Document:

ex-10_2.htm

FS Investment Corporation 8-K

 

 

Exhibit 10.2

 

AMENDED AND RESTATED SECURITY AGREEMENT

dated as of

January 28, 2010

between

BROAD STREET FUNDING LLC, as Borrower

and

DEUTSCHE BANK AG, NEW YORK BRANCH,

as Administrative Agent

 

 

 

  

  

  

 

TABLE OF CONTENTS

_________________

 

	 	 	 Page
	SECTION 1. 	
Definitions.

	
1

	SECTION 2. 	
Grant of Transaction Liens.

	
5

	SECTION 3.	
General Representations and Warranties

	
6

	SECTION 4. 	
 Further Assurances; General Covenants

	
7

	SECTION 5.  	
Investment Property

	
9

	SECTION 6.	
Deposit Accounts

	
10

	SECTION 7	
Bank Loans

	
10

	SECTION 8.  	
Operation of Collateral Accounts.

	
11

	SECTION 9. 	
Right to Vote

	
11

	SECTION 10. 	
Remedies upon Event of Default

	
12

	SECTION 11.	
Application of Proceeds

	
13

	SECTION 12.	
Fees and Expenses; Indemnification

	
14

	SECTION 13.	
Authority to Administer Collateral

	
15

	SECTION 14.	
Limitation on Duty in Respect of Collateral

	
16

	SECTION 15 	
General Provisions Concerning the Administrative Agent

	
16

	SECTION 16.	
Termination of Transaction Liens; Release of Collateral.

	
17

	SECTION 17.	
Notices

	
18

	SECTION 18. 	
No Implied Waivers; Remedies Not Exclusive

	
18

	SECTION 19.	
Successors and Assigns

	
18

	SECTION 20.	
Amendments and Waivers

	
18

	SECTION 21.	
Choice of Law

	
19

	SECTION 22. 	
Waiver of Jury Trial

	
19

	SECTION 23.	
Severability

	
19

  

  

  

	
EXHIBITS:

 

	
Exhibit A

	
Perfection Certificate

 

 

  

ii  

  

AMENDED AND RESTATED SECURITY AGREEMENT

 

This AMENDED AND RESTATED SECURITY AGREEMENT (as amended from time to time, this “Agreement”) dated as of January 28, 2011 is entered into by and among BROAD STREET FUNDING LLC, as Borrower, and DEUTSCHE BANK AG, NEW YORK BRANCH, as Administrative Agent, and amends and restates in its entirety the Security Agreement, dated as of March 10, 2010, as amended pursuant to that First Amendment to Credit Agreement and to Security Agreement, dated as of July 13, 2010.

 

RECITALS:

 

The Borrower is entering into the Credit Agreement described in Section 1 hereof, pursuant to which the Borrower intends to borrow funds for the purpose of investing on a leveraged basis in Fund Investments.

 

The Borrower is willing to secure, its obligations to the Secured Parties  under the Credit Documents, by granting Liens on its assets to the Administrative Agent, for the benefit of the Secured Parties, as provided in the Collateral Documents;

 

WHEREAS, the Lenders are not willing to make loans under the Credit Agreement unless the foregoing obligations of the Borrower are secured as described above;

 

WHEREAS, upon any foreclosure or other enforcement of the Credit Documents, the net proceeds of the Collateral are to be received by or paid over to the Administrative Agent and applied as provided herein;

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.  Definitions.

 

(a)      Terms Defined in Credit Agreement.  Terms defined in the Credit Agreement and not otherwise defined in subsection (b) or (c) of this Section 1 have, as used herein, the respective meanings provided for therein.

 

(b)      Terms Defined in UCC.  As used herein, each of the following terms has the meaning specified in the UCC:

 

 

  

  

  

 

	
Term

	 	 	
UCC

	 
	
Account

	 	 	9-102	 
	
Authenticate

	 	 	9-102	 
	
Chattel Paper

	 	 	9-102	 
	
Deposit Account

	 	 	9-102	 
	
Document

	 	 	9-102	 
	
Entitlement Holder

	 	 	8-102	 
	Entitlement Order	 	 	8-102	 
	
Financial Asset

	 	 	8-102 & 103	 
	
General Intangibles

	 	 	9-102	 
	
Instrument

	 	 	9-102	 
	
Investment Property

	 	 	9-102	 
	
Record

	 	 	9-102	 
	
Securities Account

	 	 	8-501	 
	
Securities Intermediary

	 	 	8-102	 
	
Security

	 	 	
8-102 & 103

	 
	
Security Entitlement

	 	 	8-102	 
	
Supporting Obligations

	 	 	9-102	 

(c)      Additional Definitions.  The following additional terms, as used herein, have the following meanings:

 

“Agreement” has the meaning set forth in the preamble.

 

“Asset Contribution Agreement” means the Asset Contribution Agreement dated as of March 10, 2010 between FS Investment Corporation, as contributor, and Broad Street Funding LLC, as contributee.

 

“Assignment Agreement” shall mean, with respect to any Bank Loan, an “Assignment and Acceptance Agreement,” “Assignment and Assumption Agreement” or other assignment or transfer document in the form required under the terms of such Bank Loan to assign interests and/or obligations in respect of such Bank Loan or, if there is no required form, in such form as is reasonably acceptable to Administrative Agent.

 

“Cash Collateral Account” has the meaning set forth in the Custodial Agreement.

 

“Cash Distributions” means dividends, interest and other distributions and payments (including proceeds of liquidation, sale or other disposition) made or received in cash upon or with respect to any Collateral.

 

 

  

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“Collateral” means all property, whether now owned or hereafter acquired, on which a Lien is granted or purports to be granted to the Administrative Agent pursuant to the Collateral Documents, including the items specified in Section 2(a) below.

 

“Collateral Accounts” means the Custodial Account, the Cash Collateral Account, the Administrative Expense Sub-account and any additional accounts or sub-accounts established by the Custodian pursuant to the Custodial Agreement.

 

“Collateral Documents” means this Agreement, the Custodial Agreement and any other supplemental or additional security agreements, control agreements, custodial agreements or similar instruments delivered pursuant to the Credit Documents.

 

“Control” has the following meanings:

 

(a)        when used with respect to any Security or Security Entitlement, the meaning specified in UCC Section 8-106; and

 

(b)        when used with respect to any Deposit Account, the meaning specified in UCC Section 9-104.

 

“Credit Agreement” means the Amended and Restated Credit Agreement dated as of January 28, 2011 between Broad Street Funding LLC, as borrower, and Deutsche Bank AG, New York Branch, as lender and as administrative agent, and each other lender party thereto from time to time, as amended.

 

“Custodial Account” has the meaning set forth in the Custodial Agreement.

 

 “Opinion of Counsel” means a written opinion of legal counsel (who may be counsel to the Borrower or other counsel, in either case approved by the Administrative Agent) addressed and delivered to the Administrative Agent.

 

“own” refers to the possession of sufficient rights in property to grant a security interest therein as contemplated by UCC Section 9-203, and “acquire” refers to the acquisition of any such rights.

 

“Perfection Certificate” means a certificate substantially in the form of Exhibit A, completed and supplemented with the schedules contemplated thereby to the satisfaction of the Administrative Agent, and signed by an Authorized Representative of the Borrower and a Responsible Officer of the Manager (which could be the same person as the Authorized Representative).

 

 

  

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“Pledged”, when used in conjunction with any type of asset, means at any time an asset of such type that is included (or that creates rights that are included) in the Collateral at such time.  For example, “Pledged Fund Investment” means a Fund Investment that is included in the Collateral at such time.

