Document:

ex10-1.htm

 

Exhibit 10.1

 

19 November 2012

	
BORROWER:

	
Tucows.com Co. (Nova Scotia)

	  	  
	
GUARANTORS:

	
Corporate Guarantee signed by Tucows (Delaware) Inc, and Tucows Inc.,

	  	  
	
LENDER:

	
Bank of Montreal

 

	  	  
	
CURRENCY:

	
All amounts herein are expressed in Canadian Dollars unless otherwise specified.

	  	  
	
Credit Facility #1

	
Demand Loan Revolving (“DLR”)

	
(R)

	  
	
Amount

	
Advances under Fac. 1 & 2 not to exceed USD$14,000,000 (CAD $14,854,000 @ 1.061)

	  	  
	
Loan Purpose

	
The Facility shall  be used by the Borrower for the following:

i. To finance Permitted Acquisitions; and

 

ii. To finance repurchase of shares of the Borrower

 

Provided that the Borrower is at such time within the covenants and no event of default is occurring or will occur as a result of such a transaction.

	  	  
	
Availability

	
US Base Rate based loans

Drawdowns will be available in multiple draws limited to the loan purpose stated above in any given year. All balances outstanding under this Facility shall be fully repaid within 30 days of December 31st of each year end (that being the Company’s fiscal year end) through an equivalent advance under Facility 2.

One time funded share repurchase of up to $10,000,000 via Dutch Auction to be completed by [March 31, 2013]; at all other times, funded share repurchases are not to exceed $2,000,000 at any time within the global $14,000,000 authorization for Facilities 1 & 2.

	  	  
	
Interest Rate

	
U.S. Base Rate + 1.25%

	  	  
	
Repayment

	
Interest only payments made monthly in arrears.

	  	  
	
Standby Fees:

	
0.20%. Payable on the undrawn available aggregate under Facility 1&2. This fee is payable quarterly in arrears.

	  	  
	  	  
	
Facility #2

	
Demand Loan Revolving, Reducing (DLRR)

	  	  
	
Amount

	
Advances under Fac. 1 & 2 not to exceed USD$14,000,000 (CAD $14,854,000 @ 1.061)

	  	  
	
Loan Purpose

	
To term out acquisition advances and the Borrower’s share repurchases previously funded under Facility #1.

	  	  
	
Availability

	
Advances made annually will be for the sole reason of terming out the outstanding advances under Facility #1 within 30 days of December 31st of each year.

At the Borrower’s option by way of:

i. US Base Rate

 

ii. LIBOR with terms of 3 or 6 months subject to availability of funds with minimum draws of USD $100,000 and multiples of $50,000 thereafter. Repayment permitted only on rollover date.

 

  

  

  

19 November 2012

 

 

	
Repayment

	
Equal monthly principal payments plus interest.

	  	  
	
Voluntary Repayment

	
Loans bearing interest based on US$ Base Rate may be prepaid at any time without penalty with 1-3 days written notice. LIBOR cannot be prepaid.

	  	  
	
Amortization

	
48 months

	  	  
	
Interest Rate

	
i. US Base Rate + 1.25%

 

ii. LIBOR + 2.50%

	  	  
	
CREDIT FACILITY #3 (R)

	
Operating Demand Loan (“ODL”) &/or Commercial Letter of Credit (“CLC”)

	  	  
	
AMOUNT:

	
US$1,000,000 * 1.061 (Nominal Conversion factor) = CAD$1,061,000

	  	
CLC: Max 1 yr term (subject to renewal). Standard terms and fees to apply.

	
LOAN PURPOSE:

	
Operating Requirements

	  	  
	
AVAILABILITY:

	
To be available in Canadian or US Dollar equivalent. Not subject to Margin.

	  	  
	
REPAYMENT:

	
Direct advances are to fluctuate widely with periodic clean-up on a minimum annual basis. Interest is payable monthly in arrears.

	  	  
	
INTEREST RATE:

	
BMO Bank of Montreal U.S. Base Rate + 1.25% payable monthly in arrears.

	  	  
	
FACILITY FEES:

	
A monthly monitoring fee of $500.00 in regards to the provision of the facility. This does not include standard transaction charges for account activity.

	  	  
	  	  
	
Facility #4 (R)

	
Treasury Risk Management Facility.

	  	  
	
Amount

	
US$3,500,000 * 1.061 (Nominal Conversion factor) = CAD$3,714,000

	  	  
	
Loan Type:

	
Settlement risk line to assist with hedging US$ exposure via FEFC and / or Currency options. Maximum 18 month contracts at market rates. Proper facility parameters in place with regards to deemed risk, replacement risk, and settlement risk confirmed by FX Group BMO Capital Markets.

	  	  
	
LOAN PURPOSE:

	
To manage / hedge exposure to US Dollar currency fluctuations.

