Document:

EX-10.1

 Exhibit 10.1 

CREDIT AGREEMENT 
 This
Credit Agreement dated as of November 27, 2017 (as supplemented, amended, modified, amended and restated or replaced in writing from time to time, this “Agreement”), is entered into by and between BOX, INC., a Delaware
corporation (the “Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”). 
 RECITALS

 WHEREAS, the Borrower has requested that the Lender make available loans and other financial accommodations to the Borrower; and 

WHEREAS, the Lender has agreed to make available such loans and other financial accommodations on the terms and subject to the conditions set
forth herein; 
 NOW THEREFORE, in consideration of the mutual agreements contained herein, the parties hereto agree as follows: 

ARTICLE I. 
 DEFINITIONS

 Section 1.01 Defined Terms. As used in this Agreement, the following terms have the following meanings: 

“Accounts Receivable”: All accounts (as that term is defined in the UCC). 

“Affiliate”: As applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to
any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise. 

“Agreement”: As defined in the introductory paragraph of this Agreement. 

“Applicable Margin”: For any day, (i) 0.25% in the case of Prime Rate Loans and (ii) 1.00% in the case of LIBOR Loans. 

“Applicable Reserve Requirement”: At any time, for any Loan, the maximum rate, expressed as a decimal, at which reserves are
required to be maintained with respect thereto against “Eurocurrency liabilities” (as such term is defined in Regulation D of the Board) under regulations issued from time to time by the Board or other applicable banking regulator. Without
limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any other reserve required by the Board to be maintained by such member banks with respect to (i) any category of liabilities which includes deposits by
reference to which the applicable LIBOR or any other interest rate of a Loan is determined or (ii) any category of extensions of credit or other assets which include Loans. A Loan shall be deemed to constitute Eurocurrency liabilities and as
such shall be deemed subject to reserve requirements without benefits of credit for proration, exceptions or offers that may be available from time to time to the Lender. The rate of interest on LIBOR Loans shall be adjusted automatically on and as
of the effective date of any change in the Applicable Reserve Requirement. 

 “Average Deferred Revenue Change”: The average Deferred Revenue Change
calculated based upon each of the four Fiscal Quarters in any trailing twelve month period. 
 “Bankruptcy Code”: Title 11
of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute. 

“Board”: The Board of Governors of the Federal Reserve System and any successor thereto. 

“Borrower”: As defined in the introductory paragraph of this Agreement. 

“Borrowing”: As defined in Section 2.01(b). 

“Business Day”: A day other than a Saturday, Sunday or a day on which commercial banks in California are authorized or
required by law to close. 
 “Capital Expenditures”: As to any Person, expenditures (including expenditures with respect to
Capital Leases) made by such Person to acquire or construct fixed assets, plants and equipment (including renewals, improvements and replacements, but excluding repairs unless such repairs are required to be capitalized in accordance with GAAP).

 “Capital Lease”: As applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as
lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person. 
 “Cash
Collateralize”: To pledge and deposit with or deliver to the Lender, as collateral, an amount (whether in cash or deposit account balances or in the form of a standby letter of credit in form and substance reasonably satisfactory to, and
issued by a United States commercial bank reasonably acceptable to, the Lender in its commercially reasonable discretion) pursuant to documentation in form and substance reasonably satisfactory to the Lender. “Cash Collateral” shall
have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support. 

“Cash Equivalents”: 

(i) Direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of issuance thereof; 

(ii) investments in commercial paper maturing within 270 days from the date of issuance thereof and having, at such date of
acquisition, a rating of at least “Prime 1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P; 

(iii) investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the
date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, the Lender or any domestic office of any commercial bank organized under the laws of the United States of America or any
State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000 and that issues (or the parent of which issues) commercial paper rated at least “Prime 1” (or the then equivalent grade) by
Moody’s or “A-1” (or the then equivalent grade) by S&P; 

  
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 (iv) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (i) above and entered into with a financial institution satisfying the criteria of clause (iii) above; 

(v) investments in “money market funds” within the meaning of Rule 2a-7 of
the Investment Company Act of 1940, as amended, substantially all of whose assets are invested in investments of the type described in clauses (i) through (iv) above; 

(vi) other short-term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash
management in investments of a type analogous to the foregoing; and 
 (vii) investments described on Schedule
1.01(a)(i) to the Disclosure Letter and other investments approved by the Lender. 
 “Cash Management Obligations”:
With respect to any Person, all liabilities of such Person under any agreement to provide cash management services, including treasury, depositary, overdraft, credit or debit card, electronic funds transfer and other cash management agreements. 

“CFC”: A controlled foreign corporation within the meaning of Section 957(a) of the Internal Revenue Code. 

“Change in Control”: Shall be deemed to have occurred if (i) any “person” or “group” (within the
meaning of Rule 13d-5 of the Securities Exchange Act of 1934, as in effect on the date hereof), other than the Permitted Investors, shall own, directly or indirectly, beneficially or of record, shares
representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower, or (ii) any change in control (or similar event, however denominated) with respect to the Borrower or
any Subsidiary shall occur under and as defined in any indenture or agreement in respect of any Debt in an aggregate principal amount exceeding $5,000,000 to which the Borrower or any Subsidiary is a party. 

“Change in Law”: The occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking
effect of any law, rule, regulation or treaty, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any governmental authority, central bank or comparable
entity charged with the interpretation or administration thereof, or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any governmental authority, central bank or comparable
entity charged with the interpretation or administration thereof; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued. 

“Chief Financial Officer”: The chief financial officer (or equivalent Person) of Borrower. 

  
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 “Closing Date”: The date on which all conditions precedent set forth in
Section 4.01 have been satisfied or waived by the Lender. 
 “Collateral”: The collective reference to the
“Collateral” as defined in the Security Agreement and any other collateral pledged to the Lender pursuant to a Loan Document. 

“Commitment”: The commitment of the Lender to make Loans to the Borrower pursuant to Section 2.01(a). The amount of the
Lender’s Commitment as of the Closing Date is $85,000,000. 
 “Commodity Exchange Act”: The Commodity Exchange Act (7
U.S.C. § 1 et seq.), as amended from time to time, and any successor statute. 
 “Compliance Certificate”: A
certificate substantially in the form of Exhibit B hereto. 
 “Connection Income Taxes”: Other Connection Taxes that
are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes. 
 “Consolidated
Net Income (or Deficit)”: The consolidated net income (or deficit) of any Person and its Subsidiaries, after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP, after eliminating therefrom all
extraordinary or nonrecurring items of income. 
 “Consolidated Total Interest Expense”: With respect to any Person for any
period, the aggregate amount of interest required to be paid or accrued by a Person and its Subsidiaries during such period on all indebtedness of such Person and its Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of any capitalized lease or any synthetic lease, and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the borrowing of money. 
 “Cost Sharing
Agreement”: Cost Sharing Agreement dated as of June 25, 2013 between Borrower and Box Intl Technology Ltd., as amended on October 15, 2015, as may be amended from time to time. 

“Debt”: As applied to any Person, without duplication, (i) all indebtedness for borrowed money and all obligations
evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (ii) that portion of obligations with respect to Capital Leases which is properly classified as a liability on a balance sheet in conformity with GAAP,
(iii) notes payable representing extensions of credit whether or not representing obligations for borrowed money, (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding (a) trade
accounts payable incurred in the ordinary course of business not more than ninety (90) days past due, or that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have
been provided for on the books of such Person, (b) earnout payments (other than, for the avoidance of doubt, earnout payments payable solely in Qualified Equity Interests of the Borrower) , (c) any accruals for payroll and other non-interest bearing liabilities accrued in the ordinary course of business and (d) any obligations in respect of operating leases) which purchase price is (y) due more than six months from the date of
incurrence of the obligation in respect thereof or (z) evidenced by a note or similar written instrument, (v) all indebtedness for borrowed money secured by any Lien on any property owned or held by that Person regardless of whether the
indebtedness for borrowed money secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person (excluding any obligations in respect of operating leases), (vi) all obligations, contingent or otherwise,
with respect to the face amount of all letters of credit (whether drawn or undrawn), bankers’ acceptances or similar 

  
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obligations issued for the account of such Person, (vii) all swap and related hedging arrangements (including the Hedging Obligations) of such Person valued at the net termination value
thereof, (viii) all obligations of such person in respect of Disqualified Equity Interests, and (ix) any Guaranty of such Person in respect of any Debt of any other Person described in clauses (i) through (viii) above. 

“Deferred Revenue”: All amounts received or invoiced in advance of performance under contracts and not yet recognized as
revenue, as determined in accordance with GAAP. 
 “Deferred Revenue Change”: Any change in Deferred Revenue as of the last
day of a Fiscal Quarter as compared to Deferred Revenue for the last day of the same Fiscal Quarter in the prior Fiscal Year.  

“Disclosure Letter”: That certain disclosure letter dated as of the date hereof delivered by the Borrower to the Lender, as
may be updated from time to time in accordance with the terms of this Agreement and the other Loan Documents. 

“Disposition”: As defined in Section 6.02(f). 

“Disqualified Equity Interests”: Any Equity Interests that, by their terms (or by the terms of any security or other Equity
Interest into which they are convertible or for which they are exchangeable) or upon the happening of any event or condition, (i) mature or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking
fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the
Loans and all other Obligations that are accrued and payable and the termination of the Commitment), (ii) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests) (except as a result of a change of
control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and
the termination of the Commitment), in whole or in part, (iii) provide for the scheduled payment of dividends in cash or (iv) are or become convertible into or exchangeable for Debt or any other Equity Interests that would constitute
Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Maturity Date; provided that if such Equity Interests are issued pursuant to a plan for the benefit of Borrower or its Subsidiaries or by any such plan to their
respective employees or independent contractors, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by Borrower or its Subsidiaries in order to satisfy applicable statutory
or regulatory obligations. 
 “Dollars” and “$”: The lawful currency of the United States of America. 

“Domestic Subsidiary”: Each Subsidiary that is organized under the laws of the United States, any state, territory,
protectorate or commonwealth thereof or the District of Columbia. 
 “EBITDA”: With respect to any period an amount equal
to the sum of (a) Consolidated Net Income of the Borrower and its Subsidiaries for such period, plus (b) in each case to the extent deducted in the calculation of the Borrower’s Consolidated Net Income and without duplication,
(i) depreciation and amortization for such period, plus (ii) provision (benefit) for income tax for such period, plus (iii) Consolidated Total Interest Expense paid or accrued during such period, plus
(iv) non-cash expenses, losses and charges, including, without limitation, non-cash compensation-based expenses, plus (v) all extraordinary, unusual or non-recurring expenses, losses and charges for such period, including , without limitation, restructuring charges, including, without limitations, costs, fees and expenses incurred by Borrower or its Subsidiaries in
connection with any Permitted Acquisition, plus (vi) any other expenses, losses or charges agreed to by the Lender, plus or minus (c) the Average Deferred Revenue Change, all as determined in accordance with GAAP. 

  
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 “Eligible Accounts Receivable”: Bona fide trade Accounts Receivable created in
the ordinary course of the Borrower’s consolidated business, evidenced by an invoice rendered to the account debtor, upon which the Borrower’s (on a consolidated basis) right to receive payment is absolute and not contingent upon the
fulfillment of any condition whatsoever (other than with respect to prepaid subscription fees received by the Borrower (on a consolidated basis), which fees shall be deemed to be Eligible Accounts Receivable to the extent that the corresponding
customer agreements pursuant to which such fees arise and the Borrower (on a consolidated basis) renders services remain in full force and effect and no notice of termination has been given under such agreements), and in which the Lender has a
perfected security interest of first priority, and in each case, classified as a “current asset” in accordance with GAAP, and shall not include any Account Receivable that has been outstanding more than 60 days past due. 

“Environmental Laws”: Any and all current or future statutes, ordinances, orders, rules, regulations, guidance documents,
judgments, governmental authorizations, or any other requirements of governmental authorities relating to (i) environmental matters or (ii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to any Loan Party or any of its Subsidiaries. 
 “Environmental Permit”:
Any permit, approval, identification number, license or other authorization required under any Environmental Law. 
 “Equity
Interests”: (i) All shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit
interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting, and (ii) all securities convertible into or exchangeable for any of
the foregoing and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable or exercisable. 

“ERISA”: The Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute. 

“Event of Default”: As defined in Section 7.01. 

“Excluded Taxes”: Any of the following Taxes imposed on or with respect to the Lender or required to be withheld or deducted
from a payment to the Lender (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result of the Lender being organized under the laws of, or having
its principal office or its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) Federal withholding Taxes imposed on amounts payable
to or for the account of the Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (a) the Lender acquires such interest in the Loan or Commitment or (b) the Lender changes
its lending office, except in each case to the extent that, pursuant to Section 3.11, amounts with respect to such Taxes were payable either to the Lender’s assignor immediately before the Lender became a party hereto or to the Lender
immediately before it changed its lending office, (iii) Taxes attributable to such recipient’s failure to comply with Section 3.11(f), and (iv) any Federal withholding Taxes under FATCA. 

  
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 “Excluded Swap Obligation”: With respect to any Guarantor, any Swap Obligation
if, and to the extent that, all or a portion of the guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act
or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation
arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guaranty or security interest is or becomes illegal. 

“Existing Credit Agreement”: The Credit Agreement dated as of December 4, 2015 among the Borrower, the Existing Lender,
as administrative agent, collateral agent and lender, and the other lenders party thereto (as amended, supplemented or otherwise modified from time to time). 

“Existing Lender”: HSBC Bank USA, National Association, a national banking association. 

“FATCA”: Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or
successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the
Internal Revenue Code. 
 “FCPA”: As defined in Section 5.01(y). 

“Fiscal Quarter”: A fiscal quarter of any Fiscal Year. 

“Fiscal Year”: The fiscal year of the Borrower ending on January 31 of each year. 

“Foreign Subsidiary”: Any Subsidiary that is organized under the laws of any jurisdiction other than the United States, any
state, territory, protectorate or commonwealth thereof or the District of Columbia. 
 “GAAP”: Generally accepted
accounting principles, standards and practices in the United States, applied on a consistent basis. 
 “Grantor”: As
defined in the Security Agreement. 
 “Guarantor”: Each Domestic Subsidiary (other than a Domestic Subsidiary of a Foreign
Subsidiary that is a CFC) that is a Material Subsidiary (or, at the election of the Borrower, any other Subsidiary) that is or becomes a party to a Subsidiary Guarantee. 

“Guaranty”: As to any Person, (i) any obligation, contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Debt or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation, (b) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Debt or
other obligation of the payment or performance of such Debt or other obligation, (c) to maintain working capital, equity capital or any other financial statement or condition or liquidity or level of income or cash flow of the

  
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primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (d) entered into for the purpose of assuring in any other manner the obligee in respect of such
Debt or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (ii) any Lien on any assets of such Person securing Debt or other obligation of any other
Person, whether or not such Debt or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Debt to obtain any such Lien). The amount of any Guaranty shall be deemed to be an amount equal to the
stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guaranty is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. Notwithstanding anything herein to the contrary, the term “Guaranty” shall not include endorsements for collection or deposit, in either case in the ordinary course of business, or customary and
reasonable indemnity obligations (A) in effect on the Closing Date, (B) entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Debt), or
(C) set forth in customer or vendor agreements entered into by the Borrower or any Subsidiary in the ordinary course of business consistent with past practices (other than such obligations with respect to Debt). 

“Hazardous Materials”: All chemicals, materials, substances, wastes, pollutants, contaminants, compounds, in any form,
including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas or mold, subject to regulation under or which give rise to liability pursuant to any Environmental Law. 

“Hedge Agreement”: (i) Any and all agreements in respect of rate swaps, basis swaps, credit derivative transactions, forward
rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap or floor transactions, collar transactions, currency-swaps, cross-currency rate swaps, currency options, spot contracts or any similar transactions or any combinations of the
foregoing (including any options to enter into any of the foregoing), whether or not any such transactions is governed by or subject to any master agreement, and (ii) any and all agreements which are governed by, or subject to the terms and
conditions of, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement or any other master agreement. For the avoidance of doubt, the following shall
not be deemed a “Hedge Agreement”: (a) any agreement related to incentive stock, restricted stock, restricted stock units, stock options, phantom stock or similar agreements entered into with current or former directors, officers,
employees or consultants of the Borrower, (b) any stock option or warrant agreement for the purchase of Equity Interests of the Borrower, (c) the purchase of Equity Interests of Borrower pursuant to delayed delivery contracts or other
similar agreements. 
 “Hedging Obligations”: With respect to any Person, all net liabilities of such Person under any
Hedge Agreement. 
 “Indemnified Liabilities”: As defined in Section 8.06. 

“Indemnified Parties”: As defined in Section 8.06. 

“Indemnified Taxes”: (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of
any obligation of the Borrower under any Loan Document and (ii) to the extent not otherwise described in the preceding clause (i), Other Taxes. 

  
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 “Interest Payment Date”: As to any LIBOR Loan with an Interest Period of three
months or less, the last day of such Interest Period and the Maturity Date; and as to any LIBOR Loan with an Interest Period in excess of three months, (i) each day prior to the last day of such Interest Period that occurs at intervals of three
months following the beginning of such Interest Period, (ii) the last day of such Interest Period and (iii) the Maturity Date; and as to any Prime Rate Loan, the last day of each calendar quarter, commencing on the first such date to occur
after such Prime Rate Loan is made, and the Maturity Date. 
 “Interest Period”: With respect to any LIBOR Loan: 

(i) initially, the period commencing on, as the case may be, the Borrowing date with respect to such LIBOR Loan and ending one,
three or six months thereafter as selected by the Borrower in its notice of Borrowing as provided in Section 2.01(b); and 

(ii) thereafter, each period commencing on (a) in the case of a continuation of a LIBOR Loan, the last day of the next
preceding Interest Period applicable to such LIBOR Loan and (b) in the case of a conversion to a LIBOR Loan, the effective date of such conversion, and in each case, ending one, three or six months thereafter as selected by the Borrower in its
notice of continuation or conversion as provided in Section 2.04; 
 provided that all of the foregoing provisions relating to Interest Periods are
subject to the following: 
 (a) if any Interest Period for a LIBOR Loan would otherwise end on a day which is not a LIBOR Business Day,
that Interest Period shall be extended to the next succeeding LIBOR Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately
preceding LIBOR Business Day; 
 (b) if any Interest Period for a LIBOR Loan begins on the last LIBOR Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) that Interest Period shall, subject to clause (c), end on the last LIBOR Business Day of the relevant calendar month at the end of
such Interest Period; 
 (c) Borrower may not select an Interest Period with respect to any portion of principal of a LIBOR Loan which
extends beyond the Maturity Date; and 
 (d) there shall be no more than three (3) Interest Periods with respect to LIBOR Loans
outstanding at any time. 
 “Internal Revenue Code”: The Internal Revenue Code of 1986, as amended to the date hereof and
from time to time hereafter, including any regulations of the U.S. Department of the Treasury. 
 “Landlord Subordination
Agreement”: A landlord subordination agreement in form and substance reasonably satisfactory to the Lender, executed by a landlord of any leased real property. 

“Lender”: As defined in the introductory paragraph of this Agreement. 

“Letter of Credit Sublimit”: A sublimit for Letters of Credit not to exceed $30,000,000. 

“Leverage Ratio”: The ratio of (i) without duplication, all outstanding Debt owed under the Commitment, the Letter of
Credit Sublimit and that constitutes Capital Leases, to (ii) EBITDA, measured on a trailing twelve month basis and determined on a consolidated basis in accordance with GAAP. 

  
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 “LIBOR”: With respect to any LIBOR Loan, the London interbank offered rate
administered and published by ICE Benchmark Administration Limited (or any other successor thereto which takes over administration of such rate), as determined by the Lender from time to time for purposes of providing quotations of interest rate
applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two (2) LIBOR Business Days prior to the making of such LIBOR Loan, as the rate of the offering of Dollar deposits with a maturity
comparable to the Interest Period of such LIBOR Loan, in each case as adjusted for Applicable Reserve Requirements; provided, that if LIBOR is less than zero, LIBOR shall be deemed to be zero. 

“LIBOR Business Day”: A day which is a Business Day and on which dealings in Dollar deposits may be carried out in the London
interbank market. 
 “LIBOR Loans”: Loans hereunder at such time as they accrue interest at a rate based upon LIBOR. 

“Lien”: Any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any financing lease in the nature thereof, and any agreement to give any security interest). 

“Liquidity”: At any time of determination, the sum of (i) the amount (without duplication) of Eligible Accounts
Receivable at such time and (ii) the amount of Unrestricted Cash at such time. 
 “Loans”: All advances made to the
Borrower pursuant to Section 2.01. 
 “Loan Documents”: This Agreement, the Note, the Security Documents, the
Subsidiary Guarantee, and each other agreement or certificate delivered to the Lender in connection with this Agreement and/or the credit extended hereunder (but excluding any Hedge Agreement with the Lender or its Affiliates or any agreements
relating to Cash Management Obligations owing to the Lender or its Affiliates). 
 “Loan Party”: The Borrower and the
Guarantors. 
 “Management and Services Agreement”: Management and Services Agreement dated as of August 26, 2013
between Borrower and Box.com (UK) Ltd, as may be amended from time to time. 
 “Material Adverse Effect”: (i) A
material adverse change in, or a material adverse effect upon, the business, general affairs, assets, liabilities, properties, operations, financial condition or results of operations of the Loan Parties, taken as a whole, (ii) (a) a material
impairment of the ability of any Loan Party to comply with or perform any of its payment obligations under any Loan Document or (b) a material impairment of the ability of any Loan Party to comply with or perform any of its other obligations
under any Loan Document or (iii) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document. 

“Material Subsidiary”: Any Subsidiary that, on a consolidated basis for such Subsidiary and its Subsidiaries, (i) for
the most recent Fiscal Quarter for which financial statements have been delivered or required to be delivered pursuant to Section 6.01(a)(i) or (ii) accounted for more than 10% of the consolidated revenues of the Borrower and its
Subsidiaries or (ii) as at the end of such Fiscal Quarter, was the owner of more than 10% of the consolidated assets of the Borrower and its Subsidiaries. 

  
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 “Maturity Date”: November 27, 2020. 

“Moody’s”: Moody’s Investors Service, Inc., or any successor thereto. 

“Multiemployer Plan”: A “multiemployer plan” as defined in Section 3(37) of ERISA. 

“Non-U.S. Lender Party”: As defined in Section 3.11(f)(ii)(B). 

“Note”: A promissory note in the form of Exhibit C, as supplemented, amended, modified, amended and restated or replaced in
writing from time to time. 
 “Obligations”: All advances to, debts, liabilities, obligations (monetary (including
post-petition interest, allowed or not) or otherwise) of every nature of any Loan Party from time to time arising under any Loan Document or otherwise with respect to any Loan, in each case, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, and including principal, interest, fees, expenses and indemnification obligations. 

“OFAC”: The Office of Foreign Assets Control, Department of the Treasury. 

“Other Connection Taxes”: With respect to any recipient (including the Lender), Taxes imposed as a result of a present or
former connection between such recipient (including the Lender) and the jurisdiction imposing such Tax (other than connections arising from such recipient (including the Lender) having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document). 

“Other Taxes”: All present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise
from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are
Other Connection Taxes imposed with respect to an assignment. 
 “Patriot Act”: The USA Patriot Act (Title III of Pub. L. 107-56), as amended. 
 “Pension Plan”: Any employee benefit plan as defined in
Section 3(3) of ERISA, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA. 

“Permitted Acquisition”: Any acquisition by the Borrower or any of its Subsidiaries of all or substantially all of the stock,
assets or any business line or division of a U.S. or foreign Person, whether by merger, consolidation or otherwise, in any transaction or a series of related transactions, provided that: 

(i) no less than one (1) day prior to the proposed closing date of such acquisition, the Borrower shall have delivered
written notice of such Permitted Acquisition to the Lender, which notice shall include the proposed closing date of such Permitted Acquisition; 

  
 11 

 (ii) for any acquisition in which the aggregate amount of consideration exceeds
$10,000,000, the Borrower shall have furnished to the Lender at least one (1) day prior to the consummation thereof copies of such agreements, instruments and other documents as the Lender shall reasonably request, including any term sheet
and/or commitment letter and other documents in connection with such acquisition; 
 (iii) the Borrower shall have furnished
to the Lender such documentation and other information that the Lender reasonably requests as to the target of such acquisition in order to comply with its ongoing due diligence pursuant to regulatory requirements and its internal policies,
including its obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act; 

(iv) if required under Regulation S-X of the SEC, the Borrower shall have furnished to
the Lender within the time period prescribed under Regulation S-X, a pro-forma balance sheet of the Borrower and each of its Subsidiaries (including any Subsidiary
formed or acquired in connection therewith) after giving effect to the consummation of such Permitted Acquisition and any incurrence of Loans to finance such Permitted Acquisition; 

(v) both before and immediately after giving effect to the consummation thereof, no Potential Event of Default or Event of
Default shall have occurred and be continuing; 
 (vi) the target of such Permitted Acquisition shall be engaged in a
business engaged in by the Borrower or any of its Subsidiaries on the Closing Date or (a) a related, ancillary, supplementary or complementary business line, (b) a reasonable expansion or extension thereof or (c) such other lines of
business as may be consented to in writing by the Lender (which consent shall not be unreasonably withheld or delayed); and 

(vii) the Borrower shall have furnished to the Lender (a) a Compliance Certificate duly executed by its Chief Financial
Officer that (x) to the extent Borrower is required to deliver a pro forma balance sheet pursuant to clause (iv) above, shows in reasonable detail the calculations used in determining the financial covenants set forth in Sections 6.03(a)
and 6.03(b) on a pro forma basis as of the last day of the most recently ended period for which financial statements have been delivered to Lender pursuant to Section 6.01(a)(i) or (ii), and (y) states that no Potential Event of Default or
Event of Default is continuing as of the date of delivery of such Compliance Certificate or, if a Potential Event of Default or Event of Default is continuing, states the nature thereof and the action that the Borrower proposes to take with respect
thereto and (b) a certificate duly executed by an authorized officer of the Borrower demonstrating compliance with the requirements of clauses (i) through (vi) above and stating that, to the knowledge of the Borrower, such Permitted
Acquisition has been approved by the board of directors (or equivalent governing body) of the Person to be acquired. 
 “Permitted
Investors”: The Persons listed on Schedule 1.01(a)(ii) to the Disclosure Letter. 
 “Permitted
Lien”: As defined in Section 6.02(a). 

  
 12 

 “Permitted Refinancing”: With respect to any Person, any amendment,
modification, replacement, refinancing, refunding, renewal or extension of any Debt of such Person, provided that the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable)
of the Debt so amended, modified, replaced, refinanced, refunded, renewed or extended except by an amount equal to unpaid accrued interest and premium, make whole amounts and penalties thereon plus other reasonable amounts paid, and fees and
expenses reasonably incurred, in connection with such amendment, modification, replacement, refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder. 

“Person”: An individual, partnership, corporation, limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or other entity of whatever nature, whether in an individual, fiduciary or other capacity. 

“Platform Contribution Transaction License Agreement”: Platform Contribution Transaction License Agreement dated
June 25, 2013, between the Borrower and Box Intl Technology Ltd., as may be amended from time to time. 
 “Pledged
Shares”: As defined in the Security Agreement. 
 “Potential Event of Default”: A condition or event which, after
notice or lapse of time or both, would constitute an Event of Default. 
 “Prime Rate”: At any time the rate of interest
most recently announced within Lender at its principal office as its Prime Rate, with the understanding that the Prime Rate is one of Lender’s base rates and serves as the basis upon which effective rates of interest are calculated for those
loans making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as Lender may designate. 

“Prime Rate Loans”: Loans hereunder at such time as they accrue interest at a rate based upon the Prime Rate. 

“Qualified Equity Interests”: Any Equity Interests that are not Disqualified Equity Interests. 

“Regulations T, U and X”: Regulations T, U and X, respectively, promulgated by the Board, as amended from time to time, and
any successors thereto. 
 “Replacement Assets”: With respect to any properties or assets subject to an existing Lien, any
replacements, substitutions, attachments and accessions of or to such properties or assets subject to such Lien under the terms of the documentation creating such Lien at the time such properties or assets are acquired (or, with respect to the
acquisition of a Person that owns such assets, the time such Person becomes a Subsidiary) and proceeds and products of the properties or assets subject to such Lien. 

“Requirement”: As defined in Section 3.06. 

“Restricted Payment”: any dividend or other distribution (whether in cash, securities or other property) with respect to any
Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Equity Interests in the Borrower or any Subsidiary. 
 “S&P”: Standard & Poor’s
Ratings Service, or any successor thereto. 

  
 13 

 “Sanctions”: As defined in Section 5.01(x). 

“SEC”: The Securities and Exchange Commission, or any governmental authority succeeding to any or all of its functions. 

“Secured Obligations”: Collectively, (i) the Obligations, (ii) all Hedging Obligations owing to the Lender or any
of its Affiliates and (iii) all Cash Management Obligations owing to the Lender or any of its Affiliates, provided that “Secured Obligations” shall not, as to any Loan Party, include any Excluded Swap Obligations of such Loan Party.

 “Security Agreement”: The Security Agreement dated as of November 27, 2017 among the Lender, the Borrower and the
Guarantors from time to time party thereto, as supplemented, amended, modified, amended and restated or replaced in writing from time to time. 

“Security Documents”: Collectively, the Security Agreement, and each other security agreement or other instrument or
document, in each case in form and substance reasonably satisfactory to the Lender, delivered from time to time in favor of the Lender pursuant to the terms of this Agreement to secure any of the Secured Obligations. 

“Solvent”: With respect to the Loan Parties on a consolidated basis, that as of the date of determination, both (i)
(a) the sum of the Loan Parties’ debts (including contingent liabilities) does not exceed the present fair saleable value of the Loan Parties’ present assets, (b) the Loan Parties’ capital is not unreasonably small in
relation to their business as contemplated on the Closing Date or with respect to any transaction contemplated to be undertaken after the Closing Date, and (c) the Loan Parties have not incurred and do not intend to incur, or believe (nor
should they reasonably believe) that they will incur, debts beyond their ability to pay such debts generally as they become due (whether at maturity or otherwise) and (ii) the Loan Parties are “solvent” (within the meaning given that
term and similar terms under the Bankruptcy Code and applicable laws related to fraudulent transfers and conveyances). For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. 

“Subsidiary”: A corporation, partnership or other entity of which the relevant Loan Party owns, directly or through another
Subsidiary, at the date of determination, more than 50% of the outstanding capital stock or membership interests (or other shares of beneficial interest) having ordinary voting power for the election of directors or other governing body or Person,
irrespective of whether or not at such time stock of any other class or classes might have voting power by reason of the happening of any contingency, or holds at least a majority of partnership or similar interests, or is a general partner of such
a partnership. 
 “Subsidiary Guarantee”: The Subsidiary Guarantee, in the form of Exhibit D, made by the Guarantors
party thereto in favor of the Lender, as supplemented, amended, modified, amended and restated or replaced in writing from time to time. 

“Swap Obligation”: With respect to any Guarantor, any obligation to pay or perform under any agreement, contract or
transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act. 

“Taxes”: All present or future taxes, levies, imposes, duties, deductions, withholding (including backup withholding),
assessments, fees or other charges imposed by any governmental authority, including any interest, additions to tax or penalties applicable thereto. 

  
 14 

 “U.S. Person”: Any Person that is a “United States Person” as defined
in Section 7701(a)(30) of the Internal Revenue Code. 
 “U.S. Tax Compliance Certificate”: As defined in
Section 3.11(f)(ii)(B)(iii). 
 “UCC”: The Uniform Commercial Code as in effect from time to time in the State of
California. 
 “UK Bribery Act”: As defined in Section 5.01(y). 

“Unrestricted Cash”: As of any date of determination, the amount (without duplication) of unrestricted cash and Cash
Equivalents of the Borrower or any other Loan Party that is in deposit accounts or in securities accounts, or any combination thereof, that are held in an account with (i) the Lender or any of its Affiliates, or (ii) with any other
financial institution, with respect to which, in the case of any account with any Affiliate of the Lender or another financial institution, the Lender has received an account control agreement over such account, executed by such Affiliate or
financial institution, the Lender and the Borrower or such other Loan Party, in form and substance satisfactory to the Lender, and in each case, classified as a “current asset” in accordance with GAAP. 

Section 1.02 Other Definitional Provisions. 

(a) As used herein and in any certificate or other document made or delivered pursuant hereto, accounting terms not defined in
Section 1.01, and accounting terms partly defined in Section 1.01 to the extent not defined, shall have the respective meanings given to them under GAAP. Notwithstanding the foregoing, for purposes of determining compliance with any
covenant or requirement contained herein or in any other Loan Document the effects of FASB ASC 606 on revenue recognition shall be disregarded. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set
forth in any Loan Document, and either the Borrower or the Lender shall so request, the Borrower and the Lender shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP,
provided that until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide Lender financial statements and other documents required
under this Agreement or as reasonably requested herein setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Notwithstanding anything in this Agreement or any
other Loan Documents, if GAAP requires the Borrower subsequent to the Closing Date to cause operating leases to be treated as capitalized leases, including, without limitation, as a result of the implementation of proposed changes to FASB ASC 840
and 842, then such change shall not be given effect hereunder, and those types of leases which were treated as operating leases as of the Closing Date shall continue to be treated as operating leases and not capitalized leases. 

(b) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this Agreement, and section, subsection, schedule and exhibit references are to this Agreement unless otherwise specified. 

(c) Any certificate or other writing required hereunder or under any other Loan Document to be certified by any officer or other authorized
representative of any Person shall be deemed to be executed and delivered by such officer or other authorized representative solely in such individual’s capacity as an officer or other authorized representative of such Person and not in such
officer’s or other authorized representative’s individual capacity. 

  
 15 

 (d) Unless the context requires otherwise 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 or in any other Loan Document). 
 (e) For the purposes of calculating EBITDA in connection with any
financial ratio or test for any measurement period, if at any time during such period the Borrower or a Subsidiary shall have consummated a Permitted Acquisition that requires the Borrower to deliver a pro forma balance sheet pursuant to clause
(iv) of the definition of “Permitted Acquisition”, then EBITDA for such period shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to such
Permitted Acquisition, including as a result of actions taken or expected to be taken (in the good faith determination of Borrower) and are reasonably identifiable and factually supportable, and are expected to have a continuing impact, and, in each
case, which are (x) determined on a basis consistent with Article 11 of Regulation S-X promulgated under the Securities Act and as interpreted by the staff of the SEC, or (y) reflected in any pro
forma financial model of Borrower and its Subsidiaries delivered to the Lender and which pro forma adjustments are reasonably acceptable to the Lender, or otherwise to be mutually and reasonably agreed upon by the Borrower and the Lender) or in such
other manner acceptable to the Lender; in each case, as if any such Permitted Acquisition occurred on the first day of such period. 

ARTICLE II. 
 THE LOANS

 Section 2.01 The Loans. 

(a) The Commitment. The Lender agrees, on the terms and conditions hereinafter set forth, to make Loans to the Borrower from time to
time during the period from the date hereof to but excluding the Maturity Date in an aggregate amount not to exceed the Commitment at any time outstanding. Within the limits of the Commitment, the Borrower may borrow, repay pursuant to
Section 2.02(b) and reborrow under this Section 2.01(a). 
 (b) Making the Loans. 

(i) Loans. Each borrowing under this Section 2.01 (a “Borrowing”) shall be in a minimum amount of
$100,000 or an integral multiple of $100,000 above such amount. Subject to Section 3.08, each Borrowing shall be comprised entirely of Prime Rate Loans or LIBOR Loans, as the Borrower may request in accordance herewith. The Borrower may borrow
under the Commitment, less the aggregate face amount of Letters of Credit issued under the Letter of Credit Sublimit, on any Business Day (or for LIBOR Loans, any LIBOR Business Day), provided that the Borrower shall give the Lender irrevocable
written notice substantially in the form of Exhibit A hereto (which notice must be received by the Lender prior to 12:00 p.m., California time) (1) in the case of Prime Rate Loans, on such requested Borrowing date, and (2) in
the case of LIBOR Loans, two (2) LIBOR Business Days prior to the requested Borrowing date, in each case specifying (A) the amount of the proposed Borrowing, (B) the requested date of the Borrowing, (C) whether such Borrowing is
to be a Prime Rate Loan or a LIBOR Loan (and if no election is indicated, such Borrowing shall be a Prime Rate Loan) and (D) if such Borrowing is a LIBOR Loan, the length of the Interest Period therefor. Upon satisfaction or waiver of the
applicable conditions set forth in Article IV, the Lender will make available the proceeds of all such Loans to the Borrower by crediting the account of 

  
 16 

 
the Borrower on the books of the Lender, or as otherwise directed by the Borrower. The Lender’s failure to receive any written notice of a particular Borrowing shall not relieve the Borrower
of its obligations to repay the Borrowing made and to pay interest thereon. The Lender shall not incur any liability to the Borrower in acting upon any notice of Borrowing which the Lender believes in good faith to have been given by a Person duly
authorized to borrow on behalf of the Borrower. 
 (ii) Letters of Credit. Subject to the terms and conditions of this
Agreement, Lender hereby agrees to issue or cause an affiliate to issue standby letters of credit for the account of Borrower (each, a “Letter of Credit” and collectively, “Letters of Credit”) from time to time up to and
including the Maturity Date; provided however, that the aggregate of all undrawn amounts, and all amounts drawn and unreimbursed, under any Letters of Credit issued shall not at any time exceed the Letter of Credit Sublimit. The form and substance
of each Letter of Credit shall be subject to approval by Lender, in its sole discretion. Each Letter of Credit shall be subject to the additional terms of the Letter of Credit agreements, applications and any related documents required by Lender in
connection with the issuance thereof (each, a “Letter of Credit Agreement”). Borrower agrees to execute any further documentation in connection with the Letters of Credit as Lender may reasonably request. Borrower further agrees to be
bound by the regulations and interpretations of the issuer of any Letters of Credit guaranteed by Lender and opened for Borrower’s account or by Lender’s interpretations of any Letter of Credit issued by Lender for Borrower’s account,
and Borrower understands and agrees that Lender shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letters of Credit or any modifications,
amendments, or supplements thereto. If, on the Maturity Date (or the effective date of any termination of this Agreement), there are any outstanding Letters of Credit, then on such date Borrower shall provide to Lender cash collateral in an amount
equal to at least 100% of the aggregate dollar equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or estimated by Bank to become due in connection therewith, to secure all of the Obligations relating
to such Letters of Credit. 
 (c) Note. The Loans made by the Lender pursuant hereto shall be evidenced by a Note payable to the
Lender and representing the obligation of the Borrower to pay the aggregate unpaid principal amount of all outstanding Loans, with interest thereon as prescribed in Section 2.03. The Lender is hereby authorized to record in its books and
records and on any schedule annexed to the Note the date and amount of each Loan made by the Lender, and the date and amount of each payment of principal thereof, and any such recordation shall constitute prima facie evidence of the accuracy of the
information so recorded, provided that failure by the Lender to effect such recordation shall not affect the Borrower’s obligations hereunder. Prior to the transfer of a Note, the Lender shall record such information on any schedule annexed to
and forming a part of such Note. 
 Section 2.02 Repayment. 

