stock of such partnership or limited liability company, respectively.

 

“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§77aaa-77bbbb).

 

“Treasury Management Arrangement” means any agreement or other arrangement governing the provision of treasury or cash management services, including deposit accounts, overdraft, credit or debit card, funds transfer, automated clearinghouse, zero balance accounts, return check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.

 

“Treasury Rate” means, as of the time of computation, the yield to maturity as of such time 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 the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to September 15, 2019; provided, however, that if the period from the Redemption Date to September 15, 2019, 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.

 

“Trustee” means Wells Fargo Bank, National Association until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

 

“Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.

 

“Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.

 

“Unrestricted Subsidiary” means any Subsidiary of Antero Midstream Partners (other than Finance Corp. or any successor to it) that is designated by the Board of Directors of Antero Midstream Partners as an Unrestricted Subsidiary pursuant to a resolution of such Board of Directors, but only to the extent that such Subsidiary:

 

(1) except to the extent permitted by subclause (2)(b) of the definition of “Permitted Business Investments” has no Indebtedness other than Non-Recourse Debt;

 

(2) except as permitted by Section 4.11 hereof, is not party to any agreement, contract, arrangement or understanding with Antero Midstream Partners or any Restricted Subsidiary of Antero Midstream Partners unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Antero Midstream Partners or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Antero Midstream Partners;

 

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(3) is a Person with respect to which neither Antero Midstream Partners nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and

 

(4) has not Guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Antero Midstream Partners or any of its Restricted Subsidiaries, except to the extent such Guarantee or credit support would be released, terminated or no longer exist upon such designation.

 

All Subsidiaries of an Unrestricted Subsidiary shall be also Unrestricted Subsidiaries. Any designation of a Subsidiary of Antero Midstream Partners as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a Board Resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of Antero Midstream Partners as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, Antero Midstream Partners will be in default of such covenant.

 

“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.

 

“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors of such Person.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

 

(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

 

(2) the then outstanding principal amount of such Indebtedness.

 

Section 1.02          Other Definitions.

 

	
 
    	
 
    	
Defined in
    
	
Term
    	
 
    	
Section
    
	
“Affiliate Transaction”
    	
 
    	
4.11
    
	
“Alternate Offer”
    	
 
    	
4.15
    
	
“Asset Sale Offer”
    	
 
    	
3.09
    
	
“Authentication Order”
    	
 
    	
2.02
    
	
“Change of Control Offer”
    	
 
    	
4.15
    
	
“Change of Control Payment”
    	
 
    	
4.15
    
	
“Change of Control Payment Date”
    	
 
    	
4.15
    
	
“Covenant Defeasance”
    	
 
    	
8.03
    

 

26

 

	
 
    	
 
    	
Defined in
    
	
Term
    	
 
    	
Section
    
	
“DTC”
    	
 
    	
2.03
    
	
“Event of Default”
    	
 
    	
6.01
    
	
“Excess Proceeds”
    	
 
    	
4.10
    
	
“incur”
    	
 
    	
4.09
    
	
“Incremental Funds”
    	
 
    	
4.07
    
	
“Legal Defeasance”
    	
 
    	
8.02
    
	
“Offer Amount”
    	
 
    	
3.09
    
	
“Offer Period”
    	
 
    	
3.09
    
	
“Paying Agent”
    	
 
    	
2.03
    
	
“Payment Default”
    	
 
    	
6.01
    
	
“Permitted Debt”
    	
 
    	
4.09
    
	
“Purchase Date”
    	
 
    	
3.09
    
	
“Registrar”
    	
 
    	
2.03
    
	
“Restricted Payments”
    	
 
    	
4.07
    
	
“Termination Date”
    	
 
    	
4.20
    

 

Section 1.03          Incorporation by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

 

The following TIA terms used in this Indenture have the following meanings:

 

“indenture securities” means the Notes;

 

“indenture security Holder” means a Holder of a Note;

 

“indenture to be qualified” means this Indenture;

 

“indenture trustee” or “institutional trustee” means the Trustee; and

 

“obligor” on the Notes and the Note Guarantees means the Issuers and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively.

 

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

 

Section 1.04          Rules of Construction.

 

Unless the context otherwise requires:

 

(1) a term has the meaning assigned to it;

 

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(3) “or” is not exclusive;

 

(4) words in the singular include the plural, and in the plural include the singular;

 

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(5) unless the context requires otherwise, “will” shall be interpreted to express a command;

 

(6) provisions apply to successive events and transactions; and

 

(7) references to sections of or rules under the TIA, the Exchange Act or the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time.

 

ARTICLE 2
 THE NOTES

 

Section 2.01          Form and Dating.

 

(a)   General.  The Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibit A hereto.  The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage.  Each Note will be dated the date of its authentication.  The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Issuers, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.  However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

 

(b)   Global Notes.  Notes issued in global form will be substantially in the form of Exhibit A hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto).  Notes issued in definitive form will be substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto).  Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, repurchases and redemptions.  Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

 

(c)   Euroclear and Clearstream Procedures Applicable.  The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream will be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream.

 

Section 2.02          Execution and Authentication.

 

At least one Officer must 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 a Note is authenticated, the Note will nevertheless be valid.

 

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A Note will not be valid until authenticated by the manual signature of the Trustee.  The signature will be conclusive evidence that the Note has been authenticated under this Indenture.

 

The Trustee will, upon receipt of a written order of the Issuers signed by an Officer of each Issuer (an “Authentication Order”), authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes.  The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Issuers pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.

 

The Trustee may appoint an authenticating agent acceptable to the Issuers to authenticate Notes.  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 an Agent to deal with Holders or an Affiliate of the Issuers.

 

Section 2.03          Registrar and Paying Agent.

 

The Issuers will maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”).  The Registrar will keep a register of the Notes and of their transfer and exchange.  The Issuers may appoint one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent.  The Issuers may change any Paying Agent or Registrar without notice to any Holder.  The Issuers will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture.  If the Issuers fail to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such.  Antero Midstream Partners, Finance Corp. or any of Antero Midstream Partners’ other Subsidiaries may act as Paying Agent or Registrar.

 

The Issuers initially appoint The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes.

 

The Issuers initially appoint the Trustee to act as the Registrar and Paying Agent at its Corporate Trust Office and to act as Custodian with respect to the Global Notes.

 

Section 2.04          Paying Agent to Hold Money in Trust.

 

The Issuers will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuers in making any such payment.  While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee.  The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying Agent (if other than Antero Midstream Partners or a Subsidiary) will have no further liability for the money.  If Antero Midstream Partners or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization proceedings relating to Antero Midstream Partners, the Trustee will serve as Paying Agent for the Notes.

 

Section 2.05          Holder Lists.

 

The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA §312(a). If the Trustee is not the Registrar, the Issuers will furnish to the Trustee at least seven Business Days before

 

29

 

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 the Holders of Notes, and the Issuers shall otherwise comply with TIA §312(a).

 

Section 2.06          Transfer and Exchange.

 

(a)   Transfer and Exchange of Global Notes.  A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.  All Global Notes will be exchanged by the Issuers for Definitive Notes if:

 

(1) the Issuers deliver to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Issuers within 90 days;

 

(2) the Issuers, at their option but subject to the Depositary’s rules, determine that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and deliver a written notice to such effect to the Trustee;  or

 

(3) there has occurred and is continuing a Default or Event of Default with respect to the Notes, and the Depositary notifies the Trustee of its decision to exchange the Global Notes for Definitive Notes.

 

Upon the occurrence of any of the preceding events in (1), (2) or (3) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee.  Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof.  Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note.  A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

 

(b)   Transfer and Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures.  Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act.  Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

 

(1) Transfer of Beneficial Interests in the Same Global Note.  Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend.  Beneficial interests in any 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 2.06(b)(1).

 

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(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and exchanges of beneficial interests that are not subject to either Section 2.06(b)(1) above or Section 2.06(f) below, the transferor of such beneficial interest must deliver to the Registrar either:

 

(A)  both:

 

(i)    a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures 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

 

(ii)   instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or

 

(B)  both:

 

(i)    a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and

 

(ii)   instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in clause (i) above.

 

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(s) pursuant to Section 2.06(h) hereof.

 

(3) Transfer of Beneficial Interests to Another Restricted Global Note.  A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following:

 

(A)  if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

 

(B)  if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and

 

(C)  if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.

 

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(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note.  A beneficial interest in any 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 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 2.06(b)(2) above:

 

(A)  such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the applicable Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in accordance with the applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Issuers;

 

(B)  such transfer is effected pursuant to a Shelf Registration Statement in accordance with the applicable Registration Rights Agreement;

 

(C)  such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the applicable Registration Rights Agreement; or

 

(D)  the Registrar receives the following:

 

(i)    if the holder of such beneficial interest in a 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 of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

 

(ii)   if the holder of such beneficial interest in a 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 of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in Section 2.06(b)(4)(D) hereof, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

If any such transfer is effected pursuant to this Section 2.06(b)(4)(B) or (D) hereof at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, 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.

 

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 Restricted Global Note.

 

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(c)   Transfer or Exchange of Beneficial Interests for Definitive Notes.

 

(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes.  If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation:

 

(A)  if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

 

(B)  if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

 

(C)  if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

 

(D)  if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;

 

(E)   if such beneficial interest is being transferred to an Institutional Accredited Investor 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 to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;

 

(F)   if such beneficial interest is being transferred to Antero Midstream Partners or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or

 

(G)  if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,

 

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuers shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount.  Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant.  The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

 

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(2) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes.  A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:

 

(A)  such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the applicable Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in accordance with the applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Issuers;

 

(B)  such transfer is effected pursuant to a Shelf Registration Statement in accordance with the applicable Registration Rights Agreement;

 

(C)  such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the applicable Registration Rights Agreement; or

 

(D)  the Registrar receives the following:

 

(i)    if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

 

(ii)   if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in Section 2.06(c)(3)(D) hereof, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

(3) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.  If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuers will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount.  Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant.  The Trustee will deliver such Definitive Notes to the

 

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Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will not bear the Private Placement Legend.

 

(d)   Transfer and Exchange of Definitive Notes for Beneficial Interests.

 

(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes.  If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to 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 Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

 

(B)  if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

 

(C)  if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

 

(D)  if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;

 

(E)   if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor 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 to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;

 

(F)   if such Restricted Definitive Note is being transferred to Antero Midstream Partners or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or

 

(G)  if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,

 

the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note.

 

(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an

 

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Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

 

(A)  such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the applicable Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in accordance with the applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Issuers;

 

(B)  such transfer is effected pursuant to a Shelf Registration Statement in accordance with the applicable Registration Rights Agreement;

 

(C)  such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the applicable Registration Rights Agreement; or

 

(D)  the Registrar receives the following:

 

(i)    if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

 

(ii)   if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in Section 2.06(d)(2)(D) hereof, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

 

(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes 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 will 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 exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (2)(B), (2)(D) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Issuers will issue and, upon receipt of an Authentication Order in

 

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accordance with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

 

(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 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or exchange, the requesting Holder must 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 must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).

 

(1) Restricted Definitive Notes to Restricted Definitive Notes.  Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

 

(A)  if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

 

(B)  if the transfer will be made pursuant to Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and

 

(C)  if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.

 

(2) Restricted Definitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

 

(A)  such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the applicable Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in accordance with the applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Issuers;

 

(B)  such transfer is effected pursuant to a Shelf Registration Statement in accordance with the applicable Registration Rights Agreement;

 

(C)  such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the applicable Registration Rights Agreement; or

 

(D)  the Registrar receives the following:

 

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(i)    if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

 

(ii)   if the Holder of such Restricted Definitive Notes 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 of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in Section 2.06(e)(2)(D) hereof, if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note.  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.

 

(f)    Exchange Offer. Upon the occurrence of an Exchange Offer in accordance with the applicable Registration Rights Agreement, the Issuers will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate:

 

(1) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes accepted for exchange in the Exchange Offer by Persons that certify in accordance with the applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of the Issuers; and

 

(2) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer by Persons that certify in accordance with the applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of the Issuers.

 

Concurrently with the issuance of such Notes, the Trustee will cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Issuers will execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount.

 

(g)   Legends.  The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.

 

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(1) Private Placement Legend.

 

(A)  Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. 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 UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

 

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR (IN THE CASE OF RULE 144A SECURITIES) AFTER THE LATER OF THE ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) OR 40 DAYS (IN THE CASE OF REGULATION S SECURITIES), ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, 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 OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER OR THE ISSUERS ON OR AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

BY ITS ACQUISITION OF THIS SECURITY, THE HOLDER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS SECURITY (OR ANY INTEREST IN THIS SECURITY) CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE

 

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CODE OF 1986, AS AMENDED (THE “CODE”), OR ANY GOVERNMENTAL PLAN, CHURCH PLAN, NON-U.S. PLAN, OR OTHER PLAN SUBJECT TO OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2) THE ACQUISITION, HOLDING AND SUBSEQUENT DISPOSITION OF THIS SECURITY (OR ANY INTEREST IN THIS SECURITY) WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.”

 

(B)  Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) will not bear the Private Placement Legend.

 

(2) Global Note Legend.  Each Global Note will bear a legend in substantially the following form:

 

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR 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 MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.”

 

(h)   Cancellation and/or Adjustment of Global Notes.  At such time as all beneficial interests in a particular Global Note have been exchanged for beneficial interests in another Global Note or Definitive Notes, or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof.  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

 

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of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will 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 will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

(i)    General Provisions Relating to Transfers and Exchanges.

 

(1) To permit registrations of transfers and exchanges, the Issuers will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

 

(2) No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuers may require payment of a sum sufficient to cover any transfer or exchange tax or similar governmental charge payable in connection therewith (other than any such transfer or exchange taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.04 hereof).

 

(3) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Issuers, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

 

(4) Neither the Registrar nor the Issuers will be required:

 

(A)  to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection;

 

(B)  to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or

 

(C)  to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.

 

(5) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuers may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuers shall be affected by notice to the contrary.

 

(6) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.

 

(7) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

 

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Section 2.07          Replacement Notes.

 

If any mutilated Note is surrendered to the Trustee or the Issuers and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuers will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are met.  If required by the Trustee or the Issuers, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced.  The Issuers may charge for their expenses in replacing a Note.

 

Every replacement Note is an additional obligation of each of the Issuers and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

 

Section 2.08          Outstanding Notes.

 

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding.  Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuers or an Affiliate of the Issuers holds the Note; however, Notes held by Antero Midstream Partners or a Subsidiary of Antero Midstream Partners shall not be deemed to be outstanding for purposes of Section 3.07(a) hereof.

 

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

 

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

 

If the Paying Agent (other than Antero Midstream Partners, a Subsidiary or an Affiliate of any thereof) holds, by 11:00 a.m., Eastern Time, on a Redemption Date or other maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.