	  	  
	
REMUNERATION:

	
Priced at market rates as advised by BMO Capital Markets

	  	  
	  	  
	
SETTLEMENT RISK

	
$3,500,000 Settlement Risk line for settlement of FEFC; No draws permitted. Represents the maximum face value of maturing FEFC on any given day.

	  	  

 

Note: Applicable interest rates shall increase by 200bps upon the occurrence of and during continuance of an event of default.

Note:  All interest rates and fees shall be calculated on a 365 or 366 day basis as appropriate. All LIBOR advances shall be calculated on a 360 day year with interest payments payable the earlier of note maturity and quarterly.

 

  

  

  

19 November 2012

 

 

	
Structuring Fee

	
A fee of $25,000 shall be payable at Closing.

 

Representations and Warranties

 

Those usual and customary for transactions of this type, including but not limited to (a) confirmation of corporate status and authority, (b) no material adverse change, (c) no existing security interests (d) compliance with laws including environmental laws and regulations and other environmental matters, and (e) payment of taxes.

Consolidated financial statements of Tucows Inc. must reflect, at all times, no less than 85% of assets and EBTIDA of the borrower or its secured subsidiaries.

Conditions Precedent to Current Closing

 

	
1.       

	
Completion of amended and revised loan and account documentation;

	
2.       

	
Payment of fees and expenses;

	
3.       

	
No material adverse change since the date of the latest financial statements provided to the Lender; and

	
4.       

	
Such other conditions as the Lender may reasonably request.

 

Conditions Precedent for Funding under Facility #1

 

	
1.       

	
With respect to any acquisition:

 

	
o  

	
Description of acquired business, business rational for acquisition, timing and pro-forma covenant calculations indicating the Borrower is in compliance with all financial covenants based on the most recent quarterly financial statements both before and after making subject draw, and any other financial information the lender may require;

 

	
o  

	
Acquisitions must be accretive to EBITDA and not deemed hostile by the target;

 

	
o  

	
Any indebtedness of the target is repaid upon closing and all encumbrances discharged (subject to permitted baskets);

 

	
o  

	
First ranking security (GSA) to be provided over the assets of any target acquisition within 30 days of acquisition closing;

 

	
o  

	
Such other documents the Lender may reasonably request to ensure the Bank is not at a legal, environmental, reputational or financial risk.

 

	
2.       

	
No material adverse change in the business, operations, properties, or prospects of the Borrower taken as a whole, or in the rights and remedies of the Lender;

 

	
3.       

	
All representations and warranties being true and correct in all material respects;

 

	
4.       

	
No material adverse change;

 

	
5.        

	
Timely receipt of notice of borrowing.

 

Permitted Acquisitions

 

Acquisitions must be permitted with the prior written consent of the Bank** provided that:

 

	
i.       

	
No default or event of default exists;

 

	
ii.       

	
Acquisition is related to the Borrower’s existing lines of business (but may be in a new vertical market or new jurisdiction);

 

	
iii.       

	
Acquisition is not hostile;

 

	
iv.       

	
Borrower is in compliance with all covenants and representations and warranties under the Offer Letter and will remain in compliance as a result of the completion of the acquisition.

 

  

  

  

19 November 2012

 

 

Reporting

	
Requirements:

	

Quarterly (within 45 days of quarter end):

 

	
  

	
Internally prepared quarterly consolidated financial statements of the Tucows Inc. (includes Borrower), supported by Management Discussion and Analysis including variance analysis providing explanations for material variances between actual results and projections presented to the Bank. Signed by the Borrower quarterly compliance certificate will confirm all financial covenant positions.

Annually (within 120 days of fiscal year end):

 

	
1.       

	
Audited annual consolidated financial statements of Tucows Inc. (includes Borrower),  supported by Management Discussion and Analysis including variance analysis providing explanations for material variances between actual results and projections presented to the Bank;

 

	
2.       

	
Signed compliance certificate confirming all financial covenant positions;

 

	
3.       

	
Certified aged accounts receivable and accounts payable lists;

 

	
4.       

	
Annual consolidated business plan of Tucows Inc. (includes Borrower), for the next fiscal year, comprising of a minimum of a balance sheet, income statement operating budget, cash flow statement, capital and/or lease expenditures schedule, tax liabilities, and major assumptions utilized to be provided no later than 15 days prior to the end of the then current fiscal year.

 

	
Accounting Terms 

GAAP: 

	
Except as otherwise expressly provided herein, all terms of accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time. All calculations of the components of financial information for the purposes of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence as at the date of this Agreement and used in preparation of the consolidated financial statements of the Borrower. Upon adoption by the Borrower of International Financial Reporting Standards (IFRS), or in event of a change in GAAP, the Borrower and the Bank shall negotiate in good faith to revise (if appropriate) such ratios and covenants to give effect to the intention of the parties under this agreement at the closing date, and any new ratio or covenant shall be subject to the approval of the Bank.  In the event that such a negotiation is unsuccessful, all calculations thereafter made for the purpose of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence at the closing date.

