Document:

Exhibit 4.2

 

	
 
    

 

PHILLIPS 66 PARTNERS LP

 

3.750% SENIOR NOTES DUE 2028

 

 

SIXTH SUPPLEMENTAL INDENTURE

 

Dated as of October 13, 2017

 

To

 

INDENTURE

 

Dated as of February 23, 2015

 

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

 

Trustee

 

 

	
 
    

 

 

CROSS-REFERENCE TABLE*

 

	
Trust Indenture Act Section
    	
 
    	
Indenture Section
    
	
310(a)(1)
    	
 
    	
8.10
    
	
(a)(2)
    	
 
    	
8.10
    
	
(a)(3)
    	
 
    	
N.A.
    
	
(a)(4)
    	
 
    	
N.A.
    
	
(a)(5)
    	
 
    	
8.10
    
	
(b)
    	
 
    	
8.10
    
	
(c)
    	
 
    	
N.A.
    
	
311(a)
    	
 
    	
8.11
    
	
(b)
    	
 
    	
8.11
    
	
(c)
    	
 
    	
N.A.
    
	
312(a)
    	
 
    	
3.05
    
	
(b)
    	
 
    	
12.03
    
	
(c)
    	
 
    	
12.03
    
	
313(a)
    	
 
    	
8.06
    
	
(b)(1)
    	
 
    	
N.A.
    
	
(b)(2)
    	
 
    	
8.06; 8.07
    
	
(c)
    	
 
    	
8.06; 12.02
    
	
(d)
    	
 
    	
8.06
    
	
314(a)
    	
 
    	
12.02; 12.05
    
	
(b)
    	
 
    	
N.A.
    
	
(c)(1)
    	
 
    	
12.04
    
	
(c)(2)
    	
 
    	
12.04
    
	
(c)(3)
    	
 
    	
N.A.
    
	
(d)
    	
 
    	
N.A.
    
	
(e)
    	
 
    	
12.05
    
	
(f)
    	
 
    	
N.A.
    
	
315(a)
    	
 
    	
8.01
    
	
(b)
    	
 
    	
8.05; 12.02
    
	
(c)
    	
 
    	
8.01
    
	
(d)
    	
 
    	
8.01
    
	
(e)
    	
 
    	
7.11
    

 

 

	
316(a) (last sentence)
    	
 
    	
3.09
    
	
(a)(1)(A)
    	
 
    	
7.05
    
	
(a)(1)(B)
    	
 
    	
7.04
    
	
(a)(2)
    	
 
    	
N.A.
    
	
(b)
    	
 
    	
7.07
    
	
(c)
    	
 
    	
3.12
    
	
317(a)(1)
    	
 
    	
7.08
    
	
(a)(2)
    	
 
    	
7.09
    
	
(b)
    	
 
    	
3.04
    
	
318(a)
    	
 
    	
12.01
    
	
(b)
    	
 
    	
N.A.
    
	
(c)
    	
 
    	
12.01
    

 

N.A. means not applicable.

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

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
ARTICLE 1
    
	
APPLICATION OF SUPPLEMENTAL INDENTURE AND CREATION   OF THE INITIAL NOTES
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Application of this   Supplemental Indenture
    	
2
    
	
Section 1.02
    	
Effect of this   Supplemental Indenture
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE 2
    
	
DEFINITIONS AND INCORPORATION
    
	
BY REFERENCE
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Definitions
    	
3
    
	
Section 2.02
    	
Other Definitions
    	
9
    
	
Section 2.03
    	
Incorporation by   Reference of TIA
    	
9
    
	
Section 2.04
    	
Rules of   Construction
    	
9
    
	
 
    
	
ARTICLE 3
    
	
THE NOTES
    
	
 
    
	
Section 3.01
    	
Form and Dating
    	
10
    
	
Section 3.02
    	
Execution and   Authentication
    	
11
    
	
Section 3.03
    	
Registrar and Paying   Agent
    	
11
    
	
Section 3.04
    	
Paying Agent to Hold Money   in Trust
    	
11
    
	
Section 3.05
    	
Holder Lists
    	
12
    
	
Section 3.06
    	
Transfer and Exchange
    	
12
    
	
Section 3.07
    	
Replacement Notes
    	
16
    
	
Section 3.08
    	
Outstanding Notes
    	
17
    
	
Section 3.09
    	
Treasury Notes
    	
17
    
	
Section 3.10
    	
Temporary Notes
    	
17
    
	
Section 3.11
    	
Cancellation
    	
18
    
	
Section 3.12
    	
Defaulted Interest
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE 4
    
	
REDEMPTION AND PREPAYMENT
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Notices to Trustee
    	
18
    
	
Section 4.02
    	
Selection of Notes to   Be Redeemed
    	
19
    
	
Section 4.03
    	
Notice of Redemption
    	
19
    
	
Section 4.04
    	
Effect of Notice of   Redemption
    	
20
    
	
Section 4.05
    	
Deposit of Redemption   or Purchase Price
    	
21
    
	
Section 4.06
    	
Notes Redeemed or   Purchased in Part
    	
21
    
	
Section 4.07
    	
Optional Redemption
    	
21
    
	
Section 4.08
    	
Mandatory Redemption
    	
22
    

 

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ARTICLE 5
    
	
COVENANTS
    
	
 
    
	
Section 5.01
    	
Payment of Notes
    	
22
    
	
Section 5.02
    	
Maintenance of Office   or Agency
    	
22
    
	
Section 5.03
    	
Reports
    	
23
    
	
Section 5.04
    	
Compliance Certificate
    	
23
    
	
Section 5.05
    	
Further Instruments and   Acts
    	
24
    
	
Section 5.06
    	
Existence
    	
24
    
	
Section 5.07
    	
Taxes
    	
24
    
	
Section 5.08
    	
Waiver of Stay,   Extension or Usury Laws
    	
24
    
	
Section 5.09
    	
Liens
    	
24
    
	
Section 5.10
    	
Limitation on   Sale-Leaseback Transactions
    	
27
    
	
Section 5.11
    	
Future Guarantors
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE 6
    
	
SUCCESSORS
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Consolidation, Merger, Conveyance   or Transfer
    	
28
    
	
Section 6.02
    	
Successor Issuer   Substituted
    	
28
    
	
 
    
	
ARTICLE 7
    
	
AMENDMENT, SUPPLEMENT AND WAIVER
    
	
 
    
	
Section 7.01
    	
Without Consent of   Holders of Notes
    	
29
    
	
Section 7.02
    	
With Consent of Holders   of Notes
    	
30
    
	
Section 7.03
    	
Limitations
    	
30
    
	
Section 7.04
    	
Compliance with Trust   Indenture Act
    	
31
    
	
Section 7.05
    	
Revocation and Effect   of Consents
    	
31
    
	
Section 7.06
    	
Notation on or Exchange   of Notes
    	
31
    
	
Section 7.07
    	
Trustee Protected
    	
31
    
	
 
    	
 
    	
 
    
	
ARTICLE 8
    
	
GUARANTEE
    
	
 
    	
 
    	
 
    
	
Section 8.01
    	
Unconditional Guarantee
    	
32
    
	
Section 8.02
    	
Limitation on   Guarantors’ Liability
    	
33
    
	
Section 8.03
    	
Release of Guarantors   from Guarantee
    	
33
    
	
 
    	
 
    	
 
    
	
ARTICLE 9
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
Section 9.01
    	
Trust Indenture Act   Controls
    	
34
    
	
Section 9.02
    	
Notices
    	
34
    
	
Section 9.03
    	
Communication by   Holders with Other Holders
    	
36
    
	
Section 9.04
    	
Certificate and Opinion   as to Conditions Precedent
    	
36
    
	
Section 9.05
    	
Statements Required in   Certificate or Opinion
    	
36
    
	
Section 9.06
    	
Rules by Trustee   and Agents
    	
36
    

 

ii

 

	
Section 9.07
    	
Legal Holidays
    	
37
    
	
Section 9.08
    	
No Recourse Against   Others
    	
37
    
	
Section 9.09
    	
Counterparts
    	
37
    
	
Section 9.10
    	
Governing Law
    	
37
    
	
Section 9.11
    	
No Adverse   Interpretation of Other Agreements
    	
37
    
	
Section 9.12
    	
Successors
    	
37
    
	
Section 9.13
    	
Severability
    	
38
    
	
Section 9.14
    	
Table of Contents,   Headings, Etc.
    	
38
    
	
Section 9.15
    	
Waiver of Jury Trial
    	
38
    
	
Section 9.16
    	
Act of Holders
    	
38
    
	
Section 9.17
    	
Judgment Currency
    	
39
    
	
Section 9.18
    	
Force Majeure
    	
40
    
	
Section 9.19
    	
FATCA
    	
40
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
FORM OF NOTE
    	
 
    

 

iii

 

This SIXTH SUPPLEMENTAL INDENTURE is dated as of October 13, 2017 (this “Supplemental Indenture”) among Phillips 66 Partners LP, a Delaware limited partnership, and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee, under the indenture, dated as of February 23, 2015, among the same parties (the “Base Indenture” and, as amended and supplemented by this Supplemental Indenture and as it may be amended or supplemented from time to time in the future, the “Indenture”).

 

The parties hereto agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined herein) of the Issuer’s 3.750% Senior Notes due 2028 (the “Notes”):

 

RECITALS OF THE ISSUER

 

The Issuer has duly authorized, executed and delivered the Base Indenture to provide for the issuance from time to time of the Issuer’s Securities, to be issued in one or more series as the Base Indenture provides.

 

Section 9.1(h) of the Base Indenture provides that the Issuer and the Trustee may enter into indentures supplemental to the Base Indenture, without the consent of any Holders of Securities, to provide for the issuance of and establish the form and terms and conditions of the Securities of any Series as permitted by Sections 2.1 and 2.2 of the Base Indenture.

 

Pursuant to Sections 2.1 and 2.2 of the Base Indenture, the Issuer desires to execute this Supplemental Indenture to establish the form and terms and conditions, and to provide for the issuance, of a series of senior notes designated as 3.750% Senior Notes due 2028 in an initial aggregate principal amount of $500,000,000.

 

From time to time subsequent to the date hereof, the Issuer may, if permitted to do so pursuant to the terms of the Indenture, the Initial Notes and the terms of its other indebtedness existing on such future date, issue additional senior notes of the same series as the Initial Notes in accordance with and pursuant to this Supplemental Indenture.

 

This Supplemental Indenture is subject to the provisions of the TIA, that are required to be a part of this Supplemental Indenture and shall, to the extent applicable, be governed by such provisions.

 

All things necessary have been done to make the Notes, when executed by the Issuer and authenticated and delivered hereunder and duly issued by the Issuer, the valid Obligations of the Issuer.  All things necessary to make this Supplemental Indenture a valid agreement of the Issuer, in accordance with its terms, have been done.

 

1

 

ARTICLE 1
 APPLICATION OF SUPPLEMENTAL INDENTURE
 AND CREATION OF THE INITIAL NOTES

 

Section 1.01                             Application of this Supplemental Indenture

 

Notwithstanding any other provision of this Supplemental Indenture, the provisions of this Supplemental Indenture, including as provided in Section 1.02 below, are expressly and solely for the benefit of the Holders of the Notes and shall not apply to any other Series of Securities that may be issued hereafter under the Base Indenture.  The Notes constitute a Series of Securities as provided in Section 2.2 of the Base Indenture.  Unless otherwise expressly specified, references in this Supplemental Indenture to specific Article numbers or Section numbers refer to Articles and Sections contained in this Supplemental Indenture, and not the Base Indenture or any other document.

 

Section 1.02                             Effect of this Supplemental Indenture

 

With respect to the Notes only, the Base Indenture shall be supplemented and amended pursuant to Section 9.1 thereof to establish the form and terms and conditions of the Notes as set forth in this Supplemental Indenture, including as follows:

 

(a)                                 Provisions of General Application and Securities.  Sections 1.2 through 1.4 and Article II of the Base Indenture are deleted and replaced in their entirety by the provisions of Articles 1 and 3, respectively, of this Supplemental Indenture;

 

(b)                                 Redemption.  The provisions of Article III of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 4 of this Supplemental Indenture;

 

(c)                                  Covenants.  The provisions of Article IV of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 5 of this Supplemental Indenture;

 

(d)                                 Successors.  The provisions of Article V of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 6 of this Supplemental Indenture;

 

(e)                                  Amendments and Waivers.  The provisions of Article IX of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 7 of this Supplemental Indenture;

 

(f)                                   Sinking Funds.  The provisions of Article X of the Base Indenture are deleted in their entirety; and

 

(g)                                  Miscellaneous Provisions.  The provisions of Article XI of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 9 of this Supplemental Indenture.

 

To the extent that the provisions of this Supplemental Indenture (including those referred to in clauses (a) through (g) above) conflict with any 

 

2

 

provision of the Base Indenture, the provisions of this Supplemental Indenture shall govern and be controlling, but solely with respect to the Notes.

 

ARTICLE 2
 DEFINITIONS AND INCORPORATION
 BY REFERENCE

 

Section 2.01                             Definitions.

 

All capitalized terms used herein and not otherwise defined below shall have the meanings ascribed thereto in the Base Indenture.  The following are additional definitions used in this Supplemental Indenture.

 

“Additional Notes” means additional Notes (other than the Initial Notes) issued under the Indenture in accordance with Section 3.02 hereof as part of the same series as the Initial Notes.

 

“Affiliate” of any specified person means any other person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified person.   For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling” and “controlled”), as used with respect to any person, shall mean the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

 

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

 

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

 

“Base Indenture” has the meaning ascribed to such term in the first paragraph of the preamble of this Supplemental Indenture.

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time.  The terms “Beneficially Owns” and “Beneficially Owned” have corresponding meanings.  For purposes of this definition, a Person shall be deemed not to Beneficially Own securities that are the subject of a stock purchase agreement, merger agreement, amalgamation agreement, arrangement agreement or similar agreement until consummation of the transactions or, as applicable, series of related transactions contemplated thereby.

 

“Clearstream” means Clearstream Banking, S.A.

 

3

 

“Code” means the U.S. Internal Revenue Code of 1986 and any successor statute thereto, in each case as amended from time to time.

 

“Comparable Treasury Issue” means the United States Treasury security or securities selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed (assuming, for this purpose, that the Notes matured on the Early Call Date) that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes being redeemed.

 

“Comparable Treasury Price” means (a) the average of the Reference Treasury Dealer Quotations for the redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (b) if the Issuer obtains fewer than four such Reference Treasury Dealer Quotations, the average of all quotations obtained.

 

“Consolidated Net Tangible Assets” means at any date of determination, the total amount of consolidated assets of the Issuer and its Subsidiaries after deducting therefrom (1) all current liabilities (excluding (a) any current liabilities that by their terms are extendable or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed and (b) current maturities of long-term debt), and (2) the value (net of any applicable reserves) of all goodwill, trade names, trademarks, patents and other like intangible assets, all as set forth, or on a pro forma basis would be set forth, on the consolidated balance sheet of the Issuer and its Subsidiaries for the most recently completed fiscal quarter, prepared in accordance with generally accepted accounting principles in the United States.

 

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

 

“Corporate Trust Office of the Trustee” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at the address set forth in Section 9.02 hereof, or such other address as the Trustee may designate from time to time by notice to the Holders and the Issuer, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Issuer).

 

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

 

“Debt” of any Person means, without duplication, (1) all indebtedness of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (2) all Obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (3) all Obligations of such Person in respect of letters of credit or other similar instruments (or reimbursement obligations with respect thereto), other than trade letters of credit and documentary letters of credit, performance bonds and other obligations issued by or for the account of such Person in the ordinary course of business, to the extent not drawn or, to the extent drawn, if such drawing is not reimbursed by the third Business Day following demand for reimbursement, (4) all Obligations of such Person to pay the deferred

 

4

 

and unpaid purchase price of property or services, except trade payables and accrued expenses incurred in the ordinary course of business, (5) all capitalized lease Obligations of such Person, (6) all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person (provided that if the Obligations so secured have not been assumed in full by such Person or are not otherwise such Person’s legal liability in full, then such Obligations shall be deemed to be in an amount equal to the greater of (a) the lesser of (i) the full amount of such Obligations and (ii) the fair market value of such assets, as determined in good faith by the board of directors of such Person, which determination shall be evidenced by resolutions of the board of directors of the General Partner, and (b) the amount of Obligations as have been assumed by such Person or which are otherwise such Person’s legal liability), and (7) all Debt of others (other than endorsements in the ordinary course of business) guaranteed by such Person to the extent of such guarantee.

 

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 3.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 3.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of the Indenture.

 

“Early Call Date” means December 1, 2027.

 

“Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.

 

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

 

“General Partner” means Phillips 66 Partners GP LLC, a Delaware limited liability company.

 

“Global Note Legend” means the legend set forth in Section 3.06(f)(1) hereof, which is required to be placed on all Global Notes issued under the Indenture.

 

“Global Notes” means each of the Global Notes deposited with or on behalf of and registered in the name of the Depository or its nominee, substantially in the form of Exhibit A hereto, and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Sections 3.01, 3.06(b), 3.06(c), 3.06(d) or 3.06(e) hereof.

 

“Guarantee” means any Obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Debt or other Obligation of any other Person and any Obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other Obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (b) entered into for purposes of assuring in any other manner the

 

5

 

obligee of such Debt or other Obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

 

“Guarantors” means any Subsidiary of the Issuer that Guarantees the Notes in accordance with the provisions of the Indenture, and their respective successors and assigns, in each case, until the Guarantee of such Person has been released in accordance with the provisions of the Indenture.

 

“Indenture” has the meaning ascribed to such term in the first paragraph of the preamble to this Supplemental Indenture.

 

“Independent Investment Banker” means one of the Reference Treasury Dealers selected by the Issuer or, if any such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing in the United States appointed by us.

 

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

 

“Initial Notes” means the $500,000,000 aggregate principal amount of Notes issued under the Indenture on the date hereof.