 

Section 2.09          Treasury Notes.

 

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 or any Guarantor, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuers or any Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.

 

Section 2.10          Temporary Notes.

 

Until certificates representing Notes are ready for delivery, the Issuers may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes.  Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Issuers consider appropriate for temporary Notes and as may be reasonably acceptable to the Trustee.  Without unreasonable delay, the Issuers will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.

 

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Holders of temporary Notes will be entitled to all of the benefits of this Indenture.

 

Section 2.11          Cancellation.

 

The Issuers at any time may deliver Notes to the Trustee for cancellation.  The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will destroy canceled Notes (subject to the record retention requirement of the Exchange Act).  Certification of the destruction of all canceled Notes will be delivered to the Issuers.  The Issuers may not issue new Notes to replace Notes that they have paid or that have been delivered to the Trustee for cancellation.

 

Section 2.12          Defaulted Interest.

 

If the Issuers default in a payment of interest on the Notes, they will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof.  The Issuers will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment.  The Issuers will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest.  At least 15 days before the special record date, the Issuers (or, upon the written request of the Issuers, the Trustee in the name and at the expense of the Issuers) will send or cause to be sent to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

 

Section 2.13          Trustee, Paying Agent, Registrar Not Responsible for Depositary.

 

None of the Trustee, any Paying Agent or the Registrar shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in  any Global Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.  The Trustee, any Paying Agent and the Registrar shall be entitled to deal with any Depositary, and any nominee thereof, that is the Holder of any Global Note for all purposes of this Indenture relating to such Global Note (including the payment of principal, premium, if any, and interest, the giving of instructions or directions by or to the owner or holder of a beneficial ownership interest in such Global Note) as the sole Holder of such Global Note and shall have no obligations to the beneficial owners thereof.  None of the Trustee, any Paying Agent or the Registrar shall have any responsibility or liability for any acts or omissions of any  Depositary with respect to any Global Notes, for the records of any Depositary, including records in respect of beneficial ownership interests in respect of any Global Note, for any transactions between such Depositary and any participant in such Depositary or between or among any such Depositary, any such participant or any holder or owner of a beneficial interest in any Global Note or for any transfers of beneficial interests in any Global Note.

 

ARTICLE 3
 REDEMPTION AND PREPAYMENT

 

Section 3.01          Notices to Trustee.

 

If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Section 3.07 or 4.15(d) hereof, they must furnish to the Trustee, at least five Business Days (unless a shorter period is satisfactory to the Trustee) before a notice of such redemption is to be given pursuant to Section 3.03, written notice setting forth:

 

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(1) the clause of this Indenture pursuant to which the redemption shall occur;

 

(2) the Redemption Date;

 

(3) the principal amount of Notes to be redeemed; and

 

(4) the redemption price (if then determinable and otherwise the method of determination).

 

Section 3.02          Selection of Notes to Be Redeemed.

 

If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows:

 

(1)   if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or

 

(2)         if the Notes are not listed on any national securities exchange, on a pro rata basis; or

 

(3)         in the case of Notes in global form, by such other method as DTC may prescribe.

 

No Notes of $2,000 or less can be redeemed in part.  In the event of partial redemption, the particular Notes to be redeemed will be selected, unless otherwise provided herein, not less than 15 nor more than 60 days prior to the redemption by the Trustee from the outstanding Notes not previously called for redemption.

 

The Trustee will promptly notify the Issuers in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected will be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed.  Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

 

The Issuers will promptly notify the Trustee in writing of any listing or delisting of the Notes on or from a national securities exchange.

 

Section 3.03          Notice of Redemption.

 

At least 15 days but not more than 60 days before a Redemption Date, the Issuers will mail or cause to be mailed, by first class mail (or sent electronically in the case of notices to DTC) a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be given more than 60 days prior to a 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 8 or 11 hereof. Notice of any redemption of the Notes (including upon an Equity Offering or in connection with a transaction (or series of related transactions) that constitute a Change of Control) may, at the Issuers’ discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completed of the related Equity Offering or Change of Control. In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuers’ discretion, the Redemption Date may be delayed until such time (including more than 60 days after the date the notice of redemption was delivered) as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the

 

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event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed, or such notice may be rescinded at any time in the Issuers’ discretion if in the good faith judgment of the Issuers any or all of such conditions will not be satisfied.

 

The notice will identify the Notes to be redeemed and will state:

 

(1) the Redemption Date;

 

(2) the redemption price, if then determinable and, if not, the manner of its determination;

 

(3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued in the name of the Holder thereof upon cancellation of the original Note;

 

(4) the name and address of the Paying Agent;

 

(5) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

 

(6) that, unless the Issuers default in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;

 

(7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

 

(8) any condition precedent to the redemption; and

 

(9) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.

 

At the Issuers’ request, the Trustee will give the notice of redemption in the Issuers’ names and at their expense; provided, however, that the Issuers have delivered to the Trustee written notice in accordance with Section 3.01 requesting that the Trustee give such notice and a form of the notice of redemption setting forth the information specified in the preceding paragraph.

 

Section 3.04          Effect of Notice of Redemption.

 

Once notice of redemption is given in accordance with Section 3.03 hereof, Notes called for redemption without condition will become irrevocably due and payable on the Redemption Date at the redemption price.

 

Section 3.05          Deposit of Redemption or Purchase Price.

 

Prior to 11:00 a.m., Eastern Time, on the redemption or purchase date, the Issuers will deposit with the Trustee or with the Paying Agent money sufficient (as determined by the Issuers) to pay the redemption or purchase price of and accrued interest on all Notes to be redeemed or purchased on that date.  The Trustee or the Paying Agent will promptly return to the Issuers any money deposited with the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest on all Notes to be redeemed or purchased.

 

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If the Issuers comply with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or accepted for purchase.  If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date.  If any Note called for redemption or tendered for purchase is not so paid upon surrender for redemption or purchase because of the failure of the Issuers to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate then in effect as provided in the Notes and in Section 4.01 hereof.

 

Section 3.06                             Notes Redeemed or Purchased in Part.

 

Upon surrender of a Note that is redeemed or purchased in part, the Issuers will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Issuers a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.

 

Section 3.07                             Optional Redemption.

 

(a)         At any time prior to September 15, 2019, the Issuers may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture, upon prior notice in accordance with Section 3.02 hereof, at a redemption price of 105.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date (subject to the right of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date), with an amount of cash not greater than the net cash proceeds of one or more Equity Offerings by Antero Midstream Partners; provided that:

 

(1) at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture (excluding Notes held by Antero Midstream Partners and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and

 

(2) the redemption occurs within 180 days of the date of the closing of such Equity Offering.

 

(b)         Except pursuant to the preceding paragraph, subsection (d) of this Section 3.07, and Section 4.15(d) hereof, the Notes will not be redeemable at the Issuers’ option prior to September 15, 2019.

 

(c)          On or after September 15, 2019, the Issuers may redeem all or a part of the Notes, upon prior notice in accordance with Section 3.02 hereof, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Notes redeemed to, but excluding, the applicable Redemption Date, if redeemed during the twelve-month period beginning on September 15 of each year indicated below, subject to the rights of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
2019
    	
 
    	
104.031
    	
%
    
	
2020
    	
 
    	
102.688
    	
%
    

 

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Year
    	
 
    	
Percentage
    	
 
    
	
2021
    	
 
    	
101.344
    	
%
    
	
2018 and   thereafter
    	
 
    	
100.000
    	
%
    

 

(d)         At any time prior to September 15, 2019, the Issuers may also redeem all or a part of the Notes, upon prior notice in accordance with Section 3.02 hereof, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding, the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date. The notice need not set forth the Applicable Premium but only the manner of calculation of the redemption price. With respect to any redemption pursuant to this Section 3.07(d), Antero Midstream Partners will (i) calculate the Treasury Rate on the second Business Day preceding the applicable Redemption Date and (ii) prior to such Redemption Date file with the Trustee an Officers’ Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail. The Trustee shall not be responsible for any such calculation.

 

(e)          Any redemption pursuant to this Section 3.07 or Section 4.15(d) shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

 

(f)           Unless the Issuers default in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable Redemption Date.

 

Section 3.08                             Mandatory Redemption.

 

The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Notes. The Issuers are not prohibited from acquiring the Notes by means other than a redemption, whether pursuant to a tender offer, open market purchase or otherwise, so long as the acquisition does not violate the terms of this Indenture.

 

Section 3.09                             Offer to Purchase by Application of Excess Proceeds.

 

In the event that, pursuant to Section 4.10 hereof, the Issuers are required to commence an offer to all Holders to purchase Notes (an “Asset Sale Offer”), it will follow the procedures specified below.

 

The Asset Sale Offer shall be made to all Holders and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets.  The Asset Sale Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the “Offer Period”).  No later than three Business Days after the termination of the Offer Period (the “Purchase Date”), the Issuers will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in response to the Asset Sale Offer.  Payment for any Notes so purchased will be made in the same manner as interest payments are made.

 

If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

 

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Upon the commencement of an Asset Sale Offer, the Issuers will send, in the manner prescribed in Section 12.02, a notice to the Trustee and each of the Holders, with a copy to the Trustee.  The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer.  The notice, which will govern the terms of the Asset Sale Offer, will state:

 

(1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer will remain open;

 

(2) the Offer Amount, the purchase price and the Purchase Date;

 

(3) that any Note not tendered or accepted for payment will continue to accrue interest;

 

(4) that, unless the Issuers default in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest after the Purchase Date;

 

(5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only;

 

(6) that Holders electing to have Notes purchased pursuant to any Asset Sale Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Issuers, a Depositary, if appointed by the Issuers, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

 

(7) that Holders will be entitled to withdraw their election if the Issuers, the depositary for the Asset Sale Offer or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

 

(8) that, if the aggregate principal amount of Notes and other pari passu Indebtedness surrendered by holders thereof exceeds the Offer Amount, the Notes and other pari passu Indebtedness to be purchased will be selected on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered (with such adjustments as may be deemed appropriate by the Issuers so that only Notes in denominations of $2,000, or integral multiples of $1,000 in excess thereof, will be purchased); and

 

(9) that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).

 

On or before the Purchase Date, the Issuers will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Issuers in accordance with the terms of this Section 3.09.  The Issuers, the depositary for the Asset Sale Offer or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Issuers for purchase, and the Issuers will promptly issue a new Note, and the Trustee, upon written request from the Issuers, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in a principal amount

 

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equal to any unpurchased portion of the Note surrendered.  Any Note not so accepted shall be promptly mailed or delivered by the Issuers to the Holder thereof.  The Issuers will publicly announce the results of the Asset Sale Offer on the Purchase Date.

 

Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.05 and 3.06 hereof.

 

ARTICLE 4
 COVENANTS

 

Section 4.01                             Payment of Notes.

 

The Issuers will pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes.  Principal, premium, if any, and interest will be considered paid on the date due if the Paying Agent, if other than the Antero Midstream Partners or a Subsidiary thereof, holds as of 11:00 a.m. Eastern Time on the due date money deposited by the Issuers in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.

 

The Issuers shall pay interest on overdue principal, and they shall pay interest on overdue installments of interest (including Additional Interest, if any), at the rate then prevailing on the Notes to the extent lawful.

 

The Issuers shall notify the Trustee in writing of the amounts and payment dates of any Additional Interest that may become payable under any Registration Rights Agreement. The Trustee shall not at any time be under any duty or responsibility to any Holder of Notes to determine any Additional Interest, or with respect to the nature, extent or calculation of the amount of Additional Interest owed, or with respect to the method employed in such calculation of Additional Interest.

 

Notwithstanding anything to the contrary contained in this Indenture, the Issuers may, to the extent required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments hereunder.

 

Section 4.02                             Maintenance of Office or Agency.

 

The Issuers will maintain in the City of New York an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuers in respect of the Notes and this Indenture may be served.  The Issuers will 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 fail to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

 

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 will in any manner relieve the Issuers of their obligation to maintain an office or agency in the City of New York for such purposes.  The Issuers will 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.

 

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The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or agency of the Issuers in accordance with Section 2.03 hereof.

 

Section 4.03                             Reports.

 

(a)         Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, Antero Midstream Partners shall furnish (whether through hard copy or internet access) to the Holders of Notes and the Trustee, within the time periods specified in the SEC’s rules and regulations:

 

(1) all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if Antero Midstream Partners were required to file such reports; and

 

(2) all current reports that would be required to be filed with the SEC on Form 8-K if Antero Midstream Partners were required to file such reports.

 

All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports; provided, however, that if at any time Antero Midstream Partners is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, it may complete any of the reports referred to in clauses (1) and (2) of this Section 4.03(a) as though its only registered securities were the Notes. Each annual report on Form 10-K will include a report on Antero Midstream Partners’ consolidated financial statements by Antero Midstream Partners’ independent registered public accounting firm.  In addition, Antero Midstream Partners will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing) and will post the reports on its website within those time periods.

 

If, at any time Antero Midstream Partners is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, Antero Midstream Partners will nevertheless continue filing the reports specified in the preceding paragraphs with the SEC within the time periods specified above unless the SEC will not accept such a filing.  If, notwithstanding the foregoing, the SEC will not accept Antero Midstream Partners’ filings for any reason,  Antero Midstream Partners will post the reports referred to in the preceding paragraphs on its website within the time periods that would apply if Antero Midstream Partners were required to file those reports with the SEC.

 

The Trustee shall have no obligation to determine if and when the reports, information and documents of Antero Midstream Partners are filed with the Commission via the EDGAR system and available on the Commission’s EDGAR website.

 

Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including Antero Midstream Partners’ compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely conclusively on Officers’ Certificates). The Trustee is under no duty to examine such reports, information or documents to ensure compliance with the provisions of this Indenture or to ascertain the correctness or otherwise of the information or the statements contained therein.

 

Any and all Defaults or Events of Default arising from a failure to comply with this Section 4.03 shall be deemed cured (and Antero Midstream Partners shall be deemed to be in compliance with this Section 4.03) upon furnishing or filing such information or report as contemplated by this covenant (but without regard to the date on which such information or report is so furnished or filed); provided that such

 

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cure shall not otherwise affect the rights of Holders under Section 6.01 hereof if all outstanding Notes shall have been accelerated in accordance with the terms of the Indenture and such acceleration has not been rescinded or cancelled prior to such cure.

 

(b)         For so long as any Notes remain outstanding, if at any time none of Antero Midstream Partners and the Guarantors is required to file with the SEC the reports required by paragraph (a) of this Section 4.03, Antero Midstream Partners and the Guarantors will furnish to the Holders of Notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

(c)          The Issuers will at all times comply with TIA §314(a).

 

Section 4.04                             Compliance Certificate.

