Document:

Exhibit 10.1

 

 

STOCK PURCHASE AGREEMENT

Among

LONE TREE HOLDINGS LTD.,

SIRIUS INTERNATIONAL INSURANCE GROUP, LTD.,

CM INTERNATIONAL HOLDING PTE. LTD.

and

CM BERMUDA LIMITED

Dated as of July 24, 2015

 

 

 

 

  

TABLE OF CONTENTS

Page

ARTICLE I

 Purchase and Sale of Shares; Closing

	
SECTION 1.01.

	
Purchase and Sale of the Shares

	
1

	
SECTION 1.02.

	
Closing Date

	
2

	
SECTION 1.03.

	
Transactions To Be Effected at the Closing

	
2

	
SECTION 1.04.

	
Final Determination of the Purchase Price

	
5

	
SECTION 1.05.

	
Settlement of Parent Covers

	
9

	
SECTION 1.06.

	
No Setoff

	
11

	
SECTION 1.07.

	
Withholding

	
11

	
SECTION 1.08.

	
Substitution

	
11

ARTICLE II

 Representations and Warranties of Seller

	
SECTION 2.01.

	
Organization, Standing and Power

	
11

	
SECTION 2.02.

	
Authority; Execution and Delivery; Enforceability

	
12

	
SECTION 2.03.

	
No Conflicts; Consents

	
12

	
SECTION 2.04.

	
Litigation

	
13

	
SECTION 2.05.

	
The Shares

	
13

	
SECTION 2.06.

	
Brokers

	
13

	
SECTION 2.07.

	
No Additional Representations and Warranties

	
13

ARTICLE III

 Representations and Warranties of the Company

	
SECTION 3.01.

	
Organization and Standing

	
14

	
SECTION 3.02.

	
Capital Stock of the Company and the Subsidiaries

	
14

	
SECTION 3.03.

	
Authority; Execution and Delivery; Enforceability

	
16

	
SECTION 3.04.

	
No Conflicts; Consents

	
16

	
SECTION 3.05.

	
Financial Statements

	
17

	
SECTION 3.06.

	
No Undisclosed Liabilities

	
18

	
SECTION 3.07.

	
Assets Other than Real Property Interests

	
19

	
SECTION 3.08.

	
Real Property

	
19

	
SECTION 3.09.

	
Intellectual Property

	
20

	
SECTION 3.10.

	
Contracts

	
22

	
SECTION 3.11.

	
Permits

	
24

	
SECTION 3.12.

	
Insurance

	
24

	
SECTION 3.13.

	
Tax Matters

	
25

 

 

- i -

 

	
SECTION 3.14.

	
Legal Proceedings

	
27

	
SECTION 3.15.

	
Employee Benefit Plans and Related Matters; ERISA

	
27

	
SECTION 3.16.

	
Absence of Changes or Events

	
29

	
SECTION 3.17.

	
Risk−Based Capital

	
29

	
SECTION 3.18.

	
Compliance with Applicable Laws

	
30

	
SECTION 3.19.

	
Employee and Labor Matters

	
31

	
SECTION 3.20.

	
Transactions with Affiliates

	
33

	
SECTION 3.21.

	
Brokers

	
33

	
SECTION 3.22.

	
Environmental Matters

	
33

	
SECTION 3.23.

	
Insurance Regulatory Matters; Agreements with Regulators

	
34

	
SECTION 3.24.

	
Reinsurance Contracts

	
35

	
SECTION 3.25.

	
Actuarial Reports

	
36

	
SECTION 3.26.

	
Investment Assets

	
36

	
SECTION 3.27.

	
Company Ratings

	
36

	
SECTION 3.28.

	
Agents; Binding Authority

	
37

	
SECTION 3.29.

	
No Additional Representations and Warranties

	
37

ARTICLE IV

 Representations and Warranties of Purchaser

	
SECTION 4.01.

	
Organization, Standing and Power

	
37

	
SECTION 4.02.

	
Authority; Execution and Delivery; and Enforceability

	
37

	
SECTION 4.03.

	
No Conflicts; Consents

	
38

	
SECTION 4.04.

	
Litigation

	
40

	
SECTION 4.05.

	
Regulatory Filings; Ownership of Purchaser

	
40

	
SECTION 4.06.

	
Securities Act

	
41

	
SECTION 4.07.

	
Availability of Funds

	
41

	
SECTION 4.08.

	
Brokers

	
41

	
SECTION 4.09.

	
No Insurance Affiliates

	
41

	
SECTION 4.10.

	
No Additional Representations and Warranties

	
41

ARTICLE V

 Covenants

	
SECTION 5.01.

	
Covenants Relating to Conduct of Business

	
42

	
SECTION 5.02.

	
Access to Information; Books and Records

	
47

	
SECTION 5.03.

	
Confidentiality

	
48

	
SECTION 5.04.

	
Reasonable Best Efforts; Consents, Approvals and Filings; Antitrust Strategy

	
48

	
SECTION 5.05.

	
Expenses

	
52

	
SECTION 5.06.

	
Employee Matters

	
52

	
SECTION 5.07.

	
Publicity

	
62

	
SECTION 5.08.

	
Non-Hire

	
62

	
SECTION 5.09.

	
Further Assurances

	
63

 

 

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SECTION 5.10.

	
Resignations

	
63

	
SECTION 5.11.

	
Related Party Agreements

	
63

	
SECTION 5.12.

	
Parent Contributions

	
63

	
SECTION 5.13.

	
Letter of Credit

	
63

	
SECTION 5.14.

	
Use of Trademarks

	
64

	
SECTION 5.15.

	
Solutions Entity

	
65

	
SECTION 5.16.

	
Non-Competition

	
65

	
SECTION 5.17.

	
Investment Management Agreement

	
67

	
SECTION 5.18.

	
Bi-Lateral Services Agreement

	
67

	
SECTION 5.19.

	
Preparation of Financial Statements

	
68

	
SECTION 5.20.

	
Additional Directors

	
68

ARTICLE VI

 Conditions Precedent

	
SECTION 6.01.

	
Conditions to Each Party’s Obligation

	
68

	
SECTION 6.02.

	
Conditions to Obligation of Purchaser

	
69

	
SECTION 6.03.

	
Conditions to Obligation of Seller

	
70

	
SECTION 6.04.

	
Frustration of Closing Conditions

	
71

ARTICLE VII

 Termination, Amendment and Waiver

	
SECTION 7.01.

	
Termination

	
71

	
SECTION 7.02.

	
Effect of Termination

	
72

	
SECTION 7.03.

	
Termination Fee; Purchase Option

	
73

	
SECTION 7.04.

	
Amendment

	
74

	
SECTION 7.05.

	
Extension; Waiver

	
74

ARTICLE VIII

 Indemnification

	
SECTION 8.01.

	
Indemnification by Seller

	
74

	
SECTION 8.02.

	
Indemnification by Purchaser

	
76

	
SECTION 8.03.

	
Calculation of Losses

	
76

	
SECTION 8.04.

	
Termination of Indemnification

	
78

	
SECTION 8.05.

	
Procedures

	
78

	
SECTION 8.06.

	
Survival

	
80

	
SECTION 8.07.

	
No Additional Representations

	
80

	
SECTION 8.08.

	
Exclusive Remedy

	
81

 

  

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ARTICLE IX

 Tax Matters

	
SECTION 9.01.

	
Tax Returns

	
82

	
SECTION 9.02.

	
Books and Records; Cooperation

	
83

	
SECTION 9.03.

	
Transfer Taxes

	
83

	
SECTION 9.04.

	
Additional Covenants

	
84

	
SECTION 9.05.

	
Tax Indemnity

	
84

	
SECTION 9.06.

	
Disputes

	
86

	
SECTION 9.07.

	
Survival

	
86

ARTICLE X

 General Provisions

	
SECTION 10.01.

	
Assignment

	
87

	
SECTION 10.02.

	
No Third-Party Beneficiaries

	
87

	
SECTION 10.03.

	
Notices

	
87

	
SECTION 10.04.

	
Interpretation; Exhibits; Certain Definitions

	
88

	
SECTION 10.05.

	
Counterparts

	
98

	
SECTION 10.06.

	
Entire Agreement

	
98

	
SECTION 10.07.

	
Severability

	
99

	
SECTION 10.08.

	
Enforcement

	
99

	
SECTION 10.09.

	
Arbitration

	
99

	
SECTION 10.10.

	
Governing Law

	
101

	
SECTION 10.11.

	
Waiver of Jury Trial

	
102

	
SECTION 10.12.

	
Remedies Cumulative

	
102

  

Exhibits

INDEX OF DEFINED TERMS

 

	
EXHIBIT A

	
Form of Letter of Credit

	
EXHIBIT B

	
Bi-Lateral Services Agreement

	
EXHIBIT C

	
Escrow Agreement

	
EXHIBIT D

	
Investment Management Agreement

  

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STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of July 24, 2015, among Lone Tree Holdings Ltd., an exempted company with limited liability incorporated under the laws of Bermuda with registered number 39337 having its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda (“Seller”), Sirius International Insurance Group, Ltd., an exempted company with limited liability incorporated under the laws of Bermuda with registered number 39821 having its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda (the “Company”), CM International Holding Pte. Ltd., a company with limited liability incorporated under the laws of Singapore with registered number 201437634R having its registered office at 20 Collyer Quay #23-01, Singapore 049319 (“Purchaser”), and CM Bermuda Limited, an exempted company with limited liability incorporated under the laws of Bermuda with registered number 50418 having its registered office at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda (“CMB”).

RECITALS

White Mountains Insurance Group, Ltd., an exempted company with limited liability incorporated under the laws of Bermuda with registered number 27225 having its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda (“Parent”), owns indirectly all of the issued and outstanding capital stock of Seller, and Seller owns directly all of the issued and outstanding shares of the common stock of the Company (the “Shares”).

Purchaser desires to purchase (directly or indirectly through its direct wholly-owned subsidiary, CMB) from Seller, and Seller desires to sell to Purchaser, all of the issued and outstanding Shares.

Concurrently with the execution and delivery of this Agreement, (i) Parent has executed and delivered to Purchaser a guaranty in favor of Purchaser (the “Parent Guaranty”) and (ii) China Minsheng Investment Co., Ltd., incorporated under the laws of the People’s Republic of China with registered number 310000000125935 having its registered office at No. 100 South Zhongshan Street, 23rd Floor, Shanghai 200010, People’s Republic of China (“CMI”), has executed and delivered to Seller a guaranty in favor of Seller (the “CMI Guaranty”).

Accordingly, the parties hereby agree as follows:

ARTICLE I

Purchase and Sale of Shares; Closing

SECTION 1.01.           Purchase and Sale of the Shares.  (a)  On the terms and subject to the conditions of this Agreement, at the Closing, Seller shall sell, transfer and deliver to Purchaser, and Purchaser shall purchase from Seller, all of the Shares for an amount equal to the sum of (A) the product of (i) the Closing Date Book Value multiplied by (ii) the Agreed Multiple, (B) $10 million and (C) the Adjustment Amount, if any (together, the “Purchase Price”), payable as set forth below in Section 1.03 and as determined pursuant to Section 1.04.  The purchase and sale of the Shares is referred to in this Agreement as the “Acquisition”.

 

 

 

  

(b)            Concurrently with the execution and delivery of this Agreement, Purchaser shall deliver to Seller a letter of credit in the form set out in Exhibit A issued by Hana Bank, Hong Kong Branch, in an amount of $200 million (together with any extensions or renewals thereof, the “Letter of Credit”) as security for the performance of the obligations of Purchaser hereunder, in the period up to and through Closing.  Such Letter of Credit shall terminate upon Closing or as otherwise provided under the terms of the Letter of Credit.

SECTION 1.02.           Closing Date.  The closing of the Acquisition (the “Closing”) shall take place at the offices of Conyers Dill & Pearman Limited, Clarendon House, 2 Church Street, Hamilton, Bermuda HM CX, at 10:00 a.m. on (i) the fifth Business Day following the satisfaction (or, to the extent not prohibited by Applicable Law or the byelaws and requirements of Lloyd’s, the waiver by all the parties) of the conditions set forth in Section 6.01, or, if on such day any condition set forth in Section 6.02 or 6.03 has not been satisfied (or, to the extent not prohibited by Applicable Law or the byelaws and requirements of Lloyd’s, waived by the party entitled to the benefit thereof), as soon as practicable after all the conditions set forth in Article VI have been satisfied (or, to the extent not prohibited by Applicable Law or the byelaws and requirements of Lloyd’s, waived by the parties entitled to the benefits thereof), or (ii)  a Business Day within five Business Days following the then-scheduled Closing Date as Purchaser may notify Seller pursuant to Section 8.01(c), or (iii) at such other place, time and date as shall be agreed in writing between Seller and Purchaser.  The date on which the Closing occurs is referred to in this Agreement as the “Closing Date”.

SECTION 1.03.           Transactions To Be Effected at the Closing.  At the Closing:

(a)           the Company shall deliver to Seller and Purchaser counterparts of each of the Ancillary Agreements to be entered into by the Company at the Closing, duly executed by the Company;

(b)          Seller shall:

(i)            deliver to Purchaser certificates representing the Shares, duly endorsed in blank or accompanied by stock powers duly endorsed in blank in proper form for transfer, with appropriate Transfer Tax stamps, if any, affixed; and

(ii)           deliver to Purchaser and the Company counterparts of each of the Ancillary Agreements to be entered into by Seller at the Closing, duly executed by Seller and, if party thereto, Parent;

(c)           Purchaser shall:

 

 

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(i)            deliver to Seller payment, by wire transfer to a bank account designated in writing by Seller (such designation to be made at least four Business Days prior to the Closing Date), of immediately available funds in U.S. dollars in an amount (such amount, the “Estimated Payment Amount”) equal to the sum of (A) the product of (1) Estimated Closing Book Value multiplied by (2) the Agreed Multiple, (B) $10 million and (C) the Estimated Adjustment Amount, if any.  In the event that the Estimated Closing Book Value is less than the Reference Book Value, Seller may, at its option, transfer to the Company immediately prior to Closing an amount in Cash equal to the difference between the Reference Book Value and the Estimated Closing Book Value and, upon receipt of such amount by the Company, such Cash shall be taken into account as an asset in determining the Estimated Closing Book Value for the purpose of calculating the Estimated Payment Amount payable under this Section 1.03 and the Closing Date Book Value for the purpose of calculating the Final Purchase Price as determined pursuant to Section 1.04.  In the event that the Estimated Closing Book Value is greater than the Reference Book Value (the amount of such excess, the “Estimated Book Value Excess Amount”) and Seller, Parent or any subsidiary thereof (other than the Company or any Subsidiary) has contributed Cash to the Company or any Subsidiary after the date hereof and prior to the Closing Date (other than, for the avoidance of doubt, Cash contributed to the Company or any Subsidiary in exchange for the fair market value of the Reorganization Assets (including the Closing Date Reorganization Value) or the Extracted Entities (including the Extracted Entity Value) or in respect of any Parent Covers), then an amount (the “Estimated Adjustment Amount”) equal to (x) the aggregate amount of any Cash contributed to the Company or any Subsidiary after the date hereof and prior to the Closing Date (other than, for the avoidance of doubt, Cash contributed to the Company or any Subsidiary in exchange for the fair market value of the Reorganization Assets (including the Closing Date Reorganization Value) or the Extracted Entities (including the Extracted Entity Value) or in respect of any Parent Covers) by Seller, Parent or any subsidiary thereof (other than the Company or any Subsidiary), if any (the aggregate amount of such contribution, the “Estimated Contribution Amount”), or (y) in the event that the Estimated Contribution Amount exceeds the Estimated Book Value Excess Amount, the Estimated Book Value Excess Amount, shall be excluded as an asset in determining the Estimated Closing Book Value for the purpose of calculating the Estimated Payment Amount payable under Section 1.03 and the Closing Date Book Value for the purpose of calculating the Final Purchase Price as determined pursuant to Section 1.04 and shall instead be included in the Estimated Payment Amount pursuant to clause (C) of the definition thereof; and

(ii)           deliver to Seller and the Company counterparts of each of the Ancillary Agreements to be entered into by Purchaser at the Closing, duly executed by Purchaser and, if party thereto, CMI;

(d)          Seller shall permit the Letter of Credit to be withdrawn by the Purchaser;

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(e)           the Company and the Subsidiaries shall (to the extent not previously transferred) sell, transfer and deliver the Reorganization Assets to Seller or any of its affiliates (other than the Company and the Subsidiaries) in exchange for immediately available funds in U.S. dollars in an amount equal to the Closing Date Reorganization Value reflected in the calculation of the Estimated Closing Book Value;

(f)            in the event that the conditions set forth in Article VI have been satisfied and the Company or any Subsidiary holds any of the entities listed on Section 1.03(f) of the Company Disclosure Letter (such entities  the “Run-Off Entities”), the Company and the Subsidiaries shall sell, transfer and deliver any Run-Off Entities then held by the Company or any Subsidiary to Seller or any of its affiliates (other than the Company and the Subsidiaries) in exchange for immediately available funds in U.S. dollars in an amount equal to the amount set forth on Section 1.03(f) of the Company Disclosure Letter with respect to the applicable Run-Off Entity (collectively, the “Run-Off Entity Value”), and, in connection therewith, Seller and the Company shall cause Sirius Re Holdings, Inc. to execute and deliver a guarantee (in the form customarily provided by the Company or its applicable Subsidiary in connection with similar transactions by White Mountains Solutions Holding Company and as is anticipated to be provided in connection with the sale of the Run-Off Entities pursuant to the respective Run-Off Entity SPA) to Parent for liabilities and obligations of the Run-Off Entities;

(g)           in the event that the conditions set forth in Article VI have been satisfied and Regulatory Approvals from the Insurance Regulators in the State of Tennessee have not been obtained (or have not been obtained without the imposition of a Burdensome Condition) at least four Business Days prior to the Closing Date, the Company and the Subsidiaries shall sell, transfer and deliver the entity listed on Section 1.03(g) of the Company Disclosure Letter (such entity, the “Solutions Entity”) to Seller or any of its affiliates (other than the Company and the Subsidiaries) in exchange for immediately available funds in U.S. dollars in an amount equal to the fair market value (as reasonably determined by Seller) of such entity (the “Solutions Entity Value”), and, in connection therewith, Seller and the Company shall cause Sirius Re Holdings, Inc. to execute and deliver a guarantee (in the form customarily provided by the Company or its applicable Subsidiary in connection with similar transactions by White Mountains Solutions Holding Company) to Parent for liabilities and obligations of the Solutions Entity (which guarantee shall survive the termination of the obligations under Section 5.15);

(h)           in the event that the conditions set forth in Article VI have been satisfied and Regulatory Approvals from the Insurance Regulators in Hong Kong have not been obtained (or have not been obtained without the imposition of a Burdensome Condition), the Company and the Subsidiaries shall sell, transfer and deliver the entity listed on Section 1.03(h) of the Company Disclosure Letter (such entity, the “JV Entity” and, together with the Run-Off Entities and the Solutions Entity, the “Extracted Entities”) to Seller or any of its affiliates (other than the Company and the Subsidiaries) in exchange for immediately available funds in U.S. dollars in an amount equal to the fair market value (as reasonably determined by Seller) of such entity (the “JV Entity Value” and, together with the Run-Off Entity Value and the Solutions Entity Value, the “Extracted Entity Value”).

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(i)            Pursuant to Section 1.05, Seller shall deliver to Purchaser an amount in Cash equal to the Seller Settlement Amount, if any, and the Company shall deliver to Seller an amount in Cash equal to the Company Settlement Amount, if any.

(j)            All payments made pursuant to this Section 1.03 may be applied to offset any other payment required under this Section 1.03.

SECTION 1.04.           Final Determination of the Purchase Price.  (a)  At least four Business Days prior to the anticipated Closing Date, Seller shall prepare and deliver to Purchaser a statement in the form attached to Section 1.04(j) of the Company Disclosure Letter as Exhibit B (the “Estimated Closing Date Statement”) setting forth in reasonable detail Seller’s calculation of the Estimated Closing Book Value and a calculation of the Estimated Payment Amount based thereon.  Within 45 days after the end of the calendar quarter containing the Closing Date, Purchaser shall prepare and deliver to Seller a statement in the form attached to  Section 1.04(j) of the Company Disclosure Letter as Exhibit C (the “Closing Date Statement”) setting forth in reasonable detail (i) Purchaser’s calculation of the Closing Date Book Value, (ii) a calculation of the Purchase Price based thereon, and (iii) a calculation of the difference between the Estimated Payment Amount and the Purchase Price.  The Closing Date Book Value shall be calculated in accordance with the Applicable Accounting Principles.

(b)           The Closing Date Statement shall become final and binding upon the parties on the 45th day following delivery thereof, unless Seller gives written notice of its disagreement with the Closing Date Statement (a “Notice of Disagreement”) to Purchaser prior to such date.  Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted.  If a Notice of Disagreement is received by Purchaser in a timely manner, then the Closing Date Statement (as revised in accordance with this sentence) shall become final and binding upon Seller and Purchaser on the earlier of (A) the date Seller and Purchaser resolve in writing any differences they have with respect to the matters specified by Seller in the Notice of Disagreement and (B) the date any disputed matters are finally resolved by the Accounting Firm.  During the 45-day period following the delivery of a Notice of Disagreement, Seller and Purchaser shall seek in good faith to resolve any differences that they may have with respect to the matters specified by Seller in the Notice of Disagreement.  At the end of such 45-day period, Seller and Purchaser shall submit to an independent accounting firm (the “Accounting Firm”) for resolution any and all matters that were included by Seller in the Notice of Disagreement and that remain in dispute.  The Accounting Firm shall be Ernst & Young LLP or, if such firm is unable or unwilling to act, such other internationally recognized independent public accounting firm as shall be agreed upon in writing by Seller and Purchaser (such agreement not to be unreasonably withheld, delayed or conditioned).

(c)           In resolving matters submitted to it pursuant to Section 1.04(b), the Accounting Firm (i) shall make its final determination on all matters within 60 days of its appointment; (ii) shall not hold any hearings; (iii) shall not be entitled to take or order the taking of depositions or other testimony under oath and (iv) with respect to each matter submitted to it, shall select either the Purchaser position (as set forth in the Closing Date Statement) or the Seller position (as set forth in the Notice of Disagreement) and shall not select or determine any alternative position.

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(d)           The scope of the disputes to be resolved by the Accounting Firm shall be limited to (i) whether the Closing Date Statement was prepared in accordance with the Applicable Accounting Principles (including Exhibit C of Section 1.04(j) of the Company Disclosure Letter) with respect to the matters that were submitted for resolution to the Accounting Firm, (ii) whether there were mathematical errors in the Closing Date Statement and (iii) the fees and expenses allocation pursuant to Section 1.04(f).  The Accounting Firm is not authorized to, and shall not, make any other determination, including (A) any determination with respect to any matter included in the Closing Date Statement or the Notice of Disagreement that was not submitted for resolution to the Accounting Firm, (B) any determination as to whether GAAP or SAP was followed for the Financial Statements, the Statutory Statements, the Estimated Closing Date Statement or the Closing Date Statement (other than to the extent required in connection with the determination made in clause (i) of the preceding sentence), (C) any determination as to whether the Reference Book Value, the Estimated Closing Book Value, the Estimated Adjustment Amount, the Closing Date Reorganization Value, the Extracted Entity Value or any other Cash contributed to the Company or any Subsidiary in exchange for the fair market value of the Reorganization Assets or the Extracted Entities was properly calculated in accordance with the Applicable Accounting Principles, (D) any determination as to the accuracy of Section 3.05 or any other representation or warranty in this Agreement, or (E) any determination as to compliance by the Company, Purchaser or Seller with any of its covenants in this Agreement.  Any disputes not within the scope of disputes to be resolved by the Accounting Firm pursuant to this Section 1.04(d) as well as any disputes about the scope of disputes to be resolved by the Accounting Firm pursuant to this Section 1.04(d) shall be resolved in accordance with Section 10.09.  Any determination by the Accounting Firm, and any work or analyses performed by the Accounting Firm, may not be offered as evidence in any suit, action or proceeding as evidence of a breach of Section 3.05, a breach of any other representation or warranty in this Agreement or a breach of any covenant in this Agreement (other than a breach of this Section 1.04).

(e)           The final determination by the Accounting Firm of the matters submitted to it pursuant to Section 1.04(b) shall:  (i) be in writing; (ii) include the Accounting Firm’s calculation of the Closing Date Book Value; (iii) include the Accounting Firm’s determination of each matter submitted to it pursuant to Section 1.04(b); (iv) include the allocation of fees and expenses pursuant to Section 1.04(f); and (v) include a brief summary of the Accounting Firm’s reasons for its determination of each issue.

(f)            The dispute resolution by the Accounting Firm under this Section 1.04 shall constitute an expert determination under New York CPLR Article 76 and shall not constitute an arbitration.  The determinations of the Accounting Firm as to any issue of fact shall be final and binding, absent actual and intentional fraud, bad faith or manifest error or clear failure to apply clause (i) or (ii) of the definition of “Applicable Accounting Principles”.  Judgment may be entered upon the determination of the Accounting Firm in the Supreme Court of the State of New York, New York County, the United States District Court for the Southern District of New York or any other court having jurisdiction over the party against which such determination is to be enforced.  The cost of any dispute resolution (including the fees and expenses of the Accounting Firm and reasonable attorney fees and expenses of the parties) pursuant to this Section 1.04 shall be borne by Seller and Purchaser equally.  The fees and disbursements of Purchaser’s independent accountants incurred in connection with their preparation and review of the Closing Date Statement and any Notice of Disagreement shall be borne by Purchaser, and the fees and disbursements of Seller’s independent accountants incurred in connection with their preparation and review of the Closing Date Statement and any Notice of Disagreement shall be borne by Seller.

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(g)           (i)  In the event that the Closing Date Book Value as finally determined in accordance with Section 1.04(b) (giving effect, for the avoidance of doubt, to any amounts transferred to the Company prior to Closing pursuant to the second sentence of Section 1.03(c)(i) as an asset in Closing Date Book Value) is less than the Reference Book Value, Seller may elect, by delivering written notice to Purchaser no later than five Business Days following the date on which the Closing Date Statement becomes final and binding on the parties in accordance with Section 1.04(b), to transfer to the Company an amount (such amount, the “Top-Up Amount”) in Cash equal to the difference between the Reference Book Value and the Closing Date Book Value as finally determined in accordance with Section 1.04(b).  If Seller so notifies Purchaser of its election to transfer the Top-Up Amount to the Company, (1) the Closing Date Book Value as finally determined in accordance with Section 1.04(b) shall be increased by the Top-Up Amount (such Closing Date Book Value, the “Increased Closing Date Book Value”), (2) the parties shall use the Increased Closing Date Book Value instead of the Closing Date Book Value as finally determined in accordance with Section 1.04(b) for the purpose of calculating the Final Purchase Price as determined pursuant to, and any amounts payable pursuant to, Section 1.04(h) and (3) Seller shall transfer the Top-Up Amount to the Company no later than such time as any amounts are payable pursuant to Section 1.04(h) (and the payment of the Top-Up Amount may be applied to offset any payment required to be made by Purchaser under Section 1.04(h)).

(ii)           In the event that (1) the Closing Date Book Value as finally determined in accordance with Section 1.04(b) (giving effect, for the avoidance of doubt, to any amounts transferred to the Company prior to Closing pursuant to the second sentence of Section 1.03(c)(i) as an asset in Closing Date Book Value) is greater than the Reference Book Value (the amount of such excess, the “Book Value Excess Amount”) and (2) Seller, Parent or any subsidiary thereof (other than the Company or any Subsidiary) contributed Cash to the Company or any Subsidiary after the date of this Agreement and prior to the Closing Date (other than, for the avoidance of doubt, Cash contributed to the Company or any Subsidiary in exchange for the fair market value of the Reorganization Assets (including the Closing Date Reorganization Value) or the Extracted Entities (including the Extracted Entity Value) or in respect of any Parent Covers), then the Closing Date Book Value as finally determined in accordance with Section 1.04(b) shall be decreased by an amount (such amount, the “Adjustment Amount” and such Closing Date Book Value, the “Decreased Closing Date Book Value”) equal to (x) the aggregate amount of any Cash contributed to the Company or any Subsidiary after the date of this Agreement and prior to the Closing Date (other than, for the avoidance of doubt, Cash contributed to the Company or any Subsidiary in exchange for the fair market value of the Reorganization Assets (including the Closing Date Reorganization Value) or the Extracted Entities (including the Extracted Entity Value) or in respect of any Parent Covers) by Seller, Parent or any subsidiary thereof (other than the Company or any Subsidiary), if any (the aggregate amount of such contributions, the “Contribution Amount”), or (y) in the event that the Contribution Amount exceeds the Book Value Excess Amount, the Book Value Excess Amount, and the parties shall use the Decreased Closing Date Book Value instead of the Closing Date Book Value as finally determined in accordance with Section 1.04(b) for the purpose of calculating the Final Purchase Price as determined pursuant to, and any amounts payable pursuant to, Section 1.04(h) and the Adjustment Amount shall instead be included in the Final Purchase Price pursuant to clause (C) of the definition of Purchase Price.

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(h)           In the event that the Estimated Payment Amount (based on the Estimated Closing Book Value as determined pursuant to Section 1.03(c)(i)) does not equal the Purchase Price (based on the Closing Date Book Value as finally determined in accordance with Section 1.04(b) or, if applicable, the Increased Closing Date Book Value or the Decreased Closing Date Book Value) (such Purchase Price, the “Final Purchase Price”), then (i) if the Final Purchase Price is greater than the Estimated Payment Amount, Purchaser shall, within seven Business Days after the Final Purchase Price is so finally determined, make payment by wire transfer in immediately available funds in U.S. dollars of the amount of such difference and (ii) if the Final Purchase Price is less than the Estimated Payment Amount, Seller shall, within seven Business Days after the Final Purchase Price is so finally determined, make payment by wire transfer in immediately available funds in U.S. dollars of the amount of such difference.  Any payment pursuant to this Section 1.04(h) shall be accompanied by interest thereon, compounded daily (based on a 365-day year), at a rate per annum equal to the average of the six-month LIBOR for United States dollars as published by Reuters as of 11:00 a.m. (London time) on each day during the period for which interest is to be paid, from and including the Closing Date to but excluding the date of payment.

(i)            In connection with the determination of the Closing Date Book Value pursuant to this Section 1.04:

(i)            During the 45 days following Seller’s receipt of the Closing Date Statement, Seller and its independent accountants shall be permitted to review the working papers of Purchaser, the Company and their respective independent accountants relating to the Closing Date Statement.

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(ii)           From the Closing Date through the resolution of any adjustment to the Purchase Price contemplated by this Section 1.04, Seller, Purchaser and the Company shall not take any action with respect to the accounting Books and Records of the Company on which the Closing Date Statement is to be based that are not consistent with the Company’s past practices.

(iii)          From the Closing Date through the resolution of any adjustment to the Purchase Price contemplated by this Section 1.04, Seller, Purchaser and the Company shall afford to Seller and Purchaser and their respective independent accountants reasonable access to the personnel, properties, Books and Records of the Company and the Subsidiaries for any purpose relating to the adjustment contemplated by this Section 1.04.

(j)            In this Agreement:

“Applicable Accounting Principles” means (i) the principles, policies and procedures set forth in Section 1.04(j) of the Company Disclosure Letter, whether or not used by the Company historically or in the Financial Statements or the Statutory Statements and whether or not in accordance with GAAP or SAP, (ii) with respect to any matter not covered by clause (i) above, the principles, policies and procedures used in the preparation of the Audited Financial Statements, whether or not in accordance with GAAP or SAP, and (iii) with respect to any matter not covered by clause (i) or (ii) above, GAAP applied in a manner consistent with the Audited Financial Statements; provided, however, that (A) no “subsequent event” occurring after the Closing Date shall be taken into account, even if otherwise required by clause (i), (ii) or (iii) above, and (B) except as otherwise specifically set forth in Section 1.04(j) of the Company Disclosure Letter, no change shall be made in any reserve, accrual or other account existing as of the Closing Date, nor shall any new reserve, accrual or other amount be included in the liabilities of the Company and the Subsidiaries, in either case as a result of events or developments occurring, or information becoming available, after the Closing Date, even if otherwise required by clause (i), (ii) or (iii) above.

SECTION 1.05.           Settlement of Parent Covers.  (a)  From and after the date hereof until such time as all Parent Covers have expired or been sold, unwound, settled, terminated or otherwise extinguished, the Company shall prepare and maintain a schedule (the “Parent Cover Schedule”) that sets forth each Parent Cover (whether or not currently in effect), including each Parent Cover set forth on Section 10.04(b)(4) of the Company Disclosure Letter, and reasonable detail regarding (w) the effective date, covered perils and territories and attachment point, (x) the consideration paid (including earned and unearned premiums as of the report date) by the Company or any Subsidiary to acquire such Parent Cover (such amount, the “Parent Cover Costs”), (y) the amount of any recoveries or other payment received or receivable therefrom by the Company or any Subsidiary (the “Parent Cover Benefits”) and (z) the legal entity purchasing each such Parent Cover, the applicable statutory tax rate and the applicable tax-adjusted amounts of the Parent Cover Costs and Parent Cover Benefits, in each case from and after the date of any previous settlement of Parent Cover Costs and Parent Cover Benefits pursuant to this Section 1.05.  Promptly upon request by Seller and promptly following any material change in the status of any Parent Cover or the recoveries receivable thereunder, the Company shall deliver a copy of such schedule to Seller.

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(b)            At least two Business Days prior to the anticipated Closing Date, the Company shall deliver to Seller the then-current Parent Cover Schedule.  In the event that the then current tax-adjusted Parent Cover Costs (not previously settled pursuant to this Section 1.05) exceed the then current tax-adjusted Parent Cover Benefits (not previously settled pursuant to this Section 1.05), at the Closing, Seller shall deliver to the Company an amount in Cash equal to such excess (the amount of such excess at any time, the “Seller Settlement Amount”).  In the event that the then current tax-adjusted Parent Cover Benefits (not previously settled pursuant to this Section 1.05) exceed the then current tax-adjusted Parent Cover Costs (not previously settled pursuant to this Section 1.05), at the Closing, the Company shall deliver to Seller an amount in Cash equal to such excess (the amount of such excess at any time, “Company Settlement Amount”).

(c)            During the period from and after the Closing until such time as all Parent Covers have expired or been sold, unwound, settled, terminated or otherwise extinguished and no further Parent Cover Costs or Parent Cover Benefits may accrue or be incurred, the Company shall, on a quarterly basis, deliver to Seller the then-current Parent Cover Schedule and promptly thereafter, Seller shall deliver an amount in Cash equal to the Seller Settlement Amount, if any, and Purchaser shall deliver to Seller an amount in Cash equal to the Company Settlement Amount, if any.

(d)            With respect to each Parent Cover, from and after the date hereof and until such Parent Cover has expired or been sold, unwound, settled, terminated or otherwise extinguished, the Company shall, and shall cause any applicable Subsidiary to, use its reasonable best efforts at the tax-adjusted cost of the Seller to take any action with respect to such Parent Cover upon delivery of written notice from Seller to the Company, including to sell, unwind, settle, terminate or otherwise extinguish such Parent Cover.

(e)            During the period from and after the Closing until such time as all Parent Cover Costs and all Parent Cover Benefits have been finally settled, the Company shall afford to Seller and its independent accountants reasonable access to the personnel, properties and Books and Records of the Company and the Subsidiaries for any purpose relating to the payments contemplated by this Section 1.05.

(f)            Disputes arising under this Section 1.05 regarding any Seller Settlement Amount or Company Settlement Amount or the calculation of the amounts set forth on the Parent Cover Schedule shall be identified by the party receiving the Parent Cover Schedule within 30 days of the delivery of such schedule and any dispute not resolved by mutual agreement within 30 days of the delivery of such notice shall be resolved by the Accounting Firm.  The Accounting Firm shall resolve any disputed items within 30 days of having the item referred to it pursuant to such procedures as it may require, and any such resolution by the Accounting Firm shall be final.  The costs, fees and expenses of the Accounting Firm relating to any disputes under this Section 1.05 shall be borne equally by Purchaser and Seller.

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SECTION 1.06.           No Setoff.  Seller and Purchaser acknowledge and agree that the payments contemplated by this Article I are non-refundable and that no party shall have any right of abatement, reduction, setoff, counterclaim, rescission, recoupment, refund, defense or deduction with respect thereto, in each case except as otherwise expressly provided for in this Article I.

SECTION 1.07.           Withholding.  To the extent withholding is required by Applicable Law, the Purchaser shall be entitled to deduct and withhold from the Purchase Price or any other payment made by it under this Agreement such amounts as it is required to deduct and withhold under Applicable Law (such requirement, the “Withholding Tax”), and any amounts so deducted and withheld shall be treated for all purposes of this Agreement as having been paid to the person in respect of which such deduction and withholding was made, provided that, if the Withholding Tax was imposed as a result of a present or former connection between Purchaser and the jurisdiction imposing such Withholding Tax (other than a connection arising as a result of the sale of the Shares hereunder), including for the avoidance of doubt any Withholding Tax imposed under the laws of Singapore, then the Purchaser shall pay such additional amounts as necessary so that the total amount received by Seller is equal to the amount Seller would have received had no Withholding Tax been imposed.  Purchaser and Seller shall cooperate to reduce or eliminate any Withholding Tax, and shall each provide to the other party any forms it is eligible to provide to reduce or eliminate such Withholding Tax.

SECTION 1.08.           Substitution.  Purchaser shall be entitled, by delivering written notice to Seller no later than two Business Days before the Closing Date, to require Seller to transfer the Shares to CMB at the Closing rather than Purchaser; provided, however, that Purchaser’s election to require Seller to deliver the Shares to CMB shall not relieve Purchaser of its obligation to pay the Estimated Payment Amount at Closing pursuant to Section 1.03 or any other obligations under this Agreement.  If Purchaser elects to require Seller to transfer the Shares to CMB pursuant to this Section 1.08, then following Closing all references to Purchaser in this Agreement shall be deemed to refer instead CMB and CMB shall be entitled to enforce any and all rights of Purchaser hereunder.

ARTICLE II

Representations and Warranties of Seller

Seller hereby represents and warrants to Purchaser that, except as set forth in the Seller Disclosure Letter, the statements contained in this Article II are true, complete and correct:

SECTION 2.01.           Organization, Standing and Power.  Seller is an exempted Bermuda limited company duly incorporated, validly existing and in good standing under the laws of Bermuda and has full corporate or organizational power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on the ability of Seller to perform its obligations under this Agreement and the Ancillary Agreements to which it is, or is specified to be, a party or a material adverse effect on the ability of Seller to consummate the Acquisition and the other transactions contemplated hereby and thereby (any such material adverse effect, a “Seller Material Adverse Effect”).

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SECTION 2.02.           Authority; Execution and Delivery; Enforceability.  Seller has all requisite corporate power and authority to execute this Agreement and the Ancillary Agreements to which it is, or is specified to be, a party and to consummate the Acquisition and the other transactions contemplated hereby and thereby.  The execution and delivery by Seller of this Agreement and the Ancillary Agreements to which it is, or is specified to be, a party and the consummation by Seller of the Acquisition and the other transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Seller.  Seller has duly executed and delivered this Agreement, and prior to the Closing will have duly executed and delivered each Ancillary Agreement to which it is, or is specified to be, a party, and, assuming due authorization, execution and delivery hereof and thereof by the parties hereto or thereto, this Agreement constitutes, and each Ancillary Agreement to which it is, or is specified to be, a party will after the Closing constitute, its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject in each case to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors’ rights and remedies generally and (ii) the effect of equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

SECTION 2.03.           No Conflicts; Consents.  (a)  The execution and delivery by Seller of this Agreement do not, the execution and delivery by Seller of each Ancillary Agreement to which it is, or is specified to be, a party will not, and the consummation of the Acquisition and the other transactions contemplated hereby and thereby and compliance by Seller with the terms hereof and thereof will not, (i) conflict with, or result in any violation of any provision of, the memorandum of association or bye-laws of Seller, (ii) conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any mortgage, lien, charge, encumbrance, pledge or security interest of any kind (collectively, “Liens”) upon any of the properties or assets of Seller under, any provision of any contract, lease, license, indenture, agreement, commitment or other legally binding arrangement (a “Contract”) to which Seller is a party or by which any of its properties or assets is bound or (iii) assuming (A) compliance with the matters set forth in Section 4.03(a) (other than Section 4.03(a)(iii)(A)) (and assuming the accuracy of the representations and warranties made in such Section 4.03(a)), (B) that the Consents referred to in Sections 2.03(b) and 3.04(b) are obtained and (C) that the filings referred to in Sections 2.03(b) and 3.04(b) are made and any waiting periods thereunder have terminated or expired, in the case of each of the foregoing clauses (A) through (C), prior to the Closing, conflict with, or result in any violation of any provision of, any judgment, order or decree (“Judgment”) or statute, law (including common law), ordinance, rule or regulation (“Applicable Law”), in each case, applicable to Seller or its properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Seller Material Adverse Effect.

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(b)           No consent, approval, waiver, license, permit, order or authorization (“Consent”) of or from, or registration, declaration, notice or filing made to or with any Governmental Entity is required to be obtained or made by or with respect to Seller in connection with the execution, delivery and performance of this Agreement or any Ancillary Agreement or the consummation of the Acquisition or the other transactions contemplated hereby and thereby, other than (i) compliance with and filings under the HSR Act, (ii) the Regulatory Approvals, (iii) filings with or approvals from the Bermuda Monetary Authority under the Exchange Control Act of 1972 of Bermuda and regulations thereunder and (iv) compliance with and filings under the Securities Act, the Exchange Act, applicable state securities or blue sky laws and the rules and regulations of any securities exchange.

SECTION 2.04.           Litigation.  (a) There is no Proceeding pending or, to the Knowledge of Seller, threatened against Seller or any affiliate of Seller (other than the Company and the Subsidiaries) and (b) to the Knowledge of Seller, none of Seller or Seller’s affiliates (other than the Company and the Subsidiaries) is a party to any Judgment of or settlement agreement with a Governmental Entity that, in the case of clauses (a) and (b) above, individually or in the aggregate, has had or would reasonably be expected to have a Seller Material Adverse Effect.

SECTION 2.05.           The Shares.  Seller has good and valid title to the Shares, free and clear of all Liens.  Assuming Purchaser has the requisite power and authority to be the lawful owner of the Shares, upon delivery to Purchaser at the Closing of certificates representing the Shares, duly endorsed by Seller for transfer to Purchaser, and upon Seller’s receipt of the Purchase Price or the Estimated Payment Amount, as the case may be, good and valid title to the Shares will pass to Purchaser, free and clear of any Liens, other than those arising from acts of Purchaser or its affiliates.  Other than this Agreement, the Shares are not subject to any voting trust agreement or other Contract, including any Contract restricting or otherwise relating to the voting, dividend rights or disposition of the Shares.

SECTION 2.06.           Brokers.  No broker, investment banker, financial advisor or other person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Acquisition or the other transactions contemplated hereby or by any Ancillary Agreement based upon arrangements made by or on behalf of Seller.

SECTION 2.07.           No Additional Representations and Warranties.  EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY SELLER AND THE COMPANY IN THIS AGREEMENT, SELLER AND THE COMPANY MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE SHARES, THE COMPANY, THE SUBSIDIARIES OR ANY OTHER MATTER, INCLUDING WITH RESPECT TO THE ADEQUACY OF RESERVES.

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ARTICLE III

Representations and Warranties of the Company

The Company hereby represents and warrants to Purchaser that, except as set forth in the Company Disclosure Letter, the statements contained in this Article III are true, complete and correct:

SECTION 3.01.           Organization and Standing.  (a)  Each of the Company and the Subsidiaries is duly incorporated or organized, validly existing and in good standing (to the extent the concept is recognized by the applicable jurisdiction) under the laws of the jurisdiction in which it is incorporated or organized and has full corporate or organizational power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.  Each of the Company and the Subsidiaries is duly qualified to do business in each jurisdiction in which the conduct or nature of its business or the ownership, leasing or holding of its properties makes such qualification necessary, except such jurisdictions where the failure to be so qualified, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.  The term “Subsidiary” means each person listed as a “Subsidiary” in Section 3.01 of the Company Disclosure Letter.

(b)           The Company has made available to Purchaser true and complete copies of (i) the memorandum of association of the Company, as amended to the date of this Agreement (the “Company Memorandum of Association”), and the bye-laws of the Company, as amended to the date of this Agreement (the “Company Bye-Laws”), and (ii) the comparable governing instruments, each as amended to the date of this Agreement, of each Subsidiary listed in Section 3.01 of the Company Disclosure Letter.

SECTION 3.02.           Capital Stock of the Company and the Subsidiaries.  (a)  As of the date of this Agreement, the authorized share capital of the Company consists of 12,000 shares of common stock, par value $1.00 per share (the “Common Shares”), of which 12,000 Common Shares are issued and outstanding as of the date hereof.  Except for the Common Shares, there are no other classes of capital stock or other equity securities of the Company issued, reserved for issuance or outstanding.  The Common Shares are duly authorized, validly issued, fully paid and nonassessable and are not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companies Act 1981 of Bermuda, the Company Memorandum of Association or the Company Bye-Laws or any Contract to which the Company is a party or otherwise bound.  There are not any bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of the Common Shares may vote (“Voting Company Debt”).  As of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company is a party or by which it is bound (i) obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional Common Shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Voting Company Debt or (ii) obligating the Company to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking.  As of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company.

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(b)           As of the date of this Agreement, Section 3.02(b) of the Company Disclosure Letter sets forth for each Subsidiary the amount of its authorized capital stock, the amount of its outstanding capital stock and the record and beneficial owners of its outstanding capital stock.  As of the date of this Agreement, except as set forth in Section 3.02(b) of the Company Disclosure Letter, there are no shares of capital stock or other equity securities of any Subsidiary issued, reserved for issuance or outstanding.  The Company, directly or indirectly, owns all of the outstanding shares of capital stock of each of the Subsidiaries.  All the outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable.  Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which any Subsidiary is a party or by which any Subsidiary is bound (i) obligating any Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, any Subsidiary or (ii) obligating any Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking.  As of the date of this Agreement, there are no restrictions on the sale or transfer of the Common Shares or the capital stock of the Subsidiaries, subject to obtaining regulatory approvals.  As of the date of this Agreement, there are not any outstanding contractual obligations of any Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of any Subsidiary.

(c)            Except for its interests in the Subsidiaries, as of the date of this Agreement (or in the case of Investment Assets, as of the close of business on June 30, 2015), the Company does not own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person.

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SECTION 3.03.           Authority; Execution and Delivery; Enforceability.  The Company has all necessary corporate power and authority to execute this Agreement and the Ancillary Agreements to which it is, or is specified to be, a party and to consummate the Acquisition and the other transactions contemplated hereby and thereby.  The execution and delivery by the Company of this Agreement and the Ancillary Agreements to which it is, or is specified to be, a party and the consummation by the Company of the Acquisition and the other transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company.  The Company has duly executed and delivered this Agreement, and prior to the Closing will have duly executed and delivered each Ancillary Agreement to which it is, or is specified to be, a party, and, assuming due authorization, execution and delivery hereof and thereof by the other parties hereto or thereto, this Agreement constitutes, and each Ancillary Agreement to which it is, or is specified to be, a party will after the Closing constitute, its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject in each case to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors’ rights and remedies generally and (ii) the effect of equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

SECTION 3.04.           No Conflicts; Consents.  (a)  The execution and delivery by the Company of this Agreement do not, the execution and delivery by the Company of each Ancillary Agreement to which it is, or is specified to be, a party will not, and the consummation of the Acquisition and the other transactions contemplated hereby and thereby and compliance by the Company with the terms hereof and thereof will not (i) conflict with, or result in any violation of any provision of, the Company Memorandum of Association or the Company Bye-Laws, (ii) conflict in any material respects with, or result in any material violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary under, any provision of any Listed Contract or (iii) assuming (A) compliance with the matters set forth in Section 4.03(a) (other than Section 4.03(a)(iii)(A)) (and assuming the accuracy of the representations and warranties made in such Section 4.03(a)), (B) that the Consents referred to in Sections 2.03(b) and 3.04(b) are obtained and (C) that the filings referred to in Sections 2.03(b) and 3.04(b) are made and any waiting periods thereunder have terminated or expired, in the case of each of the foregoing clauses (A) through (C), prior to the Closing, conflict in any material respects with, or result in any material violation of any provision of, any Judgment or Applicable Law, in each case, applicable to the Company or any Subsidiary or their respective properties or assets.

(b)           No Consent of or from, or registration, declaration, notice or filing made to or with, any Governmental Entity is required to be obtained or made by or with respect to the Company or any Subsidiary in connection with the execution, delivery and performance of this Agreement or any Ancillary Agreement or the consummation of the Acquisition or the other transactions contemplated hereby and thereby, other than (i) compliance with and filings under the HSR Act, (ii) the Regulatory Approvals, (iii) filings with or approvals from the Bermuda Monetary Authority under the Exchange Control Act of 1972 of Bermuda and regulations thereunder, and (iv) compliance with and filings under the Securities Act, the Exchange Act, applicable state securities or blue sky laws and the rules and regulations of any securities exchange.

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SECTION 3.05.           Financial Statements.  (a)  The Company has made available to Purchaser true, complete and correct copies of (i) the audited consolidated financial statements of SIG and its subsidiaries as of and for the years ended December 31, 2014, 2013 and 2012 (the most recent such date, the “Balance Sheet Date”), together with the report of the independent auditor of SIG thereon, including, in each case, a balance sheet and statements of comprehensive income (loss), cash flows and retained earnings or shareholders’ equity and related footnotes (the “Audited Financial Statements”) and (ii) the unaudited consolidated financial statements of SIG and its subsidiaries as of and for the three-month period ended March 31, 2015, including a balance sheet and statement of comprehensive income (loss), cash flows and retained earnings or shareholders’ equity (the “Unaudited Financial Statements” and, together with the Audited Financial Statements, the “Financial Statements”).  The Financial Statements (A) have been prepared in accordance with United States generally accepted accounting principles (or authoritative interpretation thereof by a Governmental Entity) (“GAAP”) applied on a consistent basis (except as may be indicated in the notes thereto) and (B) present fairly in all material respects the financial position, results of operations, cash flows, and changes in stockholder’s equity of SIG and its subsidiaries on a consolidated basis as of and for the respective periods indicated (subject, in each case with respect to the Unaudited Financial Statements, to the absence of footnotes and changes resulting from normal year-end adjustments).

(b)           The Company has made available to Purchaser a statement reconciling the unaudited consolidated balance sheet and statement of comprehensive income (loss) of the Company and the Subsidiaries as of and for the years ended December 31, 2014 and 2013, to the audited balance sheet and statement of comprehensive income (loss) of SIG and its subsidiaries for the years ended December 31, 2014 and 2013 (the “Reconciliation Statement”).  The Reconciliation Statement, together with the Audited Financial Statements, presents fairly, in all material respects, the financial position and results of operations of the Company and the Subsidiaries as of and for the periods indicated.

(c)           The Company has made available to Purchaser true, complete and correct copies of the audited regulatory balance sheet and regulatory results of operations and cash flows of each of the Reinsurance Subsidiaries, excluding any footnotes thereto, in each case, as of and for the years ended December 31, 2012, December 31, 2013, and December 31, 2014 (together, the “Statutory Statements”).  The Statutory Statements (A) were prepared in accordance with Applicable Law and SAP applied on a consistent basis during the periods presented and (B) present fairly in all material respects the respective regulatory financial position of the Reinsurance Subsidiaries at the respective dates thereof, and the regulatory results of operations and cash flows for the periods then ended (subject, in each case, to the absence of footnotes) and there are no permitted practices utilized in the preparation of the Statutory Statements. As of the date of this Agreement, no material weakness or significant deficiency has been asserted by any Governmental Entity with respect to any of the Statutory Statements.  As of the date of this Agreement, no Governmental Entity has requested the refiling or amending of any Statutory Statement.

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(d)           The Insurance Reserves stated in the Statutory Statements with respect to each of the Reinsurance Subsidiaries as of their respective dates: (i) were determined in all material respects in accordance with generally accepted actuarial standards consistently applied (except as otherwise noted therein); (ii) were fairly stated in all material respects in accordance with generally accepted actuarial standards consistently applied (except as otherwise noted therein); and (iii) were computed on the basis of methodologies consistent in all material respects with those used in computing the corresponding Insurance Reserves in the prior fiscal years, except as otherwise noted in the Statutory Statements and related actuarial opinions for the applicable Reinsurance Subsidiary for the 2014 fiscal year; provided, that this Section 3.05(d) shall not be construed as a representation or warranty (expressed or implied) with respect to the adequacy or sufficiency of the Insurance Reserves.

(e)           None of the Company or the Subsidiaries is a party to, or has any commitment to become a party to, any off balance sheet partnership, joint venture or any similar Contract (including any Contract relating to any transaction or relationship between any of the Company or the Subsidiaries, on the one hand, and the Parent or any of its affiliates (other than the Company and the Subsidiaries), including any structured finance, special purpose or limited purpose entity or person, on the other hand, or any “off balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K under the Exchange Act)), where the result, purpose or intended effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, any of the Company or the Subsidiaries on SIG’s financial statements.

(f)            Since January 1, 2014 and through the date of this Agreement, none of the Company or any Subsidiary nor, to the Knowledge of the Company, any current or former director, officer or employee of the Company or any Subsidiary, nor, to the Knowledge of the Company, any auditor, accountant or representative of the Company or any Subsidiary, has received or been under a duty to report (including any self-reporting obligation) any non-frivolous complaint, allegation, assertion or claim regarding the accounting, reserving or auditing practices, procedures, methodologies or methods of the Company and the Subsidiaries or their respective internal accounting controls, including any complaint, allegation, assertion or claim that the Company and the Subsidiaries have engaged in questionable accounting, reserving or auditing practices.

(g)           As of the date of this Agreement, the Company has no outstanding indebtedness for borrowed money from third party lending sources.

SECTION 3.06.           No Undisclosed Liabilities.  None of the Company or the Subsidiaries has any Liabilities that would be required to be reserved against or otherwise disclosed or reflected on a balance sheet or in the notes thereto prepared in accordance with GAAP, except (a) for Liabilities reflected, disclosed or reserved against in any Year End Balance Sheet, in the notes thereto, in the Interim Balance Sheet or in the Reconciliation Statement, (b) for Liabilities for losses, loss adjustment expenses and unearned premiums arising under Contracts for insurance or reinsurance written or assumed by the Reinsurance Subsidiaries, (c) for Liabilities incurred after the Balance Sheet Date in the ordinary course of business consistent with past practice, (d) Liabilities for Taxes and (e) other Liabilities that, individually or in the aggregate, would not reasonably be expected to result in a material adverse effect on the business, operations, financial condition or results of operations of the Company and the Subsidiaries, taken as a whole.

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SECTION 3.07.           Assets Other than Real Property Interests.  (a)  The Company or a Subsidiary has good and valid title to, or otherwise has the right to use pursuant to a valid and enforceable lease, license or similar contractual arrangement, all the material assets reflected on any Year End Balance Sheet or thereafter acquired, other than those disposed of in the ordinary course of business since the Balance Sheet Date, in each case free and clear of all Liens, except (i) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business, Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business and liens for Taxes that are not due and payable, (ii) Liens that secure obligations that are reflected as Liabilities on any Year End Balance Sheet or the existence of which is referred to in the notes to any Year End Balance Sheet and (iii) other imperfections of title or encumbrances, if any, that, individually or in the aggregate, do not materially impair, and would not reasonably be expected materially to impair, the continued use and operation of the assets to which they relate in the conduct of the business of the Company and the Subsidiaries as presently conducted (the Liens described above, together with the Liens referred to in clauses (ii) through (v) of Section 3.08, are referred to collectively as “Permitted Liens”).  This Section 3.07(a) does not relate to real property or interests in real property, such items being the subject of Section 3.08, or to Intellectual Property, such items being the subject of Section 3.09.

(b)           Immediately following the Closing and after giving effect to the transactions contemplated by this Agreement, the Company and the Subsidiaries will own, possess, have a valid license to or leasehold interest in, or have access to and the right to use or receive the benefit of, all material assets and properties necessary for the operation of the business of the Company and the Subsidiaries as such business was conducted immediately prior to Closing.

SECTION 3.08.           Real Property.

(a)           Section 3.08(a)(i) of the Company Disclosure Letter sets forth a complete list, as of the date of this Agreement, of all real property and interests in real property owned in fee by the Company or any Subsidiary (individually, an “Owned Property”).  Section 3.08(a)(ii) of the Company Disclosure Letter sets forth a complete list, as of the date of this Agreement, of all real property and interests in real property leased by the Company or any Subsidiary for which the Company or such Subsidiary is committed to make annual lease payments in excess of $250,000 (individually, a “Leased Property”).  The Company or a Subsidiary has good and insurable fee title to all Owned Property and good and valid title to the leasehold estates in all Leased Property (an Owned Property or Leased Property being sometimes referred to herein, individually, as a “Company Property”), in each case free and clear of all Liens, except (i) Liens described in clause (i), (ii) or (iii) of Section 3.07(a), (ii) leases, subleases and similar agreements set forth in Section 3.08(a)(ii) of the Company Disclosure Letter, (iii) easements, covenants, rights-of-way and other similar restrictions of record, (iv) any conditions that may be shown by a current, accurate survey or physical inspection of any Company Property made prior to the Closing and (v) (A) zoning, building and other similar restrictions, (B) Liens that have been placed by any developer, landlord or other third party on property over which the Company or any Subsidiary has easement rights or on any Leased Property and subordination or similar agreements relating thereto and (C) unrecorded easements, covenants, rights-of-way and other similar restrictions.  None of the items set forth in clauses (iii), (iv) and (v) above, individually or in the aggregate, materially impairs, or would reasonably be expected materially to impair, the continued use and operation of the Company Property to which they relate in the conduct of the business of the Company and the Subsidiaries as presently conducted or have, individually or in the aggregate, a Company Material Adverse Effect (collectively, a “Property Material Adverse Effect”).

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(b)           The Company and the Subsidiaries have received no notice, as of the date of this Agreement, under all leases and subleases in effect as of the date of this Agreement to which the Company or such Subsidiary is party (as landlord, sublandlord, tenant or subtenant) with respect to the Company Property (each, a “Real Property Lease”) to which the Company or such Subsidiary, or any applicable Company Property is subject, of breach or default thereunder which has not been cured and, to the Knowledge of the Company, no other party to any Real Property Lease is (with or without the lapse of time or the giving of notice, or both) in breach or default thereunder, except for such noncompliance, breaches and defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Property Material Adverse Effect.  As of the date of this Agreement, none of Seller, the Company and the Subsidiaries has received any notice of the intention of any party to terminate any Real Property Lease.  True, complete and correct copies of each Real Property Lease in effect as of the date of this Agreement have been made available to Purchaser.

(c)           As of the date of this Agreement, neither the Company nor any Subsidiary is a party to a Contract which contemplates the sale, lease, option to purchase or lease, or other disposition of an Owned Property, or an interest in Owned Property, to another party.

SECTION 3.09.           Intellectual Property.  (a)  Section 3.09(a) of the Company Disclosure Letter sets forth, as of the date of this Agreement, all material registered Intellectual Property (including patents, patent applications, registered trademarks and trademark applications, domain names and copyrights), and material unregistered copyrights and trademarks owned or filed by the Company or any Subsidiary, other than commercial off-the shelf software, unregistered designs, trademarks, copyrights and other unregistered Intellectual Property that, individually or in the aggregate, are not material to the conduct of the business of the Company and the Subsidiaries as presently conducted.  The Intellectual Property set forth on Section 3.09(a) of the Company Disclosure Letter is referred to in this Agreement as the “Company Intellectual Property”.