 

“Issuer” means Phillips 66 Partners LP, a Delaware limited partnership, until a successor replaces it and thereafter means the successor; provided, however, that, for purposes of any provision contained herein that is required by the TIA, “Issuer” shall also mean each other obligor, if any, of the Notes.

 

“Lien” means any mortgage, lien, pledge, security interest, charge, adverse claim, or other encumbrance.

 

“Maturity Date” means March 1, 2028.

 

“Notes” has the meaning ascribed to such term in the second paragraph of the preamble to this Supplemental Indenture.  The Initial Notes and any Additional Notes shall be treated as a single class for all purposes under the Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes.

 

“Obligations” means any principal, premium, if any, interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization, whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages, guarantees, and other liabilities or amounts payable under the documentation governing any Debt or in respect thereto.

 

“Officer” means the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of the General Partner.

 

6

 

“Officers’ Certificate” means a certificate signed on behalf of the Issuer by two of its Officers that meets the requirements of Section 9.05 hereof and is delivered to the Trustee.

 

“Opinion of Counsel” means a written opinion of legal counsel who is acceptable to the Trustee.  Such counsel may be an employee of or counsel to the Issuer or an Affiliate of the Issuer.

 

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

 

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

 

“principal” of a Note means the principal of such Note plus, when appropriate, the premium, if any, on, and any Additional Amounts in respect of, the Note.

 

“Principal Domestic Subsidiary” means any of the Issuer’s Subsidiaries that (i) has substantially all of its assets located in the United States, (ii) owns or leases, directly or indirectly, a Principal Property and (iii) in which the Issuer’s direct or indirect capital investment, together with the outstanding balance of (a) any loans and advances made to such Subsidiary by the Issuer or any other Subsidiary of the Issuer and (b) any Debt of such Subsidiary guaranteed by the Issuer or any other Subsidiary of the Issuer, exceeds $20,000,000.

 

“Principal Property” means, whether currently owned or leased or subsequently acquired, any pipeline, gathering system, terminal, storage facility, processing plant or other plant or facility located in the United States of America or any territory or political subdivision thereof owned or leased by the Issuer or any of its Subsidiaries and used in the transportation, distribution, terminalling, gathering, treating, processing, marketing or storage of crude oil, natural gas, natural gas liquids and propane and refined petroleum products except (1) any property or asset consisting of inventories, furniture, office fixtures and equipment (including data processing equipment), vehicles and equipment used on, or useful with, vehicles (but excluding vehicles that generate transportation revenues) and (2) any such property or asset, plant or terminal which, in the good faith opinion of the board of directors of the General Partner as evidenced by resolutions of the board of directors of the General Partner, is not of material importance to the total business conducted by the Issuer and its Subsidiaries, taken as a whole

 

“Reference Treasury Dealer” means each of (a) Citigroup Global Markets Inc., Scotia Capital (USA) Inc. and TD Securities (USA) LLC or their respective affiliates or successors (provided, however, that if any shall cease to be a primary U.S. Government securities dealer in The City of New York (a “Primary Treasury Dealer”), the Issuer will substitute another Primary Treasury Dealer), and (b) any other Primary Treasury Dealer selected by the Issuer.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Issuer, of the bid and ask prices for the Comparable Treasury Issue (expressed in each case as a percentage of its

 

7

 

principal amount) quoted in writing to us by such Reference Treasury Dealer as of 3:30 p.m., New York time, on the third business day preceding the redemption date.

 

“Revolving Credit Facility” means the Credit Agreement, dated as of June 7, 2013, among Phillips 66 Partners LP, Phillips 66 Partners Holdings LLC, JPMorgan Chase Bank, N.A., as administrative agent, The Royal Bank of Scotland PLC and DNB Bank ASA, New York Branch, as co-syndication agents, Mizuho Corporate Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd. and PNC Bank, National Association, as co-documentation agents, and each of RBS Securities Inc., DNB Markets, Inc., Mizuho Corporate Bank, The Bank of Tokyo-Mitsubishi UFJ, Ltd. and PNC Capital Markets LLC, as joint lead arrangers and book runners, and the other commercial lending institutions parties thereto, as amended, restated, refinanced, replaced or refunded from time to time.

 

“Sale-Leaseback Transaction” means the sale or transfer by the Issuer or any Principal Domestic Subsidiary of any Principal Property to a Person (other than the Issuer or a Principal Domestic Subsidiary) and the taking back by the Issuer or any Principal Domestic Subsidiary, as the case may be, of a lease of such Principal Property, other than (1) temporary leases for a term, including renewals at the option of the lessee, of not more than three years, (2) leases between the Issuer and a Subsidiary of the Issuer or between Subsidiaries of the Issuer, and (3) leases of Principal Property executed by the time of, or within 12 months after the latest of, the acquisition, the completion of construction, repair or improvement, or the commencement of commercial operation of the Principal Property.

 

“SEC” means the Securities and Exchange Commission.

 

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

 

“Series” or “Series of Securities” means each series of debentures, notes or other debt instruments of the Issuer created pursuant to Sections 2.1 and 2.2 of the Base Indenture.

 

“Subsidiary” means, as to any Person, (1) any corporation, association or other business entity (other than a partnership or limited liability company) of which more than 50% of the outstanding capital stock having ordinary voting power is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or (2) any general or limited partnership or limited liability company, (a) the sole general partner or member of which is the Person or a Subsidiary of the Person or (b) if there is more than one general partner or member, either (i) the only managing general partners or managing members of such partnership or limited liability company are such Person or Subsidiaries of such Person or (ii) such Person owns or controls, directly or indirectly, a majority of the outstanding general partner interests, member interests or other voting equities of such partnership or limited liability company, respectively.

 

“Supplemental Indenture” has the meaning ascribed to such term in the first paragraph of the preamble of this Supplemental Indenture.

 

“Treasury Yield” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a

 

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percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.

 

“Trustee” means The Bank of New York Mellon Trust Company, N.A., until a successor replaces it in accordance with the applicable provisions of the Indenture and thereafter means the successor serving hereunder.

 

Section 2.02                             Other Definitions.

 

	
Term
    	
 
    	
Defined in
   Section
    	
 
    
	
“Authentication   Order”
    	
 
    	
Section 3.02
    	
 
    
	
“DTC”
    	
 
    	
Section 3.03
    	
 
    
	
“FATCA”
    	
 
    	
Section 9.19
    	
 
    
	
“Judgment Currency”
    	
 
    	
Section 9.17
    	
 
    
	
“Paying Agent”
    	
 
    	
Section 3.03
    	
 
    
	
“Registrar”
    	
 
    	
Section 3.03
    	
 
    
	
“Required Currency”
    	
 
    	
Section 9.17
    	
 
    

 

Section 2.03                             Incorporation by Reference of the TIA.

 

Whenever the Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of the Indenture.  The following TIA terms used in the Indenture have the following meanings:

 

“Commission” means the SEC;

 

“indenture securities” means the Notes;

 

“indenture security holder” means a Holder;

 

“indenture to be qualified” means the Indenture;

 

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

 

“obligors” on the indenture securities means the Issuer and any successor obligor upon the Notes.

 

All other terms used in the Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise defined herein, are used herein as so defined.

 

Section 2.04                             Rules of Construction.

 

Unless the context otherwise requires:

 

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

 

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

 

(c)                                  “or” is not exclusive;

 

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

 

(e)                                  “will” shall be interpreted to express a command;

 

(f)                                   “including” shall be interpreted to mean “including, without limitation,” and the use of the word “including” followed by specific examples shall not be construed as limiting the meaning of the general wording preceding it; and

 

(g)                                  provisions apply to successive events and transactions.

 

ARTICLE 3
 THE NOTES

 

Section 3.01                             Form and Dating.

 

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

 

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

 

(b)                                 Global Notes.  Notes issued in global form will be substantially in the form of Exhibit A (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto).  Notes issued in definitive form will be substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto).  Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 3.06 hereof.

 

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Section 3.02                             Execution and Authentication.

 

At least one Officer must sign the Notes for the Issuer by manual, facsimile or electronically transmitted signature.

 

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.

 

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

 

The Trustee will, upon receipt of a written order of the Issuer signed by an Officer of the Issuer (an “Authentication Order”), authenticate Notes for original issue that may be validly issued under the Indenture, including any Additional Notes.  The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Issuer pursuant to one or more Authentication Orders, except as provided in Section 3.07 hereof.

 

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes.  An authenticating agent may authenticate Notes whenever the Trustee may do so.  Each reference in the Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer.

 

Section 3.03                             Registrar and Paying Agent.

 

The Issuer will maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”).  The Registrar will keep a register of the Notes and of their transfer and exchange.  The Issuer may appoint one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent.  The Issuer may change any Paying Agent or Registrar without notice to any Holder.  The Issuer will notify the Trustee in writing of the name and address of any Agent not a party to the Indenture.  The Issuer or any of its Subsidiaries may act as Paying Agent or Registrar.

 

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

 

The Issuer initially appoints the Trustee to act as the Registrar and Paying Agent (at its office in Houston, Texas indicated in the definition of Corporate Trust Office of the Trustee in Section 2.01 hereof) and to act as Custodian with respect to the Global Notes.

 

Section 3.04                             Paying Agent to Hold Money in Trust.

 

The Issuer will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, or premium or interest, if any, on, the Notes, and

 

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

 

Section 3.05                             Holder Lists.

 

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

 

Section 3.06                             Transfer and Exchange.

 

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

 

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

 

(2)                                 the Issuer, at its option but subject to DTC’s requirements, determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and deliver a written notice to such effect to the Trustee; or

 

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

 

Upon the occurrence of the preceding events in (1), (2) or (3) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee.  Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 3.07 and 3.10 hereof.  Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 3.06 or Section 3.07 or Section 3.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note.  A Global Note may not

 

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be exchanged for another Note other than as provided in this Section 3.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 3.06(b) hereof.

 

(b)                                 Transfer and Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of the Indenture and the Applicable Procedures.

 

(1)                                 Transfer of Beneficial Interests in the Same Global Note.  Beneficial interests in any Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Global Note.  No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 3.06(b)(1).

 

(2)                                 All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 3.06(b)(1), the transferor of such beneficial interest must deliver to the Registrar either:

 

(A)                               both:

 

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

 

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

 

(B)                               both:

 

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

 

(ii)                                  instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect such transfer or exchange referred to in clause (1) above.

 

(c)                                  Transfer and Exchange of Beneficial Interests in Global Notes to Definitive Notes. If any holder of a beneficial interest in a Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the

 

13

 

conditions set forth in Section 3.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 3.06(g) hereof, and the Issuer will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount.  Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 3.06(c) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant.  The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered.

 

(d)                                 Transfer and Exchange of Definitive Notes for Beneficial Interests.  Other than following an exchange of beneficial interest in a Global Note for Definitive Notes as contemplated by Section 3.06(a)(2), a Holder of a Definitive Note may exchange such Note for a beneficial interest in a Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Global Note at any time.  Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Global Notes.

 

(e)                                  Transfer and Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 3.06(e), the Registrar will register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing.  A Holder of Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of a Definitive Note.  Upon receipt of a request to register such a transfer, the Registrar shall register the Definitive Note pursuant to the instructions from the Holder thereof.

 

(f)                                   Legends.  In addition to the legend appearing on the face of the form of the Notes in Exhibit A hereto relating to original issue discount, the following legend will appear on the face of all Global Notes and Definitive Notes issued under the Indenture unless specifically stated otherwise in the applicable provisions of the Indenture.

 

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

 

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A

 

14

 

SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

 

(g)                                  Cancellation and/or Adjustment of Global Notes.  At such time as all beneficial interests in a particular Global Note have been exchanged for beneficial interests in another Global Note or Definitive Notes, or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 3.11 hereof.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

(h)                                 General Provisions Relating to Transfers and Exchanges.

 

(1)                                 To permit registrations of transfers and exchanges, the Issuer will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 3.02 hereof or at the Registrar’s request.

 

(2)                                 No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such

 

15

 

transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 3.10, 4.06 and 7.06 hereof).

 

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

 

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

 

(5)                                 Neither the Registrar nor the Issuer will be required:

 

(A)                               to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 4.02 hereof and ending at the close of business on the day of selection;

 

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

 

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

 

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

 

(7)                                 The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 3.02 hereof.

 

(8)                                 All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 3.06 to effect a registration of transfer or exchange may be submitted by facsimile or electronic image scan.

 

Section 3.07                             Replacement Notes.

 

If any mutilated Note is surrendered to the Trustee or the Issuer and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuer will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are met.  If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to

 

16

 

protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced.  The Issuer may charge for its expenses in replacing a Note.

 

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

 

Section 3.08                             Outstanding Notes.

 

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 3.08 as not outstanding.  Except as set forth in Section 3.09 hereof, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note; however, Notes held by the Issuer or a Subsidiary of the Issuer shall not be deemed to be outstanding for purposes of Section 4.07(a) hereof.

 

If a Note is replaced pursuant to Section 3.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.

 

If the principal amount of any Note is considered paid under Section 5.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

 

If the Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, by 11 a.m., New York City time, on a redemption date or other maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.

 

Section 3.09                             Treasury Notes.

 

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

 

Section 3.10                             Temporary Notes.

 

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

 

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

 

Section 3.11                             Cancellation.

 

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

 

Section 3.12                             Defaulted Interest.

 

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

 

Section 3.13                             CUSIP Numbers.

 

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

 

ARTICLE 4
 REDEMPTION AND PREPAYMENT

 

Section 4.01                             Notices to Trustee.

 

If the Issuer elects to redeem Notes pursuant to the optional redemption provisions of Section 4.07 hereof, it must furnish to the Trustee, at least five Business Days prior to the giving of notice of a redemption, an Officers’ Certificate setting forth:

 

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

 

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(b)                                 the redemption date;

 

(c)                                  the principal amount of Notes to be redeemed;

 

(d)                                 the redemption price (if then determined and otherwise the method of determination); and

 

(e)                                  the CUSIP number of the Notes to be redeemed.

 

Section 4.02                             Selection of Notes to Be Redeemed.

 

If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption on a pro rata basis unless otherwise required by law (or, in the case of Notes issued in global form pursuant to Article 3 hereof, by such method as DTC or its nominee or successor may require or, where such nominee or successor is the trustee, a method that most nearly approximates pro rata selection as the trustee deems fair and appropriate unless otherwise required by law); provided, that no partial redemption of any Note will occur if such redemption would reduce the principal amount of such Note to less than $2,000.

 

If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption shall become due on the date fixed for redemption. Unless the Partnership defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the Notes or portions of the Notes called for redemption.

 

The Trustee will promptly notify the Issuer in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed.  Notes and portions of Notes selected will be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder shall be redeemed.  Except as provided in the preceding sentence, provisions of the Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

 

Section 4.03                             Notice of Redemption.

 

At least 30 days but not more than 60 days before a redemption date, the Issuer will mail or cause to be mailed by first class mail (or sent electronically if DTC is the recipient) a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture pursuant to Article 9 hereof.

 

Any such redemption may, at the Issuer’s discretion, be subject to one or more conditions precedent. If such redemption is subject to the satisfaction of one or more conditions precedent, the related notice shall describe each such condition, and if applicable, shall state that, in the Issuer’s discretion, the date of redemption may be delayed until such time as any or all such

 

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conditions shall be satisfied or waived (provided that in no event shall such date of redemption be delayed to a date later than 60 days after the date on which such notice was mailed or sent), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied or waived by the date of redemption, or by the date of redemption as so delayed.

 

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

 

(a)                                 the redemption date;

 

(b)                                 the redemption price (if then determined and otherwise the method of determination);

 

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

 

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

 

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

 

(f)                                   that, unless the Issuer defaults in making such redemption payment, interest on Notes or portions thereof called for redemption ceases to accrue on and after the redemption date;

 

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

 

(h)                                 the CUSIP or ISIN number, if any; and

 

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

 

At the Issuer’s request, the Trustee will give the notice of redemption in the Issuer’s names and at the Issuer’s expense; provided, however, that the Officers’ Certificate delivered to the Trustee pursuant to Section 4.01 hereof requests that the Trustee give such notice and sets forth the information to be stated in such notice as provided in the preceding paragraph.

 

Section 4.04                             Effect of Notice of Redemption.

 

Once notice of redemption is mailed in accordance with Section 4.03 hereof, Notes called for redemption become irrevocably due and payable (subject to the provisions of the second paragraph of Section 4.03) on the redemption date at the redemption price.

 

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Section 4.05                             Deposit of Redemption or Purchase Price.

 

No later than 11:00 a.m., New York City time, on the redemption or purchase date, the Issuer will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of, and accrued interest, if any, on all Notes to be redeemed or purchased on that date.  The Trustee or the Paying Agent will promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest, if any, on all Notes to be redeemed or purchased.

 

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

 

Section 4.06                             Notes Redeemed or Purchased in Part.

 

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

 

Section 4.07                             Optional Redemption.

 

(a)                                 At any time prior to the Early Call Date, the Issuer may on any one or more occasions redeem the Notes, in whole or in part, at a redemption price, as determined by the Issuer, equal to the greater of:

 

(1)                                 100% of the principal amount of the Notes to be redeemed; or

 

(2)                                 the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed that would be due if such Notes matured on the Early Call Date but for the redemption (exclusive of any portion of the payments of interest accrued to the date of redemption), discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 25 basis points,

 

in each case, together with accrued but unpaid interest thereon to, but not including, the redemption date.

 

(b)                                 Except pursuant to Section 4.07(a), the Notes will not be redeemable at the Issuer’s option prior to the Early Call Date.

 

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(c)                                  On and after the Early Call Date, the Issuer may on any one or more occasions redeem all or a part of the Notes at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued but unpaid interest thereon to, but not including, the redemption date.

 

(d)                                 Any redemption pursuant to this Section 4.07 shall be made pursuant to the provisions of Sections 4.01 through 4.06 hereof.