 

“Post-Petition Interest” means any interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of the Borrower (or would accrue but for the operation of applicable bankruptcy or insolvency laws), whether or not such interest is allowed or allowable as a claim in any such proceeding.

 

“Proceeds” means all proceeds of, and all other profits, products, rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or other realization upon, any Collateral, including all claims of the Borrower against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of, any Collateral, and any condemnation or requisition payments with respect to any Collateral.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

 

“Release Conditions” means the following conditions for terminating all the Transaction Liens:

 

(i)        the Commitment under the Credit Agreement shall have expired or been terminated; and

 

(ii)        all Secured Obligations shall have been paid in full.

 

“Secured Obligations” means all principal of all Loans outstanding from time to time under the Credit Agreement, all interest (including Post-Petition Interest) on such Loans and all other amounts now or hereafter payable by the Borrower to the Secured Parties pursuant to the Credit Documents.

 

“Secured Parties” means the Administrative Agent and the Lenders.

 

“Transaction Liens” means the Liens granted by the Borrower under the Collateral Documents.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any Transaction Lien on any 

 

  

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Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 

(d)      Terms Generally.  The definitions of terms herein (including those incorporated by reference to the UCC or to another document) apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun includes the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Sections and Exhibits shall be construed to refer to Sections of, and Exhibits to, this Agreement and (v) the word “property” shall be construed to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

SECTION 2.  Grant of Transaction Liens.

 

(a)      The Borrower, in order to secure the Secured Obligations, grants to the Administrative Agent for the benefit of the Secured Parties a continuing security interest in all the following property of the Borrower whether now owned or existing or hereafter acquired or arising and regardless of where located:

 

(i)      all Accounts;

 

(ii)      all Chattel Paper;

 

(iii)                 all Deposit Accounts;

 

(iv)                 all Documents;

 

(v)      all General Intangibles (including, all right, title and interest of the Borrower in, to and under (1) all Bank Loans, (2) the 

 

 

  

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Management Agreement, (3) the Custodial Agreement, and (4) the Asset Contribution Agreement);

 

(vi)    all Instruments;

 

(vii)   all Investment Property;

 

(viii)  all books and records (including documentation, credit files, computer programs, printouts and other computer materials and records) of the Borrower pertaining to any of the Collateral;

 

(ix)    (1) the Collateral Accounts, (2) all Financial Assets credited to the Collateral Accounts from time to time and all Security Entitlements in respect thereof and (3) all Cash held in the Collateral Accounts from time to time; and

 

(x)        all Proceeds of the Collateral described in the foregoing clauses (i) through (ix).

 

(b)      With respect to each right to payment or performance included in the Collateral from time to time, the Transaction Lien granted therein includes a continuing security interest in (i) any Supporting Obligation that supports such payment or performance and (ii) any Lien that (x) secures such right to payment or performance or (y) secures any such Supporting Obligation.

 

(c)      The Transaction Liens are granted as security only and shall not subject the Administrative Agent or any other Secured Party to, or transfer or in any way affect or modify, any obligation or liability of the Borrower with respect to any of the Collateral or any transaction in connection therewith.

 

SECTION 3.  General Representations and Warranties.  The Borrower represents and warrants that:

 

(a)      It has good and marketable title to all its Collateral, free and clear of any Lien other than Permitted Liens.

 

(b)      It has not performed any acts that would reasonably be likely to prevent the Administrative Agent from enforcing any of the provisions of the Credit Documents or that would limit the Administrative Agent in any such enforcement.  No financing statement, security agreement, mortgage or similar or equivalent document or instrument covering all or part of the Collateral owned by the Borrower is on file or of record in any jurisdiction in which such filing or recording would be effective to perfect or record a Lien on such Collateral.  After the Closing Date, no Collateral owned by the Borrower will be in the possession 

 

  

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or under the Control of any other Person having a claim thereto or security interest therein, other than a Permitted Lien.

 

(c)      The Transaction Liens on all Collateral owned by the Borrower (i) have been validly created, (ii) will attach to each item of such Collateral on the Closing Date (or, if the Borrower first obtains rights thereto on a later date, on such later date) and (iii) when so attached, will secure all the Secured Obligations.

 

(d)      It has delivered a Perfection Certificate to the Administrative Agent.  The information set forth therein is correct and complete in all material respects as of the Closing Date.

 

(e)      When UCC financing statements describing the Collateral as “all personal property” or “all assets” have been filed in the offices specified in such Perfection Certificate, the Transaction Liens will constitute perfected security interests in the Collateral owned by the Borrower to the extent that a security interest therein may be perfected by filing pursuant to the UCC, prior to all Liens and rights of others therein.  Except for the filing of such UCC financing statements, no registration, recordation or filing with any governmental body, agency or official is required in connection with the execution or delivery of the Collateral Documents or is necessary for the validity or enforceability thereof or for the perfection or due recordation of the Transaction Liens or for the enforcement of the Transaction Liens.

 

SECTION 4.  Further Assurances; General Covenants.  The Borrower covenants as follows:

 

(a)      It will, from time to time, at its own expense, execute, deliver, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action (including any filing of financing or continuation statements under the UCC) that from time to time may be reasonably necessary or desirable, or that the Administrative Agent may reasonably request, in order to:

 

(i)    create, preserve, perfect, confirm or validate the Transaction Liens on the Collateral;

 

(ii)    in the case of any Collateral Account, cause the Administrative Agent to have Control thereof;

 

(iii)   enable the Administrative Agent and the other Secured Parties to obtain the full benefits of the Credit Documents;

 

(iv)           enable the Administrative Agent to exercise and enforce any of its rights, powers and remedies with respect to any of the Collateral 

 

  

7

  

 

(including, from time to time, duly execute and deliver to the Administrative Agent or the relevant assignee (as directed by the Administrative Agent) such Assignment Agreements and other documents and instruments determined by the Administrative Agent to be reasonably necessary to effect or evidence any assignment, purchase or other transfer of Bank Loans as the Administrative Agent may request).

 

To the extent permitted by applicable law, the Borrower authorizes the Administrative Agent to (A) execute and file such financing statements or continuation statements without the Borrower’s signature appearing thereon and, (B) upon the occurrence and during the continuance of an Event of Default, execute, deliver and complete, and seek required consents in respect of, any Assignment Agreement delivered by the Borrower with respect to any Bank Loan pursuant to Section 7.  The Borrower agrees that the Administrative Agent may utilize a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement as a financing statement.  The Borrower constitutes the Administrative Agent its attorney-in-fact to (1) execute and file all filings required or so requested for the foregoing purposes and, (2) upon the occurrence and during the continuance of an Event of Default, execute, deliver and complete, and seek required consents in respect of, any Assignment Agreement delivered by the Borrower with respect to any Bank Loan, all acts of such attorney being hereby ratified and confirmed; and such power, being coupled with an interest, shall be irrevocable until all the Transaction Liens granted by the Borrower terminate pursuant to Section 16.  The Borrower will pay the costs of, or incidental to, any recording or filing of any financing or continuation statements or other documents recorded or filed pursuant hereto.

 

(b)      The Borrower will not (i) change its name or corporate structure, (ii) change its location (determined as provided in UCC Section 9-307) or (iii) become bound, as provided in UCC Section 9-203(d) or otherwise, by a security agreement entered into by another Person, unless it shall have given the Administrative Agent prior notice thereof and delivered an Opinion of Counsel with respect thereto in accordance with Section 4(c).