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(b)           All the Company Intellectual Property has been duly registered in, filed in or issued by the appropriate Governmental Entity where such registration, filing or issuance is necessary or appropriate for the conduct of the business of the Company and the Subsidiaries as presently conducted.  Each item of the Company Intellectual Property that is registered Intellectual Property is subsisting, and to the Knowledge of the Company, valid and enforceable.  The Company or a Subsidiary is the owner of all the Company Intellectual Property.  The Company or a Subsidiary owns and has the legal and beneficial right, title and interest in, has valid licenses, sublicenses, other agreements, or otherwise has the right to use all material Intellectual Property that is necessary to conduct the business of the Company and the Subsidiaries as presently conducted, and the consummation of the Acquisition and the other transactions contemplated hereby does not and will not conflict with, alter or impair any such rights.  From January 1, 2014 to the date of this Agreement, none of Seller, the Company and the Subsidiaries has received any written communication from any person asserting any ownership interest in any Company Intellectual Property.

(c)           To the Knowledge of the Company, the conduct of the business of the Company and the Subsidiaries as presently conducted does not violate, conflict with or infringe in any material respect the Intellectual Property of any other person, except for such violations, conflicts or infringements that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.  No claims are pending or, to the Knowledge of the Company, threatened as of the date of this Agreement against the Company or any Subsidiary by any person with respect to the ownership, validity, enforceability, effectiveness or use in the business of the Company and the Subsidiaries of any Intellectual Property, and from January 1, 2014 to the date of this Agreement, none of Seller, the Company and the Subsidiaries has received any written communication alleging that the Company or any Subsidiary violated any rights relating to Intellectual Property of any person.

(d)           The Company and the Subsidiaries own or have a valid right to access and use all material computer systems, information technology hardware, software, and databases necessary for the conduct of the business of the Company and the Subsidiaries as presently conducted (the “IT Systems”).  The Company and the Subsidiaries have taken commercially reasonable steps to implement appropriate security, back-ups, disaster recovery arrangements, and hardware and software support and maintenance to minimize the risk of material error, breakdown, failure, or security breach of the IT Systems.  To the Knowledge of the Company, the IT Systems (i) do not contain viruses, worms, time bombs, back doors, Trojan horses or other malicious code, bugs, faults, or other errors or contaminants that disrupt or adversely affect  in any material respect the conduct of the business of the Company and the Subsidiaries as presently conducted; and (ii) from January 1, 2014 to the date of this Agreement have not suffered any material error, breakdown, failure, or security breach that adversely affected in any material respect the business of the Company or any of the Subsidiaries or that was required to be reported to any Governmental Entity.  The Company and the Subsidiaries have established (A) commercially reasonable programs that are designed to protect the confidentiality of electronic data, files, materials, reports, forms and records used in and necessary to conduct the business of the Company and the Subsidiaries as presently conducted that are confidential or proprietary and (B) written privacy policies applicable to the collection, use, disclosure, maintenance and transmission of health or financial information about individual policyholders, customers, consumers or benefits recipients.

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(e)           In this Agreement, “Intellectual Property” means any patent (including all reissues, divisions, continuations and extensions thereof), patent application, patent right, trademark, trademark registration, trademark application, servicemark, trade name, logo, business name, brand name, domain name, copyright, copyright registration, design, design registration or any right to any of the foregoing.

SECTION 3.10.           Contracts.  (a)  Section 3.10 of the Company Disclosure Letter lists each of the following Contracts which the Company or any Subsidiary, as of the date of this Agreement, is a party to or bound by:

(i)            any Contract relating to outstanding indebtedness (including letters of credit) for borrowed money from third party lending sources pursuant to which the Company or any Subsidiary has borrowed an amount in excess of $2,000,000;

(ii)            with respect to any joint venture, partnership or other similar agreement or arrangement with a third party, any Contract that relates to the formation, creation, operation, management or control of such joint venture, partnership or similar agreement or arrangement, in each case other than Investment Assets;

(iii)          any Contract that involves or would reasonably be expected to involve aggregate payments by or to the Company or any Subsidiary in excess of $2,000,000 in the most recent twelve-month period, other than (A) agreements solely between or among the Company or one or more Subsidiaries, (B) Contracts pursuant to which the Company or any Subsidiary provides or purchases insurance, reinsurance or retrocession and (C) Contracts that can be terminated by the Company or any Subsidiary on less than 90 days’ notice without payment by the Company or any Subsidiary of any material penalty;

(iv)         any Contract (A) that would limit the freedom of the Company or any Subsidiary to compete in any line of business or with any person or in any area after the Closing, (B) that contains exclusivity obligations or restrictions that would be binding on the Company or any Subsidiary after the Closing or (C) pursuant to which the Company or any Subsidiary provides “most favored nations” pricing status to any third party, in each case other than Contracts that can be terminated (including such restrictive provisions) by the Company or any Subsidiary on less than 90 days’ notice without payment by the Company or any Subsidiary of any material penalty;

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(v)          any Contract relating to any material interest rate, derivatives or hedging transaction;

(vi)         any Contract between the Company or any Subsidiary, on the one hand, and any Key Employee of the Company or any Subsidiary, on the other hand;

(vii)        any material Contract that relates to the investment management function of or the provision of investment management or advisory services to the business of the Company and the Subsidiaries;

(viii)      any Contract that relates to the acquisition or disposition of any division or line of business or operations, capital stock or assets or any real estate as to which there are any material ongoing obligations of the Company;

(ix)          any Contract under which the Company or any Subsidiary has committed to make any investment (in the form of a loan, capital contribution or otherwise), in any other person (other than the Company or the Subsidiaries), other than (A) any Investment Asset or (B) any investment in an amount less than $2,000,000;

(x)            any Contract under which the Company or any Subsidiary has directly or indirectly guaranteed liabilities or obligations of any person, other than the Company or any Subsidiary (and in each case other than (A) endorsements for the purpose of collection in the ordinary course of business and (B) Contracts pursuant to which the Company or any Subsidiary provides or purchases insurance, reinsurance or retrocession in the ordinary course of business), in any such case which, individually, is in excess of $2,000,000; and

(xi)          any Contract that prohibits the payment of dividends or distributions in respect of the capital stock of the Company or any Subsidiary, prohibits the pledging of the capital stock of the Company or any Subsidiary or prohibits the issuance of any guarantee by the Company or any Subsidiary.

 

(b)          As of the date of this Agreement, each Contract required to be listed in Section 3.10 of the Company Disclosure Letter (each, a “Listed Contract”) is a valid and binding agreement of the Company or Subsidiary party thereto and, to the Knowledge of the Company, any other party thereto and is in full force and effect, except for such failures to be valid, binding or in full force and effect that are not material.  The Company or the applicable Subsidiary has performed all material obligations required to be performed by it to date under the Listed Contracts, and it is not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder and, to the Knowledge of the Company, no other party to any Listed Contract is (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder, except for such noncompliance, breaches and defaults that, individually or in the aggregate, have not had and would not reasonably be expected to be material to the Company and the Subsidiaries, taken as a whole.  As of the date of this Agreement, none of Seller, the Company and the Subsidiaries has received any notice of termination of, or the intention of any party to terminate any Listed Contract.  Complete and correct copies of each Listed Contract, together with all written modifications and amendments thereto, have been made available to Purchaser.

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SECTION 3.11.           Permits.  The Company and the Subsidiaries hold, own or possess all licenses, permits, certificates, approvals, authorizations, consents, registrations, exemptions and waivers from Governmental Entities and Lloyd’s necessary for the ownership and lawful conduct of their respective businesses as conducted on the date of this Agreement, except where the failure to hold, own or possess any such Permits is not material (collectively, “Permits”).  Set forth on Section 3.11(a) of the Company Disclosure Letter is a list of jurisdictions where the Company or the Subsidiaries is conducting insurance business for insurance regulatory purposes.  The Company and the Subsidiaries are in material compliance with all of the terms and requirements of each such Permit.  As of the date of this Agreement, since the Balance Sheet Date, none of Seller, the Company and the Subsidiaries has received written notice from any Governmental Entity or Lloyd’s of any suit, action or proceeding (a “Proceeding”) relating to the revocation, suspension or termination of, or material modification to (including imposing any restriction or condition thereon), any such Permits, in each case other than any such item that has been cured or otherwise resolved to the satisfaction of such Governmental Entity or Lloyd’s, as applicable, and there is no ongoing dispute with any Governmental Entity or Lloyd’s, as applicable regarding the scope or terms of any such material Permits.  Subject to compliance with the matters set forth in Sections 2.03(b), 3.04(b) and 4.03(b) (and assuming the accuracy of the representations and warranties made in Section 4.03), none of the Permits will be subject to revocation, suspension, withdrawal or termination as a result of the consummation of the Acquisition, other than any revocation, suspension, withdrawal or termination of a Permit that is not material.

SECTION 3.12.           Insurance.  Section 3.12 of the Company Disclosure Letter sets forth a true, complete and correct list, as of the date hereof, of all current policies in respect of property and general liability, directors and officers liability, fiduciary liability, employment practices liability, errors and omissions liability and workers’ compensation liability, under which the Company and the Subsidiaries are insured (excluding, for the avoidance of doubt, any reinsurance or retrocession policy in respect of any Liability of the Company or any Subsidiary under an insurance or reinsurance policy written by the Company or any Subsidiary).  All such policies are in full force and effect (and all premiums due and payable thereon have been paid in full, other than retroactive or retrospective premium adjustments that are not yet, but may be, required to be paid with respect to any period ending prior to the Closing Date, which amounts shall be paid prior to the Closing Date if so required).  As of the date of this Agreement, there is no material claim by or with respect to the Company or the Subsidiaries pending under any of such policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies and, to the Knowledge of the Company, there has been no threatened termination of, material alteration in coverage, or material premium increase with respect to, any such policy.

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SECTION 3.13.           Tax Matters.  (a)  All material Tax Returns required to be filed by or with respect to the Company and the Subsidiaries have been timely filed (taking into account any extensions) in accordance with Applicable Law, any advance tax agreement or advance pricing agreement with a Taxing Authority, and any transfer pricing study, and all such Tax Returns were correct and complete.  All material Taxes required to be paid by or with respect to the Company or any Subsidiary, whether or not shown on such Tax Returns, have been timely paid to the appropriate Taxing Authority.  All required estimated Tax payments sufficient to avoid any underpayment penalties or interest have been made by or on behalf of the Company and each of the Subsidiaries.  There are no Liens on any of the Company’s or its Subsidiaries’ assets for Taxes other than Permitted Liens.

(b)           Neither the Company nor any Subsidiary is treated or has been treated for Tax purposes as a resident in a country other than the country of its organization and neither the Company nor any Subsidiary of the Company has, or has had, a branch, agency or permanent establishment for Tax purposes in a country other than the country of its organization.  None of the Company or its Subsidiaries are treated as fiscally transparent under Applicable Law.

(c)            The Company and the Subsidiaries have complied in all material respects with all Applicable Law relating to the collection and withholding of Taxes (including all information reporting and record keeping requirements) and all such Taxes, including all such Taxes with respect to amounts paid or owing to any Employee, independent contractor, creditor, stockholder, or other third party, have been duly paid within the time and in the manner prescribed by Applicable Law by or on behalf of the Company and the Subsidiaries.

(d)            Neither the Company nor any Subsidiary has waived in writing any statute of limitations in respect of Taxes or agreed in writing to any extension of time with respect to an assessment or deficiency for Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course).  No audit or other administrative proceeding is pending or threatened, and no judicial proceeding is pending or threatened, that involves any Tax or Tax Return filed or paid by or on behalf of the Company or any of its Subsidiaries. None of the Company or its Subsidiaries has entered into any closing agreement or requested or received any Tax rulings or administrative guidance (or similar special arrangements or privileges related to Taxes) from a Taxing Authority with respect to Taxes. No claim has been made by a Taxing Authority that the Company or a Subsidiary may be subject to taxation in a jurisdiction where Tax Returns are not filed by or on behalf of the Company or such Subsidiary.

(e)            All deficiencies for any material Taxes that have been asserted by any Taxing Authority in writing against the Company or any Subsidiary have been satisfied in full, settled or withdrawn or have been reserved for to the extent required by GAAP or SAP, as applicable.

(f)            None of the Company, the Subsidiaries, Seller or its affiliates, has received a Tax opinion with respect to any transaction relating to the Company or any of its Subsidiaries impacting a Tax Return of the Company or the Subsidiaries with respect to which the statute of limitations has not expired, other than a transaction in the ordinary course of business.

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(g)           Neither the Company nor any Subsidiary is party to or bound by any Tax sharing agreement or Tax indemnity agreement, other than an agreement (i) the sole parties to which are the Company or any Subsidiary or (ii) with third parties, made in the ordinary course of business, the primary subject of which is not Tax. None of the Company or any Subsidiary is responsible for Taxes of another person (other than the Company or a Subsidiary) as a result of transferee or successor liability or of being or having been a member of an affiliated, consolidated, combined or unitary tax group (other than a group the sole members of which are the Company or its Subsidiaries).

(h)           Neither the Company nor any of its Subsidiaries is a direct or indirect beneficiary of a guarantee of Tax benefits or any other arrangement that has the same economic effect (including an indemnity from a seller or lessee of property, or other insurance) with respect to any transaction or Tax opinion. Neither the Company nor any of its Subsidiaries is a party to any understanding or arrangement described in Section 6662(d)(2)(C)(ii) of the Code or a “reportable transaction” within the meaning of Section 6707A(c)(1) of the Code or U.S. Treasury Regulation Section 1.6011-4(b)(1) (or similar provision in non-U.S. Applicable Law).

(i)            None of the Company or any Subsidiary will be required for Tax purposes to include any material item of income in, or exclude any material item of deduction from, taxable income for any Taxable Period (or portion thereof) ending after the date of the Closing as a result of any (i) change in method of accounting made prior to the Closing, (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local, or non-U.S. income Tax law) executed prior to the Closing, (iii) installment sale or open transaction made or entered into prior to the Closing, (iv) prepaid amount received prior to the Closing, or (v) election under Section 108(i) of the Code made prior to the Closing.

(j)            The Company and its Subsidiaries have complied in all material respects with Section 482 of the Code and all other Applicable Laws, practices of and agreements with or rulings granted by Taxing Authorities concerning transfer pricing, and, without limiting the foregoing, have maintained appropriate supporting documentation with respect to transfer pricing in compliance with applicable requirements of Applicable Laws and Taxing Authorities.

(k)           The total amount of the Net Deferred Tax Asset of the Company and the Subsidiaries as of the Balance Sheet Date and the components thereof (including the relevant company, types of assets and offsetting valuation allowances) are set forth on Section 3.13(k) of the Company Disclosure Letter.  Section 3.13(k) of the Company Disclosure Letter shall be updated to reflect the components of the Net Deferred Tax Asset as taken into account in the Closing Date Book Value.

 

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SECTION 3.14.           Legal Proceedings.  As of the date of this Agreement, (a) there is no material Proceeding pending or, to the Knowledge of the Company, threatened against the Company or any Subsidiary (other than claims-related Proceedings) and (b) neither the Company nor any Subsidiary is a party to any Judgment or settlement agreement of or with a Governmental Entity resulting in, or that would reasonably be expected to result in, a loss to the Company and the Subsidiaries of $1,000,000 or more.  This Section 3.14 does not apply with respect to Intellectual Property matters, which are the subject of Section 3.09, environmental matters, which are the subject of Section 3.22, employee and labor matters, which are the subject of Section 3.19, employee benefit matters, which are the subject of Section 3.15, or Tax matters, which are the subject of Section 3.13.

SECTION 3.15.           Employee Benefit Plans and Related Matters; ERISA.

(a)           Section 3.15(a) of the Company Disclosure Letter contains a true, complete and correct list, as of the date of this Agreement, of each material Company Benefit Plan (identifying with an asterisk each such Company Benefit Plan that is a Stand-Alone Benefit Plan).  Seller or the Company has made available to Purchaser, to the extent applicable, (i) with respect to each material Company Benefit Plan, (A) a true, complete and correct copy of all plan documents and all material modifications and amendments thereto and (B) all material written correspondence from a Governmental Entity and (ii) with respect to each material Stand-Alone Benefit Plan, (A) copies of all trust agreements, insurance Contracts or other funding arrangements, (B) the most recent annual funding report, or such similar reports, statements or information returns required to be filed with or delivered to any Governmental Entity (including reports filed on Form 5500 with accompanying schedules and attachments), if any, (C) the most recent determination, qualification or opinion letter or similar document issued by any Governmental Entity for any such Stand-Alone Benefit Plan intended to qualify for favorable tax treatment and any pending application thereof and (D) the current summary plan description.

(b)          Each Stand-Alone Benefit Plan intended to be qualified under Section 401(a) of the Code, and the trust (if any) forming a part thereof, has received a favorable determination letter from the Internal Revenue Service (the “IRS”) and no event has occurred or circumstance exists that could reasonably be expected to result in a revocation of such determination letter or the imposition of any penalty or Liability with respect to the qualified status of any such Stand-Alone Benefit Plan or trust.  Each Company Benefit Plan has been operated in accordance with its terms and Applicable Laws, except as would not individually or in the aggregate, reasonably be expected to result in a material Liability to the Company and the Subsidiaries. Neither the Company or any Subsidiary has received any claim or notice that a Stand-Alone Benefit Plan is in non-compliance with its terms or Applicable Laws, except as would not individually or in the aggregate, reasonably be expected to result in a material Liability to the Company and the Subsidiaries.

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(c)            Liability; Compliance.

(i)            No Company Benefit Plan is or has been subject to Title IV of ERISA. No Company Benefit Plan is a defined benefit plan, determines benefits based on level of compensation and years of service or has assets that exceed the present value of its projected benefit obligations (determined based on actuarial assumptions used in the most recently prepared actuarial valuation report with respect to such Company Benefit Plan).

(ii)            As of the date of this Agreement, (A) there are no pending or, to the Knowledge of the Company, threatened, claims, suits, actions or disputes by or on behalf of any participant or his or her dependents with respect to any of the Company Benefit Plans, or otherwise involving any Company Benefit Plan or the assets of any Company Benefit Plan or by or on behalf of any Participant against the Company or any Subsidiary regarding matters relating to a Company Benefit Plan and (B) no Stand-Alone Benefit Plan is under audit, investigation or examination (nor, to the Knowledge of the Company, has notice been received of any potential audit, investigation or examination) nor is any Stand-Alone Benefit Plan subject to any suit, claim or proceeding by any Governmental Entity except, in the case of clauses (A) and (B), as would not, individually or in the aggregate, reasonably be expected to result in a material Liability to the Company and the Subsidiaries.

(iii)          Neither the Company nor any Subsidiary has any Liability in respect of, or obligation to provide, post-employment or post-retirement health, medical or life insurance benefits for any Participant, except (A) as required by Applicable Laws or (B) where the entire cost of coverage or benefits is borne by the Participant.

(iv)         (A) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not (alone or in combination with any other event) (1) give rise to any Liability or obligation with respect to any Company Benefit Plan or to any Participant, (2) result in forgiveness of any indebtedness of any Participant, or (3) increase the amount of compensation or benefits, or accelerate the vesting or timing of payment of any compensation or benefits, payable to any Participant or increase or accelerate the funding obligation with respect to any Company Benefit Plan except, in the case of clauses (1)-(3), as would not, individually or in the aggregate, reasonably be expected to result in a material Liability to the Company and the Subsidiaries and (B) without limiting the generality of the forgoing, no amount paid or payable to any Participant in connection with the consummation of the transactions contemplated by this Agreement (either alone or in conjunction with any other event) could be an “excess parachute payment” within the meaning of Section 280G of the Code (or any corresponding provisions of state, local or foreign law).

(v)           Each Company Benefit Plan that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code complies in all material respects in form and operation with Section 409A of the Code and the regulations thereunder so as to avoid any Tax under Section 409A of the Code, (ii) each Company Benefit Plan that constitutes a “nonqualified deferred compensation plan” of a “nonqualified entity” within the meaning of Section 457A of the Code complies in all material respects in form and operation with Section 457A of the Code and all applicable IRS guidance promulgated thereunder so as to avoid any Tax under Section 457A of the Code, and (iii) neither the Company, nor any Subsidiary, has any indemnity obligation for any Taxes imposed under Sections 4999, 409A, or 457A of the Code.

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(vi)         (A) No Stand-Alone Benefit Plan is a “multiple employer welfare arrangement” within the meaning of Section 3(40) of ERISA,(B) neither the Company, nor any Subsidiary, maintains or has any obligation to contribute to any “voluntary employees’ beneficiary association” within the meaning of Section 501(c)(9) of the Code or other funding arrangement for the provision of welfare benefits (such disclosure to include the amount of any such funding) and (C) all Company Benefit Plans that are “welfare plans” (within the meaning of Section 3(1) of ERISA) are fully insured or are self-insured and subject to stop-loss coverage, and no claim under any such Company Benefit Plan could reasonably be expected to result in any material uninsured liability to the Company or any Subsidiary.

(vii)        Neither the Company nor any of the Subsidiaries has been an employer in an occupational pension scheme to which sections 38 to 51 of the Pensions Act 2004 (or the equivalent provisions under Northern Irish law) applies or an associated person or connected person with such an employer as defined for those sections.

SECTION 3.16.           Absence of Changes or Events.  From the Balance Sheet Date to the date of this Agreement, (a) the Company and the Subsidiaries have conducted their businesses in the ordinary course (other than with respect to its activities in connection with the proposed sale of the Company and the negotiation, execution and performance of this Agreement and any Ancillary Agreement) and (b) there has not been any event or change (including any disposal of material assets or business operations or the termination of any Contract material to the operation of the business of the Company and its Subsidiaries) that has had, individually or in the aggregate, a Company Material Adverse Effect.

SECTION 3.17.           Risk−Based Capital.  Except as set forth on Section 3.17 of the Company Disclosure Letter, the Seller has made available to the Purchaser, prior to the date hereof, true and complete copies of all material analyses, reports and other data prepared by or for any Reinsurance Subsidiary and submitted by any Reinsurance Subsidiary to any Insurance Regulator of such Reinsurance Subsidiary since January 1, 2014, in each case relating to its risk−based capital together with true, accurate and complete copies of all substantive responses from the relevant Insurance Regulators to such submissions and any related correspondence between the Insurance Regulators and such Reinsurance Subsidiary.   There are no material disputes or issues outstanding between the relevant Reinsurance Subsidiary and any relevant Insurance Regulators concerning the adequacy of such Reinsurance Subsidiary’s regulatory capital resources.

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SECTION 3.18.           Compliance with Applicable Laws.

(a)           The Company and the Subsidiaries are and have been in compliance with all Applicable Laws in all material respects since January 1, 2013.  From January 1, 2013 to the date of this Agreement, none of Seller, the Company and the Subsidiaries has received any written notice from a Governmental Entity that alleges that the Company or a Subsidiary is not in compliance in any material respect with any Applicable Law.  The representations in this Section 3.18(a) do not apply with respect to Tax matters.

(b)          Neither the Company nor any Subsidiary, nor their respective directors, employees, or any person acting on their behalf have taken or will take any action in violation of the Anti-Bribery Laws, or, directly or indirectly or through a third party:

(i)            Have paid, offered, promised, given or authorized, or will pay, offer, promise, give or authorize, directly or indirectly, the payment of money or anything of value to a Government Official intending to:

(A)            influence a Government Official in his official capacity in order to assist the Company or any a Subsidiary in obtaining or retaining business or a business advantage, or in directing business to the Company or any Subsidiary;

(B)            secure an improper advantage for the Company or any Subsidiary;

(C)            induce any such Government Official to use his influence to affect or influence any act, omission or decision of a Governmental Entity in order to assist the Company or any of the Subsidiaries in obtaining or retaining business, or in directing business to the Company or any Subsidiary; or

(D)            provide an unlawful personal gain or benefit, of financial or other value, to any such Government Official on behalf of the Company or any Subsidiary; or

(ii)            otherwise, make any bribe, payoff, influence payment, kickback, or other unlawful payment to any person, regardless of the form, whether in money, property, or services, to obtain or retain business or to obtain any improper advantage for the Company or any Subsidiary.

(c)            Neither Seller, the Company nor any of the Subsidiaries or, to the Knowledge of the Company, any director, officer, employee, affiliate, agent or representative of the Company, is an individual or entity that is, or is owned or controlled by a person that is:

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(i)            the subject of any economic or financial sanctions or trade embargoes administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the U.S. Departments of State or Commerce or any other U.S. Governmental Entity, or by the United Nations Security Council, or other relevant sanctions authority (collectively, “Sanctions”), or

(ii)            located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Cuba, Iran, North Korea, Sudan and Syria).

(d)            The operations of the Company and the Subsidiaries are and have been conducted at all times since January 1, 2013 in material compliance with the applicable anti-money laundering statutes of jurisdictions in which the Company and the Subsidiaries conduct and have in such period conducted business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”).   No Proceeding by any Government Entity asserting a violation by the Company or any Subsidiary of Anti-Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.

(e)           To the Knowledge of the Company, the Company and each of the Subsidiaries complies in all material respects with (a) all Applicable Laws concerning data privacy, data protection and data security (“Data and Privacy Laws”) and (b) its published privacy notices and policies (including, without limitation, with respect to making disclosures to customers or consumers).  The Company and the each of the Subsidiaries takes commercially reasonable administrative, technical, and physical measures to ensure that Personal Information is protected against material loss, damage, and unauthorized access, use, modification, or other misuse.

(f)            To the Knowledge of the Company, since January 1, 2013, there has been no material loss, damage, or unauthorized access, use, modification or other misuse of any Personal Information maintained by or on behalf of the Company or any of the Subsidiaries.

(g)          Since January 1, 2013, no person (including any Governmental Entity) has provided any written notice, made any written claim, or commenced any Proceeding by or before any Governmental Entity with respect to loss, damage, or unauthorized access, use, modification, or other misuse of any Personal Information maintained by or on behalf of the Company or any of the Subsidiaries.

SECTION 3.19.           Employee and Labor Matters.

(a)           Neither the Company nor any Subsidiary is party to, or is otherwise bound by, any collective bargaining agreement or other Contract with a labor organization (collectively, “Labor Agreements”), and, to the Knowledge of the Company, there are not any labor unions or other organizations or groups representing, purporting to represent or attempting to represent any Employees nor has there been, to the Knowledge of the Company, any application for certification of a collective bargaining agent or other activities, efforts or proceedings of any union or other labor organization to organize any Employees.  The Company and the Subsidiaries have complied in all material respects with the terms of any Labor Agreement.

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(b)           Each of the Company and the Subsidiaries: (i) is in compliance with all requirements of Applicable Laws with respect to employment, employment practices, terms and conditions of employment, equal employment opportunity, nondiscrimination, immigration, benefits, collective bargaining and Labor Agreements, the payment of social security and similar taxes, worker classification, occupational safety and health, termination of employment or services, plant closing, employee classification, wages, hours and other labor-related matters, (ii) has not engaged in any unfair labor practices and (iii) has no Liability for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Entity with respect to unemployment compensation benefits, social security or other benefits or obligations for any Employee (other than routine payments to be made in the normal course of business and consistent with past practice), except as would not, individually or in the aggregate, reasonably be expected to result in a material Liability to the Company and the Subsidiaries. The Company and each Subsidiary have maintained records that are up-to-date and accurate in all material respects regarding employment of each of its Employees (including, without limitation, details of terms of employment, payments of salaries, tax and social insurance funds contributions, disciplinary and health and safety matters) and any termination of employment.

(c)           As of the date of this Agreement, there is no Proceeding, labor dispute, audit or grievance pending or, to the Knowledge of the Company, threatened with respect to the Company or any Subsidiary relating to any employment Contract, compensation, wages and hours, leave of absence, plant closing notification, employment, privacy right, labor dispute (including relating to any Labor Agreement), workers’ compensation policy, long-term disability policy, safety, retaliation, immigration or discrimination matter involving any Participants, including charges of unfair labor practices or harassment complaints, except as would not, individually or in the aggregate, reasonably be expected to result in a material Liability to the Company and the Subsidiaries. There is not presently pending or existing, and to the Knowledge of the Company, there is not threatened, any strike, lockout, slowdown, picketing, work stoppage, or employee grievance process.

(d)           The Seller, the Company and each Subsidiary have properly classified for all purposes (including for all Tax purposes and for purposes of determining eligibility to participate in any employee benefit plan) all Participants, and the Seller, the Company and each Subsidiary have withheld and paid over all applicable Taxes and made all appropriate filings in connection with services provided by the Participants, as applicable.

(e)            Neither the Company nor any Subsidiary has, since January 1, 2012), effectuated (a) a “plant closing” as defined in the WARN Act (or any similar state, local or foreign law) affecting any site of employment or one or more facilities or operating units within any site of employment or facility or (b) a “mass layoff” as defined in the WARN Act (or any similar state, local or foreign law) affecting any site of employment or facility.

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(f)            The execution of this Agreement does not, and the consummation of the transactions contemplated hereunder will not, either alone or in conjunction with any other event, result in or give rise to any obligation to notify, consult with or obtain the consent or approval of any Employee, union, works council, or other employee representative.

(g)           There is no person employed or engaged by the Company or any Subsidiary who is not wholly engaged in the business undertaken by the Company and the Subsidiaries. No Employee is seconded to any affiliate of the Parent other than the Company and the Subsidiaries.  No person who works in the business undertaken by the Company and the Subsidiaries is employed or engaged by any affiliate of the Parent that is not the Company or a Subsidiary.

SECTION 3.20.           Transactions with Affiliates.  Section 3.20 of the Company Disclosure Letter lists all Contracts to which the Company or any Subsidiary, on the one hand, and Seller or any of its affiliates (other than the Company and the Subsidiaries), on the other hand, are a party or are otherwise bound that involve continuing liabilities or obligations of the Company and the Subsidiaries in excess of $1,000,000 (each, an “Affiliate Transaction”).  Each Reinsurance Subsidiary that is a party to an Affiliate Transaction has complied in all material respects with all requirements of Applicable Law or Governmental Entities applicable thereto and obtained all material approvals of Governmental Entities necessary in connection therewith.

SECTION 3.21.           Brokers.  No broker, investment banker, financial advisor or other person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Acquisition or the other transactions contemplated hereby or by any Ancillary Agreement based upon arrangements made by or on behalf of the Company.

SECTION 3.22.           Environmental Matters.  Other than as arising from or relating to any liability or obligation (including for losses or loss adjustment expenses) arising under contracts for insurance or reinsurance written or assumed by the Reinsurance Subsidiaries, (a)the Company and each Subsidiary has at all times since January 1, 2014 complied in all material respects with all applicable Environmental Laws (which compliance includes the possession by the Company and each Subsidiary of all material Permits and other governmental authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof) and (b) there are no pending or, to the Knowledge of the Company, threatened Proceedings against the Company or any Subsidiary that seek to impose, or that are reasonably likely to result in, any liability or obligation of the Company or any Subsidiary under any Environmental Law, and neither the Company nor any Subsidiary is subject to any agreement, Judgment, letter or memorandum by or with any Governmental Entity or third party imposing any liability or obligation on such entity with respect to any Environmental Law.

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SECTION 3.23.           Insurance Regulatory Matters; Agreements with Regulators.  (a)  The Reinsurance Subsidiaries have filed all material reports, statements, registrations, filings or submissions required to be filed with any Insurance Regulator since January 1, 2014, and no material deficiencies have been asserted in writing by any Governmental Entity since January 1, 2014 with respect to any such reports, statements, registrations, filings and submissions that have not been cured or otherwise resolved or are no longer being pursued by such Governmental Entity.  Since January 1, 2014, none of the Reinsurance Subsidiaries is or has been a “commercially domiciled insurer” under the laws of any jurisdiction or is or has been otherwise treated as domiciled in a jurisdiction other than its jurisdiction of organization.  The Company has made available to Purchaser true, complete and correct copies of (i) all reports of examination (including financial, market conduct and similar examinations) of the Reinsurance Subsidiaries issued by any Insurance Regulator since January 1, 2014, (ii) all material insurance holding company filings or submissions provided to any Insurance Regulator with respect to the Company or any Subsidiary since January 1, 2014 and all material correspondence related thereto, and (iii) all other material registrations, filings and submissions provided to any Insurance Regulator with respect to any of the Reinsurance Subsidiaries since January 1, 2014 and all material correspondence related thereto.  As of the date of this Agreement, neither the Company nor any Subsidiary is subject to any pending or, to the Knowledge of the Company, threatened financial or market conduct examination or investigation by any Insurance Regulator.

(b)          All policies or contracts of insurance or reinsurance  written by the Reinsurance Subsidiaries (collectively, “Policies”) in effect as of the date hereof have been, to the extent required under Applicable Law, filed with or submitted to and not objected to by the relevant Governmental Entity within the period provided for objection.

(c)           No provision in any Policy gives the holder thereof or any other person the right to receive policy dividends.

(d)          To the Knowledge of the Company, each agent, broker, insurance intermediary or producer engaged on behalf of the Subsidiaries (each, a “Producer”), (i) complies with all Applicable Laws regarding such Producer’s authority to engage in the type of insurance activities in which such Producer is engaged on behalf of the Subsidiaries, (ii) is duly licensed or authorized (including, the marketing, sale or issuance of any policies) in each jurisdiction in which such Producer places or sells policies and (iii) is duly authorized and appointed by the applicable Subsidiary pursuant to Applicable Laws.

(e)           Section 3.23(e) of the Company Disclosure Letter lists each Contract between the Company or any Subsidiary, on the one hand, and any third party managing general agent or managing general underwriter, on the other hand, that generated aggregate gross premiums in excess of $2,000,000 during the period from January 1, 2014, to December 31, 2014, other than any Contracts relating to general brokerage agreements.

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(f)            Except as required by Applicable Laws or the byelaws or requirements of Lloyd’s with respect to insurance and the reinsurance licenses maintained by the Subsidiaries, there is no written agreement, memorandum of understanding, commitment letter or similar undertaking binding on the any Subsidiary, or order or direction by, or extraordinary supervisory letter or cease-and-desist order from, any Insurance Regulator binding on any Subsidiary that restricts materially the conduct of the business of the Subsidiaries or relates to their capital adequacy, credit or risk management policies or management.  No Subsidiary has adopted any policy, procedure or board resolution at the request of any Insurance Regulator that restricts materially the conduct of the business of such Subsidiary or relates to its capital adequacy, credit or risk management policies or management.

(g)          No Subsidiary, other than those listed on Section 3.23(g) of the Company Disclosure Letter (the “Corporate Members”), has underwritten at Lloyd’s since January 1, 2014.

(h)          Since January 1, 2014, the Corporate Members have not at any time underwritten insurance or reinsurance at Lloyd’s other than on Lloyd’s syndicate 1945.

(i)            No Corporate Member has agreed to sell, transfer or “drop” any of its rights to participate on Lloyd’s syndicate 1945 for the Company’s 2015 fiscal year.

(j)            Section 3.23(j) of the Company Disclosure Letter contains a true, complete and accurate copy of the business plan submitted to Lloyd’s for 2015 and the funds at Lloyd’s supporting such business plans and, to the Knowledge of the Company, the relevant Subsidiary has not received any written notice, from Lloyd’s that it should not write business consistent with such business plan.

SECTION 3.24.           Reinsurance Contracts.  (a)  Section 3.24 of the Company Disclosure Letter lists each reinsurance or retrocession treaty or agreement to which any Reinsurance Subsidiary is the cedent relating to the Company’s 2015 or 2014 retrocession program and that is in force as of the date of this Agreement, other than any such treaty or agreement under which the Company has gross ceded premiums (calculated in accordance with SAP) of $2,500,000 or less as of January 1, 2015 (the “Company Reinsurance Contracts”).

(b)          As of the date of this Agreement, each Company Reinsurance Contract constitutes a valid and binding agreement of the Reinsurance Subsidiary party thereto and, to the Knowledge of the Company, each other party thereto, and is in full force and effect, except for such failures to be valid, binding or in full force and effect that are not material.  The applicable Reinsurance Subsidiary has performed all material obligations required to be performed by it to date under the Company Reinsurance Contracts, and it is not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder and, to the Knowledge of the Company, no other party to any Company Reinsurance Contract is (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder, except for such noncompliance, breaches and defaults that, individually or in the aggregate, have not had and would not reasonably be expected to be material to the Company and the Subsidiaries, taken as a whole.  As of the date of this Agreement, none of Seller, the Company and the Subsidiaries has received any notice of the intention of any party to terminate any Company Reinsurance Contract.  Complete and correct copies of each Company Reinsurance Contract, together with all written modifications and amendments thereto and any related security documents, have been made available to Purchaser.

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SECTION 3.25.           Actuarial Reports.  (a)  The Company has made available to Purchaser true, correct and complete copies of all actuarial reports in the Company’s or the Reinsurance Subsidiaries’ possession and prepared by the Seller, the Company or relevant Reinsurance Subsidiary or by opining actuaries, independent or otherwise, on or after January 1, 2014 with respect to the Reinsurance Subsidiaries (including all material attachments, addenda, supplements and modifications thereto.  To the Knowledge of the Company, the Company and its Subsidiaries have not intentionally withheld any information relevant to the preparation of any actuarial reports on or after January 1, 2014.

(b)          Section 3.25(b) of the Company Disclosure Letter sets forth a list of all material written correspondence between the Company or the Subsidiaries and any Insurance Regulator since January 1, 2013, regarding the amount of reserves reflected on any Statutory Statements of the Company or the Subsidiaries or the actuarial assumptions or methodologies employed in the calculation of reserves, and the Company has delivered or made available to the Purchaser, prior to the date hereof, true, correct and complete copies of all such correspondence.

 

SECTION 3.26.           Investment Assets.  (a)  Section 3.26(a) of the Company Disclosure Letter sets forth a true, complete and correct list of all Investment Assets as of the close of business on June 30, 2015 (collectively, the “Scheduled Investments”), with information included therein as to the cost of each such Scheduled Investment and, if reasonably available, the market value thereof.  None of the Scheduled Investments was in arrears or default in the payment of principal or interest or dividends or, to the Knowledge of the Company, had been permanently impaired to any material extent.

(b)          Section 3.26(b) of the Company Disclosure Letter sets forth a true, complete and correct copy of the investment policy of the Company and the Subsidiaries as in effect on the date of this Agreement (the “Investment Policy”).

SECTION 3.27.           Company Ratings.  As of the date of this Agreement, the financial strength of the Reinsurance Subsidiaries is rated “A” by A.M. Best Company, Inc. (“A.M. Best”) and “A-” by Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies, Inc. (“S&P”).  As of the date of this Agreement, neither A.M. Best nor S&P has announced that it has under review its rating of the financial strength of the Reinsurance Subsidiaries.  As of the date of this Agreement, there are no conditions (financial or otherwise) imposed specifically on any of the Reinsurance Subsidiaries by A.M. Best or S&P on retaining any currently held rating assigned to the Reinsurance Subsidiaries.

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SECTION 3.28.           Agents; Binding Authority.  No agent, broker or other person who is not an employee of any of the Reinsurance Subsidiaries has or, since January 1, 2014, has had “binding authority” or permission to bind or obligate any of the Reinsurance Subsidiaries to issue any insurance or reinsurance Contract.

SECTION 3.29.           No Additional Representations and Warranties.  EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY SELLER AND THE COMPANY IN THIS AGREEMENT, SELLER AND THE COMPANY MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE SHARES, THE COMPANY, THE SUBSIDIARIES OR ANY OTHER MATTER, INCLUDING WITH RESPECT TO THE ADEQUACY OF RESERVES.

ARTICLE IV

Representations and Warranties of Purchaser

Purchaser hereby represents and warrants to Seller that, except as set forth in the Purchaser Disclosure Letter, the statements contained in this Article IV are true, complete and correct:

SECTION 4.01.           Organization, Standing and Power.  Purchaser is duly organized, validly existing and in good standing under the laws Singapore and CMB is duly organized, validly existing and in good standing under the laws of Bermuda.  Each of Purchaser and CMB has full corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to carry on its business as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, have not had and would not reasonably be expected to have a Purchaser Material Adverse Effect.  Purchaser has made available to Seller true, correct and complete copies of the articles of association of CMI.

SECTION 4.02.           Authority; Execution and Delivery; and Enforceability.  Each of Purchaser and CMB has full corporate power and authority to execute this Agreement and the Ancillary Agreements to which Purchaser or CMB, as applicable, is, or is specified to be, a party and to consummate the Acquisition and the other transactions contemplated hereby and thereby.  The execution and delivery by Purchaser and CMB of this Agreement and the Ancillary Agreements to which Purchaser or CMB, as applicable, is, or is specified to be, a party and the consummation of the Acquisition and the other transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Purchaser and CMB.  Each of Purchaser and CMB has duly executed and delivered this Agreement, and prior to the Closing will have duly executed and delivered each Ancillary Agreement to which Purchaser or CMB, as applicable, is, or is specified to be, a party, and, assuming due authorization, execution and delivery hereof and thereof by the parties hereto or thereto, this Agreement constitutes, and each Ancillary Agreement to which Purchaser or CMB, as applicable is, or is specified to be, a party will after the Closing constitute, Purchaser’s and CMB’s legal, valid and binding obligation, enforceable against Purchaser and CMB in accordance with its terms, subject in each case to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors’ rights and remedies generally and (ii) the effect of equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

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SECTION 4.03.           No Conflicts; Consents.

(a)            The execution and delivery by Purchaser and CMB of this Agreement do not, the execution and delivery by Purchaser and CMB of each Ancillary Agreement to which Purchaser or CMB, as applicable, is, or is specified to be, a party will not, and the consummation of the Acquisition and the other transactions contemplated hereby and thereby and compliance by Purchaser and CMB with the terms hereof and thereof will not (i) conflict with, or result in any violation of any provision of, the organization documents of Purchaser or CMB, as applicable, (ii) conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the material properties or assets of Purchaser or any of its subsidiaries (including CMB) under, any provision of any Contract to which Purchaser or any of its subsidiaries (including CMB) is a party or by which any of their respective properties or assets is bound or (iii) assuming (A) compliance with the matters set forth in Section 3.04(a) (other than Section 3.04(a)(iii)(A)) (and assuming the accuracy of the representations and warranties made in Section 2.03(a) and Section 3.04(a)), (B) that the Consents referred to in Section 2.03(b), 3.04(b) and 4.03(b) are obtained and (C) that the filings referred to in Section 2.03(b), 3.04(b) and 4.03(b) are made and any waiting periods thereunder have terminated or expired, in the case of each of the foregoing clauses (A) through (C), prior to the Closing, conflict with, or result in any violation of any provision of, any Judgment or Applicable Law, in each case, applicable to Purchaser or any of its subsidiaries  (including CMB) or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Purchaser Material Adverse Effect.   The consummation of the Acquisition will not result in any Reinsurance Subsidiary being ineligible for a Permit to conduct its business in any jurisdiction in which it conducts its business on the date hereof on the grounds that such Reinsurance Subsidiary would then be directly or indirectly “owned” or “controlled”, in whole or in part, by any Governmental Entity within the meaning of any Government Ownership Restriction.  A “Government Ownership Restriction” is an Applicable Law restricting or prohibiting licensure of an entity owned or controlled by any Governmental Entity (such as, by way of example and not limitation, § 1102(h) of the New York Insurance Law).  No circumstance or set of facts exists that would reasonably be expected to cause a Governmental Entity or Lloyd’s to disapprove of, or seek to restrict or prevent, the Acquisition on the basis of a Government Ownership Restriction.

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(b)          Assuming the accuracy of the representations and warranties set forth in the first two sentences of Section 3.11, no Consent of or from, or registration, declaration, notice or filing made to or with, any Governmental Entity or Insurance Regulator is required to be obtained or made by or with respect to Purchaser or any Purchaser Related Person in connection with the execution, delivery and performance of this Agreement or any Ancillary Agreement or the consummation of the Acquisition or the other transactions contemplated hereby and thereby, other than (i) compliance with and filings under the HSR Act; (ii) the filing by Purchaser, CMI and CMB of a Form A or equivalent document with the New York State Department of Financial Services, and approval thereof, together with a request for determination of non-control in respect of HGB in accordance with § 1501(c) of the New York Insurance Law or similar relief in respect of HGB (the “New York Approvals”), (iii) the filing by Purchaser, CMI and CMB of a Form A or equivalent document with the Tennessee Department of Commerce and Insurance, and approval thereof, together with a disclaimer of affiliation in respect of HGB in accordance with § 56-11-105(k) of the Tennessee Statutes or a request for similar relief in respect of HGB (iv) assuming the Run-Off Entities are held by the Company or any Subsidiary as of the Closing, the filing by Purchaser, CMI and CMB of a Form A or equivalent document with the Illinois Department of Insurance, and approval thereof, and a disclaimer of affiliation in respect of HGB in accordance with 215 ILCS 5/131.19 or a request for similar relief in respect of HGB; (v) filings by Purchaser, CMI, CMB and HGB with, and Consents in respect thereof, from the Bermuda Monetary Authority under the Exchange Control Act of 1972 of Bermuda and regulations thereunder (the “Bermuda Approvals”); (vi) the filing of ownership and ownership management assessment forms FFFS 2009:3; appendix 1a (natural person) (as applicable), appendix 1b (legal person), appendix 1c (senior management in a firm that owns a financial institution) and appendix 2 (management assessment) of Purchaser, CMI, CMB and HGB and approval thereof by the Swedish Financial Supervisory Authority (the “FFFS Approvals”); (vii) each of the U.K. Prudential Regulation Authority and the U.K. Financial Conduct Authority having given notice that it approves or has no objection to Purchaser, CMI, CMB and HGB acquiring control (within the meaning of Section 181 of the U.K. Financial Services and Markets Act 2000) of Sirius International Managing Agency Limited or, in the absence of such notice, the U.K. Prudential Regulation Authority and/or the U.K. Financial Conduct Authority (as the case may be) being treated in accordance with Section 189(b) of the U.K. Financial Services and Markets Act 2000 as having approved Purchaser, CMI, CMB and HGB acquiring such control; (viii) the Franchise Board of Lloyd’s having given notice in accordance with paragraph 43 of the Underwriting Byelaw of Lloyd’s (no. 2 of 2003) that it approves or has no objection to Purchaser, CMI, CMB and HGB acquiring control (within the meaning of Lloyd’s Definitions Byelaw (no. 7 of 2005)) of Sirius International Managing Agency Limited; (ix) Lloyd’s having given notice in accordance with paragraph 12 of the Membership Byelaw (no. 5 of 2005) that it approves or has no objection to Purchaser, CMI, CMB and HGB acquiring control (within the meaning of Lloyd’s Definitions Byelaw (no. 7 of 2005)) of White Mountains Re Sirius Capital Limited (the approvals or notifications in clauses (vii) through (ix), the “U.K. Approvals”);  (x) approval from the Hong Kong Insurance Authority with respect to Purchaser, CMI, CMB and HGB becoming a controller of BE Re, (xi) approval from the applicable Insurance Regulators in Australia, Singapore and Labuan with respect to Purchaser, CMI, CMB and HGB becoming a controller of Sirius International Insurance Corporation which has regulated branches in those countries; and (xii) such other Consents, registrations, declarations, notifications or filings by or with respect to Purchaser or any Purchaser Related Person that, if not obtained, made or given have not had and would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.

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SECTION 4.04.           Litigation.  As of the date of this Agreement, (a) there is no material Proceeding pending or, to the Knowledge of Purchaser, threatened against Purchaser or any Purchaser Related Person and (b) to the Knowledge of Purchaser, none of Purchaser or any Purchaser Related Person is a party to any Judgment of or settlement agreement with a Governmental Entity that, in the case of clauses (a) and (b) above, individually or in the aggregate, has had or would reasonably be expected to have a Purchaser Material Adverse Effect.

SECTION 4.05.           Regulatory Filings; Ownership of Purchaser.

(a)           The Form A or equivalent document to be filed by Purchaser, CMI and CMB with the New York State Department of Financial Services and the Tennessee Department of Commerce and Insurance, together with all supporting materials and documentation, will be, and the forms of such documents which have been delivered to Seller prior to the date hereof are, true and correct.  The filings to be filed with the U.K. Prudential Regulation Authority, the U.K. Financial Conduct Authority and Lloyd’s by Purchaser, CMI, CMB and HGB, together with all supporting materials and documentation, will be, and the forms of such documents which have been delivered to Seller prior to the date hereof are, true and correct. Seller acknowledges that Purchaser is not making any representation in this Section 4.05(a) with respect to any information contained in such filings that was provided to Purchaser by Seller or its affiliates.

(b)          Section 4.05(b) of the Purchaser Disclosure Letter sets forth a true, correct and complete list of (i) all persons (including any group of persons acting in concert) that, upon and immediately following the Closing, directly or indirectly could be deemed to “control”, or exercise significant influence over the management of, the Company and each of the Subsidiaries, within the meaning of any Applicable Laws, (ii) all persons (including any group of persons acting in concert) directly or indirectly holding 10% or more of the shares of or voting power (including shares or voting power deemed to be held) in Purchaser, CMI, CMB, BGB or HGB as of the date hereof and, in the case of HGB, following completion of the merger of BGB with and into HGB (details of which have been disclosed to Seller) and (iii) all persons (including any group of persons acting in concert) that will directly or indirectly hold 10% or more of the shares of or voting power (including shares or voting power deemed to be held) in Purchaser, CMI, CMB, BGB or HGB immediately prior to Closing (any such person described in clauses (i) through (iii), a “Potential Controller”).

  

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(c)           Section 4.05(c) of the Purchaser Disclosure Letter sets forth a true, correct and complete list of all officers and directors of HGB.  The NAIC biographical affidavit in respect of the sole director of HGB which has been delivered to Seller prior to the date hereof is true, correct and complete.

SECTION 4.06.           Securities Act.  The Shares purchased by Purchaser or CMB, as applicable, pursuant to this Agreement are being acquired for investment only and not with a view to, or for sale in connection with, any public distribution thereof, and neither Purchaser nor CMB shall offer to sell or otherwise dispose of the Shares so acquired by Purchaser or CMB, as applicable, in violation of any of the registration requirements of the Securities Act.  Purchaser and CMB (either alone or together with Purchaser’s and CMB’s advisors) have sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of Purchaser’s and CMB’s investment in the Shares and is capable of bearing the economic risks of such investment.

SECTION 4.07.           Availability of Funds.  Purchaser has, and will have available to it at Closing on an unconditional basis, the financial capability and all sufficient cash on hand necessary to pay the Purchase Price, to effect all other transactions contemplated by this Agreement and the Ancillary Agreements and to pay all fees and expenses of or payable by Purchaser and any other amounts required to be paid by Purchaser in connection with the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements.

SECTION 4.08.           Brokers.  No broker, investment banker, financial advisor or other person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Acquisition or the other transactions contemplated hereby or by any Ancillary Agreement based upon arrangements made by or on behalf of Purchaser or any of Purchaser’s affiliates (including CMB).

SECTION 4.09.           No Insurance Affiliates.  As of the date hereof, neither Purchaser nor any of its affiliates (including CMB) nor BGB, nor HGB, nor any other Potential Controller, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, any other person that provides insurance or reinsurance products or services or otherwise is subject to regulation by any Insurance Regulator in any jurisdiction.  For purposes of this Section 4.09, “control” means control as defined under or within the meaning of any applicable insurance laws, rules and regulations of any jurisdiction or applicable with respect to any Insurance Regulator, and the term “controlled” has the meaning correlative to the foregoing.

SECTION 4.10.           No Additional Representations and Warranties.  EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY PURCHASER IN THIS AGREEMENT, PURCHASER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, CONCERNING PURCHASER OR ANY OTHER MATTER.

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ARTICLE V

Covenants

SECTION 5.01.           Covenants Relating to Conduct of Business.  (a)  Except as required by Applicable Law or the byelaws or requirements of Lloyd’s, expressly required or permitted by this Agreement, as set forth in Section 5.01(a) of the Company Disclosure Letter or with the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), from the date of this Agreement to the Closing, the Company shall, and shall cause the Subsidiaries to: (x) conduct their respective businesses in the ordinary course in substantially the same manner as previously conducted during the twelve months prior to the date of this Agreement; and (y) to the extent consistent with clause (x), use their commercially reasonable efforts to preserve intact their respective businesses and the current relationships and goodwill of the Company and the Subsidiaries with customers, suppliers, contractors, licensors, employees, agents, producers, distributors, insureds, Insurance Regulators and others having business dealings with them.  In addition (and without limiting the generality of the foregoing), except as set forth in Section 5.01(a) of the Company Disclosure Letter, required by Applicable Law or the byelaws or requirements of Lloyd’s or otherwise expressly required or permitted by this Agreement, from the date of this Agreement to the Closing, the Company shall not, and shall not permit any Subsidiary to, do any of the following without the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned):

(i)            (A) split, combine, reclassify or recapitalize any of its outstanding capital stock or other equity interest or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock or other equity interest or (B) purchase, redeem or otherwise acquire any shares of outstanding capital stock or other equity interest of the Company or any Subsidiary or any rights, warrants or options to acquire any such shares or equity interest;

(ii)            issue, sell, grant or pledge any shares of capital stock or other equity interest of the Company or any Subsidiary, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities;

(iii)         (A) amend the Company Memorandum of Association or the Company Bye-Laws or (B) amend the comparable organizational documents of any Subsidiary;

(iv)         purchase, sell, lease, license or otherwise dispose of (including by way of reinsurance) or acquire any assets (other than (x) Investment Assets, which are the subject of clause (xvii) of this Section 5.01, (y) interests in real property, which are the subject of clause (v) of this Section 5.01 and (z) in the ordinary course of business consistent with past practice) for which the aggregate consideration paid or payable in any individual transaction is in excess of $1,000,000 or in the aggregate in excess of $5,000,000;

 

 

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                (v)          permit any Owned Property to become subject to any Lien or other encumbrance, other than Permitted Liens, or enter into any agreement for the sale, lease, option to sell or lease, or other disposition of any Owned Property, or amend, extend, renew or otherwise modify in any material respect any of the Real Property Leases;

(vi)         enter into any Contract with respect to any merger, consolidation, liquidation, dissolution, business combination or similar transaction involving a third party, on the one hand, and the Company or any Subsidiary, on the other hand, or enter into any joint venture arrangement or partnership with any third party;

(vii)        incur any financial indebtedness for borrowed money from third party lending sources or entities that are not the Company or any Subsidiary (other than accounts payable incurred in respect of property or services purchased in the ordinary course of business consistent with past practice) or assume, grant or guarantee the obligations of any third party or entity that is not the Company or any Subsidiary, or make any third party loans or advances (other than, in each case, in the ordinary course of business consistent with past practice or consistent with the Investment Policy), in each case, for individual amounts in excess of $1,000,000 or in the aggregate in excess of $5,000,000;

(viii)      make any capital expenditures in excess of $1,000,000 individually or $5,000,000 in the aggregate (other than capital expenditures included in the business plans for the Company and the Subsidiaries that have been made available to Purchaser prior to the date of this Agreement);

(ix)          establish, adopt, exercise discretion, amend or terminate any Company Benefit Plan or any arrangement which, upon its establishment or adoption, would constitute a Company Benefit Plan, except as required by Applicable Laws or as required pursuant to the terms of any Company Benefit Plan, or other written agreement, as in effect on the date of this Agreement;

(x)            make any material bonus, profit-sharing or similar payment, or grant any equity or equity-related award, or fund, materially increase or accelerate the vesting, payment or amount of, wages, salary, commissions, fringe benefits, severance benefits, deferred compensation or other compensation or benefits (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to, or for the benefit of, any Employee, or communicate to an Employee a plan, proposal or intention to conduct such aforementioned actions, in each case except (A) (x) as required by Applicable Laws, (y) the terms of any Company Benefit Plan or any compensation or benefit plan maintained by Parent and its subsidiaries (other than the Company and the Subsidiaries) or (z) any other written agreement set forth in Section 5.01(x) of the Company Disclosure Letter, in each case as in effect on the date of this Agreement or (B) in the ordinary course of business consistent with past practice (including in connection with promotions and employee review cycles), provided that in the case of this clause (B), to the extent reasonably practicable, an Authorized Representative of the Company shall consult with an Authorized Representative of the Purchaser prior to taking any such action;

 

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(xi)          (A) except in the case of an offer of employment that is outstanding on the date hereof, hire any employee with an expected annual cash compensation in excess of $500,000 or (B) terminate any Employee other than for cause (as determined by the Company or a Subsidiary, as applicable, in its reasonable discretion);

(xii)         (A) settle or compromise any material Tax audit, claim, dispute or proceeding with any Taxing Authority or forgo the right to any refund of material Taxes; (B) change the Company’s or any Subsidiary’s methods, policies or practices of Tax accounting or methods of reporting income or deductions for Tax purposes from those employed in the preparation of its most recently filed Tax Return; (C) amend any material Tax Return of or with respect to the Company or any of the Subsidiaries; (D) enter into any material agreement with a Taxing Authority with respect to the Company or any of the Subsidiaries, or terminate any material agreement entered into with a Taxing Authority with respect to the Company or any of the Subsidiaries that is in effect as of the date hereof; (E) alter or make any material Tax election; (F) request a ruling relating to Taxes; or (G) grant any power of attorney relating to Tax matters;

(xiii)       make any material change in the policies, practices or principles of the Company or the Subsidiaries in effect on the date hereof with respect to underwriting or claims administration (other than any change necessitated by a change in Applicable Law, GAAP or SAP);

(xiv)      enter into any commutations of, or amend, modify or otherwise revise, any Company Reinsurance Contract that results in a material increase in risk or change in coverage (other than (A) in the ordinary course of business consistent with past practice during the 36 months prior to the date of this Agreement, (B) with respect to any such commutation or amendment, modification or other revision that would result in (1) an increase in net income or (2) a reduction in net income of less than $2,500,000, (C) with respect to any such commutations or any reinsurance agreement or treaty solely involving the Company and the Subsidiaries or (D) with respect to any such commutations or any reinsurance agreement or treaty solely involving the Company or any Subsidiary, on the one hand, and Parent or any of its subsidiaries, on the other hand, which will be fully commuted prior to Closing);

 

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(xv)        make any changes in any respect in the Company’s or any Subsidiary’s financial accounting or actuarial methods, principles or practices, except as may be required (A) by GAAP (or any interpretation thereof), (B) by SAP (or any interpretation thereof) or (C) by Applicable Law;

(xvi)       amend or otherwise change the Investment Policy in any material respect or manage Investment Assets other than in compliance with the Investment Policy;

(xvii)     enter into any new line of business;

(xviii)    amend, extend, renew or otherwise modify in any material respect any Listed Contract or enter into any Contract that would have been required to be listed in Section 3.10 of the Company Disclosure Letter had it been entered into prior to the date of this Agreement;

(xix)        compromise or settle any Proceeding involving the Company or any Subsidiary which would result in any post-Closing obligation or restriction other than (A) any claims-related Proceedings in the ordinary course of business or (B) settlements or compromises that involve solely monetary damages;

(xx)         voluntarily abandon, terminate or fail to renew any material Permit of the Company or the Subsidiaries except (A) as may be required in order to comply with Applicable Law or (B) in the ordinary course of business; or

(xxi)        authorize any of, or commit or agree to take, whether in writing or otherwise, to do any of, the foregoing actions.

(b)           Notice of Certain Events.  (i)  From the date of this Agreement until the Closing, Seller shall promptly notify Purchaser in writing of:  (A) any circumstance, event or action relating to any of Seller, the Company or the Subsidiaries the existence, occurrence or taking of which has resulted or would reasonably be expected to result in (1) the failure of any of the conditions set forth in ‎Section 6.01 or Section 6.02 to be satisfied or (2) Seller having the right to terminate this Agreement pursuant to Section 7.01(a)(v); (B) any notice or other communication from any person alleging that the consent of such person is required in connection with the transactions contemplated by this Agreement; and (C) any notice or other communication from any Governmental Entity or Lloyd’s in connection with the transactions contemplated by this Agreement.