(a) Mandatory Repayment. The aggregate principal amount of the Loans outstanding on the Maturity Date, together with accrued but unpaid
interest thereon, shall be due and payable in full on the Maturity Date. 
 (b) Optional Prepayment. Subject to Section 3.07,
the Borrower may at its option prepay the Loans, in whole or in part, at any time and from time to time without premium or penalty, provided that the Lender shall have received from the Borrower notice of any such prepayment no later

  
 17 

 
than 11:00 a.m. California time (i) two (2) LIBOR Business Days prior to any date of prepayment of any LIBOR Loan and (ii) on the date of prepayment of any Prime Rate Loan, in each
case specifying the date and the amount of prepayment. Partial prepayments hereunder shall be in an aggregate principal amount of the lesser of (a) a minimum of $100,000 and in an integral multiple of $100,000 and (b) the outstanding
balance of the Loan being paid. 
 (c) Reduction or Termination of Commitment. At any time, the Borrower may, upon not less than five
(5) Business Days’ prior written notice to the Lender, terminate or permanently reduce the Commitment without premium or penalty by an aggregate minimum amount of $5,000,000 or any integral multiple of $5,000,000 in excess thereof; unless,
after giving effect thereto and to any prepayments of Loans made pursuant to Section 2.02(b), the outstanding principal amount of all Loans would exceed the amount of the Commitment sought to be in effect after such reduction. Once reduced in
accordance with this Section 2.02(c), the Commitment may not be increased. 
 Section 2.03 Interest Payment Dates and Interest
Rate. 
 (a) Payment of Interest. Interest with respect to each Loan shall be payable in arrears on each Interest Payment Date
for such Loan. 
 (b) Prime Rate Loans. Loans which are Prime Rate Loans shall bear interest on the unpaid principal amount thereof
at a rate per annum equal to the Prime Rate plus the Applicable Margin. 
 (c) LIBOR Loans. Loans which are LIBOR Loans shall bear
interest for each Interest Period with respect thereto on the unpaid principal amount thereof at a rate per annum equal to LIBOR determined for such Interest Period in accordance with the terms hereof plus the Applicable Margin. 

Section 2.04 Continuation; Conversion. 

The Borrower may elect from time to time to (a) continue any outstanding LIBOR Loan upon the expiration of the Interest Period applicable
thereto as a LIBOR Loan by giving to the Lender at least two (2) LIBOR Business Days’ prior irrevocable written notice of continuation and the succeeding Interest Period of such continued Loan will commence on the last day of the Interest
Period of the Loan to be continued, (b) convert any outstanding LIBOR Loan upon expiration of the Interest Period applicable thereto to a Prime Rate Loan by giving to the Lender at least one (1) Business Day’s prior irrevocable
written notice of conversion and (c) convert any outstanding Prime Rate Loan to a LIBOR Loan by giving to the Lender at least two (2) LIBOR Business Days’ prior irrevocable written notice of conversion, provided that no Loan may be
continued as a Loan other than a Prime Rate Loan if an Event of Default or Potential Event of Default has occurred and is continuing. Each such irrevocable written notice electing to continue or convert a Loan shall specify: (i) the proposed
continuation or conversion date, (ii) the amount of the Loan to be continued or converted, (iii) the nature of the proposed continuation or conversion (including whether the converted Loan will be a LIBOR Loan or a Prime Rate Loan) and
(iv) for Loans being continued as or converted to LIBOR Loans, the requested Interest Period, and shall certify that no Event of Default or Potential Event of Default has occurred and is continuing. On the date on which such continuation or
conversion is being made, the Lender shall take such action as is necessary to effect such continuation or conversion. In the event that no notice of continuation or conversion, or an incomplete notice of continuation or conversion, is received by
the Lender with respect to outstanding LIBOR Loans, or if an Event of Default or Potential Event of Default has occurred and is continuing, then upon expiration of the Interest Period(s) applicable thereto, such Loans shall automatically convert to
Prime Rate Loans. 

  
 18 

 Section 2.05 Fees. 

(a) Annual Loan Fee. The Borrower agrees to pay to the Lender, an annual fee equal to the Commitment multiplied by 0.20%. Such fee
will be fully earned and shall be due and payable in advance in full in cash on the Closing Date and on each annual anniversary thereof. 

(b) Letter of Credit Fees. Borrower shall pay to Lender (i) fees upon the issuance of each Letter of Credit equal to 0.75% per
annum (computed on the basis of a 360-day year, actual days elapsed) of the face amount thereof, and (ii) fees upon the payment or negotiation of each drawing under any Letter of Credit and fees upon the
occurrence of any other activity with respect to any Letter of Credit (including without limitation, the transfer, amendment or cancellation of any Letter of Credit) determined in accordance with Lender’s standard fees and charges then in
effect for such activity. 
 (c) Lender Expenses. Borrower shall pay to Lender all Lender Expenses (including reasonable
attorneys’ fees and expenses for documentation and negotiation of this Agreement, provided that such fees paid by Borrower for the documentation and negotiation of this Agreement through the Closing Date and completion of any post-closing items
pursuant to Section 6.01(r) will not exceed the lesser of (i) 50% of all such attorneys’ fees and expenses incurred by Lender or (ii) Twenty Thousand Dollars ($20,000)) incurred through and after the Closing Date, when due (or, if no
stated due date, upon demand by Lender). 
 Section 2.06 Cash Collateralization. 

(a) Hedging Obligations. Upon the request of the Lender during the continuance of any Event of Default, the Borrower shall immediately
Cash Collateralize the outstanding Hedging Obligations owing to the Lender or any of its Affiliates in an amount equal to 100% of the aggregate amount of such Hedging Obligations. 

(b) Cash Management Obligations. Upon the request of the Lender during the continuance of any Event of Default, the Borrower shall
immediately Cash Collateralize the outstanding Cash Management Obligations owing to the Lender or any of its Affiliates in an amount equal to 100% of the aggregate amount of such Cash Management Obligations. 

(c) Security Interest. The Borrower hereby grants to the Lender a security interest in all cash, deposit accounts and all balances in
such cash or deposit accounts and all proceeds of the foregoing deposited as cash collateral pursuant to this Section 2.06 or Section 7.01. 

(d) Return of Cash Collateral. Cash Collateral provided under this Section 2.06 shall be returned to the Borrower within five
(5) Business Days after all Events of Default or Potential Events of Default have been cured or waived. Any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to,
any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents. 
 ARTICLE III. 

GENERAL PROVISIONS CONCERNING THE LOANS 

Section 3.01 Use of Proceeds. The proceeds of the Loans hereunder shall be used by the Borrower (i) to repay all outstanding
Debt owed to the Existing Lender and the other lenders under the Existing Credit Agreement; (ii) to pay fees and expenses incurred in connection with this Agreement and the other Loan Documents, and (iii) for working capital and general
corporate purposes of the Borrower and its Subsidiaries (including, to finance any Permitted Acquisition). 

  
 19 

 Section 3.02 Default Interest. Notwithstanding anything to the contrary contained in
Section 2.03, any amounts payable hereunder which are not paid when due shall bear interest at a rate per annum which is equal to 3.00% above the rate which would otherwise be applicable pursuant to Section 2.03 or otherwise under this
Agreement from the date of such nonpayment until paid in full (after as well as before judgment), payable on demand. 
 Section 3.03
Computation of Interest. 
 (a) Calculations. All computations of interest for Prime Rate Loans when the Prime Rate is
determined by the Lender’s prime lending rate shall be made on the basis of the year of 365 or 366 days, as the case may be, and the actual number of days elapsed. All other interest and fees hereunder shall be calculated on the basis of a 360
day year for the actual days elapsed. Any change in the interest rate on a Prime Rate Loan resulting from a change in the Prime Rate shall become effective as of the opening of business on the day on which such change in the Prime Rate shall become
effective. 
 (b) Determination by Lender. Each determination of an interest rate by the Lender pursuant to any provision of this
Agreement shall be conclusive and binding on the Borrower in the absence of manifest error. 
 Section 3.04 Payments. The
Borrower shall make each payment of principal, interest and fees hereunder and under the Note, without set-off or counterclaim, not later than 12:00 p.m., California time, on the day when due in lawful money
of the United States of America to the Lender at the office of the Lender designated from time to time in immediately available funds. Subject to the provisions set forth in the definition of “Interest Period”, if any payment hereunder
shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be. 

Section 3.05 Delay in Requests. Failure or delay on the part of the Lender to demand compensation pursuant to Section 3.06,
3.07 or 3.09 shall not constitute a waiver of the Lender’s right to demand such compensation, except that the Borrower shall not be required to compensate the Lender pursuant to those Sections for any increased costs incurred or reductions
suffered more than 180 days prior to the date that the Lender notifies the Borrower of the change in law giving rise to such increased costs or reductions and of the Lender’s intention to claim compensation therefor, unless the change in law
giving rise to such increased costs or reduction is retroactive, in which case the 180 day period referred to above shall be extended to include the period of retroactive effect thereof. 

Section 3.06 Reduced Return. If the Lender shall have determined that any Change in Law (each, a “Requirement”)
regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on the Lender’s or its holding company’s capital as a consequence of its Commitment, Loans and obligations hereunder (and which has not
been taken into account in computing LIBOR or the Applicable Reserve Requirement) to a level below that which would have been achieved but for such Requirement or compliance therewith (taking into consideration the Lender’s policies with
respect to capital or liquidity requirements) by an amount deemed by the Lender to be material (which amount shall be determined by the Lender’s reasonable allocation of the aggregate of such reductions resulting from such events), then from
time to time, within ten (10) Business Days after demand (accompanied by a statement setting forth and explaining the change in such requirement and including all relevant calculations relating thereto) by the Lender, the Borrower shall pay to
the Lender such additional amount or amounts as will compensate the Lender for such reduction. The determination of such amount by the Lender shall be presumed correct absent manifest error. This covenant shall survive termination of this Agreement
and the payment of the Obligations. 

  
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 Section 3.07 Funding Losses. The Borrower hereby agrees to indemnify the Lender and
to hold the Lender harmless from any loss or expense, including, but not limited to, any such loss or expense arising from interest or fees payable by the Lender to lenders of funds obtained by it in order to maintain its LIBOR Loans hereunder, in
each case, which the Lender actually sustains or incurs (in each case, excluding loss of anticipated profits or margin) as a consequence of (i) the Borrower failing to borrow or continue any LIBOR Loan after notice has been given to the Lender
in accordance with this Agreement (whether or not withdrawn by the Borrower), (ii) if for any reason a LIBOR Loan must be converted to a Prime Rate Loan in accordance with this Agreement, (iii) default by the Borrower in making any
prepayment of a LIBOR Loan on any date specified in a prepayment notice thereof in accordance with Section 2.02(b) or (iv) the Borrower making any payment of a LIBOR Loan on a day other than the last day of the Interest Period for such
Loan. For purposes of this Section 3.07, it shall be assumed that the Lender had funded or would have funded 100%, as the case may be, of a LIBOR Loan in the London interbank market for a corresponding amount and term. The determination of such
amount by the Lender shall be presumed correct in the absence of manifest error. This covenant shall survive termination of this Agreement and the payment of the Obligations. 

Section 3.08 Inability to Determine Interest Rate. In the event that the Lender shall have determined (which determination shall
be conclusive and binding upon the Borrower) that by reason of circumstances affecting the London interbank market, adequate and reasonable means do not exist for ascertaining LIBOR applicable pursuant to Section 2.03 for any Interest Period
with respect to a LIBOR Loan that will result from a requested LIBOR Loan or that such rate of interest does not adequately cover the cost of funding such Loan, the Lender shall forthwith give notice of such determination to the Borrower not later
than 1:00 p.m. California time, on the requested Borrowing date or the last day of an Interest Period of a Loan which was to have been continued as a LIBOR Loan. If such notice is given and has not been withdrawn, (i) any requested LIBOR Loan
shall be made as a Prime Rate Loan, or, at the Borrower’s option, such Loan shall not be made, and (ii) any outstanding LIBOR Loan shall be converted, on the last day of the then current Interest Period with respect thereto, to a Prime
Rate Loan. Until such notice has been withdrawn by the Lender, no further LIBOR Loans shall be made. The Lender will review the circumstances affecting the London interbank market from time to time and the Lender will withdraw such notice at such
time as it shall determine that the circumstances giving rise to said notice no longer exist. 
 Section 3.09 Requirements of
Law. In the event that any Change in Law: 
 (a) does or shall subject the Lender to any Taxes with respect to this Agreement, the Note
or any Loan made, or change the basis of taxation of payments to the Lender of principal, interest, fee or any other amount payable hereunder (except for (A) Indemnified Taxes, (B) Excluded Taxes and (C) Connection Income Taxes, or
changes in the rates thereof); 
 (b) does or shall impose, modify or hold applicable any reserve, assessment rate, special deposit,
compulsory loan or other requirement against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended with respect to any Loan Document or any Loan by, or any other acquisition of
funds by, any office of the Lender which are not otherwise included in the determination of LIBOR at the last Borrowing or continuation date of a Loan; 

(c) does or shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or other requirement against the Commitment
to extend credit; or 

  
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 (d) does or shall impose on the Lender any other condition with respect to any Loan Document or
any Loan; and the result of any of the foregoing is to increase the cost to the Lender of making, renewing or maintaining its Commitment or the LIBOR Loans or to reduce any amount receivable thereunder (which increase or reduction shall be
determined by the Lender’s customary allocation of the aggregate of such cost increases or reduced amounts receivable resulting from such events), then, in any such case, the Borrower shall pay to the Lender, within ten (10) Business Days
of its demand, any additional amounts necessary to compensate the Lender for such additional cost or reduced amount receivable as determined by the Lender with respect to this Agreement. If the Lender becomes entitled to claim any additional amounts
pursuant to this Section 3.09, it shall notify the Borrower of the event by reason of which it has become so entitled. A statement incorporating the calculation as to any additional amounts payable pursuant to the foregoing sentence submitted
by the Lender to the Borrower shall be presumed correct in the absence of manifest error. This covenant shall survive termination of this Agreement and the payment of the Obligations. 

Section 3.10 Illegality. Notwithstanding any other provisions herein, if any Change in Law shall make it unlawful, impossible, or
impracticable for the Lender to make or maintain LIBOR Loans as contemplated by this Agreement, (a) the commitment of the Lender hereunder to make LIBOR Loans shall forthwith be cancelled and (b) the Lender’s Loans then outstanding as
LIBOR Loans, if any, shall be converted automatically to Prime Rate Loans on the last day of the then current Interest Period with respect thereto or within such earlier period as required by law. The Borrower hereby agrees to pay the Lender, within
three (3) Business Days of its demand, any additional amounts necessary to compensate the Lender for any actual costs incurred by the Lender in making any conversion in accordance with this Section 3.10, including, but not limited to, any
interest or fees payable by the Lender to lenders of funds obtained by it in order to make or maintain its LIBOR Loans hereunder (the Lender’s notice of such costs, as certified to the Borrower, to be presumed correct absent manifest error).

 Section 3.11 Taxes. 

(a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and
clear of and without deduction for any Taxes, except as required by applicable law. If the Borrower shall be required by law to deduct or withhold any Taxes from such payments, then (i) the Borrower shall make all required deductions,
(ii) the Borrower shall pay the full amount deducted to the relevant governmental authority in accordance with applicable law, and (iii) if such tax is an Indemnified Tax, the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional sums payable under this Section 3.11) the Lender receives an amount equal to the sum it would have received had no such deductions been made. 

(b) Payment of Other Taxes by the Borrower. In addition, the Borrower shall pay all Other Taxes in accordance with applicable law or,
at the election of the Lender, timely reimburse it for the payment of such Other Taxes. 
 (c) Indemnification by the Borrower. The
Borrower shall indemnify the Lender, within ten (10) Business Days after written demand therefor, for the full amount of any Indemnified Taxes paid by the Lender on or with respect to any payment by or on account of any obligation of the
Borrower hereunder (including any such Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.11) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified
Taxes were correctly or legally imposed or asserted by the relevant governmental authority. A certificate as to the amount of such payment or liability delivered to the Borrower by the Lender shall be presumed correct absent manifest error. 

  
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 (d) Evidence of Payments. As soon as practicable after any payment of any Taxes by the
Borrower to a governmental authority pursuant to this Section 3.11, the Borrower shall deliver to the Lender the original or a certified copy of a receipt issued by such governmental authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory to the Lender. 
 (e) Refunds. If the Lender
determines in its sole discretion exercised in good faith that it has received a refund of any Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this
Section 3.11, it shall pay over such refund to the Borrower (but only to the extent of indemnification payments made, or additional amounts paid, by the Borrower under this Section 3.11 with respect to such Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Lender and without interest (other than any interest paid by the relevant governmental authority with respect to such
refund), provided that the Borrower, upon the request of the Lender, shall repay the amount paid over to the Borrower to the Lender in the event the Lender is required to repay such refund to such governmental authority. This Section 3.11 shall
not be construed to require the Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person. 

(f) Status of Lenders. (i) The Lender or other relevant party that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the Borrower, at any time reasonably requested by the Borrower such properly completed and executed documentation reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate of withholding. In addition, the Lender or other relevant party if reasonably requested by the Borrower shall deliver such other documentation prescribed by applicable law or reasonably
requested by the Borrower as will enable the Borrower to determine whether or not the Lender or other relevant party is subject to United States backup withholding or information reporting requirements. Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.11(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable
judgment such completion, execution or submission would subject the Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of the Lender. 

(ii) Without limiting the generality of the foregoing: 

(A) the Lender or other relevant party that is a U.S. Person shall deliver to the Borrower on or prior to the date of this Agreement or the
date on which such other relevant party becomes the Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower), executed originals of IRS Form W-9 certifying
that Lender or other relevant party is exempt from Federal backup withholding tax; 
 (B) the Lender or other relevant party that is not a
U.S. Person (a “Non-U.S. Lender Party”) shall, to the extent it is legally entitled to do so, deliver to the Borrower (in such number of copies as shall be requested by the Borrower) on or
prior to the date on which such Non-U.S. Lender Party becomes the Lender or other relevant party under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower), whichever
of the following is applicable; 

  
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 (i) in the case of a Non-U.S. Lender
Party claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, Federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty; 

(ii) executed originals of IRS Form W-8ECI; 

(iii) in the case of a Non-U.S. Lender Party claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate to the effect that such Non-U.S. Lender Party is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described
in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or 

(iv) to the extent a Non-U.S. Lender Party is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable, provided that if the Non-U.S. Lender Party is a partnership and one or more direct or
indirect partners of such Non-U.S. Lender party are claiming the portfolio interest exemption, such Non-U.S. Lender Party may provide a U.S. Tax Compliance Certificate
on behalf of each such direct and indirect partner; 
 (C) any Non-U.S. Lender Party shall, to the
extent it is legally entitled to do so, deliver to the Borrower (in such number of copies as shall be requested by the Borrower) on or prior to the date on which such Non-U.S. Lender Partner becomes the Lender
under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower) executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in Federal withholding Tax,
duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made; and 

(D) if a payment made to the Lender (or other relevant party) under any Loan Document would be subject to Federal withholding Tax imposed by
FATCA if the Lender (or other relevant party) were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), the Lender (or other
relevant party) shall deliver to the Borrower at the time or times prescribed by law and at such time or times reasonably requested by the Borrower such documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(1) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower as may be necessary for the Borrower to comply with its obligations under FATCA and to determine that the Lender (or
other relevant party) has complied with the Lender’s (or other relevant party’s) obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall
include any amendments made to FATCA after the date of this Agreement. 

  
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 If any form or certification previously delivered expires or becomes obsolete or inaccurate in
any respect, the Lender (or other relevant party) shall update such form or certification or promptly notify the Borrower in writing of its legal inability to do so. 

ARTICLE IV. 
 CONDITIONS
OF LENDING 
 Section 4.01 Conditions Precedent to Credit Facility. The effectiveness of this Agreement and the obligations
of the Lender to make Loans hereunder on the Closing Date are subject to the conditions precedent that: 
 (a) The Lender shall have
received the following, each in form and substance satisfactory to the Lender in its sole discretion: 
 (i) executed copies
of this Agreement, the Note, the Security Agreement and each other Loan Document; 
 (ii) a copy of the certificate of
incorporation of the Borrower, certified as of a recent date by the Secretary of State of the State of Delaware; 
 (iii) a
copy of the bylaws of the Borrower, certified by the Secretary or an Assistant Secretary or other authorized person of the Borrower; 

(iv) a copy of resolutions of the Board of Directors or other authorizing documents of the Borrower approving the Loan
Documents and the Borrowings hereunder; 
 (v) an incumbency certificate executed by the Secretary or an Assistant Secretary
or other authorized person of the Borrower or equivalent document, certifying the names and signatures of the officers of the Borrower or other Persons authorized to sign the Loan Documents and the other documents to be delivered hereunder; 

(vi) a certificate of good standing or its equivalent and evidence of good standing as to payment of any applicable franchise
or similar taxes with respect to the Borrower from the Secretary of State of the State of Delaware; 
 (vii) evidence that
all governmental, regulatory and other third party consents and approvals required in connection with the Loan Documents and the Borrowings hereunder have been obtained and are in full force and effect; 

(viii) a favorable opinion or opinions of counsel for the Borrower addressing issues under California and Delaware law, dated
the Closing Date; 
 (ix) evidence of payment of all costs, expenses, fees and other compensation (including reasonable,
documented and out-of-pocket attorneys’ fees and expenses) required to be paid to the Lender by the Borrower pursuant to this Agreement or any other written
agreement on or prior to the Closing Date; 
 (x) a certificate from the Chief Financial Officer of the Borrower or other
authorized officer with knowledge of the financial position of the Borrower dated the Closing Date certifying as to the matters set forth in Section 5.01(p) of this Agreement as to Solvency; 

  
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 (xi) a completed Compliance Certificate for the fiscal quarter ending
July 31, 2017; 
 (xii) such documentation and other information that the Lender requests as to the Borrower in order to
comply with its ongoing due diligence pursuant to regulatory requirements and its internal policies, including its obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot
Act; 
 (xiii) other than as delivered pursuant to Section 4.03 of this Agreement, evidence that the Lender shall have a
valid and perfected first priority security interest in the Collateral (subject to Permitted Liens, except with respect to the Collateral that is required to be physically delivered to the Lender pursuant to the Security Documents) (including
(w) any documents reasonably requested by the Lender or as required by the terms of the Security Documents to evidence its security interest in the Collateral (including, without limitation, any Landlord Subordination Agreements, bailee
letters, control agreements and filings evidencing a security interest in any intellectual property included in the Collateral); (x) copies of lien search reports and of all effective prior filings listed therein, together with evidence of the
termination of such prior filings (except with respect to Permitted Liens), in each case as may be requested by the Lender, (y) such documents duly executed by the Borrower as the Lender may request with respect to the perfection of its
security interests in the Collateral (including financing statements under the UCC and other applicable documents under the laws of any jurisdiction with respect to the perfection of Liens created by the Security Documents) and (z) all
certificates, instruments and other documents representing the Collateral and related undated powers or endorsements duly executed in blank); 

(xiv) a completed perfection certificate as to the Borrower, dated the Closing Date and signed by an authorized officer of the
Borrower, together with all attachments contemplated thereby; 
 (xv) an executed payoff letter from the Existing Lender
which shall, among other things, provide for the discharge of all Liens over the property of the Borrower in favor of the Existing Lender in connection with the Existing Credit Agreement; 

(xvi) evidence of insurance coverage, in form, substance, amounts, covering risks and issued by companies satisfactory to the
Lender, and where required by the Lender, with lender loss payable endorsements in favor of the Lender; 
 (xvii) such other
certificates and documents as the Lender shall reasonably request; 
 (b) all corporate and legal proceedings and all instruments and
documents in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in content, form and substance to the Lender and its counsel, and the Lender and the Lender’s counsel shall have received any and all
further information and documents which the Lender or such counsel may reasonably have requested in connection therewith, such documents where appropriate to be certified by proper corporate or governmental authorities; 

  
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 (c) completion by the Lender of a due diligence investigation of the Borrower in scope, and with
results, satisfactory to the Lender in its reasonable discretion; 
 (d) neither the Borrower nor any of its Subsidiaries shall be in
default in the performance of any agreement or instrument to which it may be a party or by which its properties may be bound, or in violation of any law, in any case which defaults and violations, individually or in the aggregate, have had or could
reasonably be expected to have a Material Adverse Effect; 
 (e) the representations and warranties contained in this Agreement and the
other Loan Documents shall be true, correct and complete in all material respects (or, in the case of any such representation or warranty already qualified by materiality or reference to Material Adverse Effect, in all respects) on and as of the
Closing Date as though made on and as of the Closing Date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true, correct and complete in all
material respects (or, in the case of any such representation or warranty already qualified by materiality or reference to Material Adverse Effect, in all respects) on and as of such earlier date; 

(f) no event or condition shall have occurred and be continuing that would constitute an Event of Default or Potential Event of Default; and

 (g) since the date of the most recent audited financial statements received by the Lender prior to the Closing Date, no Material Adverse
Effect shall have occurred. 
 Section 4.02 Conditions Precedent to Each Borrowing. The obligation of the Lender to make a Loan
on the occasion of each Borrowing (including the initial Borrowing) shall be subject to the further condition precedent that on the date of such Borrowing, the following statements shall be true and the Lender shall have received the notice required
by Section 2.01(b), which notice shall be deemed to be a certification by the Borrower that: 
 (a) the representations and warranties
contained in this Agreement and the other Loan Documents are true, correct and complete in all material respects (or, in the case of any such representation or warranty already qualified by materiality or reference to Material Adverse Effect, in all
respects) on and as of such date as though made on and as of such date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true, correct and
complete in all material respects (or, in the case of any such representation or warranty already qualified by materiality or reference to Material Adverse Effect, in all respects) on and as of such earlier date; 

(b) no event or condition has occurred and is continuing, or would result from such Borrowing that would constitute an Event of Default or
Potential Event of Default; and 
 (c) all Loan Documents are in full force and effect. 

Section 4.03 Post Closing Conditions. Borrower agrees to deliver the following items to Bank: 

(a) within five (5) Business Days (or any longer period agreed to by Bank) after the date hereof, to the extent such Equity Interests are
certificated, the certificates for the Equity Interests of Borrower’s Subsidiaries, together with Stock Powers, duly executed in blank; provided that such certificates shall be for 100% of the voting power of all classes of the Equity Interests
with respect to any Domestic Subsidiary and 65% of the voting power of all classes of the Equity Interests of a Foreign Subsidiary (or Domestic Subsidiary of a Foreign Subsidiary that is a CFC); 

  
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 (b) within sixty (60) days (or any longer period agreed to by Bank) after the date hereof,
account control agreements, in form and substance satisfactory to the Lender, and executed by the financial institution or securities intermediary at which the Borrower’s deposit account(s) or securities account(s) not held with Lender and
constituting Collateral, as the case may be, are maintained; 
 (c) within sixty (60) days (or any longer period agreed to by Bank)
after the date hereof, a Landlord Subordination Agreement, in form and substance reasonably acceptable to Bank, in favor of Bank for 900 Jefferson Ave., Redwood City, CA 94063 by the respective landlord thereof, together with the duly executed
original signatures thereto. 
 ARTICLE V. 

REPRESENTATIONS AND WARRANTIES 

Section 5.01 Representations and Warranties. The Borrower represents and warrants as follows: 

(a) Organization. Each Loan Party and each of its Subsidiaries is duly incorporated, formed or organized, as applicable, validly
existing and in good standing under the laws of the jurisdiction of its incorporation, formation or organization (to the extent such concept is relevant or applicable in such jurisdiction) and each jurisdiction where such Loan Party is required to
be qualified to do business unless the failure to so qualify is not likely to have a Material Adverse Effect, and has all requisite corporate, limited liability company or partnership power and authority to own and operate its properties and to
carry out its business. 
 (b) Authorization. The execution, delivery and performance by each Loan Party of the Loan Documents
executed by it, and the making of Borrowings hereunder in the case of the Borrower, are within such Loan Party’s corporate, limited liability or partnership powers, as applicable, and have been duly authorized by all necessary corporate,
limited liability or partnership action, as applicable. 
 (c) No Conflict. The execution, delivery and performance by each Loan
Party of the Loan Documents executed by it do not (i) violate such Person’s charter, by-laws or other organizational document, (ii) violate any law or regulation (including Regulations T, U and
X) applicable to such Person or any order, judgment or decree of any court or governmental agency body binding on such Person, (iii) result in a breach of or a default under, or result in or require the imposition of a Lien pursuant to any
contract binding on such Person, except to the extent the foregoing could not reasonably be expected to have a Material Adverse Effect, or (iv) violate any material agreement as to which such Person is a party, except to the extent such
violation could not reasonably be expected to result in the termination of such material agreement or otherwise have a Material Adverse Effect. 

(d) Governmental Consents. No authorization or approval or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution, delivery and performance by any Loan Party of the Loan Documents, except for filings and recordings with respect to the Collateral to be made under the Loan Documents. 

(e) Validity. Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and constitutes the
binding obligations of each Loan Party that is a party thereto, each enforceable against each Loan Party that is a party thereto in accordance with their respective terms, except in each case as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights. 

  
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 (f) Litigation. Except as set forth on Schedule 5.01(f)to the Disclosure Letter,
there is no action or proceeding pending (or threatened in writing) affecting any Loan Party or any of its Subsidiaries before any court, governmental agency or arbitrator, which could reasonably be expected to have a Material Adverse Effect. 

(g) Employee Benefit Plans. No Loan Party, (i) sponsors, maintains or contributes to (or is required to contribute to) any Pension
Plans or (ii) contributes to a Multiemployer Plan or has been required to contribute to a Multiemployer Plan or Pension Plan in the past six years. 

(h) Disclosure. No information, report, financial statement, exhibit or schedule furnished to the Lender by or on behalf of any Loan
Party or any of its Subsidiaries for use in connection with the transactions contemplated by this Agreement, taken as a whole, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the
statements contained therein (taken as a whole) not misleading in any material respect in the light of the circumstances in which the same were made; provided that, to the extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast or projection, the Borrower represents and warrants only that it acted in good faith and utilized reasonable assumptions (based upon accounting principles consistent with the historical audited financial
statements of the Borrower) and due care in the preparation of such information, report, financial statement, exhibit or schedule, it being recognized by the Lender that such information as it relates to future events is not to be viewed as fact and
that actual results during the period or periods covered by such information may differ materially from the projected results set forth therein. 

(i) Environmental Matters. Each Loan Party and its Subsidiaries are in compliance with all Environmental Laws and no event or condition
has occurred or is occurring with respect to such Loan Party or any of its Subsidiaries relating to any Environmental Law that has resulted in or could reasonably be expected to result in claims alleging potential liability or responsibility for
violation of any Environmental Law or release or injury to the environment, or is or could reasonably be expected to be the subject of any investigation, proceeding, settlement, except in each case violations and claims that, individually or in the
aggregate, have not had and could not reasonably be expected to have a Material Adverse Effect. Such Loan Party and its Subsidiaries have all Environmental Permits necessary for the ownership and operation of their respective properties and
businesses as presently owned and operated and as presently proposed to be owned and operated, except for those which are not yet necessary or the absence of which, individually, or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. Neither such Loan Party nor its Subsidiaries has transported or arranged for the transport of any Hazardous Materials or any other materials subject to Environmental Laws to any environmental
clean-up site which has not been in compliance with Environmental Laws, except for any noncompliance that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 (j) Title to Properties; Liens; Location of Real Property and Leased Premises. (i) Each Loan Party and its Subsidiaries have
(A) good, sufficient and legal title to (in the case of fee interests) the real property owned by it, (B) valid leasehold interests in (in the case of leasehold interests in real property) the real property leased by it or (C) good
title to all of their respective material personal property. Except as permitted by Section 6.02(a), all such properties are free and clear of Liens. (ii) Schedule 5.01(j)(ii) to the Disclosure Letter lists, as of the Closing Date,
all real property owned by the Borrower and its Subsidiaries and the addresses thereof. (iii) Schedule 5.01(j)(iii) to the Disclosure Letter lists, as of the Closing Date, each parcel of real property leased, subleased, licensed or
sublicensed by the Borrower and its Subsidiaries, the address and the owner thereof, and the expiration date of the related lease, sublease, license or sublicense. 

  
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 (k) Payment of Taxes. All income and other material tax returns and reports of each Loan
Party and its Subsidiaries required to be filed by any of them have been timely filed (or an extension has been obtained for the filing thereof), and all taxes shown on such tax returns to be due and payable and all assessments, fees and other
governmental charges upon such Loan Party and its Subsidiaries and upon their respective properties, assets, income, businesses and franchises that are due and payable have been paid when due and payable, except any of the foregoing that are being
contested in good faith by appropriate proceedings and with respect to which reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP have been made or provided therefor. 

(l) Governmental Regulation. Neither any Loan Party nor any of its Subsidiaries is subject to regulation under the Investment Company
Act of 1940 or under any other Federal or state statute or regulation which may limit its ability to incur Debt or which may otherwise render all or any portion of the Obligations unenforceable. The Borrower is not engaged nor will the Borrower
engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System of the United States of America) in
violation of Regulation T, U or X. 
 (m) Licenses and Permits; Intellectual Property. Each Loan Party and its Subsidiaries own or
possess all licenses, permits, franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, necessary for the operation of their businesses, free and clear of all Liens (other than Permitted Liens)
and, except (i) as set forth on Schedule 5.01(m) to the Disclosure Letter, or (ii) as could not reasonably be expected to have a Material Adverse Effect, without known conflict with the rights of others. Except (A) as set forth
on Schedule 5.01(m) to the Disclosure Letter, or (B) as could not reasonably be expected to have a Material Adverse Effect, (i) to the knowledge of such Loan Party, no product of such Loan Party or its Subsidiaries infringes in any
material respect any license, permit, franchise, authorization, patent, copyright, service mark, trademark, trade name or other right owned by any other Person and (ii) to the knowledge of such Loan Party, there is no material violation by any
Person of any right of such Loan Party or any of its Subsidiaries with respect to any patent, copyright, service mark, trademark, trade name or other right owned or used by such Loan Party or any of its Subsidiaries. 

(n) Labor Disputes; Casualties. Neither any Loan Party nor any of its Subsidiaries is affected by any fire, explosion, accident,
strike, lockout, or other labor dispute, drought, storm, hail, earthquake, embargo, act of public enemy or other casualty (whether or not covered by insurance) which, individually or in the aggregate, has had or could be reasonably expected to have
a Material Adverse Effect. 
 (o) Compliance. Neither any Loan Party nor any of its Subsidiaries is in default in the performance of
any agreement or instrument to which it is a party or by which its properties are bound, or in violation of any law, in any case which defaults and violations, individually or in the aggregate, have had or could reasonably be expected to have a
Material Adverse Effect. 
 (p) Solvency. The Loan Parties on a consolidated basis are, and, upon the incurrence of, and after giving
effect to, any Obligations under the Loan Documents by the Loan Parties, will be, Solvent. 

  
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 (q) Investments. No Loan Party has any investments as described in Section 6.02(e) in
other Persons except investments which would be permitted under Section 6.02(e). 
 (r) Debt. No Loan Party has any Debt except
Debt which would be permitted under Section 6.02(b). 
 (s) Equity Ownership; Subsidiaries. Schedule 5.01(s) to the
Disclosure Letter correctly sets forth the ownership interest of each Subsidiary of the Borrower as of the Closing Date. As of the Closing Date, the capitalization of the Borrower’s Subsidiaries consists of the number of Equity Interests,
authorized, issued and outstanding, of such classes and series, with or without par value, described on Schedule 5.01(s) to the Disclosure Letter. All outstanding Equity Interests of the Borrower’s Subsidiaries have been duly authorized
and validly issued and are fully paid and nonassessable, in the case of Equity Interests issued by a corporation, or duly issued and outstanding, in the case of Equity Interests issued by any other entity, and not subject to any preemptive or
similar rights, except as described on Schedule 5.01(s) to the Disclosure Letter. As of the Closing Date, there are no outstanding stock purchase warrants, subscriptions, options, securities, instruments or other rights of any type or nature
whatsoever, which are convertible into, exchangeable for or otherwise provide for or require the issuance of Equity Interests of any Subsidiary of the Borrower, except as described on Schedule 5.01(s) to the Disclosure Letter. All outstanding
shares of the Borrower’s capital stock have been duly authorized and validly issued and are fully paid and nonassessable. 
 (t)
OFAC. Neither any Loan Party nor any of its Subsidiaries (i) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2011 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in dealings or transactions prohibited by Section 2 of such executive order, or is otherwise
associated with any such person in a manner violative of Section 2 or (iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of
Treasury’s OFAC regulation or executive order. 
 (u) Insurance. Each Loan Party and its properties and businesses, and the
properties and businesses of its Subsidiaries, are insured with financially sound and reputable insurance companies (which are not Loan Parties or Affiliates of the Loan Parties) against loss or damage as required by Section 6.01(e). 

(v) Negative Pledge. Neither the Borrower nor any of its Subsidiaries is a party to or bound by any agreement or undertaking or
security which prohibits the creation or existence of any Lien upon any of its properties or assets or which requires the grant of security for an obligation if security is granted for the Obligations, except for (i) this Agreement and the
other Loan Documents, (ii) covenants in Capital Leases and documents creating Liens permitted by Section 6.02(a) which prohibit further Liens on the properties encumbered thereby and (iii) any other agreement or undertaking permitted
by Section 6.02(j). 
 (w) Security Documents. The Security Documents are effective to create in favor of the Lender a legal,
valid and enforceable security interest in the Collateral described therein (including any proceeds of any item of such Collateral). In the case of (i) the Pledged Shares described in the Security Agreement, when any stock certificates or
notes, as applicable, representing such Pledged Shares are delivered to the Lender and (ii) the other Collateral described in the Security Documents, when a financing statement in appropriate form is filed in the applicable filing office (which
financing statement has been duly completed and delivered to the Lender), the Lender shall have a fully perfected first priority Lien on, and security interest in, all right, title and interest of the applicable Loan Party in such Collateral

  
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(including any proceeds of any item of such Collateral) (in each case, to the extent a security interest in such Collateral and proceeds can be perfected through the filing of a financing
statement in such filing office or through the delivery of such Pledged Shares), as security for the Secured Obligations, in each case prior and superior in right to any other Person, except Liens expressly permitted by Section 6.02(a). 