 

(c)      At least 30 days before it takes any action contemplated by Section 4(b), the Borrower will, at its own expense, cause to be delivered to the Administrative Agent an Opinion of Counsel, in form and substance satisfactory to the Administrative Agent, to the effect that (i) all financing statements and amendments or supplements thereto, continuation statements and other documents required to be filed or recorded in order to perfect and protect the Transaction Liens against all creditors of and purchasers from the Borrower after it takes such action (except any continuation statements specified in such Opinion of Counsel that are to be filed more than six months after the date thereof) have been filed or  

 

 

  

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recorded in each office necessary for such purpose, (ii) all fees and taxes, if any, payable in connection with such filings or recordations have been paid in full and (iii) except as otherwise agreed by the Administrative Agent, such action will not adversely affect the perfection or priority of the Transaction Lien on any Collateral after it takes such action or the accuracy of the representations and warranties herein relating to such Collateral.

 

(d)      It will notify the Administrative Agent as soon as it has knowledge or reasonable belief that the value of any Collateral has been or may be materially impaired (including as a result of a default or event of default occurring with respect to any Collateral).

 

(e)      It will, promptly upon request, provide to the Administrative Agent all information and evidence concerning the Collateral that the Administrative Agent may reasonably request from time to time to enable it to enforce the provisions of the Collateral Documents.

 

(f)       It agrees that any financing statement may contain an indication or description of the Collateral that describes such property in any manner as the Administrative Agent may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to the Administrative Agent herein, including describing such property as “all assets, whether now owned or hereafter acquired” or “all personal property, whether now owned or hereafter acquired”.

 

SECTION 5.  Investment Property.  The Borrower represents, warrants and covenants to the Secured Parties as follows:

 

(a)      Securities and Security Entitlements.  On or prior to the Closing Date, the Borrower will deliver or cause to be delivered to the Custodian, in the manner specified in Section 5(c), all Securities, Security Entitlements and negotiable Instruments then owned by the Borrower, for credit by the Custodian to the Custodial Account.  Thereafter, whenever the Borrower acquires any other Security, Security Entitlement or negotiable Instrument, the Borrower will, as promptly as practicable, cause such Security, Security Entitlement or negotiable Instrument to be delivered to the Custodian, in the manner specified in Section 5(c), for credit by the Custodian to the Custodial Account.

 

(b)      Perfection as to Security Entitlements.  Upon the execution and delivery of the Custodial Agreement by the parties thereto, so long as any Financial Asset owned by the Borrower is credited to the Custodial Account, (i) the Transaction Lien on the Borrower’s Security Entitlement in respect of such Financial Asset will be perfected, subject to no Liens or rights of others (except Permitted Liens), (ii) the Administrative Agent will have Control of such Security 

 

 

  

9

  

 

Entitlement and (iii) no action based on an adverse claim to such Security Entitlement or such Financial Asset, whether framed in conversion, replevin, constructive trust, equitable lien or other theory, may be asserted against any Secured Party.

 

(c)      Delivery.  All Securities, Security Entitlements and negotiable Instruments shall be delivered to the Custodian in the manner specified in the definition of “delivery” under the Credit Agreement.

 

SECTION 6.  Deposit Accounts.  The Borrower represents, warrants and covenants to the Secured Parties as follows:

 

(a)      Deposit of Cash.  On or prior to the Closing Date, the Borrower will deposit or cause to be deposited in the Cash Collateral Account (or, to the extent permitted under Section 4.01(g) of the Credit Agreement, the Administrative Expense Sub-account) all Cash then owned by the Borrower.  Thereafter, the Borrower will cause all Cash owned by Borrower from time to time, including all Cash Distributions received with respect to assets held in the Collateral Accounts and all Proceeds of Collateral, to be deposited in the Cash Collateral Account, to be held and administered as provided under the Credit Documents.

 

(b)      Perfection as to Deposit Accounts.  Upon the execution and delivery of the Custodial Agreement by the parties thereto, (i) the Transaction Lien on the Cash Collateral Account and the Administrative Expense Sub-account will be perfected, subject to no Liens or rights of others (except Permitted Liens) and (ii) the Administrative Agent will have Control of such Collateral Accounts.

 

SECTION 7.  Bank Loans.  The Borrower represents, warrants and covenants to the Secured Parties as follows:

 

(a)      Delivery of Assignment Agreements.  On or prior to the Closing Date, the Borrower will deliver to the Custodian three Assignment Agreements in respect of each Bank Loan then owned by the Borrower, each undated and duly executed in blank by the Borrower as assignor.  Thereafter, promptly upon its acquisition of any interest in a Bank Loan, the Borrower will deliver to the Administrative Agent three Assignment Agreements in respect of such Bank Loan, each undated and duly executed in blank by the Borrower as assignor.

 

(b)      Delivery of Promissory Notes.  On or prior to the Closing Date, in respect of each Bank Loan owned by the Borrower that is evidenced by a promissory note, but excluding any Participation Interests, the Borrower will deliver the original of such promissory note to the Custodian, to be held by the Custodian as agent and bailee of the Administrative Agent pursuant to the Custodial Agreement.  Thereafter, promptly upon its acquisition of any interest in 

 

  

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a Bank Loan that is evidenced by a promissory note, but excluding any Participation Interests, the Borrower will deliver the original of such promissory note to the Custodian, to be held by the Custodian as agent and bailee of the Administrative Agent pursuant to the Custodial Agreement.

 

(c)   Delivery of Participation Agreements.  On or prior to the Closing Date, in respect of each Participation Interest owned by the Borrower, the Borrower will deliver a copy of the applicable participation agreement to the Custodian, to be held by the Custodian as agent and bailee of the Administrative Agent pursuant to the Custodial Agreement.  Thereafter, promptly upon its entry into any Participation Interest, the Borrower will deliver a copy of the applicable participation agreement to the Custodian, to be held by the Custodian as agent and bailee of the Administrative Agent pursuant to the Custodial Agreement.

 

SECTION 8.  Operation of Collateral Accounts.

 

(a)      If an Event of Default shall have occurred and is continuing, the Administrative Agent may (i) instruct the Custodian to retain all cash and investments then held in any Collateral Account, (ii) instruct the Custodian to liquidate any or all investments held therein and/or (iii) withdraw any amounts held therein and apply such amounts as provided in Section 10.

 

(b)      If immediately available cash on deposit in any Collateral Account is not sufficient to make any distribution or withdrawal to be made pursuant hereto, the Administrative Agent will cause to be liquidated, as promptly as practicable, such investments held in or credited to such Collateral Account as shall be required to obtain sufficient cash to make such distribution or withdrawal and, notwithstanding any other provision hereof, such distribution or withdrawal shall not be made until such liquidation has taken place.

 

SECTION 9.  Right to Vote.  (a) Unless an Event of Default shall have occurred and is continuing, the Borrower will have the right, from time to time, to vote and to give consents, ratifications and waivers with respect to any Pledged Fund Investment or any other Collateral.

 

(b)      If an Event of Default shall have occurred and is continuing, the Administrative Agent will have the right to the extent permitted by law to vote, to give consents, ratifications and waivers and to take any other action with respect to the Pledged Fund Investments, with the same force and effect as if the Administrative Agent were the absolute and sole owner thereof, and the Borrower will take all such action as the Administrative Agent may reasonably request from time to time to give effect to such right.