(ii)           From the date of this Agreement until the Closing, Purchaser shall promptly notify Seller in writing of:  (A) any circumstance, event or action relating to Purchaser or any Purchaser Related Person the existence, occurrence or taking of which has resulted or would reasonably be expected to result in the failure of any of the conditions set forth in ‎Section 6.01 or Section 6.03 to be satisfied; (B) any notice or other communication from any person alleging that the consent of such person is required in connection with the transactions contemplated by this Agreement or that any Governmental Approval relating to any person other than Purchaser, CMI, CMB or HGB is required; and (C) any notice or other communication from any Governmental Entity or Lloyd’s in connection with the transactions contemplated by this Agreement.

 

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(iii)         From the date of this Agreement until the Closing, to the extent reasonably practicable, Seller shall cause an Authorized Representative of the Company to consult with an Authorized Representative of Purchaser prior to discontinuing or terminating an existing line of business.

(iv)         Three Business Days prior to the Closing Date, Seller shall provide written notice to Purchaser stating whether, based on information then available to Seller and events that have occurred prior to such date, Seller intends to exercise its right to terminate this Agreement pursuant to Section 7.01(a)(v); provided, however, that in no event shall the delivery of such notice limit Seller’s ability to exercise its right to terminate this Agreement pursuant to Section 7.01(a)(v) to the extent further information becomes available to Seller or a catastrophe event or events, including any and all natural or man-made perils, occurs, in each case on or after the date of such notice.

(c)           Insurance.  The Company shall cause to be maintained all insurance policies set forth in Section 3.12 of the Company Disclosure Letter or suitable replacements therefor, in full force and effect through the close of business on the Closing Date. 

(d)          From the date of this Agreement until the Closing, (i) no party shall take any action that is intended to or would reasonably be expected to result in the failure of the conditions set forth in Section 6.01 or Section 6.02 (in the case of Seller or the Company) or Section 6.01 or 6.03 (in the case of Purchaser) and (ii) Purchaser shall ensure that (1) no person, or group of persons acting in concert, directly or indirectly holds 10% or more of the shares of or voting power (including shares or voting power deemed to be held) in (x) CMI (other than BGB or HGB; provided that neither BGB nor HGB shall increase the direct or indirect beneficial ownership of shares of or voting power in CMI after the date hereof), (y) BGB or (z) HGB, (2) Purchaser is a direct wholly owned subsidiary of CMI and (3) CMB is a direct wholly owned subsidiary of Purchaser, in each case unless Seller otherwise consents in writing.

(e)           The Company shall and shall cause each of its Subsidiaries to conduct its and their business in accordance with all applicable legal and administrative requirements in any jurisdiction.

(f)            Except with respect to the transactions set forth in Section 5.01(f)(i) of the Company Disclosure Letter, Seller shall not and shall procure that neither the Company nor any of its Subsidiaries shall enter into any Contract with respect to the transactions set forth in Section 5.01(f)(ii) of the Company Disclosure Letter (the transactions set forth in Sections 5.01(f)(i) of the Company Disclosure Letter and 5.01(f)(ii) of the Company Disclosure Letter, the “Restricted Transactions”) without the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned). Seller shall cause an Authorized Representative of the Company to regularly consult with an Authorized Representative of Purchaser regarding the progress of the Restricted Transactions.

 

 

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(g)          Promptly following the date of this Agreement, each of Purchaser and the Company shall designate one or more representatives (each, an “Authorized Representative”) who shall be the authorized representative of such party for the purposes set forth in this Agreement.

SECTION 5.02.            Access to Information; Books and Records.

(a)           Seller shall cause the Company and the Subsidiaries to afford to Purchaser and its accountants, counsel and other representatives reasonable access, upon reasonable notice during normal business hours during the period prior to the Closing, to all the officers, properties and Books and Records of the Company and the Subsidiaries and, during such period, shall cause the Company and the Subsidiaries to furnish promptly to Purchaser any available information concerning the Company or a Subsidiary as Purchaser may reasonably request, so long as such access or requests do not unreasonably disrupt the normal operations of the Company and the Subsidiaries; provided, however, that the Company and the Subsidiaries may withhold any document or information to the extent that it would require the Company or any Subsidiary to (i) disclose information subject to attorney client privilege or other legal privilege if such disclosure would jeopardize such privilege, (ii) violate any Applicable Law or (iii) disclose records or information which, in the reasonable good faith opinion of the Company, would expose the Company to the risk of liability for disclosure of sensitive, confidential or Personal Information; provided, that, in each case, Seller shall cause the Company and the Subsidiaries to use commercially reasonable efforts to allow for such disclosure in a manner that does not result in the loss of such privilege, violate Applicable Law or expose the Company to liability for disclosure of sensitive, confidential or Personal Information, as applicable.

(b)          At the Closing, Seller shall cause all Books and Records (i) in the possession of Seller or Parent or any subsidiary thereof (other than the Company and the Subsidiaries), (ii) that relate exclusively to the business of the Company and the Subsidiaries and (iii) copies of which are not already located or accessible (in physical or electronic form) at any offices of any of the Company or any Subsidiary or otherwise in the possession of the Company or the Subsidiaries, to be delivered, at Purchaser’s expense, to the Company (or a person designated by Purchaser) in the manner (and in the case of physical Books and Records, at the location(s)) reasonably requested by Purchaser.  Notwithstanding the foregoing, this Section 5.02(b) shall not require Seller to cause the delivery of copies of any Books and Records relating to the business of the Company and the Subsidiaries that (A) are contained within accounts, ledgers, books, records, reports or other information of Seller or Parent or any subsidiary thereof (other than the Company and the Subsidiaries) or (B) were prepared by or exclusively for the use of Seller or Parent or any subsidiary thereof (other than the Company and the Subsidiaries).

 

 

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SECTION 5.03.            Confidentiality.  Purchaser acknowledges that the information being provided to it in connection with the Acquisition and the consummation of the other transactions contemplated hereby is subject to the terms of a confidentiality agreement, dated January 29, 2015, between CM International Capital Limited and Parent (the “Purchaser Confidentiality Agreement”), the terms of which are incorporated herein by reference.  Seller acknowledges that the information regarding Purchaser and its affiliates being provided to it by Purchaser or its representatives in connection with the Acquisition and the consummation of the other transactions contemplated hereby is subject to the terms of a confidentiality agreement, dated June 4, 2015, between Purchaser and Parent (the “Seller Confidentiality Agreement” and, together with the Purchaser Confidentiality Agreement, the “Confidentiality Agreements”), the terms of which are incorporated herein by reference.  Effective upon, and only upon, the Closing, the Confidentiality Agreements shall terminate with respect to information relating solely to the Company and the Subsidiaries; provided, however, that (i) Purchaser acknowledges and agrees that any and all other information provided to it by Seller or Seller’s representatives concerning Seller, Parent or any other subsidiary of Parent (other than the Company and the Subsidiaries), and (ii) Seller acknowledges and agrees that any and all other information provided to it by Purchaser concerning Purchaser or its affiliates, shall remain subject to the terms and conditions of the applicable Confidentiality Agreement after the Closing Date.

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SECTION 5.04.            Reasonable Best Efforts; Consents, Approvals and Filings; Antitrust Strategy.  (a)  Upon the terms and subject to the conditions and other agreements set forth in this Agreement, each of Seller, the Company, Purchaser and CMB shall, and Purchaser and CMB shall cause CMI to, use its reasonable best efforts to take, or cause to be taken, and Purchaser and CMB shall cause all other Potential Controllers (other than Purchaser, CMI and CMB) if applicable to take or cause to be taken, all actions, and to do or cause to be done, and to assist and cooperate in doing, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the Acquisition and the other transactions contemplated by this Agreement, including using its reasonable best efforts to (i) comply as promptly as reasonably practicable with all requirements of Governmental Entities and Lloyd’s applicable to the Acquisition, (ii) seek to obtain or make as promptly as reasonably practicable all approvals, filings or notices necessary or advisable in connection with the Acquisition, including any approvals, filings or notices required under the HSR Act and in connection with the Regulatory Approvals (the “Governmental Approvals”), and (iii) fulfill or cause the fulfillment of the conditions to Closing set forth in Article VI.  The parties shall, and Purchaser shall cause all other Potential Controllers to, cooperate with the reasonable requests of each other in seeking to obtain as promptly as practicable all such Governmental Approvals.  In connection therewith, Seller and Purchaser shall make, and cause their respective affiliates, and in the case of Purchaser, all other Potential Controllers, to make, all filings required by Applicable Laws and the byelaws and requirements of Lloyd’s as promptly as practicable after the date hereof in order to facilitate prompt consummation of the Acquisition and the other transactions contemplated by this Agreement, and shall provide and shall cause their respective affiliates, and in the case of Purchaser, all other Potential Controllers, to provide such information and communications to Governmental Entities and Lloyd’s as such Governmental Entities and Lloyd’s may request. For the purposes of this Section 5.04, “reasonable best efforts” shall not require Purchaser to take or agree to take any action or agree to any condition, limitation, restriction or requirement that, individually or in the aggregate with any other actions, conditions, limitations, restrictions or requirements, would result in a Burdensome Condition.  A “Burdensome Condition” means (i) a material adverse effect on the business, operations, condition (financial or otherwise) or results of operation of (x) Purchaser and its subsidiaries, taken as a whole or (y) the Company and the Subsidiaries, taken as a whole or (ii) any requirement to sell, license, assign, transfer, divest, hold separate or otherwise dispose of, before or after the Closing Date, any material assets (other than Investment Assets) or businesses of Purchaser, the Company or the Subsidiaries or any of their respective affiliates, or (iii) the imposition on Purchaser or any Reinsurance Subsidiary by any Governmental Entity of any capital requirement not applicable to insurers generally in the jurisdiction of such Governmental Entity that expressly requires Purchaser or any of its affiliates to contribute more than $75,000,000 of additional capital to the Company and the Subsidiaries  (including in order to fulfill trusteed assets requirements) (provided that, for the avoidance of doubt (x) to the extent that the Company and the Subsidiaries are not prohibited under Applicable Law and the byelaws or requirements of Lloyd’s, the Company and the Subsidiaries shall transfer capital and apply assets to fulfill any such capital requirement (including any such trusteed asset requirement), and (y) (1) any trusteed asset requirement to the extent so funded by capital of the Company or any of its Subsidiaries and (2) any transfer solely among the Company and its Subsidiaries shall not be deemed a contribution of Purchaser or any of its affiliates; provided further that, to the extent such transfer of capital among the Company and its Subsidiaries to fulfill such capital requirements (including any trusteed asset requirement) causes a Governmental Entity with jurisdiction over a transferring entity to impose an express obligation on Purchaser or any of its affiliates to contribute additional capital to such transferring entity, such contribution obligation shall also be subject to this clause (iii), including the foregoing proviso).

 

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(b)       Without limiting the generality of the foregoing, as soon as reasonably practicable after the date of this Agreement, the parties shall make, and Purchaser shall cause all other Potential Controllers to make, all filings and notifications with all Governmental Entities and Lloyd’s that may be or may become reasonably necessary, proper or advisable under this Agreement and Applicable Laws and the byelaws and requirements of Lloyd’s to consummate and make effective the Acquisition and the other transactions contemplated by this Agreement, including (i) Purchaser causing all documents, forms, applications, submissions and notifications (including an application by HGB for the determination of non-control in the form required by the New York State Department of Financial Services) to be filed with Insurance Regulators or otherwise in each jurisdiction where required by applicable insurance or financial services laws or the byelaws and requirements of Lloyd’s with respect to the Acquisition (including with respect to the Regulatory Approvals), such filings to be made as promptly as practicable, and in any event not later than 20 Business Days following the date of this Agreement and, in each case, to be in compliance with all material requirements of Applicable Law or the byelaws and requirements of Lloyd’s, if applicable, and (x) in the case of the Form A of Purchaser, CMI and CMB to be filed with the New York State Department of Financial Services and the Tennessee Department of Commerce and Insurance and the filings of Purchaser, CMI, CMB and HGB in respect of the U.K. Approvals, to be in substantially the form which has been delivered to Seller prior to the date hereof, (y) in the case of the request for determination of non-control or disclaimer of affiliation or similar relief, as applicable, in respect of HGB to be filed with the New York State Department of Financial Services and the Tennessee Department of Commerce and Insurance, to be substantially consistent with the information regarding BGB and HGB contained in the filings of HGB in respect of the U.K. Approvals in the form which has been delivered to Seller prior to the date hereof and (z) to the extent that HGB is required by the New York State Department of Financial Services or the Tennessee Department of Commerce and Insurance to file a Form A, (1) such Form A will be substantially consistent with the information regarding HGB and BGB contained in the filings of HGB in respect of the U.K. Approvals in the form which has been delivered to Seller prior to the date hereof and (2) the NAIC biographical affidavit in respect of the sole director of HGB to be submitted with such Form A will be substantially in the form which has been delivered to Seller prior to the date hereof, (ii) Seller and Purchaser each making an appropriate filing of a notification and report form pursuant to the HSR Act with respect to the Acquisition, such filings to be made not later than 10 Business Days following the date of this Agreement, (iii) Seller and Purchaser each making as promptly as reasonably practicable any other filing that may be required under any other applicable antitrust or competition law or by any Governmental Entity with jurisdiction over enforcement of any applicable antitrust or competition laws and (iv) Seller and Purchaser causing to be made as promptly as reasonably practicable any other filing that may be required under any insurance, financial services or similar Applicable Law or the byelaws or requirements of Lloyd’s or by any Governmental Entity with jurisdiction over enforcement of any applicable insurance, financial services or similar Applicable Law or Lloyd’s, including, in the case of Purchaser, any such filings required to be made by any other Potential Controller.  Seller and Purchaser each shall supply, and Purchaser shall cause each other Potential Controller to supply, as promptly as reasonably practicable any additional information and documentary material that may be reasonably requested pursuant to the HSR Act or any other Applicable Laws or the byelaws or requirements of Lloyd’s.  Purchaser shall have sole responsibility for the filing fees associated with all filings under the HSR Act and any filings required by applicable insurance laws, and Seller and Purchaser shall equally bear the cost of any filing fees associated with any other required filings.  Prior to furnishing any written materials to any Insurance Regulator in connection with the Acquisition or the other transactions contemplated by this Agreement, the furnishing party shall provide the other party with a copy thereof and Purchaser shall provide Seller a copy of any such materials to be furnished by each other Potential Controller, and such other party shall have a reasonable opportunity to provide comments thereon.  Each party shall give to the other party prompt written notice if it receives, and Purchaser shall give Seller prompt written notice if any other Potential Controller receives, any notice or other communication from any Insurance Regulator in connection with the Acquisition or the other transactions contemplated by this Agreement, and, in the case of any such notice or communication which is in writing, shall promptly furnish such other party with a copy thereof.  If any Insurance Regulator requires that a hearing or pre-application meeting be held in connection with any requisite approval, Purchaser and CMB shall, and shall cause CMI to, use its reasonable best efforts to arrange, and Purchaser shall cause each other Potential Controller to arrange, for such hearing or pre-application meeting to be held as promptly as practicable after the notice that such hearing or pre-application meeting is required has been received by Purchaser, CMI, CMB or such other Potential Controller and Seller shall use its reasonable best efforts, and shall cooperate with Purchaser in its efforts, to arrange that such hearings or pre-application meetings are held as promptly as practicable after Purchaser, CMI, CMB or such other Potential Controller receives notice that such hearing or pre-application meeting is required.  Purchaser shall give to Seller reasonable prior written notice of the time and place when any meetings or other conferences may be held by it, CMI, CMB or any other Potential Controller with any Insurance Regulator in connection with the Acquisition and the other transactions contemplated by this Agreement, and Seller shall have the right to have a representative or representatives attend or otherwise participate in any such meeting or conference; provided, however, that Purchaser shall have the right to require Seller’s representative or representatives to not attend or participate in any portion of any such meeting or conference to the extent that Purchaser reasonably believes such meeting or conference will involve discussions of confidential information of Purchaser.  Neither party shall be required to comply with any of the foregoing provisions of this Section 5.04(b) to the extent that such compliance would be prohibited by Applicable Law.

 

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   (c)      From and after the date of this Agreement, Seller and Purchaser shall use their reasonable best efforts, and shall cooperate with each other, to obtain as soon as reasonably practicable following the date hereof all required approvals, consents, waivers or authorizations from third parties under any Listed Contract required in connection with the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements (each, a “Third Party Consent”).  Seller and Purchaser shall equally bear the costs, fees and expenses (including any license or other fees and expenses) associated with obtaining the Third Party Consents.   In the event any Third Party Consent is not obtained by the Closing Date, (i) Seller shall continue at Purchaser’s request to use reasonable best efforts to cooperate with Purchaser in attempting to obtain any such Third Party Consent, (ii) to the extent practicable, Seller and Purchaser shall negotiate in good faith with respect to an alternative arrangement (such as a license or transition services agreement) until such time as such Third Party Consent has been obtained which results in the Company and the Subsidiaries receiving the benefits and bearing all the costs, liabilities and burdens with respect to any such Listed Contract (provided, however, that the Company shall undertake to pay or satisfy all costs, expenses, obligations and liabilities incurred by Seller or any of its affiliates in connection with any such alternative arrangement) and (iii) notwithstanding anything in this Agreement to the contrary, subject to Seller using its reasonable best efforts as required by this Section 5.04(c), the failure of any such Third Party Consent to be obtained shall in no event be deemed to give rise to a breach or inaccuracy in any representation, warranty, covenant or agreement given or made by Seller in this Agreement or give rise to any indemnification obligation under Article VIII and shall not be considered for purposes of determining the satisfaction of any of the conditions set forth in Article VI.

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(d)          Notwithstanding anything to the contrary in this Agreement, subject to Purchaser’s compliance with its obligations pursuant to Section 5.04(a) and (b), Purchaser has the sole right to control and direct all antitrust strategy in connection with review of the Agreement by any Governmental Entity, or any litigation by, or negotiations with, any antitrust authority or other person relating to the Acquisition under the HSR Act or any other antitrust law and will take the lead in all meetings, discussions and communications with any Governmental Entity relating to obtaining antitrust approval for the Agreement; provided that, to the extent reasonably practicable and not prohibited by Applicable Law, Purchaser will provide Seller an opportunity to review in advance, and Purchaser will consult with and consider in good faith the comments of Seller and/or the Company with respect to, any filing, communication, defense, litigation, negotiation or strategy. If there is a disagreement about antitrust strategy, the Purchaser’s decision controls.

SECTION 5.05.            Expenses.  Whether or not the Closing takes place, and except as set forth in Section 5.04, Article VIII and Article IX, all fees, costs and expenses incurred in connection with this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby shall be paid by the party incurring such fees, costs or expenses.

SECTION 5.06.            Employee Matters.

(a)            For the twelve months immediately following the Closing Date (the “Continuation Period”), Purchaser shall, or shall cause the Company and the Subsidiaries or Purchaser’s other affiliates to, provide to each Employee who continues employment with the Company and the Subsidiaries after the Closing Date (such Employees, the “Continuing Employees”) (i) a base salary or base wages and incentive compensation opportunities (both annual and long-term) that are no less favorable in the aggregate than the base salary or base wages and incentive compensation opportunities (both annual and long-term) applicable to such Continuing Employee immediately prior to the Closing (with long-term incentive opportunities being based on performance goals relating to the Company and the Subsidiaries), (ii) employee benefits (other than defined benefit pension and retiree medical benefits) that are no less favorable in the aggregate than those provided to such Continuing Employee immediately prior to the Closing and (iii) in the case of each such Continuing Employee whose employment is terminated by Purchaser and its affiliates (including, after the Closing, the Company and the Subsidiaries) prior to the last day of the Continuation Period, severance benefits and payments that are no less favorable in the aggregate than the severance benefits and payments that would have been provided to such Continuing Employee under the applicable severance policy or practice of the Company and the Subsidiaries immediately prior to the Closing.  Subject to the limitations under Section 5.01(a) of this Agreement, nothing in this Agreement shall be construed as altering or limiting the rights of the Company and the Subsidiaries to (x) terminate the employment of any Employee, (y) amend, modify or terminate any compensation or employee benefit plan, program, agreement or arrangement, subject to the terms of such plan, program, agreement or arrangement or as necessary to comply with Applicable Laws or (z) except as expressly set forth herein, change the terms or conditions of employment of any Employee.  Except as contemplated under Sections 5.06(g) and 5.06(h), the active participation of the Participants in the compensation and benefit plans, programs and arrangements of Parent and its affiliates (other than a Stand-Alone Benefit Plan) shall terminate effective as of the Closing, and from and after the Closing, none of Purchaser or its affiliates (including, after the Closing, the Company and the Subsidiaries) shall have any Liability under or in respect of (and Purchaser and its affiliates (including, after the Closing, the Company and the Subsidiaries) shall be indemnified and held harmless by Parent with respect to) such compensation and benefit plans, programs and arrangements of the Parent and its affiliates.  From and after the Closing, none of Parent or any of its affiliates shall have any Liability under or in respect of (and Parent and its affiliates shall be indemnified and held harmless with respect to) the Stand-Alone Benefit Plans.

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(b)            Parent, Seller and Purchaser intend that the consummation of the transactions contemplated by this Agreement shall not constitute or give rise to a severance of employment of any Employee (or, if applicable, severance from service of any other service provider) prior to or upon such consummation of such transactions and that the Employees and such service providers shall have continuous and uninterrupted employment or service (as applicable) immediately before and immediately after the Closing.  Notwithstanding anything herein to the contrary, Parent and its affiliates shall not have any responsibility for, and the Purchaser and its affiliates shall hold harmless and indemnify Parent and its affiliates with respect to, any and all Liabilities arising as a result of the actual or constructive termination of (i) an Employee’s employment (or, if applicable, other service provider’s service) as a result of the consummation of the transactions contemplated by this Agreement and (ii) a Continuing Employee’s employment (or, if applicable, other service provider’s service) with Purchaser and its affiliates (including the Company and the Subsidiaries) on or after the Closing.

(c)            From and after the Closing Date, Purchaser shall, or shall cause the Company and the Subsidiaries or Purchaser’s other affiliates to, (i) honor all obligations under the Stand-Alone Benefit Plans in accordance with their terms as in effect immediately prior to the Closing, (ii) recognize all the Continuing Employees’ accrued and unused vacation and other paid time-off benefits consistent with the terms of the vacation or similar policies of the Company and the Subsidiaries applicable to Continuing Employees as in effect immediately prior to the Closing and (iii) pay, no later than March 15, 2016, all annual bonuses that are payable to Continuing Employees with respect to the 2015 fiscal year under the terms of the annual bonus plans of the Company and the Subsidiaries (the “FY 2015 Bonuses”) provided that the aggregate amount paid by Purchaser and its affiliates (including, after the Closing, the Company and the Subsidiaries) to Continuing Employees with respect to the FY 2015 Bonuses shall not be less than the amount accrued as a liability in respect of the FY 2015 Bonuses in the calculation of the Closing Date Book Value.  For the avoidance of doubt, for purposes of the SIG LTIP, the transactions contemplated by this Agreement shall be deemed to constitute a “change in control” with respect to the Participants.

(d)            From and after the Closing Date, Purchaser shall, or shall cause the Company and the Subsidiaries or Purchaser’s other affiliates to, (i) recognize, for all purposes under all plans, programs and arrangements established or maintained by Purchaser or any of its affiliates (including, after the Closing, the Company and the Subsidiaries) a Continuing Employee’s service with Parent and its affiliates (including the Company and the Subsidiaries) and any of their respective predecessors, including for purposes of eligibility, vesting and benefit levels and benefit accruals (other than benefit accruals under a defined benefit pension plan), provided that no such recognition of service shall be required to the extent that it would result in a duplication of benefits, (ii) waive any pre-existing condition exclusion, actively-at-work requirement or waiting period under all employee health and other welfare benefit plans established or maintained by Purchaser or any of its affiliates (including, after the Closing, the Company and the Subsidiaries) for the benefit of Continuing Employees, except to the extent such pre-existing condition, exclusion, requirement or waiting period would have been applicable under the corresponding Company Benefit Plan or any plan, program, agreement, arrangement or understanding that is required by Applicable Laws immediately prior to the Closing and (c) provide full credit for any co-payments, deductibles or similar out-of –pocket payments made or incurred by Continuing Employees prior to the Closing Date for the plan year in which the Closing occurs.

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(e)            Purchaser agrees to provide, or to cause its affiliates to provide, any required notice under the Worker Adjustment and Retraining Notification Act (the “WARN Act”) and any similar Applicable Law and to otherwise comply with the WARN Act and any Applicable Law with respect to any “plant closing” or “mass layoff” (as defined in the WARN Act) or group termination or similar event affecting Employees (including as a result of the consummation of the transactions contemplated by this Agreement) and occurring on or after the Closing Date.  Parent and Purchaser shall indemnify and hold each other harmless, respectively, with respect to, any Liability incurred pursuant to the WARN Act or any similar Applicable Law in connection with any Employee whose employment terminates before the Closing Date (in the case of Parent’s indemnity) or on or after the Closing Date (in the case of Purchaser’s indemnity).    Seller shall notify Purchaser prior to the Closing of any layoffs of any Employees in the 90-day period prior to the Closing.

(f)            (i) Each SIG Performance Unit Award that is outstanding immediately prior to the Closing shall remain outstanding in accordance with its terms from and after the Closing, and service with the Company and the Subsidiaries following the Closing shall be taken into account for purposes of determining the vesting of each such SIG Performance Unit Award after the Closing.  Each SIG Performance Unit Award shall be settled in cash by Purchaser and the Company after the Closing in accordance with its terms based on the Payment Value (as defined in the SIG LTIP) and Payout Percentage (as defined in the SIG LTIP) for the applicable Award Period (as defined in the SIG LTIP), in each case, as determined by Purchaser and the Company in accordance with the SIG LTIP; provided that Parent hereby agrees and acknowledges that such Payment Value and Payout Percentage (calculated in accordance with Section 5(c) of the SIG LTIP) shall not reflect the effect of the transactions contemplated by this Agreement on the UROC (as defined in the SIG LTIP) for such Award Period; provided further that, as soon as reasonably practicable after the last day of the applicable Award Period, Purchaser and the Company shall notify Seller of the Payment Value and Payout Percentage determined by Purchaser and the Company with respect to such Award Period.  Notwithstanding any other provision of this Section 5.06 to the contrary, the aggregate amount of cash paid by Purchaser and the Company to holders of SIG Performance Unit Awards outstanding immediately prior to the Closing for purposes of settling such awards shall not be less than the Aggregate Adjusted SIG PUA Amount (as defined below).

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(ii)            Purchaser acknowledges and agrees that, from and after the Closing Date, (A) Purchaser and its affiliates (including the Company and the Subsidiaries) shall be solely responsible for (and Seller and its affiliates shall not have any Liability under or in respect of (and shall be indemnified and held harmless by Purchaser and its affiliates with respect to)) any payment (including any employment or similar Taxes (including social security contributions or the local equivalent)) required to be made in respect of the settlement of SIG Performance Unit Awards, it being understood and agreed however that Parent shall indemnify and hold harmless Purchaser and its affiliates (including the Company and the Subsidiaries after the Closing Date) from and against any liability arising from or with respect to the effect of the proposed transactions contemplated by this Agreement on the calculation of the UROC under Section 5(c) of the SIG LTIP, and (B) the Company and its Subsidiaries shall be responsible for all Tax withholding and reporting obligations with respect to the SIG Performance Unit Awards.

(iii)           In connection with the Seller’s calculation of the Estimated Closing Book Value, Seller shall determine, with respect to each SIG Performance Unit Award that is outstanding immediately prior to the Closing Date, (A) the SIG PUA Amount (as defined below) and (B) the Adjusted SIG PUA Amount (as defined below).  For purposes of this Agreement, the “SIG PUA Amount” shall equal the product of (1) the number of Performance Units subject to a SIG Performance Unit Award, (2) the Payment Value with respect to such SIG Performance Unit Award and (3) the Payout Percentage with respect to such SIG Performance Unit Award, and the Payment Value and Payout Percentage shall be determined as described in this Section 5.06(f)(iii).  The Payment Value and the Payout Percentage with respect to the applicable Award Period shall be determined for purposes of the calculation of Estimated Closing Book Value and Closing Date Book Value, as applicable, by taking into account the UROC as of the Business Day immediately prior to the Closing Date and, with respect to the portion of such Award Period occurring on and after the Closing Date, based on a forecast of the UROC with respect to the remainder such Award Period (in each case, without regard to any effect of the transactions contemplated under this Agreement on the UROC).  Such determinations of the SIG PUA Amount, the applicable Payment Value and the applicable Payout Percentage shall otherwise be in accordance with the terms of the SIG LTIP and otherwise consistent with past practice.  The “Adjusted SIG PUA Amount” shall equal the product of (1) the applicable SIG PUA Amount and (2) the Pre-Closing Pro-Rata Portion.

 

The Estimated Closing Book Value as determined pursuant to Section 1.03(c)(i) and the Closing Date Book Value as finally determined in accordance with Section 1.04 shall (x) reflect as liabilities (A) the Aggregate Adjusted SIG PUA Amount and (B) the employer-paid portion of any employment or similar Taxes (including social security contributions or the local equivalent) that would be imposed on the Company or a Subsidiary upon the payment of the Aggregate Adjusted SIG PUA Amount and (y) reflect as assets the Tax Benefit attributable to the amounts in clause (x).  The calculation of each amount in the preceding sentence (and each component thereof) shall be subject to the provisions of Section 1.04 and shall be made in accordance with the Applicable Accounting Principles.

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(g)            (i) Prior to the Closing, the Board of Directors of Parent (or a duly authorized committee thereof) shall adopt such resolutions and take such other actions as may be necessary to provide that, notwithstanding any provision to the contrary in the Parent LTIP, each Parent Performance Share Award that is outstanding immediately prior to the Closing shall remain outstanding in accordance with its terms from and after the Closing and shall be assumed by the Company (provided that service with the Company and the Subsidiaries following the Closing shall be taken into account for purposes of vesting thereunder after the Closing) and shall be settled in cash by Purchaser and the Company after the Closing in accordance with its terms based on (A) the Performance Percentage (as defined in the Parent LTIP) for the applicable Award Period (as defined in the Parent LTIP), as determined by Parent in accordance with the Parent LTIP, which Performance Percentage shall be the same as the Performance Percentage determined by Parent to be applicable to the Parent Performance Share Awards held by then-active employees of Seller and its affiliates (other than employees of the Company and the Subsidiaries) with respect to the same Award Period and (B) the Parent common share price (as determined by the Parent in good faith in accordance with the Parent LTIP) at the time of settlement; provided that, as soon as reasonably practicable after the last day of the applicable Award Period, Seller shall notify Purchaser of the Performance Percentage for the applicable Award Period and such Parent common share price.  The amount payable by the Purchaser and the Company to settle such a Parent Performance Share Award is referred to as the “Parent PSA Amount”.

(ii)            With respect to each Parent Performance Share Award that is outstanding immediately prior to the Closing, in the event that the holder’s employment with the Company and the Subsidiaries terminates during the applicable Award Period, the Purchaser shall notify Seller of such termination promptly, and in any event no more than five days following the date of such termination.  Purchaser acknowledges and agrees that, from and after the Closing Date, (A) Purchaser and its affiliates (including the Company and the Subsidiaries) shall be solely responsible for (and Seller and its affiliates shall not have any Liability under or in respect of (and shall be indemnified and held harmless by Purchaser and its affiliates with respect to)) any payment (including any employment or similar Taxes (including social security contributions or the local equivalent)) required to be made in respect of the settlement of such Parent Performance Share Awards and (B) the Company and its Subsidiaries shall be responsible for all withholding and reporting obligations with respect to such Parent Performance Share Awards; provided, however, that Parent shall indemnify and hold harmless the Purchaser and its affiliates (including the Company and the Subsidiaries after the Closing Date), from and against any Liability arising out of or with respect to the calculation of the Parent PSA Amount.

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(iii)           Section 5.06(g)(iii) of the Company Disclosure Letter sets forth the target value of each Parent Performance Share Award outstanding on the date hereof (the “Specified Target Value”).

(iv)           (A) As soon as practicable following the last day of an applicable Award Period, Seller shall determine, subject to Purchaser’s opportunity to review and comment on the basis for Parent’s determination, (1) the After-Tax Parent PSA Amount and the (2) After-Tax Post-Closing Parent PSA Amount for each Parent Performance Share Award settled at the end of such Award Period.  The “After-Tax Parent PSA Amount” for an award shall equal (1) the Parent PSA Amount for such award (which shall exclude any increase in an award by reason of the termination of employment of an Employee after the Closing Date) plus the employer-paid portion of any employment or similar Taxes (including social security contributions or the local equivalent) imposed on the Company or its Subsidiaries with respect to the payment of the Parent PSA Amount, minus (2) the Tax Benefit attributable to the payment or accrual of the amount described in clause (1).   The “After-Tax Post-Closing Parent PSA Amount” for an award shall equal (1) the product of (x) the Specified Target Value for such award plus the employer-paid portion of any employment or similar Taxes (including social security contributions or the local equivalent) that would be imposed on the Company or its Subsidiaries in respect of the payment of such Specified Target Value and (y) the Post-Closing Pro-Rata Portion, minus (2) the Tax Benefit attributable to the payment or accrual of the amount described in clause (1).

 

 (B)  If the After-Tax Parent PSA Amount for a Parent Performance Share Award settled at the end of an Award Period exceeds the After-Tax Post-Closing Parent PSA Amount for such award, then Parent shall pay to Purchaser the amount of such excess as soon as practicable after the end of such Award Period.

(v)            The Estimated Closing Book Value and the Closing Date Book Value shall, notwithstanding any other provision of this Agreement, exclude all effects of the Parent Performance Share Awards (including any accruals, and any amounts payable by either party, in respect of such awards), as provided in Section 1.04(j) of the Company Disclosure Letter.

(h)            (i) Prior to the Closing, the Board of Directors of Parent (or a duly authorized committee thereof) shall adopt such resolutions and take such other actions as may be necessary to provide that, notwithstanding any provision to the contrary in the Parent LTIP, each Parent Restricted Share Award that is outstanding immediately prior to the Closing shall remain outstanding from and after the Closing in accordance with its terms, provided that, service with the Company and the Subsidiaries following the Closing shall be taken into account for purposes of vesting thereunder after the Closing.

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(ii)            With respect to each such Parent Restricted Share Award that is outstanding as of the Closing, in the event that the holder’s employment with the Company and the Subsidiaries terminates during the applicable Restricted Period (as defined in the Parent LTIP), Purchaser shall notify Seller of such termination promptly, and in any event no more than five days following the date of such termination.  Purchaser acknowledges and agrees that, from and after the Closing Date, (A) Purchaser and its affiliates (including the Company and the Subsidiaries) shall be solely responsible for (and Seller and its affiliates shall not have any Liability under or in respect of (and shall be indemnified and held harmless by Purchaser and its affiliates with respect to)) any employment or similar Taxes (including social security contributions or the local equivalent) required to be made in respect of such Parent Restricted Share Awards and (B) the Company and its Subsidiaries shall be responsible for all withholding and reporting obligations with respect to the Parent Restricted Share Awards.  Parent and the Company shall cooperate (and provide each other with all information reasonably necessary) to allow holders of Parent Restricted Share Awards to satisfy their withholding tax obligations to the Company and the Subsidiaries through share withholding as permitted by the Parent LTIP.

(iii)           Section 5.06(h)(iii) of the Company Disclosure Letter sets forth the grant date fair value of each Parent Restricted Share Award outstanding on the date hereof, as determined under Applicable Accounting Principles and FASB ASC Topic 718, Compensation – Stock Compensation (the “Total Parent RSA Amount”).

(iv)           (A) As soon as practicable following the last day of the applicable Restricted Period with respect to a Parent Restricted Share Award, Seller shall determine, subject to Purchaser’s opportunity to review and comment on the basis for Parent’s determination, (1) the Post-Closing Parent RSA Amount, (2) the Excess Employment Tax Amount and (3) the Excess Tax Benefit Amount, with respect to such Parent Restricted Share Award.  The “Post-Closing Parent RSA Amount” shall equal the Total Parent RSA Amount times the Post-Closing Pro-Rata Portion.  The “Excess Employment Tax Amount” shall equal the excess (if any) of (1) the employer-paid portion of any employment or similar Taxes (including social security contributions or the local equivalent) imposed on the Company or its Subsidiaries in respect of such Parent Restricted Share Award over (2) the employer-paid portion of any employment or similar Taxes (including social security contributions or the local equivalent) that would be imposed on the Company or its Subsidiaries in respect of such award at a value equal to its Post-Closing Parent RSA Amount.  The “Excess Tax Benefit Amount” shall equal the excess (if any) of (1) the Tax Benefit attributable to such Parent Restricted Share Award and the payment of any related employer-paid employment or similar Taxes (including social security contributions or the local equivalent) imposed on the Company or its Subsidiaries over (2) the Tax Benefit that would be attributable to such Parent Restricted Share Award at a value equal to its Post-Closing Parent RSA Amount and the payment of any related employer-paid employment or similar Taxes (including social security contributions or the local equivalent) imposed on the Company or its Subsidiaries.  The Excess Tax Benefit Amount shall be adjusted to take into account the tax cost of any gain recognized by the Company or the Subsidiaries in respect of any Parent Restricted Share Award.

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 (B)  As soon as practicable following the last day of an applicable Restricted Period with respect to a Parent Restricted Share Award, if the Post-Closing Parent RSA Amount, plus the Excess Tax Benefit Amount, minus the Excess Employment Tax Amount (the “Parent RSA Net Payment Amount”) is a positive number then Purchaser shall pay such positive amount to Parent, and if the Parent RSA Net Payment Amount is a negative number then Parent shall pay the absolute value of such amount to Purchaser.

(v)            The Estimated Closing Book Value and the Closing Date Book Value shall, notwithstanding any other provision of this Agreement, exclude all effects of the Parent Restricted Share Awards (including any accruals, and any amounts payable by either party, in respect of such awards), as provided in Section 1.04(j) of the Company Disclosure Letter.

(i)             (i) Section 5.06(i)(i) of the Company Disclosure Letter sets forth a summary of the bonus arrangements to be entered into by the Company before the Closing Date (the “Bonus Arrangements”) and the estimated aggregate amount of the bonuses payable under such Bonus Arrangements (the “Aggregate Bonus Amount”).   Not later than three Business Days prior to the Closing Date, the Seller will deliver to the Company and Purchaser a schedule (the “Bonus Schedule”) that sets forth (A) the names of the Employees who are eligible to receive the bonuses payable under the Bonus Arrangements (the “Bonus Recipients”), (B) the bonus to be paid to each such Bonus Recipient shortly after the Closing Date as compensation for services performed before the Closing Date (the “Transaction Bonuses”), (C) the percentage (the “Applicable Bonus Percentage”) for each Bonus Recipient to be used to determine the bonuses to be paid as soon as practicable after the twelfth month anniversary of the Closing Date (the “First Retention Bonus Date”) and the twentieth month anniversary of the Closing Date (the “Second Retention Bonus Date” and, together with the First Retention Bonus Date, the “Retention Bonus Dates”) as compensation for services to be performed after the Closing Date (the “Retention Bonuses”), and (D) the formula for determining the Aggregate Bonus Amount under the Bonus Arrangements.

(ii)            As soon as practicable (but in no event later than 10 Business Days) after the Closing Date, the Company shall pay to each Bonus Recipient (reduced by applicable Tax withholding) the Transaction Bonus for such Transaction Bonus Recipient.  Not later than five Business Days after the Closing Date, Seller shall pay to the Company an amount equal to (1) the aggregate amount of the Transaction Bonuses plus the employer-paid portion of any employment or similar Taxes (including social security contributions or the local equivalent) imposed on the Company or its Subsidiaries with respect to the payment of the Transaction Bonuses, minus (2) the Tax Benefit attributable to the payment or accrual of the amount described in clause (1).

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(iii)           In the event that a Bonus Recipient’s employment with the Company and the Subsidiaries terminates prior to a Retention Bonus Date, the Purchaser shall notify Seller of such termination promptly, and in any event no more than five days following the date of such termination.  As soon as practicable after the First Retention Bonus Date, as set forth in and subject to the Bonus Arrangements, the Company shall pay to each Bonus Recipient, subject to his or her continued employment until the First Retention Bonus Date (and reduced by applicable Tax withholding), a Retention Bonus equal to the greater of (A) $0 and (B) 50% of the excess of (1) the product of (x) the Aggregate Bonus Amount (as then estimated) and (y) the Applicable Bonus Percentage for such Bonus Recipient over (2) the Transaction Bonus for such Bonus Recipient.  As soon as practicable after the Second Retention Bonus Date, as set forth in and subject to the Bonus Arrangements, the Company shall pay to each Bonus Recipient, subject to his or her continued employment until the Second Retention Bonus Date (and reduced by applicable Tax withholding), a Retention Bonus equal to the greater of (A) $0 and (B) the excess of (1) the product of (x) the Aggregate Bonus Amount (as finally determined) and (y) the Applicable Bonus Percentage for such Bonus Recipient over (2) the sum of (x) the Transaction Bonus for such Bonus Recipient and (y) the Retention Bonus for such Bonus Recipient paid in respect of the First Retention Bonus Date.  Notwithstanding the foregoing, the Retention Bonuses shall also include amounts determined under similar principles with respect to any Employee who is not employed on the Retention Bonus Date but nevertheless under the Bonus Arrangements is entitled to a Retention Bonus, and appropriate adjustments shall be made as set forth in the Bonus Arrangements in the case of certain Employees receiving a transaction bonus from Seller or an affiliate of Seller (other than the Company or a Subsidiary) as compensation for services performed before the Closing Date for the Seller or an affiliate of Seller.   Not later than five Business Days prior to each Retention Bonus Date Seller shall pay to the Company an amount equal to (1) the aggregate Retention Bonuses payable to all Bonus Recipients for such Retention Bonus Date plus the amount of the employer-paid portion of any employment or similar Taxes (including social security contributions or the local equivalent) payable by the Company or its Subsidiaries in respect of the payment of such Retention Bonuses, minus (2) the Tax Benefit attributable to the amount described in clause (1).

(iv)          The Estimated Closing Book Value and the Closing Date Book Value shall, notwithstanding any other provision of this Agreement, exclude all effects of the Transaction Bonuses and Retention Bonuses (including any accruals, and any amounts payable by either party, in respect of such bonuses).

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(j)             For purposes of this Section 5.06, the following terms shall have the meanings set forth below:

“Aggregate Adjusted SIG PUA Amount” means the sum of the Adjusted SIG PUA Amounts with respect to all SIG Performance Unit Awards outstanding immediately prior to the Closing Date.

“Parent Common Share” means a common share of Parent, par value $1.00 per share.

“Parent LTIP” means the Parent Long-Term Incentive Plan, as amended.

“Parent Performance Share Award” means a performance share award with respect to Parent Common Shares granted under the Parent LTIP that is held by an Employee.

“Parent Restricted Share Award” means an award of restricted Parent Common Shares granted under the Parent LTIP that is held by an Employee.

“Performance Unit” means the units in which a SIG Performance Unit Award is denominated.

“Post-Closing Pro-Rata Portion” means, with respect to an award, a fraction (A) the numerator of which is the number of days from and including the Closing Date in the Award Period or Restricted Period applicable to such award and (B) the denominator of which is the total number of days in such Award Period or Restricted Period.

“Pre-Closing Pro-Rata Portion” means, with respect to an award, a fraction (A) the numerator of which is the number of days prior to the Closing Date in the Award Period or Restricted Period applicable to such award and (B) the denominator of which is the total number of days in such Award Period or Restricted Period.

“SIG LTIP” means the SIG Long-Term Incentive Plan.

“SIG Performance Unit Award” means a performance unit award granted under the SIG LTIP.

 “Tax Benefit” means the current or deferred benefit of a Tax deduction that is available to the Company or a Subsidiary with respect to the payment or accrual of a liability or expense, net of any valuation allowance.  Seller agrees that to the extent a Tax deduction is taken into account in the determination of a Tax Benefit, none of Seller or its affiliates will claim such Tax deduction on any of its Tax Returns.  Purchaser, the Company and the Subsidiaries shall provide Seller and its affiliates with reasonable access to information, including copies of relevant Tax Returns or portions thereof, together with accompanying schedules, related workpapers and documents relating to rulings or other determinations by Taxing Authorities, as are reasonably necessary for the determination of a Tax Benefit (and may redact such information as is not reasonably necessary for the determination of a Tax Benefit), and Seller shall, and shall cause its affiliates to, keep all such information and items confidential and shall use such information solely in connection with the determination of a Tax Benefit.

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(k)            Except as provided in Section 5.06(f), (g) and (h), Parent shall indemnify and hold harmless the Company and the Subsidiaries from and against any Liability under or arising with respect to any Company Benefit Plan (other than a Stand-Alone Benefit Plan).

(l)            Seller shall indemnify and hold harmless Purchaser (including the Company and the Subsidiaries after the Closing Date) from and against any and all Liability arising under or with respect to the defined benefit pension plan of One Beacon Services, LLC set forth on Section 3.15(c)(i)(1) of the Company Disclosure Letter and shall procure that responsibility for such defined benefit pension plan shall be transferred to the Seller Group on or before Closing.

(m)            Nothing in this Agreement shall be construed to (i) confer on any person, other than the parties hereto, their successors and permitted assigns, any benefit or right, including the right to enforce the provisions of this Section 5.06, (ii) cause any person to be a third-party beneficiary of this Agreement, or (iii) establish, amend, modify, waive or terminate any Company Benefit Plan or any comparable compensation or benefit plan, agreement or arrangement of Purchaser or its affiliates prior to, upon or following the Closing.

SECTION 5.07.            Publicity.  No public release or announcement concerning the transactions contemplated hereby shall be issued by any party or its affiliates without the prior consent of the other parties (which consent shall not be unreasonably withheld, delayed or conditioned), except as such release or announcement may be required by Applicable Law or the rules or regulations of or any listing agreement with any United States or foreign securities exchange, in which case the party required to make the release or announcement shall allow the other party reasonable time to comment on such release or announcement in advance of such issuance; provided, however, that each of Seller, the Company and Purchaser and their respective affiliates may make internal announcements to their respective employees that are consistent with the parties’ prior public disclosures regarding the transactions contemplated hereby.

SECTION 5.08.            Non-Hire.  (a)  For a period of 36 months following the Closing Date, without the prior written consent of Purchaser, none of Parent or its subsidiaries shall, directly or indirectly, employ or contract for the services of any Company Covered Employee.

(b)            For a period of 36 months following the Closing Date, without the prior written consent of Parent, none of the Company, the Subsidiaries, Purchaser or Purchaser’s affiliates shall, directly or indirectly, employ or contract for the services of any Seller Covered Employee.

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SECTION 5.09.            Further Assurances.  From time to time, as and when requested by any party, each party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions, as such other party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement; provided, nothing in this Agreement shall be construed to obligate Purchaser or its affiliates to take any action that would or would reasonably be expected to result in a Burdensome Condition.

SECTION 5.10.            Resignations.  At or prior to the Closing, Seller shall deliver to Purchaser letters of resignation, effective as of the Closing, of the directors of the Company and the Subsidiaries set forth in Section 5.10 of the Company Disclosure Letter.

SECTION 5.11.            Related Party Agreements.  Except as set forth in Section 5.11 of the Company Disclosure Letter, all arrangements between the Company or any Subsidiary, on the one hand, and Seller or any of its affiliates (other than the Company and the Subsidiaries), on the other hand, shall be terminated immediately prior to the Closing, and Seller shall cause all intercompany balances between the Company or any Subsidiary, on the one hand, and Seller or any of its affiliates (other than the Company and the Subsidiaries), on the other hand, to be paid in full and settled as of the close of business on the Business Day immediately preceding the Closing Date.

SECTION 5.12.            Parent Contributions.  Nothing contained in this Agreement shall prevent, limit or impair the ability of Parent or Seller to contribute Cash to the Company or the Subsidiaries prior to the Closing (whether as a result of a change, development, event or occurrence occurring between the date of this Agreement and Closing Date or otherwise); provided, however that, to the extent reasonably practicable, Parent or Seller, as applicable, shall consult with Purchaser prior to making any such contribution.

SECTION 5.13.            Letter of Credit.  (a)  Promptly following the Closing, Seller and Purchaser shall deliver joint written notice to the Issuing Bank of the effective delivery of funds by Purchaser at the Closing and releasing the Issuing Bank from its obligations under the Letter of Credit.

(b)            In the event that the Closing does not occur due to the valid termination of this Agreement by Seller:

(i)            Seller shall deliver written notice to the Issuing Bank releasing the Issuing Bank from its obligations under the Letter of Credit on the date which is three months after the date of such valid termination (the “Claim Deadline”) unless prior to the Claim Deadline Seller has delivered written notice to Purchaser of a claim against Purchaser for breach of this Agreement, together with reasonable detail regarding the basis of such claim and setting forth the aggregate amount claimed by Seller (such amount, the “Disputed Claim Amount”).

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(ii)            Seller shall deliver written notice to the Issuing Bank releasing the Issuing Bank from its obligations under the Letter of Credit at such time as all pending claims for Purchaser’s breach of this Agreement have been finally resolved and satisfied and are not subject to appeal.

(c)            In the event that the Closing does not occur due to the valid termination of this Agreement by Purchaser:

(i)            Seller shall deliver written notice to the Issuing Bank releasing the Issuing Bank from its obligations under the Letter of Credit on the Claim Deadline unless prior to the Claim Deadline Seller has delivered written notice to Purchaser (x) that Seller has disputed the valid termination of this Agreement and (y) that Seller has a claim against Purchaser for breach of this Agreement, together with reasonable detail regarding the basis of such claim and setting forth the Disputed Claim Amount.

(ii)            Seller shall deliver written notice to the Issuing Bank releasing the Issuing Bank from its obligations under the Letter of Credit at such time as all pending claims regarding (x) valid termination of this Agreement by Purchaser and (y) Purchaser’s breach of this Agreement, in each case have been finally resolved and satisfied and are not subject to appeal.

(d)            The parties agree that, in the case of a drawing upon the Letter of Credit by Seller resulting from a Demand (as defined in the Letter of Credit) in the form of Option B, Seller shall instruct the Issuing Bank to make payment to an escrow account specified by Seller, which account shall be governed by an escrow agreement substantially in the form attached hereto as Exhibit C, with such modifications or changes as may be requested by the escrow agent party thereto (the “Escrow Agreement”).  Concurrently with any Instruction (as defined in the Escrow Agreement) delivered to the escrow agent pursuant to the terms of the Escrow Agreement, Seller shall provide a copy of such Instruction (as defined in the Escrow Agreement) to Purchaser.

(e)            At any time following the Claim Deadline, to the extent that the aggregate Disputed Claim Amount claimed by Seller in respect of any pending claims by Seller against Purchaser for breach of this Agreement is less than the amount then available for drawing under the Letter of Credit, Seller shall deliver written notice to the Issuing Bank instructing the Issuing Bank to reduce the amount then available for drawing under the Letter of Credit to the aggregate Disputed Claim Amount claimed by Seller in respect of any pending claims by Seller against Purchaser for breach of this Agreement.

(f)            Concurrently with any Demand (as defined in the Letter of Credit) delivered to the Issuing Bank, Seller shall provide a copy of such Demand (as defined in the Letter of Credit) to Purchaser.

SECTION 5.14.            Use of Trademarks.  Prior to Closing, Seller and the Company shall (a) cause any applicable Subsidiary to amend its organizational documents to change its corporate name to a name that does not use, include or otherwise incorporate the trademark “White Mountains” or any name or derivative thereof (including “WM”) (the “Parent Mark”) and (b) use commercially reasonable efforts to cause the Subsidiaries to cease using the Parent Mark.  From and after the date that is 45 calendar days after the Closing Date, the Company, the Subsidiaries and Purchaser shall, and shall cause each of their respective affiliates, members, managers, officers, directors, employees, agents and representatives to, cease to, and thereafter not, use or register the Parent Mark or any derivative thereof or any name or trademark confusingly similar thereto in or for any business anywhere in the world.

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SECTION 5.15.            Solutions Entity.  In the event that the Solutions Entity is sold, transferred and delivered to Seller or any of its affiliates (other than the Company and the Subsidiaries) pursuant to Section 1.03(g), until such time as the Regulatory Approvals from the Insurance Regulators in the State of Tennessee have been obtained, Seller and Purchaser shall negotiate in good faith with respect to an alternative arrangement (such as a license or transition services agreement) until such time as such Regulatory Approvals from the Insurance Regulators in the State of Tennessee have been obtained which results in the Company and the Subsidiaries receiving the benefits and bearing all the costs, liabilities and burdens with respect to the Solutions Entity (provided, however, that the Company shall undertake to pay or satisfy all costs, expenses, obligations and liabilities incurred by Seller or any of its affiliates in connection with any such alternative arrangement).  Promptly upon receipt of the Regulatory Approvals from the Insurance Regulators in the State of Tennessee, Seller or its applicable affiliate shall sell, transfer and deliver to Purchaser or any of its subsidiaries, in exchange for immediately available funds in U.S. dollars in an amount equal to the Solutions Entity Value, the Solutions Entity.  The obligations set forth in this Section 5.15 shall expire on the date that is 12 months following the Closing.

SECTION 5.16.            Non-Competition.

(a)            For a period of 18 months following the Closing Date, without the prior written consent of Purchaser, Seller shall not, and Seller shall cause Parent and its subsidiaries not to, directly or indirectly, for its or their own account (i) engage in the business of underwriting, writing, issuing or selling any property, accident and health, trade credit or aviation reinsurance products of the types written by the Company and its Subsidiaries as of the Closing Date (a “Competing Business”), or (ii) acquire, or enter into an agreement to acquire, any equity interest in any person that engages directly or indirectly in a Competing Business. Notwithstanding the foregoing, nothing in this Agreement shall preclude, prohibit or restrict Parent and its subsidiaries from engaging in any manner in any of the following:

(i)        owning or acquiring, directly or indirectly, securities of any person engaging in a Competing Business if Parent or such subsidiary, directly or indirectly, do not own or acquire 35% or more of the outstanding voting securities of such person;

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(ii)       managing or controlling investment funds that make investments in persons engaging in a Competing Business, so long as such investments are in the ordinary course of business and not for the account of Parent or any of its subsidiaries (other than in connection with co-investment obligations equal to or less than 35% of the capital commitments of any such fund);

(iii)     selling and/or underwriting any insurance products whatsoever other than any such selling or underwriting activities that comprise a Competing Business; or

(iv)     acquiring, hiring, merging or combining with any business, person or assets that would otherwise violate this Section 5.16 after the Closing Date (an “After-Acquired Business”) (and, following such acquisition, hiring, merger or combination, no activities of such After-Acquired Business or of Parent or any of its subsidiaries relating to or in connection with the activities of such After-Acquired Business shall be deemed to violate this Section 5.16) if at the time of such acquisition, hiring, merger or combination, the portion of the aggregate gross revenues of the After-Acquired Business attributable to the Competing Business in the most recently completed fiscal year immediately prior to the date of such acquisition, hiring, merger or combination is less than 35%; provided, for the avoidance of doubt, that Parent and its subsidiaries may not hire any person pursuant to this clause (iv) to the extent that such action would result in a breach of Section 5.08(a).

(b)            Notwithstanding anything in this Section 5.16 to the contrary, Parent and its subsidiaries shall have the right to engage in any Competing Business after a Change of Control has occurred.

(c)            Notwithstanding anything in this Section 5.16 to the contrary, Parent and its subsidiaries shall be permitted to own or acquire, or agree to acquire, securities in OneBeacon Insurance Group, Ltd. and its subsidiaries and any securities into which such securities are converted or for which such securities are exchanged or any other securities received in respect of such securities and nothing herein shall in any way restrict the operations or conduct of business of OneBeacon Insurance Group, Ltd. and its subsidiaries.

(d)            Parent acknowledges that the restrictions contained in this Section 5.16 are reasonable and necessary to protect the legitimate interests of Purchaser and constitute a material inducement to Purchaser to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this Section 5.16 should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by Applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by Applicable Law. The covenants contained in this Section 5.16 and each provision of this Section 5.16 are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

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(e)            For purposes of this Section 5.16, the term “Change of Control” shall mean, after the date hereof (A) any person or group being the owner, directly or indirectly, beneficially or of record, of more than 50% of the voting power or equity interests in Parent or any successor thereto, (B) any person or group acquiring all or substantially all of the assets of Parent and its subsidiaries, or (C) members of the board of directors of Parent as of the date of this Agreement, or directors nominated by the board of directors of Parent as of the date of this Agreement, ceasing to constitute a majority of such board of directors.

SECTION 5.17.            Investment Management Agreement.  From and after the Closing until the date that is six months following the Closing Date, Seller shall cause White Mountains Advisors LLC to not terminate the Investment Management Agreements without the consent of the Company.

SECTION 5.18.            Bi-Lateral Services Agreement.  (a)  Between the date of this Agreement and the Closing, Seller, Purchaser and the Company will cooperate with each other in good faith to agree to Annex A and Annex B of the Bi-Lateral Services Agreement.

(b)            If on or prior to the Closing, Annex A and Annex B of the Bi-Lateral Services Agreement is not agreed between the parties and a Bi-Lateral Services Agreement is entered into between the Company and Seller (or its relevant affiliates), with effect from the Closing and in consideration for the mutual undertakings set out in this Agreement,

(i)             Seller shall (and Seller shall procure that Parent or the relevant subsidiary of Parent shall) provide or procure the provision of such services as requested by Purchaser at Closing to the Company and the Subsidiaries (x) as are necessary to operate the relevant business of the Company and the Subsidiaries in a manner conducted in the 12-month period prior to the Closing; and (y) as have been provided by Seller (or Parent or the relevant subsidiary of Parent (other than the Company and the Subsidiaries)) during the 12-month period prior to the Closing;

(ii)            the Company shall (and the Company shall procure that the Subsidiaries shall) provide or procure the provision of such services as requested by Seller at Closing to Seller and its affiliates (x) as are necessary to operate the relevant business of the Seller and its affiliates in a manner conducted in the 12-month period prior to the Closing; and (y) as have been provided by the Company (or its relevant affiliates) during the 12-month period prior to the Closing; and

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(iii)           any services provided by Seller (or its affiliates) pursuant to Section 5.15(b)(i), or the Company (or its subsidiaries) pursuant to Section 5.15(b)(ii) shall be provided on a “fully allocated cost basis” as incurred by the party providing such services, without additional mark-up, in the substantially same manner provided by such party during the 12-month period prior to the Closing and for such time periods as may be reasonably requested (provided that such time periods shall be no longer than 6 months following the Closing).

SECTION 5.19.            Preparation of Financial Statements.  Purchaser shall cause HGB and BGB to prepare and make available to Seller, as soon practicable after the date of this Agreement, audited consolidated financial statements of BGB and its subsidiaries as of and for the fiscal years ending December 31, 2010, 2011 and 2012, together with the report of the independent auditor of BGB thereon, including, in each case, a balance sheet and statements of comprehensive income (loss), cash flows and retained earnings or shareholders’ equity and related footnotes.  Such financial statements shall reflect historical operations of BGB solely as an investment vehicle with no other operations during such periods.  To the extent that HGB is required by the New York State Department of Financial Services of the Tennessee Department of Commerce and Insurance to file a Form A, Purchaser shall cause such financial statements, in the form made available to Seller pursuant to the first sentence of this Section 5.19, to be submitted with HGB’s Form A.

SECTION 5.20.            Additional Directors.  During the period from and after the date of this Agreement and until the Closing, Purchaser and CMB shall not, and shall cause CMI and HGB not to, elect, appoint or otherwise add any additional directors to its board or directors (or equivalent governing body) or elect, appoint or otherwise add any additional officers, in each case without Seller’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed); provided, however, that Seller shall be deemed to have consented to any such additional director or officer to the extent that a true, correct and complete NAIC biographical affidavit in respect of such person was provided to Seller prior to the date of this Agreement; provided further that any biographical affidavit or other background information in respect of such officer or director submitted in connection with any Regulatory Approval shall be consistent with the NAIC biographical affidavit in respect of such person provided to Seller prior to the date of this Agreement.