(x) Sanctions. None of the Borrower or any of its Subsidiaries nor, to the knowledge of the Borrower, any director, officer, employee,
agent or Affiliate of the Borrower or any of its Subsidiaries is a Person that is, or is owned or controlled by Persons that are, (i) the subject of any sanctions administered or enforced by OFAC, the US Department of State, the United Nations
Security Council, the European Union, Her Majesty’s Treasury or the Hong Kong Monetary Authority (collectively, “Sanctions”), or (ii) located, organized or resident in a country or territory that is, or whose government
is, the subject of Sanctions, including, without limitation, currently, the Crimea Region, Cuba, Iran, North Korea, Sudan and Syria. 
 (y)
Anti-Bribery. None of the Borrower, nor to the knowledge of the Borrower, any director, officer, agent, employee, Affiliate or other person acting on behalf of the Borrower or any of its Subsidiaries is aware of or has taken any
action, directly or indirectly, that would result in a violation by such persons of any applicable anti-bribery law, including but not limited to, the United Kingdom Bribery Act 2010 (the “UK Bribery Act”) and the U.S.
Foreign Corrupt Practices Act of 1977 (the “FCPA”). Furthermore, the Borrower and, to the knowledge of the Borrower, its Affiliates have conducted their businesses in compliance with the UK Bribery Act, the FCPA and similar laws,
rules or regulations and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. 

ARTICLE VI. 
 COVENANTS

 Section 6.01 Affirmative Covenants. So long as the Note or any Obligation (other than inchoate indemnity obligations)
hereunder and under the other Loan Documents shall remain unpaid or the Lender shall have any Commitment hereunder, unless the Lender shall otherwise consent in writing: 

(a) Financial Information. The Borrower will furnish to the Lender: 

(i) as soon as available, but in any event within ninety (90) days after the end of each Fiscal Year, a copy of the
audited consolidated financial statements of the Borrower and its Subsidiaries as at the end of such Fiscal Year, including a balance sheet and related statements of income and cash flows, accompanied by a report and opinion thereon (prepared in
accordance with generally accepted auditing standards) of Ernst & Young LLP or other independent certified public accountants reasonably acceptable to the Lender (which report and opinion shall be unqualified as to going concern and scope
of audit); 
 (ii) as soon as available, but in any event within forty-five (45) days after each of the first three
Fiscal Quarters of each Fiscal Year, a copy of the unaudited consolidated financial statements of the Borrower and its Subsidiaries for such period; 

all such financial statements referred to in clauses (i) – (ii) to fairly present in all material respects the financial condition and
results of operations of the Borrower and its Subsidiaries and to be in reasonable detail and in accordance with GAAP (subject in the case of quarterly financials to changes resulting from normal year-end
adjustments and the absence of footnotes); and 

  
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 (iii) as soon as available, but in any event within forty-five (45) days
after the end of each Fiscal Quarter, a complete and accurate Accounts Receivable agings report in form satisfactory to the Lender, calculated as of the last day of such Fiscal Quarter; and 

(iv) as soon as available, but in any event within sixty (60) days after the beginning of each Fiscal Year, management
projected year-end consolidated financial statements of the Borrower and its Subsidiaries for such Fiscal Year, including a projected balance sheet and related statements of income and cash flows and a
statement of all the material assumptions on which such projections are based. 
 (b) Notices and Information. The Borrower shall
deliver to the Lender: 
 (i) promptly upon any senior officer of the Borrower obtaining actual knowledge (w) of any
condition or event which constitutes an Event of Default or Potential Event of Default, (x) that any Person has given any notice to any Loan Party or any of its Subsidiaries or taken any other action with respect to a claimed default or event
or condition of the type referred to in Section 7.01(e), (y) of the institution of any litigation involving an alleged liability (including possible forfeiture of property) of any Loan Party or any of its Subsidiaries equal to or greater
than $5,000,000 with respect to any such Person, or any adverse determination in any litigation involving a potential liability of any Loan Party or any of its Subsidiaries equal to or greater than $5,000,000 with respect to any such Person, in each
case to the extent not covered by insurance, or (z) of a condition or events that could reasonably be expected to cause a Material Adverse Effect, an officers’ certificate specifying the nature and period of existence of any such condition
or event, or specifying the notice given or action taken by such holder or Person and the nature of such claimed default, Event of Default, Potential Event of Default, event or condition, and what action the Borrower or the applicable Subsidiary has
taken, is taking and proposes to take with respect thereto; 
 (ii) promptly, and in any event within thirty (30) days
after receipt thereof, a copy of any notice, summons, citation, directive, letter or other form of communication from any governmental authority or court in any way concerning any action or omission on the part of such Loan Party or any of its
Subsidiaries in connection with any Hazardous Material or any waste or by product thereof, or concerning the filing of a Lien upon, against or in connection with such Loan Party or such Subsidiary, or any of their leased or owned real or personal
property, in connection with a Hazardous Substance Superfund or a Post-Closure Liability Fund as maintained pursuant to Section 9507 of the Internal Revenue Code, in each case which could reasonably be expected to have a Material Adverse
Effect; 
 (iii) concurrently with any delivery of financial statements under clause (a)(i) or (a)(ii) above, a Compliance
Certificate duly executed by the Chief Financial Officer of the Borrower that, among other things, (x) shows in reasonable detail the calculations used in determining the financial covenants set forth in Section 6.03(a) and in
Section 6.03(b) as of the end of such Fiscal Quarter, as applicable, and (y) states that no Potential Event of Default or Event of Default is continuing as of the date of delivery of such Compliance Certificate or, if a Potential Event of
Default or Event of Default is continuing, states the nature thereof and the action that the Loan Parties propose to take with respect thereto; 

  
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 (iv) reserved; 

(v) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other
materials filed by the Borrower or any Subsidiary with the SEC, or with any national securities exchange, or distributed to its stockholders, as the case may be; 

(vi) promptly upon receipt thereof, copies of all material reports submitted to the Borrower by its independent certified
public accountants in connection with each annual audit examination of the Borrower and its Subsidiaries made by such accountants, including the “management letter” submitted by such accountants to the Borrower in connection with their
annual audit and any written management responses thereto, and copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any
actual investigation or indicating a likely investigation by such agency regarding financial or other operational results of the Borrower or any Subsidiary thereof; and 

(vii) promptly, and, to the extent practicable, within ten (10) Business Days after request by the Lender, such other
information and data with respect to the Borrower or any of its Subsidiaries as from time to time may be reasonably requested by the Lender. 
 Documents
required to be delivered pursuant to Section 6.01(a)(i) or (ii) or Section 6.01(b)(v) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at;
https://www.boxinvestorrelations.com/financial-information/sec-filings/default.aspx or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to
which the Lender has access; provided that: (x) the Borrower shall deliver paper copies of such documents to the Lender if the Lender so requests until a written request to cease delivering paper copies is given by the Lender and (y) the
Borrower shall notify the Lender (by facsimile, electronic mail, automatic electronic notification or other form of notification acceptable to the Lender) of the posting of any such documents. 

(c) Corporate Existence. Except as otherwise permitted under Section 6.02(d) or 6.02(f), each Loan Party shall, and shall cause
each of its Subsidiaries to, at all times, preserve and keep in full force and effect (i) its corporate, limited liability company or partnership, as applicable, existence and (ii) rights and franchises material to its business; provided
that any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lender. 

(d) Payment of Taxes and Claims. Each Loan Party shall, and shall cause each of its Subsidiaries to, pay all federal income taxes and
material state and local taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its franchises, business, income or property before any penalty or fine accrues thereon, except for
any of the foregoing that are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and (i) with respect to which reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP have been made or provided therefor and (ii) in the case of a tax, assessment, or charge which has or may become a Lien against any of the Collateral, such proceedings conclusively operate to stay the sale of any portion of
the Collateral to satisfy such tax, assessment, or charge. 

  
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 (e) Maintenance of Properties; Insurance. Except as could not reasonably be expected to
have a Material Adverse Effect, each Loan Party shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition (other than wear and tear occurring in the ordinary course of
business) all properties used in the business of such Loan Party and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof which in the exercise of its reasonable business
judgment are required for the continuation of its business. Each Loan Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained, with financially sound and reputable insurance companies (which are not Affiliates of
the Loan Parties), insurance with respect to its properties and business and the properties and businesses of its Subsidiaries against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the
same or similar businesses and similarly situated, of such types and in such amounts (and with such deductibles) as are customarily carried under similar circumstances by such other corporations. 

(f) Use of Proceeds. The Borrower shall only use the proceeds of the Loans as permitted under Section 3.01. 

(g) Compliance with Laws, Etc. Each Loan Party shall exercise, and cause each of its Subsidiaries to exercise, all due diligence in
order to comply with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, including, without limitation, all Environmental Laws, noncompliance with which could reasonably be expected to cause, either
individually or in the aggregate, a Material Adverse Effect. 
 (h) Books and Records. Each Loan Party shall, and shall cause each of
its Subsidiaries to, maintain proper records and accounts in which full, true and correct entries in conformity with GAAP, consistently applied, shall be made of its financial transactions and matters involving the assets and business of such Loan
Party and its Subsidiaries. 
 (i) OFAC, Etc. Without limiting clause (g) above, each Loan Party shall, and shall cause each of
its Subsidiaries to, (i) ensure that no Person who owns a controlling interest in or otherwise controls a Loan Party is or shall be (x) listed on the Specially Designated Nationals and Blocked Person List maintained by OFAC and/or any
other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (y) a person designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any
related enabling legislation or any other similar Executive Orders, and (ii) comply with all applicable Bank Secrecy Act and anti-money laundering laws and regulations. 

(j) Payment of Obligations. Each Loan Party shall, and shall cause each of its Subsidiaries to, pay all obligations and lawful claims
(including, without limitation, claims for labor, services, materials and supplies) that, if unpaid, would become a Lien for a material amount against any of its properties or assets, except for any such obligations being contested in good faith by
appropriate proceedings diligently conducted and against which adequate reserves, if any required under GAAP, have been established, and so long as any Lien resulting therefrom has not become enforceable or is the subject of proceedings that operate
to stay the enforcement of such Lien. 

  
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 (k) Material Licenses. Each Loan Party shall, and shall cause each of its Subsidiaries to,
maintain and preserve all licenses, permits (including Environmental Permits), authorizations and consents from any Person and all registrations, notices and filings with any Person (i) which if not obtained, held or made would have a Material
Adverse Effect or (ii) that is necessary for the execution or performance by such Loan Party or such Subsidiary, or the validity or enforceability against such party, of this Agreement or any other Loan Document. 

(l) Environmental Matters. Except as could not, individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, each Loan Party shall, and shall cause each of its Subsidiaries to, (i) comply, and cause all lessees and other Persons operating or occupying properties owned or leased by it to comply, with all Environmental Laws and
Environmental Permits, (ii) obtain and renew all Environmental Permits necessary for its operations and properties and (iii) conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other
action necessary to address Hazardous Materials at, on, under or emanating from any properties owned or leased by it in accordance with the requirements of all Environmental Laws. 

(m) Subsidiaries. (i) From and after the Closing Date, if the Borrower or any of its Subsidiaries acquires or creates any Domestic
Subsidiary (other than a Domestic Subsidiary of a Foreign Subsidiary that is a CFC) that is a Material Subsidiary (and, at the election of the Borrower, any other Domestic Subsidiary), promptly, and in no event later than twenty (20) Business
Days after such acquisition or creation, notify the Lender of that fact and cause such Domestic Subsidiary (A) to execute and deliver to the Lender a counterpart of the Subsidiary Guarantee and the Security Agreement and to take all such
further actions and execute all such further documents and instruments as may be reasonably requested by the Lender to create in favor of the Lender a valid and perfected first priority Lien in all of the Collateral of such Domestic Subsidiary
(subject to Permitted Liens), and (B) to execute and deliver to the Lender such documents and instruments and to take actions comparable to those described in clauses (ii), (iii), (iv), (v) (vi), (vii), (xii), (xiii), (xiv) and (xvi) of
Section 4.01(a) as the Lender may reasonably request. (ii) For each Subsidiary acquired or created after the Closing Date, each Loan Party shall have complied with its obligations under the Security Agreement in respect of the Equity
Interests of such Subsidiary. For the avoidance of doubt, no Foreign Subsidiary (or Domestic Subsidiary of a Foreign Subsidiary that is a CFC) shall be required to execute and deliver a Guaranty or Security Agreement, and no equity interests of a
Foreign Subsidiary (or Domestic Subsidiary of a Foreign Subsidiary that is a CFC) shall be required to be pledged pursuant to the provisions of the Security Agreement or otherwise, in each case to the extent material adverse tax consequences to the
Borrower could reasonably be expected to result therefrom, it being understood and agreed that a pledge by the Borrower or its Domestic Subsidiary of 65% of the voting power and 100% of the non-voting power of
all classes of the Equity Interests of a Foreign Subsidiary (or Domestic Subsidiary of Foreign Subsidiary that is a CFC) will not cause material adverse tax consequences to Borrower and a pledge by the Borrower or its Domestic Subsidiary of more
than 65% of the voting power of all classes of the Equity Interests of a Foreign Subsidiary (or Domestic Subsidiary of a Foreign Subsidiary that is a CFC) will be deemed to cause material adverse tax consequences to Borrower. 

(n) Employee Benefit Plans. No Loan Party shall, (i) establish a Pension Plan or (ii) contribute to or become required to
contribute to a Multiemployer Plan. 
 (o) Access to Property and Inspections. Each Loan Party shall, and shall cause its
Subsidiaries to, at the Borrower’s sole cost and expense, permit the Lender and each of its duly authorized representatives or agents to visit (but only during normal business hours when no Event of Default has occurred and is continuing) any
of its properties and inspect any of its assets or books and records, to conduct appraisals and valuations, to examine and make copies of its books and records, and to discuss its affairs, finances and accounts with, and to be advised as to the same
by, its officers and employees at any such reasonable times and intervals as the Lender may reasonably request and, so long as no Event of Default or Potential Event of Default has occurred and is continuing, with reasonable prior notice to the
Borrower; provided that, so long as no Event of Default or Potential Event of Default has occurred and is continuing, the Lender shall not request more than one field visit and examination during any Fiscal Year. 

  
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 (p) Business Locations. Each Loan Party shall promptly (but in no event more than thirty
(30) days) after adding any new leased business location in the United States containing any assets (excluding leasehold improvements and any raw materials related thereto) of any Loan Party with a book value in excess of $3,000,000
individually for any location or $5,000,000 for all locations with respect to which the applicable landlord has not executed and delivered a Landlord Subordination Agreement, notify the Lender of such fact, and, if requested by the Lender, use its
reasonable best efforts to cause the applicable landlord to enter into a Landlord Subordination Agreement with respect to each such location as requested by the Lender. For the avoidance of doubt, this Section 6.01(p) shall not apply to
facilities utilized by the Borrower or its Subsidiaries solely as data centers for its server equipment. 
 (q) Accounts. Each Loan
Party shall maintain its primary U.S. depository and operating accounts with Lender. 
 (r) Post-Closing Matters. Execute and deliver
the documents and complete the tasks set forth on Schedule 6.01(r), in each case within the time limits specified on such schedule. 

(s) Further Assurances. Each Loan Party shall execute any and all further documents, financing statements, agreements and instruments,
and take all such further actions, which the Lender may reasonably request, to cause the Lender to have at all times a first priority, perfected Lien in the Collateral (subject to Permitted Liens). 

Section 6.02 Negative Covenants. So long as any Note or Obligation (other than inchoate indemnity obligations) hereunder and under
the other Loan Documents shall remain unpaid or the Lender shall have any Commitment hereunder, without the written consent of the Lender: 

(a) Liens, Etc. Borrower shall not, and shall not permit any of its Subsidiaries to, create or suffer to exist any Lien upon or with
respect to any of its assets or properties, whether now owned or hereafter acquired, or assign any right to receive income, in each case to secure any Debt of any Person, other than (in each case, a “Permitted Lien”): 

(i) Liens in favor of the Lender; 

(ii) Liens existing on the Closing Date and listed on Schedule 6.02(a) to the Disclosure Letter and any modifications,
replacements, renewals, refinancings or extensions thereof; provided that the Lien does not extend to any additional property other than (A) Replacement Assets, and (B) proceeds and products thereof; 

(iii) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in
the ordinary course of business or by operation of law, and Liens incurred by the Borrower or such Subsidiary in the ordinary course of business in connection with worker’s compensation, unemployment insurance and other types of social
security, or to secure the performance of surety and appeal bonds, deeds, leases (other than Debt), government contracts, bids, trade contracts, statutory obligations, performance and return of money bonds and other similar obligations; 

(iv) Liens or charges arising in favor of governmental authorities by operation of law for which no default exists in the
payment of the obligations secured thereby or which are being contested in compliance with Section 6.01(d); 

  
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 (v) Liens arising under (A) the security documents in respect of Hedge
Agreements permitted under Section 6.02(b)(iii) in favor of the Lender or its Affiliates and (B) agreements relating to Cash Management Obligations in favor of the Lender or its Affiliates; 

(vi) Capital Leases of, and security interests in, assets acquired, constructed or improved (whether real or personal, tangible
or intangible) by the Borrower or such Subsidiary after the date hereof, provided that such Liens and the Debt secured thereby (A) are incurred prior to or within 180 days after such acquisition or the completion of such construction or
improvement, (B) the Debt secured thereby does not exceed the cost of acquiring, constructing or improving such assets and is otherwise permitted by Section 6.02(b)(ii), and (C) such Liens shall not apply to any other property or
assets of the Borrower or such Subsidiary (other than Replacement Assets); 
 (vii) Liens of landlords and mortgagees of
landlords arising by statute; 
 (viii) judgment Liens securing judgments and other proceedings not constituting an Event of
Default hereunder; 
 (ix) Liens existing on (A) property acquired by such Loan Party or Subsidiary at the time of such
acquisition or (B) assets of a Person at the time such Person is acquired, so long as (1) the Lien was not created in contemplation of such acquisition, (2) the amount of the obligations secured thereby has not been increased in
connection with such acquisition or at any time thereafter (except in connection with any Permitted Refinancing), (3) any such Lien does not extend to property not subject to such Lien at the time of such acquisition (other than improvements thereon
and Replacement Assets), any such Lien is applicable only to specific property, and such Liens are not “blanket” or all asset Liens, and (4) such Lien secures only (x) those obligations which it secures on the date of such
acquisition or the date such Person is acquired, as the case may be, and such obligations are otherwise permitted by Section 6.02(b)(vii) and (y) any Permitted Refinancing of such obligations; 

(x) to the extent constituting a Lien, any interest or title of (i) a lessor under any personal property operating lease
entered into in the ordinary course of business of the Borrower or any Subsidiary and precautionary financing statement filings relating thereto and (ii) a licensor under any non-exclusive license entered
into in the ordinary course of business of the Borrower or any Subsidiary; 
 (xi) zoning restrictions, easements, rights-of-way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in
amount and do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries; 

(xii) Liens on assets of Foreign Subsidiaries; provided that (A) such Liens do not extend to, or encumber, assets
that constitute Collateral or the Equity Interests of the Borrower or any of the other Loan Parties, and (B) such Liens extending to the assets of any Foreign Subsidiary secure only Debt incurred by such Foreign Subsidiary pursuant to
Section 6.02(b)(vi), (vii) or (xi); 

  
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 (xiii) (A) Liens of a collecting bank arising in the ordinary course of
business under Section 4-210 of the Uniform Commercial Code in effect in the relevant jurisdiction and (B) Liens arising in the ordinary course of business of any depositary bank or securities
intermediary in connection with statutory, common law and customary contractual rights of set-off and recoupment with respect to any deposit account or securities account of the Borrower or any Subsidiary
thereof; 
 (xiv) Liens on cash pledged to secure (i) obligations in respect of letters of credit or banker’s
acceptances permitted under Section 6.02(b)(x) or (ii) Cash Management Obligations permitted under Section 6.02(b)(v); 

(xv) Liens on proceeds of insurance policies securing the financing of the premiums with respect thereto; 

(xvi) Liens in favor of a seller solely on any cash earnest money deposits made by the Borrower or any of its Subsidiaries in
connection with any letter of intent or purchase agreement with respect to any Permitted Acquisition or other investment permitted by Section 6.02(e); 

(xvii) leases, non-exclusive licenses, subleases or
non-exclusive sublicenses granted to others that do not interfere in any material respect with the business of the Borrower and its Subsidiaries, taken as a whole; and 

(xviii) other Liens not specifically listed above securing obligations not to exceed $5,000,000 in the aggregate at any time
outstanding. 
 (b) Debt. Borrower shall not, and shall not permit any of its Subsidiaries to, create or suffer to exist any Debt,
other than: 
 (i) Debt owed to the Lender; 

(ii) Capital Leases and Debt incurred to finance the acquisition, construction or improvement of any equipment or capital
assets in an aggregate principal amount not to exceed $100,000,000 at any time outstanding; 
 (iii) obligations (contingent
or otherwise) existing or arising under any Hedge Agreement, provided that if such obligations are not with the Lender or any of its Affiliates, (x) such obligations are (or were) entered into by such Loan Party in the ordinary course of
business for the purpose of directly mitigating risks associated with fluctuations in interest rates or foreign exchange rates and (y) such Hedge Agreement does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party; 

(iv) to the extent constituting Debt, investments permitted under Section 6.02(e), including intercompany Debt of the
Borrower and the Subsidiaries to the extent permitted by Section 6.02(e); provided that any such Debt that is owed by a Loan Party to a Subsidiary that is not a Loan Party is subordinated to the Obligations on the terms satisfactory to
the Lender; 

  
 39 

 (v) Cash Management Obligations, provided that if such Cash Management
Obligations are not with the Lender or any of its Affiliates, to the extent incurred in the ordinary course of business in a manner not prohibited by this Agreement; 

(vi) Debt existing on the date of this Agreement and set forth on Schedule 6.02(b) to the Disclosure Letter, together
with any Permitted Refinancing; 
 (vii) Debt assumed in connection with a Permitted Acquisition, so long as such Debt
(A) does not exceed $5,000,000 in the aggregate at any time outstanding and (B) was not incurred in contemplation of such Permitted Acquisition; 

(viii) Debt under performance bonds, surety bonds, release, appeal and similar bonds, statutory obligations or with respect to
workers’ compensation claims, in each case incurred in the ordinary course of business; 
 (ix) Guaranties with respect
to Debt permitted by this Section; 
 (x) Debt in respect of letters of credit or bankers’ acceptances supporting
facility leases in an aggregate principal or face amount not exceeding $5,000,000 at any time; 
 (xi) Debt secured by Liens
permitted by Sections 6.02(a)(iii), (iv), (vii), (viii), (x), (xi), and (xiii); 
 (xii) Debt of the Borrower or any of its
Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn by the Borrower or such Subsidiary in the ordinary course of business against insufficient funds; 

(xiii) Debt in the form of earn-outs in respect of any Permitted Acquisition or any other investments permitted by
Section 6.02(e); 
 (xiv) Debt owing to any insurance company in connection with the financing of any insurance premiums
permitted by such insurance company in the ordinary course of business; and 
 (xv) Debt not otherwise permitted under this
Section 6.02(b) in an aggregate principal amount not to exceed $5,000,000 at any time outstanding for such Loan Parties and their Subsidiaries taken as a whole. 

(c) Restricted Payments. Borrower shall not, and shall not permit any of its Subsidiaries to, declare or make, or agree to declare or
make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so; except: 

(i) any Subsidiary may declare and pay dividends or make other distributions ratably to its equity holders; 

(ii) payments made or expected to be made by the Borrower in respect of withholding or similar Taxes payable by any future,
present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options or the vesting of restricted stock
awards or restricted stock units; 

  
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 (iii) so long as no Event of Default or a Potential Event of Default shall have
occurred and be continuing or would result therefrom, the Borrower may repurchase its Equity Interests owned by employees of the Borrower or the Subsidiaries or make payments to employees of the Borrower or the Subsidiaries upon termination of
employment in connection with the exercise of stock options, stock appreciation rights or similar equity incentives or equity based incentives pursuant to management or employee incentive plans or in connection with the death or disability of such
employees in an aggregate amount not to exceed $2,000,000 in any Fiscal Year; 
 (iv) the Borrower and its Subsidiaries may
declare and pay dividends or make other distributions solely in Qualified Equity Interests of such Person; and 
 (v) the
Borrower may deliver its Equity Interests upon conversation of any Equity Interest and pay cash solely in lieu of issuing fractional shares in connection with such conversion. 

(d) Consolidation, Merger. The Borrower shall not, and shall not permit its Subsidiaries to, consolidate with or merge into any other
corporation or entity, except that (i) if at the time thereof and immediately after giving effect thereto no Event of Default or Potential Event of Default shall have occurred and be continuing, (x) any Subsidiary may merge into the
Borrower in a transaction in which the Borrower is the surviving corporation, and (y) any Subsidiary may merge into or consolidate with any other Subsidiary (provided that if any party to any such transaction is a Loan Party, the surviving
entity of such transaction shall be a Loan Party) and (ii) in connection with a Permitted Acquisition, any corporation or entity may consolidate with or merge into any Loan Party or any Loan Party (other than the Borrower) may merge into any
other corporation or entity, provided that such Loan Party shall be the surviving entity of such merger or consolidation or the surviving entity of such merger or consolidation shall become a Loan Party promptly following the consummation thereof,
and provided, further, that immediately after the consummation of such consolidation or merger there shall exist no condition or event which constitutes an Event of Default or a Potential Event of Default. 

(e) Loans, Investments. The Borrower shall not, and shall not permit its Subsidiaries to, make or permit to remain outstanding any loan
or advance to, or own, purchase or acquire any stock, obligations or securities of or any other interest in, or make any capital contribution to, any other Person or make any acquisition of all or substantially all of the stock or assets of any
business or division of a Person through a merger, consolidation or any other combination with such Person in any transaction or a series of related transactions, except that the Borrower and such Subsidiary may: 

(i) acquire any Cash Equivalents; 

(ii) acquire and own stock, securities and other investments received from customers and suppliers in connection with debts
created in the ordinary course of business owing to such Loan Party or such Subsidiaries; 
 (iii) endorse negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business; 
 (iv) consummate a
Permitted Acquisition, provided that the aggregate amount of consideration (other than consideration payable in Qualified Equity Interests) expended to acquire Persons or assets that do not become Loan Parties or Collateral, respectively, shall not
exceed $10,000,000 during the term of this Agreement; 

  
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 (v) maintain the loans, investments and/or liabilities in existence on the date
of this Agreement and set forth on Schedule 6.02(e)(v) to the Disclosure Letter; 
 (vi) invest in the Equity
Interests of the Subsidiaries, provided that (A) any such investment in the form of Equity Interests held by a Loan Party shall be pledged pursuant to the Security Agreement (subject to any limitations applicable to voting stock of a
Foreign Subsidiary referred to therein), (B) no part of any such investment by a Loan Party to a non-Loan Party shall take the form of a contribution of intellectual property (other than any contribution or
transfer to a Foreign Subsidiary of intellectual property that is necessary to, or useful in, the business of such Foreign Subsidiary pursuant to the Management and Services Agreement, the Cost Sharing Agreement or the Platform Contribution
Transaction License Agreement), and (C) the aggregate amount of investments by the Loan Parties in Subsidiaries that are not Loan Parties (determined without regard to any write-downs or write-offs of such investments) shall not exceed
$25,000,000 per Fiscal Year; 
 (vii) reserved; 

(viii) make loans or advances made by the Borrower to any Subsidiary and made by the Borrower or any Subsidiary to the Borrower
or any other Subsidiary; provided that (A) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged to the Lender pursuant to the Security Agreement, (B) such loans and advances shall be unsecured
and, to the extent owed by a Loan Party to a Person that is not a Loan Party, subordinated to the Obligations pursuant to a subordination agreement in form and substance satisfactory to the Lender, and (C) the amount of such loans and advances
made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (vi) of this Section; 

(ix) make investments, loans or advances constituting non-cash consideration received
by the Borrower or any Subsidiary in respect of any Dispositions permitted under Section 6.02(f); 
 (x) accounts
receivable and extensions of trade credit arising in the ordinary course of business; 
 (xi) make investments represented by
Hedge Agreements permitted under Section 6.02(b); and 
 (xii) maintain deposit and securities accounts to the extent
not prohibited by this Agreement; and 
 (xiii) make other investments, loans or advances in an aggregate amount not to
exceed $3,000,000 during the term of this Agreement. 
 For purposes of compliance with this Section 6.02(e), the amount of any investment (whether an
equity investment, loan, guarantee or other investment governed by this Section 6.02(e)) of any Person shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such investment less
(x) any returns or distributions of capital or repayment of principal actually received 

  
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in cash by such Person with respect thereto, whether by disposition, return on capital, dividend or otherwise or (y) in the case of any investment by a Loan Party in any Foreign Subsidiary,
as reduced by any cash payments received by such Loan Party from any Foreign Subsidiary pursuant to the Management and Services Agreement, the Cost Sharing Agreement or the Platform Contribution Transaction License Agreement. 

(f) Asset Sales. Borrower shall not, and shall not permit its Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business, property or assets outside the ordinary course of business (including stock or other equity of a Subsidiary), whether now owned or hereafter acquired (a
“Disposition”), except that any Loan Party and any Subsidiary may convey, sell, lease, transfer or otherwise dispose of business, property or assets (i) that are surplus, obsolete or otherwise not used or useful in the
business of such Loan Party or such Subsidiary, provided that not less than 75% of the aggregate sale price from such Disposition shall be paid in cash or credited against the purchase price of replacement property or other assets useful in
the business of Borrower and its Subsidiaries, (ii) consisting of cash or Cash Equivalents (A) in exchange for cash or other Cash Equivalents, (B) to a Person that is not an Affiliate of any Loan Party or such Subsidiary, or
(C) to a Person that is an Affiliate of any Loan Party or such Subsidiary, to the extent permitted by Section 6.02(g) and not prohibited by any other provision of the Credit Agreement, (iii) in exchange for other assets comparable or
superior as to type, value and quality, as determined in good faith by Borrower, (iv) between and among the Borrower and its Subsidiaries, provided that if the transferor in such a transaction is a Loan Party, then either (x) the
transferee must be a Loan Party or (y) the portion of any such Disposition made for less than fair market value and any non-cash consideration received in exchange for such Disposition shall in each case
constitute an investment in such Subsidiary restricted by Section 6.02(e) and must be permitted thereunder; (v) resulting from any casualty, taking or condemnation of any property of the Borrower or any Subsidiary; (vi) constituting
subleases of office space, for fair market value as determined by the Borrower in good faith, in the ordinary course of business not interfering with the ordinary conduct of the business of the Borrower or any of its Subsidiaries; (vii) to the
extent permitted by Section 6.01(c) or Sections 6.02(a), (c) or (e); (viii) constituting sale and leaseback transactions permitted by Section 6.02(q); (ix) consisting of Inventory in the ordinary course of business; (x) consisting of
the lapse, abandonment or other Disposition of Intellectual Property, that is in the reasonable business judgment of the Borrower, no longer used or useful in the conduct of its business or otherwise uneconomical to prosecute or maintain;
(xi) the unwinding of Hedge Agreement permitted under Section 6.02(b) for aggregate consideration not exceeding $5,000,000 in the aggregate during any Fiscal Year so long as (A) at the time of such Disposition, no Event of Default or
Potential Event of Default shall have occurred and be continuing or would result from such Disposition; (B) not less than 75% of the aggregate sale price from such Disposition shall be paid in cash, and (C) all such Dispositions shall be
for at least fair market value of the assets or property subject to such Disposition. 
 (g) Transactions with Affiliates. Except as
otherwise permitted by the Loan Documents, Borrower shall not, and shall not permit its Subsidiaries to, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service)
with any Affiliate of such Loan Party or its Subsidiaries on terms that are less favorable to such Loan Party or such Subsidiary than those that could reasonably be expected to be obtained at the time from Persons who are not such an Affiliate;
provided that this clause (g) shall not prohibit the issuance and sale of Equity Interests to the extent not otherwise prohibited under the terms of this Agreement. 

  
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 (h) Conduct of Business. Borrower shall not, and shall not permit its Subsidiaries to,
engage in any business, other than (i) the businesses engaged in by such Loan Party or such Subsidiaries on the Closing Date; (ii) any related, ancillary, supplementary or complementary business line; (iii) any reasonable expansion or
extension of any of the foregoing; or (iv) such other lines of business as may be consented to in writing by the Lender. 
 (i)
Modification of Organizational Documents; Etc. No Loan Party shall permit its or any of its Subsidiaries’ charter, by-laws or other organizational documents to be amended or modified in any way
unless (i) copies of such amendment or modification are promptly provided to the Lender, or have been previously provided to the Lender in accordance with Section 6.01(b), (ii) such amendment or modification does not adversely affect in
any material respect the interests of the Lender hereunder or at law and (iii) such amendment or modification is not reasonably likely to have Material Adverse Effect. No Loan Party shall, and shall not permit any of its Subsidiaries to, change
its jurisdiction of incorporation, formation or organization, as applicable, name or corporate form without providing ten (10) days’ prior written notice to the Lender. 

(j) Inconsistent Agreements; Negative Pledge. No Loan Party shall, or shall permit any of its Subsidiaries to, enter into any agreement
containing any provision which would be violated or breached by any Borrowing by the Borrower hereunder or by the performance by any Loan Party of any of its Obligations hereunder or under any other Loan Document (including the grant of the Liens in
the Collateral pursuant to the Security Documents). No Loan Party shall or shall allow any of its Subsidiaries to create or permit to exist or become effective any encumbrance or restriction on the ability of such Loan Party or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien in favor of Lender upon any of its properties or revenues or which requires the grant of any security for an obligation if security is granted for the Secured Obligations, except for
(i) this Agreement and the other Loan Documents, (ii) covenants in capital leases and documents creating Liens permitted by Section 6.02(a) prohibiting further Liens on the properties encumbered thereby and Replacement Assets,
(iii) customary restrictions in leases and other contracts restricting the assignment or pledge thereof, (iv) any encumbrance or restriction existing under or by reason of applicable law, regulation or rule, (v) any encumbrance or
restriction with respect to the subletting, assignment or transfer of any property or asset that is a lease, sublease, license, sublicense, permit, franchise, conveyance or contract or similar property or asset, (vi) any encumbrance or
restriction existing by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of any Loan Party or any Subsidiary thereof not otherwise prohibited by this Agreement, and customary
restrictions contained in purchase agreements and acquisition agreements to the extent in effect pending the consummation of such transaction, (vii) restrictions that are binding on a Subsidiary at the time such Subsidiary first becomes a
Subsidiary, so long as such restrictions were not into solely in contemplation of such Persona becoming a Subsidiary, (viii) customary restrictions under any arrangement with any governmental authority imposed on any Foreign Subsidiary in
connection with governmental grants, financial aid, tax holidays or similar benefits or economic interests. Notwithstanding the foregoing, the Loan Parties shall not grant any Person, or suffer to exist, control over any deposit accounts or
securities accounts, other than (x) pursuant to control agreements in favor of the Lender or (y) in connection with Liens permitted pursuant to Sections 6.02(a)(ii), (xiv) and (xvi) limited solely to deposits and pledges so permitted.

 (k) Amendments to Certain Agreements. The Borrower shall not, and shall not permit any of its Subsidiaries to, amend or otherwise
modify, or waive any rights under, the Management and Services Agreement, the Cost Sharing Agreement or the Platform Contribution Transaction License Agreement to which such Person is a party in any manner adverse to the Lender. 

(l) Fiscal Year. The Borrower shall not change its Fiscal Year end to a date other than January 31. 

  
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 (m) Prepayment and Cancellation of Debt. No Loan Party shall, or shall permit any of its
Subsidiaries to, (i) voluntarily prepay any Debt other than (x) the Obligations in accordance with the terms of the Loan Documents, (y) Debt permitted under Section 6.02(b) (provided that any prepayment of Debt that is
subordinated to the Obligations must also be permitted under the terms of the applicable subordination or intercreditor agreement) and (z) trade payables in the ordinary course of business, or (ii) cancel any claim or debt owing to it,
except for reasonable consideration determined by the Borrower in good faith or as permitted by Section 6.02(f). 
 (n) Certain
Equity Securities; Equity Ownership. Neither the Borrower nor any Subsidiary shall issue any Equity Interest that is not Qualified Equity Interest. The Borrower shall not cause or suffer to exist a Change in Control. 

(o) New Subsidiaries. The Borrower shall not acquire, organize or create any Subsidiary unless (i) the Borrower complies with
Section 6.01(m) hereunder, (ii) such Subsidiary is wholly owned by the Borrower, directly or indirectly, and (iii) such Borrower shall have complied with its obligations under the Security Agreement in respect of the Shares (as
defined in the Security Agreement) of such Subsidiary. 
 (p) Employee Benefit Plans. No Loan Party shall establish (i) a
Pension Plan or (ii) contribute to or become required to contribute to a Multiemployer Plan. 
 (q) Sale and Lease-Back
Transactions. No Loan Party shall, and shall not permit any of their Subsidiaries to, enter into any arrangement, directly or indirectly, with any Person whereby it shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred unless any obligations
in connection with any Capital Lease or Liens arising in connection therewith are permitted by Sections 6.02(a) and 6.02(b), as the case may be. 

(r) Sanctions; Anti-Bribery. Borrower will not, directly or, to the Borrower’s knowledge, indirectly, use the proceeds of the
Loans or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of
such funding, is, or whose government is, the subject of Sanctions or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans, whether as underwriter, advisor,
investor or otherwise). The Borrower will not directly, or to the Borrower’s knowledge, indirectly, permit any part of the proceeds of the Loans to be used for any payments that would constitute a violation of any applicable anti-bribery law.

 (s) Capital Expenditures. Borrower shall not, and shall not permit any of its Subsidiaries to, make any Capital Expenditures if at
the time of making of such Capital Expenditure, an Event of Default shall have occurred and is continuing or would result from such Capital Expenditure. 

Section 6.03 Financial Covenants. So long as the Note or any Obligation hereunder and under the other Loan Documents shall remain
unpaid or the Lender shall have any Commitment hereunder: 
 (a) Minimum Liquidity. The Borrower shall not permit the Liquidity to be
less than $120,000,000 at any time, measured as of the last day of any Fiscal Quarter; and 

  
 45 

 (b) Leverage Ratio. The Borrower shall not permit the Leverage Ratio, measured quarterly
on a trailing 12 months basis, to be greater than the ratios set below for the corresponding measuring periods: 
  

			
	Measuring Period End Date	  	Leverage Ratio
		
	July 31, 2017	  	4.25 to 1.00
		
	October 31, 2017	  	4.25 to 1.00
		
	January 31, 2018	  	3.25 to 1.00
		
	April 30, 2018	  	3.25 to 1.00
		
	July 31, 2018	  	3.25 to 1.00
		
	October 31, 2018	  	3.25 to 1.00
		
	January 31, 2019	  	3.25 to 1.00
		
	April 30, 2019	  	3.00 to 1.00
		
	July 31, 2019	  	3.00 to 1.00
		
	October 31, 2019	  	2.50 to 1.00
		
	 January 31, 2020 and each

measuring period thereafter
	  	2.50 to 1.00

 ARTICLE VII. 