 

Section 4.08                             Mandatory Redemption.

 

The Issuer is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

ARTICLE 5
 COVENANTS

 

Section 5.01                             Payment of Notes.

 

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

 

The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium at a rate that is equal to the then applicable interest rate on the Notes to the extent lawful; the Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest, if any (without regard to any applicable grace period), at the same rate to the extent lawful.

 

Section 5.02                             Maintenance of Office or Agency.

 

The Issuer will maintain in Houston, Texas an office or agency (which may be an office of the Trustee or an affiliate of the Trustee) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and the Indenture may be served.  The Issuer will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Issuer fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

 

The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission will in any manner relieve the Issuer of its obligation to maintain an office or agency in Houston, Texas for such purposes.  The Issuer will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

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Section 5.03                             Reports.

 

(a)                                 So long as any Notes are outstanding, the Issuer shall:

 

(1)                                 during such time as it is subject to the reporting requirements of the Exchange Act, file with the Trustee, within 30 days after it files the same with the SEC, copies of the annual reports and the information, documents and other reports that it is required to file with the SEC pursuant to the Exchange Act; and

 

(2)                                 during such time as it is not subject to the reporting requirements of the Exchange Act, file with the Trustee, within 30 days after it would have been required to file the same with the SEC, financial statements, including any notes thereto (and with respect to annual reports, an auditors’ report by a firm of established national reputation) and a Management’s Discussion and Analysis of Financial Condition and Results of Operations, both comparable to what it would have been required to file with the SEC had it been subject to the reporting requirements of the Exchange Act.

 

(b)                                 Notwithstanding the foregoing, reports, information and documents filed with the SEC via the EDGAR system will be deemed to be delivered to the Trustee as of the time of such filing via EDGAR for purposes of this Section 5.03, provided, that the Trustee shall have no responsibility to determine if such filing has occurred.

 

(c)                                  Any and all Defaults or Events of Default arising from a failure to furnish or file in a timely manner a report or certification required by this Section 5.03 shall be deemed cured (and the Issuer shall be deemed to be in compliance with this Section 5.03) upon furnishing or filing such report or certification as contemplated by this Section 5.03 (but without regard to the date on which such report or certification is so furnished or filed); provided that such cure shall not otherwise affect the rights of the Holders under Article 7 of the Base Indenture if the principal, premium, if any, and interest have been accelerated in accordance with the terms of the Indenture and such acceleration has not been rescinded or cancelled prior to such cure.

 

(d)                                 Delivery of any reports, information and documents to the Trustee, including pursuant to Section 5.03, is for informational purposes only and the Trustee’s receipt of such shall not constitute actual or constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants pursuant to Article 5 hereof (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

Section 5.04                             Compliance Certificate.

 

(a)                                 The Issuer shall, so long as any Notes are outstanding, deliver to the Trustee, within 120 days after the end of each fiscal year of the Issuer,  a statement signed by an Officer, which need not constitute an Officers’ Certificate, complying with TIA §314(a)(4) and stating that in the course of performance by the signing Officer of his or her duties as such Officer, he or she would normally obtain knowledge of the keeping, observing, performing and fulfilling by the Issuer of its obligations under the Indenture, and further stating that to the best of his or her knowledge the Issuer has kept, observed, performed and fulfilled each and every

 

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covenant contained in the Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which such Officer may have knowledge and what action the Issuer is taking or proposes to take with respect thereto).

 

(b)                                 The Issuer will, so long as any Notes are outstanding, deliver to the Trustee, within 30 days of any Officer becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action the Issuer is taking or proposes to take with respect thereto.

 

Section 5.05                             Further Instruments and Acts.

 

The Issuer shall, upon request of the Trustee, execute and deliver such further instruments and do such further acts as may reasonably be necessary or proper to carry out more effectually the purposes of the Indenture.

 

Section 5.06                             Existence.

 

Subject to the provisions of Article VI, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence and all rights (charter and statutory) and franchises of the Issuer, provided that the Issuer shall not be required to preserve any such right or franchise if the Issuer shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer.

 

Section 5.07                             Taxes.

 

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

 

Section 5.08                             Waiver of Stay, Extension and Usury Laws.

 

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

 

Section 5.09                             Liens.

 

(a)                                 The Issuer will not, and will not permit any of its Principal Domestic Subsidiaries to, issue, assume or guarantee any Debt for borrowed money secured by any Lien upon any Principal Property of the Issuer or any of its Principal Domestic Subsidiaries, or upon any equity interests of any Principal Domestic Subsidiary, whether such Principal Property is, or

 

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equity interests are, owned on or acquired after the date of the Indenture, unless the Notes then outstanding are equally and ratably secured by such Lien for so long as any such Debt is so secured, other than:

 

(1)                                 (a) Liens on assets (including improvements and accession thereto and proceeds thereof) existing at the time of the acquisition thereof and (b) conditional sales agreements or other title retention agreements and leases in the nature of title retention agreements with respect to any property hereafter acquired, and any additions thereto, proceeds thereof and property in replacement or substitution thereof, so long as no such Lien shall extend to or cover any other property of the Issuer or such Principal Domestic Subsidiary;

 

(2)                                 Liens upon any property of the Issuer or any Principal Domestic Subsidiary or any equity interests of any Principal Domestic Subsidiary existing as of the date of the issuance of the Initial Notes;

 

(3)                                 Liens upon the property or any equity interests of any entity, which Liens existed at the time such entity became a Subsidiary of the Issuer; provided, however, that such Liens only encumber the property or assets of such entity at the time such entity becomes a Subsidiary of the Issuer, and any additions thereto, proceeds thereof and property or assets in replacement or substitution thereof;

 

(4)                                 Liens upon the property or assets of any entity at the time such entity is merged into or consolidated with the Issuer or any Subsidiary of the Issuer or at the time of a sale, lease or other disposition of the properties of an entity (or division thereof) as an entirety or substantially as an entirety to the Issuer or a Subsidiary of the Issuer; provided, however, that such Liens only encumber such entity or the property or assets of such entity, as applicable, at the time of such merger, consolidation or sale, lease or other disposition, and any additions thereto, proceeds thereof and property or assets in replacement or substitution thereof;

 

(5)                                 Liens for taxes or assessments or other governmental charges or levies relating to amounts that are not yet delinquent or are being contested in good faith;

 

(6)                                 pledges or deposits to secure: (a) any governmental charges or levies; (b) obligations under workers’ compensation laws, unemployment insurance and other social security legislation; (c) performance in connection with bids, tenders, contracts (other than contracts solely for the payment of money) or leases to which the Issuer or any Principal Domestic Subsidiary is a party; (d) public or statutory obligations of the Issuer or any Principal Domestic Subsidiary; and (e) surety, stay, appeal, indemnity, customs, performance or return-of-money bonds or pledges or deposits in lieu thereof;

 

(7)                                 builders’, materialmen’s, mechanics’, carriers’, warehousemen’s, workers’, repairmen’s, operators’, landlords’ or other similar Liens, in the ordinary course of business;

 

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(8)                                 Liens created by or resulting from any litigation or proceeding that at the time is being contested in good faith by appropriate proceedings, including Liens relating to judgments thereunder as to which the Issuer or any Principal Domestic Subsidiary has not exhausted its appellate rights;

 

(9)                                 Liens on deposits or customary netting or offset provisions required by any Person with whom the Issuer or any Principal Domestic Subsidiary enters into forward contracts, futures contracts, swap agreements or other commodities contracts in the ordinary course of business and in accordance with established risk management policies and Liens in connection with leases (other than capital leases) made, or existing on property acquired, in the ordinary course of business;

 

(10)                          easements (including, without limitation, reciprocal easement agreements and utility agreements), zoning restrictions, rights-of-way, covenants, consents, reservations, encroachments, variations and other restrictions on the use of property or minor irregularities in title thereto, charges or encumbrances (whether or not recorded) affecting the use of real property and which are incidental to, and do not materially impair the use of such property in the operation of the business of the Issuer and its Subsidiaries, taken as a whole, or the value of such property for the purpose of such business;

 

(11)                          Liens in favor of the United States of America, any State, any foreign country or any department, agency or instrumentality or political subdivision of any such jurisdiction, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the property subject to such Liens, including, without limitation, Liens to secure Debt of the pollution control or industrial revenue bond type;

 

(12)                          Liens on assets (a) securing all or any portion of the cost of acquiring, constructing, improving, developing, repairing or expanding such assets or (b) securing Debt incurred prior to, at the time of, or within 12 months after the later of the acquisition, the completion of construction, improvement, development, repair or expansion or the commencement of commercial operations of such assets, for the purpose (in the case of this clause (b)) of (x) financing all or any part of the purchase price of such assets or (y) financing all or any part of the cost of construction, improvement, development, repair or expansion of any such assets;

 

(13)                          Liens in favor of the Issuer, one or more Principal Domestic Subsidiaries, one or more wholly owned Subsidiaries of the Issuer or any combination of the foregoing;

 

(14)                          the replacement, extension or renewal (or successive replacements, extensions or renewals), as a whole or in part, of any Lien, or of any agreement, referred to in clauses (1) through (13) above, or the replacement, extension or renewal of the Debt secured thereby (not exceeding the principal amount of Debt secured thereby, other than to provide for the payment of any underwriting or other fees related to any such

 

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replacement, extension or renewal, as well as any premiums owed on and accrued and unpaid interest payable in connection with any such replacement, extension or renewal); provided that such replacement, extension or renewal is limited to all or a part of the same property that secured the Lien replaced, extended or renewed (plus improvements thereon or additions or accessions thereto); or

 

(15)                          any Lien not excepted by the foregoing clauses; provided that immediately after the creation or assumption of such Lien the aggregate principal amount of Debt of the Issuer or any Principal Domestic Subsidiary secured by all Liens created or assumed under the provisions of this clause (15), together with all net sale proceeds from any Sale-Leaseback Transactions entered into pursuant Section 5.10(b) or 5.10(c) (reduced by the amounts applied pursuant to Section 5.10(c)) shall not exceed an amount equal to 15% of Consolidated Net Tangible Assets for the fiscal quarter that was most recently completed prior to the creation or assumption of such Lien.

 

(b)                                 Notwithstanding the foregoing, for purposes of making the calculation set forth in clause (a)(15) of this Section 5.09, with respect to any such secured Debt of a non-wholly-owned Principal Domestic Subsidiary of the Issuer with no recourse to the Issuer or any wholly owned Principal Domestic Subsidiary thereof, only that portion of the aggregate principal amount of such secured Debt reflecting the Issuer’s pro rata ownership interest in such non-wholly-owned Principal Domestic Subsidiary shall be included in calculating compliance with this Section 5.09.

 

Section 5.10                             Limitation on Sale-Leaseback Transactions.

 

The Issuer shall not, and shall not permit any of its Principal Domestic Subsidiaries to, engage in a Sale-Leaseback Transaction, unless:

 

(a)                                 the Sale-Leaseback Transaction occurs within one year from the date of acquisition of the relevant Principal Property or the date of the completion of construction, development or substantial repair or improvement or commencement of full operations on such Principal Property, whichever is later;

 

(b)                                 the Issuer or such Principal Domestic Subsidiary would be entitled under Section 5.09 to incur Debt secured by a Lien on the Principal Property subject to the Sale-Leaseback Transaction in a principal amount equal to or exceeding the net sale proceeds from such Sale-Leaseback Transaction without equally and ratably securing the notes; or

 

(c)                                  the Issuer or such Principal Domestic Subsidiary, within a one year period after such Sale-Leaseback Transaction, applies or causes to be applied an amount equal to all or a portion of the net sale proceeds from such Sale-Leaseback Transaction (with any such amount not being so designated to be permitted as set forth in clause (b) of this Section 5.10) to (1) the prepayment, repayment, redemption or retirement of any Debt of the Issuer or any of its Subsidiaries that is not by its terms subordinated to the notes (x) for borrowed money or (y) evidenced by bonds, debentures, notes or other similar instruments, or (2) the acquisition, construction, improvement, repair or expansion of one or more Principal Properties.

 

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Section 5.11                             Future Guarantors.

 

As of the date of this Supplemental Indenture, the Notes shall not be Guaranteed by any of the Issuer’s Subsidiaries. If, after the date of this Supplemental Indenture, any of the Issuer’s Subsidiaries (other than Phillips 66 Partners Holdings LLC) Guarantees, becomes a borrower or guarantor under, or grants any Lien to secure any Obligations pursuant to, the Revolving Credit Facility, then the Issuer shall cause such Subsidiary to become a Guarantor by executing a supplement to the Indenture and delivering such supplement to the Trustee promptly (but in any event, within 30 days of the date on which it guaranteed or incurred such Obligations or granted such Lien, as the case may be).

 

ARTICLE 6
 SUCCESSORS

 

Section 6.01                             Consolidation, Merger, Conveyance or Transfer.

 

(a)                                 The Issuer may not consolidate with or merge with or into any other Person, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets and the properties or assets of its Subsidiaries (taken as a whole with the properties or assets of the Issuer) to another Person in one or more related transactions, unless:

 

(1)                                 either: (a) in the case of a merger or consolidation, the Issuer is the surviving entity; or (b) the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition has been made is a Person formed, organized or existing under the laws of the United States, any state thereof or the District of Columbia;

 

(2)                                 the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or the Person to which such sale, assignment, transfer, lease, conveyance or other disposition has been made expressly assumes all of the Issuer’s Obligations under the Notes and the Indenture, including the Issuer’s Obligation to pay all principal of, premium, if any, and interest on, the Notes pursuant to the Indenture;

 

(3)                                 the Issuer delivers an Officers’ Certificate and Opinion of Counsel to the Trustee, each stating that such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition and any supplemental indenture required in connection therewith comply with the Indenture and that all conditions precedent set forth in the Indenture have been complied with; and

 

(4)                                 immediately after giving effect to the transaction, no Event of Default or default under the Indenture will have occurred and be continuing.

 

Section 6.02                             Successor Issuer Substituted.

 

Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets, of the Issuer in accordance with Section 6.01, the successor person formed by such consolidation or into or with which the Issuer is merged or to which such

 

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sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under the Indenture with the same effect as if such successor person has been named as the Issuer herein; provided, however, that the predecessor Issuer in the case of a sale, conveyance or other disposition (other than a lease) shall be released from all obligations and covenants under the Indenture and the Notes.

 

ARTICLE 7
 AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 7.01                             Without Consent of Holders of Notes.

 

Notwithstanding Section 7.02 of the Indenture, without the consent of any Holder of Notes, the Issuer, the Guarantors, if any, and the Trustee may amend or supplement the Indenture, the Notes or the Guarantees:

 

(a)                                 to cure any ambiguity, defect or inconsistency;

 

(b)                                 to comply with Article 6;

 

(c)                                  to provide for uncertificated Notes in addition to or in place of certificated Notes;

 

(d)                                 to surrender any of the Issuer’s rights or powers under the Indenture;

 

(e)                                  to add covenants or events of default for the benefit of the holders of Notes;

 

(f)                                   to comply with the applicable procedures of the applicable Depositary;

 

(g)                                  make any change that does not adversely affect the rights of any Holder as determined in good faith by the Issuer, as evidenced in an Officers’ Certificate delivered to the Trustee;

 

(h)                                 to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Notes and to add to or change any of the provisions of the Indenture to provide for or facilitate the administration of the trusts hereunder by more than one Trustee;

 

(i)                                     to conform the text of the Indenture or the Notes to any provision of the “Description of Notes” section of the Issuer’s Prospectus Supplement dated October 10, 2017, relating to the offering of the Initial Notes;

 

(j)                                    to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA;

 

(k)                                 to evidence the succession of another person to the Issuer, or successive successions, and the assumption by the successor person of the covenants, agreements and Obligations of such Issuer the pursuant to Article 6;

 

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(l)                                     to add any Guarantor or to evidence the release of any Guarantor from its Guarantee, in each case as provided in the Indenture; or

 

(m)                             to comply with the rules or regulations of any securities exchange or automated quotation system on which any of the Notes may be listed or traded.

 

Section 7.02                             With Consent of Holders of Notes.

 

The Issuer and the Trustee may enter into a supplemental indenture with the written consent of the Holders of a majority in principal amount of the outstanding Notes affected by such supplemental indenture (including consents obtained in connection with a tender offer or exchange offer for the Notes), for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of Notes.  Except as provided in Section 6.13 of the Base Indenture, the Holders of a majority in principal amount of the outstanding Notes by notice to the Trustee (including consents obtained in connection with a tender offer or exchange offer for the Notes) may waive compliance by the Issuer with any provision of the Indenture or the Notes.

 

It shall not be necessary for the consent of the Holders of Notes under this Section 7.02 to approve the particular form of any proposed supplemental indenture or waiver, but it shall be sufficient if such consent approves the substance thereof.  After a supplemental indenture or waiver under this Section 7.02 becomes effective, the Issuer shall mail to the Holders of Notes affected thereby a notice briefly describing the supplemental indenture or waiver.  Any failure by the Issuer to mail or publish such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

 

Section 7.03                             Limitations.

 

Without the consent of each Holder affected, an amendment or waiver may not:

 

(a)                                 reduce the principal amount of the Notes whose Holders must consent to an amendment, supplement or waiver;

 

(b)                                 reduce the rate of or extend the time for payment of interest (including default interest) on any Note;

 

(c)                                  reduce the principal or change the Maturity Date;

 

(d)                                 waive a Default or Event of Default in the payment of the principal of or interest, if any, on any Note (except in connection with a rescission of acceleration of the Notes by the Holders of a majority in principal amount of the outstanding Notes and a related waiver of the payment default that resulted from such acceleration);

 

(e)                                  make the principal of or interest, if any, on any Note payable in any currency other than Dollars;

 

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(f)                                   make any change in Sections 6.08 or 6.13 of the Base Indenture or this clause (f); or

 

(g)                                  waive a redemption payment with respect to any Note, provided that such redemption is made at the Issuer’s option.