ARTICLE VI

Conditions Precedent

SECTION 6.01.            Conditions to Each Party’s Obligation.  The obligation of Purchaser to purchase and pay for the Shares and the obligation of Seller to sell the Shares to Purchaser is subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:

(a)            Governmental Approvals.  All Regulatory Approvals listed in Section 6.01(a) of the Company Disclosure Letter shall have been obtained without the imposition of a Burdensome Condition, and the waiting period (and any extension thereof) under the HSR Act, if applicable to the consummation of the Acquisition, shall have expired or been terminated.

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(b)            No Injunctions or Restraints.  No Applicable Law or Judgment enacted, entered, promulgated, enforced or issued by any Governmental Entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Acquisition (a “Legal Restraint”) shall be in effect (other than any such Applicable Law, Judgment or Legal Restraint enacted, entered, promulgated, enforced, issued or imposed by any Governmental Entity of, or located in or organized under the laws of, the People’s Republic of China).

SECTION 6.02.            Conditions to Obligation of Purchaser.  The obligation of Purchaser to purchase and pay for the Shares is subject to the satisfaction (or waiver by Purchaser) on or prior to the Closing Date of the following conditions:

(a)            Representations and Warranties of the Company.  The representations and warranties of the Company (i) contained in the first sentence of Section 3.01(a) and Sections 3.02(a), 3.02(b), 3.03 and 3.16(b) shall be true and correct in all respects (except to the extent of any de minimis inaccuracy) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), and (ii) contained in this Agreement, other than in those Sections identified in clause (i) of this Section 6.02(a) shall be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect.  Purchaser shall have received a certificate signed on behalf of the Company by an authorized officer of the Company to such effect.

(b)            Representations and Warranties of Seller.  The representations and warranties of Seller contained in this Agreement (except for the representations and warranties contained in Section 2.01, 2.02 and 2.05) shall be true and correct (without giving effect to any limitation as to “materiality” or “Seller Material Adverse Effect” set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Seller Material Adverse Effect, and the representations and warranties of Seller contained in Section 2.01, 2.02 and 2.05 shall be true and correct in all respects (except to the extent of any de minimis inaccuracy) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date).  Purchaser shall have received a certificate signed on behalf of Seller by an authorized officer of Seller to such effect.

  

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(c)            Performance of Obligations of Seller and the Company.  Seller and the Company shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Seller or the Company by the time of the Closing, and Purchaser shall have received certificates signed by an authorized officer of Seller and the Company, as applicable, to such effect.

(d)            Ancillary Agreements.  Each of the Ancillary Agreements to which Seller or the Company is, or is specified to be, a party shall have been executed and delivered by Seller and the Company, as applicable.

(e)            Company Material Adverse Effect.  From the date of this Agreement, there shall not have occurred any event, occurrence, change or development that, individually or in the aggregate, has resulted in, or would reasonably be expected to result in, a Company Material Adverse Effect.  Purchaser shall have received a certificate signed on behalf of Seller by an authorized officer of Seller to such effect.

(f)            Company Ratings.  The financial strength of the Reinsurance Subsidiaries shall be rated “A-” or better by A.M. Best and “A-” or better by S&P (or, if one or both of such rating entities have ceased to provide ratings of the Reinsurance Subsidiaries, ratings that are equivalent or better from another internationally recognized rating entity).  Purchaser shall have received a certificate signed on behalf of Seller by an authorized officer of Seller to such effect.

SECTION 6.03.            Conditions to Obligation of Seller.  The obligation of Seller to sell the Shares to Purchaser is subject to the satisfaction (or waiver by Seller) on or prior to the Closing Date of the following conditions:

(a)            Representations and Warranties of Purchaser.  The representations and warranties of Purchaser contained in this Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Purchaser Material Adverse Effect” set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Purchaser Material Adverse Effect.  Seller shall have received a certificate signed by Purchaser to such effect.

(b)            Performance of Obligations of Purchaser.  Purchaser shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Purchaser by the time of the Closing, and Seller shall have received a certificate signed by Purchaser to such effect.

(c)            Ancillary Agreements.  Each of the Ancillary Agreements to which Purchaser is, or is specified to be, a party shall have been executed and delivered by Purchaser, as applicable.

 

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              SECTION 6.04.            Frustration of Closing Conditions.  Neither Purchaser nor Seller may rely on the failure of any condition set forth in this Article VI to be satisfied if such failure was caused by such party’s failure to act in good faith or to use its reasonable best efforts to cause the Closing to occur, as required by Section 5.04.

ARTICLE VII

Termination, Amendment and Waiver

SECTION 7.01.            Termination.  (a)  This Agreement may be terminated and the Acquisition and the other transactions contemplated by this Agreement abandoned at any time prior to the Closing:

(i)            by mutual written consent of Seller and Purchaser;

(ii)            by either Seller or Purchaser:

(1)            if the Closing does not occur on or prior to May 31, 2016 (the “Outside Date”); provided, however, that the right to terminate this Agreement under this Section 7.01(a)(ii)(1) shall not be available to any party if such failure of the Closing to occur on or prior to the Outside Date is principally caused by or is the result of a breach of this Agreement by such party or the failure of any representation or warranty of such party contained in this Agreement to be true and correct; or

(2)            if the condition set forth in Section 6.01(b) is not satisfied and the Legal Restraint giving rise to such non-satisfaction has become final and non-appealable; provided, however, that the right to terminate this Agreement under this Section 7.01(a)(ii)(2) shall not be available to a party if such failure to satisfy the condition set forth in Section 6.01(b) is principally caused by or is the result of a breach of this Agreement by such party or the failure of any representation or warranty of such party contained in this Agreement to be true and correct;

(iii)            by Seller, if Purchaser breaches or fails to perform any of its covenants or agreements contained in this Agreement, or if any of the representations or warranties of Purchaser contained herein fails to be true and correct, which breach or failure (A) would give rise to the failure of a condition set forth in Section 6.03(a) or Section 6.03(b) and (B) is not reasonably capable of being cured by Purchaser by the Outside Date or is not cured by Purchaser within 30 days after receiving written notice from Seller; provided, however, that the right to terminate this Agreement under this Section 7.01(a)(iii) shall only be available if Seller and the Company are not then in breach of any covenant or agreement contained in this Agreement and no representation or warranty of Seller or the Company contained herein then fails to be true and correct such that the conditions set forth in Section 6.02(a), 6.02(b) or 6.02(c) could not then be satisfied;

 

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(iv)            by Purchaser, if Seller or the Company breaches or fails to perform any of its covenants or agreements contained in this Agreement, or if any of the representations or warranties of Seller or the Company contained herein fails to be true and correct, which breach or failure (A) would give rise to the failure of a condition set forth in Section 6.02(a), 6.02(b) or 6.02(c) and (ii) is not reasonably capable of being cured by Seller or the Company by the Outside Date or is not cured by Seller or the Company within 30 days after receiving written notice from Purchaser; provided, however, that the right to terminate this Agreement under this Section 7.01(a)(iv) shall only be available if Purchaser is not then in breach of any covenant or agreement contained in this Agreement and no representation or warranty of Purchaser contained herein then fails to be true and correct such that the conditions set forth in Section 6.03(a) or 6.03(b) could not then be satisfied; or

(v)            by Seller, if a catastrophe event or events, including any and all natural or man-made perils, has occurred after the date of this Agreement that has resulted, or would reasonably be expected to result, in aggregate Catastrophe Losses to the Company and the Subsidiaries in excess of $350,000,000; provided, however, that the right to terminate this Agreement under this Section 7.01(a)(v) shall only be available if Seller is not then in Intentional Breach of this Agreement.

(b)            In the event of termination by Seller or Purchaser pursuant to this Section 7.01, written notice of such termination shall be given to the other parties to this Agreement and the transactions contemplated by this Agreement shall be terminated, without further action by any party.  If the transactions contemplated by this Agreement are terminated as provided herein:

(i)            Purchaser shall return all documents and other material received from Seller or the Company relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to Seller or the Company, as the case may be; and

(ii)            all confidential information received by Purchaser with respect to the business of the Company and the Subsidiaries shall be treated in accordance with the Confidentiality Agreement, which shall remain in full force and effect notwithstanding the termination of this Agreement.

SECTION 7.02.            Effect of Termination.  If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in Section 7.01, this Agreement shall become null and void and of no further force and effect, without any liability or obligation on the part of any party, except for the provisions of, (i) Sections 2.06, 3.20 and 4.08 relating to broker’s fees, (ii) Section 5.03 relating to the obligation of Purchaser to keep confidential certain information and data obtained by it, (iii) Section 5.05 relating to certain expenses, (iv) Section 5.07 relating to publicity, (v) Section 7.01 and this Section 7.02 and Section 7.03 and (vi) Article X (Miscellaneous), all of which shall survive such termination.  Nothing in this Section 7.02 however, shall be deemed to release any party from any liability for damages for any breach by such party of the terms and provisions of this Agreement or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement.

 

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                      SECTION 7.03.            Termination Fee; Purchase Option.  (a)  In the event that this Agreement is terminated pursuant to Section 7.01(a)(v), then Seller shall pay Purchaser a fee in an amount equal to $120,000,000 (the “Termination Fee”) by wire transfer of same-day funds in U.S. dollars on the Business Day immediately following the Option Expiration Date, unless prior to the Option Expiration Date, Purchaser has elected to receive the Termination Fee in Common Shares (or equivalents) of the Company pursuant to Section 7.03(b). 

(b)            In the event that this Agreement is terminated pursuant to Section 7.01(a)(v), Purchaser shall have the right to elect to receive, in exchange for the payment of the Termination Fee in same-days funds in U.S. dollars, a number of Common Shares (or equivalents) of the Company, free and clear of any Liens (other than those arising from acts of Purchaser or its affiliates or contained in the Company Memorandum of Association or the Company Bye-Laws), (the “Termination Fee Shares”) equal to (i) $120,000,000 divided by (ii) the Per Share Option Price.

(c)            In the event that Purchaser elects pursuant to Section 7.03(b) to receive Termination Fee Shares in lieu of the Termination Fee pursuant to Section 7.03(a), Purchaser shall have the right to purchase (the “Purchase Option”) from Seller, and if Purchaser exercises such right, Seller shall sell to Purchaser, an additional number of Common Shares (or equivalents) of the Company, free and clear of any Liens (other than those arising from acts of Purchaser or its affiliates or contained in the Company Memorandum of Association or the Company Bye-Laws), specified by Purchaser (the “Additional Shares” and, together with the Termination Fee Shares, the “Option Shares”) at a price per Common Share equal to the Per Share Option Price; provided that the number of Option Shares that Purchaser shall be entitled to purchase or otherwise acquire shall in no event exceed 9.9% of the then issued and outstanding Common Shares (or equivalents) of the Company.

(d)            Purchaser may exercise its right to receive the Termination Fee in the form of Termination Fee Shares and, if it does so, may also exercise the Purchase Option during the period from the date of receipt of the notice of termination of this Agreement pursuant to Section 7.01(a)(v) until the date that is 15 days following the date of receipt of such notice of termination (the “Option Expiration Date”) by delivering to Seller a written notice specifying that Purchaser elects to receive the Termination Fee Shares in lieu of the Termination Fee and stating the total number of Additional Shares Purchaser desires to purchase.

 

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(e)            Following Purchaser’s election to receive the Termination Fee Shares and, if applicable, its exercise of the Purchase Option, Seller and Purchaser shall, as promptly as reasonably practicable, enter into a stock subscription agreement (the “Option Subscription Agreement”) containing (i) customary fundamental representations and warranties by each of Seller and Purchaser, including representations and warranties from Seller and the Company that are substantially similar to the representations set forth in Article II and Sections 3.01, 3.02, 3.03, 3.04 and 3.21, and representations and warranties from Purchaser that are substantially similar to the representations set forth in Sections 4.01, 4.02, 4.03, 4.04, 4.06, 4.07 and 4.08 hereof, (ii) a customary right of first refusal in favor of Seller in the event that Purchaser desires to sell any Option Shares following the Option Closing, and (iii) customary tag-along and drag-along rights.  Purchaser’s investment in the Company and purchase of the Option Shares shall be structured such that Purchaser’s investment from and after the Option Closing does not reflect the results of, or other changes in the value of, the Reorganization Assets held by the Company and its Subsidiaries.

(f)            At the closing pursuant to the Option Subscription Agreement (the “Option Closing”), (i) Purchaser shall deliver to Seller, in exchange for each Additional Share, the Per Share Option Price in same-day funds in U.S. dollars; and (ii) Seller shall deliver to Purchaser certificates representing the Termination Fee Shares and the Additional Shares, duly endorsed in blank or accompanied by stock powers duly endorsed in blank in proper form for transfer with appropriate Transfer Tax stamps, if any, affixed.

SECTION 7.04.            Amendment.  This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

SECTION 7.05.            Extension; Waiver.  At any time prior to the Closing, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) waive compliance with any of the agreements or conditions contained in this Agreement.  Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.  The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

ARTICLE VIII

Indemnification

SECTION 8.01.            Indemnification by Seller.  (a)  From and after the Closing, Seller shall indemnify Purchaser, its affiliates (including the Company and the Subsidiaries) and each of their respective former, current and future officers, directors, employees, stockholders, agents and representatives (the “Purchaser Indemnitees”) against and hold them harmless from any loss, liability, claim, damage or expense, including reasonable legal fees and expenses (collectively, “Losses”), suffered or incurred by such Purchaser Indemnitee to the extent arising from, relating to or otherwise in respect of:

(i)            any breach as of the date of this Agreement and/or where applicable as of the Closing Date (or, to the extent expressly made as of an earlier date, as of such earlier date) of any representation or warranty of Seller or the Company contained in this Agreement or in any certificate delivered pursuant hereto; and

 

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(ii)            any breach of any covenant or agreement of Seller (or, prior to the Closing, the Company) contained in this Agreement.

(b)            Seller shall not be required to indemnify any Purchaser Indemnitee, and shall not have any liability, under Section 8.01(a)(i) of this Article VIII:

(i)            unless the aggregate amount of all Losses for which Seller would, but for this clause (i), be liable thereunder exceeds on a cumulative basis an amount equal to one percent (1%) of the Final Purchase Price (the “Deductible”), and then only to the extent of any such excess; provided, however, that this clause (i) shall not apply to any claim for indemnification arising out of a breach or alleged breach of any Company or Seller representation or warranty which is a Fundamental Representation;

(ii)            for any individual item or series of related items arising out of the same facts or circumstances where the Loss relating thereto is less than $100,000, and such item or series of related items arising out of the same facts or circumstances shall not be aggregated for purposes of clause (i) of this Section 8.01(b); provided, however, that this clause (ii) shall not apply to any claim for indemnification arising out of a breach or alleged breach of any Company or Seller representation or warranty which is a Fundamental Representation; and

(iii)            for Losses under Section 8.01(a)(i) in excess of an amount equal to fifteen percent (15%) of the Final Purchase Price in the aggregate (the “Cap”); provided that this clause (iii) shall not be applicable with regards to claims of, or causes of action arising from, Fraud or to any claim for indemnification arising out of a breach or alleged breach of any Company or Seller representation or warranty which is a Fundamental Representation.

(c)            Seller shall not be required to indemnify any Purchaser Indemnitee, and shall not have any liability, with respect to any breach of any representation, warranty or covenant of Seller or the Company, if:  (A) Seller provides written notice to Purchaser prior to the Closing, describing in reasonable detail such breach, (B) Seller acknowledges in writing that the effect of such breach is a failure of any condition to Purchaser’s obligations set forth in Article VI and (C) Purchaser proceeds with the Closing; provided that in no event shall this clause 8.01(c) apply to any Intentional Breach by Seller or the Company of any representation, warranty or covenant hereunder.  In the event that Seller provides such written notice in clause (A) of the previous sentence to Purchaser less than five Business Days prior to the then-scheduled Closing Date, Purchaser may, at its option, extend the Closing Date for up to five Business Days.

 

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(d)            In no event shall Seller’s aggregate indemnification obligation for Losses and Tax Losses pursuant to this Article VIII and Article IX (including with respect to any breach or alleged breach of any Fundamental Representation), taken together, exceed the Final Purchase Price (other than claims of, or causes of action arising from Fraud).

SECTION 8.02.            Indemnification by Purchaser.

(a)            From and after the Closing, Purchaser and the Company, jointly and severally, shall indemnify Seller and its affiliates and each of their respective former, current, or future officers, directors, employees, stockholders, agents and representatives (the “Seller Indemnitees”) against and hold them harmless from any Loss suffered or incurred by such Seller Indemnitee to the extent arising from, relating to or otherwise in respect of:

(i)            any breach as of the Closing Date of any representation or warranty of Purchaser contained in this Agreement or in any certificate delivered pursuant hereto; and

(ii)            any breach of any covenant or agreement of Purchaser (or, after the Closing, the Company) contained in this Agreement.

(b)            Purchaser and the Company shall not be required to indemnify any Seller Indemnitee, and shall not have any liability, under Section 8.02(a)(i) of this Article VIII in respect of a breach of the Purchaser’s representations and warranties in Article IV:

(i)            unless the aggregate of all Losses for which Purchaser and the Company would, but for this clause (i), be liable thereunder exceeds the Deductible, and then only to the extent of any such excess; provided, however, that this clause (i) shall not apply to any claim for indemnification arising out of a breach or alleged breach of any Purchaser representation or warranty which is a Fundamental Representation;

(ii)            in excess of the Cap provided that this clause (ii) shall not be applicable with regards to claims of, or causes of action arising from, Fraud or to any claim for indemnification arising out of a breach or alleged breach of any Purchaser representation or warranty which is a Fundamental Representation.

(c)            In no event shall Purchaser’s aggregate indemnification obligation for Losses pursuant to this Article VIII or amounts under Section 9.05(d) (including with respect to any breach of any Fundamental Representation), taken together, exceed the Final Purchase Price (other than claims of, or causes of action arising from, Fraud).

 

SECTION 8.03.            Calculation of Losses.  (a)  The amount of any Loss or Tax Loss for which indemnification is provided under this Article VIII or Article IX shall be (i) net of any amounts actually recovered and received by the indemnified party as a result of any indemnification by a third party or under insurance policies with respect to such Loss and (ii) reduced to take account of any net Tax benefit currently realized (in the form of cash from, or as a reduction of a cash liability owed to, a Taxing Authority, or in the form of a deferred tax asset) by the indemnified party arising from the circumstances giving rise to the incurrence or payment of any such Loss.  For purposes of the preceding sentence, the deferred tax asset shall be calculated net of any valuation allowance reasonably determined by the Company, except that in calculating the valuation allowance, the underlying tax attribute shall be deemed to expire after five calendar years (if it does not expire earlier under then-Applicable Law).  Purchaser, the Company and the Subsidiaries shall provide Seller and its affiliates with reasonable access to information, including copies of relevant Tax Returns or portions thereof, together with accompanying schedules, related workpapers and documents relating to rulings or other determinations by Taxing Authorities, as are reasonably necessary for the determination of any net Tax benefit (and may redact such information as is not reasonably necessary for the determination of any net Tax benefit), and Seller shall, and shall cause its affiliates to, keep all such information and items confidential and shall use such information solely in connection with the determination of any net Tax benefit.

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(b)            If any insurance proceeds or other amounts are received by any Purchaser Indemnitee or Seller Indemnitee after receipt of any indemnification payment pursuant to this Article VIII, Purchaser or Seller, as applicable, shall promptly repay to the indemnifying party such portion of such indemnification payment equal to the amounts so recovered or realized.

(c)            The amount of the Loss or Tax Loss arising out of any item reflected as a liability or provided for or reserved against in calculating the Closing Date Book Value (as finally determined under Section 1.04) shall be calculated net of the amount so reflected, provided for or reserved against.  Notwithstanding any other provision of this Agreement to the contrary, no Purchaser Indemnitee shall be entitled to indemnification under this Article VIII or Article IX for any Losses or Tax Losses to the extent such Losses or Tax Losses are reflected, provided for or reserved against in the Closing Date Book Value.

(d)            For the avoidance of doubt, neither Seller nor the Company makes any representation, warranty or guarantee whatsoever that the Insurance Reserves held by or on behalf of the Company and the Subsidiaries are or will be sufficient for the purposes for which they were established, and nothing in this Agreement shall be construed as providing the economic equivalent of any such representation, warranty or guarantee.  Notwithstanding any other provision of this Agreement to the contrary, no Purchaser Indemnitee shall be entitled to indemnification under this Article VIII for any Losses to the extent such Losses arise out of any failure of the Insurance Reserves held by or on behalf of the Company and the Subsidiaries to be sufficient for the purposes for which they were established and regardless of whether such Insurance Reserves are general in nature or specific to a particular matter.

(e)            No indemnified party shall be entitled to indemnification under this Article VIII or Article IX with respect to any Losses or Tax Losses that are in the nature of punitive, incidental, consequential, special, treble or indirect damages or damages based on any multiple, including business interruption, loss of future revenue, profits or income, or loss of business reputation or opportunity, in each case of any kind or nature, regardless of the form of action through which any of the foregoing are sought unless such party satisfies all of the elements necessary for recovery of such Losses under the laws of the State of New York.

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SECTION 8.04.            Termination of Indemnification.  The obligations to indemnify and hold harmless any party (i) pursuant to Section 8.01(a)(i) or 8.02(a)(i) shall terminate when the applicable representation or warranty terminates pursuant to Section 8.06 and (ii) pursuant to Section 8.01(a)(ii) or 8.02(a)(ii) shall terminate when the applicable covenant terminates pursuant to Section 8.06; provided, however, that such obligations to indemnify and hold harmless shall not terminate with respect to any specific item as to which the person to be indemnified has, before the expiration of the applicable survival period, previously made a claim by delivering a notice of such claim (stating in reasonable detail the basis of such claim) pursuant to Section 8.05 to the party to be providing the indemnification (it being understood and agreed that such obligations to indemnify and hold harmless shall survive only until, and only for the purposes of, the final resolution of the matter covered by such notice).

SECTION 8.05.            Procedures.  (a)  Third Party Claims.  In order for a Seller Indemnitee or a Purchaser Indemnitee, as applicable (each, an “indemnified party”) to be entitled to any indemnification provided for under Section 8.01 or 8.02 in respect of, arising out of or involving a claim made by any person against the indemnified party (a “Third Party Claim”), such indemnified party must notify the indemnifying party in writing (and in reasonable detail) of the Third Party Claim within 30 days following receipt by such indemnified party of notice of the Third Party Claim; provided, however, that, subject to Sections 8.04 and 8.06, failure to give such notification shall not affect the indemnification provided hereunder except to the extent the indemnifying party shall have been actually prejudiced as a result of such failure (except that the indemnifying party shall not be liable for any expenses incurred during the period in which the indemnified party failed to give such notice).  Thereafter, the indemnified party shall deliver to the indemnifying party, promptly following the indemnified party’s receipt thereof, copies of all notices and documents (including court papers) received by the indemnified party relating to the Third Party Claim.

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(b)            Assumption.  If a Third Party Claim is made against an indemnified party, the indemnifying party shall be entitled to participate in the defense thereof and, if it so chooses, to assume the defense thereof with counsel selected by the indemnifying party, so long as such counsel is not reasonably objected to by the indemnified party; provided, however, that as a condition to assuming such defense, the indemnifying party shall acknowledge its responsibility for Losses resulting from or relating to such Third Party Claim.  Should the indemnifying party so elect  in writing to assume the defense of a Third Party Claim, the indemnifying party shall not be liable to the indemnified party for any legal expenses subsequently incurred by the indemnified party in connection with the defense thereof.  If the indemnifying party assumes such defense, the indemnified party shall have the right to participate in the defense thereof and to employ counsel (not reasonably objected to by the indemnifying party), at its own expense, separate from the counsel employed by the indemnifying party, it being understood that the indemnifying party shall control such defense.  The indemnifying party shall be liable for the fees and expenses of counsel employed by the indemnified party for any period during which the indemnifying party has not assumed the defense thereof (other than during any period in which the indemnified party shall have failed to give notice of the Third Party Claim as provided above).  If the indemnifying party chooses to defend or prosecute a Third Party Claim, all the indemnified parties shall cooperate in the defense or prosecution thereof in a commercially reasonable manner.  Such cooperation shall include the retention and (upon the indemnifying party’s request) the provision to the indemnifying party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder; provided, however, that such indemnified parties may withhold any such records or information to the extent necessary to preserve attorney client privilege, so long as such indemnified parties deliver to the indemnifying party the information contained in such records or information to the extent possible while preserving such attorney client privilege.  Whether or not the indemnifying party assumes the defense of a Third Party Claim, the indemnified party shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the indemnifying party’s prior written consent (which consent shall not be unreasonably withheld).  If the indemnifying party assumes the defense of a Third Party Claim, the indemnified party shall agree to any settlement, compromise or discharge of a Third Party Claim that the indemnifying party may recommend and that by its terms obligates the indemnifying party to bear the full amount of the liability in connection with such Third Party Claim and which releases the indemnified party completely in connection with such Third Party Claim; provided, however, that the indemnifying party shall not, without prior written consent of the indemnified party (which consent shall not be unreasonably withheld), settle, compromise or offer to settle or compromise any Third Party Claim on a basis that would result in (A) injunctive or other nonmonetary relief against the indemnified party, including the imposition of a consent order, injunction or decree that would restrict the future activity or conduct of the indemnified party, or (B) a finding or admission of a violation of law by the indemnified party.   Notwithstanding the foregoing, the indemnifying party shall not be entitled to assume the defense of any Third Party Claim (and shall be liable for the reasonable fees and expenses of counsel incurred by the indemnified party in defending such Third Party Claim) if (W) the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the indemnified party that the indemnified party reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages (and if such equitable relief or other nonmonetary relief portion of the Third Party Claim can be so separated from that for money damages, the indemnifying party shall be entitled to assume the defense of the portion relating to money damages), (X) the indemnifying party and the indemnified party both are named parties to the proceedings and the indemnified party has reasonably concluded, after conferring with its outside counsel, that representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them or (Y) the indemnifying party is not entitled to a legal defense or counterclaim available to the indemnified party.  

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(c)            Direct Claims.  In the event any indemnified party should have a claim against any indemnifying party under Section 8.01 or 8.02 that does not involve a Third Party Claim (a “Direct Claim”) being asserted against or sought to be collected from such indemnified party, the indemnified party shall deliver notice of such claim with reasonable promptness to the indemnifying party.  Subject to Sections 8.04 and 8.06, the failure by any indemnified party so to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have to such indemnified party under Section 8.01 or 8.02, except to the extent the indemnifying party shall have been actually prejudiced as a result of such failure. The indemnifying party shall have a period of 30 days within which to respond to such Direct Claim.  If the indemnifying party does not respond within such 30-day period, the indemnifying party will be deemed to have accepted the Direct Claim.

(d)            Mitigation.  Purchaser and Seller and their respective affiliates shall use commercially reasonable efforts to mitigate or resolve any claim or liability with respect to which one party is obligated (or would be obligated, but for the limitations contained in Section 8.01(b) or 8.02(b), as applicable) to indemnify the other party hereunder.  The costs of mitigation pursuant to this Section 8.05(d) will themselves be Losses.

SECTION 8.06.            Survival.  The representations, warranties, covenants and agreements contained in this Agreement and in any document delivered in connection herewith shall survive the Closing solely for purposes of this Article VIII as follows:

(i)            the Fundamental Representations shall survive until the latest date permitted by Applicable Law;

(ii)            the representations and warranties contained in Section 3.13 shall not survive the Closing;

(iii)            the representations and warranties contained in this Agreement (other than the Fundamental Representations and the representations and warranties contained in Section 3.13) shall survive for 18 months following the Closing;

(iv)            the covenants and agreements contained in this Agreement to be performed at or prior to the Closing shall not survive the Closing; and

(v)            the covenants and agreements contained in this Agreement to be performed after the Closing shall survive in accordance with their terms.

Following the expiration of the applicable survival period, the applicable representations, warranties, covenants and agreements shall terminate and thereafter be of no force and effect, except as provided in Section 8.04.

 

SECTION 8.07.            No Additional Representations.  Purchaser acknowledges that it and its representatives have been permitted full and complete access to the books and records, facilities, equipment, tax returns, Contracts, insurance or reinsurance policies (or summaries thereof) and other properties and assets of the Company and the Subsidiaries that it and its representatives have desired or requested to see or review, and that it and its representatives have had a full opportunity to meet with the officers and employees of the Company and the Subsidiaries to discuss the business of the Company and the Subsidiaries.  Purchaser acknowledges that (i) none of Seller, the Company or any other person has made any representation or warranty, expressed or implied, as to the Company or any Subsidiary or the accuracy or completeness of any information regarding the Company and the Subsidiaries furnished or made available to Purchaser and its representatives, except as expressly set forth in this Agreement, (ii) Purchaser has not relied on any representation or warranty from Seller, the Company or any other person in determining to enter into this Agreement, except as expressly set forth in this Agreement, and (iii) none of Seller or any other person shall have or be subject to any liability to Purchaser or any other person resulting from the distribution to Purchaser, or Purchaser’s use of, any information, documents or material made available to Purchaser in any “data rooms”, management presentations or in any other form in expectation of the transactions contemplated hereby.

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SECTION 8.08.            Exclusive Remedy.  Except (i) with respect to claims relating to the Bi-Lateral Services Agreement and (ii) as otherwise specifically provided in this Agreement, the Seller and Purchaser acknowledge and agree that their sole and exclusive remedy after the Closing with respect to any and all claims relating to this Agreement, the Acquisition and the other transactions contemplated hereby, the Company or any Subsidiary or their assets and liabilities (other than claims of, or causes of action arising from Fraud) shall, in each case, be pursuant to the indemnification provisions set forth in this Article VIII and Article IX.  In furtherance of the foregoing, each of the Seller, Purchaser and the Company (on behalf of themselves and their affiliates) hereby waive, from and after the Closing, to the fullest extent permitted under Applicable Law, any and all rights, claims and causes of action (other than claims of, or causes of action arising from Fraud) they or their affiliates may have against the Purchaser or the Seller, as applicable, arising under or based upon this Agreement, any Ancillary Agreement, any document or certificate delivered in connection herewith, any Applicable Law (including any rights of contribution or recovery under the Comprehensive Environmental Response, Compensation, and Liability Act or any analogous state law, or relating to any other environmental matters), common law or otherwise (except pursuant to the indemnification provisions set forth in this Article VIII and Article IX).  After the Closing, neither Seller, Purchaser nor the Company nor their affiliates may bring any suit, action or proceeding seeking to rescind the Acquisition or this Agreement, whether based on fraud, gross negligence, negligence, breach of contract, breach of statute or otherwise.

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ARTICLE IX

Tax Matters

SECTION 9.01.            Tax Returns.  (a)  The Seller shall cause the Company to (i) prepare and file, to the standard reasonably expected from an independent tax accountant, all Tax Returns with respect to the Company and the Subsidiaries required to be filed on or before Closing Date (including such supplemental non-mandatory Tax forms as would reasonably be expected to accompany such Tax Returns) and (ii) pay to the relevant Taxing Authority all Taxes shown as due on such Tax Returns, within the time and in the manner prescribed by Applicable Law.

(b)            The Purchaser shall cause the Company to prepare and file (or cause to be prepared and filed), to the standard reasonably expected from an independent tax accountant, all Tax Returns with respect to the Company and the Subsidiaries required to be filed after the Closing Date (including such supplemental non-mandatory Tax forms as would reasonably be expected to accompany such Tax Returns) with respect to any Taxable Periods ending on or prior to the Closing Date (“Pre-Closing Periods”) and Taxable Periods ending after, but including, the Closing Date (“Straddle Periods”).  In the case of Tax Returns for Pre-Closing Periods, Seller shall be responsible for paying to the relevant Taxing Authority or Purchaser, as directed by Purchaser, all Taxes shown as due on such Tax Returns, within the time and in the manner prescribed by Applicable Law.  In the case of Tax Returns for Straddle Periods, at the time Purchaser provides a copy of such Tax Return to Seller, Purchaser shall provide a notice setting forth the amount of Tax allocable to the period ending on (and including) the Closing Date in accordance with Section 9.05(b), and Seller shall pay to the relevant Taxing Authority or Purchaser, as directed by Purchaser, such amount of Tax no later than 5 days prior to the time such Tax Return is due.  Notwithstanding the foregoing, Seller shall not be responsible for any Tax under this Section 9.01(b) to the extent the liability for such Tax was taken into account in the calculation of Closing Date Book Value as finally determined under Section 1.04 of this Agreement.

(c)            The payment of Taxes with a Tax Return under subsection (a) or (b) shall be without prejudice to the indemnification rights of the parties under Section 9.05.

(d)            Each of Seller and Purchaser shall use reasonable best efforts to make any Tax Returns and work papers in respect of a Taxable Period that begins on or before the Closing Date, which such party is responsible for causing to be prepared, available for review by the other party sufficiently in advance of the due date for filing such Tax Returns (after taking into account available extensions), but in all events at least 45 days prior to the date such Tax Return is required to be filed, to provide such other party with a meaningful opportunity to analyze, comment on and dispute such Tax Returns.  The reviewing party shall notify the preparing party of any comments or disputes with respect to such Tax Returns in advance of the due date for filing such Tax Returns (after taking into account available extensions), but in all events at least 30 days prior to the date such Tax Return is required to be filed, to provide such other party with a meaningful opportunity to consider such comments or disputes and for such Tax Returns to be modified, as appropriate, before filing.  In the event of any disagreement between Purchaser and Seller, such disagreement shall be resolved in accordance with Section 9.06.  If the Tax Accountant does not resolve any differences between Seller and Purchaser with respect to such Tax Return at least five Business Days prior to the due date therefor, (i) such Tax Return shall be filed as prepared by the party having the responsibility hereunder for preparing such Tax Return and amended to reflect the Tax Accountant’s resolution and (ii) to the extent the amount of Tax shown on such return remains disputed by Seller, Seller shall not be required to pay such amount pursuant to Section 9.01(b) until such dispute is resolved.

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SECTION 9.02.            Books and Records; Cooperation.  (a)  The parties to this Agreement and their respective affiliates will provide each other with such cooperation and information as Purchaser or Seller reasonably may request of the other or such affiliates with respect to any Tax matter at the expense of the requesting party (unless such expense is an expense for which an indemnity is due).  Such cooperation shall include providing signatures with respect to any Tax Returns that must be filed, and providing copies of relevant Tax Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings or other determinations by Taxing Authorities.  Each of Seller, Purchaser and their respective affiliates shall retain all Tax Returns, schedules and work papers, records and other documents in its possession relating to Tax matters of the Company and the Subsidiaries until the later of (i) the expiration of the statute of limitations of the Taxable Periods to which such Tax Returns and other documents relate, without regard to extensions, or (ii) six years following the due date (without extension) for such Tax Returns.  Prior to disposing of any such records, notice shall be given by Purchaser or Seller, as applicable, to the other party providing reasonable terms allowing such other party to take, at its sole expense, possession of such records.

(b)            Without limiting the foregoing, at the Closing, Seller may retain any Tax Returns with respect to the Company and the Subsidiaries in the possession of Seller or any of its affiliates, and Purchaser shall be provided with copies of the Company and the Subsidiaries’ separate Tax Returns and the pro forma portion of any consolidated or combined Tax Returns relating solely to the Company and the Subsidiaries.

(c)            Any information obtained under this Section 9.02 shall be kept confidential, except as may be otherwise necessary in connection with the filing of Tax Returns or amendments, or conducting an audit or other proceeding.

SECTION 9.03.             Transfer Taxes.  Seller and Purchaser shall each pay 50% of any Transfer Taxes incurred in connection with transactions contemplated by this Agreement, except that Purchaser shall pay 100% of any such Transfer Taxes imposed by the Republic of Singapore.  Seller and Purchaser shall cooperate with each other in the timely filing and execution of any Tax Returns and other documentation relating to such Transfer Taxes, the remitting of payment of all such Taxes and the delivery of any forms claiming exemption or relief from any such Taxes.

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SECTION 9.04.             Additional Covenants.  (a)  All Tax sharing agreements with respect to the Company or any Subsidiary (except for Tax sharing agreements solely between the Company and the Subsidiaries) shall be terminated with respect to any Liability of the Company or any Subsidiary as of the day prior to the Closing Date and the Company and the Subsidiaries shall not be bound thereby or have any Liability thereunder at any time thereafter.

(b)            Seller and Purchaser (and each of their respective affiliates) agree to treat all payments made by either of them under this Agreement (other than payments made under Section 1.03, which payments constitute the Purchase Price) as adjustments to the Purchase Price for all Tax purposes and that such treatment shall govern for purposes hereof except to the extent that the Applicable Laws of a particular jurisdiction require otherwise.

SECTION 9.05.             Tax Indemnity.  (a)  From and after the Closing Date, Seller shall indemnify the Purchaser Indemnitees and hold them harmless from and against all liability for (u) Taxes imposed on or payable by or with respect to the Company or any of its Subsidiaries for any Pre-Closing Periods, (v) any Taxes imposed on or payable by or with respect to the Company or any of its Subsidiaries which are allocable to the portion of a Straddle Period ending on (and including) the Closing Date, (w) any Taxes of a person other than the Company or any of its Subsidiaries for which the Company or any of its Subsidiaries is or becomes liable as a result of (i) an agreement principally related to Taxes and existing at any time prior to the Closing, (ii) transferee or successor liability existing at any time prior to the Closing or (iii) being or having been a member of an affiliated, consolidated, combined or unitary tax group on or prior to the Closing Date, including pursuant to U.S. Treasury Regulation Section 1.1502-6 or any analogous or similar state, local, or non-U.S. law, (x) a change in a Closing Statement Tax Attribute as a result of (i) a final determination by a Taxing Authority, excluding by reason of a change in law, official interpretation of a Taxing Authority or official practice of a Taxing Authority, in each case after the Closing, or, with respect to a Luxembourg Closing Statement Tax Attribute, the application of the Luxembourg Circular L.I.R. no. 114/2 of 2 September 2010 as a result of an action of the Purchaser, the Company or the Subsidiaries after the Closing (other than an action required hereunder) or (ii) the application of such Closing Statement Tax Attribute to offset or reduce any Tax liability of the Seller described in clauses (u), (v), (w) or Section 9.01(b), in each case which, if given effect as of the Closing Date (using the same accounting principles as utilized in the calculation of Closing Date Book Value), would have caused a reduction in the Net Deferred Tax Asset. in which case the amount subject to indemnification under this clause (w) shall be equal to such reduction multiplied by the Agreed Multiple, (x) a change in a Compensation Related Tax Attribute as a result of a final determination by a Taxing Authority, excluding by reason of a change in law official interpretation of a Taxing Authority or official practice of a Taxing Authority, in each case after the Closing, which, if given effect as of the date of the calculation of the related Tax Benefit (using the same accounting principles as utilized in the calculation of such Tax Benefit) would have caused a reduction in such Tax Benefit, in which case the amount subject to indemnification under this clause (y) shall be equal to such reduction, and (z) any reasonable out-of-pocket expenses, including reasonable attorneys’ fees, incurred or arising in connection with or in respect of the assessment, assertion, contest or imposition of a Tax or change in a Pre-Closing or Compensation Related Tax Attribute described in any of clauses (u), (v), (w), (x) or (y) (the sum of (u), (v), (w), (x) and (y) being referred to herein as a “Tax Loss”). For the avoidance of doubt, a change in a Closing Statement Tax Attribute that results in an indemnification obligation under clause (x) shall not be taken into account in determining whether a change in a Tax Benefit occurred under clause (y).

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(b)            For purposes of this Article IX, in the case of any Taxes that are payable for a Straddle Period, the portion of such Tax allocable to the portion of such Tax period ending on (and including) the Closing Date shall (x) in the case of any Taxes other than gross receipts, sales or use Taxes and Taxes based upon or related to income, be deemed to be the amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of days in the Tax period ending on and including the Closing Date and the denominator of which is the number of days in the entire Tax period, and (y) in the case of any Tax based upon or related to income and any gross receipts, sales or use Tax, be deemed equal to the amount which would be payable if the relevant Tax period ended on and included the Closing Date.  All determinations necessary to give effect to the allocation set forth in the foregoing clause (y) shall be made in a manner consistent with prior practice of the Company and its Subsidiaries.  For purposes of determining the amount of Taxes allocable to the portion of a Straddle Period that ends on (and includes) the Closing Date, each entity in which the Company or any of its Subsidiaries owns an interest which is fiscally transparent for Tax purposes shall be treated as if its taxable year ended at the close of business on the Closing Date.

(c)            For the avoidance of doubt, Taxes of the Company and its Subsidiaries for which Seller is responsible under Section 9.01(b) or clause (v), (w) or (x) of Section 9.05(a) shall be computed after taking into account any Closing Statement Tax Attributes available to reduce such Taxes.

(d)            From and after the Closing Date, Purchaser and the Company, jointly and severally, shall indemnify the Seller Indemnitees and hold them harmless from and against all liability for (x) Taxes imposed on the Company or any of its Subsidiaries for any Taxable Period beginning after the Closing Date, (y) Taxes imposed on the Company or any of its Subsidiaries that are allocable to the portion of a Straddle Period beginning on the day after the Closing Date and (z) any Taxes described in Section 9.01(b) or clause (v), (w), (x) or (y) of Section 9.05(a) for which Seller is not responsible by reason of Section 8.03(a) or (c), the final sentence of Section 9.01(b) or Section 9.05(e). For the avoidance of doubt, the indemnity under this Section 9.05(d) shall be limited by Section 8.02(c).

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(e)            Purchaser agrees to give prompt notice to Seller of any Tax Loss or the assertion of any claim, or the commencement of any suit, action or proceeding in respect of which indemnity may be sought under this Section 9.05 (a “Tax Proceeding”) and will give Seller such information with respect thereto as Seller may reasonably request.  Seller may (i) participate in and (ii) in the case of a Tax Proceeding for Taxes relating to a Pre-Closing Period, upon written notice to Purchaser, assume the defense of any such suit, action or proceeding (including any Tax audit); provided that (x) Seller shall thereafter consult with Purchaser upon Purchaser’s reasonable request for such consultation from time to time with respect to such suit, action or proceeding (including any Tax audit) and (y) Seller shall not, without Purchaser’s consent (not to be unreasonably withheld, conditioned or delayed), agree to any settlement with respect to any Tax if such settlement would reasonably be expected to materially adversely affect the Tax liability of any Purchaser Indemnitee and (z) if Seller provides notice to Purchaser that Seller wishes to concede the Tax Proceeding, Seller shall not be obligated to indemnify Purchaser for further costs and expenses under 9.05(a).  If Seller assumes such defense, (i) Purchaser shall have the right (but not the duty) to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by Seller and (ii) Seller shall not assert that the Tax Loss, or any portion thereof, with respect to which Purchaser seeks indemnification is not within the ambit of this Section 9.05.  Whether or not Seller chooses to defend or prosecute any claim, all of the parties hereto shall cooperate in the defense or prosecution thereof.  Notwithstanding any other provision of this Section 9.05, Seller shall not be liable under this Section 9.05 with respect to any Tax Loss resulting from a claim or demand the defense of which Seller was not offered the opportunity to assume as provided under this Section 9.05(e), to the extent Seller’s liability under this Section 9.05 is actually and materially adversely affected as a result thereof.

(f)            Notwithstanding anything to the contrary in this Agreement, Section 9.05 and not Sections 8.01 (other than Section 8.01(d)), 8.02, and 8.05, shall govern indemnification of the Purchaser Indemnitees in respect of Tax Losses and the conduct of Tax Proceedings.

SECTION 9.06.             Disputes.  Disputes arising under this Article IX and not resolved by mutual agreement within 30 days shall be resolved by an internationally recognized accounting firm with no material relationship with Purchaser, Seller or their affiliates (the “Tax Accountant”), chosen by and mutually acceptable to both Purchaser and Seller within five days of the date on which the need to choose the Tax Accountant arises.  The Tax Accountant shall resolve any disputed items within 30 days of having the item referred to it pursuant to such procedures as it may require, and any such resolution by the Tax Accountant shall be final unless not consistent with a final determination of the applicable Taxing Authority.  The costs, fees and expenses of the Tax Accountant shall be borne equally by Purchaser and Seller.

SECTION 9.07.             Survival.  The covenants and indemnities in this Article IX shall survive for purposes of this Article IX until the expiration of the relevant statute of limitations.

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ARTICLE X

General Provisions

SECTION 10.01.          Assignment.  This Agreement and the rights and obligations hereunder shall not be assignable or transferable, in whole or in part, by operations of law or otherwise, by any party without the prior written consent of the other parties hereto.  Any attempted assignment in violation of this Section 10.01 shall be null and void.  Subject to the preceding sentences, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

SECTION 10.02.          No Third-Party Beneficiaries.  Except as provided in Article VIII, this Agreement is for the sole benefit of the parties hereto and their permitted successors and assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such successors and assigns, any legal or equitable rights hereunder.

SECTION 10.03.          Notices.  All notices, requests, claims, demands and other communications to any party hereunder shall be in writing and shall be deemed given if delivered personally, by e-mail (which is confirmed) or if sent by overnight courier (providing proof of delivery) to the parties at the following addresses:

 

	
 

	
(i) 

	
if to Purchaser, to:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
China Minsheng Investment Co., Ltd.

No. 100 South Zhonshan Street

Shanghai 200010

 P.R. China

	
 

	
 

	
 

	
Attention: 

E-mail: 

	
Liao Feng

liaofeng@cm-inv.com

	
 

	
 

	
 

	
 

	
 

	
 

	
with a copy (which shall not constitute notice) to:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Clifford Chance LLP

10 Upper Bank Street

 London

 E14 5JJ	
 

	
 

	
 

	
Attention: 

E-mail: 

	
Katherine Coates, Esq.

katherine.coates@cliffordchance.com

	
 

	
 

	
 

	
 

	
 

	 		
Clifford Chance US LLP

31 West 52nd Street

New York, NY

10019-6131

United States of America

	
	 		
Attention: 

E-mail: 

	
Nicholas R. Williams, Esq.

nick.williams@cliffordchance.com

	
	 			

 

 

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	 	(ii) 	if to Seller, to:	
	 			
	 		
c/o White Mountains Insurance Group, Ltd.

14 Wesley Street, Fifth Floor

Hamilton HM 11

Bermuda

	
	 		
Attention:  

E-mail:

	
Robert Seelig

rseelig@whitemountains.com

	
	 			
	 	with a copy (which shall not constitute notice) to:	
	 			
	 		
Cravath, Swaine & Moore LLP

Worldwide Plaza 825 Eighth Avenue

New York, New York 10019

	
	 		
Attention:

 

	
Philip A. Gelston, Esq.

Ting S. Chen, Esq.

	
	 		
E-mail: 

 

	
pgelston@cravath.com

tchen@cravath.com

	
	 			

SECTION 10.04.          Interpretation; Exhibits; Certain Definitions.  (a)  The headings contained in this Agreement, in any Exhibit hereto and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The term “or” is not exclusive.  The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”.  All references herein to “dollars”, “U.S. dollars” or “$” shall be deemed to be references to the lawful money of the United States.  All provisions herein qualified by the term “domestic” or “foreign” shall be construed on the basis that the United States is the relevant domestic country.  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.  Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.  References to a person are also to its permitted successors and assigns.  All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Exhibit but not otherwise defined therein, shall have the meaning as defined in this Agreement.  When a reference is made in this Agreement to an Article, Section or Exhibit, such reference shall be to an Article or Section of, or an Exhibit to, this Agreement unless otherwise indicated.  The Seller Disclosure Letter shall be arranged in numbered and lettered sections and subsections corresponding to the numbered and lettered sections and subsections contained in Article II, and the disclosure in any section or subsection shall be deemed to qualify other sections and subsections in Article II to the extent (and only to the extent) that it is reasonably apparent from the face of such disclosure that such disclosure also qualifies or applies to such other sections or subsections.  The Company Disclosure Letter shall be arranged in numbered and lettered sections and subsections corresponding to the numbered and lettered sections and subsections contained in Article III and Article V, and the disclosure in any section or subsection shall be deemed to qualify other sections and subsections in Article III or Article V to the extent (and only to the extent) that it is reasonably apparent from the face of such disclosure that such disclosure also qualifies or applies to such other sections or subsections.  The Purchaser Disclosure Letter shall be arranged in numbered and lettered sections and subsections corresponding to the numbered and lettered sections and subsections contained in Article IV, and the disclosure in any section or subsection shall be deemed to qualify other sections and subsections in Article IV to the extent (and only to the extent) that it is reasonably apparent from the face of such disclosure that such disclosure also qualifies or applies to such other sections or subsections.

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(b)            For all purposes hereof:

“affiliate” of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person; provided that, for purposes of this Agreement and the Ancillary Agreements, OneBeacon Insurance Group, Ltd. and its subsidiaries shall not be considered affiliates of Parent or Seller.  For purposes of this definition, “control”, when used with respect to any person, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have the meanings correlative to the foregoing.

“Agreed Multiple” means 1.273.

“Ancillary Agreements” means the Parent Guaranty, the CMI Guaranty, the Bi-Lateral Services Agreement, the Letter of Credit, the Investment Management Agreement and any other agreement, if any, between the parties that is identified therein as an Ancillary Agreement.

“Anti-Bribery Laws” means the US Foreign Corrupt Practices Act (15 U.S.C. §78-dd-1, et seq., as amended), the UK Bribery Act 2010, as well as all other anti-bribery laws, anti-corruption laws, conflict of interest laws, or other Applicable Laws of similar purpose and effect.

“BGB” means Beijing Guoxin Baotai Investment Consulting Co., Ltd.

 

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“Bi-Lateral Services Agreement” means the Bi-Lateral Services Agreement between Seller and the Company, in the form attached to this Agreement as Exhibit B.

“Books and Records” means all written or electronic accounts, ledgers and records (including computer generated, recorded or stored records) relating to the business of the Company and the Subsidiaries, including customer lists, contract forms, applications, enrollment forms, policy information, policyholder information, claim records, sales records, underwriting records, administrative, pricing, underwriting, claims handling and reserving manuals, corporate and accounting and other records (including the books of account and other records), Tax records (including Tax Returns), disclosure and other documents and filings required under Applicable Law, financial records, employee records and compliance records relating to the business of the Company and the Subsidiaries; provided, however, that Books and Records does not include (i) the physical or electronic copies of financial and operational reports provided to Seller, Parent or any subsidiary thereof (other than the Company and the Subsidiaries) in the ordinary course of business (but, for the avoidance of doubt, this clause (i) does not exclude the records or other information otherwise constituting Books and Records underlying such reports)  or (ii) any financial or other information provided in connection with or contained within the consolidated or consolidating financial information of Parent and its subsidiaries.

“Business Day” means any day, other than a Saturday or a Sunday, on which commercial banks in Bermuda and New York, New York, are open for normal banking business.

“Cash” means (i) cash and (ii) as of any date, (A) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government maturing within 91 days  of such date; (B) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P or the equivalent rating from another nationally recognized rating agency and in each case maturing within 91 days of such date; (C) marketable short-term money market and similar securities having a rating of at least P-2 by Moody’s or at least A-2 S&P or the equivalent rating from another nationally recognized rating agency and in each case maturing within 91 days of such date; (D) certificates of deposit, time deposits and eurodollar time deposits maturing within 91 days from such date, bankers’ acceptances maturing within 91 days of such date and overnight bank deposits, in each case with any U.S. commercial bank; (E) indebtedness or preferred stock issued by third parties with a rating of at least A2 from Moody’s or at least A by S&P or the equivalent rating from another nationally recognized rating agency maturing within 91 days of such date; and (F) investments with average maturities of 91 days or less from such date in money market funds rated at least AAA- by S&P or at least Aaa3 by Moody’s or the equivalent rating from another nationally recognized rating agency.

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“Catastrophe Losses” means the aggregate losses and expenses resulting from any catastrophe event or events, including any and all natural or man-made perils, minus the estimated recoveries under reinsurance protections inuring to the benefit of the Company and its Subsidiaries plus the estimated associated reinstatement premiums paid by the Company or any of its Subsidiaries and minus the estimated associated reinstatement premiums received by the Company or any of its Subsidiaries, calculated on a pre-tax basis; provided that Catastrophe Losses shall be calculated assuming that none of the Parent Covers had been obtained or entered into or were ever in existence.

“Closing Date Book Value” means the Closing Date Book Value as defined in, and as calculated in accordance with, the Applicable Accounting Principles and Exhibit C of Section 1.04(j) of the Company Disclosure Letter  and as finally determined in accordance with Section 1.04 (which amount, for the avoidance of doubt, shall not include the Solutions Entity Excess Amount).

“Closing Date Reorganization Value” means an amount equal to the aggregate fair market value (as reasonably determined by Seller in accordance with the Applicable Accounting Principles) of (i) the Reorganization Assets set forth in Section 1.03(e)(i) of the Company Disclosure Letter as of the close of business on the Business Day immediately prior the Closing Date and (ii) the Reorganization Assets set forth in Section 1.03(e)(ii) of the Company Disclosure Letter as of the close of business on the last Business Day of the calendar quarter ending immediately prior to the Closing Date.

“Closing Statement Tax Attribute” means the net operating loss, foreign tax credit, tax basis in an asset or any similar tax characteristic of any of the Company or the Subsidiaries with respect to a Pre-Closing Period or the portion of a Straddle Period ending on (and including) the Closing Date (under the principles of Section 9.05(b)) or otherwise taken into account in the calculation of Closing Date Book Value.”Code” shall mean the Internal Revenue Code of 1986, as amended.

“Company Benefit Plans” means each employee benefit plan, scheme, program, policy, practice, arrangement or contract providing for retirement, health, life, dental, disability, accident or group insurance, vacation, holiday, sick leave, loan, child or dependent care, legal services, cafeteria, workers compensation or insurance, retiree medical insurance, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards or fringe benefits and any other compensation, employee benefits or remuneration of any kind (including, but not limited to, any “employee benefit plan” ( as defined in Section 3(3) of ERISA, whether or not subject to ERISA) and any bonus, stock bonus, stock purchase, restricted stock, stock option or other equity-based, employment, consulting, termination, retention, change in control, supplemental retirement, severance or other plan, scheme, program, policy, practice, arrangement or contract), whether written or unwritten, funded or unfunded, in each case, sponsored, maintained, contributed to or required to be contributed to by the Company or any Subsidiary for the benefit of any Participant, or with respect to which the Company or any Subsidiary is or was a party or has or may have any Liability or in which any Employee participates, other than any plan, scheme, program, policy, practice, arrangement or contract mandated by Applicable Laws; provided that, with respect to outstanding Parent Performance Share Awards and Parent Restricted Share Awards, Company Benefit Plans shall include the Parent LTIP.

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“Company Covered Employee” means the persons identified or listed in Section 10.04(b)(1)(i) of the Company Disclosure Letter.

“Company Disclosure Letter” means the disclosure letter delivered by the Company to Purchaser in connection with the execution and delivery of this Agreement by the parties.

“Company Material Adverse Effect” means a material adverse effect on the business, operations, financial condition or results of operations of the Company and the Subsidiaries, taken as a whole, excluding any effect resulting from (a) any change, development, event or occurrence arising out of or relating to general economic, regulatory, legislative, political or market conditions, (b) any change, development, event or occurrence affecting the insurance or reinsurance industry generally, (c) changes in Applicable Law, the byelaws or requirements of Lloyd’s, GAAP or SAP, (d) any change, development, event or occurrence arising out of or relating to natural catastrophe events, man-made disasters, acts of terrorism, war (whether or not declared) or other hostilities, (e) any change in the financial condition of the Company and the Subsidiaries to the extent that such change has been remedied at or prior to the Closing or was reflected or provided for or reserved against in the calculation of the Closing Date Book Value, (f) any failure, in and of itself, of the Company and the Subsidiaries to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics, or any downgrade or potential downgrade of the credit, financial strength or claims paying rating of the Company or any Subsidiary by any rating agency (it being understood that the underlying facts giving rise or contributing to such failure, change or downgrade or potential downgrade and the other effects thereof shall not be excluded pursuant to this clause (f)), (g) the announcement and pendency of this Agreement and the transactions contemplated hereby, including any loss of or change in relationship with any customer, business partner, labor union, broker, agent, regulator or reinsurance provider, or departure of any employee or officer, of the Company or any Subsidiary resulting therefrom, (h) any action or failure to act on the part of Seller or the Company or any Subsidiary required by this Agreement or any of the Ancillary Agreements or requested or consented to in writing by Purchaser, (i) any action on the part of Purchaser or any of Purchaser’s affiliates and (j) any condition or requirement imposed by any Governmental Entity or Lloyd’s in connection with the granting or issuance of any Governmental Approval in respect of the Acquisition, but only to the extent that any such effect described in the preceding clauses (a), (b), (c) and (d) does not materially and disproportionately affect the Company and the Subsidiaries relative to other persons engaged in the reinsurance of similar risks.

“Compensation Related Tax Attribute” means a current or deferred Tax deduction or that is available to the Company or the Subsidiaries that is taken into account in the calculation of the Tax Benefit in Section 5.6 and reduces an amount otherwise payable by Seller or increases an amount otherwise payable by Purchaser.

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 “Employee” means any current or former employee of the Company or any Subsidiary.

“Environmental Law” means any Applicable Law relating to pollution or protection of the environment or natural resources or human health as it relates to the environment.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any person required or any particular time to be aggregated with any of the Company or any Subsidiary under Sections 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

“Estimated Closing Book Value” means the Estimated Closing Book Value as defined in, and as calculated in accordance with, the Applicable Accounting Principles and Exhibit B of Section 1.04(j) of the Company Disclosure Letter (which amount, for the avoidance of doubt, shall not include the Solutions Entity Excess Amount).

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

“Fraud” means, (i) with respect to Seller, an actual and intentional fraud with respect to the making of the representations and warranties pursuant to Article II or Article III or in any certificate delivered to Purchaser pursuant to Sections 6.02(a), 6.02(b), 6.02(c), 6.02(e) or 6.02(f), provided that such actual and intentional fraud of Seller shall be deemed to exist only if any of the individuals included on Section 10.04(b)(2)(i) of the Company Disclosure Letter or Section 10.04(b)(2)(ii) of the Seller Disclosure Letter had actual knowledge (as opposed to imputed or constructive knowledge) that such representations and warranties, as qualified by the Company Disclosure Letter or the Seller Disclosure Letter, as applicable, were actually breached when made, with the express intention that Purchaser may rely thereon to its detriment and (ii) with respect to Purchaser, an actual and intentional fraud with respect to the making of the representations and warranties pursuant to Article IV or in any certificate delivered to Seller pursuant to Sections 6.03(a) or 6.03(b), provided that such actual and intentional fraud of Purchaser shall be deemed to exist only if any of the individuals included on Section 10.04(b)(2)(iii) of the Purchaser Disclosure Letter had actual knowledge (as opposed to imputed or constructive knowledge) that such representations and warranties, as qualified by the Purchaser Disclosure Letter, were actually breached when made, with the express intention that Seller may rely thereon to its detriment.

“Fundamental Representations” means the representations and warranties included in Sections 2.01, 2.02, 2.05, 3.02(a), 3.02(b), 3.03, 4.01, 4.02, and 4.06 and the first sentence of Section 3.01(a).

“Governmental Entity” means (a) a national government, political subdivision thereof, or government of a state or local jurisdiction therein; or (b) an instrumentality, board, commission, court, or agency, whether civilian or military, of any of the above; or (c) a government-owned/government-run/government-controlled association, organization, business or enterprise.

