Document:

Exhibit
10.8

 

	CREDIT SUISSE SECURITIES (USA) LLC

    CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

    Eleven Madison Avenue

    New York, NY 10010	UBS
        AG, STAMFORD BRANCH

        600
        Washington Boulevard

        Stamford,
        Connecticut 06901

         

        ubs
        securities llc

        1285
        Avenue of the Americas

        New
        York, New York 10019

 

CONFIDENTIAL

 

December
22, 2016

 

Project
Cognac

Senior
Secured Term Facility

Commitment
Letter

 

HCAC
Merger Sub, Inc.

c/o
Hennessey Capital Acquisition Corp. II

700
Louisiana Street, Suite 900

Houston,
Texas 77002

Attention:
Kevin Charlton

 

Ladies
and Gentlemen:

 

You
have advised Credit Suisse Securities (USA) LLC (“CS Securities”), Credit Suisse AG, Cayman Islands Branch
(“CS AG” and together with CS Securities, “CS”), UBS AG, Stamford Branch (“UBS”)
and UBS Securities LLC (“UBSS”, and together with UBS, the “UBS Parties”) (CS and the UBS
Parties, collectively, the “Initial Commitment Parties” and, together with any other Commitment Party appointed
as described below, collectively, the “Commitment Parties”, “us” or “we”)
that you intend to acquire, directly or indirectly, the Target (as defined on Exhibit A hereto) and consummate the other
transactions described on Exhibit A hereto. Capitalized terms used but not otherwise defined herein are used with
the meanings assigned to such terms in the Exhibits hereto.

 

1. Commitments.

 

In
connection with the Transactions contemplated hereby, each of CS AG and UBS (together with any other Initial Lender appointed
as described below, collectively, the “Initial Lenders”), and each other Initial Lender hereby commits on a
several, but not joint, basis to provide the percentage of the entire principal amount of the Term Facility set forth opposite
such Initial Lender’s name on Schedule 1 hereto (as such schedule may be amended or supplemented in accordance with
the terms of this Commitment Letter), in each case, (i) upon the terms set forth or referred to in this letter, the Transaction
Summary attached as Exhibit A hereto and the Summaries of Terms and Conditions attached as Exhibits B
hereto and (ii) the initial funding of which is subject only to the conditions set forth on Exhibit C hereto
(such Exhibits A through C, including the annexes thereto, the “Term Sheets” and together
with this letter, collectively, this “Commitment Letter”).

 

     

     

    

 

2. Titles
and Roles.

 

It
is agreed that:

 

		(a)	each
                                         of CS Securities and UBSS, together with any other Term Lead Arranger appointed as described
                                         below, will act as joint lead arrangers and joint bookrunners for the Term Facility (acting
                                         in such capacities, the “Lead Arrangers”); and

 

		(b)	CS
                                         AG will act as sole administrative agent and as sole collateral agent for the Term Facility.

 

Except
as set forth below, you agree that no other agents, co-agents, lead arrangers, bookrunners, managers or arrangers will be appointed,
no other titles will be awarded and no compensation (other than that expressly contemplated in the Fee Letter dated the date hereof
and delivered in connection herewith (the “Fee Letter”)) will be paid to obtain the commitments of the Lenders
under the Term Facility unless you and we shall so reasonably agree; provided, that CS Securities will have “left”
placement (the “Left Lead Arranger”) in any marketing materials or other documentation used in connection with
the Term Facility and (z) the other agents (or their affiliates, as applicable) for the Term Facility will be listed in an
order determined by you in consultation with the Commitment Parties in any marketing materials or other documentation used in
connection with the Term Facility.

 

Notwithstanding
the foregoing, you may, on or prior to December 23, 2016, appoint up to 2 additional agents, co-agents, lead arrangers, bookrunners,
managers or arrangers or confer other titles in respect of the Term Facility (any such agent, co-agent, lead arranger, bookrunner,
manager, arranger or other titled institution, an “Additional Agent”) in a manner and with economics determined
by you in consultation with the Lead Arranger (it being understood that (a) no Additional Agent shall be entitled to a greater
percentage of the economics than either Initial Commitment Party, (b) you may not allocate more than 30% of the total economics
in respect of the Term Facility to Additional Agents (or their affiliates), (c) each Additional Agent (or its affiliate)
shall assume a proportion of the commitments with respect to the Term Facility that is equal to the proportion of the economics
allocated to such Additional Agent (or its affiliates) in respect thereof, and Schedule 1 hereto shall be automatically
amended accordingly as it pertains to the Term Facility and (d) to the extent you appoint (or confer titles on) any Additional
Agent, the economics allocated to, and the commitment amounts of, each relevant Commitment Party in respect of the Term Facility
will be proportionately reduced (or otherwise reduced in a manner agreed by you and us) by the amount of the economics allocated
to, and the commitment amount of, such Additional Agent (or its affiliate), in each case upon the execution and delivery by such
Additional Agent of customary joinder documentation reasonably acceptable to you and us, and thereafter, such Additional Agent
shall constitute a “Commitment Party,” “Initial Lender,” and/or “Term Lead Arranger,” as applicable,
under this Commitment Letter and under the Fee Letter).

 

3. Syndication.

 

We
intend to syndicate the Term Facility to a group of lenders identified by us in consultation with you and acceptable to you (it
being understood and agreed that your consent may not be unreasonably withheld or delayed) (such lenders, the “Lenders”);
it being understood and agreed that we will not syndicate to any Disqualified Institution (as defined below).

 

    	 	2	 

     

    

 

“Disqualified
Institution” means:

 

(a) (i)
any person identified on Part A of Annex I to the Fee Letter on the date hereof, (ii) any affiliate of any person
described in clause (i) above that is identifiable based solely the name of such affiliate and (iii) any other affiliate
of any person described in clause (i) above that is identified in a written notice to the Left Lead Arranger (or, after
the Closing Date, the Term Agent, as applicable) after the date hereof (each such person, a “Disqualified Lending Institution”);
and/or

 

(b)
(i) any person that is a competitor of the Target and/or any of its subsidiaries (each such person, a “Competitor”)
and/or any affiliate of any competitor, in each case that is identified on Part B of Annex I to the Fee Letter on
the date hereof, (ii) any Competitor that is identified in writing and reasonably acceptable to the Left Lead Arrangers (if after
the date hereof and prior to the Closing Date) or the Term Agent, as applicable (if after the Closing Date), (iii) any affiliate
of any person described in clauses (i) and/or (ii) above (other than any bona fide debt fund affiliate) that is
identifiable based solely on the name of such affiliate) and (iv) any other affiliate of any person described in clauses (i)
and/or (iii) above that is identified by a written notice to the Left Lead Arranger (or, after the Closing Date, the
Term Agent, as applicable) after the date hereof (it being understood and agreed that no bona fide debt fund affiliate of any
Competitor may be designated as Disqualified Institution pursuant to this clause (iv)); provided that no written
notice delivered pursuant to clauses (a)(iii), (b)(ii) and/or (b)(iv) above shall apply retroactively to
disqualify any person that has previously acquired an assignment or participation interest in the Loans.

 

Notwithstanding
any other provision of this Commitment Letter to the contrary and notwithstanding any syndication, assignment or other transfer
by any Initial Lender, other than in connection with any assignment to an Additional Agent upon designation of such Additional
Agent as an Initial Lender and the execution and delivery by such Additional Agent of customary joinder documentation, in each
case pursuant to the immediately preceding paragraph, in respect of the amount allocated to such Additional Agent, (a) no Initial
Lender shall be relieved, released or novated from its obligations hereunder (including its obligation to fund its applicable
percentage of the Term Facility on the Closing Date if the conditions set forth on Exhibit D hereto are satisfied or waived)
in connection with any syndication, assignment or other transfer until after the initial funding of the Term Facility on the Closing
Date, (b) no such syndication, assignment or other transfer shall become effective with respect to any portion of any Initial
Lender’s commitments in respect of the Term Facility until the initial funding of the Term Facility on the Closing Date
and (c) unless the Borrower agrees in writing in its sole discretion, each Initial Lender, each Commitment Party and each
Lead Arranger shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the
Term Facility, including all rights with respect to consents, waivers, modifications, supplements and amendments, until the Closing
Date has occurred.

 

The
Lead Arrangers intend to commence syndication efforts with respect to the Term Facility promptly and from the Acceptance Date
(as defined below) until the earlier to occur of (x) a Successful Syndication (as defined in the Fee Letter) and (y) the
date that is 60 days after the Closing Date (the “Syndication Period”), and you agree to assist (and to use
your commercially reasonable efforts to cause the Target to assist) the Lead Arrangers in completing a syndication of the Term
Facility that is reasonably satisfactory to the Lead Arrangers and you. Such assistance shall include (a) using your commercially
reasonable efforts to ensure that the syndication efforts benefit from your existing banking relationships and, to the extent
appropriate and reasonable, those of you and the Target, (b) facilitating direct contact between appropriate members of senior
management of you, on the one hand, and the proposed Lenders, on the other hand (and using your commercially reasonable efforts
to ensure such contact between non-legal advisors of you and appropriate members of senior management and non-legal advisors of
the Target, on the one hand, and the proposed Lenders, on the other hand, subject to the limitations on your rights set forth
in the Acquisition Agreement), in all cases at times and locations to be mutually agreed upon, (c) your assistance and provision
of information for use (and using your commercially reasonable efforts to cause the Target to assist and provide information for
use) in the preparation of a customary confidential information memorandum (the “CIM”) and other customary
marketing materials to be used in connection with the syndication of the Term Facility, (d) the hosting, with the Lead Arrangers,
of meetings (or, if you and we shall agree, conference calls in lieu of any such meeting) of prospective Lenders (limited to one
“bank meeting”, unless otherwise deemed reasonably necessary by the Lead Arrangers) at times and locations to be mutually
agreed (and using your commercially reasonable efforts to cause the senior management of the Target to be available for such meetings),
(e) during the Syndication Period, your ensuring that there is no competing issuance or incurrence of debt securities or
bank financing by or on behalf of Holdings, the Borrower or their respective subsidiaries and your using commercially reasonable
efforts to ensure that there are no competing issuances or incurrences of debt securities or bank financing by and on behalf of
the Target or their subsidiaries announced, offered, placed or arranged (other than, for the avoidance of doubt, (i) the Term
Facility and (ii) Permitted Surviving Debt), in each case that could reasonably be expected to materially impair the primary syndication
of the Term Facility and (f) using your commercially reasonable efforts to obtain public corporate credit or public corporate
family ratings, as applicable, of the Borrower and public ratings for the Term Facility from each of Moody’s Investors Service,
Inc. (“Moody’s”) and Standard & Poor’s Financial Services LLC (“S&P”),
a subsidiary of S&P Global Inc. prior to the commencement of the Marketing Period (it being understood that obtaining such
ratings is in no event a condition to the commitments hereunder). Notwithstanding anything to the contrary contained in this Commitment
Letter or the Fee Letter, neither the commencement nor the completion of the syndication of any of the Term Facility, nor obtaining
ratings for the Term Facility, shall constitute a condition precedent to the availability and initial funding of the Term Facility
on the Closing Date.

 

    	 	3	 

     

    

 

The
Lead Arrangers, in their capacity as such, will manage, in consultation with you (and subject to your consent rights set forth
in the first paragraph of this Section 3), all aspects of the syndication, including decisions as to the selection of prospective
Lenders to be approached (which may not be Disqualified Institutions) and when they will be approached, when the Lenders’
commitments will be accepted, which Lenders will participate, the allocation of the commitments among the Lenders and the amount
and distribution of fees among the Lenders.

 

You
acknowledge that (a) the Lead Arrangers will make available customary marketing materials (the “Information Materials”),
including the CIM (containing customary language exculpating the Commitment Parties and their respective affiliates with respect
to any liability related to the use of the contents of the Public Package (as defined below)) and a customary lenders’ presentation
to the proposed syndicate of Lenders by posting the Information Materials on IntraLinks, SyndTrak or another similar secure electronic
system and (b) certain of the prospective Lenders may be “public side” Lenders (i.e., Lenders that
have personnel that do not wish to receive material non-public information within the meaning of foreign or the United States
federal or state securities laws with respect to Holdings, the Borrower, the Target, their respective subsidiaries, or the respective
securities of any of the foregoing or the Acquisition (“MNPI”) (each, a “Public Lender”
and, collectively, the “Public Lenders”)). At the request of the Lead Arrangers, you agree to assist and to
use commercially reasonable efforts to cause the Target to assist us in preparing an additional version of the information package
and presentation consisting exclusively of information and documentation with respect to Holdings, the Borrower, the Target, their
respective subsidiaries, the respective securities of any of the foregoing and the Acquisition that is either information of a
type that would be made publicly available if Holdings, the Borrower or the Target were to become public reporting companies or
not material with respect to Holdings, the Borrower, the Target, your and their respective subsidiaries, any of their respective
securities or the Acquisition for purposes of foreign or United States federal or state securities laws (and is not otherwise
MNPI) (the “Public Package”). It is understood that in connection with your assistance described above, customary
authorization letters will be included in the CIM that (i) authorize the distribution of the CIM to prospective Lenders, (ii)
confirm that the Public Package does not include MNPI or any information of a type that would not be publicly available if Holdings,
the Borrower, or the Target were public reporting companies and (iii) contain a customary “10b-5 representation”.
You acknowledge and agree that, in addition to the Public Package, the following documents may be distributed to all prospective
Lenders (other than Disqualified Institutions), including prospective Public Lenders (except to the extent you notify us in writing
to the contrary prior to distribution and provided that you have been given a reasonable opportunity to review such documents
and comply with applicable disclosure obligations): (i) the Term Sheets, (ii) drafts and final definitive documentation
with respect to the Term Facility, (iii) administrative materials prepared by the Lead Arrangers for prospective Lenders
(such as lender meeting invitations, allocations and funding and closing memoranda) and (iv) notifications of changes in
the terms of the Term Facility. You also agree, at our request, to identify (or, in the case of information relating to the Target
and its subsidiaries, use commercially reasonable efforts to identify) information to be distributed to the Public Lenders by
clearly and conspicuously marking the same as “PUBLIC”. By marking any documents, information or other data “PUBLIC”,
you shall be deemed to have authorized the Commitment Parties and the prospective Lenders to treat such documents, information
or other data as not containing MNPI (it being understood that you shall not be under any obligation to mark any particular Information
“Public”).

 

    	 	4	 

     

    

 

4. Information.

 

You
hereby represent that, to your knowledge with respect to the Target and its subsidiaries, (a) all written information concerning
Holdings, the Borrower and their respective subsidiaries and the Target and its subsidiaries (other than the Projections, other
forward-looking and/or projected information and information of a general economic or industry-specific nature) that has been
or will be made available to any of us by Holdings, the Borrower or any of their respective representatives on your behalf in
connection with the transactions contemplated hereby (the “Information”), when taken as a whole, does not or
will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of the circumstances under which such statements are
made (after giving effect to all supplements and updates thereto from time to time) and (b) the Projections have been or
will be prepared in good faith based upon assumptions believed by you to be reasonable at the time furnished (it being recognized
by the Commitment Parties that such Projections are not to be viewed as facts and are subject to significant uncertainties and
contingencies many of which are beyond your control, that no assurance can be given that any particular financial projections
will be realized, that actual results may differ from projected results and that such differences may be material). You agree
that if, at any time prior to the later of the expiration of the Syndication Period and the Closing Date, you become aware that
any of the representations in the preceding sentence would be incorrect if the Information or the Projections were being furnished
and such representations were being made at such time, you will (or prior to the Closing Date with respect to Information and
Projections concerning the Target and its subsidiaries, you will, use commercially reasonable efforts to) promptly supplement
the Information and the Projections so that (to your knowledge with respect to the Target and its subsidiaries) the representations
in the preceding sentence remain true in all material respects under those circumstances; provided, that any such supplementation
shall cure any breach of such representations. You understand that in arranging and syndicating the Term Facility, we may use
and rely on the Information and Projections without independent verification thereof and we do not assume responsibility for the
accuracy and completeness of the Information or the Projections. Notwithstanding anything to the contrary contained in this Commitment
Letter or the Fee Letter, none of the making of the representation in this Section 4, the provision of any supplement thereto,
nor the accuracy of any such representation or supplement shall constitute a condition precedent to the availability and/or initial
funding of the Term Facility on the Closing Date.

 

    	 	5	 

     

    

 

5. Fee
Letter.

 

As
consideration for the commitments and agreements of the Commitment Parties hereunder, you agree to pay or cause to be paid the
fees described in the Fee Letter on the terms and subject to the conditions (including as to timing and amount) set forth therein.

 

6. Limited
Conditionality Provision.

 

Notwithstanding
anything in this Commitment Letter, the Fee Letter, the Credit Documentation or any other letter agreement or other undertaking
concerning the financing of the transactions contemplated hereby to the contrary, (a) the only representations relating to
Holdings, the Borrower, the Target and their respective subsidiaries and their respective businesses, the accuracy of which shall
be a condition to the availability and initial funding of the Term Facility on the Closing Date, shall be (i) such of the
representations made by or on behalf of the Target, their subsidiaries or their respective businesses in the Acquisition Agreement
as are material to the interests of the Lenders, but only to the extent that you or your applicable affiliate have the right to
terminate your (or its) obligations under the Acquisition Agreement or to decline to consummate the Acquisition as a result of
a breach of such representations in the Acquisition Agreement (to such extent, the “Specified Acquisition Agreement Representations”)
and (ii) the Specified Representations (as defined below), (b) the terms of the Credit Documentation shall be in a form
such that they do not impair the availability of the Term Facility on the Closing Date if the conditions set forth on Exhibit C
hereto are satisfied (it being understood and agreed that to the extent any Collateral (including the creation or perfection
of any security interest) is not or cannot be provided on the Closing Date (other than, to the extent required under the Term
Sheets, (i) the perfection of a lien on Collateral that is of the type where a lien on such Collateral may be perfected solely
by the filing of a financing statement under the Uniform Commercial Code (“UCC”) and (ii) a pledge of
the equity interests of the Borrower and the Subsidiary Guarantors with respect to which a lien may be perfected on the Closing
Date by the delivery of a stock or equivalent certificate (together with a stock power or similar instrument of transfer endorsed
in blank for the relevant certificate, it being understood that if you have used your commercially reasonable efforts to deliver
the same, stock or equivalent certificates of the Target’s subsidiaries shall only be required to be delivered on the Closing
Date if you have actually received such certificates from the seller or its designee)) after your use of commercially reasonable
efforts to do so without undue burden or expense, then the provision and/or perfection of such Collateral shall not constitute
a condition precedent to the availability or initial funding of the Term Facility on the Closing Date but may instead be delivered
and/or perfected within 90 days (or such longer period as the Agent may reasonably agree) after the Closing Date pursuant to arrangements
to be mutually agreed by the parties hereto acting reasonably and (c) the only conditions (express or implied) to the availability
of the Term Facility on the Closing Date are those expressly set forth on Exhibit C hereto, and such conditions shall
be subject in all respects to the provisions of this paragraph.

 

For
the avoidance of doubt, your compliance with your obligations under this Commitment Letter and/or the Fee Letter, other than your
satisfaction (or procurement of a waiver of) the conditions described on Exhibit C hereto, is not a condition to the availability
of the Term Facility on the Closing Date.

 

For
purposes hereof, “Specified Representations” means the representations and warranties set forth in the applicable
Credit Documentation relating to: organizational existence of the Loan Parties; organizational power and authority (as they relate
to due authorization, execution, delivery and performance of the applicable Credit Documentation) of the Loan Parties; due authorization,
execution and delivery of the relevant Credit Documentation by the Loan Parties, and enforceability of the relevant Credit Documentation
(as it relates to the entering into and performance thereof) against the Loan Parties; solvency as of the Closing Date (after
giving effect to the Transactions) of the Borrower and its subsidiaries on a consolidated basis (in form and scope consistent
with the solvency certificate to be delivered pursuant to paragraph 1(b) of Exhibit C hereto); no conflicts
of the Credit Documentation with the organizational documents of the Loan Parties; Federal Reserve margin regulations; the Investment
Company Act; the PATRIOT Act; the use of proceeds of the Term Facility on the Closing Date not violating OFAC or FCPA and the
creation, validity and perfection of security interests (subject in all respects to security interests and liens permitted under
the Credit Documentation and to the foregoing provisions of this paragraph and the provisions of the immediately preceding paragraph).
This Section 6 and the provisions contained herein shall be referred to as the “Limited Conditionality Provision”.

 

    	 	6	 

     

    

 

7. Indemnification;
Expenses.

 

You
agree (a) to indemnify and hold harmless each of the Commitment Parties, their respective affiliates and controlling persons
and their respective directors, officers, employees, partners, agents, advisors and other representatives (each, together with
their successors and assigns, an “indemnified person”) from and against any and all losses, claims, damages
and liabilities to which any such indemnified person may become subject arising out of or in connection with this Commitment Letter,
the Fee Letter, the Term Facility, the use of the proceeds thereof and the Acquisition and the Transactions or any claim, litigation,
investigation or proceeding relating to any of the foregoing (a “Proceeding”), regardless of whether any indemnified
person is a party thereto or whether such Proceeding is brought by you, any of your affiliates or any third party, and to reimburse
each indemnified person within 30 days following written demand (together with customary backup documentation in reasonable detail
supporting such reimbursement request) therefor for any reasonable and documented legal or other out-of-pocket expenses incurred
in connection with investigating or defending any Proceeding (but limited, in the case of legal fees and expenses, to one counsel
to such indemnified persons taken as a whole and, solely in the case of an actual or perceived conflict of interest where an indemnified
person informs you of such conflict, one additional counsel to all affected indemnified persons, taken as a whole (and, if reasonably
necessary, of one local counsel in any relevant jurisdiction to all such persons, taken as a whole and, solely in the case of
any such conflict of interest, one additional local counsel to all affected indemnified persons taken as a whole, in each such
relevant jurisdiction)); provided, that the foregoing indemnity will not, as to any indemnified person, apply to losses,
claims, damages, liabilities or related expenses to the extent they are determined by a final non appealable judgment of a court
of competent jurisdiction to have arisen from (i) the willful misconduct, bad faith or gross negligence of, or material breach
of this Commitment Letter, the Fee Letter or the Credit Documentation by, such indemnified person (or any of its Related Parties
(as defined below)), or (ii) any dispute solely among indemnified persons which does not arise out of any act or omission
of Holdings or the Borrower or any of their respective subsidiaries (other than any Proceeding against any Commitment Party solely
in its capacity or in fulfilling its role as an Agent or Lead Arranger or similar role under the Term Facility), and (b) if
the Closing Date occurs, to reimburse each Commitment Party on the Closing Date (to the extent an invoice therefor is received
by the Invoice Date) or, if invoiced after the Invoice Date, within 30 days following receipt of the relevant invoice, for all
reasonable and documented out-of-pocket expenses (including due diligence expenses, collateral appraisal expenses, applicable
syndication expenses and travel expenses, but limited, in the case of legal fees and expenses, to the reasonable fees, charges
and disbursements of one legal counsel to the Commitment Parties, taken as a whole (which fees, charges and disbursements, for
the avoidance of doubt, shall be limited to those of the legal counsel identified in the Term Sheets that have been acting for
the Lead Arrangers prior to the date hereof, and, if reasonably necessary, of one local counsel in any relevant local jurisdiction
to all such persons, taken as a whole), incurred in connection with the Term Facility and any related documentation (including
this Commitment Letter, the Fee Letter and the Credit Documentation).

 

    	 	7	 

     

    

 

No
indemnified person or any other party hereto shall be liable for any damages arising from the use by any person (other than such
indemnified person (or its Related Parties) or any other party hereto) of Information or other materials obtained through electronic,
telecommunications or other information transmission systems, except to the extent of direct, as opposed to indirect, consequential
or punitive, damages arising from the gross negligence, bad faith or willful misconduct of, or material breach of this Commitment
Letter, the Fee Letter or the Credit Documentation by, such indemnified person (or any of its Related Parties), or such other
party hereto, as applicable, in each case as determined by a final non-appealable judgment of a court of competent jurisdiction.
None of the indemnified persons, Holdings, the Borrower, the Investors, the Target or any of their respective affiliates or the
respective directors, officers, employees, agents, advisors or other representatives of any of the foregoing shall be liable for
any special, indirect, consequential or punitive damages in connection with this Commitment Letter, the Fee Letter or the Term
Facility (including the use or intended use of the proceeds of the Term Facility) or the transactions contemplated hereby; provided,
that nothing contained in this sentence shall limit your indemnification obligations hereinabove to the extent such special, indirect,
consequential or punitive damages are included in any third party claim in connection with which such indemnified person is otherwise
entitled to indemnification hereunder. You shall not be liable for any settlement of any Proceeding effected by any indemnified
person without your consent (which consent shall not be unreasonably withheld or delayed), but if any such Proceeding is settled
with your written consent, or if there is a judgment of a court of competent jurisdiction in any such Proceeding, you agree to
indemnify and hold harmless such indemnified person in the manner set forth above. You shall not, without the prior written consent
of the affected indemnified person (which consent shall not be unreasonably withheld or delayed), effect any settlement of any
pending or threatened Proceeding against any indemnified person in respect of which indemnity could have been sought hereunder
by such indemnified person unless such settlement (a) includes an unconditional release of such indemnified person from all
liability or claims that are the subject matter of such Proceeding and (b) does not include any statement as to any admission
of fault or culpability. Notwithstanding the foregoing, each indemnified person shall be obligated to refund or return any and
all amounts paid by you under this Section 7 to such indemnified person for any losses, claims, damages, liabilities and expenses
to the extent such indemnified person is not entitled to payment of such amounts in accordance with the terms hereof as determined
in a final non-appealable judgment a court of competent jurisdiction. For purposes hereof, “Related Party”
means, with respect to any indemnified person, any (or all, as the context may require) of such indemnified person’s affiliates
and controlling persons and its or their respective directors, officers, employees, partners, agents, advisors and other representatives.

 

8. Sharing
of Information, Absence of Fiduciary Relationship.

 

You
acknowledge that the Initial Commitment Parties may be providing debt financing, equity capital or other services (including financial
advisory services) to other companies in respect of which you may have conflicting interests regarding the transactions described
herein or otherwise. You also acknowledge that we do not have any obligation to use in connection with the transactions contemplated
by this Commitment Letter, or to furnish to you, confidential information obtained by us from other companies.

 

You
further acknowledge and agree that (a) no fiduciary, advisory or agency relationship between you and each of the Initial Commitment
Parties is intended to be or has been created in respect of any of the transactions contemplated by this Commitment Letter, irrespective
of whether the Initial Commitment Parties have advised or are advising you on other matters, (b) each of the Initial Commitment
Parties, on the one hand, and you, on the other hand, have an arm’s-length business relationship that does not directly
or indirectly give rise to, nor do you rely on, any fiduciary duty on the part of any Initial Commitment Party, (c) you are capable
of evaluating and understanding, and you understand and accept, the terms, risks and conditions of the transactions contemplated
by this Commitment Letter, (d) you have been advised that the Initial Commitment Parties are engaged in a broad range of transactions
that may involve interests that differ from your interests and that the Initial Commitment Parties have no obligation to disclose
such interests and transactions to you by virtue of any fiduciary, advisory or agency relationship and (e) you waive, to the fullest
extent permitted by law, any claims you may have against the Initial Commitment Parties for breach of fiduciary duty or alleged
breach of fiduciary duty and agree that the Initial Commitment Parties shall have no liability (whether direct or indirect) to
you in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of you,
including your equity holders, employees or creditors. Additionally, you acknowledge and agree that the Initial Commitment Parties
are not advising you as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction (including, without
limitation, with respect to any consents needed in connection with the transactions contemplated hereby). You shall consult with
your own advisors concerning such matters and shall be responsible for making your own independent investigation and appraisal
of the transactions contemplated hereby (including, without limitation, with respect to any consents needed in connection therewith),
and the Initial Commitment Parties shall have no responsibility or liability to you with respect thereto. Any review by the Initial
Commitment Parties of the Borrower, the Company, the Transactions, the other transactions contemplated hereby or other matters
relating to such transactions will be performed solely for the benefit of the Initial Commitment Parties and shall not be on behalf
of you or any of your affiliates.

 

    	 	8	 

     

    

 

You
further acknowledge that each Initial Commitment Party may be a full-service securities firm engaged in securities trading and
brokerage activities as well as providing investment banking and other financial services. In the ordinary course of business,
each Initial Commitment Party may provide investment banking and other financial services to, and/or acquire, hold or sell, for
its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans
and other obligations) of you, Holdings, the Borrower, the Company and other companies with which you, Holdings, the Borrower
or the Company may have commercial or other relationships. With respect to any securities and/or financial instruments so held
by any Initial Commitment Party or any of its respective customers, all rights in respect of such securities and financial instruments,
including any voting rights, will be exercised by the holder of the rights, in its sole discretion.