 

Section 7.04                             Compliance with Trust Indenture Act.

 

Every amendment to the Indenture or the Notes shall be set forth in a supplemental indenture hereto that complies with the TIA as then in effect.

 

Section 7.05                             Revocation and Effect of Consents.

 

Until an amendment is set forth in a supplemental indenture or a waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder and every subsequent Holder of a Note or portion thereof that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note.  However, any such Holder or subsequent Holder may revoke the consent as to his Note or portion thereof if the Trustee receives the notice of revocation before the date of the supplemental indenture or the date the waiver becomes effective.

 

Any amendment or waiver once effective shall bind every Holder of Notes affected by such amendment or waiver unless it is of the type described in any of clauses (a) through (g) of Section 7.03.  In that case, the amendment or waiver shall bind each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion thereof that evidences the same debt as the consenting Holder’s Note.

 

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to the Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to give such consent or to revoke any consent previously given or take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless consents from Holders of the principal amount of Notes required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 120-day period.

 

Section 7.06                             Notation on or Exchange of Notes.

 

The Issuer or the Trustee may place an appropriate notation about an amendment or waiver on any Notes thereafter authenticated.  The Issuer in exchange for the Notes may issue and the Trustee shall authenticate upon request new Notes that reflect the amendment or waiver.

 

Section 7.07                             Trustee Protected.

 

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article 7 or the modifications thereby of the trusts created by the Indenture, the

 

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Trustee shall be entitled to receive, and (subject to Section 7.1 of the Base Indenture) shall be fully protected in relying upon, an Opinion of Counsel or an Officers’ Certificate, complying with Section 9.04, and stating that such amendment or supplement is authorized or permitted by the Indenture. The Trustee shall sign all supplemental indentures upon delivery of such an Officers’ Certificate or Opinion of Counsel or both, except that the Trustee need not sign any supplemental indenture that adversely affects its rights.

 

ARTICLE 8
 GUARANTEE

 

Section 8.01                             Unconditional Guarantee.

 

(a)                                 Notwithstanding any provision of this Article 7 to the contrary, the provisions of this Article 7 shall be applicable only if the Issuer is required to cause one of its Subsidiaries to deliver a supplemental indenture pursuant to Section 5.11.

 

(b)                                 For value received, each Guarantor shall, jointly and severally, fully, unconditionally and absolutely guarantee to the Holders and to the Trustee the due and punctual payment of the principal of and interest on the Notes and all other amounts due and payable under the Indenture and the Notes by the Issuer, when and as such principal and interest shall become due and payable, whether on the Maturity Date or by declaration of acceleration, call for redemption or otherwise, according to the terms of such Notes and the Indenture, subject to the limitations set forth in Section 8.02.

 

(c)                                  Failing payment when due of any amount guaranteed pursuant to the Guarantee, for whatever reason, each of the Guarantors will be jointly and severally obligated to pay the same immediately.  Each of the Guarantors hereby agrees that its Obligations hereunder shall be full, unconditional and absolute, irrespective of the validity, regularity or enforceability of the Notes, the Guarantee (including the Guarantee of any other Guarantor) or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer or any other Guarantor, or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of any of the Guarantors.  Each Guarantor hereby agrees that, in the event of a default in payment of the principal of or interest on the Notes entitled to the Guarantee of such Guarantor, whether on the Maturity Date or by declaration of acceleration, call for redemption or otherwise, legal proceedings may be instituted by the Trustee on behalf of the Holders or, subject to Section 6.7 of the Base Indenture, by the Holders, on the terms and conditions set forth in the Indenture, directly against such Guarantor to enforce the Guarantee without first proceeding against the Issuer or any other Guarantor.

 

(d)                                 Each Guarantor hereby (i) waives diligence, presentment, demand of payment, filing of claims with a court in the event of the merger, insolvency or bankruptcy of the Issuer or any of the Guarantors, and all demands whatsoever and (ii) acknowledges that any agreement, instrument or document evidencing the Guarantee may be transferred and that the benefit of its Obligations hereunder shall extend to each holder of any agreement, instrument or document evidencing the Guarantee without notice to it.  Each Guarantor further agrees that, if at

 

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any time all or any part of any payment theretofore applied by any person to the Guarantee is, or must be, rescinded or returned for any reason whatsoever, including, without limitation, the insolvency, bankruptcy or reorganization of the Issuer or any of the Guarantors, the Guarantee shall, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence notwithstanding such application, and the Guarantee shall continue to be effective or be reinstated, as the case may be, as though such application had not been made.

 

(e)                                  Each Guarantor shall be subrogated to all rights of the Holders and the Trustee against the Issuer in respect of any amounts paid by such Guarantor pursuant to the provisions of the Indenture and the Guarantee; provided, however, that such Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until all of the Notes entitled to the Guarantee of such Guarantor and the Guarantee shall have been paid in full or discharged.

 

Section 8.02                             Limitation on Guarantors’ Liability.

 

Each Guarantor by its acceptance hereof and each Holder of a Note entitled to the benefits of the Guarantee hereby confirms that it is the intention of all such parties that the guarantee by such Guarantor pursuant to the Guarantee not constitute a fraudulent transfer or conveyance for purposes of any federal or state law.  To effectuate the foregoing intention, each Holder of a Note entitled to the benefits of the Guarantee and each Guarantor hereby irrevocably agrees that the Obligations of each Guarantor under the Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and to any collections from or payments made by or on behalf of any other Guarantor in respect of the Obligations of such other Guarantor under the Guarantee, not result in the Obligations of such Guarantor under the Guarantee constituting a fraudulent conveyance or fraudulent transfer under federal or state law.

 

Section 8.03                             Release of Guarantors from Guarantee.

 

(a)                                 Notwithstanding any other provisions of the Indenture, the Guarantee of any Guarantor may be released upon the terms and subject to the conditions set forth in Sections 8.1,  8.3 and 8.4 of the Base Indenture and in this Section 8.03.  Provided that no Default shall have occurred and shall be continuing under the Indenture, the Guarantee incurred by a Guarantor pursuant to this Article 8 shall be unconditionally released and discharged

 

(1)                                 in connection with any sale or other disposition of all or substantially all of the properties or assets of, or all of our direct or indirect limited partnership, limited liability company or other equity interests in, that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) an Affiliate of the Issuer;

 

(2)                                 upon the merger of the Guarantor into us or any other Guarantor or the liquidation or dissolution of the Guarantor; or

 

(3)                                 upon delivery of written notice to the Trustee of the release of all guarantees or other Obligations of the Guarantor under our Revolving Credit Facility.

 

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(b)                                 Upon receipt of a written request of the Issuer accompanied by an Officers’ Certificate and an Opinion of Counsel to the effect that any Guarantor is entitled to release from the Guarantee in accordance with the provisions of the Indenture, the Trustee shall sign an appropriate instrument delivered to it evidencing the release of such Guarantor from the Guarantee.  Any Guarantor not so released shall remain liable for the full amount of principal of and interest on the Notes entitled to the benefits of the Guarantee as provided in the Indenture, subject to the limitations of Section 8.02.

 

(c)                                  If at any time following any release of a Guarantor from its guarantee of the notes pursuant to Section 7.03(a)(3), such entity again guarantees Obligations under our Revolving Credit Facility, then the Issuer shall cause such entity to again guarantee the Notes in accordance with the Indenture.

 

ARTICLE 9
 MISCELLANEOUS

 

Section 9.01                             Trust Indenture Act Controls.

 

If any provision of the Indenture limits, qualifies or conflicts with another provision which is required or deemed to be included in the Indenture by the TIA, such required or deemed provision of the TIA shall control.

 

Section 9.02                             Notices.

 

Any notice or communication by the Issuer or the Trustee to the other, or by a Holder to the Issuer, the Guarantors or the Trustee, is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, facsimile or overnight air courier guaranteeing next day delivery:

 

If to any of the Issuer and any Guarantors:

 

Phillips 66 Partners LP

2331 CityWest Boulevard

Houston, TX 77042

Attention:                                         General Counsel

Telephone:                                   (855) 283-9237

 

with a copy to:

 

Latham & Watkins LLP

811 Main Street

Suite 3700

Houston, Texas  77002

Attention:                                         William N. Finnegan, IV

Thomas G. Brandt

Telephone:                                   (713) 546-5400

Facsimile:                                         (213) 546-5401

 

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If to the Trustee:

 

The Bank of New York Mellon Trust Company, N.A.

601 Travis Street, 16th Floor

Houston, Texas 77002

Attention:                                         Corporate Trust Administration

Telephone:                                   (713) 483-6536

Facsimile:                                         (713) 483-6954

 

The Issuer or the Trustee by notice to the others may designate additional or different addresses for subsequent notices or communications.

 

Any notice or communication to a Holder shall be sent electronically or by first-class mail to his address shown on the register kept by the Registrar.  Failure to mail a notice or communication to a Holder of any Notes or any defect in it shall not affect its sufficiency with respect to other Holders of that or any other Notes.

 

If a notice or communication is sent or published in the manner provided above, within the time prescribed, it is duly given, whether or not the Holder receives it.

 

If the Issuer sends a notice or communication to Holders, it shall send a copy to the Trustee and each Agent at the same time.

 

Notwithstanding any other provision of the Indenture or any Note, where the Indenture or any Note provides for notice of any event (including any notice of redemption) to a Holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given to the Depositary for such Note (or its designee) pursuant to the customary procedures of such Depositary.

 

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

 

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Section 9.03                             Communication by Holders with Other Holders.

 

The Holders of the Notes may communicate pursuant to TIA § 312(b) with the other Holders of the Notes or any other series of securities issued pursuant to the Base Indenture with respect to their rights under the Indenture or the Notes or such other series.  The Issuer, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

 

Section 9.04                             Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Issuer to the Trustee to take any action under the Indenture, the Issuer shall, if requested by the Trustee, furnish to the Trustee:

 

(a)                                 an Officers’ Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in the Indenture relating to the proposed action have been complied with; and

 

(b)                                 an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

 

Section 9.05                             Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in the Indenture (other than a certificate provided pursuant to TIA §314(a)(4)) must comply with the provisions of TIA §314(e) and must include:

 

(a)                                 a statement that the person making such certificate or opinion has read such covenant or condition;

 

(b)                                 a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

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

 

(d)                                 a statement as to whether or not, in the opinion of such person, such condition or covenant has been satisfied.

 

Section 9.06                             Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or at a meeting of Holders.  The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

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Section 9.07                             Legal Holidays.

 

Unless otherwise provided by Board Resolution or Officers’ Certificate, a “Legal Holiday” is any day that is not a Business Day.  If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

 

Section 9.08                             No Recourse Against Others.

 

A director, officer, employee, unitholder or stockholder (past or present), as such, of the Issuer, the General Partner or their respective Affiliates, or a Guarantor shall not have any liability for any Obligations of the Issuer under the Notes or the Indenture or for any claim based on, in respect of or by reason of such Obligations or their creation.  Each Holder by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for the issuance of the Notes.

 

Section 9.09                             Counterparts.

 

The Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

The exchange of copies of the Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of the Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 9.10                             Governing Law.

 

THE INDENTURE AND THE NOTES, INCLUDING ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THE INDENTURE OR THE NOTES, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

Section 9.11                             No Adverse Interpretation of Other Agreements.

 

The Indenture may not be used to interpret another indenture, loan or debt agreement of the Issuer or a Subsidiary of the Issuer.  Any such indenture, loan or debt agreement may not be used to interpret the Indenture.

 

Section 9.12                             Successors.

 

All agreements of the Issuer and the Guarantors in the Indenture and the Notes shall bind their respective successors.  All agreements of the Trustee in the Indenture shall bind its successor.

 

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Section 9.13                             Severability.

 

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

 

Section 9.14                             Table of Contents, Headings, Etc.

 

The Table of Contents, Cross Reference Table, and headings of the Articles and Sections of the Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

 

Section 9.15                             Waiver of Jury Trial.

 

EACH OF THE ISSUER, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 9.16                             Act of Holders.

 

Any request, demand, authorization, direction, notice, consent, waiver or other action provided by the Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of Holders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of the Indenture and conclusive in favor of the Trustee, the Issuer and the Guarantors, if made in the manner provided in this Section 9.16.

 

The fact and date of the execution by any person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to such officer the execution thereof.  Where such execution is by a signer acting in a capacity other than such signer’s individual capacity, such certificate or affidavit shall also constitute sufficient proof of such signer’s authority.  The fact and date of the execution of any such instrument or writing, or the authority of the person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

 

The ownership of Notes shall be proved by the Holder list maintained under Section 3.05 hereunder.

 

Any request, demand, authorization, direction, notice, consent, waiver or other act of the Holder of Notes shall bind every future Holder of the same Notes and the holder of each Notes

 

38

 

issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Notes.

 

If the Issuer shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Issuer may, at its option, by or pursuant to a Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Issuer shall have no obligation to do so.  If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the outstanding Notes shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of the Indenture not later than six months after the record date.

 

The Depositary, as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture.

 

Section 9.17                             Judgment Currency.

 

The Issuer agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of or interest or other amount on the Notes (the “Required Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking procedures a person could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a New York Banking Day, then, the rate of exchange used shall be the rate at which in accordance with normal banking procedures a person could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which final unappealable judgment is entered and (b) its Obligations under the Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable, and (iii) shall not be affected by judgment being obtained for any other sum due under the Indenture.  For purposes of the foregoing, “New York Banking Day” means any day except a Saturday, Sunday or a legal holiday in The City of New York on which banking institutions are authorized or required by law, regulation or executive order to close.

 

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Section 9.18                             Force Majeure.

 

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of god, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

Section 9.19                             FATCA

 

In order to comply with applicable tax laws, rules and regulations under Sections 1471-1474 of the Code (including directives, guidelines and interpretations promulgated by competent authorities), in effect from time to time (“FATCA”), the Issuer agrees (i) upon request, to provide to the Trustee any tax-related information about Holders or any taxable transactions contemplated hereby (including any modification to the terms of such transactions), to the extent such information is directly available to the Issuer, so that the Trustee can determine whether it has tax-related obligations under FATCA and (ii) that the Trustee shall be entitled to make any withholding or deduction from payments to Holders under the Indenture to the extent necessary to comply with FATCA.

 

[Signatures on following page]

 

40

 

SIGNATURES

 

Dated as of October 13, 2017

 

	
 
    	
PHILLIPS 66 PARTNERS LP
    
	
 
    	
By: Phillips 66 Partners GP LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ John Zuklic
    
	
 
    	
 
    	
Name: John Zuklic
    
	
 
    	
 
    	
Title: Vice President and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
    
	
 
    	
as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Karen Yu
    
	
 
    	
 
    	
Name: Karen Yu
    
	
 
    	
 
    	
Title: Vice President
    

 

Signature Page to Sixth Supplemental Indenture

 

 

EXHIBIT A

 

[Face of Note]

 

CUSIP 718549 AF5

ISIN US718549AF57

 

3.750 % Senior Notes due 2028

 

	
No.
    	
$                                 
    

 

PHILLIPS 66 PARTNERS LP

 

promises to pay, to                    or registered assigns,

 

the principal sum of                         DOLLARS of the United States of America [or such greater or lesser amount as may be indicated on the attached Schedule of Exchanges of Interests in the Global Note] on March 1, 2028.

 

Interest Payment Dates:  March 1 and September 1

 

Record Dates:  February 15 and August 15

 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been duly executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit of the Indenture or be valid or obligatory for any purpose.

 

[Signature Page Follows]

 

 

	
Dated:                  ,   20
    	
 
    
	
 
    	
 
    
	
 
    	
PHILLIPS 66 PARTNERS LP
    
	
 
    	
By: Phillips 66 Partners GP, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

	
Certificate of Authentication:
    	
 
    
	
 
    	
 
    
	
This is one of the Notes referred to in the within-mentioned   Indenture:
    	
 
    
	
The Bank of New York Mellon Trust Company, N.A.,
    	
 
    
	
as Trustee
    	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    
					

 

A-2

 

[Back of Note]

 

3.750% Senior Note due 2028

 

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

 

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

(1)                                 INTEREST.  Phillips 66 Partners LP (the “Issuer”) promises to pay or cause to be paid interest on the principal amount of this Note at 3.750% per annum from October 13, 2017 until maturity.  The Issuer will pay interest semi-annually in arrears on March 1 and September 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”).  Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that, if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be March 1, 2018.  The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time at a rate that is equal to the then applicable interest rate on the Notes to the extent lawful; the Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest, if any (without regard to any applicable grace period), from time to time at the same rate to the extent lawful.

 

Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

(2)                                 METHOD OF PAYMENT.  The Issuer will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the February 15 and August 15 immediately preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 3.12 of the Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium, if any, and interest at the office or agency of the Issuer maintained for such purpose within Houston, Texas, or, at the option of the Issuer, payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of, premium, if any, on, or interest on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Issuer or the Paying Agent.  Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

(3)                                 PAYING AGENT AND REGISTRAR.  Initially, The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, will act as Paying Agent and

 

A-3

 

Registrar.  The Issuer may change the Paying Agent or Registrar without notice to any Holder.  The Issuer or any of its Subsidiaries may act as Paying Agent or Registrar.

 

(4)                                 INDENTURE.  The Issuer issued the Notes under an Indenture dated as of February 23, 2015 (the “Base Indenture”) among the Issuer and the Trustee, as amended and supplemented by the First Supplemental Indenture thereto of even date therewith (the Base Indenture, as so supplemented and amended, the “Indenture”).  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the TIA.  The Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms.  To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.  The Notes are unsecured Obligations of the Issuer.  The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.

 

(5)                                 OPTIONAL REDEMPTION.

 

(a)                                 At any time prior to December 1, 2027 (the “Early Call Date”), the Issuer may on any one or more occasions redeem the Notes, in whole or in part, at a redemption price, as determined by the Issuer, equal to the greater of:

 

(A)                               100% of the principal amount of the Notes to be redeemed; or

 

(B)                               the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed that would be due if such Notes matured on the Early Call Date but for the redemption (exclusive of any portion of the payments of interest accrued to the date of redemption), discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 25 basis points, in each case, together with accrued but unpaid interest thereon to, but not including, the redemption date.