 

	
Financial Covenants:

	
At all times, the Borrower will observe and maintain the following financial covenants based on the Borrower’s consolidated financial statements (to be calculated on a rolling 4-quarter basis unless otherwise indicated).

 

	
1.       

	
Maximum Total Funded Debt to EBITDA: 2.00:1.

	
2.       

	
Minimum Fixed Charge Coverage: 1.20:1.

	
3.       

	
Maximum Annual Capital Expenditures capped at $3,600,000 per annum, based on management forecast, and to be reviewed on an annual basis. Subject to covenant compliance both before and after such expenditures. Any additional amounts will be considered based on the Bank’s satisfactory review of the Borrower’s capital expenditure budget, to be submitted annually.

	
Definitions:

	
EBITDA = Earnings as defined in the Company’s consolidated financial statements prepared in accordance with Generally Accepted Accounting Principals (GAAP) before cash interest expense (i.e. accrued interest gets added back), taxes on earnings, depreciation and amortization, but excluding dividend, interest and extraordinary or non-recurring other income as set out in the financial statements (such latter items to be agreed-upon by BMO).

 

  

  

  

19 November 2012

 

 

	
  

	
Senior Funded Debt = the credit facilities hereunder and all interest bearing debt not subordinated to the credit facilities hereunder.  For greater clarity, Senior Funded Debt shall include, but not be limited to capital leases, guarantees and PMSIs but will exclude any settlement risk associated with forward contracts.

	
  

	
Total Funded Debt = Senior Funded Debt plus sub-debt (if applicable), but excluding investor sub-debt where rights of acceleration are prohibited until full repayment of the senior debt hereunder, as set out under an inter-creditor agreement with the senior debt lenders hereunder, and will also exclude any settlement risk associated with forward contracts.

	
  

	
Fixed Charge Coverage Ratio = EBITDA less cash taxes paid or  payable in that period, less unfunded capital expenditures, less unfunded share repurchase and less cash dividends paid and any other cash distributions, divided by the aggregate of fixed principal repayments and cash interest expenses payable in respect of Total Funded Debt.

Non-Financial Covenants:

Usual, including maintenance of insurance, payment of taxes, disposition of major assets, compliance with statutes and with environmental standards, Reporting Requirements as set out above, notices of default on a timely basis, no material judgments, access to books and records, no assumption of additional debt or guarantee obligations by the Borrower except for leases and/or purchase money security interests entered into with respect to capital expenditures to a maximum of the covenant limits hereunder in any consecutive 12-month period, and no payment of dividends.  The Borrower shall comply with all material laws (including environmental) and maintain its assets and property in good working condition and maintain satisfactory insurance.

So Long as the Borrower is indebted to the Lender, the Borrower and/or Corporate Guarantors agree that without the prior written consent of the Lender acting reasonably:

Amalgamation and Mergers. The Borrower and/or Corporate Guarantors shall not amalgamate merge or reorganize with any corporation without the prior written consent of the Lender, which consent shall not be unreasonably withheld if any contemplated amalgamation or merger meets the criteria as defined within Permitted Acquisitions.

 

Change of Control.

There shall be no change in control of the Borrower and /or Corporate Guarantors without the prior written approval of the Lender which shall not be unreasonably withheld. Notwithstanding the foregoing, changes in the ownership of the issued and outstanding shares of the company, as the case may be, shall be permitted if such changes do not affect the control exercised directly or indirectly on the Borrower and/or Corporate Guarantors.

 

Assets Subject to Security.  The Borrower and/or Corporate Guarantors shall not in any fiscal years, sell, alienate, assign, lease or otherwise dispose of any fixed asset, machinery, equipment or immovable property subject to the Security unless in the normal course of business;

Corporate Distributions. The Borrower and/or Corporate Guarantors shall not make subrogated loan principal or interest payments, dividend payments, principal payments on shareholder advances in any fiscal year if, as a result of such distributions the Financial Covenants are breached or would be by the making of such distributions which, but for the lapse of time or giving notice, or both, would constitute a breach of its Financial Covenants contemplated herein. All permitted distributions may be made annually on the basis of the most recent annual Financial Statements of the Borrower;

Negative Pledge. Except for permitted encumbrances, the Borrower and/or Corporate Guarantors shall not create, assume or permit to exit any security interest, charge or other encumbrances on any of its assets, revenues and on its properties ranking or purporting to rank prior to or pari passu with or after the Security;

Permitted Debt. The Borrower and/or Corporate Guarantors shall not incur any debt other than the Lender’s credit facilities. Any renewal, extension or refinancing of the debts mentioned in this paragraph will be permitted provided that the principal amount of such Debt shall not be increased nor shall the security granted in relation thereto be extended to cover additional property or to secure additional Debt. The Borrower and/or Guarantors shall not incur any new Debt or new operating leases if the Borrower is in breach of its Financial Covenants. If any Breach of covenants has occurred and is continuing, The Borrower and/or Corporate Guarantors may not incur any new debt including, without limitation, Subordinated Debt.