 

9. Confidentiality.

 

This
Commitment Letter is entered into on the understanding that neither this Commitment Letter nor the Fee Letter nor any of their
terms or substance shall be disclosed by you, directly or indirectly, to any other person except (a) you and your subsidiaries,
the Target and its Subsidiaries, arrangers of the New ABL Facility, and to your and their respective directors, officers, employees,
affiliates, members, partners, stockholders, attorneys, accountants, independent auditors, agents and other advisors, in each
case, on a confidential basis (provided, that until after the Closing Date, any disclosure of the Fee Letter or its contents to
any arranger of the New ABL Facility that is not a Lead Arranger or its directors, officers, employees, affiliates, members, partners,
stockholders, attorneys, accountants, independent auditors, agents or other advisors shall be redacted in a manner to be mutually
agreed), (b) in any legal, judicial or administrative proceeding or as otherwise required by applicable law, rule or regulation
or as requested by a governmental authority (in which case you agree, (i) to the extent permitted by law, to inform us promptly
in advance thereof and (ii) to use commercially reasonable efforts to ensure that any such information so disclosed is accorded
confidential treatment), (c) to the extent reasonably necessary or advisable in connection with the exercise of any remedy
or enforcement of any right under this Commitment Letter and/or the Fee Letter, (d)  this Commitment Letter and the existence
and contents of this Commitment Letter (but not the Fee Letter or the contents thereof, other than the existence thereof and the
aggregate amount of the fees payable thereunder and the results of the exercise of any Flex Provision therein as part of projections,
pro forma information and a generic disclosure of aggregate sources and uses in marketing materials and other disclosures)
may be disclosed (i) in any syndication or other marketing materials in connection with the Term Facility or the New ABL
Facility, (ii) in any proxy statement or similar public filing related to the Acquisition, and (iii) in connection with any
public filing requirement, (e) the Term Sheets, including the existence and contents thereof, may be disclosed to any rating
agency in connection with the Transactions (together with the results of the exercise of any Flex Provision in the Fee Letter
and the aggregate amount of fees payable under the Fee Letter as part of projections, pro forma information and a generic disclosure
of aggregate sources and uses) and (f) after your acceptance hereof, (i) this Commitment Letter and the Fee Letter, including
the existence and contents hereof and thereof, may be shared in consultation with the Lead Arrangers with potential Additional
Agents on a confidential basis and (ii) the Term Sheets, including the existence and contents thereof (but not the Fee Letter),
may be disclosed in consultation with the Lead Arrangers to any Lender or participant or prospective Lender or prospective participant
and, in each case, their respective directors (or equivalent managers), officers, employees, affiliates, independent auditors,
or other experts and advisors on a confidential basis. The foregoing restrictions shall cease to apply in respect of the existence
and contents of this Commitment Letter (but not in respect of the Fee Letter and its contents) on the earlier of the Closing Date
and one year following the date on which this Commitment Letter has been accepted by you.

 

    	 	9	 

     

    

 

The
Commitment Parties shall use all information received by them in connection with the Transaction and the related transactions
(including any information obtained by them based on a review of any books and records relating to Holdings, the Borrower or the
Target or any of their respective subsidiaries or affiliates) solely for the purposes of providing the services that are the subject
of this Commitment Letter and shall treat confidentially all such information and the terms and contents of this Commitment Letter,
the Fee Letter and the Credit Documentation and shall not publish, disclose or otherwise divulge such information; provided,
however, that nothing herein shall prevent any Commitment Party from disclosing any such information (a) subject to
the final proviso of this sentence, to any Lender or participant or prospective Lender or participant (in each case, other than
any Disqualified Institution), (b) to the extent compelled by legal process in, or reasonably necessary to, the defense of
such legal, judicial or administrative proceeding, in any legal, judicial or administrative proceeding or otherwise as required
by applicable law, rule or regulation (in which case such Commitment Party shall (i) to the extent permitted by law, inform you
promptly in advance thereof and (ii) use commercially reasonable efforts to ensure that any such information so disclosed is accorded
confidential treatment), (c) upon the request or demand of any governmental, regulatory or self-regulatory authority having
jurisdiction over such Commitment Party or its affiliates (in which case such Commitment Party shall except with respect to any
audit or examination conducted by bank accountants or any governmental, regulatory or self-regulatory authority exercising examination
or regulatory authority, (i) to the extent permitted by law, notify you promptly in advance thereof and (ii) use commercially
reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment), (d) to the directors
(or equivalent managers), officers, employees, independent auditors or other experts and advisors of such Commitment Party (collectively,
the “Representatives”) on a “need to know” basis solely in connection with the transactions contemplated
hereby and who are informed of the confidential nature of such information and are or have been advised of their obligation to
keep information of this type confidential, (e) to any Commitment Party and to any Commitment Party’s affiliates and
any of their respective Representatives on a “need to know” basis solely in connection with the transactions contemplated
hereby and who are informed of the confidential nature of such information and are or have been advised of their obligation to
keep such information confidential; provided that such Commitment Party shall be responsible for its affiliates’
and their Representatives’ compliance with this paragraph; and/or (f) to the extent any such information becomes publicly
available other than by reason of disclosure by such Commitment Party, its affiliates or its or their respective Representatives
in breach of this Commitment Letter or to the extent that such information (I) is received by a Commitment Party from a third
party that is not to such Commitment Party’s knowledge subject to confidentiality obligations owing to you, the Target or
any of your or their respective subsidiaries, or any of your or their respective affiliates or (II) was already in such Commitment
Party’s possession (except to the extent received in a manner that would be restricted by the immediately preceding clause
(I)) or is independently developed by such Commitment Party based exclusively on information that disclosure of which would not
otherwise be restricted by this paragraph and (g) subject to the final proviso of this sentence, to any direct or indirect
contractual counterparty to any credit default swap, total return swap, total rate of return swap or similar derivative instrument
and (h) subject to your prior approval of the information to be disclosed, to Moody’s or S&P in connection with
obtaining a rating contemplated pursuant to this Commitment Letter and/or the Credit Documentation, as applicable, on a confidential
basis; provided, further, that the disclosure of any such information pursuant to clauses (a) or (g)
above shall be made subject to the acknowledgment and acceptance by the relevant recipient that such information is being disseminated
on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you
and each Lead Arranger, including, without limitation, as set forth in the CIM or other marketing materials) in accordance with
the standard syndication processes of the Lead Arrangers or market standards for dissemination of such type of information, which
shall in any event require “click through” or other affirmative action on the part of the recipient to access such
confidential information and acknowledge its confidentiality obligations in respect thereof. The provisions of this paragraph
(other than with respect to the confidentiality of the Fee Letter) shall automatically terminate on the date that is two years
following the date of this Commitment Letter unless earlier superseded by the relevant Credit Documentation. Notwithstanding anything
in Section 9 to the contrary, each Initial Commitment Party may place advertisements in financial and other newspapers
and periodicals or on a home page or similar place for dissemination of information on the Internet or World Wide Web as it may
choose, and circulate similar promotional materials, after the closing of the Transactions in the form of a “tombstone”
or otherwise describing the names of you, the Borrower and your and its affiliates (or any of them), and the amount, type and
closing date of such Transactions, all at the applicable Initial Commitment Party’s expense. This Commitment Letter and
the Fee Letters supersede all prior understandings, whether written or oral, between us with respect to the Term Facility.

 

    	 	10	 

     

    

 

10. Miscellaneous.

 

This
Commitment Letter shall not be assignable by any party hereto (except (x) by you to one or more of your affiliates that is
a “shell” company organized under the laws of the United States controlled, directly or indirectly, by you to effect
the consummation of the Acquisition prior to or substantially concurrently with (and to the Target substantially concurrently
with) the consummation of the closing of the Acquisition and (y) by us as expressly contemplated under Sections 2 and 3
above), without the prior written consent of each other party hereto (and any purported assignment without such consent shall
be null and void), is intended to be solely for the benefit of the parties hereto and, to the extent expressly provided in Section 7
above, the indemnified persons, and is not intended to and does not confer any benefits upon, or create any rights in favor
of, any person other than the parties hereto and, to the extent expressly provided in Section 7 above, the indemnified
persons. Subject to Section 3 above, each Commitment Party reserves the right to assign its obligations to any affiliate
thereof (other than Disqualified Institutions) or to employ the services of its affiliates in fulfilling its obligations contemplated
hereby; it being understood that any such affiliate shall be entitled to the benefits afforded to, and subject to the obligations
of, such Commitment Party hereunder; provided that (a) no Commitment Party shall be relieved of any obligation hereunder
in the event that any affiliate to which it has assigned its obligations or through which it performs its obligations hereunder
fails to perform the same in accordance with the terms hereof and (b) the assigning Commitment Party shall be responsible for
any breach by any such affiliate of the obligations hereunder that are applicable to it. This Commitment Letter may not be amended
or waived except by an instrument in writing signed by you and each Commitment Party. Any provision of this Commitment Letter
that provides for, requires or otherwise contemplates any consent, approval, agreement or determination by the Borrower on or
prior to the Closing Date shall be construed as providing for, requiring or otherwise contemplating your consent, approval, agreement
or determination (unless you otherwise notify the other parties hereto). This Commitment Letter may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of which, when taken together, shall constitute one
agreement. Delivery of an executed signature page of this Commitment Letter by facsimile or other electronic transmission (including
“.pdf”, “.tif” or similar format) shall be effective as delivery of a manually executed counterpart hereof.
This Commitment Letter and the Fee Letter are the only agreements that have been entered into among us and you with respect to
the Term Facility and set forth the entire understanding of the parties with respect hereto and thereto, and supersede all prior
agreements and understandings related to the subject matter hereof.

 

    	 	11	 

     

    

 

This
Commitment Letter, and any claim, controversy or dispute arising under or related to this Commitment Letter, (whether in tort,
contract (at law or in equity) or otherwise), shall be governed by, and construed and interpreted in accordance with, the laws
of the State of New York; provided, that, notwithstanding the preceding sentence and the governing law provisions of this
Commitment Letter and the Fee Letter, it is understood and agreed that (a) the interpretation of the definition of “Material
Adverse Effect” (and whether or not a Material Adverse Effect has occurred), (b) the determination of the accuracy of any
Specified Acquisition Agreement Representation and whether as a result of any inaccuracy thereof you or your applicable affiliate
has the right to terminate your or its obligations under the Acquisition Agreement or to decline to consummate the Acquisition
and (c) the determination of whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement
and, in any case, claims or disputes arising out of any such interpretation or determination or any aspect thereof, in each case,
shall be governed by, and construed and interpreted in accordance with, the laws of the state of Delaware regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws thereof. Each of the parties hereto irrevocably agrees
to waive, to the fullest extent permitted by applicable law, all right to trial by jury in any suit, action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) related to or arising out of the Acquisition, this Commitment Letter, the Fee
Letter or the performance by us or any of our affiliates of the services contemplated hereby.

 

Each
of the parties hereto agrees that each of this Commitment Letter and the Fee Letter is a binding and enforceable agreement with
respect to the subject matter contained herein or therein (including an obligation to negotiate in good faith); it being acknowledged
and agreed that, notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letter, the commitments
to fund the Term Facility are subject only to the applicable conditions set forth on Exhibit C hereto; provided
that nothing contained in this Commitment Letter obligates you or any of your affiliates to consummate the Acquisition or
to draw down any portion of any of the Term Facility.

 

Each
of the parties hereto irrevocably and unconditionally (a) submits to the exclusive jurisdiction of any state or federal court
sitting in the Borough of Manhattan in the City of New York (or any appellate court therefrom) over any suit, action or proceeding
arising out of or relating to this Commitment Letter or the Fee Letter, (b) agrees that all claims in respect of any such
action or proceeding shall be heard and determined in such New York state or, to the extent permitted by law, federal court and
(c) agrees that a final, non-appealable judgment in any such action may be enforced in other jurisdictions in any manner
provided by law; provided, that with respect to any suit, action or proceeding arising out of or relating to the Acquisition
Agreement or the transactions contemplated thereby and which does not involve claims against us or the Lenders or any indemnified
person, this sentence shall not override any jurisdiction provision set forth in the Acquisition Agreement. You and we agree that
service of any process, summons, notice or document by registered mail addressed to such person shall be effective service of
process against such person for any suit, action or proceeding brought in any such court. Each of the parties hereto hereby irrevocably
and unconditionally waives any objection to the laying of venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding has been brought in an inconvenient forum.

 

Each
of the Commitment Parties hereby notifies you that, pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L.
107-56 (signed into law on October 26, 2001) (the “PATRIOT Act”), it is required to obtain, verify
and record information that identifies each Loan Party, which information includes names, addresses, tax identification numbers
and other information that will allow each Lender to identify each Loan Party in accordance with the PATRIOT Act. This notice
is given in accordance with the requirements of the PATRIOT Act and is effective for the Commitment Parties and each Lender.

 

    	 	12	 

     

    

 

The
Fee Letter and the compensation, indemnification, confidentiality, jurisdiction, governing law, sharing of information, no agency
or fiduciary duty, waiver of jury trial, service of process, venue and syndication provisions (including the Flex Provisions)
contained herein and in the Fee Letter shall remain in full force and effect regardless of whether the Credit Documentation is
executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the commitments hereunder;
provided, that your obligations under this Commitment Letter (other than your obligations with respect to (a) information
and the syndication of the Term Facility, which shall survive only until the later of the expiration of the Syndication Period
and the Closing Date, at which time such obligations shall terminate and be of no further force and effect, and (b) confidentiality
of the Fee Letter and the contents thereof) shall automatically terminate and be of no further force and effect (and be superseded
by the applicable Credit Documentation to the extent covered therein) on the Closing Date and you shall automatically be released
from all liability hereunder in connection therewith at such time. Subject to the preceding sentence, you may terminate this Commitment
Letter (in whole but not in part as to the Term Facility) upon written notice to the Initial Lenders at any time.

 

If
the foregoing correctly sets forth our agreement, please indicate your acceptance of our offer (such date of acceptance, the “Acceptance
Date”) as set forth in this Commitment Letter and the Fee Letter by returning to us executed counterparts of this Commitment
Letter and of the Fee Letter not later than 11:59 p.m., New York City time, on December 23, 2016. Such offer will remain available
for acceptance until such time, but will automatically expire at such time if we have not received such executed counterparts
in accordance with the preceding sentence. In the event that the Closing Date does not occur on or before 11:59 p.m., New York
City time, on the earliest of (a) the date of the termination of the Acquisition Agreement by you or with your written consent
in each case prior to the closing of the Acquisition, (b) the date of the closing of the Acquisition without the use of the applicable
Term Facility and (c) May 31, 2017, then this Commitment Letter and the commitments hereunder shall automatically terminate unless
we shall, in our sole discretion, agree to an extension.

 

[Remainder
of page intentionally left blank]

 

    	 	13	 

     

    

 

We
are pleased to have been given the opportunity to assist you in connection with this important financing.

 

	 	Very
    truly yours,
	 	 
	 	CREDIT
    SUISSE SECURITIES (USA) LLC
	 	 	 
	 	By:
    	/s/
    Joseph Kieffer
	 	Name:
    	Joseph
    Kieffer 
	 	Title:
    	Authorized
    Signatory 
	 	 	 
	 	CREDIT
    SUISSE AG, CAYMAN ISLANDS BRANCH
	 	 	 
	 	By:
    	/s/
    Vipul Dhadda
	 	Name:
    	Vipul
    Dhadda 
	 	Title:
    	Authorized
    Signatory 
	 	 	 
	 	By:
    	/s/
    Kelly Heimrich
	 	Name:
    	Kelly
    Heimrich 
	 	Title:
    	Authorized
    Signatory 
	 	 	 
	 	UBS
    AG, STAMFORD BRANCH
	 	 	 
	 	By:
    	/s/
Luke Bartolone
	 	Name:
    	Luke
    Bartolone 
	 	Title:
    	Director
    
	 	 	 
	 	By:  	/s/
    John Stroll
	 	Name:
    	John
    Stroll 
	 	Title:
    	Executive
    Director 
	 	 	 
	 	UBS
    SECURITIES LLC
	 	 	 
	 	By:
    	/s/
    Luke Bartolone 
	 	Name:
    	Luke
    Bartolone 
	 	Title:
    	Director
    
	 	 	 
	 	By:  	/s/
    John Stroll
	 	Name:
    	John
    Stroll 
	 	Title:
    	Executive
    Director 

 

[Signature
Page to Commitment Letter (Project Cognac)]

 

     

     

    

 

Accepted
and agreed to as of

the
date first above written:

 

	HCAC
    MERGER SUB, INC.	 
	 	 
	By:	/s/
    Daniel J. Hennessy 	 
	Name:
    	Daniel
    J. Hennessy 	 
	Title:
    	President
    	 

 

[Signature
Page to Commitment Letter (Project Cognac)]

 

     

     

    

 

SCHEDULE
1

 

TERM
FacilitY Commitments

 

 

	Lender	 	Term Facility	 
	CS AG	 	 	50	%
	UBS	 	 	50	%
	Total:	 	 	100	%

 

     

     

    

 

EXHIBIT
A

 

PROJECT
COGNAC

Transaction
Summary

 

 

 

Hennessey
Capital Acquisition Corp. II (“Holdings”) intends directly or indirectly, to acquire (the “Acquisition”)
Daseke, Inc. (the “Target”), all as set forth in the Acquisition Agreement (as defined on Exhibit C
hereto).

 

(a) Holdings
and HCAC Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Holdings (“Merger Sub”),
will enter into the Acquisition Agreement with the Target, pursuant to which Merger Sub will merge with and into the Target in
a manner set forth therein;

 

(b) new
equity holders of Holdings will make cash contributions to Holdings (collectively, the “Equity Contribution”)
in exchange for common equity, qualified preferred equity or other equity of Holdings (such qualified preferred equity and other
equity, in each case, to be on terms reasonably satisfactory to the Lead Arrangers, it being understood that terms set forth in
the draft certificate of designation dated as of December 19, 2016, together with any modifications or amendments thereof that
are not materially adverse to the Lenders (it being understood that the addition of Annex A thereto, which relates to the “Fundamental
Change Additional Shares” as defined therein, on the Closing Date shall not be considered materially adverse to the Lenders),
shall be deemed to be reasonably satisfactory) (collectively, the “Permitted Equity”), which Equity Contribution,
(i) when combined with cash proceeds of the initial public offering of Holdings that are released to Holdings from its trust account
(the “Holdings Trust Proceeds”) on or about the Closing Date (excluding, for the avoidance of doubt, any such
proceeds of the Equity Contribution or Holdings Trust Proceeds that are applied to redeem or repurchase equity interests as described
in clause (g) below), will be at least $85 million in the aggregate (determined on a gross basis) and (ii) when combined with
equity of the Target’s and Holdings’ existing equity holders and/or members of management that will be retained, rolled
over or converted, if any, will constitute an aggregate amount not less than 50% (the “Minimum Equity Contribution Percentage”),
of the sum of the total consolidated pro forma debt and equity of Holdings on the Closing Date (excluding the proceeds of any
loans incurred thereunder to fund original issue discount (“OID”) or upfront fees as a result of the application
of the Flex Provisions (as defined in the Fee Letter));

 

(c) the
Borrower will obtain (i) a $350.0 million term loan B facility on the terms set forth in Exhibit B and (ii) amend, amend
and restate or replace its existing asset-based revolving credit facility (the “Existing ABL Facility”) on
the terms set forth in the commitment letter between Daseke, Inc. and PNC Bank, National Association dated as of the date hereof
or otherwise reasonably satisfactory to the Lead Arrangers (the “New ABL Facility”);

 

    	 	Transaction Summary
Exhibit A - Page 1
	 

     

    

 

(d) all
existing third party debt for borrowed money, if any, of the Target and its subsidiaries will be repaid, redeemed, defeased, discharged,
refinanced, replaced or terminated (or irrevocable notice for the repayment or redemption thereof will be given to the extent
accompanied by any prepayments or deposits required to defease, terminate and satisfy in full any related indentures or notes)
and all commitments thereunder shall have been terminated (the “Refinancing”) other than (i) indebtedness
outstanding under the New ABL Facility, (ii) capital leases, purchase money indebtedness, equipment financings, real estate
financings, letters of credit and surety bonds; provided, that, the amounts permitted to survive under this clause (ii) shall
not exceed in an aggregate amount of up to $45.0 million and (iii) certain other indebtedness that the Borrower and the Lead Arrangers
reasonably agree may remain outstanding after the Closing Date (the foregoing indebtedness, together with any replacement, extension
and renewal of any such indebtedness that matures or will be terminated on or prior to the Closing Date, collectively, the “Permitted
Surviving Debt”);

 

(e) the
fees, premiums, expenses and other transaction costs incurred in connection with the Transactions, including to fund any OID and/or
upfront fees (the “Transaction Costs”) will be paid;

 

(f) the
proceeds of the Equity Contribution and the Term Facility funded on the Closing Date will be used to pay the consideration for,
and other amounts owing in connection with, the Acquisition under the Acquisition Agreement, to effect the Refinancing and to
pay all or a portion of Transaction Costs; and

 

(g) (i)
$25,000,000 in cash proceeds of the Equity Contribution, and (i) up to $10,000,000 in Holdings Trust Proceeds, in each case will
be applied to redeem or repurchase equity interests in the Target held by the Target’s existing subordinated lenders as
of the Closing Date.

 

The
transactions described above are collectively referred to as the “Transactions”. For purposes of the Commitment
Letter and the Fee Letter, “Closing Date” shall mean the date of the consummation of the Acquisition and the
satisfaction or waiver by the Lead Arrangers of the conditions set forth on Exhibit C.

 

    	 	Transaction Summary
Exhibit A - Page 2
	 

     

    

 

EXHIBIT
B

 

PROJECT
COGNAC

TERM
FACILITY

SUMMARY
OF TERMS

 

Set
forth below is a summary of the principal terms for the Term Facility. Capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Commitment Letter to which this Exhibit B is attached or on
Exhibits A or C (including the Annexes hereto and thereto) attached thereto.

 

	PARTIES	 
	 	 
	Borrower:	Initially,
    Merger Sub, and  following consummation of the Transactions, the Target
	 	 
	Guarantors:	All
    obligations of the Borrower under the Term Facility and, at the Borrower’s option, under any currency, interest rate
    protection or other hedging agreement  and any cash management arrangement, in each case entered into with a Term
    Lender (as defined below), the Agent (as defined below) or a Lead Arranger or any person that is an affiliate of a Term Lender,
    Agent or a Lead Arranger at the time such transaction is entered into, (collectively, the “Borrower Obligations”)
    will be unconditionally guaranteed on a senior basis (the “Term Guaranty”) by (x) Holdings and (y) each
    of the Borrower’s wholly-owned domestic Restricted Subsidiaries (the entities described in this clause (y), the
    “Subsidiary Guarantors”; and the Subsidiary Guarantors, together with Holdings, collectively, the “Guarantors”;
    and the Guarantors, together with the Borrower, collectively, the “Loan Parties”), other than (collectively,
    the “Excluded Subsidiaries”):

 

	 	(a)	immaterial subsidiaries subject to thresholds to be
agreed (“Immaterial Subsidiaries”),

 

	 	(b)	any subsidiary (i) that is prohibited from providing
a Guaranty by (A) any law or regulation or (B) any contractual obligation that, in the case of this clause (B), exists
on the Closing Date or at the time such subsidiary becomes a subsidiary (and was not entered into in contemplation thereof), (ii)
that would require a governmental (including regulatory) consent, approval, license or authorization in order to provide a Guaranty
(unless such consent, approval, license or authorization has been obtained) or (iii) where the provision of a Guaranty would result
in material adverse tax consequences as reasonably determined by the Borrower,

 

	 	(c)	any direct or indirect domestic subsidiary that has
no material assets other than the capital stock and, if applicable, indebtedness of one or more CFCs (as defined below) (a “CFC
Holdco”),

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 1
	 

     

    

 

	 	(d)	any domestic subsidiary that is a direct or indirect
subsidiary of (i) a Foreign Subsidiary that is a CFC or (ii) a CFC Holdco,

 

	 	(e)	not-for-profit subsidiaries, captive insurance subsidiaries
and special purpose entities used for permitted securitization facilities, if any,

 

	 	(f)	solely in the case of any obligation under any Secured
Hedging Agreement that constitutes a “swap” within the meaning of section 1(a)(47) of the Commodity Exchange
Act (after giving effect to a customary “keepwell” provision applicable under the Guaranty), any subsidiary of the
Borrower that is not an “Eligible Contract Participant” as defined under the Commodity Exchange Act,

 

	 	(g)	any Restricted Subsidiary acquired by the Borrower or
any of its Restricted Subsidiaries that, at the time of the relevant acquisition, is an obligor in respect of assumed indebtedness
that is permitted by the Credit Documentation (as defined below) and was not incurred or modified in contemplation of such acquisition
to the extent (and for so long as) the documentation governing the applicable assumed Indebtedness prohibits such Restricted Subsidiary
from providing a Guaranty, and 

 

	 	(h)	any subsidiary to the extent that the burden or cost
of providing a Guaranty outweighs the benefit afforded thereby as reasonably agreed by the Borrower and the Agent.

 

	 	Notwithstanding
        the foregoing, (i) no borrower or guarantor under the New ABL Facility shall constitute an Excluded Subsidiary, and (i)
        each borrower or guarantor under the New ABL Facility (other than the Borrower) shall be a Guarantor under the Term Facility.

         

        For
        purposes of the Credit Documentation, (a) “Foreign Subsidiary” means any existing or future direct
        or indirect subsidiary of the Borrower organized under the laws of any jurisdiction other than the United States, any
        state thereof or the District of Columbia, (b) “CFC” means a “controlled foreign corporations”
        within the meaning of Section 957 of the Internal Revenue Code of 1986, as amended, and (c) “Restricted Subsidiary”
        means any existing or future direct or indirect subsidiary of the Borrower other than any Unrestricted Subsidiary (as
        defined below).

	 	 
	Joint
    Lead Arrangers and Joint Bookrunners:	Credit
    Suisse Securities (USA) LLC, UBS Securities LLC and any other Lead Arranger appointed pursuant to the Commitment Letter will
    act as joint lead arrangers and joint bookrunners for the Term Facility (in such capacity, the “Lead Arrangers”).

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 2
	 

     

    

 

	Administrative
    Agent and Collateral Agent:	Credit
    Suisse AG, Cayman Islands Branch will act as the sole and exclusive administrative agent and collateral agent for the Lenders
    (in such capacities, the “Agent”).
	 	 
	Lenders:	A
    syndicate of banks, financial institutions and other entities, including the Initial Lenders, but excluding Disqualified Institutions,
    arranged by the Lead Arrangers and reasonably acceptable to the Borrower (collectively, and together with any party that becomes
    a lender by assignment as set forth under the heading “Assignments and Participations” below, the “Lenders”).
	 	 
	Type
    and Amount:	(A)
        A term loan facility the Closing Date Term Facility in an aggregate principal amount of $250.0 million (the loans thereunder,
        the “Closing Date Term Loans”); or

         

        (B)
        A delayed draw term loan facility (the “Delayed Draw Term Loan Facility” and, together with the Closing
        Date Term Facility, the “Term Facility”) in an aggregate principal amount of $100.0 million (the loans
        thereunder, the “Delayed Draw Term Loans” and, together with the Closing Date Term Loans, the “Term
        Loans” or “Loans”).

	 	 
	Amortization:	(A)
        Commencing on the last day of the first full fiscal quarter ended after the Closing Date, the Closing Date Term Loans
        shall be repayable in equal quarterly installments in aggregate annual amounts equal to 1.00% per annum of the original
        principal amount of the Closing Date Term Loans, with the balance payable on the date which is 7 years following the Closing
        Date (the “Term Loan Maturity Date”).

         

        (B)
        The Delayed Draw Term Loans shall be repayable in equal quarterly installments in aggregate annual amounts equal to a
        percentage of the original principal amount of the Delayed Draw Term Loans that will permit the Delayed Draw Term Loans
        to be fungible with the Closing Date Term Loans and will commence on the next scheduled installment date after the relevant
        Delayed Draw Term Loan drawing date, with the balance payable on the Term Loan Maturity Date.

	 	 
	Availability:	(A)
        The Closing Date Term Loans shall be made in a single drawing on the Closing Date. Repayments and prepayments of the Closing
        Date Term Loans may not be reborrowed.

         

        (B)
        The Delayed Draw Term Loans may be funded on or after the Closing Date until the date that is twelve (12) months after
        the Closing Date in up to 3 borrowings Repayments and prepayments of the Delayed Draw Term Loan may not be reborrowed.

	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 3
	 

     

    

 

	Maturity:	The
    Term Loan Maturity Date.
	 	 
	Use
    of Proceeds:	(A)
        The proceeds of the Closing Date Term Loans will be used to finance a portion of the Transactions (including payment of
        the Transaction Costs).

         

        (B)
        The proceeds of each borrowing under the Delayed Draw Term Loan Facility will be used solely to finance any Permitted
        Acquisition, so long as after giving effect to any such other Permitted Acquisition, the Total Leverage Ratio does not
        exceed 3.50:1.00.

