Document:

Exhibit 10.1

 

EXECUTION COPY

 

TERMINATION AGREEMENT

 

This Termination Agreement (this “Agreement”) is made and effective on and as of this 27th day of October, 2015 (the “Effective Date”), by and between Ares Holdings L.P., a Delaware limited partnership (“AH LP”), and Ares Investments L.P., a Delaware limited partnership (“AI LP”), on the one hand, and Kayne Anderson Capital Advisors, L.P., a California limited partnership (“KACALP”), KA Fund Advisors, LLC, a Delaware limited liability company (“KAFA”), Kayne Anderson Investment Management Inc., a Nevada corporation (“KA Investment Management”), each of the other KA Owners party to the Merger Agreement (as defined below), acting through David Shladovsky as representative of the KA Owners (the “Sellers’ Representative”), and the Sellers’ Representative, on the other hand.  AH LP and AI LP are hereinafter referred to collectively as the “Ares Parties.”  KACALP, KAFA, KA Investment Management, the KA Owners and the Sellers’ Representative are hereinafter referred to collectively as the “KA Parties.”  The Ares Parties and the KA Parties are hereinafter referred to collectively as the “Parties.”

 

RECITALS

 

A.        The Parties entered into that certain Business Combination and Merger Agreement (the “Merger Agreement”) dated as of July 23, 2015.  Capitalized terms used in this Agreement but not defined herein have the meanings ascribed to them in the Merger Agreement.

 

B.        Pursuant to Section 11.1 of the Merger Agreement, the Sellers’ Representative has been authorized and empowered to act on behalf of the KA Owners party to the Merger Agreement to, among other things, (1) terminate the Merger Agreement, (2) settle or compromise any Actions or potential Actions relating to the Merger Agreement and (3) negotiate and settle any disputes and controversies with the Buyers.

 

C.        The Parties desire to terminate the Merger Agreement and the Transaction Documents and to settle any and all disputes pertaining to any claims made or that could have been made in connection with or arising out of the Merger Agreement or the Transaction Documents.

 

NOW, THEREFORE, in consideration of the foregoing recitals, the promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties stipulate and agree as follows:

 

1.         Additional Definitions.  The following terms shall have the meanings ascribed thereto as follows:

 

1.1       “Ares Investor” means each Buyer Affiliate, each Person that owns (or whose Affiliates or Family Members own) a direct or indirect equity interest in Ares Owners, and each of their respective Affiliates and Family Members.

 

1.2       “Claims” means all claims for relief, rights, demands, Actions, Liabilities, debts, matters, and issues of any kind whatsoever.

 

 

1.3       “Released Ares Parties” means (a) the Ares Parties and each Investment Fund Managed by a Buyer Affiliate, (b) each of their respective Affiliates, (c) each of their and their respective Affiliates’ parents, subsidiaries, investors, shareholders, advisors, Representatives, attorneys, brokers, and insurers, (d) each of the Family Members, heirs, successors, assigns and predecessors in interest of any of the foregoing, and (e) all other Persons acting on behalf of any of the foregoing.

 

1.4       “Released Claims” means any and all Claims (including Unknown Claims), whether known or unknown, contingent or absolute, matured or unmatured, discoverable or undiscoverable, that have been, could or might have been, or in the future might be asserted by any Releasing Ares Parties or Releasing KA Parties, in any case, based upon, in connection with, arising out of, or in any way relating to, the Merger Agreement or the Transaction Documents or the Events related to the Transactions.  Notwithstanding the foregoing, Released Claims shall not include any Claims arising under, or to enforce the terms of, this Agreement or the Confidentiality Agreement.

 

1.5       “Released KA Parties” means (a) the KA Parties, each KA Entity, each Investment Fund Managed by any KA Entity, KA RetainCo and KA Associates, (b) each of their respective Affiliates, (c) each of their and their respective Affiliates’ parents, subsidiaries, investors, shareholders, advisors, Representatives, attorneys, brokers and insurers, (d) each of the Family Members, heirs, successors, assigns and predecessors in interest of any of the foregoing, and (e) all other Persons acting on behalf of any of the foregoing.

 

1.6       “Released Parties” means the Released Ares Parties and the Released KA Parties.

 

1.7       “Releasing Ares Parties” means (a) the Ares Parties, each Investment Fund Managed by a Buyer Affiliate and each of their respective Affiliates, (b) each of their and their respective Affiliates’ parents, subsidiaries, investors, shareholders, advisors, Representatives, attorneys, brokers, and insurers, (c) each of the Family Members, heirs, successors, assigns and predecessors in interest of any of the foregoing, and (d) all Persons acting on behalf of any of the foregoing.

 

1.8       “Releasing KA Parties” means (a) the KA Parties, each KA Entity, each Investment Fund Managed by any KA Entity, KA RetainCo, KA Associates and each of their respective Affiliates, (b) each of their and their respective Affiliates’ parents, subsidiaries, investors, shareholders, advisors, Representatives, attorneys, brokers, and insurers, (c) each of the Family Members, heirs, successors, assigns and predecessors in interest of any of the foregoing, and (d) all Persons acting on behalf of any of the foregoing.

 

1.9       “Releasing Parties” means the Releasing Ares Parties and the Releasing KA Parties.