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“Government Official” means (i) an employee, officer, or representative of, or any person otherwise acting in an official capacity for or on behalf of a Governmental Entity; (ii) a legislative, administrative, or judicial official; (iii) a candidate for political office; (iv) an individual who holds any other official, ceremonial, or other appointed or inherited position with a government or any of its agencies; or (v) an officer or employee of a supra-national organization (e.g., World Bank, United Nations, International Monetary Fund, OECD). 

“HGB” means Horgos Guoxin Baotai Venture Capital Co., Ltd.

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

“Insurance Regulator” means any insurance supervisory department or officials having jurisdiction over any part of the operations, business, assets, liabilities, products and services of any of the Reinsurance Subsidiaries, including Lloyd’s.

“Insurance Reserves” means any reserves, funds or provisions for losses, claims, premiums, loss and loss adjustment expenses (including reserves for incurred but not reported losses and loss adjustment expenses) and other Liabilities in respect of the insurance or reinsurance contracts issued by the Reinsurance Subsidiaries.

“Intentional Breach” shall mean a breach of a representation, warranty or covenant of this Agreement that is caused by a deliberate act taken, or a deliberate failure to act omitted to be taken, by Seller or Company, as applicable, with actual knowledge that such act or omission to act constitutes a breach of this Agreement.

“Interim Balance Sheet” means the GAAP balance sheet as of March 31, 2015, included in the Unaudited Financial Statements described in Section 3.05(a).

 

“Investment Assets” means any investment assets (whether or not required by GAAP or SAP to be reflected on a balance sheet) beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by the Company or any Subsidiary, including bonds, notes, debentures, mortgage loans, real estate and all other instruments of indebtedness, stocks, partnership or joint venture interests and all other equity interests, certificates issued by or interests in trusts, derivatives and all other assets, in each case acquired for investment purposes and including any assets held in trust in respect of White Mountains Re Sirius Capital Limited in accordance with the Lloyd’s Premiums Trust Deed entered into between Lloyd’s and White Mountains Re Sirius Capital Limited, but excluding, for the avoidance of doubt, any equity securities of the Subsidiaries owned by the Company or other Subsidiary.

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“Investment Management Agreements” means the Amended and Restated Investment Management Agreements (i) between Sirius International Insurance Corporation and White Mountains Advisors LLC, in the form attached to this Agreement as Exhibit D-1, (ii) between Sirius America Insurance Company and White Mountains Advisors LLC, in the form attached to this Agreement as Exhibit D-2 and (iii) between the Company and White Mountains Advisors LLC, in the form attached to this Agreement as Exhibit D-3.

“Issuing Bank” has the meaning set forth in the Letter of Credit from time to time.

“Key Employee” means the persons identified or listed in Section 10.04(b)(3) of the Company Disclosure Letter.

“Knowledge” means the actual knowledge after reasonable inquiry of (i) with respect to the Company, those persons listed in Section 10.04(b)(2)(i) of the Company Disclosure Letter, (ii) with respect to Seller, those persons listed in Section 10.04(b)(2)(ii) of the Seller Disclosure Letter and (iii) with respect to Purchaser, those persons listed in Section 10.04(b)(2)(iii) of the Purchaser Disclosure Letter (in each case whether or not such inquiry was actually made).

“Liability” means any and all liabilities, obligations, debts and commitments of any kind, character or description.

“Lloyd’s” means the Society and Corporation of Lloyd’s incorporated under the Lloyd’s Acts 1871 to 1982 (including the council constituted by the Lloyd’s Act 1982 and any delegate or person through whom the council is authorized to act).

“Moody’s” means Moody’s Investors Service, Inc.

“Net Deferred Tax Asset” means the aggregate of the deferred tax assets and deferred tax liabilities, net of any valuation allowance, of the Company and the Subsidiaries, taken into account in the calculation of Closing Date Book Value.

“Parent Covers” means retrocessions, industry loss warranties, insurance linked securities and other similar protections, in each case obtained by the Company or any of the Subsidiaries for the benefit of Parent or any of its subsidiaries (other than the Company or any of the Subsidiaries) and set forth on Section 10.04(b)(4) of the Company Disclosure Letter, as supplemented from time to time by delivery of notice of supplement from Seller to Purchaser following the date of this Agreement.

“Participant” means any current or former employee, officer, director, consultant or individual service provider of the Company or any Subsidiary.

“Per Share Option Price” means a dollar amount equal to (A) the sum of (1) (i) the Closing Date Book Value  multiplied by (ii) the Agreed Multiple and (2) $10,000,000, divided by (B) the number of Common Shares (or equivalents) issued and outstanding as of the Option Closing.  For purposes of this definition, the Closing Date Book Value shall be calculated (x) assuming that the transactions described in Section 1.03(e) had been effected prior to the close of business on the Business Day immediately prior to the date of the Option Closing and (y) in accordance with the Applicable Accounting Principles (provided that all references in the Applicable Accounting Principles to the Closing or the Closing Date shall be deemed to be replaced with a reference to the Option Closing or the date of the Option Closing, as applicable).

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“person” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Entity or other entity.

“Personal Information” means  (i) name, address, telephone number, health information, drivers’ license number, government issued identification number, or any other data that can be used to identify, contact, or precisely locate an individual; (ii) any nonpublic personally identifiable financial information, such as information relating to a relationship between an individual person and a financial institution, and/or related to a financial transaction by such individual person with a financial institution; or (iii) Internet Protocol addresses or other persistent device identifiers. Personal Information may relate to any individual, including employees, contractors, customers, and end users.

“Preference Shares” means the shares of fixed/floating perpetual non-cumulative preference shares of SIG, par value $0.01 per share.

“Purchaser Disclosure Letter” means the disclosure letter delivered by Purchaser to Seller in connection with the execution and delivery of this Agreement by the parties.

“Purchaser Material Adverse Effect” means a material adverse effect on the ability of Purchaser to perform its obligations under this Agreement and the Ancillary Agreements to which it is, or is specified to be, a party or a material adverse effect on the ability of Purchaser to consummate the Acquisition and the other transactions contemplated hereby.

“Purchaser Related Person” means (i) any affiliate of Purchaser, CMI or CMB or (ii) any direct or indirect shareholder of Purchaser, CMI or CMB (including, for the avoidance of doubt, BGB, HGB and any other shareholder of Purchaser, CMI, CMB, BGB or HGB holding shares that are (x) not fully paid or are assessable, (y) non-voting or (z) otherwise limited in their rights and privileges).

“Reference Book Value” means $1,747,449,220.

“Regulatory Approvals” means any approvals, filings or notifications required in connection with the acquisition of Shares contemplated by this Agreement by the laws, rules and regulations of Australia, Bermuda, Hong Kong, Labuan, the State of New York, the State of Tennessee, Sweden, Singapore and the United Kingdom or the byelaws and requirements of Lloyd’s, as applicable, including, with respect to Purchaser, (i) the filing of a Form A with the New York State Department of Financial Services and approval thereof by the New York State Superintendent of Financial Services, (ii) the U.K. Approvals and (iii) the FFFS Approvals.

“Reinsurance Subsidiaries” means the Subsidiaries set forth in Section 10.04(b)(5) of the Company Disclosure Letter.

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“Reorganization Assets” means the assets and other items set forth in Sections 1.03(e)(i) and 1.03(e)(ii) of the Company Disclosure Letter.

“Run-Off Entity SPA” means, as applicable, (i) the stock purchase agreement by and between White Mountains Solutions Holding Company and Sojourner Holding Company LLC dated May 22, 2015; or (ii) the stock purchase agreement by and between White Mountains Solutions Holding Company and Agency Bonding Captives, Inc. dated September 17, 2014.

 

“SAP” means, with respect to any Reinsurance Subsidiary, the statutory accounting practices prescribed or permitted by its domiciliary Insurance Regulator, including, if applicable, International Financial Reporting Standards.

 

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

“Seller Covered Employee” means the persons identified or listed in Section 10.04(b)(1)(ii) of the Seller Disclosure Letter.

“Seller Disclosure Letter” means the disclosure letter delivered by Seller to Purchaser in connection with the execution and delivery of this Agreement by the parties.

“SIG” means Sirius International Group, Ltd., an exempt company with limited liability incorporated under the laws of Bermuda with registered number 33445 having its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, and an indirect wholly owned subsidiary of the Company.

“Solutions Entity Excess Amount” means an amount equal to (i) the Solutions Entity Value minus (ii) the carrying book value of the Solutions Entity as of the Closing Date.

“Stand-Alone Benefit Plans” means each Company Benefit Plan that (i)is sponsored solely by the Company or any Subsidiary or (ii) to which the Company or any Subsidiary and a Participant are the only parties.

“subsidiary” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first person or by another subsidiary of such first person; provided that, for purposes of this Agreement and the Ancillary Agreements, OneBeacon Insurance Group, Ltd. and its subsidiaries shall not be considered subsidiaries of Parent or Seller.

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“Tax” means (i) all taxes, charges, fees, duties, customs, tariffs, imposts, payments in lieu, levies or other assessments or charges in the nature of a tax or any other similar payment imposed by any Taxing Authority, including income, license, recording, occupation, environmental, customs duties, single business, margin, unemployment, disability, mortgage, inventory, alternative or add-on minimum, profits, receipts, premium, excise, property, sales, use, value-added, registration duty, net worth, transfer, franchise, payroll, withholding, social security, estimated or other taxes and (ii) any interest, penalty, fine or addition to any of the foregoing, whether disputed or not. The term “Tax” shall also include (without limitation) taxes prescribed under Luxembourg income tax law and related regulations, circulars, amendments and public case law.  This contains the following forms of direct taxation: (i) Municipal Business Tax, (ii) Net Wealth Tax, and (iii) Corporate Income Tax.

 “Tax Return” means any U.S. federal, state, local or non-U.S. Tax report, return (including information return), claim for refund, election, notice, estimated Tax filing, declaration, statement, schedule, form, request or other document (including (i) Corporate income tax, municipal business, net wealth tax and value added tax returns and (ii) any related or supporting information or any amendment to any of the foregoing) supplied to, required to be filed with or required to be maintained by any Taxing Authority with respect to Taxes, including any return or filing made on a consolidated, group, combined, unified or affiliated basis.

“Taxable Period” means any taxable year or any other period that is treated as a taxable year, with respect to which any Tax may be imposed under any applicable statute, rule, or regulation.

“Taxing Authority” means any Governmental Entity having primary jurisdiction over the assessment, determination, collection or imposition of any Tax.

“Transfer Tax” means any and all sales, use, stamp, documentary, filing, recording, transfer, real estate, stock transfer, intangible property transfer, personal property transfer, registration, securities transactions, conveyance and notarial Taxes, and similar fees, Taxes and governmental charges (together with any interest, penalty, addition to Tax, and additional amount imposed in respect thereof).

 “Year End Balance Sheets” means (a) the GAAP balance sheet as of December 31, 2014, included in the Audited Financial Statements described in Section 3.05(a) and (b) the statutory balance sheets as of December 31, 2014, included in the Statutory Statements described in Section 3.05(b).

SECTION 10.05.          Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.

SECTION 10.06.          Entire Agreement.  This Agreement, the Seller Disclosure Letter, the Company Disclosure Letter, the Purchaser Disclosure Letter, the Ancillary Agreements and the Confidentiality Agreement, along with the Schedules and Exhibits thereto, contain the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, relating to such subject matter.  None of the parties shall be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject matter except as specifically set forth herein or in the Seller Disclosure Letter, the Company Disclosure Letter, the Purchaser Disclosure Letter, the Ancillary Agreements or the Confidentiality Agreement.

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SECTION 10.07.          Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Applicable Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party or such party waives its rights under this Section 10.07 with respect thereto.  Upon any determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated by this Agreement are fulfilled to the extent possible.

SECTION 10.08.          Enforcement.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  Subject to Section 8.07, it is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Supreme Court of the State of New York, New York County and the United States District Court for the Southern District of New York, without proof of damages or otherwise, this being in addition to the recovery of monetary damages or any other remedy to which they are entitled at law or in equity.  The right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without that right, none of Seller, the Company or Purchaser would have entered into this Agreement.  Each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that the other parties hereto have an adequate remedy at law or an award of specific performance is not an appropriate remedy for any reason at law or in equity.  The parties hereto acknowledge and agree that any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 10.08 shall not be required to provide any bond or other security in connection with any such order or injunction, and the party opposing such injunction or injunctions hereby agrees that it shall not contest the amount or absence of any such bond or other security requested or offered by the party seeking such injunction or injunctions.

 

SECTION 10.09.          Arbitration.  (a)  Any dispute arising out of, relating to or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the arbitration rules of the International Chamber of Commerce (the “ICC”) then in effect, which rules are deemed to be incorporated by reference into this Section 10.09 (the “ICC Rules”).  The arbitral tribunal shall consist of three arbitrators.  Purchaser and Seller shall each nominate one arbitrator, the party requesting arbitration concurrently with such request and the other party within fifteen calendar days from receipt of the request for arbitration.  In the event that Purchaser or Seller fails to nominate an arbitrator or deliver notification of such nomination to the other party and to the ICC within this time period, upon request of Purchaser or Seller, such arbitrator shall instead be appointed by the ICC within fifteen calendar days of the ICC receiving such request in accordance with the ICC Rules.  The two arbitrators appointed in accordance with the above provisions shall nominate the third arbitrator and notify Purchaser and Seller and the ICC in writing of such nomination within fifteen calendar days of their appointment.  If the first two appointed arbitrators fail to nominate a third arbitrator or notify Purchaser, Seller and the ICC of that nomination within this time period, then, upon request of Purchaser or Seller, the third arbitrator shall be appointed by the ICC within fifteen calendar days of the ICC receiving such request in accordance with the ICC Rules.  The third arbitrator shall serve as president of the arbitral tribunal.  The seat, or legal place, of arbitration shall be New York, New York.  The language to be used in the arbitral proceedings shall be English.  The governing law of this agreement to arbitrate shall be the laws of the State of New York.

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(b)             Each arbitrator shall be qualified to practice law under the Laws of the State of New York and fluent in the English language.  No arbitrator shall be an employee, officer, director, consultant, contractor or other service provider of either party or of their respective affiliates, nor shall any arbitrator have any interest that would be affected in any material respect by the outcome of the dispute.  The decision of a majority of the arbitrators shall be final and binding on Purchaser and Seller and their respective successors and assigns, and the parties waive any form of challenge or appeal against it and agree that judgment may be entered on any such award by any court having competent jurisdiction. Purchaser and Seller hereby waive any right to refer any question of law to any court.

(c)             In its award the arbitrators shall allocate, in their discretion, among the parties to the arbitration all costs of the arbitration, including the fees and expenses of the arbitrators and reasonable attorney’s fees, costs and expert witness expenses incurred by the parties.

(d)            The parties hereby agree that the arbitral tribunal shall have the power to award equitable remedies (including specific performance).  The parties irrevocably submit to the personal jurisdiction of the Supreme Court of the State of New York, in and for the County of New York, or the United States District Court for the Southern District of New York, each for the limited purpose of enforcing this agreement to arbitrate, including any action to compel arbitration or to stay or enjoin any action or proceeding commenced or prosecuted in violation of this Section 10.09, and irrevocably waive any objection to venue for such a proceeding in any such court.  Each party’s agreement to this arbitration is voluntary. Nothing in these dispute resolution provisions shall be construed as preventing either party from seeking conservatory or similar interim relief in any court of competent jurisdiction.

 

(e)            In order to facilitate the comprehensive resolution of related disputes and to avoid inconsistent decisions in related disputes, upon request of any party to an arbitration proceeding commenced pursuant to this Section 10.09, any dispute, controversy or claim subsequently noticed for arbitration under the provisions of this Section 10.09 may be consolidated with the earlier-commenced arbitration proceeding, as determined within the discretion of the arbitral tribunal appointed in the first-commenced arbitration proceeding.  The arbitral tribunal must not consolidate such arbitrations unless the arbitral tribunal determines that (i) there are issues of fact or law common to the proceedings, so that a consolidated proceeding would be more efficient than separate proceedings, and (ii) no party hereto would be prejudiced as a result of such consolidation through undue delay, conflict of interest or otherwise.  If the first-appointed arbitral tribunal determines that the arbitrations shall be consolidated, the first-appointed arbitral tribunal shall have jurisdiction over the consolidated arbitration to the exclusion of any other arbitrator or arbitral tribunal and any appointment of another arbitrator in relation to the other arbitrations will be deemed to be functus officio. Any such termination of an arbitrator’s appointment shall be without prejudice to: (i) the validity of any act done or order made by that arbitrator or by the ICC in support of that arbitration before the termination of his appointment; (ii) his entitlement to be paid his proper fees and disbursements; and (iii) the date when any claim or defence was raised for the purpose of applying any limitation bar or any similar rule or provision.

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(f)            The parties agree that the arbitration shall be kept confidential and that the existence of the proceeding and any element of it (including but not limited to any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions, and any awards) shall not be disclosed other than to the arbitral tribunal, the ICC, the parties, their counsel, accountants and auditors, insurers and re-insurers, and any person necessary to the conduct of the proceeding.  The confidentiality obligations shall not apply (i) if disclosure is required by law, rule or regulation, or in judicial or administrative proceedings or (ii) as far as disclosure is necessary or appropriate to enforce the rights arising out of the award.

(g)            Each party to this Agreement irrevocably consents to service of process by U.S. registered mail to such party’s respective address set forth above in Section 10.03, including for proceedings regarding the recognition and enforcement of any award resulting from an arbitration brought pursuant to this Section 10.09 or any judgment, of any jurisdiction, resulting therefrom, and for enforcement of the agreement to arbitrate set forth in this Section 10.09.  Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by applicable law.

(h)            This Section 10.09 shall not apply to any dispute under Section 1.04 or 1.05 or Article IX that is required to be decided by the Accounting Firm.

SECTION 10.10.          Governing Law.  This Agreement, and all matters, claims or causes of action (whether in contract or tort) based upon, arising out of or relating to this Agreement or the negotiation, execution or performance of this Agreement, shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

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SECTION 10.11.          Waiver of Jury Trial.  Each party hereby waives to the fullest extent permitted by Applicable Law, any right it may have to a trial by jury in respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement, any Ancillary Agreement or any transaction contemplated hereby or thereby.  Each party (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement and the Ancillary Agreements, as applicable, by, among other things, the mutual waivers and certifications in this Section 10.11.

SECTION 10.12.          Remedies Cumulative.  Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party shall be deemed cumulative with, and not exclusive of, any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy shall not preclude the exercise of any other remedy.

[Signature Pages Follow]

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              IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above.

 

	 	
LONE TREE HOLDINGS LTD.

	 
	 	 	 	 
	
 

	
by: 

	/s/ Jennifer Pitts	 
	 	 	Name:  Jennifer Pitts	 
	 	 	Title:  Director, Vice President & Assistant Secretary	 
	 	 	 	 

 

 

	 	
SIRIUS INTERNATIONAL INSURANCE GROUP, LTD.

	 
	 	 	 	 
	
 

	
by: 

	/s/ Allan L. Waters	 
	 	 	Name:  Allan L. Waters	 
	 	 	Title:  CEO	 
	 	 	 	 

 

 

 

	 	
CM INTERNATIONAL HOLDING PTE. LTD.

	 
	 	 	 	 
	
 

	
by: 

	/s/ Feng Liao	 
	 	 	Name:  Feng Liao	 
	 	 	Title:  Director	 
	 	 	 	 

 

	 	
CM BERMUDA LIMITED

	 
	 	 	 	 
	
 

	
by: 

	/s/ Feng Liao	 
	 	 	Name:  Feng Liao	 
	 	 	Title:  Director	 
	 	 	 	 

  

  

INDEX OF DEFINED TERMS

	
Term

	
Section

	
A.M. Best

	
3.27

	
Accounting Firm

	
1.04(b)

	
Acquisition

	
1.01(a)

	
Additional Shares

	
7.03(c)

	
Adjusted SIG PUA Amount

	
5.06(f)(iii)

	
Adjustment Amount

	
1.04(a)

	
affiliate

	
10.04(b)

	
Affiliate Transaction

	
3.20

	
After-Acquired Business

	
5.16(a)(iv)

	
After-Tax Parent PSA Amount

	
5.06(g)(iv)

	
After-Tax Post-Closing Parent PSA Amount

	
5.06(g)(iv)

	
Aggregate Adjusted SIG PUA Amount

	
5.06(j)

	
Aggregate Bonus Amount

	
5.06(i)

	
Agreed Multiple

	
10.04(b)

	
Agreement

	
Preamble

	
Ancillary Agreements

	
10.04(b)

	
Anti-Bribery Laws

	
10.04(b)

	
Anti-Money Laundering Laws

	
3.18(d)

	
Applicable Accounting Principles

	
1.04(i)

	
Applicable Law

	
2.03(a)

	
Audited Financial Statements

	
3.05(a)

	
Authorized Representative

	
5.01(g)

	
Balance Sheet Date

	
3.05(a)

	
BGB

	
10.04(b)

	
Bi-Lateral Services Agreement

	
10.04(b)

	
Bonus Arrangements

	
5.06(i)

	
Bonus Recipients

	
5.06(i)

	
Bonus Schedule

	
5.06(i)

	
Book Value Excess Amount

	
1.04(a)

	
Books and Records

	
10.04(b)

	
Burdensome Condition

	
5.04(a)

	
Business Day

	
10.04(b)

	
Cap

	
8.01(b)(iii)

	
Cash

	
10.04(b)

	
Catastrophe Losses

	
10.04(b)

	
Change of Control

	
5.16(e)

	
Claim Deadline

	
5.13(b)(i)

	
Closing

	
1.02

	
Closing Date

	
1.02

	
Closing Date Book Value

	
10.04(b)

	
Closing Date Reorganization Value

	
10.04(b)

 

Index-1

 

 

	 Term	Section
	
Closing Date Statement

	
1.04(a)

	
CMI

	
Recitals

	
CMI Guaranty

	
Recitals

	
Code

	
10.04(b)

	
Common Shares

	
3.02(a)

	
Company

	
Preamble

	
Company Benefit Plans

	
10.04(b)

	
Company Bye-Laws

	
3.01(b)

	
Company Covered Employee

	
10.04(b)

	
Company Disclosure Letter

	
10.04(b)

	
Company Intellectual Property

	
3.09(a)

	
Company Material Adverse Effect

	
10.04(b)

	
Company Memorandum of Association

	
3.01(b)

	
Company Property

	
3.08(a)

	
Company Reinsurance Contracts

	
3.24(a)

	
Company Settlement Amount

	
1.05

	
Competing Business

	
5.16(a)

	
Confidentiality Agreements

	
5.03

	
Consent

	
2.03(b)

	
Continuation Period

	
5.06(a)

	
Continuing Employees

	
5.06(a)

	
Contract

	
2.03(a)

	
Contribution Amount

	
1.04(a)

	
control

	
10.04(b)

	
controlled

	
10.04(b)

	
controlling

	
10.04(b)

	
Corporate Members

	
3.23(g)

	
Data and Privacy Laws

	
3.18(e)

	
Deductible

	
8.01(b)(i)

	
Direct Claim

	
8.05(c)

	
Disputed Claim Amount

	
5.13(b)(i)

	
Employee

	
10.04(b)

	
Environmental Law

	
10.04(b)

	
ERISA

	
10.04(b)

	
ERISA Affiliate

	
10.04(b)

	
Estimated Adjustment Amount

	
1.03(c)(i)

	
Estimated Book Value Excess Amount

	
1.03(c)(i)

	
Estimated Closing Book Value

	
10.04(b)

	
Estimated Closing Date Statement

	
1.04(a)

	
Estimated Contribution Amount

	
1.03(c)(i)

	
Estimated Payment Amount

	
1.03(c)(i)

	
Exchange Act

	
10.04(b)

	
Extracted Entities

	
1.03(h)

	
Extracted Entity Value

	
1.03(h)

 

Index-2

 

 

	 Term	Section
	
FFFS Approvals

	
4.03(b)

	
Final Purchase Price

	
1.04(h)

	
Financial Statements

	
3.05(a)

	
Fraud

	
10.04(b)

	
Fundamental Representations

	
10.04(b)

	
FY 2015 Bonuses

	
5.06(c)

	
GAAP

	
3.05(a)

	
Government Official

	
10.04(b)

	
Government Ownership Restriction

	
4.03(a)

	
Governmental Approvals

	
5.04(a)

	
Governmental Entity

	
10.04(b)

	
HGB

	
10.04(b)

	
HSR Act

	
10.04(b)

	
ICC

	
10.09(a)

	
ICC Rules

	
10.09(a)

	
indemnified party

	
8.05(a)

	
Insurance Regulator

	
10.04(b)

	
Insurance Reserves

	
10.04(b)

	
Intellectual Property

	
3.09(e)

	
Intentional Breach

	
10.04(b)

	
Interim Balance Sheet

	
10.04(b)

	
Investment Assets

	
10.04(b)

	
Investment Management Agreement

	
10.04(b)

	
Investment Policy

	
3.26(b)

	
IRS

	
3.15(b)

	
Issuing Bank

	
10.04(b)

	
IT Systems

	
3.09(d)

	
Judgment

	
2.03(a)

	
JV Entity

	
1.03(h)

	
JV Entity Value

	
1.03(h)

	
Knowledge

	
10.04(b)

	
Labor Agreements

	
3.19(a)

	
Leased Property

	
3.08(a)

	
Legal Restraint

	
6.01(b)

	
Letter of Credit

	
1.01(b)

	
Liability

	
10.04(b)

	
Liens

	
2.03(a)

	
Listed Contract

	
3.10(b)

	
Lloyd’s

	
10.04(b)

	
Losses

	
8.01(a)

	
Moody’s

	
10.04(b)

	
Net Deferred Tax Asset

	
10.04(b)

	
Notice of Disagreement

	
1.04(b)

	
Option Closing

	
7.03(f)

 

 

Index-3

 

 

	 Term	Section
	
Option Expiration Date

	
7.03(d)

	
Option Shares

	
7.03(c)

	
Option Subscription Agreement

	
7.03(e)

	
Outside Date

	
7.01(a)(ii)(1)

	
Owned Property

	
3.08(a)

	
Parent

	
Recitals

	
Parent Common Share

	
5.06(i)

	
Parent Common Share Price

	
5.06(i)

	
Parent Cover Benefits

	
1.05(a)

	
Parent Cover Costs

	
1.05(a)

	
Parent Cover Schedule

	
1.05(a)

	
Parent Covers

	
10.04(b)

	
Parent Guaranty

	
Recitals

	
Parent LTIP

	
5.06(i)

	
Parent Mark

	
5.14

	
Parent Performance Share Award

	
5.06(i)

	
Parent PSA Amount

	
5.06(g)(iii)

	
Parent Restricted Share Award

	
5.06(i)

	
Participant

	
10.04(b)

	
Per Share Option Price

	
10.04(b)

	
Performance Unit

	
5.06(j)

	
Permits

	
3.11

	
Permitted Liens

	
3.07(a)

	
person

	
10.04(b)

	
Personal Information

	
10.04(b)

	
Policies

	
3.23(b)

	
Post-Closing Pro-Rata Portion

	
5.06(j)

	
Potential Controller

	
4.05(b)

	
Pre-Closing Periods

	
9.01(b)

	
Pre-Closing Pro-Rata Portion

	
5.06(j)

	
Preference Shares

	
10.04(b)

	
Proceeding

	
3.11

	
Producer

	
3.23(d)

	
Property Material Adverse Effect

	
3.08(a)

	
Purchase Option

	
7.03(c)

	
Purchase Price

	
1.01(a)

	
Purchaser

	
Preamble

	
Purchaser Confidentiality Agreement

	
5.03

	
Purchaser Disclosure Letter

	
10.04(b)

	
Purchaser Indemnitees

	
8.01(a)

	
Purchaser Material Adverse Effect

	
10.04(b)

	
Purchaser Related Person

	
10.04(b)

	
Real Property Lease

	
3.08(b)

	
Reconciliation Statement

	
3.05(b)

 

Index-4

 

 

	 Term	Section
	
Reference Book Value

	
10.04(b)

	
Regulatory Approvals

	
10.04(b)

	
Reinsurance Subsidiaries

	
10.04(b)

	
Reorganization Assets

	
10.04(b)

	
Restricted Transactions

	
5.01(f)

	
Retention Bonus Date

	
5.06(i)

	
Retention Bonuses

	
5.06(i)

	
Run-Off Entities

	
1.03(f)

	
Run-Off Entity Value

	
1.03(f)

	
S&P

	
3.27

	
Sanctions

	
3.18(c)(i)

	
SAP

	
10.04(b)

	
Scheduled Investments

	
3.26(a)

	
Securities Act

	
10.04(b)

	
Seller

	
Preamble

	
Seller Confidentiality Agreement

	
5.03

	
Seller Covered Employee

	
10.04(b)

	
Seller Disclosure Letter

	
10.04(b)

	
Seller Indemnitees

	
8.02(a)

	
Seller Material Adverse Effect

	
2.01

	
Seller Settlement Amount

	
1.05

	
Shares

	
Recitals

	
SIG

	
10.04(b)

	
SIG LTIP

	
5.06(i)

	
SIG Performance Unit Award

	
5.06(i)

	
SIG PUA Amount

	
5.06(f)(iii)

	
Solutions Entity

	
1.03(g)

	
Solutions Entity Excess Amount

	
10.04(b)

	
Solutions Entity Value

	
1.03(g)

	
Specified Target Value

	
5.06(g)(iii)

	
Stand-Alone Benefit Plans

	
10.04(b)

	
Statutory Statements

	
3.05(c)

	
Straddle Periods

	
9.01(b)

	
subsidiary

	
10.04(b)

	
Subsidiary

	
3.01(a)

	
Tax

	
10.04(b)

	
Tax Accountant

	
9.06

	
Tax Attribute

	
10.04(b)

	
Tax Benefit

	
5.06(j)

	
Tax Loss

	
9.05(a)

	
Tax Proceeding

	
9.05(e)

	
Tax Return

	
10.04(b)

	
Taxable Period

	
10.04(b)

	
Taxing Authority

	
10.04(b)

 

Index-5

 

 

	 Term	Section
	
Termination Fee

	
7.03(a)

	
Termination Fee Shares

	
7.03(b)

	
Third Party Claim

	
8.05(a)

	
Third Party Consent

	
5.04(c)

	
Top-Up Amount

	
1.04(g)

	
Transaction Bonuses

	
5.06(i)

	
Transfer Tax

	
10.04(b)

	
U.K. Approvals

	
4.03(b)

	
Unaudited Financial Statements

	
3.05(a)

	
Voting Company Debt

	
3.02(a)

	
WARN Act

	
5.06(e)

	
Withholding Tax

	
1.06

	
Year End Balance Sheets

	
10.04(b)

Index-6EXH 4.1 CHTR 7.23.15 8K

EXHIBIT 4.1

EXECUTION VERSION

CHARTER COMMUNICATIONS OPERATING, LLC
and
CHARTER COMMUNICATIONS OPERATING CAPITAL CORP.
and
CCO SAFARI II, LLC,
as Issuers,
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee and Collateral Agent
_______________________________
INDENTURE
Dated as of July 23, 2015
_______________________________
PROVIDING FOR ISSUANCE OF SENIOR SECURED DEBT SECURITIES

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)
	11.03

	 
	(c)
	11.03

	313
	

	(a)
	7.06

	 
	(b)(1)
	N.A.

	 
	(b)(2)
	7.06; 7.07

	 
	(c)
	7.06; 11.02

	 
	(d)
	7.06

	314
	

	(a)
	4.04; 11.02; 11.04

	 
	(b)
	N.A.

	 
	(c)(1)
	11.04

	 
	(c)(2)
	11.04

	 
	(c)(3)
	N.A.

	 
	(d)
	N.A.

	 
	(e)
	11.05

	 
	(f)
	N.A.

	315
	

	(a)
	7.01; 7.02

	 
	(b)
	7.05; 11.02

	 
	(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)
	11.01

	 
	(b)
	N.A.

	 
	(c)
	11.01

N.A. means not applicable.
________________________________
* This Cross Reference Table is not part of this Indenture.

i

TABLE OF CONTENTS
	
					
	 
	 
	 
	Page
	

	 
	 
	 
	 

	ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
	1
	

	 
	Section 1.01
	Definitions
	1
	

	 
	Section 1.02
	Other Definitions
	13
	

	 
	Section 1.03
	Incorporation by Reference of Trust Indenture Act
	13
	

	 
	Section 1.04
	Rules of Construction
	14
	

	 
	 
	 
	 

	ARTICLE 2 THE NOTES
	14
	

	 
	Section 2.01
	Form and Dating
	14
	

	 
	Section 2.02
	Execution and Authentication
	17
	

	 
	Section 2.03
	Registrar and Paying Agent
	17
	

	 
	Section 2.04
	Paying Agent to Hold Money in Trust
	18
	

	 
	Section 2.05
	Holder Lists
	18
	

	 
	Section 2.06
	Transfer and Exchange
	18
	

	 
	Section 2.07
	Replacement Notes
	31
	

	 
	Section 2.08
	Outstanding Notes
	31
	

	 
	Section 2.09
	Treasury Notes
	32
	

	 
	Section 2.10
	Temporary Notes
	32
	

	 
	Section 2.11
	Cancellation
	32
	

	 
	Section 2.12
	Defaulted Interest
	32
	

	 
	Section 2.13
	CUSIP Numbers
	33
	

	 
	 
	 
	 

	ARTICLE 3 REDEMPTION AND PREPAYMENT
	33
	

	 
	Section 3.01
	Redemption and Prepayment
	33
	

	 
	 
	 
	 

	ARTICLE 4 COVENANTS
	33
	

	 
	Section 4.01
	Payment of Notes
	33
	

	 
	Section 4.02
	Maintenance of Office or Agency
	34
	

	 
	Section 4.03
	Reports
	34
	

	 
	Section 4.04
	Compliance Certificate
	35
	

	 
	Section 4.05
	Legal Existence
	36
	

	 
	Section 4.06
	Limitation on Liens
	36
	

	 
	Section 4.07
	Future Subsidiary Guarantors
	37
	

	 
	 
	 
	 

	ARTICLE 5 SUCCESSORS
	37
	

	 
	Section 5.01
	Merger, Consolidation or Sale of Assets
	37
	

	 
	 
	 
	 

	ARTICLE 6 DEFAULTS AND REMEDIES
	38
	

	 
	Section 6.01
	Events of Default
	38
	

	 
	Section 6.02
	Acceleration
	39
	

	 
	Section 6.03
	Other Remedies
	40
	

	 
	Section 6.04
	Waiver of Existing Defaults
	40
	

	 
	Section 6.05
	Control by Majority
	40
	

	 
	Section 6.06
	Limitation on Suits
	40
	

ii

	
					
	 
	Section 6.07
	Rights of Holders of Notes to Receive Payment
	41
	

	 
	Section 6.08
	Collection Suit by Trustee
	41
	

	 
	Section 6.09
	Trustee May File Proofs of Claim
	41
	

	 
	Section 6.10
	Priorities
	42
	

	 
	Section 6.11
	Undertaking for Costs
	42
	

	 
	 
	 
	 

	ARTICLE 7 TRUSTEE
	43
	

	 
	Section 7.01
	Duties of Trustee
	43
	

	 
	Section 7.02
	Rights of Trustee
	44
	

	 
	Section 7.03
	Individual Rights of Trustee
	45
	

	 
	Section 7.04
	Trustee's Disclaimer
	45
	

	 
	Section 7.05
	Notice of Defaults
	45
	

	 
	Section 7.06
	Reports by Trustee to Holders
	46
	

	 
	Section 7.07
	Compensation and Indemnity
	46
	

	 
	Section 7.08
	Replacement of the Trustee
	47
	

	 
	Section 7.09
	Successor Trustee by Merger, etc
	48
	

	 
	Section 7.10
	Eligibility; Disqualification
	48
	

	 
	Section 7.11
	Preferential Collection of Claims Against the Issuer
	48
	

	 
	 
	 
	 

	ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
	48
	

	 
	Section 8.01
	Option to Effect Legal Defeasance or Covenant Defeasance
	48
	

	 
	Section 8.02
	Legal Defeasance and Discharge
	49
	

	 
	Section 8.03
	Covenant Defeasance
	49
	

	 
	Section 8.04
	Conditions to Legal or Covenant Defeasance
	50
	

	 
	Section 8.05
	Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions
	51
	

	 
	Section 8.06
	Repayment to Applicable Issuers
	52
	

	 
	Section 8.07
	Reinstatement
	52
	

	 
	 
	 
	 

	ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER
	52
	

	 
	Section 9.01
	Without Consent of Holders of Notes
	52
	

	 
	Section 9.02
	With Consent of Holders of Notes
	54
	

	 
	Section 9.03
	Compliance with Trust Indenture Act
	55
	

	 
	Section 9.04
	Revocation and Effect of Consents
	55
	

	 
	Section 9.05
	Notation on or Exchange of Notes
	56
	

	 
	Section 9.06
	Trustee and Collateral Agent to Sign Amendments, etc
	56
	

	 
	 
	 
	 

	ARTICLE 10 GUARANTEE
	56
	

	 
	Section 10.01
	Guarantee
	56
	

	 
	Section 10.02
	Limitation on Liability
	58
	

	 
	Section 10.03
	[Reserved]
	59
	

	 
	Section 10.04
	No Waiver
	59
	

iii

	
					
	 
	Section 10.05
	Modification
	59
	

	 
	Section 10.06
	Execution of Supplemental Indenture for Future Note Guarantors
	59
	

	 
	Section 10.07
	Non-Impairment
	60
	

	 
	 
	 
	 

	ARTICLE 11 THE ESCROW ISSUER
	60
	

	 
	Section 11.01
	The Escrow Issuer
	60
	

	 
	 
	 
	 

	ARTICLE 12 MISCELLANEOUS
	60
	

	 
	Section 12.01
	Trust Indenture Act Controls
	60
	

	 
	Section 12.02
	Notices
	60
	

	 
	Section 12.03
	Communication by Holders with Other Holders
	62
	

	 
	Section 12.04
	Certificate and Opinion as to Conditions Precedent
	62
	

	 
	Section 12.05
	Statements Required in Certificate or Opinion
	62
	

	 
	Section 12.06
	Rules by Trustee and Agents
	63
	

	 
	Section 12.07
	No Personal Liability of Directors, Officers, Employees, Members and Stockholders
	63
	

	 
	Section 12.08
	Governing Law
	63
	

	 
	Section 12.09
	No Adverse Interpretation of Other Agreements
	63
	

	 
	Section 12.10
	Successors
	63
	

	 
	Section 12.11
	Severability
	64
	

	 
	Section 12.12
	Counterpart Originals
	64
	

	 
	Section 12.13
	Table of Contents, Headings, etc
	64
	

	 
	Section 12.14
	Waiver of Jury Trial
	64
	

	 
	Section 12.15
	Force Majeure
	64
	

	 
	 
	 
	 

	ARTICLE 13 SATISFACTION AND DISCHARGE
	64
	

	 
	Section 13.01
	Satisfaction and Discharge of Indenture
	64
	

	 
	Section 13.02
	Application of Trust Money
	65
	

	 
	 
	 
	 

	ARTICLE 14 COLLATERAL
	65
	

	 
	Section 14.01
	Security Documents
	65
	

	 
	Section 14.02
	Collateral Agreement
	66
	

	 
	Section 14.03
	Release of Collateral
	66
	

	 
	Section 14.04
	Collateral Agent
	68
	

	 
	Section 14.05
	Further Assurances; Insurance
	68
	

Exhibits
Exhibit A    -    Form of Global 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 Supplemental Indenture
Exhibit F    -    Form of Collateral Agreement
Exhibit G    -    Form of Intercreditor Agreement

iv

INDENTURE dated as of July 23, 2015 among Charter Communications Operating, LLC, a Delaware limited liability company (as further defined below, the “Company” or “CCO”), Charter Communications Operating Capital Corp., a Delaware corporation (as further defined below, “Capital Corp”), CCO Safari II, LLC, a Delaware limited liability company (as further defined below, “Escrow Issuer” and together with the Company and Capital Corp, the “Issuers”), The Bank of New York Mellon Trust Company, N.A., as trustee (in such capacity, the “Trustee”) and as collateral agent (in such capacity, the “Collateral Agent”).
WITNESSETH:
WHEREAS, the Issuers have duly authorized the execution and delivery of this Indenture to provide for the issuance of secured debentures, notes, bonds or other evidence of indebtedness (the “Notes”) of the Company and Capital Corp or the Escrow Issuer in an unlimited aggregate principal amount to be issued from time to time in one or more series as provided in this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid and legally binding agreement of the Issuers, in accordance with its terms, have been done.
The Issuers, the Trustee and the Collateral Agent agree as follows for the benefit of each other and, except as provided herein, for the equal and ratable benefit of the Holders of the Notes:
ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01    Definitions.

“Acquisition Agreement” means that certain Agreement and Plan of Mergers, dated as of May 23, 2015, among CCI, Time Warner Cable Inc., CCH I, LLC, Nina Corporation I, Inc., Nina Company II, LLC and Nina Company III, LLC.
“Acquisition Transactions” means the transactions contemplated by the Acquisition Agreement.
“Additional Notes” means Notes issued pursuant to the terms of any supplemental indenture in addition to the Initial Notes (other than any Notes issued in respect of the Initial Notes pursuant to Sections 2.06, 2.07, 2.10 or 9.05 of the Indenture or Notes issued in respect of any Notes redeemed in part as provided for under any supplemental indenture).
“Administrative Agent” means the administrative agent under the Credit Agreement, or any successor thereto.
“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, shall mean 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” shall have correlative meanings.
“Agent” means any Registrar or Paying Agent.
“Applicable Issuers” means (i) with respect to Notes issued by the Escrow Issuer, the Escrow Issuer (unless the Company and Capital Corp have assumed the Escrow Issuer’s obligation with respect thereto pursuant to an indenture supplemental hereto, in which case such term shall refer to the Company and Capital Corp) and (ii) with respect to Notes issued by the Company and Capital Corp, the Company and Capital Corp.
“Applicable Procedures” means, with respect to any transfer or transaction involving a Global Note or beneficial interest therein, the rules and procedures of the Depositary, Euroclear and Clearstream, in each case to the extent applicable to such transaction and as in effect from time to time.
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor thereto. 
“Business Day” means each day which is not a Legal Holiday.
“Capital Corp” means Charter Communications Operating Capital Corp., a Delaware corporation, and any successor Person thereto.
“CCH” means Charter Communications Holdings, LLC, a Delaware limited liability company, and any successor Person thereto.
“CCH I” means CCH I, LLC, a Delaware limited liability company, and any successor Person thereto.
“CCH II” means CCH II, LLC, a Delaware limited liability company, and any successor Person thereto.
“CCHC” means Charter Communications Holding Company, LLC, a Delaware limited liability company, and any successor Person thereto.
“CCI” means Charter Communications, Inc., a Delaware corporation, and any successor Person thereto.
“CCOH” means CCO Holdings, LLC, a Delaware limited liability company, and any successor Person thereto. 
“Charter Group” means the collective reference to the Designated Holding Companies, the Company and its Subsidiaries.
“Clearstream” means Clearstream Banking, société anonyme (formerly Cedelbank).

-2-

“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” means all property and assets, whether now owned or hereafter acquired, in which Liens are, from time to time, purported to be granted to secure the Note Obligations pursuant to the Security Documents.
“Collateral Agent” means The Bank of New York Mellon Trust Company, N.A. until a successor replaces it and, thereafter, means such successor.
“Collateral Agreement” means the Collateral Agreement substantially in the form of Exhibit F to be dated as of the Escrow Release Date by and among CCO, Capital Corp, the Collateral Agent and the other grantors party thereto from time to time, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time.
“Collateral Release Event” shall occur on the first date when (A) there is no Equally and Ratably Secured Indebtedness outstanding (or, all Equally and Ratably Secured Indebtedness outstanding on such date shall cease to constitute Equally and Ratably Secured Indebtedness substantially concurrently with the release of the Liens on the Collateral securing the Notes and the Note Guarantees) and (B) the Issuers have delivered an Officers’ Certificate to the Trustee and the Collateral Agent certifying that the condition set forth in clause (A) above is satisfied.
“Commission” or “SEC” means the Securities and Exchange Commission.
“Company” or “CCO” means Charter Communications Operating, LLC, a Delaware limited liability company, and any successor Person thereto, but for the avoidance of doubt, does not include any of its Subsidiaries.
“Consolidated Net Worth” means, with respect to any Person, at the date of any determination, the consolidated stockholders’ or owners’ equity of the holders of Equity Interests or partnership interests of such Person and its subsidiaries, determined on a consolidated basis in accordance with GAAP consistently applied, which, for the avoidance of doubt, may, at the Issuers’ option, be calculated on a consolidated basis in accordance with GAAP on a pro forma basis to give effect to any assets acquired or to be acquired on or before the date of calculation.
“Credit Agreement” means the Credit Agreement, dated as of March 18, 1999, as amended and restated as of April 11, 2012, among CCOH, CCO, the lenders party thereto, Bank of America, N.A., as administrative agent, and the other parties thereto together with the related documents thereto (including any term loans and revolving loans thereunder, any guarantees and security documents), as further amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any agreement (and related document) governing indebtedness incurred to refinance, in whole or in part, the borrowings and commitments then outstanding or permitted to be outstanding under such Credit Agreement or a successor Credit Agreement, whether by the same or any other lender or group of lenders.
“Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in Section 12.02 or such other address as to which the Trustee may designate from time to time by 

-3-

notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee.
“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; provided that any Default that results solely from the taking of an action that would have been permitted but for the continuation of a previous Default will be deemed to be cured if such previous Default is cured prior to becoming 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, 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 securities of any series, the Person specified in Section 2.03 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.
“Designated Holding Companies” means CCI and certain of its subsidiaries that are direct or indirect owners of Equity Interests of the Issuers.
“Designated Parent Companies” means CCI, CCH II, CCH I, New Charter, CCH and CCHC.
“Domestic Subsidiary” means each Subsidiary other than a Foreign Subsidiary.
“Eligible Escrow Investments” has the meaning set forth in the Escrow Agreement.
“Equally and Ratably Secured Indebtedness” means all Indebtedness For Borrowed Money of an Issuer or a Material Subsidiary of CCO that is secured by any Lien on any assets of CCO or any of its Material Subsidiaries that is not a Permitted Lien.
“Equity Interests” means any and all shares, interests, participations or other equivalents (however designated) of equity interests of a corporation, any and all classes of membership interests in a limited liability company, any and all classes of partnership interests in a partnership and any and all other equivalent ownership interests in a Person, and any and all warrants, rights or options to purchase any of the foregoing.
“Escrow Agreement” means the escrow agreement dated as of July 23, 2015, by and among the Escrow Issuer, the Trustee and Bank of America, N.A., as escrow agent (together with its successors in such capacity, the “Escrow Agent”), pursuant to which the gross proceeds of the Initial Notes plus certain additional amounts will be deposited into the applicable Escrow Account (as defined in the Escrow Agreement).
“Escrow Issuer” means CCO Safari II, LLC, a Delaware limited liability company, and any successor Person thereto.

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“Escrow Release Date” means the date on which the Escrow Release (as defined in the Escrow Agreement) occurs. 
“Euroclear” means Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear system.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Exchange Notes” means any notes issued in exchange for Notes of a series pursuant to the Registration Rights Agreement or similar agreement.
 “Exchange Offer” means the offer of the Issuers to issue and deliver to Holders of Notes that are not prohibited by law or policy of the SEC from participating in such offer in exchange for such Notes, a like aggregate principal amount of Exchange Notes.
“Exchange Offer Registration Statement” means a registration statement relating to the Exchange Offer as provided in the Registration Rights Agreement.
 “Existing TWC Notes” means any debt securities of Time Warner Cable Inc. or any of its Subsidiaries (other than debt securities held by Time Warner Cable Inc. or any of its Subsidiaries) outstanding on the Escrow Release Date.
“Fiscal Year” means the fiscal year of the entity, which in the case of CCO, at the date hereof ends on December 31.
“Foreign Subsidiary” means any (i) Subsidiary that is not organized under the laws of the United States of America or any State thereof or the District of Columbia or (ii) Subsidiary of a Person described in clause (i) of this definition.
“Foreign Subsidiary Voting Equity Interests” means the voting Equity Interests of any Foreign Subsidiary described in clause (i) of the definition of Foreign Subsidiary.
“GAAP” means generally accepted accounting principles in the United States which are in effect on the Issue Date.
“Global Note Legend” means the legend set forth in Section 2.06(g)(ii) 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.
“Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America, and the payment for which the United States pledges its full faith and credit.
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative 

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functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).
“Guarantee” means, (i) when used as a noun, a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness For Borrowed Money or other obligations; and (ii) when used as a verb means to enter into a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness For Borrowed Money.
“Guaranty Agreement” means a supplemental indenture hereto, in a form reasonably satisfactory to the Trustee, pursuant to which a Note Guarantor guarantees the Issuers’ obligations with respect to the Notes on the terms provided for in Article 10.
“Holder” means the Person in whose name a note is registered in the Register.
“Increased Amount” means any increase in the amount of Indebtedness for Borrowed Money in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional indebtedness with the same terms, and accretion of original issue discount and increases in the amount of indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing indebtedness.
“Incur” means issue, assume, enter into a Guarantee, incur or otherwise become liable for. The term “Incurrence” when used as a noun shall have a correlative meaning.
“Indebtedness For Borrowed Money” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all indebtedness of such Person evidenced by bonds, debentures, notes or similar instruments and (c) all Guarantee obligations of such Person with respect to indebtedness of the type described in clauses (a) and (b) above of others. The Indebtedness For Borrowed Money of any Person shall include the Indebtedness For Borrowed Money of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other contractual relationship with such entity, except to the extent the terms of such Indebtedness For Borrowed Money provide that such Person is not liable therefor. 
“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 Notes issued on the Issue Date (and any Notes issued in respect of the Initial Notes pursuant to Sections 2.06, 2.07, 2.10 or 9.05 of the Indenture or Notes issued in respect of any Notes redeemed in part as provided for under any supplemental indenture hereto).

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“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 that is not also a QIB.
“Intercreditor Agreement” means the Intercreditor Agreement substantially in the form of Exhibit G to be dated as of the Escrow Release Date by and among the Collateral Agent, the Administrative Agent and each additional agent from time to time party thereto, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time.
“Investments” means any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or any purchase of Equity Interests, bonds, notes, debentures or other debt securities of, or any assets constituting a significant part of a business unit of, or any other investment in, any Person. 
“Issue Date” means the date Notes are first issued under this Indenture.
“Issuers” has the meaning assigned to it in the preamble to this Indenture.
“Investments” means, with respect to any Person, all investments by such Person in other Persons, including Affiliates, in the forms of direct or indirect loans (including Guarantees of Indebtedness For Borrowed Money or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business) and purchases or other acquisitions for consideration of Indebtedness For Borrowed Money, 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.
“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York. 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 sent to all Holders of any Additional Notes for use by such Holders in connection with any Exchange Offer.
“Lien” means any mortgage, pledge, security interest or lien; provided, however, that in no event shall a lease be deemed to constitute a Lien.
“Material Subsidiary” means any Person that is a Domestic Subsidiary if, at the end of the most recent fiscal quarter of CCO, the aggregate amount, determined in accordance with GAAP consistently applied, of securities of, loans and advances to, and other Investments in, such Person held by CCO and its Subsidiaries exceeded 10% of CCO’s Consolidated Net Worth.
“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.
“New Charter” means the successor entity to CCH I, which successor entity shall become the new public company parent following the completion of the Acquisition Transactions.

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“Non-Recourse Subsidiary” has the meaning provided in the Credit Agreement on the Issue Date.
“Non-U.S. Person” means a Person who is not a U.S. Person.
“Note” or “Notes” has the meaning assigned to it in the recitals.
“Note Guarantee” means a Guarantee by a Note Guarantor of the Issuers’ obligations with respect to the Notes.
“Note Guarantor” means a Subsidiary Guarantor and any other Person that executes a supplemental indenture as to this Indenture as a Note Guarantor until released from its Note Guarantee in accordance with Article 10 of this Indenture.
“Note Obligations” means the “Obligations” as defined in the Collateral Agreement.
“Obligations” means, with respect to any Indebtedness For Borrowed Money, all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements and other amounts payable pursuant to the documentation governing such Indebtedness For Borrowed Money.
“Officer” means, with respect to any Person, the Chairman of the Board, the President, any Vice President, the Treasurer or the Secretary of such Person. 
“Officers’ Certificate” means a certificate signed by two Officers that meets the requirements of Section 12.05.
“Opinion of Counsel” means an opinion from legal counsel that meets the requirements of Section 12.05. The counsel may be an employee of or counsel to the Company or any Subsidiary of the Company.
“Parent” means (i) any of the Designated Parent Companies, CCOH, and each of their respective successors (by way of conversion, merger and amalgamation), and/or any direct or indirect Subsidiary of the foregoing a majority of the Equity Interests of which is owned directly or indirectly by one or more of the foregoing Persons, as applicable, and that directly or indirectly beneficially owns a majority of the Equity Interests of CCOH, and any successor Person to any of the foregoing.; and (ii) any holding company of the foregoing where the direct or indirect holders of the voting stock of such holding company immediately following the transaction where the holding company became a holding company are substantially the same as the holders of the Issuers’ voting stock immediately prior to that transaction.
“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).
“Permitted Liens” means: 

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(1)Liens Incurred by CCO or Subsidiaries of CCO to secure Indebtedness For Borrowed Money of such Subsidiaries to and/or in favor of CCO or one or more Subsidiaries of CCO; 

(2)Liens existing on the Issue Date (other than Liens securing obligations under the Credit Agreement or the Existing TWC Notes); 

(3)Liens (excluding for the avoidance of doubt, any Liens securing the Existing TWC Notes) affecting property of a Person existing at the time it becomes a Subsidiary of CCO or at the time it merges into or consolidates with CCO or a Subsidiary of CCO or at the time of a sale, lease or other disposition of all or substantially all of the properties of such Person to CCO or any of its Subsidiaries; 

(4)Liens (excluding for the avoidance of doubt, any Liens securing the Existing TWC Notes) on property or assets existing at the time of the acquisition thereof or incurred to secure payment of all or a part of the purchase price thereof or to secure indebtedness incurred prior to, at the time of, or within 18 months after the acquisition thereof for the purpose of financing all or part of the purchase price thereof, in a principal amount not exceeding 110% of the purchase price; 

(5)Liens on any property to secure all or part of the cost of improvements or construction thereon or indebtedness incurred to provide funds for such purpose in a principal amount not exceeding 110% of the cost of such improvements or construction; 

(6)Liens on shares of stock, indebtedness or other securities or assets of a Person that is not a Subsidiary of CCO; 

(7)any extension, renewal or replacement (or successive extensions, renewals or replacements), as a whole or in part, of any Liens described in clauses (2), (3), (4), (5), (6), (9), (10) and (11) (it being understood that any such Liens described in clause (10) extended, renewed or replaced shall still be deemed outstanding for the purposes of such clause (10) and permitted thereunder), of this definition, for amounts not exceeding the principal amount of the Indebtedness For Borrowed Money secured by the Lien so extended, renewed or replaced (plus an amount equal to any premiums, accrued interest, fees and expenses payable in connection therewith); provided, however, that such extension, renewal or replacement Lien is limited to all or a part of the same assets that were covered by the Lien extended renewed or replaced (plus improvements on such assets and any Liens on assets that could have secured the Indebtedness For Borrowed Money pursuant to written agreements and instruments existing at the time); 

(8)with respect to the Notes of each series, Liens securing Obligations in respect of the Notes of such series and the Note Guarantees thereof and Liens in favor of the Trustee; 

(9)Liens resulting from progress payments or partial payments under United States government contracts or subcontracts; 

(10)Liens arising or existing in connection with Indebtedness For Borrowed Money in an aggregate principal amount not exceeding at the time such Lien is issued, created or 

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assumed the greater of (a) 15% of the Consolidated Net Worth of CCO and (b) $7 billion; and 

(11)Liens securing the Increased Amount of Indebtedness For Borrowed Money so long as the Lien securing such Indebtedness For Borrowed Money was permitted under this Indenture.

“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.
“principal” of a note means the principal of the note plus the premium, if any, payable on the note which is due or overdue or is to become due at the relevant time.
“Private Placement Legend” means the legend set forth in Section 2.06(g)(i)(a) to be placed on all Additional 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.
“Register” means a register in which, subject to such reasonable regulations as it may prescribe, the Issuers shall provide for the registration of the Notes and of transfers and exchanges of such Notes which the Issuers shall cause to be kept at the appropriate office of the Registrar in accordance with Section 2.03.
“Registration Rights Agreement” means any registration rights agreement among the Applicable Issuers and the initial purchasers named therein with respect to any Notes.
“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, the Private Placement Legend and the Regulation S Legend deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in an initial denomination equal to the outstanding principal amount of any Additional Notes initially sold in reliance on Rule 903 of Regulation S.
“Regulation S Legend” means the legend set forth in Section 2.06(g)(iii) which is required to be placed on all Regulation S Global Notes issued under this Indenture.
“Responsible Officer” when used with respect to the Trustee or the Collateral Agent, means any officer within the Corporate Trust Administration of the Trustee or officer appointed by the Collateral Agent (in each case, or any successor group thereto) who customarily performs functions similar to those performed by the Persons who at the time shall be such officer and with direct responsibility for the administration of this Indenture 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.

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“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.
“Restricted Global Note” means a Global Note bearing the Private Placement Legend.
“Rule 144” means Rule 144 promulgated under the Securities Act. 
“Rule 144A” means Rule 144A promulgated under the Securities Act.
“Rule 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 an initial denomination equal to the outstanding principal amount of any Additional Notes initially sold in reliance on Rule 144A.
“Rule 903” means Rule 903 promulgated under the Securities Act. 
“Rule 904” means Rule 904 promulgated under the Securities Act.
“S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.
“Security” or “Securities” means one or more of the Notes duly authenticated by the Trustee and delivered pursuant to the provisions of this Indenture.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Security Documents” means the Collateral Agreement, and any other mortgages, deeds of trust, deeds to secure debt, security agreements, pledge agreements, agency agreements and other instruments and documents executed and delivered pursuant to this Indenture or any of the foregoing, as the same may be amended, supplemented or otherwise modified from time to time and pursuant to which Collateral is pledged, assigned or granted to or on behalf of the Collateral Agent for the ratable benefit of the Trustee and the Holders.
“series” refers to all Notes established pursuant to any supplemental indenture to this Indenture that have the same economic terms and that are specified to be a “series” of Notes hereunder. 
“Shelf Registration Statement” means a “shelf” registration statement providing for the registration and the sale on a continuous or delayed basis of any Notes as may be provided in any Registration Rights Agreement.
“Significant Subsidiary” means (a) with respect to any Person, any Subsidiary of such Person which would be considered a “Significant Subsidiary” as defined in Rule 1-02(w) of Regulation S-X under the Securities Act and (b) in addition, with respect to the Company, Capital Corp.

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“Special Interest” means all additional interest owing on the Notes pursuant to the Registration Rights Agreement.
“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness For Borrowed Money, the date on which such payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness For Borrowed Money, or, if none, the original documentation governing such Indebtedness For Borrowed Money, and shall 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 Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Voting Stock is at the time owned or controlled, directly or indirectly, by: 
(1)such Person; 

(2)such Person and one or more Subsidiaries of such Person; or 

(3)one or more Subsidiaries of such Person. 