	 	 
	Incremental
    Term Facility:	The
    Borrower will have the right, from time to time, on one or more occasions, to add one or more incremental term facilities
    and/or increase the Term Facility (each, an “Incremental Term Facility”) on terms and conditions agreed
    by the Borrower and the relevant Incremental Term Facility lenders in an aggregate outstanding principal amount not to exceed
    (without duplication):

 

	 	(a)	$65 million (the “Fixed Incremental Amount”)
less the aggregate outstanding principal amount of all Incremental Equivalent Debt (as defined below) issued and/or incurred in
reliance on this clause (a), plus

 

	 	(b)	an unlimited amount (the “Incremental Incurrence-Based
Component”) so long as, in the case of this clause (b), after giving effect to the relevant Incremental Term
Facility, (1) if such Incremental Term Facility is secured by a lien on the Term Priority Collateral that is pari passu with the
lien securing the Term Facility, the First Lien Leverage Ratio (as defined below) does not exceed the First Lien Leverage Ratio
on the Closing Date, (2) if such Incremental Term Facility is secured by a lien on the Term Priority Collateral that is junior
to the lien securing the Term Facility, the Secured Leverage Ratio (as defined below) does not exceed the Secured Leverage Ratio
on the Closing Date or (3) if such Incremental Term Facility is unsecured, the Total Leverage Ratio (as defined below) does not
exceed the Total Leverage Ratio on the Closing Date, in each case described in this clause (b), calculated on a pro forma
basis, including the application of the proceeds thereof (without “netting” the cash proceeds of the applicable Incremental
Term Facility);

 

	 	provided,
    that, in each case, at the time of the addition thereof:

 

	 	 	(i)	no event of default exists or would exist after giving
effect thereto;

 

	 	 	(ii)	any Incremental Term Facility will have a final maturity
date no earlier than the then-existing Term Loan Maturity Date;

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 4
	 

     

    

 

	 	 	(iii)	the weighted average life to maturity applicable to
each Incremental Term Facility shall not be shorter than the weighted average life to maturity of the then-existing Term Facility;

 

	 	 	(iv)	the interest rate applicable to any Incremental Term
Facility will be determined by the Borrower and the lenders providing such Incremental Term Facility and, in the case of any Incremental
Term Facility entered into within 12 months of the Closing Date that is pari passu with the existing Term Facility in right of
payment and with respect to security, such interest rate will not be more than 0.50% higher than the corresponding interest rate
applicable to the existing Term Facility unless the interest rate margin with respect to the existing Term Facility is adjusted
to be equal to the interest rate with respect to the relevant Incremental Term Facility, minus, 0.50%; provided
that in determining the applicable interest rate: (w) OID or upfront fees paid by the Borrower in connection with such Incremental
Term Facility or the existing Term Facility (based on a 4-year average life to maturity or lesser remaining average life to maturity)
shall be included, (x) any amendments to the Applicable Margin on the existing Term Facility that became effective subsequent
to the Closing Date but prior to the time of the addition of such Incremental Term Facility shall be included, (y) arrangement,
commitment, structuring, underwriting fees and amendment fees paid or payable to the Lead Arrangers (or their affiliates) in their
respective capacities as such in connection with the existing Term Facility or to one or more arrangers (or their affiliates)
in their capacities as such (regardless of whether such fees are paid to or shared in whole in part with any lender) applicable
to such Incremental Term Facility and any other fees not paid generally to all lenders ratably shall be excluded and (z) if such
Incremental Term Facility includes any “LIBOR” interest rate floor greater than that applicable to the existing Term
Facility and such floor is applicable to the existing Term Facility on the date of determination, such excess amount shall be
equated to interest margin for determining the increase;

   

    	 	Term Sheet – Term Facility
Exhibit B - Page 5
	 

     

    

 

	 	 	(v)	any Incremental Term Facility may rank pari passu or
junior in right of payment and pari passu or junior with respect to security with the Term Facility and, if secured, may not be
secured by any assets other than the Collateral or may be unsecured (and to the extent subordinated in right of payment or security,
subject to intercreditor arrangements reasonably satisfactory to the Agent) and, if guaranteed, may not be guaranteed by any Restricted
Subsidiary which is not a Loan Party; and

 

	 	 	(vi)	(A) no Incremental Term Facility shall share more favorably
than ratably in any prepayments of the Term Facility,  and (B) except as otherwise provided above (including with respect
to margin, pricing, maturity and/or fees), the terms of any Incremental Term Facility, if not substantially consistent with the
terms of the Term Facility, shall be reasonably satisfactory to the Agent (it being understood that terms not substantially consistent
with the Incremental Term Facility which are applicable only after the then-existing Term Loan Maturity Date are acceptable to
the Agent).

 

	 	Any
    Incremental Term Facility may be provided by existing Lenders or, subject to the reasonable consent of the Agent, other persons
    who become Lenders in connection therewith if such consent would be required under the heading “Assignments and Participations”
    below for assignments or participations of Term Loans or commitments, as applicable, to such person; provided, that
    no existing Lender will be obligated to provide any such Incremental Term Facility.
	 	 
	 	Any
    loans or commitments incurred under any Incremental Term Facility shall be deemed to have been incurred under the Incremental
    Incurrence-Based Component prior to the Fixed Incremental Amount.
	 	 
	 	The
    proceeds of any Incremental Term Facility may be used by the Borrower and its subsidiaries for working capital and other general
    corporate purposes, including the financing of permitted acquisitions and other investments and any other use not prohibited
    by the Credit Documentation.
	 	 
	 	To
    the extent the proceeds of any Incremental Term Facility are intended to be applied to finance an acquisition or other investment
    that is permitted under the Credit Documentation, the availability thereof shall, if agreed by the lenders providing such
    Incremental Term Facility, be subject to customary “SunGard” or other applicable “certain funds” conditionality
    provisions, it being understood that the availability of such Incremental Term Facility shall nevertheless be subject to the
    absence of any payment or bankruptcy default and the accuracy of customary “specified” and “acquisition
    agreement” representations. 
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 6
	 

     

    

 

	 	The
    Credit Documentation will permit the Borrower to issue notes or borrow loans (or obtain commitments in respect thereof) in
    lieu of loans (or commitments) under the Incremental Term Facility (so long as the applicable conditions to borrowing loans
    under the Incremental Term Facility would have been satisfied) that are (at the option of the Borrower) unsecured or secured
    by the Collateral on a pari passu or junior basis (“Incremental Equivalent Debt”); it being understood
    and agreed that, other than with respect to Incremental Equivalent Debt incurred in the form of term loans that are pari passu
    in right of payment and secured on a pari passu basis with the Term Loans, the Term Facility shall not be subject to a “most
    favored nation” pricing adjustment as a result of the issuance or incurrence of such Incremental Equivalent Debt.
	 	 
	 	As
    used herein, 
	 	 

 

	 	(a)	“Consolidated Total Debt”, on any
date of determination, will be defined as:

 

	 	 	(i)	the amount of third party consolidated indebtedness
for borrowed money, purchase money indebtedness and/or capital lease obligations of the Borrower and its Restricted Subsidiaries
on the applicable date of determination, minus

 

	 	 	(ii)	the amount, not to exceed an amount to be agreed, of
(A) unrestricted cash and cash equivalents of the Borrower and its Restricted Subsidiaries whether or not held in a pledged account
and (B) cash and cash equivalents of the Borrower and its Restricted Subsidiaries that are restricted in favor of the Term Facility
(which may also include cash and cash equivalents securing other indebtedness that is secured by a lien on the Collateral along
with the Term Facility) (in each case, such unrestricted cash and restricted cash and cash equivalents to be determined in accordance
with GAAP) (the amounts described in clauses (ii)(A) and (ii)(B), collectively, “Unrestricted Cash”),

 

	 	(b)	“First Lien Leverage Ratio” will
be defined as the ratio of (i) Consolidated Total Debt that is secured by a first-priority lien on any property or assets of Borrower
and its Restricted Subsidiaries (including, for the avoidance of doubt, indebtedness under the New ABL Facility), to (ii) trailing
4-quarter Consolidated EBITDA (as described below),

   

    	 	Term Sheet – Term Facility
Exhibit B - Page 7
	 

     

    

 

	 	(c)	“Secured Leverage Ratio” will be
defined as the ratio of (i) Consolidated Total Debt that is secured by a lien on any property or assets of Borrower and its Restricted
Subsidiaries to (ii) trailing 4-quarter Consolidated EBITDA, and

 

	 	(d)	“Total Leverage Ratio” will be defined
as the ratio of (i) Consolidated Total Debt to (ii) trailing 4-quarter Consolidated EBITDA.

 

	 	For
    purposes of the Credit Documentation, “Consolidated EBITDA” (and, without duplication, component definitions,
    including, without limitation, net income) will (x) be based upon the consolidated net income (determined in accordance
    with GAAP) of the Borrower and its Restricted Subsidiaries, (y) include a customary addback in respect of cost savings
    and synergies anticipated to be realized within 18 months up to an amount not to exceed 25% of Consolidated EBITDA, provided
    that such cost savings and synergies are reasonably identifiable and factually supportable (the “Cost Savings Add-back”),
    and (z) be defined in a manner to be mutually agreed:
	 	 
	Refinancing
    Term Facility:	The
    Borrower shall have the right to refinance and/or replace the Term Loans (and loans and commitments under any Incremental
    Term Facility) in whole or in part with (x) one or more new term facilities (each, a “Refinancing Term Facility”)
    under the Credit Documentation with the consent of the Borrower and the institutions providing such Refinancing Term Facility
    and/or (y) one or more series of notes or loans, in the case of each of clause (x) and (y), that will be pari
    passu or junior in right of payment and be secured by the Collateral on a pari passu or junior basis with the remaining portion
    of the Term Facility or Incremental Cash Flow Revolving Facility, as applicable, or be unsecured (such notes or loans, the
    “Refinancing Notes”); provided, that
	 	 
	 	(a)
    any Refinancing Term Facility or issue of Refinancing Notes that is pari passu or junior with respect to security shall be
    subject to a customary intercreditor agreement, the material terms of which shall be reasonably acceptable to the Agent and
    the Borrower,
	 	 
	 	(b)
    no Refinancing Term Facility or Refinancing Notes shall mature prior to the latest maturity date of the Term Facility being
    refinanced or replaced and no Refinancing Term Facility or Refinancing Notes shall have a shorter weighted average life than
    the Term Loans being refinanced or replaced,
	 	 
	 	(c)
    no Refinancing Revolving Facility shall mature (or require commitment reductions) prior to the maturity date of the loans
    or commitments being refinanced,
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 8
	 

     

    

 

	 	(d)
    any Refinancing Term Facility or issuance of Refinancing Notes shall have pricing (including interest, fees and premiums),
    optional prepayment and redemption terms as may be agreed to by the Borrower and the lenders party thereto,
	 	 
	 	(e)
    if any such Refinancing Term Facility or issuance of Refinancing Notes is secured, it shall not be secured by any assets other
    than the Collateral,
	 	 
	 	(f)
    if any such Refinancing Term Facility or issuance of Refinancing Notes is guaranteed, it shall not be guaranteed by any subsidiaries
    of the Borrower other than the Guarantors,
	 	 
	 	(g)
    the other terms and conditions (excluding those referenced in clauses (b) through (f) above) of such Refinancing
    Term Facility or issuance of Refinancing Notes shall be substantially identical to, or (taken as a whole) no more favorable
    (as reasonably determined by the Borrower) to the lenders providing such Refinancing Term Facility or the holders of such
    Refinancing Notes than those applicable to the loans or commitments being refinancing or replaced (except for covenants or
    other provisions applicable only to periods after the latest final maturity date of the relevant loans or commitments existing
    at the time of such refinancing or replacement) or such terms shall be current market terms for such type of indebtedness,
	 	 
	 	(h)
    except to the extent otherwise permitted under the Credit Documentation, the aggregate principal amount of any Refinancing
    Term Facility or issuance of Refinancing Notes shall not exceed the aggregate principal amount of indebtedness and commitments
    being refinanced or replaced therewith, plus interest, premiums, fees and expenses, and
	 	 
	 	(i)
    no Refinancing Term Facility shall share more favorably than ratably in any mandatory prepayment of the Term Loans.
	 	 
	CERTAIN
    PAYMENT PROVISIONS
	 
	Fees
    and Interest Rates:	As
    set forth on Annex I hereto.  
	 	 
	Closing
    Fees:	As
    set forth in the Fee Letter.
	 	 
	Optional
    Commitment Reductions:	The
    commitments under the Delayed Draw Term Loan Facility may be reduced and/or terminated, in whole or in part, without premium
    or penalty, in minimum amounts to be agreed, at the option of the Borrower at any time upon 3 business days’ prior notice.
	 	 
	Optional
    Prepayments:	Term
    Loans may be prepaid, in whole or in part, without premium or penalty (except as described under the heading “Term Loan
    Prepayment Fee” below), in minimum amounts to be agreed, at the option of the Borrower at any time upon 1 business day’s
    (or, in the case of a prepayment of Eurodollar Loans (as defined in Annex I hereto), 3 business days’) prior
    notice, subject to reimbursement of the Lenders’ actual redeployment costs in the case of a prepayment of Eurodollar
    Loans prior to the last day of the relevant interest period.  Optional prepayments of the Term Loans shall be applied
    to the Term Loans and the installments thereof as directed by the Borrower (or in the absence of direction from the Borrower,
    in the direct order of maturity).
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 9
	 

     

    

 

	Term
    Loan Prepayment Fee:	Any
    Repricing Transaction (as defined below) consummated prior to the date that is 6 months after the Closing Date will be subject
    to a prepayment premium of 1.00% on the principal amount of the Term Loans prepaid, including, in the case of any amendment
    in connection with a Repricing Transaction, the principal amount of the relevant Term Loans of any Lender which are amended
    or required to be assigned in accordance with the “yank a bank” provisions set forth in the Credit Documentation
    as a result of such Lender’s failure to consent to such amendment.
	 	 
	 	For
    purposes of the Credit Documentation, “Repricing Transaction” means the refinancing or repricing by the
    Borrower of all or any portion of the Term Loans the primary purpose of which is to reduce the all-in-yield applicable to
    the Term Loans (x) with the proceeds of any secured term loans incurred or guaranteed by the Borrower or any Guarantor or
    (y) in connection with any amendment to the Credit Documentation, in either case, (i) having or resulting in an effective
    interest rate (to be calculated in a manner consistent with that set forth above in clause (iv) of the proviso to the
    first sentence under the heading “Incremental Term Facility” above) as of the date of such refinancing or repricing
    that is (and not by virtue of any fluctuation in any “base” rate) less than the effective interest rate applicable
    to the Term Loans as of the date of such refinancing or repricing and (ii) in the case of a refinancing of the Term Loans,
    the proceeds of which are used to repay, in whole or in part, the principal of outstanding Term Loans, but excluding, in any
    such case, any refinancing or repricing of Term Loans in connection with any transformative acquisition or similar investment
    (to be defined), “change of control” transaction or initial public offering.
	 	 
	Mandatory
    Prepayments:	The
    following amounts shall be applied to prepay the Term Loans, in each case with carveouts and exceptions consistent with the
    Documentation Considerations:

 

	 	(a)	100% of the net cash proceeds of any incurrence of debt
by the Borrower or any of its Restricted Subsidiaries (other than debt otherwise permitted under the Credit Documentation (other
than indebtedness incurred pursuant to a Refinancing Term Facility or an issuance of Refinancing Notes to refinance or replace
the Term Loans or loans under the Incremental Term Facility));

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 10
	 

     

    

 

	 	(b)	100% of the net cash proceeds in excess of an amount
to be agreed per transaction (or series of related transactions) and an amount to be agreed per fiscal year of any non-ordinary
course sale or other disposition of assets to be agreed and excluding in any event dispositions of ABL Priority Collateral to
the extent that the net cash proceeds thereof are required to be applied to repay loans outstanding under the New ABL Facility
in order to be in compliance with the “Borrowing Base” (as defined in the New ABL Facility documentation) (subject
to reinvestment of such proceeds in assets useful in the operations of the Borrower or its subsidiaries within 12 months following
receipt (or if the Borrower or its subsidiaries have committed to reinvest such proceeds within such 12-month period reinvestment
within 6 months following such 12-month period));

 

	 	(c)	50% of Excess Cash Flow (to be defined but in any event
to take into account the provisions described below) for each fiscal year of the Borrower (commencing with the first full fiscal
year ended after the Closing Date); provided, that:

 

	 	 	(i)	any such Excess Cash Flow prepayment shall be required
only if the amount of the prepayment exceeds a de minimis amount to be mutually agreed,

 

	 	 	(ii)	the foregoing percentage shall be reduced to 25% and
0% for any fiscal year with respect to which the First Lien Leverage Ratio (at the time of the respective payment and recalculated
to give pro forma effect to any such paydown or reduction) is equal to or less than 2.75:1.00 and 2.00:1.00 respectively,

 

	 	 	(iii)	at the option of the Borrower, the amount of such Excess
Cash Flow prepayment shall be reduced on a dollar-for-dollar basis by the amount of (x) voluntary prepayments of the Term Loans
and/or any Incremental Term Facility that is secured on a pari passu basis with the Term Loans, and (y) any reduction in
the outstanding principal amount of any Term Loan and/or any loans under any Incremental Term Facility resulting from assignments
to (and purchases by) the Borrower or any Restricted Subsidiary, in each case to the extent of the amount of cash paid by the
Borrower or any such Restricted Subsidiary in connection with the relevant assignments and purchases in each case made prior to
any Excess Cash Flow prepayment date (without duplication in any other Excess Cash Flow period, and except to the extent financed
with indebtedness), and

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 11
	 

     

    

 

	 	 	(iv)	Excess Cash Flow shall be reduced by amounts used for
capital expenditures, acquisitions and certain other investments (including investments in joint ventures) and certain restricted
payments made during such fiscal year and, at the option of the Borrower, made prior to the date of such Excess Cash Flow prepayment
or (except with respect to restricted payments) contractually committed  to be made during such fiscal year or prior
to the date of such Excess Cash Flow prepayment (without duplication in any other Excess Cash Flow period and except to the extent
financed with indebtedness); provided that if the amount of cash (not financed with indebtedness) actually utilized during
the four fiscal quarters following such fiscal year is less than the committed amount, the difference shall be deducted from Excess
Cash Flow for the succeeding fiscal year.

 

	 	Mandatory
    prepayments of the Term Loans shall be applied to the installments thereof as directed by the Borrower (or in the absence
    of direction from the Borrower in the direct order of maturity); provided, that the Credit Documentation will provide
    that, in the case of any mandatory prepayment in respect of any asset sale or casualty or condemnation event, the Borrower
    may apply the net cash proceeds thereof ratably to the payment of the Term Loans and any other indebtedness that is secured
    on a pari passu basis with the Term Loans.
	 	 
	 	All
    mandatory prepayments described under clauses (b) and (c) above, to the extent attributable to Foreign Subsidiaries,
    will be subject to permissibility under local law (e.g., financial assistance, corporate benefit, thin capitalization, capital
    maintenance and similar legal principles, restrictions on upstreaming of cash intra group and the fiduciary and statutory
    duties of the directors of the relevant subsidiaries); provided that the Borrower shall use commercially reasonable
    efforts to take all reasonable actions required by applicable law to permit the repatriation of the relevant amounts.  Further,
    if the Borrower determines in good faith that the Borrower or any Restricted Subsidiary would incur a material and adverse
    tax liability (including any withholding tax) if all or a portion of the funds required to make a mandatory prepayment were
    upstreamed or transferred as a distribution or dividend (a “Restricted Amount”), the amount the Borrower
    will be required to mandatorily prepay shall be reduced by the Restricted Amount until such time as it may upstream or transfer
    such Restricted Amount, to the extent available, without incurring such tax liability.
	 	 
	 	Any
    Lender (each a “Declining Lender”) may elect not to accept any mandatory prepayment, but in the case of
    clause (a) above, solely to the extent not representing a refinancing of the Term Loans.  Any prepayment
    amount declined by a Declining Lender (such declined payment, the “Declined Proceeds”) shall be an addition
    to the Available Basket (as defined below).
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 12
	 

     

    

 

	COLLATERAL	Subject
    to the Limited Conditionality Provision and the provisions of the immediately following paragraphs, the Borrower Obligations
    with respect to the Term Facility and the obligations of each other Loan Party under the Term Guaranty shall be secured by
    (a) a perfected, first-priority security interest in substantially all now owned or hereafter acquired other personal
    property and real property of the Borrower and the Guarantors (other than ABL Priority Collateral (as defined below)) (including,
    without limitation, (i) a pledge of the capital stock of the Borrower owned by Holdings and a pledge of the capital stock
    of each Loan Party’s direct Restricted Subsidiaries, but limited, in the case of voting capital stock of Foreign Subsidiaries
    and CFC Holdcos, to a pledge of 65% of the voting capital stock of any first-tier Foreign Subsidiary or CFC Holdco, and (ii)
    any and all tractors, trailers and equipment used for transport, other than, for the avoidance of doubt, any parts inventory)
    (the collateral described in this clause (a), the “Term Priority Collateral”); and (b) a perfected
    second-priority security interest (subject to permitted liens and other exceptions set forth in the New ABL Facility documentation)
    in each Loan Party’s now owned or hereafter acquired (i) accounts receivable, (ii) inventory, (iii) cash, cash equivalents
    (other than cash and cash equivalents constituting identifiable proceeds of Term Priority Collateral), (iv) securities and
    deposit accounts (subject to exceptions for accounts containing exclusively identifiable cash proceeds of Term Priority Collateral),
    (v) general intangibles (other than capital stock and intellectual property), instruments, documents, chattel paper, commercial
    tort claims, letter of credit rights and supporting obligations, in each case related to the foregoing, (vi) books and records
    to the extent related to the foregoing and (vii) in each case above, proceeds thereof (the collateral described in this clause (b),
    the “ABL Priority Collateral” and, together with the Term Priority Collateral, the “Collateral”),
    in each case, subject to permitted liens and to certain customary exceptions and excluding Excluded Assets (as defined below).
	 	 
	 	Notwithstanding
    the foregoing, the Collateral will exclude (collectively, the “Excluded Assets”):

 

	 	(a)	all leasehold real property,

 

	 	(b)	all fee-owned real property with a fair market value
(as reasonably estimated by the Borrower) of less than an amount to be mutually agreed, and all fee-owned real property securing
Permitted Surviving Debt as of the Closing Date or any refinancing thereof for so long as such property secures the Permitted
Surviving Debt or any permitted refinancing thereof (collectively, “Excluded Real Property”),

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 13
	 

     

    

 

	 	(c)	interests in joint ventures and non-wholly-owned subsidiaries
(i) which cannot be pledged without the consent of one or more third parties other than Holdings, the Borrower or any of their
subsidiaries (after giving effect to any applicable anti-assignment provision of the UCC or other applicable law) and/or (ii)
the pledge of which could give rise to a “right of first refusal”, a “right of first offer” or a similar
right that may be exercised by any third party other than Holdings, the Borrower or any of their respective wholly-owned subsidiaries,

 

	 	(d)	the capital stock of (i) captive insurance subsidiaries,
(ii) not-for-profit subsidiaries, (iii) special purpose entities used for permitted securitization facilities and/or (iv) Unrestricted
Subsidiaries,

 

	 	(e)	margin stock,

 

	 	(f)	assets the grant or perfection of a security interest
in which would result in material and adverse tax consequence as reasonably determined by the Borrower, written notice of which
determination is provided by the Borrower to the Agent,

 

	 	(g)	any property or asset the grant or perfection of a security
interest in which would require governmental consent, approval, license or authorization (unless such consent, approval, license
or authorization has been obtained), after giving effect to any applicable anti-assignment provision of the UCC or other applicable
law and other than proceeds thereof to the extent that the assignment of the same is effective under the UCC or other applicable
law notwithstanding such consent or restriction,

 

	 	(h)	any “intent-to-use” trademark application
prior to the filing of a “Statement of Use”, “Declaration of Use”, “Amendment to Allege Use”
or similar notice with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant
of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable
law,

 

	 	(i)	commercial tort claims below a threshold to be agreed,

 

	 	(j)	Tax and Trust Funds,

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 14
	 

     

    

 

	 	(k)	any lease, license or agreement or any property subject
to a purchase money security interest, capital lease or a similar arrangement permitted by the credit agreement to the extent
that a grant of a security interest therein would violate or invalidate such lease, license or agreement or purchase money or
similar arrangement or trigger a right of termination in favor of any other party thereto after giving effect to the applicable
anti-assignment provisions of the UCC or other applicable law,

 

	 	(l)	other exceptions to be agreed consistent with the Documentation
Considerations or otherwise reasonably satisfactory to the Agent and the Borrower.

 

	 	“Tax
    and Trust Funds” means cash, cash equivalents or other assets comprised solely of (a) funds used for payroll
    and payroll taxes and other employee benefit payments to or for the benefit of such Loan Party’s employees, (b) all
    taxes required to be collected, remitted or withheld (including, without limitation, federal and state withholding taxes (including
    the employer’s share thereof)) and (c) any other funds which any Loan Party holds in trust or as an escrow or fiduciary
    for another person which is not a Loan Party in the ordinary course of business.
	 	 
	 	Notwithstanding
    anything to the contrary contained herein:

 

	 	(a)	no Loan Party shall be required to grant a security
interest in or a pledge of any asset or perfect a security interest in any Collateral to the extent the cost, burden, difficulty
or consequence of obtaining or perfecting a security interest therein outweighs the benefit of the security afforded thereby as
reasonably determined by the Borrower and the Agent or (B) the grant or perfection of a security interest in such asset or Collateral,
as applicable, would be prohibited by applicable law

 

	 	(b)	no action outside of the United States shall be required
in order to create or perfect any security interest in any asset located or titled outside of the United States, and no non-US
law security or pledge agreement or foreign intellectual property filing, search or schedule shall be required,

 

	 	(c)	any required mortgage will be permitted to be delivered
after the Closing Date in accordance with the Limited Conditionality Provision,

 

	 	(d)	the Loan Parties shall not be required to seek any landlord
lien waiver, estoppel, warehouseman waiver or other collateral access or similar letter or agreement, 

 

	 	(e)	no action shall be required to obtain perfection through
(i) control agreements or other control arrangements (other than control of pledged capital stock and promissory notes having
a value above a threshold to be agreed, in each case, to the extent constituting Collateral and otherwise required above), or
(ii) lien notation on certificates of title evidencing assets with an aggregate book value less than or equal to an amount
to be agreed.

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 15
	 

     

    

 

	 	(f)	the following Collateral shall not be required to be
perfected (other than to the extent perfected by the filing of a UCC financing statement):

 

	 	 	(i)	the capital stock of (A) any Immaterial Subsidiary and/or
(B) any person that is not a subsidiary which, if a subsidiary, would constitute an Immaterial Subsidiary, and

 

	 	 	(ii)	letter of credit rights, and

 

	 	(g)	the guaranty and security documents will contain such
other exceptions and qualifications as the Borrower and the Agent may reasonably agree.

 

	Ranking:	The
        lien priority, relative rights and other creditors’ rights matters in respect of the Term Facility and the New ABL
        Facility will be set forth in a customary intercreditor agreement (the “Intercreditor Agreement”), which shall
        be consistent with the Documentation Considerations (as defined below) and/or otherwise reasonably satisfactory to the
        Borrower, the Agent and the agent under the New ABL Facility. For the avoidance of doubt, the Intercreditor Agreement
        will permit, among other things, (a) additional indebtedness permitted to be incurred pursuant to the Incremental
        Facilities and any Incremental Equivalent Debt, (b) additional indebtedness under the New ABL Facility permitted
        to be incurred pursuant to the any incremental facility provisions thereunder and (c) refinancing indebtedness in
        respect of any of the foregoing.

         

        In
        addition, and subject, to the Intercreditor Agreement, the Credit Documentation will authorize and require the Agent to
        enter into additional intercreditor agreements (each, an “Additional Intercreditor Agreement”) which
        allow (at the Borrower’s option) additional debt that is permitted to be incurred and secured under the Credit Documentation
        to be secured by a lien on the Collateral that is pari passu with or junior to the lien on the Collateral securing the
        Term Facility.

	 	 
	CONDITIONS	The
    only conditions precedent to the availability of the Term Facility on the Closing shall be those set forth in the Limited
    Conditionality Provision and in Exhibit C hereto.  The making of each Delayed Draw Term Loan after the Closing
    Date shall be conditioned on (a) the accuracy in all material respects of all representations in the Credit Documentation,
    (b) there being no default or event of default in existence at the time of, and after giving effect to the making of, such
    extension of credit and (c) the delivery of a customary borrowing notice.
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 16
	 

     

    

 

	DOCUMENTATION	 
	 	 
	Credit
    Documentation:	The
    definitive financing documentation for the Term Facility (including the Intercreditor Agreement, the “Credit Documentation”
    will contain the terms and conditions set forth in the Commitment Letter (as such terms may be modified by the “Market
    Flex” provisions of the Fee Letter) and such other terms as the Borrower and the Lead Arrangers may agree; it being
    understood and agreed that the Credit Documentation shall:

 

	 	(a)	not contain any conditions to the availability and initial
funding of the Term Facility on the Closing Date other than as set forth on Exhibit C;

 

	 	(b)	subject to the right to exercise the Flex Provisions,
contain only those mandatory prepayments, representations and warranties, affirmative, financial and negative covenants and events
of default expressly set forth in this Exhibit B, in each case, applicable to the Borrower and its Restricted Subsidiaries
(and Holdings in certain limited circumstances), which shall be subject to standards, qualifications, thresholds, exceptions for
materiality and/or otherwise and “baskets,” grace and cure periods, in each case, consistent (where applicable) with
the Documentation Considerations; it being understood and agreed that to the extent that the Credit Documentation requires (x)
compliance with any financial ratio or test (including the Financial Covenant (as defined below)), (y) the absence of any default
or event of default (or any type of default or event of default) or (z) compliance with any cap expressed as a percentage of Consolidated
EBITDA or Consolidated Total Assets as a condition to the consummation of any acquisition or similar investment or the incurrence
of any indebtedness in connection therewith, the determination of whether the relevant condition is satisfied shall be made at
the time of the execution of the definitive documentation with respect to the relevant acquisition or other investment, after
giving effect to such acquisition or other investment and any related indebtedness on a pro forma basis (it being understood that
in connection with any subsequent calculation of any ratio or basket availability with respect to any acquisition or similar investment
or incurrence of any indebtedness in connection therewith on or following such date of execution of such definitive documentation
and prior to the earlier of the date on which such acquisition or investment is consummated or such definitive documentation is
terminated or expires without consummation of such acquisition or investment, any such ratio or basket shall be calculated on
a pro forma basis assuming such acquisition or investment (and other transactions in connection therewith, including any incurrence
of indebtedness and the use of proceeds thereof) have been consummated)

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 17
	 

     

    

 

	 	(c)	give due regard to:

 

	 	 	(i)	the operational and strategic requirements of the Borrower,
the Target, and their respective subsidiaries in light of their consolidated capital structure, size, industry and practices (including,
without limitation, the leverage profile and projected free cash flow generation of the Borrower, the Target and their respective
subsidiaries), in each case, after giving effect to the Transactions,

 

	 	 	(ii)	the model delivered by Holdings on November 16, 2016
(the “Projections”), and

 

	 	 	(iii)	customary EU bail-in provisions; and 

 

	 	 	(iv)	operational requirements of the Agent to the extent not in conflict with the term hereof;

 

		it being
    understood and agreed that the Credit Documentation shall in all cases be based on a credit agreement to be mutually agreed
    (the items described in clauses (c)(i) through (c)(iii), collectively, the “Documentation
    Considerations”; and

 

	 	(d)	be negotiated in good faith by the Borrower and the
Commitment Parties giving effect to the Limited Conditionality Provision so that the Credit Documentation is finalized as promptly
as practicable after the acceptance of the Commitment Letter.