EVENTS OF DEFAULT 

Section 7.01 Events of Default. If any of the following events (each, an “Event of Default”) shall occur and be
continuing: 
 (a) any Loan Party shall (i) fail to pay any principal hereunder when due, (ii) fail to pay any interest or other
amount payable hereunder or under any other Loan Documents within three (3) Business Days of the date when due, or (iii) fail to Cash Collateralize any obligations as required hereunder; or 

(b) any representation or warranty made by a Loan Party herein or in any other Loan Document or by a Loan Party (or any of its officers) in
connection with this Agreement or any other Loan Document shall prove to have been incorrect in any material respect when made; or 
 (c)
(i) any Loan Party shall fail to perform or observe any term, covenant or agreement contained in Sections 6.01(b)(i), 6.01(c), 6.01(f), 6.01(q), 6.01(r), 6.02 or 6.03; or (ii) any Loan Party shall fail to perform or observe any term, covenant
or agreement contained in Sections 4.01 or 4.02 of the Security Agreement on its part to be performed or observed and any such failure shall remain unremedied for twenty (20) days after the earlier to occur of (A) such Loan Party obtaining
actual knowledge of such failure and (B) such Loan Party’s receipt of written notice from Lender of such failure; or 

  
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 (d) any Loan Party shall fail to perform or observe any term, covenant or agreement contained in
this Agreement or any other Loan Document other than those referred to in clauses (a), (b) and (c) above on its part to be performed or observed and any such failure shall remain unremedied for thirty (30) days after the earlier to occur
of (i) such Loan Party obtaining actual knowledge of such failure and (ii) such Loan Party’s receipt of written notice from Lender of such failure; or 

(e) any Loan Party or any of its Subsidiaries shall fail to pay any principal of, or premium or interest on, any Debt (excluding Debt
evidenced by the Loan Documents) (i) in any amount with respect to any Hedging Obligations or Cash Management Obligations owing to the Lender or any of its Affiliates, or (ii) in an aggregate principal amount exceeding $5,000,000 in any
other case, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt,
or an event of default shall occur and be continuing under any agreement or instrument relating to any such Debt, in each case which shall accelerate the maturity of such Debt or permit the holder thereof or any trustee or agent for such holder to
cause such Debt to become due and payable prior to its expressed maturity, provided that this clause shall not apply (1) to secured Debt that becomes due as a result of the voluntary sale or transfer of the property or assets securing
such Debt, if such sale or transfer is permitted hereunder or (2) termination events or equivalent events pursuant to the terms of Hedge Agreements not arising as a result of a default by the Borrower or any Subsidiary thereunder; or 

(f) (i) the Borrower, any other Loan Party or any Material Subsidiary of the Borrower shall commence any case, proceeding or other action
(x) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it
as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (y) seeking appointment
of a receiver, trustee, custodian or other similar official for it or for all or substantially all of its assets, or the Borrower, any other Loan Party or any Material Subsidiary of the Borrower shall make a general assignment for the benefit of its
creditors, or (ii) there shall be commenced against the Borrower, any other Loan Party or any Material Subsidiary of the Borrower any case, proceeding or other action of a nature referred to in clause (i) above which (x) results in
the entry of an order for relief or any such adjudication or appointment or (y) remains undismissed or undischarged for a period of sixty (60) days; or 

(g) one or more final, non-appealable judgments, attachments or decrees shall be entered against any
Loan Party or any of its Subsidiaries involving in the aggregate a liability equal to or greater than $5,000,000 with respect to such Loan Party or such Subsidiary in excess of insurance (as to which a solvent and unaffiliated insurance company has
not denied coverage) or third-party indemnities (as to which the indemnitor has not denied responsibility) and such judgments, attachments or decrees shall not have been satisfied, vacated, dismissed, discharged, or stayed or bonded pending appeal
within ninety (90) days from the entry thereof; or 
 (h) any Loan Document, for any reason other than satisfaction in full of all
Obligations (other than inchoate indemnity obligations), ceases to be in full force and effect, is declared null and void, or any Loan Party denies that it has any further liability under such Loan Document or gives notice to such effect; or 

  
 47 

 (i) any Loan Document purporting to grant a Lien to secure any Obligation shall, at any time
after the delivery of such Loan Document, fail to create a valid and enforceable Lien on any Collateral purported to be covered thereby (except to the extent terminated in accordance with the terms of this Agreement or any other Loan Document), or
such Lien shall fail or cease to be a perfected Lien on any Collateral with the priority required in the relevant Loan Document or any Loan Party shall state in writing that any of the events described in this clause (i) shall have occurred,
except, in each case, if such failure is a result of the Lender’s action or omission; or 
 (j) any part of the property of any Loan
Party is nationalized, expropriated, seized or otherwise appropriated, or custody or control of such property or of such Loan Party is assumed by any governmental authority, unless the same (i) is not likely to have a Material Adverse Effect or
(ii) is being contested in good faith by appropriate proceedings diligently pursued and a stay of enforcement is in effect; 
 THEN (i) upon the
occurrence of any Event of Default described in clause (f) above, the Commitment shall immediately terminate and all Loans and Letters of Credit hereunder together with accrued interest thereon and all other Obligations owing under this
Agreement, the Note and the other Loan Documents shall automatically become due and payable and (ii) upon the occurrence of any other Event of Default, the Lender may, by notice to the Borrower, declare the Commitment to be terminated
forthwith, whereupon the Commitment shall immediately terminate, and/or, by notice to the Borrower, declare the Loans hereunder, with accrued interest thereon and all other Obligations owing under this Agreement, the Note and the other Loan
Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable, and in each case the Borrower shall be required to immediately Cash Collateralize (x) the outstanding Hedging Obligations owing to the
Lender or any of its Affiliates in an amount equal to 100% of the aggregate net amount of such Hedging Obligations and (y) the outstanding Cash Management Obligations owing to the Lender or any of its Affiliates in an amount equal to 100% of
the aggregate amount of such Cash Management Obligations. Except as expressly provided above in this Section 7.01, presentment, demand, protest and all other notices of any kind are hereby expressly waived. 

ARTICLE VIII. 

MISCELLANEOUS 

Section 8.01 Amendments, Etc. No amendment or waiver of any provision of any Loan Documents, nor consent to any departure by any
Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Lender and the applicable Loan Party and then such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given. 
 Section 8.02 Notices, Etc. Except as otherwise set forth in this Agreement, all notices and other
communications provided for hereunder and under the other Loan Documents shall be in writing (including email or facsimile communication) and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by
facsimile or email, (i) if to a Loan Party, to the attention of the Borrower at the Borrower’s address set forth on the signature page hereof and (ii) if to the Lender, at the address set forth below or, as to each party, at such
other address as shall be designated by such party in a written notice to the other parties. All such notices and communications shall be effective as follows: notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient); and 

  
 48 

 
notices delivered by email shall be deemed to have been given when received. Notwithstanding the foregoing, notices and communications to the Lender pursuant to Article II shall not be
effective until received by the Lender. 
 Wells Fargo Corporate Banking – Technology Banking Group 

45 Fremont Street, 7th Floor, San Francisco, CA 94105 

Phone: 415-222-1183 

Email: wendy.y.wong@wellsfargo.com 

Attention: Wendy Wong 

Section 8.03 Right of Set-off. Upon the occurrence and during the continuance of any Event
of Default, the Lender and each of its Affiliates are hereby authorized by each Loan Party, at any time and from time to time, without notice, to the fullest extent permitted by applicable law (a) to set off against, and to appropriate and
apply to the payment of, the obligations and liabilities of such Loan Party under the Loan Documents (whether matured or unmatured) any and all amounts owing by the Lender to such Loan Party (whether payable in Dollars or any other currency, whether
matured or unmatured, and, in the case of deposits, whether general or special, time or demand, provisional or final and however evidenced), irrespective of whether or not the Lender or any of its Affiliates shall have made any demand under this
Agreement or any other Loan Document and although such obligations and liabilities of such Loan Party are owed to a branch, office or Affiliate of the Lender different from the branch, office or Affiliate holding such deposit or obligated on such
amounts, and (b) pending any such action, to the extent necessary, to hold such amounts as collateral to secure such obligations and liabilities and to return as unpaid for insufficient funds any and all checks and other items drawn against any
deposits so held as the Lender in its sole discretion may elect. Each Loan Party hereby grants to the Lender a security interest in all deposits and accounts maintained with the Lender or any of its Affiliates to secure the Secured Obligations. The
rights of the Lender and its Affiliates under this Section 8.03 are in addition to other rights and remedies (including other rights of set-off) which the Lender or its Affiliates may have. 

Section 8.04 No Waiver; Remedies. No failure on the part of the Lender to exercise, and no delay in exercising, any right under
any of the Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right under any of the Loan Documents preclude any other or further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law. 
 Section 8.05 Costs and Expenses. Subject to the
limitation specified in Section 2.05(c), the Borrower hereby agrees to pay on demand (a) all reasonable and documented out-of-pocket costs and expenses of the
Lender (including reasonable and documented out-of-pocket attorneys’ fees and costs) in connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents or (b) all costs and expenses of the Lender (including attorneys’ fees and costs) in connection with the administration of the Loan Documents or any amendments, modifications, or waivers of the
provisions hereof or thereof, enforcement (including, without limitation, in appellate, bankruptcy, insolvency, liquidation, reorganization, moratorium or other similar proceedings) or restructuring of the Loan Documents (including any amendment,
modification or waiver with respect thereto). This covenant shall survive termination of this Agreement and the payment of the Obligations. 

Section 8.06 Indemnity. Whether or not the transactions contemplated hereby shall be consummated, the Borrower hereby agrees to
indemnify, pay and hold the Lender, its Affiliates and their respective shareholders, officers, directors, employees and agents of the Lender (collectively, the “Indemnified Parties”), harmless from and against any and all claims,
liabilities, losses, damages, 

  
 49 

 
penalties, costs and expenses (whether or not any of the foregoing Persons is a party to any litigation), including, without limitation, attorneys’ fees and costs and costs of investigation,
document production, attendance at a deposition, or other discovery, with respect to or arising out of this Agreement or the other Loan Documents or any use of proceeds hereunder, or any exercise by the Lender of its rights and remedies under this
Agreement or, any other Loan Document, or any claim, demand, action or cause of action being asserted against any Loan Party, including without limitation with respect to violation of any Environmental Law or other Law (collectively, the
“Indemnified Liabilities”), provided that the Borrower shall have no obligation hereunder with respect to Indemnified Liabilities arising from (i) the gross negligence or willful misconduct of any such Persons or its employees
or representatives or (ii) any breach in bad faith by such Indemnified Party of any Loan Document. No Indemnified Party shall assert, and each Indemnified Party hereby waives, any claim based on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in
any way related to, this Agreement or any other Loan Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof or any act or omission or event occurring in connection therewith, and each Indemnified Party hereby waives, releases and covenants not to sue upon any such claim or seek any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor. This covenant shall survive termination of this Agreement and the payment of the Obligations. 

Section 8.07 Assignments and Participations. The Lender may sell, assign, transfer, negotiate or grant participations to other
financial institutions in all or part of its right and obligations under the Loan Documents (including all or a portion of its Commitment and the Loans at the time owing to the Lender), (i) in the case of a sale, assignment or transfer, with the
consent of the Borrower (such consent not to be unreasonably withheld, conditioned or delayed), provided, that the Borrower’s consent shall not be required (A) at any time that an Event of Default has occurred and is continuing or
(B) in the case of a sale, assignment or transfer to an Affiliate of the Lender or an Approved Fund of the Lender, and (ii) in the case of a participation, without the consent of, or notice to, the Borrower, provided, further, that
in each case, any assignee or transferee agrees to be bound by the terms and conditions of this Agreement; and provided even further, that, in the case of a participation, (x) the Lender’s obligations under this Agreement shall
remain unchanged, (y) the Lender shall remain solely responsible to the Borrower for the performance of such obligations, and (z) the Borrower shall continue to deal solely and directly with the Lender in connection with the Lender’s
rights and obligations under this Agreement. The Lender may, in connection with any actual or proposed assignment or participation, disclose to the actual or proposed assignee or participant, any information relating to the Loan Parties, so long as
such potential participants or assignees comply with the provisions of Section 8.09 related to participants and assignees. No Loan Party shall have the right to assign its rights hereunder or under any Loan Document or any interest herein or
therein without the prior written consent of the Lender, which consent can be withheld in the sole discretion of the Lender. “Approved Fund” means any Person (other than a natural Person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities and that is administered or managed by the Lender or an Affiliate of the Lender. 

Section 8.08 Limitation on Payments. The parties hereto intend to conform to all applicable laws limiting the maximum rate of
interest that may be charged or collected by the Lender from the Borrower. Accordingly, notwithstanding any other provision hereof, the Borrower shall not be required to make any payment to or for the account of the Lender, and the Lender shall
refund any payment made by the Borrower, to the extent that such requirement or such failure to refund would 

  
 50 

 
violate or conflict with mandatory and nonwaivable provisions of applicable law limiting the maximum amount of interest which may be charged or collected by the Lender from the Borrower. To the
fullest extent permitted by law, in any action, suit or proceeding pertaining to this Agreement, the burden of proof, by clear and convincing evidence, shall be on the Borrower to demonstrate that this Section 8.08 applies to limit any
obligation of the Borrower under this Agreement or to require the Lender to make any refund, or claiming that this Agreement conflicts with any applicable law limiting the maximum rate of interest that may be charged or collected by the Lender from
the Borrower, as to each element of such claim. 
 Section 8.09 Disclosure of Information. The Lender may disclose information
relating to any Loan Party or any of their respective businesses, including information regarding the financial condition and property, and the amount of Debt owed to the Lender and the terms, conditions and other provisions applicable thereto to
its Affiliates and to any of its partners, directors, officers, employees, agents, trustees, advisors and representatives, regulatory authorities (including self-regulatory), assignees or participants or prospective assignees or participants,
provided that each such Person shall be informed of the confidential nature of such information and instructed to keep such information confidential, and in the case of assignees or participants or prospective assignees or participants, such
Persons shall have executed and delivered in favor of the Borrower a confidentiality agreement in reasonable and customary form. 

Section 8.10 Limitation of Liability. TO THE FULLEST EXTENT PERMITTED BY LAW, NO CLAIM MAY BE MADE BY ANY PARTY TO ANY LOAN
DOCUMENT AGAINST THE OTHER PARTY HERETO OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF SUCH OTHER PARTY FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS
AGREEMENT OR, ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION OR EVENT IN CONNECTION WITH ANY OF THE FOREGOING (WHETHER BASED ON BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY); AND EACH PARTY HEREBY WAIVES,
RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST. 

Section 8.11 Effectiveness; Binding Effect; Governing Law. This Agreement shall become effective when it shall have been executed
by the Borrower and the Lender and thereafter shall be binding upon and inure to the benefit of the Borrower, the Lender and their respective successors and assigns (subject to Section 8.07). THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW PRINCIPLES WHICH WOULD RESULT IN THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION. 

Section 8.12 Waiver of Jury Trial. THE BORROWER HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THE BORROWER AND THE LENDER RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.

 Section 8.13 Consent to Jurisdiction; Venue. All judicial proceedings brought against a Loan Party with respect to this
Agreement or the other Loan Documents may be brought in any state or federal court of competent jurisdiction in the State of California, and by execution and delivery of this Agreement, each Loan Party hereby accepts for itself and in connection
with its properties, 

  
 51 

 generally and unconditionally, the exclusive jurisdiction of the aforesaid courts, and each Loan
Party hereby irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement and the other Loan Documents. Each Loan Party hereby irrevocably waives any right it may have to assert the doctrine of forum non
conveniens or to object to venue to the extent any proceeding is brought in accordance with this Section 8.13. Nothing in this Agreement or in any other Loan Document shall affect any right that the Lender may otherwise have to bring any action
or proceeding relating to any Loan Document against any Loan Party or its property in the courts of any jurisdiction. 
 Section 8.14
Entire Agreement. This Agreement with all Exhibits and Schedules hereto and the other Loan Documents embody the entire agreement and understanding by and among the parties hereto and thereto relating to the subject matter hereof and thereof
and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof and thereof. 

Section 8.15 Separability of Provisions; Headings. In case any one or more of the provisions contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. Section headings in this Agreement are included for
convenience of reference only and shall not be given any substantive effect. 
 Section 8.16 Execution in Counterparts; Etc.
This Agreement may be executed in any number of counterparts and by different 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. Delivery of an executed counterpart of this Agreement by facsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. 

Section 8.17 USA Patriot Act. The Lender hereby notifies the Loan Parties that pursuant to the requirements of the Patriot Act it
is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow the Lender to identify the Loan Parties in accordance
with the Patriot Act. 
 Section 8.18 English Language. This Agreement and each of the other Loan Documents has been negotiated
and executed in the English language. Except as specified otherwise herein all certificates, reports, notices and other documents and communications given or delivered pursuant to this Agreement and the other Loan Documents (including any
modifications or supplements hereto or thereto) shall be in the English language, or accompanied by an English translation. 

Section 8.19 Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices
in Section 8.02. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable laws. 

[remainder of page intentionally left blank] 

  
 52 

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

			
	BORROWER:
	
	BOX, INC.
		
	By:	 	/s/ Dylan Smith
	Name: Dylan Smith
	Title: Chief Financial Officer
		
	Address:	 	
		 	900 Jefferson Ave
		 	Redwood City, CA 94063
		 	Phone: (877) 729-4269
		 	Facsimile: (888) 418-6762
		 	Attention: Chief Financial Officer

 [Signature Page to Credit Agreement] 

 
			
	LENDER:
	
	WELLS FARGO BANK, NATIONAL ASSOCIATION
		
	By:	 	/s/ Wendy Wong
	Name:	 	Wendy Wong
	Title:	 	VP

 [Signature Page to Credit Agreement] 

 EXHIBIT A 

FORM OF NOTICE OF BORROWING 
 Dated:
                     
 Pursuant
to that certain Credit Agreement dated as of November         , 2017 (as supplemented, amended, modified, amended and restated or replaced in writing from time to time, the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as therein defined), by and between BOX, INC., a Delaware corporation (the “Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), this
represents Borrower’s request to borrow as follows: 
  

	 	1.	Date of Borrowing:
                                         
                             

 

	 	2.	Amount of Borrowing: $
                                         
                    

  

	 	3.	Interest Rate:  [Prime Rate]  [LIBOR] 

  

	 	4.	For LIBOR Loans – Interest Period:   [one]   [three]   [ six] month(s) 

 The
undersigned officer, to the best of his or her knowledge, certifies that: 
  

	 	(i)	the representations and warranties contained in the Credit Agreement and the other Loan Documents are true, correct and complete in all material respects (or, in the case of any such representation or warranty already
qualified by materiality or reference to Material Adverse Effect, in all respects) on and as of the date hereof as though made on and as of the date hereof, except to the extent such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties were true, correct and complete in all material respects (or, in the case of any such representation or warranty already qualified by materiality or reference to Material Adverse Effect, in all
respects) on and as of such earlier date; 

  

	 	(ii)	no event or condition has occurred and is continuing or would result from the Borrowing contemplated hereby that would constitute an Event of Default or a Potential Event of Default; and 

 

	 	(iii)	all Loan Documents are in full force and effect. 

 [Balance of Page Intentionally
Left Blank] 

 IN WITNESS WHEREOF, the Borrower has caused this Notice of Borrowing to be executed and delivered
by its duly authorized officer, as of the date and the place first above written. 
  

			
	BOX, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

 EXHIBIT B 

COMPLIANCE CERTIFICATE 

                    
        , 201     
 THE UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS: 

 

	 	1.	I am the Chief Financial Officer of BOX, INC. (the “Borrower”). 

  

	 	2.	Reference is made to that certain Credit Agreement dated as of November 27, 2017 (as supplemented, amended, modified, amended and restated or replaced in writing from time to time, the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as therein defined), by and between BOX, INC., a Delaware corporation (the “Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”). All
terms used but not otherwise defined herein shall have the meanings set forth in the Credit Agreement. 

  

	 	3.	[No Potential Event of Default or Event of Default is continuing as of the date of delivery of this Compliance Certificate.] 

  

	 	  	[OR] 

  

	 	  	[A Potential Default or Event of Default is continuing as of the date of delivery of this 

  

	 	  	Compliance Certificate. The nature of such Potential Default or Event of Default is
                                    . The action that the
Borrower proposes to take with respect thereto is
                                    .] 

 

	 	4.	Attached hereto as Annex A are the calculations used in determining the financial covenants set forth in Section 6.03(a) and Section 6.03(b) of the Credit Agreement, in each case, as of the date of this
Compliance Certificate. 

 The foregoing certifications, together with the computations set forth in Annex A hereto are made and
delivered as of the date first set forth above pursuant to the Credit Agreement. 
  

			
	BOX, INC.

 
			
		
	By:	 	  

 
			
	Name:	 	  

 
			
	Title:	 	  

 ANNEX A 

To Compliance Certificate 
  

							
	 I. Section 6.03(a) – Minimum Liquidity
	  				  	
			
	 a. Liquidity
	  				  	
			
	 i.       Amount without duplication of Eligible Accounts
Receivable of the Borrower (on a consolidated basis) at such time:
	  				  	$                    
			
	 ii.      Amount of Unrestricted Cash of the Borrower and any other
Loan Part at such time:
	  				  	$                    
			
	 1.      Unrestricted cash, plus
	  				  	$  
			
	 2.      unrestricted Cash Equivalents, in each case, of the
Borrower and any other Loan Party in deposit or securities accounts (or any combination thereof) held with the Lender or any of its Affiliates, or with any other financial institution, with respect to which the Lender has received an account control
agreement over such account
	  				  	$  
			
	 b. The sum of Line I.a.i and Line I.a.ii
	  				  	$                    
			
	 c. Minimum required at all times:
	  				  	$120,000,000
			
	 II. Section 6.03(b) – Leverage Ratio
	  				  	
			
	 a. Borrower’s total Debt:
	  				  	
			
	 i.       Outstanding SBLCs issued under the Agreement
	  				  	$                    
			
	 ii.      Debt outstanding under the Agreement
	  				  	$                    
			
	 iii.    Capital Leases
	  				  	$                    
			
	 iv.     Without duplication, Line II.a.i plus Line II.a.ii plus
Line II.a.iii
	  				  	$                    
			
	 b. Borrower’s EBITDA:
	  				  	
			
	 i.       Consolidated Net Income:
	  				  	$                    
			
	 ii.      Add-backs:
	  				  	
			
	 1.      Depreciation and amortization:
	  				  	$                    
			
	 2.      Provision (benefits) for income tax
	  				  	$                    
			
	 3.      Consolidated Total Interest Expense
	  				  	$                    
			
	 4.      Non-cash
expenses, losses and charges, including, without limitation, non-cash compensation-based expenses:
	  				  	$                    
			
	 5.      Extraordinary, unusual or
non-recurring expenses, losses and charges, including, without limitation, restructuring charges and costs, fees and expenses incurred by Borrower or its Subsidiaries in connection with any Permitted
Acquisition
	  				  	$                    

							
			
	 6.      Other expenses, losses or charges agreed to by the
Lender:
	  				  	$                    
			
	 7.      Total adjustments (sum of Line II.b.ii.1 through
Line II.b.ii.6)
	  				  	$                    
			
	 iii.    Average Deferred Revenue Change
	  				  	$                    
			
	 iv.     Adjusted EBITDA (Line II.b.i plus Line II.b.ii.7 plus Line
II.b.iii)
	  				  	$                    
			
	 c. Line II.a.iv divided by Line II.b.iv:
	  				  	               : 1.0
			
	 d. Minimum required amounts set forth below:
	  				  	

  

			
		
	Measuring Period End Date	  	        Leverage Ratio            
		
	July 31, 2017	  	4.25 to 1.00    
		
	October 31, 2017	  	4.25 to 1.00    
		
	January 31, 2018	  	3.25 to 1.00    
		
	April 30, 2018	  	3.25 to 1.00    
		
	July 31, 2018	  	3.25 to 1.00    
		
	October 31, 2018	  	3.25 to 1.00    
		
	January 31, 2019	  	3.25 to 1.00    
		
	April 30, 2019	  	3.00 to 1.00    
		
	July 31, 2019	  	3.00 to 1.00    
		
	October 31, 2019	  	2.50 to 1.00    
		
	 January 31, 2020 and each

measuring period thereafter
	  	2.50 to 1.00    

 EXHIBIT C 

FORM OF NOTE 
 $ 85,000,0000 

FOR VALUE RECEIVED, BOX, INC., a Delaware corporation (the “Borrower”), hereby promises to pay to WELLS FARGO BANK, NATIONAL
ASSOCIATION or its registered assigns (the “Lender”), the principal amount of Eighty-Five Million Dollars ($85,000,000.00) or, if less, the aggregate amount of the Loans pursuant to the Commitment (each as defined in the Credit Agreement
referred to below) made by the Lender pursuant to the Credit Agreement dated as of November     , 2017 by and between the Borrower and the Lender (as supplemented, amended, modified, amended and restated or replaced in
writing from time to time the “Credit Agreement”; capitalized terms used herein but not otherwise defined shall have the meanings set forth in the Credit Agreement) outstanding on the Maturity Date. 

The Borrower also promises to pay interest on the unpaid principal amount hereof from the date hereof until paid at the rates and at the times
which shall be determined in accordance with the provisions of the Credit Agreement. 
 All payments of principal and interest in respect of
this Note shall be made in Dollars in same day funds at the office of the Lender described in the Credit Agreement. Until notified of the transfer of this Note, the Borrower shall be entitled to deem the Lender or such person who has been so
identified by the transferor in writing to the Borrower as the holder of this Note, as the owner and holder of this Note. The Lender may attach schedules to this Note and endorse thereon the date, amount, and payments with respect thereto. Any
failure to attach schedules or make such endorsements to this Note shall not limit or otherwise affect the obligation of the Borrower hereunder with respect to payments of principal or interest on this Note. 

This is the Note referred to in the Credit Agreement, and this Note is entitled to the benefits of the Credit Agreement and is secured by the
Collateral. The Credit Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified. 
 No reference herein to the Credit Agreement and no provision of this Note or the Credit
Agreement shall alter or impair the obligations of the Borrower, which are absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective times and in the currency herein prescribed. 

The Borrower hereby promises to pay on demand all costs and expenses of the Lender required by Section 8.05 of the Credit Agreement. The
Borrower hereby consents to renewals and extensions of time at or after the maturity hereof, without notice, and hereby waives diligence, presentment, protest, demand and notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder. 
 To the extent of any inconsistency between the terms and
conditions of this Note and the terms and conditions of the Credit Agreement, the terms and conditions of the Credit Agreement shall control. 

This Note may be transferred only in accordance with Section 8.07 of the Credit Agreement. 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW
PRINCIPLES WHICH WOULD RESULT IN THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION. 
 [Balance of Page Intentionally Left
Blank] 

 IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly
authorized officer, as of the date and the place first above written. 
  

			
	BOX, INC.
		
	By:	 	 
	Name:	 	 
	Title:	 	 

 EXHIBIT D 

Form of Subsidiary Guarantee 

[See attached.] 

 FORM OF SUBSIDIARY GUARANTEE 

This SUBSIDIARY GUARANTEE is dated as of
                , 2017 (this “Agreement”), by
                                , a
                     and each other present or future Domestic Subsidiary of the Borrower that becomes a party hereto after the date hereof
(each, a “Guarantor” and collectively, the “Guarantors”), in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”). 

To induce the Lender from time to time to extend credit and other financial accommodations to BOX, INC., a Delaware corporation (the
“Borrower”), pursuant to that certain Credit Agreement dated as of November __, 2017 between the Borrower and the Lender (as supplemented, amended, modified, amended and restated or replaced in writing from time to time the “Credit
Agreement”; capitalized terms used but not otherwise defined herein have the meanings set forth in the Credit Agreement) and the other Loan Documents, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor has agreed to guarantee the Guaranteed Obligations (as hereinafter defined). Accordingly, the parties hereto agree as follows: 

Section 1. The Guarantee. 

1.01 The Guarantee. Each Guarantor hereby jointly and severally, and absolutely and unconditionally, guarantees to the Lender and its
respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise and at all times thereafter) of all Guaranteed Obligations. Each Guarantor hereby further jointly and severally agrees
that if the Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, such Guarantor will promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or
renewal. “Guaranteed Obligations” shall mean, collectively, (a) the Obligations, (b) all Hedging Obligations permitted under the Credit Agreement owing to the Lender or any of its Affiliates, and (c) all Cash Management
Obligations permitted under the Credit Agreement owing to the Lender or any of its Affiliates, provided that “Guaranteed Obligations” shall not, as to any Guarantor, include any Excluded Swap Obligations of such Guarantor. 

1.02 Obligations Unconditional. The obligations of each Guarantor under Section 1.01 are absolute and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or enforceability of any agreement or instrument under which any Guaranteed Obligations have been incurred (herein, the “Underlying Instruments”), or any substitution,
release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, it being the intent of this Section 1.02 that the obligations of such Guarantor hereunder shall be absolute and unconditional, joint and several, under any and all circumstances. Without
limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder which shall remain absolute and unconditional as described above: 

(i) at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance shall be waived; 
 (ii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under any Underlying Instrument shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; 

 (iii) any lien or security interest granted to, or in favor of, the Lender as security for any
of the Guaranteed Obligations shall fail to be perfected; or 
 (iv) any other guarantee provided to, or in favor of, the Lender to
guarantee the Guaranteed Obligations shall fail to be enforceable. 
 Each Guarantor hereby expressly waives diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Lender exhaust any right, power or remedy or proceed against the Borrower under any Underlying Instrument, or against any other Person under any other guarantee of, or security for,
any of the Guaranteed Obligations. As used in this paragraph, any reference to “the principal” is a reference to the Borrower, and any reference to “the creditor” is a reference to the Lender. In accordance with Section 2856
of the California Civil Code (a) each Guarantor waives any and all rights and defenses available to it by reason of Sections 2787 to 2855, inclusive, of the California Civil Code, including without limitation any and all rights or defenses such
Guarantor or any other guarantor of the Guaranteed Obligations may have because the Guaranteed Obligations are secured by real property. This means, among other things: (1) the creditor may collect from such Guarantor without first foreclosing
on any real or personal property collateral pledged by the principal; and (2) if the creditor forecloses on any real property collateral pledged by the principal: (A) the amount of the Guaranteed Obligations may be reduced only by the
price for which the collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price and (B) the creditor may collect from such Guarantor even if the creditor, by foreclosing on the real property collateral,
has destroyed any right such Guarantor may have to collect from the principal. This is an unconditional and irrevocable waiver of any right and defenses such Guarantor may have because the Guaranteed Obligations are secured by real property. These
rights and defenses include, but are not limited to, any rights and defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure. Each Guarantor also waives all rights and defenses arising out of an election of
remedies by the creditor, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a Guaranteed Obligation, has destroyed such Guarantor’s rights of subrogation and reimbursement against the
principal by the operation of Section 580d of the Code of Civil Procedure or otherwise; and even though that election of remedies by the creditor, such as nonjudicial foreclosure with respect to security for an obligation of any other guarantor
of any of the Guaranteed Obligations, has destroyed such Guarantor’s rights of contribution against such other guarantor. No other provision of this Agreement shall be construed as limiting the generality of any of the covenants and waivers set
forth in this paragraph. As provided below, this Agreement shall be governed by, and shall be construed and enforced in accordance with, the internal laws of the State of California, without regard to conflicts of laws principles. 

1.03 Reinstatement. The obligations of each Guarantor under this Section 1 shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of the Borrower in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise. 
 1.04 Subrogation. Each Guarantor hereby jointly and severally agrees that until the
payment and satisfaction in full of all Obligations (other than contingent indemnification obligations in respect of which no claim for payment has been made or no notice for indemnification has been issued by the indemnitee), and the expiration or
termination of the Commitment and all other obligations of the Lender to make financial accommodations available to the Borrower under the Underlying Instruments, it subordinates and agrees not to enforce any claim, right or remedy arising by reason
of any performance by it of the guarantee in this Section 1, whether by subrogation or otherwise, in each case, whether such claim, right or remedy arises in equity, under contract, by statute (including without limitation under California
Civil Code Section 2847, 2848 or 2849), under common law or otherwise, against the Borrower, or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations. 

 1.05 Remedies. Each Guarantor hereby jointly and severally agrees that, if any Guarantor
fails to fulfill its duty to pay all Guaranteed Obligations guaranteed hereunder when due (whether at stated maturity, by acceleration or otherwise and at all times thereafter), the Lender shall have all of the remedies of a creditor and, to the
extent applicable, of a secured party, under the Loan Documents and all applicable law. 
 1.06 Instrument for the Payment of Money.
Each Guarantor hereby acknowledges that the guarantee in this Section 1 constitutes an instrument for the payment of money, and consents and agrees that the Lender, at its sole option, in the event of a dispute by such Guarantor in the payment
of any moneys due hereunder, shall have the right to bring motion action under California Code of Civil Procedure section 437c(a). 
 1.07
Continuing Guarantee. The guarantee in this Section 1 is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising. Each Guarantor irrevocably waives any right (including without limitation any such right
arising under California Civil Code Section 2815) to revoke this Agreement as to future transactions giving rise to any Guaranteed Obligations. 

Section 2. Miscellaneous. 

2.01 Notices. All notices, requests, consents and demands hereunder shall be delivered as set forth in Section 8.02 of the Credit
Agreement. 
 2.02 No Waiver. No failure on the part of the Lender to exercise, and no delay in exercising, any right under any of
the Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any of the Loan Documents preclude any other or further exercise thereof or the exercise of any other right. The remedies herein are
cumulative and are not exclusive of any remedies provided by law. 
 2.03 Amendments, Etc. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by any Guarantor herefrom, shall be in any event effective unless the same shall be in writing and signed by the Lender and the applicable Guarantor and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given. 
 2.04 Costs and Expenses. Each Guarantor
hereby jointly and severally agrees to pay on demand all costs and expenses of the Lender under Section 8.05 of the Credit Agreement. This covenant shall survive termination of this Agreement and payment of the Guaranteed Obligations. 

2.05 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of
the Guarantors and the Lender, provided that no Guarantor shall assign or transfer its rights or obligations hereunder without the prior written consent of the Lender, which consent can be withheld in the sole and absolute discretion of the
Lender. 
 2.06 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different 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. Delivery of an executed counterpart of this Agreement by facsimile or
other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. 

 2.07 Governing Law; Submission to Jurisdiction; Etc. 

(a) Effectiveness; Binding Effect; Governing Law. This Agreement shall become effective when executed by the Guarantors and the Lender
and thereafter shall be binding upon and inure to the benefit of the Guarantors, the Lender and their respective successors and assigns (subject to Section 2.05). THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW PRINCIPLES WHICH WOULD RESULT IN THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION. 

(b) Consent to Jurisdiction; Venue. All judicial proceedings brought against any Guarantor with respect to this Agreement may be
brought in any state or federal court of competent jurisdiction in the State of California, and by execution and delivery of this Agreement, each Guarantor hereby accepts for itself and in connection with its properties, generally and
unconditionally, the exclusive jurisdiction of the aforesaid courts, and each hereby irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Each Guarantor hereby irrevocably waives any right it may have to
assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this Section 2.07. Nothing in this Agreement or in any other Loan Document shall affect any right that the Lender may
otherwise have to bring any action or proceeding relating to any Loan Documents against any Guarantor or its property in the courts of any jurisdiction. 

(c) Service of Process. Each Guarantor hereby irrevocably consents to service of process in the manner provided in Section 8.19 of
the Credit Agreement. 
 2.08 Fraudulent Conveyance. Anything contained in this Agreement to the contrary notwithstanding, the
obligations of each Guarantor under this Agreement and the other Loan Documents shall be limited to a maximum aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of Title 11 of the United States Code or any applicable provisions of comparable state law (collectively, the “Fraudulent Transfer Laws”), in each case after giving effect to all other
liabilities of such Guarantor, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically excluding, however, any liabilities of such Guarantor (x) in respect of intercompany indebtedness to the Borrower or
other affiliates of the Borrower to the extent that such indebtedness would be discharged in an amount equal to the amount paid by such Guarantor hereunder and (y) under any guaranty of subordinated indebtedness which guaranty contains a
limitation as to maximum amount similar to that set forth in this Section 2.08, pursuant to which the liability of such Guarantor hereunder is included in the liabilities taken into account in determining such maximum amount) and after giving
effect as assets to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, reimbursement, indemnification or contribution of such Guarantor pursuant to applicable law or pursuant to
the terms of any agreement. 
 2.09 Keepwell. Each Qualified ECP Guarantor (as hereinafter defined) hereby jointly and severally
absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Guarantor to honor all of its obligations under this Agreement in respect of Swap Obligations (provided,
however, that each Qualified ECP Guarantor shall only be liable under this Section 2.09 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 2.09, or otherwise under this
Agreement, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section 2.09 shall remain in full force and effect
until all of the Guaranteed Obligations (other than contingent indemnification obligations in respect of which no claim for payment has been made or no notice for indemnification has 

 
been issued by the indemnitee) shall have been paid in full and the Commitment terminated. Each Qualified ECP Guarantor intends that this Section 2.09 constitutes, and this Section 2.09
shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act. “Qualified ECP Guarantor”
means, in respect of any Swap Obligation, each Guarantor that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such
other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time
by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act. 
 2.10 Waiver of Jury Trial. EACH
PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN ANY GUARANTOR AND THE LENDER RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT. 
 2.11 Separability of Provisions; Headings. In case any one or more of the provisions 

contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired thereby. Section headings in this Agreement are included for convenience of reference only and shall not be given any substantive effect. 

2.12 Agents and Attorneys-in-Fact. The Lender may
employ agents and attorneys-in-fact in connection herewith and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in good faith except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Lender
acted with gross negligence or willful misconduct in the selection of such agents or attorneys-in-fact. 

2.13 Entire Agreement. This Agreement and the other Loan Documents embody the entire agreement and understanding by and among the
parties hereto and thereto relating to the subject matter hereof and thereof and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof and thereof. 

2.14 English Language. This Agreement and each of the other Loan Documents has been negotiated and executed in the English language.
Except as specified otherwise herein all certificates, reports, notices and other documents and communications given or delivered pursuant to this Agreement and the other Loan Documents (including any modifications or supplements hereto or thereto)
shall be in the English language, or accompanied by an English translation. 
 2.15 Representations, Warranties and Covenants. Each
Guarantor makes, for the benefit of the Lender, each of the representations, warranties and covenants made in the Credit Agreement by the Borrower as to such Guarantor, its assets, financial condition, operations, organization, legal status,
business and the Loan Documents to which it is a party. 
 [Balance of Page Intentionally Left Blank] 

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

			
	[SUBSIDIARY GUARANTOR]
		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	WELLS FARGO BANK, NATIONAL ASSOCIATION
		
	By:	 	 
	Name:	 	 
	Title:Exhibit 4.1

 

SRC ENERGY INC.

 

6.250% SENIOR NOTES DUE 2025

 

INDENTURE

 

Dated as of November 29, 2017

 

U.S. BANK NATIONAL ASSOCIATION

 

Trustee

 

 

CROSS-REFERENCE TABLE(1)

 

	
Trust Indenture Act Section
    	
 
    	
Indenture Section
    
	
310(a)(1)
    	
 
    	
7.10
    
	
(a)(2)
    	
 
    	
7.10
    
	
(a)(3)
    	
 
    	
N.A.
    