 

  

  

  

19 November 2012

Security:

Currently Held:

	
1.  

	
LF130 Ontario Security Agreement (P.P.S.A.). Signed by Tucows.com Co. PPSA file No. 637354656.

	
2.  

	
Guarantee (Guaranty) for Indebtedness of a Corporation signed by Tucows ( Delaware) Inc.

	
3.  

	
Security Agreement by Tucows ( Delaware) Inc.

	
4.  

	
Guarantee (Guaranty) for Indebtedness of a Corporation.  Signed by Tucows Inc.

	
5.  

	
Security Agreement by Tucows Inc.

	
6.  

	
Guarantee for Indebtedness of a Corporation. Signed by Mailbank Nova Scotia Co.

	
7.  

	
LF 130 General Security Agreement signed by Mailbank Nova Scotia Co.

	
8.  

	
Loan Agreement signed by Tucows.com Inc. Borrower and Bank.

	
9.  

	
LF 44 Guarantee for indebtedness of a Corporation signed by Tucows Domain Holdings Co. in favour of Tucows.com Co.

	
10.  

	
LF130 Ontario Security Agreement. Registration File No. 637507458.

	
11.  

	
Guarantee (Guaranty) Indebtedness of a Corporation. Signed by Innerwise

	
12.  

	
Security Agreement by Innerwise Inc.

	
13.  

	
Estoppel Letter from HSBC to Bank of Montreal.

	
14.  

	
Assignment of fire insurance policy.

	
15.  

	
Solicitors favourable letter of opinion.

	
16.  

	
Environmental checklist/indemnity (copy only).

	
17.  

	
Copy of final executed purchase and sale agreement.

	
18.  

	
Confirmation of ICANN Accreditation.

	
19.  

	
LF 823 U.S.Dollars base rate Loans-Promissory Note.

	
20.  

	
Executed Purchase and Sale Agreement.

	
21.  

	
Executed Offer Letter.

	
22.  

	
Letter of Acknowledgement. Tucows ( Delaware) Inc, Tucows Inc, to sign indicating current corporate guarantee to support increased advances.

	
23.  

	
Letter of Acknowledgement outlining the temporary waiver of the cap on share repurchases until March 31, 2011.

	
24.  

	
Promissory Notes in the amount of $4MM.

To be obtained:

	
1.  

	
Relevant documentation reflecting increase in corporate guarantee to $19,269M.

	
2.  

	
Guarantee in a form acceptable to the Lender for any subsidiaries not included in current security package: Ting Inc. (Delaware).

	
3.  

	
Signed updated terms sheet.

	
Expiration:

	
This term sheet shall be open for Acceptance by the Borrower until November 30, 2012.  At that time, the Lender shall have no obligation to fund the increases to Facilities 1 and 2 proposed herein.

Evidence of  obligations (noteless advances)

The Lender may, but shall not be obliged to, request the Borrower to execute and deliver from time to time such promissory notes as may be required in order to evidence its Obligations in connection with the Facilities.  The Lender shall open and maintain, in accordance with its usual practice, an account or accounts evidencing such Obligations, and the information entered in such accounts shall be deemed to be prima facie correct.

 

  

  

  

19 November 2012

 

	  	  	
Bank of Montreal

___________________________     ____________________________

Per:                                                      Per:

         Director                                               Senior Manager

This Terms and Conditions is accepted as presented

this ________ day of ________________, 2012

Tucows.com Co.

Per: ___________________________________

                                 Name/Title

Per: ___________________________________

                                 Name/TitleEX 10.20 Employment Agreement

Exhibit  10.20

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of October 1, 2012  between Inergy GP, LLC, a Delaware limited liability company (the "Company"), and Michael J. Campbell an individual ("Employee").
The Company and Employee hereby agree as follows: 
1.Employment.  Employee is being employed by the Company as the Company's Senior Vice President - Chief Financial Officer upon and subject to the terms and conditions of this Agreement.  During the term of his employment under this Agreement, Employee shall report to the Company's President (currently R. Brooks Sherman, Jr.) or to such other person or persons as the Company may designate from time to time.  Employee will begin his employment with the Company under this Agreement on October 1, 2012.
2.    Duties.  During the term of his employment under this Agreement, Employee will perform his duties hereunder at such time or times as the Company may reasonably request.  Employee's duties may be varied by the Company from time to time without violating the terms of this Agreement and shall include: (i) devoting his best efforts and his entire business time to further properly the interests of the Company to the satisfaction of the Company, (ii) being subject to the Company's direction and control at all times with respect to his activities on behalf of the Company, (iii) complying with all rules, orders, regulations, policies, practices and decisions of the Company, (iv) truthfully and accurately maintaining and preserving all records and making all reports as the Company may require, and (v) fully accounting for all monies and other property of the Company of which he may from time to time have custody and delivering the same to the Company whenever and however directed to do so.
3.    Compensation.  For all services rendered by Employee to the Company, the Company shall pay Employee a salary (the "Salary") at the annual rate of Two Hundred and Fifty Thousand Dollars ($250,000), payable in arrears in accordance with the Company's general payroll practices.  All payments and benefits provided pursuant to this Agreement are subject to income tax withholding and other applicable tax and withholding requirements. 
4.    Expenses.  The Company shall reimburse Employee for all ordinary and necessary out-of-pocket expenses incurred and paid by Employee in the course of the performance of Employee's duties pursuant to this Agreement and consistent with the Company's policies in effect from time to time with respect to travel, entertainment and other business expenses, and subject to the Company's requirements with respect to the manner of approval and reporting of such expenses.