 

(b)                                 Except pursuant to the preceding paragraphs, the Notes will not be redeemable at the Issuer’s option prior to the Early Call Date.

 

(c)                                  On and after the Early Call Date, the Issuer may on any one or more occasions redeem all or a part of the Notes, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued but unpaid interest thereon to, but not including, the redemption date.

 

(6)                                 MANDATORY REDEMPTION.  The Issuer is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

(7)                                 NOTICE OF REDEMPTION.  At least 30 days but not more than 60 days before a redemption date, the Issuer will mail or cause to be mailed by first class mail (or sent electronically if DTC is the recipient) a notice of redemption to each Holder whose

 

A-4

 

Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture pursuant to Article 9 thereof.  Notes and portions of Notes selected will be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder shall be redeemed.

 

(8)                                 DENOMINATIONS, TRANSFER, EXCHANGE.  The Notes are in registered form in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes or similar governmental charge permitted by the Indenture.  The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part.  Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the next succeeding Interest Payment Date.

 

(9)                                 PERSONS DEEMED OWNERS.  The registered Holder of a Note may be treated as the owner of it for all purposes. Only registered Holders have rights under the Indenture.

 

(10)                          AMENDMENT, SUPPLEMENT AND WAIVER.  Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes, including Additional Notes, if any, voting as a single class, and any existing Default or Event of Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, voting as a single class.  Without the consent of any Holder of Notes, the Indenture, the Notes or the Guarantees (if in existence) may be amended or supplemented:  to cure any ambiguity, defect or inconsistency; to comply with Article 6 of the Indenture; to provide for uncertificated Notes in addition to or in place of certificated Notes; to surrender any of the Issuer’s rights or powers under the Indenture; to add covenants or events of default for the benefit of the Holders of Notes; to comply with the applicable procedures of the applicable Depositary; make any change that does not adversely affect the rights of any Holder as determined in good faith by the Issuer, as evidenced in an Officers’ Certificate delivered to the Trustee; to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Notes and to add to or change any of the provisions of the Indenture to provide for or facilitate the administration of the trusts hereunder by more than one Trustee; to conform the text of the Indenture or the Notes to any provision of the “Description of Notes” section of the Issuer’s Prospectus Supplement dated October 10, 2017, relating to the offering of the Initial Notes; to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; to evidence the succession of another person to the Issuer, or successive

 

A-5

 

successions, and the assumption by the successor person of the covenants, agreements and obligations of such Issuer the pursuant to Article 6; and to add any Guarantor or to evidence the release of any Guarantor from its Guarantee, in each case as provided in the Indenture; or to comply with the rules or regulations of any securities exchange or automated quotation system on which any of the Notes may be listed or traded.

 

(11)                          DEFAULTS AND REMEDIES.  Events of Default include:  (i) default in the payment of any interest on any the Notes when it becomes due and payable, and continuance of such default for a period of 30 days (unless the entire amount of such payment is deposited by the Issuer with the Trustee or with a Paying Agent prior to 11:00 a.m., New York City time, on the 30th day of such period);(ii) default in the payment of principal of the Notes on the Maturity Date; (iii) default in the performance or breach of any covenant or agreement of the Issuer in the Indenture (other than defaults pursuant to paragraphs (i) or (ii) above), which default continues uncured for a period of 90 days after there has been given, by registered or certified mail, (a) to the Issuer by the Trustee or (b) to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the outstanding Securities of that Series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” under the Indenture; (iv) the Issuer pursuant to or within the meaning of any Bankruptcy Law: (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (d) makes a general assignment for the benefit of its creditors; (v) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against the Issuer in an involuntary case, (b) appoints a Custodian of the Issuer or for all or substantially all of its property, or (c) orders the liquidation of the Issuer, and the order or decree remains unstayed and in effect for 90 days.  In the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Issuer, all outstanding Notes will become due and payable immediately without further action or notice.  If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.  Holders may not enforce the Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it.  The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, premium, if any, or interest) if it determines that withholding notice is in their interest.  The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of all the Holders, rescind an acceleration or waive an existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of principal of, or premium or interest, if any, on, the Notes (including in connection with an offer to purchase any Notes).  The Issuer is required to deliver to the Trustee annually an Officers’ Certificate regarding compliance with the Indenture, and the Issuer is required, within 30 days of becoming aware of any Default or

 

A-6

 

Event of Default, to deliver to the Trustee a written statement specifying such Default or Event of Default.

 

(12)                          NO RECOURSE AGAINST OTHERS.  A director, officer, employee, unitholder or stockholder (past or present), as such, of the Issuer, the General Partner or their respective Affiliates, or a Guarantor shall not have any liability for any Obligations of the Issuer under the Notes or the Indenture or for any claim based on, in respect of or by reason of such Obligations or their creation.  Each Holder by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for the issuance of the Notes.

 

(13)                          AUTHENTICATION.  This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

(14)                          ABBREVIATIONS.  Customary abbreviations may be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

(15)                          CUSIP NUMBERS.  Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers or corresponding ISIN numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.

 

(16)                          GOVERNING LAW.  THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE GUARANTEES, IF ANY.

 

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture.  Requests may be made to:

 

Phillips 66 Partners LP

2331 CityWest Boulevard

Houston, TX 77042

Attention:         General Counsel

Telephone:       (855) 283-9237

 

A-7

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

	
(I) or (we) assign and transfer this   Note to:
    	
 
    
	
 
    	
(Insert assignee’s legal name)
    
	
 
    
	
 
    
	
(Insert assignee’s soc. sec. or tax I.D. no.)
    
	
 
    
	
 
    
	
 
    
	
 
    
	
 
    
	
 
    
	
(Print or type assignee’s name, address and zip code)
    
	
 
    
	
and irrevocably   appoint                                                    
    
	
to transfer this   Note on the books of the Issuer.  The   agent may substitute another to act for him.
    

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Your Signature:
    	
 
    
	
 
    	
(Sign exactly as your name appears on   the face of this Note)
    
	
 
    	
 
    
	
 
    	
Tax Identification No.
    	
 
    
	
 
    	
 
    
	
Signature Guarantee*:
    	
 
    	
 
    	
 
    
								

 

*              Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-8

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

 

	
Date of
   Exchange
    	
 
    	
Amount of
   decrease in
   Principal
   Amount of this
   Global Note
    	
 
    	
Amount of
   increase in
   Principal
   Amount of this
   Global Note
    	
 
    	
Principal
   Amount of this
   Global Note
   following such
   decrease (or
   increase)
    	
 
    	
Signature of
   authorized
   officer of Trustee
   or Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*                                   This Schedule should be included only if the Note is issued in global form.

 

A-9EX-4.2

 Exhibit 4.2 

BANDWIDTH.COM, INC. 

INVESTORS’ RIGHTS AGREEMENT 

FEBRUARY 22, 2011 

 TABLE OF CONTENTS 

 

					
	 	  	Page	 
	 1. DEFINITIONS
	  	 	1	 
		
	 1.1. “Affiliate”
	  	 	1	 
	 1.2. “Common Stock”
	  	 	1	 
	 1.3. “Damages”
	  	 	2	 
	 1.4. “Derivative Securities”
	  	 	2	 
	 1.5. “Exchange Act”
	  	 	2	 
	 1.6. “Excluded Registration”
	  	 	2	 
	 1.7. “Form S-1”
	  	 	2	 
	 1.8. “Form S-3”
	  	 	2	 
	 1.9. “GAAP”
	  	 	2	 
	 1.10. “Holder”
	  	 	2	 
	 1.11. “Immediate Family Member”
	  	 	2	 
	 1.12. “Initiating Holders”
	  	 	2	 
	 1.13. “IPO”
	  	 	3	 
	 1.14. “Key Employee”
	  	 	3	 
	 1.15. “Key Holder Registrable Securities”
	  	 	3	 
	 1.16. “New Securities”
	  	 	3	 
	 1.17. “Person”
	  	 	3	 
	 1.18. “Registrable Securities”
	  	 	3	 
	 1.19. “Registrable Securities then outstanding”
	  	 	3	 
	 1.20. “Restricted Securities”
	  	 	4	 
	 1.21. “SEC”
	  	 	4	 
	 1.22. “SEC Rule 144”
	  	 	4	 
	 1.23. “SEC Rule 145”
	  	 	4	 
	 1.24. “Securities Act”
	  	 	4	 
	 1.25. “Selling Expenses”
	  	 	4	 
	 1.26. “Series A Director”
	  	 	4	 
	 1.27. “Series A Preferred Stock”
	  	 	4	 
		
	 2. REGISTRATION RIGHTS
	  	 	5	 
		
	 2.1. Demand Registration
	  	 	5	 
	 2.2. Company Registration
	  	 	6	 
	 2.3. Underwriting Requirements
	  	 	7	 
	 2.4. Obligations of the Company
	  	 	8	 
	 2.5. Furnish Information
	  	 	9	 
	 2.6. Expenses of Registration
	  	 	10	 
	 2.7. Delay of Registration
	  	 	10	 
	 2.8. Indemnification
	  	 	10	 
	 2.9. Reports Under Exchange Act
	  	 	12	 
	 2.10. Limitations on Subsequent Registration Rights
	  	 	13	 
	 2.11. “Market Stand-off” Agreement
	  	 	13	 
	 2.12. Restrictions on Transfer
	  	 	14	 
	 2.13. Termination of Registration Rights
	  	 	15	 

  
 i 

					
	 3. INFORMATION AND OBSERVER RIGHTS
	  	 	16	 
		
	 3.1. Delivery of Financial Statements
	  	 	16	 
	 3.2. Inspection
	  	 	17	 
	 3.3. Advisory Board
	  	 	17	 
	 3.4. Termination of Information, Observer and Advisory Board Rights
	  	 	17	 
	 3.5. Confidentiality
	  	 	18	 
		
	 4. RIGHTS TO FUTURE STOCK ISSUANCES
	  	 	18	 
		
	 4.1. Right of First Offer
	  	 	18	 
	 4.2. Termination
	  	 	19	 
		
	 5. ADDITIONAL COVENANTS
	  	 	19	 
		
	 5.1. Insurance
	  	 	19	 
	 5.2. Employee Agreements
	  	 	20	 
	 5.3. Employee Stock
	  	 	20	 
	 5.4. Board Matters
	  	 	20	 
	 5.5. Successor Indemnification
	  	 	20	 
	 5.6. Termination of Covenants
	  	 	21	 
		
	 6. MISCELLANEOUS
	  	 	21	 
		
	 6.1. Successors and Assigns
	  	 	21	 
	 6.2. Governing Law
	  	 	21	 
	 6.3. Counterparts
	  	 	21	 
	 6.4. Titles and Subtitles
	  	 	21	 
	 6.5. Notices
	  	 	22	 
	 6.6. Amendments and Waivers
	  	 	22	 
	 6.7. Severability
	  	 	23	 
	 6.8. Aggregation of Stock
	  	 	23	 
	 6.9. Entire Agreement
	  	 	23	 
	 6.10. Dispute Resolution
	  	 	23	 
	 6.11. Delays or Omissions
	  	 	24	 
	 6.12. Acknowledgment
	  	 	24	 

  

					
	 Schedule A
	 	—	 	Schedule of Investors
	 Schedule B
	 	—	 	Schedule of Key Holders
	 Exhibit A
	 	—	 	Form of Noncompetition and Nonsolicitation Agreement

  
 ii 

 INVESTORS’ RIGHTS AGREEMENT 

THIS INVESTORS’ RIGHTS AGREEMENT (the “Agreement”) is made as of February 22, 2011, by and among Bandwidth.com,
Inc., a Delaware corporation (the “Company”), Carmichael Investment Partners, LLC, a Delaware limited liability company, (individually “Carmichael” or the “Investor” or, together with any subsequent
successors or transferees, who become parties hereto pursuant to Section 6.1 below, the “Investors”) and each of the stockholders listed on Schedule B hereto, each of whom is referred to herein as a
“Key Holder.” 
 RECITALS 

WHEREAS, the Company and Carmichael are parties to the Series A Preferred Stock Purchase Agreement of even date herewith (the
“Purchase Agreement”); and 
 WHEREAS, in order to induce the Company to enter into the Purchase Agreement and to
induce Carmichael to invest funds in the Company pursuant to the Purchase Agreement, Carmichael and the Company hereby agree that this Agreement shall govern the rights of the Investors to cause the Company to register shares of Common Stock
issuable to the Investors, to receive certain information from the Company, and to participate in future equity offerings by the Company, and shall govern certain other matters as set forth in this Agreement; and 

WHEREAS, each Key Holder is a party to a Buy-Sell Agreement by and between such Key Holder and
the Company (each a “Buy-Sell Agreement”), which Buy-Sell Agreements include certain rights of the Key Holders to cause the Company to register shares
of Common Stock held by such Key Holders, to receive certain information from the Company, and to participate in future equity offerings by the Company, as the case may be; and 

WHEREAS, each Key Holder desires to terminate such Buy-Sell Agreement and become a party to
this Agreement; 
 NOW, THEREFORE, the parties hereby agree as follows: 

1. Definitions. For purposes of this Agreement: 

1.1. “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly,
controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled
by one or more general partners or managing members of, or shares the same management company with, such Person. 
 1.2. “Common
Stock” means shares of the Company’s common stock, par value $0.001 per share. 

  
 1 

 1.3. “Damages” means any loss, damage, or liability (joint or several) to which
a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or
alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or
Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law. 

1.4. “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each
case, directly or indirectly), Common Stock, including options and warrants. 
 1.5. “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 
 1.6. “Excluded
Registration” means (i) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (ii) a registration relating to an SEC Rule
145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a
registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered. 

1.7. “Form S-1” means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC. 
 1.8. “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial
information by reference to other documents filed by the Company with the SEC. 
 1.9. “GAAP” means generally accepted
accounting principles in the United States. 
 1.10. “Holder” means any holder of Registrable Securities who is a party to
this Agreement. 
 1.11. “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law, including adoptive relationships, of a natural person referred to herein. 

1.12. “Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.

  
 2 

 1.13. “IPO” means the Company’s first underwritten public offering of its
Common Stock under the Securities Act. 
 1.14. “Key Employee” means any executive-level employee (including division
director and vice president-level positions) as well as any employee who, either alone or in concert with others, develops, invents, programs, or designs any Company Intellectual Property (as defined in the Purchase Agreement). 

1.15. “Key Holder Registrable Securities” means (i) the outstanding shares of Common Stock held by the Key
Holders as of the date hereof (or issuable upon the conversion or exercise of any warrant, right, or other security held by the Key Holders as of the date hereof), (ii) any Common Stock issued (or issuable upon the conversion or exercise of any
warrant, right, or other security that is issued) to the Key Holders from or after the date hereof, including, without limitation, upon the conversion or exercise of any warrant, right or other security, and (iii) any Common Stock issued as (or
issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of such shares. 

1.16. “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as
rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities. 

1.17. “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 1.18. “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Series A
Preferred Stock; (ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, acquired by the
Investors after the date hereof; (iii) the Key Holder Registrable Securities, provided, however, that such Key Holder Registrable Securities shall not be deemed Registrable Securities and the Key Holders shall not be deemed
Holders for the purposes of Subsections 2.1 or 2.10; and (iv) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the
applicable rights under this Agreement are not assigned pursuant to Subsection 6.1, and excluding for purposes of Section 2 any shares for which registration rights have terminated pursuant to Subsection
2.13 of this Agreement. 
 1.19. “Registrable Securities then outstanding” means the number of shares determined
by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are
Registrable Securities. 
 1.20. “Restricted Securities” means the securities of the Company required to bear the legend
set forth in Subsection 2.12(b) hereof. 

  
 3 

 1.21. “SEC” means the Securities and Exchange Commission. 

1.22. “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act. 

1.23. “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act. 

1.24. “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 1.25. “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to
the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Subsection 2.6. 

1.26. “Series A Director” means any director of the Company that the holders of record of the Series A
Preferred Stock are entitled to elect pursuant to the Company’s Certificate of Incorporation. 
 1.27. “Series
A Preferred Stock” means shares of the Company’s Series A Preferred Stock, par value $0.001 per share. 
 1.28. “True
Sale” means: (a) a merger or consolidation in which (i) the Company is a constituent party, or (ii) a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger
or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted
into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation or (2) if the surviving or
resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation (provided that, for the purpose of this definition
of “True Sale” all shares of Common Stock issuable upon exercise of Options (as defined in the Company’s Certificate of Incorporation) outstanding immediately prior to such merger or consolidation or upon conversion of Convertible
Securities (as defined in the Company’s Certificate of Incorporation) outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable,
converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged); (b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or
series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more
subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a
wholly owned subsidiary of the 

  
 4 

 
Company; or (c) any other transaction that each of the Investor, James A. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC agrees in writing constitutes a “True
Sale” for the purposes of this Agreement; provided, however, no transaction described in either clause (a) or clause (b) above will constitute a “True Sale” unless, in the case of any transaction described in clause
(a) above, all of the consideration to be distributed to the holders of the Company’s capital stock constitutes cash and/or marketable securities or, in the case of any transaction described in clause (b) above, all of the
consideration actually paid to the Company constitutes cash and/or marketable securities. 
 2. Registration Rights. The Company
covenants and agrees as follows: 
 2.1. Demand Registration. 

(a) Form S-1 Demand. If at any time after the earlier of (i) five (5) years after the
date of this Agreement or (ii) one hundred eighty (180) days after the effective date of the registration statement for the IPO, the Company receives a request from Holders of twenty-five percent (25%) of the Registrable Securities then
outstanding that the Company file a Form S-1 registration statement, then the Company shall (i) within ten (10) days after the date such request is given, give notice thereof (the “Demand
Notice”) to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within sixty (60) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be
included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsection
2.1(c) and Subsection 2.3. 
 (b) Form S-3 Demand. If at any time when it is
eligible to use a Form S-3 registration statement, the Company receives a request from Holders of at least twenty percent (20%) of the Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $3,000,000, then the Company shall
(i) within ten (10) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within forty-five (45) days after the date
such request is given by the Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other
Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsection 2.1(c) and Subsection 2.3. 