	
(a)(4)
    	
 
    	
N.A.
    
	
(a)(5)
    	
 
    	
7.10
    
	
(b)
    	
 
    	
7.10
    
	
(c)
    	
 
    	
N.A.
    
	
311(a)
    	
 
    	
7.11
    
	
(b)
    	
 
    	
7.11
    
	
(c)
    	
 
    	
N.A.
    
	
312(a)
    	
 
    	
2.05
    
	
(b)
    	
 
    	
12.03
    
	
(c)
    	
 
    	
Section 12.1312.03
    
	
313(a)
    	
 
    	
7.06
    
	
(b)(1)
    	
 
    	
N.A.
    
	
(b)(2)
    	
 
    	
7.06; 7.07
    
	
(c)
    	
 
    	
7.06; 12.02
    
	
(d)
    	
 
    	
7.06
    
	
314(a)
    	
 
    	
4.03; 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)
    	
 
    	
7.01
    
	
(b)
    	
 
    	
7.05; 12.02
    
	
(c)
    	
 
    	
7.01
    
	
(d)
    	
 
    	
7.01
    
	
(e)
    	
 
    	
6.11
    
	
316(a)(last sentence)
    	
 
    	
2.09
    
	
(a)(1)(A)
    	
 
    	
6.05
    
	
(a)(1)(B)
    	
 
    	
6.04
    
	
(a)(2)
    	
 
    	
N.A.
    
	
(b)
    	
 
    	
6.07
    
	
(c)
    	
 
    	
2.12
    
	
317(a)(1)
    	
 
    	
6.08
    
	
(a)(2)
    	
 
    	
6.09
    

 

(1)  This Cross Reference Table is not part of the Indenture.
 N.A. means not applicable.

 

i

 

	
Trust Indenture Act Section
    	
 
    	
Indenture Section
    
	
(b)
    	
 
    	
2.04
    
	
318(a)
    	
 
    	
12.01
    
	
(b)
    	
 
    	
N.A.
    
	
(c)
    	
 
    	
12.01
    

 

ii

 

TABLE OF CONTENTS

 

 

	
 
    	
PAGE
    
	
 
    	
 
    
	
ARTICLE 1
   DEFINITIONS AND INCORPORATION BY REFERENCE
    
	
 
    	
 
    
	
Section 1.01. Definitions
    	
1
    
	
Section 1.02. Other Definitions
    	
35
    
	
Section 1.03. Incorporation by Reference of Trust Indenture Act
    	
36
    
	
Section 1.04. Rules of Construction
    	
36
    
	
 
    	
 
    
	
ARTICLE 2
   THE NOTES
    
	
 
    
	
Section 2.01. Form and Dating
    	
37
    
	
Section 2.02. Execution and Authentication
    	
38
    
	
Section 2.03. Registrar and Paying Agent
    	
38
    
	
Section 2.04. Paying Agent to Hold Money in Trust
    	
39
    
	
Section 2.05. Holder Lists
    	
39
    
	
Section 2.06. Transfer and Exchange
    	
39
    
	
Section 2.07. Replacement Notes
    	
53
    
	
Section 2.08. Outstanding Notes
    	
54
    
	
Section 2.09. Treasury Notes
    	
54
    
	
Section 2.10. Temporary Notes
    	
54
    
	
Section 2.11. Cancellation
    	
55
    
	
Section 2.12. Defaulted Interest
    	
55
    
	
Section 2.13. CUSIP Numbers
    	
55
    
	
 
    	
 
    
	
ARTICLE 3
   REDEMPTION AND PREPAYMENT
    
	
 
    
	
Section 3.01. Notices to Trustee
    	
55
    
	
Section 3.02. Selection of Notes to Be Redeemed
    	
55
    
	
Section 3.03. Notice of Redemption
    	
56
    
	
Section 3.04. Effect of Notice of Redemption
    	
57
    
	
Section 3.05. Deposit of Redemption or Purchase Price
    	
57
    
	
Section 3.06. Notes Redeemed or Purchased in Part
    	
58
    
	
Section 3.07. Optional Redemption
    	
58
    
	
Section 3.08. Special Mandatory Redemption
    	
59
    
	
Section 3.09. Offer to Purchase by Application of Excess Proceeds
    	
60
    
	
 
    	
 
    
	
ARTICLE 4
   COVENANTS
    
	
 
    	
 
    
	
Section 4.01. Payment of Notes
    	
62
    
	
Section 4.02. Maintenance of Office or Agency
    	
62
    
	
Section 4.03. Reports
    	
62
    

 

iii

 

	
Section 4.04. Compliance Certificate
    	
64
    
	
Section 4.05. Taxes
    	
64
    
	
Section 4.06. Stay, Extension and Usury Laws
    	
65
    
	
Section 4.07. Restricted Payments
    	
65
    
	
Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted   Subsidiaries
    	
70
    
	
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock
    	
73
    
	
Section 4.10. Asset Sales
    	
77
    
	
Section 4.11. Transactions with Affiliates
    	
79
    
	
Section 4.12. Liens
    	
81
    
	
Section 4.13. Business Activities
    	
82
    
	
Section 4.14. Corporate Existence
    	
82
    
	
Section 4.15. Offer to Repurchase Upon Change of Control
    	
82
    
	
Section 4.16. Additional Note Guarantees
    	
85
    
	
Section 4.17. Designation of Restricted and Unrestricted Subsidiaries
    	
85
    
	
Section 4.18. Covenant Suspension
    	
85
    
	
Section 4.19. Consent Payments
    	
86
    
	
 
    	
 
    
	
ARTICLE 5
   SUCCESSORS
    
	
 
    
	
Section 5.01. Merger, Consolidation or Sale of Assets
    	
87
    
	
Section 5.02. Successor Corporation Substituted
    	
88
    
	
 
    	
 
    
	
ARTICLE 6
   DEFAULTS AND REMEDIES
    
	
 
    	
 
    
	
Section 6.01. Events of Default
    	
88
    
	
Section 6.02. Acceleration
    	
90
    
	
Section 6.03. Other Remedies
    	
91
    
	
Section 6.04. Waiver of Past Defaults
    	
91
    
	
Section 6.05. Control by Majority
    	
91
    
	
Section 6.06. Limitation on Suits
    	
91
    
	
Section 6.07. Rights of Holders of Notes to Receive Payment
    	
92
    
	
Section 6.08. Collection Suit by Trustee
    	
92
    
	
Section 6.09. Trustee May File Proofs of Claim
    	
92
    
	
Section 6.10. Priorities
    	
93
    
	
Section 6.11. Undertaking for Costs
    	
93
    
	
 
    	
 
    
	
ARTICLE 7
   TRUSTEE
    
	
 
    	
 
    
	
Section 7.01. Duties of Trustee
    	
93
    
	
Section 7.02. Rights of Trustee
    	
94
    
	
Section 7.03. Individual Rights of Trustee
    	
95
    
	
Section 7.04. Trustee’s Disclaimer
    	
95
    
	
Section 7.05. Notice of Defaults
    	
96
    

 

iv

 

	
Section 7.06. Reports by Trustee to Holders of the Notes
    	
96
    
	
Section 7.07. Compensation and Indemnity
    	
96
    
	
Section 7.08. Replacement of Trustee
    	
97
    
	
Section 7.09. Successor Trustee by Merger, etc.
    	
98
    
	
Section 7.10. Eligibility; Disqualification
    	
98
    
	
Section 7.11. Preferential Collection of Claims Against Company
    	
99
    
	
 
    	
 
    
	
ARTICLE 8
   LEGAL DEFEASANCE AND COVENANT DEFEASANCE
    
	
 
    	
 
    
	
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance
    	
99
    
	
Section 8.02. Legal Defeasance and Discharge
    	
99
    
	
Section 8.03. Covenant Defeasance
    	
100
    
	
Section 8.04. Conditions to Legal or Covenant Defeasance
    	
100
    
	
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other   Miscellaneous Provisions
    	
101
    
	
Section 8.06. Repayment to Company
    	
102
    
	
Section 8.07. Reinstatement
    	
102
    
	
 
    	
 
    
	
ARTICLE 9
   AMENDMENT, SUPPLEMENT AND WAIVER
    
	
 
    
	
Section 9.01. Without Consent of Holders of Notes
    	
103
    
	
Section 9.02. With Consent of Holders of Notes
    	
104
    
	
Section 9.03. Compliance with Trust Indenture Act
    	
105
    
	
Section 9.04. Revocation and Effect of Consents
    	
105
    
	
Section 9.05. Notation on or Exchange of Notes
    	
106
    
	
Section 9.06. Trustee to Sign Amendments, etc.
    	
106
    
	
 
    	
 
    
	
ARTICLE 10
   NOTE GUARANTEES
    
	
 
    
	
Section 10.01. Guarantee
    	
106
    
	
Section 10.02. Limitation on Guarantor Liability
    	
107
    
	
Section 10.03. Execution of Supplemental Indenture for Note Guarantee
    	
108
    
	
Section 10.04. Guarantors May Consolidate, etc., on Certain Terms
    	
108
    
	
Section 10.05. Releases
    	
109
    
	
 
    	
 
    
	
ARTICLE 11
   SATISFACTION AND DISCHARGE
    
	
 
    
	
Section 11.01. Satisfaction and Discharge
    	
110
    
	
Section 11.02. Application of Trust Money
    	
111
    
	
 
    	
 
    
	
ARTICLE 12
   MISCELLANEOUS
    
	
 
    	
 
    
	
Section 12.01. Trust Indenture Act Controls
    	
111
    

 

v

 

	
Section 12.02. Notices
    	
111
    
	
Section 12.03. Communication by Holders of Notes with Other Holders of Notes
    	
113
    
	
Section 12.04. Certificate and Opinion as to Conditions Precedent
    	
113
    
	
Section 12.05. Statements Required in Certificate or Opinion
    	
113
    
	
Section 12.06. Rules by Trustee and Agents
    	
113
    
	
Section 12.07. No Personal Liability of Directors, Officers, Employees and   Stockholders
    	
114
    
	
Section 12.08. Governing Law
    	
114
    
	
Section 12.09. No Adverse Interpretation of Other Agreements
    	
114
    
	
Section 12.10. Successors
    	
114
    
	
Section 12.11. Severability
    	
114
    
	
Section 12.12. Counterpart Originals
    	
114
    
	
Section 12.13. Table of Contents, Headings, etc.
    	
114
    
	
Section 12.14. Payment Date Other Than a Business Day
    	
115
    
	
Section 12.15. Evidence of Action by Holders
    	
115
    
	
Section 12.16. U.S.A. Patriot Act
    	
115
    
	
Section 12.17. Force Majeure
    	
115
    

 

	
EXHIBITS
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
 
    	
FORM OF NOTE
    
	
 
    	
 
    	
 
    
	
Exhibit B
    	
 
    	
FORM OF CERTIFICATE OF   TRANSFER
    
	
 
    	
 
    	
 
    
	
Exhibit C
    	
 
    	
FORM OF CERTIFICATE OF   EXCHANGE
    
	
 
    	
 
    	
 
    
	
Exhibit D
    	
 
    	
FORM OF CERTIFICATE OF   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
    
	
 
    	
 
    	
 
    
	
Exhibit E
    	
 
    	
FORM OF SUPPLEMENTAL   INDENTURE
    

 

vi

 

INDENTURE dated as of November 29, 2017 among SRC Energy Inc., a Colorado corporation (the “Company”), and U.S. Bank National Association, a national banking association, as trustee.

 

The Company and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the 6.250% Senior Notes due 2025 (the “Notes”):

 

Article 1
 DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.                          Definitions.

 

“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 144A.

 

“Acquired Debt” means, with respect to any specified Person:

 

(1)                                 Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person; and

 

(2)                                 Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

 

“Additional Interest” has the meaning assigned to that term pursuant to the Registration Rights Agreement.

 

“Additional Notes” means additional Notes (other than the Initial Notes and the Exchange Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes.

 

“Adjusted Consolidated Net Tangible Assets” means, as of any date of determination, without duplication:

 

(a)                                 the sum of:

 

(i)                                     the discounted future net revenues from Proved Reserves of the Company and its Restricted Subsidiaries calculated in accordance with SEC guidelines (before any state or federal income taxes) and giving effect to Hedging Obligations as estimated in a reserve report prepared as of the end of the Company’s most recently completed fiscal year, which reserve report is prepared or audited by independent petroleum engineers as to Proved Reserves accounting

 

 

for at least 80% of all such discounted future net revenues and by the Company’s petroleum engineers with respect to any other Proved Reserves covered by such report, as increased by, as of the date of determination, the estimated discounted future net revenues from:

 

(A)                               estimated Proved Reserves of the Company and its Restricted Subsidiaries acquired since such year-end; and

 

(B)                               estimated Proved Reserves of the Company and its Restricted Subsidiaries attributable to extensions, discoveries and other additions and upward revisions of estimates of Proved Reserves (including previously estimated development costs incurred during the period and the accretion of discount since the prior period end) since such year-end due to exploration, development or exploitation, production or other activities which would, in accordance with standard industry practice, cause such revisions,

 

and decreased by, as of the date of determination, the discounted future net revenue attributable to:

 

(C)                               estimated Proved Reserves of the Company and its Restricted Subsidiaries reflected in such reserve report produced or disposed of since such year-end; and

 

(D)                               reductions in estimated Proved Reserves of the Company and its Restricted Subsidiaries reflected in such reserve report attributable to downward revisions of estimates of Proved Reserves since such year-end due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions;

 

in the case of the preceding clauses (A) through (D), calculated on a pre-tax basis in accordance with SEC guidelines and estimated by the Company’s petroleum engineers or any independent petroleum engineers engaged by the Company for such purpose;

 

(ii)                                  the capitalized costs that are attributable to oil and gas properties of the Company and its Restricted Subsidiaries to which no Proved Reserves are attributable, based on the Company’s books and records as of a date no earlier than the last day of the Company’s most recent quarterly or annual period for which internal financial statements are available;

 

(iii)                               the Consolidated Net Working Capital of the Company and its Restricted Subsidiaries as of a date no earlier than the last day of the Company’s most recent quarterly or annual period for which internal financial statements are available; and

 

(iv)                              the greater of:

 

2

 

(A)                               the net book value and

 

(B)                               the appraised value, as estimated by independent appraisers,

 

in each case, of other tangible assets (including Investments in unconsolidated Subsidiaries) of the Company and its Restricted Subsidiaries as of a date no earlier than the last day of the Company’s most recent quarterly or annual period for which internal financial statements are available; provided that if no such appraisal has been performed, the Company will not be required to obtain such an appraisal and only clause (a)(iv)(A) of this definition will apply,

 

minus, to the extent not otherwise taken into account in the immediately preceding clause (a),

 

(b)                                 the sum of

 

(i)                                     the net book value of any Capital Stock in a Restricted Subsidiary that is not owned by the Company or any of its Restricted Subsidiaries;

 

(ii)                                  to the extent not otherwise taken into account in determining Adjusted Consolidated Net Tangible Assets, any net gas balancing liabilities of the Company and its Restricted Subsidiaries as of the last day of the Company’s most recent annual or quarterly period for which internal financial statements are available;

 

(iii)                               to the extent included in clause (a)(i) above, the discounted future net revenues, calculated on a pre-tax basis in accordance with SEC guidelines (utilizing the prices utilized in the Company’s year-end reserve report), attributable to reserves that are required to be delivered to third parties to fully satisfy the obligations of the Company and its Restricted Subsidiaries with respect to Volumetric Production Payments on the schedules specified with respect thereto; and

 

(iv)                              the discounted future net revenues, calculated on a pre-tax basis in accordance with SEC guidelines, attributable to reserves subject to Dollar-Denominated Production Payments that, based on the estimates of production and price assumptions included in determining the discounted future net revenues specified in (a)(i) above, would be necessary to fully satisfy the payment obligations of the Company and its Restricted Subsidiaries with respect to Dollar-Denominated Production Payments on the schedules specified with respect thereto.

 

If the Company changes its method of accounting from the full cost method to the successful efforts method or a similar method of accounting, “Adjusted Consolidated Net Tangible Assets” will continue to be calculated as if the Company were still using the full cost method of accounting.

 

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“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

 

“Agent” means any Registrar or Paying Agent.

 

“Applicable Premium” means, with respect to any Note at the time of computation, the excess of:

 

(a)                                 the present value at such time of (i) the redemption price of the Note at December 1, 2020 (such redemption price being set forth in the table appearing in Section 3.07 hereof) plus (ii) all required interest payments due on the Note through December 1, 2020 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such time plus 50 basis points discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), over

 

(b)                                 the principal amount of the Note.

 

“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.

 

“Asset Sale” means:

 

(1)                                 the sale, lease, conveyance or other disposition of any assets or rights by the Company or any of the Company’s Restricted Subsidiaries; provided that the sale, lease, conveyance or other disposition of all or substantially all of the properties or assets of the Company and its Subsidiaries taken as a whole will be governed by Section 4.15 or by Section 5.01 hereof and not by the provisions of Section 4.10 hereof; and

 

(2)                                 the issuance of Equity Interests by any of the Company’s Restricted Subsidiaries or the sale by the Company or any of the Company’s Restricted Subsidiaries of Equity Interests in any of the Company’s Subsidiaries.

 

Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:

 

(1)                                 any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $20.0 million;

 

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(2)                                 a disposition of assets between or among the Company and its Restricted Subsidiaries;

 

(3)                                 an issuance of Equity Interests by a Restricted Subsidiary of the Company to the Company or to a Restricted Subsidiary of the Company;

 

(4)                                 the sale, lease or other disposition of equipment, inventory, products, services, accounts receivable or other assets in the ordinary course of business (including in connection with any compromise, settlement or collection of accounts receivable) and any sale or other disposition of damaged, worn-out or obsolete assets (including the abandonment or other disposition of intellectual property) that is, in the reasonable judgment of the Company, no longer economically practicable to maintain or useful in the conduct of the business of the Company and its Restricted Subsidiaries taken as whole;

 

(5)                                 licenses and sublicenses by the Company or any of its Restricted Subsidiaries of software or intellectual property, including seismic data and interpretations thereof, in the ordinary course of business;

 

(6)                                 any surrender or waiver of contract rights or settlement, release, recovery on or surrender of contract, tort or other claims;

 

(7)                                 the granting of Liens not prohibited by Section 4.12 hereof and dispositions in connection with Permitted Liens;

 

(8)                                 the sale or other disposition of cash or Cash Equivalents or other financial instruments (other than Oil and Gas Hedging Contracts);

 

(9)                                 a Restricted Payment that does not violate Section 4.07 hereof, including the issuance or sale of Equity Interests or the sale, lease or other disposition of products, services, equipment, inventory, accounts receivable or other assets pursuant to any such Restricted Payment, or a Permitted Investment, including the unwinding of any Hedging Obligations, and the issuance or sale of Equity Interests or the sale, lease or other disposition of products, services, equipment, inventory, accounts receivable or other assets pursuant to any such Permitted Investment;

 

(10)                          sale or other disposition of Hydrocarbons or other mineral products or inventory in the ordinary course of business;

 

(11)                          an Asset Swap or the farm-out, lease or sublease of developed or undeveloped crude oil or natural gas properties owned or held by the Company or any Restricted Subsidiary;

 

(12)                          dispositions of crude oil and natural gas properties; provided that at the time of any such disposition such properties do not have associated with them any Proved Reserves; and

 

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(13)                          any Production Payments and Reserve Sales; provided that any such Production Payments and Reserve Sales, other than incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to the Company or a Restricted Subsidiary of the Company, shall have been created, incurred, issued, assumed or Guaranteed in connection with the financing of, and within 90 days after the acquisition of, the property that is subject thereto.

 

“Asset Swap” means any substantially contemporaneous (and in any event occurring within 180 days of each other) purchase and sale or exchange of any assets or properties used or useful in the Oil and Gas Business between the Company or any of its Restricted Subsidiaries and another Person; provided, that the Fair Market Value of the properties or assets traded or exchanged by the Company or such Restricted Subsidiary (together with any cash) is reasonably equivalent to the Fair Market Value of the properties or assets (together with any cash) to be received by the Company or such Restricted Subsidiary, and provided further that any net cash received must be applied in accordance with Section 4.10 hereof if then in effect.

 

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

 

“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.

 

“Board of Directors” means:

 

(1)                                 with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

 

(2)                                 with respect to a partnership, the board of directors of the general partner of the partnership;

 

(3)                                 with respect to a limited liability company, the managing member or members or managers or board of managers or any controlling committee of managing members or managers thereof; and

 

(4)                                 with respect to any other Person, the board or committee of such Person serving a similar function.

 

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“Board Resolution” means a copy of a resolution certified by the Secretary, an Assistant Secretary or another authorized Officer of the applicable Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Borrowing Base” means, with respect to borrowings under the Credit Agreement and any amendment to and/or modification or replacement thereof in the form of a reserve-based borrowing base credit facility, in each case with lenders that include commercial banks regulated by the U.S. Office of the Comptroller of the Currency, the maximum amount determined or re-determined by the lenders thereunder as the aggregate lending value to be ascribed to the Oil and Gas Properties and other assets of the Company and its Restricted Subsidiaries against which such lenders are prepared to provide loans, letters of credit or other Indebtedness to the credit parties, using customary practices and standards for determining reserve based borrowing base loans and which are generally applied to borrowers in the Oil and Gas Business by commercial lenders, as determined semi-annually during each year and/or on such other occasions as may be required or provided for therein.

 

“Broker-Dealer” has the meaning set forth in the applicable Registration Rights Agreement.

 

“Business Day” means any day other than a Saturday, Sunday, or a day on which banking institutions in New York City are authorized by law, regulation or executive order to remain closed.

 

“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty. Notwithstanding the foregoing, any arrangement (whether entered into before or after the date of this Indenture) that would not have been classified as a capital lease pursuant to GAAP as in effect on the date of this Indenture will be deemed not to represent a Capital Lease Obligation.

 

“Capital Stock” means:

 

(1)                                 in the case of a corporation, corporate stock;

 

(2)                                 in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)                                 in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and

 

(4)                                 any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the 

 

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issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

 

“Cash Equivalents” means:

 

(1)                                 United States dollars;

 

(2)                                 Government Securities having maturities of not more than one year from the date of acquisition;

 

(3)                                 certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any lender party to the Credit Agreement or with any domestic commercial bank or any branch or agency of a non-U.S. bank licensed to conduct business in the United States, in each case having combined capital and surplus of at least $100.0 million and a short term deposit rating no lower than A2 or P2 by S&P or Moody’s, respectively;

 

(4)                                 repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

 

(5)                                 commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and, in each case, maturing within one year after the date of creation thereof; and

 

(6)                                 money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition.

 

“Change of Control” means the occurrence of any of the following:

 

(1)                                 the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Subsidiaries taken as a whole to any Person (including any “person” (as that term is used in Section 13(d)(3) of the Exchange Act));

 

(2)                                 the adoption of a plan relating to the liquidation or dissolution of the Company;

 

(3)                                 the consummation of any transaction (including any merger or consolidation), the result of which is that any Person (including any “person” (as defined above)), becomes the Beneficial Owner, directly or indirectly, of more 

 

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than 50% of the Voting Stock of the Company, measured by voting power rather than number of shares; or

 

(4)                                 the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company or the merger of any Person with or into a Subsidiary of the Company if Capital Stock of the Company is issued in connection therewith, unless holders of a majority of the aggregate voting power of the Voting Stock of the Company, immediately prior to such transaction, hold securities of the surviving or transferee Person that represent, immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving Person.

 

“Clearstream” means Clearstream Banking, S.A., as operator of the Clearstream system.

 

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

 

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

 

“Company” means SRC Energy Inc., and any and all successors thereto.

 

“Consolidated EBITDAX” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:

 

(1)                                 provision for taxes based on income or profits (including state franchise taxes accounted for as income taxes in accordance with GAAP) of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus

 

(2)                                 the Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus

 

(3)                                 depreciation, depletion, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period), impairment and other non-cash charges and expenses (excluding any such non-cash charge or expense to the extent that it represents an accrual of or reserve for cash charges or expenses in any future period or amortization of a prepaid cash charge or expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, depletion, amortization, impairment and other non-cash charges or expenses were deducted in computing such Consolidated Net Income; plus

 

(4)                                 exploration and abandonment expense (if applicable) to the extent deducted in calculating such Consolidated Net Income; plus

 

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(5)                                 the accretion of interest charges on future plugging and abandonment obligations and future retirement benefits, to the extent such charges were deducted in calculating such Consolidated Net Income; plus

 

(6)                                 if such Person accounts for its oil and natural gas operations using successful efforts or a similar method of accounting, consolidated exploration expense of such Person and its Restricted Subsidiaries; minus

 

(7)                                 non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business; and minus

 

(8)                                 to the extent increasing such Consolidated Net Income for such period, the sum of (a) the amount of deferred revenues that are amortized during such period and are attributable to reserves that are subject to Volumetric Production Payments and (b) amounts recorded in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments,

 

in each case, on a consolidated basis and determined in accordance with GAAP.

 

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the net income (loss) of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP and without any reduction in respect of Preferred Stock dividends or distributions; provided that:

 

(1)                                 all extraordinary gains or losses and all gains or losses realized in connection with any Asset Sale or the disposition of securities or the early extinguishment of Indebtedness, together with any related provision for taxes on any such gain or loss, will be excluded;

 

(2)                                 the net income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person;

 

(3)                                 the net income (but not loss) of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that net income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, partners or members;

 

(4)                                 the cumulative effect of a change in accounting principles will be excluded;

 

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(5)                                 unrealized losses and gains under derivative instruments included in the determination of Consolidated Net Income, including those resulting from the application of FASB ASC 815, will be excluded; and

 

(6)                                 any asset impairment writedowns on Oil and Gas Properties under GAAP or SEC guidelines will be excluded.

 

“Consolidated Net Working Capital” of any Person as of any date of determination means the amount (shown on the balance sheet of such Person and its Restricted Subsidiaries prepared on a consolidated basis in accordance with GAAP as of the end of the most recent fiscal quarter of such Person for which internal financial statements are available) by which (a) all current assets of such Person and its Restricted Subsidiaries other than current assets from Oil and Gas Hedging Contracts, exceeds (b) all current liabilities of the Company and its Restricted Subsidiaries, other than (i) current liabilities included in Indebtedness, (ii) current liabilities associated with asset retirement obligations relating to oil and gas properties and (iii) any current liabilities from Oil and Gas Hedging Contracts, in each case as set forth in the consolidated financial statements of the Company prepared in accordance with GAAP (excluding any adjustments made pursuant to FASB ASC 815).

 

“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” will be at the address of the Trustee specified in Section 12.02 hereof (except with respect to payments on the Notes and any exchange, transfer or surrender of the Notes, in which case this address will be U.S. Bank National Association, 111 Filmore Avenue E., St. Paul, Minnesota 55017, Attention: Bond Drop Window, or, at 100 Wall Street, Suite 1600, New York, New York 10005, or such other address as to which the Trustee may give notice to the Company.

 

“Credit Agreement” means that certain Amended and Restated Credit Agreement dated as of November 28, 2012, as amended by that certain First Amendment to Credit Agreement dated as of February 12, 2013, Second Amendment to Credit Agreement dated as of June 28, 2013, Third Amendment to Credit Agreement dated as of December 20, 2013, Fourth Amendment to Credit Agreement dated as of June 3, 2014, Fifth Amendment to Amended and Restated Credit Agreement dated as of December 15, 2014, Sixth Amendment to Amended and Restated Credit Agreement dated as of June 2, 2015, Seventh Amendment to Amended and Restated Credit Agreement dated as of January 28, 2016, Eighth Amendment to Amended and Restated Credit Agreement dated as of May 3, 2016, Ninth Amendment to Amended and Restated Credit Agreement dated as of October 14, 2016, Tenth Amendment to Amended and Restated Credit Agreement dated as of April 28, 2017 and Eleventh Amendment to Amended and Restated Credit Agreement dated as of September 27, 2017, by and among SRC Energy Inc., SunTrust Bank, as administrative agent, and the lenders party thereto, including any related notes,  Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced (including 

 

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by means of sales of debt securities to institutional investors) in whole or in part from time to time.

 

“Credit Facilities” means one or more debt facilities (including the Credit Agreement) or other credit agreements, indentures, commercial paper facilities or other forms of debt financing, in each case, with banks or other institutional lenders, accredited investors or institutional investors providing for revolving credit loans, term loans, term debt, debt securities, capital market financings, private placements, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, extended, increased, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

 

“Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap agreement or other similar agreement as to which such Person is a party or a beneficiary.

 

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

 

“Customary Recourse Exceptions” means, with respect to any Non-Recourse Debt of an Unrestricted Subsidiary, exclusions from the exculpation provisions with respect to such Non-Recourse Debt for the voluntary bankruptcy of such Unrestricted Subsidiary, fraud, misapplication of cash, environmental claims, waste, willful destruction and other circumstances customarily excluded by lenders from exculpation provisions or included in separate indemnification agreements in non-recourse financings.

 

“Default” means any breach of any term of this Indenture that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

 

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 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 2.03 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 this Indenture.

 

“Designated Non-cash Consideration” means the Fair Market Value of non-cash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an officers’ certificate, setting forth the basis of such valuation, less the amount of cash 

 

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or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

 

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Company to repurchase or redeem such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 hereof. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Indenture will be the maximum amount that the Company and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.

 

“Dollar-Denominated Production Payments” means production payment obligations recorded as liabilities in accordance with GAAP, together with all undertakings and obligations in connection therewith.

 

“Domestic Subsidiary” means any Restricted Subsidiary of the Company that was formed under the laws of the United States or any state of the United States or the District of Columbia or that Guarantees or otherwise provides direct credit support for any Indebtedness of the Company (other than a Foreign Subsidiary).

 

“Equity Interests” of any Person means (1) any and all Capital Stock of such Person and (2) all rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such Capital Stock of such Person, but excluding from all of the foregoing any debt securities convertible into or exchangeable for Equity Interests, regardless of whether such debt securities include any right of participation with Equity Interests.

 

“Equity Offering” means a public or private sale of Equity Interests of the Company (other than Disqualified Stock and other than to a Subsidiary of the Company) made for cash on a primary basis by the Company, or a cash contribution to the Company’s common equity capital from any Person.

 

“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.

 

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“Exchange Notes” means the Notes issued in an Exchange Offer pursuant to Section 2.06(f) hereof in exchange for, and in an aggregate principal amount equal to, the Initial Notes or any Additional Notes in compliance with the terms of the Registration Rights Agreement and containing terms substantially identical to the Initial Notes or any Additional Notes (except that (i) such Exchange Notes will be registered under the Securities Act and will not be subject to transfer restrictions or bear the Restricted Legend and (ii) the provisions relating to Additional Interest will be eliminated).

 

“Exchange Offer” has the meaning set forth in the applicable Registration Rights Agreement.

 

“Exchange Offer Registration Statement” has the meaning set forth in the applicable Registration Rights Agreement.

 

“Existing Indebtedness” means all Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit Agreement or the Notes or the Note Guarantees) in existence on the date of this Indenture, until such amounts are repaid.

 

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the Company in the case of amounts of $20.0 million or more and otherwise by an officer of the Company (unless otherwise provided in this Indenture). Any such determination shall be conclusive.

 

“FASB ASC 815” means Financial Accounting Standards Board Accounting Standards Codification Topic No. 815, Derivatives and Hedging.

 

“First Closing” has the meaning assigned to that term in the Noble Agreement.

 

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated EBITDAX of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of Preferred Stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable  four-quarter reference period. For purposes of this definition, whenever pro forma effect is to be given to any calculation under this definition, the pro forma calculations will be determined in good faith by the chief financial or accounting officer of the specified Person; provided that such officer may in his or her discretion include any reasonably 

 

14

 

identifiable and factually supportable pro forma changes to Consolidated EBITDAX, including any pro forma expenses and cost reductions, that have occurred or in the judgment of such officer are reasonably expected to occur within 12 months of the date of the applicable transaction (regardless of whether such expense or cost reduction or any other operating improvements could then be reflected properly in pro forma financial statements prepared in accordance with Regulation S-X under the Securities Act or any other regulation or policy of the SEC) and that are set forth in an officers’ certificate signed by the chief financial or accounting officer that states (a) the amount of each such adjustment and (b) that such adjustments are based on the reasonable good faith belief of the officers executing such officers’ certificate at the time of such execution and the factual basis on which such good faith belief is based.

 

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

 

(1)                                 acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations, or by any Person or any of its Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including all related financing transactions and including increases in ownership of Restricted Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, or that are to be made on the Calculation Date, will be given pro forma effect (in accordance with Regulation S-X under the Securities Act) as if they had occurred on the first day of the four-quarter reference period;

 

(2)                                 the Consolidated EBITDAX attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;

 

(3)                                 the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;

 

(4)                                 any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period;

 

(5)                                 any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and

 

(6)                                 if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into 

 

15

 

account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months).

 

“Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:

 

(1)                                 the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (excluding (i) any interest attributable to Dollar-Denominated Production Payments, (ii) write-off of deferred financing costs and (iii) accretion of interest charges on future plugging and abandonment obligations, future retirement benefits and other obligations that do not constitute Indebtedness, but including amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings), and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates; plus

 

(2)                                 the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus

 

(3)                                 any interest on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus

 

(4)                                 all dividends or distributions, whether paid or accrued and whether or not in cash, on any series of Disqualified Stock of such Person or any series of Preferred Stock of its Restricted Subsidiaries, other than dividends or distributions on Equity Interests payable solely in Equity Interests of such Person (other than Disqualified Stock) or to such Person or a Restricted Subsidiary of such Person.

 

“Foreign Subsidiary” means any Restricted Subsidiary other than a Domestic Restricted Subsidiary.

 

“GAAP” means generally accepted accounting principles in the United States, which are in effect from time to time.

 

“GCII Acquisition” means the acquisition by the Company of approximately 30,200 net acres of undeveloped acreage and non-operated properties in Weld County, Colorado pursuant to the Noble Agreement.

 

“Global Note Legend” means the legend set forth in Section 2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.

 

“Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and 

 

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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  2.01, 2.06(b)(iii), 2.06(b)(iv), 2.06(d)(ii) and 2.06(f) hereof.

 

“Government Securities” means obligations issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support thereof).

 

“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise). When used as a verb, “Guarantee” has a correlative meaning.

 

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

 

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under any Interest Rate and Currency Hedges, Oil and Gas Hedging Contracts and other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices, in each case entered into in the ordinary course of business and for non-speculative purposes.

 

“Holder” means a Person in whose name a Note is registered.

 

“Hydrocarbons” means oil, natural gas, casing head gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, natural gas liquids, gaseous hydrocarbons and all constituents, elements or compounds thereof and products refined or processed therefrom.

 

“IAI Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes resold to Institutional Accredited Investors.

 

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:

 

(1)                                 in respect of borrowed money;

 

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(2)                                 evidenced by or issued in exchange for bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

 

(3)                                 in respect of bankers’ acceptances;

 

(4)                                 representing Capital Lease Obligations;

 

(5)                                 representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed, except any such balance that constitutes an accrued expense or a trade payable; or

 

(6)                                 representing any Interest Rate and Currency Hedges,

 

if and to the extent any of the preceding items (other than letters of credit and Interest Rate and Currency Hedges) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others of the type set forth in clauses (1)-(5) above secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person (including, with respect to any Production Payment, any warranties or guarantees of production or payment by such Person with respect to such Production Payment, but excluding other contractual obligations of such Person with respect to such Production Payment). Subject to the preceding sentence, neither Dollar-Denominated Production Payments nor Volumetric Production Payments shall be deemed to be Indebtedness.

 

In addition, “Indebtedness” of any Person shall include Indebtedness described in the preceding paragraph that would not appear as a liability on the balance sheet of such Person if:

 

(1)                                 such Indebtedness is the obligation of a Joint Venture;

 

(2)                                 such Person or a Restricted Subsidiary of such Person is a general partner of the Joint Venture (a “Joint Venture General Partner”); and

 

(3)                                 there is recourse, by contract or operation of law, with respect to the payment of such Indebtedness to property or assets of such Person or a Restricted Subsidiary of such Person; and then such Indebtedness shall be included in an amount not to exceed:

 

(a)                                 the lesser of (i) the net assets of the Joint Venture General Partner and (ii) the amount of such obligations to the extent that there is recourse, by contract or operation of law, to the property or assets of such Person or a Restricted Subsidiary of such Person; or

 

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(b)                                 if less than the amount determined pursuant to clause (a) immediately above, the actual amount of such Indebtedness that is recourse to such Person or a Restricted Subsidiary of such Person, if the Indebtedness is evidenced by a writing and is for a determinable amount and the related interest expense shall be included in Fixed Charges to the extent actually paid by such Person or its Restricted Subsidiaries.

 

Notwithstanding the preceding, “Indebtedness” of a Person shall not include:

 

(1)                                 any indebtedness that has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash or Cash Equivalents (in an amount sufficient to satisfy all such indebtedness obligations at maturity or redemption, as applicable, and all payments of interest and premium, if any) in a trust or account created or pledged for the sole benefit of the holders of such indebtedness, and subject to no other Liens;

 

(2)                                 any obligation of such Person in respect of a farm-in agreement or similar arrangement whereby such Person agrees to pay all or a share of the drilling, completion or other expenses of an exploratory or development well (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interest therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well in exchange for an ownership interest in an oil or gas property;

 

(3)                                 any repayment or reimbursement obligation of such Person or any of its Restricted Subsidiaries with respect to Customary Recourse Exceptions, unless and until an event or circumstance occurs that triggers the Person’s or such Restricted Subsidiary’s direct repayment or reimbursement obligation (as opposed to contingent or performance obligations) to the lender or other Person to whom such obligation is actually owed, in which case the amount of such direct payment or reimbursement obligation shall constitute Indebtedness;

 

(4)                                 any obligation in respect of any Oil and Gas Hedging Contract;

 

(5)                                 any obligations in respect of (a) bid, performance, completion, surety, appeal and similar bonds, (b) obligations in respect of bankers’ acceptances, (c) insurance obligations or bonds and other similar bonds and obligations and (d) any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations, in each case in the ordinary course of business and not relating to obligations for borrowed money;

 

(6)                                 any obligation arising from any agreement providing for indemnities, guarantees, purchase price adjustments, holdbacks, contingency payment obligations based on the performance of the acquired or disposed assets or similar obligations (other than Guarantees of Indebtedness) incurred by any Person in connection with the acquisition or disposition of assets; and

 

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(7)                                 all contracts and other obligations, agreements, instruments or arrangements described in clauses (18) and (27) of the definition of “Permitted Liens.”

 

“Indenture” means this Indenture, as amended or supplemented from time to time.

 

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

 

“Initial Notes” means the first $550.0 million aggregate principal amount of Notes issued under this Indenture on the date hereof.