 

(a)         The Issuers and each Guarantor shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate (at least one of the signatories of which shall be the principal executive officer, the principal financial officer, or the principal accounting officer of Antero Midstream Partners) stating that a review of the activities of the Issuers and Antero Midstream Partners’ Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Issuers have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Issuers have kept, observed, performed and fulfilled each and every covenant contained in this Indenture and are not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuers are taking or propose to take with respect thereto).

 

(b)         So long as any of the Notes are outstanding, the Issuers and the Guarantors will deliver to the Trustee, promptly upon any Officer thereof becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action the Issuers are taking or propose to take with respect thereto.

 

Section 4.05                             Taxes.

 

Antero Midstream Partners will pay, and will cause each of its Restricted Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

 

Section 4.06                             Stay, Extension and Usury Laws.

 

The Issuers and each of the Guarantors covenant (to the extent that they may lawfully do so) that they will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuers and each of the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenants that they will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

 

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Section 4.07                             Restricted Payments.

 

(a)         Antero Midstream Partners will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(1) declare or pay any dividend or make any other payment or distribution on account of Antero Midstream Partners’ or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving Antero Midstream Partners or any of its Restricted Subsidiaries) or to the direct or indirect holders of Antero Midstream Partners’ or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than distributions or dividends payable in Equity Interests of Antero Midstream Partners (other than Disqualified Equity) and other than distributions or dividends payable to Antero Midstream Partners or a Restricted Subsidiary);

 

(2) purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving Antero Midstream Partners) any Equity Interests of Antero Midstream Partners or any direct or indirect parent of Antero Midstream Partners;

 

(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of Antero Midstream Partners or any Guarantor that is  contractually subordinated to the Notes or to any Note Guarantee (excluding intercompany Indebtedness between or among Antero Midstream Partners and any of its Restricted Subsidiaries), except a payment of interest or principal within one year of the Stated Maturity thereof; or

 

(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”),

 

unless, at the time of and after giving effect to such Restricted Payment, no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment and either:

 

(1) if the Fixed Charge Coverage Ratio for Antero Midstream Partners’ Reference Period is not less than 1.75 to 1.00, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Antero Midstream Partners and its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4) (to the extent, in the case of clause (4), payments are made other than to Antero Midstream Partners or a Restricted Subsidiary), (5), (6), (7), (9), (10) and (11) of Section 4.07(b) hereof) during the quarter in which such Restricted Payment is made, is less than the sum, without duplication, of:

 

(A)       Available Cash from Operating Surplus as of the end of the immediately preceding quarter; plus

 

(B)       100% of the aggregate net cash proceeds received by Antero Midstream Partners (including the Fair Market Value of any Permitted Business or long-term assets that are used or useful in a Permitted Business to the extent acquired in consideration of Equity Interests of Antero Midstream Partners (other than Disqualified Equity)) since the Issue Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of Antero Midstream Partners (other than Disqualified Equity) or from the issue or sale of convertible or exchangeable Disqualified Equity or convertible or exchangeable debt securities of Antero Midstream Partners that have been converted into

 

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or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Equity or debt securities) sold to a Subsidiary of Antero Midstream Partners); plus

 

(C)       to the extent that any Restricted Investment that was made after the Issue Date is sold for cash or Cash Equivalents or otherwise liquidated or repaid for cash or Cash Equivalents, the return of capital or similar payment made in cash or Cash Equivalents with respect to such Restricted Investment (less the cost of disposition, if any); plus

 

(D)       the net reduction in Restricted Investments made after the Issue Date resulting from dividends, repayments of loans or advances, or other transfers of assets in each case to Antero Midstream Partners or any of its Restricted Subsidiaries from any Person (including, without limitation, Unrestricted Subsidiaries) or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries, to the extent such amounts have not been included in Available Cash from Operating Surplus for any period commencing on or after the Issue Date (items (b), (c) and (d) being referred to as “Incremental Funds”); minus

 

(E)        the aggregate amount of Incremental Funds previously expended pursuant to this clause (1) and clause (2) below; or

 

(2) if the Fixed Charge Coverage Ratio for Antero Midstream Partners’ Reference Period is less than 1.75 to 1.00, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Antero Midstream Partners and its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4) (to the extent, in the case of clause (4), payments are made other than to Antero Midstream Partners or a Restricted Subsidiary), (5), (6),  (7), (9), (10) and (11) of Section 4.07(b) hereof) during the quarter in which such Restricted Payment is made (such Restricted Payments for purposes of this clause (2) meaning only distributions on common units or subordinated units of Antero Midstream Partners and any general partner interest or incentive distribution rights of the General Partner), is less than the sum, without duplication, of:

 

(A)       $250.0 million less the aggregate amount of all Restricted Payments made by Antero Midstream Partners and its Restricted Subsidiaries pursuant to this clause (2)(A) during the period ending on the last day of the fiscal quarter immediately preceding the date of such Restricted Payment and beginning on the Issue Date; plus

 

(B)       Incremental Funds to the extent not previously expended to this clause (2) or clause (1) above.

 

(b)         The provisions of Section 4.07(a) hereof will not prohibit:

 

(1) the payment of any dividend or distribution or the consummation of an irrevocable redemption of subordinated Indebtedness within 60 days after the date of the declaration of such dividend or distribution, or the delivery of the irrevocable notice of redemption, as the case may be, if at the date of declaration  or the date on which such irrevocable notice is delivered, such dividend, distribution or redemption would have complied with the provisions of this Indenture (assuming, in the case of a redemption payment, the giving of the notice of such redemption payment would have been deemed to be a Restricted Payment at such time and such deemed Restricted Payment would have been permitted at such time);

 

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(2) the making of any Restricted Payment in exchange for, or out of the net cash proceeds of, a substantially concurrent (a) capital contribution to Antero Midstream Partners from any Person (other than a Restricted Subsidiary of Antero Midstream Partners) or (b) sale (other than to a Restricted Subsidiary of Antero Midstream Partners) of Equity Interests (other than Disqualified Equity) of Antero Midstream Partners, with a sale being deemed substantially concurrent if such Restricted Payment occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded or deducted from the calculation of Available Cash from Operating Surplus and Incremental Funds;

 

(3) the purchase, redemption, defeasance or other acquisition or retirement for value of any subordinated Indebtedness of Antero Midstream Partners or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;

 

(4) the payment of any distribution or dividend by a Restricted Subsidiary of Antero Midstream Partners to the holders of its Equity Interests (other than Disqualified Equity) on a pro rata basis;

 

(5) so long as no Default has occurred and is continuing or would be caused thereby, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Antero Midstream Partners or any Restricted Subsidiary of Antero Midstream Partners held by any current or former officer, director, consultant or employee of the General Partner, Antero Midstream Partners or any of Antero Midstream Partners’ Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock or unit option agreement, shareholders’ agreement, employment agreement or similar agreement; provided, that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $5.0 million in any twelve-month period; provided further, that Antero Midstream Partners may carry over and make in subsequent twelve-month periods, in addition to the amounts permitted for such twelve-month period, up to $2.0 million of unutilized capacity under this clause (5) attributable to the immediately preceding twelve-month period; provided further, that such amount in any twelve-month period may be increased by an amount not to exceed (a) the cash proceeds received by Antero Midstream Partners from the sale of Equity Interests of Antero Midstream Partners to members of management, employees or directors of the General Partner, Antero Midstream Partners or its Restricted Subsidiaries that occurs after the Issue Date (to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause 1(B) or 2(B) of Section 4.07(a) hereof), plus (b) the cash proceeds of key man life insurance policies received by Antero Midstream Partners after the Issue Date, less (c) the amount of any Restricted Payments made pursuant to clauses (a) and (b) of this clause (5);

 

(6) so long as no Default has occurred and is continuing or would be caused thereby, payments of dividends on Disqualified Equity issued pursuant to Section 4.09 hereof;

 

(7) purchases or other acquisitions of Capital Stock (a) deemed to occur upon exercise of stock or unit options, warrants or other convertible securities if such Capital Stock represents a portion of the exercise price of such options, warrants or other convertible securities or (b) made in lieu of withholding taxes resulting from any such exercise;

 

(8) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital

 

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Stock of Antero Midstream Partners; or arising from stock or unit dividends, splits or business combinations;

 

(9) in connection with an acquisition by Antero Midstream Partners or any of its Restricted Subsidiaries, the return to Antero Midstream Partners or any of its Restricted Subsidiaries of Equity Interests of Antero Midstream Partners or any of its Restricted Subsidiaries constituting a portion of the purchase consideration in settlement of any indemnification claims or pursuant to any purchase price adjustments under the acquisition agreement;

 

(10) so long as no Default or Event of Default has occurred and is continuing, the purchase, redemption, defeasance or other acquisition or retirement for value of any subordinated Indebtedness pursuant to provisions similar to those in Section 4.10 or 4.15; provided that all Notes validly tendered and not withdrawn by Holders in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been purchased, redeemed, defeased or otherwise acquired or retired for value; and

 

(11) other Restricted Payments in an aggregate amount not to exceed $25.0 million since the Issue Date.

 

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by Antero Midstream Partners or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment, except that the amount of any non-cash dividend or distribution paid in accordance with clause (1) of Section 4.07(b) hereof shall be the Fair Market Value as of the date on which such dividend or distribution is declared. The Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined in the manner prescribed in the definition of that term. For the purposes of determining compliance with this Section 4.07, in the event that a (a) Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (11), Antero Midstream Partners will be permitted to classify (or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07 and (b) a Restricted Payment is made pursuant to clause (1) or (2) of Section 4.07(a), Antero Midstream Partners will be permitted to classify whether all or any portion thereof is being (and in the absence of such classification shall be deemed to have classified the minimum amount possible as having been) made with Incremental Funds.

 

Section 4.08                             Dividend and Other Payment Restrictions Affecting Subsidiaries.

 

(a)         Antero Midstream Partners will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary that is not a Guarantor to:

 

(1) pay dividends or make any other distributions on its Equity Interests to Antero Midstream Partners or any of its Restricted Subsidiaries, or pay any indebtedness owed to Antero Midstream Partners or any of its Restricted Subsidiaries; provided that priority of any preferred equity or similar Equity Interest in receiving dividends or liquidating distributions prior to the payment of dividends or liquidating distributions on common equity shall not be deemed to be a restriction on the ability to make distributions on Equity Interests;

 

(2)  make loans or advances to Antero Midstream Partners or any of its other Restricted Subsidiaries; or

 

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(3) sell, lease or otherwise transfer any of its properties or assets to Antero Midstream Partners or any of its other Restricted Subsidiaries.

 

(b)         The restrictions in Section 4.08(a) hereof will not apply to encumbrances or restrictions existing under or by reason of:

 

(1) agreements as in effect on the Issue Date and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements or the Indebtedness to which they relate; provided that the amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend, distribution and other payment restrictions than those contained in those agreements on the Issue Date;

 

(2) this Indenture, the Notes and the Note Guarantees;

 

(3) agreements governing other Indebtedness permitted to be incurred under the provisions of the covenant described above under Section 4.09 and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of such agreements; provided that the restrictions therein are not materially more restrictive, taken as a whole, than those contained in this Indenture, the Notes and the Note Guarantees;

 

(4) applicable law, rule, regulation or order;

 

(5) any instrument governing Indebtedness or Equity Interest of a Person acquired by Antero Midstream Partners or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Equity Interest was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;

 

(6) customary non-assignment provisions in transportation agreements or purchase and sale or exchange agreements, pipeline and water treatment agreements, or similar operational agreements or in licenses or leases, in each case entered into in the ordinary course of business;

 

(7) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3) of Section 4.08(a) hereof;

 

(8) any agreement (a) for the sale or other disposition of a Restricted Subsidiary that contains any such restrictions on that Restricted Subsidiary pending its sale or other disposition or (b) for the sale or other disposition of a particular asset or line of business of a Restricted Subsidiary that imposes restrictions on assets subject to any agreement of the nature described in clause (3) of Section 4.08(a) hereof;

 

(9) Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

 

(10) Liens permitted to be incurred under the provisions of Section 4.12 hereof that limit the right of the debtor to dispose of the assets subject to such Liens;

 

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(11) provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements entered into in the ordinary course of business;

 

(12) any agreement or instrument relating to any property or assets acquired after the Issue Date, so long as such encumbrance or restriction relates only to the property or assets so acquired and is not and was not created in anticipation of such acquisitions;

 

(13) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

 

(14) any instrument governing Indebtedness of a FERC Subsidiary, provided that such Indebtedness was otherwise permitted to be incurred under this Indenture; and

 

(15) encumbrances or restrictions contained in, or in respect of, Hedging Obligations permitted under this Indenture from time to time.

 

Section 4.09                             Incurrence of Indebtedness and Issuance of Disqualified Equity.

 

(a)         Antero Midstream Partners will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Antero Midstream Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Antero Midstream Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Antero Midstream Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for the Antero Midstream Partners’ Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, 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 Equity had been issued, as the case may be, at the beginning of such Reference Period.

 

(b)         The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (11) below:

 

(1)  the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of additional Indebtedness and letters of credit and the Guarantees thereof under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Antero Midstream Partners and its Restricted Subsidiaries thereunder) not to exceed the greater of (a) $2.0 billion and (b) the sum of $1.4 billion and 30% of Consolidated Net Tangible Assets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom);

 

(2) the incurrence by Antero Midstream Partners and its Restricted Subsidiaries of any Existing Indebtedness;

 

(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by (a) the Notes and the related Note Guarantees issued on the Issue Date and (b) any Exchange Notes and the related Note Guarantees issued thereafter;

 

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(4) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Antero Midstream Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), at any time outstanding not to exceed the greater of  (a) $100.0 million and (b) 5.0% of Consolidated Net Tangible Assets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom);

 

(5) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2), (3), (4) or (10) of this Section 4.09(b) or this clause (5);

 

(6) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Antero Midstream Partners and any of its Restricted Subsidiaries; provided, however, that:

 

(A)       if Antero Midstream Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Antero Midstream Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Antero Midstream Partners, or the Note Guarantee, in the case of a Guarantor; and

 

(B)       (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Antero Midstream Partners or a Restricted Subsidiary of Antero Midstream Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Antero Midstream Partners or a Restricted Subsidiary of Antero Midstream Partners,

 

will be deemed, in each case, to constitute an incurrence of such Indebtedness by Antero Midstream Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);

 

(7) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of Hedging Obligations or Indebtedness under Treasury Management Arrangements;

 

(8) the Guarantee by Antero Midstream Partners, or any of its Restricted Subsidiaries of (a) Indebtedness of Antero Midstream Partners or a Restricted Subsidiary of Antero Midstream Partners that was permitted to be incurred by another provision of this Section 4.09 or (b) Indebtedness incurred by Joint Ventures,  provided that such Guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being Guaranteed is subordinated to or pari passu with the Notes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed;

 

(9) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts,

 

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reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including Guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing;

 

(10) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;

 

(11) the issuance by Antero Midstream Partners or any of its Restricted Subsidiaries of Disqualified Equity to Antero Midstream Partners or any of its Restricted Subsidiaries, as the case may be; provided, however, that:

 

(A)       any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held, directly or indirectly, by a Person other than Antero Midstream Partners or a Restricted Subsidiary of Antero Midstream Partners; and

 

(B)       any sale or other transfer of any such Disqualified Equity to a Person that is not either Antero Midstream Partners or a Restricted Subsidiary of Antero Midstream Partners;

 

will be deemed, in each case, to constitute an issuance of such Disqualified Equity by Antero Midstream Partners or such Restricted Subsidiary that was not permitted by this clause;

 

(12) the incurrence in the ordinary course of business by Antero Midstream Partners or any of its Restricted Subsidiaries of Indebtedness under letters of credit incurred pursuant to a Credit Facility, provided that such obligations are reimbursed within 10 days following the drawing of such letter of credit;

 

(13) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Antero Midstream Partners or any Joint Venture but only to the extent that such liability is the result of Antero Midstream Partners’ or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed $25.0 million; and

 

(14) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $100.0 million and (b) 5.0% of Consolidated Net Tangible Assets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom).