(c) Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Subsection
2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board of Directors it would be materially detrimental to the Company and its stockholders for such registration
statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate
reorganization, 

  
 5 

 
or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as
confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect
to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than one hundred twenty (120) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this
right more than twice in any twelve (12) month period; and provided further that the Company shall not register any securities for its own account or that of any other stockholder during such one hundred twenty (120) day period
other than an Excluded Registration. 
 (d) The Company shall not be obligated to effect, or to take any action to effect, any registration
pursuant to Subsection 2.1(a)(i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date
of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected two
registrations pursuant to Subsection 2.1(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a
request made pursuant to Subsection 2.1(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 2.1(b) (i) during the period that is thirty (30) days before
the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith
commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Company has effected two registrations pursuant to Subsection 2.1(b) within the twelve (12) month period immediately preceding
the date of such request. A registration shall not be counted as “effected” for purposes of this Subsection 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the
Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Subsection 2.6, in which case such withdrawn
registration statement shall be counted as “effected” for purposes of this Subsection 2.1(d).  

2.2. Company Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for
stockholders other than the Holders) any of its Common Stock under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give
each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Subsection 2.3, cause to be registered all
of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Subsection 2.2 before the effective
date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with
Subsection 2.6. 

  
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 2.3. Underwriting Requirements. 

(a) If, pursuant to Subsection 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their
request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Subsection 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will be selected by the
Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall
(together with the Company as provided in Subsection 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Subsection 2.3, if
the managing underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that
otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as
nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by
the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. To facilitate the allocation of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder to the nearest 100 shares.  
 (b) In connection with any
offering involving an underwriting of shares of the Company’s capital stock pursuant to Subsection 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders
accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If
the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion
determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole
discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that
are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by
all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares. Notwithstanding the
foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering, (ii) the
number of Registrable Securities included in the offering be reduced below twenty percent 

  
 7 

 
(20%) of the total number of securities included in such offering, unless such offering is the IPO, in which case the selling Holders may be excluded further if the underwriters make the
determination described above and no other stockholder’s securities are included in such offering, (iii) notwithstanding (ii) above, any Registrable Securities which are not Key Holder Registrable Securities be excluded from such
underwriting unless all Key Holder Registrable Securities are first excluded from such offering, or (iv) notwithstanding (ii) or (iii) above, any Key Holder Registrable Securities which are held by James A. Bowen, FT Bandwidth Ventures,
LLC, and/or FT Bandwidth Ventures II, LLC, be excluded from such underwriting unless all other Key Holder Registrable Securities are first excluded from such offering. For purposes of the provision in this Subsection 2.3(b) concerning
apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family
Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such
“selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence. 

(c) For purposes of Subsection 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the
underwriter’s cutback provisions in Subsection 2.3(a), fewer than fifty percent (50) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included. 

2.4. Obligations of the Company. Whenever required under this Section 2 to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably possible: 
 (a) prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that
(i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities
included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with
applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to 365 days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold; 

(b) prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with
such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement; 

  
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 (c) furnish to the selling Holders such numbers of copies of a prospectus, including a
preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities; 

(d) use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other
securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act; 

(e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and
customary form, with the underwriter(s) of such offering; 
 (f) use its commercially reasonable efforts to cause all such Registrable
Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed; 

(g) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number
for all such Registrable Securities, in each case not later than the effective date of such registration; 
 (h) promptly make available
for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling
Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith; 

(i) notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been
declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and 
 (j) after such
registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus. 

2.5. Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this
Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of
disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities. 

  
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 2.6. Expenses of Registration. All expenses (other than Selling Expenses) incurred in
connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the
Company; and the reasonable fees and disbursements, not to exceed $30,000, of one counsel for the selling Holders (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company
shall not be required to pay for any expenses of any registration proceeding begun pursuant to Subsection 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to
be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable
Securities agree to forfeit their right to one registration pursuant to Subsection 2.1(a) or Subsection 2.1(b), as the case may be; provided further that if, at the time of such withdrawal, the Holders shall have learned of a
material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders
shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Subsection 2.1(a) or Subsection 2.1(b). All Selling Expenses relating to Registrable Securities registered pursuant to
this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf. 

2.7. Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any
registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2. 

2.8. Indemnification. If any Registrable Securities are included in a registration statement under this
Section 2: 
 (a) To the extent permitted by law, the Company will indemnify and hold harmless each selling
Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other
expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this
Subsection 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be
liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or
other aforementioned Person expressly for use in connection with such registration. 

  
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 (b) To the extent permitted by law, each selling Holder, severally and not jointly, will
indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and
accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each
case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such
registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages
may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Subsections 2.8(b)
and 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder. 

(c) Promptly after receipt by an indemnified party under this Subsection 2.8 of notice of the commencement of any action
(including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Subsection 2.8, give the
indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which
notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by
one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any
such action shall relieve such indemnifying party of any liability to the indemnified party under this Subsection 2.8, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The
failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Subsection 2.8. 

  
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 (d) To provide for just and equitable contribution to joint liability under the Securities Act
in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Subsection 2.8 but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Subsection 2.8 provides for
indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Subsection 2.8, then, and in each such case, such parties will
contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the
indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to
information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in
any such case, (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no
event shall a Holder’s liability pursuant to this Subsection 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Subsection 2.8(b), exceed the proceeds from the offering received by such Holder (net
of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder. 
 (e)
Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall control. 
 (f) Unless otherwise superseded by an underwriting agreement
entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Subsection 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this
Section 2, and otherwise shall survive the termination of this Agreement. 
 2.9. Reports Under Exchange
Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to
a registration on Form S-3, the Company shall: 
 (a) make and keep available adequate current
public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO; 

  
 12 

 (b) use commercially reasonable efforts to file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and 

(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a
written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO), the Securities
Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any
time after the Company so qualifies); and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time
after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form). 

2.10. Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the
prior written consent of the Holders of a majority of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would (i) provide to such holder the right
to include securities in any registration on other than either a pro rata basis with respect to the Registrable Securities or on a subordinate basis after all Holders have had the opportunity to include in the registration and offering all shares of
Registrable Securities that they wish to so include or (ii) allow such holder or prospective holder to initiate a demand for registration of any securities held by such holder or prospective holder; provided that this limitation shall
not apply to any additional Investor who becomes a party to this Agreement in accordance with Subsection 6.9. 
 2.11.
“Market Stand-off” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period
commencing on the date of the final prospectus relating to the registration by the Company of shares of its Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1, and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days, or such other period as may be requested by the Company or an
underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research reports and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA Rule
2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or
warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock held immediately
before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such
securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other 

  
 13 

 
securities, in cash, or otherwise. The foregoing provisions of this Subsection 2.11 shall apply only to the IPO, shall not apply to the sale of any shares to an underwriter pursuant
to an underwriting agreement, or the transfer of any shares to any trust for the direct or indirect benefit of the Holder or the immediate family of the Holder, provided that the trustee of the trust agrees to be bound in writing by the restrictions
set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Holders only if all officers and directors are subject to the same restrictions and the Company uses commercially
reasonable efforts to obtain a similar agreement from all stockholders individually owning more than one percent (1%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Series A
Preferred Stock). The underwriters in connection with such registration are intended third-party beneficiaries of this Subsection 2.11 and shall have the right, power, and authority to enforce the
provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Subsection 2.11
or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders subject to such agreements,
based on the number of shares subject to such agreements.  
 2.12. Restrictions on Transfer. 

(a) The Series A Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall
not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the
provisions of the Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Series A Preferred Stock and the Registrable Securities held by such Holder to agree to take and hold such securities subject to
the provisions and upon the conditions specified in this Agreement. 
 (b) Each certificate or instrument representing (i) the Series
A Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the securities referenced in clauses (i) and (ii), upon any stock split, stock dividend, recapitalization, merger, consolidation,
or similar event, shall (unless otherwise permitted by the provisions of Subsection 2.12(c)) be stamped or otherwise imprinted with a legend substantially in the following form: 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES
MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. 

THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER,
A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. 

  
 14 

 The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent
of the Restricted Securities in order to implement the restrictions on transfer set forth in this Subsection 2.12. 
 (c) The holder
of each certificate representing Restricted Securities, by acceptance thereof, agrees to comply in all respects with the provisions of this Section 2. Before any proposed sale, pledge, or transfer of any Restricted
Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereof shall give notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer.
Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written
opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act;
provided, however, no such opinion of legal counsel will be required in connection with any sale, pledge or transfer to which the provisions of Subsections 2.1 and 2.2 of the Right of First Refusal and Co-Sale
Agreement, dated as of the date hereof, by and among the Company, the Investor and the Key Holders named therein, do not apply pursuant to the terms and conditions of Section 3 of such Right of First Refusal and
Co-Sale Agreement; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a
recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted
Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given
by the Holder to the Company. The Company will not require such a legal opinion or “no action” letter (x) in any transaction in compliance with SEC Rule 144 or (y) in any transaction in which such Holder distributes Restricted
Securities to an Affiliate of such Holder for no consideration; provided that each transferee agrees in writing to be subject to the terms of this Subsection 2.12. Each certificate or instrument evidencing the Restricted Securities
transferred as above provided shall bear, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Subsection 2.12(b), except that such certificate shall not bear such restrictive legend if, in
the opinion of counsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act. 

2.13. Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any
registration pursuant to Subsection 2.1 or Subsection 2.2 shall terminate upon the earliest to occur of: 
 (a) a True Sale;

  
 15 

 (b) such time as Rule 144 or another similar exemption under the Securities Act is available for
the sale of all of such Holder’s shares without limitation during a three-month period without registration; and 
 (c) the
fifth anniversary of the IPO. 
 3. Information and Observer Rights. 

3.1. Delivery of Financial Statements to Carmichael; Related Matters. The Company shall deliver to Carmichael: 

(a) as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company,
(i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and a comparison between (x) the actual amounts as of and for such fiscal year and (y) the comparable amounts for the
prior year and as included in the Budget (as defined in Subsection 3.1(e)) for such year, with an explanation of any material differences between such amounts and a schedule as to the sources and applications of funds for such year, and
(iii) a statement of stockholders’ equity as of the end of such year, all such financial statements audited and certified by independent public accountants reasonably acceptable to Carmichael (for clarity, Grant Thornton LLP will be deemed
reasonably acceptable to Carmichael).  
 (b) as soon as practicable, but in any event within
forty-five (45) days after the end of each quarter of each fiscal year of the Company, unaudited statements of income and of cash flows for such fiscal quarter, and an unaudited balance sheet and a
statement of stockholders’ equity as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit
adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP); 
 (c) as soon as practicable, but
in any event within forty-five (45) days after the end of each quarter of each fiscal year of the Company, a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for
shares of capital stock outstanding at the end of the period, the Common Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Common Stock and the exchange ratio or exercise price applicable
thereto, and the number of shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit Carmichael to calculate its respective percentage equity ownership in the Company;

 (d) as soon as practicable, but in any event within thirty (30) days of the end of each month, an unaudited income statement and
statement of cash flows for such month, and an unaudited balance sheet and statement of stockholders’ equity as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to
normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP); and 

  
 16 

 (e) as soon as practicable, but in any event before the end of each fiscal year, a budget and
business plan for the next fiscal year (collectively, the “Budget”), approved by the Board of Directors and prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and,
promptly after prepared, any other budgets or revised budgets prepared by the Company. 
 (f) If, for any period, the Company has any
subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the
Company and all such consolidated subsidiaries. 
 (g) Notwithstanding anything else in this Subsection 3.1 to the contrary, the
Company may cease providing the information set forth in this Subsection 3.1 during the period starting with the date sixty (60) days before the Company’s good-faith estimate of the date of filing of a registration statement if it
reasonably concludes it must do so to comply with the SEC rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Subsection 3.1 shall be reinstated at such time as the
Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective. 

3.2. Delivery of Financial Statements to Key Holders. The Company shall deliver to each Key Holder: 

(a) as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company,
(i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and (iii) a statement of stockholders’ equity as of the end of such year, all such financial statements audited and
certified by the Company’s independent public accountants; and 
 (b) as soon as practicable, but in any event within forty-five (45) days after the end of each quarter of each fiscal year of the Company, unaudited statements of income and of cash flows for such fiscal quarter, and an unaudited balance sheet and a statement of
stockholders’ equity as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and
(ii) not contain all notes thereto that may be required in accordance with GAAP). 
 3.3. Inspection. The Company shall permit
Carmichael, at Carmichael’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of
the Company as may be reasonably requested by Carmichael and with reasonable advance notification; provided, however, that the Company shall not be obligated pursuant to this Subsection 3.3 to provide access to any information that it
reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or the disclosure of which would adversely affect the
attorney-client privilege between the Company and its counsel. 
 3.4. Advisory Board. As long as Carmichael owns not less than
250,000 shares of Series A Preferred Stock (or an equivalent amount of Common Stock issued upon conversion thereof) (subject to appropriate adjustment for stock splits, stock dividends, combinations, and other recapitalizations), Carmichael shall
have the right to appoint two (2) members to the Company’s Advisory Board. The Company covenants and agrees to convene at least four (4) meetings of the Advisory Board each fiscal year. 

  
 17 

 3.5. Termination of Information, Inspection and Advisory Board Rights. The covenants set
forth in Subsection 3.1, Subsection 3.3, Subsection 3.3 and Subsection 3.4 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first
becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a True Sale, whichever event occurs first. 

3.6. Confidentiality. Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any
purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), unless
such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Subsection 3.6 by such Investor), (b) is or has been independently developed or conceived by the Investor
without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company;
provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its
investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Subsection 3.6; (iii) to any existing or
prospective Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, provided that such Investor informs such Person that such information is confidential and directs such Person
to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, provided that the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such
required disclosure.  
 4. Rights to Future Stock Issuances. 

4.1. Right of First Refusal. Subject to the terms and conditions of this Subsection 4.1 and applicable securities laws, if the
Company proposes to offer or sell any New Securities, the Company shall first grant to each of Carmichael and each Key Holder the right of first refusal to purchase, on the terms and conditions set forth in the Company’s Offer Notice (as
defined below), up to that portion of such New Securities which equals the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Series A Preferred Stock and any
other Derivative Securities then held, by Carmichael or such Key Holder, as the case may be, bears to the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Series A Preferred Stock
and other Derivative Securities). Carmichael and each Key Holder shall be entitled to apportion the right of first refusal hereby granted to it among itself and its Affiliates in such proportions as it deems appropriate. 

  
 18 

 (a) In the event the Company proposes to undertake an issuance of New Securities, the Company
will give Carmichael and each Key Holder written notice (the “Offer Notice”) of its intention, describing (i) the type of New Securities which the Company proposes to issue, (ii) the number of such New Securities which the
Company proposes to issue, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities. 
 (b)
Carmichael and each Key Holder will have thirty (30) days from the date of any such Offer Notice to exercise its right of first refusal pursuant to this Subsection 4.1 hereof for the price and upon the general terms specified in the
Offer Notice by written notice to the Company stating therein the quantity of New Securities to be purchased by Carmichael or such Key Holder, as the case may be. The closing of any sale pursuant to this Subsection 4.1(b) shall occur within
ninety (90) days of the date that the Offer Notice is given. 
 (c) The Company may, during the ninety (90) day period following
the expiration of the period provided in Subsection 4.1(b), offer and sell all such New Securities respecting which the rights of first refusal of Carmichael or any Key Holder, as the case may be, were not exercised, at a price and upon terms
no more favorable in any material respect to the purchasers thereof than specified in the Offer Notice. If the Company has not sold all such New Securities within such ninety (90) day period following the expiration of the period provided in
Subsection 4.1(b), the Company will not thereafter issue or sell any New Securities without first notifying Carmichael and the Key Holders in accordance with this Subsection 4.1. 

(d) The right of first refusal in this Subsection 4.1 shall not be applicable to (i) Exempted Securities (as defined in the
Company’s Certificate of Incorporation); (ii) New Securities issued to Carmichael and/or James A. Bowen from time to time due to or in connection with the issuance of New Securities (including, without limitation, Exempted Securities) to
the Company’s directors, employees, independent contractors, and/or advisors, or (iii) shares of Common Stock issued in the IPO.  

4.2. Termination. The covenants set forth in Subsection 4.1 shall terminate and be of no further force or effect
(i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a True Sale, whichever event
occurs first. 
 5. Additional Covenants. The Company covenants and agrees with Carmichael as follows: 

5.1. Insurance. The Company shall use its commercially reasonable efforts to obtain, within thirty (30) days of the date hereof,
from financially sound and reputable insurers Directors and Officers liability insurance and term “key-person” insurance on David A. Morken, each in an amount and on terms and conditions satisfactory
to the Board of Directors, including the Series A Director, and will use commercially reasonable efforts to cause such insurance policies to be maintained until such time as the Board of Directors determines that such insurance should be
discontinued. The key-person policy shall name the Company as loss payee, and neither policy shall be cancelable by the Company without prior approval by the Board of Directors including the Series A Director.