 

	Representations
    and Warranties:	Limited
    to the following (to be applicable to the Borrower and its Restricted Subsidiaries, and for certain representations, Holdings,
    and subject to exceptions, qualifications and limitations for materiality and Material Adverse Effect to be mutually agreed
    in the Credit Documentation):  organizational existence; organizational power and authority; due authorization,
    execution and delivery of the Credit Documentation; enforceability of the Credit Documentation; no conflicts of the Credit
    Documentation with applicable law, organizational documents or contractual obligations; financial statements; no material
    adverse effect; capitalization of subsidiaries as of the Closing Date; compliance with law; FCPA, OFAC and the PATRIOT Act;
    governmental approvals and consents, (as such approvals and consents pertain to the Credit Documentation); no default under
    certain material agreements; ERISA and labor matters; environmental matters; litigation; ownership of property (including
    intellectual property); taxes; Federal Reserve margin regulations; Investment Company Act; accuracy of disclosure as of the
    Closing Date (to be consistent with the “10b-5” representation set forth in the Commitment Letter to which this
    Exhibit B is attached); solvency (to be defined in a manner consistent with Annex I to Exhibit C)
    of the Borrower and its Subsidiaries, on a consolidated basis, on the Closing Date; and the creation, validity, perfection
    and priority of security interests.
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 18
	 

     

    

 

	Affirmative
    Covenants:	Limited
    to the following (to be applicable to the Borrower and its Restricted Subsidiaries (and, in certain limited circumstances,
    Holdings): delivery of (a) annual audited financial statements within 90 days of the end of each fiscal year accompanied by
    an opinion of a nationally-recognized independent accounting firm that is not subject to (i) a “going concern”
    qualification (other than a “going concern” qualification resulting from the maturity of the Term Facility or
    the New ABL Facility within the 4 fiscal quarter period following the relevant audit opinion or the impending breach of any
    financial covenant) or (ii) a qualification as to the scope of the relevant audit, (b) quarterly unaudited financial statements
    (for each of the first 3 fiscal quarters of each fiscal year) within 45 days of the end of each fiscal quarter, in the case
    of each of clause (a) and (b) with customary MD&A disclosure; (c) an annual budget within 90 days of the end of each
    fiscal year, (d) officers’ certificates and other information reasonably requested by the Agent, (e) concurrently
    with the delivery of annual and quarterly financial statements, a compliance certificate, and (f) notices of default
    and certain other events that would reasonably be expected to have a Material Adverse Effect; maintenance of books and records;
    maintenance of existence; compliance with laws (including, without limitation, ERISA and environmental laws); FCPA, OFAC and
    the PATRIOT Act; maintenance of property and insurance; payment of obligations, including taxes; right of the Agent to inspect
    property and books and records (subject, absent a continuing event of default, to frequency and cost reimbursement limitations);
    commercially reasonable efforts to maintain public corporate and public corporate family ratings and public facility ratings
    by each of S&P and Moody’s (but not to maintain a specific rating); use of proceeds; designation of Unrestricted
    Subsidiaries; and further assurances on guaranty and Collateral matters (including, without limitation, with respect to additional
    guarantees and security interests in after-acquired property), subject to the parameters set forth under “COLLATERAL”
    above.  
	 	 
	Financial
    Covenant:	A
    maximum Total Leverage Ratio covenant (the “Financial Covenant”) shall apply to the Term Facility.
	 	 
	 	The
    Financial Covenant will be set at a level of based on a 30% cushion (calculated on a non-cumulative basis) in Consolidated
    EBITDA above the Consolidated EBITDA levels set forth in the Projections until the Term Loan Maturity Date, with stepdowns
    to be agreed.
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 19
	 

     

    

 

	

                                                                                
	If
    any Flex Provision is actually exercised, whether before or after the Closing Date, the covenant levels for the Financial
    Covenant shall be adjusted in the Credit Documentation (or pursuant to an amendment thereto) in order to maintain the leverage
    levels described herein.
	 	 
	 	For
    purposes of the Credit Documentation, any obligation of a person under a lease that is not (or would not be) required to be
    classified and accounted for as a capitalized lease on a balance sheet of such person under GAAP as in effect as of the date
    on which the Credit Documentation is initially entered into, shall not be treated as a capitalized lease as a result of the
    adoption of changes in GAAP or changes in the application of GAAP and shall continue to be treated as an operating lease.
	 	 
	 	The
    cash proceeds of a sale of, or contribution to, equity (which equity shall be Permitted Equity) of the Borrower during any
    fiscal quarter and on or prior to the day that is 15 business days after the day on which financial statements are required
    to be delivered for such fiscal quarter will, at the request of the Borrower, be included in the calculation of Consolidated
    EBITDA for purposes of determining compliance with the Financial Covenant at the end of such fiscal quarter and applicable
    subsequent periods (any such equity contribution so included in the calculation of Consolidated EBITDA, a “Specified
    Equity Contribution”); provided, that (a) in each 4 consecutive fiscal quarter period, there shall be no
    more than 2 fiscal quarters (which may be consecutive) in which a Specified Equity Contribution is made, (b) no more than
    5 Specified Equity Contributions may be made in the aggregate, (c) the amount of any Specified Equity Contribution shall be
    no greater than the amount required to cause the Borrower to be in compliance with the Financial Covenant, (d) any pro forma
    adjustment to Consolidated EBITDA resulting from any Specified Equity Contribution shall be counted as Consolidated EBITDA
    solely for purposes of determining compliance with the Financial Covenant and shall not be included for any other purpose
    during any fiscal quarter in which the pro forma adjustment applies and (e) there shall be no pro forma or other reduction
    of indebtedness with the proceeds of any Specified Equity Contribution for purposes of determining compliance with the Financial
    Covenant for the fiscal quarter in respect of which such Specified Equity Contribution was made (other than, with respect
    to any future period, with respect to any portion of such Specified Equity Contribution that is actually applied to repay
    any indebtedness). 
	 	 
	 	The
    Credit Documentation will contain a standstill provision prohibiting the exercise of remedies related to any breach of the
    Financial Covenant during the period in which any Specified Equity Contribution will be made after the Borrower delivers written
    notice to the Agent of the Borrower’s intention to cure the Financial Covenant with the proceeds of the Specified Equity
    Contribution; it being understood that the standstill provision shall apply solely in respect of the breach of the Financial
    Covenant giving rise to the relevant Specified Equity Contribution.
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 20
	 

     

    

 

	Negative
    Covenants:	Limited
    to the following (applicable to the Borrower and its Restricted Subsidiaries and, in the case of the passive holding company
    covenant set forth below, Holdings), in each case to include the ability of the Borrower to divide and re-classify its utilization
    of any available baskets under clauses (a) and (b) below from time to time:

 

	 	(a)	indebtedness (including guarantee obligations in respect
of indebtedness), with baskets and exceptions for, among other things,

 

	 	 	(i)	purchase money indebtedness and capital leases in an
aggregate outstanding principal amount (excluding, for the avoidance of doubt, the principal of any such indebtedness or capital
leases incurred in reliance on another basket) not to exceed 0.50x Consolidated EBITDA when incurred,

 

	 	 	(ii)	Permitted Surviving Debt,

 

	 	 	(iii)	other senior, senior subordinated or subordinated debt
pursuant to customary terms to be mutually agreed so long as, after giving pro forma effect thereto, including the application
of the proceeds thereof:

 

	 	 	(A)	if such debt is secured by a lien on the Term Priority
Collateral that is pari passu with the lien securing the Term Facility, the First Lien Leverage Ratio does not exceed the First
Lien Leverage Ratio on the Closing Date,

 

	 	 	(B)	if such debt is secured by a lien on the Term Priority
Collateral that is junior to the lien securing the Term Facility, the Secured Leverage Ratio does not exceed the Second Leverage
Ratio on the Closing Date, or

 

	 	 	(C)	if such debt is secured by a lien on any asset that
does not constitute Collateral or is unsecured, the Total Leverage Ratio does not exceed the Total Leverage Ratio after the Closing
Date (this clause (iii), the “Ratio Debt Basket”);

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 21
	 

     

    

 

	 		provided, that
    (x) the aggregate outstanding principal amount of indebtedness incurred by Restricted Subsidiaries that are not Loan Parties
    in reliance on the Ratio Debt Basket shall not exceed an amount to be agreed and (y) any debt incurred under the Ratio Debt
    Basket in the form of loans that are pari passu in right of payment and secured on a pari passu basis with the Term Loans
    will be subject to a “most favored nation” pricing adjustment;

 

	 	 	(iv)	indebtedness incurred in connection with any Incremental
Term Facility, Refinancing Term Facility and/or in connection with any Refinancing Notes, 

 

	 	 	(v)	intercompany debt, subject only to any applicable restrictions
in the investment covenant and subordination in the case of debt owed by Loan Parties to non-loan Parties,

 

	 	 	(vi)	debt incurred by Foreign Subsidiaries that is unsecured
or secured by assets of Foreign Subsidiaries in an aggregate amount not to exceed an amount to be agreed at any time outstanding,

 

	 	 	(vii)	other debt incurred by non-Loan Parties in an aggregate
outstanding principal amount not to exceed an amount to be agreed,

 

	 	 	(viii)	indebtedness assumed in connection with any acquisition
permitted under the Credit Documentation so long as (A) no event of default exists, (B) the Borrower is in compliance with the
Financial Covenant after giving pro forma effect thereto and (C) the relevant indebtedness was not incurred in contemplation of
the relevant acquisition;

 

	 	 	(ix)	any Incremental Equivalent Debt; it being understood
and agreed that Incremental Equivalent Debt incurred in the form of loans that are pari passu in right of payment and secured
on a pari passu basis with the Term Loans will be subject to a “most favored nation” pricing adjustment,

 

	 	 	(x)	a general debt basket in an aggregate outstanding principal
amount not to exceed an amount to be agreed, 

 

	 	 	(xi)	indebtedness arising under any derivative transaction
not entered into for speculative purposes,

 

	 	 	(xii)	indebtedness under the New ABL Facility not to exceed
a maximum amount to be agreed,

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 22
	 

     

    

 

	 	 	(xiii)	unsecured indebtedness consisting of seller notes and
similar obligations incurred in connection with Permitted Acquisitions in an aggregate principal amount to be agreed in any fiscal
year,

 

	 	 	(xiv)	unsecured indebtedness consisting of earnout and similar
obligations incurred in connection with Permitted Acquisitions so long as the aggregate amount of payments in respect thereof
in any fiscal year does not exceed an amount to be agreed,

 

	 	 	(xv)	additional indebtedness secured by Excluded Real Property
in an aggregate principal amount (excluding, for the avoidance of doubt, the principal of any such indebtedness incurred in reliance
on another basket) not to exceed an amount to be agreed at any time outstanding, and

 

	 	 	(xvi)	permitted refinancing indebtedness in respect of permitted
indebtedness (other than indebtedness incurred under replenishable Dollar baskets);

 

	 	(b)	liens, with baskets and exceptions for, among other
things, 

 

	 	 	(i)	liens securing any Incremental Term Facility, Refinancing
Term Facility and/or issuance of Refinancing Notes,

 

	 	 	(ii)	liens in respect of taxes, materialmen’s, supplier’s
or similar statutory liens that (x) are not more than 30 days overdue, (y) are being contested in good faith and
are subject to appropriate reserves to the extent required under GAAP or (z) the non-payment of which could not reasonably
be expected to result in a Material Adverse Effect,

 

	 	 	(iii)	liens securing Permitted Surviving Debt,

 

	 	 	(iv)	liens securing purchase money indebtedness and capital
leases permitted to be incurred under clause (a)(i) above, 

 

	 	 	(v)	liens on acquired assets, and the stock of acquired
entities, securing debt assumed in connection with any acquisition (so long as such liens were not created in contemplation of
such acquisition),

 

	 	 	(vi)	(A) liens on capital stock of joint ventures securing
capital contributions to, or obligations of, such persons and (B) customary rights of first refusal and tag, drag and similar
rights in joint venture agreements,

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 23
	 

     

    

 

	 	 	(vii)	liens securing the New ABL Facility (including any ABL
Incremental Term Facility), subject to the Intercreditor Agreement,

 

	 	 	(viii)	liens securing debt incurred in reliance on the Ratio
Debt Basket, having the priorities described therein and subject to an Additional Intercreditor Agreement,

 

	 	 	(ix)	liens in respect of secured permitted refinancing indebtedness,

 

	 	 	(x)	a general lien basket in an aggregate outstanding principal
amount not to exceed an amount to be agreed,

 

	 	 	(xi)	liens
on Collateral securing Incremental Equivalent Debt, subject to an Additional Intercreditor Agreement,  
	 	 	 	 
	 	 	(xii)	 liens on assets of Foreign Subsidiaries securing indebtedness
incurred in reliance on clause (a)(vi) above, and

 

	 	 	(xiii)	liens on Excluded Real Property securing indebtedness
incurred in reliance on clause (a)(xv) above;

 

	 	(c)	mergers, consolidations, liquidations and dissolutions;

 

	 	(d)	sales, dispositions or transfers (“Dispositions”)
of assets with a fair market value in excess of a de minimis amount to be mutually agreed, with baskets and exceptions for, among
other things, 

 

	 	 	(i)	Dispositions in the ordinary course of business of inventory,
obsolete, surplus or worn out property and property no longer useful in the business, 

 

	 	 	(ii)	Dispositions of any assets on an unlimited basis for
fair market value so long as (A) with respect to Dispositions in excess of an amount to be agreed, at least 75% of the consideration
consists of cash or cash equivalents and Designated Non-Cash Consideration (to be defined giving effect to the Documentation Considerations)
not to exceed an amount to be agreed, (B) the relevant Disposition is subject to the terms set forth in the mandatory prepayment
requirements in the Credit Documentation and (C) no event of default exists on the date on which the agreement governing the relevant
Disposition is executed,

 

	 	 	(iii)	Dispositions of any asset in connection with casualty
or condemnation events or like kind exchanges,

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 24
	 

     

    

 

	 	 	(iv)	Dispositions of investments in joint ventures to the
extent required by, or made pursuant to, buy/sell arrangements between joint venture or similar parties set forth in the relevant
joint venture arrangements and/or similar binding arrangements,

 

	 	 	(v)	sale leaseback transactions in an aggregate amount not
to exceed an amount to be agreed,

 

	 	 	(vi)	Dispositions of non-core assets acquired in connection
with an acquisition and designated as such within 90 days of such acquisition, subject to no event of default and application
of the proceeds in accordance with the mandatory prepayment provisions of the Credit Documentation and subject to a cap to be
agreed, and

 

	 	 	(vii)	other Dispositions in an aggregate amount not to exceed
an amount to be agreed;

 

		it being
    understood that the lien on any Collateral that is the subject of a Disposition permitted under the Credit Documentation will
    be automatically released upon the consummation of such Disposition; 

 

	 	(e)	dividends or distributions on, or redemptions or repurchases
of, the capital stock of the Borrower (“Restricted Payments”), with exceptions for, among other things, 

 

	 	 	(i)	distributions to Holdings to pay (or to make distributions
to any direct or indirect parent of Holdings to pay) taxes due and payable by Holdings (or any direct or indirect parent of Holdings)
to any taxing authority and that are attributable to the income or operation of the Borrower or its subsidiaries, including any
consolidated, combined or similar income tax liabilities attributable to taxable income of Borrower and its Restricted Subsidiaries,
operating expenses in the ordinary course and other corporate overhead, franchise and similar taxes required to maintain its corporate
existence and fees and expenses of debt or equity offerings (whether or not successful),

 

	 	 	(ii)	distributions to Holdings to fund (or to make distributions
to any direct or indirect parent of Holdings to fund) the repurchase or redemption of the capital stock of Holdings, or its direct
or indirect parents, in each case, held by future, current or former directors, officers, employees, members of management and
consultants and/or their respective estates, heirs, family members, spouses, domestic partners, former spouses or former domestic
partners in an amount not to exceed an amount to be agreed per fiscal year, with unused amounts permitted to be carried forward
to subsequent fiscal years, and

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 25
	 

     

    

 

	 	 	(iii)	to the extent constituting a Restricted Payment, the
consummation of the Transactions;

 

	 	 	provided that dividends in respect of common
equity of Holdings will be subject to the following conditions (x) the Borrower shall be in pro forma compliance with a Total
Leverage Ratio set at 2.50:1.00, and (y) any such dividend shall not exceed trailing twelve month consolidated net income of the
Borrower and its Restricted Subsidiaries.

 

	 	(f)	acquisitions of equity interests, investments, loans
and advances (“Investments”), with exceptions for, among other things, 

 

	 	 	(i)	Investments in Holdings and/or any Restricted Subsidiary;
provided, that the aggregate outstanding amount of Investments made by Loan Parties in Holdings and/or any Restricted Subsidiary
that is not a Loan Party will be limited to an amount to be agreed,

 

	 	 	(ii)	Investments in Foreign Subsidiaries in an aggregate
outstanding amount not to exceed an amount to be agreed,

 

	 	 	(iii)	Investments in joint ventures and Unrestricted Subsidiaries
in an aggregate outstanding amount not to exceed an amount to be agreed,

 

	 	 	(iv)	Investments in Restricted Subsidiaries in connection
with internal reorganizations and/or restructurings and related activities that do not materially impair the Guaranties, taken
as a whole, or the security interest of the Agent in the Collateral, taken as a whole,

 

	 	 	(v)	Permitted Acquisitions (as defined below), and

 

	 	 	(vi)	a general Investment basket in an aggregate outstanding
amount not to exceed an amount to be agreed.

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 26
	 

     

    

 

	 	(g)	(i) prepayments, redemptions and repurchases (any
such prepayment, redemption or repurchase, a “Restricted Debt Payment”) of any material subordinated debt,
junior lien debt and certain unsecured debt (“Restricted Debt”) (and excluding, for the avoidance of doubt,
regularly scheduled interest payments and payment of fees, expenses and indemnification obligations), other than: 

 

	 	 	(A)	refinancings or exchanges of Restricted Debt for like
or junior debt subject to conditions to be agreed,

 

	 	 	(B)	payments with, or conversions to, Permitted Equity,
and

 

	 	 	(C)	other Restricted Debt Payments to be mutually agreed,

 

	 	 	(ii)	modifications of the terms of Restricted Debt (A) in
violation of the Intercreditor Agreement or any other applicable intercreditor or subordination agreement or (B) that are materially
adverse to the Lenders; and

 

	 	(h)	burdensome agreements (i.e., negative pledge clauses
and limitations on dividends and other distributions by Restricted Subsidiaries);

 

	 	(i)	passive holding company applicable to Holdings;

 

	 	(j)	changes in business;

 

	 	(k)	transactions with affiliates with respect to transactions
with a fair market value in excess of a de minimis amount to be mutually agreed, with exceptions to permit, among others, (i) transactions
among the Borrower and its Restricted Subsidiaries, (ii) the transactions and payments required under the Acquisition Agreement,
(iii) transactions that are for fair market value and on other terms that, taken as a whole, are no less favorable to the
Borrower and its Restricted Subsidiaries than an arm’s length transaction and (iv) other exceptions to be mutually
agreed;

 

	 	(l)	changes in fiscal year; and

 

	 	(m)	amendments of organizational documents of the Loan Parties
that are materially adverse to the Lenders.

 

	 	For
    purposes of determining the permissibility of any action, change, transaction or event that requires a calculation of any
    financial ratio or test (including the Total Leverage Ratio, the First Lien Leverage Ratio, the Secured Leverage Ratio and
    the amount of Consolidated EBITDA, Adjusted Consolidated Net Income or consolidated total assets), such financial ratio or
    test shall be calculated at the time such action is taken, such change is made, such transaction is consummated or such event
    occurs, as the case may be, and no Default or Event of Default shall be deemed to have occurred solely as a result of a change
    in such financial ratio or test occurring after the time such action is taken, such change is made, such transaction is consummated
    or such event occurs, as the case may be.
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 27
	 

     

    

 

	 	The
    limitations on Investments, Restricted Payments and Restricted Debt Payments referenced above shall be subject to a carve-out
    for a “building” basket (the “Available Basket”) in a cumulative amount equal to:

 

	 	(a)	$25.0 million, plus

 

	 	(b)	without duplication:

 

	 	 	(i)	a growth amount (the “Growth Amount”)
based on an amount (which shall not be less than zero) equal to the retained portion of Excess Cash Flow (i.e. Excess Cash Flow
not otherwise required to be applied to prepay the Term Loans), which will accumulate on an annual basis (commencing with the
first full fiscal year for which financial statements are available after the Closing Date), plus

 

	 	 	(ii)	the cash proceeds of Permitted Equity of the Borrower
and/or its Restricted Subsidiaries (other than Specified Equity Contributions and amounts used for the Contributions Indebtedness
basket) after the Closing Date, plus

 

	 	 	(iii)	the cash proceeds of debt and disqualified stock issued
after the Closing Date that have been exchanged or converted into Permitted Equity, plus

 

	 	 	(iv)	the net cash proceeds of sales of investments made after
the Closing Date using the Available Basket (up to the amount of the original investment), plus

 

	 	 	(v)	cash returns, profits, distributions and similar amounts
received on investments made after the Closing Date using the Available Amount (up to the amount of the original investment),
plus

 

	 	 	(vi)	the amount of any investment made by the Borrower and/or
any of its Restricted Subsidiaries in any Unrestricted Subsidiary after the Closing Date using the Available Amount, that has
been redesignated as a Restricted Subsidiary or that has been merged or consolidated into the Borrower or any of its Restricted
Subsidiaries or the fair market value of the assets of any Unrestricted Subsidiary that have been transferred to the Borrower
or any of its Restricted Subsidiaries, plus

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 28
	 

     

    

 

	 	 	(vii)	any Declined Proceeds;

 

	 	provided
    that, except with respect to any use of clauses (a) or (b)(ii) above, (x) no event of default may be continuing and (y)
    the Borrower shall be in pro forma compliance with a Total Leverage Ratio set at 3.25:1.00.
	 	 
	 	The
    Credit Documentation will permit the Borrower and its Restricted Subsidiaries to acquire all or substantially all of the assets
    of any person or any line of business or division thereof or the equity interests of any person (including any Investment
    which serves to increase the Borrower’s or its  Restricted Subsidiary’s respective equity ownership in any
    Restricted Subsidiary or in any joint venture) that is engaged in a similar business and becomes a Restricted Subsidiary (each,
    a “Permitted Acquisition”), in each case so long as, after giving effect thereto and any indebtedness to
    be incurred or assumed in connection therewith, (a) the Borrower is in pro forma compliance with the Financial Covenant and
    (b) there is no event of default.
	 	 
	 	Permitted
    Acquisitions of (a) entities that do not become Guarantors or (b) assets that are not acquired by a Loan Party will be limited
    in an aggregate amount to be agreed; provided that, in the case of each of clauses (a) and (b), such
    limitation shall not apply to the extent (x) the relevant acquisition is made with the proceeds of sales of, or contributions
    to, Permitted Equity of the Borrower or (y) (1) the person so acquired (or the person owning the assets so acquired) becomes
    a Guarantor even though such person owns equity interests in persons that are not otherwise required to become Guarantors
    and (2) not less than 70% of the Consolidated EBITDA of the consolidated target is generated by entities that become Guarantors.
	 	 
	Unrestricted
    Subsidiaries:	The
    Credit Documentation will contain provisions pursuant to which, subject to customary limitations on Investments in Unrestricted
    Subsidiaries, the Borrower will be permitted to designate (or re-designate) any existing or subsequently acquired or organized
    Restricted Subsidiary as an “unrestricted subsidiary” (each, an “Unrestricted Subsidiary”)
    and designate (or re-designate) any such Unrestricted Subsidiary as a Restricted Subsidiary; provided, that after giving
    effect to any such designation or re-designation, no event of default shall exist (including after giving effect to the reclassification
    of any indebtedness of, and/or liens on the assets of, the relevant subsidiary) and the Borrower shall be in pro forma compliance
    with the Financial Covenant. Unrestricted Subsidiaries (and the sale of any equity interests therein or assets thereof) will
    not be subject to the mandatory prepayment, representations and warranties, affirmative or negative covenants, Financial Covenant
    or event of default provisions of the Credit Documentation, and the results of operations and indebtedness of Unrestricted
    Subsidiaries will not be taken into account for purposes of determining compliance with the Financial Covenant or any financial
    ratio set forth in the Credit Documentation.  No Restricted Subsidiary may be designated as an Unrestricted Subsidiary
    under the Term Facility if it is a Restricted Subsidiary under the New ABL Facility.
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 29
	 

     

    

 

	Events
    of Default:	Limited
    to the following:  nonpayment of principal when due; nonpayment of interest, fees or other amounts after 5 business
    days; material inaccuracy of a representation or warranty when made or deemed made; violation of a covenant (subject, in the
    case of affirmative covenants (other than notices of default and the covenant to maintain the organizational existence of
    the Borrower; provided that the delivery of a notice of default at any time will cure such event of default arising
    from the failure to timely deliver such notice of default), to a grace period of 30 days following written notice from
    the Agent); cross default and cross acceleration to material indebtedness other than any event of default related to a breach
    of the New ABL Facility (or any refinancing or replacement thereof) unless an acceleration (and termination of commitments)
    thereunder has occurred); provided that there will be cross default and cross acceleration to any payment event of
    default under the New ABL Facility; bankruptcy events with respect to Holdings, the Borrower or a material Restricted Subsidiary
    (with a customary grace period for involuntary actions); ERISA events subject to Material Adverse Effect; material unpaid,
    final judgments for money (to the extent not covered by insurance) that have not been vacated, discharged, stayed or bonded
    pending appeal within 60 days from the entry thereof; actual (or assertion by a Loan Party in writing of the) invalidity
    of the definitive credit agreement in respect of the Term Facility, any material Guaranty or material portion of the Collateral
    or subordination provisions in respect of material indebtedness (including the New ABL Facility); and a change of control
    (to be defined in a manner to be mutually agreed).  
	 	 
	 	In
    addition, no breach of the Financial Covenant will result in an Event of Default until the date that is 15 business days after
    the day on which financial statements are required to be delivered for the relevant fiscal quarter if, in the case of this
    clause (a), the Borrower then has the right to receive a Specified Equity Contribution in respect thereof and has delivered
    notice of its intention to exercise such right
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 30
	 

     

    

 

	Voting:	Amendments and waivers of the Credit Documentation will
require the approval of Lenders holding more than 50% of the aggregate amount of the Term Loans (the “Required Lenders”),
except that

 

	 	(a)	the consent of each Lender directly and adversely affected
thereby shall be required with respect to:

 

	 	 	(i)	any reduction in the principal amount of any Term Loan
owed to such Lender,  

 

	 	 	(ii)	any extension of the final maturity of any Term Loan
owed to such Lender or the due date of any interest or fee payment or any scheduled amortization payment in respect of any Term
Loan owed to such Lender,  

 

	 	 	(iii)	any reduction in the rate of interest (other than a
waiver of default interest) or the amount of any fee owed to such Lender (it being understood that any change in any definition
applicable to any ratio used in the calculation of such rate of interest or fees (or any component definition thereof) shall not
constitute a reduction in any rate of interest or any fee),  

 

	 	 	(iv)	any increase in the amount (other than with respect
to any Incremental Term Facility to which such Lender has agreed) of such Lender’s commitment (it being understood that
no waiver of any condition precedent or the waiver of any default, event of default or mandatory prepayment shall constitute an
increase of any commitment of any Lender),  

 

	 	 	(v)	any extension of the expiry date of such Lender’s
commitment (it being understood that a waiver of any condition precedent or the waiver of any default, event of default or mandatory
prepayment shall not constitute an extension of any commitment of any Lender), and reductions of principal or interest without
consideration, and  

 

	 	 	(vi)	any modification to the pro rata sharing and pro rata
sharing of payment provisions, except as otherwise provided in the Credit Documentation, and  

 

	 	(b)	the consent of 100% of the Lenders will be required
with respect to:

 

	 	 	(i)	reductions of any of the voting percentages set forth
in the definition of “Required Lenders”,

 

	 	 	(ii)	releases of all or substantially all of the Collateral
(other than in accordance with the Credit Documentation), and

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 31
	 

     

    

 

	 	 	(iii)	releases of all or substantially all of the value of
the Guaranty under the Term Facility (other than in accordance with the Credit Documentation),

 

	 	Modifications
    to provisions regarding pro rata payments or sharing of payments, in each case, in connection with loan buy-back
    or similar programs, “amend and extend” transactions or the addition of one or more tranches of debt (which may,
    but are not required to be new money tranches) and the like not otherwise contemplated hereby shall only require approval
    of the Required Lenders, and non-pro rata distributions and commitment reductions will be permitted in connection
    with any such loan buy-back or similar programs, amend and extend transactions or new tranches of debt and as contemplated
    hereby.
	 	 
	 	The
    Credit Documentation will contain provisions to permit the amendment and extension and/or replacement of the Term Facility
    (including any Incremental Term Facility), which may be provided by existing Lenders or, subject to the reasonable consent
    of the Agent if required under the heading “Assignments and Participations” below, other persons who become Lenders
    in connection therewith, in each case without the consent of any other Lender; provided that any offer to extend and/or
    replace the Term Facility will be offered to all existing Lenders of the class being extended and/or replaced.
	 	 