5.    Additional Benefits.  
(a)    Employee shall be eligible for such fringe benefits, if any, by way of insurance, hospitalization and vacations normally provided to employees of the Company generally and such additional benefits as may be from time to time agreed upon in writing between Employee and the Company.  
(b)    Employee will receive cash bonuses as determined by the Company in its sole discretion, payable in such amounts and at such times as the Company may determine.
6.    Covenant Not to Disclose Confidential Information.  Employee acknowledges that during the course of his employment with the Company Employee has had and will continue to have access to and knowledge of certain information and data that the Company or any subsidiary, parent or affiliate of the Company considers confidential and that the release of such information or data to unauthorized persons or entities would be extremely detrimental to the Company.  As a consequence, Employee hereby agrees and acknowledges that he owes a duty to the Company not to disclose, and agrees that, during and after the term of his employment, without the prior written consent of the Company, he will not communicate, publish or disclose, to any person or entity anywhere or use (for his own benefit or the benefit of others) any Confidential Information (as defined below) for any purpose other than carrying out his duties as contemplated by this Agreement.  Employee will use his best efforts at all times to hold in confidence and to safeguard any Confidential Information to ensure that any unauthorized persons and entities do not gain possession of any Confidential Information and, in particular, will not permit any Confidential Information to be read, duplicated or copied.  Employee will return to the Company all originals and copies of documents and other materials, whether in printed or electronic format or otherwise, containing or derived from Confidential Information in Employee's possession or under Employee's control when the duties of Employee no longer require Employee's possession thereof, or whenever the Company requests, and in any event will return all such Confidential Information within ten days if the employment relationship with the Company is terminated for any or no reason and will not retain any copies thereof.  Employee acknowledges that Employee is obligated to protect the Confidential Information from disclosure or use even after termination of the employment relationship.  For purposes of this Agreement, the term "Confidential Information" means any information or data used by or belonging or relating to the Company or any subsidiary, parent or affiliate of the Company, or any party to whom the Company owes a duty of confidentiality that is not known generally to the industry in which the Company or any subsidiary, parent or affiliate of the Company, or any party to whom the Company owes a duty of confidentiality is or may be engaged, including, but not limited to, any and all trade secrets, proprietary data and information relating to the Company's or any subsidiary, parent or affiliate of the Company's, or any party to whom the Company owes a duty of confidentiality past, present or future business and products, price lists, customer lists, acquisition candidates, processes, procedures or standards, know‐how, manuals, hardware, software, source code, business strategies, records, marketing plans, drawings, technical information, specifications, designs, patent information, financial information, whether or not reduced to writing, or information or data that the Company or any subsidiary, parent or affiliate 

2

of the Company or any party to whom the Company owes a duty of confidentiality advises Employee should be treated as confidential information.  Confidential Information does not include any information that: (i) is rightfully known to Employee prior to Employee's employment, and independent of any disclosure or access to the information via the Company as evidenced by Employee's written records; or (ii) is or later becomes part of the public domain and known within the relevant industry through no fault of Employee.
7.    Disclosure and Assignment of Intellectual Property.
(a)    Employee agrees that the Company shall become the owner of all inventions, discoveries, developments, ideas, writings, and expressions, including, but not limited to, any and all concepts, improvements, techniques, know-how, innovations, systems, processes, machines, current or proposed products, works, information, reports, papers, logos, computer programs, designs, marketing materials, and methods of manufacture, distribution, management or other methods (whether or not reduced to writing and whether or not patentable or protectable by copyright), that Employee conceives, develops, creates, makes, perfects or reduces to practice in whole or in part while employed by the Company or within one year after termination of Employee's employment for any or no reason, and that:  (i) directly or indirectly relate to or arise out of Employee's job responsibilities for the Company or the performance of the duties of Employee's employment by the Company; (ii) result from research, development, or other activities of the Company; or (iii) relate or pertain in any way to the existing or reasonably anticipated scope, business or products of the Company or any subsidiary, parent or affiliate of the Company (collectively, the "Intellectual Property").  All of the right, title and interest in and to the Intellectual Property shall become exclusively owned by the Company or its nominee regardless of whether or not the conception, development, creation, making, perfection or reduction to practice of such Intellectual Property involved the use of the Company's time, facilities or materials and regardless of where such Intellectual Property may be conceived, made or perfected.
(b)    Employee agrees to promptly and fully disclose in writing to the Company all inventions, discoveries, developments, ideas, writings, and expressions conceived, developed, created, made, perfected or reduced to practice, in whole or in part, while employed by the Company or within one year after termination of Employee's employment for any or no reason, regardless of whether Employee believes the invention, discovery, development, writing, expression or idea should be considered Intellectual Property of the Company under any provision of this Agreement, in order to enable the Company to make a determination as to its rights with respect to the same.
(c)    Any and all information relating to Intellectual Property shall be considered Confidential Information and shall not be disclosed by Employee to any person or entity outside of the Company.
(d)    Any Intellectual Property that is the subject of copyright shall be considered a "work made for hire" within the meaning of the Copyright Act of 1976, as amended, and shall be the sole property of the Company or its nominee.  To the extent 