 

1.10     “Unknown Claims” means any Released Claim that the Releasing Ares Parties or the Releasing KA Parties do not know or suspect to exist in his, her or its favor at the time of the release of the applicable Released Parties, including Released Claims which, if known by him, her or it, might have affected his, her or its release of the applicable Released Parties, or

 

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might have affected his, her or its decision not to object to this Agreement.  Unknown Claims include those claims in which some or all of the facts comprising the claim may be unsuspected or undisclosed.

 

2.         Termination of the Merger Agreement.  Effective as of the Effective Date, the Merger Agreement shall be terminated pursuant to Section 8.1 of the Merger Agreement, and no party thereto or to any Transaction Document shall have any further rights, duties, Liabilities or obligations of any nature whatsoever with respect to, in connection with or otherwise arising under the Merger Agreement (including those provisions of the Merger Agreement which by their terms would otherwise survive termination of the Merger Agreement) or the Transaction Documents; provided that Article XI of the Merger Agreement shall continue to survive and remain in full force and effect.

 

3.         Expense Reimbursement.

 

3.1       The Ares Parties, their designees or someone acting on their behalf, shall reimburse to KACALP an amount equal to KACALP’s estimated out-of-pocket costs and expenses incurred in connection with the Transactions in the amount of Thirty Million Dollars ($30,000,000.00) (the “Expense Reimbursement Amount”). The Expense Reimbursement Amount will not be adjusted upward or downward if such total expenses differ from such estimated amount.

 

3.2       Within two Business Days following the Effective Date, the Ares Parties (or their designees or someone acting on their behalf) shall deliver the Expense Reimbursement Amount to KACALP by wire transfer of immediately available funds in accordance with the instructions provided by the Sellers’ Representative.

 

4.         Investment in KA Funds.

 

4.1       Subject to the other provisions of this Section 4, the Ares Parties will direct capital from one or more Ares Investors to be managed by KACALP (or its Subsidiaries) comprised of:

 

(a)        a $50,000,000 capital commitment to Kayne Anderson Energy Fund VII, L. P. (“KAEF VII”);

 

(b)        a $50,000,000 capital commitment to Kayne Private Energy Income Fund, L.P. (“KPEIF”); and

 

(c)        $50,000,000 in (i) a separately managed account (the “MLP/Midstream SMA”) that will invest in (x) MLP marketable securities and (y) midstream energy companies, with an objective of maximizing total return or (ii) if required pursuant to Section 4.4, the KA Hedge Funds (as defined below).

 

4.2       After the first anniversary of the Effective Date, the Ares Investors may withdraw any amount from the MLP/Midstream SMA or the KA Hedge Funds, as applicable, or terminate the MLP/Midstream SMA.

 

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4.3       Within ten Business Days following the Effective Date, (i) the Ares Investors shall execute the subscription documents in substantially the form attached as Exhibit C hereto with respect to the KAEF VII capital commitment and KPEIF capital commitment and (ii) the parties shall execute the side letters in substantially the form attached as Exhibit D hereto with respect to the KAEF VII capital commitment and the KPEIF capital commitment.

 

4.4       The terms of the Ares Investors’ investment in the MLP/Midstream SMA shall be as favorable to the Ares Investors as those provided to any other investor in a similarly sized separately managed account with substantially the same strategy  managed by the KA Entities (considering the Ares Investors’ aggregate investment in the MLP/Midstream SMA). The parties will use commercially reasonable efforts to enter into definitive documentation on mutually agreeable terms with respect to the MLP/Midstream SMA within 30 days following the Effective Date; provided that if the parties have not entered into such definitive documentation within 30 days following the Effective Date (or such longer period agreed to among the Parties), the Ares Parties will direct $50,000,000 from one or more Ares Investors to be invested in one or more of the following five funds: (a) Kayne Anderson Midstream Institutional Fund, L.P., (b) Kayne Anderson MLP Fund, L.P., (c) Kayne Energy Credit Opportunities, L.P., (d) Kayne Anderson Infrastructure Income Fund, L.P. and (e) Kayne Select Midstream Recovery Fund, L.P. (together, the “KA Hedge Funds”), and cause the applicable Ares Investors to promptly execute the relevant subscription documents with respect to the applicable KA Hedge Fund(s) in substantially the form used for such fund by similarly situated investors.  The Ares Investors’ investments in any single KA Hedge Fund will be aggregated for purposes of obtaining any size-based benefits provided for in any documents applicable to such KA Hedge Fund.

 

5.         Joint Efforts.  Until the first anniversary of the Effective Date, KACALP and the Ares Parties will use commercially reasonable efforts to jointly pursue separately managed accounts and products that include MLPs or MLP closed-end funds as a primary component of the strategy.

 

6.         Denial of Liability.  This Agreement is made in compromise and settlement of all Released Claims among the Parties.  This Agreement shall not be construed, in any fashion, as an admission of Liability or wrongdoing by any Person.  Each Released Party specifically denies having engaged in any wrongdoing whatsoever regarding any other Person with respect to the Released Claims.