 

 

  

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SECTION 10.  Remedies upon Event of Default.  (a) If an Event of Default shall have occurred and is continuing (for the avoidance of doubt, upon commencement by the Administrative Agent of any of the remedies set forth herein or in any of the other Credit Documents or upon notice by the Administrative Agent to the Borrower or the Manager that it intends to promptly commence the exercise of any such remedies, such Event of Default shall be deemed to be continuing, and may not be cured or curable by any subsequent actions or events), the Administrative Agent may exercise (or cause its sub-agents to exercise) any or all of the remedies available to it (or to such sub-agents) under the Credit Documents.

 

(b)      Without limiting the generality of the foregoing, if an Event of Default shall have occurred and is continuing, the Administrative Agent may exercise all the rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) with respect to any Collateral.  In addition, the Administrative Agent may, without being required to give any notice, except as herein provided or as may be required by mandatory provisions of law, withdraw all cash held in the Collateral Accounts and apply such cash as provided in Section 11 and, if there shall be no such cash or if such cash shall be insufficient to pay all the Secured Obligations in full, sell, lease, license or otherwise dispose of the Collateral or any part thereof at such place or places as the Administrative Agent deems best, and for cash, credit or any combination thereof or for future delivery, at public or private sale, without demand of performance to effect any such disposition or of the time or place thereof, and the Administrative Agent or any one else may be the purchaser, lessee, assignee or recipient of any or all of the Collateral so disposed of at any public sale (or, to the extent permitted by law, at any private sale) and thereafter hold the same absolutely, free from any claim or right of whatsoever kind, including any right or equity of redemption (statutory or otherwise) of the Borrower, any such demand, right or equity being hereby expressly waived and released.  The Borrower hereby agrees that in the case of any Collateral that is a Bank Loan, the Administrative Agent may effect any such disposition by selling such Bank Loan in a private sale in which the Administrative Agent is the purchaser followed by a sale by the Administrative Agent of participations in such Bank Loan to one or more third parties (who may be affiliates of a Secured Party), and that such manner of disposition shall be deemed to be commercially reasonable.  The Borrower shall remain liable to the Secured Parties for any deficiency following any such sale of Collateral.  In addition to the foregoing remedies, the Administrative Agent may take any action that is necessary in Administrative Agent’s sole good faith discretion to protect, preserve or enforce its rights hereunder or to reduce any risk of loss that it may suffer.

 

 

  

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(c)      The Administrative Agent may adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the sale may be so adjourned.  Notice of any such sale or other disposition shall be given to the Borrower to the extent required by Section 13 and by applicable law.  If so requested by the Administrative Agent or by any buyer of the Collateral or any part thereof, the Borrower shall further ratify and confirm any action taken pursuant to the power of attorney granted herein by executing and delivering to the Administrative Agent or to such buyer or buyers at the expense of the Borrower all instruments of assignment, conveyance or transfer, releases, instructions and entitlement orders as may be designated in any such request.

 

(d)      Neither the Administrative Agent nor any Secured Party shall incur any liability as a result of the sale of the Collateral, or any part thereof, at any private sale pursuant to this Section 10 conducted in a commercially reasonable manner.  The Borrower hereby waives any claims against the Administrative Agent and the Secured Parties arising by reason of the fact that the price at which the Collateral may have been sold at such a private sale was less than the price that might have been obtained at a public sale, even if the Administrative Agent accepts the first offer received and does not offer the Collateral to more than one offeree.

 

(e)      Without limiting the generality of the foregoing, if an Event of Default shall have occurred and is continuing, the Administrative Agent may, pursuant hereto and the Management Agreement, terminate (or cause to be terminated) the Management Agreement and replace (or cause to be replaced) the Manager with an institution selected by the Administrative Agent in its sole and absolute discretion (which may be Deutsche Bank AG or any of its Affiliates) legally qualified, permitted under applicable law and with the capacity to assume the responsibilities, duties and obligations of the Manager under the Credit Documents and the Management Agreement.

 

(f)      Notwithstanding anything to the contrary contained herein, none of the rights of the Administrative Agent specifically identified herein are intended to limit the rights of the Administrative Agent or any other Secured Party under the Credit Documents.

 

SECTION 11.  Application of Proceeds.  If an Event of Default shall have occurred and is continuing, the Administrative Agent shall apply (i) any Cash held in the Collateral Accounts and (ii) the Proceeds of any sale or other disposition of all or any part of the Collateral, in the following order of priority:

 

 

  

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first,  to pay the expenses of such sale or other disposition, including reasonable compensation to agents of and counsel for the Administrative Agent, and all expenses, liabilities and advances incurred or made by the Administrative Agent in connection with the Credit Documents, and any other amounts then due and payable to the Administrative Agent pursuant to Section 12 of this Agreement or Section 9.01 of the Credit Agreement;

 

                 second,  to pay ratably all interest (including Post-Petition Interest) on the Secured Obligations payable under the Credit Agreement, until payment in full of all such interest and fees shall have been made;

 

                 third,  to pay the unpaid principal of the Secured Obligations ratably, until payment in full of the principal of all Secured Obligations shall have been made (or so provided for);

 

                 fourth,  to pay all other Secured Obligations ratably, until payment in full of all such other Secured Obligations shall have been made (or so provided for); and

 

                 finally, to pay to the Borrower, or as a court of competent jurisdiction may direct, any surplus then remaining from such Cash or the Proceeds of the Collateral;

 

The Administrative Agent may make such distributions hereunder in cash or in kind or, on a ratable basis, in any combination thereof.

 

SECTION 12.  Fees and Expenses; Indemnification.  (a) The Borrower will forthwith upon demand pay to the Administrative Agent:

 

(i)     the amount of any taxes that the Administrative Agent may have been required to pay by reason of the Transaction Liens or to free any Collateral from any other Lien thereon;

 

(ii)    the amount of any and all reasonable out-of-pocket expenses, including transfer taxes and reasonable fees and expenses of counsel and other experts, that the Administrative Agent may incur in connection with (x) the administration or enforcement of the Credit Documents, including such expenses as are incurred to preserve the value of the Collateral or the validity, perfection, rank or value of any Transaction Lien, (y) the collection, sale or other disposition of any Collateral or (z) the exercise by the Administrative Agent of any of its rights or powers under the Credit Documents;

 

 

  

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   (iii)    the amount of any fees that the Borrower shall have agreed in writing to pay to the Administrative Agent and that shall have become due and payable in accordance with such written agreement; and

 

   (iv)    the amount required to indemnify the Administrative Agent for, or hold it harmless and defend it against, any loss, liability or expense (including the reasonable fees and expenses of its counsel and any experts or sub-agents appointed by it hereunder) incurred or suffered by the Administrative Agent in connection with the Credit Documents, except to the extent that such loss, liability or expense directly and primarily arises from the Administrative Agent’s gross negligence or willful misconduct or a breach of any duty that the Administrative Agent has under this Agreement (after giving effect to Section 14).

 

Any such amount not paid to the Administrative Agent on demand will bear interest for each day thereafter until paid at a rate per annum equal to the Weighted Average Rate in effect from time to time plus the Applicable Margin plus 2%.

 

(b)      If any transfer tax, documentary stamp tax or other tax is payable in connection with any transfer or other transaction provided for in the Collateral Documents, the Borrower will pay such tax and provide any required tax stamps to the Administrative Agent or as otherwise required by law.