3

that the Company does not automatically own any such Intellectual Property as a work made for hire, Employee shall assign all right, title and interest in and to such Intellectual Property to the Company.  All right, title and interest in and to any other Intellectual Property, including, but not limited to, patent, industrial design, trademark, trade dress and trade secret rights shall be assigned and is hereby assigned exclusively to the Company or its nominee.  Employee further agrees to execute and deliver all documents and do all acts that the Company considers necessary or desirable to secure to the Company or its nominee the entire right, title and interest in and to the Intellectual Property, including, but not limited to, executing applications for any United States and/or foreign patents or copyright registrations, disclosing relevant prior art, reviewing office actions and providing technical input to assist the Company in overcoming any rejections.  Any document prepared and filed pursuant to this Section 7(d) shall be prepared and filed at the Company's expense.  Employee further agrees to cooperate with the Company as reasonably necessary to maintain or enforce the Company's rights in the Intellectual Property.  Employee hereby irrevocably appoints the President of the Company as Employee's attorney‐in‐fact with authority to execute for Employee and on Employee's behalf any and all assignments, patent or copyright applications, or other instruments and documents required to be executed by Employee pursuant to this Section 7(d), if Employee is unwilling or unable to execute same.
(e)    The Company shall have no obligation to use, attempt to protect by patent or copyright, or promote any of the Intellectual Property; provided, however, that the Company, in its sole discretion, may reward Employee for any especially meritorious contributions in any manner it deems appropriate or may provide Employee with full or partial releases as to any subject matter contributed by Employee in which the Company is not interested.
8.    Legal Proceedings to Compel Disclosure.  In the event that Employee is requested pursuant to, or required by, applicable law, regulation, or legal process, to disclose any Confidential Information or Intellectual Property, Employee shall notify the Company of such request within five days of such request being made and shall enable the Company or any subsidiary, parent or affiliate of the Company to seek an appropriate protective order.  In the event that such a protective order or other protective remedy is not obtained, Employee shall furnish only that portion of the Confidential Information or Intellectual Property that, in the opinion of Employee's counsel, is legally required and will exercise Employee's best efforts to obtain reliable assurances that confidential treatment will be accorded the Confidential Information or Intellectual Property.
9.    Covenant Not to Compete.  Employee acknowledges that during his employment with the Company he, at the expense of the Company, has been and will continue to be specially trained in the business of the Company, has established and will continue to establish favorable relations with the customers, clients and accounts of the Company or any subsidiary, parent or affiliate of the Company and has had and will continue to have access to the Intellectual Property, trade secrets and Confidential Information of the Company or any subsidiary, parent or affiliate of the Company.  Therefore, in consideration of such training and relations, and in 