 

7.         Mutual Release

 

7.1       In consideration of the mutual agreements contained herein, and with the exception of the rights and obligations created or preserved by this Agreement:

 

(a)        The Ares Parties, on their own behalf and, to the fullest extent lawful, on behalf of each of the other Releasing Ares Parties, (i) fully, finally, and forever release, relinquish and discharge all Released Claims (including Unknown Claims) against each of the Released KA Parties, (ii) covenant not to sue any of the Released KA Parties with respect to any such Released Claims, and (iii) shall be permanently barred and enjoined from instituting, commencing, or prosecuting any such Released Claims against the Released KA Parties.

 

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(b)        The KA Parties, on their own behalf and, to the fullest extent lawful, on behalf of each of the other Releasing KA Parties (i) fully, finally, and forever release, relinquish and discharge all Released Claims (including Unknown Claims) against each of the Released Ares Parties, (ii) covenant not to sue any of the Released Ares Parties with respect to any such Released Claims, and (iii) shall be permanently barred and enjoined from instituting, commencing, or prosecuting any such Released Claims against the Released Ares Parties.

 

(c)        Nothing herein shall in any way impair or restrict the rights of any Person to enforce the terms of this Agreement or the Confidentiality Agreement.

 

8.         California Civil Code Section 1542 Waiver and Covenant Not to Sue

 

8.1       The Parties intend and agree that this Agreement shall be effective as a full and final accord and satisfaction and release of and from all Parties as described in Section 7.  In furtherance thereof, each of the Parties acknowledges that it is familiar with Section 1542 of the Civil Code of the State of California, which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

8.2       The Ares Parties, on their own behalf and, to the fullest extent lawful, on behalf of each of the other Releasing Ares Parties, and the KA Parties, on their own behalf and, to the fullest extent lawful, on behalf of each of the other Releasing KA Parties, waive any and all rights they have or may have under California Civil Code Section 1542, or any similar provision of Law or successor statute to it in California or any other state, with respect to the releases contained in Section 7.  In connection with this waiver, the Parties acknowledge that they are aware that they may hereafter discover claims presently unknown or unsuspected, or facts in addition to or different from those which they now know or believe to be true, with respect to the releases included in Section 7.  Nevertheless, the Parties intend by this Agreement, and upon the advice of independently selected counsel, to release fully, finally and forever all matters identified in Section 7.  In furtherance of such intention, the releases set forth in this Agreement shall be and shall remain in effect as full and complete releases notwithstanding the discovery or existence of any such additional or different claims or facts relevant hereto.  Notwithstanding the foregoing, nothing herein shall have any effect to release or otherwise impact the Parties’ obligations under the terms of this Agreement or the Confidentiality Agreement.

 

9.         Press Releases and Public Announcement.  At approximately 8:00 a.m. Eastern Daylight Time on the Effective Date, (i) the Parties shall issue a joint press release in the form attached as Exhibit A-1 hereto (the “Joint Press Release”), it being understood that Ares Management may file the Form 8-K with respect to this Agreement prior to such time, and (ii) the KA Parties shall issue a press release related to certain KA Funds in the form attached as Exhibit A-2. Subject to Sections 10 and 11, from time to time following the issuance of the Joint Press Release, the Parties or their respective Affiliates and Representatives may issue separate press releases or make other announcements or statements that relate to this Agreement or the

 

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termination of the Merger Agreement and the transactions contemplated by either of the foregoing; provided that, each of the Parties will not, and will use commercially reasonably efforts to cause their Affiliates and their and their Affiliates’ respective Representatives and Family Members not to:

 

9.1       except to the extent (i) determined to be necessary (based on advice of counsel) to comply with applicable Law, (ii) in response to legal process, required testimony or filings with a Governmental Entity, or (iii) in connection with any Action not prohibited hereby, make any public statements that are inconsistent with, or otherwise contrary to, the statements in the Joint Press Release or the talking points attached as Exhibit B hereto; or

 

9.2       make any announcements or statements that relate to this Agreement or the termination of the Merger Agreement and the transactions contemplated by either of the foregoing until 30 minutes following the issuance of the Joint Press Release (other than (i) to Persons that are bound by a confidentiality obligation with respect to such information, and have agreed not to use any such information in violation of any Law and (ii) filings under the Exchange Act, the Investment Company Act or the Advisers Act or other disclosures required by Law).

 

10.       Cooperation.  The Parties will, and will cause each of their controlled Affiliates to, cooperate and take, or cause to be taken, all commercially reasonable and lawful actions as may be necessary or appropriate to withdraw all applications, notices, petitions and filings made with, and to terminate all proceedings before, a Governmental Entity in connection with the Transactions.

 

11.       Non-Disparagement.  The Ares Parties will not, and will use commercially reasonably efforts to cause their Affiliates and their and their Affiliates’ respective Representatives and Family Members not to, disparage, or make any derogatory remarks about, any Released KA Parties.  The KA Parties will not, and will use commercially reasonably efforts to cause their Affiliates and their and their Affiliates’ respective Representatives and Family Members not to, disparage or make any derogatory remarks about, any Released Ares Parties.  The foregoing shall not be violated by truthful statements (i) determined to be necessary (based on advice of counsel) to comply with applicable Law, (ii) in response to legal process, required testimony or filings with a Governmental Entity, (iii) made in connection with any Action not prohibited hereby, or (iv) made in confidence to such Person’s Representatives.