	 	The
    Credit Documentation will permit the Agent and the Borrower to enter into one or more amendments thereto to incorporate the
    provisions of any Incremental Term Facility made available without any Lender’s consent, so long as the purpose of such
    amendment is solely to incorporate the appropriate provisions for such Incremental Term Facility in the Credit Documentation.
	 	 
	 	The
    Credit Documentation shall contain provisions allowing the Borrower to replace a Lender in connection with, but not limited
    to, (i) amendments and waivers requiring the consent of all Lenders or of all Lenders directly affected thereby (so long as
    the Required Lenders or a majority of the relevant group of affected Lenders, as the case may be, consent), (ii) increased
    costs and loss of yield, (iii) taxes and (iv) insolvent Lenders.
	 	 
	Defaulting
    Lenders:	The
    Credit Documentation will contain customary limitations on and protections with respect to “defaulting” Lenders,
    including, but not limited to, exclusion for purposes of voting.
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 32
	 

     

    

 

	Assignments
    and Participations:	The
    Lenders shall be permitted to assign all or a portion of their Term Loans and commitments to any person (other than to (a)
    any Disqualified Institution, (b) any natural person and (c) except as otherwise provided herein, the Borrower or any affiliate
    thereof) with the consent of (i) the Borrower (not to be unreasonably withheld), unless a payment or bankruptcy (with respect
    to the Borrower) event of default has occurred and is continuing or such assignment is to a Lender, an affiliate of a Lender
    or an Approved Fund (as defined below) of a Lender; provided that the Borrower shall be deemed to have consented to
    any assignment unless it has objected thereto by delivering written notice to the Agent within 10 business days after receipt
    of a request for consent thereto and (ii) the Agent (not to be unreasonably withheld or delayed).  Non-pro rata
    assignments shall be permitted.  In the case of partial assignments (other than to another Lender, an affiliate
    of a Lender or an Approved Fund), the minimum assignment amount shall be $1 million, unless otherwise agreed by the Borrower
    and the Agent.  The Agent shall receive a processing and recordation fee of $3,500 (which fee may be waived or reduced
    in the sole discretion of the Agent) in connection with all assignments.
	 	 
	 	The
    Lenders shall also have the right to sell participations in their Term Loans to other persons (other than any Disqualified
    Institutions (provided that the list of Disqualified Institutions (other than affiliates identifiable by name referred
    to in the definition of “Disqualified Institution”) is made available to all Lenders).  Participants
    shall have the same benefits as the Lenders with respect to yield protection and increased cost provisions subject to customary
    limitations and restrictions.  Voting rights of participants shall be limited to those matters set forth in clauses
    (a) and (b) of the first paragraph under “Voting” with respect to which the affirmative vote of the
    Lender from which it purchased its participation would be required.
	 	 
	 	The
    list of Disqualified Institutions (other than affiliates identifiable by name referred to in the definition of “Disqualified
    Institution”) shall be made available by the Agent to any Lender who specifically requests a copy thereof.
	 	 
	 	“Approved
    Fund” means, with respect to any Lender, any person (other than a natural person) that is engaged in making, purchasing,
    holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities
    and is administered, advised or managed by (i) such Lender, (ii) an affiliate of such Lender or (iii) an entity or an affiliate
    of an entity that administers, advises or manages such Lender.
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 33
	 

     

    

 

	 	The
    Credit Documentation shall provide that Term Loans may be purchased by and assigned to (x) any Non-Debt Fund Affiliate (as
    defined below) and/or (y) Holdings, the Borrower and/or any subsidiary of the Borrower (the persons in clauses (x)
    and (y) above collectively, “Affiliated Lenders”) on a non-pro rata basis through Dutch auctions
    open to all Lenders holding Term Loans on a pro rata basis in accordance with customary procedures to be agreed and/or open
    market purchases, notwithstanding any consent requirements set forth above; provided, that:

 

	 	(a)	no Affiliated Lender shall be required to make a representation
that, as of the date of any such purchase and assignment, it is not in possession of MNPI with respect to Holdings, the Borrower
and/or any subsidiary thereof and/or any of their respective securities,

 

	 	(b)	Term Loans owned or held by Affiliated Lenders shall
be (i) disregarded in the determination of any Required Lender vote (and such Term Loans shall be deemed to be voted pro rata
to the non-Affiliated Lenders) and (ii) voted by the Agent in its discretion in connection with any plan of reorganization in
an insolvency proceeding unless such plan effects the holder thereof, in its capacity as such, in a disproportionately adverse
manner relative to the treatment of other Lenders,

 

	 	(c)	Term Loans owned or held by Affiliated Lenders shall
not, in the aggregate, exceed 25% of the aggregate outstanding Term Facility at any time (after giving effect to any substantially
simultaneous cancellations thereof),

 

	 	(d)	no Affiliated Lender, solely in its capacity as such,
shall be permitted to attend any “lender-only” conference calls or meetings or receive any related “lender-only”
information,

 

	 	(e)	in the case of any Dutch auction or open market purchase
conducted by Holdings, the Borrower or any of their subsidiaries, no event of default shall be continuing at the time of acceptance
of bids for the relevant Dutch auction or the confirmation of such open market purchase,

 

	 	(f)	any Term Loans acquired by Holdings, the Borrower or
any of their subsidiaries shall be promptly cancelled, and

 

	 	(g)	the relevant Affiliated Lender shall identify itself
as such prior to such assignment.

 

	 	Notwithstanding
    the foregoing, (a) the Credit Documentation shall permit (but not require) any Non-Debt Fund Affiliate to contribute any assigned
    Term Loans to Holdings, the Borrower or any their subsidiaries for purposes of cancelling such Term Loans, (b) each Affiliated
    Lender shall have the right to vote on any amendment, modification, waiver or consent that would require the vote of all Lenders
    or the vote of all Lenders directly and adversely affected thereby and (c) no amendment, modification, waiver or consent shall
    affect any Affiliated Lender (in its capacity as a Lender) in a manner that is disproportionate to the effect on any Lender
    of the same class or that would deprive such Affiliated Lender of its pro rata share of any payments to which it is entitled.
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 34
	 

     

    

 

	 	“Non-Debt
    Fund Affiliate” means any affiliate of Holdings or the Borrower (other than Holdings, the Borrower or any subsidiary
    of the Borrower).
	 	 
	Yield
    Protection and Taxes:	The
    Credit Documentation shall contain customary provisions (a) protecting the Lenders against increased costs or loss of
    yield resulting from changes in reserve, capital adequacy and other requirements of law (provided that (i) the
    Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives
    thereunder or issued in connection therewith or in implementation thereof and (ii) all requests, rules, guidelines, requirements
    and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor
    or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in the case of
    each of clauses (i) and (ii), be deemed to constitute a change in requirements of law, regardless of the
    date enacted, adopted, issued, or implemented but solely to the extent the relevant increased costs or loss of yield would
    have been included if they had been imposed under applicable increased cost provisions), in each case, subject to customary
    limitations and exceptions (it being understood that requests for payments on account of increased costs resulting from market
    disruption shall be limited to circumstances generally affecting the banking market and when the Required Lenders have made
    a request therefor) and (b) indemnifying the Term Lenders for actual “breakage costs” incurred in connection
    with, among other things, any prepayment of a Eurodollar Loan on a day other than the last day of an interest period with
    respect thereto.
	 	 
	 	The
    Credit Documentation shall contain a customary tax gross-up with exceptions to be agreed; it being understood that the gross
    up obligations shall not apply to U.S. federal withholding taxes imposed as a result of the failure to comply with the requirements
    of current Sections 1471 through 1474 of the Internal Revenue Code (or any amended or successor provisions that are substantively
    comparable and not materially more onerous to comply with), and any current or future regulations promulgated thereunder or
    other official guidance or interpretations issued pursuant thereto and any intergovernmental agreements implementing the foregoing.
	 	 
	 	The
    Credit Documentation shall (a) contain provisions regarding the timing for asserting a claim in respect of yield protection
    and/or taxes and (b) solely with respect to increased costs, require that each Lender asserting any such claim certify
    to the Borrower that it is generally requiring reimbursement for the relevant amounts from similarly situated borrowers under
    comparable syndicated credit facilities.  
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 35
	 

     

    

 

	Expenses
    and Indemnification:	The
    Borrower shall pay:

 

	 	(a)	if the Closing Date occurs, all reasonable and documented
out-of-pocket expenses of the Agent and the Lead Arrangers incurred on or after the Closing Date within 30 days of a written demand
therefor, together with backup documentation supporting such reimbursement request, associated with the syndication of the Term
Facility and the preparation, execution, delivery and administration of the Credit Documentation and any amendment or waiver with
respect thereto (but limited, in the case of legal fees and expenses, to the actual reasonable and documented out-of-pocket fees,
disbursements and other charges of one counsel to the Agent, in each case as counsel to the Agent and the Lead Arrangers, taken
as a whole (it being understood and agreed that such counsel shall be the law firm representing the Left Lead Arranger), and,
if reasonably necessary, of one local counsel in any relevant local jurisdiction to such persons, taken as a whole), and

 

	 	(b)	all reasonable and documented out-of-pocket expenses
of the Agent and the Lenders within 30 days of a written demand therefor (but limited, in the case of legal fees and expenses,
to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of one counsel to the Agent and the
Lenders, taken as a whole, and, if necessary, of one local counsel in any relevant jurisdiction to such persons, taken as a whole)
in connection with the enforcement of the Credit Documentation.

 

	 	The
    Agent, the Lead Arrangers and the Lenders (and their respective affiliates and controlling persons (and their respective officers,
    directors, employees, partners, agents, advisors and other representatives) (each, together with their successors and assigns,
    an “indemnified person”) will be indemnified for and held harmless against, any losses, claims, damages,
    liabilities or expenses (but limited, in the case of legal fees and expenses, to the actual reasonable and documented out-of-pocket
    fees, disbursements and other charges of one counsel to all indemnified persons taken as a whole and, solely in the case of
    an actual or potential conflict of interest, one additional counsel to all affected indemnified persons taken as a whole,
    and, if reasonably necessary, one local counsel in any relevant jurisdiction to all indemnified persons, taken as a whole,
    and solely in the case of any such actual or potential conflict of interest, one additional local counsel to all affected
    indemnified persons, taken as a whole, in each relevant jurisdiction) incurred in respect of the Term Facility or the use
    or the proposed use of proceeds thereof, except to the extent they are determined by a final, non-appealable judgment of a
    court of competent jurisdiction to have arisen from (a) the gross negligence, bad faith or willful misconduct of, or material
    breach of the Credit Documentation by, such indemnified person, in each case as determined and/or (b) any dispute solely among
    the indemnified persons (other than any claims against an indemnified person in its capacity as the Agent or Lead Arranger)
    that does not arise out of any act or omission of Holdings, the Borrower, or any of their respective subsidiaries.  
	 	 

    	 	Term Sheet – Term Facility
Exhibit B - Page 36
	 

     

    

 

	 	None
    of the indemnified persons, Holdings or any of its affiliates or the respective directors, officers, employees, agents, advisors
    or other representatives of any of the foregoing shall be liable for any special, indirect, consequential or punitive damages
    in connection with the Term Facility (including the use or intended use of the proceeds of the Term Facility) or the transactions
    contemplated hereby; provided, that nothing contained in this sentence shall limit the indemnification obligations
    to the extent set forth hereinabove to the extent such special, indirect, consequential or punitive damages are included in
    any third party claim in connection with which such indemnified person is entitled to indemnification hereunder.
	 	 
	Governing
    Law and Forum:	New
    York; provided, that, (a) any Credit Documentation that governs security interests and lien in the Collateral shall
    be governed by the laws of the jurisdiction in which such security interest and/or lien is intended to be created or perfected
    (subject to the terms hereof) and (b) notwithstanding the governing law provisions of the Credit Documentation, it is understood
    and agreed that (i) the interpretation of the definition of “Material Adverse Effect” (and whether or not
    a Material Adverse Effect has occurred), (ii) the determination of the accuracy of any Specified Acquisition Agreement
    Representation and whether as a result of any inaccuracy thereof either the Borrower or its applicable affiliate has the right
    to terminate its obligations under the Acquisition Agreement or to decline to consummate the Acquisition and (iii) the
    determination of whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement and,
    in any case, claims or disputes arising out of any such interpretation or determination or any aspect thereof shall, in each
    case, be governed by, and construed in accordance with, the laws of Delaware, regardless of the laws that might otherwise
    govern under applicable principles of conflicts of laws thereof.
	 	 
	Counsel
    to the Agent and the Lead Arrangers:	Davis
    Polk & Wardwell LLP.

 

    	 	Term Sheet – Term Facility
Exhibit B - Page 37
	 

     

    

 

Annex I
to Exhibit B

 

INTEREST
RATES

 

	Interest
    Rate Options:	The
    Borrower may elect that the Term Loans bear interest at a rate per annum equal to (a) ABR, which shall not be less than 2.00%,
    plus the Term Facility Applicable Margin (as defined below) or (b) the Eurodollar Rate, which shall not be less than
    1.00% per annum, plus the Term Facility Applicable Margin.
	 	 
	 	As
    used herein:
	 	 
	 	“Term
    Facility Applicable Margin” means (a) 4.00% in the case of ABR Loans and (b) 5.00% in the case of Eurodollar Loans.
	 	 
	 	Overdue
    amounts shall bear interest, to the fullest extent permitted by law, at (a) in the case of principal and interest, 2.00% per
    annum above the rate then borne by (in the case of such principal) such borrowings or (in the case of interest) the borrowings
    to which such overdue amount relates or (b) in the case of fees, 2.00% per annum in excess of the rate otherwise applicable
    to Term Loans maintained as ABR Loans from time to time. 
	 	 
	Interest
    Payment Dates:	In
        the case of ABR Loans, quarterly in arrears.

         

        In
        the case of Eurodollar Loans, on the last day of each relevant interest period and, in the case of any interest period
        longer than 3 months, on each successive date 3 months after the first day of such interest period.

	 	 
	Rate
    Basis:	All
    per annum rates shall be calculated on the basis of a year of 360 days for actual days elapsed.
	 	 
	Delayed-Draw
    Ticking fee:	With
    respect to the undrawn portion of the commitments in respect of the Delayed Draw Term Facility, (i) initially, 0% on and after
    the Closing Date and until the date that is 30 days after the Closing Date, (ii) from the date that is 31 days after the Closing
    Date and until the date that is 60 days after the Closing Date, a rate equal to 50% of the interest margin applicable to Eurodollar
    Loans, and (iii) from and after the date that is 61 days after the Closing Date, a rate equal to 100% of the interest margin
    (after giving effect to any flex provisions in the Fee Letter) applicable to Eurodollar Loans plus any LIBOR “floor”,
    payable in each case to non-Defaulting Lenders quarterly in arrears after the Closing Date and upon the termination of the
    commitments, calculated based on the number of days elapsed in a 360-day year.

 

    	 	Term Sheet - Term Facility
Annex I to Exhibit B - Page 1
	 

     

    

 

EXHIBIT
C

 

PROJECT
COGNAC

CONDITIONS

 

The
availability and initial funding of the Term Facility on the Closing Date shall be subject to the satisfaction (or waiver by the
Initial Lenders) of solely the following conditions (subject to the Limited Conditionality Provision). Capitalized terms used
but not otherwise defined herein have the meanings assigned to such terms in the Commitment Letter to which this Exhibit C
is attached or on Exhibits A or B (including the Annexes thereto) attached thereto.

 

		(c)	The
                                         Credit Documentation shall have executed and delivered by each of the parties party thereto,
                                         and the Commitment Parties shall have received:

 

		(a)	customary
                                         closing certificates, borrowing notices and legal opinions, corporate documents and resolutions/evidence
                                         of authority for the Loan Parties; and

 

		(b)	a
                                         certificate of the chief financial officer (or other officer with reasonably equivalent
                                         responsibilities) of the Borrower in the form attached as Annex I hereto,
                                         certifying that the Borrower and its Subsidiaries, on a consolidated basis, after giving
                                         effect to the Transactions, are solvent.

 

		(d)	The
                                         Specified Acquisition Agreement Representations and the Specified Representations shall
                                         be true and correct to the extent required in the Limited Conditionality Provision.

 

		(e)	Prior
                                         to or substantially concurrently with the funding of the initial borrowings under the
                                         Term Facility contemplated by the Commitment Letter, Holdings shall have received the
                                         Equity Contribution on terms consistent with clause (b) of Exhibit A to the Commitment
                                         Letter.

 

		(f)	The
                                         Agreement and Plan of Merger with respect to the Acquisition (together with the exhibits
                                         and disclosure schedules thereto, the “Acquisition Agreement”), among,
                                         Holdings Merger Sub, Target, and the other parties thereto, shall be in form and substance
                                         reasonably satisfactory to the Commitment Parties (with the Commitment Parties hereby
                                         acknowledging that the terms of the draft Acquisition Agreement dated as of December
                                         19, 2016 and received by the Commitment Parties on December 19, 2016 are reasonably satisfactory).
                                         Substantially concurrently with the funding of the initial borrowings under the Term
                                         Facility, the Acquisition shall be consummated in accordance with the terms of the Acquisition
                                         Agreement, but without giving effect to any amendments, waivers or consents by Holdings
                                         or the Borrower that are materially adverse to the interests of the Initial Lenders or
                                         the Lead Arrangers in their respective capacities as such without the consent of the
                                         Lead Arrangers, such consent not to be unreasonably withheld, delayed or conditioned
                                         (it being understood that (a) any decrease in the purchase price shall not be materially
                                         adverse to the interests of the Initial Lenders or the Lead Arrangers so long as such
                                         decrease is allocated (i) first, to reduce the Equity Contribution such that the Equity
                                         Contribution represents the Minimum Equity Contribution Percentage, and (ii) thereafter,
                                         to reduce the Equity Contribution and the Term Facility on a pro rata, dollar-for-dollar
                                         basis, (b) any increase in the purchase price shall not be materially adverse to the
                                         Initial Lenders or the Lead Arrangers so long as such increase is funded by amounts permitted
                                         to be drawn under the Term Facility, the New ABL Facility or the Equity Contribution
                                         (without reducing the percentage otherwise required to be contributed pursuant to the
                                         definition thereof), (c) any amendment or modification of the definition of “Material
                                         Adverse Effect” shall be deemed to be materially adverse to the interests of the
                                         Initial Lenders or the Lead Arrangers and (d) the granting of any consent under the Acquisition
                                         Agreement that is not materially adverse to the interests of the Initial Lenders or the
                                         Lead Arrangers shall not otherwise constitute an amendment or waiver).

 

    	 	Conditions
Exhibit C - Page 1
	 

     

    

 

		(g)	The
                                         Refinancing shall have been consummated substantially concurrently with the initial borrowings
                                         under the Term Facility and the New ABL Facility shall be effective on terms consistent
                                         with clause (c) of Exhibit A to the Commitment Letter concurrently with the initial
                                         borrowings under the Term Facility.

 

		(h)	Since
                                         the date hereof, no Material Adverse Effect (as defined in the Acquisition Agreement)
                                         shall have occurred.

 

		(i)	The
                                         Lead Arrangers shall have received (a) an audited consolidated balance sheet and audited
                                         consolidated statements of income, stockholders’ equity and cash flows of the Target
                                         as of the end of and for the fiscal years ended on or about December 31, 2014 and December
                                         31, 2015 and each subsequent fiscal year ended at least 90 days prior to the Closing
                                         Date, (b) unaudited consolidated balance sheets and related statements of income and
                                         cash flows of the Target for the fiscal quarter ended on or about September 30, 2016
                                         and each subsequent fiscal quarter ended at least 45 days prior to the Closing Date,
                                         and (c) a pro forma consolidated balance sheet and related pro forma statement of income
                                         of the Borrower as of the last day of and for the four fiscal quarters ended on the last
                                         date/or which financial statements pursuant to clause (a) and (b) were most recently
                                         required (the “Pro Forma Financial Statements”), prepared after giving
                                         effect to the Transactions as if the Transactions had occurred as of such date (in the
                                         case of such balance sheet) or at the beginning of such period (in the case of the statement
                                         of income). The information described under clauses (a), (b) and (c)
                                         of this paragraph 7 shall be defined as the “Required Bank Information.”

 

		(j)	Subject
                                         to the Limited Conditionality Provision and the provisions of the Intercreditor Agreement,
                                         all documents and instruments necessary to establish that the Agents will have perfected
                                         security interests (subject to liens permitted under the relevant Credit Documentation)
                                         in the Collateral under the Term Facility shall have been executed (to the extent applicable)
                                         and delivered to the applicable Agent and, if applicable, be in proper form for filing.

 

		(k)	All
                                         (a) fees required to be paid on the Closing Date pursuant to the Fee Letter and
                                         (b) expenses required to be paid on the Closing Date pursuant to the Commitment
                                         Letter (in the case of this clause (b), to the extent invoiced at least 3
                                         business days prior to the Closing Date (the “Invoice Date”) or such
                                         later date to which the Borrower may agree), shall, in each case, have been paid (which
                                         amounts may be offset against the proceeds of the Term Facility).

 

		(l)	The
                                         Agents shall have received, at least 3 business days prior to the Closing Date, all documentation
                                         and other information required by regulatory authorities with respect to the Loan Parties
                                         under applicable “know your customer” and anti-money laundering rules and
                                         regulations, including, without limitation, the PATRIOT Act, that has been reasonably
                                         requested by any Initial Lender at least 10 business days in advance of the Closing Date.

 

		(m)	The
                                         Lead Arrangers shall have been afforded a period (the “Marketing Period”)
                                         of at least 15 consecutive business days (ending no later than the business day immediately
                                         prior to the Closing Date) commencing upon receipt of the Required Bank Information,
                                         to syndicate the Term Facility; provided, that in no event shall the Marketing
                                         Period commence prior to January 9, 2017.

 

    	 	Conditions
Exhibit C - Page 2
	 

     

    

 

Annex I
to Exhibit C

 

FORM
OF SOLVENCY CERTIFICATE

 

[●][●],
2016

 

This
Solvency Certificate is being executed and delivered pursuant to Section [●] of that certain [●]1,
(the “Credit Agreement”; the terms defined therein being used herein as therein defined).

 

I,
[●], the [Chief Financial Officer/equivalent officer] of the Borrower, in such capacity and not in an individual
capacity, hereby certify as follows:

 

		(n)	I
                                         am generally familiar with the businesses and assets of the Borrower and its Subsidiaries,
                                         taken as a whole, and am duly authorized to execute this Solvency Certificate on behalf
                                         of the Borrower Representative pursuant to the Credit Agreement; and

 

		(o)	As
                                         of the date hereof and after giving effect to the Transactions and the incurrence of
                                         the indebtedness and obligations being incurred in connection with the Credit Agreement
                                         and the Transactions, that, (i) the sum of the debt (including contingent liabilities)
                                         of the Borrower and its Subsidiaries, taken as a whole, does not exceed the fair value
                                         of the assets (on a going concern basis) of the Borrower and its Subsidiaries, taken
                                         as a whole, (ii) the present fair saleable value of the assets of the Borrower and
                                         its Subsidiaries, taken as a whole, is not less than the amount that will be required
                                         the probable liabilities (including contingent liabilities) of the Borrower and its Subsidiaries,
                                         taken as a whole, on their debts as they become absolute and matured, (iii) the capital
                                         of the Borrower and its Subsidiaries, taken as a whole, is not unreasonably small in
                                         relation to the business of the Borrower and its Subsidiaries, taken as a whole, contemplated
                                         as of the date hereof; and (iv) the Borrower and its Subsidiaries, taken as a whole,
                                         do not intend to incur, or believe that they will incur, debts (including current obligations
                                         and contingent liabilities) beyond their ability to pay such debt as they mature in the
                                         ordinary course of business. For the purposes hereof, the amount of any contingent liability
                                         at any time shall be computed as the amount that, in light of all of the facts and circumstances
                                         existing at such time, represents the amount that can reasonably be expected to become
                                         an actual or matured liability.

 

[Remainder
of page intentionally left blank] 

 

 

1
Describe Credit Agreement.

 

    	 	Conditions
Annex I to Exhibit C - Page 1
	 

     

    

 

IN
WITNESS WHEREOF, I have executed this Solvency Certificate on the date first written above.

 

	 	By:	 
	 	Name:	[●]
	 	Title:	[Chief Financial Officer/equivalent officer]

 

 

Conditions

Annex I to Exhibit C – Page 2Exhibit 4.1

 

Execution Version

 

 

ANTERO RESOURCES CORPORATION,

 

THE SUBSIDIARY GUARANTORS PARTY HERETO

 

AND

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
 AS TRUSTEE

 

 

INDENTURE

 

Dated as of December 21, 2016

 

 

5.0% Senior Notes due 2025

 

 

 

Table of Contents

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I   DEFINITIONS AND INCORPORATION BY REFERENCE
    	
 
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 1.1.
    	
 
    	
Definitions
    	
 
    	
1
    
	
SECTION 1.2.
    	
 
    	
Other Definitions
    	
 
    	
39
    
	
SECTION 1.3.
    	
 
    	
Incorporation by Reference of Trust Indenture Act
    	
 
    	
41
    
	
SECTION 1.4.
    	
 
    	
Rules of Construction
    	
 
    	
41
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE II   THE SECURITIES
    	
 
    	
42
    
	
 
    	
 
    	
 
    
	
SECTION 2.1.
    	
 
    	
Form, Dating and Terms
    	
 
    	
42
    
	
SECTION 2.2.
    	
 
    	
Execution and Authentication
    	
 
    	
50
    
	
SECTION 2.3.
    	
 
    	
Registrar and Paying Agent
    	
 
    	
51
    
	
SECTION 2.4.
    	
 
    	
Paying Agent to Hold Money in Trust
    	
 
    	
52
    
	
SECTION 2.5.
    	
 
    	
Securityholder Lists
    	
 
    	
52
    
	
SECTION 2.6.
    	
 
    	
Transfer and Exchange
    	
 
    	
53
    
	
SECTION 2.7.
    	
 
    	
[Reserved]
    	
 
    	
56
    
	
SECTION 2.8.
    	
 
    	
Form of   Certificate to be Delivered in Connection with Transfers to Institutional   Accredited Investors
    	
 
    	
56
    
	
SECTION 2.9.
    	
 
    	
Form of Certificate to be Delivered in   Connection with Transfers Pursuant to Regulation S
    	
 
    	
58
    
	
SECTION 2.10.
    	
 
    	
Mutilated, Destroyed, Lost or Stolen Securities
    	
 
    	
59
    
	
SECTION 2.11.
    	
 
    	
Outstanding Securities
    	
 
    	
60
    
	
SECTION 2.12.
    	
 
    	
Temporary Securities
    	
 
    	
61
    
	
SECTION 2.13.
    	
 
    	
Cancellation
    	
 
    	
61
    
	
SECTION 2.14.
    	
 
    	
Payment of Interest; Defaulted Interest
    	
 
    	
61
    
	
SECTION 2.15.
    	
 
    	
Computation of Interest
    	
 
    	
63
    
	
SECTION 2.16.
    	
 
    	
CUSIP, Common Code and ISIN Numbers
    	
 
    	
63
    
	
SECTION 2.17.
    	
 
    	
Trustee, Paying Agent, Registrar Not Responsible for   Depositary
    	
 
    	
63
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III   COVENANTS
    	
 
    	
63
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 3.1.
    	
 
    	
Payment of Securities
    	
 
    	
63
    
	
SECTION 3.2.
    	
 
    	
Limitation on Indebtedness and Preferred Stock
    	
 
    	
64
    
	
SECTION 3.3.
    	
 
    	
Limitation on Restricted Payments
    	
 
    	
67
    
	
SECTION 3.4.
    	
 
    	
Limitation on Restrictions on Distributions from   Restricted Subsidiaries
    	
 
    	
73
    
	
SECTION 3.5.
    	
 
    	
Limitation on Sales of Assets and Subsidiary Stock
    	
 
    	
76
    
	
SECTION 3.6.
    	
 
    	
Limitation on Liens
    	
 
    	
80
    
	
SECTION 3.7.
    	
 
    	
[Reserved]
    	
 
    	
80
    
	
SECTION 3.8.
    	
 
    	
Limitation on Affiliate Transactions
    	
 
    	
80
    
	
SECTION 3.9.
    	
 
    	
Purchase of Securities Upon a Change of Control
    	
 
    	
82
    
	
SECTION 3.10.
    	
 
    	
Provision of Financial Information
    	
 
    	
85
    
	
SECTION 3.11.
    	
 
    	
Future Subsidiary Guarantors
    	
 
    	
86
    

 

i

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 3.12.
    	
 
    	
Maintenance of Office or Agency
    	
 
    	
86
    
	
SECTION 3.13.
    	
 
    	
Corporate Existence
    	
 
    	
86
    
	
SECTION 3.14.
    	
 
    	
Payment of Taxes
    	
 
    	
86
    
	
SECTION 3.15.
    	
 
    	
Compliance Certificate
    	
 
    	
87
    
	
SECTION 3.16.
    	
 
    	
Further Instruments and Acts
    	
 
    	
87
    
	
SECTION 3.17.
    	
 
    	
Statement by Officers as to Default
    	
 
    	
87
    
	
SECTION 3.18.
    	
 
    	
Covenant Termination
    	
 
    	
87
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV   SUCCESSOR COMPANY
    	
 
    	
88
    
	
 
    	
 
    	
 
    
	
SECTION 4.1.
    	
 
    	
Merger and Consolidation
    	
 
    	
88
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V REDEMPTION   OF SECURITIES
    	
 
    	
89
    
	
 
    	
 
    	
 
    
	
SECTION 5.1.
    	