Unless otherwise specified, each reference to a Subsidiary shall refer to a Subsidiary of the Company.
“Subsidiary Guarantor” means each Subsidiary of CCO that executes a supplemental indenture to this Indenture as a Note Guarantor until released from its Note Guarantee.
“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, then “TIA” means, to the extent required by such amendment, the Trust Indenture Act of 1939 as so amended.
“Trustee” means The Bank of New York Mellon Trust Company, N.A., until a successor replaces The Bank of New York Mellon Trust Company, N.A., in accordance with Article 7 and thereafter means the successor serving hereunder.
“Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.
“Unrestricted Global Note” means a permanent Global Note substantially in the form of Exhibit A attached hereto that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing the Initial Notes or any Additional Notes that do not bear the Private Placement Legend.
“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or 

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instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer’s option.
“U.S. Person” means a U.S. person as defined in Rule 902(k) under the Securities Act.
“Voting Stock” of a Person means all classes of Equity Interests of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thererof.
“Wholly Owned Subsidiary” means, as to any Person, any other Person all of the Equity Interests of which (other than (i) directors’ qualifying shares required by law or (ii) in the case of CC VIII, LLC, the CCVIII Interest) are owned by such Person directly or through other Wholly Owned Subsidiaries or a combination thereof.
Section 1.02    Other Definitions.

	
			
	Term
	 
	Defined in Section

	“Authentication Order”
	 
	2.02

	“Covenant Defeasance”
	 
	8.03

	“DTC”
	 
	2.03

	“Event of Default”
	 
	6.01

	“Guaranteed Obligations”
	 
	10.01

	“Legal Defeasance”
	 
	8.02

	“Paying Agent”
	 
	2.03

	“Registrar”
	 
	2.03

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 means the Issuers and any successor obligor upon the Notes.
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.

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Section 1.04    Rules of Construction.

Unless the context otherwise requires:
(i)a term has the meaning assigned to it;

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

(iii)“or” is not exclusive;

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

(v)provisions apply to successive events and transactions;

(vi)references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(vii)references to any statute, law, rule or regulation shall be deemed to refer to the same as from time to time amended and in effect and to any successor statute, law, rule or regulation;

(viii)references to any contract, agreement or instrument shall mean the same as amended, modified, supplemented or amended and restated from time to time, in each case, in accordance with any applicable restrictions contained in this Indenture; and

(ix)“including” means “including, without limitation.”

ARTICLE 2
THE NOTES

Section 2.01    Form and Dating.

(a)General. The Notes shall 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 or this Indenture and may reference terms of the Notes. Each Note shall be dated the date of its authentication.

The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited. The Notes may be issued in one or more series. There shall be set forth in one or more indentures supplemental hereto, prior to the issuance of Notes of any series:
(a)the title of the series (which shall distinguish the Notes of such series from the Notes of all other series) and the Applicable Issuers with respect to such series of Notes;

(b)any limit upon the aggregate principal amount of the Notes of the series that may be authenticated and delivered under this Indenture (except for Notes authenticated and delivered 

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upon transfer of, or in exchange for, or in lieu of, other Notes of such series pursuant to this Indenture);

(c)the dates on which or periods during which the Notes of the series may be issued, and the dates on, or the range of dates within, which the principal of and premium, if any, on the Notes of such series are or may be payable or the method by which such date or dates shall be determined or extended;

(d)the rate or rates at which the Notes of the series shall bear interest, if any, or the method by which such rate or rates shall be determined, whether such interest shall be payable in cash or additional Notes of the same series or shall accrue and increase the aggregate principal amount outstanding of such series (including if such Securities were originally issued at a discount), the date or dates from which such interest shall accrue, or the method by which such date or dates shall be determined, the interest payment dates on which any such interest shall be payable, and the record dates for the determination of Holders to whom interest is payable on such interest payment dates or the method by which such date or dates shall be determined, the right, if any, to extend or defer interest payments and the duration of such extension or deferral;

(e)if other than U.S. Dollars, the currency in which Notes of the series shall be denominated or in which payment of the principal of, premium, if any, or interest in the Notes of the series shall be payable and any other terms concerning such payment;

(f)the place or places, if any, in addition to or instead of the Corporate Trust Office of the Trustee where the principal of, premium, if any, and interest on Notes of the series shall be payable, and where Notes of any series may be presented for registration of transfer, exchange or conversion, and the place or places where notices and demands to or upon the Issuers in respect of the Notes of such series may be made;

(g)the price or prices at which, the period or periods within which or the date or dates on which, and the terms and conditions upon which Notes of the series may be redeemed, in whole or in part, at the option of the Applicable Issuers, if the Applicable Issuers are to have that option;

(h)the obligation or right, if any, of the Applicable Issuers to redeem, purchase or repay Notes of the series pursuant to any sinking fund, amortization or analogous provisions or at the option of a Holder thereof and the price or prices at which, the period or periods within which or the date or dates on which, and the terms and conditions upon which Notes of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;

(i)if other than the principal amount thereof, the portion of the principal amount of the securities of the series which shall be payable upon declaration of acceleration of the maturity thereof;

(j)[Reserved];

(k)whether the Notes of the series are to be issued with original issue discount and the amount of discount with which such Notes may be issued;

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(l)provisions, if any, for the defeasance of Notes of the series in whole or in part and any addition or change in the provisions related to satisfaction and discharge;

(m)whether the Notes of the series are to be issued in whole or in part in the form of one or more Global Notes, and, in such case, the Depositary for such Global Notes, and the terms and conditions, if any, upon which interests in such Global Note or Global Notes may be exchanged in whole or in part for the individual Notes represented thereby in definitive form registered in the name or names of Persons other than such Depositary or a nominee or nominees thereof;

(n)the date as of which any Global Notes of the series shall be dated if other than the original issuance of the first Security of the series to be issued;

(o)the form of the Notes of the series;

(p)[Reserved]; 

(q)any restriction or condition on the transferability of the Notes such series;

(r)any addition or change in the provisions related to compensation and reimbursement of the Trustee which applies to Securities of such series;

(s)any addition or change in the provisions related to supplemental indentures which applies to Notes of such series;

(t)provisions, if any, granting special rights to Holders upon the occurrence of specified events;

(u)any addition to or change in the Events of the Default which applies to any Notes of the series; and

(v)any other terms of the Notes of such series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 9.01).

(b)Global Notes. Notes issued in global form shall be substantially in the form of Exhibit A (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A (without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such outstanding Notes as shall be specified therein and each shall provide that it shall represent 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 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 shall 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.

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(c)[Reserved].

(d)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” and “Customer Handbook” of Clearstream (or, in each case, equivalent documents setting forth the procedures of Euroclear and Clearstream) shall be applicable to transfers of beneficial interests in Regulation S Global Notes that are held by Participants through Euroclear or Clearstream.

Section 2.02    Execution and Authentication.

Two Officers shall sign the Notes for each Applicable Issuer 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 shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature (which may be by facsimile) of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
At any time and from time to time after the execution and delivery of this Indenture, the Applicable Issuers may deliver Notes executed by the Applicable Issuers to the Trustee for authentication; and the Trustee shall authenticate and deliver Notes upon a written order of the Applicable Issuers signed by an Officer of each of the Applicable Issuers (an “Authentication Order”). Such Authentication Order shall specify the amount of Notes to be authenticated and the date on which the Notes are to be authenticated, and whether the Notes are to be issued as one or more Global Notes and such other information as the Applicable Issuers may include or the Trustee may reasonably request. The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture is unlimited.
The Trustee may appoint an authenticating agent acceptable to the Applicable 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 Applicable Issuers.
Section 2.03    Registrar and Paying Agent.

The Issuers shall maintain an office or agency in the Borough of Manhattan, the City of New York, 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”). Until otherwise designated by the Issuers, the Issuers’ office or agency in New York shall be the office of the Trustee maintained for such purpose. The Registrar shall keep the 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 Registrar or Paying 

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Agent may resign at any time upon not less than ten (10) Business Days’ prior written notice to the Issuers. The Issuers shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which shall incorporate any applicable terms of the TIA. The Issuers shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. The Company or any of its 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 and to act as custodian with respect to the Global Notes.
Section 2.04    Paying Agent to Hold Money in Trust.

Principal of, premium, if any, and interest on the Notes will be payable at the office of the Paying Agent or, at the option of the Applicable Issuers, payment of interest may be made by check mailed to Holders at their respective addresses set forth in the Register; provided, all payments of principal, premium, if any, and interest with respect to the Notes represented by one or more Global Notes registered in the name or held by the Depositary shall be made by wire transfer of immediately available funds to accounts specified by the Holder prior to 10:00 a.m., New York time, on each due date of the principal and interest on any Note. The Applicable Issuers shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall 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 of such Applicable Issuers, and shall notify the Trustee of any default by the Applicable 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 Applicable 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 an Applicable Issuer or a Subsidiary) shall have no further liability for the money. If an Applicable Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuers, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05    Holder Lists.

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Applicable Issuers shall furnish to the Trustee at least seven (7) Business Days before each interest payment date but after the record date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders, 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 as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary 

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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 shall be exchanged by the Issuers for Definitive Notes if:

(i)the Applicable 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 120 days after the date of such notice from the Depositary;

(ii)the Applicable Issuers in their sole discretion 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

(iii)there shall have occurred and be continuing a Default or Event of Default with respect to the Notes.

Upon the occurrence of any of the preceding events in (i), (ii) or (iii) 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. 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, 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).
(b)Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Prior to the expiration of the 40-day distribution compliance period set forth in Regulation S, beneficial interests in any Regulation S Global Notes may be held only through Euroclear or Clearstream unless transferred in accordance with Section 2.06(b)(iii)(B). Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(i)Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any 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)(i).

(ii)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 

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Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either:

(A)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

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

(C)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

(D)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 (A) above.

Upon consummation of an Exchange Offer by the Applicable Issuers in accordance with Section 2.06(f), the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. 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).
(iii)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)(ii) above and the Registrar receives the following:

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

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a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) above and:

(A)such exchange or transfer is effected pursuant to an Exchange Offer in accordance with a 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 the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the relevant Exchange Notes or (3) 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 a Registration Rights Agreement;

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

(D)such exchange or transfer is effected after the expiration of the 40-day distribution compliance period set forth in Regulation S and the Registrar receives the following:

(1)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

(2)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 this subparagraph (D), 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 subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Applicable Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, 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 pursuant to subparagraph (B) or (D) above.
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.
(c)Transfer or Exchange of Beneficial Interests for Definitive Notes.

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(i)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 (provided that any such beneficial interest in Regulation S Global Note shall not be so exchangeable until after the expiration of the 40-day distribution compliance period set forth in Regulation S);

(B)if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, 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 under the Securities Act, 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 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(i) 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)(iv) thereof, if applicable;

(F)such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(ii) 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)(iii) thereof,

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h), and the Applicable 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 

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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)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.
(ii)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 a Registration Rights Agreement and the Holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the relevant Exchange Notes or (3) 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 a Registration Rights Agreement;

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

(D)such exchange or transfer is effected after the expiration of the 40-day distribution compliance period set forth in Regulation S and the Registrar receives the following:

(1)if the Holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private Placement Legend, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

(2)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 Definitive Note that does not bear the Private Placement Legend, 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 this subparagraph (D), 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.
(iii)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)(ii), the Trustee shall cause the aggregate principal 

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amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h), 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 pursuant to this Section 2.06(c)(iii) 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 pursuant to this Section 2.06(c) (iii) shall not bear the Private Placement Legend.

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

(i)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 under the Securities Act, 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 under the Securities Act, 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 under the Securities Act, 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 the Company 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

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(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 shall 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 Rule 144A Global Note or, in the case of clause (C) above, the Regulation S Global Note.
(ii)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 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 a Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the relevant Exchange Notes or (3) 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 a Registration Rights Agreement;

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

(D)such exchange or transfer is effected after the expiration of the 40-day distribution compliance period set forth in Regulation S and the Registrar receives the following:

(1)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

(2)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 this subparagraph (D), 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)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

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(iii)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 shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Applicable Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall 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 shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e):

(i)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 under the Securities Act, 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 903 or 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.

(ii)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:

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(A)such exchange or transfer is effected pursuant to an Exchange Offer in accordance with a Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the relevant Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuers;

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

(C)any such transfer is effected by a broker-dealer pursuant to an Exchange Offer Registration Statement in accordance with a Registration Rights Agreement; or

(D)such exchange or transfer is effected after the expiration of the 40-day distribution compliance period set forth in Regulation S and the Registrar receives the following:

(1)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

(2)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 this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Issuers 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.
(iii)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 a Registration Rights Agreement, the Applicable Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate (i) 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 tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they are not participating in a distribution of the relevant Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Applicable Issuers, and accepted for exchange in the relevant Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the relevant Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Issuers shall 

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execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount.

(g)Legends. The following legends shall 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:

(i)Private Placement Legend.

(A)Except as permitted by subparagraph (B) below, each Restricted 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:

THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTES EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE NOTES EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) (A) TO A PERSON WHO IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), (II) TO CCO, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTES EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE NOTE EVIDENCED HEREBY.
(B)Notwithstanding the foregoing, any Initial Note and any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

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(ii)Global Note Legend. Each Global Note shall 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.
(iii)Regulation S Legend. Each Regulation S Global Note should bear a legend in substantially the following form:

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.
(h)Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11. At 

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any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(i)General Provisions Relating to Transfers and Exchanges.

(i)To permit registrations of transfers and exchanges, the Applicable Issuers shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Applicable Issuers’ order or at the Registrar’s request.

(ii)No service charge shall 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 tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10 and 9.05).

(iii)The Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(iv)All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Applicable 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.

(v)The Applicable Issuers shall not be required to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.

(vi)Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Applicable 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 Applicable Issuers shall be affected by notice to the contrary.

(vii)The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02.

(viii)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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(ix)Each Holder of a Note agrees to indemnify the Applicable Issuers and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder’s Security in violation of any provision of this Indenture and/or applicable United States Federal or state securities law.

(x)The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary Participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(xi)Neither the Trustee nor any Agent shall have any responsibility for any actions taken or not taken by the Depositary.

Section 2.07    Replacement Notes.

If any mutilated Note is surrendered to the Trustee or the Applicable Issuers and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Applicable Issuers shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Applicable Issuers, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Applicable Issuers to protect the Applicable Issuers, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Applicable Issuers may charge for their expenses in replacing a Note.
Every replacement Note is an additional legally binding obligation of the Issuers and shall 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 of this Indenture, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09, a Note does not cease to be outstanding because an Issuer or an Affiliate of an Issuer holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.

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If the Paying Agent (other than an Issuer, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall 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 an Issuer, or by any Person directly or indirectly controlled by or under direct or indirect common control with an Issuer or, if the TIA is applicable to this Indenture, to the extent required by the TIA, any person controlling an Issuer, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned shall be so disregarded.
Section 2.10    Temporary Notes.

Until certificates representing Notes are ready for delivery, the Applicable Issuers may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Applicable Issuers considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Applicable Issuers shall prepare and the Trustee shall authenticate Definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this Indenture.
Section 2.11    Cancellation.

The Applicable Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of such canceled Notes in its customary manner. The Applicable 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 Applicable Issuers default in a payment of interest on the Notes, they shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, which interest on defaulted interest shall accrue until the defaulted interest is deemed paid hereunder, 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. The Applicable Issuers shall 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 Applicable Issuers shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before 

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the special record date, the Applicable Issuers (or, upon the written request of the Applicable Issuers, the Trustee in the name and at the expense of the Applicable Issuers) shall transmit 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    CUSIP Numbers.

The Applicable Issuers in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Applicable Issuers will promptly notify the Trustee in writing of any change in the “CUSIP” numbers of any Notes.
ARTICLE 3
REDEMPTION AND PREPAYMENT

Section 3.01    Redemption and Prepayment 

The redemption and prepayment terms with respect to any series of Notes will be set forth in one or more supplemental indentures governing such series of Notes.
SECTION 4
COVENANTS

Notwithstanding anything herein to the contrary, prior to the Escrow Release Date, neither the Issuers nor any of the Note Guarantors shall be subject to the provisions of this Article 4 (other than Section 4.04).
Section 4.01    Payment of Notes.

The Applicable Issuers shall pay or cause to be paid the principal, 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 shall be considered paid on the date due if the Paying Agent, if other than the Applicable Issuers or a Subsidiary thereof, holds as of 10:00 a.m. New York City time on the due date money deposited by the Applicable Issuers in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. The Applicable Issuers shall pay all Special Interest, if any, in the same manner on the dates and in the amounts set forth in any Registration Rights Agreement.
The Applicable Issuers shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Code) on overdue principal at the rate equal to 2.00% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; they shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Code) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.

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Section 4.02    Maintenance of Office or Agency.

The Applicable Issuers shall maintain in the Borough of Manhattan, 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 Applicable Issuers in respect of the Notes and this Indenture may be served. The Applicable Issuers shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Applicable Issuers shall fail to maintain any such required office or agency or shall fail 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 Applicable Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Applicable Issuers of their obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Applicable Issuers shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
Each Issuer hereby designates The Bank of New York Mellon, at 101 Barclay Street, Floor 8W, New York, New York 10286, as one such office or agency of such Issuer in accordance with Section 2.03.
Section 4.03    Reports.

The Company shall file with the Trustee, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the TIA at the times and in the manner provided pursuant to the TIA; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. The Company shall also comply with the other provisions of Section 314(a) of the TIA. 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 the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates). 
 With respect to any Notes that have not been exchanged for Exchange Notes, the Company shall provide the Trustee and the Holders of the Notes with (i) annual consolidated financial statements of the Company audited by the Company’s independent public accountants within 90 days after the end of each Fiscal Year of the Company and (ii) unaudited quarterly consolidated financial statements (including a balance sheet, income statement and cash flow statement for the fiscal quarter or quarters then ended and the corresponding fiscal quarter or quarters from the prior year) within 45 days of the end of each of the first three fiscal quarters of 

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each Fiscal Year of the Company. Such annual and quarterly financial statements shall be prepared in accordance with GAAP. 
Notwithstanding anything to the contrary set forth above, for so long as the Issuers are direct or indirect majority-owned subsidiaries of any Parent (or other Person which, directly or indirectly, owns a majority of the outstanding common equity interests of the Company), if (i) such Parent (or other Person which, directly or indirectly, owns a majority the outstanding common equity interests of the Company) has provided a guarantee with respect to the Notes and has furnished the Holders of the Notes or filed electronically with the Commission the reports described in the preceding paragraphs with respect to such Parent (or other Person which, directly or indirectly, owns a majority of the outstanding common Equity Interests of the Company) (including any consolidating financial information required by Regulation S-X relating to the Issuers), or (ii) such Parent (or other Person which, directly or indirectly, owns a majority the outstanding common equity interests of the Company) has furnished the Holders of the Notes or filed electronically with the SEC the reports described in the preceding paragraphs with respect to such Parent (or other Person which, directly or indirectly, owns a majority of the outstanding common Equity Interests of the Company) (including any consolidating financial information required by Regulation S-X relating to the Issuers) and such reports include a brief explanation (or such explanation is otherwise made available to the Holders) of the material differences between the financial statements of such Parent and that of the Company, then in each case, the Issuers shall be deemed to be in compliance with this Section 4.03. 

Any information filed with the SEC and available at www.SEC.gov or made available on any Parent’s website shall be deemed transmitted, filed and delivered as required under this Section 4.03.
Section 4.04    Compliance Certificate.

(a)The Issuers shall deliver to the Trustee, within 120 days after the end of each Fiscal Year, an Officers’ Certificate stating that a review of the activities of the Issuers and their 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 the 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 the Indenture and are not in default in the performance or observance of any of the terms, provisions and conditions of the Indenture (or, if a Default or Event of Default shall have 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) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any (including Special Interest, if any), on the Notes is prohibited or if such event has occurred, a description of the event and what action the Issuers are taking or propose to take with respect thereto.

(b)The Issuers shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer within 30 days after becoming aware of any Default or 

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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    Legal Existence.

Subject to, and as permitted under, Article 5, and the ability of the Company or any of its Subsidiaries to convert (or similar action) to another form of legal entity under the laws of the jurisdiction under which the Company such Subsidiary then exists, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its limited liability company existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary; provided, however, that the Company shall not be required to preserve or keep the corporate, partnership or other existence of any of its Subsidiaries (other than Capital Corp if the other Issuer is not then a corporation), if the Company shall determine that the preservation or keeping thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Company and its Subsidiaries, taken as a whole.
Section 4.06    Limitation on Liens.

(a)The Company shall not, and shall not permit any of its Material Subsidiaries to, directly or indirectly, Incur any Lien on any of its assets (including Equity Interests of a Subsidiary), whether owned at the Issue Date or thereafter acquired, securing Indebtedness For Borrowed Money, other than Permitted Liens, without effectively providing that the Notes shall be secured, equally and ratably, on such assets of the Company or such Material Subsidiary with (or prior to) the Indebtedness For Borrowed Money so secured for so long as such Indebtedness For Borrowed Money is so secured.

(b)Any Lien created for the benefit of the Holders of the Notes pursuant to Section 4.06(a) shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Lien that gave rise to such Lien created for the benefit of the Holders of the Notes.

(c)Additionally, prior to a Collateral Release Event, the Company shall not, and shall not permit any Subsidiary to, directly or indirectly, Incur any Lien on any of its assets (including Equity Interests of a Subsidiary), whether owned at the Issue Date or thereafter acquired, to secure Equally and Ratably Secured Indebtedness without effectively providing that the Notes shall be secured equally and ratably on the assets of the Company or such Subsidiary with (or prior to) the Equally and Ratably Secured Indebtedness so secured for so long as such Equally and Ratably Secured Indebtedness is so secured.

(d)Any Lien created for the benefit of the Holders of the Notes pursuant to Section 4.06(c) shall provide by its terms that such Lien will be automatically and unconditionally released and discharged upon the release and discharge of the Lien that gave rise to such Lien created for the benefit of the Holders of the Notes.

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(e)This Section 4.06 requires only equal and ratable treatment in the application of proceeds of Collateral and does not require that the Trustee have any ability to control the Collateral or the enforcement of remedies.

(f)The reference to assets in Section 4.06(a) and Section 4.06(c) above means the assets of the Company or any Material Subsidiary at the time of Incurrence of the Lien.

Section 4.07    Future Subsidiary Guarantors.

Prior to the occurrence of a Collateral Release Event, the Company shall cause any Subsidiary (other than the Issuer) that is an obligor of, or issues a Guarantee with respect to, any Equally and Ratably Secured Indebtedness, to, in each case, within 15 days, (1) execute and deliver to the Trustee a Guaranty Agreement pursuant to which such Subsidiary will Guarantee payment of the Notes on the same terms and conditions as those set forth in the Indenture and (2) grant a Lien on its property and assets for the benefit of the Holders and the Trustee, to the extent required pursuant to Section 4.06 above.
ARTICLE 5
SUCCESSORS

Notwithstanding anything herein to the contrary, the provisions of this Article 5 shall not apply to an Issuer unless and until such Issuer executes a supplemental indenture expressly subjecting itself to this Article 5.
Section 5.01    Merger, Consolidation or Sale of Assets.

The Company shall not consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, directly or indirectly, all or substantially all its assets to, any Person (other than a Subsidiary Guarantor), unless:
(1) the resulting, surviving or transferee Person (the “Successor Company”) shall be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) shall expressly assume, by an indenture supplemental thereto, executed and delivered to the Trustee and the Collateral Agent, in form reasonably satisfactory to the Trustee and the Collateral Agent, all the obligations of the Company under the Notes and the Indenture and the Successor Company (if not the Company) shall, by supplement to the security documents, assume all obligations of the Company under the Security Documents and make;
(2) immediately after giving pro forma effect to such transaction, no Default shall have occurred and be continuing; and
(3) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the requirements of this Indenture.
For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more 

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Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.
The Successor Company will be the successor to the Company and shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture, and the predecessor company, except in the case of a lease, shall be released from its obligations under the Indenture, any Security Documents and the Intercreditor Agreement, including the obligation to pay the principal of and interest on the Notes.
For the avoidance of doubt, this Section 5.01 shall not apply to transactions by and among the Company and its Subsidiaries.
ARTICLE 6
DEFAULTS AND REMEDIES

Notwithstanding anything herein to the contrary, the provisions of this Article 6 shall not apply to an Issuer unless and until such Issuer executes a supplemental indenture expressly subjecting itself to this Indenture.
Section 6.01    Events of Default.

Except where otherwise indicated by the context or where the term is otherwise defined for a specific purpose, the term “Event of Default” as used in this Indenture with respect to Notes of any series shall mean one of the following described events unless it is either inapplicable to a particular series or it is specifically deleted or modified in a supplemental indenture:
(1)default for 30 consecutive days in the payment when due of interest on the Notes of such series;

(2)default in payment when due of the principal of or premium, if any, on the Notes of such series when due at maturity, upon optional redemption, upon declaration of acceleration or otherwise;

(3)the failure by the Issuers or any Note Guarantor to comply for 90 days after notice with its covenants or other agreements (other than those described in the immediately preceding clauses (1) and (2) above), provided that a default under this clause (3) will not constitute an Event of Default with respect to a series of Notes until the Trustee or the Holders of 30% in principal amount of the outstanding Notes of such series notify the Issuers of the default and the Issuers do not cure such default within the time specified after receipt of such notice;

(4)(I) an Applicable Issuer or any Subsidiary Guarantor that is a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Code:

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(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, or

(d)makes a general assignment for the benefit of its creditors; or

(II) a court of competent jurisdiction enters an order or decree under any Bankruptcy Code that:
(a)is for relief against an Applicable Issuer or a Subsidiary Guarantor that is a Significant Subsidiary in an involuntary case;

(b)appoints a custodian of an Applicable Issuer or a Subsidiary Guarantor that is a Significant Subsidiary or for all or substantially all of the property of an Applicable Issuer or a Subsidiary Guarantor that is a Significant Subsidiary; or

(c)orders the liquidation of an Applicable Issuer or a Subsidiary Guarantor that is a Significant Subsidiary, and the order or decree remains unstayed and in effect for 60 consecutive days.

(5)any Note Guarantee of any Subsidiary Guarantor that is a Significant Subsidiary (or Note Guarantees of any group of Subsidiary Guarantors that, taken together, would constitute a Significant Subsidiary) ceases to be in full force and effect (other than in accordance with the terms of such Note Guarantee and/or this Indenture) or any Note Guarantor denies or disaffirms its obligations under its Note Guarantee; and

(6)a material portion of the Collateral ceases to be subject to the Liens of the Security Documents (other than in accordance with the terms of this Indenture and the Security Documents) or any Issuer or Subsidiary Guarantor denies or disaffirms its obligations under the Security Documents to which it is party.

Section 6.02    Acceleration.

In the case of an Event of Default arising from Section 6.01(4) with respect to an Applicable Issuer, all outstanding Notes shall ipso facto become due and payable immediately without any declaration or other act on the part of the Trustee or any Holders of the Notes.
If any other Event of Default with respect to the Notes of any series occurs and is continuing, the Trustee by notice to the Applicable Issuers or the Holders of at least 30% in principal amount of the then outstanding Notes of any series by notice to the Applicable Issuers and the Trustee may declare the Notes of such series to be due and payable immediately. 
The Holders of a majority in aggregate principal amount of the Notes of any series then outstanding by written notice to the Trustee may on behalf of all of the Holders of such series rescind an acceleration and its consequences with respect to such series of Notes if the rescission 

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would not conflict with any judgment or decree and if all existing Events of Default (except non-payment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived.
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, if any, and interest 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 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 Existing Defaults.

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes of any series by notice to the Trustee may on behalf of the Holders of all of the Notes of such series waive any 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, if any, or interest on, the Notes of such series (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 of such series 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.

Subject to the terms of the Intercreditor Agreement, the Holders of a majority in principal amount of the outstanding Notes of a series are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect to such series. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a note of such series or that would involve the Trustee in personal liability.
Section 6.06    Limitation on Suits.

Subject to Article 7, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture or the Security Documents at the request or direction of any of the Holders of a series of Notes unless such Holders have offered to the Trustee indemnity or security satisfactory to it against any loss, liability or expense. Subject to the Intercreditor Agreement, except to enforce the right to receive 

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payment of principal, premium (if any) or interest when due, no Holder of a note of a series may pursue any remedy with respect to the Indenture or the Notes of such series unless:
(1) such Holder has previously given the Trustee notice that an Event of Default is continuing; 
(2) Holders of at least 30% in principal amount of the outstanding Notes of such series have requested the Trustee to pursue the remedy; 
(3) such Holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense; 
(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and 
(5) Holders of a majority in principal amount of the outstanding Notes of such series have not given the Trustee a direction inconsistent with such request within such 60-day period. 

Section 6.07    Rights of Holders of Notes to Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal, premium, if any, and interest on any Note, on or after the respective due dates expressed in such 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) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Applicable Issuers for the whole amount of principal of, premium, if any, 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 Holders allowed in any judicial proceedings relative to the Applicable 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 Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents 

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and counsel, and any other amounts due the Trustee under Section 7.07. 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 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

Subject to the terms of the Intercreditor Agreement, if the Trustee collects any money pursuant to this Article 6 from any Applicable Issuer (or any other obligor on any of the Notes), 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, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; 
Second: to Holders for amounts due and unpaid on the Notes of the Applicable Issuer (or other obligor from which such money has been collected) for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any and interest, respectively; and 
Third: to the Issuers or such party as a court of competent jurisdictions shall direct. 
The Trustee may fix a record date and payment date for any payment to Holders 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 and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes of any series.

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SECTION 7
TRUSTEE
Section 7.01    Duties of Trustee.

(1)If an Event of Default with respect to the Notes of any series has occurred and is continuing, the Trustee shall, with respect to such series, 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.

(2)Except during the continuance of an Event of Default with respect to any series of Notes:

(a)the duties of the Trustee, with respect to the Notes of any series, shall 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

(b)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 required to be furnished to the Trustee hereunder and conforming to the requirements of this Indenture. However, in the case of certificates or opinions specifically required by any provision hereof to be furnished to it, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein).

(3)The Trustee may not be relieved from liabilities for its own gross negligent action, its own gross negligent failure to act, or its own willful misconduct, except that:

(a)this paragraph (3) does not limit the effect of paragraph (2) of this Section 7.01;

(b)the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Trustee, unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts; and

(c)the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.

(4)Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (1), (2), and (3) of this Section 7.01.

(5)No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall 

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have offered to the Trustee security and indemnity satisfactory to it against any loss, liability, claim, damage or expense.

(6)The Trustee shall 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.

(7)The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or documents.

Section 7.02    Rights of Trustee.

(1)The Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any document (whether in its original or facsimile form) 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.

(2)Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel of its own selection and the written advice or opinion of such counsel or any Opinion of Counsel shall 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.

(3)The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

(4)The Trustee shall 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.

(5)Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from an Issuer shall be sufficient if signed by an Officer of such Issuer.

(6)The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of Holder unless such Holder shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

(7)The Trustee shall not be charged with knowledge of any Default or Event of Default unless either (a) a Responsible Officer of the Trustee shall have actual knowledge of such Default or Event of Default or (b) written notice of such Default or Event of Default shall have been given to and received at the Corporate Trust Office of the Trustee by the Issuers or any Holder and such notice references the Notes and this Indenture.

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(8)The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuers, personally or by agent or attorney at the sole cost of the Issuers and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(9)In no event shall the Trustee 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.

(10)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, including, without limitation, as Collateral Agent, and each agent, custodian and other Person employed to act hereunder.

(11)The Trustee may request that each Issuer deliver certificates setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

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 the Trustee. However, in the event that the Trustee acquires any conflicting interest, it must eliminate such conflict within 90 days and apply to the SEC for permission to continue as trustee 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.
Section 7.04    Trustee’s Disclaimer.

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture 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 shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall 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 a Responsible Officer of the Trustee, the Trustee shall transmit to Holders a notice of the Default or Event of Default within 90 days after the Trustee acquires knowledge thereof. Except in the 

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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 Holders.
Section 7.06    Reports by Trustee to Holders.

By March 15th of each year, and for so long as any Notes remain outstanding, the Trustee shall transmit to Holders 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 shall comply with TIA § 313(b)(2). The Trustee shall also transmit by all reports as required by TIA § 313(c).
A copy of each report at the time of its transmittal to Holders shall be transmitted to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA § 313(d). The Issuers shall promptly notify the Trustee when the Notes are listed or delisted on any stock exchange.
Section 7.07    Compensation and Indemnity.

The Issuers shall pay to the Trustee from time to time compensation as agreed upon in writing for its acceptance of this Indenture and services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers shall reimburse the Trustee promptly upon request for all disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.
The Issuers shall, jointly and severally, indemnify the Trustee and any predecessor trustee against any and all losses, liabilities, claims, damages or expenses (including reasonable legal fees and expenses) including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) 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 (including this Section 7.07) and defending itself against any claim (whether asserted by the Issuers or 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, damage, claim, liability or expense determined, in a final judgment by a court of competent jurisdiction, to have been caused by its own gross negligence or willful misconduct. The Trustee shall notify the Issuers promptly of any claim for which it may seek indemnity of which a Responsible Officer of the Trustee has received written notice. Failure by the Trustee to so notify the Issuers shall not relieve the Issuers of their obligations hereunder. The Issuers shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Issuers shall pay the reasonable fees and expenses of such counsel. The Issuers need not pay for any settlement made without their consent, which consent shall not be unreasonably withheld.
The obligations of the Issuers in this Section 7.07 shall survive resignation or removal of the Trustee and the satisfaction, discharge or termination of this Indenture.

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To secure the Issuers’ payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except such money or property held in trust by the Trustee to pay the principal of and interest on any Notes. Such Lien shall survive the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(4) 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 Code.
The Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.
Section 7.08    Replacement of the Trustee.

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.
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 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:
(a)the Trustee fails to comply with Section 7.10;

(b)the Trustee is adjudged as bankrupt or as insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Code;

(c)a custodian or public officer takes charge of the Trustee or its property; or

(d)the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers.
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 principal amount of the then outstanding Notes may petition at the expense of the Issuers any court of competent jurisdiction for the appointment of a successor Trustee.
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, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

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A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall transmit a notice of its succession to Holders. The retiring Trustee shall 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. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuers’ obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.
The transfer event shall occur no less than 31 days after the Trustee’s receipt of notice of removal from the Issuers or a majority of the Holders.
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 shall be the successor Trustee.
Section 7.10    Eligibility; Disqualification.

There shall 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 shall 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.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE 

Section 8.01    Option to Effect Legal Defeasance or Covenant Defeasance.

The Applicable Issuers may, at any time, elect to have either Section 8.02 or 8.03 applied to all outstanding Notes of any series upon compliance with the conditions set forth below in this Article 8.

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Section 8.02    Legal Defeasance and Discharge.

Upon the Applicable Issuers’ exercise under Section 8.01 of the option applicable to this Section 8.02, the Applicable Issuers shall, subject to the satisfaction of the conditions set forth in Section 8.04, be deemed to have been discharged from their obligations with respect to all outstanding Notes of such series on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Applicable Issuers shall be deemed to have paid and discharged the entire Indebtedness For Borrowed Money represented by the outstanding Notes of such series, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all their other obligations under such Notes 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 shall survive until otherwise terminated or discharged hereunder:
(a)the rights of Holders of outstanding Notes of such series to receive payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due from the trust referred to below;

(b)the Applicable Issuers’ obligations with respect to the Notes of such series concerning issuing temporary 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;

(c)the rights, powers, trusts, duties and immunities of the Trustee and the Applicable Issuers’ obligations in connection therewith; and

(d)the Legal Defeasance provisions of this Indenture;

Subject to compliance with this Article 8, the Applicable Issuers may exercise their option under this Section 8.02 notwithstanding the prior exercise of their option under Section 8.03.
Section 8.03    Covenant Defeasance.

Upon the Applicable Issuers’ exercise under Section 8.01 of the option applicable to this Section 8.03 with respect to any series of Notes, the Issuers shall, subject to the satisfaction of the conditions set forth in Section 8.04, be released from their obligations under the covenants contained in Article 5 with respect to the outstanding Notes of such series on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, “Covenant Defeasance”), and the Notes of such series shall 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 shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes of such series, the Issuers may omit to comply with and shall 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 covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such 

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omission to comply shall not constitute a Default or an Event of Default under Section 6.01, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuers’ exercise under Section 8.01 of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04, Sections 6.01 (3) through 6.01(5) shall not constitute Events of Default.
Section 8.04    Conditions to Legal or Covenant Defeasance.

In order to exercise either Legal Defeasance pursuant to Section 8.02 or Covenant Defeasance pursuant to Section 8.03 with respect to a series of Notes, the following conditions must be met:
(1)the Applicable Issuers must irrevocably deposit or cause to be deposited with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as are expected to be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the outstanding Notes of such series on the stated maturity or on the applicable redemption date, as the case may be, and the Issuers must specify whether the Notes of such series are being defeased to maturity or to a particular redemption date;

(2)in the case of Legal Defeasance, the Issuers shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that

(b)the Applicable Issuers have received from, or there has been published by, the Internal Revenue Service a ruling or

(c)since the date such Notes of such series were first issued, 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 of such series 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 Covenant Defeasance, the Applicable Issuers shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes of such series 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 resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing)):

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(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) to which the Applicable Issuer or any of its Subsidiaries is a party or by which the Applicable Issuer or any of its Subsidiaries is bound;

(6)the Applicable Issuers must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Applicable Issuers with the intent of preferring Holders over the other creditors of the Applicable Issuers with the intent of defeating, hindering, delaying or defrauding creditors of the Applicable Issuers or others; and

(7)the Applicable 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.

Notwithstanding the foregoing, the Opinion of Counsel required by clause (2) above with respect to a Legal Defeasance need not be delivered if all Notes of the applicable series not theretofore delivered to the Trustee for cancellation,
(a)have become due and payable or 

(b)will become due and payable on the maturity date within one year, by their terms or under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Applicable Issuers.

Section 8.05    Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 8.06, 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 in respect of the outstanding Notes of a series shall be held in trust and applied by the Trustee, in accordance with the provisions of the Notes of such series and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuers acting as Paying Agent) as the Trustee may determine, to 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 Applicable Issuers shall 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 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.
Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Applicable 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 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)), are 

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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 Applicable Issuers.

Any money deposited with the Trustee or any Paying Agent, or then held by the Applicable 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, and premium, if any, or interest has become due and payable shall be paid to the Applicable Issuers on their request or (if then held by the Applicable Issuers) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Applicable 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 Applicable Issuers as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Applicable 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 shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining shall be repaid to the Applicable Issuers.
Section 8.07    Reinstatement.

If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03, 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 Applicable Issuers’ obligations under this Indenture and the Notes, shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 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, as the case may be; provided, however, that, if the Applicable Issuers make any payment of principal of, premium, if any, or interest on any Note following the reinstatement of their obligations, the Applicable Issuers shall be subrogated to the rights of Holders to receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER

Notwithstanding anything herein to the contrary, the provisions of this Article 9 shall not apply to an Issuer unless and until such Issuer executes a supplemental indenture expressly subjecting itself to this Article 9.
Section 9.01    Without Consent of Holders of Notes.

Notwithstanding Section 9.02 of this Indenture, the Issuers (or as it relates to the Notes of a series, the Applicable Issuers), the Note Guarantors, the Trustee and the Collateral Agent may amend or supplement this Indenture, the Intercreditor Agreement, any Note Guarantee, any Security Document, or the Notes of any series without the consent of any Holder of a Note of such series to:

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(1)cure any ambiguity, omission, mistake, defect or inconsistency;

(2)to provide for the assumption by a successor Person of the obligations of the Issuers or any Note Guarantor under the Indenture or the Security Documents;

(3)to provide for uncertificated notes in addition to or in place of certificated notes (provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code);

(4)to add Guarantees with respect to the Notes or to add additional Collateral to secure the Notes and the Note Guarantees;

(5)to add to the covenants of the Issuers or any Note Guarantor for the benefit of the Holders of the Notes or to surrender any right or power conferred upon the Issuers or any Note Guarantor;

(6)make any change that would provide any additional rights or benefits to Holders of any series or that does not adversely affect the legal rights under this Indenture of any such Holder;

(7)to conform the text of the Indenture, the Notes, any Note Guarantee, the Intercreditor Agreement or any Security Document to the description and terms of such Notes in the offering circular, offering memorandum, prospectus supplement or other offering document applicable to such Notes as the time of the initial sale thereof; 

(8)to make any amendment to the provisions of the Indenture relating to the transfer and legending of Notes; provided, however, that (a) compliance with the Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer Notes;

(9)to release Collateral from the Lien under the Security Document when permitted or required by the Security Documents, the Indenture or the Intercreditor Agreement;

(10)to evidence and provide for the acceptance and appointment under the Indenture of a successor Trustee or Collateral Agent thereunder pursuant to the requirements thereof;

(11)to issue Exchange Notes and related Note Guarantees as provided for in the Registration Rights Agreement relating to the Notes; 

(12)to release a Note Guarantor pursuant to the terms of Article 10; or

(13)change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall not be effective with respect to any outstanding Notes of any series created prior to the execution of such supplemental indenture that is entitled to the benefit of such provision.  

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The consent of the Holders of the Notes is not necessary to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.
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 receipt by the Trustee and the Collateral Agent an Officers’ Certificate and an Opinion of Counsel pursuant to Section 9.06, the Trustee and the Collateral Agent shall join with the Issuers and any Note 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 and the Collateral Agent shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.
Neither the Issuers nor any Affiliate of CCI may, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to all Holders and is paid to all Holders that so consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.
Section 9.02    With Consent of Holders of Notes.

Except as provided below in this Section 9.02, this Indenture, the Intercreditor Agreement, any Note Guarantee, the Security Documents, or the Notes of any series may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the outstanding Notes of each series affected (including, without limitation, consents obtained in connection with a purchase of, or a tender offer or exchange offer for, Notes) and, subject to Sections 6.04 and 6.07, any existing Default or compliance with any provision of this Indenture or the Notes of any series may be waived, including by way of amendment, with the consent of the Holders of a majority in aggregate principal amount of the outstanding Notes of each series affected (including, without limitation, consents obtained in connection with a purchase of, or a tender offer or exchange offer for, Notes). Section 2.08 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 rate of or extend the time for payment of interest on any such Note;

(3)reduce the principal of or change the maturity date of any such Note;

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(4)change the provisions applicable to the redemption of any such Note as set forth in any supplemental indenture relating to such Note (other than the timing for the notice of redemption);

(5)make any Note payable in money other than that stated in the Notes;

(6)impair the right of any Holder of such Notes to receive payment of principal of and interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes; provided, however, that an acceleration of such Notes may be rescinded and any payment default that resulted from such acceleration may be waived by the Holders of at least the percentage of aggregate principal amount of the Notes of such series required to amend the covenant or provision contained in the Indenture or any Note Guarantee, the breach of which resulted in such acceleration; or

(7)make any change in the amendment provisions which require each Holder’s consent or in the waiver provisions.

Notwithstanding the preceding, without the consent of the Holders of at least 66 2⁄3% in aggregate principal amount of the Notes of a series then outstanding, no amendment or waiver may make any change in any Security Document, the Intercreditor Agreement or the provisions in the Indenture dealing with Collateral or application of trust proceeds of the Collateral with the effect of releasing the Liens securing the Obligations in respect of the Notes of such series on all or substantially all of the Collateral.
It shall 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 or waiver, but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Applicable Issuers shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Applicable Issuers to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07, the Holders of a majority in aggregate principal amount of the outstanding Notes of each affected series may waive compliance in a particular instance by the Applicable Issuers with any provision of this Indenture or such Notes.
Section 9.03    Compliance with Trust Indenture Act.

Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the TIA as then in effect. 
Section 9.04    Revocation and Effect of Consents.

Until an amendment, supplement or waiver becomes effective, a consent thereto by a Holder is a continuing consent by the Holder 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 

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consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
Section 9.05    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, 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 shall not affect the validity and effect of such amendment, supplement or waiver.
Section 9.06    Trustee and Collateral Agent to Sign Amendments, etc.

The Trustee and the Collateral Agent shall 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 and the Collateral Agent. In executing any amended or supplemental indenture, the Trustee and the Collateral Agent shall be provided with and (subject to Section 7.01) shall be fully protected in relying upon, in addition to the documents required by Section 12.04, an Officers’ Certificate and an Opinion of Counsel, in each case from the Issuers, stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.
ARTICLE 10
GUARANTEE

Section 10.01    Guarantee.

(a)Each Note Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, to each Holder and to the Trustee (i) the full and punctual payment when due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all obligations of the Issuers under this Indenture (including obligations to the Trustee) and the Notes, whether for payment of principal of, premium, if any, or interest on in respect of the Notes and all other monetary obligations of the Issuers under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuers whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the “Guaranteed Obligations”). Each Note Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from any Note Guarantor, and that each Note Guarantor shall remain bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation.

(b)To the extent applicable, each Note Guarantor waives presentation to, demand of payment from and protest to the Issuers of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Note Guarantor waives notice of any default under the 

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Notes or the Guaranteed Obligations. The obligations of each Note Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuers or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (iv) the failure of any Holder or Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (v) any change in the ownership of each Note Guarantor, except as provided in Section 10.02(b) or Section 10.02(c). Each Note Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Note Guarantors, such that such Note Guarantor’s obligations would be less than the full amount claimed.

(c)Each Note Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuers first be used and depleted as payment of the Issuers’ or such Note Guarantor’s obligations hereunder prior to any amounts being claimed from or paid by such Note Guarantor hereunder. Each Note Guarantor hereby waives any right to which it may be entitled to require that the Issuer be sued prior to an action being initiated against such Note Guarantor.

(d)Each Note Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment when due (and not a guarantee of collection) and waives any right to require that any resort be had by any holder or the Trustee to any security held for payment of the Guaranteed Obligations.

(e)The Note Guarantee of each Note Guarantor is equal in right of payment to all existing and future unsubordinated Indebtedness For Borrowed Money of such Note Guarantor.

(f)Except as expressly set forth in Sections 8.02, 10.02 and 10.06, the obligations of each Note Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Note Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Note Guarantor or would otherwise operate as a discharge of any Note Guarantor as a matter of law or equity.

(g)Each Note Guarantor agrees that its Note Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Each Note Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any holder or the Trustee upon the bankruptcy or reorganization of the Issuers or otherwise.

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(h)In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Note Guarantor by virtue hereof, upon the failure of the Issuers to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Note Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuers to Holders and the Trustee.

(i)Each Note Guarantor agrees that it shall not be entitled to any right of subrogation in relation to Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Note Guarantor further agrees that, as between it, on the one hand, and Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of the Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Note Guarantor for the purposes of this Section 10.01.

(j)Each Note Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any holder in enforcing any rights under this Section 10.01.

(k)Upon request of the Trustee, each Note Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

Section 10.02    Limitation on Liability.

(a)Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by each Note Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Note Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

(b)A Note Guarantee by any Note Guarantor shall terminate and be of no further force or effect and such Note Guarantor shall be deemed to be released from all obligations under this Article 10:

(i)upon the occurrence of a Collateral Release Event; 

(ii)at such time as such Note Guarantor is either: (A) not an issuer or guarantor of any item of Indebtedness for Borrowed Money (whether by repayment or otherwise) and any other Equally and Ratably Secured Indebtedness and ceases (or substantially concurrently 

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will cease) to be the guarantor of any Equally and Ratably Secured Indebtedness (or such Subsidiary Guarantor’s obligations with respect to all Equally and Ratably Secured Indebtedness shall cease to exist substantially concurrently with such release of its Note Guarantee); or (B) released or relieved as an issuer or guarantor of its obligations of an item of Indebtedness for Borrowed Money (whether by repayment or otherwise) and not an issuer or guarantor of any other Equally and Ratably Secured Indebtedness and ceases (or substantially concurrently will cease) to be the guarantor of any Equally and Ratably Secured Indebtedness (or such Subsidiary Guarantor’s obligations with respect to all Equally and Ratably Secured Indebtedness shall cease to exist substantially concurrently with such release of its Note Guarantee);

(iii)upon the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of (i) all or substantially all the assets of or (ii) any Equity Interests of the Capital Stock (including any sale, disposition or other transfer following which the applicable Note Guarantor is no longer a Subsidiary), of such Note Guarantor if such sale, disposition, exchange or other transfer is made in a manner not in violation of this Indenture; and

(iv)upon the Issuers’ exercise of their legal defeasance option or covenant defeasance option under Article 8 or if the Issuers’ obligations under this Indenture are discharged in accordance with the terms of this Indenture.

Section 10.03    [Reserved].

Section 10.04    No Waiver.

Neither a failure nor a delay on the part of either the Trustee or Holders in exercising any right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 10 at law, in equity, by statute or otherwise.
Section 10.05    Modification.

No modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any Note Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Note Guarantor in any case shall entitle any Note Guarantor to any other or further notice or demand in the same, similar or other circumstances.
Section 10.06    Execution of Supplemental Indenture for Future Note Guarantors.

Each Subsidiary and other Person which is required to become a Note Guarantor of any series of Notes pursuant to the terms of this Indenture (as supplemented by the supplemental indenture with respect to such Notes) shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit E hereto pursuant to which such Subsidiary or 

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other Person shall become a Note Guarantor under this Article 10 and shall guarantee the Notes. Concurrently with the execution and delivery of such supplemental indenture, the Issuers shall deliver to the Trustee an Opinion of Counsel and an Officers’ Certificate to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary or other Person and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors’ rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Guarantee of such Note Guarantor is a valid and binding obligation of such Note Guarantor, enforceable against such Note Guarantor in accordance with its terms and/or to such other matters as the Trustee may reasonably request.
Section 10.07    Non-Impairment.

The failure to endorse a Guarantee on any Note shall not affect or impair the validity thereof.
ARTICLE 11
THE ESCROW ISSUER

Section 11.01    The Escrow Issuer.

The Escrow Issuer agrees, from and until an escrow release date specified in a supplemental indenture, that the Escrow Issuer will restrict its primary activities to issuing capital stock and receiving capital contributions, performing its obligations in respect of the Notes under this Indenture and any supplemental indenture related thereto and the applicable escrow agreement, consummating the release of funds from escrow release, redeeming the Notes pursuant to a special mandatory redemption specified in any supplemental indenture, if applicable, and conducting such other activities as are necessary or appropriate to carry out the activities described above. Prior to an escrow release date, the Escrow Issuer shall not own, hold or otherwise have any interest in any material assets other than the escrow account, cash and Eligible Escrow Investments and its rights under the applicable escrow agreement.
ARTICLE 12
MISCELLANEOUS

Section 12.01    Trust Indenture Act Controls.

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA § 318(c), the imposed duties shall control.
Section 12.02    Notices.

Any notices or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if made by hand delivery, first class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery, and addressed as follows:
If to the Issuers:

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Charter Communications Operating, LLC
Charter Communications Operating Capital Corp.
CCO Safari II, LLC
c/o Charter Communications, Inc.
12405 Powerscourt Drive, Suite 100
St. Louis, Missouri 63131
Facsimile No.: (314) 965-6640
Attention: Corporate Secretary

With a copy to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Facsimile No.: (212) 446-4900
Attention: Christian O. Nagler, Esq.

If to the Trustee and/or the Collateral Agent:
The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Facsimile No.: (312) 827-8542
Attention: Corporate Trust Administration

The Issuers, the Trustee or the Collateral Agent, may designate additional or different addresses for subsequent notices or communications by notice to each other Person.
All notices and communications (other than those sent to Holders) shall 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 shall 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. Any notice or communication shall also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuers mail a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

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The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, pdf, facsimile transmission or other similar unsecured electronic methods, provided, however, that the Trustee shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Issuer elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Issuer agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.
Section 12.03    Communication by Holders with Other Holders.

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:
(i)an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05) 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

(ii)an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

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 (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include:
(i)a statement that the Person making such certificate or opinion has read such covenant or condition;

(ii)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;

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(iii)a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

(iv)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, Members and Stockholders.

No director, officer, employee, incorporator, member or stockholder of the Issuers or any Note Guarantor, as such, shall have any liability for any obligations of the Issuers or Note Guarantor under the Notes or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
Section 12.08    Governing Law.

THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES AND ANY GUARANTEE WITHOUT GIVING EFFECT TO THE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR ANY GUARANTEE.
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 the Issuers or their 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, as the case may be, shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors.

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Section 12.11    Severability.

In case any provision in this Indenture or the Notes, as the case may be, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 12.12    Counterpart Originals.

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
Section 12.13    Table of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table 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 shall in no way modify or restrict any of the terms or provisions.
Section 12.14    Waiver of Jury Trial.

EACH OF THE ISSUERS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVE, 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.
Section 12.15    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.
ARTICLE 13
SATISFACTION AND DISCHARGE

Section 13.01    Satisfaction and Discharge of Indenture.

This Indenture shall cease to be of further effect with respect to the Notes of any series (except as to any surviving rights of registration of transfer or exchange of Notes of such series herein expressly provided for), and the Trustee, on demand of and at the expense of the Issuers, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to such series of Notes, when
(1)either:

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(a)all Notes of such series theretofore authenticated and delivered (other than (i) Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.07 and (ii) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuers and thereafter repaid to the Issuers or discharged from such trust) have been delivered to the Trustee for cancellation; or

(b)all Notes of such series not theretofore delivered to the Trustee for cancellation

(i)have become due and payable, or

(ii)will become due and payable at their Stated Maturity within one year, or

(iii)are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers, and the Issuers, in the case of (i), (ii) or (iii) above, have deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Notes which have become due and payable) or to the maturity or redemption thereof, as the case may be;

(2)the Issuers have paid or caused to be paid all other sums payable hereunder by the Issuers; and

(3)each of the Issuers has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture pursuant to this Article 13, the obligations of the Issuers to the Trustee under Section 7.07, and, if money shall have been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section 13.01, the obligations of the Trustee under Section 13.02 shall survive such satisfaction and discharge.
Section 13.02    Application of Trust Money.

All money deposited with the Trustee pursuant to Section 13.01 with respect to any series of Notes shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any 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.
ARTICLE 14
COLLATERAL

Section 14.01    Security Documents.

From and after the Escrow Release Date, the due and punctual payment of the principal of, premium (if any) and interest, if any, on, the Notes when and as the same shall be due and 

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payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of, premium (if any) and interest, if any, on the Notes and performance of all other obligations of the Issuers and the Note Guarantors to the Holders or the Trustee and the Notes (including, without limitation, the Note Guarantees), according to the terms hereunder or thereunder, shall be secured as provided in the Security Documents. The Issuer shall, and shall cause the Subsidiary Guarantors to, take any and all actions and make all filings (including the filing of UCC financing statements, continuation statements and amendments thereto) required to create and maintain, as security for the Obligations of the Issuers and the Guarantors to the Secured Parties under this Indenture, the Notes, the Note Guarantees and the Security Documents, a valid and enforceable perfected Lien and security interest in and on all of the Collateral (subject to the terms of the Intercreditor Agreement and the Security Documents), in favor of the Collateral Agent for the benefit of the Holders and the Trustee subject to no Liens other than Permitted Liens. 
Each Holder, by its acceptance of a Note, consents and agrees to the terms of the Security Documents (including, without limitation, the provisions providing for foreclosure and release of Collateral) and the Intercreditor Agreement, as the same may be in effect or may be amended from time to time in accordance with their terms and authorizes and appoints The Bank of New York Mellon Trust Company, N.A. as the Trustee and the Collateral Agent (and each successor Trustee and Collateral Agent), and each Holder authorizes and directs the Trustee and the Collateral Agent to enter into the Security Documents and the Intercreditor Agreement and for the Trustee to enter into the Escrow Agreement and to perform its obligations and exercise its rights thereunder in accordance with respect to the provisions thereof. The Holders consent and agree to be bound by the terms of the Security Documents and the Intercreditor Agreement, as the same may be in effect from time to time, and agrees to perform their obligations thereunder in accordance therewith.
Section 14.02    Collateral Agreement.

This Article 14 and the provisions of each other Security Document are subject to the terms, conditions and benefits set forth therein and the Intercreditor Agreement. The Issuers and each of the Note Guarantors consent to, and agree to be bound by, the terms of the Security Documents, as the same may be in effect from time to time, and to perform their obligations thereunder in accordance therewith.
Section 14.03    Release of Collateral.

The Liens on the Collateral shall be automatically released: 
(1)with respect to any series of Notes, in whole, upon payment in full of the principal of, accrued and unpaid interest and premium, if any, on the Notes of such series; 

(2)with respect to any series of Notes, in whole, upon satisfaction and discharge of this Indenture with respect to such Notes pursuant to Article 13; 

(3)with respect to any series of Notes, in whole, upon a legal defeasance or covenant defeasance with respect to such Notes as set forth under Article 8; 

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(4)as to any property or asset constituting Collateral that is sold or otherwise disposed of by the Issuers or any Note Guarantor in a transaction not prohibited by this Indenture at the time of such sale or disposition; 

(5)as to any property or assets constituting Collateral owned by a Note Guarantor that is released from its Note Guarantee in accordance with this Indenture; 

(6)with respect to any series of Notes, in whole or in part, with the consent of Holders of the requisite percentage of Notes of such series in accordance with Article 9; 

(7)to the extent required in accordance with the applicable provisions of the Security Documents and the Intercreditor Agreement; 

(8)in whole, upon a Collateral Release Event; 

(9)in accordance with clauses (b) and (d) of Section 4.06; and 

(10)as to any Collateral at such time as such Collateral (A) no longer secures indebtedness previously secured and does not secure any Equally and Ratably Secured Indebtedness (or such Collateral will no longer secure any Equally and Ratably Secured Indebtedness substantially concurrently with such release of Liens on such Collateral) or (B) does not secure any Equally and Ratably Secured Indebtedness (or such Collateral will no longer secure any Equally and Ratably Secured Indebtedness substantially concurrently with such release of Liens on such Collateral), 

provided, however, that, in the case of any release in whole pursuant to clauses (1), (2) or (3) above, all amounts owing to the Trustee under this Indenture with respect to such series of Notes have been paid or duly provided for. 
Upon compliance by the Issuers with the conditions precedent set forth above, and delivery to the Trustee of an Officers’ Certificate and Opinion of Counsel, the Trustee or the Collateral Agent shall promptly execute and deliver such documents and other instruments and authorize the making of such filings and registrations as may be necessary, requested and provided by the Issuers to evidence the release and re-conveyance to the Issuers or the applicable Note Guarantor of the applicable Collateral. 
Any certificate or opinion required by Section 314(d) of the Trust Indenture Act in connection with obtaining the release of Collateral may be made by an Officer of CCO, except in cases where Section 314(d) requires that such certificate or opinion be made by an independent engineer, appraiser or other expert. 
Notwithstanding anything to the contrary in this Indenture, the Issuers and the Subsidiary Guarantors will not be required to comply with all or any portion of Section 314(d) of the Trust Indenture Act if they determine in good faith, based on the advice of counsel, that under the terms of that section and/or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including “no action” letters or exemptive orders, all or the relevant portion of Section 314(d) of the Trust Indenture Act is inapplicable to the released Collateral.

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Section 14.04    Collateral Agent.

The Collateral Agent shall hold (directly or through co-trustees or agents), and will be entitled to enforce, all Liens on the Collateral created by the Security Documents.
Except as provided in the Collateral Agreement, the Collateral Agent shall not be obligated:
(1)    to act upon directions purported to be delivered to it by any Person; 
(2)    to foreclose upon or otherwise enforce any Lien; or 
(3)    to take any other action whatsoever with regard to any or all of the Security Documents, the Liens created thereby or the Collateral.
Section 14.05    Further Assurances; Insurance.