 

SECTION 13.  Authority to Administer Collateral.  The Borrower irrevocably appoints the Administrative Agent its true and lawful attorney, with full power of substitution, in the name of the Borrower or otherwise, for the sole use and benefit of the Secured Parties, but at the Borrower’s expense, to the extent permitted by law to exercise, at any time and from time to time following the occurrence and continuance of an Event of Default, all or any of the following powers with respect to all or any of the Collateral:

 

(a)        to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof,

 

(b)        to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto,

 

(c)        to sell, lease, license or otherwise dispose of the same or the proceeds or avails thereof, as fully and effectually as if the Administrative Agent were the absolute owner thereof,

 

(d)        to extend the time of payment of any or all thereof and to make any allowance or other adjustment with reference thereto, 

 

  

15

  

provided that, except in the case of Collateral that threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Administrative Agent will give the Borrower prior written notice of the time and place of any public sale thereof or the time after which any private sale or other intended disposition thereof will be made (which the parties agree may be less than ten (10) days prior thereto); provided that, if no notice of such action is required under the UCC, then the Borrower agrees that no such notice shall be required hereunder.  Any such notice shall (i) contain the information specified in UCC Section 9-613, (ii) be Authenticated and (iii) be sent to the parties required to be notified pursuant to UCC Section 9-611(c); provided that, if the Administrative Agent fails to comply with this sentence in any respect, its liability for such failure shall be limited to the liability (if any) imposed on it as a matter of law under the UCC.

 

SECTION 14.  Limitation on Duty in Respect of Collateral.  Beyond the exercise of reasonable care in the custody and preservation thereof, the Administrative Agent will have no duty as to any Collateral in its possession or control or in the possession or control of any sub-agent or bailee or any income therefrom or as to the preservation of rights against prior parties or any other rights pertaining thereto.  The Administrative Agent will be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession or control if such Collateral is accorded treatment substantially equal to that which it accords its own property, and will not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of any act or omission of any sub-agent or bailee selected by the Administrative Agent in good faith, except to the extent that such liability arises directly and primarily from the Administrative Agent’s gross negligence or willful misconduct.

 

SECTION 15.  General Provisions Concerning the Administrative Agent.

 

(a)      The provisions of Article 8 of the Credit Agreement shall inure to the benefit of the Administrative Agent, and shall be binding upon the Borrower and all Secured Parties, in connection with this Agreement and the other Collateral Documents.  Without limiting the generality of the foregoing, (i) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing, (ii) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Credit Documents that the Administrative Agent is required in writing to exercise by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.13 of the Credit Agreement), and (iii) except as expressly set forth in the Credit Documents, the Administrative Agent shall not have any 

 

  

16

  

 

duty to disclose, and shall not be liable for any failure to disclose, any information relating to the Borrower that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall not be responsible for the existence, genuineness or value of any Collateral or for the validity, perfection, priority or enforceability of any Transaction Lien, whether impaired by operation of law or by reason of any action or omission to act on its part under the Collateral Documents.  The Administrative Agent shall be deemed not to have knowledge of any Event of Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Secured Party.

 

(b)      Sub-Agents and Related Parties.  The Administrative Agent may perform any of its duties and exercise any of its rights and powers through one or more sub-agents appointed by it.  The Administrative Agent and any such sub-agent may perform any of its duties and exercise any of its rights and powers through its Related Parties.  The exculpatory provisions of Section 14 and this Section shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent.

 

(c)      Information as to Secured Obligations and Actions by Secured Parties.  For all purposes of the Credit Documents, including determining the amounts of the Secured Obligations or whether any action has been taken under any Collateral Document, the Administrative Agent will be entitled to rely on information from (i) its own records for information as to the Secured Parties, their Secured Obligations and actions taken by them, (ii) any Secured Party for information as to its Secured Obligations and actions taken by it, to the extent that the Administrative Agent has not obtained such information from its own records, and (iii) the Borrower, to the extent that the Administrative Agent has not obtained information from the foregoing sources.

 

(d)      Refusal to Act.  The Administrative Agent may refuse to act on any notice, consent, direction or instruction from any Secured Party or any agent, trustee or similar representative thereof that, in the Administrative Agent’s opinion, (i) is contrary to law or the provisions of any Collateral Document, (ii) may expose the Administrative Agent to liability (unless the Administrative Agent shall have been indemnified, to its reasonable satisfaction, for such liability by the Secured Parties that gave such notice, consent, direction or instruction) or (iii) is unduly prejudicial to Secured Parties not joining in such notice, consent, direction or instruction.

 

SECTION 16.  Termination of Transaction Liens; Release of Collateral.

 

(a)       The Transaction Liens shall terminate when the Administrative Agent has determined that all the Release Conditions have been satisfied.

 

  

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(b)      At any time before the Transaction Liens terminate, the Administrative Agent   may, at the written request of the Borrower, (i) release any Collateral (but not all or substantially all the Collateral) with the prior written consent of the Required Lenders or (ii) release all or substantially all the Collateral with the prior written consent of all Lenders.

 

(c)      Upon any sale of a Fund Investment or any other Collateral in accordance with the terms of the Credit Agreement, the Transaction Lien thereon shall automatically terminate, without any action by the Borrower or the Administrative Agent.

 

(d)      Upon any termination of a Transaction Lien or release of Collateral, the Administrative Agent will, at the Borrower’s expense, execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence the termination of such Transaction Lien or the release of such Collateral, as the case may be.

 

SECTION 17.  Notices.  Each notice, request or other communication given to any party hereunder shall be given in accordance with Section 9.03 of the Credit Agreement.

 

SECTION 18.  No Implied Waivers; Remedies Not Exclusive.  No failure by the Administrative Agent or any Secured Party to exercise, and no delay in exercising and no course of dealing with respect to, any right or remedy under any Credit Document shall operate as a waiver thereof; nor shall any single or partial exercise by the Administrative Agent or any Secured Party of any right or remedy under any Credit Document preclude any other or further exercise thereof or the exercise of any other right or remedy.  The rights and remedies specified in the Credit Documents are cumulative and are not exclusive of any other rights or remedies provided by law.

 

SECTION 19.  Successors and Assigns.  This Agreement is for the benefit of the Administrative Agent and the other Secured Parties.  If all or any part of any Secured Party’s interest in any Secured Obligation is assigned or otherwise transferred in accordance with Section 9.05 of the Credit Agreement, the transferor’s rights hereunder, to the extent applicable to the obligation so transferred, shall be automatically transferred with such obligation.  This Agreement shall be binding on the Borrower and its successors and assigns.

 

SECTION 20.  Amendments and Waivers.  Neither this Agreement nor any provision hereof may be waived, amended, modified or terminated except pursuant to an agreement or agreements in writing entered into by the Administrative Agent, with the consent of such Lenders as are required to consent thereto under Section 9.13 of the Credit Agreement.  No such waiver, amendment 

 

  

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or modification shall be binding upon the Borrower, except with its written consent.

 

SECTION 21.  Choice of Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of New York, except as otherwise required by mandatory provisions of law and except to the extent that remedies provided by the laws of any jurisdiction other than the State of New York are governed by the laws of such jurisdiction.

 

SECTION 22.  Waiver of Jury Trial.  EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY COLLATERAL DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 23.  Severability.  If any provision of any Credit Document is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions of the Credit Documents shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Secured Parties in order to carry out the intentions of the parties thereto as nearly as may be possible and (ii) the invalidity or unenforceability of such provision in such jurisdiction shall not affect the validity or enforceability thereof in any other jurisdiction.