 

12.       Independent Legal Advice.  Each Party acknowledges, warrants and represents that it has sought such independent legal advice as it deems necessary with respect to the advisability of making this Agreement and the meaning and effect of all aspects of the Agreement, and executes this Agreement with full knowledge of all rights which it may have.  Each Party represents that it enters into this Agreement freely, knowingly and voluntarily, and that the execution and delivery of the Agreement is not the result of any fraud, duress, mistake or undue influence whatsoever.

 

13.       Governing Law.  All matters relating to or arising out of this Agreement will be governed by and construed in accordance with the Laws of the State of New York, without giving effect to any choice of Law or conflict of Law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of New York.

 

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14.       Construction of Agreement.  The parties have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

 

15.       Modification. This Agreement may not be amended, supplemented, or otherwise modified except in a writing signed by the Party against whose interest such change will operate.  No waiver by any Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.  No waiver shall be valid unless such waiver is in writing and signed by the Party against whom such waiver is sought to be enforced (it being understood that a waiver signed by the Sellers’ Representative is valid against all the KA Owners, KAFA and KACALP).

 

16.       Warranty of Authority.

 

16.1     Each of the Parties represents and warrants to the other Parties the following:

 

(a)        If the Party is an individual, he or she has the power and authority to execute this Agreement on his or her own behalf, and to deliver and perform all of his or her obligations hereunder.

 

(b)        If the Party is an entity,

 

(i)                                  it is validly existing and in good standing under the Laws of the jurisdiction in which it was organized;

 

(ii)                              the person executing this Agreement has all requisite entity power and authority to execute this Agreement on the entity’s behalf, and to deliver and perform its obligations hereunder;

 

(iii)                          the execution, delivery, and performance by such Party of this Agreement is authorized by all necessary entity action on the part of such Party; and

 

(iv)                          the execution, delivery, and performance by such Party of this Agreement does not and will not violate any material provision of the applicable charter document of such Party.

 

(c)        The execution, delivery and performance by such Party of this Agreement does not and will not:

 

(i)                                  violate any material provision of federal, state, or local Law or regulation applicable to such Party, or any order, 

 

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judgment, or decree of any court or other  governmental authority binding on such Party, or

 

(ii)                              conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any contract or agreement to which such Party is a party or a violation of the rights of any third party.

 

(d)       The execution, delivery, and performance by such Party of this Agreement is the legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar Laws relating to or limiting creditors’ rights generally.

 

(e)        Such Party has not directly or indirectly transferred, assigned, or otherwise disposed of any part of, or interest in, any Released Claim.

 

16.2     The Sellers’ Representative represents and warrants to the Ares Parties the following:

 

(a)        The Sellers’ Representative has the power and authority to execute this Agreement on behalf of the KA Owners.

 

(b)        The execution, delivery, and performance by the Sellers’ Representative of this Agreement on behalf of the KA Owners have been authorized by all necessary action on the part of the Sellers’ Representative and the KA Owners.

 

(c)        The execution, delivery, and performance by the Sellers’ Representative of this Agreement is the legal, valid and binding obligation of the Sellers’ Representative and the KA Owners, enforceable against such Persons in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar Laws relating to or limiting creditors’ rights generally.

 

17.       Continued Effect.  This Agreement is binding upon, inures to the benefit of and is enforceable by the parties named herein and their respective successors.  No party hereto may assign either this Agreement or any of its or their respective rights, interests or obligations hereunder.  It is not the intention of the Parties to confer third-party beneficiary rights, and this Agreement does not confer any such rights, upon any other Person, except for each non-party Released Ares Party and each non-party Released KA Party, which shall be express third-party beneficiaries of Sections 6, 7, 8 and 11 and shall be entitled to enforce their rights thereunder to the same extent as if they were party to this Agreement.

 

18.       Survival of Confidentiality Agreement.  Notwithstanding anything in this Agreement or in the Merger Agreement to the contrary, the Confidentiality Agreement shall continue to survive and remain in full force and effect.

 

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19.       Further Assurances.  The Parties hereby agree to take such reasonable steps or execute such reasonable documents as may be necessary in the future to effectuate the terms of this Agreement.

 

20.       Counterparts.  This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart to this Agreement.

 

21.       Severability.  If any provision of this Agreement is held to be illegal, invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect.  Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

 

22.       Complete Agreement.  This Agreement (including the exhibits hereto) supersedes all prior discussions and agreements (including term sheets) among the Parties with respect to the matters covered herein and constitutes the complete and final expression and understanding of the Parties hereto as to such matters.

 

23.       Notices.  All notices, requests and other communications under this Agreement must be in writing and will be deemed to have been duly given only if (a) delivered personally against written receipt, (b) mailed by registered or certified mail, postage prepaid, return receipt requested, (c) messengered by reputable international overnight courier, fee prepaid or (d) sent by e-mail with confirmation of transmission by the transmitting equipment or no failure message is generated, to the parties hereto at the following addresses:

 

If to any of the KA Parties:

 

David Shladovsky
 1800 Avenue of the Stars, Third Floor

Los Angeles, CA 90067

	
E-mail   address:
    	
dshladovsky@kaynecapital.com
    

 

with a copy to:

 

Paul Hastings, LLP

55 Second Street, 24th Floor

San Francisco, CA 94105

	
Attention:
    	
David   Hearth
    
	
E-mail   address:
    	
davidhearth@paulhastings.com
    

 

and

 

Paul Hastings, LLP

 

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515 South Flower Street, 25th Floor

Los Angeles, CA 90015

	
Attention:
    	
Robert   A. Miller, Jr.
    