 

“Initial Purchasers” means J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey, Inc., Deutsche Bank Securities Inc., KeyBanc Capital Markets Inc., Capital One Securities, Inc., Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Comerica Securities, Inc. and Seaport Global Securities LLC.

 

“Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.

 

“interest,” in respect of the Notes, unless the context otherwise requires, refers to interest and Additional Interest, if any.

 

“Interest Rate Agreement” means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary.

 

“Interest Rate and Currency Hedges” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement.

 

“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities (excluding any interest in an oil or natural gas leasehold), together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Company’s Investments in

 

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such Subsidiary that were not sold or disposed of in an amount determined as provided in the penultimate paragraph of Section 4.07 hereof. The acquisition by the Company or any Restricted Subsidiary of the Company of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in the penultimate paragraph of  Section 4.07 hereof. Except as otherwise provided in this Indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.

 

“Joint Venture” means a partnership or joint venture that is not a Restricted Subsidiary.

 

“Letter of Transmittal” means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction, other than a precautionary financing statement respecting a lease not intended as a security agreement.

 

“Material Subsidiary” means any Domestic Subsidiary (a) that has consolidated assets that exceed $5.0 million individually, or $15.0 million when aggregated with all other Domestic Subsidiaries that would not otherwise be deemed Material Subsidiaries, as of the end of the most recent fiscal quarter of the Company for which financial statements are required to be delivered under this Indenture, or (b) whose consolidated cash flows exceed $5.0 million individually, or $15.0 million when aggregated with all other Domestic Subsidiaries that would not otherwise be deemed Material Subsidiaries, for the period of four consecutive fiscal quarters of the Company most recently ended for which financial statements are required to be delivered under this Indenture.

 

“Moody’s” means Moody’s Investors Service, Inc., and any successor to the ratings business thereof.

 

“Net Proceeds” means the aggregate amount of cash proceeds and Cash Equivalents received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration received in any Asset Sale but excluding any non-cash consideration deemed to be cash for purposes of Section 4.10 hereof), net of the direct costs relating to such Asset Sale, including legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after

 

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taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale or in order to obtain a necessary consent to such Asset Sale, distributions and other payments required to be made to holders of minority interests in subsidiaries or joint ventures as a result of the Asset Sale, and any escrow or reserve for adjustment or indemnification obligations in respect of the sale price of such asset or assets established in accordance with GAAP.

 

“Noble Agreement” means the purchase and sale agreement dated November 7, 2017, among the Company, Noble Energy, Inc. and Noble Energy Wyco, LLC, a subsidiary of Noble Energy, Inc., related to the GCII Acquisition.

 

“Non-Recourse Debt” means Indebtedness:

 

(1)                                 as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable as a guarantor or otherwise, in each case other than (i) Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any joint venture owned by the Company or any Restricted Subsidiary to the extent securing otherwise Non-Recourse Debt of such Unrestricted Subsidiary or joint venture and (ii) Customary Recourse Exceptions; and

 

(2)                                 as to which the lenders have been notified in writing that they will not have any recourse to the Capital Stock or assets of the Company or any of its Restricted Subsidiaries (other than the Equity Interests of an Unrestricted Subsidiary or any joint venture owned by the Company or any Restricted Subsidiary), except for Customary Recourse Exceptions.

 

“Non-U.S. Person” means a Person who is not a U.S. Person.

 

“Note Guarantee” means the Guarantee by each Guarantor of the Company’s Obligations under this Indenture and the Notes, as provided in Article 10 hereof.

 

“Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes, any Additional Notes and any Exchange Notes shall be treated as a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes, any Additional Notes and any Exchange Notes.

 

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

 

“Offering Memorandum” means the Offering Memorandum of the Company, dated November 14, 2017, relating to the initial offering of the Notes.

 

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“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.

 

“Officers’ Certificate” means a certificate that meets the requirements of Section 12.05 hereof and is signed on behalf of the Company by two of the Officers of the Company, one of whom must be the principal executive officer, the principal financial officer or the principal accounting officer of the Company in the case of the Officers’ Certificate delivered pursuant to Section 4.03 hereof.

 

“Oil and Gas Business” means (i) the acquisition, exploitation, exploration, development, production, operation and disposition of interests in oil, gas and other Hydrocarbon properties, (ii) the gathering, marketing, treating, processing, refining, storage, selling and transporting of any production from such interests or properties and products produced in association therewith, (iii) any business relating to exploration for or development, production, treatment, processing, refining, storage, transportation or marketing of oil, gas and other minerals and products produced in association therewith, (iv) oil field sales and services and related activities, (v) development, purchase and sale of real estate and interests therein, and (vi) any activity that is ancillary to or necessary or appropriate for the activities described in clauses (i) through (v) of this definition.

 

“Oil and Gas Hedging Contracts” means any puts, cap transactions, floor transactions, collar transactions, forward contract, commodity swap agreement, commodity option agreement or other similar agreement or arrangement in respect of Hydrocarbons to be used, produced, processed or sold by the Company or any of its Restricted Subsidiaries that are customary in the Oil and Gas Business and designed to protect such Person against fluctuation in Hydrocarbons prices and not for speculative purposes.

 

“Oil and Gas Properties” means all properties, including equity or other ownership interest therein, owned by such Person or any of its Restricted Subsidiaries which contain or are believed to contain Proved Reserves.

 

“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 12.05 hereof. Such counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee.

 

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

 

“Permitted Acquisition Indebtedness” means Indebtedness or Disqualified Stock of the Company or any of its Restricted Subsidiaries to the extent such Indebtedness or Disqualified Stock was Indebtedness or Disqualified Stock of any other Person existing at the time (a) such Person became a Restricted Subsidiary of the

 

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Company or (b) such Person was merged or consolidated with or into the Company or any of its Restricted Subsidiaries, provided that on the date such Person became a Restricted Subsidiary or the date such Person was merged or consolidated with or into the Company or any of its Restricted Subsidiaries, as applicable, either

 

(1)                                 immediately after giving effect to such transaction and any related financing transaction on a pro forma basis as if the same had occurred at the beginning of the applicable four-quarter period, the Company or such Person (if the Company is not the survivor in the transaction) would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof, or

 

(2)                                 immediately after giving effect to such transaction and any related financing transaction on a pro forma basis as if the same had occurred at the beginning of the applicable four-quarter period, the Fixed Charge Coverage Ratio of the Company or such Person (if the Company is not the survivor in the transaction) is equal to or greater than the Fixed Charge Coverage Ratio of the Company immediately prior to such transaction.

 

“Permitted Business Investments” means investments made in the ordinary course of, and of a nature that is or shall have become customary in, the Oil and Gas Business as a means of actively exploiting, exploring for, acquiring, developing, processing, gathering, marketing or transporting oil and gas and other Hydrocarbons through agreements, transactions, interests or arrangements which permit one to share risks or costs, comply with regulatory requirements regarding local ownership or satisfy other objectives customarily achieved through the conduct of Oil and Gas Business jointly with third parties, including without limitation (i) ownership interests in oil, natural gas, other Hydrocarbon properties or any interest therein, processing facilities or gathering, transportation, processing, storage or related systems and ancillary real property interest, (ii) Investments in the form of or pursuant to operating agreements, processing agreements, farm-in agreements, farm-out agreements, developments agreements, area of mutual interest agreements, unitization agreements, pooling agreements, joint bidding agreements, service contracts, joint venture agreements, partnership agreements (whether general or limited), subscription agreements, stock purchase agreements and other similar agreements (including for limited liability companies) with third parties, and (iii) direct or indirect ownership interests or Investments in drilling rigs, fracturing units and other related equipment or in Persons that own or provide such equipment.

 

“Permitted Investments” means:

 

(1)                                 any Investment in the Company or in a Restricted Subsidiary of the Company;

 

(2)                                 any Investment in Cash Equivalents;

 

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(3)                                 any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment:

 

(a)                                 such Person becomes a Restricted Subsidiary of the Company; or

 

(b)                                 such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its properties or assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company;

 

(4)                                 any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof, including pursuant to an Asset Swap;

 

(5)                                 any acquisition of assets or Capital Stock solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company;

 

(6)                                 any Investments received in compromise or resolution of (a) obligations of trade creditors or customers that were incurred in the ordinary course of business of the Company or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (b) litigation, arbitration or other disputes;

 

(7)                                 Investments represented by Hedging Obligations;

 

(8)                                 loans or advances to officers, directors or employees made in the ordinary course of business of the Company or any Restricted Subsidiary of the Company in an aggregate principal amount not to exceed $5.0 million at any one time outstanding;

 

(9)                                 repurchases of the Notes;

 

(10)                          any Guarantee of Indebtedness permitted to be incurred by Section 4.09 hereof other than a Guarantee of Indebtedness of an Affiliate of the Company that is not a Restricted Subsidiary of the Company;

 

(11)                          any Investment existing on, or made pursuant to binding commitments existing on, the date of this Indenture and any Investment consisting of an extension, modification or renewal of any Investment existing on, or made pursuant to a binding commitment existing on, the date of this Indenture; provided that the amount of any such Investment may be increased (a) as required by the terms of such Investment as in existence on the date of this Indenture or (b) as otherwise permitted under this Indenture;

 

(12)                          Investments acquired after the date of this Indenture as a result of the acquisition by the Company or any Restricted Subsidiary of the Company of

 

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another Person, including by way of a merger, amalgamation or consolidation with or into the Company or any of its Restricted Subsidiaries, or all or substantially all of the properties or assets of another Person, in each case, in a transaction that is not prohibited by Section 5.01 hereof to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

 

(13)                          Permitted Business Investments;

 

(14)                          advances and prepayments for asset purchases in the ordinary course of business;

 

(15)                          receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

 

(16)                          surety and performance bonds and workers’ compensation, utility, lease, tax, performance and similar deposits and prepaid expenses in the ordinary course of business;

 

(17)                          guarantees by the Company or any of its Restricted Subsidiaries of operating leases (other than Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Company or any such Restricted Subsidiary in the ordinary course of business;

 

(18)                          Investments in any units of any oil and gas royalty trust; and

 

(19)                          other Investments in any Person other than an Affiliate of the Company that is not a Subsidiary of the Company having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (19) that are at the time outstanding not to exceed the greater of (a) $50.0 million and (b) 4.0% of Adjusted Consolidated Net Tangible Assets; provided, however, that if any Investment pursuant to this clause (19) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (19) for so long as such Person continues to be a Restricted Subsidiary.

 

“Permitted Liens” means:

 

(1)                                 Liens on assets of the Company or any Guarantor securing Indebtedness and other Obligations under Credit Facilities that were incurred pursuant to clause (1) of the definition of Permitted Debt or securing Hedging

 

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Obligations related thereto or securing Obligations with regard to Treasury Management Arrangements;

 

(2)                                 Liens in favor of the Company or a Restricted Subsidiary;

 

(3)                                 Liens on property of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company or is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such Person becoming a Restricted Subsidiary of the Company or such merger or consolidation and do not extend to any assets other than those of the Person that becomes a Restricted Subsidiary of the Company or is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company;

 

(4)                                 Liens on property (including Capital Stock) existing at the time of acquisition of the property by the Company or any Subsidiary of the Company; provided that such Liens were in existence prior to such acquisition and not incurred in contemplation of such acquisition;

 

(5)                                 Liens to secure the performance of statutory obligations, insurance, surety or appeal bonds, workers’ compensation obligations, bid, plugging and abandonment and performance bonds, deposits as security for tax and other obligations, or other obligations of a like nature incurred in the ordinary course of business (including Liens to secure letters of credit issued to assure payment of such obligations);

 

(6)                                 Liens to secure Indebtedness (including Capital Lease Obligations) permitted by Section 4.09(b)(iv) hereof covering only the assets acquired with or financed by such Indebtedness;

 

(7)                                 Liens existing on the date of this Indenture (other than Liens pursuant to any Credit Facilities);

 

(8)                                 Liens created for the benefit of (or to secure) the Notes (or the Note Guarantees);

 

(9)                                 Liens for taxes, assessments or other governmental charges or which are being contested in good faith by appropriate proceedings provided appropriate reserves required pursuant to GAAP have been made in respect thereof;

 

(10)                          Liens on insurance policies and proceeds thereof, or other deposits, to secure insurance premium financings;

 

(11)                          filing of Uniform Commercial Code financing statements as a precautionary measure in connection with operating leases;

 

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(12)                          bankers’ Liens, rights of setoff, Liens arising out of judgments or awards not constituting an Event of Default and notices of lis pendens and associated rights related to litigation and Liens for taxes, assessments or other governmental charges being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

 

(13)                          Liens on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge or redemption of Indebtedness;

 

(14)                          Liens on specific items of inventory or other goods (and the proceeds thereof) of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created in the ordinary course of business for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

(15)                          grants of software and other technology licenses in the ordinary course of business;

 

(16)                          Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

 

(17)                          Liens in respect of Production Payments and Reserve Sales; provided, that such Liens are limited to the property that is subject to such Production Payments and Reserve Sales;

 

(18)                          Liens arising under oil and gas leases or subleases, assignments, farm-out agreements, farm-in agreements, division orders, contracts for the sale, purchase, exchange, transportation, gathering or processing of Hydrocarbons, unitizations and pooling designations, declarations, orders and agreements, development agreements, joint venture agreements, partnership agreements, operating agreements, royalties, working interests, net profits interests, joint interest billing arrangements, participation agreements, production sales contracts, area of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, licenses, sublicenses and other agreements which are customary in the Oil and Gas Business; provided, however, in all instances that such Liens are limited to the assets that are the subject of the relevant agreement, program, order or contract;

 

(19)                          Liens to secure performance of Hedging Obligations of the Company or any of its Restricted Subsidiaries not for speculative purposes;

 

(20)                          Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to Indebtedness that does not exceed in aggregate principal amount, at any one time outstanding, the greater of (a) $50.0 million and (b) 5.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence;

 

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(21)                          landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or similar Liens arising by contract or statute in the ordinary course of business and with respect to amounts which are not yet delinquent or are being contested in good faith by appropriate proceedings;

 

(22)                          encumbrances, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

 

(23)                          Liens on pipelines and pipeline facilities that arise by operation of law;

 

(24)                          Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any joint venture owned by the Company or any Restricted Subsidiary to the extent securing Non-Recourse Debt of such Unrestricted Subsidiary or joint venture;

 

(25)                          Liens on escrowed proceeds of debt securities or other Indebtedness permitted by this Indenture, or on cash similarly set aside at the time of the incurrence of any Indebtedness permitted by this Indenture, or government securities purchased with such cash;

 

(26)                          leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole;

 

(27)                          Liens arising under this Indenture in favor of the trustee for its own benefit and similar Liens in favor of other trustees, agents and representatives arising under instruments governing Indebtedness permitted to be incurred under this Indenture; provided that such Liens are solely for the benefit of the trustees, agents or representatives in their capacities as such and not for the benefit of the holders of this Indebtedness; and

 

(28)                          any Lien renewing, extending, refinancing or refunding a Lien permitted by this definition, including Permitted Refinancing Indebtedness, provided that (a) the principal amount of the Indebtedness secured by such Lien is not increased except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection therewith and by an amount equal to any existing commitments unutilized thereunder and (b) no assets encumbered by any such Lien other than the assets permitted to be encumbered immediately prior to such renewal, extension, refinance or refund are encumbered thereby (other than improvements thereon, accessions thereto and proceeds thereof).

 

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“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company (a) issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge, or (b) constituting an amendment to or a deferral or renewal of, other Indebtedness of the Company or any of its Restricted Subsidiaries (other than intercompany Indebtedness) or any Disqualified Stock of the Company; provided that:

 

(1)                                 the principal amount (or accreted value, if applicable), or in the case of Disqualified Stock, the amount thereof determined in accordance with the definition of Disqualified Stock, of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness or the amount of the Disqualified Stock renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness or accrued and unpaid dividends on the Disqualified Stock, as the case may be, and the amount of all fees and expenses, including premiums, incurred in connection therewith);

 

(2)                                 such Permitted Refinancing Indebtedness has a final maturity date or redemption date, as applicable, that is (a) later than the final maturity date or redemption date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness or Disqualified Stock being renewed, refunded, refinanced, replaced, defeased or discharged or (b) more than 90 days after the final maturity date of the Notes;

 

(3)                                 if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes or the Note Guarantees, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes or the Note Guarantees, as applicable, on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and

 

(4)                                 such Indebtedness is incurred (other than by way of a Guarantee) or Disqualified Stock is issued either by the Company or by the Restricted Subsidiary of the Company that was the obligor on the Indebtedness or Disqualified Stock being renewed, refunded, refinanced, replaced, defeased or discharged; provided that a Restricted Subsidiary that is also a Guarantor may guarantee Permitted Refinancing Indebtedness incurred by the Company, regardless of whether such Restricted Subsidiary was an obligor or guarantor of the Indebtedness being refinanced.

 

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

 

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“Preferred Stock” means, with respect to any Person, any and all preferred or preference stock or other similar Equity Interests (however designated) of such Person whether outstanding or issued after the date of this Indenture.

 

“Private Placement Legend” means the legend set forth in Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

 

“Production Payments” means Dollar-Denominated Production Payments and Volumetric Production Payments, collectively.

 

“Production Payments and Reserve Sales” means the grant or transfer by the Company or any of its Restricted Subsidiaries to any Person of a royalty, overriding royalty, net profits interest, Production Payment, partnership or other interest in Oil and Gas Properties, reserves or the right to receive all or a portion of the production or the proceeds from the sale of production attributable to such properties where the holder of such interest has recourse solely to such production or proceeds of production, subject to the obligation of the grantor or transferor to operate and maintain, or cause the subject interests to be operated and maintained, in a reasonably prudent manner or other customary standard or subject to the obligation of the grantor or transferor to indemnify for environmental, title or other matters customary in the Oil and Gas Business, including any such grants or transfers pursuant to incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists or other providers of technical services to the Company or any of its Restricted Subsidiaries.

 

“Proved Reserves” means crude oil and natural gas reserves constituting “proved oil and gas reserves” as defined in Rule 4-10 of Regulation S-X of the Securities Act.

 

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of November 29, 2017, among the Company and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time and, with respect to any Additional Notes, one or more registration rights agreements among the Company and the other parties thereto, as such agreement(s) may be amended, modified or supplemented from time to time, relating to rights given by the Company to the purchasers of Additional Notes to register such Additional Notes under the Securities Act.

 

“Regulation S” means Regulation S promulgated under the Securities Act.

 

“Regulation S Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S.

 

“Reporting Default” means a Default described in Section 6.01(d) hereof.

 

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“Responsible Officer,” when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

 

“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

 

“Restricted Global Note” means a Global Note bearing the Private Placement Legend.

 

“Restricted Investment” means an Investment other than a Permitted Investment.

 

“Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.

 

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

 

“Rule 144” means Rule 144 promulgated under the Securities Act.

 

“Rule 144A” means Rule 144A promulgated under the Securities Act.

 

“Rule 903” means Rule 903 promulgated under the Securities Act.

 

“Rule 904” means Rule 904 promulgated under the Securities Act.

 

“S&P” means Standard & Poor’s Ratings Services, and any successor to the ratings business thereof.

 

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

 

“Shelf Registration Statement” means the Shelf Registration Statement as defined in the applicable Registration Rights Agreement.

 

“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture.

 

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the first date it was incurred in compliance with the terms of this Indenture, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal

 

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prior to the date originally scheduled for the payment thereof; provided that, in the case of debt securities that are by their terms convertible into Capital Stock (or cash or a combination of cash and Capital Stock based on the value of the Capital Stock) of the Company, any obligation to offer to repurchase such debt securities on a date(s) specified in the original terms of such securities, which obligation is not subject to any condition or contingency, will be treated as a Stated Maturity date of such convertible debt securities.

 

“Subsidiary” means, with respect to any specified Person:

 

(1)                                 any corporation, association or other business entity (other than a partnership or limited liability company) of which more than 50% of the total voting power of its Voting Stock is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

 

(2)                                 any partnership or limited liability company of which (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

 

“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).

 

“Treasury Management Arrangement” means any agreement or other arrangement governing the provision of treasury or cash management services, including deposit accounts, overdraft, credit or debit card, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.

 

“Treasury Rate” means, in respect of any redemption date, the yield to maturity, as of the time of computation, of the most recently issued United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to such time (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to December 1, 2020; provided, however, that if the period from the redemption date to December 1, 2020, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used. The Company will (a) calculate the Treasury Rate no later than the second (and no earlier than the fourth) Business Day preceding the applicable redemption date (or, in the case of any redemption in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture, on the Business Day preceding

 

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such event) and (b) prior to such redemption date file with the Trustee a statement setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail.

 

“Trustee” means U.S. Bank National Association, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

 

“Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.

 

“Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.

 

“Unrestricted Subsidiary” means any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary through merger or consolidation or Investment therein) that is designated by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:

 

(1)                                 has no Indebtedness other than Non-Recourse Debt;

 

(2)                                 except as permitted by Section 4.11 hereof, is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;

 

(3)                                 is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and

 

(4)                                 has not Guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries, except to the extent such Guarantee would be released upon such designation.

 

All Subsidiaries of an Unrestricted Subsidiary shall also be Unrestricted Subsidiaries.

 

“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.

 

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“Volumetric Production Payments” means production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertakings and obligations in connection therewith.

 

“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person entitling the holders thereof (whether at all times or only so long as no senior class of Capital Stock has voting power by reason of any contingency) to vote in the election of members of the Board of Directors of such Person; provided that with respect to a limited partnership or other entity which does not have a Board of Directors, Voting Stock means the Capital Stock of the general partner of such limited partnership or other business entity with the ultimate authority to manage the business and operations of such Person.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified Stock at any date, the number of years obtained by dividing:

 

(1)                                 the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity or redemption, in respect of the Indebtedness or Disqualified Stock, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

 

(2)                                 the then outstanding aggregate amount of such Indebtedness or Disqualified Stock.

 

Section 1.02.                          Other Definitions.

 

	
Term
    	
 
    	
Defined in
   Section
    
	
Affiliate Transaction
    	
 
    	
4.11
    
	
Alternate Offer
    	
 
    	
4.15
    
	
Asset Sale Offer
    	
 
    	
4.10
    
	
Authentication Order
    	
 
    	
2.02
    
	
Change of Control Offer
    	
 
    	
4.15
    
	
Change of Control Payment
    	
 
    	
4.15
    
	
Change of Control Payment Date
    	
 
    	
4.15
    
	
Covenant Defeasance
    	
 
    	
8.03
    
	
DTC
    	
 
    	
2.03
    
	
Event of Default
    	
 
    	
6.01
    
	
Excess Proceeds
    	
 
    	
4.10
    
	
incur
    	
 
    	
4.09
    
	
Initial Lien
    	
 
    	
4.12
    
	
Legal Defeasance
    	
 
    	
8.02
    
	
Offer Amount
    	
 
    	
3.09
    
	
Offer Period
    	
 
    	
3.09
    
	
Paying Agent
    	
 
    	
2.03
    

 

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Payment Default
    	
 
    	
6.01
    
	
Permitted Debt
    	
 
    	
4.09
    
	
Purchase Date
    	
 
    	
3.09
    
	
Redemption Notice Date
    	
 
    	
3.08
    
	
Registrar
    	
 
    	
2.03
    
	
Restricted Payments
    	
 
    	
4.07
    
	
Special Mandatory Redemption Date
    	
 
    	
3.08
    
	
Special Mandatory Redemption Event
    	
 
    	
3.08
    
	
Special Mandatory Redemption Price
    	
 
    	
3.08
    
	
Suspension Period
    	
 
    	
4.18
    

 

Section 1.03.                          Incorporation by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

 

The following TIA terms used in this Indenture have the following meanings:

 

“indenture securities” means the Notes;

 

“indenture security Holder” means a Holder of a Note;

 

“indenture to be qualified” means this Indenture;

 

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

 

“obligor” on the Notes and the Note Guarantees means the Company and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively.

 

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

 

Section 1.04.                          Rules of Construction.

 

Unless the context otherwise requires:

 

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

 

(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;

 

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

 

(f)                          provisions apply to successive events and transactions;

 

(g)                         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

 

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

 

Article 2
 THE NOTES

 

Section 2.01.                          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 this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this 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 this Indenture, the provisions of this Indenture shall govern and be controlling. If any Additional Notes issued are not fungible with the Initial notes for U.S. federal income tax purposes, the Additional Notes shall have a separate “CUSIP” number.

 

(b)                        Global Notes. Notes issued in global form will be substantially in the form of Exhibits A hereto (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 2.06 hereof.

 

(c)                         Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating Procedures of the Euroclear System” and the “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream

 

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Banking” and “Customer Handbook” of Clearstream will be applicable to transfers of beneficial interests in the Regulation S Global Note that are held by Participants through Euroclear or Clearstream.

 

Section 2.02.                          Execution and Authentication.  At least one Officer must sign the Notes for the Company 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 this Indenture.

 

The Trustee will, upon receipt of a written order of the Company signed by an Officer of the Company (an “Authentication Order”), authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes and any Exchange 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 Company pursuant to one or more Authentication Orders, except as provided in Section 2.07(a) hereof.

 

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

 

Section 2.03.                          Registrar and Paying Agent.  The Company 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 Company 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 Company may change any Paying Agent or Registrar without notice to any Holder. The Company will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of the Company’s Subsidiaries may act as Paying Agent or Registrar.

 

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

 

The Company initially appoints the Trustee to act as the Registrar and Paying Agent (at its office indicated in the definition of Corporate Trust Office of the Trustee in Section 1.01 hereof) and to act as Custodian with respect to the Global Notes.

 

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Section 2.04.                          Paying Agent to Hold Money in Trust.  The Company 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, premium, if any, on, and interest or Additional Interest, if any, on, the Notes, and will notify the Trustee of any default by the Company 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 Company 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 Company or a Subsidiary) will have no further liability for the money. If the Company or a Subsidiary 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 Company, the Trustee will serve as Paying Agent for the Notes.

 

Section 2.05.                          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 Company 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 Company shall otherwise comply with TIA §312(a).

 

Section 2.06.                          Transfer and Exchange.  (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred 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 Global Notes will be exchanged by the Company for Definitive Notes if:

 

(i)                                     the Depositary (A) notifies the Company that it is unwilling or unable to continue to act as Depositary or (B) has ceased to be a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 90 days after the date of such notice from the Depositary;

 

(ii)                                  the Company, at its option but subject to the Depositary’s requirements, notifies the Trustee in writing that it elects to cause the issuance of the Definitive Notes; or

 

(iii)                               there has occurred and is continuing an Event of Default and the Depositary notifies the Trustee of its decision to exchange such Global Note for Definitive Notes.

 

Upon the occurrence of any of the preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as

 

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provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06,  2.07 or  2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) 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 this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

 

(i)                                     Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).

 

(ii)                                  All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either:

 

(A)                               both:

 

(1)                                 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

 

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

 

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(B)                               both:

 

(1)                                 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

 

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

 

Upon consummation of an Exchange Offer by the Company in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

 

(iii)                               Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) above and the Registrar receives the following:

 

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

 

(B)                               if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (ii) thereof; and

 

(C)                               if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (iii) thereof, if applicable.

 

(iv)                              Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person 

 

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

 

(A)                               such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the applicable Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;

 

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

 

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

 

(D)                               the Registrar receives the following:

 

(1)                                 if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

 

(2)                                 if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in Section 2.06(b)(iv)(D) hereof, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

If any such transfer is effected pursuant to either Section 2.06(b)(iv)(B) or (D) hereof at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an 

 

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aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred.

 

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

 

(c)                                  Transfer or Exchange of Beneficial Interests for Definitive Notes.

 

(i)                                     Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation:

 

(A)                               if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

 

(B)                               if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

 

(C)                               if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

 

(D)                               if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;

 

(E)                                if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;

 

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

 

(G)                               if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to 

 

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the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,

 

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

 

(ii)                                  Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:

 

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

 

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

 

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

 

(D)                               the Registrar receives the following:

 

(1)                                 if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

 

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(2)                                 if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in Section 2.06(d)(i)(D)Section 2.06(c)(3)(D) hereof, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

(iii)                               Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company 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 2.06(c)(iii) 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. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) will not bear the Private Placement Legend.

 

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

 

(i)                                     Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

 

(A)                               if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

 

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(B)                               if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

 

(C)                               if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

 

(D)                               if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;

 

(E)                                if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;

 

(F)                                 if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or

 

(G)                               if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,

 

the Trustee will cancel the Restricted Definitive Note, and will increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note.

 

(ii)                                  Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

 

(A)                               such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the applicable Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the 

 

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distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;

 

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

 

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

 

(D)                               the Registrar receives the following:

 

(1)                                 if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

 

(2)                                 if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in Section 2.06(d)(ii)(D) hereof, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

 

(iii)                               Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

 

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an 

47

 

Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

 

(e)                                  Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar 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. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).

 

(i)                                     Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

 

(A)                               if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

 

(B)                               if the transfer will be made pursuant to Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and

 

(C)                               if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.

 

(ii)                                  Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

 

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

 

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

 

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

 

(D)                               the Registrar receives the following:

 

(1)                                 if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

 

(2)                                 if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in Section 2.06(e)(ii)(D) hereof, if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

(iii)                               Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

 

(f)                                   Exchange Offer. Upon the occurrence of an Exchange Offer in accordance with the applicable Registration Rights Agreement, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate:

 

(i)                                     one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of the Company; and

 

(ii)                                  Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for

 

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exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of the Company.

 

Concurrently with the issuance of such Notes, the Trustee will cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company will execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount.

 

(g)                                  Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued hereunder unless specifically stated otherwise in the applicable provisions hereof.

 

(i)                                     Private Placement Legend.

 

(A)                               Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ‘SECURITIES ACT’), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

 

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE ‘RESALE RESTRICTION TERMINATION DATE’) THAT IS IN THE CASE OF RULE 144A NOTES: ONE YEAR (OR SUCH SHORTER PERIOD THEN REQUIRED UNDER RULE 144 OR ITS SUCCESSOR RULE) OR IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A  REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE 

 

50

 

SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A ‘QUALIFIED INSTITUTIONAL BUYER’ AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL ‘ACCREDITED INVESTOR’ WITHIN THE MEANING OF RULE 501(a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’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER THAT IS NOT AN AFFILIATE OF THE COMPANY AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.”

 

(B)                               Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs 2.06(b)(iv), 2.06(c)(ii), 2.06(c)(iii), 2.06(d)(ii), 2.06(d)(iii), 2.06(e)(ii), 2.06(e)(iii) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) will not bear the Private Placement Legend.

 

(ii)                                  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 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(A) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE 

 

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TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

 

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 COMPANY 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.”

 

(h)                                 Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or beneficial interests in other Global 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 2.11 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.

 

(i)                                     General Provisions Relating to Transfers and Exchanges.

 

(i)                                     To permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

 

(ii)                                  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 

 

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transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections  2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).

 

(iii)                               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 Company, evidencing the same debt, and entitled to the same benefits hereunder, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

 

(iv)                              Neither the Registrar nor the Company 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 3.02 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.

 

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

 

(vi)                              The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.

 

(vii)                           All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

 

Section 2.07.                          Replacement Notes.  If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company 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 Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent 

 

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from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note.

 

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

 

Section 2.08.                          Outstanding Notes.  The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of Section 3.07(a) hereof.

 

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

 

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

 

If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, by 10:00 a.m. Eastern 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 2.09.                          Treasury Notes.  In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or any Guarantor, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Guarantor, 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 actually knows are so owned will be so disregarded.

 

Section 2.10.                          Temporary Notes.  Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Company will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.

 

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

 

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Section 2.11.                          Cancellation.  The Company 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 Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

 

Section 2.12.                          Defaulted Interest.  If the Company 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, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company 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 Company 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 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) 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 2.13.                          CUSIP Numbers.  The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

 

Article 3
 REDEMPTION AND PREPAYMENT

 

Section 3.01.                          Notices to Trustee.  If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 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 this Indenture pursuant to which the redemption shall occur;

 

(b)                                 the redemption date;

 

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

 

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

 

Section 3.02.                          Selection of Notes to Be Redeemed.  If less than all of the Notes are to be redeemed under any of the redemption provisions in this Indenture, the Trustee will select Notes for redemption on a pro rata basis (or, in the case of Notes issued in global 

 

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form pursuant to Article 2 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) unless otherwise required by law or applicable stock exchange or depositary requirements. Notwithstanding the foregoing, no Notes of $2,000 or less can be redeemed in part.

 

In the event of partial redemption by lot, the particular Notes to be redeemed will be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.

 

The Trustee will promptly notify the Company 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 this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

 

Section 3.03.                          Notice of Redemption.  At least 30 days but not more than 60 days before a redemption date, the Company will mail or cause to be mailed, by first class mail, or send 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 sent 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 this Indenture pursuant to 8 or 11 hereof.

 

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 Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

 

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

 

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

 

At the Company’s request, the Trustee will give the notice of redemption in the Company’s name and at the Company’s expense; provided, however, that the Officers’ Certificate delivered to the Trustee pursuant to Section 3.01 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.

 

Any such redemption may, at the Company’s discretion, be subject to one or more conditions precedent, including any related Equity Offering. 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 Company’s discretion, the date of redemption may be delayed until such time as any or all such 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 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.

 

Section 3.04.                          Effect of Notice of Redemption.  Once notice of redemption is sent in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable (subject to the provisions of  Section 3.03 hereof) on the redemption date at the redemption price.

 

Section 3.05.                          Deposit of Redemption or Purchase Price.  No later than 10:00 a.m. Eastern Time on the redemption or purchase date, the Company will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of, and accrued interest and Additional 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 Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest and Additional Interest, if any, on, all Notes to be redeemed or purchased.

 

If the Company 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 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 Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until 

 

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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 and in Section 4.01 hereof.

 

Section 3.06.                          Notes Redeemed or Purchased in Part.  Upon surrender of a Note, that is not a Global Note, that is redeemed or purchased in part, the Company will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for, and deliver to, the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.  For Notes issued in Global Form, the Trustee will reflect the amount of any increase or decrease as appropriate to reflect the amount outstanding at the request of the Company.

 

Section 3.07.                          Optional Redemption.  (a) At any time prior to December 1, 2020, the Company may, on any one or more occasions, redeem up to 35% of the aggregate principal amount of Notes issued under this Indenture, upon notice as provided in this Indenture, at a redemption price equal to 106.250% of the principal amount of the Notes redeemed, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the rights of Holders on the relevant record date to receive interest on the relevant interest payment date), with an amount of cash not greater than the net cash proceeds of one or more Equity Offerings by the Company, provided that:

 

(i)                                     at least 65% of the aggregate principal amount of Notes originally issued under this Indenture (excluding any Additional Notes and Notes held by the Company and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and

 

(ii)                                  the redemption occurs within 180 days of the date of the closing of such Equity Offering.

 

(b)                                 At any time prior to December 1, 2020, the Company may on any one or more occasions redeem all or a part of the Notes, upon notice as provided in this Indenture, at a redemption price equal to:

 

(i)                                     100% of the principal amount of the Notes redeemed, plus

 

(ii)                                  the Applicable Premium,

 

plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date).

 

(c)                                  Except pursuant to Section 3.07(a), (b) or (e) hereof, Section 3.08 hereof or Section 4.15(e) hereof, the Notes will not be redeemable prior to December 1, 2020.

 

(d)                                 On or after December 1, 2020, the Company may on any one or more occasions redeem all or a part of the Notes, upon notice as provided in this Indenture, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, on the Notes redeemed, to the applicable date of redemption, if redeemed during the twelve-month period 

 

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beginning on December 1 of the years indicated below, subject to the rights of Holders on the relevant record date to receive interest on the relevant interest payment date:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
2020
    	
 
    	
104.688
    	
%
    
	
2021
    	
 
    	
103.125
    	
%
    
	
2022
    	
 
    	
101.563
    	
%
    
	
2023 and thereafter
    	
 
    	
100.000
    	
%
    

 

Unless the Company defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.

 

(e)                                  The Company may redeem all (but not a portion of) the Notes when permitted by, and pursuant to the conditions in, Section 4.15(e) hereof.

 

(f)                                   Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

 

Section 3.08.                          Special Mandatory Redemption.  (a)  The Company shall redeem the Notes, in whole but not in part, in accordance with this Section 3.08 at a special mandatory redemption price (the “Special Mandatory Redemption Price”) equal to 100% of the aggregate principal amount of the Notes, plus accrued and unpaid interest on the principal amount of the Notes to, but not including, the Special Mandatory Redemption Date, (A) if the First Closing is not completed on or prior to January 10, 2018 (provided that, if the Noble Agreement is amended to extend the date of the First Closing beyond January 10, 2018, this date will be extended to the termination date of the First Closing set forth in such amendment, but in no case shall this date be extended beyond March 15, 2018) or (B) if, prior to such date, the Noble Agreement is terminated (each, a “Special Mandatory Redemption Event”).

 

(b) Upon the occurrence of a Special Mandatory Redemption Event, the Company shall promptly (but in no event later than five (5) Business Days following such Special Mandatory Redemption Event) notify the Trustee in writing of such event, and the Trustee shall, no later than five (5) Business Days following receipt of such notice from the Company, notify the Holders (such date of notification to the Holders, the “Redemption Notice Date”) that the Notes will be redeemed on the 15th day following the Redemption Notice Date (such date, the “Special Mandatory Redemption Date”), in each case in accordance with the applicable provisions set forth herein (except that the time periods in Article 3, to the extent inconsistent with the time periods in this Section 3.08, shall be superseded by the time periods set forth in this Section 3.08). The Trustee, upon receipt of the notice specified above, on the Redemption Notice Date shall, on  behalf of the Company, notify each Holder in accordance with the applicable provisions of this Indenture that all of the outstanding Notes shall be redeemed at the Special Mandatory Redemption Price on the Special Mandatory Redemption Date automatically and without any further action by the Holders of the Notes. At or prior to 12:00 p.m. (New York City time) on the Business Day immediately preceding the Special

 

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Mandatory Redemption Date, the Company shall deposit with the Trustee funds sufficient to pay the Special Mandatory Redemption Price for the Notes. If such deposit is made as provided in this Section 3.08(b), the notes will cease to bear interest on and after the Special Mandatory Redemption Date.

 

Section 3.09.                          Offer to Purchase by Application of Excess Proceeds.  In the event that, pursuant to Section 4.10 hereof, the Company is required to commence an Asset Sale Offer to all Holders to purchase Notes, it will follow the procedures specified below.

 

The Asset Sale Offer shall be made to all Holders and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase, prepay or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than three Business Days after the termination of the Offer Period (the “Purchase Date”), the Company will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered, if applicable) or, if less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased will be made in the same manner as interest payments are made.