  
 19 

 5.2. Employee Agreements. The Company will cause (i) each person now or hereafter
employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) with access to confidential information and/or trade secrets to enter into a nondisclosure and proprietary rights assignment
agreement and (ii) each Key Employee who receives options to purchase shares of the Company’s Common Stock to enter into a one (1) year noncompetition and nonsolicitation agreement, substantially, in the form attached hereto as
Exhibit A. In addition, the Company shall not amend, modify, terminate, waive, or otherwise alter, in whole or in part, any of the above-referenced agreements or any restricted stock agreement between the Company and any employee, without the
consent of the Series A Director. 
 5.3. Employee Stock. Unless otherwise approved by the Board of Directors, all future employees
and consultants of the Company who purchase, receive options to purchase, or receive awards of shares of the Company’s capital stock after the date hereof shall be required to execute restricted stock or option agreements, as applicable,
providing for (i) vesting of shares over a four (4) year period, with the first twenty-five percent (25%) of such shares vesting following twelve (12) months of continued employment or service, and the remaining shares vesting in
equal monthly installments over the following thirty-six (36) months, and (ii) a market stand-off provision substantially similar to that in Subsection
2.11. In addition, unless otherwise approved by the Board of Directors, the Company shall retain a “right of first refusal” on employee transfers until the Company’s IPO and shall have the right to repurchase unvested
shares at cost upon termination of employment of a holder of restricted stock. 
 5.4. Board Matters. Unless otherwise determined by
the vote of a majority of the directors then in office, the Board of Directors shall meet at least quarterly in accordance with an agreed-upon schedule. The Company shall reimburse the nonemployee directors for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board of Directors. The Company shall
cause to be established, as soon as practicable after such request, and will maintain, an audit and compensation committee, each of which shall include the Series A Director. The Series A Director shall be entitled in such person’s discretion
to be a member of any Board committee. The Company shall use commercially reasonable efforts, in a manner reasonably determined by the Company’s Board of Directors to appropriately position the Company in anticipation of any then-current plans
to file a registration statement in connection with an initial public offering of the Company’s Common Stock, to identify suitable persons who are not employed by the Company to serve as independent directors, each of whom will be elected by
the holders of the Company’s Common Stock. 
 5.5. Successor Indemnification. If the Company or any of its successors or
assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and
assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the Company’s
Bylaws, its Certificate of Incorporation, or elsewhere, as the case may be. 

  
 20 

 5.6. Termination of Covenants. The covenants set forth in this
Section 5, except for Subsection 5.5, shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the periodic
reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a True Sale, whichever event occurs first. 

6. Miscellaneous. 
 6.1.
Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (i) is an Affiliate of a Holder; (ii) is a
Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; or (iii) after such transfer, holds at least 30,000 shares of Registrable Securities (subject
to appropriate adjustment for stock splits, stock dividends, combinations, and other recapitalizations); provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and
address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and
conditions of this Agreement, including the provisions of Subsection 2.11. For the purposes of determining the number of shares of Registrable Securities held by a transferee, the holdings of a transferee (1) that is an Affiliate or
stockholder of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be aggregated together and with those of the
transferring Holder; provided further that all transferees who would not qualify individually for assignment of rights shall have a single attorney-in-fact for the
purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein. 
 6.2. Governing Law. This Agreement and any controversy arising out of or relating
to this Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with
the internal laws of North Carolina, without regard to conflict of law principles that would result in the application of any law other than the law of the State of North Carolina. 

6.3. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly
delivered and be valid and effective for all purposes.  
 6.4. Titles and Subtitles. The titles and subtitles
used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement. 

  
 21 

 6.5. Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail or facsimile during the
recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage
prepaid; or (iv) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt.
All communications shall be sent to the respective parties at their addresses as set forth on Schedule A hereto (or Schedule B (as applicable)), or to the principal office of the Company and to the attention of the Chief Executive
Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified by written notice given in accordance with this Subsection 6.5. If notice is given to the Company, a copy shall also be sent
to Attention: General Counsel, 4001 Weston Parkway, Cary, NC 27513, legal@bandwidth.com, and if notice is given to Carmichael, a copy shall also be given to John M. Fogg, Robinson, Bradshaw & Hinson, P.A., 1450 Raleigh Road, Suite
215, Chapel Hill, NC 27517, jfogg@rbh.com. 
 6.6. Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities
then outstanding (excluding any Key Holder Registrable Securities for the purposes of determining the holders of a majority of the Registrable Securities then outstanding); provided that the Company may in its sole discretion waive compliance
with Subsection 2.12(c) (and the Company’s failure to object promptly in writing after notification of a proposed assignment allegedly in violation of Subsection 2.12(c) shall be deemed to be a waiver); and provided further that
any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. Further, this Agreement may not be amended, and no provision hereof may be waived, in each case, in any way which would
adversely affect the rights of the Key Holders hereunder without also the written consent of the holders of at least a majority of the Registrable Securities held by the Key Holders, which majority of the Registrable Securities held by the Key
Holders must include James A. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC, so long as James A. Bowen, FT Bandwidth Ventures, LLC or FT Bandwidth Ventures II, LLC, respectively, holds any Registrable Securities. In addition,
(i) this Agreement may not be amended, modified or terminated and the observance of any term hereunder may not be waived with respect to any Investor or Key Holder without the written consent of such Investor or Key Holder unless such
amendment, modification, termination or waiver applies to all Investors and Key Holders, respectively, in the same fashion and such amendment, modification, termination or waiver is otherwise approved pursuant to the immediately preceding sentence
of this Section 6.6, and (ii) the consent of the Key Holders shall not be required for any amendment, modification, termination or waiver if such amendment, modification, termination or waiver does not apply to the Key Holders. The Company
shall give prompt notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance with this
Subsection 6.6 shall be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be
deemed to be or construed as a further or continuing waiver of any such term, condition, or provision. 

  
 22 

 6.7. Severability. In case any one or more of the provisions contained in this Agreement
is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be
reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law. 
 6.8. Aggregation of
Stock. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as
among themselves in any manner they deem appropriate. 
 6.9. Entire Agreement. This Agreement (including any Schedules and Exhibits
hereto) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly
canceled. Upon the effectiveness of this Agreement, each of the Buy-Sell Agreements will be deemed terminated and of no further force or effect. 

6.10. Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of
North Carolina and to the jurisdiction of the United States District Court for the Eastern District of North Carolina for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence
any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of North Carolina or the United States District Court for the Eastern District of North Carolina, and (c) hereby waive, and agree
not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or
execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. 

WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT,
THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY
EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL 

  
 23 

 6.11. Delays or Omissions. No delay or omission to exercise any right, power, or remedy
accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or
acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All
remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative. 
 6.12.
Acknowledgment. The Company acknowledges that the Investors are in the business of venture capital investing and therefore review the business plans and related proprietary information of many enterprises, including enterprises which may have
products or services which compete directly or indirectly with those of the Company. Nothing in this Agreement shall preclude or in any way restrict the Investors from investing or participating in any particular enterprise whether or not such
enterprise has products or services which compete with those of the Company. 
 [Remainder of Page Intentionally Left Blank] 

  
 24 

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

  

			
	            BANDWIDTH.COM, INC.
		
	By:	 	/s/ David A. Morken
	Name:	 	David A. Morken
	Title:	 	Chief Executive Officer

  

			
	 CARMICHAEL INVESTMENT PARTNERS, LLC

		
	By:	 	/s/ Brian D. Bailey
	Name:	 	Brian D. Bailey
	Title:	 	Managing Partner

			
	KEY HOLDERS:
	
	/s/ J. Adam Abram
	J. Adam Abram
	
	B. THOMAS M. SMITH, JR. DECLARATION OF TRUST
		
	By:	 	/s/ B. Thomas M. Smith, Jr.
		 	B. Thomas M. Smith, Jr., Trustee
	
	/s/ B. Thomas M. Smith
	B. Thomas M. Smith
	
	/s/ James A. Bowen
	James A. Bowen
	
	FT BANDWIDTH VENTURES, LLC
		
	By:	 	/s/ James A. Bowen
		 	James A. Bowen, Manager
	
	FT BANDWIDTH VENTURES II, LLC
		
	By:	 	/s/ James A. Bowen
		 	James A. Bowen, Manager
	
	/s/ John Alston Gardner
	John Alston Gardner
	
	/s/ Naomi Lerner
	Naomi Lerner
	
	/s/ Sarah Lerner
	Sarah Lerner
	
	/s/ Steven J. Lerner
	Steven J. Lerner
	
	/s/ David W. Smith
	David W. Smith

 SCHEDULE A 

Investors 
 Carmichael Investment Partners,
LLC 
 6000 Fairview Road, Suite 1200 
 Charlotte, NC 28210 

704-552-3770 

brian.bailey@carmichaelpartners.com 

 SCHEDULE B 

Key Holders 
 J. Adam Abram 

300 Meadowmont Village Cr. 
 Suite 333 

Chapel Hill, North Carolina 27517 
 Email: jaabram@gmail.com 

B. THOMAS M. SMITH, JR. DECLARATION OF TRUST 
 4086 Penshurt Park

 Sarasota, Florida 34235 
 Email: new_weetartan@yahoo.com 

B. Thomas M. Smith 
 4086 Penshurt Park 

Sarasota, Florida 34235 
 Email: new_weetartan@yahoo.com 

James A. Bowen 
 415 West Union 

Wheaton, Illinois 60187 
 Email: jbowen@ftportfolios.com 

FT BANDWIDTH VENTURES, LLC 
 c/o James A. Bowen 

120 Liberty Drive 
 Wheaton, Illinois 60187 

Email: jbowen@ftportfolios.com 
 FT BANDWIDTH VENTURES II, LLC

 c/o James A. Bowen 
 120 Liberty Drive 

Wheaton, Illinois 60187 
 Email: jbowen@ftportfolios.com 

John Alston Gardner 
 1266 W. Paces Ferry Road 

Box 459 
 Atlanta, Georgia 30327 

Email: alstongardner@yahoo.com 
 Naomi Lerner 

Attention: Steven J. Lerner 
 110 Sandy Creek Trail 

Chapel Hill, North Carolina 27516 
 Email:
slerner@bluehillgroup.com 

 Sarah Lerner 

Attention: Steven J. Lerner 
 110 Sandy Creek Trail 

Chapel Hill, North Carolina 27516 
 Email:
slerner@bluehillgroup.com 
 Steven J. Lerner 
 110 Sandy Creek
Trail 
 Chapel Hill, North Carolina 27516 
 Email:
slerner@bluehillgroup.com 
 David W. Smith 
 4945 SW 91st Drive 
 Gainesville, Florida 32608 

Email: dwsmith@ufl.edu 

 AMENDMENT WITH RESPECT TO MATTERS RELATED TO 

RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT 

AND INVESTORS’ RIGHTS AGREEMENT 

This Amendment (the “Amendment”) is made by and among (i) Bandwidth.com, Inc. (the “Company”),
(ii) (A) the Key Holders (as defined in the ROFR Agreement (as defined below)) holding a majority of the shares of Transfer Stock held by all of the Key Holders as of the Amendment Effective Date (as defined below), including, James A. Bowen,
FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC, and (B) the Key Holders (as defined in the IR Agreement (as defined below)) holding a majority of the shares of Registrable Securities (as defined in the IR Agreement), including,
James A. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC, and (iii) Carmichael Investment Partners, LLC, as the holder of all of the shares of Common Stock issued or issuable upon conversion of the outstanding Preferred
Stock. Capitalized terms not otherwise defined in this Amendment are as defined in the Right of First Refusal and Co-Sale Agreement, dated as of February 22, 2011 (the “ROFR Agreement”).

 WHEREAS, in addition to the ROFR Agreement, the Company, the Investor, and certain Key Holders are parties to the Investors’ Rights
Agreement, dated as of February 22, 2011 (the “IR Agreement”); and 
 WHEREAS, the Company, the Investor and the Key
Holders desire to amend the ROFR Agreement as described in this Amendment as of the Amendment Effective Date stated on the signature page attached hereto (the “Amendment Effective Date”); and 

WHEREAS, the Company, the Investor and certain Key Holders who are parties to the IR Agreement desire to amend the ROFR Agreement as described
in this Amendment as of the Amendment Effective Date. 
 NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 

1. Amendment to ROFR Agreement. Section 3.1 of the ROFR Agreement is hereby deleted in its entirety and the following is inserted
in lieu thereof: 
 Exempted Transfers. Notwithstanding the foregoing or anything to the contrary herein, the provisions of
Subsections 2.1 and 2.2 shall not apply: (a) in the case of a Key Holder that is an entity, upon a transfer by such Key Holder to its stockholders, members, partners or other equity holders, (b) to a repurchase of Transfer Stock
from a Key Holder by the Company at a price no greater than that originally paid by such Key Holder for such Transfer Stock and pursuant to an agreement containing vesting and/or repurchase provisions approved by a majority of the Board of
Directors, (c) to a pledge of Transfer Stock that creates a mere security interest in the pledged Transfer Stock, provided that the pledgee thereof agrees in writing in advance to be bound by and comply with all applicable provisions of this
Agreement to the same extent as if it were the Key Holder making such pledge, (d) (i) in the case of a Key Holder that is a natural person, upon a transfer of Transfer Stock by such Key Holder made for bona fide estate planning purposes, either
during his or her lifetime or on death by will or intestacy to his or her spouse, child (natural or adopted), or any other direct lineal descendant of such Key Holder (or his or her spouse) (all of the foregoing collectively referred to as
“family members”), or any other person approved by the Board of Directors of the Company, including the Series A Director (as defined in the Company’s Certificate of Incorporation), or any custodian or trustee of any trust,
partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by, such Key Holder or any such family members, (ii) in the case of The 2009 Henry Rice Kaestner

 
GRAT, upon a transfer of Transfer Stock by such Key Holder to Henry R. Kaestner and/or spouse, child (natural or adopted), or any other direct lineal descendant of such Key Holder (or his or her
spouse) (all of the foregoing collectively referred to as “family members”), or any other person approved by the Board of Directors of the Company, including the Series A Director (as defined in the Company’s Certificate of
Incorporation), or any custodian or trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by, such Key Holder or any such family members, or (iii) in the case of
The 2009 David Morken GRAT, upon a transfer of Transfer Stock by such Key Holder to David A. Morken and/or spouse, child (natural or adopted), or any other direct lineal descendant of such Key Holder (or his or her spouse) (all of the foregoing
collectively referred to as “family members”), or any other person approved by the Board of Directors of the Company, including the Series A Director (as defined in the Company’s Certificate of Incorporation), or any custodian or
trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by, such Key Holder or any such family members, or (e) to the sale by the Key Holder of up to 5% of the
Transfer Stock held by such Key Holder as of the date that such Key Holder first became party to this Agreement; provided, however, (i) David A. Morken, the 2009 David Morken GRAT and/or any transferee of David A. Morken and/or the 2009 David
Morken GRAT permitted pursuant to clause (d) above will at all times from and after February 22, 2011 be aggregated to determine such 5% and any sales or transfers by David A. Morken, the 2009 David Morken GRAT and/or any transferee of
David A. Morken and/or the 2009 David Morken GRAT permitted pursuant to clause (d) above will at all times from and after February 22, 2011 be aggregated to determine compliance with such 5%, and (ii) Henry R. Kaestner, the 2009 Henry
Rice Kaestner GRAT and/or any transferee of Henry R. Kaestner and/or the 2009 Henry Rice Kaestner GRAT permitted pursuant to clause (d) above will at all times from and after February 22, 2011 be aggregated to determine such 5% and any
sales or transfers by Henry R. Kaestner, the 2009 Henry Rice Kaestner GRAT and/or any transferee of Henry R. Kaestner and/or the 2009 Henry Rice Kaestner GRAT permitted pursuant to clause (d) above will at all times from and after
February 22, 2011 be aggregated to determine compliance with such 5%; provided that in the case of clause(s) (a), (c), (d) or (e), the Key Holder shall deliver prior written notice to the Investors of such pledge, gift or transfer and such
shares of Transfer Stock shall at all times remain subject to the terms and restrictions set forth in this Agreement and such transferee shall, as a condition to such issuance, deliver a counterpart signature page to this Agreement as confirmation
that such transferee shall be bound by all the terms and conditions of this Agreement as a Key Holder (but only with respect to the securities so transferred to the transferee), including the obligations of a Key Holder with respect to Proposed Key
Holder Transfers of such Transfer Stock pursuant to Section 2; and provided, further, in the case of any transfer pursuant to clause (a) or (d) above, that such transfer is made pursuant to a transaction in which there
is no consideration actually paid for such transfer. 
 2. Amendment to IR Agreement. Section 4.1(d) of the IR Agreement is
hereby deleted in its entirety and the following is inserted in lieu thereof: 
 The right of first refusal in this Subsection 4.1
shall not be applicable to (i) Exempted Securities (as defined in the Company’s Certificate of Incorporation); (ii) New Securities issued to Carmichael and/or James A. Bowen from time to time due to or in connection with the
issuance of New Securities (including, without limitation, Exempted Securities) to the Company’s directors, employees, independent contractors, and/or advisors, (iii) shares of Common Stock issued in the IPO, or (iv) warrants to
purchase up to 1,939 shares of Common Stock issued to Carmichael Investment Partners, LLC (and shares of Common Stock issuable upon exercise of such warrants). 

 3. Miscellaneous. This Amendment may only be amended in writing by and among (i) the
Company, (ii) the Key Holders holding a majority of the shares of Transfer Stock held by all of the Key Holders, including, James A. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC, and (iii) Carmichael Investment
Partners, LLC, as the holder of all of the shares of Common Stock issued or issuable upon conversion of the outstanding Preferred Stock. The section headings contained in this Amendment are inserted for convenience only and will not affect in any
way the meaning or interpretation of this Amendment. Except as otherwise provided herein, the terms and conditions of the ROFR Agreement and the IR Agreement remain in full force and effect. 

(The remainder of this page is intentionally left blank.) 

 IN WITNESS WHEREOF, the undersigned have executed this Amendment as of September 21, 2012
(the “Amendment Effective Date”). 
  

			
	BANDWIDTH.COM, INC.
		