 

Antero Midstream Partners will not incur, and will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Antero Midstream Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Antero Midstream Partners, Finance Corp. or any such Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.

 

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For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Antero Midstream Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09.  Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt.

 

The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Antero Midstream Partners as accrued to the extent required by the definition of such term.  Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that Antero Midstream Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.

 

The amount of any Indebtedness outstanding as of any date will be:

 

(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;

 

(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and

 

(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

 

(A) the Fair Market Value of such assets at the date of determination; and

 

(B) the amount of the Indebtedness of the other Person.

 

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, 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, in the case of revolving credit debt;  provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

 

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Section 4.10                             Asset Sales.

 

Antero Midstream Partners will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

 

(1) Antero Midstream Partners (or the Restricted Subsidiary, as the case may be) receives consideration (including by way of relief from, or by any Person assuming responsibilities for, any liabilities, contingent or otherwise) at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of (such Fair Market Value to be determined on the date of contractually agreeing to such Asset Sale and which shall give effect to the assumption by another Person of any liabilities as provided for in clause (2)(A) below; and

 

(2) at least 75% of the consideration received in the Asset Sale by Antero Midstream Partners or such Restricted Subsidiary, together with the consideration received in all other Asset Sales by Antero Midstream Partners or any Restricted Subsidiary since the Issue Date (on a cumulative basis) is in the form of cash or Cash Equivalents.  For purposes of this provision, each of the following shall be deemed to be cash:

 

(A)       any liabilities, as shown on Antero Midstream Partners’ most recent consolidated balance sheet, of Antero Midstream Partners or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantees) that are assumed by the transferee of any such assets pursuant to a novation agreement that releases Antero Midstream Partners or such Restricted Subsidiary from further liability;

 

(B)       any securities, notes or other Obligations received by Antero Midstream Partners or any such Restricted Subsidiary from such transferee that are within 90 days after the Asset Sale (subject to ordinary settlement periods), converted by Antero Midstream Partners or such Restricted Subsidiary into cash, to the extent of the cash received in that conversion;

 

(C)       any stock or assets of the kind referred to in clause (2) or (4) of the next succeeding paragraph; and

 

(D)       accounts receivable of a business retained by Antero Midstream Partners or any of its Restricted Subsidiaries, as the case may be, following the sale of such business, provided such accounts receivable (i) are not past due more than 60 days and (ii) do not have a payment date greater than 90 days from the date of the invoices creating such accounts receivable.

 

Within 365 days after the receipt of any Net Proceeds from an Asset Sale, Antero Midstream Partners (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds:

 

(1) to repay Senior Indebtedness of Antero Midstream Partners or its Restricted Subsidiaries (or to make an offer to repurchase or redeem such Indebtedness, provided that such repurchase or redemption closes within 45 days after the end of such 365-day period);

 

(2) to acquire all or substantially all of the properties or assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of Antero Midstream Partners;

 

(3) to make a capital expenditure in a Permitted Business; or

 

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(4) to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business.

 

Notwithstanding the foregoing, if within 365 days after the receipt of any Net Proceeds from an Asset Sale, Antero Midstream Partners (or the applicable Restricted Subsidiary, as the case may be) enters into a binding written agreement irrevocably committing Antero Midstream Partners or such Restricted Subsidiary to an application of funds of the kind described in clause (2), (3) or (4) of the preceding paragraph, and as to which the only condition to closing is the receipt of required governmental approvals or, in the case of clause (3), the completion of required construction of the applicable asset(s), Antero Midstream Partners or such Restricted Subsidiary shall be deemed not to be in violation of the preceding paragraph.  Any Net Proceeds that are applied pursuant to clause (2) or (4) of the preceding paragraph pursuant to any such binding agreement shall be deemed to have been applied for such purpose within such 365-day period so long as they are so applied within two years after the date of receipt of such Net Proceeds.

 

Pending the final application of any Net Proceeds, Antero Midstream Partners or any Restricted Subsidiary may temporarily reduce revolving credit borrowings (to the extent amounts corresponding to such reduction are permitted to be borrowed under this Indenture) or otherwise invest the Net Proceeds in any manner that is not prohibited by this Indenture.

 

Any Net Proceeds from Asset Sales that are not applied or invested as provided in the second paragraph of this Section 4.10 will constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds exceeds $30.0 million, within five days thereof, Antero Midstream Partners will make an Asset Sale Offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds.  The offer price in any Asset Sale Offer will be equal to 100% of the principal amount plus accrued and unpaid interest, if any, to the date of purchase, and will be payable in cash.  If any Excess Proceeds remain after consummation of an Asset Sale Offer, Antero Midstream Partners (or any Restricted Subsidiary) may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture.  If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the representative of such other pari passu Indebtedness will select such other pari passu Indebtedness to be purchased on a pro rata basis.  Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.

 

Antero Midstream Partners will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of Section 3.09 hereof or this Section 4.10, Antero Midstream Partners will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.09 hereof or this Section 4.10 by virtue of such compliance.

 

Section 4.11                             Transactions with Affiliates.

 

(a)         Antero Midstream Partners will not, and will not permit any of its Restricted Subsidiaries to, 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, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Antero Midstream Partners (each an “Affiliate Transaction”), unless:

 

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(1) the Affiliate Transaction is on terms that are no less favorable to Antero Midstream Partners or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by Antero Midstream Partners or such Restricted Subsidiary with an unrelated Person or, if in the good faith judgment of the Board of Directors of Antero Midstream Partners, no comparable transaction is available with which to compare such Affiliate Transaction, such Affiliate Transaction is fair to Antero Midstream Partners or the relevant Restricted Subsidiary from a financial or commercial point of view; and

 

(2) Antero Midstream Partners delivers to the Trustee with respect to any Affiliate Transaction (or series of related Affiliate Transactions) involving aggregate consideration in excess of $50.0 million, a resolution of the Board of Directors of Antero Midstream Partners set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a) and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of Antero Midstream Partners.

 

(b)         The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 4.11(a) hereof:

 

(1)  reasonable fees and compensation paid to or for the benefit of any employee, officer or director of Antero Midstream Partners, any of its Restricted Subsidiaries or the General Partner, and any employment agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by Antero Midstream Partners or any of its Restricted Subsidiaries existing on the Issue Date, or entered into thereafter in the ordinary course of business, and any indemnities or other transactions permitted or required by bylaw, statutory provisions or any of the foregoing agreements, plans or arrangements;

 

(2) transactions between or among Antero Midstream Partners or its Restricted Subsidiaries;

 

(3) transactions with a Person (other than an Unrestricted Subsidiary of Antero Midstream Partners) that is an Affiliate of Antero Midstream Partners solely because Antero Midstream Partners owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;

 

(4) any issuance or sale of Equity Interests (other than Disqualified Equity) of Antero Midstream Partners to Affiliates of Antero Midstream Partners;

 

(5) Restricted Payments or Permitted Investments that do not violate Section 4.07 hereof;

 

(6) customary compensation, indemnification and other benefits made available to officers, directors or employees of Antero Midstream Partners, a Restricted Subsidiary of Antero Midstream Partners or the General Partner, including reimbursement or advancement of out-of-pocket expenses and provisions of officers’ and directors’ liability insurance;

 

(7) in the case of gathering, processing, compression, transporting, fractionating, waste water treatment or other operational contracts, any such contracts are entered into in the ordinary course of business on terms substantially similar to those contained in similar contracts entered into by Antero Midstream Partners or any Restricted Subsidiary and third parties, or if neither Antero Midstream Partners nor any Restricted Subsidiary has entered into a similar contract with a third party, that the terms are no less favorable than those available from third parties on an

 

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arm’s length basis, as determined in good faith by a majority of the disinterested members of the Board of Directors of Antero Midstream Partners;

 

(8) the existence of, or the performance by Antero Midstream Partners or any Restricted Subsidiary of its obligations under the terms of, any agreements that are described in the Antero Midstream Partners’ Annual Report on Form 10-K for the fiscal year ended December 31, 2015 under the heading “Certain Relationships and Related Transactions and Director Independence” to which it is a party as of the date of the Offering Memorandum and any amendments thereto and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by Antero Midstream Partners or any Restricted Subsidiary of its obligations under, any future amendment to such agreements or under any such similar agreements shall only be permitted by this clause (8) to the extent that the terms of any such amendment or new agreement, taken as a whole, are not less favorable to the Holders in any material respect as determined in good faith by a majority of the disinterested members of the Board of Directors of Antero Midstream Partners;

 

(9) if such Affiliate Transaction is with a Person in its capacity as a holder of Indebtedness or Equity Interests of Antero Midstream Partners or any of its Restricted Subsidiaries, a transaction in which such Person is treated no more favorably than the other holders of such Indebtedness or Equity Interests;

 

(10) (A) Guarantees by Antero Midstream Partners or any of its Restricted Subsidiaries of the performance of obligations of Unrestricted Subsidiaries or Joint Ventures in the ordinary course of business, except for Guarantees of Indebtedness in respect of borrowed money, and (B) pledges by Antero Midstream Partners or any Restricted Subsidiary of Capital Stock in Unrestricted Subsidiaries or Joint Ventures for the benefit of lenders or other creditors of Unrestricted Subsidiaries or Joint Ventures as contemplated by clause (13) of the definition of “Permitted Liens” so long as any such transaction described in this clause (B), if involving aggregate if involving aggregate consideration in excess of $50.0 million, has been approved by a majority of the disinterested members of the Board of Directors of Antero Midstream Partners;

 

(11) any transaction in which the Partnership or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an accounting, appraisal or investment banking firm of national standing stating that such transaction is fair to Antero Midstream Partners or such Restricted Subsidiary from a financial point of view or that such transaction meets the requirements of clause (1) of Section 4.11(a) hereof; and

 

(12) any transactions between Antero Midstream Partners or any Restricted Subsidiary and any Person, a director of which is also a director of Antero Midstream Partners or a Restricted Subsidiary, provided that such director abstains from voting as a director of Antero Midstream Partners or the Restricted Subsidiary, as applicable, in connection with the approval of the transaction.

 

Section 4.12                             Liens.

 

Antero Midstream Partners will not and will not permit any Guarantor to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than Permitted Liens) securing Indebtedness, upon any of their property or assets, now owned or hereafter acquired, unless:

 

(1)                                 in the case of Liens securing subordinated Indebtedness of Antero Midstream Partners or a Guarantor, the Notes or Note Guarantees, as applicable, are contemporaneously

 

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secured by a Lien on such property or assets on a senior basis to the subordinated Indebtedness so secured with the same priority that the Notes or Note Guarantees, as applicable, have to such subordinated Indebtedness until such time as such subordinated Indebtedness are no longer so secured by a Lien; and

 

(2)                                 in the case of Liens securing Senior Indebtedness of Antero Midstream Partners or a Guarantor, the Notes or Note Guarantees, as applicable, are contemporaneously secured by a Lien on such property or assets on an equal and ratable basis with the Senior Indebtedness so secured until such time as such Senior Indebtedness is no longer so secured by a Lien.

 

Any Lien on property or assets of Antero Midstream Partners or a Guarantor created for the benefit of Holders of the Notes pursuant to the preceding paragraph shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged at such time as there are no other Liens of any kind (other than Permitted Liens) on such property or assets securing such Indebtedness.

 

Section 4.13                             Limitations on Finance Corp. Activities.

 

Finance Corp. will not hold any material assets, become liable for any material obligations or engage in any significant business activities; provided, that Finance Corp. may be a co-obligor or guarantor with respect to Indebtedness if Antero Midstream Partners is an obligor on such Indebtedness and the net proceeds of such Indebtedness are received by Antero Midstream Partners, Finance Corp. or one or more Guarantors. At any time after Antero Midstream Partners is a corporation, Finance Corp. may consolidate or merge with or into Antero Midstream Partners or any other Restricted Subsidiary.

 

Section 4.14                             Corporate Existence.

 

Subject to Article 5 hereof, Antero Midstream Partners shall do or cause to be done all things necessary to preserve and keep in full force and effect:

 

(1) its limited partnership existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of Antero Midstream Partners or any such Restricted Subsidiary; and

 

(2) the rights (charter and statutory), licenses and franchises of Antero Midstream Partners and its Restricted Subsidiaries; provided, however, that Antero Midstream Partners shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Restricted Subsidiaries, if the General Partner shall determine that the preservation thereof is no longer desirable in the conduct of the business of Antero Midstream Partners and its Restricted Subsidiaries, taken as a whole.

 

Section 4.15                             Offer to Repurchase Upon Change of Control.

 

(a)         Upon the occurrence of a Change of Control, Antero Midstream Partners will make an offer (a “Change of Control Offer”) to each Holder of Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to, but excluding, the date of purchase (the “Change of Control Payment”), subject to the rights of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the date of purchase. Within 30 days

 

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following any Change of Control, Antero Midstream Partners will send a notice to each Holder describing the transaction or transactions that constitute the Change of Control and stating:

 

(1) that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered will be accepted for payment;

 

(2) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice is sent (the “Change of Control Payment Date”);

 

(3) that any Note not tendered will continue to accrue interest;

 

(4) that, unless Antero Midstream Partners defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date;

 

(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

 

(6) that Holders will be entitled to withdraw their election if the Paying Agent or depositary receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and

 

(7) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof.

 

Antero Midstream Partners will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.15, Antero Midstream Partners will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.15 by virtue of such compliance.

 

(b)         On the Change of Control Payment Date, Antero Midstream Partners will, to the extent lawful:

 

(1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;

 

(2) deposit with the Paying Agent or depositary an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and

 

(3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by Antero Midstream Partners.

 

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The Paying Agent or depositary will promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes (or, if all the Notes are then in global form, it will make such payment through the facilities of DTC), and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.  Antero Midstream Partners will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

 

The provisions described above that require Antero Midstream Partners to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of this Indenture are applicable.