 

If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

 

Upon the commencement of an Asset Sale Offer, the Company will send, by first class mail, or send electronically if DTC is the recipient, a notice to the Trustee and each of the Holders. The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the terms of the Asset Sale Offer, will state:

 

(a)                                 that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer will remain open;

 

(b)                                 the Offer Amount, the purchase price and the Purchase Date;

 

(c)                                  that any Note not tendered or accepted for payment will continue to accrue interest;

 

(d)                                 that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest on and after the Purchase Date;

 

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(e)                                  that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in denominations of $2,000 or an integral multiple of $1,000 in excess thereof;

 

(f)                                   that Holders electing to have Notes purchased pursuant to any Asset Sale Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

 

(g)                                  that Holders will be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, electronic image scan, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

 

(h)                                 that, if the aggregate principal amount of Notes surrendered by Holders thereof exceeds the Offer Amount allocated to the purchase of Notes in the Asset Sale Offer, the Trustee will select the Notes and other pari passu Indebtedness to be purchased on a pro rata basis (except that any Notes represented by a Global Note shall be selected 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) based on the principal amount of Notes surrendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased); and

 

(i)                                     that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).

 

On or before the Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Notes or portions thereof tendered pursuant to the Asset Sale Offer and required to be purchased pursuant to this Section 3.09 and Section 4.10 hereof, or if Notes in an aggregate principal amount less than the Offer Amount allocated to the purchase of Notes in the Asset Sale Offer have been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this  Section 3.09. The Company, the depositary for the Asset Sale Offer or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company will promptly issue a new Note, and the Trustee, upon written request from the Company, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to 

 

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any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Sale Offer on the Purchase Date.

 

Article 4
 COVENANTS

 

Section 4.01.                          Payment of Notes.  The Company will pay or cause to be paid the principal of, premium, if any, on, and interest and Additional Interest, if any, on, the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest and Additional Interest, if any, will be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary of the Company, holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest and Additional Interest, if any, then due. The Company will pay all Additional Interest, if any, in the same manner on the dates and in the same amounts set forth in the applicable Registration Rights Agreement.

 

Section 4.02.                          Maintenance of Office or Agency.  The Company will maintain in the City and State of New York, 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 Company in respect of the Notes and this Indenture may be served. The Company 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 Company 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 Company 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 Company of its obligation to maintain an office or agency in the City and State of New York for such purposes. The Company 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.

 

The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 hereof.

 

Section 4.03.                          Reports.  (a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company will furnish to the Holders of Notes or cause the Trustee to furnish to the Holders of Notes (or file with the SEC for public availability), within the time periods specified in the SEC’s rules and regulations:

 

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(i)                                     all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if the Company were required to file such reports, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report thereon by the Company’s certified independent accountants; and

 

(ii)                                  all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

 

The availability of the foregoing reports on the SEC’s EDGAR filing system will be deemed to satisfy the foregoing delivery requirements. All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. The Company will at all times comply with TIA §314(a),

 

If, at any time, the Company is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, the Company will nevertheless continue filing the reports specified in the preceding paragraphs with the SEC within the time periods specified above unless the SEC will not accept such a filing.

 

The Company will not take any action for the purpose of causing the SEC not to accept any such filings. If, notwithstanding the foregoing, the SEC will not accept the Company’s filings for any reason, the Company will post the reports referred to in the preceding paragraphs on its website within the time periods that would apply if the Company were required to file those reports with the SEC.

 

If, at any time, the Company does not have a class of equity securities listed on a national securities exchange, the Company will schedule a conference call to be held reasonably promptly, but not more than ten Business Days following the release of each report containing the financial information referred to in clause (i) above to discuss the information contained in such report. The Company shall be permitted to combine this conference call with any other conference call for other debt or equity holders or lenders. The Company will take reasonable steps to notify Holders of Notes about such call and provide them and prospective investors in the Notes with instructions to obtain access to such conference call concurrently with and in the same manner as each delivery of financial statements pursuant to clause (i) above.

 

For the avoidance of doubt, (a) any such reports or other information delivered pursuant to the foregoing will not be required to contain the separate financial information for Guarantors as contemplated by Rule 3-10 of Regulation S-X or any financial statements of unconsolidated subsidiaries or 50% or less owned persons as contemplated by Rule 3-09 of Regulation S-X or any schedules required by Regulation S-X, or in each case any successor provisions and (b) such information shall not be required to comply with Regulation G under the Exchange Act or Item 10(e) of Regulation S-K with respect to any non-GAAP financial measures contained therein.

 

(b)                                 If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by Section

 

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4.03(a) will include, to the extent material, a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Company. No certifications or attestations concerning the financial statements or disclosure controls and procedures or internal controls that would otherwise be required pursuant to the Sarbanes-Oxley Act of 2002 will be required, and nothing contained herein or in this Indenture shall otherwise require the Company to comply with the terms of the Sarbanes-Oxley Act of 2002 at any time when it would not otherwise be subject to such statute.

 

(c)                                  Any and all Defaults or Events of Default arising from a failure to furnish in a timely manner any report required by this covenant shall be deemed cured (and the Company shall be deemed to be in compliance with this Section 4.03) upon filing or posting such report as contemplated by this covenant (but without regard to the date on which such report is so filed or posted); provided that such cure shall not otherwise affect the rights of the Holders under Article 6 hereof if the principal of, premium, if any, on, and interest and Additional Interest, if any, on the Notes have been accelerated in accordance with the terms of this Indenture and such acceleration has not been rescinded or cancelled prior to such cure.

 

(d)                                 The Company will furnish to the Holders and Beneficial Owners of the Notes and to the securities analysts, broker dealers and prospective investors, upon their request, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Notes are not freely transferable under the Securities Act.

 

Section 4.04.                          Compliance Certificate.  (a) The Company and each Guarantor (to the extent that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Company and its Restricted Subsidiaries and their performance under this Indenture during the preceding fiscal year has been made under the supervision of the signing Officers, and further stating, as to each such Officer signing such certificate, that based on such review, to his or her knowledge the Company has fulfilled its obligations under this Indenture (or, if a Default or Event of Default has occurred, specifying all such Defaults or Events of Default of which he or she has knowledge and what action the Company is taking or proposes to take with respect thereto).

 

(b)                                 So long as any of the Notes are outstanding, the Company will deliver to the Trustee, forthwith upon any Officer of the Company becoming aware of any Default or Event of Default, a written statement specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.

 

Section 4.05.                          Taxes.  The Company will pay, and will 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 

 

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proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

 

Section 4.06.                          Stay, Extension and Usury Laws.  The Company and each of the Guarantors 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, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by 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 4.07.                          Restricted Payments.  (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(i)                                     declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company and other than dividends or distributions payable to the Company or a Restricted Subsidiary of the Company);

 

(ii)                                  repurchase, redeem or otherwise acquire or retire for value (including in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company;

 

(iii)                               make any payment on or with respect to, or repurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Company or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee (excluding (A) any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries and (B) the purchase or other acquisition of subordinated Indebtedness acquired in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such purchase or other acquisition), except a payment of interest or principal at the Stated Maturity thereof; or

 

(iv)                              make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (iv) of this Section 4.07(a) being collectively referred to as “Restricted Payments”),

 

unless, at the time of and after giving effect to such Restricted Payment:

 

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(A)                               no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;

 

(B)                               the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the most recently ended four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in  Section 4.09(a) hereof; and

 

(C)                               such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries since the date of this Indenture (excluding Restricted Payments permitted by clauses (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix),  (x) and (xi) of Section 4.07(b) hereof), is less than the sum, without duplication, of:

 

(1)                                 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the Company’s fiscal quarter in which the Notes are originally issued to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

 

(2)                                 100% of the aggregate net cash proceeds and the Fair Market Value of property or securities other than cash (including marketable securities, other than marketable securities of the Company or a Subsidiary of the Company, and including Capital Stock of Persons, other than the Company or a Subsidiary of the Company, engaged primarily in the Oil and Gas Business or assets used or useful in the Oil and Gas Business), in each case received by the Company since the date of this Indenture as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than (x) Disqualified Stock and (y) net cash proceeds received from an issuance or sale of such Equity Interests to a Subsidiary of the Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan, option plan or similar trust is financed by loans from or Guaranteed by the Company or any Restricted Subsidiary (unless such loans have been repaid with cash on or prior to the date of determination)) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests 

 

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(or Disqualified Stock or debt securities) sold to a Subsidiary of the Company); plus

 

(3)                                 to the extent not already included in Consolidated Net Income for such period, if any Restricted Investment that was made by the Company or any of its Restricted Subsidiaries after the date of this Indenture is (A) sold for cash (other than to the Company or any Subsidiary of the Company) (B) reduced as a result of (I) repayment of loans or advances, or other transfers of assets, in each case to the Company or any Restricted Subsidiary, (II) other repurchases, repayments or redemptions of such Restricted Investments, or (III) the release of any Guarantee (except to the extent any amounts are paid under such Guarantee) that constituted a Restricted Investment or (C) otherwise cancelled, liquidated or repaid for cash, the cash return of capital with respect to such Restricted Investment resulting from such sale, liquidation or repayment (less any out-of-pocket costs incurred in connection with any such sale); plus

 

(4)                                 the amount by which Indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company’s balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to the date of this Indenture of any such Indebtedness for Equity Interests (other than Disqualified Stock) of the Company (less the amount of any cash, or the Fair Market Value of any other property (other than such Equity Interests), distributed by the Company upon such conversion or exchange and excluding the net cash proceeds from the conversion or exchange financed, directly or indirectly, using funds borrowed from the Company or any Subsidiary), together with the net proceeds, if any, received by the Company or any of its Restricted Subsidiaries upon such conversion or exchange; plus

 

(5)                                 to the extent that any Unrestricted Subsidiary of the Company designated as such after the date of this Indenture is redesignated as a Restricted Subsidiary pursuant to the terms of this Indenture or is merged or consolidated with or into, or transfers or otherwise disposes of all or substantially all of its properties or assets to or is liquidated into, the Company or a Restricted Subsidiary after the date of this Indenture, the lesser of, as of the date of such redesignation, merger, consolidation, transfer, disposition or liquidation, (A) the Fair Market Value of the Company’s Investment in such Subsidiary (or of the properties or assets disposed of, as applicable) as of the date of such redesignation, merger, consolidation, transfer, disposition or 

 

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liquidation and (B) such Fair Market Value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary after the date of this Indenture; plus

 

(6)                                 any dividends or distributions received in cash by the Company or a Restricted Subsidiary after the date of this Indenture from an Unrestricted Subsidiary of the Company, to the extent that such dividends or distributions were not otherwise included in the Consolidated Net Income of the Company for such period.

 

(b)                                 The provisions of Section 4.07(a) hereof will not prohibit:

 

(i)                                     the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or distribution or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend, distribution or redemption payment would have complied with the provisions of this Indenture;

 

(ii)                                  the making of any Restricted Payment in exchange for, or out of or with the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to the Company; provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will not be considered to be net proceeds of Equity Interests for purposes of clause  (a)(iv)(C)(2) of Section 4.07 hereof and will not be considered to be net cash proceeds from an Equity Offering for purposes of Section 3.07(a) hereof;

 

(iii)                               the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;

 

(iv)                              the repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of the Company or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee (including the payment of any required premium and any fees and expenses incurred in connection with such repurchase, redemption, defeasance or other acquisition or retirement) with the net cash proceeds from a substantially concurrent incurrence of Permitted Refinancing Indebtedness;

 

(v)                                 repurchases of Indebtedness of the Company or any Guarantor that is contractually subordinated in right of payment to the Notes or a Note Guarantee at a purchase price not greater than (i) 101% of the principal amount of such subordinated Indebtedness in the event of a Change of Control or (ii) 100% of the principal amount of such subordinated Indebtedness in the event of an Asset Sale, 

 

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in each case plus accrued and unpaid interest thereon, to the extent required by the terms of such Indebtedness, but only if:

 

(A)                               in the case of a Change of Control, the Company has first complied with and fully satisfied its obligations under Section 4.15 hereof; or

 

(B)                               in the case of an Asset Sale, the Company has complied with and fully satisfied its obligations in accordance with the covenant in Section 4.10 hereof;

 

(vi)                              so long as no Default or Event of Default has occurred and is continuing, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former officer, director or employee of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $5.0 million in any twelve-month period (with unused amounts in any twelve-month period being carried over to succeeding twelve-month periods);

 

(vii)                           the repurchase of Equity Interests deemed to occur upon the exercise of stock or other equity options to the extent such Equity Interests represent a portion of the exercise price of those stock or other equity options and any repurchase or other acquisition of Equity Interests made in lieu of or to satisfy the Company’s tax withholding obligations in connection with any exercise, exchange or vesting of equity compensation (including stock options, warrants, incentives, restricted stock, restricted stock units, phantom stock, performance shares, performance share units or other rights to acquire Equity Interests);

 

(viii)                        so long as no Default or Event of Default has occurred and is continuing or would be caused thereby, the declaration and payment of regularly scheduled or accrued dividends or distributions to holders of any class or series of Disqualified Stock of the Company or any Preferred Stock of any Restricted Subsidiary of the Company issued on or after the date of this Indenture in accordance with the Fixed Charge Coverage Ratio Test described in Section 4.09(a) hereof;

 

(ix)                              payments of cash, dividends, distributions, advances or other Restricted Payments by the Company or any of its Restricted Subsidiaries to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants, the conversion or exchange of Capital Stock of any such Person or any other transaction permitted by this Indenture;

 

(x)                                 other Restricted Payments in an aggregate amount not to exceed the greater of (i) $35.0 million and (ii) 3.0% of Adjusted Consolidated Net

 

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Tangible Assets (determined as of the time of such Restricted Payment) since the date of this Indenture;

 

(xi)                              payments or distributions to dissenting stockholders pursuant to applicable law in connection with a merger, consolidation or transfer of all or substantially all of the assets of the Company that complies with the provisions described in Section 5.01 hereof; and

 

(xii)                           repurchases or redemptions of shares of common Equity Interests of the Company from any Holder of less than 100 shares of such common Equity Interests; provided that the aggregate amount paid for all such repurchases or redemptions shall not exceed $1.0 million in any fiscal year.

 

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment (or, in the case of a dividend or distribution, on the date of declaration) of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined in accordance with the definition of “Fair Market Value.”

 

For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the exceptions described in Sections 4.07(b)(i) through 4.07(b)(xii), the Company shall, in its sole discretion, classify such Restricted Payment, or later classify, reclassify or re-divide all or a portion of such Restricted Payment in any manner that complies with this Section 4.07.

 

Section 4.08.                          Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.  (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

 

(i)                                     pay dividends or make any other distributions on its Capital Stock to the Company or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries; provided that the priority that any series of Preferred Stock of a Restricted Subsidiary has in receiving dividends, distributions or liquidating distributions before dividends, distributions or liquidating distributions are paid in respect of common stock of such Restricted Subsidiary shall not constitute a restriction on the ability to make dividends or distributions on Capital Stock for purposes of this Section 4.08;

 

(ii)                                  make loans or advances to the Company or any of its Restricted Subsidiaries (it being understood that the subordination of loans or advances made to the Company or any of its Restricted Subsidiaries to other Indebtedness incurred by the Company or any of its Restricted Subsidiaries shall not be deemed a restriction on the ability to make loans or advances); or

 

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(iii)                               sell, lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.

 

(b)                                 The restrictions in Section 4.08(a) hereof will not apply to encumbrances or restrictions existing under or by reason of:

 

(i)                                     agreements governing Existing Indebtedness and Credit Facilities, or any other agreements or instruments, as in effect on the date of this Indenture and any amendments, restatements, modifications, renewals, extensions, supplements, increases, refundings, replacements or refinancings of those agreements; provided that the encumbrances or restrictions contained in the amendments, restatements, modifications, renewals, extensions, supplements, increases, refundings, replacements or refinancings are not, in the good faith judgment of an Officer of the Company, materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in those agreements on the date of this Indenture;

 

(ii)                                  this Indenture, the Notes and the Note Guarantees;

 

(iii)                               agreements governing other Indebtedness permitted to be incurred under Section 4.09 hereof and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements; provided that the encumbrances or restrictions contained therein are not, in the reasonable good faith judgment of an Officer of the Company, materially more restrictive, taken as a whole, than those contained in this Indenture, the Notes and the Note Guarantees or the Credit Agreement as in effect on the date of this Indenture

 

(iv)                              applicable law, rule, regulation, order, approval, permit or similar restriction;

 

(v)                                 any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, and any amendments, restatements, modifications, renewals, extensions, supplements, increases, refundings, replacements or refinancings thereof; provided, that the encumbrances and restrictions in any such amendments, restatements, modifications, renewals, extensions, supplements, increases, refundings, replacements or refinancings are, in the reasonable good faith judgment of an Officer of the Company, no more restrictive, taken as a whole, than those in effect on the date of the acquisition; provided further, that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;

 

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(vi)                              customary non-assignment provisions in contracts, licenses, easements or leases, in each case, entered into in the ordinary course of business;

 

(vii)                           purchase money obligations for property acquired and security agreements, mortgages, Capital Lease Obligations or similar instruments that impose restrictions on the property purchased or leased of the nature described in clause (iii) of Section 4.08(a) hereof;

 

(viii)                        any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its sale or other disposition;

 

(ix)                              Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are, in the reasonable good faith judgment of an Officer of the Company, not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

 

(x)                                 Liens permitted to be incurred under the provisions of Section 4.12 hereof that limit the right of the debtor to dispose of the assets subject to such Liens;

 

(xi)                              provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements (including agreements entered into in connection with a Restricted Investment) entered into with the approval of the Company’s Board of Directors, which limitation is applicable only to the assets that are the subject of such agreements;

 

(xii)                           encumbrances or restrictions applicable only to a Restricted Subsidiary that is not a Domestic Subsidiary;

 

(xiii)                        encumbrances or restrictions on cash or other deposits or net worth imposed by customers or lessors under contracts or leases entered into in the ordinary course of business;

 

(xiv)                       Indebtedness incurred by any Restricted Subsidiary, provided that the restrictions contained in the agreements or instruments governing such Indebtedness (A) apply only in the event of a payment default or a default with respect to a financial covenant in such agreement or instrument and (B) will not materially affect the Company’s ability to pay all principal, interest and premium, if any, on the Notes, in the reasonable good faith judgment of an Officer of the Company; and

 

(xv)                          customary encumbrances and restrictions contained in agreements of the types described in the definition of Permitted Business Investments.

 

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Section 4.09.                          Incurrence of Indebtedness and Issuance of Preferred Stock.  (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.

 

(b)                                 Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):

 

(i)                                     the incurrence by the Company and any Guarantor of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and the Guarantors thereunder) not to exceed the greatest of (i) $450.0 million, (ii) $100.0 million plus 30.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence and (iii) the Borrowing Base at the time of incurrence;

 

(ii)                                  the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;

 

(iii)                               the incurrence by the Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees and the Exchange Notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;

 

(iv)                              the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (iv), not to exceed the greater of (i) $40.0 million and (ii)

 

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3.5% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence;

 

(v)                                 the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was incurred under Section 4.09(a) hereof or clause (ii), (iii), (iv), (v),  (xiv), (xv) or (xvi) of this Section 4.09(b);

 

(vi)                              the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:

 

(A)                               if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and

 

(B)                               (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company,

 

will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (vi);

 

(vii)                           the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:

 

(A)                               any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and

 

(B)                               any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company,

 

will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (vii);

 

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(viii)                        the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;

 

(ix)                              the Guarantee by the Company or any of the Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the Guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being Guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed;

 

(x)                                 the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance, bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds, and completion guarantees provided by the Company or a Restricted Subsidiary of the Company in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;

 

(xi)                              the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;

 

(xii)                           the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;

 

(xiii)                        any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;

 

(xiv)                       any Permitted Acquisition Indebtedness;

 

(xv)                          the incurrence by the Company or any Restricted Subsidiary of Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiaries; and

 

(xvi)                       the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as

 

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applicable) at any time outstanding (other than Indebtedness permitted by Sections 4.09(a) or 4.09(b)(i) through 4.09(b)(xv)), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (xvi), not to exceed, at any one time outstanding, the greater of (i) $50.0 million and (ii) 5.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance.

 

The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any Guarantor solely by virtue of being unsecured or by virtue of being secured on a junior priority basis.

 

For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xvi) of Section 4.09(b)above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of the definition of Permitted Debt and may not be reclassified.

 

The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional shares or units of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued to the extent required by the definition of such term.

 

The amount of any Indebtedness outstanding as of any date will be:

 

(a)                                 the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;

 

(b)                                 the principal amount of the Indebtedness, in the case of any other Indebtedness; and

 

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(c)                                  in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

 

(1)                                 the Fair Market Value of such assets at the date of determination; and

 

(2)                                 the amount of the Indebtedness of the other Person.

 

Section 4.10.                          Asset Sales.  The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

 

(a)                                 the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at the time of the Asset Sale at least equal to the Fair Market Value (measured as of the date of the consummation of such Asset Sale) of the assets or Equity Interests issued or sold or otherwise disposed of; and

 

(b)                                 at least 75% of the aggregate consideration received in the Asset Sale by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following will be deemed to be cash:

 

(i)                                     any liabilities, as shown on the Company’s most recent consolidated balance sheet, of the Company or any of its Restricted Subsidiaries (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets pursuant to a novation or indemnity agreement that releases the Company or such Restricted Subsidiary from or indemnifies the Company or such Restricted Subsidiary against further liability;

 

(ii)                                  with respect to any Asset Sale of oil and natural gas properties by the Company or any of its Restricted Subsidiaries where the Company or such Restricted Subsidiary retains an interest in such property, any agreement by the transferee (or an Affiliate thereof) to pay all or a portion of the costs and expenses of the Company or such Restricted Subsidiary related to the exploration, development, completion or production of such properties and activities related thereto;

 

(iii)                               any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are, within 180 days of the Asset Sale, converted by the Company or such Restricted Subsidiary into cash, to the extent of the cash received in that conversion;

 

(iv)                              any Capital Stock or assets of the kind referred to in clause (ii) or (iv) of Section 4.10(c) hereof; and

 

(v)                                 any Designated Non-cash Consideration received by the Company or such Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (v) since the date of this Indenture, not to exceed an

 

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amount equal to 10.0% of Adjusted Consolidated Net Tangible Assets (determined at the time of receipt of such Designated Non-cash Consideration), with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value.

 

(c)                                  Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company or one or more of its Restricted Subsidiaries may apply an amount equal to the amount of such Net Proceeds at its option to any combination of the following:

 

(i)                                     to repay, repurchase or redeem any senior Indebtedness of the Company or any Guarantor, in each case owing to a Person other than the Company or any Restricted Subsidiary;

 

(ii)                                  to acquire all or substantially all of the assets, or any Capital Stock, of one or more other Persons primarily engaged in the Oil and Gas Business, if, after giving effect to any such acquisition of Capital Stock, such Person becomes a Restricted Subsidiary of the Company;

 

(iii)                               to make capital expenditures in respect of the Company’s or any of its Restricted Subsidiaries’ Oil and Gas Business; or

 

(iv)                              to acquire other assets that are not classified as current assets under GAAP and that are used or useful in the Oil and Gas Business.

 

The requirement of clause (ii) or (iv) of Section 4.10(c) hereof shall be deemed to be satisfied if a bona fide binding contract committing to make the acquisition referred to therein is entered into by the Company or any of its Restricted Subsidiaries with a Person other than an Affiliate of the Company within the time period specified in Section 4.10(c) and such Net Proceeds are subsequently applied in accordance with such contract within 180 days following the date such agreement is entered into.

 

Pending the final application of any Net Proceeds, the Company or any of its Restricted Subsidiaries may invest the Net Proceeds in any manner that is not prohibited by this Indenture.

 

The Net Proceeds from Asset Sales that are not applied or invested as provided in Section 4.10(c) hereof will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $25.0 million, within ten Business Days thereof, the Company will make an offer (an “Asset Sale Offer”) to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Section 4.10 with respect to offers to purchase, prepay or redeem such Indebtedness with the proceeds of sales of assets, to purchase, prepay or redeem, on a pro rata basis, the maximum principal amount of Notes and such other pari passu Indebtedness (plus all accrued interest on the Notes and other Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount, plus accrued and

 

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unpaid interest, if any, to the date of purchase, prepayment or redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company or any of its Restricted Subsidiaries may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and any pari passu Indebtedness tendered in such Asset Sale Offer exceeds the amount of Excess Proceeds allocated to the purchase of Notes, the Trustee will select the Notes to be purchased on a pro rata basis (except that any Notes represented by a Note in global form will be selected 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), based on the amounts tendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased). Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.

 

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with Section 3.09 or this Section 4.10 hereof, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under  Section 3.09 hereof or this  Section 4.10 by virtue of such compliance.

 

Section 4.11.                          Transactions with Affiliates.  (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate of the Company (each, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $1 million, unless:

 

(i)                                     the Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company or, if in the good faith judgment of the Board of Directors of the Company, no comparable transaction is available with which to compare such Affiliate Transaction, such Affiliate Transaction is otherwise fair to the Company or the relevant Restricted Subsidiary from a financial point of view; and

 

(ii)                                  the Company delivers to the Trustee:

 

(A)                               with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess

 

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of $20.0 million, an Officers’ Certificate certifying that such Affiliate Transaction or series of related Affiliate Transactions complies with this Section 4.11; and

 

(B)                               with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $40.0 million, a resolution of the Board of Directors of the Company set forth in an Officers’ Certificate certifying that such Affiliate Transaction or series of related Affiliated Transactions complies with this  Section 4.11 and that such Affiliate Transaction or series of related Affiliate Transactions has been approved by a majority of the disinterested members of the Board of Directors of the Company, if any.

 

(b)                                 The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 4.11(a) hereof:

 

(i)                                     any employment or consulting agreement, employee benefit plan, officer or director indemnification, compensation or severance agreement or any similar arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto;

 

(ii)                                  transactions between or among the Company and its Restricted Subsidiaries;

 

(iii)                               transactions with a Person (other than an Unrestricted Subsidiary of the Company) that is an Affiliate of the Company solely because the Company owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;

 

(iv)                              payment of reasonable and customary fees and compensation paid to, and indemnity or insurance provided on behalf of, officers, directors, employees or consultants of the Company or any of its Restricted Subsidiaries;

 

(v)                                 any issuance of Equity Interests (other than Disqualified Stock) of the Company to, or receipt of a capital contribution from, Affiliates of the Company;

 

(vi)                              Restricted Payments that do not violate the provisions of Section 4.07 hereof and any Permitted Investment;

 

(vii)                           the performance of obligations of the Company or any of its Restricted Subsidiaries under the terms of any written agreement to which the Company or any of its Restricted Subsidiaries was a party on the date of this Indenture (or any agreement in respect of the GCII Acquisition as in effect on the date of the First Closing), as such agreements may be amended, modified or supplemented from time to time; provided, however, that any future amendment, modification or supplement to such an agreement entered into after the date of this Indenture will be permitted to the extent that its terms do not materially and

 

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adversely affect the rights of any Holders of the Notes (as determined in good faith by the Board of Directors of the Company) as compared to the terms of such agreement in effect on the date of this Indenture (or the date of the First Closing, as applicable);

 

(viii)                        payments to an Affiliate in respect of the Notes or any other Indebtedness of the Company or any of its Restricted Subsidiaries on the same basis as concurrent payments are made or offered to be made in respect thereof to non-Affiliates;

 

(ix)                              loans or advances to or reimbursements of expenses incurred by employees for moving, entertainment and travel expenses and similar expenditures in the ordinary course of business;

 

(x)                                 transactions between the Company or any of its Restricted Subsidiaries and any other Person, a director of which is also on the Board of Directors of the Company or any direct or indirect parent company of the Company, and such common director is the sole cause for such other Person to be deemed an Affiliate of the Company or any of its Restricted Subsidiaries; provided, however, that such director abstains from voting as a member of the Board of Directors of the Company or any direct or indirect parent company of the Company, as the case may be, on any transaction with such other Person;

 

(xi)                              in the case of contracts for exploring for, producing, marketing, storing or otherwise handling Hydrocarbons, or activities or services reasonably related or ancillary thereto, or other operational contracts, any such contracts entered into in the ordinary course of business and otherwise in compliance with the terms of this Indenture which are fair to the Company and its Restricted Subsidiaries, or are on terms at least as favorable as might reasonably have been obtained at such time from a Person that is not an Affiliate of the Company, in either case in the reasonable determination of the Board of Directors of the Company or the senior management thereof; and

 

(xii)                           any transaction in which the Company or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an accounting, appraisal or investment banking firm of national standing stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or that such transaction meets the requirements of Section 4.11(a)(i) hereof.

 

Section 4.12.                          Liens.  The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur or assume any Lien (an “Initial Lien”) of any kind (other than Permitted Liens) securing Indebtedness upon any of their property or assets now owned or hereafter acquired, unless the Notes or any Note Guarantee of such Restricted Subsidiary, as applicable, are secured on an equal and ratable basis with the Indebtedness so secured until such time as such Indebtedness is no longer secured by the Initial Lien.

 

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Any Lien created for the benefit of Holders of Notes pursuant to the preceding paragraph shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Initial Lien.

 

Section 4.13.                          Business Activities.  The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than the Oil and Gas Business, except to such extent as would not be material to the Company and its Restricted Subsidiaries taken as a whole.

 

Section 4.14.                          Corporate Existence.  Subject to Article 5 and Section 10.04 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect:

 

(a)                                 its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Restricted Subsidiary; and

 

(b)                                 the material rights, licenses and franchises of the Company and its Restricted Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Restricted Subsidiaries, if the preservation thereof is, in the judgment of the Company, no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole; and provided, further, that this Section 4.14 does not prohibit any transaction otherwise permitted by Section 4.10 or Article 5 hereof.

 

Section 4.15.                          Offer to Repurchase Upon Change of Control.  (a) Upon the occurrence of a Change of Control, except as provided in this Section 4.15, the Company will make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes at a purchase price in cash (the “Change of Control Payment”) equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to the date of purchase (the “Change of Control Payment Date”), subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control, or at the Company’s option, prior to such Change of Control but after it is publicly announced, the Company will send a notice to each Holder describing the transaction or transactions that constitute the Change of Control and stating:

 

(i)                                     that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered will be accepted for payment;

 

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(ii)                                  the purchase price and the expiration date of the Change of Control Offer, which shall be no earlier than 30 days and no later than 60 days from the date such notice is sent, or such later date as is necessary to comply with law;

 

(iii)                               that any Note not tendered will continue to accrue interest;

 

(iv)                              that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date;

 

(v)                                 that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

 

(vi)                              that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, electronic image scan, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and

 

(vii)                           that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof.

 

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.15, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.15 by virtue of such compliance.

 

(b)                                 Promptly following the expiration of the Change of Control Offer, the Company will, to the extent lawful, accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer. Promptly after such acceptance, the Company will, on the Change of Control Payment Date, to the extent lawful:

 

(i)                                     deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and

 

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(ii)                                  deliver or cause to be delivered to the Trustee the Notes accepted for payment, together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.

 

The Paying Agent will promptly mail or wire transfer (but in any case not later than five days after the Change of Control Payment Date) to each Holder of Notes properly tendered the Change of Control Payment for such Notes (or, if all the Notes are then in global form, it will make such payment through the facilities of DTC), and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any. The Company will announce publicly the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

 

(c)                                  Notwithstanding anything to the contrary in this Section 4.15, the Company will not be required to make a Change of Control Offer upon a Change of Control if (i) a third party makes the Change of Control Offer in the manner, at the price, at the times and otherwise in compliance with the requirements set forth in this Section 4.15 and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, (ii) notice of redemption of all outstanding Notes has been given pursuant to Section 3.03 hereof, unless and until there is a default in payment of the applicable redemption price, or (iii) in connection with or in contemplation of any Change of Control, the Company has made an offer to purchase (an “Alternate Offer”) any and all Notes validly tendered at a cash price equal to or higher than the Change of Control Payment and has purchased all Notes properly tendered in accordance with the terms of the Alternate Offer.

 

(d)                                 Notwithstanding anything to the contrary contained herein, a Change of Control Offer or Alternate Offer may be made in advance of a Change of Control, conditioned upon the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer or Alternate Offer is made. The closing date of any Change of Control Offer or Alternative Offer made in advance of a Change of Control may be changed to conform to the actual closing date of the Change of Control; provided that such closing date is not earlier than 30 days nor later than 60 days from the date the Change of Control Offer or Alternative Offer notice is sent pursuant to this Section 4.15.

 

(e)                                  In the event that Holders of not less than 90% of the aggregate principal amount of the outstanding Notes accept a Change of Control Offer or Alternate Offer and the Company (or a third party making the Change of Control Offer or Alternate Offer in lieu of the Company as described in paragraph (c) above) purchases all of the Notes held by such Holders, the Company (or any third party making such Change of Control Offer or Alternative Offer in lieu of the Company as described above) will have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following the purchase pursuant to the Change of Control Offer or Alternate Offer described above, to redeem all of the Notes that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment, plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest, if

 

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any, on the Notes that remain outstanding, to the date of redemption (subject to the rights of Holders on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).

 

Section 4.16.                          Additional Note Guarantees.  If the Company or any of its Restricted Subsidiaries acquires or creates another Domestic Subsidiary after the date of this Indenture that (i) incurs or guarantees Indebtedness under any Credit Facility and (ii) is a Material Subsidiary, then, in either case, that Subsidiary will become a Guarantor by executing a supplemental indenture in substantially the form of Exhibit E hereto and delivering an Opinion of Counsel to the Trustee within 30 days after the date that Subsidiary incurred such Indebtedness.

 

Section 4.17.                          Designation of Restricted and Unrestricted Subsidiaries.  The Board of Directors of the Company may designate any Restricted Subsidiary of the Company to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary of the Company is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary will be deemed to be either (1) an Investment made as of the time of the designation that will reduce the amount available for Restricted Payments under  Section 4.07 hereof or (2) a Permitted Investment under one or more clauses of the definition of Permitted Investments, as determined by the Company. That designation will only be permitted if the Investment would be permitted at that time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

 

Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a Board Resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, the Company will be in default of such covenant.

 

The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Company; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under  Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the applicable reference period and (2) no Default or Event of Default would be in existence following such designation.

 

Section 4.18.                          Covenant Suspension.  If on any date following the date of this Indenture: (a) the Notes are rated Baa3 or better by Moody’s or BBB- or better by S&P

 

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(or, if either such entity ceases to rate the Notes for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company as a replacement agency); and (b) no Default or Event of Default shall have occurred and is continuing under this Indenture, then, beginning on that date and subject to the provisions of this Section 4.18, Sections  4.07, 4.08, 4.09, 4.10, 4.11, 4.13,  4.17 and Section 5.01(a)(iv) of this Indenture will be suspended.

 

During any period that the foregoing Sections have been suspended (the “Suspension Period”), the Company’s Board of Directors may not designate any of its Subsidiaries as Unrestricted Subsidiaries pursuant to  Section 4.17 hereof or the second paragraph of the definition of “Unrestricted Subsidiaries.”

 

Notwithstanding the foregoing, if the rating assigned to the Notes by both such ratings agencies should subsequently decline to below Baa3 and BBB- from Moody’s or S&P, respectively, the foregoing covenants will be reinstituted as of and from the date both such ratings were below investment grade. Calculations under the reinstated Section 4.07 hereof will be made as if  Section 4.07 hereof had been in effect since the date of this Indenture except that no Default will be deemed to have occurred solely by reason of a Restricted Payment made while that covenant was suspended. Furthermore, all Indebtedness incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be deemed to have been incurred or issued pursuant to Section 4.09(b)(ii) hereof. In addition, for purposes of Section 4.11 hereof, all agreements and arrangements entered into by the Company or any Restricted Subsidiary with an Affiliate of the Company during the Suspension Period will be deemed to have been entered into prior to the date of this Indenture and permitted by Section 4.11(b)(vii) hereof, and for purposes of Section 4.08 hereof, all contracts entered into during the Suspension Period that contain any of the restrictions contemplated by such covenant will be deemed to have been existing on the date of this Indenture.

 

Section 4.19.                          Consent Payments.  The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

 

Notwithstanding the foregoing, with respect to any payment of consideration for, or as an inducement to, any consent, waiver or amendment of any of the terms or provisions of this Indenture, the Notes or the Note Guarantees in connection with an Exchange Offer, the Company and any of its Restricted Subsidiaries may exclude (i) Holders or Beneficial Owners of the Notes that are not “qualified institutional buyers” as defined in Rule 144A under the Securities Act, or “non-U.S. Persons” as defined in Regulation S under the Securities Act, and (ii) Holders or Beneficial Owners of the Notes in any jurisdiction (other than the United States) where the inclusion of such Holders or

 

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Beneficial Owners would require the Company or any such Restricted Subsidiary to comply with the registration requirements or other similar requirements under any securities laws of such jurisdiction, or the solicitation of such consent, waiver or amendment from, or the granting of such consent or waiver, or the approval of such amendment by, Holders or Beneficial Owners in such jurisdiction would be unlawful, in each case as determined by the Company in its sole discretion.

 

Article 5
 SUCCESSORS

 

Section 5.01.                          Merger, Consolidation or Sale of Assets.  (a) The Company will not: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving Person), or (2) sell, assign, transfer, convey, lease or otherwise dispose of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries, taken as a whole, in one or more related transactions, to another Person, unless:

 

(i)                                     either: (A) the Company is the surviving Person; or (B) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance, lease or other disposition has been made is an entity organized or existing under the laws of the United States, any state of the United States or the District of Columbia; and, if such entity is not a corporation, a co-obligor of the Notes is a corporation organized or existing under any such laws;

 

(ii)                                  the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance, lease or other disposition has been made assumes all the obligations of the Company under the Notes, this Indenture and (if then in effect), the Registration Rights Agreement, pursuant to a supplemental indenture and a supplement to the Registration Rights Agreement, in form reasonably satisfactory to the Trustee;

 

(iii)                               immediately after giving effect to such transaction, no Default or Event of Default exists; and

 

(iv)                              the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance, lease or other disposition has been made, would, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period (A) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (B) have had a Fixed Charge Coverage Ratio equal to or greater than the actual Fixed Charge Coverage Ratio for the Company for such four-quarter period.

 

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(b)                                 This Section 5.01 will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of properties or assets between or among the Company and its Restricted Subsidiaries. Clauses (iii) and (iv) of Section 5.01(a) hereof will not apply to (i) any merger or consolidation of the Company with or into one of its Restricted Subsidiaries for any purpose or (ii) with or into an Affiliate solely for the purpose of reincorporating the Company in another jurisdiction.

 

Section 5.02.                          Successor Corporation Substituted.  Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of the Company in accordance with  Section 5.01 hereof in which the Company is not the surviving entity, the surviving Person formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the Company shall refer instead to the successor Person and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter (except in the case of a lease of all or substantially all of the Company’s properties or assets), the Company will be relieved of all obligations and covenants under this Indenture and the Notes.