4

consideration of his employment with the Company and the additional benefits provided by this Agreement, and in consideration of the restricted units awarded to Employee on the same date of this Agreement, and to further protect the Intellectual Property, trade secrets and Confidential Information of the Company or any subsidiary, parent or affiliate of the Company, Employee agrees that during the term of his employment by the Company and for a period of two (2) years from and after the voluntary or involuntary termination of such employment for any or no reason, he will not, directly or indirectly, without the express written consent of the Company, except when and as requested to do in and about the performing of his duties under this Agreement:
(a)    own, manage, operate, control or participate in the ownership, management, operation or control of, or have any interest, financial or otherwise, in or act as an officer, director, partner, manager, member, principal, employee, agent, representative, consultant or independent contractor of, or in any way assist, any individual or entity in the conduct of any business that processes, stores, transports, trades, markets or distributes natural gas or liquefied by-products of natural gas or petroleum;
(b)    divert or attempt to divert clients or customers (whether or not such persons have done business with the Company or any subsidiary, parent or affiliate of the Company once or more than once) or accounts of the Company or any subsidiary, parent or affiliate of the Company; or
(c)    entice or induce or in any manner influence any person who is or shall be in the employ or service of the Company or any subsidiary, parent or affiliate of the Company to leave such employ or service for the purpose of engaging in a business that may be in competition with any business now or at any time during the period hereof engaged in by the Company or any subsidiary, parent or affiliate of the Company.
Notwithstanding the foregoing provisions, Employee may (i) take action for, on behalf of, and at the direction of the Company pursuant to a written agreement with the Company or otherwise, and (ii) own up to 5% of the outstanding equity securities in any corporation or entity (including, but not limited to, units in a master limited partnership) that is listed upon a national stock exchange or actively traded in the over‐the‐counter market.
10.    Specific Performance.  Recognizing that irreparable damage will result to the Company in the event of the breach or threatened breach of any of the foregoing covenants and assurances by Employee contained in Sections 6, 7, 8 or 9, and that the Company's remedies at law for any such breach or threatened breach will be inadequate, the Company and its successors and assigns, in addition to such other remedies which may be available to them, shall be entitled to an injunction, including a mandatory injunction, to be issued by any court of competent jurisdiction ordering compliance with this Agreement or enjoining and restraining Employee, and each and every person and entity acting in concert or participation with him, from the continuation of such breach and, in addition thereto, he shall pay to the Company all ascertainable damages, including, but not limited to, costs and reasonable attorneys' fees sustained by the Company by reason of the breach or threatened breach of such covenants and 

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assurances.  The covenants and obligations of Employee set forth in Sections 6, 7, 8 and 9 are in addition to and not in lieu of or exclusive of any other obligations and duties of Employee to the Company, whether express or implied in fact or in law.
11.    Company Policies.  Employee agrees to affirmatively support the Company's policies and practices as they may from time to time be adopted by the Company, including, but not limited to, policies against discrimination and harassment in the workplace.
12.    Term and Termination.
(a)    Subject to earlier termination as provided in Sections 12(b), 12(c), 12(d) and 12(e), the term of Employee's employment under this Agreement will be five (5) years beginning on October 1, 2012 and will automatically be extended for consecutive one year periods thereafter unless either party elects to terminate such employment and notifies the other party of such election at least 30 days prior to the end of the then-current term.
(b)    Notwithstanding Section 12(a), Employee's employment with the Company will terminate immediately upon the death, disability or adjudication of legal incompetence of Employee, or upon the Company's ceasing to carry on its business without assigning this Agreement pursuant to Section 18 or becoming bankrupt.  For purposes of this Agreement, Employee will be deemed to be disabled when Employee has become unable, by reason of physical or mental disability, to satisfactorily perform the essential functions of his job and there is no reasonable accommodation that can be provided to enable him to perform satisfactorily those essential functions.  Such matters will be determined by, or to the reasonable satisfaction of, the Company.
(c)    Notwithstanding Section 12(a), the Company may terminate Employee's employment at any time for Cause or without Cause.  “Cause” means (i) the Employee has repeatedly failed to perform the duties assigned to him, (ii) the Employee has been convicted of a felony or misdemeanor involving moral turpitude, (iii) the Employee has engaged in acts or omissions against the Company constituting dishonesty, breach of fiduciary obligation, or intentional wrongdoing or misfeasance, (iv) the Employee has acted intentionally or in bad faith in a manner which results in a material detriment to the assets, business or prospects of the Company, (v) the Employee has been guilty of habitual absenteeism, chronic alcoholism or other form of addiction, or (vi) the Employee has breached any obligation under this Agreement.
(d)    If Employee's employment with the Company is terminated (1) as a result of the death, disability, adjudication of legal incompetence of Employee, (2) as a result of the Company ceasing to carry on its business without assigning this Agreement pursuant to Section 18, (3) as a result of the Company becoming bankrupt, (4) by the Company for Cause, or (5) by Employee for any or no reason, the Company shall pay or provide to Employee:

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(i)    such Salary as Employee has earned and not yet received through the date of such employment termination, determined on a pro rata basis based on the number of work days in the month of termination; 
(ii)    such other fringe benefits (other than any bonus, severance pay benefit or participation in the Company's 401(k) employee benefit plan) normally provided to employees of the Company as Employee has earned and not yet received through the date of such employment termination, determined on a pro rata basis based on the number of work days in the month of termination.
(e)    If Employee's employment with the Company is terminated by the Company without Cause (and not due to the death, disability, adjudication of legal incompetence of Employee, or as a result of the Company ceasing to carry on its business without assigning this Agreement pursuant to Section 18, or becoming bankrupt), the Company shall pay or provide to Employee:
(i)    the unpaid amount of Employee's Salary for the remainder of the then-current term of this Agreement, payable bi-monthly in arrears;
(ii)    such other fringe benefits (other than any bonus, severance pay benefit or participation in the Company's 401(k) employee benefit plan) normally provided to employees of the Company as Employee has earned and not yet received through the date of such employment termination, determined on a pro rata basis based on the number of work days in the month of termination.
13.    Survival of Obligations.  All obligations of Employee that by their nature involve performance, in any particular, after the expiration or termination of Employee's employment with the Company, or that cannot be ascertained to have been fully performed until after the expiration or termination of Employee's employment with the Company, shall survive the expiration or termination of this Agreement.  Except as otherwise specifically provided in this Agreement, all of the Company's obligations under this Agreement will terminate at the time this Agreement or Employee's employment with the Company is terminated for any reason.
14.    Notice.  Any notice, request, consent or communication under this Agreement is effective only if it is in writing and personally delivered or sent by certified mail, return receipt requested, postage prepaid, or by a nationally recognized overnight delivery service, with delivery confirmed, addressed as follows:
If to the Company:
Name:                        With Copy To:
Attn:  John J. Sherman            Attn: Laura L. Ozenberger
Inergy GP, LLC                Inergy GP, LLC
Two Brush Creek Blvd., Suite 200        Two Brush Creek Blvd., Suite 200
Kansas City, Missouri  64112            Kansas City, Missouri  64112

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If to Employee:
Name:                
Michael J. Campbell 
14008 Parkhill Lane
Overland Park, KS 66221

or such other persons and/or addresses as shall be furnished in writing by any party to the other party, and shall be deemed to have been given only upon its delivery in accordance with this Section 14.
15.    No Conflicts.  Employee represents and warrants to the Company that neither the execution nor delivery of this Agreement, nor the performance of Employee's obligations hereunder will conflict with, or result in a breach of, any term, condition, or provision of, or constitute a default under, any obligation, contract, agreement, covenant or instrument to which Employee is a party or under which Employee is bound, including the breach by Employee of a fiduciary duty to any former employers.
16.    Entire Agreement; Amendment; Termination of Previous Agreement.  This Agreement cancels and supersedes all previous agreements relating to the subject matter of this Agreement, written or oral, between the parties hereto (including the Employment Agreement dated May 10, 2005  between Employee and Company, as amended by the First Amendment to Employment Agreement, dated October 24, 2005, and Second Amendment dated February 1, 2010) and contains the entire understanding of the parties hereto with respect to the subject matter hereof and shall not be amended, modified or supplemented in any manner whatsoever except as otherwise provided herein or in writing signed by each of the parties hereto.  
17.    Potential Unenforceability of Any Provision.  If a final judicial determination is made that any provision of this Agreement is an unenforceable restriction against Employee, the provisions of this Agreement will be rendered void only to the extent that such judicial determination finds such provisions unenforceable, and such unenforceable provisions will automatically be reconstituted and become a part of this Agreement, effective as of the date of this Agreement, to the maximum extent in favor of the Company that is lawfully enforceable.  A judicial determination that any provision of this Agreement is unenforceable will not render the entire Agreement unenforceable, but rather this Agreement will continue in full force and effect absent any unenforceable provision to the maximum extent permitted by law.
18.    Assignment.  This Agreement is personal and not assignable by Employee but it may be assigned by the Company without notice to or consent of Employee to, and shall thereafter be binding upon and enforceable by, any affiliate of the Company and any person or entity who acquires or succeeds to substantially all of the business or assets of the Company or substantially all of the business or assets of the principal operating unit that Employee oversees or to which Employee is assigned (and such person or entity will be deemed included in the definition of the "Company" for all purposes of this Agreement) but is not otherwise assignable by the Company.

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19.    Waiver of Breach.  Failure of the Company to demand strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of the term, covenant or condition, nor will any waiver or relinquishment by the Company of any right or power hereunder at any one time or more times be deemed a waiver or relinquishment of the right or power at any other time or times.
20.    Expenses.  If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party is entitled to receive reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.
21.    Headings.  The headings of the sections of this Agreement have been inserted for convenience of reference only and do not restrict or otherwise modify any of the terms or provisions hereof.
22.    Governing Law.  This Agreement and all rights and obligations of the parties hereunder are governed by the laws of the State of Missouri applicable to agreements made and to be performed entirely within the State, including all matters of enforcement, validity and performance.
23.    Counterparts.  This Agreement may be executed in any number of counterparts, each of which are deemed to be an original and all of which constitute one agreement that is binding upon both of the parties hereto, notwithstanding that both parties are not signatories to the same counterpart.
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The parties have executed this Amended and Restated Employment Agreement as of the date set forth in the introductory clause.
INERGY GP, LLC
By: /s/ R. Brooks Sherman, Jr.                
Name:  R. Brooks Sherman, Jr. 
Title:  President 

/s/ Michael J. Campbell                
MICHAEL J. CAMPBELL 

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