	By:	 	/s/ David A. Morken
		 	David A. Morken, Chief Executive Officer
	
	CARMICHAEL INVESTMENT PARTNERS, LLC
		
	By:	 	Carmichael Bandwidth, LLC
		
	By:	 	/s/ Brian D. Bailey
		 	Brian D. Bailey, Managing Partner

 
			
	
	/s/ David A. Morken
	David A. Morken, Individually
	
	THE 2007 MICHAEL OWEN MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Henry R. Kaestner
		 	Henry R. Kaestner, Trustee
	
	THE 2007 GRACE ELAINE MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Henry R. Kaestner
		 	Henry R. Kaestner, Trustee
	
	THE 2007 HELEN CHRISTINE MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Henry R. Kaestner
		 	Henry R. Kaestner, Trustee
	
	THE 2007 DANIEL JAMES MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Henry R. Kaestner
		 	Henry R. Kaestner, Trustee
	
	THE 2007 INGA MARIE MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Henry R. Kaestner
		 	Henry R. Kaestner, Trustee
	
	THE 2007 BENJAMIN SCOTT MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Henry R. Kaestner
		 	Henry R. Kaestner, Trustee

 
			
	
	/s/ Henry R. Kaestner
	Henry R. Kaestner, Individually
	
	THE 2007 GRAHAM REED KAESTNER IRREVOCABLE TRUST
		
	By:	 	/s/ Tom Hahn
		 	Tom Hahn, Trustee
	
	THE 2007 JOSEPH RICE KAESTNER IRREVOCABLE TRUST
		
	By:	 	/s/ Tom Hahn
		 	Tom Hahn, Trustee
	
	THE 2007 BENJAMIN HENRY KAESTNER IV IRREVOCABLE TRUST
		
	By:	 	/s/ Tom Hahn
		 	Tom Hahn, Trustee

 
			
	
	/s/ James A. Bowen
	James A. Bowen
	
	FT BANDWIDTH VENTURES, LLC
		
	By:	 	/s/ James A. Bowen
		 	James A. Bowen, Manager
	
	FT BANDWIDTH VENTURES II, LLC
		
	By:	 	/s/ James A. Bowen
		 	James A. Bowen, Manager

 AMENDMENT WITH RESPECT TO MATTERS RELATED TO 

RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT, INVESTORS’ RIGHTS AGREEMENT AND VOTING AGREEMENT

 This Amendment (the “Amendment”) is made by and among (i) Bandwidth.com, Inc. (the “Company”),
(ii) (A) the Key Holders (as defined in the ROFR Agreement (as defined below)) holding a majority of the shares of Transfer Stock (as defined in the ROFR Agreement (as defined below)) held by all of the Key Holders as of the Amendment Effective
Date (as defined below), including, James A. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC, (B) the Key Holders (as defined in the IR Agreement (as defined below)) holding a majority of the shares of Registrable Securities
(as defined in the IR Agreement), including, James A. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC, and (C) the Key Holders (as defined in the Voting Agreement (as defined below)) holding a majority of the Shares (as
defined in the Voting Agreement) then held by such Key Holders, including James A. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC, and (iii) Carmichael Investment Partners, LLC, as the holder of all of the shares of Common
Stock issued or issuable upon conversion of the outstanding Preferred Stock. 
 WHEREAS, in addition to the ROFR Agreement, the Company, the
Investor, and certain Key Holders are parties to the Investors’ Rights Agreement, dated as of February 22, 2011 (as previously amended, the “IR Agreement”); and 

WHEREAS, in addition to the ROFR Agreement and the IR Agreement, the Company, the Investor and certain Key Holders are parties to the Voting
Agreement, dated as of February 22, 2011 (as previously amended, the “Voting Agreement”); and 
 WHEREAS, the Company,
the Investor and the Key Holders desire to amend the ROFR Agreement as described in this Amendment as of the Amendment Effective Date stated on the signature page attached hereto (the “Amendment Effective Date”); and 

WHEREAS, the Company, the Investor and certain Key Holders who are parties to the IR Agreement desire to amend the IR Agreement as described
in this Amendment as of the Amendment Effective Date; and 
 WHEREAS, the Company, the Investor and certain Key Holders who are parties to
the Voting Agreement desire to amend the Voting Agreement as described in this Amendment as of the Amendment Effective Date. 
 NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 

 

	 	1.	Amendments to ROFR Agreement. 

 (a) Section 1.18 of the ROFR Agreement is hereby
deleted in its entirety and the following is inserted in lieu thereof: 
 “True Sale” means: (a) a merger or
consolidation in which (i) the Company is a constituent party, or (ii) a subsidiary of the Company is a constituent party and the Company issues shares of its Capital Stock pursuant to such merger or consolidation, except any such merger
or consolidation involving the Company or a subsidiary in which the shares of Capital Stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital
stock that represent, immediately following such merger or consolidation, a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly

  
 1 

 
owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation (provided that, for the
purpose of this definition of “True Sale” all shares of Common Stock issuable upon exercise of Options (as defined in the Company’s Certificate of Incorporation) outstanding immediately prior to such merger or consolidation or upon
conversion of Convertible Securities (as defined in the Company’s Certificate of Incorporation) outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation
and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged); (b) the sale, lease, transfer, exclusive license or other disposition, in a
single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or
otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or
other disposition is to a wholly owned subsidiary of the Company; or (c) any other transaction that each of the Investor, James A. Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC agrees in writing constitutes
a “True Sale” for the purposes of this Agreement. Notwithstanding the foregoing, no transaction described in either clause (a) or clause (b) above will constitute a “True Sale” unless, in the case of any transaction
described in clause (a) above, all of the consideration to be distributed to the holders of the Company’s capital stock constitutes cash and/or marketable securities or, in the case of any transaction described in clause (b) above,
all of the consideration actually paid to the Company constitutes cash and/or marketable securities. 
  

	 	(b)	The concluding sentence of Section 2.2(a) of the ROFR Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof: 

For the purposes of this Section 2.2 (and any section or subsection referenced in this Section 2.2 or any other section or subsection
necessarily implied for the operation of this Section 2.2) only, James A. Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC, and FT Bandwidth Ventures II, LLC, each will be deemed to be an Investor and not a Key Holder. 

 

	 	(c)	Section 6.8 of the ROFR Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof: 

Amendment; Waiver and Termination. This Agreement may be amended, modified or terminated (other than pursuant to
Section 6.1 above) and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument executed by (a) the Company,
(b) the Key Holders holding a majority of the shares of Transfer Stock then held by all of the Key Holders, which majority of the shares of Transfer Stock held by the Key Holders must include James A. Bowen, Susan R. Bowen, FT Bandwidth
Ventures, LLC and FT Bandwidth Ventures II, LLC, so long as James A. Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC or FT Bandwidth Ventures II, LLC, respectively is a Key Holder; and (c) the holders of a majority of the shares of Common
Stock issued or issuable upon conversion of the then outstanding shares of Preferred Stock held by the Investors (voting as a single class and on an as-converted basis). Any amendment, modification,
termination or waiver so effected shall be binding upon the Company, the Investors, the Key Holders and all of their respective successors and permitted assigns whether or not such party, assignee or other shareholder entered into or approved such
amendment, modification, termination or waiver. Notwithstanding the foregoing, (i) this Agreement may not be amended, modified or terminated and the observance of any term hereunder may not be waived with respect to any Investor (including
James A. Bowen, Susan R. 

  
 2 

 
Bowen, FT Bandwidth Ventures, LLC, and FT Bandwidth Ventures II, LLC, for the purposes of any amendment, modification, termination or waiver of any rights pursuant to Section 2.2 above), or
Key Holder without the written consent of such Investor (including James A. Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC, and FT Bandwidth Ventures II, LLC, for the purposes of any amendment, modification, termination or waiver of any rights
pursuant to Section 2.2 above) or Key Holder unless such amendment, modification, termination or waiver applies to all Investors (including James A. Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC, and FT Bandwidth Ventures II, LLC, for the
purposes of any amendment, modification, termination or waiver of any rights pursuant to Section 2.2 above) and Key Holders, respectively, in the same fashion and such amendment, modification, termination or waiver is otherwise approved
pursuant to the first sentence of this Section 6.8, and (ii) the consent of the Key Holders shall not be required for any amendment, modification, termination or waiver if such amendment, modification, termination or waiver does not apply
to the Key Holders. The Company shall give prompt written notice of any amendment, modification or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, modification, termination or waiver. No
waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. 

 

	 	2.	Amendment to IR Agreement. 

 (a) Section 1.28 of the IR Agreement is hereby deleted
in its entirety and the following is inserted in lieu thereof: 
 “True Sale” means: (a) a merger or consolidation in
which (i) the Company is a constituent party, or (ii) a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation
involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that
represent, immediately following such merger or consolidation, a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly owned subsidiary of
another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation (provided that, for the purpose of this definition of “True Sale” all shares of Common Stock
issuable upon exercise of Options (as defined in the Company’s Certificate of Incorporation) outstanding immediately prior to such merger or consolidation or upon conversion of Convertible Securities (as defined in the Company’s
Certificate of Incorporation) outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, converted or exchanged in such merger or
consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged); (b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the
Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if
substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the
Company; or (c) any other transaction that each of the Investor, James A. Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC agrees in writing constitutes a “True Sale” for the purposes of this
Agreement. Notwithstanding the foregoing, no transaction described in either clause (a) or clause (b) above will constitute a “True Sale” unless, in the case of any transaction described in clause (a) above,

  
 3 

 
all of the consideration to be distributed to the holders of the Company’s capital stock constitutes cash and/or marketable securities or, in the case of any transaction described in clause
(b) above, all of the consideration actually paid to the Company constitutes cash and/or marketable securities. 
  

	 	(b)	Section 2.3(b)(iv) of the IR Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof: 

notwithstanding (ii) or (iii) above, any Key Holder Registrable Securities which are held by James A. Bowen, Susan R. Bowen, FT Bandwidth
Ventures, LLC, and/or FT Bandwidth Ventures II, LLC, be excluded from such underwriting unless all other Key Holder Registrable Securities are first excluded from such offering. 

 

	 	(c)	Section 4.1(d) of the IR Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof: 

The right of first refusal in this Subsection 4.1 shall not be applicable to (i) Exempted Securities (as defined in the
Company’s Certificate of Incorporation); (ii) New Securities issued to Carmichael, James A. Bowen and/or Susan R. Bowen pursuant to the letter agreement, each dated as of November 23, 2016, or (iii) shares of Common Stock
issued in the IPO. 
  

	 	(d)	Section 6.6 of the IR Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof: 

Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding (excluding any Key Holder Registrable
Securities for the purposes of determining the holders of a majority of the Registrable Securities then outstanding); provided that the Company may in its sole discretion waive compliance with Subsection 2.12(c) (and the Company’s
failure to object promptly in writing after notification of a proposed assignment allegedly in violation of Subsection 2.12(c) shall be deemed to be a waiver); and provided further that any provision hereof may be waived by any waiving party
on such party’s own behalf, without the consent of any other party. Further, this Agreement may not be amended, and no provision hereof may be waived, in each case, in any way which would adversely affect the rights of the Key Holders hereunder
without also the written consent of the holders of at least a majority of the Registrable Securities held by the Key Holders, which majority of the Registrable Securities held by the Key Holders must include James A. Bowen, Susan R. Bowen, FT
Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC, so long as James A. Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC or FT Bandwidth Ventures II, LLC, respectively, holds any Registrable Securities. In addition, (i) this Agreement
may not be amended, modified or terminated and the observance of any term hereunder may not be waived with respect to any Investor or Key Holder without the written consent of such Investor or Key Holder unless such amendment, modification,
termination or waiver applies to all Investors and Key Holders, respectively, in the same fashion and such amendment, modification, termination or waiver is otherwise approved pursuant to the immediately preceding sentence of this Section 6.6,
and (ii) the consent of the Key Holders shall not be required for any amendment, modification, termination or waiver if such amendment, modification, termination or waiver does not apply to the Key Holders. The Company shall give prompt notice
of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance with this Subsection 6.6
shall be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed
as a further or continuing waiver of any such term, condition, or provision. 

  
 4 

 3. Amendment to Voting Agreement. 

 

	 	(a)	Section (c) of the definition of “True Sale” in Section 4 of the Voting Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof: 

“any other transaction that each of the Investor, James A. Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II,
LLC agrees in writing constitutes a “True Sale” for the purposes of this Agreement;” 
  

	 	(b)	Section 5.8 of the Voting Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof: 

This Agreement may be amended or terminated and the observance of any term hereof may be waived (either generally or in a particular instance
and either retroactively or prospectively) only by a written instrument executed by (a) the Company; (b) the Key Holders holding a majority of the Shares then held by the Key Holders, which majority must include must include James A.
Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC, so long as James A. Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC or FT Bandwidth Ventures II, LLC, respectively is a Key Holder; and (c) the holders of a
majority of the shares of Common Stock issued or issuable upon conversion of the shares of Series A Preferred Stock held by the Investors (voting as a single class and on an as-converted basis). Any amendment,
modification, termination or waiver so effected shall be binding upon the Company, the Investors, the Key Holders and all of their respective successors and permitted assigns whether or not such party, assignee or other shareholder entered into or
approved such amendment, modification, termination or waiver. Notwithstanding the foregoing, (i) this Agreement may not be amended, modified or terminated and the observance of any term hereunder may not be waived with respect to any Investor
or Key Holder without the written consent of such Investor or Key Holder unless such amendment, modification, termination or waiver applies to all Investors and Key Holders, respectively, in the same fashion and such amendment, modification,
termination or waiver is otherwise approved pursuant to the first sentence of this Section 5.8, and (ii) the consent of the Key Holders shall not be required for any amendment, modification, termination or waiver if such amendment,
modification, termination or waiver does not apply to the Key Holders. Notwithstanding the foregoing, Subsection 1.2(a) of this Agreement shall not be amended or waived without the written consent Carmichael Investment Partners, LLC. The
Company shall give prompt written notice of any amendment, termination or waiver hereunder to any party that did not consent in writing thereto. Any amendment, termination or waiver effected in accordance with this Subsection 5.8 shall be
binding on each party and all of such party’s successors and permitted assigns, whether or not any such party, successor or assignee entered into or approved such amendment, termination or waiver. For purposes of this Subsection 5.8, the
requirement of a written instrument may be satisfied in the form of an action by written consent of the Stockholders circulated by the Company and executed by the Stockholder parties specified, whether or not such action by written consent makes
explicit reference to the terms of this Agreement. 
 4. Miscellaneous. This Amendment may only be amended in writing by and among
(i) the Company, (ii) the Key Holders holding a majority of the shares of Transfer Stock held by all of the Key Holders, including, James A. Bowen, Susan R. Bowen, FT Bandwidth Ventures, LLC and FT Bandwidth Ventures II, LLC, and
(iii) Carmichael Investment Partners, LLC, as the holder of all of the shares of Common Stock issued or issuable upon conversion of the outstanding Preferred Stock. The section headings contained in this Amendment are inserted for convenience
only and will not affect in any way the meaning or interpretation of this Amendment. Except as otherwise provided herein, the terms and conditions of the ROFR Agreement, the IR Agreement and the Voting Agreement remain in full force and effect. 

(The remainder of this page is intentionally left blank.) 

  
 5 

 IN WITNESS WHEREOF, the undersigned have executed this Amendment as of November 23, 2016
(the “Amendment Effective Date”). 
  

			
	BANDWIDTH.COM, INC.
		
	By:	 	/s/ David A. Morken
		 	David A. Morken, Chief Executive Officer
	
	CARMICHAEL INVESTMENT PARTNERS, LLC
		
	By:	 	Carmichael Bandwidth, LLC
		
	By:	 	/s/ Brian D. Bailey
		 	Brian D. Bailey, Managing Partner

  
 6 

 
			
	
	/s/ James A. Bowen
	James A. Bowen
	
	FT BANDWIDTH VENTURES, LLC
		
	By:	 	/s/ James A. Bowen
		 	James A. Bowen, Manager
	
	FT BANDWIDTH VENTURES II, LLC
		
	By:	 	/s/ James A. Bowen
		 	James A. Bowen, Manager
	
	/s/ Susan R. Bowen
	Susan R. Bowen

  
 7 

 
			
	/s/ David A. Morken
	David A. Morken, Individually
	
	THE 2007 MICHAEL OWEN MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Grace Elaine Morken
		 	Grace Elaine Morken, Trustee
	
	THE 2007 GRACE ELAINE MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Michael Owen Morken
		 	Michael Owen Morken, Trustee
	
	THE 2007 HELEN CHRISTINE MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Grace Elaine Morken
		 	Grace Elaine Morken, Trustee
	
	THE 2007 DANIEL JAMES MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Michael Owen Morken
		 	Michael Owen Morken, Trustee
	
	THE 2007 INGA MARIE MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Grace Elaine Morken
		 	Grace Elaine Morken, Trustee
	
	THE 2007 BENJAMIN SCOTT MORKEN IRREVOCABLE TRUST
		
	By:	 	/s/ Michael Owen Morken
		 	Michael Owen Morken, Trustee

  
 8 

 
			
	
	/s/ Henry R. Kaestner
	Henry R. Kaestner, Individually
	
	THE 2007 GRAHAM REED KAESTNER IRREVOCABLE TRUST
		
	By:	 	/s/ Tom Hahn
		 	Tom Hahn, Trustee
	
	THE 2007 JOSEPH RICE KAESTNER IRREVOCABLE TRUST
		
	By:	 	/s/ Tom Hahn
		 	Tom Hahn, Trustee
	
	THE 2007 BENJAMIN HENRY KAESTNER IV IRREVOCABLE TRUST
		
	By:	 	/s/ Tom Hahn
		 	Tom Hahn, Trustee
	
	THE 2015 CHRISHELLE DAWN MORKEN IRREVOCABLE GST TRUST
		
	By:	 	/s/ David A. Morken
		 	David A. Morken, Trustee
	
	DAVID MORKEN 2014 CHARITABLE REMAINDER UNITRUST
		
	By:	 	/s/ David A. Morken
		 	David A. Morken, Trustee
	
	2014 DAVID MORKEN IRREVOCABLE GST TRUST
		
	By:	 	/s/ David A. Morken
		 	David A. Morken, Trustee

  
 9

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