 

Article 6
 DEFAULTS AND REMEDIES

 

Section 6.01.                          Events of Default.  Each of the following is an “Event of Default”:

 

(a)                                 default for 30 days in the payment when due of interest and Additional Interest, if any, on the Notes;

 

(b)                                 default in the payment when due (at Stated Maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes;

 

(c)                                  failure by the Company to comply with the provisions of Section 5.01 hereof or to consummate a purchase of Notes when required pursuant to Sections 3.08, 4.10 or 4.15 hereof;

 

(d)                                 failure by the Company for 180 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with Section 4.03 hereof;

 

(e)                                  failure by the Company for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with any of its other agreements in this Indenture;

 

(f)                                   default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money

 

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borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the date of this Indenture, if that default:

 

(i)                                     is caused by a failure to pay principal of, premium, if any, on, or interest, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or

 

(ii)                                  results in the acceleration of such Indebtedness prior to its Stated Maturity,

 

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $35.0 million or more; provided, however, that if, prior to any acceleration of the Notes, (i) any such Payment Default is cured or waived, (ii) any such acceleration is rescinded, or (iii) such Indebtedness is repaid, any Default or Event of Default caused by such Payment Default or acceleration shall be automatically rescinded, so long as such rescission does not conflict with any judgment, decree or applicable law;

 

(g)                                  failure by the Company or any of its Restricted Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $35.0 million (to the extent not covered by insurance by a reputable and creditworthy insurer as to which the insurer has not disclaimed coverage), which judgments are not paid, discharged or stayed, for a period of 60 days;

 

(h)                                 the Company or any of the Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:

 

(i)                                     commences a voluntary case,

 

(ii)                                  consents to the entry of an order for relief against it in an involuntary case,

 

(iii)                               consents to the appointment of a custodian of it or for all or substantially all of its property,

 

(iv)                              makes a general assignment for the benefit of its creditors, or

 

(v)                                 generally is not paying its debts as they become due;

 

(i)                                     a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

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(i)                                     is for relief against the Company or any of the Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary in an involuntary case;

 

(ii)                                  appoints a custodian of the Company or any of the Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary; or

 

(iii)                               orders the liquidation of the Company or any of the Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary;

 

and the order or decree remains unstayed and in effect for 60 consecutive days; and

 

(j)                                    except as permitted by this Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee.

 

Section 6.02.                          Acceleration.  In the case of an Event of Default specified in Section 6.01(h) or 6.01(i) hereof, with respect to the Company, any Restricted Subsidiary of the Company that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, 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 by notice in writing to the Company and, in the case of a notice by Holders, also to the Trustee specifying the applicable Event of Default and that such notice is a notice of acceleration.

 

Upon any such declaration, the Notes shall become due and payable immediately.

 

The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of all of the Holders of all the Notes, rescind an acceleration and its consequences hereunder, if, among other things, (1) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction, (2) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, on, and interest or Additional Interest, if any, on, the Notes that has become due solely by such declaration of such acceleration, have been cured or waived

 

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and (3) the Trustee has been paid all amounts then owing to the Trustee under Section 7.07 hereof.

 

Section 6.03.                          Other Remedies.  If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of, premium, if any, on, and interest and Additional Interest, if any, on, the Notes or to enforce the performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

 

Section 6.04.                          Waiver of Past Defaults.  The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of principal of, premium, if any, on, or interest and Additional Interest, if any, on, the Notes (including in connection with an offer to purchase); provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration, as provided in Section 6.02. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

 

Section 6.05.                          Control by Majority.  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 of exercising any trust or power conferred on the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability.

 

Section 6.06.                          Limitation on Suits.  Except to enforce the right to receive payment of principal, premium, if any, or interest and Additional Interest, if any, when due, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

 

(a)                                 such Holder has previously given to the Trustee written notice that an Event of Default is continuing;

 

(b)                                 Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

 

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(c)                                  such Holder or Holders offer and, if requested, provide to the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;

 

(d)                                 the Trustee does not comply with such request within 60 days after receipt of the request and the offer, or provision if requested, of security or indemnity; and

 

(e)                                  during such 60-day period, Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with such request.

 

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

 

Section 6.07.                          Rights of Holders of Notes to Receive Payment.  Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of, premium, if any, on, and interest and Additional Interest, if any, on, the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

Section 6.08.                          Collection Suit by Trustee.  If an Event of Default specified in Section 6.01(a) or (b) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, on, and interest and Additional Interest, if any, remaining unpaid on, the Notes and interest on overdue principal and, to the extent lawful, interest and Additional Interest, if any, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

Section 6.09.                          Trustee May File Proofs of Claim.  The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under  Section 7.07 hereof out

 

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of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 6.10.                          Priorities.  If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

 

First: to the Trustee, its agents and attorneys for amounts due under  Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

 

Second: to Holders of the Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest and Additional Interest, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest and Additional Interest, if any, respectively; and

 

Third: to the Company or to such party as a court of competent jurisdiction shall direct.

 

The Trustee may fix a record date and payment date for any payment to Holders of the Notes pursuant to this Section 6.10.

 

Section 6.11.                          Undertaking for Costs.  In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.

 

Article 7
 TRUSTEE

 

Section 7.01.                          Duties of Trustee.  (a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

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(b)                                 Except during the continuance of an Event of Default:

 

(i)                                     the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(ii)                                  in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

 

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

 

(i)                                     this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

 

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

 

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

 

(d)                                 Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01.

 

(e)                                  No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability.

 

(f)                                   The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

Section 7.02.                          Rights of Trustee.  (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

 

(b)                                 Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from

 

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liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

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

 

(d)                                 The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

 

(e)                                  Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company will be sufficient if signed by an Officer of the Company.

 

(f)                                   Subject to the provisions of this Indenture relating to the duties of the Trustee in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders have furnished to the Trustee indemnity or security reasonably satisfactory to it against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction.

 

(g)                                  The Trustee shall not be deemed to have notice of a Default or an Event of Default unless a Responsible Officer of the Trustee has actual knowledge of such Default or Event of Default.

 

(h)                                 In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood or such loss or damage and regardless of the form of action.

 

(i)                                     The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

 

Section 7.03.                          Individual Rights of Trustee.  The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (as defined in the TIA) after a Default has occurred and is continuing it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee (if this Indenture has been qualified under the TIA) or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

 

Section 7.04.                          Trustee’s Disclaimer.  The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this

 

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Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

 

Section 7.05.                          Notice of Defaults.  If a Default or Event of Default occurs and is continuing and if it is actually known to the Trustee, the Trustee will send to Holders of the Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, on, or interest or Additional Interest, if any, on, any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.

 

Section 7.06.                          Reports by Trustee to Holders of the Notes.

 

(a)                                 Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee will send to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA §313(a) (but if no event described in TIA §313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also will comply with TIA §313(b)(2). The Trustee will also transmit by mail all reports as required by TIA §313(c).

 

(b)                                 A copy of each report at the time of its mailing to the Holders of the Notes will be mailed by the Trustee to the Company and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA §313(d). The Company will promptly notify the Trustee when the Notes are listed on any stock exchange.

 

Section 7.07.                          Compensation and Indemnity.

 

(a)                                 The Company will pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder as agreed in a separate fee agreement. The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust. The Company will reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses will include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

(b)                                 The Company and the Guarantors will jointly and severally indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Company, the Guarantors, any Holder or any other Person) or liability in

 

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connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee will notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company will not relieve the Company or any of the Guarantors of their obligations hereunder. The Company or such Guarantor will defend the claim and the Trustee will cooperate in the defense. The Trustee may have separate counsel and the Company will pay the reasonable fees and expenses of such counsel. Neither the Company nor any Guarantor need pay for any settlement made without its consent, which consent will not be unreasonably withheld.

 

(c)                                  The obligations of the Company and the Guarantors under this  Section 7.07 will survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee.

 

(d)                                 To secure the Company’s and the Guarantors’ payment obligations in this  Section 7.07, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal of, premium, if any, on, and interest, if any, on, particular Notes. Such Lien will survive the satisfaction and discharge of this Indenture.

 

(e)                                  When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

 

(f)                                   The Trustee will comply with the provisions of TIA §313(b)(2) to the extent applicable.

 

Section 7.08.                          Replacement of Trustee.

 

(a)                                 A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

(b)                                 The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:

 

(i)                                     the Trustee fails to comply with Section 7.10 hereof;

 

(ii)                                  the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

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

 

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(iv)                              the Trustee becomes incapable of acting.

 

(c)                                  If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

 

(d)                                 If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least a majority in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

(e)                                  If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(f)                                   A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee will mail a notice of its succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under  Section 7.07 hereof will continue for the benefit of the retiring Trustee.

 

Section 7.09.                          Successor Trustee by Merger, etc.

 

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.

 

Section 7.10.                          Eligibility; Disqualification.

 

There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.

 

This Indenture will always have a Trustee who satisfies the requirements of TIA §310(a)(1), (2) and (5). The Trustee is subject to TIA §310(b).

 

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Section 7.11.                          Preferential Collection of Claims Against Company.

 

The Trustee is subject to TIA §311(a), excluding any creditor relationship listed in TIA §311(b). A Trustee who has resigned or been removed shall be subject to TIA §311(a) to the extent indicated therein.

 

Article 8
 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.01.                          Option to Effect Legal Defeasance or Covenant Defeasance.

 

The Company may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes and Note Guarantees upon compliance with the conditions set forth below in this Article 8.

 

Section 8.02.                          Legal Defeasance and Discharge.

 

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (a) and (b) below, and to have satisfied all their other obligations under such Notes, the Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:

 

(a)                                 the rights of Holders of outstanding Notes to receive payments in respect of the principal of, premium, if any, on, or interest or Additional Interest, if any, on, such Notes when such payments are due from the trust referred to in Section 8.04 hereof;

 

(b)                                 the Company’s obligations with respect to such Notes under Article 2 and Section 4.02 hereof;

 

(c)                                  the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s and the Guarantors’ obligations in connection therewith; and

 

(d)                                 the Legal Defeasance provisions of this Article 8.

 

Subject to compliance with this  Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

 

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Section 8.03.                          Covenant Defeasance.

 

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their respective obligations under the covenants contained in Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14(b), 4.15, 4.16, 4.17, 4.18 and 4.19 hereof and clause (iv) of Section 5.01(a) hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes to the extent permitted by GAAP). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Company and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, the events described in Sections 6.01(c), (d), (e), (f), (g) and (j) hereof will not constitute Events of Default.

 

Section 8.04.                          Conditions to Legal or Covenant Defeasance.

 

In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or Section 8.03 hereof:

 

(a)                                 the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants delivered to the Trustee, to pay the principal of, premium, if any, on, and interest, if any, on, the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date;

 

(b)                                 in the case of an election under Section 8.02 hereof, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:

 

(i)                                     the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

 

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(ii)                                  since the date of this Indenture, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel will confirm that, the Beneficial Owners of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(c)                                  in the case of an election under Section 8.03 hereof, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Beneficial Owners of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

(d)                                 no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit (and any similar concurrent deposit relating to other Indebtedness), and the granting of Liens to secure such borrowings);

 

(e)                                  such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture and the agreements governing any other Indebtedness being defeased, discharged or replaced) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

 

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

 

(g)                                  the Company must deliver to the Trustee an Officers’ Certificate stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with; and

 

(h)                                 the Company must deliver to the Trustee an Opinion of Counsel stating that the conditions precedent described in Sections 8.04(b), 8.04(c) and 8.04(e) hereof relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

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

 

Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either

 

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directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, if any, but such money need not be segregated from other funds except to the extent required by law.

 

The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to  Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

 

Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.06.                          Repayment to Company.

 

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, on, and interest, if any, on, any Note and remaining unclaimed for two years after such principal, premium, if any, or interest and Additional Interest, if any, has become due and payable shall be paid to the Company on its request or (if then held by the Company) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.

 

Section 8.07.                          Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s and the Guarantors’ obligations under this Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,

 

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however, that, if the Company makes any payment of principal of, premium, if any, on, or interest, if any, on, any Note following the reinstatement of its obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

 

Article 9
 AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01.                          Without Consent of Holders of Notes.

 

Notwithstanding Section 9.02 of this Indenture, without the consent of any Holder of Notes, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Notes or the Note Guarantees:

 

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

 

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

 

(c)                                  to provide for the assumption of the Company’s or a Guarantor’s obligations to Holders of the Notes and Note Guarantees in the case of a merger or consolidation or disposition of all or substantially all of the Company’s or such Guarantor’s properties or assets, as applicable;

 

(d)                                 to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights under this Indenture of any Holder, including to comply with requirements of the SEC or DTC in order to maintain the transferability of the Notes pursuant to Rule 144A or Regulation S;

 

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

 

(f)                                   to conform the text of this Indenture, the Notes or the Note Guarantees to any provision of the “Description of Notes” section of the Offering Memorandum;

 

(g)                                  to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the date hereof;

 

(h)                                 to secure the Notes or the Note Guarantees pursuant to the requirements of Section 4.12 hereof;

 

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

 

(j)                                    to evidence or provide for the acceptance of appointment under this Indenture of a successor Trustee.

 

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Upon the request of the Company, and upon receipt by the Trustee of the documents described in  Section 9.06 hereof, the Trustee will join with the Company and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

 

Section 9.02.                          With Consent of Holders of Notes.

 

Except as provided in Section 9.01 and below in this Section 9.02, the Company, the Guarantors and the Trustee may amend or supplement this Indenture (including Sections 3.09, 4.10 and 4.15 hereof) and the Notes and the Note Guarantees 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 (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Section 6.04 and Section 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, on, or interest or Additional Interest, if any, on, the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Notes or the Note Guarantees 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 (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 9.02. However, without the consent of each Holder affected, an amendment, supplement or waiver under this  Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

 

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

 

(b)                                 reduce the principal of or change the fixed maturity of any Note or alter or waive any of the provisions with respect to the redemption or repurchase of the Notes (other than provisions relating to minimum required notice of optional redemption or provisions under Sections 3.09, 4.10 or 4.15 hereof);

 

(c)                                  reduce the rate of or change the time for payment of interest, including Additional Interest, on any Note;

 

(d)                                 waive a Default or Event of Default in the payment of principal of, premium, if any, on, or interest or Additional Interest, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);

 

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

 

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(f)                                   make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, premium, if any, on, or interest or Additional Interest, on, the Notes (other than as permitted in clause (g) below);

 

(g)                                  waive a redemption or repurchase payment with respect to any Note (other than a payment required by Section 3.09, 4.10 or 4.15 hereof);

 

(h)                                 release any Guarantor from any of its obligations under its Note Guarantee or this Indenture, except in accordance with the terms of this Indenture; or

 

(i)                                     make any change in the preceding amendment, supplement or waiver provisions.

 

Upon the request of the Company to the Trustee, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of the Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee will join with the Company and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amended or supplemental indenture.

 

It is not necessary for the consent of the Holders of the Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.

 

After an amendment, supplement or waiver under this  Section 9.02 becomes effective, the Company will send to the Holders of the Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to send such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

 

Section 9.03.                          Compliance with Trust Indenture Act.

 

Every amendment or supplement to this Indenture or the Notes will be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

 

Section 9.04.                          Revocation and Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

 

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Section 9.05.                          Notation on or Exchange of Notes.

 

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

 

Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment, supplement or waiver.

 

Section 9.06.                          Trustee to Sign Amendments, etc.

 

The Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.

 

Article 10
 NOTE GUARANTEES

 

Section 10.01.                   Guarantee.

 

(a)                                 Subject to this Article 10, upon executing a supplemental indenture in the form of Exhibit E hereto, each Guarantor will hereby, jointly and severally, unconditionally Guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:

 

(i)                                     the principal of, premium, if any, on, and interest and Additional Interest, if any, on, the Notes will be  promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any, on, and interest, if any, on, the Notes, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

 

(ii)                                  in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.

 

Failing payment when due of any amount so Guaranteed or any performance so Guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to

 

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pay the same immediately. Each Guarantor agrees that this is a Guarantee of payment and not a Guarantee of collection.

 

(b)                                 The Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this 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 Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

 

(c)                                  If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by any of them to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

 

(d)                                 Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations Guaranteed hereby until payment in full of all obligations Guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the obligations Guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations Guaranteed hereby, and (ii) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.

 

Section 10.02.                   Limitation on Guarantor Liability.

 

Each Guarantor and, by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on

 

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behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance.

 

Section 10.03.                   Execution of Supplemental Indenture for Note Guarantee.

 

The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors.

 

In the event that the Company or any of its Restricted Subsidiaries creates or acquires any Domestic Subsidiary after the date of this Indenture that (i) incurs or guarantees Indebtedness under any Credit Facility, and (ii) is a Material Subsidiary, if required by Section 4.16 hereof, the Company will cause such Domestic Subsidiary to comply with the provisions of  Section 4.16 hereof, to execute a supplemental indenture in the form of Exhibit E hereto to become a Guarantor, and to otherwise comply with this Article 10, to the extent applicable.

 

Section 10.04.                   Guarantors May Consolidate, etc., on Certain Terms.

 

Except as otherwise provided in Section 10.05 hereof, no Guarantor may sell, assign, transfer, convey or otherwise dispose of, in one or more related transactions, all or substantially all of its properties or assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than the Company or another Guarantor, unless:

 

(a)                                 immediately after giving effect to such transaction or series of transactions, no Default or Event of Default exists; and

 

(b)                                 either:

 

(i)                                     subject to  Section 10.05 hereof, the Person acquiring the properties or assets in any such sale, assignment, transfer, conveyance or other disposition or the Person formed by or surviving any such consolidation or merger (if other than the Guarantor) unconditionally assumes all the obligations of that Guarantor under its Note Guarantee and this Indenture and (if then in effect) the Registration Rights Agreement pursuant to a supplemental indenture and a supplement to the Registration Rights Agreement, in form reasonably satisfactory to the Trustee; or

 

(ii)                                  the Net Proceeds of such transaction or series of transactions are applied in a manner that does not violate Section 4.10 hereof.

 

In case of any such consolidation, merger, sale or other disposition and upon the assumption by the successor Person, by supplemental indenture in the form of Exhibit E hereto, executed and delivered to the Trustee, of the Note Guarantee of the Guarantor, and provided that the Guarantor is not in violation of any covenant of this Indenture to be performed by the Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. All the

 

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Note Guarantees so issued will in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof.

 

Except as set forth in Articles  4 and 5 hereof, and notwithstanding clauses 10.04(b)(i) and (ii) above, nothing contained in this Indenture or in any of the Notes will prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or will prevent any sale or other disposition of the properties or assets of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor.

 

Section 10.05.                   Releases.

 

The Note Guarantee of a Guarantor shall be automatically released:

 

(a)                                 upon any sale or other disposition of all or substantially all of the properties or assets of that Guarantor, by way of merger, consolidation or otherwise, to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, if the sale or other disposition does not violate Section 4.10 hereof;

 

(b)                                 in connection with any sale or other disposition of Capital Stock of that Guarantor by way of merger, consolidation or otherwise to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, if the sale or other disposition does not violate  Section 4.10 hereof and such Guarantor ceases to be a Restricted Subsidiary of the Company as a result of the sale or other disposition;

 

(c)                                  upon designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Indenture;

 

(d)                                 upon the liquidation or dissolution of such Guarantor in a transaction or series of transactions that does not violate the terms of this Indenture;

 

(e)                                  upon Legal Defeasance or Covenant Defeasance in accordance with Article 8 hereof or satisfaction and discharge of this Indenture in accordance with Article 11 hereof; or

 

(f)                                   upon such Guarantor becoming (i) no longer liable for Indebtedness under any Credit Facility or (ii) no longer a Material Subsidiary.

 

Any Guarantor not released from its obligations under its Note Guarantee as provided in this Section 10.05 will remain liable for the full amount of principal of, premium, if any, on, and interest and Additional Interest, if any, on, the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 10.

 

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Article 11
 SATISFACTION AND DISCHARGE

 

Section 11.01.      Satisfaction and Discharge.

 

This Indenture will be satisfied and discharged and will cease to be of further effect as to all Notes issued hereunder (except as to surviving rights of registration of transfer or exchange of the Notes and as otherwise specified in this Article 11), when:

 

(a)        either:

 

(i)        all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or

 

(ii)       all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the giving of a notice of redemption or otherwise or will become due and payable within one year and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium, if any, and interest and Additional Interest, if any, to the date of Stated Maturity or redemption;

 

(b)        in respect of subclause (ii) of clause (a) of this Section 11.01, no Event of Default has occurred and is continuing on the date of the deposit (other than an Event of Default resulting from the borrowing of funds to be applied to such deposit and any similar deposit relating to other Indebtedness and, in each case, the granting of Liens to secure such borrowings);

 

(c)        the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by  which the Company or any Guarantor is bound (other than with respect to the borrowing of funds to be applied concurrently to make the deposit required to effect such satisfaction and discharge and any similar concurrent deposit relating to other Indebtedness, and in each case the granting of Liens to secure such borrowings);

 

(d)        the Company or any Guarantor has paid or caused to be paid all other sums payable by it under this Indenture; and

 

(e)        the Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at Stated Maturity or on the redemption date, as the case may be.

 

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In addition, the Company must deliver to the Trustee an Officers’ Certificate stating that all conditions precedent to satisfaction and discharge have been satisfied, and an Opinion of Counsel stating that the conditions precedent to satisfaction and discharge described in Sections 11.01(c) and 11.01(e) hereof have been satisfied.

 

Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to subclause  (ii) of clause (a) of this Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive. In addition, nothing in this  Section 11.01 will be deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the satisfaction and discharge of this Indenture.

 

Section 11.02.      Application of Trust Money.

 

Subject to the provisions of  Section 8.06 hereof, all money deposited with the Trustee pursuant to  Section 11.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal, premium, if any, and interest and Additional Interest, if any, for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

 

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with  Section 11.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to  Section 11.01 hereof; provided that if the Company has made any payment of principal of, premium, if any, on, and interest and Additional Interest, if any, on, any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

 

Article 12
 MISCELLANEOUS

 

Section 12.01.      Trust Indenture Act Controls.

 

This Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA §318(c), the imposed duties will control.

 

Section 12.02.      Notices.

 

Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing in the English language and delivered in Person or 

 

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by first class mail (registered or certified, return receipt requested), electronic image scan, facsimile transmission or overnight air courier guaranteeing next day delivery, to the others’ address:

 

If to any of the Company and the Guarantors:

 

SRC Energy Inc.

1675 Broadway, Suite 2600

Denver, Colorado 80202
 Attention: General Counsel

 

If to the Trustee:

 

U.S. Bank National Association
 950 17th Street
 Denver, Colorado 80202
 Attention: Global Corporate Trust Services/DN-CO-T12C

 

The Company, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

 

All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by electronic image scan or facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

 

Any notice or communication to a Holder will be mailed by first class mail (or sent electronically if DTC is the recipient), certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar, except that all notices and communications to the Depositary as a Holder shall be given in the manner it prescribes, notwithstanding anything to the contrary indication herein. Any notice or communication will also be so  given to any Person described in TIA §313(c), to the extent required by the TIA. Failure to send a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders.

 

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

 

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

 

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Section 12.03.      Communication by Holders of Notes with Other Holders of Notes.

 

Holders may communicate pursuant to TIA §312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA §312(c).

 

Section 12.04.      Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

 

(a)        an Officers’ Certificate (which must include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

 

(b)        an Opinion of Counsel (which must include the statements set forth in  Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

Section 12.05.      Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA §314(a)(4)) 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 12.06.      Rules by Trustee and Agents.

 

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

 

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

 

No director, officer, employee, incorporator or stockholder or other owner of any Capital Stock of the Company or any Restricted Subsidiary, as such, will have any liability for any obligations of the Company or the Restricted Subsidiaries under the Notes, this Indenture or the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

Section 12.08.      Governing Law.

 

THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.

 

Section 12.09.      No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 12.10.      Successors.

 

All agreements of the Company in this Indenture and the Notes will bind its successors. All agreements of the Trustee in this Indenture will bind its successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.05 hereof.

 

Section 12.11.      Severability.

 

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

 

Section 12.12.      Counterpart Originals.

 

The parties may sign any number of copies of this Indenture, and each party hereto may sign any number of separate copies of this Indenture. Each signed copy shall  be an original, but all of them together represent the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this 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 12.13.      Table of Contents, Headings, etc.

 

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to 

 

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be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.

 

Section 12.14.      Payment Date Other Than a Business Day.

 

If any payment with respect to any principal of, premium, if any, on, or interest or Additional Interest, if any, on, any Note (including any payment to be made on any date fixed for redemption or purchase of any Note) is due on a day which is not a Business Day, then the payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on such date, and no interest will accrue for the intervening period.

 

Section 12.15.      Evidence of Action by Holders.

 

Whenever in this Indenture it is provided that the Holders of a specified percentage in aggregate principal amount of the Notes may take action (including the making of any demand or request, the giving of any direction, notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with procedures approved by the Trustee, (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders or (d) in the case of Notes evidenced by a Global Note, by any electronic transmission or other message, whether or not in written format, that complies with the Depositary’s applicable procedures.

 

Section 12.16.      U.S.A. Patriot Act.

 

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identities each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

 

Section 12.17.      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.

 

115

 

[Signatures on following page]

 

116

 

SIGNATURES

 

	
Dated as of November 29, 2017
    	
 
    
	
 
    	
COMPANY:
    
	
 
    	
SRC ENERGY INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ James P. Henderson
    
	
 
    	
 
    	
Name:
    	
James P. Henderson
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL ASSOCIATION,
    
	
 
    	
as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Leland Hansen
    
	
 
    	
 
    	
Name:
    	
Leland Hansen
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

[Signature page to Indenture]

 

 

EXHIBIT A

 

[Face of Note]

 

CUSIP

 

6.250% Senior Notes due 2025

 

	
No.
    	
$
    

 

SRC ENERGY INC.

 

SRC Energy Inc., a Colorado corporation (the “Company”), promises to pay, for value received, to CEDE & CO. or its registered assigns, the principal sum of                  DOLLARS ($               ) [or such greater or lesser amount as may be indicated on the attached Schedule of Exchanges of Interests in the Global Note] on December 1, 2025.

 

Interest Rate: 6.250% per annum

 

Interest Payment Dates: June 1 and December 1

 

Record Dates: May 15 and November 15

 

Dated:

 

A-1

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officers.

 

 

	
 
    	
SRC ENERGY INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
[·]
    
	
 
    	
 
    	
Title:
    	
[·]
    

 

A-1

 

(Form of Trustee’s Certificate of Authentication)

 

This is one of the Notes referred to
 in the within-mentioned Indenture:

 

	
U.S. BANK NATIONAL ASSOCIATION
    	
 
    
	
as Trustee
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    

 

A-2

 

[BACK OF NOTE]

 

6.250% SENIOR NOTES DUE 2025

 

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

 

[Insert the Private Placement 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. SRC Energy Inc., a Colorado corporation (the “Company”), promises to pay or cause to be paid interest on the principal amount of this Note at 6.250% per annum from November 29, 2017 until maturity and to pay the Additional Interest, if any, payable pursuant to the Registration Rights Agreement. The Company will pay interest and Additional Interest, if any, semi-annually in arrears on June 1 and December 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 June 1, 2018. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

(2) METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) and Additional Interest, if any, to the Persons who are registered Holders of Notes at the close of business on the May 15 and November 15 next 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 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium, if any, and interest and Additional Interest, if any, at the office or agency of the Company maintained for such purpose within the City and State of New York, or, at the option of the Company, payment of interest and Additional Interest, if any, 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, and interest and Additional Interest, if any, on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Company 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, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The

 

A-3

 

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

 

(4) INDENTURE. The Company issued the Notes under an Indenture dated as of November 29, 2017 (the “Indenture”) between the Company and the Trustee. 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 such Act 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 to the extent permitted by law. The Notes are unsecured obligations of the Company. 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, 2020, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture, upon notice as provided in the Indenture, at a redemption price equal to 106.250% of the principal amount of the Notes redeemed, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the rights of Holders on the relevant record date to receive interest on the relevant Interest Payment Date), with an amount of cash not greater than the net cash proceeds of an Equity Offering by the Company, provided that:

 

(A) at least 65% of the aggregate principal amount of Notes originally issued under the Indenture (excluding any Additional Notes and Notes held by the Company and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and

 

(B) the redemption occurs within 180 days of the date of the closing of such Equity Offering.

 

(b) At any time prior to December 1, 2020, the Company may on any one or more occasions redeem all or a part of the Notes, upon notice as provided in the Indenture, at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus the Applicable Premium, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date.

 

(c) The Company may redeem all (but not a portion of) the Notes when permitted by, and pursuant to the conditions in, Section 4.15(e) of the Indenture.

 

(d) Except pursuant to the preceding paragraphs under “(5) OPTIONAL REDEMPTION,” the Notes will not be redeemable at the Company’s option prior to December 1, 2020.

 

A-4

 

(e) On or after December 1, 2020, the Company may on any one or more occasions redeem all or a part of the Notes, upon notice as provided in the Indenture, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, on the Notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on December 1 of the years indicated below, subject to the rights of Holders on the relevant record date to receive interest on the relevant Interest Payment Date:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
2020
    	
 
    	
104.688
    	
%
    
	
2021
    	
 
    	
103.125
    	
%
    
	
2022
    	
 
    	
101.563
    	
%
    
	
2023 and thereafter
    	
 
    	
100.000
    	
%
    

 

Unless the Company defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.

 

(6) SPECIAL MANDATORY REDEMPTION. Except as described in the Indenture under “Special Mandatory Redemption,” the Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

(7) REPURCHASE AT THE OPTION OF HOLDER.

 

(a) If there is a Change of Control, the Company will be required to make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date (the “Change of Control Payment”). Within 30 days following any Change of Control, or at the Company’s option, prior to such Change of Control but after it is publicly announced, the Company will send a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture.

 

(b) If the Company or a Restricted Subsidiary of the Company consummates any Asset Sales, within ten Business Days of each date on which the aggregate amount of Excess Proceeds exceeds $25.0 million, the Company will make an Asset Sale Offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase, prepay or redeem with the proceeds of sales of assets to purchase, prepay or redeem, on a pro rata basis, the maximum principal amount of Notes and such other pari passu Indebtedness (plus all accrued interest on the Indebtedness and the amount of all

 

A-5

 

fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount, plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, prepayment or redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant Interest Payment Date, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company or any Restricted Subsidiary may use those Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and pari passu Indebtedness tendered in such Asset Sale Offer exceeds the amount of Excess Proceeds allocated to the purchase of Notes, the Trustee will select the Notes to be purchased on a pro rata basis (except as provided in Section 4.10 of the Indenture), based on the amounts tendered. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

 

(8) NOTICE OF REDEMPTION. At least 30 days but not more than 60 days before a redemption date, or such later date as is necessary to comply with law, the Company will mail or cause to be mailed, by first class mail, or send 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 sent 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 Articles 8 or 11 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.

 

(9) 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 Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company 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 Company 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.

 

(10) 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.

 

A-6

 

(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Notes or the Note Guarantees 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, subject to Section 6.04 and Section 6.07 of the Indenture, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, on, or interest of Additional Interest, if any, on, the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of the Indenture or the Notes or the Note Guarantees 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 Note Guarantees may be amended or supplemented: to cure any ambiguity, defect or inconsistency; to provide for uncertificated Notes in addition to or in place of certificated Notes; to provide for the assumption of the Company’s or a Guarantor’s obligations to Holders of the Notes and Note Guarantees in the case of a merger or consolidation or disposition of all or substantially all of the Company’s or such Guarantor’s  properties or assets, as applicable; to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any Holder, including to comply with the requirements of the SEC or DTC in order to maintain the transferability of the Notes pursuant to Rule 144A or Regulation S; to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; to conform the text of the Indenture, the Notes, the Note Guarantees to any provision of the “Description of Notes” section of the Offering Memorandum; to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture; to secure the Notes or the Note Guarantees pursuant to the requirement of Section 4.12 of the Indenture; to add any additional Guarantor or to evidence the release of any Guarantor from its Note Guarantee, in each case as provided in the Indenture; or to evidence or provide for the acceptance of appointment under the Indenture of a successor Trustee.

 

(12) DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest and Additional Interest, if any, on, the Notes; (ii) default in the payment when due (at Stated Maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the Notes, (iii) failure by the Company to comply with the provisions of Section 5.01 of the Indenture or to consummate a purchase of Notes when required pursuant to Sections 3.08, 4.10 or 4.15 of the Indenture; (iv) failure by the Company for 180 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with Section 4.03 of the Indenture; (v) failure by the Company for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with any of its other agreements in the Indenture; (vi) default under certain other agreements relating to Indebtedness of the Company or any of its Restricted Subsidiaries which default is a Payment Default or results in the acceleration of such Indebtedness prior to its express maturity and the principal amount of the Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the

 

A-7

 

maturity of which has been so accelerated, aggregate to $35.0 million or more; (vii) failure by the Company or any of its Restricted Subsidiaries to pay certain final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $35.0 million (to the extent not covered by insurance by a reputable and creditworthy insurer as to which the insurer has not disclaimed coverage), which judgments are not paid, discharged or stayed, for a period of 60 days; (viii) certain events of bankruptcy or insolvency with respect to the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary; and (ix) except as permitted by the Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee. In the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company, any Restricted Subsidiary of the Company that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, 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 or Additional Interest, if any) if a committee of its Responsible Officers in good faith 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, premium, if any, on, or interest or Additional Interest, if any, on, the Notes (including in connection with an offer to purchase any Notes). The Company is required to deliver to the Trustee annually an Officers’ Certificate regarding compliance with the Indenture, and the Company is required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a written statement specifying such Default or Event of Default.

 

(13) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

 

(14) NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator or stockholder or other owner of any Capital Stock of the Company or any Restricted Subsidiary, as such, will have any liability for any obligations of the Company or the Restricted Subsidiaries under the Notes, the Indenture or the Note Guarantees or

 

A-8

 

for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

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

 

(16) 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).

 

(17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes will have all the rights set forth in the Registration Rights Agreement dated as of November 29, 2017, among the Company and the other parties named on the signature pages thereof or, in the case of Additional Notes, Holders of Restricted Global Notes and Restricted Definitive Notes will have the rights set forth in one or more registration rights agreements, if any, among the Company and the other parties thereto, relating to rights given by the Company to the purchasers of any Additional Notes (collectively, the “Registration Rights Agreement”).

 

(18) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP 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.

 

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

 

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to:

 

SRC Energy Inc.

1675 Broadway, Suite 2600
 Denver, Colorado 80202
 Attention: General Counsel

 

A-9

 

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 Company. The agent may substitute another to act for him.

 

	
Date:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Your Signature:
    	
 
    
	
 
    	
(Sign exactly as your name appears on the face of this   Note)
    
	
 
    	
 
    
	
 
    	
 
    
	
Signature Guarantee*:
    	
 
    	
 
    
					

 

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

 

A-10

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

 

o Section 4.10 o Section 4.15

 

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:

 

$

 

	
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-11

 

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-12

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

SRC Energy Inc.
 1675 Broadway, Suite 2600
 Denver, Colorado 80202
 Attention: General Counsel

 

U.S. Bank National Association
 950 17th Street
 DN-CO-T12C
 Denver, Colorado 80202
 Attention: Corporate Trust Services

 

Re: 6.250% Senior Notes due 2025

 

Reference is hereby made to the Indenture, dated as of November 29, 2017 (the “Indenture”), between SRC Energy Inc., a Colorado corporation (the “Company”), and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

, (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $                 in such Note[s] or interests (the “Transfer”), to (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1. o Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.

 

B-1

 

2. o Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Restricted Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.

 

3. o Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

 

(a) o such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

 

OR

 

(b) o such Transfer is being effected to the Company or a subsidiary thereof;

 

OR

 

(c) o such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

 

OR

 

(d) o such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other

 

B-2

 

than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.

 

4. o Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.

 

(a) o Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(b) o Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(c) o Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in

 

B-3

 

accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Insert Name of Transferor]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
Date:
    	
 
    	
 
    	
 
    
					

 

B-4

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

1. The Transferor owns and proposes to transfer the following:

 

[CHECK ONE OF (A) OR (B)]

 

(a) o a beneficial interest in the:

 

(i) o 144A Global Note (CUSIP 78470V AA6), or

 

(ii) o Regulation S Global Note (CUSIP U8522V AA8), or

 

(iii) o IAI Global Note (CUSIP 78470V AB4); or

 

(b) o a Restricted Definitive Note.

 

2. After the Transfer the Transferee will hold:

 

[CHECK ONE]

 

(a) o a beneficial interest in the:

 

(i) o 144A Global Note (CUSIP 78470V AA6), or

 

(ii) o Regulation S Global Note (CUSIP U8522V AA8), or

 

(iii) o IAI Global Note (CUSIP 78470V AB4); or

 

(iv) o Unrestricted Global Note (CUSIP 78470V AC2); or

 

(b) o a Restricted Definitive Note; or

 

(c) o an Unrestricted Definitive Note,

 

in accordance with the terms of the Indenture.

 

B-5

 

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

SRC Energy Inc.

1675 Broadway, Suite 2600
 Denver, Colorado 80202
 Attention: General Counsel

 

U.S. Bank National Association
 950 17th Street
 DN-CO-T12C
 Denver, Colorado 80202
 Attention: Corporate Trust Services

 

Re: 6.250% Senior Notes due 2025

 

(CUSIP [  ])

 

Reference is hereby made to the Indenture, dated as of November 29, 2017 (the “Indenture”), between SRC Energy Inc., a Colorado corporation (the “Company”), and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

, (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $                    in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

 

1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note

 

(a) o Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

C-1

 

(b) o Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

(c) o Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

(d) o Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes

 

(a) o Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

 

C-2

 

(b) o Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] o 144A Global Note, o Regulation S Global Note, o IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

 

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Insert Name of Transferor]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    
					

 

C-3

 

EXHIBIT D

 

FORM OF CERTIFICATE FROM
 ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

SRC Energy Inc.
 1675 Broadway, Suite 2600
 Denver, Colorado 80202
 Attention: General Counsel

 

U.S. Bank National Association
 950 17th Street
 DN-CO-T12C
 Denver, Colorado 80202
 Attention: Corporate Trust Services

 

Re: 6.250% Senior Notes due 2025

 

Reference is hereby made to the Indenture, dated as of November 29, 2017 (the “Indenture”), between SRC Energy Inc., a Colorado corporation (the “Company”), and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

In connection with our proposed purchase of $                  aggregate principal amount of:

 

(a) o a beneficial interest in a Global Note, or

 

(b) o a Definitive Note,

 

we confirm that:

 

1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).

 

2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an Opinion of Counsel in form reasonably acceptable to the

 

D-1

 

Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.

 

3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.

 

4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

 

5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.

 

You are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Insert Name of Accredited Investor]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    
					

 

D-2

 

EXHIBIT E

 

[FORM OF SUPPLEMENTAL INDENTURE
 TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

 

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of [·], among [·] (the “Guaranteeing Subsidiary”), a subsidiary of SRC Energy Inc., a Colorado corporation (the “Company”), the Company, and U.S. Bank National Association, as trustee under the Indenture referred to below (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of November 29, 2017 providing for the issuance of 6.250% Senior Notes due 2025 (the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally Guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and

 

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

 

2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof.

 

4. NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator or stockholder or other owner of any Capital Stock of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture or the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

E-1

 

5. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

 

6. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

 

7. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.

 

8. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

 

E-2

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

 

 

	
 
    	
[GUARANTEEING SUBSIDIARY]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SRC ENERGY INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL ASSOCIATION As Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

E-3

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