 

[Signatures begin on the next page]

 

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

 

	 	
BROAD STREET FUNDING LLC

as Borrower

	 	 	 
	 	
By:

	
/s/ Gerald F. Stahlecker

	 	  	
Name:

	
Gerald F. Stahlecker

	 	  	
Title:

	
Executive Vice President

 

	 	
DEUTSCHE BANK AG, NEW YORK BRANCH, 

as Administrative Agent

	 	 	 
	 	
By:

	
/s/ Satish Ramakrishna

	 	  	
Name:

	
Satish Ramakrishna

	 	  	
Title:

	
Managing Director

 

	 	
By:

	
/s/ Frank Nelson

	 	  	
Name:

	
Frank Nelson

	 	  	
Title:

	
Managing Director

 

 

 

[Signature page to Security Agreement]

  

  

  

EXHIBIT A

to Security Agreement

 

PERFECTION CERTIFICATE

 

The undersigned is a duly authorized officer of BROAD STREET FUNDING LLC (the “Lien Grantor”).  With reference to the Security Agreement dated as of March 10, 2010 between BROAD STREET FUNDING LLC, as borrower, and DEUTSCHE BANK AG, NEW YORK BRANCH, as administrative agent (terms defined therein being used herein as therein defined), the undersigned certifies to the Secured Parties as follows:

 

A.      Information Required for Filings and Searches for Prior Filings.

 

1.      Jurisdiction of Organization.  The Lien Grantor is a limited liability company organized under the laws of Delaware.

 

2.      Name.  The exact name of the Lien Grantor as it appears in its certificate of formation is as follows:

 

BROAD STREET FUNDING LLC

 

3.      Prior Names; Predecessors.  (a) Set forth below is each other name that the Lien Grantor has had since its organization, together with the date of the relevant change:

 

	  	
   None

 

(b)           The Lien Grantor has not changed its corporate structure in any way within the past five years.

 

(c)           None of the Lien Grantor’s Collateral was acquired from another Person within the past five years, except

 

(i)    property sold to the Lien Grantor by another Person in the ordinary course of such other Person’s business;

 

(ii)   property with respect to which the Transaction Liens are to be perfected by taking possession or control thereof; and

 

(iii)   property contributed by FS Investment Corporation (the “Equity Owner”) pursuant to the Asset Contribution Agreement dated as of March 10, 2010 between the Equity Owner and the Borrower.

 

A-1

  

  

  

4.           Organizational ID Number.  Set forth below is the Organizational Identification Number, if any, issued by the jurisdiction of organization of the Lien Grantor.

 

   26-1630040

 

5.      Chief Executive Office.  The chief executive office of the Lien Grantor (or its place of business if there is only one) is located at the address set forth below:

 

	

Mailing Address

	 	

County

	 	

State

	
Cira Centre, 2929 Arch Street, Suite 675

	 	
Philadelphia

	 	
PA, 19104

	  	 	  	 	  

B.      Search Reports.

 

Attached hereto as Schedule A is a true copy of a file search report from the central UCC filing office in Delaware with respect to the Borrower.

 

C.    Absence of Certain Property.

 

The Lien Grantor does not own any assets of material value which constitute commercial tort claims, farm products, electronic chattel paper, letter-of-credit rights which are not supporting obligations or as-extracted collateral, as each of the foregoing terms is defined in the UCC.

 

 

[Signatures begin on the next page]

 

A-2

  

  

  

IN WITNESS WHEREOF, I have hereunto set my hand this __ day of __________, 2010.

 

	 	
BROAD STREET FUNDING LLC

	 	 	 
	 	
By:

	  
	 	  	
Name:

	  
	 	  	
Title:

	  

 

[Signature page to Perfection Certificate]

A-3

  

  

  

EXHIBIT A

to Perfection Certificate

UCC Filing Search

Attached

 

 

 

 

 

 

 

 

 

A-4ex4-1.htm

BYLAWS OF

BUCKINGHAM EXPLORATION INC.

A Nevada Corporation

ARTICLE I

Stockholders

Section 1. Annual Meeting. The annual meeting of the Stockholders shall be held at such date and time as may be designated by the Board of Directors for the purpose of electing Directors and conducting such other business as may properly be brought before the meeting. The annual meeting of the Stockholders may be waived by the written consent of the Stockholders owning a majority of the entire issued and outstanding capital stock of the Corporation and entitled to vote.

Section 2. Special Meetings. Special meetings of the Stockholders, for any purpose or purposes, unless otherwise prescribed by the Articles of Incorporation or any applicable law or regulation, may be called by the President or the Secretary by resolution of the Board of Directors or at the request in writing of Stockholders owning a majority of the entire issued and outstanding capital stock of the Corporation and entitled to vote. Such request shall state the purpose of the proposed meeting.

Section 3. Place of Meetings. The Board of Directors may designate any place, either within or without the State of Nevada, as the place of meeting for any annual meeting or special meeting. If no designation is made, the place of meeting shall be the registered office of the Corporation. Special meetings of the Stockholders may be held at such time and place within or without the State of Nevada as shall be stated in the notice of the meeting, or in duly executed waiver of notice thereof. Business transacted at any special meeting of Stockholders shall be limited to the purposes stated in the notice.

Section 4. Quorum; Adjourned Meetings. The holders of a majority of the issued and outstanding capital stock of the Corporation and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the Stockholders for the transaction of business except as otherwise provided by statute or by the Articles of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the Stockholders, the Stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting form time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.

Section 5. Voting. Each Stockholder of record of the Corporation entitled to vote at any meeting of Stockholders shall be entitled to one (1) vote for each share of stock in his name on the books of the Corporation. Upon the demand of any Stockholder, the vote for Directors and the vote upon any question before the meeting shall be by ballot.

When a quorum is present or represented at any meeting, the affirmative vote of the holders of a majority of the stock having voting power present in person or represented by proxy and entitled to vote on the subject matter shall be sufficient to elect Directors or to decide any question brought before such meeting, unless the question is one upon which, by express provision of applicable law, the rules and regulations of any stock exchange applicable to the Corporation or of the Articles of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 6. Proxies. At any meeting of the Stockholders any Stockholder may be represented and vote by a proxy or proxies appointed by an instrument in writing. In the event that any such instrument in writing shall designate two (2) or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one (1) shall be present, then that one (1) shall have and may exercise all of the powers conferred by such written instrument upon all the persons so designated unless the instrument shall otherwise provide. No proxy or power of attorney to vote shall be used to vote at a meeting of the Stockholders unless it shall have been filed with the secretary of the meeting. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of voters shall be decided by the inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding Officer of the meeting.

Section 7. Action Without Meeting. Any action, which may be taken by the vote of the Stockholders at a meeting, may be taken without a meeting if authorized by the written consent of Stockholders holding at least a majority of the voting power, unless the provisions of the statutes or of the Articles of Incorporation require a greater proportion of voting power to authorize such action in which case such greater proportion of written consents shall be required.

 

  

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ARTICLE II

Directors

Section 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all powers of the Corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the Stockholders.

Section 2. Number, Tenure and Qualifications. The number of Directors which constitute the entire Board of Directors of the Corporation shall be at least one (1). The Board of Directors may from time to time increase the number of Directors to no more than fifteen (15) or decrease the number of Directors to no less than one (1). The Directors shall be elected at the annual meeting of the Stockholders and, except as provided in Section 5 of this Article II, each Director elected shall hold office until his successor is elected and qualified. Directors of the Corporation need not be Stockholders.