	
E-mail   address:
    	
robertmiller@paulhastings.com
    

 

If to the Ares Parties:

 

 

	
Ares Management, L.P.
   2000 Avenue of the Stars, 12th Floor
   Los Angeles, CA  90067
    
	
Attention:
    	
Michael D. Weiner
    
	
 
    	
Naseem Sagati
    
	
E-mail address:
    	
weiner@aresmgmt.com
    
	
 
    	
nsagati@aresmgmt.com
    

 

with a copy to:

 

Proskauer Rose LLP
 2049 Century Park East
 Suite 3200
 Los Angeles, CA  90067

	
Attention:
    	
Michael A. Woronoff
    
	
 
    	
Jonathan Benloulou
    
	
E-mail address:
    	
mworonoff@proskauer.com
    
	
 
    	
jbenloulou@proskauer.com
    

 

All such notices, requests and other communications will be deemed given, (i) if delivered personally as provided in this Section 23, upon delivery, (ii) if delivered by mail as provided in this Section 23 upon receipt, (iii) if delivered by overnight courier as provided in this Section 23 upon the earlier of the second Business Day following the date sent by such overnight courier and receipt and (iv) if sent by e-mail, on the date confirmation of delivery is received by the sender from the intended recipient by e-mail or no failure message is generated (in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section 23).  Any party hereto may change the address to which notices, requests and other communications hereunder are to be delivered by giving the other party hereto notice in the manner set forth herein.

 

24.       Other Miscellaneous Provisions.  The provisions of Sections 1.2 (Construction), 12.9 (Arbitration), 12.10 (Jurisdiction; Service of Process; Waiver of Jury Trial), 12.15 (Specific Performance) and 12.17 (Headings) of the Merger Agreement shall apply to this Agreement mutatis mutandis.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have approved and executed this Agreement as of the date first above written.

 

 

	
 
    	
ARES PARTIES:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ARES HOLDINGS L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
BY: ARES HOLDCO LLC, ITS   GENERAL PARTNER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
BY: ARES HOLDINGS   INC., ITS SOLE MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael D. Weiner                                               
    
	
 
    	
 
    	
Name:
    	
Michael D. Weiner
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ARES INVESTMENTS L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
BY: AI HOLDCO LLC, ITS   GENERAL PARTNER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
BY: ARES MANAGEMENT,   L.P., ITS SOLE 
   MEMBER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael D. Weiner                                               
    
	
 
    	
 
    	
Name:
    	
Michael D. Weiner
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
					

 

[Signature Page to Termination Agreement]

 

 

	
 
    	
KA PARTIES:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
KAYNE ANDERSON CAPITAL   ADVISORS, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David   Shladovsky                                               
    
	
 
    	
 
    	
Name:
    	
David Shladovsky
    
	
 
    	
 
    	
Title:
    	
General Counsel
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
KA FUND ADVISORS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Shladovsky                                               
    
	
 
    	
 
    	
Name:
    	
David Shladovsky
    
	
 
    	
 
    	
Title:
    	
General Counsel
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DAVID SHLADOVSKY,
    
	
 
    	
AS THE SELLERS’ REPRESENTATIVE,   ON HIS BEHALF
   AND ON BEHALF OF THE KA OWNERS
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Shladovsky                                               
    
					

 

[Signature Page to Termination Agreement]

 

 

	
 
    	
KAYNE ANDERSON INVESTMENT   MANAGEMENT, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:  KA   Holdings, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ David Shladovsky                                               
    
	
 
    	
 
    	
Name:
    	
David Shladovsky
    
	
 
    	
 
    	
Title:
    	
General Counsel and   Secretary
    

 

[Signature Page to Termination Agreement]

 

 

EXHIBIT A-1

 

JOINT PRESS RELEASE

 

 

EXHIBIT A-2

 

KA PARTIES PRESS RELEASE

 

 

EXHIBIT B

 

TALKING POINTS

 

 

EXHIBIT C

 

SUBSCRIPTION DOCUMENTS

 

See attached.

 

 

EXHIBIT D

 

SIDE LETTERS

 

See attached.EX-10.1

 Exhibit 10.1 

SEPARATION AND RELEASE AGREEMENT 

In consideration of the promises and mutual undertakings contained herein, and other good and valuable consideration, the
receipt and sufficiency of which the parties hereby acknowledge, the parties to this Separation and Release Agreement (the “Agreement”), Bruce G. Anderson (“Employee”) and CryoLife, Inc. (“CryoLife” or the
“Company”), hereby agree as follows: 
 1. CryoLife terminated Employee’s employment with CryoLife effective
the 8th day of September, 2015 (the “Termination Date”). 
 2. In consideration of Employee’s release of
CryoLife of any and all claims, entry into the restrictive covenants set forth below and the other covenants and undertakings herein, CryoLife agrees to take each of the following actions: 

a. Pay Employee the total gross amount of $281,200, which represents twelve (12) months’ base salary, less normal
withholdings, payable as a one-time lump sum, on January 29, 2016. 
 b. Pay Employee a lump sum in the amount
of $23,687, which represents the value of twelve (12) months of Employee’s continued coverage under CryoLife’s group medical plan pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended (“COBRA”), to
be paid on the first pay day following the Effective Date. The “Effective Date” of this Agreement will be the date following the expiration of the seven (7)-day revocation period referenced below. 