The Issuers and each of the Note Guarantors shall cause to be done all acts and things that may be required, or that the Collateral Agent from time to time may reasonably request, to assure and confirm that the Collateral Agent holds duly created and enforceable and perfected Liens upon the Collateral, in each case, as contemplated by, and with the Lien priority required under, the Security Documents and the Intercreditor Agreement, and subject to the limitations set forth therein. 
Upon reasonable request of the Collateral Agent or otherwise provided under the Collateral Agreement, at any time and from time to time, the Issuers and each of the Note Guarantors will promptly execute, acknowledge and deliver such Security Documents, instruments, certificates, notices and other documents, and take such other actions as shall be reasonably required, or that the Collateral Agent may reasonably request, to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, in each case as contemplated by the Security Documents.
[Signatures on following page]

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Dated as of July 23, 2015
Charter Communications Operating, LLC, 
as an Issuer

By: /s/Thomas M. Degnan    
Name: Thomas M. Degnan
Title: Senior Vice President - Finance and Corporate Treasurer
Charter Communications Operating Capital Corp., as an Issuer
By: /s/Thomas M. Degnan    
Name: Thomas M. Degnan
Title: Senior Vice President - Finance and Corporate Treasurer
CCO Safari II, LLC, as an Issuer
By: /s/Thomas M. Degnan    
Name: Thomas M. Degnan
Title: Senior Vice President - Finance and Corporate Treasurer

[Signature Page to Base Indenture]

The Bank of New York Mellon Trust Company, N.A., as Trustee
By: /s/Teresa Petta    
Name: Teresa Petta
Title:   Vice President

The Bank of New York Mellon Trust Company, N.A., as Collateral Agent
By: /s/Teresa Petta    
Name: Teresa Petta
Title:   Vice President

[Signature Page to Base Indenture]

EXHIBIT A
[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.] 1    
[THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTES EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE NOTES EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) (A) TO A PERSON WHO IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A TRANSACTION MEETING THE 

————————————————————
1    Include Global Note Legend, if applicable.

A-1

REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), (II) TO CCO, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTES EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE NOTE EVIDENCED HEREBY.] 2    
[THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.]     3     

————————————————————
2    Include Private Placement Legend, if applicable.
3    Include Regulation S Legend, if applicable.

A-2

[Face of Note]
CUSIP NO. [                ]
[Ÿ]% Senior Notes due [Ÿ]
No [ ]
$[        ]
[Charter Communications Operating, LLC 
and 
Charter Communications Operating Capital Corp.]

[CCO Safari II, LLC]
promise to pay to CEDE & CO. or to registered assigns the principal amount of $[   ] Dollars on [      ].
Interest Payment Dates: [    ] and [        ]
Record Dates: [    ] and [        ]
Subject to Restrictions set forth in this Note.

A-3

IN WITNESS WHEREOF, [each of Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.] [CCO Safari II, LLC] has caused this instrument to be duly executed.
Dated: [    ]
	
		
	[CHARTER COMMUNICATIONS OPERATING, LLC

	By:
	 

	Name:

	Title

	 
	 

	By:
	 

	Name:

	Title

	 
	 

	[CHARTER COMMUNICATIONS OPERATING CAPITAL CORP.

	By:
	 

	Name:

	Title]

	 
	 

	By:
	 

	Name:

	Title

	 
	 

	 
	 

	[CCO SAFARI II, LLC, as an Issuer

	By:
	 

	Name:

	Title

	 
	 

	By:
	 

	Name:

	Title]

A-4

This is one of the Notes referred to in the within-mentioned Indenture:
Dated: [    ]
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

By:____________________________________
Authorized Signatory

A-5

EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
[Charter Communications Operating, LLC
Charter Communications Operating Capital Corp.]
[CCO Safari II, LLC]
c/o [Charter Communications Operating, LLC
12405 Powerscourt Drive, Suite 100
St. Louis, Missouri 63131]

The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Facsimile No.: (312) 827-8542
Attention: Corporate Trust Administration
Re: Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.
 ̈    [   ]% Senior Secured Notes due [   ] (CUSIP [ ]) (the “Notes”)
Reference is hereby made to the Indenture, dated as of July 23, 2015 (as amended, supplemented or otherwise modified, the “Indenture”), among Charter Communications Operating, LLC (the “Company”), Charter Communications Operating Capital Corp. (“Capital Corp”), CCO Safari II, LLC (together with the Company and Capital Corp, the “Issuers”), the guarantor party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent. 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. Check if Transferee will take delivery of a beneficial interest in the Rule 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States 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 believed and 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 

B-1

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 Rule 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act.
 ̈    2. Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or 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 made in contravention of the requirements of Rule 903 (b) or Rule 904(b) of Regulation S under the Securities Act and (iii) the transaction is not part of a plan or scheme to evade the registration requirements of 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 Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act. If the Transfer of the beneficial interest occurs prior to the expiration of the 40-day distribution compliance period set forth in Regulation S, the transferred beneficial interest will be held immediately thereafter through Euroclear or Clearstream.
 ̈    3. Check and complete if Transferee will take delivery of a beneficial interest in a 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):
 ̈    (i) such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or
 ̈    (ii) such Transfer is being effected to the Company or a subsidiary thereof; or
 ̈    (iii) 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
 ̈    (iv) 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 

B-2

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 Restricted Global Note and/or the Definitive Notes and in the Indenture and the Securities Act.
 ̈    4. Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.
 ̈    (i) 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 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.
 ̈    (ii) Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or 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.
 ̈    (iii) 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, Rule 903 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.

B-3

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuers.
_______________________
[Insert Name of Transferor]

By_____________________
Name:
Title:
Dated:__________________

B-4

ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
 ̈    (a) a beneficial interest in the:
 ̈    (i) Rule 144A Global Note (CUSIP_______), or
 ̈    (ii) Regulation S Global Note (CUSIP_______), or
 ̈    (b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
 ̈    (a) a beneficial interest in the:
 ̈    (i) Rule 144A Global Note (CUSIP_______), or
 ̈    (ii) Regulation S Global Note (CUSIP_______), or
 ̈    (iii) Unrestricted Global Note (CUSIP_______), or
 ̈    (b) a Restricted Definitive Note; or
 ̈    (c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.

B-5

EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
[Charter Communications Operating, LLC
Charter Communications Operating Capital Corp.]
[CCO Safari II, LLC]
c/o [Charter Communications, Inc.
12405 Powerscourt Drive, Suite 100
St. Louis, Missouri 63131]

The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Facsimile No.: (312) 827-8542
Attention: Corporate Trust Administration
Re: Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.

 ̈    [ ]% Senior Secured Notes due [    ] (CUSIP [    ]) (the “Notes”)
Reference is hereby made to the Indenture, dated as of July 23, 2015 (as amended, supplemented or otherwise modified, the “Indenture”), among Charter Communications Operating, LLC (the “Company”), Charter Communications Operating Capital Corp. (“Capital Corp”), CCO Safari II, LLC (together with the Company and Capital Corp, the “Issuers”) and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent. 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
 ̈    (i) 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 United States 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. If the Exchange is from beneficial interest in a Regulation S Global Note to beneficial interest in an Unrestricted Global 

C-1

Note, the Owner further certifies that it is either (x) a non-U.S. Person to whom Notes would be transferred in accordance with Regulation S or (y) a U.S. Person who purchased Notes in a transaction that did not require registration under the Securities Act.
 ̈    (ii) 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.
 ̈    (iii) 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 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. If the Exchange is from beneficial interest in a Regulation S Global Note to an Unrestricted Definitive Note, the Owner further certifies that it is either (x) a non-U.S. Person to whom Notes could be transferred in accordance with Regulation S or (y) a U.S. Person who purchased Notes in a transaction that did not require registration under the Securities Act.
 ̈    (iv) 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
 ̈    (i) 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. If the Exchange is from beneficial interest in a Regulation S Global 

C-2

Note to a Restricted Definitive Note, the Owner further certifies that it is either (x) a non-U.S. Person to whom Notes could be transferred in accordance with Regulation S or (y) a U.S. Person who purchased Notes in a transaction that did not require registration under the Securities Act. 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.
 ̈    (ii) 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]
 ̈    Rule 144A Global Note or ❑ Regulation S 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 and the benefit of the Issuers.
_______________________
[Insert Name of Transferor]
By____________________
Name:
Title:
Dated:_________________

C-3

EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

[Charter Communications Operating, LLC
Charter Communications Operating Capital Corp.]
[CCO Safari II, LLC]
c/o [Charter Communications, Inc.
12405 Powerscourt Drive, Suite 100
St. Louis, Missouri 63131]

The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Facsimile No.: (312) 827-8542
Attention: Corporate Trust Administration
Re: Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.

 ̈    [ ]% Senior Secured Notes due [    ] (CUSIP [ ]) (the “Notes”)
Reference is hereby made to the Indenture, dated as of July 23, 2015 (as amended, supplemented or otherwise modified, the “Indenture”), among Charter Communications Operating, LLC (the “Company”), Charter Communications Operating Capital Corp. (“Capital Corp”), CCO Safari II, LLC (together with the Company and Capital Corp, the “Issuers”) and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent. 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:
(i)❑ a beneficial interest in a Global Note, or

(ii)❑ 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 United States 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 the Company or any subsidiary thereof, (b) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as 

D-1

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 Company a signed letter substantially in the form of this letter and an Opinion of Counsel in form reasonably acceptable to the Company 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(d) 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.
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 and the Issuers are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.
___________________________________
[Insert Name of Transferor]
By_________________________________
Name:
Title:
Dated:________________

D-2

EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of [   ], among [GUARANTOR] (the “New Guarantor”)[, a subsidiary of Charter Communications Operating, LLC (or its successor), a Delaware limited liability company, and Charter Communications Operating Capital Corp. (or its successor), a Delaware corporation[, CCO Safari II, LLC (or its successor), a Delaware limited liability company,] (together, the “Issuers”)], and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”) under the Indenture referred to below.
W I T N E S S E T H :
WHEREAS the Issuers have heretofore executed and delivered to the Trustee an indenture (as amended, supplemented or otherwise modified, the “Indenture”) dated as of July 23, 2015, providing for the issuance of the Issuers’ Notes
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the Collateral Agent the Issuers and other Guarantors, if any, are authorized to execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Issuers and the Trustee mutually covenant and agree for the equal and ratable benefit of Holders as follows:
1.    Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “Holders” in this Supplemental Indenture shall refer to the term “Holders” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such Holders. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.
2.    Agreement to Guarantee. The New Guarantor hereby agrees, jointly and severally with all existing guarantors (if any), to unconditionally guarantee the Issuers’ Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes and to perform all of the obligations and agreements of a Guarantor under the Indenture.
3.    Notices. All notices or other communications to the New Guarantor shall be given as provided in Section 12.02 of the Indenture.
4.    Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental 

E-1

Indenture shall form a part of the Indenture for all purposes, and every Holder heretofore or hereafter authenticated and delivered shall be bound hereby.
5.    Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
6.    Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
7.    Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
8.    Effect of Headings. The Section headings herein are for convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR]
By:                                                                       
Name:
Title:

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:                                                                           
Name:
Title:

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Collateral Agent
By:                                                                           
Name:
Title:

E-2

EXHIBIT F

[Form of]

COLLATERAL AGREEMENT

made by

CHARTER COMMUNICATIONS OPERATING, LLC,

CHARTER COMMUNICATIONS OPERATING CAPITAL CORP. 

and the other Grantors party hereto from time to time

in favor of

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Collateral Agent

Dated as of [         ], 201[ ]

TABLE OF CONTENTS	
					
	 
	 
	 
	Page
	

	 
	 
	 
	 

	SECTION 1. DEFINED TERMS
	1
	

	 
	1.1
	Definitions
	1
	

	 
	1.2
	Other Definitional Provisions
	6
	

	 
	 
	 
	 

	SECTION 2. GRANT OF SECURITY INTEREST
	6
	

	 
	2.1
	Collateral
	6
	

	 
	 
	 
	 

	SECTION 3. CERTIFICATED INTERESTS
	7
	

	 
	3.1
	Pledged Partnerships Interests
	7
	

	 
	3.2
	Pledged LLC Interests
	7
	

	 
	 
	 
	 

	SECTION 4. REPRESENTATIONS AND WARRANTIES
	7
	

	 
	4.1
	Title; No Other Liens
	7
	

	 
	4.2
	Perfected First Priority Liens
	8
	

	 
	4.3
	Jurisdiction of Organization
	8
	

	 
	4.4
	Pledged Securities
	8
	

	 
	 
	 
	 

	SECTION 5. COVENANTS
	8
	

	 
	5.1
	Delivery of Instruments, Certificated Securities and Chattel Paper
	8
	

	 
	5.2
	Insurance
	9
	

	 
	5.3
	Maintenance of Perfected Security Interest; Further Documentation    
	9
	

	 
	5.4
	Changes in Locations, Name, etc
	9
	

	 
	5.5
	Pledged Securities
	9
	

	 
	 
	 
	 

	SECTION 6. REMEDIAL PROVISIONS
	10
	

	 
	6.1
	Investment Property
	10
	

	 
	6.2
	Proceeds To Be Turned Over to Collateral Agent
	11
	

	 
	6.3
	Application of Proceeds
	11
	

	 
	6.4
	Code and Other Remedies
	11
	

	 
	6.5
	Registration Rights
	12
	

	 
	6.6
	Deficiency
	13
	

	 
	6.7
	Certain Matters Relating to Pledged Receivables
	13
	

	 
	6.8
	Communications with Obligors; Grantors Remain Liable
	13
	

	 
	 
	 
	 

	SECTION 7. THE COLLATERAL AGENT
	14
	

	 
	7.1
	Collateral Agent’s Appointment as Attorney-in-Fact, etc
	14
	

	 
	7.2
	Duty of Collateral Agent
	15
	

	 
	7.3
	Financing Statements
	16
	

	 
	7.4
	Authority of Collateral Agent
	16
	

	 
	 
	 
	 

	SECTION 8. MISCELLANEOUS
	16
	

	 
	8.1
	Amendments in Writing
	16
	

	 
	8.2
	Notices
	16
	

	 
	8.3
	No Waiver by Course of Conduct; Cumulative Remedies
	16
	

	 
	8.4
	Enforcement Expenses; Indemnification
	17
	

-i-

	
					
	 
	8.5
	Successors and Assigns
	17
	

	 
	8.6
	Counterparts
	17
	

	
					
	 
	8.7
	Severability
	17
	

	 
	8.8
	Governmental Approvals
	18
	

	 
	8.9
	Section Headings
	19
	

	 
	8.10
	Integration
	19
	

	 
	8.11
	GOVERNING LAW
	19
	

	 
	8.12
	Submission to Jurisdiction; Waivers
	19
	

	 
	8.13
	Acknowledgments
	20
	

	 
	8.14
	Additional Grantors; Release
	20
	

	 
	8.15
	WAIVER OF JURY TRIAL
	21
	

	 
	8.16
	Intercreditor Agreement
	21
	

SCHEDULES
		
	Schedule 1
	Notice Addresses

		
	Schedule 2
	Pledged Securities

		
	Schedule 3
	Perfection Matters

		
	Schedule 4
	Jurisdictions of Organization 

Schedule 5    Intellectual Property
Schedule 6    List of Subsidiary Guarantors
ANNEXES
Annex 1    Form of Assumption Agreement
    

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COLLATERAL AGREEMENT
COLLATERAL AGREEMENT, dated as of [     ], 201[ ], made by CHARTER COMMUNICATIONS OPERATING, LLC (“CCO”) and CHARTER COMMUNICATIONS OPERATING CAPITAL CORP. (“CCO Capital” and, together with CCO, the “Issuers” and together with the Issuers and any other entity that may become a party hereto as provided herein, collectively, the “Grantors”, and individually, a “Grantor”), in favor of THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Collateral Agent (in such capacity, the “Collateral Agent”), for the Holders from time to time of the Notes (as defined below) pursuant to the Indenture, dated as of July 23, 2015 (as amended, supplemented or otherwise modified from time to time including, without limitation, by the First Supplemental Indenture referred to below, the “Indenture”), among CCO Safari II, LLC (“CCO Safari,” which has since merged with and into CCO), the Issuers, and The Bank of New York Mellon Trust Company, N.A., as trustee (in such capacity, the “Trustee”) and collateral agent.
W I T N E S S E T H:
WHEREAS, CCO Safari issued 3.579% Senior Secured Notes due 2020, 4.464% Senior Secured Notes due 2022, 4.908% Senior Secured Notes due 2025, 6.384% Senior Secured Notes due 2035, 6.484% Senior Secured Notes due 2045 and 6.834% Senior Secured Notes due 2055 (collectively and together with any Additional Notes (as defined in the Indenture), the “Notes”) pursuant to the First Supplemental Indenture, dated as of July 23, 2015, by and among CCO Safari, CCH II, LLC, as limited guarantor thereto, the Trustee and the Collateral Agent; 
WHEREAS, the Issuers have assumed all of the obligations of CCO Safari under the Notes pursuant to the Second Supplemental Indenture, dated as of the date hereof, by and among the Issuers, the guarantors party thereto, the Trustee and the Collateral Agent;
WHEREAS, upon consummation of the offering of the Notes, CCO Safari entered into an escrow agreement (the “Escrow Agreement”) with the Trustee and Bank of America, N.A., as escrow agent (in such capacity, the “Escrow Agent”), pursuant to which CCO Safari deposited into escrow accounts the gross proceeds from the offering of the Notes.
WHEREAS, it is a condition precedent to the release of the funds deposited in the escrow accounts to the Issuers (the “Escrow Release”) that the Grantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable benefit of the Holders.
NOW, THEREFORE, in consideration of the above premises, the parties hereto hereby agree as follows:
SECTION 1.  DEFINED TERMS

1.1    Definitions.

(a)Unless otherwise defined herein, terms defined in the Indenture and used herein shall have the meanings given to them in the Indenture, and the following terms are used herein as defined in the Applicable UCC:  Accounts, Certificated Security, Chattel Paper, Documents, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Letter-of-Credit Rights and Supporting Obligations.  

(b)    The following terms shall have the following meanings:

“Additional Collateral”:  all of the following property of the Issuers or any Subsidiary Guarantor, to the extent that a security interest in such property can be perfected by the filing of a Uniform Commercial Code financing statement:  all Accounts, all Chattel Paper, all Documents, all Equipment, all Fixtures, all General Intangibles, all Instruments, all Intellectual Property, all Inventory, all Investment Property and all other property not otherwise described in this definition.
“Agreement”:  this Collateral Agreement, as the same may be amended, supplemented, restated or otherwise modified from time to time.
“Applicable UCC”:  the Uniform Commercial Code as from time to time in effect in the State of New York; provided, however, that, at any time, if by reason of mandatory provisions of law, any or all of the perfection or priority of the Collateral Agent’s and the Secured Parties’ security interest in any item or portion of the Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “Applicable UCC” shall mean the Uniform Commercial Code as in effect, at such time, in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions relating to such provisions.
“CATV Franchise”:  collectively, with respect to CCO and its Subsidiaries, (a) any franchise, license, permit, wire agreement or easement granted by any political jurisdiction or unit or other local, state or federal franchising authority (other than licenses, permits and easements not material to the operations of a CATV System) pursuant to which such Person has the right or license to operate a CATV System and (b) any law, regulation, ordinance, agreement or other instrument or document setting forth all or any part of the terms of any franchise, license, permit, wire agreement or easement described in clause (a) of this definition.
“CATV System”:  any cable distribution system owned or acquired by CCO or any of its Subsidiaries which receives audio, video, digital, other broadcast signals or information or telecommunications by cable, optical, antennae, microwave or satellite transmission and which amplifies and transmits such signals to customers of CCO or any of its Subsidiaries. 
“CCH”: Charter Communications Holdings, LLC, a Delaware limited liability company, together with its successors.
 “Collateral”:  as defined in Section 2.1.
“Collateral Account”:  any collateral account established by the Collateral Agent as provided in Section 7.2.
“FCC”:  the Federal Communications Commission and any successor thereto.
“FCC License”:  any community antenna relay service, broadcast auxiliary license, earth station registration, business radio, microwave or special safety radio service license issued by the FCC pursuant to the Communications Act of 1934, as amended.
“Foreign Subsidiary”:  any Subsidiary organized under the laws of any jurisdiction outside the United States of America.
“Foreign Subsidiary Voting Equity Interests”:  the voting Equity Interests of any Foreign Subsidiary.

-2-

“Grantor”:  as defined in the preamble.
“Governmental Authority”:  any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).
 “Indenture Documents”:  the Indenture, the Notes,this Agreement, the other Security Documents and any other document made, delivered or given in connection with any of the foregoing to which a Grantor is party that is designated as an Indenture Document. 
“Intellectual Property”:  the collective reference to all rights, priorities and privileges in and to the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement or other impairment thereof, in each case, whether arising under United States, multinational or foreign laws or otherwise, including the right to receive all proceeds and damages therefrom.
“Intercompany Obligations”:  all obligations, whether constituting General Intangibles or otherwise, owing to the Issuers or any Subsidiary Grantor by any Affiliate of the Issuers or such Subsidiary Grantor.
“Investment Property”:  the collective reference to (i) all “investment property” as such term is defined in Section 9-102(a)(49) of the Applicable UCC (other than any Foreign Subsidiary Voting Stock excluded from the definition of “Pledged Stock”) and (ii) whether or not constituting “investment property” as so defined, all Pledged Notes and all Pledged Stock.
“License”:  as to any Person, any license, permit, certificate of need, authorization, certification, accreditation, franchise, approval, or grant of rights by any Governmental Authority or other Person necessary or appropriate for such Person to own, maintain, or operate its business or property, including FCC Licenses and CATV Franchises.
“Obligations”:  the collective reference to the unpaid principal of and, premium and interest, if any, on the Notes and related guarantees and all other obligations and liabilities of the Grantors (including, without limitation, any increase in the aggregate principal amount of the Notes together with any fees and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Grantors, whether or not a claim for such fees or interest are allowed in such proceeding) to the Collateral Agent, the Trustee or any Holder, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Indenture, this Agreement, any Indenture Document or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel that are required to be paid by such Grantor pursuant to the terms of this Agreement or any other Indenture Document).
“Patents”:  (i) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof and all goodwill associated therewith, including, without limitation, any of the foregoing referred to in Schedule 5, (ii) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including, without limitation, any of the foregoing referred to in Schedule 5, and (iii) all rights to obtain any reissues or extensions of the foregoing.  

-3-

“Patent License”:  all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in part by a Patent, including, without limitation, any of the foregoing referred to in Schedule 5 (it being understood that oral agreements are not required to be listed on Schedule 5).
“Pledged Issuers”:  the collective reference to each issuer of any Pledged Securities.
“Pledged LLC Interests”:  in each case, whether now existing or hereafter acquired, all of a Grantor’s right, title and interest in and to:
(i)    any Pledged Issuer (other than any Non-Recourse Subsidiary) that is a limited liability company, but not any of such Grantor’s obligations from time to time as a holder of interests in any such Pledged Issuer (unless the Collateral Agent or its designee, on behalf of the Collateral Agent, shall elect to become a holder of interests in any such Pledged Issuer in connection with its exercise of remedies pursuant to the terms hereof);
(ii)    any and all moneys due and to become due to such Grantor now or in the future by way of a distribution made to such Grantor in its capacity as a holder of interests in any such Pledged Issuer or otherwise in respect of such Grantor’s interest as a holder of interests in any such Pledged Issuer;
(iii)    any other property of any such Pledged Issuer to which such Grantor now or in the future may be entitled in respect of its interests in any such Pledged Issuer by way of distribution, return of capital or otherwise;
(iv)    any other claim or right which such Grantor now has or may in the future acquire in respect of its interests in any such Pledged Issuer;
(v)    the organizational documents of any such Pledged Issuer;
(vi)    all certificates, options or rights of any nature whatsoever that may be issued or granted by any such Pledged Issuer to such Grantor while this Agreement is in effect; and
(vii)    to the extent not otherwise included, all Proceeds of any or all of the foregoing.
“Pledged Notes”:  any promissory note evidencing loans made by any Grantor to any member of the Charter Group, including in each case without limitation, all promissory notes listed on Schedule 2.
“Pledged Partnership Interests”:  in each case, whether now existing or hereafter acquired, all of a Grantor’s right, title and interest in and to:
(i)    any Pledged Issuer (other than any Non-Recourse Subsidiary) that is a partnership, but not any of such Grantor’s obligations from time to time as a general or limited partner, as the case may be, in any such Pledged Issuer (unless the Collateral Agent or its designee, on behalf of the Collateral Agent, shall elect to become a general or limited partner, as the case may be, in any such Pledged Issuer in connection with its exercise of remedies pursuant to the terms hereof);
(ii)    any and all moneys due and to become due to such Grantor now or in the future by way of a distribution made to such Grantor in its capacity as a general partner or limited part-

-4-

ner, as the case may be, in any such Pledged Issuer or otherwise in respect of such Grantor’s interest as a general partner or limited partner, as the case may be, in any such Pledged Issuer;
(iii)    any other property of any such Pledged Issuer to which such Grantor now or in the future may be entitled in respect of its interests as a general partner or limited partner, as the case may be, in any such Pledged Issuer by way of distribution, return of capital or otherwise;
(iv)    any other claim or right which such Grantor now has or may in the future acquire in respect of its general or limited partnership interests in any such Pledged Issuer;
(v)    the partnership agreement or other organizational documents of any such Pledged Issuer;
(vi)    all certificates, options or rights of any nature whatsoever that may be issued or granted by any such Pledged Issuer to such Grantor while this Agreement is in effect; and
(vii)    to the extent not otherwise included, all Proceeds of any or all of the foregoing.
“Pledged Receivables”:  the collective reference to all Receivables pledged by any Grantor as Collateral.
“Pledged Securities”:  the collective reference to the Pledged Notes and the Pledged Stock, together with the Proceeds thereof.
“Pledged Stock”:  the Equity Interests listed on Schedule 2, together with any other shares, stock certificates, options, interests or rights of any nature whatsoever in respect of the Equity Interests with respect to the Issuers, any Subsidiary Grantor, and of any Person (other than any Non-Recourse Subsidiary) that may be issued or granted to, or held by the Issuers or any Subsidiary Grantor, while this Agreement is in effect including, in any event, the Pledged LLC Interests and Pledged Partnership Interests.
“Proceeds”:  all “proceeds” as such term is defined in Section 9-102(a)(64) of the Applicable UCC and, in any event, shall include, without limitation, all dividends, distributions or other income from the Pledged Securities and Investment Property, collections thereon or distributions or payments with respect thereto.
“Receivable”:  any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, any Account).
“Requirement of Law”:  as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Securities Act”:  the Securities Act of 1933, as amended.
“Secured Parties”:  the collective reference to the Collateral Agent, the Holders and the Trustee.

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“Subsidiary Grantor”:  any Subsidiary of CCO (other than CCO Capital) that is a Grantor.
“Trademarks”:  (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, including, without limitation, any of the foregoing referred to in Schedule 5, and (ii) the right to obtain all renewals thereof.
“Trademark License”:  any agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark, including, without limitation, any of the foregoing referred to in Schedule 5 (it being understood that oral agreements are not required to be listed on Schedule 5).
1.2    Other Definitional Provisions.

(a)The words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified.

(b)The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(c)Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

(d)All capitalized terms not defined herein shall have the meaning ascribed to them in the Indenture.

SECTION 2.    GRANT OF SECURITY INTEREST

2.1    Collateral.  Each Grantor hereby assigns and transfers to the Collateral Agent, and hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in, all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (subject to the last paragraph of this Section 2.1, collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of such Grantor’s Obligations:

(a)    all Pledged Securities;
(b)    all Intercompany Obligations;
(c)    all Additional Collateral;
(d)    all books and records pertaining to the Collateral; and

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(e)    to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any and all of the foregoing, all collateral security and guarantees given by any Person with respect to any of the foregoing and any Instruments evidencing any of the foregoing.
Notwithstanding any of the other provisions set forth in any subsection of this Section 2.1 or any other provision of this Agreement, (i) this Agreement shall not constitute a grant of a security interest in, and the Collateral shall not include, (x) any property to the extent that such grant of a security interest is prohibited by any Requirements of Law of a Governmental Authority, requires a consent not obtained of any Governmental Authority pursuant to such Requirement of Law or is prohibited by, or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement (including any joint venture, partnership or limited liability company operating agreement, unless the same relates to a Wholly Owned Subsidiary), instrument or other document evidencing or giving rise to such property except to the extent that such Requirement of Law or the term in such contract, license, agreement, instrument or other document providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable law (it being understood that, subject to the limitations set forth in this paragraph, it is the intent of the parties that the Collateral include all FCC Licenses, CATV Franchises, , the economic value thereof and all Proceeds thereof), (y) any property that is subject to a purchase money security interest permitted by the Indenture for so long as it is subject to such security interest or (z) any Equity Interests or other securities of any Subsidiary of the Issuers in excess of the maximum amount of such Equity Interests or securities that could be included in the Collateral without creating a requirement pursuant to Rule 3-16 of Regulation S-X under the Securities Act of 1933, as amended, for separate financial statements of such Subsidiary to be included in filings by the Charter Group  with the SEC (or any other governmental agency) and (ii) in no event shall more than 66% of the total outstanding Foreign Subsidiary Voting Equity Interest of any Foreign Subsidiary constitute Collateral or be required to be pledged hereunder.
SECTION 3. CERTIFICATED INTERESTS
3.1    Pledged Partnership Interests.  Concurrently with the delivery to the Collateral Agent of any certificate representing any Pledged Partnership Interests, the relevant Grantor shall, if requested by the Collateral Agent, deliver an undated power covering such certificate, duly executed in blank by such Grantor.
3.2    Pledged LLC Interests.  Concurrently with the delivery to the Collateral Agent of any certificate representing any Pledged LLC Interests, the relevant Grantor shall, if requested by the Collateral Agent, deliver an undated power covering such certificate, duly executed in blank by such Grantor.

SECTION 4.    REPRESENTATIONS AND WARRANTIES

Each Grantor hereby represents and warrants to the Collateral Agent and each Secured Party that:
4.1    Title; No Other Liens.  Except for the security interest granted to the Collateral Agent for the ratable benefit of the Secured Parties pursuant to this Agreement and the other Liens not prohibited to exist on the Collateral by the Indenture, such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others.  For the avoidance of doubt, it is understood and agreed that any Grantor may, as part of its business, grant licenses to third parties to use Intellectual Property owned or developed by a Grantor.  For purposes of this Agreement and the other Indenture Documents, such licensing activity shall not constitute a “Lien” on such Intellectual Property.  Each of the Collateral Agent and each Secured Party understands that any such licenses may be exclusive to the applicable licensees, and such exclusivity provisions may limit the ability of the Collateral Agent to utilize, sell, lease 

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or transfer the related Intellectual Property or otherwise realize value from such Intellectual Property pursuant hereto.

4.2    Perfected First Priority Liens.  The security interests granted pursuant to this Agreement (a) constitute valid perfected security interests in all of the Collateral in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, as collateral security for such Grantor’s Obligations, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens not prohibited by the Indenture.

4.3    Jurisdiction of Organization.  On the date hereof, such Grantor’s jurisdiction of organization is specified on Schedule 4.

4.4    Pledged Securities.The Equity Interests pledged by such Grantor hereunder constitute all the issued and outstanding shares of all classes of the Equity Interests of each Pledged Issuer owned by such Grantor or, in the case of Foreign Subsidiary Voting Stock, if less, 66% of the outstanding Foreign Subsidiary Voting Stock of each relevant Pledged Issuer.

(a)Except with respect to Pledged Stock from time to time constituting an immaterial portion of the Collateral, all the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable.

(b)None of the Pledged LLC Interests or Pledged Partnership Interests constitutes a security under Section 8-103 of the Applicable UCC or the corresponding code or statute of any other applicable jurisdiction.

(c)Except with respect to Pledged Notes from time to time constituting an immaterial portion of the Collateral, each of the Pledged Notes constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and the implied covenant of good faith and fair dealing.

(d)Such Grantor is the record and beneficial owner of, and has good and marketable title to, the Pledged Securities pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and any Liens not prohibited by the Indenture.

SECTION 5.    COVENANTS

Each Grantor covenants and agrees that, from and after the date of this Agreement until the Obligations shall have been paid in full or the relevant Collateral has been released in accordance with Section 8.14:
5.1    Delivery of Instruments, Certificated Securities and Chattel Paper.  If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument, Certificated Security or Chattel Paper with a face value of $5,000,000 or more, such Instrument, Certificated Security or Chattel Paper shall be promptly delivered to the Collateral Agent, duly indorsed, to be held as Collateral pursuant to this Agreement.

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5.2    Insurance.  All insurance maintained by any Grantor with respect to the Collateral shall name the Collateral Agent as insured party or loss payee, as applicable and customary.

5.3    Maintenance of Perfected Security Interest; Further Documentation.  (a)  Such Grantor shall take all reasonable and necessary actions to maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 4.2 and shall defend such security interest against the claims and demands of all Persons whomsoever.

(b)Such Grantor will furnish to the Collateral Agent and the Holders from time to time statements and schedules further identifying and describing the assets and property of such Grantor constituting, or intended to constitute, Collateral and such other reports in connection therewith as the Collateral Agent may reasonably request, all in reasonable detail.

(c)The Grantors shall at all times ensure that the Collateral Agent, for the benefit of the Secured Parties, has a perfected security interest in the Collateral to the same extent as all Equally and Ratably Secured Indebtedness.

5.4    Changes in Locations, Name, etc. Such Grantor will not, except upon prior written notice to the Collateral Agent:

(a)    change its jurisdiction of organization; or
(b)    change its name to such an extent that any financing statement filed by the Collateral Agent in connection with this Agreement would become seriously misleading;
unless, within 30 days of the taking of any such actions, such Grantor delivers to the Collateral Agent notice of such change and evidence that all steps necessary to maintain the validity, perfection and priority of the security interests provided for herein have been taken.
5.5    Pledged Securities.

(a)If such Grantor shall become entitled to receive or shall receive any certificate (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Equity Interests of any Pledged Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Collateral Agent and the Holders, hold the same in trust for the Collateral Agent and the Holders, and, with respect to Pledged Stock constituting securities under and as defined in Section 8-103 of the Applicable UCC, deliver the same forthwith to the Collateral Agent in the exact form received, duly indorsed by such Grantor to the Collateral Agent, if required, together with an undated power covering such certificate duly executed in blank by such Grantor, to be held by the Collateral Agent, subject to the terms hereof, as additional collateral security for the Obligations.  During the continuance of an Event of Default, after written notice from the Collateral Agent, any sums paid upon or in respect of the Pledged Securities upon the liquidation or dissolution of any Pledged Issuer shall be paid over to the Collateral Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Securities or any property shall be distributed upon or with respect to the Pledged Securities pursuant to the recapitalization or reclassification of the capital of any Pledged Issuer or pursuant to the reorganization thereof, the property so distributed shall be delivered to the Collateral Agent to be held by it hereunder as additional collateral security for the Obligations.  If any sums of money or property so paid or distributed in respect of the Pledged Securities shall be received by such Gran- 

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tor, during the continuance of an Event of Default, after notice from the Collateral Agent, such Grantor shall, until such money or property is paid or delivered to the Collateral Agent, hold such money or property in trust for the Holders, segregated from other funds of such Grantor, as additional collateral security for the Obligations.

(b)No Grantor shall (i) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Securities or Proceeds thereof (except pursuant to a transaction not prohibited by the Indenture), (ii) create, incur or permit to exist any Lien, or any claim of any Person with respect to, any of the Pledged Securities or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or Liens not prohibited under the Indenture or (iii) enter into any agreement or undertaking restricting, directly or indirectly, the right or ability of the Collateral Agent to sell, assign or transfer any of the Pledged Securities hereunder or Proceeds thereof.

(c)In the case of each Grantor which is an Pledged Issuer, such Pledged Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Pledged Securities issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Collateral Agent promptly in writing of the occurrence of any of the events described in Section 5.5(a) with respect to the Pledged Securities issued by it and (iii) the terms of Sections 6.1(c) and 6.5 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 6.1(c) or 6.5 with respect to the Pledged Securities issued by it.

SECTION 6.    REMEDIAL PROVISIONS

6.1    Investment Property.

(a)Unless an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given written notice to the relevant Grantor of the Collateral Agent’s intent to exercise its corresponding rights pursuant to Section 6.1(b), each Grantor shall be permitted to receive all cash dividends paid in respect of the Pledged Stock and all payments made in respect of the Pledged Notes, to the extent not prohibited by the Indenture, and to exercise all voting and organizational rights with respect to the Pledged Securities; provided, however, that no vote shall be cast or right exercised or other action taken which would impair the Collateral or which would be inconsistent with or result in any violation of any provision of the Indenture, this Agreement or any other Indenture Document.

(b)If an Event of Default shall occur and be continuing and the Collateral Agent shall give written notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Collateral Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Securities and make application thereof to the Obligations in the order specified in Section 6.3, and (ii) any or all of the Pledged Securities shall be registered in the name of the Collateral Agent or its nominee, and the Collateral Agent or its nominee may but is under no obligation to thereafter exercise (x) all voting, organizational and other rights pertaining to such Pledged Securities at any meeting of shareholders of the relevant Pledged Issuer or Pledged Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Securities as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Securities upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the organizational structure of any Pledged Issuer, or upon the exercise by any Grantor or the Collateral Agent of any right, privilege or option pertaining to such Pledged Securities, and in connection therewith, the right to deposit and deliver any and all of the Pledged Securities with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent may determine), all without liability except to account for property actually received by it, but the Collateral 

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Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

(c)Each Grantor hereby authorizes and instructs each Pledged Issuer of any Pledged Securities pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Collateral Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Pledged Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Securities directly to the Collateral Agent.

6.2    Proceeds To Be Turned Over to Collateral Agent.  In addition to the rights of the Collateral Agent and the Holders specified in Section 6.7 with respect to payments of Pledged Receivables, if an Event of Default shall occur and be continuing, following written notice from the Collateral Agent, all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Collateral Agent and the Holders, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Collateral Agent, if required).  All Proceeds received by the Collateral Agent hereunder shall be held by the Collateral Agent in a Collateral Account maintained under its sole dominion and control.  All Proceeds while held by the Collateral Agent in a Collateral Account (or by such Grantor in trust for the Collateral Agent and the Holders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in Section 6.3.

6.3    Application of Proceeds.  At such intervals as may be agreed upon by the Issuers and the Collateral Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Collateral Agent’s election, the Collateral Agent may apply all or any part of Proceeds constituting Collateral, whether or not held in any Collateral Account in payment of the Obligations in the order specified in the Indenture, and any part of such funds which the Collateral Agent elects not so to apply and deems not required as collateral security for the Obligations shall be paid over from time to time by the Collateral Agent to the Issuers or as a court of competent jurisdiction shall direct.  Any balance of such Proceeds remaining after the Obligations shall have been paid in full, shall be paid over to the Issuers or as a court of competent jurisdiction shall direct.

6.4    Code and Other Remedies.  If an Event of Default shall occur and be continuing, the Collateral Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the Applicable UCC or any other applicable law.  Without limiting the generality of the foregoing, the Collateral Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or, to the extent permitted by law, private sale or sales, at any exchange, broker’s board or office of the Collateral Agent or any other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk.  The Collateral Agent or any other Secured Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any 

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Grantor, which right or equity is hereby waived and released.  Each Grantor further agrees, at the Collateral Agent’s request, to assemble the Collateral and make it available to the Collateral Agent at places which the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.  The Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.4, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Collateral Agent and the other Secured Parties hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Collateral Agent may elect, and only after such application and after the payment by the Collateral Agent of any other amount required by any provision of law, including, without limitation, Section 9-615(a)(3) of the Applicable UCC, need the Collateral Agent account for the surplus, if any, to any Grantor.  To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Collateral Agent or any other Secured Party arising out of the exercise by them of any rights hereunder.  If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.

6.5    Registration Rights.

(a)If the Collateral Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Section 6.4, and it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will cause the Pledged Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Pledged Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its reasonable best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto.  Each Grantor agrees to cause such Pledged Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all jurisdictions which the Collateral Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

(b)Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may by reason of such prohibitions be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner.  The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Pledged Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Pledged Issuer would agree to do so.

(c)Each Grantor agrees to use its reasonable best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 6.5 valid and binding and in compliance with any and all other applicable Re-

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quirements of Law.  Each Grantor further agrees that a breach of any of the covenants contained in this Section 6.5 will cause irreparable injury to the Collateral Agent and the other Secured Parties, that the Collateral Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.5 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Indenture.

6.6    Deficiency.  Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Collateral Agent or any other Secured Party to collect such deficiency.

6.7    Certain Matters Relating to Pledged Receivables.  The Collateral Agent hereby authorizes each Grantor pledging Receivables hereunder to collect such Grantor’s Pledged Receivables, provided that the Collateral Agent may curtail or terminate said authority at any time after the occurrence and during the continuance of an Event of Default.  At any time after the occurrence and during the continuance of an Event of Default, after written notice to such Grantor from the Collateral Agent, any payments of Pledged Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Collateral Agent if required, in a Collateral Account maintained under the sole dominion and control of the Collateral Agent, subject to withdrawal by the Collateral Agent for the account of the Secured Parties only as provided in Section 6.3, and (ii) until so turned over, shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Grantor.  Each such deposit of Proceeds of Pledged Receivables shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

6.8    Communications with Obligors; Grantors Remain Liable.

(a)The Collateral Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default communicate with obligors under the Pledged Receivables to verify with them the existence, amount and terms of any Receivables.

(b)Upon the written request of the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall notify obligors on the Pledged Receivables that the Pledged Receivables have been assigned to the Collateral Agent for the ratable benefit of the Secured Parties and that payments in respect thereof shall be made directly to the Collateral Agent.

(c)Anything herein to the contrary notwithstanding, each Grantor pledging Receivables shall remain liable under each of the Pledged Receivables to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto.  Neither the Collateral Agent nor any other Secured Party shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Party of any payment relating thereto, nor shall the Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

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SECTION 7.    THE COLLATERAL AGENT

7.1    Collateral Agent’s Appointment as Attorney-in-Fact, etc.

(a)Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following:

(i)in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Pledged Receivable or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any and all such moneys due under any Pledged Receivable or with respect to any other Collateral whenever payable;

(ii)in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Collateral Agent may request to evidence the Collateral Agent’s and the other Secured Parties’ security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

(iii)pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof; 

(iv)execute, in connection with any sale provided for in Section 6.4 or 6.5, any indorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral;

(v)(1) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct; (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (3) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (6) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate; (7) assign any Patent or Trademark (along with the goodwill of the business to which any such Patent or Trademark pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (8) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for

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all purposes, and do, at the Collateral Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Collateral Agent deems necessary to protect, preserve or realize upon the Collateral and the Collateral Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do; and
(vi)exercise any of the Collateral Agent’s rights pursuant to Section 6.9.

Anything in this Section 7.1(a) to the contrary notwithstanding, the Collateral Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.1(a) unless an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given written notice of its intent to exercise its rights under this Section 7.1(a).
(b)If any Grantor fails to perform or comply with any of its agreements contained herein, the Collateral Agent, at its option, after prior notice to such Grantor, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.

(c)The expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 7.1, together with interest thereon at a rate per annum equal to the highest rate per annum at which interest would then be payable on the Notes under the Indenture, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Collateral Agent on demand.

(d)Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof.  All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

7.2    Duty of Collateral Agent.  The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the Applicable UCC or otherwise, shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account.  Beyond the exercise of reasonable care in the custody thereof, the Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Collateral Agent 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 Collateral Agent 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 carrier, forwarding agency or other agent or bailee selected by the Collateral Agent in good faith.  Neither the Collateral Agent, any other Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Collateral Agent and the other Secured Parties hereunder are solely to protect the Collateral Agent’s and the other Secured Parties’ interests in the Collateral and shall not impose any duty upon the Collateral Agent or any other Secured Party to exercise any such powers.  The Collateral Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers.  The Collateral Agent shall not be responsible for the existence, genuineness or 

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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, except to the extent such action or omission constitutes gross negligence, bad faith or willful misconduct on the part of the Collateral Agent, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Company 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.

7.3    Financing Statements.  Pursuant to any applicable law, each Grantor authorizes the Collateral Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without the signature of such Grantor in such form and in such offices as the Collateral Agent may deem appropriate to perfect the security interests of the Collateral Agent under this Agreement.  A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction.  Each Grantor authorizes the Collateral Agent to use the collateral description “all personal property” in any such financing statements.  Notwithstanding the foregoing authorizations, in no event shall the Collateral Agent be obligated to prepare or file any financing statements whatsoever, or to maintain the perfection of the security interest granted hereunder.  Each Grantor agrees to prepare, record and file, at its own expense, financing statements (and continuation statements when applicable) with respect to the Collateral now existing or hereafter created meeting the requirements of applicable state law in such manner and in such jurisdictions as are necessary to perfect and maintain perfected the Collateral, and to deliver a file stamped copy of each such financing statement or other evidence of filing to the Collateral Agent.  Neither the Trustee nor the Collateral Agent shall be under any obligation whatsoever to file any such financing or continuation statements or to make any other filing under the UCC in connection with this Agreement.

7.4    Authority of Collateral Agent.  Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed by the Indenture and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and each Grantor, the Collateral Agent shall be conclusively presumed to be acting as agent for the other Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

SECTION 8.    MISCELLANEOUS

8.1    Amendments in Writing.  None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Article 9 of the Indenture.

8.2    Notices.  All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in the Indenture.

8.3    No Waiver by Course of Conduct; Cumulative Remedies.  Neither the Collateral Agent nor any other Secured Party shall by any act (except by a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default.  No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any other Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege 

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hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Collateral Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Collateral Agent or such other Secured Party would otherwise have on any future occasion.  The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

8.4    Enforcement Expenses; Indemnification.

(a)Each Grantor agrees to pay or reimburse the Collateral Agent for all its costs and expenses incurred in enforcing or preserving any rights under this Agreement and the other Indenture Documents to which such Grantor is a party, including, without limitation, the reasonable and documented fees and disbursements of one firm of counsel (together with any special and local counsel) to the Collateral Agent to the extent the Issuers would be required to do so pursuant to the Indenture.

(b)Each Grantor agrees to pay, and to save the Collateral Agent and the other Secured Parties harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral to the extent the Issuers would be required to do so pursuant to the Indenture.

(c)Each Grantor agrees, jointly and severally, to pay, and to save the Collateral Agent harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Issuers would be required to do so pursuant to the Indenture.

(d)The agreements in this Section 8.4 shall survive repayment of the Obligations and all other amounts payable under the Indenture and the other Indenture Documents.

8.5    Successors and Assigns.  This Agreement shall be binding upon the successors and assigns of each Grantor and Guarantor and shall inure to the benefit of the Collateral Agent and the other Secured Parties and their successors and assigns; provided that no Grantor or Guarantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent.

8.6    Counterparts.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page of this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

8.7    Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

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8.8    Governmental Approvals.

(a)Notwithstanding anything herein to the contrary, this Agreement, the other Indenture Documents and the transactions contemplated hereby and thereby, prior to the exercise of any rights and remedies provided in this Agreement or the other Indenture Documents, including, without limitation, voting the Pledged Securities or a foreclosure of the security interest granted under this Agreement, except to the extent not prohibited by applicable Requirements of Law, (i) do not and will not constitute, create, or have the effect of constituting or creating, directly or indirectly, actual or practical ownership of the Issuers or any Subsidiary of the Issuers by the Collateral Agent or the other Secured Parties, or control, affirmative or negative, direct or indirect, by the Collateral Agent or the other Secured Parties over the management or any other aspect of the operation of the Issuers or any Subsidiary of the Issuers, which ownership and control remains exclusively and at all times in the Issuers and such Subsidiary, and (ii) do not and will not constitute the transfer, assignment, or disposition in any manner, voluntarily or involuntarily, directly or indirectly, of any License at any time issued to the Issuers or any Subsidiary of the Issuers, or the transfer of control of the Issuers or any Subsidiary of the Issuers, including, without limitation, within the meaning of Section 310(d) of the Communications Act of 1934, as amended.

(b)Notwithstanding any other provision of this Agreement, any foreclosure on, sale, transfer or other disposition of, or the exercise of any right to vote or consent with respect to, any of the Pledged Securities, as provided herein, or any other action taken or proposed to be taken by the Collateral Agent hereunder which would affect the operational, voting or other control of the Issuers or any Subsidiary of the Issuers, shall be in accordance with applicable Requirements of Law.

(c)Notwithstanding anything to the contrary contained in this Agreement or in any other Indenture Document, the Secured Parties shall not, without first obtaining the approval of the FCC or any other applicable Governmental Authority, take any action pursuant to this Agreement which would constitute or result in, or be deemed to constitute or result in, any assignment of a License, including, without limitation, any CATV Franchise of the Issuers or any Subsidiary of the Issuers, or any change of control of the Issuers or any Subsidiary of the Issuers, if such assignment or change in control would require, under then existing Requirements of Law (including the written rules and regulations promulgated by the FCC), the prior approval of the FCC or such other Governmental Authority.

(d)If the consent of the FCC or any other Governmental Authority is required in connection with any of the actions which may be taken by the Collateral Agent in the exercise of its rights under this Agreement or any of the other Indenture Documents during the continuance of an Event of Default, then the Issuers, at its sole cost and expense, shall use its reasonable best efforts to secure such consent and to cooperate fully with the Collateral Agent to secure such consent.  Upon the exercise by the Collateral Agent of any power, right, privilege or remedy pursuant to this Agreement during the continuance of an Event of Default which requires any consent, approval, recording, qualification or authorization of the FCC or any other Governmental Authority or instrumentality, the Issuers will promptly prepare, execute, deliver and file, or will promptly cause the preparation, execution, delivery and filing of, all applications, certificates, instruments and other documents and papers that may be deemed necessary or advisable to obtain such governmental consent, approval, recording, qualification or authorization including, without limitation, the assignor’s or transferor’s portion of any application or applications for consent to the assignment of license necessary or appropriate under the rules and regulations of the FCC or any other Governmental Authority for approval of any sale, transfer or assignment to the Collateral Agent or any other Person of the Pledged Securities.  Subject to the provisions of applicable law, if the Issuers fail or refuse to execute, or fails or refuse to cause another Person to execute, such documents, the Collateral Agent, as attorney-in-fact for the Issuers appointed pursuant to Section 7.1, or the clerk of any court of competent jurisdiction, may execute and file the same on behalf of the Issuers.  In addition to the forego-

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ing, during the continuance of an Event of Default the Issuers agree to take, or cause to be taken, any action which may be deemed necessary or advisable in order to obtain and enjoy the full rights and benefits granted to the other Secured Parties or the Collateral Agent by this Agreement and any other instruments or agreements executed pursuant hereto, including, without limitation, at the Issuers’ cost and expense, the exercise of the Issuers’ best efforts to cooperate in obtaining FCC or other governmental approval of any action or transaction contemplated by this Agreement or any other instrument or agreement executed pursuant hereto which is then required by law.

(e)the Issuers recognizes that the authorizations, permits and licenses held by the Issuers or any of their respective Subsidiaries are unique assets which may have to be assigned or transferred in order for the other Secured Parties to realize the value of the security interests granted to the Collateral Agent.  The Issuers further recognize that a violation of this Section 8.8 could result in irreparable harm to the Secured Parties for which monetary damages are not readily ascertainable.  Therefore, in addition to any other remedy which may be available to the Collateral Agent and other Secured Parties at law or in equity, the Collateral Agent and the other Secured Parties shall have the remedy of specific performance of the provisions of this Section 8.8.  To enforce the provisions of this Section 8.8, the Collateral Agent is authorized to request the consent or approval of the FCC or other Governmental Authority to a voluntary or an involuntary assignment or transfer of control of any authorization, permit or license.  In connection with the exercise of its remedies under this Agreement or under any of the other Indenture Documents, the Collateral Agent may obtain the appointment of a Collateral Agent or receiver to assume, upon receipt of all necessary judicial, FCC or other Governmental Authority consents or approvals, the control of any Person, subject to compliance with applicable Requirements of Law.  Such Collateral Agent or receiver shall have all rights and powers provided to it by law or by court order or provided to the Collateral Agent under this Agreement.

8.9    Section Headings.  The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

8.10    Integration.  This Agreement and the other Indenture Documents represent the agreement of each Grantor, the Collateral Agent and the other Secured Parties with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Collateral Agent or any other Secured Party relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Indenture Documents.

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

8.12    Submission to Jurisdiction; Waivers.  Each Grantor hereby irrevocably and unconditionally:

(a)    submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Indenture Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;
(b)    consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or pro-

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ceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
(c)    agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Grantor at its address referred to in Section 8.2 or at such other address of which the Collateral Agent shall have been notified pursuant thereto;
(d)    agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and
(e)    waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.
8.13    Acknowledgments.  Each Grantor hereby acknowledges that:

(a)    it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Indenture Documents to which it is a party;
(b)    neither the Collateral Agent nor any other Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Indenture Documents, and the relationship between the Grantors, on the one hand, and the Collateral Agent and other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and
(c)    no joint venture is created hereby or by the other Indenture Documents or otherwise exists by virtue of the transactions contemplated hereby among the other Secured Parties or among the Grantors and the other Secured Parties.
8.14    Additional Grantors; Release.

(a)Each Subsidiary of the Issuers that is required to become a party to this Agreement pursuant to the Indenture shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

(b)The Liens securing the Obligations will be released, in whole or in part, as provided in Section 14.03 of the Indenture.  At such time as the Liens securing the Obligations are released in whole as provided in Section 14.03 of the Indenture, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors.  At the request and sole expense of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral held by the Collateral Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.

(c)If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction not prohibited by the Indenture Documents, then the Collateral Agent, at the request and sole expense of such Grantor, shall promptly execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such 

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Collateral.  At the request and sole expense of the Issuers, a Subsidiary Grantor shall be released from its obligations hereunder in the event that all the Equity Interests of such Subsidiary Grantor shall be sold, transferred or otherwise disposed of in a transaction not prohibited by the Indenture.

8.15    WAIVER OF JURY TRIAL.  EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

8.16    Intercreditor Agreement.  Notwithstanding anything herein to the contrary, the Liens on any Collateral granted to the Collateral Agent pursuant to this Agreement, and the exercise of any right or remedy by the Collateral Agent with respect to any such Collateral, are subject to the provisions of the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement in effect at such time and the terms of this Agreement, the terms of Intercreditor Agreement shall govern and control.  Notwithstanding anything herein to the contrary, so long as the Intercreditor Agreement is effective, any requirement hereunder to deliver any Shared Collateral (as such term is defined in the Intercreditor Agreement) or the proceeds thereof to the Collateral Agent shall be deemed satisfied by delivery of such Shared Collateral to the Applicable Authorized Representative (as such term is defined in the Intercreditor Agreement). 
8.17    Incorporation of Rights.  The rights, privileges and immunities of the Trustee in the Indenture are hereby incorporated by reference and extended to the Collateral Agent in this Agreement.    

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IN WITNESS WHEREOF, each of the undersigned has caused this Collateral Agreement to be duly executed and delivered as of the date first above written.
CHARTER COMMUNICATIONS OPERATING, LLC, as Grantor
By:                                                                                    
Name:    
Title:    
CHARTER COMMUNICATIONS OPERATING, CAPITAL CORP., as Grantor
By:                                                                                        
Name:    
Title:    

[GRANTORS]
By:                                                                                        
Name:    
Title:    
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Collateral Agent
By:                                                                                        
Name:    
Title:    

Schedule 1
NOTICE ADDRESSES 

Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
Pledged LLC Interests:
	
			
	Name of Limited Liability Company
	Type of Interest
	Percentage of Interest Pledged

	 
	 
	 

Pledged Partnership Interests:
	
			
	Name of Pledged Issuer
	Type of Interest
	Percentage of Pledged

	 
	 
	 

Pledged Stock of Corporations:
	
				
	Name of Pledged Issuer
	Class of Stock
	Stock Certificate No.
	Percentage of Shares Pledged

	 
	 
	 
	 

Pledged Notes:

Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS

Uniform Commercial Code Filings
	
			
	 
	Debtor Name
	Filing Jurisdiction

	 
	 
	 

Patent and Trademark Filings
	
			
	Patent Owner
	U.S. Registration
No. of Patents
	Filing Office

	 
	#
	 

Actions with respect to Pledged Securities
Other Actions

Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION
	
			
	 
	Grantor
	Jurisdiction of Organization

	 
	 
	 

Schedule 5
PATENTS AND PATENT LICENSES

TRADEMARKS AND TRADEMARK LICENSES

Schedule 6
SUBSIDIARY GUARANTORS
[List Subsidiary Guarantors]

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ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Collateral Agreement, dated as of [     ], 201[  ] (as the same may be further amended, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”), made by the Grantors party thereto for the benefit of [      ], as Collateral Agent.  The undersigned agrees for the benefit of the Collateral Agent and the other Secured Parties as follows:
1.    The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned.
2.    The undersigned will notify the Collateral Agent promptly in writing of the occurrence of any of the events described in Section 5.5(a) of the Agreement.
3.    The terms of Sections 6.1(c) and 6.5 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 6.1(c) or 7.5 of the Agreement.
[NAME OF PLEDGED ISSUER]
By:                                                                                               
Name:    
Title:    
Address for Notices:
                                                                                     
                                                                                     
                                                                                     
Fax:            
            
            

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Annext 1 to the
Collateral Agreement

ASSUMPTION AGREEMENT, dated as of ________________, ____, made by ______________________________, a ______________ (the “Additional Grantor”), in favor of [      ]., as Collateral Agent (in such capacity, the “Collateral Agent”), for the Holders pursuant to the indenture, dated as of July 23, 2015 (as amended, supplemented or otherwise modified from time to time, the “Indenture”), among Charter Communications Operating, LLC (“CCO”),  Charter Communications Operating Capital Corp. (together with CCO, the “Issuers”), The Bank of New York Mellon Trust Company, N.A., as Trustee and as Collateral Agent.  All capitalized terms not defined herein shall have the meaning ascribed to them in the Indenture.
W I T N E S S E T H :
WHEREAS, CCO Safari issued 3.579% Senior Secured Notes due 2020, 4.464% Senior Secured Notes due 2022, 4.908% Senior Secured Notes due 2025, 6.384% Senior Secured Notes due 2035, 6.484% Senior Secured Notes due 2045 and 6.834% Senior Secured Notes due 2055 (collectively and together with any Additional Notes, the “Notes”) pursuant to the First Supplemental Indenture, dated as of July 23, 2015, by and among CCO Safari, CCH II, LLC, as limited guarantor thereto, the Trustee and the Collateral Agent; 
WHEREAS, the Issuers have assumed all of the obligations of CCO Safari under the Notes pursuant to the Second Supplemental Indenture, dated as of [     ], by and among the Issuers, the guarantors party thereto, the Trustee and the Collateral Agent;
WHEREAS, in connection with the Indenture, the Issuers and certain of their Subsidiaries have entered into the Collateral Agreement, dated as of [    ], 201[  ] (as further amended, supplemented or otherwise modified from time to time, the “Collateral Agreement”), in favor of the Collateral Agent for the benefit of the Secured Parties; 
WHEREAS, the Indenture requires the Additional Grantor to become a party to the Collateral Agreement; and 
WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Collateral Agreement; 
NOW, THEREFORE, IT IS AGREED:
By executing and delivering this Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the Collateral Agreement, hereby becomes a party to the Collateral Agreement as a Grantor thereunder with the same force and effect as if originally named therein as a Grantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Grantor thereunder.  The information set forth in Annex 1-A hereto is hereby added to the information set forth in the Schedules to the Collateral Agreement.  The Additional Grantor hereby represents and warrants that each of the representations and warranties contained in Section 4 of the Collateral Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date (except for any representation and warranty that is made as of a specified earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date).  Without limiting the generality of the foregoing, the Additional Grantor hereby assigns and transfers to the Collateral Agent, and hereby grants to the Collateral Agent, for the 

-4-

ratable benefit of the Secured Parties, of a security interest in, all of the Collateral now owned or at any time hereafter acquired by such Additional Grantor or in which such Additional Grantor now has or at any time in the future may acquire any right, title or interest as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of such Additional Grantor’s Obligations.