Section 3. Chairman of the Board. The Board of Directors may elect a Chairman of the Board who shall preside at meetings of the Stockholders and the Board of Directors, and shall see that all orders and resolutions of the Board of Directors are carried into effect.

Section 4. Vice Chairman of the Board. The Board of Directors may elect a Vice Chairman of the Board who shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties as the Board of Directors may from time to time prescribe.

Section 5. Resignation. Any Director may resign at any time by providing written notice to the Chairman of the Board, the President or the Secretary of the Corporation. Such resignation shall take effect at the time therein specified, and, unless otherwise specified in such resignation, its acceptance by the Board of Directors shall not be necessary to make it effective.

Section 6. Vacancies. Vacancies in the Board of Directors, including those caused by an increase in the number of Director positions, may be filled by a vote of the majority of the remaining Directors, though less than a quorum, or by a sole remaining Director, and each Director so elected shall hold office until his successor is elected at an annual or a special meeting of the Stockholders. The holders of two-thirds of the outstanding shares of Stock entitled to vote may at any time peremptorily terminate the term of office of all or any of the Directors by vote at a meeting called for such purpose or by written statement filed with the Secretary or, in his absence, with any other Officer of the Corporation. Such removal shall be effective immediately, even if successors are not elected simultaneously.

A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any Directors, or if the authorized number of Directors is increased, or if the Stockholders fail at any annual or special meeting of Stockholders at which any Director or Directors are elected to elect the full number of Directors authorized to be elected at that meeting.

If the Board of Directors accepts the resignation of a Director tendered to take effect at a future time, the Board or the Stockholders shall have power to elect a successor to take office when the resignation is to become effective.

No reduction of the authorized number of Directors shall have the effect of removing any Director prior to the expiration of his term of office.

Section 7. Annual and Regular Meetings. Annual meetings of the Board of Directors shall be held at any place within or without the State of Nevada which has been designated from time to time by resolution of the Board or by written consent of all members of the Board. In the absence of such designation annual meetings shall be held at the registered office of the Corporation. Regular meetings of the Board may be held at a place so designated or at the registered office.

Regular meetings of the Board of Directors may be held without call or notice at such time and at such place as shall from time to time be fixed and determined by the Board of Directors.

Section 8. First Meeting. The first meeting of each newly elected Board of Directors shall be held immediately following the adjournment of the meeting of Stockholders and at the place thereof. No notice of such meeting shall be necessary to the Directors in order legally to constitute the meeting, provided a quorum is present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors.

  

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Section 9. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President, any Vice President or any two (2) Directors.

Written notice of the time and place of any special meeting shall be delivered personally to each Director, or sent to each Director by mail or by other form of written communication, charges prepaid, addressed to him at his address as it is shown upon the records or if such address is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. In case such notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company at least three (3) days prior to the time of the holding of the meeting. In case such notice is hand delivered as above provided, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting. Such mailing, telegraphing or delivery as above provided shall be due, legal and personal notice to such Director.

Section 10. Business of Meetings. The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if either before or after the meeting, each of the Directors not present signs a written waiver of notice, or a consent to holding such meeting, or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made part of the minutes of the meeting.

Section 11. Quorum; Adjourned Meetings. A majority of the authorized number of Directors shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number be required by law or by the Articles of Incorporation. Any action of a majority, although not at a regularly called meeting, and the record thereof, if assented to in writing by all of the other members of the Board shall be as valid and effective in all respects as if passed by the Board at a regular meeting.

A quorum of the Directors may adjourn any Directors’ meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the Directors present at any Directors meeting, either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board.

Notice of the time and place of holding an adjourned meeting need not be given to the absent Directors if the time and place is fixed at the meeting adjourned.

Section 12. Committees. The Board of Directors may, by resolution adopted by a majority of the total number of Directors then in office, designate one (1) or more committees, each committee to consist of one (1) or more of the Directors of the Corporation, which, to the extent permitted by applicable law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be fixed to all papers which may require it. The Board of Directors may designate one (1) or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors upon request.

Such committee or committees shall have such name or names as may be determined from time to time by resolution of the Board of Directors. The members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members shall constitute a quorum for the transaction of business, and the act of a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee.

Section 13. Committee Rules. Subject to applicable law and the rules and regulations of any national securities exchange on which any securities of the Corporation are listed, each committee of the Board of Directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum.

Section 14. Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent to the action is signed by a majority of the members of the Board of Directors or of such committee, as the case may be, and filed with the minutes of proceedings of the Board of Directors or such committee.

Section 15. Special Compensation. The Directors may be paid their expenses of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as Director. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefore. Members of special or standing committees may be allowed like reimbursement and compensation for attending committee meetings.

Section 16. Preferred Stock. The Board of Directors has the power, without further action by the Stockholders, to determine the relative rights, preferences, privileges and restrictions of the preferred stock, and to issue the preferred stock in one or more series’ as determined by the Board of Directors. The designation of rights, preferences, privileges and restrictions could include preferences as to liquidation, redemption and conversion rights, voting rights, dividends or other preferences, any of which may be dilutive of the interest of the Stockholders of the common stock or the preferred stock of any other series.

  

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ARTICLE III

Officers

Section 1. Appointment. The Officers of the Corporation shall be appointed by the Board of Directors and shall be a President, a Secretary and a Treasurer, none of whom need also be Directors. The Board of Directors may also appoint one (1) or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Articles of Incorporation or these Bylaws.

Section 2. President. The President shall be the Chief Executive Officer of the Corporation and shall have active management of the business of the Corporation. He shall execute on behalf of the Corporation all instruments requiring such execution except to the extent the execution thereof shall be expressly designated by the Board of Directors to some other Officer or agent of the Corporation.

Section 3. Vice President. The Vice President shall act under the direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. The Vice President shall perform such other duties and have such other powers as the President of the Board of Directors may from time to time prescribe. The Board of Directors may designate one (1) or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice Presidents. The duties and powers of the President shall descend to the Vice Presidents in such specified order of seniority.

Section 4. Secretary. The Secretary shall act under the direction of the President. Subject to the direction of the President he shall attend all meetings of the Board of Directors and all meetings of the Stockholders and record the proceedings. The Secretary shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the Stockholders and special meetings of the Board of Directors, and shall perform such other duties as the President or the Board of Directors may from time to time prescribe.

Section 5. Assistant Secretaries. The Assistant Secretaries shall act under the direction of the President. In the order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe.

Section 6. Treasurer. The Treasurer shall act under the direction of the President. Subject to the direction of the President he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation.

If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum, and with such surety or sureties, as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 7. Assistant Treasurers. The Assistant Secretaries shall act under the direction of the President. In the order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe.

Section 8. Compensation. The compensation of all Officers of the Corporation shall be approved by the Board of Directors, and no Officer shall be prevented from receiving such compensation by virtue of his or her also being a Director of the Corporation.

Section 9. Removal and Resignation. The Officers of the Corporation shall hold office at the pleasure of the Board of Directors. Any Officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors.

Section 10.  Absence or Disability of Officers. In the case of the absence or disability of any Officer of the Corporation and of any person hereby authorized to act in such Officer’s place during such Officer’s absence or disability, the Board of Directors may by resolution delegate the powers and duties of such Officer to any other person.