c. Provide up to twelve (12) months of outplacement services through an outplacement provider selected by Employee and
approved by the Company, in an amount not to exceed $15,000. 
 Employee acknowledges that the consideration set forth in this paragraph
shall be the sole monetary obligation that CryoLife has to him following his execution of this Agreement, and that he shall have no further claim to monies of any kind, whether representing vacation pay, bonuses, stock, or otherwise, unless such
claim is not permitted to be waived by law. 
 Notwithstanding anything to the contrary set forth above, because of his separation, Employee
shall be entitled to the benefits that accrue upon retirement pursuant to the Company’s Stock Plans and deferred compensation plans (including, for avoidance of doubt, with respect to the Stock Plans, his options granted pursuant to Option
Agreements, which shall remain exercisable, but only to the extent vested as of the Termination Date, until the earlier of the end of the applicable option term or thirty-six (36) months from the Termination Date, and otherwise in accordance
with the applicable Option Agreement). 
 All payments to Employee shall be subject to normal deductions and withholdings where applicable.
Further, the parties agree that CryoLife makes no representations or warranties to Employee with respect to the tax consequences (including but not limited to income tax consequences) contemplated by this Agreement or the payment of any benefits
hereunder, and that CryoLife has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for Employee. 

3. In consideration of the covenants from CryoLife to Employee set forth above, the receipt and sufficiency of which are
hereby acknowledged, Employee agrees to release and forever discharge CryoLife and all of its present and former officers, directors, partners, employees, agents, insurers, affiliates, attorneys, parents, subsidiaries, and representatives
(hereafter, the “Released Parties”) from any and all claims and causes of action (including but not limited to costs and attorneys’ fees) of whatever kind or nature, joint or several, under any federal, state or local statute,
ordinance or under the common law, including, but not limited to, the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with
Disabilities Act, any claim for retaliation or wrongful discharge of employment as a result of any present or future claim of whistleblower status under the Dodd-Frank Act or any analogous state statute (provided that nothing herein shall prevent
Employee from reporting any concerns that he might have that are protected activities under the Dodd-Frank Act, nor is this Agreement designed to impede such activity by Employee), and any other employment discrimination law, state or federal, as
well as any other claims based on constitutional, statutory, common law or regulatory grounds, that Employee had or has from the beginning of time up the execution of this Agreement, against the Released Parties, whether known or unknown, which are
based on acts or facts arising or occurring prior to the Effective Date of this Agreement. 

  
 1 

 a. Nothing in this Agreement shall be construed as prohibiting Employee from
making a claim with the Equal Employment Opportunity Commission or any similar or equivalent state agency or the National Labor Relations Board, or from filing a whistleblower or other report with the United States or a state Department of Labor or
other governmental administrative agency, or from assisting any third-party, by providing truthful testimony, in pursuit of such future claim, action or lawsuit of any kind. Nothwithstanding the foregoing, should Employee pursue any such
administrative claim or otherwise assist any third-party in the pursuit of such administrative claim, action or lawsuit of any kind, Employee, to the maximum extend allowed by law, agrees and acknowledges that he will not seek, and hereby waives and
forfeits, any right to recover monetary damages associated with any such claim, action or proceeding. 
 b. Employee
represents and warrants that neither Employee nor anyone acting on Employee’s behalf has filed or initiated any charge, claim or lawsuit against the Released Parties in any administrative or judicial proceeding. 

4. In further consideration of the covenants from CryoLife to Employee set forth above, the receipt and sufficiency of which
are hereby acknowledged, Employee agrees to the following: 
 a. Definitions. For the specific purpose of the
covenants contained in this Section and for all other purposes under this Agreement, certain terms are defined as follows: 

(1) “Company Business” shall mean and include the allograft cardiac or vascular tissue processing
business, the biological glue, powdered hemostat or protein hydrogel product business, and the transmyocardial revascularization business. 

(2) “Competing Business” shall mean any person or entity that is engaged in, or conducts, a business
substantially similar to the Company Business and only that portion of the business that is in competition with the Company Business. 