 
    	
Redemption
    	
 
    	
89
    
	
SECTION 5.2.
    	
 
    	
Applicability of Article
    	
 
    	
90
    
	
SECTION 5.3.
    	
 
    	
Election to Redeem; Notice to Trustee
    	
 
    	
90
    
	
SECTION 5.4.
    	
 
    	
Selection by Trustee of Securities to Be Redeemed
    	
 
    	
90
    
	
SECTION 5.5.
    	
 
    	
Notice of Redemption
    	
 
    	
90
    
	
SECTION 5.6.
    	
 
    	
Deposit of Redemption Price
    	
 
    	
92
    
	
SECTION 5.7.
    	
 
    	
Securities Payable on Redemption Date
    	
 
    	
92
    
	
SECTION 5.8.
    	
 
    	
Securities Redeemed in Part
    	
 
    	
92
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI   DEFAULTS AND REMEDIES
    	
 
    	
93
    
	
 
    	
 
    	
 
    
	
SECTION 6.1.
    	
 
    	
Events of Default
    	
 
    	
93
    
	
SECTION 6.2.
    	
 
    	
Acceleration
    	
 
    	
95
    
	
SECTION 6.3.
    	
 
    	
Other Remedies
    	
 
    	
96
    
	
SECTION 6.4.
    	
 
    	
Waiver of Past Defaults
    	
 
    	
96
    
	
SECTION 6.5.
    	
 
    	
Control by Majority
    	
 
    	
96
    
	
SECTION 6.6.
    	
 
    	
Limitation on Suits
    	
 
    	
97
    
	
SECTION 6.7.
    	
 
    	
Rights of Holders to Receive Payment
    	
 
    	
97
    
	
SECTION 6.8.
    	
 
    	
Collection Suit by Trustee
    	
 
    	
97
    
	
SECTION 6.9.
    	
 
    	
Trustee May File Proofs of Claim
    	
 
    	
97
    
	
SECTION 6.10.
    	
 
    	
Priorities
    	
 
    	
98
    
	
SECTION 6.11.
    	
 
    	
Undertaking for Costs
    	
 
    	
98
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VII   TRUSTEE
    	
 
    	
98
    
	
 
    	
 
    	
 
    
	
SECTION 7.1.
    	
 
    	
Duties of Trustee
    	
 
    	
98
    
	
SECTION 7.2.
    	
 
    	
Rights of Trustee
    	
 
    	
100
    
	
SECTION 7.3.
    	
 
    	
Individual Rights of Trustee
    	
 
    	
101
    
	
SECTION 7.4.
    	
 
    	
Trustee’s Disclaimer
    	
 
    	
101
    
	
SECTION 7.5.
    	
 
    	
Notice of Defaults
    	
 
    	
102
    
	
SECTION 7.6.
    	
 
    	
Reports by Trustee to Holders
    	
 
    	
102
    
	
SECTION 7.7.
    	
 
    	
Compensation and Indemnity
    	
 
    	
102
    
	
SECTION 7.8.
    	
 
    	
Replacement of Trustee
    	
 
    	
103
    
	
SECTION 7.9.
    	
 
    	
Successor Trustee by Merger
    	
 
    	
104
    

 

ii

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 7.10.
    	
 
    	
Eligibility; Disqualification
    	
 
    	
104
    
	
SECTION 7.11.
    	
 
    	
Preferential Collection of Claims Against the Issuer
    	
 
    	
104
    
	
SECTION 7.12.
    	
 
    	
Trustee’s Application for Instruction from the   Issuer
    	
 
    	
104
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VIII   DISCHARGE OF INDENTURE; DEFEASANCE
    	
 
    	
105
    
	
 
    	
 
    	
 
    
	
SECTION 8.1.
    	
 
    	
Discharge of Liability on Securities; Defeasance
    	
 
    	
105
    
	
SECTION 8.2.
    	
 
    	
Conditions to Defeasance
    	
 
    	
107
    
	
SECTION 8.3.
    	
 
    	
Application of Trust Money
    	
 
    	
108
    
	
SECTION 8.4.
    	
 
    	
Repayment to the Issuer
    	
 
    	
108
    
	
SECTION 8.5.
    	
 
    	
Indemnity for U.S. Government Obligations
    	
 
    	
108
    
	
SECTION 8.6.
    	
 
    	
Reinstatement
    	
 
    	
108
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IX   AMENDMENTS
    	
 
    	
109
    
	
 
    	
 
    	
 
    
	
SECTION 9.1.
    	
 
    	
Without Consent of Holders
    	
 
    	
109
    
	
SECTION 9.2.
    	
 
    	
With Consent of Holders
    	
 
    	
110
    
	
SECTION 9.3.
    	
 
    	
Compliance with Trust Indenture Act
    	
 
    	
111
    
	
SECTION 9.4.
    	
 
    	
Revocation and Effect of Consents and Waivers
    	
 
    	
111
    
	
SECTION 9.5.
    	
 
    	
Notation on or Exchange of Securities
    	
 
    	
111
    
	
SECTION 9.6.
    	
 
    	
Trustee to Sign Amendments
    	
 
    	
112
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE X   GUARANTEE
    	
 
    	
112
    
	
 
    	
 
    	
 
    
	
SECTION 10.1.
    	
 
    	
Guarantee
    	
 
    	
112
    
	
SECTION 10.2.
    	
 
    	
Limitation on Liability; Termination, Release and   Discharge
    	
 
    	
114
    
	
SECTION 10.3.
    	
 
    	
Right of Contribution
    	
 
    	
114
    
	
SECTION 10.4.
    	
 
    	
No Subrogation
    	
 
    	
115
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE XI   [RESERVED]
    	
 
    	
115
    
	
 
    	
 
    	
 
    
	
ARTICLE XII   MISCELLANEOUS
    	
 
    	
115
    
	
 
    	
 
    	
 
    
	
SECTION 12.1.
    	
 
    	
Trust Indenture Act Controls
    	
 
    	
115
    
	
SECTION 12.2.
    	
 
    	
Notices
    	
 
    	
115
    
	
SECTION 12.3.
    	
 
    	
Communication by Holders with other Holders
    	
 
    	
117
    
	
SECTION 12.4.
    	
 
    	
Certificate and Opinion as to Conditions Precedent
    	
 
    	
117
    
	
SECTION 12.5.
    	
 
    	
Statements Required in Certificate or Opinion
    	
 
    	
117
    
	
SECTION 12.6.
    	
 
    	
When Securities Disregarded
    	
 
    	
118
    
	
SECTION 12.7.
    	
 
    	
Rules by Trustee, Paying Agent and Registrar
    	
 
    	
118
    
	
SECTION 12.8.
    	
 
    	
Legal Holidays
    	
 
    	
118
    
	
SECTION 12.9.
    	
 
    	
GOVERNING LAW
    	
 
    	
118
    
	
SECTION 12.10.
    	
 
    	
No Personal Liability of Directors, Officers,   Employees and Stockholders
    	
 
    	
118
    
	
SECTION 12.11.
    	
 
    	
Successors
    	
 
    	
118
    
	
SECTION 12.12.
    	
 
    	
Multiple Originals
    	
 
    	
118
    
	
SECTION 12.13.
    	
 
    	
Qualification of Indenture
    	
 
    	
118
    
	
SECTION 12.14.
    	
 
    	
Force Majeure
    	
 
    	
118
    

 

iii

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 12.15.
    	
 
    	
Table of Contents; Headings
    	
 
    	
119
    
	
SECTION 12.16.
    	
 
    	
WAIVER OF JURY TRIAL
    	
 
    	
119
    

 

iv

 

	
EXHIBIT A
    	
Form of the   Series A Note
    
	
EXHIBIT B
    	
Form of the   Series B Note
    
	
EXHIBIT C
    	
Form of Indenture   Supplement to Add Subsidiary Guarantors
    

 

v

 

CROSS-REFERENCE TABLE

 

	
TIA
   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)
    	
 
    	
 
    	
 
    	
7.8; 7.10
    
	
311(a)
    	
 
    	
 
    	
 
    	
7.11
    
	
(b)
    	
 
    	
 
    	
 
    	
7.11
    
	
312(a)
    	
 
    	
 
    	
 
    	
2.5
    
	
(b)
    	
 
    	
 
    	
 
    	
12.3
    
	
(c)
    	
 
    	
 
    	
 
    	
12.3
    
	
313(a)
    	
 
    	
 
    	
 
    	
7.6
    
	
(b)(1)
    	
 
    	
 
    	
 
    	
7.6
    
	
(b)(2)
    	
 
    	
 
    	
 
    	
7.6
    
	
(c)
    	
 
    	
 
    	
 
    	
7.6
    
	
(d)
    	
 
    	
 
    	
 
    	
7.6
    
	
314(a)
    	
 
    	
 
    	
 
    	
3.11; 3.15; 12.5
    
	
(b)
    	
 
    	
 
    	
 
    	
N.A.
    
	
(c)(1)
    	
 
    	
 
    	
 
    	
12.4
    
	
(c)(2)
    	
 
    	
 
    	
 
    	
12.4
    
	
(c)(3)
    	
 
    	
 
    	
 
    	
N.A.
    
	
(d)
    	
 
    	
 
    	
 
    	
N.A.
    
	
(e)
    	
 
    	
 
    	
 
    	
12.5
    
	
315(a)
    	
 
    	
 
    	
 
    	
7.1
    
	
(b)
    	
 
    	
 
    	
 
    	
7.5; 12.2
    
	
(c)
    	
 
    	
 
    	
 
    	
7.1
    
	
(d)
    	
 
    	
 
    	
 
    	
7.1
    
	
(e)
    	
 
    	
 
    	
 
    	
6.11
    
	
316(a)(last sentence)
    	
 
    	
 
    	
 
    	
12.6
    
	
(a)(1)(A)
    	
 
    	
 
    	
 
    	
6.5
    
	
(a)(1)(B)
    	
 
    	
 
    	
 
    	
6.4
    
	
(a)(2)
    	
 
    	
 
    	
 
    	
N.A.
    
	
(b)
    	
 
    	
 
    	
 
    	
6.7
    
	
(c)
    	
 
    	
 
    	
 
    	
2.14
    
	
317(a)(1)
    	
 
    	
 
    	
 
    	
6.8
    
	
(a)(2)
    	
 
    	
 
    	
 
    	
6.9
    
	
(b)
    	
 
    	
 
    	
 
    	
2.4
    
	
318(a)
    	
 
    	
 
    	
 
    	
12.1
    

 

Note:  This Cross-Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

 

vi

 

This INDENTURE dated as of December 21, 2016, is among ANTERO RESOURCES CORPORATION, a Delaware corporation (the “Issuer”), the Subsidiary Guarantors (as defined herein) party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Trustee”), a national banking association, as trustee.

 

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of (i) the Issuer’s 5.0% Senior Notes, Series A, due 2025, issued on the date hereof and the guarantees thereof by the Subsidiary Guarantors (the “Initial Securities”), (ii) if and when issued, an unlimited principal amount of additional 5.0% Senior Notes, Series A, due 2025 in a non-registered offering or 5.0% Senior Notes, Series B, due 2025 in a registered offering of the Issuer, and the guarantees thereof by the Subsidiary Guarantors that may be offered from time to time subsequent to the Issue Date, in each case subject to Section 2.1 (the “Additional Securities”) as provided in Section 2.1(a) and (iii) if and when issued, the Issuer’s 5.0% Senior Notes, Series B, due 2025 and the guarantees thereof by the Subsidiary Guarantors that may be issued from time to time in exchange for Initial Securities or any Additional Securities in an offer registered under the Securities Act as provided in a Registration Rights Agreement, as hereinafter defined (the “Exchange Securities,” and together with the Initial Securities and Additional Securities, the “Securities”):

 

ARTICLE I

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.1.              Definitions.

 

“Acquired Indebtedness” means Indebtedness (i) of a Person or any of its Subsidiaries existing at the time such Person becomes or is merged with and into a Restricted Subsidiary or (ii) assumed in connection with the acquisition of assets from such Person, in each case whether or not Incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to have been Incurred, with respect to clause (i) of the preceding sentence, on the date such Person becomes or is merged with and into a Restricted Subsidiary and, with respect to clause (ii) of the preceding sentence, on the date of consummation of such acquisition of assets.

 

“Additional Assets” means:

 

(1)           any properties or assets to be used by the Issuer or a Restricted Subsidiary in the Oil and Gas Business;

 

(2)           capital expenditures by the Issuer or a Restricted Subsidiary in the Oil and Gas Business;

 

(3)           the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Issuer or a Restricted Subsidiary; or

 

(4)           Capital Stock constituting a Minority Interest in any Person that at such time is a Restricted Subsidiary;

 

 

provided, however, that, in the case of clauses (3) and (4), such Restricted Subsidiary is primarily engaged in the Oil and Gas Business.

 

“Additional Interest” means the interest payable as a consequence of the failure to effectuate in a timely manner the exchange offer and/or shelf registration procedures set forth in the applicable Registration Rights Agreement.

 

“Additional Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

 

“Adjusted Consolidated Net Tangible Assets” of the Issuer means (without duplication), as of the date of determination, the remainder of:

 

(a)           the sum of:

 

(i)     discounted future net revenues from proved oil and gas reserves of the Issuer and its Restricted Subsidiaries calculated in accordance with SEC guidelines (but giving effect to applicable Commodity Agreements in place as of the date of determination (whether positive or negative)) before any state or federal income taxes, as estimated by the Issuer in a reserve report prepared as of the end of the Issuer’s most recently completed fiscal year for which audited financial statements are available, as increased by, as of the date of determination, the estimated discounted future net revenues from

 

(A)          estimated proved oil and gas reserves acquired since such year end, which reserves were not reflected in such year-end reserve report, and

 

(B)          estimated oil and gas reserves attributable to extensions, discoveries and other additions and upward revisions of estimates of proved oil and gas reserves 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 (including the impact to proved reserves and future net revenues from estimated development costs incurred and the accretion of discount since such year end),

 

and decreased by, as of the date of determination, the estimated discounted future net revenues from

 

(C)          estimated proved oil and gas reserves produced or disposed of since such year end to the extent such estimated discounted future net revenues were included in such year end reserve report or such estimated reserves under clauses (A) or (B) above, and

 

(D)          estimated oil and gas reserves attributable to downward revisions of estimates of proved oil and gas 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 clauses (A), (B) and (D) calculated on a pre-tax basis substantially in accordance with SEC guidelines utilizing prices and costs calculated in accordance with

 

2

 

SEC guidelines (but giving effect to applicable Commodity Agreements in place as of the date of determination (whether positive or negative)) as if the end of the most recent fiscal quarter preceding the date of determination for which such information is available to the Issuer were year end; provided, however, that in the case of each of the determinations made pursuant to clauses (A) through (D), such increases and decreases shall be as estimated by the Issuer’s petroleum engineers;

 

(ii)            the capitalized costs that are attributable to oil and gas properties of the Issuer and its Restricted Subsidiaries to which no proved oil and gas reserves are attributable, based on the Issuer’s books and records as of a date no earlier than the date of the Issuer’s latest available annual or quarterly financial statements;

 

(iii)           the Net Working Capital of the Issuer and its Restricted Subsidiaries on a date no earlier than the date of the Issuer’s latest annual or quarterly financial statements; and

 

(iv)          the greater of

 

(A)          the net book value of other tangible assets of the Issuer and its Restricted Subsidiaries, as of a date no earlier than the date of the Issuer’s latest annual or quarterly financial statements, and

 

(B)          the appraised value, as estimated by independent appraisers, of other tangible assets of the Issuer and its Restricted Subsidiaries, as of a date no earlier than the date of the Issuer’s latest audited financial statements; provided, that, if no such appraisal has been performed, the Issuer shall not be required to obtain such an appraisal and only clause (iv)(A) of this definition shall apply;

 

minus

 

(b)           the sum of:

 

(i)            Minority Interests;

 

(ii)           any net gas balancing liabilities of the Issuer and its Restricted Subsidiaries reflected in the Issuer’s latest annual or quarterly balance sheet (to the extent not deducted in calculating Net Working Capital of the Issuer in accordance with clause (a)(iii) above of this definition);

 

(iii)          to the extent included in (a)(i) above, the discounted future net revenues, calculated in accordance with SEC guidelines (but utilizing prices and costs calculated in accordance with SEC guidelines as if the end of the most recent fiscal quarter preceding the date of determination for which such information is available to the Issuer were year end), attributable to reserves which are required to be delivered to third parties to fully satisfy the obligations of the Issuer and its Restricted Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using the schedules specified with respect thereto); and

 

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(iv)          the discounted future net revenues, calculated in accordance with SEC guidelines, attributable to reserves subject to Dollar-Denominated Production Payments which, 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 Issuer and its Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if applicable, using the schedules specified with respect thereto).

 

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

 

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

 

“Asset Disposition” means any direct or indirect sale, lease (including by means of Production Payments and Reserve Sales and a Sale/Leaseback Transaction but excluding an operating lease entered into in the ordinary course of the Oil and Gas Business), transfer, issuance or other disposition, or a series of related sales, leases, transfers, issuances or dispositions that are part of a common plan, of (A) any Capital Stock of a Restricted Subsidiary (other than Preferred Stock of Restricted Subsidiaries issued in compliance with Section 3.2 and directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Issuer or a Restricted Subsidiary), (B) all or substantially all the assets of any division or line of business of the Issuer or any Restricted Subsidiary (excluding any division or line of business the assets of which are owned by an Unrestricted Subsidiary) or (C) any other assets of the Issuer or any Restricted Subsidiary outside of the ordinary course of business of the Issuer or such Restricted Subsidiary (each referred to for the purposes of this definition as a “disposition”), in each case by the Issuer or any of its Restricted Subsidiaries, including any disposition by means of a merger, consolidation or similar transaction.

 

Notwithstanding the preceding, the following items shall not be deemed to be Asset Dispositions:

 

(1)           a disposition by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to a Restricted Subsidiary;

 

(2)           a disposition of cash, Cash Equivalents or other financial assets in the ordinary course of business;

 

(3)           a disposition of Hydrocarbons or mineral products inventory in the ordinary course of business;

 

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(4)           a disposition of damaged, unserviceable, obsolete or worn out equipment or equipment that is no longer necessary for the proper conduct of the business of the Issuer and its Restricted Subsidiaries and that is disposed of in each case in the ordinary course of business;

 

(5)           transactions in accordance with Section 4.1;

 

(6)           an issuance of Capital Stock by a Restricted Subsidiary to the Issuer or to a Restricted Subsidiary;

 

(7)           the making of a Permitted Investment or a Restricted Payment (or a disposition that would constitute a Restricted Payment but for the exclusions from the definition thereof) permitted by Section 3.3;

 

(8)           an Asset Swap;

 

(9)           dispositions of assets with a Fair Market Value of less than $10.0 million;

 

(10)         Permitted Liens;

 

(11)         dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

 

(12)         the licensing or sublicensing of intellectual property (including, without limitation, the licensing of seismic data) or other general intangibles and licenses, leases or subleases of other property in the ordinary course of business which do not materially interfere with the business of the Issuer and its Restricted Subsidiaries;

 

(13)         foreclosure on assets;

 

(14)         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 Issuer or a Restricted Subsidiary, shall have been created, Incurred, issued, assumed or guaranteed in connection with the financing of, and within 60 days after the acquisition of, the property that is subject thereto;

 

(15)         surrender or waiver of contract rights, oil and gas leases, or the settlement, release or surrender of contract, tort or other claims of any kind;

 

(16)         the abandonment, farmout, lease or sublease of developed or undeveloped oil and gas properties in the ordinary course of business; and

 

(17)         a disposition (whether or not in the ordinary course of business) of any oil and gas property or interest therein to which no proved reserves are attributable at the time of such disposition.

 

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“Asset Swap” means any substantially contemporaneous (and in any event occurring within 180 days of each other) purchase and sale or exchange of any oil or natural gas properties or assets or interests therein between the Issuer or any of its Restricted Subsidiaries and another Person; provided, that any cash received must be applied in accordance with Section 3.5 as if the Asset Swap were an Asset Disposition.

 

“Average Life” means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing (1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment by (2) the sum of all such payments.

 

“Bankruptcy Law” means Title 11 of the United States Code or 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 a corresponding meaning.  For purposes of this definition, a Person shall not be deemed to Beneficially Own securities that are the subject of a stock purchase agreement, merger agreement or similar agreement until consummation of the transactions or, as applicable, series of related transactions contemplated thereby.

 

“Board of Directors” means, as to any Person that is a corporation, the board of directors of such Person or any duly authorized committee thereof or as to any Person that is not a corporation, the board of managers or such other individual or group serving a similar function.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of a 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.

 

“Business Day” means each day that is not a Saturday, Sunday or other day on which commercial banking institutions in New York, New York are authorized or required by law to close.

 

“Capital Stock” of any Person means any and all shares, units, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into, or exchangeable for, such equity.

 

“Capitalized Lease Obligations” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation will be the capitalized amount of such obligation at the time any determination thereof is to be made as determined in accordance with GAAP, and the Stated Maturity thereof will be the date of the last

 

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payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty.  Notwithstanding the preceding, any lease (whether entered into before or after the Issue Date) that would have been classified as an operating lease pursuant to GAAP as in effect on the Issue Date will be deemed not to represent a Capitalized Lease Obligation.

 

“Cash Equivalents” means:

 

(1)           securities issued or directly and fully guaranteed or insured by the United States Government or any agency or instrumentality of the United States (provided that the full faith and credit of the United States is pledged in support thereof), having maturities of not more than one year from the date of acquisition;

 

(2)           marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition and, at the time of acquisition, having a credit rating of “A” (or the equivalent thereof) or better from either S&P or Moody’s;

 

(3)           certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits or bankers’ acceptances having maturities of not more than one year from the date of acquisition thereof issued by any commercial bank the short-term deposit of which is rated at the time of acquisition thereof at least “A-2” or the equivalent thereof by S&P, or “P-2” or the equivalent thereof by Moody’s, and having combined capital and surplus in excess of $100.0 million;

 

(4)           repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (1), (2) and (3) entered into with any bank meeting the qualifications specified in clause (3) above;

 

(5)           commercial paper rated at the time of acquisition thereof at least “A-2” or the equivalent thereof by S&P or “P-2” or the equivalent thereof by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named Rating Agencies cease publishing ratings of investments, and in any case maturing within one year after the date of acquisition thereof; and

 

(6)           interests in any investment company or money market fund which invests 95% or more of its assets in instruments of the type specified in clauses (1) through (5) above.

 

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“Cash Management Obligations” means, with respect to the Issuer or any Subsidiary Guarantor, any obligations of such Person to U.S. Bank National Association or any other lender in respect of treasury management arrangements, depositary or other cash management services, including any treasury management line of credit.

 

“Change of Control” means:

 

(1)           any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than a Permitted Holder, is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Issuer (or its successor by merger, consolidation or purchase of all or substantially all of its assets) (for the purposes of this clause (1), such person or group shall be deemed to Beneficially Own any Voting Stock of the Issuer held by a parent entity, if such person or group Beneficially Owns, directly or indirectly, more than 50% of the total voting power of the Voting Stock of such parent entity), which occurrence is followed by a Rating Decline within 90 days;

 

(2)           the 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 assets of the Issuer and its Restricted Subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), which occurrence is followed by a Rating Decline within 90 days; or

 

(3)           the adoption by the Board of Directors of the Issuer of a plan or proposal for the liquidation or dissolution of the Issuer.

 

Notwithstanding the preceding, a conversion of the Issuer or any of its Restricted Subsidiaries from a limited liability company, corporation, limited partnership or other form of entity to a limited liability company, corporation, limited partnership or other form of entity or an exchange of all of the outstanding Capital Stock in one form of entity for Capital Stock for another form of entity shall not constitute a Change of Control, so long as following such conversion or exchange the “persons” (as that term is used in Section 13(d)(3) of the Exchange Act) who Beneficially Owned the Capital Stock of the Issuer immediately prior to such transactions continue to Beneficially Own in the aggregate more than 50% of the Voting Stock of such entity, or continue to Beneficially Own sufficient Equity Interests in such entity to elect a majority of its directors, managers, trustees or other persons serving in a similar capacity for such entity, and, in either case no “person” Beneficially Owns more than 50% of the Voting Stock of such entity.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commodity Agreements” means, in respect of any Person, any forward contract, commodity swap agreement, commodity option agreement or other similar agreement or arrangement in respect of Hydrocarbons used, produced, processed or sold by such Person that are customary in the Oil and Gas Business and designed to protect such Person against fluctuation in Hydrocarbon prices.

 

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“Common Stock” means with respect to any Person, any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or nonvoting) of such Person’s common stock whether or not outstanding on the Issue Date, and includes, without limitation, all series and classes of such common stock.

 

“Consolidated Coverage Ratio” means as of any date of determination, the ratio of (x) the aggregate amount of Consolidated EBITDAX of the Issuer for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which financial statements are in existence to (y) Consolidated Interest Expense for such four fiscal quarters, provided, however, that:

 

(1)           if the Issuer or any Restricted Subsidiary:

 

(a)           has Incurred any Indebtedness since the beginning of such period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated EBITDAX and Consolidated Interest Expense for such period will be calculated after giving effect on a pro forma basis to such Indebtedness and the use of proceeds thereof as if such Indebtedness had been Incurred on the first day of such period and such proceeds had been applied as of such date (except that in making such computation, the amount of Indebtedness under any revolving Credit Facility outstanding on the date of such calculation will be deemed to be (i) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (ii) if such revolving Credit Facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such revolving Credit Facility to the date of such calculation, in each case, provided that such average daily balance shall take into account any repayment of Indebtedness under such revolving Credit Facility as provided in clause (b)); or

 

(b)           has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of the period, including with the proceeds of such new Indebtedness, that is no longer outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a discharge of Indebtedness (in each case other than Indebtedness Incurred under any revolving Credit Facility unless such Indebtedness has been permanently repaid and the related commitment terminated), Consolidated EBITDAX and Consolidated Interest Expense for such period will be calculated after giving effect on a pro forma basis to such discharge of such Indebtedness as if such discharge had occurred on the first day of such period;

 

(2)           if, since the beginning of such period, the Issuer or any Restricted Subsidiary has made any Asset Disposition or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is such an Asset Disposition, the Consolidated EBITDAX for such period will be reduced by an amount equal to the Consolidated EBITDAX (if positive) directly attributable to the assets which are the subject of such Asset Disposition for such period or increased by an amount equal to the Consolidated

 

9

 

EBITDAX (if negative) directly attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Issuer or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Issuer and its continuing Restricted Subsidiaries in connection with or with the proceeds from such Asset Disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Issuer and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);

 

(3)           if, since the beginning of such period, the Issuer or any Restricted Subsidiary (by merger or otherwise) has made an Investment in any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary or is merged with or into the Issuer or a Restricted Subsidiary) or an acquisition (or will have received a contribution) of assets, including any acquisition or contribution of assets occurring in connection with a transaction causing a calculation to be made under this Indenture, which constitutes all or substantially all of a company, division, operating unit, segment, business, group of related assets or line of business, Consolidated EBITDAX and Consolidated Interest Expense for such period will be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition or contribution had occurred on the first day of such period; and

 

(4)           if, since the beginning of such period, any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period) made any Asset Disposition or any Investment or acquisition of assets that would have required an adjustment pursuant to clause (2) or (3) above if made by the Issuer or a Restricted Subsidiary during such period, Consolidated EBITDAX and Consolidated Interest Expense for such period will be calculated after giving pro forma effect thereto as if such Asset Disposition or Investment or acquisition of assets had occurred on the first day of such 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 a responsible financial or accounting officer of the Issuer; provided that such officer may in his or her discretion include any reasonably 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). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness will be calculated as if the average rate in effect from the beginning of such period to the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable

 

10

 

to such Indebtedness, but if the remaining term of such Interest Rate Agreement is less than 12 months, then such Interest Rate Agreement shall only be taken into account for that portion of the period equal to the remaining term thereof). If any Indebtedness that is being given pro forma effect bears an interest rate at the option of the Issuer, the interest rate shall be calculated by applying such optional rate chosen by the Issuer. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.

 

“Consolidated EBITDAX” for any period means, without duplication, the Consolidated Net Income for such period, plus the following, without duplication and to the extent deducted (and not added back) in calculating such Consolidated Net Income:

 

(1)           Consolidated Interest Expense;

 

(2)           Consolidated Income Tax Expense;

 

(3)           consolidated depletion and depreciation expense of the Issuer and its Restricted Subsidiaries;

 

(4)           consolidated amortization expense or impairment charges of the Issuer and its Restricted Subsidiaries recorded in connection with the application of FASB Accounting Standards Codification (“ASC”) Topic No. 350, Intangibles — Goodwill and Others, and FASB ASC Topic No. 360, Property, Plant and Equipment”;

 

(5)           other non-cash charges of the Issuer and its Restricted Subsidiaries (excluding any such non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation); and

 

(6)           consolidated exploration and abandonment expense of the Issuer and its Restricted Subsidiaries,

 

if applicable for such period; and less, to the extent included in calculating such Consolidated Net Income and in excess of any costs or expenses attributable thereto that were deducted (and not added back) in calculating such Consolidated Net Income, the sum of (x) the amount of deferred revenues that are amortized during such period and are attributable to reserves that are subject to Volumetric Production Payments, (y) amounts recorded in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments and (z) other non-cash gains (excluding any non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash item that reduced Consolidated EBITDAX in any prior period).