  

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ARTICLE IV

Notices

Section 1. Notice of Meetings. Notices of meetings shall be in writing and signed by either the President or a Vice President or the Secretary or an Assistant Secretary or by such other person or persons as the Directors shall designate. Such notice shall state the purpose or purposes for which the meeting is called and the time and the place, which may be within or without the State of Nevada, where it is to be held. A copy of such notice shall be either delivered personally to or shall be mailed, postage prepaid, to each Stockholder of record entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before such meeting. If mailed, it shall be directed to a Stockholder at his address as it appears upon the records of the Corporation and upon such mailing of any such notice, the service thereof shall be complete and the time of the notice shall begin to run from the date upon which such notice is deposited in the mail for transmission to such Stockholder. Personal delivery of any such notice to any Officer of a Corporation or association, or to any member of a partnership, shall constitute delivery of such notice to such Corporation, association or partnership. In the event of the transfer of stock, after delivery of such notice of and prior to the holding of the meeting it shall not be necessary to deliver or mail notice of the meeting to the transferee.

Section 2. Effect of Irregularly Called Meetings. Whenever all parties entitled to vote at any meeting, whether of Directors or Stockholders, consent, either by writing on the records of the meeting filed with the Secretary, or by presence at such meeting and oral consent entered on the minutes, or by taking part in the deliberations at such meeting without objection, the doings of such meeting shall be as valid as if had at a meeting regularly called and noticed, and at such meeting any business may be transacted which is not excepted from the written consent or to the consideration of which no objection for want of notice is made at the time, and if any meeting be irregular for want of notice or of such consent, provided a quorum was present at such meeting, the proceedings of said meeting may be ratified and approved and rendered likewise valid and the irregularity or defect therein waived by writing signed by all parties having the right to vote at such meeting; and such consent or approval of Stockholders may be by proxy or attorney, but all such proxies and powers of attorney must in writing.

Section 3. Waiver of Notice. Whenever any notice whatever is required to be given under the provisions of the statutes, of the Articles of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

Capital Stock

Section 1. Certificates. Every Stockholder shall be entitled to have a certificate signed by the President or a Vice President, the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation certifying the number of shares owned by him in the Corporation. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative, participating, optional or other special rights of the various classes of stock or series thereof and the qualifications, limitations or restrictions of such rights, shall be set forth in full or summarized on the face or back of the certificate, which the Corporation shall issue to represent such stock.

If a certificate is signed (i) by a transfer agent other than the Corporation or its employees or (ii) by a registrar other than the Corporation or its employees, the signatures of the Officers of the Corporation may be facsimiles. In case any Officer who signed or whose facsimile signature has been placed upon a certificate shall cease to be an Officer before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be an Officer. The seal of the Corporation, or a facsimile thereof, may, but need not be, affixed to a certificate of stock.

Section 2. Lost or Destroyed Certificates. The Board of Directors may direct a new stock Articles or certificates to be issued in place of any certificate or certificates issued by the Corporation alleged to have been lost or destroyed upon the making of an affidavit of that fact by the person claiming the certificate or certificates of to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the Corporation a bond in such sum as it may direct as an indemnity against any claim that may be made against the Corporation with the respect to the certificate or certificates alleged to have been lost or destroyed.

Section 3. Replacement Certificates. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation, if it is satisfied that all provisions of the laws and regulations applicable to the Corporation regarding transfer and ownership of stock have been complied with, to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 4. Record Date. The Board of Directors may fix in advance a date not exceeding sixty (60) days nor less than ten (10) days preceding the date of any meeting of Stockholders, or the date for the payment of any distribution, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining the consent of Stockholders for any purpose, as a record date for the determination of the Stockholders entitled to notice of and to vote at any such meeting, and any adjournment thereof, or entitled to receive payment of such distribution, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid.

Section 5. Registered Owner. The Corporation shall be entitled to recognize the person registered on its books as the owner of stock to be the exclusive owner for all associated purposes including voting and distribution, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Nevada.

Section 6. Restrictions on Transfer. No Stockholder may sell, transfer or otherwise dispose of any stock without the consent of the Board of Directors. The Board of Directors is not required to provide reasons for any refusal to consent to any such sale, transfer or other disposition.  This section does not apply if the Corporation is a publicly-traded company.

 

  

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ARTICLE VI

Indemnification

Section 1. Indemnification of Officers, Directors, Employees and Other Persons. Every person who was or is a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or a person of whom he is the legal representative is or was a Director or Officer of the Corporation or is or was serving at the request of the Corporation or for its benefit as a Director or Officer of another Corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada against all expense, liability and loss (including attorney’s fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith. The expenses of Officers and Directors incurred defending a civil or criminal action, suit or proceeding must be paid by the Corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding upon receipt of an undertaking by or on behalf of the Director or Officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the Corporation. Such right of indemnification shall be a contractual right, which may be enforced in any manner desired by such person. Such right of indemnification shall not be exclusive of any other rights which such Directors, Officers or representatives may have or hereafter acquire and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of Stockholders, provision of law or otherwise, as well as their rights under this Article VI.

Section 2. Insurance. The Board of Directors may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was a Director or Officer of the Corporation, or is or was serving at the request of the Corporation as a Director or Officer of another Corporation, or as its representative in a partnership, joint venture, trust or other enterprise against liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person.

Section 3. Further Bylaws. The Board of Directors may from time to time adopt further Bylaws with respect to indemnification and may amend these and such Bylaws to provide at all times the fullest indemnification permitted by the laws of the State of Nevada.

ARTICLE VII

General Provisions

Section 1. Registered Office. The registered office of this Corporation shall be in the State of Nevada.

The Corporation may also have offices at such other places both within and without the State of Nevada as the Board of Directors may from time to time determine or the business of the Corporation may require.

Section 2. Distributions. Distributions upon the capital stock of the Corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting in accordance with applicable law. Distributions may be paid in cash, in property or in shares of the capital stock of the Corporation, subject to the provisions of the Articles of Incorporation.

Section 3. Reserves. Before the payment of any distribution, there may be set aside out of any funds of the Corporation available for distributions such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing distributions or for repairing or maintaining any property of the Corporation or for such other purpose as the Directors shall think conducive to the interest of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created.

Section 4. Checks and Notes. All checks or demands for the money and notes of the Corporation shall be signed by such Officer or Officers or such other person or persons, and in such a manner, as the Board of Directors may from time to time designate.

Section 5. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 6. Corporate Seal. The Corporation may have a corporate seal which shall have inscribed thereon the name of the Corporation and the words "Corporate Seal" and "Nevada". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced.

Section 7. Voting Securities Owned by Corporation. Voting securities in any other company held by the Corporation shall be voted by the President or any Vice President or any other Officer authorized to do so by the Board of Directors. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.

Section 8. Inspection of Books and Records. The Board of Directors shall have the power from time to time to determine to what extent and at what times and places and under what conditions the books or records of the Corporation shall be open to the inspection of the Stockholders. No Stockholder shall have any right to inspect any book or record of the Corporation except as conferred by the laws of the State of Nevada, unless and until authorized otherwise by resolution of the Board of Directors or the Stockholders of the Corporation.

Section 9. Section Headings.  Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

Section 10. Inconsistent Provisions. In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Articles of Incorporation, the Nevada General Corporation Law or any other applicable law or regulation, such provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

Section 11. Amendments. The Board of Directors may alter, amend, change, add to or repeal these Bylaws by the affirmative vote of a majority of the total number of Directors then in office, subject to further action by the Stockholders. Any alteration or repeal of these Bylaws by the Stockholders of the Corporation shall require the affirmative vote of a majority of the combined voting power of the then issued and outstanding shares of the Corporation entitled to vote on such alteration or repeal.

 

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