(3) “Confidential Information” shall mean, collectively, all “Proprietary Information” and
“Trade Secrets” of the Company. 
 (4) “Proprietary Information” shall mean all data,
formulae, processes, procedures, methods, documentation, information, records, drawings, designs, specifications, test results, evaluations, know-how, material directly related to sales processes, information risk management, tests or assays,
business, assets, products or prospects related to the Company and the Company Business, which is or was communicated to, supplied to, observed by or created by Employee, either directly or indirectly, at any time during the employment relationship,
whether or not received from the Company or from any actual or potential customer or client of the Company, or from any person with a business relationship, whether contractual or otherwise, with the Company. The term “Proprietary
Information” shall not include any information that Employee can prove: (a) was known by Employee prior to the time of employment with the Company as long as such information was not acquired, either directly or indirectly, from the
Company; (b) is or becomes publicly known through no direct or indirect act, fault or omission of Employee; (c) is or becomes part of the public domain through no direct or indirect act, fault or omission of Employee; or (d) was
received by Employee from a third party having the legal right to transmit the same without restriction as to use and disclosure and such receipt was not in connection with any business relationship or prospective business relationship with the
Company or its Affiliates; provided, however, that a combination of features shall not be deemed to be within the foregoing exceptions merely because individual features are in the public domain or otherwise within such exceptions, as previously
described, unless the combination itself is in the public domain or otherwise entirely within any one such exception. 

(5) “Territory” shall mean all international countries in which CryoLife currently does business
either directly or through distributors, the United States of America and Canada. 
 (6) “Trade
Secrets” shall mean information not generally known about the Company’s business which is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality and from which the Company derives
economic value from the fact that the information is not generally known to other persons who can obtain economic value from its disclosure or 

  
 2 

 
use, and shall include any and all Proprietary Information which may be protected as a trade secret under any applicable law, even if not specifically designated as such. Trade Secrets may
include, but are not limited to, technical or non-technical data, compilations, programs and methods, techniques, drawings, processes, financial data, lists of actual customers and potential customers, customer route books, cards or lists containing
the names, addresses, habits and business locations of past, present and prospective customers, sales reports, price lists, product formulae, methods and procedures relating to services. 

b. Acknowledgments. Employee acknowledges that: (i) the Company has expended substantial time, money, effort and
other resources to develop its goodwill, clients, business sources and relationships; (ii) the Company has a legitimate business interest in protecting the same; (iii) in connection with Employee’s employment by the Company, the
Company has introduced Employee to its customers, business sources and relationships and has expended considerable time, effort and capital to train Employee in the Company Business; (iv) by virtue of Employee’s employment with the
Company, Employee had contact with certain of the Company’s customers and business sources and relationships; (v) in Employee’s capacity, Employee may be privy to certain Confidential Information, Proprietary Information and Trade
Secrets not generally known or available to the Company’s competitors or the general public; (vi) the nature and periods of the restrictions imposed by the covenants contained in this Section are fair, reasonable, and necessary to protect
and preserve for the Company and that such restrictions will not prevent Employee from earning a livelihood; (vii) the Company would sustain great and irreparable loss and damage if Employee were in any manner to breach any of such covenants;
(viii) the Company conducts its business actively in and throughout all geographical areas included within the Territory and other persons are engaged in like and similar business in the Territory; and (ix) the Territory is reasonable
because Employee’s responsibilities were performed throughout the Territory. 
 c. Agreement Not to Compete.
Employee covenants and agrees with the Company that Employee will not at any time during the twenty-four (24) months after the Effective Date of this Agreement, either directly or indirectly perform work or services that are the same or
substantially similar to those the employee performed for CryoLife, either as an employee, owner, director, volunteer, or consultant, for any Competing Business in the Territory where Employee performed services for CryoLife. 

d. Agreement Not to Divert Employees. Employee covenants and agrees with the Company that Employee will not, within the
Territory, at any time during the twenty-four (24) months after the Effective Date of this Agreement, either directly or indirectly, solicit, entice, persuade or induce, or attempt to solicit, entice, persuade or induce any person who is
employed by the Company to terminate his or her employment or contractual arrangement with the Company. 
 e. Protection
of Confidential Information. Employee covenants and agrees that all Confidential Information (including all Proprietary Information and Trade Secrets) and all physical embodiments thereof received or developed by Employee or disclosed to
Employee while employed by the Company is confidential and is and will remain the sole and exclusive property of the Company. Employee further covenants and agrees, for so long as such information remains confidential, to hold all Confidential
Information in trust and in the strictest confidence, and will not use, reproduce, distribute, disclose or otherwise disseminate the Confidential Information or any physical embodiments thereof and in no event shall Employee take any action causing
or fail to take the action necessary in order to prevent any Confidential Information disclosed to or developed by Employee to lose its character or cease to qualify as Confidential Information. Notwithstanding anything contained herein to the
contrary, this covenant shall not limit in any manner the protection of the Company’s Trade Secrets otherwise afforded by law. 

f. Cooperation. Employee agrees to cooperate with CryoLife, during the twelve (12) months following the Effective
Date, by responding to reasonable requests by the Company for information and assistance and providing such information and/or assistance up to four (4) hours per week (the “Comp time”) for no additional consideration other than the
benefits described in Section 2 above. Employee acknowledges that such cooperation may include timely completion of an officers and directors questionnaire provided by CryoLife. 

5. Employee agrees to return all Company property in his Employee possession, custody or control immediately. Notwithstanding
anything to the contrary in this Agreement, no consideration will be payable under this Agreement until Employee has satisfied this obligation. 

  
 3 

 6. Employee represents and warrants that as of the date of execution of this
Agreement, Employee has not assigned or transferred or purported to assign or transfer any of the claims released herein. Employee hereby agrees to indemnify and hold harmless the Released Parties against, without any limitation, any and all claims
and causes of action (including, but not limited to, costs and attorneys’ fees), arising out of any such transfer or assignment. 