 

(c)          Notwithstanding anything to the contrary in this Section 4.15, Antero Midstream Partners will not be required to make a Change of Control Offer upon a Change of Control if (1) 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 4.15 and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, (2) notice of redemption has been given pursuant to Section 3.07 hereof, unless and until there is a default in payment of the applicable redemption price, or (3) in connection with or in contemplation of any Change of Control, Antero Midstream Partners makes an offer to purchase (an “Alternate Offer”) any and all Notes validly tendered and not withdrawn at a cash price equal to or higher than the Change of Control Payment and purchases all Notes properly tendered and not withdrawn under the Alternate Offer.

 

(d)         With respect to the Notes, in the event that Holders of not less than 90% of the aggregate principal amount of the outstanding Notes tender and do not withdraw such Notes in a Change of Control Offer or Alternate Offer and Antero Midstream Partners (or the third party making the Change of Control Offer as provided above) purchases all of the Notes validly tendered and not withdrawn by such Holders, the Issuers will have the right, upon not less than 15 nor more than 60 days’ prior notice, given not more than 30 days following the purchase pursuant to the Change of Control Offer or Alternate Offer described above, to redeem all of the Notes that remain outstanding following such purchase at a redemption price equal to 101% of the aggregate principal amount of such Notes, plus accrued and unpaid interest on the Notes that remain outstanding to, but excluding, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date).

 

Section 4.16                             [Reserved.]

 

Section 4.17                             [Reserved.]

 

Section 4.18                             Additional Guarantees.

 

If, after the Issue Date, any wholly-owned Domestic Subsidiary (other than Finance Corp.) of Antero Midstream Partners that is not already a Guarantor Guarantees any other Indebtedness of either of the Issuers under a Credit Facility in an aggregate principal amount in excess of $50.0 million, then that Subsidiary will become a Guarantor by executing and delivering to the Trustee a supplemental indenture substantially in the form of Exhibit F hereto within 30 Business Days of the date on which it Guaranteed such Indebtedness; provided that the preceding shall not apply to Subsidiaries of Antero Midstream Partners that have been properly designated as Unrestricted Subsidiaries in accordance with this Indenture for so long as they continue to constitute Unrestricted Subsidiaries. Notwithstanding the preceding, any

 

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Note Guarantee of a Domestic Subsidiary that was incurred pursuant to this Section 4.18 will be released in accordance with Section 10.05 hereof.

 

Section 4.19                             Designation of Restricted and Unrestricted Subsidiaries.

 

The Board of Directors of Antero Midstream Partners may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by Antero Midstream Partners and its Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be deemed to be an Investment made as of the time of the designation and will either reduce the amount available for Restricted Payments under Section 4.07 hereof or qualify as a Permitted Investment under one or more clauses of the definition of Permitted Investments, as determined by Antero Midstream Partners; provided that any designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

 

Any designation of a Subsidiary of Antero Midstream Partners as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07 hereof.  If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of Antero Midstream Partners as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, Antero Midstream Partners will be in default of such covenant.

 

The Board of Directors of Antero Midstream Partners may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of Antero Midstream Partners; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of Antero Midstream Partners of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the Reference Period and (2) no Default or Event of Default would be in existence following such designation.

 

Section 4.20                             Termination of Covenants.

 

(a)         If at any time (i) the Notes are assigned an Investment Grade Rating from both Rating Agencies, (ii) no Default or Event of Default has occurred and is continuing under this Indenture and (iii) Antero Midstream Partners has delivered to the Trustee an Officers’ Certificate certifying to the foregoing provisions of this sentence (the “Termination Date”), Antero Midstream Partners and its Restricted Subsidiaries will no longer be subject to the following provisions of this Indenture: (1) Section 4.07; (2) Section 4.08; (3) Section 4.09; (4) Section 4.11; (5) Section 4.13; (6) Section 4.18; and (7) clause 4 of Section 5.01(a).

 

(b)         However, Antero Midstream Partners and its Restricted Subsidiaries will remain subject to the other provisions of this Indenture, including : (1) Section 4.03; (2) Section 4.12; (3) Section 4.19; and (4) Section 5.01 (with the exception of clause (4) of Section 5.01(a)).

 

(c)          No Subsidiary may be designated as an Unrestricted Subsidiary after the Termination Date.

 

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ARTICLE 5
 SUCCESSORS

 

Section 5.01          Merger, Consolidation or Sale of Assets.

 

(a)   Neither of the Issuers may: (1) consolidate or merge with or into another Person (whether or not such Issuer is the surviving entity); or (2) directly or indirectly, sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the properties or assets of the Issuers and the Restricted Subsidiaries, taken as a whole, in one or more related transactions, to another Person, unless:

 

(1) either:

 

(A)  such Issuer is the surviving entity; or

 

(B)  the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a Person organized or existing under the laws of the United States, any state of the United States or the District of Columbia; provided, however, that Finance Corp. may not consolidate or merge with or into any Person other than a corporation satisfying such requirement so long as Antero Midstream Partners is not a corporation;

 

(2) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or the Person to which such sale, assignment, transfer, lease, conveyance or other disposition has been made assumes all the obligations of such Issuer under the Notes, this Indenture and any Registration Rights Agreement then in effect pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee;

 

(3)  immediately after such transaction, no Default or Event of Default exists; and

 

(4) in the case of a transaction involving Antero Midstream Partners and not Finance Corp., Antero Midstream Partners or the Person formed by or surviving any such consolidation or merger (if other than Antero Midstream Partners), or to which such sale, assignment, transfer, lease, conveyance or other disposition has been made, will on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable Reference Period:

 

(A)  be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or

 

(B)  have a Fixed Charge Coverage Ratio not less than the Fixed Charge Coverage Ratio of Antero Midstream Partners immediately prior to such transaction; and

 

(5) such Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or disposition and such supplemental indenture (if any) comply with this Indenture and all conditions precedent therein relating to such transaction have been satisfied.

 

provided that this Section 5.01 will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among Antero Midstream Partners and its Restricted Subsidiaries, provided further that Sections 5.01(a)(3) and (4) will not apply to any merger or consolidation of Antero

 

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Midstream Partners (A) with or into one of its Restricted Subsidiaries for any purpose or (B) with or into an Affiliate solely for the purpose of reorganizing Antero Midstream Partners in another jurisdiction.

 

(b)   Notwithstanding Section 5.01(a), Antero Midstream Partners will be permitted to reorganize as any other form of entity in accordance with the procedures established in this Indenture; provided that:

 

(1) the reorganization involves the conversion (by merger, sale, contribution or exchange of assets or otherwise) of Antero Midstream Partners into a form of entity other than a limited partnership formed under Delaware law;

 

(2) the entity so formed by or resulting from such reorganization is an entity organized or existing under the laws of the United States, any state thereof or the District of Columbia;

 

(3) the entity so formed by or resulting from such reorganization assumes all the obligations of Antero Midstream Partners under the Notes, this Indenture and any Registration Rights Agreement then in effect pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee;

 

(4) immediately after such reorganization no Default or Event of Default exists; and

 

(5) such reorganization is not adverse to the Holders of the Notes (for purposes of this clause (5) it is stipulated that such reorganization shall not be considered adverse to the Holders of the Notes solely because the successor or survivor of such reorganization (a) is subject to federal or state income taxation as an entity or (b) is considered to be an “includible corporation” of an affiliated group of corporations within the meaning of Section 1504(b) of the Code or any similar state or local law).

 

Section 5.02          Successor Corporation Substituted.

 

Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of Antero Midstream Partners in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the successor Person formed by such consolidation or into or with which Antero Midstream Partners is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the “Antero Midstream Partners” shall refer instead to the successor Person and not to Antero Midstream Partners), and may exercise every right and power of Antero Midstream Partners under this Indenture with the same effect as if such successor Person had been named as Antero Midstream Partners herein.

 

ARTICLE 6
 DEFAULTS AND REMEDIES

 

Section 6.01          Events of Default.

 

Each of the following is an “Event of Default”:

 

(1) default for 30 days in the payment when due of interest with respect to the Notes;

 

(2) default in the payment when due (at Stated Maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes;

 

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(3) failure by Antero Midstream Partners to make a Change of Control Offer or an Asset Sale Offer within the timer periods set forth, or consummate a purchase of Notes when required pursuant to the terms described in Section 4.15 or Sections 3.09 and 4.10 or to  comply with the provisions of Section 5.01 hereof;

 

(4) failure by Antero Midstream Partners for 180 days after written notice to Antero Midstream Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with Section 4.03(a);

 

(5) failure by Antero Midstream Partners for 60 days after written notice to Antero Midstream Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with any of its other agreements in the Indenture; or

 

(6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Antero Midstream Partners or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by Antero Midstream Partners or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, if that default:

 

(A)  is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or

 

(B)  results in the acceleration of such Indebtedness prior to its express maturity,

 

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $50.0 million or more, provided, however, that if, prior to any acceleration of the Notes, (i) any such Payment Default is cured or waived, (ii) any such acceleration is rescinded, or (iii) such Indebtedness is repaid during the 30-day period commencing upon the end of any applicable grace period for such Payment Default or the occurrence of such acceleration, as applicable, any Event of Default caused by such Payment Default or acceleration shall automatically be rescinded, so long as such rescission does not conflict with any judgment, decree or applicable law;

 

(7) failure by an Issuer or any of Antero Midstream Partners’ Restricted Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $50.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

 

(8) an Issuer or any of Antero Midstream Partners’ Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Antero Midstream Partners that, taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:

 

(A)  commences a voluntary case,

 

(B)  consents to the entry of an order for relief against it in an involuntary case,

 

(C)  consents to the appointment of a custodian of it or for all or substantially all of its property,

 

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(D)  makes a general assignment for the benefit of its creditors, or

 

(E)   generally is not paying its debts as they become due;

 

(9) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)  is for relief against an Issuer or any of Antero Midstream Partners’ Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Antero Midstream Partners that, taken together, would constitute a Significant Subsidiary in an involuntary case;

 

(B)  appoints a custodian of an Issuer or any of Antero Midstream Partners’ Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Antero Midstream Partners that, taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of an Issuer or any of Antero Midstream Partners’ Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Antero Midstream Partners that, taken together, would constitute a Significant Subsidiary; or

 

(C)  orders the liquidation of an Issuer or any of Antero Midstream Partners’ Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Antero Midstream Partners that, taken together, would constitute a Significant Subsidiary;

 

and the order or decree remains unstayed and in effect for 60 consecutive days; and

 

(10) except as permitted by this Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee.

 

Section 6.02          Acceleration.

 

In the case of an Event of Default specified in clause (8) or (9) of Section 6.01 hereof, with respect to Finance Corp., Antero Midstream Partners or any Restricted Subsidiary of Antero Midstream Partners that is a Significant Subsidiary or any group of Restricted Subsidiaries of Antero Midstream Partners that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice.  If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.

 

Upon any such declaration, the Notes shall become due and payable immediately.

 

The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest, or premium, if any, on, or the principal of, the Notes.

 

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Section 6.03          Other Remedies.

 

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium and interest, if any, on the Notes or to enforce the performance of any provision of the Notes or 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 of a Note 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.  All remedies are cumulative to the extent permitted by law.

 

Section 6.04          Waiver of Past Defaults.

 

Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium or interest on the Notes (including in connection with an offer to purchase); provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration.  Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

 

Section 6.05          Control by Majority.

 

Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it.  However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability.

 

Section 6.06          Limitation on Suits.

 

A Holder may pursue a remedy with respect to this Indenture or the Notes only if:

 

(1) such Holder gives to the Trustee written notice that an Event of Default is continuing;

 

(2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

 

(3) such Holder or Holders offer and, if requested, provide to the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;

 

(4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and

 

(5) during such 60-day period, Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with such request.

 

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

 

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Section 6.07          Rights of Holders of Notes to Receive Payment.

 

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and interest and on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), 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(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuers for the whole amount of principal of, premium and interest remaining unpaid on, the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

Section 6.09          Trustee May File Proofs of Claim.

 

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuers (or any other obligor upon the Notes), their creditors or their property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such 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 to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof.  To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.  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.

 

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

 

First:            to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

 

Second:       to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and interest ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and

 

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Third:           to the Issuers or to such party as a court of competent jurisdiction shall direct.

 

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.

 

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 a 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 reasonable costs, including reasonable attorneys’ fees, 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 Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.

 

ARTICLE 7
 TRUSTEE

 

Section 7.01          Duties of Trustee.

 

(a)   If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its 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:

 

(1) the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(2) 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.  However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

 

(c)   The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

 

(2) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

(3) the Trustee will 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 hereof.

 

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(d)   Whether or not therein expressly so provided, 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)   No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability.  The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder has furnished to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

 

(f)    The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers.  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

Section 7.02          Rights of Trustee.

 

(a)   The Trustee may conclusively rely upon 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 will not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel.  The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

(c)   The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d)   The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

 

(e)   Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuers will be sufficient if signed by an Officer of each of the Issuers.

 

(f)    The Trustee will 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 unless such Holders have furnished to the Trustee indemnity or security satisfactory to it against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction.

 

(g)   The Trustee shall not be deemed to have notice of a Default or an Event of Default unless a Responsible Officer of the Trustee (i) receives written notice of such Default or Event of Default or otherwise (ii) has actual knowledge of such Default or Event of Default.

 

(h)   In no event shall the Trustee be responsible or liable for special, indirect, punitive 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 or such loss or damage and regardless of the form of action.

 

(i)    The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder.

 

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(j)    Any discretion, permissive right or privilege in favor of the Trustee shall not be construed as a duty or obligation.

 

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 any Affiliate of the Issuers with the same rights it would have if it were not Trustee.  However, in the event that the Trustee acquires any conflicting interest (as such term is defined in the TIA) it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee (if this Indenture has been qualified under the TIA) with such conflict or resign.  Any Agent may do the same with like rights and duties.  The Trustee is also subject to Sections 7.10 and 7.11 hereof.

 

Section 7.04          Trustee’s Disclaimer.

 

The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’ use of the proceeds from the Notes or any money paid to the Issuers or upon the Issuers’ direction under any provision of this Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

 

Section 7.05          Notice of Defaults.

 

If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee will send to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs.  Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.

 

Section 7.06          Reports by Trustee to Holders of the Notes.

 

(a)   Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee will send to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA §313(a) (but if no event described in TIA §313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted).  The Trustee also will comply with TIA §313(b)(2).  The Trustee will also transmit, in the manner prescribed in Section 12.02, all reports as required by TIA §313(c).

 

(b)   A copy of each report at the time it is sent to the Holders of Notes will be sent by the Trustee to the Issuers and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA §313(d).  The Issuers will promptly notify the Trustee when the Notes are listed on any stock exchange.

 

Section 7.07          Compensation and Indemnity.