 

Notwithstanding the preceding sentence, clauses (2) through (6) relating to amounts of a Restricted Subsidiary will be added to Consolidated Net Income to compute Consolidated EBITDAX of the Issuer only to the extent (and in the same proportion) that the net income (loss) of such Restricted Subsidiary was included in calculating the Consolidated Net Income of the Issuer and, to the extent the amounts set forth in clauses (2) through (6) are in

 

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excess of those necessary to offset a net loss of such Restricted Subsidiary or if such Restricted Subsidiary has net income for such period included in Consolidated Net Income, only if a corresponding amount would be permitted at the date of determination to be dividended to the Issuer by such Restricted Subsidiary (unless it is a Subsidiary Guarantor) without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or the holders of its Capital Stock.

 

“Consolidated Income Tax Expense” means, with respect to any period, the provision for federal, state, local and foreign income taxes (including state franchise taxes) of the Issuer and its Restricted Subsidiaries for such period as determined in accordance with GAAP.

 

“Consolidated Interest Expense” means, for any period, the total consolidated interest expense (less interest income) of the Issuer and its Restricted Subsidiaries, whether paid or accrued, plus, to the extent not included in such interest expense and without duplication:

 

(1)           interest expense attributable to Capitalized Lease Obligations and the interest component of any deferred payment obligations;

 

(2)           amortization of debt discount and debt issuance cost (provided that any amortization of bond premium will be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such amortization of bond premium has otherwise reduced Consolidated Interest Expense);

 

(3)           non-cash interest expense;

 

(4)           commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;

 

(5)           the interest expense on Indebtedness of another Person that is guaranteed by the Issuer or one of its Restricted Subsidiaries or secured by a Lien on assets of the Issuer or one of its Restricted Subsidiaries, to the extent such guarantee becomes payable or such Lien becomes subject to foreclosure;

 

(6)           cash costs associated with Interest Rate Agreements (including amortization of fees); provided, however, that if Interest Rate Agreements result in net cash benefits rather than costs, such benefits shall be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income;

 

(7)           the consolidated interest expense of the Issuer and its Restricted Subsidiaries that was capitalized during such period; and

 

(8)           all dividends paid or payable in cash, Cash Equivalents or Indebtedness or accrued during such period on any series of Disqualified Stock of the Issuer or on Preferred Stock of its Restricted Subsidiaries payable to a party other than the Issuer or a Wholly-Owned Subsidiary,

 

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minus, to the extent included above, any interest attributable to Dollar-Denominated Production Payments.

 

For the purpose of calculating the Consolidated Coverage Ratio in connection with the Incurrence of any Indebtedness described in the final paragraph of the definition of “Indebtedness,” the calculation of Consolidated Interest Expense shall include all interest expense (including any amounts described in clauses (1) through (8) above) relating to any Indebtedness of the Issuer or any Restricted Subsidiary described in the final paragraph of the definition of “Indebtedness.”

 

“Consolidated Net Income” means, for any period, the aggregate net income (loss) of the Issuer and its consolidated Subsidiaries determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends of such Person; provided, however, that there will not be included (to the extent otherwise included therein) in such Consolidated Net Income:

 

(1)           any net income (loss) of any Person (other than the Issuer) if such Person is not a Restricted Subsidiary, except that:

 

(a)           subject to the limitations contained in clauses (3) and (4) below, the Issuer’s equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Issuer or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (2) below); and

 

(b)           the Issuer’s equity in a net loss of any such Person for such period will be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Issuer or a Restricted Subsidiary during such period;

 

(2)           any net income (but not loss) of any Restricted Subsidiary (other than a Subsidiary Guarantor) if such Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Issuer, except that:

 

(a)           subject to the limitations contained in clauses (3), (4) and (5) below, the Issuer’s equity in the net income of any such Restricted Subsidiary for such period will be included in such Consolidated Net Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Issuer or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to another Restricted Subsidiary, to the limitation contained in this clause); and

 

(b)           the Issuer’s equity in a net loss of any such Restricted Subsidiary for such period will be included in determining such Consolidated Net Income;

 

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(3)           any gain (loss) realized upon the sale or other disposition of any property, plant or equipment of the Issuer or its consolidated Subsidiaries (including pursuant to any Sale/Leaseback Transaction) which is not sold or otherwise disposed of in the ordinary course of business and any gain (loss) realized upon the sale or other disposition of any Capital Stock of any Person;

 

(4)           any extraordinary or nonrecurring gains or losses, together with any related provision for taxes on such gains or losses and all related fees and expenses;

 

(5)           the cumulative effect of a change in accounting principles;

 

(6)           any asset impairment writedowns on Oil and Gas Properties under GAAP or SEC guidelines;

 

(7)           any unrealized non-cash gains or losses or charges in respect of Hedging Obligations (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging);

 

(8)           income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued);

 

(9)           all deferred financing costs written off, and premiums paid, in connection with any early extinguishment of Indebtedness; and

 

(10)         any non-cash compensation charge arising from any grant of stock, stock options or other equity based awards; provided that the proceeds resulting from any such grant will be excluded from Section 3.3(c)(ii).

 

“Credit Facility” means, with respect to the Issuer or any Restricted Subsidiary, one or more debt facilities (including, without limitation, the Senior Secured Credit Agreement), indentures or commercial paper facilities providing for revolving credit loans, term loans, capital markets financings, 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, refunded, replaced or refinanced in whole or in part from time to time (and whether or not with the original administrative agent and lenders or another administrative agent or agents or other lenders and whether provided under the Senior Secured Credit Agreement or any other credit or other agreement or indenture).

 

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

 

“Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

 

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“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 event which is, or after notice or passage of time or both would be, an Event of Default.

 

“Definitive Securities” means certificated Securities.

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) at the option of the holder of the Capital Stock or upon the happening of any event:

 

(1)           matures or is mandatorily redeemable (other than redeemable only for Capital Stock of such Person which is not itself Disqualified Stock) pursuant to a sinking fund obligation or otherwise;

 

(2)           is convertible or exchangeable for Disqualified Stock or other Indebtedness (excluding Capital Stock which is convertible or exchangeable solely at the option of such Person or a Subsidiary thereof); or

 

(3)           is redeemable at the option of the holder of the Capital Stock in whole or in part,

 

in each case on or prior to the date that is 91 days after the earlier of the date (a) of the Stated Maturity of the Securities or (b) on which there are no Securities outstanding; provided that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock; provided further, that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Issuer to repurchase such Capital Stock upon the occurrence of a change of control or asset sale (each defined in a substantially identical manner to the corresponding definitions in this Indenture) shall not constitute Disqualified Stock if the terms of such Capital Stock (and all such securities into which it is convertible or for which it is exchangeable) provide that (i) the Issuer may not repurchase or redeem any such Capital Stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) pursuant to such provision prior to compliance by the Issuer with Section 3.5 and Section 3.9 and (ii) such repurchase or redemption will be permitted solely to the extent also permitted in accordance with Section 3.3.

 

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

 

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“Domestic Subsidiary” means any Restricted Subsidiary that is organized under the laws of the United States of America or any state thereof or the District of Columbia.

 

“DTC” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other depository institution hereinafter appointed by the Issuer.

 

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

“Equity Offering” means a public or private offering for cash by the Issuer of Capital Stock (other than Disqualified Stock), other than public offerings registered on Form S-8.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Exchange Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

 

“Fair Market Value” means, with respect to any asset or property, the sale value that would be obtained in an arm’s-length free market transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. Fair Market Value of an asset or property in excess of $10.0 million shall be determined by the Board of Directors of the Issuer acting in good faith, whose determination shall be conclusive and evidenced by a resolution of such Board of Directors, and any lesser Fair Market Value may be determined by an officer of the Issuer acting in good faith.

 

“Foreign Subsidiary” means any Restricted Subsidiary that is not organized under the laws of the United States of America or any state thereof or the District of Columbia.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time. All ratios and computations based on GAAP contained in this Indenture will be computed in conformity with GAAP.

 

“Guarantee” means, individually, any guarantee of payment of the Securities by a Subsidiary Guarantor pursuant to the terms of this Indenture and any supplemental indenture thereto, and, collectively, all such guarantees.

 

The term “guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

 

(i)            to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or

 

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(ii)           entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

 

provided, however, that the term “guarantee” will not include endorsements for collection or deposit in the ordinary course of business or any obligation to the extent it is payable only in Capital Stock of the Subsidiary Guarantor that is not Disqualified Stock. The term “guarantee” used as a verb has a corresponding meaning.

 

“Guarantor Subordinated Obligation” means, with respect to a Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter Incurred) which is expressly subordinated in right of payment to the obligations of such Subsidiary Guarantor under its Guarantee pursuant to a written agreement.

 

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Agreement.

 

“Holder” or “Securityholder” means a Person in whose name a Security is registered in the Securities Register.

 

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

 

“IAI” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

“Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary whose total assets, as of the end of the most recent month for which financial statements are available, are less than $1,000,000 and whose total revenues for the most recent 12-month period for which financial statements are available do not exceed $1,000,000; provided that a Restricted Subsidiary will not be considered to be an Immaterial Subsidiary if it, directly or indirectly, guarantees or otherwise provides direct credit support for any Indebtedness of the Issuer.

 

“Incur” means issue, create, assume, guarantee, incur or otherwise become directly or indirectly liable for, contingently or otherwise; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be deemed to be Incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary; and the terms “Incurred” and “Incurrence” have meanings correlative to the foregoing.

 

“Indebtedness” means, with respect to any Person on any date of determination (without duplication, whether or not contingent):

 

(1)           the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money;

 

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(2)           the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

(3)           the principal component of all obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (including reimbursement obligations with respect thereto except to the extent such reimbursement obligation relates to a trade payable, and except to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such obligation is satisfied within 30 days of payment on the letter of credit);

 

(4)           the principal component of all obligations of such Person (other than obligations payable solely in Capital Stock that is not Disqualified Stock) to pay the deferred and unpaid purchase price of property (except as described in clause (8) of the penultimate paragraph of this definition of “Indebtedness”), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto to the extent such obligations would appear as a liabilities upon the consolidated balance sheet of such Person in accordance with GAAP;

 

(5)           Capitalized Lease Obligations of such Person to the extent such Capitalized Lease Obligations would appear as liabilities on the consolidated balance sheet of such Person in accordance with GAAP;

 

(6)           the principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (but excluding, in each case, any accrued dividends);

 

(7)           the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of (a) the Fair Market Value of such asset at such date of determination and (b) the amount of such Indebtedness of such other Persons;

 

(8)           the principal component of Indebtedness of other Persons to the extent guaranteed by such Person; and

 

(9)           to the extent not otherwise included in this definition, net obligations of such Person under Commodity Agreements, Currency Agreements and Interest Rate Agreements (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such obligation that would be payable by such Person at such time);

 

provided, however, that any indebtedness which 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, shall not constitute “Indebtedness.”

 

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The amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date.

 

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

 

(1)           Production Payments and Reserve Sales;

 

(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 obligations under Currency Agreements, Commodity Agreements and Interest Rate Agreements; provided that such Agreements are entered into for bona fide hedging purposes of such Person or its Subsidiaries (as determined in good faith by the Board of Directors or senior management of such Person, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of Currency Agreements or Commodity Agreements, such Currency Agreements or Commodity Agreements are related to business transactions of such Person or its Subsidiaries entered into in the ordinary course of business and, in the case of Interest Rate Agreements, such Interest Rate Agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of such Person or its Subsidiaries Incurred without violation of this Indenture;

 

(4)           any obligation arising from agreements of such Person or a Subsidiary providing for indemnification, guarantees, adjustment of purchase price, holdbacks, contingency payment obligations or similar obligations, in each case, Incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary, provided that such Indebtedness is not reflected on the face of the balance sheet of such Person or any Subsidiary;

 

(5)           any obligation arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (including daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of Incurrence;

 

(6)           in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;

 

(7)           all contracts and other obligations, agreements, instruments or arrangements described in clause (19), (20), (21) or (28)(a) of the definition of “Permitted Liens”;

 

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(8)           accrued expenses and trade payables and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days past the invoice or billing date or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted; and

 

(9)           any repayment or reimbursement obligation of such Person or any of its Subsidiaries with respect to Customary Recourse Exceptions, unless and until an event or circumstance occurs that triggers the Person’s or such 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.

 

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

 

(1)           such Indebtedness is the obligation of a partnership or joint venture that is not a Subsidiary of such Person (a “Joint Venture”);

 

(2)           such Person or a Restricted Subsidiary of such Person is a general partner of the Joint Venture or otherwise liable for all or a portion of the Joint Venture’s liabilities (a “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 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 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 Subsidiary of such Person; or

 

(b)           if less than the amount determined pursuant to clause (a) immediately above, the actual amount of such Indebtedness that is with recourse to such Person or a 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 Consolidated Interest Expense to the extent actually paid by such Person and its Subsidiaries.

 

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

 

“Initial Purchasers” means J.P. Morgan Securities LLC and the other initial purchasers listed in Schedule 1 of the Purchase Agreement dated December 7, 2016 among the Issuer, the Subsidiary Guarantors and J.P. Morgan Securities LLC, as representative of such initial purchasers relating to the Initial Securities.

 

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“Initial Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

 

“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.

 

“Investment” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of any direct or indirect advance, loan or other extensions of credit (including by way of guarantee or similar arrangement, but excluding any debt or extension of credit represented by a bank deposit other than a time deposit and advances or extensions of credit to customers in the ordinary course of business) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments (excluding any interest in a crude oil or natural gas leasehold to the extent constituting a security under applicable law) issued by, such other Person and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided that none of the following will be deemed to be an Investment:

 

(1)           Hedging Obligations entered into in the ordinary course of business and in compliance with this Indenture;

 

(2)           endorsements of negotiable instruments and documents in the ordinary course of business; and

 

(3)           an acquisition of assets, Capital Stock or other securities by such Person or a Subsidiary for consideration to the extent such consideration consists of Common Stock of such Person.

 

The amount of any Investment shall not be adjusted for increases or decreases in value, write-ups, write-downs or write-offs with respect to such Investment.

 

For purposes of the definition of “Unrestricted Subsidiary” and Section 3.3,

 

(1)           “Investment” will include the portion (proportionate to the Issuer’s equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the Fair Market Value of the net assets of such Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer will be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to

 

(a)           the Issuer’s “Investment” in such Subsidiary at the time of such redesignation less (b) the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time that such Subsidiary is so re-designated a Restricted Subsidiary; and

 

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(2)           any property transferred to or from an Unrestricted Subsidiary will be valued at its Fair Market Value at the time of such transfer; and

 

(3)           if the Issuer or any Restricted Subsidiary sells or otherwise disposes of any Capital Stock of any Restricted Subsidiary such that, after giving effect to any such sale or disposition, such entity is no longer a Subsidiary of the Issuer, then the Issuer shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Capital Stock of such former Subsidiary not sold or disposed of.

 

“Investment Grade Rating” means a rating equal to or higher than:

 

(1)           Baa3 (or the equivalent) with a stable or better outlook by Moody’s; and

 

(2)           BBB— (or the equivalent) with a stable or better outlook by S&P,

 

or, if either such entity ceases to make a rating on the Securities publicly available for reasons outside of the Issuer’s control, the equivalent investment grade credit rating from any other Rating Agency.

 

“Investment Grade Rating Event” means the first day on which the Securities have an Investment Grade Rating from each Rating Agency, and no Default has occurred and is then continuing under this Indenture.

 

“Issue Date” means the first date on which the Securities are issued under this Indenture.

 

“Issuer” means, as applicable, (i) the Person named as the “Issuer” in the first introductory paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Issuer” shall mean such successor Person, and (ii) Antero Resources LLC, a Delaware limited liability company and the predecessor in interest of the Person named as the “Issuer” in the first introductory paragraph of this instrument.

 

“Lien” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority 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; provided that in no event shall an operating lease be deemed to constitute a Lien.

 

“Minority Interest” means the percentage interest represented by any class of Capital Stock of a Restricted Subsidiary that are not owned by the Issuer or a Restricted Subsidiary.

 

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“Moody’s” means Moody’s Investors Service, Inc., or any successor to the rating agency business thereof.

 

“Net Available Cash” from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, including consideration deemed to be cash pursuant to the seventh paragraph of Section 3.5, in each case net of:

 

(1)           all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses Incurred, and all federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP (after taking into account any available tax credits or deductions and any tax sharing agreements), as a consequence of such Asset Disposition;

 

(2)           all payments made on any Indebtedness (including any Hedging Obligation) which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition;

 

(3)           all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures or to holders of royalty or similar interests as a result of such Asset Disposition;

 

(4)           the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the assets disposed of in such Asset Disposition and retained by the Issuer or any Restricted Subsidiary after such Asset Disposition; and

 

(5)           all relocation expenses incurred as a result thereof and all related severance and associated costs, expenses and charges of personnel related to assets and related operations disposed of;

 

provided, however, that if any consideration for an Asset Disposition (that would otherwise constitute Net Available Cash) is required to be held in escrow pending determination of whether or not a purchase price adjustment will be made, such consideration (or any portion thereof) shall become Net Available Cash only at such time as it is released to the Issuer or any of its Restricted Subsidiaries from escrow.

 

“Net Cash Proceeds” with respect to any issuance or sale of Capital Stock or any contribution to equity capital, means the cash proceeds of such issuance, sale or contribution net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, listing fees, discounts or commissions and brokerage, consultant and other fees and charges actually Incurred in connection with such issuance, sale or contribution and net of taxes paid or payable as a result

 

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of such issuance or sale (after taking into account any available tax credit or deductions and any tax sharing arrangements).

 

“Net Working Capital” means (a) the sum of (i) all current assets of the Issuer and its Restricted Subsidiaries, except current assets from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business,  plus (ii) the amount of revolving credit borrowings available to be Incurred under the Senior Secured Credit Agreement, less (b) all current liabilities of the Issuer and its Restricted Subsidiaries, except current liabilities (i) associated with asset retirement obligations relating to oil and gas properties, (ii) included in Indebtedness and (iii) any current liabilities from commodity price risk management activities arising in the ordinary course of the Oil and Gas Business, in each case as set forth in the consolidated financial statements of the Issuer prepared in accordance with GAAP.

 

“Non-Recourse Debt” means Indebtedness of a Person:

 

(1)           as to which neither the Issuer nor any Restricted Subsidiary (a) provides any guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor or otherwise), except for Customary Recourse Exceptions;

 

(2)           no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Issuer or any Restricted Subsidiary to declare a default under such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and

 

(3)           as to which the lenders have no recourse against any of the assets of the Issuer or its Restricted Subsidiaries, except for Customary Recourse Exceptions.

 

“Non-U.S. Person” means a Person who is not a U.S. Person (as defined in Regulation S).

 

“Obligations” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), other monetary obligations, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

 

“Offering Memorandum” means the final offering memorandum, dated December 7, 2016, relating to the offering by the Issuer of the Initial Securities.

 

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“Officer” means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer or the Secretary of the Issuer. Officer of any Subsidiary Guarantor has a correlative meaning.

 

“Officers’ Certificate” means a certificate signed by two Officers of the Issuer.

 

“Oil and Gas Business” means:

 

(1)           the business of acquiring, exploring, exploiting, developing, producing, operating and disposing of interests in oil, natural gas, liquefied natural gas and other Hydrocarbon and mineral properties or products produced in association with any of the foregoing;

 

(2)           the business of gathering, marketing, distributing, treating, processing, storing, refining, selling and transporting of any production from such interests or properties and products produced in association therewith and the marketing of oil, natural gas, other Hydrocarbons and minerals obtained from unrelated Persons;

 

(3)           any other related energy business, including power generation and electrical transmission business, directly or indirectly, from oil, natural gas and other Hydrocarbons and minerals produced substantially from properties in which the Issuer or its Restricted Subsidiaries, directly or indirectly, participate;

 

(4)           any business relating to oil field sales and service; and

 

(5)           any business or activity relating to, arising from, or necessary, appropriate or incidental to the activities described in the foregoing clauses (1) through (4) of this definition.

 

“Oil and Gas Properties” means all properties, including equity or other ownership interests therein, owned by a Person which contain or are believed to contain oil and gas reserves.

 

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer, a Subsidiary Guarantor or the Trustee.

 

“Pari Passu Indebtedness” means any Indebtedness of the Issuer or any Subsidiary Guarantor that ranks equally in right of payment to the Securities or the Guarantees, as the case may be.

 

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, as amended, and signed into law October 26, 2001.

 

“Permitted Acquisition Indebtedness” means Indebtedness (including Disqualified Stock) of the Issuer or any of the Restricted Subsidiaries to the extent such Indebtedness was Indebtedness:

 

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(1)           of an acquired Person prior to the date on which such Person became a Restricted Subsidiary as a result of having been acquired and not incurred in contemplation of such acquisition; or

 

(2)           of a Person that was merged, consolidated or amalgamated with or into the Issuer or a Restricted Subsidiary that was not incurred in contemplation of such merger, consolidation or amalgamation,

 

provided that on the date such Person became a Restricted Subsidiary or the date such Person was merged, consolidated and amalgamated with or into the Issuer or a Restricted Subsidiary, as applicable, after giving pro forma effect thereto,

 

(a)           the Restricted Subsidiary or the Issuer, as applicable, would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 3.2(a) or

 

(b)           the Consolidated Coverage Ratio for the Issuer would be greater than the Consolidated Coverage Ratio for the Issuer immediately prior to such transaction.

 

“Permitted Business Investment” means any Investment made in the ordinary course of, and of a nature that is or shall have become customary in, the Oil and Gas Business including investments or expenditures for actively exploiting, exploring for, acquiring, developing, producing, processing, gathering, marketing or transporting oil, natural gas or other Hydrocarbons and minerals 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 the Oil and Gas Business jointly with third parties including:

 

(1)           ownership interests in oil, natural gas, other Hydrocarbons and minerals properties, liquefied natural gas facilities, processing facilities, gathering systems, pipelines, storage facilities or related systems or ancillary real property interests;

 

(2)           Investments in the form of or pursuant to operating agreements, working interests, royalty interests, mineral leases, processing agreements, farm-in agreements, farm-out agreements, contracts for the sale, transportation or exchange of oil, natural gas, other Hydrocarbons and minerals, production sharing agreements, participation agreements, development 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, stockholder agreements and other similar agreements (including for limited liability companies) with third parties; and

 

(3)           direct or indirect ownership interests in drilling rigs and related equipment, including, without limitation, transportation equipment.

 

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For the avoidance of doubt, any Investments by the Issuer pursuant to the Amended and Restated Contribution Agreement, dated as of November 10, 2014, by and between Antero Midstream Partners LP and the Issuer shall constitute Permitted Business Investments.

 

“Permitted Holder” means each of (i) Warburg Pincus & Co.; (ii) Paul M. Rady (“Rady”); (iii) Glen C. Warren, Jr. (“Warren”); (iv) Rady’s wife or Warren’s wife; (v) any lineal descendant of either Rady or Warren; (vi) the guardian or other legal representative of either Rady or Warren; (vii)  the estate of either Rady or Warren; (viii) any trust of which at least one of the trustees is either Rady or Warren, or the principal beneficiaries of which are any one or more of the Persons referred to in the preceding clauses (ii) through (vii); (ix) any Person that is controlled by any one or more of the Persons in the preceding clauses (i) through (viii); and (x) any group (within the meaning of the Exchange Act) that includes one or more of the Persons described in the preceding clauses (i) through (ix), provided that such Persons described in the preceding clauses (i) through (ix) control more than 50% of the total voting power of such group.

 

“Permitted Investment” means an Investment by the Issuer or any Restricted Subsidiary in:

 

(1)           the Issuer, a Restricted Subsidiary or a Person which will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is the Oil and Gas Business;

 

(2)           another Person whose primary business is the Oil and Gas Business if as a result of such Investment such other Person becomes a Restricted Subsidiary or is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Issuer or a Restricted Subsidiary and, in each case, any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer;

 

(3)           cash and Cash Equivalents;

 

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

 

(5)           payroll, commission, travel, relocation and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

 

(6)           loans or advances to employees (other than executive officers) made in the ordinary course of business consistent with past practices of the Issuer or such Restricted Subsidiary;

 

(7)           Capital Stock, obligations or securities received in settlement of debts (x) created in the ordinary course of business and owing to the Issuer or any Restricted

 

27

 

Subsidiary or in satisfaction of judgments or (y) pursuant to any plan of reorganization or similar arrangement in a bankruptcy or insolvency proceeding;

 

(8)           any Person as a result of the receipt of non-cash consideration from an Asset Disposition that was made pursuant to and in compliance with, Section 3.5;

 

(9)           Investments in existence on the Issue Date;

 

(10)         Commodity Agreements, Currency Agreements, Interest Rate Agreements and related Hedging Obligations, which transactions or obligations are Incurred in compliance with Section 3.2;

 

(11)         guarantees issued in accordance with Section 3.2;

 

(12)         Permitted Business Investments;

 

(13)         any Person where such Investment was acquired by the Issuer or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (b) as a result of a foreclosure by the Issuer or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

(14)         any Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits made in the ordinary course of business by the Issuer or any Restricted Subsidiary;

 

(15)         guarantees of performance or other obligations (other than Indebtedness) arising in the ordinary course in the Oil and Gas Business, including obligations under oil and natural gas exploration, development, joint operating, and related agreements and licenses, concessions or operating leases related to the Oil and Gas Business;

 

(16)         Investments in the Securities; and

 

(17)         Investments by the Issuer or any of its Restricted Subsidiaries, together with all other Investments pursuant to this clause (17), in an aggregate amount outstanding at the time of such Investment not to exceed the greater of $150.0 million and 1.5% of the Issuer’s Adjusted Consolidated Net Tangible Assets (with the Fair Market Value of such Investment being measured at the time such Investment is made and without giving effect to subsequent changes in value) provided, however, that if any Investment pursuant to this clause (17) 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) of this definition and shall cease to have been made pursuant to this clause (17) for so long as such Person continues to be a Restricted Subsidiary.

 

28

 

“Permitted Liens” means, with respect to any Person:

 

(1)           Liens securing Indebtedness under a Credit Facility permitted to be Incurred under this Indenture;

 

(2)           pledges or deposits by such Person under workers’ compensation laws, unemployment insurance laws, social security or old age pension laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits (which may be secured by a Lien) to secure public or statutory obligations of such Person including letters of credit and bank guarantees required or requested by the United States, any State thereof or any foreign government or any subdivision, department, agency, organization or instrumentality of any of the foregoing in connection with any contract or statute (including lessee or operator obligations under statutes, governmental regulations, contracts or instruments related to the ownership, exploration and production of oil, natural gas, other hydrocarbons and minerals on State, Federal or foreign lands or waters), or deposits of cash or United States government bonds to secure indemnity performance, surety or appeal bonds or other similar bonds to which such Person is a party, or deposits as security for contested taxes or import or customs duties or for the payment of rent, in each case Incurred in the ordinary course of business;

 

(3)           statutory and contractual Liens of landlords and Liens imposed by law, including carriers’, warehousemen’s, mechanics’, materialmen’s and repairmen’s Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings if a reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made in respect thereof;

 

(4)           Liens for taxes, assessments or other governmental charges or claims not yet subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings; provided that appropriate reserves, if any, required pursuant to GAAP have been made in respect thereof;

 

(5)           Liens in favor of issuers of surety or performance bonds or bankers’ acceptances issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

 

(6)           survey exceptions, encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) 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 the assets of such Person and its Restricted Subsidiaries, taken as a whole, or materially impair their use in the operation of the business of such Person;

 

(7)           Liens securing Hedging Obligations;

 

29

 

(8)           leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) which do not materially interfere with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries;

 

(9)           prejudgment Liens and judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

 

(10)         Liens for the purpose of securing the payment of all or a part of the purchase price of, or Capitalized Lease Obligations, purchase money obligations or other payments Incurred to finance the acquisition, lease, improvement or construction of or repairs or additions to, assets or property acquired or constructed in the ordinary course of business; provided that:

 

(a)           the aggregate principal amount of Indebtedness secured by such Liens is otherwise permitted to be Incurred under this Indenture and does not exceed the cost of the assets or property so acquired or constructed; and

 

(b)           such Liens are created within 360 days of the later of the acquisition, lease, completion of improvements, construction, repairs or additions or commencement of full operation of the assets or property subject to such Lien and do not encumber any other assets or property of the Issuer or any Restricted Subsidiary other than such assets or property and assets affixed or appurtenant thereto;

 

(11)         Liens arising solely by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution; provided that:

 

(a)           such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Issuer in excess of those set forth by regulations promulgated by the Federal Reserve Board; and

 

(b)           such deposit account is not intended by the Issuer or any Restricted Subsidiary to provide collateral to the depository institution;

 

(12)         Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Issuer and its Restricted Subsidiaries in the ordinary course of business;

 

(13)         Liens existing on the Issue Date other than Liens securing the Senior Secured Credit Agreement;

 

30

 

(14)         Liens on property or Capital Stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming a Subsidiary; provided further, however, that any such Lien may not extend to any other property owned by the Issuer or any Restricted Subsidiary (other than assets or property affixed or appurtenant thereto);

 

(15)         Liens on property at the time the Issuer or any of its Subsidiaries acquired the property, including any acquisition by means of a merger or consolidation with or into the Issuer or any of its Subsidiaries; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided further, however, that such Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary (other than assets or property affixed or appurtenant thereto);

 

(16)         Liens securing the Securities, Guarantees and other obligations under this Indenture;

 

(17)         Liens securing Refinancing Indebtedness Incurred to refinance Indebtedness that was previously so secured, provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced or is in respect of property or assets that is the security for a Permitted Lien hereunder;

 

(18)         any interest or title of a lessor under any Capitalized Lease Obligation or operating lease;

 

(19)         Liens in respect of Production Payments and Reserve Sales, which Liens shall be limited to the property that is the subject of such Production Payments and Reserve Sales;

 

(20)         Liens arising under 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, 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;

 

(21)         Liens on pipelines or pipeline facilities that arise by operation of law;

 

31

 

(22)         Liens securing Indebtedness in an aggregate principal amount outstanding at any one time, added together with all other Indebtedness secured by Liens Incurred pursuant to this clause (22), not to exceed the greater of $100.0 million and 1.0% of the Issuer’s Adjusted Consolidated Net Tangible Assets, as determined on the date of Incurrence of such Indebtedness after giving pro forma effect to such Incurrence and the application of the proceeds therefrom;

 

(23)         Liens in favor of the Issuer or any Subsidiary Guarantor;

 

(24)         deposits made in the ordinary course of business to secure liability to insurance carriers;

 

(25)         Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

 

(26)         Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 3.3; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

 

(27)         Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

 

(28)         any (a) interest or title of a lessor or sublessor under any lease, liens reserved in oil, gas or other Hydrocarbons, minerals, leases for bonus, royalty or rental payments and for compliance with the terms of such leases; (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to (including, without limitation, ground leases or other prior leases of the demised premises, mortgages, mechanics’ liens, tax liens, and easements); or (c) subordination of the interest of the lessee or sublessee under such lease to any restrictions or encumbrance referred to in the preceding clause (b);

 

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

 

(30)         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, however, 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 such Indebtedness;

 

(31)         Liens arising from the deposit of funds or securities in trust for the purpose of decreasing or defeasing Indebtedness so long as such deposit of funds or

 

32

 

securities and such decreasing or defeasing of Indebtedness are permitted under Section 3.3; and

 

(32)         Liens in favor of collecting or payer banks having a right of setoff, revocation, or charge back with respect to money or instruments of the Issuer or any Subsidiary of the Issuer on deposit with or in possession of such bank.