7. This Agreement and the covenants, representations, warranties and releases contained herein shall inure to the benefit of
and be binding upon Employee and CryoLife and each of their successors, heirs, assigns, agents, affiliates, parents, subsidiaries and representatives. 

8. This Agreement contains the entire agreement and understanding concerning the subject matter between the parties. Each
party acknowledges that no one has made any representation whatsoever not contained herein concerning the subject matter hereof, to induce the execution of this Agreement. This Agreement expressly supersedes, without limitation, any previously
executed Secrecy and Noncompetition Agreement and Change of Control Agreements between the Company and Employee. The applicable Option Agreements shall remain in effect as set forth herein. 

9. Employee acknowledges that the consideration for signing this Agreement is a benefit to which Employee would not have been
entitled without signing this Agreement. 
 10. The following information is required by the Older Workers Benefit
Protection Act of 1990 because the severance payments offered to you have been established in connection with an exit incentive program offered to a group or class of employees. 

a. Employee has the right to, and has been advised to, consult with an attorney before signing this Agreement. Employee
further acknowledges Employee’s understanding that Employee has forty-five (45) days to consider the Agreement before signing it, that Employee may revoke this Agreement within seven (7) calendar days after signing it, by delivering
written evidence of such revocation to CryoLife within that seven (7)-day period, and that this Agreement will not be effective or enforceable until expiration of that seven (7)-day revocation period. Revocation may be made by delivering written
notice of revocation to the attention of Jean Holloway, Vice President and General Counsel, at CryoLife, Inc., 1655 Roberts Boulevard, NW, Kennesaw, Georgia 30144. 

b. The class, unit, or group of individuals covered by the program includes all employees in the Executive level whose
employment was terminated during September 2015. 
 The following is a listing of the ages and job titles of employees
selected for the program and offered consideration for signing the waiver: 
  

					
	 Job Title
	  	Age	 
	 VP, US Sales & Global Mktg
	  	 	49	  
	 Sr. VP, International Sales
	  	 	69	  

 The following is a list of the ages of individuals in the same job classification or
organizational unit who were not selected for the program: 
  

					
	 Job Title
	  	Age	 
	 VP, Clinical Research
	  	 	48	  
	 Director, Human Resources
	  	 	58	  
	 VP, Research & Development
	  	 	48	  
	 VP, General Counsel
	  	 	58	  
	 Chief Accounting Officer
	  	 	45	  
	 EVP/COO/CFO
	  	 	51	  
	 Sr. VP, Ops, QA and RA
	  	 	61	  
	 VP, Physician Relations & Educ.
	  	 	73	  

  
 4 

 11. Employee agrees to refrain from making any disparaging remarks about CryoLife
or Employee’s employment at CryoLife, other than as may reasonably be necessary for fair competition or as referenced in Section 4. 

12. Miscellaneous. 

a. Severability. In the event a court of competent jurisdiction finds any provision (or subpart thereof) (including but
not limited to the covenants referenced in Section 4) to be illegal or unenforceable, the parties agree that the court shall modify the provision(s) (or subpart(s) thereof) to make the provision(s) (or subpart(s) thereof) and this Agreement
valid and enforceable to the fullest extent permitted by law. Any illegal or unenforceable provision (or subpart thereof) shall otherwise be severable and shall not affect the validity of the remainder of such provision and any other provision of
this Agreement. 
 b. Modification, Governing Law; Waiver. This Agreement can only be modified by a writing signed by
the parties, and shall be interpreted in accordance with and governed by the laws of the State of Georgia (including Georgia’s new Restrictive Covenants Act) without regard to the choice of law provisions thereof. Any dispute arising out of or
relating to this Agreement, or the construction, enforceability or breach thereof, shall be brought only in a state or federal court sitting in Cobb County, Georgia. Employee hereby expressly consents to personal jurisdiction in said courts and
waives any objections to jurisdiction and venue of said courts for the resolution of disputes as described herein. Failure to assert or act upon any breach of this Agreement shall not constitute a waiver of the right to assert a future breach of the
Agreement or any portion thereof. 
 RECEIPT: 

I acknowledge receipt of a copy of this Separation and Release Agreement. Unless and until I execute this Agreement in the
other space provided below, I have not agreed to it. 
  

							
		 	  
	 		 	                        
		 	 Signature for Purposes of Receipt Only
	 		 	Date

  
 5 

 MY SIGNATURE BELOW SIGNIFIES MY UNDERSTANDING OF AND VOLUNTARY ASSENT TO THE TERMS OF THIS AGREEMENT. I
UNDERSTAND AND ACKNOWLEDGE THAT BY SIGNING THIS AGREEMENT, I MAY BE GIVING UP VALUABLE RIGHTS. 
  

			
		 	 /s/ Bruce G. Anderson

		 	 Bruce G. Anderson

		
	 Date:
	 	 10/6/2015

  

	
	Sworn to and subscribed before me this     day of             , 2015.
	
	  

	 Notary Public

  

			
	 CryoLife, Inc.

		
	 By:
	 	 /s/ J. Patrick Mackin

		 	 J. Patrick Mackin

President and Chief Executive Officer

		
	 Date:
	 	 10/8/2015

  
 6

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