 

(a)   The Issuers will pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder.  The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust.  The Issuers will reimburse the Trustee

 

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promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services.  Such expenses will include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

(b)   The Issuers and the Guarantors will indemnify, jointly and severally, the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Issuers and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Issuers, the Guarantors, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or willful misconduct.  The Trustee will notify the Issuers promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the Issuers will not relieve the Issuers or any of the Guarantors of their obligations hereunder.  The Issuers or such Guarantor will defend the claim and the Trustee will cooperate in the defense.  The Trustee may have separate counsel and the Issuers will pay the reasonable fees and expenses of such counsel.  Neither the Issuers nor any Guarantor need pay for any settlement made without its consent, which consent will not be unreasonably withheld.

 

(c)   The obligations of the Issuers and the Guarantors under this Section 7.07 will survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

 

(d)   To secure the Issuers’ and the Guarantors’ payment obligations in this Section 7.07, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes.  Such Lien will survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

 

(e)   When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(8) or (9) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

 

(f)    The Trustee will comply with the provisions of TIA §313(b)(2) to the extent applicable.

 

Section 7.08          Replacement of Trustee.

 

(a)   A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

(b)   The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuers.  The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuers in writing.  The Issuers may remove the Trustee if:

 

(1) the Trustee fails to comply with Section 7.10 hereof;

 

(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

(3) a custodian or public officer takes charge of the Trustee or its property; or

 

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(4) the Trustee becomes incapable of acting.

 

(c)   If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers will promptly appoint a successor Trustee.  Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers.

 

(d)   If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

(e)   If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(f)    A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers.  Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee will send a notice of its succession to Holders.  The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof.  Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuers’ obligations under Section 7.07 hereof will continue for the benefit of the retiring Trustee.

 

Section 7.09          Successor Trustee by Merger, etc.

 

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.

 

Section 7.10          Eligibility; Disqualification.

 

There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.

 

This Indenture will always have a Trustee who satisfies the requirements of TIA §310(a)(1), (2) and (5).  The Trustee is subject to TIA §310(b).

 

Section 7.11          Preferential Collection of Claims Against the Issuers.

 

The Trustee is subject to TIA §311(a), excluding any creditor relationship listed in TIA §311(b).  A Trustee who has resigned or been removed shall be subject to TIA §311(a) to the extent indicated therein.

 

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ARTICLE 8
 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.01          Option to Effect Legal Defeasance or Covenant Defeasance.

 

The Issuers may, at their option and at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes and Note Guarantees upon compliance with the conditions set forth below in this Article 8.

 

Section 8.02          Legal Defeasance and Discharge.

 

Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means that the Issuers and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other obligations under such Notes, the Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Issuers, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:

 

(1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium, if any, on, such Notes when such payments are due from the trust referred to in Section 8.04 hereof;

 

(2) the Issuers’ obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

 

(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuers’ and the Guarantors’ obligations in connection therewith; and

 

(4) this Article 8.

 

Subject to compliance with this Article 8, the Issuers may exercise their option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

 

Section 8.03          Covenant Defeasance.

 

Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their obligations under the covenants contained in Sections 4.03, 4.04(b), 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.18 and 4.19 hereof and clause (4) of Section 5.01 hereof with respect to the outstanding Notes, and the Guarantors will be released from their Obligations with respect to the Note Guarantees, on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder.  For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Issuers and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such

 

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covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby.  In addition, upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(7) inclusive and Section 6.01(10) hereof will not constitute Events of Default.

 

Section 8.04          Conditions to Legal or Covenant Defeasance.

 

In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03 hereof:

 

(1) the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank or firm of independent public accountants, to pay the principal of, or interest and premium, if any, on the outstanding Notes on the stated date for payment thereof or on the applicable Redemption Date, as the case may be, and the Issuers must specify whether the Notes are being defeased to such stated date for payment or to a particular Redemption Date;

 

(2) in the case of an election under Section 8.02 hereof, the Issuers must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:

 

(A)  the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling; or

 

(B)  since the Issue Date, there has been a change in the applicable federal income tax law,

 

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(3) in the case of an election under Section 8.03 hereof, the Issuers must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

(4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit (and any similar concurrent deposit relating to other Indebtedness) or the grant of Liens securing such borrowings);

 

(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture or any other agreement governing other Indebtedness being defeased, discharged or

 

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replaced) to which Antero Midstream Partners or any of its Subsidiaries is a party or by which Antero Midstream Partners or any of its Subsidiaries is bound;

 

(6) the Issuers must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Issuers with the intent of preferring the Holders of Notes over the other creditors of the Issuers or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuers; and

 

(7) the Issuers must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

Section 8.05          Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.

 

Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including either Issuer acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest but such money need not be segregated from other funds except to the extent required by law.

 

The Issuers will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

 

Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to the Issuers from time to time upon the request of the Issuers any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.06          Repayment to the Issuers.

 

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuers, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall be paid to the Issuers on their request or (if then held by the Issuers) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Issuers for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuers as trustee thereof, will thereupon cease; provided, however, that, if any Definitive Note is then outstanding, the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuers cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuers.

 

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Section 8.07          Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuers’ and the Guarantors’ obligations under this Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Issuers make any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuers will be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

 

ARTICLE 9
 AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01          Without Consent of Holders of Notes.

 

Notwithstanding Section 9.02 of this Indenture, the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture or the Notes or the Note Guarantees without the consent of any Holder of Note:

 

(1) to cure any ambiguity, defect or inconsistency;

 

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

 

(3) to provide for the assumption of an Issuer’s or a Guarantor’s obligations to the Holders of the Notes and Note Guarantees in the case of a merger or consolidation or disposition of all or substantially all of the Issuers’ or such Guarantors’ properties or assets, as applicable;

 

(4) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any such Holder;

 

(5) to conform the text of this Indenture, the Notes or the Note Guarantees to any provision of the “Description of notes” section of the Issuers’ Offering Memorandum to the extent that such provision was intended to be a verbatim recitation of a provision of this Indenture, the Notes or the Note Guarantees;

 

(6) to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the Issue Date;

 

(7) to allow any Guarantor to execute a supplemental indenture or a notation of a Note Guarantee with respect to the Notes or to reflect the release of a Note Guarantee in accordance with this Indenture;

 

(8) to secure the Notes or the Note Guarantees;

 

(9) to comply with the rules of any applicable securities depository;

 

(10) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; or

 

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(11) to provide for the reorganization of Antero Midstream Partners as any other form of entity, in accordance with Section 5.01(a).

 

Upon the request of the Issuers, and upon receipt by the Trustee of the documents described in Section 9.05 hereof, the Trustee will join with the Issuers and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

 

Section 9.02          With Consent of Holders of Notes.

 

Except as provided below in this Section 9.02, the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture (including, without limitation, Sections 3.09, 4.10 and 4.15 hereof), the Notes and the Note Guarantees with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any), including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes, and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any), including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes.  (Section 2.08 hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 9.02.) However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

 

(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

 

(2) reduce the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption or repurchase of the Notes (other than provisions relating to minimum required notice of optional redemption or the provisions of Sections 3.09 and 4.10 or Section 4.15 hereof);

 

(3) reduce the rate of or change the time for payment of interest, including default interest on any Note;

 

(4) waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);

 

(5) make any Note payable in money other than that stated in the Notes;

 

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of, principal of, or interest or premium, if any, on, the Notes (other than as permitted by clause (7) below);

 

(7) waive a redemption or repurchase payment with respect to any Note (other than a payment required by Sections 3.09 and 4.10 or Section 4.15 hereof);

 

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(8) release any Guarantor from any of its obligations under its Note Guarantee or this Indenture, except in accordance with the terms of this Indenture; or

 

(9) make any change in the preceding amendment, supplement and waiver provisions.

 

Upon the request of the Issuers accompanied by a resolution of their respective Boards of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.05 hereof, the Trustee will join with the Issuers and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amended or supplemental Indenture.

 

It is not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.

 

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuers will send to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Issuers to send such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

 

Section 9.03          Revocation and Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note.  However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective.  An amendment, supplement or waiver becomes effective in accordance with its terms (except as provided in the second succeeding paragraph) and thereafter binds every Holder.

 

The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver.  If a record date is fixed, then notwithstanding the second to last sentence of 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 consent to such amendment or waiver or revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.

 

After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of the clauses (1) through (9) of Section 9.02, in which case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same indebtedness as the consenting Holder’s Note.

 

Section 9.04          Notation on or Exchange of Notes.

 

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated.  The Issuers in exchange for all Notes may issue and the Trustee shall,

 

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upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

 

Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment, supplement or waiver.

 

Section 9.05          Trustee to Sign Amendments, etc.

 

The Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.

 

Section 9.06          Compliance with TIA.

 

Every amendment or supplement to this Indenture or the Notes will be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

 

Section 9.07          Effect of Supplemental indentures.

 

Upon the execution of any supplemental indenture under this Article 9, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

ARTICLE 10
 NOTE GUARANTEES

 

Section 10.01       Guarantee.

 

(a)   Subject to this Article 10, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuers hereunder or thereunder, that:

 

(1)  the principal of, premium, if any, and interest on, the Notes will be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Issuers to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

 

(2) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that 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.

 

Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately.  Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

 

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(b)   The Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuers, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.  Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuers, any right to require a proceeding first against the Issuers, protest, notice and all demands whatsoever and covenants that its Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

 

(c)   If any Holder or the Trustee is required by any court or otherwise to return to the Issuers, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuers or the Guarantors, any amount paid by either to the Trustee or such Holder, each Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

 

(d)   Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.  Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Section 10.01, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purposes of this Section 10.01.  The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.

 

Section 10.02       Limitation on Guarantor Liability.

 

Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirm that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee.  To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance.

 

Section 10.03       Execution and Delivery of Notation of Note Guarantee.

 

To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached as Exhibit E hereto will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture (including any supplement thereto) will be executed on behalf of such Guarantor by one of its Officers.

 

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Each Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 hereof will remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.

 

If an Officer whose signature is on this Indenture or on the notation of its Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which such notation of its Note Guarantee is endorsed, the Note Guarantee will be valid nevertheless.

 

The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors.

 

In the event that the Issuers or any of Antero Midstream Partners’ Restricted Subsidiaries creates or acquires any wholly-owned Domestic Subsidiary after the date of this Indenture, if required by Section 4.18 hereof, the Issuers will cause such Domestic Subsidiary to comply with the provisions of Section 4.18 hereof and this Article 10, to the extent applicable.

 

Section 10.04       Guarantors May Consolidate, etc., on Certain Terms.

 

Except as otherwise provided in Section 10.05 hereof, a Guarantor may not sell or otherwise dispose of all or substantially all of its properties or assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than the Issuers or another Guarantor, unless:

 

(1) immediately after giving effect to such transaction, no Default or Event of Default exists; and

 

(2) either:

 

(A)  the Person acquiring the properties or assets in any such sale or disposition or the Person formed by or surviving any such consolidation or merger is a Guarantor, or assumes all the obligations of that Guarantor under this Indenture, its Note Guarantee and any Registration Rights Agreement then in effect, pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee; or

 

(B)  the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this Indenture, if any.

 

In case of any such consolidation, merger, sale or other disposition and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and reasonably satisfactory in form to the Trustee, of such obligations of the Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor.  Such successor Person thereupon may cause to be signed any or all of the notations of Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Issuers and delivered to the Trustee.  The Note Guarantee so issued by such successor Person will in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though such Note Guarantee had been issued at the date of the execution hereof.

 

Section 10.05       Releases.

 

(a)           In the event of any sale or other disposition (i) of all or substantially all of the properties or assets of any Guarantor, by way of merger, consolidation or otherwise, to a Person that is not (either

 

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before or after giving effect to such transactions) Antero Midstream Partners or a Restricted Subsidiary of Antero Midstream Partners, or (ii) of all of the Capital Stock of any Guarantor after which the applicable Guarantor is no longer a Restricted Subsidiary of Antero Midstream Partners, then such Guarantor will be released and relieved of any obligations under its Note Guarantee and all of its other Obligations under this Indenture; provided that such sale or other disposition does not violate the applicable provisions of Section 4.10 hereof.

 

(b)           Upon designation of any Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Indenture, such Guarantor will be released and relieved of any obligations under its Note Guarantee and all of its other Obligations under this Indenture.

 

(c)           Upon release or discharge of the Guarantee by any Guarantor with respect to Indebtedness under a Credit Facility or the Guarantee that resulted in the creation of a Note Guarantee, such Guarantor will be released and relieved of any obligations under its Note Guarantee and its other Obligations under this Indenture; provided, however, that if, at any time following such release or discharge, that Guarantor later Guarantees Indebtedness of either Issuer under a Credit Facility, then such Guarantor shall be required to provide a Note Guarantee at such time if required in accordance with Section 4.18 hereof.

 

(d)           Upon Legal or Covenant Defeasance in accordance with Article 8 hereof or satisfaction and discharge of this Indenture in accordance with Article 11 hereof, each Guarantor will be released and relieved of any obligations under its Note Guarantee and all of its other Obligations under this Indenture.

 

(e)           Upon the merger or consolidation of any Guarantor with and into an Issuer or another Guarantor that is the surviving Person in such merger or consolidation, or upon the liquidation or dissolution of such Guarantor, such Guarantor will be relieved of any obligations under its Note Guarantee and all of its other Obligations under this Indenture.

 

(f)            Upon delivery by the Issuers to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect that the conditions of this Section 10.05 for a release have been satisfied, the Trustee will execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Note Guarantee and all of its other Obligations under this Indenture.

 

(g)           Any Guarantor not released from its obligations under its Note Guarantee and all of its other Obligations under this Indenture as provided in this Section 10.05 will remain liable for the full amount of principal of and interest, and premium, if any, on the Notes and for the other Obligations of such Guarantor under this Indenture as provided in this Article 10.

 

ARTICLE 11
 SATISFACTION AND DISCHARGE

 

Section 11.01       Satisfaction and Discharge.

 

This Indenture will be discharged and will cease to be of further effect as to all Notes issued hereunder (except as to surviving rights of registration of transfer or exchange of the Notes and as otherwise specified in this Indenture), when:

 

(1) either:

 

(A)  all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been

 

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deposited in trust and thereafter repaid to the Issuers, have been delivered to the Trustee for cancellation; or

 

(B)  all Notes that have not been delivered to the Trustee for cancellation have become due and payable or will become due and payable within one year by reason of the sending of a notice of redemption or otherwise, and the Issuers or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, in the opinion of a nationally recognized investment bank or firm of independent public accountants if the deposit includes any Government Securities, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest, if any, to the date of Stated Maturity or redemption;

 

(2) in the case of clause (1)(b) above, no Event of Default has occurred and is continuing on the date of such deposit (other than an Event of Default resulting from the borrowing of funds to be applied to such deposit and any similar deposit relating to other Indebtedness and, in each case, the granting of Liens to secure such borrowings), and such deposit will not result in a breach or violation of, or constitute a default under, any material agreement or instrument to which Antero Midstream Partners or any of its Subsidiaries is a party or by which Antero Midstream Partners or any of its Subsidiaries is bound (other than with respect to the borrowing of funds to be applied concurrently to make the deposit required to effect such satisfaction and discharge and any similar concurrent deposit relating to other Indebtedness, and in each case the granting of Liens to such borrowings);

 

(3) the Issuers or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture; and

 

(4) the Issuers have delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at Stated Maturity or on the Redemption Date, as the case may be.