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IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:                                                                                                
Name:    
Title:    

-6-

Annex 1-A to the
Assumption Agreement

Supplement to Schedule 1
Supplement to Schedule 2
Supplement to Schedule 3
Supplement to Schedule 4
Supplement to Schedule 5

-7-

EXHIBIT G
FORM OF INTERCREDITOR AGREEMENT

FIRST LIEN INTERCREDITOR AGREEMENT
Among
CHARTER COMMUNICATIONS OPERATING, LLC,
the other Grantors party hereto,
BANK OF AMERICA, N.A.,
as Credit Agreement Collateral Agent for the Credit Agreement Secured Parties
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as the Notes Collateral Agent for the Indenture Secured Parties
and
each Additional Agent from time to time party hereto
dated as of [   ], 201[ ]

-1-

FIRST LIEN INTERCREDITOR AGREEMENT dated as of [   ], 201[ ] (as amended, supplemented or otherwise modified from time to time, this “Agreement”), Charter Communications Operating, LLC, a Delaware limited liability company (the “Borrower”), the other Grantors (as defined below) party hereto, Bank of America, N.A., as administrative agent for the Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “Credit Agreement Collateral Agent”) and The Bank of New York Mellon Trust Company, N.A., as collateral agent for the Indenture Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “Notes Collateral Agent”) and each Additional Agent from time to time party hereto for the Additional First Lien Secured Parties of the Series with respect to which it is acting in such capacity.
In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Credit Agreement Collateral Agent (for itself and on behalf of the Credit Agreement Secured Parties), the Notes Collateral Agent (for itself and on behalf of the Indenture Secured Parties) and each Additional Agent (for itself and on behalf of the Additional First Lien Secured Parties of the applicable Series) agree as follows:
ARTICLE I
Definitions
SECTION 1.10      Certain Defined Terms.  Capitalized terms used but not otherwise defined herein have the meanings set forth in the Credit Agreement and the Indenture, as applicable, with the Credit Agreement controlling in the event of discrepancies, or, if defined in the New York UCC, the meanings specified therein. As used in this Agreement, the following terms have the meanings specified below:
“Additional Agent” means the collateral agent and the administrative agent and/or trustee (as applicable) or any other similar agent or Person under any Additional First Lien Documents, in each case, together with its successors in such capacity.
“Additional First Lien Debt Facility” means one or more debt facilities, commercial paper facilities or indentures for which the requirements of Section 5.13 of this Agreement have been satisfied, in each case with banks, other lenders or trustees, providing for revolving credit loans, term loans, letters of credit, notes or other borrowings, in each case, as amended, restated, supplemented or otherwise modified, refinanced or replaced from time to time; provided that none of the Credit Agreement, the TWC Indenture, the TWCE Indenture nor the Indenture shall constitute an Additional First Lien Debt Facility at any time.
“Additional First Lien Documents” means, with respect to any Series of Additional First Lien Obligations, the notes, credit agreements, indentures, security documents and other operative agreements evidencing or governing such Indebtedness, and each other agreement entered into for the purpose of securing any Series of Additional First Lien Obligations.
“Additional First Lien Obligations” means, with respect to any Additional First Lien Debt Facility, (a) all principal of, and interest (including, without limitation, any interest, fees and other amounts which accrue after the commencement of any Bankruptcy Case, whether or not allowed or allowable as a claim in any such proceeding) payable with respect to, such Additional First Lien Debt Facility, (b) all other amounts payable to the related Additional First Lien Secured Parties under the related Additional First Lien Documents and (c) any renewals or extensions of the foregoing.

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“Additional First Lien Secured Party” means, with respect to any Series of Additional First Lien Obligations, the holders of such Additional First Lien Obligations, the Additional Agent with respect thereto, any trustee or agent or any other similar agent or Person therefor under any related Additional First Lien Documents and the beneficiaries of each indemnification obligation undertaken by any Grantor under any related Additional First Lien Documents.
“Agreement” has the meaning assigned to such term in the preamble hereto.
“Applicable Authorized Representative” means, with respect to any Shared Collateral, (i) until the earlier of (x) the Discharge of the Credit Agreement Obligations (other than Credit Agreement Obligations described in clause (ii) of the definition thereof) and (y) the Non-Applicable Authorized Representative Enforcement Date, the Credit Agreement Collateral Agent and (ii) from and after the earlier of (x) the Discharge of the Credit Agreement Obligations and (y) the Non-Applicable Authorized Representative Enforcement Date, the Major Non-Applicable Authorized Representative.
“Bankruptcy Case” has the meaning assigned to such term in Section 2.05(b).
“Bankruptcy Code” means Title 11 of the United States Code, as amended.
“Bankruptcy Law” means the Bankruptcy Code, and any other federal, state, province or foreign law for the relief of debtors, or any arrangement, reorganization, insolvency, moratorium, assignment for the benefit of creditors, any other marshalling of the assets or liabilities of Holdings or any of its Subsidiaries, or similar law affecting creditors’ rights generally. 
“Borrower” has the meaning assigned to such term in the preamble hereto.
“Collateral” means all assets and properties subject to Liens created pursuant to any First Lien Security Document to secure one or more Series of First Lien Obligations.
“Collateral Agent” means (i) in the case of any Credit Agreement Obligations, the Credit Agreement Collateral Agent, (ii) in the case of the Indenture Obligations, the Notes Collateral Agent, and (iii) in the case of any Series of Additional First Lien Obligations or Additional First Lien Secured Parties that become subject to this Agreement after the date hereof, the Additional Agent named for such Series in the applicable Joinder Agreement.
“Controlling Secured Parties” means, with respect to any Shared Collateral, the Series of First Lien Secured Parties whose Collateral Agent is the Applicable Authorized Representative for such Shared Collateral.
“Credit Agreement” means that certain Amended and Restated Credit Agreement dated as of March 18, 1999, as amended and restated as of April 11, 2012, (as the same may be amended, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time), among the Borrower, Holdings, the lenders party thereto from time to time, Bank of America, N.A., as administrative agent, and the other parties thereto. 
“Credit Agreement Collateral Agent” has the meaning assigned to such term in the preamble hereto.

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“Credit Agreement Obligations” means (i) the “Obligations” as defined in the Credit Agreement and (ii) the TWC Notes Obligations.
“Credit Agreement Secured Parties” means the “Secured Parties” as defined in the Credit Agreement and the TWC Notes Secured Parties.
 “Credit Agreement Security Agreement” means the “Guarantee and Collateral Agreement” as defined in the Credit Agreement.
“DIP Financing” has the meaning assigned to such term in Section 2.05(b).
“DIP Financing Liens” has the meaning assigned to such term in Section 2.05(b).
“DIP Lenders” has the meaning assigned to such term in Section 2.05(b).
“Discharge” means, with respect to any Shared Collateral and any Series of First Lien Obligations, the date on which such Series of First Lien Obligations is no longer secured by such Shared Collateral. The term “Discharged” shall have a corresponding meaning.
“Discharge of First Lien Obligations” means, with respect to any Shared Collateral, the Discharge of the applicable First Lien Obligations with respect to such Shared Collateral; provided that a Discharge of First Lien Obligations shall not be deemed to have occurred in connection with a Refinancing of such First Lien Obligations with additional First Lien Obligations secured by such Shared Collateral under an Additional First Lien Document which has been designated in writing by the applicable Collateral Agent (under First Lien Obligation so Refinanced) or by the Borrower, in each case, to each other Collateral Agent as a “First Lien Obligation” for purposes of this Agreement.
“Event of Default” means an “Event of Default” (or any other similarly defined term) as defined in any Secured Credit Document.
“First Lien Obligations” means, collectively, (i) the Credit Agreement Obligations, (ii) the Indenture Obligations, and (iii) each Series of Additional First Lien Obligations.
“First Lien Secured Parties” means (i) the Credit Agreement Secured Parties, (ii) the Indenture Secured Parties and (iii) the Additional First Lien Secured Parties with respect to each Series of Additional First Lien Obligations.
“First Lien Security Documents” means the Credit Agreement Security Agreement, the Notes Security Agreement and each other agreement entered into in favor of any Collateral Agent for the purpose of securing any Series of First Lien Obligations.
“Grantors” means the Borrower and each other Subsidiary of the Borrower which has granted a security interest pursuant to any First Lien Security Document to secure any Series of First Lien Obligations.  The Grantors existing on the date hereof are Holdings, the Borrower, CCO Capital and each party set forth on Annex I hereto.
“Holdings” means CCO Holdings, LLC a Delaware limited liability company.
“Impairment” has the meaning assigned to such term in Section 1.03.

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“Indenture” means that certain Indenture dated as of July 23, 2015, among CCO Safari II, LLC (which has since merged with and into CCO), CCO, CCO Capital and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent, as supplemented through the date hereof, and as may further be amended, restated, supplemented, increased or otherwise modified, refinanced or replaced.
“Indenture Obligations” means the “Obligations” as defined in the Notes Security Agreement.
“Indenture Secured Parties” means the “Secured Parties” as defined in the Notes Security Agreement.
“Insolvency or Liquidation Proceeding” means:
(1)    any case commenced by or against any Grantor under any Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of any Grantor, any receivership or assignment for the benefit of creditors relating to any Grantor or any similar case or proceeding relative to any Grantor or its creditors, as such, in each case whether or not voluntary;
(2)    any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to any Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or
(3)    any other proceeding of any type or nature in which substantially all claims of creditors of any Grantor are determined and any payment or distribution is or may be made on account of such claims.
“Intervening Creditor” shall have the meaning assigned to such term in Section 2.01(a).
“Joinder Agreement” means a supplement to this Agreement in the form of Annex II hereof required to be delivered by an Additional Agent to the Applicable Authorized Representative pursuant to Section 5.13 hereto in order to establish an additional Series of Additional First Lien Obligations and become Additional First Lien Secured Parties hereunder.
“Major Non-Applicable Authorized Representative” means, with respect to any Shared Collateral, the Collateral Agent (other than the Credit Agreement Collateral Agent) of the Series of First Lien Obligations (other than the Credit Agreement Obligations) that constitutes the largest outstanding principal amount of any then outstanding Series of First Lien Obligations (excluding the Series of Credit Agreement Obligations) with respect to such Shared Collateral.
“New York UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York.
“Non-Applicable Authorized Representative” means, at any time with respect to any Shared Collateral, any Collateral Agent that is not the Applicable Authorized Representative at such time with respect to such Shared Collateral.
“Non-Applicable Authorized Representative Enforcement Date” means, with respect to any Non-Applicable Authorized Representative, the date which is 90 days (throughout which 90 day period such Non-Applicable Authorized Representative was the Major Non-Applicable Authorized Rep-

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resentative) after the occurrence of both (i) an Event of Default under and as defined in the Secured Credit Documents under which such Non-Applicable Authorized Representative is the Major Non-Applicable Authorized Representative and (ii) the Applicable Authorized Representative and each other Collateral Agent’s receipt of written notice from such Non-Applicable Authorized Representative certifying that (x) such Non-Applicable Authorized Representative is the Major Non-Applicable Authorized Representative and that an Event of Default under and as defined in the Secured Credit Documents under which such Non-Applicable Authorized Representative is the Collateral Agent has occurred and is continuing and (y) the First Lien Obligations of the Series with respect to which such Non-Applicable Authorized Representative is the Collateral Agent are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of the applicable Secured Credit Documents; provided that the Non-Applicable Authorized Representative Enforcement Date shall be stayed and shall not occur and shall be deemed not to have occurred with respect to any Shared Collateral (1) at any time the Applicable Authorized Representative has commenced and is diligently pursuing any enforcement action with respect to such Shared Collateral or (2) at any time the Grantor which has granted a security interest in such Shared Collateral is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding.
“Non-Controlling Secured Parties” means, with respect to any Shared Collateral, the First Lien Secured Parties which are not Controlling Secured Parties with respect to such Shared Collateral.
“Notes Collateral Agent” has the meaning assigned to such term in the preamble hereto.
“Notes Security Agreement” means the “Collateral Agreement” as defined in the Indenture.
“Possessory Collateral” means any Shared Collateral in the possession of any Collateral Agent (or its agents or bailees), to the extent that possession thereof perfects a Lien thereon under the Uniform Commercial Code of any jurisdiction or any other applicable law. Possessory Collateral includes, without limitation, any certificated securities, Promissory Notes, Instruments, and Chattel Paper, in each case, delivered to or in the possession of the Collateral Agent under the terms of the First Lien Security Documents.
“Proceeds” has the meaning assigned to such term in Section 2.01(a).
“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure, refund, replace or repay, or to issue other Indebtedness or enter alternative financing arrangements, in exchange or replacement for such Indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including in each case, but not limited to, after the original instrument giving rise to such Indebtedness has been terminated and including, in each case, through any credit agreement, indenture or other agreement. “Refinanced” and “Refinancing” have correlative meanings.
“Secured Credit Document” means (i) the Credit Agreement and each other Loan Document (as defined in the Credit Agreement), (ii) the Indenture, the Notes (as defined in the Indenture) and the Notes Security Agreement, (iii) the TWC Indenture, the TWCE Indenture, the TWC Notes, and (iv) each Additional First Lien Document.
“Senior Class Debt” shall have the meaning assigned to such term in Section 5.13.

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“Senior Class Debt Parties” shall have the meaning assigned to such term in Section 5.13.
“Senior Class Debt Representative” shall have the meaning assigned to such term in Section 5.13.
“Senior Lien” means the Liens on the Collateral in favor of the First Lien Secured Parties under the First Lien Security Documents.
“Series” means (a) with respect to the First Lien Secured Parties, each of (i) the Credit Agreement Secured Parties (in their capacities as such), (ii) the Indenture Secured Parties (in their capacity as such), and (iii) the Additional First Lien Secured Parties that become subject to this Agreement after the date hereof that are represented by a common Collateral Agent (in its capacity as such for such Additional First Lien Secured Parties) and (b) with respect to any First Lien Obligations, each of (i) the Credit Agreement Obligations, (ii) the Indenture Obligations, and (iii) the Additional First Lien Obligations incurred pursuant to any Additional First Lien Debt Facility or any related Additional First Lien Documents, which pursuant to any Joinder Agreement, are to be represented hereunder by a common Collateral Agent (in its capacity as such for such Additional First Lien Obligations).
“Shared Collateral” means, at any time, Collateral in which the holders of two or more Series of First Lien Obligations (or their respective Collateral Agents) hold a valid and perfected security interest at such time. If more than two Series of First Lien Obligations are outstanding at any time and the holders of less than all Series of First Lien Obligations hold a valid and perfected security interest in any Collateral at such time, then such Collateral shall constitute Shared Collateral for those Series of First Lien Obligations that hold a valid security interest in such Collateral at such time and shall not constitute Shared Collateral for any Series which does not have a valid and perfected security interest in such Collateral at such time.
“TWC” means Time Warner Cable Inc., and any successor Person thereto. 
“TWCE Indenture” means that certain Indenture dated as of April 30, 1992, among Time Warner Inc., Time Warner Entertainment Company, L.P., and The Bank of New York, as Trustee, as such Indenture may be amended, restated, supplemented, increased or otherwise modified, refinanced or replaced. 
“TWC Indenture” means that certain Indenture dated as of April 9, 2007, among the TWC, TW NY Cable Holding Inc., as Guarantor, Time Warner Entertainment Company, L.P., as Guarantor, and The Bank of New York, as Trustee, as such Indenture may be amended, restated, supplemented, increased or otherwise modified, refinanced or replaced.
“TWC Notes” means any debt securities of TWC or any of its Subsidiaries (other than debt securities held by TWC or any of its Subsidiaries) on the date hereof. 
“TWC Notes Obligations” means the “[TWC Notes Obligations]” as defined in the Credit Agreement Security Agreement to the extent secured by a Lien on any Collateral.
“TWC Notes Secured Parties” means any holder of any TWC Notes Obligations to the extent secured by a Lien on any Collateral. 

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“Uniform Commercial Code” or “UCC” means the New York UCC, or the Uniform Commercial Code (or any similar or comparable legislation) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral. 
SECTION 1.02      Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (iii) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles, Sections and Annexes of this Agreement, (v) unless otherwise expressly qualified herein, the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (vi) the term “or” is not exclusive.
SECTION 1.03      Impairments.  It is the intention of the First Lien Secured Parties of each Series that the holders of First Lien Obligations of such Series (and not the First Lien Secured Parties of any other Series) bear the risk of (i) any determination by a court of competent jurisdiction that (x) any of the First Lien Obligations of such Series are unenforceable under applicable law or are subordinated to any other obligations (other than another Series of First Lien Obligations), (y) any of the First Lien Obligations of such Series do not have an enforceable security interest in any of the Collateral securing any other Series of First Lien Obligations and/or (z) any intervening security interest exists securing any other obligations (other than another Series of First Lien Obligations) on a basis ranking prior to the security interest of such Series of First Lien Obligations but junior to the security interest of any other Series of First Lien Obligations or (ii) the existence of any Collateral for any other Series of First Lien Obligations that is not Shared Collateral (any such condition referred to in the foregoing clauses (i) or (ii) with respect to any Series of First Lien Obligations, an “Impairment” of such Series); provided that the existence of a maximum claim with respect to Mortgaged Properties (as defined in the Credit Agreement) which applies to all First Lien Obligations shall not be deemed to be an Impairment of any Series of First Lien Obligations. In the event of any Impairment with respect to any Series of First Lien Obligations, the results of such Impairment shall be borne solely by the holders of such Series of First Lien Obligations, and the rights of the holders of such Series of First Lien Obligations (including, without limitation, the right to receive distributions in respect of such Series of First Lien Obligations pursuant to Section 2.01) set forth herein shall be modified to the extent necessary so that the effects of such Impairment are borne solely by the holders of the Series of such First Lien Obligations subject to such Impairment. Additionally, in the event the First Lien Obligations of any Series are modified pursuant to applicable law (including, without limitation, pursuant to Section 1129 of the Bankruptcy Code), any reference to such First Lien Obligations or the Secured Credit Documents governing such First Lien Obligations shall refer to such obligations or such documents as so modified.

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ARTICLE II
Priorities and Agreements with Respect to Shared Collateral
SECTION 2.01      Priority of Claims.  
(a)    Anything contained herein or in any of the Secured Credit Documents to the contrary notwithstanding (but subject to Section 1.03), if an Event of Default has occurred and is continuing, and the Applicable Authorized Representative is taking action to enforce rights in respect of any Shared Collateral, or any distribution is made in respect of any Shared Collateral in any Bankruptcy Case of any Grantor or any First Lien Secured Party receives any payment pursuant to any intercreditor agreement (other than this Agreement) with respect to any Shared Collateral, the proceeds of any sale, collection or other liquidation of any such Shared Collateral by any Collateral Agent or any First Lien Secured Party and proceeds of any such distribution or payment (all proceeds of any sale, collection or other liquidation of any Shared Collateral and all proceeds of any such distribution or payment being collectively referred to as “Proceeds”), shall be applied (i) FIRST, to the payment of all amounts owing to each Collateral Agent (in its capacity as such) pursuant to the terms of any Secured Credit Document, (ii) SECOND, subject to Section 1.03, to the payment in full of the First Lien Obligations of each Series on a ratable basis, with such Proceeds to be applied to the First Lien Obligations of a given Series in accordance with the terms of the applicable Secured Credit Documents and (iii) THIRD, after the Discharge of all First Lien Obligations, to the Grantors or their successors or assigns, as their interests may appear, or otherwise, or as a court of competent jurisdiction may direct.  Notwithstanding the foregoing, with respect to any Shared Collateral for which a third party (other than a First Lien Secured Party) has a lien or security interest that is junior in priority to the security interest of any Series of First Lien Obligations, but senior (as determined by appropriate legal proceedings in the case of any dispute) to the security interest of any other Series of First Lien Obligations (such third party an “Intervening Creditor”), the value of any Shared Collateral or Proceeds which are allocated to such Intervening Creditor shall be deducted on a ratable basis solely from the Shared Collateral or Proceeds to be distributed in respect of the Series of First Lien Obligations with respect to which such Impairment exists.  If, despite the provisions of this Section 2.01(a), any First Lien Secured Party shall receive any payment or other recovery in excess of its portion of payments on account of the First Lien Obligations to which it is then entitled in accordance with this Section 2.01(a), such First Lien Secured Party shall hold such payment or recovery in trust for the benefit of all First Lien Secured Parties for distribution in accordance with this Section 2.01(a).
(b)    It is acknowledged that the First Lien Obligations of any Series may, subject to the limitations set forth in the then extant Secured Credit Documents, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, Refinanced or otherwise amended or modified from time to time, all without affecting the priorities set forth in Section 2.01(a) or the provisions of this Agreement defining the relative rights of the First Lien Secured Parties of any Series.
(c)    Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing any Series of First Lien Obligations granted on the Shared Collateral and notwithstanding any provision of the Uniform Commercial Code of any jurisdiction or any other applicable law or the Secured Credit Documents or any defect or deficiencies in the Liens securing the First Lien Obligations of any Series or any other circumstance whatsoever (but, in each case, subject to Section 1.03), each Collateral Agent, for itself and on behalf of each applicable First Lien Secured Party, hereby agrees that (i) the Liens securing each Series of First Lien Obligations on any Shared Collateral shall be of equal priority and (ii) the benefits and proceeds of the Shared Collateral shall be shared among the First Lien Secured Parties as provided herein.

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SECTION 2.02      Actions with Respect to Shared Collateral; Prohibition on Contesting Liens.  
(a)    With respect to any Shared Collateral, (i) only the Applicable Authorized Representative shall act or refrain from acting with respect to the Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral) and (ii) no Non-Applicable Authorized Representative or other Non-Controlling Secured Party shall or shall instruct the Applicable Authorized Representative to, commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its security interest in or realize upon, or take any other action available to it in respect of, any Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral), whether under any First Lien Security Document, applicable law or otherwise, it being agreed that only the Applicable Authorized Representative shall be entitled to take any such actions or exercise any such remedies with respect to Shared Collateral; provided that, notwithstanding the foregoing, (i) in any Bankruptcy Case, any Collateral Agent or any other First Lien Secured Party may file a proof of claim or statement of interest with respect to the applicable series of First Lien Obligations owed to the applicable series of First Lien Secured Parties; (ii) any Collateral Agent or any other First Lien Secured Party may take any action to preserve or protect the validity and enforceability of the Liens granted in favor of First Lien Secured Parties, provided that no such action is, or could reasonably be expected to be, (A) adverse to the Liens granted in favor of the Controlling Secured Parties or the rights of the Applicable Authorized Representative or any other Controlling Secured Parties to exercise remedies in respect thereof or (B) otherwise inconsistent with the terms of this Agreement; and (iii) any Collateral Agent or any other First Lien Secured Party may file any responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of such First Lien Secured Party, including any claims secured by the Shared Collateral, in each case, to the extent not inconsistent with the terms of this Agreement.  Notwithstanding the equal priority of the Liens, the Applicable Authorized Representative may deal with the Shared Collateral as if such Applicable Authorized Representative had a senior Lien on such Collateral. No Non-Applicable Authorized Representative or Non-Controlling Secured Party will contest, protest or object to any foreclosure proceeding or action brought by the Applicable Authorized Representative or Controlling Secured Party or any other exercise by the Applicable Authorized Representative or Controlling Secured Party of any rights and remedies relating to the Shared Collateral. The foregoing shall not be construed to limit the rights and priorities of any First Lien Secured Party or Collateral Agent with respect to any Collateral not constituting Shared Collateral.
(b)    Each Collateral Agent agrees, for itself and on behalf of each applicable First Lien Secured Party, to be bound by the provisions of this Agreement.
(c)    Each Collateral Agent agrees, for itself and on behalf of each applicable First Lien Secured Party, that it will not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity, attachment or enforceability of a Lien held by or on behalf of any of the First Lien Secured Parties in all or any part of the Collateral, or the provisions of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of any Collateral Agent or any other First Lien Secured Party to enforce this Agreement.
SECTION 2.03      No Interference; Payment Over.  
(a)    Each Collateral Agent agrees, for itself and on behalf of each applicable First Lien Secured Party, that (i) it will not challenge, or support any other Person in challenging, in any pro-

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ceeding the validity or enforceability of any First Lien Obligations of any Series or any First Lien Security Document or the validity, attachment, perfection or priority of any Lien under any First Lien Security Document or the validity or enforceability of the priorities, rights or duties established by or other provisions of this Agreement; (ii) it will not take or cause to be taken any action the purpose or intent of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of the Shared Collateral by the Applicable Authorized Representative, (iii) it will not institute in any Bankruptcy Case or other proceeding any claim against the Applicable Authorized Representative or any other First Lien Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to any Shared Collateral, and none of the Applicable Authorized Representative or any other First Lien Secured Party shall be liable for any action taken or omitted to be taken by the Applicable Authorized Representative or other First Lien Secured Party with respect to any Shared Collateral in accordance with the provisions of this Agreement, (iv) it will not seek, and hereby waives any right, to have any Shared Collateral or any part thereof marshaled upon any foreclosure or other disposition of such Collateral and (v) it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of any Collateral Agent or any other First Lien Secured Party to enforce this Agreement.
(b)    Each Collateral Agent agrees, for itself and on behalf of each applicable First Lien Secured Party, that if it shall obtain possession of any Shared Collateral or shall realize any proceeds or payment in respect of any such Shared Collateral, pursuant to any First Lien Security Document or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding or through any other exercise of remedies (including pursuant to any intercreditor agreement), at any time prior to the Discharge of each of the First Lien Obligations, then it shall hold such Shared Collateral, proceeds or payment in trust for the other First Lien Secured Parties that have a security interest in such Shared Collateral and promptly transfer such Shared Collateral, Proceeds or payment, as the case may be, to the Applicable Authorized Representative, to be distributed in accordance with the provisions of Section 2.01 hereof.
SECTION 2.04      Automatic Release of Liens; Amendments to First Lien Security Documents.  
(a)    If, at any time the Applicable Authorized Representative forecloses upon or otherwise exercises remedies against any Shared Collateral resulting in a sale or disposition thereof, then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens in favor of each Collateral Agent for the benefit of each Series of First Lien Secured Parties upon such Shared Collateral will automatically be released and discharged; provided that any proceeds of any Shared Collateral realized therefrom shall be applied pursuant to Section 2.01 hereof.
(b)    Each Collateral Agent agrees, for itself and on behalf of each applicable First Lien Secured Party, that each Collateral Agent may enter into any amendment to any First Lien Security Document that does not violate this Agreement.
(c)    Each Collateral Agent agrees to execute and deliver (at the sole cost and expense of the Grantors) all such authorizations and other instruments as shall reasonably be requested by the Applicable Authorized Representative to evidence and confirm any release of Shared Collateral provided for in this Section.

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SECTION 2.05.      Certain Agreements with Respect to Bankruptcy or Insolvency Proceedings. 
(a)    This Agreement shall continue in full force and effect notwithstanding the commencement of any proceeding under the Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law by or against Holdings or any of its Subsidiaries.
(b)    If any Grantor shall become subject to a case (a “Bankruptcy Case”) under the Bankruptcy Code and shall, as debtor(s)-in-possession, move for approval of financing (“DIP Financing”) to be provided by one or more lenders (the “DIP Lenders”) under Section 364 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law or the use of cash collateral under Section 363 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, each Collateral Agent agrees, for itself and on behalf of each applicable First Lien Secured Party, that it will raise no objection to any such financing or to the Liens on the Shared Collateral securing the same (“DIP Financing Liens”) or to any use of cash collateral that constitutes Shared Collateral unless the Applicable Authorized Representative, shall then oppose or object to such DIP Financing or such DIP Financing Liens or use of cash collateral (and (i) to the extent that such DIP Financing Liens are senior to the Liens on any such Shared Collateral for the benefit of the Controlling Secured Parties, each Non-Controlling Secured Party will subordinate its Liens with respect to such Shared Collateral on the same terms as the Liens of the Controlling Secured Parties (other than any Liens of any First Lien Secured Parties constituting DIP Financing Liens) are subordinated thereto, and (ii) to the extent that such DIP Financing Liens rank pari passu with the Liens on any such Shared Collateral granted to secure the First Lien Obligations of the Controlling Secured Parties, each Non-Controlling Secured Party will confirm the priorities with respect to such Shared Collateral as set forth herein), in each case so long as (A) the First Lien Secured Parties of each Series retain the benefit of their Liens on all such Shared Collateral pledged to the DIP Lenders, including proceeds thereof arising after the commencement of such proceeding, with the same priority vis-a-vis all the other First Lien Secured Parties (other than any Liens of the First Lien Secured Parties constituting DIP Financing Liens) as existed prior to the commencement of the Bankruptcy Case, (B) the First Lien Secured Parties of each Series are granted Liens on any additional collateral pledged to any First Lien Secured Parties as adequate protection or otherwise in connection with such DIP Financing or use of cash collateral, with the same priority vis-a-vis the First Lien Secured Parties (other than any Liens of the First Lien Secured Parties constituting DIP Financing Liens) as existed prior to the commencement of the Bankruptcy Case, (C) if any amount of such DIP Financing or cash collateral is applied to repay any of the First Lien Obligations, such amount is applied pursuant to Section 2.01 of this Agreement, and (D) if any First Lien Secured Parties are granted adequate protection with respect to First Lien Obligations subject hereto, including in the form of periodic payments, in connection with such DIP Financing or use of cash collateral, the proceeds of such adequate protection are applied pursuant to Section 2.01 of this Agreement; provided that the First Lien Secured Parties of each Series shall have a right to object to the grant of a Lien to secure the DIP Financing over any Collateral subject to Liens in favor of the First Lien Secured Parties of such Series or its Collateral Agent that shall not constitute Shared Collateral; and provided, further, that the First Lien Secured Parties receiving adequate protection shall not object to any other First Lien Secured Party receiving adequate protection comparable to any adequate protection granted to such First Lien Secured Parties in connection with a DIP Financing or use of cash collateral.
SECTION 2.06.      Reinstatement. In the event that any of the First Lien Obligations shall be paid in full and such payment or any part thereof shall subsequently, for whatever reason (including an order or judgment for disgorgement of a preference under the Bankruptcy Code, or any similar law, or the settlement of any claim in respect thereof), be required to be returned or repaid, the terms and conditions of this Article II shall be fully applicable thereto until all such First Lien Obligations shall again have been paid in full in cash.

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SECTION 2.07.      Insurance.  As between the First Lien Secured Parties, the Applicable Authorized Representative shall have the right to adjust or settle any insurance policy or claim covering or constituting Shared Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding affecting the Shared Collateral.
SECTION 2.08.      Refinancings. The First Lien Obligations of any Series may be Refinanced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is otherwise required to permit the Refinancing transaction under any Secured Credit Document) of any First Lien Secured Party of any other Series, all without affecting the priorities provided for herein or the other provisions hereof; provided that the Collateral Agent of the holders of any such Refinancing indebtedness shall have executed a Joinder Agreement on behalf of the holders of such Refinancing indebtedness.
SECTION 2.09.      Possessory Collateral Agent as Gratuitous Bailee for Perfection.  
(a)    The Applicable Authorized Representative agrees to hold any Shared Collateral constituting Possessory Collateral that is part of the Shared Collateral in its possession or control (or in the possession or control of its agents or bailees) as gratuitous bailee and agent for the benefit of each other First Lien Secured Party and any assignee solely for the purpose of perfecting the security interest granted in such Possessory Collateral, if any, pursuant to the applicable First Lien Security Documents, in each case, subject to the terms and conditions of this Section 2.09; provided that at any time after the Discharge of the First Lien Obligations of the Series for which the Applicable Authorized Representative is acting, the Applicable Authorized Representative shall (at the sole cost and expense of the Grantors), promptly deliver all Possessory Collateral to the Applicable Authorized Representative (after giving effect to the Discharge of such First Lien Obligations) together with any necessary endorsements reasonably requested by the Applicable Authorized Representative (or make such other arrangements as shall be reasonably requested by the Applicable Authorized Representative to allow the Applicable Authorized Representative to obtain control of such Possessory Collateral).  Pending delivery to the Applicable Authorized Representative, each other Collateral Agent agrees to hold any Shared Collateral constituting Possessory Collateral, from time to time in its possession, as gratuitous bailee and agent for the benefit of each other First Lien Secured Party and any assignee, solely for the purpose of perfecting the security interest granted in such Possessory Collateral, if any, pursuant to the applicable First Lien Security Documents, in each case, subject to the terms and conditions of this Section 2.09.
(b)    The duties or responsibilities of the Applicable Authorized Representative and each other Collateral Agent under this Section 2.09 shall be limited solely to holding any Shared Collateral constituting Possessory Collateral as gratuitous bailee and agent for the benefit of each other First Lien Secured Party for purposes of perfecting the Lien held by such First Lien Secured Parties therein.
ARTICLE III
Existence and Amounts of Liens and Obligations
SECTION 3.01.      Determinations with Respect to Amounts of Liens and Obligations. Whenever any Collateral Agent shall be required, in connection with the exercise of its rights or the performance of its obligations hereunder, to determine the existence or amount of any First Lien Obligations of any Series, or the Shared Collateral subject to any Lien securing the First Lien Obligations of any Series, it may request that such information be furnished to it in writing by each other Collateral Agent and shall be entitled to make such determination on the basis of the information so furnished; provided, however, that if any Collateral Agent shall fail or refuse reasonably promptly to provide the requested information, the requesting Collateral Agent shall be entitled to make any such determination by such method 

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as it may, in the exercise of its good faith judgment, determine, including by reliance upon a certificate of the Borrower. Each Collateral Agent may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to any Grantor, any First Lien Secured Party or any other Person as a result of such determination.
ARTICLE IV
The Applicable Authorized Representative
SECTION 4.01.      Appointment and Authority.
(a)    Each of the First Lien Secured Parties hereby irrevocably appoints and authorizes the Applicable Authorized Representative to take such actions on its behalf and to exercise such powers as are delegated to the Applicable Authorized Representative by the terms hereof, together with such powers and discretion as are reasonably incidental thereto.  In this connection, the Applicable Authorized Representative and any co-agents, sub-agents and attorneys-in-fact appointed by the Applicable Authorized Representative pursuant to the applicable Secured Credit Documents for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under any of the First Lien Security Documents, or for exercising any rights and remedies thereunder shall be entitled to the benefits of all provisions of this Article IV and Section 9 of the Credit Agreement and the equivalent provision of the Indenture and the Notes Security Agreement and any Additional First Lien Document (as though such co-agents, sub-agents and attorneys-in-fact were the “Collateral Agent” named therein) as if set forth in full herein with respect thereto.  Without limiting the foregoing, each of the First Lien Secured Parties, and each Collateral Agent, hereby agrees to provide such cooperation and assistance as may be reasonably requested by the Applicable Authorized Representative to facilitate and effect actions taken or intended to be taken by the Applicable Authorized Representative pursuant to this Article IV, such cooperation to include execution and delivery of notices, instruments and other documents as are reasonably deemed necessary by the Applicable Authorized Representative to effect such actions, and joining in any action, motion or proceeding initiated by the Applicable Authorized Representative for such purposes.
(b)    Each Non-Controlling Secured Party acknowledges and agrees that the Applicable Authorized Representative shall be entitled, for the benefit of the First Lien Secured Parties, to sell, transfer or otherwise dispose of or deal with any Shared Collateral as provided herein and in the First Lien Security Documents, without regard to any rights to which the Non-Controlling Secured Parties would otherwise be entitled as a result of their Credit Agreement Obligations, Indenture Obligations or Additional First Lien Obligations, as applicable. Without limiting the foregoing, each Non-Controlling Secured Party agrees that none of the Applicable Authorized Representative or any other First Lien Secured Party shall have any duty or obligation first to marshal or realize upon any type of Shared Collateral (or any other Collateral securing any of the First Lien Obligations), or to sell, dispose of or otherwise liquidate all or any portion of such Shared Collateral (or any other Collateral securing any First Lien Obligations), in any manner that would maximize the return to the Non-Controlling Secured Parties, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the Non-Controlling Secured Parties from such realization, sale, disposition or liquidation.  Each of the First Lien Secured Parties waives any claim it may now or hereafter have against the Applicable Authorized Representative or the Collateral Agent for any other Series of First Lien Obligations or any other First Lien Secured Party of any other Series arising out of (i) any actions that do not violate this Agreement which any Collateral Agent or any First Lien Secured Party takes or omits to take (including, actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to real-

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ize upon, any of the Collateral and actions with respect to the collection of any claim for all or any part of the First Lien Obligations from any account debtor, guarantor or any other party) in accordance with the First Lien Security Documents or any other agreement related thereto or to the collection of the First Lien Obligations or the valuation, use, protection or release of any security for the First Lien Obligations, (ii) any election by any Collateral Agent or any holders of First Lien Obligations, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code or (iii) subject to Section 2.05, any borrowing by, or grant of a security interest or administrative expense priority under Section 364 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law by, any Grantor or any of their Subsidiaries, as debtor-in-possession.
SECTION 4.02.      Rights as a First Lien Secured Party.  
The Person serving as the Applicable Authorized Representative hereunder shall have the same rights and powers in its capacity as a First Lien Secured Party under any Series of First Lien Obligations that it holds as any other First Lien Secured Party of such Series and may exercise the same as though it were not the Applicable Authorized Representative and the term “First Lien Secured Party” or “First Lien Secured Parties” or (as applicable) “Credit Agreement Secured Party”, “Credit Agreement Secured Parties”, “Indenture Secured Party”, “Indenture Secured Parties”, “Additional First Lien Secured Party” or “Additional First Lien Secured Parties” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Applicable Authorized Representative hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Grantors or any Subsidiary or other Affiliate thereof as if such Person were not the Applicable Authorized Representative hereunder and without any duty to account therefor to any other First Lien Secured Party.
SECTION 4.03.      Exculpatory Provisions.  The Applicable Authorized Representative shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, the Applicable Authorized Representative:
(i)    shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing;
(ii)    shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby; provided that the Applicable Authorized Representative shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Applicable Authorized Representative to liability or that is contrary to this Agreement or applicable law;
(iii)    shall not, except as expressly set forth herein, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to a Grantor or any of its Affiliates that is communicated to or obtained by the Person serving as the Applicable Authorized Representative or any of its Affiliates in any capacity;
(iv)    shall not be liable for any action taken or not taken by it (1) in the absence of its own gross negligence or willful misconduct or (2) in reliance on a certificate of an authorized officer of the Borrower stating that such action is permitted by the terms of this Agreement. The Applicable Authorized Representative shall be deemed not to have knowledge of any Event of Default under any Series of First Lien Obligations unless and until notice describing such Event of Default and referencing applicable agreement is given to the Applicable Authorized Representative;

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(v)    shall not be responsible for or have any duty to ascertain or inquire into (1) any statement, warranty or representation made in or in connection with this Agreement or any other First Lien Security Document, (2) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (3) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (4) the validity, enforceability, effectiveness or genuineness of this Agreement, any other First Lien Security Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the First Lien Security Documents, (5) the value or the sufficiency of any Collateral for any Series of First Lien Obligations, or (6) the satisfaction of any condition set forth in any Secured Credit Document, other than to confirm receipt of items expressly required to be delivered to the Applicable Authorized Representative; and
(vi)    need not segregate money held hereunder from other funds except to the extent required by law.  The Applicable Authorized Representative shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing.
SECTION 4.04.  Collateral and Guaranty Matters.  Each of the First Lien Secured Parties irrevocably authorizes the applicable Collateral Agent, at its option and in its discretion, to release any Lien on any property granted to or held by the Collateral Agent under any First Lien Security Document in accordance with Section 2.04 or upon receipt of a written request from the Borrower stating that the releases of such Lien is permitted by the terms of each then extant Secured Credit Document.

ARTICLE V
Miscellaneous
SECTION 5.01.      Notices.  All notices and other communications provided for herein (including, but not limited to, all the directions and instructions to be provided to the Applicable Authorized Representative herein by the First Lien Secured Parties) shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:
(a)    if to any Grantor, to the Borrower, at its address at 440 Atlantic Street, 10th Floor, Stamford, Connecticut  06901;
(b)    if to the Credit Agreement Collateral Agent, to it at Bank of America, N.A., [   ]; 
(c)    if to the Notes Collateral Agent, to it at The Bank of New York Mellon Trust Company, N.A., [                      ] EMM to confirm. ; and
(d)    if to any other Collateral Agent, to it at the address set forth in the applicable Joinder Agreement.
Any party hereto may change its address, fax number or email address for notices and other communications hereunder by notice to the other parties hereto. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and, may be personally served, telecopied, electronically mailed or sent by courier service or U.S. mail and shall be 

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deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or electronic mail or upon receipt via U.S. mail (registered or certified, with postage prepaid and properly addressed).  For the purposes hereof, the addresses of the parties hereto shall be as set forth above or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties. As agreed to in writing among the Applicable Authorized Representative and each other Collateral Agent from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable person provided from time to time by such person.
The Notes Collateral Agent agrees to accept and act upon instructions or directions pursuant to this Agreement sent by unsecured e-mail, pdf, facsimile transmission or other similar unsecured electronic methods, provided, however, that the Notes Collateral Agent shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing.  If a Grantor, the Credit Agreement Collateral Agent or any other Collateral Agent or Senior Class Debt Representative elects to give the Notes Collateral Agent e-mail or facsimile instructions (or instructions by a similar electronic method) and the Notes Collateral Agent in its discretion elects to act upon such instructions, the Notes Collateral Agent’s understanding of such instructions shall be deemed controlling.  The Notes Collateral Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Notes Collateral Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. Each Grantor, the Credit Agreement Collateral Agent and any other Collateral Agent or Senior Class Debt Representative each agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Notes Collateral Agent, including without limitation the risk of the Notes Collateral Agent acting on unauthorized instructions, and the risk or interception and misuse by third parties.
SECTION 5.02.      Waivers; Amendment; Joinder Agreements.  
(a)    No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.
(b)    Neither this Agreement nor any provision hereof may be terminated, waived, amended or modified (other than pursuant to any Joinder Agreement) except pursuant to an agreement or agreements in writing entered into by each Collateral Agent.  The Grantors shall not have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except to the extent their rights or obligations are adversely affected (in which case the Borrower shall have the right to consent to or approve any such amendment, modification or waiver).
(c)    Notwithstanding the foregoing, without the consent of any First Lien Secured Party, any Additional Agent may become a party hereto by execution and delivery of a Joinder Agreement in accordance with Section 5.13 of this Agreement and upon such execution and delivery, such Additional Agent and the Additional First Lien Secured Parties and Additional First Lien Obligations of the Series for which such Additional Agent is acting shall be subject to the terms hereof.

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(d)    Notwithstanding the foregoing, without the consent of any other Collateral Agent or First Lien Secured Party, the Applicable Authorized Representative may effect amendments and modifications to this Agreement to the extent necessary to reflect any incurrence of any Additional First Lien Obligations in compliance with the Credit Agreement, the Indenture and any Additional First Lien Documents.
SECTION 5.03.      Parties in Interest.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, as well as the other First Lien Secured Parties, all of whom are intended to be bound by, and to be third party beneficiaries of, this Agreement.
SECTION 5.04.      Survival of Agreement.  All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.
SECTION 5.05.      Counterparts.  This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile, PDF or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
SECTION 5.06      Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.  The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 5.07.      Authorization.  By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement.  The Credit Agreement Collateral Agent represents and warrants that this Agreement is binding upon the Credit Agreement Secured Parties. The Notes Collateral Agent represents and warrants that this Agreement is binding upon the Indenture Secured Parties.  This Agreement is the “First Priority Intercreditor Agreement” under and as defined in the Indenture.
SECTION 5.08.      Submission to Jurisdiction Waivers; Consent to Service of Process.  Each Collateral Agent, on behalf of itself and the First Lien Secured Parties of the Series for whom it is acting, irrevocably and unconditionally:
(a)    submits for itself and its property in any legal action or proceeding relating to this Agreement, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York sitting in New York County, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;
(b)    consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same;

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(c)    agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Person (or its Collateral Agent) at the address referred to in 5.01;
(d)    agrees that nothing herein shall affect the right of any other party hereto (or any First Lien Secured Party) to effect service of process in any other manner permitted by law or shall limit the right of any party hereto (or any First Lien Secured Party) to sue in any other jurisdiction; and
(e)    waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 5.08 any special, exemplary, punitive or consequential damages.
SECTION 5.09.      GOVERNING LAW; WAIVER OF JURY TRIAL.  
(A)    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW.
(B)    EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 5.10.      Headings.  Article, Section and Annex headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
SECTION 5.11.      Conflicts.  In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of any of the other First Lien Security Documents or Additional First Lien Documents, the provisions of this Agreement shall control.
SECTION 5.12.      Provisions Solely to Define Relative Rights.  The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the First Lien Secured Parties in relation to one another.  No Grantor or any other creditor thereof shall have any rights or obligations hereunder, except as expressly provided in this Agreement (provided that nothing in this Agreement (other than Section 2.04, 2.05 or 2.09) is intended to or will amend, waive or otherwise modify the provisions of the Credit Agreement, the TWC Indenture, the TWCE Indenture, the Indenture or any Additional First Lien Documents), and no Grantor may rely on the terms hereof (other than Section 2.04, 2.05 or 2.09). Nothing in this Agreement is intended to or shall impair the obligations of any Grantor, which are absolute and unconditional, to pay the First Lien Obligations as and when the same shall become due and payable in accordance with their terms.
SECTION 5.13.      Additional First Lien Obligations.  To the extent, but only to the extent permitted by the provisions of the Credit Agreement, the TWC Indenture, the TWCE Indenture, the Indenture and the Additional First Lien Documents, the Borrower may incur Additional First Lien Obligations.  Any such additional class or series of Additional First Lien Obligations (the “Senior Class Debt”) may be secured by a Lien and may be guaranteed by the Grantors on a pari passu basis, in each case under and pursuant to the Additional First Lien Documents, if and subject to the condition that the Collateral Agent of any such Senior Class Debt (each, a “Senior Class Debt Representative”), acting on behalf of the holders of such Senior Class Debt (such Collateral Agent and holders in respect of any Senior Class 

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Debt being referred to as the “Senior Class Debt Parties”), becomes a party to this Agreement by satisfying the conditions set forth in clauses (i) through (iv) of the immediately succeeding paragraph.
In order for a Senior Class Debt Representative to become a party to this Agreement,
(i)    such Senior Class Debt Representative, the Applicable Authorized Representative and each Grantor shall have executed and delivered an instrument substantially in the form of Annex IV (with such changes as may be reasonably approved by the Applicable Authorized Representative and such Senior Class Debt Representative) pursuant to which such Senior Class Debt Representative becomes a Collateral Agent and Additional Agent hereunder, and the Senior Class Debt in respect of which such Senior Class Debt Representative is the Collateral Agent and the related Senior Class Debt Parties become subject hereto and bound hereby;
(ii)    the Borrower shall have delivered to the Applicable Authorized Representative true and complete copies of each of the Additional First Lien Documents relating to such Senior Class Debt, certified as being true and correct by a Responsible Officer of the Borrower;
(iii)    the Borrower shall have delivered to the Applicable Authorized Representative an Officer’s Certificate stating that such Additional First Lien Obligations are permitted by each applicable Secured Credit Document to be incurred, or to the extent a consent is otherwise required to permit the incurrence of such Additional First Lien Obligations under any Secured Credit Document, each Grantor has obtained the requisite consent; and
(iv)    the Additional First Lien Documents, as applicable, relating to such Senior Class Debt shall provide, in a manner reasonably satisfactory to the Applicable Authorized Representative, that each Senior Class Debt Party with respect to such Senior Class Debt will be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Senior Class Debt.
SECTION 5.14      Integration.  This Agreement together with the other Secured Credit Documents and the First Lien Security Documents represents the entire agreement of each of the Grantors and the First Lien Secured Parties with respect to the subject matter hereof and there are no promises, undertakings, representations or warranties by any Grantor, any Collateral Agent or any other First Lien Secured Party relative to the subject matter hereof not expressly set forth or referred to herein or in the other Secured Credit Documents or the First Lien Security Documents.
SECTION 5.15      [Reserved].
SECTION 5.16      Information Concerning Financial Condition of  Grantors.  In accordance with their respective First Lien Obligations Documents, the Applicable Authorized Representative, the other Collateral Agents and the Secured Parties shall each be responsible for keeping themselves informed of (a) the financial condition of the Grantors and all endorsers or guarantors of the First Lien Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the First Lien Obligations; provided that nothing in this Section 5.16 shall impose a duty on the Notes Collateral Agent to inform itself or investigate the financial condition of the Grantors beyond that which may be required under the Indenture.  The Applicable Authorized Representative, the other Collateral Agents and the Secured Parties shall have no duty to advise any other party hereunder of information known to it or them regarding such condition or any such circumstances or otherwise.  In the event that the Applicable Authorized Representative, any other Collateral Agent or any Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any such information to any other party, it shall be under no obligation to (i) make, and Applicable Authorized Representative, the other Collateral Agents and the Secured 

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Parties shall not make or be deemed to have made, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (ii) provide any additional information or to provide any such information on any subsequent occasion, (iii) undertake any investigation or (iv) disclose any information that, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.
SECTION 5.17.      Additional Grantors.  The Borrower agrees that, if any Subsidiary of the Borrower shall become a Grantor after the date hereof, it will promptly cause such Subsidiary to become party hereto by executing and delivering an instrument in the form of Annex V. Upon such execution and delivery, such Subsidiary will become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein.  The execution and delivery of such instrument shall not require the consent of any other party hereunder, and will be acknowledged by the Applicable Authorized Representative. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.
SECTION 5.18.      Further Assurances.  Each Collateral Agent, on behalf of itself and each First Lien Secured Party under the Credit Agreement, TWC Indenture, the TWCE Indenture, Indenture or Additional First Lien Debt Facility, as applicable, agrees that it will take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the other parties hereto may reasonably request to effectuate the terms of, and the Lien priorities contemplated by, this Agreement.
SECTION 5.19.      Credit Agreement Collateral Agent and Notes Collateral Agent.  It is understood and agreed that (a) the Credit Agreement Collateral Agent is entering into this Agreement in its capacity as administrative agent under the Credit Agreement and [in its capacity as collateral agent] under the Credit Agreement Security Agreement and the provisions of Section 9 of the Credit Agreement applicable to it as administrative agent thereunder shall also apply to it as Applicable Authorized Representative hereunder, and (b) the Notes Collateral Agent is entering into this Agreement in its capacity as Trustee and Collateral Agent under the Indenture and as Notes Collateral Agent under the Collateral Agreement and the provisions of the Indenture and the Notes Security Agreement granting or extending any rights, protections, privileges, indemnities and immunities to the Trustee, Collateral Agent or Notes Collateral Agent thereunder shall also apply to the Notes Collateral Agent hereunder.
For the avoidance of doubt, the parties hereto acknowledge that in no event shall the Credit Agreement Collateral Agent or Notes Collateral Agent 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 any such party has been advised of the likelihood of such loss or damage and regardless of the form of action.

-21-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
BANK OF AMERICA, N.A.,
as Credit Agreement Collateral Agent and Applicable Authorized Representative
		
	By:
	____________________________________________________

Name:
Title: 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Notes Collateral Agent
		
	By:
	____________________________________________________

Name:
Title: 

CHARTER COMMUNICATIONS OPERATING LLC
		
	By:
	____________________________________________________

Name:
Title: 

THE GRANTORS LISTED ON ANNEX I HERETO,
		
	By:
	____________________________________________________

Name:
Title: 

-22-

ANNEX I
Grantors

ANNEX II
[FORM OF] JOINDER NO. [ ] dated as of [      ], 20[  ] to the FIRST LIEN INTERCREDITOR AGREEMENT dated as of [               ], 2015 (the “First Lien Intercreditor Agreement”), among Charter Communications Operating, LLC, a Delaware limited liability company (the “Borrower”), the other Grantors party hereto, Bank of America, N.A., as administrative agent for the Credit Agreement Secured Parties (in such capacity and together with its successors in such capacity, the “Credit Agreement Collateral Agent”) and The Bank of New York Mellon Trust Company, N.A., as collateral agent for the Indenture Secured Parties (in such capacity and together with its successors in such capacity, the “Notes Collateral Agent”) and each Additional Agent from time to time party hereto for the Additional First Lien Secured Parties of the Series with respect to which it is acting in such capacity.
A.    Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the First Lien Intercreditor Agreement.
B.    As a condition to the ability of the Borrower or its Restricted Subsidiaries to incur Additional First Lien Obligations and to secure such Senior Class Debt with the Senior Lien and to have such Senior Class Debt guaranteed by the Grantors on a senior basis, in each case under and pursuant to the Additional First Lien Documents, the Senior Class Debt Representative in respect of such Senior Class Debt is required to become a Collateral Agent under, and such Senior Class Debt and the Senior Class Debt Parties in respect thereof are required to become subject to and bound by, the First Lien Intercreditor Agreement.  Section 5.13 of the First Lien Intercreditor Agreement provides that such Senior Class Debt Representative may become a Collateral Agent under, and such Senior Class Debt and such Senior Class Debt Parties may become subject to and bound by, the First Lien Intercreditor Agreement, upon the execution and delivery by the Senior Class Debt Representative of an instrument in the form of this Joinder and the satisfaction of the other conditions set forth in Section 5.13 of the First Lien Intercreditor Agreement.  The undersigned Senior Class Debt Representative (the “New Collateral Agent”) is executing this Joinder in accordance with the requirements of the First Lien Intercreditor Agreement.
Accordingly, the Applicable Authorized Representative and the New Collateral Agent agree as follows:
SECTION 1.    In accordance with Section 5.13 of the First Lien Intercreditor Agreement, the New Collateral Agent by its signature below becomes a Collateral Agent and Additional Agent under, and the related Senior Class Debt and Senior Class Debt Parties become subject to and bound by, the First Lien Intercreditor Agreement with the same force and effect as if the New Collateral Agent had originally been named therein as a Collateral Agent, and the New Collateral Agent, on behalf of itself and such Senior Class Debt Parties, hereby agrees to all the terms and provisions of the First Lien Intercreditor Agreement applicable to it as a Collateral Agent and to the Senior Class Debt Parties that it represents as Additional First Lien Secured Parties.  Each reference to a “Collateral Agent” or an “Additional Agent” in the First Lien Intercreditor Agreement shall be deemed to include the New Collateral Agent.  The First Lien Intercreditor Agreement is hereby incorporated herein by reference.
SECTION 2.    The New Collateral Agent represents and warrants to the Applicable Authorized Representative and the other First Lien Secured Parties that (i) it has full power and authority to enter into this Joinder, in its capacity as [agent] [trustee], (ii) this Joinder has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of such Agreement and (iii) the Additional First Lien Documents relating to such Senior Class Debt provide that, upon the New Collateral Agent’s entry into this Agreement, the Senior Class Debt Parties in respect of such Senior Class Debt will be subject to and bound by the provisions of the First Lien Intercreditor Agreement as Additional First Lien Secured Parties.

SECTION 3.    This Joinder may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Joinder shall become effective when the Collateral Agent shall have received a counterpart of this Joinder that bears the signature of the New Collateral Agent.  Delivery of an executed signature page to this Joinder by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Joinder.
SECTION 4.    Except as expressly supplemented hereby, the First Lien Intercreditor Agreement shall remain in full force and effect.
SECTION 5.    THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6.    In case any one or more of the provisions contained in this Joinder should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the First Lien Intercreditor Agreement shall not in any way be affected or impaired.  The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7.    All communications and notices hereunder shall be in writing and given as provided in Section 5.01 of the First Lien Intercreditor Agreement.  All communications and notices hereunder to the New Collateral Agent shall be given to it at the address set forth below its signature hereto.
SECTION 8.    The Borrower agrees to reimburse the Applicable Authorized Representative for its reasonable out-of-pocket expenses in connection with this Joinder, including the reasonable fees, other charges and disbursements of counsel for the Applicable Authorized Representative.
SECTION 9.    The New Collateral Agent is joining the First Lien Intercreditor Agreement in its capacity as collateral agent under the applicable Additional First Lien Documents governing such Additional First Lien Obligations and the provisions of such documents granting or extending any rights, protections, privileges, indemnities and immunities to the New Collateral Agent thereunder shall also apply to the New Collateral Agent under the First Lien Intercreditor Agreement.

-2-

IN WITNESS WHEREOF, the New Collateral Agent and the Applicable Authorized Representative have duly executed this Joinder to the First Lien Intercreditor Agreement as of the day and year first above written.
[NAME OF NEW COLLATERAL AGENT], as 
[                 ] for the holders of 
[                                  ],

		
	By:
	____________________________________________________

Name:
Title: 

-3-

Address for notices:
_______________________________________
_______________________________________
attention of: 
 _____________________________
Telecopy:  
_______________________________

-4-

Acknowledged by:
[___________________],
as Applicable Authorized Representative

By:    ____________________________________________________
Name:
Title: 

CHARTER COMMUNICATIONS OPERATING, LLC
By:    ____________________________________________________
Name:
Title: 

THE GRANTORS 
LISTED ON SCHEDULE I HERETO

By:    ____________________________________________________
Name:
Title:

-5-

Schedule I to the
Joinder to the
First Lien Intercreditor Agreement
Grantors
[               ]

ANNEX III
SUPPLEMENT NO.    dated as of     , to the FIRST LIEN INTERCREDITOR AGREEMENT dated as [               ], 2015 (the “First Lien Intercreditor Agreement”), among Charter Communications Operating, LLC, a Delaware limited liability company (the “Borrower”), the other Grantors party hereto, Bank of America, N.A., as administrative agent for the Credit Agreement Secured Parties (in such capacity and together with its successors in such capacity, the “Credit Agreement Collateral Agent”) and The Bank of New York Mellon Trust Company, N.A., as collateral agent for the Indenture Secured Parties (in such capacity and together with its successors in such capacity, the “Notes Collateral Agent”) and each Additional Agent from time to time party hereto for the Additional First Lien Secured Parties of the Series with respect to which it is acting in such capacity.
A.    Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the First Lien Intercreditor Agreement.
B.    The Grantors have entered into the First Lien Intercreditor Agreement.  Pursuant to certain Secured Credit Documents, certain newly acquired or organized Subsidiaries of the Borrower are required to enter into the First Lien Intercreditor Agreement.  Section 5.17 of the First Lien Intercreditor Agreement provides that such Subsidiaries may become party to the First Lien Intercreditor Agreement by execution and delivery of an instrument in the form of this Supplement.  The undersigned Subsidiary (the “New Grantor”) is executing this Supplement in accordance with the requirements of the Credit Agreement, the TWC Indenture, the TWCE Indenture, the Indenture and Additional First Lien Documents.
Accordingly, the Applicable Authorized Representative and the New Grantor agree as follows:
SECTION 1.    In accordance with Section 5.17 of the First Lien Intercreditor Agreement, the New Grantor by its signature below becomes a Grantor under the First Lien Intercreditor Agreement with the same force and effect as if originally named therein as a Grantor, and the New Grantor hereby agrees to all the terms and provisions of the First Lien Intercreditor Agreement applicable to it as a Grantor thereunder.  Each reference to a “Grantor” in the First Lien Intercreditor Agreement shall be deemed to include the New Grantor.  The First Lien Intercreditor Agreement is hereby incorporated herein by reference.
SECTION 2.    The New Grantor represents and warrants to the Applicable Authorized Representative and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 3.    This Supplement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Supplement shall become effective when the Applicable Authorized Representative shall have received a counterpart of this Supplement that bears the signature of the New Grantor.  Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4.    Except as expressly supplemented hereby, the First Lien Intercreditor Agreement shall remain in full force and effect.

SECTION 5.    THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6.    In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the First Lien Intercreditor Agreement shall not in any way be affected or impaired.  The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7.    All communications and notices hereunder shall be in writing and given as provided in Section 5.01 of the First Lien Intercreditor Agreement.  All communications and notices hereunder to the New Grantor shall be given to it in care of the Borrower as specified in the First Lien Intercreditor Agreement.
SECTION 8.    The Borrower agrees to reimburse the Applicable Authorized Representative for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Applicable Authorized Representative.

-2-

IN WITNESS WHEREOF, the New Grantor, and the Applicable Authorized Representative have duly executed this Supplement to the First Lien Intercreditor Agreement as of the day and year first above written.
[NAME OF NEW GRANTOR],
		
	By:
	____________________________________________________

Name:
Title: 

Acknowledged by:
[_________________], as Applicable Authorized Representative,
By:    ________________________________
Name:
Title:

-3-

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