 

In addition, the Issuers must deliver (a) an Officers’ Certificate stating that all conditions precedent set forth in clauses (1) through (4) above have been satisfied, and (b) an Opinion of Counsel to the Trustee (which Opinion of Counsel may be subject to customary assumptions and qualifications), stating that all conditions precedent to satisfaction and discharge set forth in Section 11.01(2) and (4) have been satisfied; provided that the Opinion of Counsel with respect to 11.01(2) above may be to the knowledge of such counsel.

 

Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive.  In addition, nothing in this Section 11.01 will be deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the satisfaction and discharge of this Indenture.

 

Section 11.02       Application of Trust Money.

 

Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the

 

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Notes and this Indenture, to the payment, either directly or through any Paying Agent (including either Issuer acting as Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

 

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 11.01 hereof 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’ and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 11.01; provided that if the Issuers have made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of their obligations, the Issuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

 

ARTICLE 12
 MISCELLANEOUS

 

Section 12.01       TIA Controls.

 

This Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA.  If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA §318(c), the imposed duties will control.

 

Section 12.02       Notices.

 

Any notice or communication by the Issuers, any Guarantor or the Trustee to the others is duly given if in writing in the English language and delivered in Person or by first class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery, to the others’ address:

 

If to the Issuers and/or any Guarantor:

 

Antero Midstream Partners LP

Antero Midstream Finance Corporation
 1615 Wynkoop Street
 Denver, Colorado 80202
 Facsimile No.:  (303) 357-7315
 Attention:  Chief Financial Officer

 

with a copy (which shall not constitute notice) to:

 

Vinson & Elkins L.L.P.

1001 Fannin, Suite 2500

Houston, Texas 77002

Facsimile No.:  (713) 615-5650

Attention:  W. Matthew Strock

 

91

 

If to the Trustee:

 

Wells Fargo Bank, National Association
 750 N. Saint Paul Place, Suite 1750

Dallas, Texas 75202

Facsimile No.:  (214) 756-7401
 Attention:  Corporate, Municipal & Escrow Services

 

The Issuers, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

 

All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

 

Any notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar; provided, however, that any notice or communication to a Holder of a Global Note will be given in the manner prescribed by DTC or other Depositary. Any notice or communication will also be so given to any Person described in TIA §313(c), to the extent required by the TIA.  Failure to give a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders.

 

If a notice or communication is sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

 

If the Issuers send a notice or communication to Holders, they will send a copy to the Trustee and each Agent at the same time.

 

Section 12.03       Communication by Holders of Notes with Other Holders of Notes.

 

Holders may communicate pursuant to TIA §312(b) with other Holders with respect to their rights under this Indenture or the Notes.  The Issuers, the Trustee, the Registrar and anyone else shall have the protection of TIA §312(c).

 

Section 12.04       Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Issuers to the Trustee to take any action under this Indenture, the Issuers shall furnish to the Trustee:

 

(1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

 

(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

 

92

 

Section 12.05       Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture must include:

 

(1) a statement that the person making such certificate or opinion has read such covenant or condition;

 

(2) 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;

 

(3) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

 

(4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been satisfied.

 

Section 12.06       Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or at a meeting of Holders.  The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

Section 12.07       No Personal Liability of Directors, Officers, Employees and Unitholders.

 

No past, present or future director, officer, partner, member, employee, incorporator, manager or unit holder or other owner of Equity Interest of the Issuers, the General Partner or any Guarantor, as such, will have any liability for any obligations of the Issuers or the Guarantors under the Notes, this Indenture, the Note Guarantees 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 and the Note Guarantees.

 

Section 12.08       Governing Law.

 

THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.

 

Section 12.09       No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret any other indenture, loan or debt agreement of Antero Midstream Partners or its Subsidiaries or of any other Person.  Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 12.10       Successors.

 

All agreements of the Issuers in this Indenture and the Notes will bind their respective successors.  All agreements of the Trustee in this Indenture will bind its successors.  All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.05 hereof.

 

93

 

Section 12.11       Severability.

 

In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

 

Section 12.12       Counterpart Originals.

 

The parties may sign any number of copies of this Indenture, and each party hereto may sign any number of separate copies of this Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 12.13       Table of Contents, Headings, etc.

 

The Table of Contents and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.

 

Section 12.14       Payment Date Other Than a Business Day.

 

If any payment with respect to any principal of, premium, if any, on, or interest on any Note (including any payment to be made on any date fixed for redemption or purchase of any Note) is due on a day which is not a Business Day, then the payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on such date, and no interest will accrue for the intervening period.

 

Section 12.15       Evidence of Action by Holders.

 

Whenever in this Indenture it is provided that the Holders of a specified percentage in aggregate principal amount of the Notes may take action (including the making of any demand or request, the giving of any direction, notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with procedures approved by the Trustee, (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders or (d) in the case of Notes evidenced by a Global Note, by any electronic transmission or other message, whether or not in written format, that complies with the Depositary’s applicable procedures.

 

Section 12.16       U.S.A. Patriot Act.

 

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identities each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree

 

94

 

that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

 

Section 12.17       Force Majeure.

 

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

Section 12.18       Waiver of Jury Trial.

 

EACH OF THE ISSUERS, THE 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.

 

[Signatures on following page]

 

95

 

SIGNATURES

 

IN WITNESS WHEREOF, the parties have executed this Indenture as of the date first written above.

 

	
 
    	
ANTERO MIDSTREAM PARTNERS LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Antero   Resources Midstream Management LLC,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ ALVYN A. SCHOPP
    
	
 
    	
 
    	
Name:
    	
Alvyn A. Schopp
    
	
 
    	
 
    	
Title:
    	
Chief Administrative   Officer, Regional Senior Vice President and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ANTERO   MIDSTREAM FINANCE CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ ALVYN A. SCHOPP
    
	
 
    	
 
    	
Name:
    	
Alvyn A. Schopp
    
	
 
    	
 
    	
Title:
    	
Chief Administrative   Officer, Regional Senior Vice President and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
GUARANTORS:
    
	
 
    	
 
    	
 
    
	
 
    	
ANTERO   MIDSTREAM LLC
    
	
 
    	
ANTERO   TREATMENT LLC
    
	
 
    	
ANTERO   WATER LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ ALVYN A. SCHOPP
    
	
 
    	
 
    	
Name:
    	
Alvyn A. Schopp
    
	
 
    	
 
    	
Title:
    	
Chief Administrative   Officer, Regional Senior Vice President and Treasurer
    

 

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ PATRICK T. GIORDANO
    
	
 
    	
 
    	
Name: 
    	
Patrick T. Giordano
    
	
 
    	
 
    	
Title: 
    	
Vice President
    

 

[SIGNATURE PAGE TO THE INDENTURE]

 

 

EXHIBIT A

 

FORM OF NOTE

 

	
 
    	
CUSIP [TO BE INSERTED]
    

 

5.375% Senior Notes due 2024

 

	
No.
    	
$
    

 

ANTERO MIDSTREAM PARTNERS LP

and

ANTERO MIDSTREAM FINANCE CORPORATION

 

jointly and severally promise to pay to                               , or registered assigns,

 

the principal sum of                                                                                                                      DOLLARS [or such greater or lesser amount as may be specified on the attached schedule]* on September 15, 2024.

 

Interest Payment Dates:  March 15 and September 15

 

Record Dates:  March 1 and September 1

 

Dated:                                , 20

 

	
 
    	
ANTERO MIDSTREAM PARTNERS, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Antero Resources Midstream Management LLC,
    
	
 
    	
 
    	
its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
ANTERO MIDSTREAM FINANCE CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

This is one of the Notes referred to
 in the within-mentioned Indenture:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
   as Trustee

 

	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    

 

*      To be included only if the Note is issued in global form.

 

A-1

 

[Form of Face of Note]

 

5.375% Senior Notes due 2024

 

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR 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 MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. 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 UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

 

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR (IN THE CASE OF RULE 144A SECURITIES) AFTER THE LATER OF THE ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) OR 40 DAYS (IN THE CASE OF REGULATION S SECURITIES), ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS

 

A-2

 

DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, 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 OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER OR THE ISSUERS ON OR AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

BY ITS ACQUISITION OF THIS SECURITY, THE HOLDER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS SECURITY (OR ANY INTEREST IN THIS SECURITY) CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR ANY GOVERNMENTAL PLAN, CHURCH PLAN, NON-U.S. PLAN, OR OTHER PLAN SUBJECT TO OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2) THE ACQUISITION, HOLDING AND SUBSEQUENT DISPOSITION OF THIS SECURITY (OR ANY INTEREST IN THIS SECURITY) WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.

 

A-3

 

[Form of Reverse of Note]

 

5.375% Senior Notes due 2024

 

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

(1) INTEREST.  Antero Midstream Partners LP, a Delaware limited partnership (“Antero Midstream Partners”), and Antero Midstream Finance Corporation, a Delaware corporation (“Finance Corp.” and, together with Antero Midstream Partners, the “Issuers”), jointly and severally promise to pay interest on the principal amount of this Note at 5.375% per annum from September 13, 2016 until maturity, including any interest payable pursuant to the Registration Rights Agreement.  The Issuers will pay interest semi-annually in arrears on March 15 and September 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”).  Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be March 15, 2017. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

(2) METHOD OF PAYMENT.  The Issuers will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the March 1 or September 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium and interest at the office or agency of the Issuers maintained for such purpose within or without the City and State of New York, or, at the option of the Issuers, payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest and premium on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Issuers or the Paying Agent to an account in the United States.  Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

(3) PAYING AGENT AND REGISTRAR.  Initially, Wells Fargo Bank, National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar.  The Issuers may change any Paying Agent or Registrar without notice to any Holder.  Antero Midstream Partners or any of its Subsidiaries may act in any such capacity.

 

(4) INDENTURE.  The Issuers issued the Notes under an Indenture dated as of September 13, 2016 (the “Indenture”) among the Issuers, the Guarantors and the Trustee.  The terms of the Notes include those stated in the Indenture.  The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms.  To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.  The Notes are unsecured obligations of the Issuers.  The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.

 

A-4

 

(5) OPTIONAL REDEMPTION.

 

(a)           Except pursuant to paragraphs (b), (c) and (d) of this Section 5, the Notes will not be redeemable at the Issuers’ option prior to September 15, 2019.  On or after September 15, 2019, the Issuers may redeem all or a part of the Notes,  upon prior notice in accordance with Section 3.02 of the Indenture, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest on the Notes redeemed to, but excluding, the applicable Redemption Date, if redeemed during the twelve-month period beginning on September 15 of each year indicated below, subject to the rights of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
2019
    	
 
    	
104.031
    	
%
    
	
2020
    	
 
    	
102.688
    	
%
    
	
2021
    	
 
    	
101.344
    	
%
    
	
2022 and   thereafter
    	
 
    	
100.000
    	
%
    

 

Unless the Issuers default in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable Redemption Date.

 

(b)           Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to September 15, 2019, the Issuers may on any one or more occasions redeem, upon prior notice in accordance with Section 3.02 of the Indenture, up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture at a redemption price of 105.375% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption Date (subject to the right of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date), with an amount of cash not greater than the net cash proceeds of one or more Equity Offerings by Antero Midstream Partners; provided that at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture (excluding Notes held by Antero Midstream Partners and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and the redemption occurs within 180 days of the date of the closing of such Equity Offering.

 

(c)           Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to September 15, 2019, the Issuers may also redeem all or a part of the Notes, upon prior notice  in accordance with Section 3.02 of the Indenture, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest to, but excluding, the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on an interest payment date that is on prior to the Redemption Date.

 

(d)           The Issuers may also redeem the Notes as provided in Section 4.15(d) of the Indenture, on the terms and subject to the conditions set forth therein.

 

For purposes of this Paragraph 5, “Applicable Premium” means, with respect to any Note at the time of determination, the greater of: (1) 1.00% of the principal amount of the Note; or (2) the excess of: (a) the present value at such time of (i) the redemption price of the Note at September 15, 2019 (such redemption price being set forth in the table appearing in Section 3.07(c) of the Indenture) plus (ii) all required interest payments due on the Note through September 15, 2019 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the principal amount of the Note, if greater. “Treasury Rate” means, as of the time of computation, the yield to maturity as of such time of United States

 

A-5

 

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 the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to September 15, 2019; provided, however, that if the period from the Redemption Date to September 15, 2019, 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.

 

(6) MANDATORY REDEMPTION.

 

The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Notes. The Issuers may acquire the Notes by means other than a redemption, whether pursuant to a tender offer, open market purchase or otherwise, so long as the acquisition does not violate the terms of the Indenture.

 

(7) REPURCHASE AT THE OPTION OF HOLDER.

 

(a)           If there is a Change of Control, Antero Midstream Partners will be required to make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase (the “Change of Control Payment”).  Within 30 days following any Change of Control, Antero Midstream Partners will send a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture.

 

(b)           If Antero Midstream Partners or a Restricted Subsidiary of Antero Midstream Partners consummates any Asset Sales, within five days of each date on which the aggregate amount of Excess Proceeds exceeds $30.0 million, Antero Midstream Partners will commence an offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in Section 4.10 of the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes and such other pari passu Indebtedness 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 plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in Section 3.09 of the Indenture.  If any Excess Proceeds remain after consummation of an Asset Sale Offer, Antero Midstream Partners (or any Restricted Subsidiary) may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.  If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the representative of such other pari passu Indebtedness will select such other pari passu Indebtedness to be purchased on a pro rata basis.

 

(c)           Holders of Notes that are the subject of a Change of Control Offer or an Asset Sale Offer will receive an offer to purchase from the Issuers prior to any related purchase date, and Holders of Definitive Notes may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

 

(8) NOTICE OF REDEMPTION.  Notice of redemption will be mailed (or sent electronically in the case of notices to DTC), at least 15 days but not more than 60 days before the Redemption Date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be given more than 60 days prior to a Redemption Date if the notice is issued in connection with a

 

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defeasance of the Notes or a satisfaction or discharge of the Indenture.  Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 and in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. Notice of any redemption of the Notes (including upon an Equity Offering or in connection with a transaction (or series of related transactions) that constitute a Change of Control) may, at the Issuers’ discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completed of the related Equity Offering or Change of Control. In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuers’ discretion, the Redemption Date may be delayed until such time (including more than 60 days after the date the notice of redemption was delivered) as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed, or such notice may be rescinded at any time in the Issuers’ discretion if in the good faith judgment of the Issuers any or all of such conditions will not be satisfied.

 

(9) DENOMINATIONS, TRANSFER, EXCHANGE.  The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuers may require a Holder to pay any transfer tax or similar governmental charge required by law or permitted by the Indenture.  The Issuers need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part.  Also, the Issuers need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

 

(10) PERSONS DEEMED OWNERS.  The registered Holder of a Note may be treated as its owner for all purposes, and only such Holders have rights under the Indenture.

 

(11) AMENDMENT, SUPPLEMENT AND WAIVER.  Subject to certain exceptions, the Indenture or the Notes or the Note Guarantees may be amended or supplemented with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, and any existing Default or Event of Default or compliance with any provision of the Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any.  Without the consent of any Holder of a Note, the Indenture or the Notes or the Note Guarantees may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of an Issuer’s or a Guarantor’s obligations to Holders of the Notes and Note Guarantees in the case of a merger or consolidation or disposition of all or substantially all of the Issuers’ or such Guarantor’s properties or assets, as applicable, to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to conform the text of the Indenture, the Notes or the Note Guarantees to any provision of the “Description of notes” section of the Issuers’ Offering Memorandum to the extent that such provision was intended to be a verbatim recitation of a provision of the Indenture, the Notes or Note Guarantee, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture as of the Issue Date, to allow any Guarantor to execute a supplemental indenture or a notation of a Note Guarantee with respect to the Notes or to reflect the release of a Note Guarantee in accordance with this Indenture, to secure the Notes or the Note Guarantees, to comply with the rules of any applicable securities depository, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the

 

A-7

 

TIA, or to provide for the reorganization of Antero Midstream Partners in any other form or entity, in accordance with Section 5.01(b) of the Indenture.

 

(12) DEFAULTS AND REMEDIES.  Events of Default include:  (i) default for 30 days in the payment when due of interest on, with respect to the Notes; (ii) default in the payment when due (at Stated Maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the Notes; (iii) failure by Antero Midstream Partners to timely consummate repurchase offers under Section 4.15 or Sections 3.09 and 4.10 of the Indenture  or to comply with Section 5.01 of the Indenture; (iv) failure by Antero Midstream Partners for 180 days after written notice to Antero Midstream Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with Section 4.03(a) of the Indenture; (v) failure by Antero Midstream Partners for 60 days after written notice to Antero Midstream Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with any of its other agreements in the Indenture; (vi) default under certain other agreements relating to Indebtedness of Antero Midstream Partners or its Restricted Subsidiaries which default (A) is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”) or (B) results in the acceleration of such Indebtedness prior to its express maturity, in each case subject to a minimum threshold and cure period; (vii) certain final judgments for the payment of money that remain undischarged for a period of 60 days; (viii) certain events of bankruptcy or insolvency with respect to the Issuers or any of Antero Midstream Partners’ Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary; and (ix) except as permitted by the Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect or any Guarantor or any Person acting on its behalf denies or disaffirms its obligations under such Guarantor’s Note Guarantee.  If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.  Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to Finance Corp., Antero Midstream Partners or any Restricted Subsidiary of Antero Midstream Partners that is a Significant Subsidiary or any group of Restricted Subsidiaries of Antero Midstream Partners that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice.  Holders may not enforce the Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal, interest, or premium, if any.  The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium, if any, on, or the principal of, the Notes.  The Issuers and the Guarantors are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuers and the Guarantors are required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

 

(13) TRUSTEE DEALINGS WITH THE ISSUERS.  The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuers or their Affiliates, and may otherwise deal with the Issuers or their Affiliates, as if it were not the Trustee.

 

(14) NO RECOURSE AGAINST OTHERS.  A director, officer, partner, member, employee, incorporator, manager or unit holder or other owner of Equity Interest of the Issuers, the General Partner

 

A-8

 

or any Guarantor, as such, will not have any liability for any obligations of the Issuers or the Guarantors under the Notes, the Indenture, the Note Guarantees 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 the issuance of the Notes and the Note Guarantees.

 

(15) AUTHENTICATION.  This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

(16) 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 right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

(17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes will have all the rights set forth in the Registration Rights Agreement dated as of the Issue Date, among the Issuers, the Guarantors and the other parties named on the signature pages thereof or, in the case of Additional Notes, Holders of Restricted Global Notes and Restricted Definitive Notes will have the rights set forth in one or more registration rights agreements, if any, among the Issuers, the Guarantors and the other parties thereto, relating to rights given by the Issuers and the Guarantors to the purchasers of any Additional Notes (collectively, the “Registration Rights Agreement”).

 

(18) CUSIP NUMBERS.  Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to 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.

 

(19) GOVERNING LAW.  THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES.

 

The Issuers will furnish to any Holder upon written request and without charge a copy of each of the Indenture and the Registration Rights Agreement.  Requests may be made to:

 

Antero Midstream Partners LP

Antero Midstream Finance Corporation
 1615 Wynkoop Street
 Denver, Colorado 80202
 Attention:  Chief Financial Officer

 

A-9

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

	
(I) or (we) assign   and transfer this Note to:
    	
 
    
	
 
    	
(Insert   assignee’s legal name)
    

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint

to transfer this Note on the books of the Issuers.  The agent may substitute another to act for him.

 

	
Date:
    	
 
    	
 
    

 

	
Your Signature:  
    	
 
    
	
(Sign exactly as   your name appears on the face of this Note)
    

 

	
Signature Guarantee*:
    	
 
    	
 
    

 

*              Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-10

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

 

o Section 4.10                                   o Section 4.15

 

If you want to elect to have only part of the Note purchased by the Issuers pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:

 

$                                         

 

	
Date:
    	
 
    	
 
    

 

	
Your Signature:  
    	
 
    
	
(Sign exactly as   your name appears on the face of this Note)
    

 

	
Tax   Identification No.:  
    	
 
    

 

	
Signature Guarantee*:
    	
 
    	
 
    

 

*              Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-11

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest 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
   officer of Trustee or
   Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*      This schedule should be included only if the Note is issued in global form.

 

A-12

 

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

Antero Midstream Partners LP

Antero Midstream Finance Corporation

1615 Wynkoop Street

Denver, Colorado 80202

 

Wells Fargo Bank, National Association

750 N. Saint Paul Place, Suite 1750

Dallas, Texas 75202

 

Re:  5.375% Senior Notes due 2024

 

Reference is hereby made to the Indenture, dated as of September 13, 2016 (the “Indenture”), among Antero Midstream Partners LP, a Delaware limited partnership (“Antero Midstream Partners”), and Antero Midstream Finance Corporation, a Delaware corporation (“Finance Corp.” and, together with Antero Midstream Partners, the “Issuers”), the Guarantors party thereto and Wells Fargo Bank, National Association, as trustee.  Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

, (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $            in such Note[s] or interests (the “Transfer”), to                              (the “Transferee”), as further specified in Annex A hereto.  In connection with the Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.  o  Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A.  The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.  Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.

 

2.  o  Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Restricted Definitive Note pursuant to Regulation S.  The Transfer is being effected pursuant to and in accordance with Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been

 

B-1

 

made in contravention of the requirements of Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an initial purchaser of the Notes).  Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.

 

3.  o  Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S.  The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

 

(a)                                 o   such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

 

or

 

(b)                                 o   such Transfer is being effected to the Issuers or a subsidiary thereof;

 

or

 

(c)                                  o   such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

 

or

 

(d)                                 o   such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act.  Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.

 

4.  o  Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.

 

(a)  o  Check if Transfer is pursuant to Rule 144.  (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer

 

B-2

 

restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(b)  o  Check if Transfer is Pursuant to Regulation S.  (i) The Transfer is being effected pursuant to and in accordance with Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(c)  o  Check if Transfer is Pursuant to Other Exemption.  (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

This certificate and the statements contained herein are made for your benefit.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Insert Name of   Transferor]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    	
 
    
					

 

B-3

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

1.                                      The Transferor owns and proposes to transfer the following:

 

[CHECK ONE OF (a) OR (b)]

 

(a)         o   a beneficial interest in the:

 

(i)                               o   144A Global Note (CUSIP O369OA AA4), or

 

(ii)                            o   Regulation S Global Note (CUSIP U0018Y AA0), or

 

(iii)                         o   IAI Global Note (CUSIP O369OA AB2); or

 

(b)  o   a Restricted Definitive Note.

 

2.                                      After the Transfer the Transferee will hold:

 

[CHECK ONE]

 

(a)  o   a beneficial interest in the:

 

(i)                               o   144A Global Note (CUSIP O369OA AA4), or

 

(ii)                            o   Regulation S Global Note (CUSIP U0018Y AA0), or

 

(iii)                         o   IAI Global Note (CUSIP O369OA AB2); or

 

(iv)                        o   Unrestricted Global Note (CUSIP          ); or

 

(b)  o   a Restricted Definitive Note; or

 

(c)  o   an Unrestricted Definitive Note,

 

in accordance with the terms of the Indenture.

 

B-4

 

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

Antero Midstream Partners LP

Antero Midstream Finance Corporation

1615 Wynkoop Street

Denver, Colorado 80202

 

Wells Fargo Bank, National Association

750 N. Saint Paul Place, Suite 1750

Dallas, Texas 75202

 

Re:  5.375% Senior Notes due 2024

 

(CUSIP           )

 

Reference is hereby made to the Indenture, dated as of September 13, 2016 (the “Indenture”), among Antero Midstream Partners LP, a Delaware limited partnership (“Antero Midstream Partners”), and Antero Midstream Finance Corporation, a Delaware corporation (“Finance Corp.” and, together with Antero Midstream Partners, the “Issuers”), the Guarantors party thereto and Wells Fargo Bank, National Association, as trustee.  Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

, (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $             in such Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Owner hereby certifies that:

 

1.                                      Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note

 

(a)  o                           Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note.  In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

(b)  o                           Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note.  In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

(c)  o                            Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note.  In connection with the Owner’s Exchange of a Restricted Definitive Note for

 

C-1

 

a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

(d)  o                           Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note.  In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

2.                                      Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes

 

(a)  o                           Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note.  In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer.  Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

 

(b)  o                           Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note.  In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] o 144A Global Note, o Regulation S Global Note, o IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States.  Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

 

This certificate and the statements contained herein are made for your benefit.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Insert Name of   Transferor]

 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    	
 
    
					

 

C-2

 

EXHIBIT D

 

FORM OF CERTIFICATE FROM
 ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

Antero Midstream Partners LP

Antero Midstream Finance Corporation

1615 Wynkoop Street

Denver, Colorado 80202

 

Wells Fargo Bank, National Association

750 N. Saint Paul Place, Suite 1750

Dallas, Texas 75202

 

Re:  5.375% Senior Notes due 2024

 

Reference is hereby made to the Indenture, dated as of September 13, 2016 (the “Indenture”), among Antero Midstream Partners LP, a Delaware limited partnership (“Antero Midstream Partners”), and Antero Midstream Finance Corporation, a Delaware corporation (“Finance Corp.” and, together with Antero Midstream Partners, the “Issuers”), the Guarantors party thereto and Wells Fargo Bank, National Association, as trustee.  Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

In connection with our proposed purchase of $             aggregate principal amount of:

 

(a)  o                                             a beneficial interest in a Global Note, or

 

(b)  o                                             a Definitive Note,

 

we confirm that:

 

1.                                      We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).

 

2.                                      We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence.  We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to Antero Midstream Partners or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Issuers a signed letter substantially in the form of this letter and, if such transfer is in respect of a principal amount of Notes, at the time of transfer of less than $250,000, an Opinion of Counsel in form reasonably acceptable to the Issuers to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.

 

D-1

 

3.                                      We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Issuers such certifications, legal opinions and other information as you and the Issuers may reasonably require to confirm that the proposed sale complies with the foregoing restrictions.  We further understand that the Notes purchased by us will bear a legend to the foregoing effect.

 

4.                                      We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and 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 and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

 

5.                                      We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.

 

You are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Insert Name of   Accredited Investor]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    	
 
    
					

 

D-2

 

EXHIBIT E

 

[FORM OF NOTATION OF GUARANTEE]

 

For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, dated as of September 13, 2016 (the “Indenture”), among Antero Midstream Partners LP, a Delaware limited partnership (“Antero Midstream Partners”), and Antero Midstream Finance Corporation, a Delaware corporation (“Finance Corp.” and, together with Antero Midstream Partners, the “Issuers”), the Guarantors party thereto and Wells Fargo Bank, National Association, as trustee (the “Trustee”), (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes, whether at Stated Maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Issuers 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 Guarantors to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee.  Each Holder of a Note, by accepting the same,  agrees to and shall be bound by such provisions.

 

Capitalized terms used but not defined herein have the meanings given to them in the Indenture.

 

	
 
    	
[NAME OF GUARANTOR(S)]

 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

E-1

 

EXHIBIT F

 

FORM OF SUPPLEMENTAL INDENTURE
 TO BE DELIVERED BY SUBSEQUENT GUARANTORS

 

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of                 , 200  ,  is among                    (the “Guaranteeing Subsidiary”), Antero Midstream Partners LP, a Delaware limited partnership (“Antero Midstream Partners”), and Antero Midstream Finance Corporation (“Finance Corp.” and, together with Antero Midstream Partners, the “Issuers”), the other Guarantors (as defined in the Indenture referred to herein) and Wells Fargo Bank, National Association, as trustee under the Indenture referred to below (the “Trustee”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuers and the initial Guarantors have heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of September 13, 2016 providing for the issuance of the Issuers’ 5.375% Senior Notes due 2024 (the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuers’ Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and

 

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is 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 Guaranteeing Subsidiary, the other Guarantors, the Issuers and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

1.                                      CAPITALIZED TERMS.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

 

2.                                      AGREEMENT TO GUARANTEE.  The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof.

 

4.                                      NO RECOURSE AGAINST OTHERS.  No past, present or future director, officer, partner, member, employee, incorporator, manager,  unit holder or other owner of an Equity Interest of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Issuers or the Guarantors under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of the 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 and the Note Guarantees.

 

5.                                      NEW YORK LAW TO GOVERN.  THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

 

6.                                      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.

 

F-1

 

7.                                      EFFECT OF HEADINGS.  The Section headings herein are for convenience only and shall not affect the construction hereof.

 

8.                                      THE TRUSTEE.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary, the other Guarantors and the Issuers.

 

F-2

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

 

	
 
    	
[GUARANTEEING   SUBSIDIARY]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ANTERO MIDSTREAM PARTNERS LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Antero Resources Midstream Management LLC,
    
	
 
    	
 
    	
its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
ANTERO MIDSTREAM FINANCE CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[EXISTING GUARANTORS]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS FARGO BANK,   NATIONAL ASSOCIATION,
    
	
 
    	
  as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

F-3

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