 

In each case set forth above, notwithstanding any stated limitation on the assets that may be subject to such Lien, a Permitted Lien on a specified asset or group or type of assets may include Liens on all improvements, additions and accessions thereto and all products and proceeds thereof (including dividends, distributions and increases in respect thereof).

 

“Permitted Tax Distributions” means, for any calendar year or portion thereof during which the Issuer was a pass-through entity for U.S. federal income tax purposes, any payments or distributions made by the Issuer to its members on or about each estimated tax payment date as well as each other applicable due date to enable the members of the Issuer (or, if any of them is itself a pass-through entity for U.S. federal income tax purposes, the owners of such member’s Capital Stock) to make payments of U.S. federal and state income taxes (including estimates thereof) as a result of the operations of the Issuer and its Subsidiaries during the current or any previous calendar year, not to exceed an amount equal to each such member’s (or in the case of a pass-through entity, the owners of its Capital Stock) U.S. federal and state income tax liability resulting solely from the pass-through tax treatment of such member’s (or its owners’) interest in the Issuer and as calculated pursuant to the terms of the limited liability company agreement of the Issuer as in effect on the Prior Issue Date and as it may have been amended thereafter in a manner that was not, considered as a whole, adverse to the Holders of the Notes.

 

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

 

“Preferred Stock” as applied to the Capital Stock of any corporation or other Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation or other Person, over Capital Stock of any other class of such corporation or other Person.

 

“Prior Issue Date” means November 19, 2012, the initial date of issuance of the Issuer’s 6.0% Senior Notes due 2020.

 

“Production Payments and Reserve Sales” means the grant or transfer by the Issuer or a Restricted Subsidiary to any Person of a royalty, overriding royalty, net profits interest, production payment (whether volumetric or dollar denominated), 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

 

33

 

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 Issuer or a Restricted Subsidiary.

 

“QIB” means any “qualified institutional buyer” as such term is defined in Rule 144A.

 

“Rating Agency” means each of S&P and Moody’s, or if S&P or Moody’s or both shall not make a rating on the Securities publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuer (as certified by a Board Resolution) which shall be substituted for S&P or Moody’s, or both, as the case may be.

 

“Rating Decline” means the occurrence of a decrease of one or more gradations (including gradations within rating categories as well as between rating categories) in the rating of the Securities by either Rating Agency.

 

“Redemption Date” means, with respect to any redemption of Securities, the date of redemption with respect thereto.

 

“Refinancing Indebtedness” means Indebtedness that is Incurred to refund, refinance, replace, exchange, renew, repay, extend, prepay, redeem or retire (including pursuant to any defeasance or discharge mechanism) (collectively, “refinance” and “refinances” and “refinanced” shall have correlative meanings) any Indebtedness (including Indebtedness of the Issuer that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of another Restricted Subsidiary, but excluding Indebtedness of a Subsidiary that is not a Restricted Subsidiary that refinances Indebtedness of the Issuer or a Restricted Subsidiary), including Indebtedness that refinances Refinancing Indebtedness, provided, however, that:

 

(1)           (a) if the Stated Maturity of the Indebtedness being refinanced is the same as or earlier than the Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being refinanced or (b) if the Stated Maturity of the Indebtedness being refinanced is later than the Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated Maturity at least 91 days later than the Stated Maturity of the Securities;

 

(2)           the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being refinanced;

 

(3)           such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced (plus, without duplication, any additional Indebtedness Incurred to pay

 

34

 

interest, premiums or defeasance costs required by the instruments governing such existing Indebtedness and fees and expenses Incurred in connection therewith); and

 

(4)           if the Indebtedness being refinanced is subordinated in right of payment to the Securities or a Guarantee, such Refinancing Indebtedness is subordinated in right of payment to the Securities or the Guarantee on terms at least as favorable to the holders as those contained in the documentation governing the Indebtedness being refinanced.

 

“Registration Rights Agreement” means that certain registration rights agreement dated as of the Issue Date by and among the Issuer, the Subsidiary Guarantors and the Initial Purchasers and, with respect to any Additional Securities, one or more substantially similar registration rights agreements among the Issuer and the other parties thereto, as any such agreement may be amended from time to time.

 

“Reporting Failure” means the failure of the Issuer to file with the SEC and make available or otherwise deliver to the Trustee and each Holder of Securities, within the time periods specified in Section 3.10 (after giving effect to any grace period specified under Rule 12b-25 under the Exchange Act), the periodic reports, information, documents or other reports which the Issuer may be required to file with the SEC pursuant to such provision.

 

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

 

“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 Investment” means any Investment other than a Permitted Investment.

 

“Restricted Securities” means Initial Securities and Additional Securities bearing the Restricted Securities Legend.

 

“Restricted Securities Legend” means the legend set forth in Section 2.1(d)(1).

 

“Restricted Subsidiary” means any Subsidiary of the Issuer other than an Unrestricted Subsidiary.

 

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

 

“S&P” means S&P Global Ratings, a division of S&P Global, Inc., or any successor to the rating agency business thereof.

 

“Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired whereby the Issuer or a Restricted Subsidiary transfers such property to a Person and the Issuer or a Restricted Subsidiary leases it from such Person.

 

35

 

“SEC” means the United States Securities and Exchange Commission.

 

“Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

 

“Securities Act” means the Securities Act of 1933 (15 U.S.C. §§ 77a-77aa), as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Securities Custodian” means the custodian with respect to the Global Security (as appointed by DTC), or any successor Person thereto and shall initially be the Trustee.

 

“Senior Secured Credit Agreement” means the Fourth Amended and Restated Credit Agreement dated as of November 4, 2010 among the Issuer, as borrower, certain subsidiaries of the Issuer, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders parties thereto from time to time, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof and any indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under Section 3.2).

 

“Shelf Registration Statement” shall have the meaning set forth in the applicable Registration Rights Agreement.

 

“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, as in effect on the Issue Date.

 

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.

 

“Subordinated Obligation” means any Indebtedness of the Issuer (whether outstanding on the Issue Date or thereafter Incurred) which is expressly subordinated in right of payment to the Securities pursuant to a written agreement.

 

“Subsidiary” of any Person means (a) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total ordinary voting power of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof (or Persons performing similar functions) or (b) any partnership, joint venture, limited liability company or similar entity of which more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, that is, in the case of clauses (a) and (b), at the time owned or controlled,

 

36

 

directly or indirectly, by (1) such Person, (2) such Person and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of such Person. Unless otherwise specified herein or the context indicates otherwise, each reference to a Subsidiary (other than in this definition) will refer to a Subsidiary of the Issuer.

 

“Subsidiary Guarantor” means any Subsidiary of the Issuer that is a guarantor of the Securities, including any Person that is required after the Issue Date to guarantee the Securities pursuant to Section 3.11, in each case until a successor replaces such Person pursuant to the applicable provisions of this Indenture and, thereafter, means such successor.

 

“TIA” or “Trust Indenture Act” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as in effect on the date of this Indenture.

 

“Trustee” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

 

“Trust Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

 

“Unrestricted Subsidiary” means:

 

(1)           Antero Midstream Partners LP;

 

(2)           any Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Issuer in the manner provided below; and

 

(3)           any Subsidiary of an Unrestricted Subsidiary.

 

The Board of Directors of the Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary through merger or consolidation or Investment therein) to be an Unrestricted Subsidiary only if:

 

(1)           such Subsidiary or any of its Subsidiaries does not own any Capital Stock or Indebtedness of or have any Investment in, or own or hold any Lien on any property of, any other Subsidiary of the Issuer which is not a Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary;

 

(2)           all the Indebtedness of such Subsidiary and its Subsidiaries shall, at the date of designation, and will at all times thereafter, consist of Non-Recourse Debt;

 

(3)           on the date of such designation, such designation and the Investment of the Issuer or a Restricted Subsidiary in such Subsidiary complies with Section 3.3;

 

37

 

(4)           such Subsidiary is a Person with respect to which neither the Issuer nor any of its Restricted Subsidiaries has any direct or indirect obligation to subscribe for additional Capital Stock of such Person;

 

(5)           such Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or substantially all of the business of the Issuer and its Subsidiaries; and

 

(6)           on the date such Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is not a party to any agreement, contract, arrangement or understanding with the Issuer or any Restricted Subsidiary with terms substantially less favorable to the Issuer or such Restricted Subsidiary than those that might have been obtained from Persons who are not Affiliates of the Issuer.

 

Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by filing with the Trustee a Board Resolution of the Issuer giving effect to such designation and an Officers’ Certificate certifying that such designation complies with the foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date.

 

The Board of Directors of the Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof and the Issuer could Incur at least $1.00 of additional Indebtedness under Section 3.2(a) on a pro forma basis taking into account such designation.

 

“U.S. Government Obligations” means securities that are (a) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depositary receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depositary receipt.

 

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

 

38

 

“Voting Stock” of an entity means all classes of Capital Stock of such entity then outstanding and normally entitled to vote in the election of members of such entity’s Board of Directors.

 

“Wholly-Owned Subsidiary” means a Restricted Subsidiary, all of the Capital Stock of which (other than directors’ qualifying shares) is owned by the Issuer or another Wholly-Owned Subsidiary.

 

SECTION 1.2.              Other Definitions.

 

	
Term
    	
 
    	
Defined in
   Section
    	
 
    
	
“Additional Restricted Securities”
    	
 
    	
2.1(b)
    	
 
    
	
“Affiliate Transaction”
    	
 
    	
3.8
    	
 
    
	
“Agent Members”
    	
 
    	
2.1(e)(iii)
    	
 
    
	
“Alternate Offer”
    	
 
    	
3.9
    	
 
    
	
“Asset Disposition Offer Amount”
    	
 
    	
3.5
    	
 
    
	
“Asset Disposition Offer Period”
    	
 
    	
3.5
    	
 
    
	
“Asset Disposition Offer”
    	
 
    	
3.5
    	
 
    
	
“Asset Disposition Purchase Date”
    	
 
    	
3.5
    	
 
    
	
“Authenticating Agent”
    	
 
    	
2.2
    	
 
    
	
“Change of Control Offer”
    	
 
    	
3.9
    	
 
    
	
“Change of Control Payment”
    	
 
    	
3.9(1)
    	
 
    
	
“Change of Control Payment Date”
    	
 
    	
3.9(2)
    	
 
    
	
“Clearstream”
    	
 
    	
2.1(b)
    	
 
    
	
“covenant defeasance option”
    	
 
    	
8.1(b)
    	
 
    
	
“cross acceleration provision”
    	
 
    	
6.1(6)(b)
    	
 
    
	
“Defaulted Interest”
    	
 
    	
2.14
    	
 
    
	
“Euroclear”
    	
 
    	
2.1(b)
    	
 
    
	
“Event of Default”
    	
 
    	
6.1
    	
 
    

 

39

 

	
Term
    	
 
    	
Defined in
   Section
    	
 
    
	
“Excess Proceeds”
    	
 
    	
3.5
    	
 
    
	
“Exchange Global Note”
    	
 
    	
2.1(b)
    	
 
    
	
“General Partner”
    	
 
    	
1.1
    	
 
    
	
“Global Securities”
    	
 
    	
2.1(b)
    	
 
    
	
“Initial Lien”
    	
 
    	
3.6
    	
 
    
	
“Institutional Accredited Investor Global Notes”
    	
 
    	
2.1(b)
    	
 
    
	
“Institutional Accredited Investor Notes”
    	
 
    	
2.1(b)
    	
 
    
	
“Issuer Order”
    	
 
    	
2.2
    	
 
    
	
“Joint Venture”
    	
 
    	
1.1
    	
 
    
	
“judgment default provision”
    	
 
    	
6.1(9)
    	
 
    
	
“legal defeasance option”
    	
 
    	
8.1(b)
    	
 
    
	
“Legal Holiday”
    	
 
    	
12.8
    	
 
    
	
“Notice of Default”
    	
 
    	
6.1(4); 6.1(5)
    	
 
    
	
“Pari Passu Securities”
    	
 
    	
3.5
    	
 
    
	
“Paying Agent”
    	
 
    	
2.3
    	
 
    
	
“payment default”
    	
 
    	
6.1(6)(a)
    	
 
    
	
“protected purchaser”
    	
 
    	
2.10
    	
 
    
	
“Registrar”
    	
 
    	
2.3
    	
 
    
	
“Regulation S Global Note”
    	
 
    	
2.1(b)
    	
 
    
	
“Regulation S Notes”
    	
 
    	
2.1(b)
    	
 
    
	
“Resale Restriction Termination Date”
    	
 
    	
2.6(b)
    	
 
    
	
“Restricted Payment”
    	
 
    	
3.3(4)
    	
 
    
	
“Restricted Period”
    	
 
    	
2.1(b)
    	
 
    

 

40

 

	
Term
    	
 
    	
Defined in
   Section
    	
 
    
	
“Rule 144A Global Note”
    	
 
    	
2.1(b)
    	
 
    
	
“Rule 144A Notes”
    	
 
    	
2.1(b)
    	
 
    
	
“Securities Register”
    	
 
    	
2.3
    	
 
    
	
“Special Interest Payment Date”
    	
 
    	
2.14(a)
    	
 
    
	
“Special Record Date”
    	
 
    	
2.14(a)
    	
 
    
	
“Successor Company”
    	
 
    	
4.1(a)(1)
    	
 
    

 

SECTION 1.3.              Incorporation by Reference of Trust Indenture Act.  This Indenture is subject to the mandatory provisions of the TIA which are incorporated by reference in and made a part of this Indenture.  The following TIA terms have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Securities and the Guarantees.

 

“indenture security holder” means a Securityholder.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means the Trustee.

 

“obligor” on the indenture securities means the Issuer, the Subsidiary Guarantors and any other obligor on the indenture securities.

 

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

 

SECTION 1.4.              Rules of Construction.  Unless the context otherwise requires:

 

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

 

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

 

(3)           “or” is not exclusive;

 

(4)           “including” means including without limitation;

 

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(5)           words in the singular include the plural and words in the plural include the singular;

 

(6)           all amounts expressed in this Indenture or in any of the Securities in terms of money refer to the lawful currency of the United States of America; and

 

(7)           the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

ARTICLE II

 

THE SECURITIES

 

SECTION 2.1.              Form, Dating and Terms.

 

(a)           The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited.  The Initial Securities issued on the date hereof shall be in an aggregate principal amount of $600,000,000.  In addition, the Issuer may issue, from time to time in accordance with the provisions of this Indenture, Additional Securities (as provided herein) and Exchange Securities.  Furthermore, Securities may be authenticated and delivered upon registration of transfer, exchange or in lieu of, other Securities pursuant to Section 2.2, 2.6, 2.10, 2.12, 5.8 or 9.5, in connection with an Asset Disposition Offer pursuant to Section 3.5 or in connection with a Change of Control Offer pursuant to Section 3.9.

 

The Initial Securities shall be known and designated as “5.0% Senior Notes, Series A, due 2025” of the Issuer.  Additional Securities issued as Restricted Securities shall be known and designated as “5.0% Senior Notes, Series A, due 2025” of the Issuer.  Additional Securities issued other than as Restricted Securities shall be known and designated as “5.0% Senior Notes, Series B, due 2025” of the Issuer, and Exchange Securities shall be known and designated as “5.0% Senior Notes, Series B, due 2025” of the Issuer.

 

With respect to any Additional Securities, the Issuer shall set forth in (a) a Board Resolution and (b) (i) an Officers’ Certificate or (ii) one or more indentures supplemental hereto, the following information:

 

(1)           the aggregate principal amount of such Additional Securities to be authenticated and delivered pursuant to this Indenture;

 

(2)           the issue price and the issue date of such Additional Securities, including the date from which interest shall accrue; and

 

(3)           whether such Additional Securities shall be Restricted Securities issued in the form of Exhibit A hereto and/or shall be issued in the form of Exhibit B hereto.

 

In authenticating and delivering Additional Securities, the Trustee shall be entitled to receive and shall be fully protected in relying upon, in addition to the Opinion of

 

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Counsel and Officers’ Certificate required by Section 12.4, an Opinion of Counsel as to the due authorization, execution, delivery, validity and enforceability of such Additional Securities.

 

The Initial Securities, any Additional Securities and the Exchange Securities shall be considered collectively as a single class for all purposes of this Indenture.  Holders of the Initial Securities, any Additional Securities and the Exchange Securities will vote and consent together on all matters to which such Holders are entitled to vote or consent as one class, and none of the Holders of the Initial Securities, any Additional Securities or the Exchange Securities shall have the right to vote or consent as a separate class on any matter to which such Holders are entitled to vote or consent.

 

If any of the terms of any Additional Securities are established by action taken pursuant to Board Resolutions of the Issuer, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Issuer and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate or the indenture supplemental hereto setting forth the terms of the Additional Securities.

 

(b)           The Initial Securities are being offered and sold by the Issuer pursuant to a Purchase Agreement, dated December 7, 2016, among the Issuer, the Subsidiary Guarantors and J.P. Morgan Securities LLC, as representative of the Initial Purchasers.  The Initial Securities and any Additional Securities (if issued as Restricted Securities) (the “Additional Restricted Securities”) shall be resold initially only to (A) QIBs in reliance on Rule 144A and (B) Non-U.S. Persons in reliance on Regulation S.  Such Initial Securities and Additional Restricted Securities may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and IAIs in accordance with Rule 501 of the Securities Act, in each case, in accordance with the procedure described herein.  Additional Securities offered after the date hereof may be offered and sold by the Issuer from time to time pursuant to one or more purchase agreements in accordance with applicable law.

 

Initial Securities and Additional Restricted Securities offered and sold to QIBs in the United States of America in reliance on Rule 144A (the “Rule 144A Notes”) shall be issued in the form of a permanent global Security substantially in the form of Exhibit A, which is hereby incorporated by reference and made a part of this Indenture, including appropriate legends as set forth in Section 2.1(d) (the “Rule 144A Global Note”), deposited with the Trustee, as Securities Custodian, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.  The Rule 144A Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate.  The aggregate principal amount of the Rule 144A Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as Securities Custodian, as hereinafter provided.

 

Initial Securities and any Additional Restricted Securities offered and sold outside the United States of America (the “Regulation S Notes”) in reliance on Regulation S shall initially be issued in the form of a permanent global Security substantially in the form of Exhibit A including appropriate legends as set forth in Section 2.1(d) (the “Regulation S Global Note”) deposited upon issuance with, or on behalf of, the Trustee as Securities Custodian in the manner described in this Article II for credit to the respective accounts of the purchasers (or to such other

 

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accounts as they may direct), including, but not limited to, accounts at Euroclear Bank S.A./N.V. (“Euroclear”) or Clearstream Banking, société anonyme (“Clearstream”).  Prior to the 40th day after the later of the commencement of the offering of the Initial Securities and the Issue Date (such period through and including such 40th day, the “Restricted Period”), interests in the Regulation S Global Note may only be transferred to Non-U.S. Persons pursuant to Regulation S, unless exchanged for interests in another Global Security in accordance with the transfer and certification requirements described herein.  Investors may hold their interests in the Regulation S Global Note through organizations other than Euroclear or Clearstream that are participants in DTC’s system or directly through Euroclear or Clearstream, if they are participants in such systems, or indirectly through organizations which are participants in such systems.  If such interests are held through Euroclear or Clearstream, Euroclear and Clearstream shall hold such interests in the applicable Regulation S Global Note on behalf of their participants through customers’ securities accounts in their respective names on the books of their respective depositaries.  Such depositaries, in turn, shall hold such interests in the applicable Regulation S Global Note in customers’ securities accounts in the depositaries’ names on the books of DTC.

 

The Regulation S Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate.  The aggregate principal amount of the Regulation S Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.

 

Initial Securities and Additional Restricted Securities resold to IAIs (the “Institutional Accredited Investor Notes”) in the United States of America shall be issued in the form of a permanent global Security substantially in the form of Exhibit A including appropriate legends as set forth in Section 2.1(d) (the “Institutional Accredited Investor Global Note”) deposited with the Trustee, as Securities Custodian, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.  The Institutional Accredited Investor Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate.  The aggregate principal amount of the Institutional Accredited Investor Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.

 

Exchange Securities exchanged for interests in the Rule 144A Notes, the Regulation S Notes and the Institutional Accredited Investor Notes shall be issued in the form of a permanent global Security, substantially in the form of Exhibit B, which is hereby incorporated by reference and made a part of this Indenture, deposited with the Trustee as hereinafter provided, including the appropriate legend set forth in Section 2.1(d) (the “Exchange Global Note”).  The Exchange Global Note shall be deposited upon issuance with, or on behalf of, the Trustee as Securities Custodian, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The Exchange Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate.

 

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The Rule 144A Global Note, the Regulation S Global Note, the Institutional Accredited Investor Global Note and the Exchange Global Note are sometimes collectively herein referred to as the “Global Securities.”

 

The principal of (and premium, if any) and interest (including Additional Interest, if any) on the Securities shall be payable at the office or agency of the Issuer maintained for such purpose pursuant to Section 2.3; provided, however, that, at the option of the Issuer, each installment of interest may be paid by (i) check mailed to addresses of the Persons entitled thereto as such addresses shall appear on the Securities Register or (ii) wire transfer to an account located in the United States maintained by the payee, subject to the last sentence of this paragraph.  Payments in respect of Securities represented by a Global Security (including principal, premium, if any, and interest) will be made by wire transfer of immediately available funds to the accounts specified by DTC.  At the Issuer’s option, payments in respect of Securities represented by Definitive Securities (including principal, premium, if any, and interest) may be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if the Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 15 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

 

The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage, in addition to those set forth on Exhibit A and Exhibit B and in Section 2.1(d).  The Issuer shall approve any notation, endorsement or legend on the Securities.  Each Security shall be dated the date of its authentication, and the Trustee’s certificate of authentication shall be substantially in the form set forth on Exhibit A and Exhibit B.  The terms of the Securities set forth in Exhibit A and Exhibit B are part of the terms of this Indenture and, to the extent applicable, the Issuer, the Subsidiary Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to be bound by such terms.

 

(c)           Denominations.  The Securities shall be issuable only in fully registered form, without coupons, and only in denominations of $2,000 and any integral multiple of $1,000 in excess thereof.

 

(d)           Restrictive Legends.  Unless and until (i) an Initial Security or an Additional Security issued as a Restricted Security is sold under an effective registration statement or (ii) an Initial Security or an Additional Security issued as a Restricted Security is exchanged for an Exchange Security in connection with an effective registration statement, in each case pursuant to a Registration Rights Agreement or a similar agreement:

 

(1)           the Rule 144A Global Note, the Regulation S Global Note and the Institutional Accredited Investor Global Note shall bear the following legend on the face thereof:

 

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,

 

45

 

ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION 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 ONE YEAR (IN THE CASE OF RULE 144A SECURITIES) AFTER THE LATER OF THE 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) OR 40 DAYS (IN THE CASE OF REGULATION S SECURITIES) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE DATE ON WHICH THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S, ONLY (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (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 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) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’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. THE HOLDER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER OR THE ISSUER ON OR AFTER THE RESALE

 

46

 

RESTRICTION TERMINATION DATE.

 

BY ITS ACQUISITION AND HOLDING OF THIS SECURITY, THE HOLDER THEREOF WILL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS SECURITY (OR ANY INTEREST IN THIS SECURITY) CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (‘‘ERISA’’), A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR ANY GOVERNMENTAL PLAN, CHURCH PLAN, NON-U.S. PLAN, OR OTHER PLAN SUBJECT TO OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2) THE ACQUISITION, HOLDING AND DISPOSITION OF THIS SECURITY (OR ANY INTEREST IN THIS SECURITY) WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.

 

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.

 

(2)           Each Global Security, whether or not an Initial Security, shall bear the following legend on the face thereof:

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A

 

47

 

SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

(3)           Each Security issued hereunder that has more than a de minimis amount of original issue discount for U.S. federal income tax purposes shall bear a legend in substantially the following form:

 

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES.  THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT UNDER SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.  A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR THIS SECURITY BY SUBMITTING A REQUEST FOR SUCH INFORMATION TO THE ISSUER AT THE FOLLOWING ADDRESS:  ANTERO RESOURCES CORPORATION, 1615 WYNKOOP STREET, DENVER, COLORADO 80202, ATTENTION: CHIEF FINANCIAL OFFICER.

 

(e)           Book-Entry Provisions.

 

(i)            This Section 2.1(e) shall apply only to Global Securities deposited with the Trustee, as Securities Custodian.

 

(ii)           Each Global Security initially shall (x) be registered in the name of Cede & Co. as the nominee of DTC, (y) be delivered to the Trustee as Securities Custodian and (z) bear legends as set forth in Section 2.1(d). Transfers of a Global Security (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, to the Depositary, its successors or their respective nominees, except as set forth in Section 2.1(e)(v) and 2.1(f).  If a beneficial interest in a Global Security is transferred or exchanged for a beneficial interest in another Global Security, the Trustee will (x) record a decrease in the principal amount of the Global Security being transferred or exchanged equal to the principal amount of such transfer or exchange and (y) record a like increase in the principal amount of the other Global Security.  Any beneficial interest in one Global Security that is transferred to a Person who takes delivery in the form of an interest in another Global Security, or exchanged for an interest in another Global Security, will, upon transfer or exchange, cease to be an interest in such Global Security and become an interest in the other Global Security and, accordingly, will thereafter be subject to all transfer and exchange restrictions, if any, and other procedures applicable to beneficial interests in such other Global Security for as long as it remains such an interest.

 

(iii)          Members of, or participants in, DTC (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by DTC or by the Trustee as the Securities Custodian or under such Global Security, and DTC may be treated by the Issuer, the Subsidiary Guarantors, the Trustee and any agent of the Issuer, the Subsidiary Guarantors or the Trustee as the absolute owner of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Subsidiary Guarantors, the Trustee or any agent of the Issuer, the Subsidiary Guarantors or the

 

48

 

Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices of DTC governing the exercise of the rights of a Holder of a beneficial interest in any Global Security.

 

(iv)          In connection with any transfer of a portion of the beneficial interest in a Global Security pursuant to Section 2.1(f) to beneficial owners who are required to hold Definitive Securities, the Securities Custodian shall reflect on its books and records the date and a decrease in the principal amount of such Global Security in an amount equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, one or more Definitive Securities of like tenor and amount.

 

(v)           In connection with the transfer of an entire Global Security to beneficial owners pursuant to Section 2.1(f), such Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by DTC in exchange for its beneficial interest in such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations.

 

(vi)          The registered Holder of a Global Security may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

 

(vii)         Any Holder of a Global Security shall, by acceptance of such Global Security, agree that transfers of beneficial interests in such Global Security may be effected only through a book-entry system maintained by (a) the Holder of such Global Security (or its agent) or (b) any holder of a beneficial interest in such Global Security, and that ownership of a beneficial interest in such Global Security shall be required to be reflected in a book entry.

 

(f)            Definitive Securities.

 

(i)            Except as provided below, owners of beneficial interests in Global Securities will not be entitled to receive Definitive Securities.  If required to do so pursuant to any applicable law or regulation, beneficial owners may obtain Definitive Securities in exchange for their beneficial interests in a Global Security upon written request in accordance with DTC’s and the Registrar’s procedures.  In addition, Definitive Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in a Global Security if (A) DTC notifies the Issuer that it is unwilling or unable to continue as depositary for such Global Security or DTC ceases to be a clearing agency registered under the Exchange Act, at a time when DTC is required to be so registered in order to act as depositary, and in each case a successor depositary is not appointed by the Issuer within 90 days of such notice or (B) the Issuer, in its sole discretion, executes and delivers to the Trustee and Registrar an Officers’ Certificate stating that such Global Security shall be so exchangeable.  In the event of the occurrence of any of the events specified in the preceding sentence or in clause (A) or (B) of the preceding sentence, Definitive Securities delivered in exchange for any Global Note or beneficial interests therein

 

49

 

will be registered in the names, and issued in any approved denominations, requested by or on behalf of DTC (in accordance with its customary procedures).

 

(ii)           Any Definitive Security delivered in exchange for an interest in a Global Security pursuant to Section 2.1(e)(iv) shall, except as otherwise provided by Section 2.6(d), bear the Restricted Securities Legend.

 

(iii)          If a Definitive Security is transferred or exchanged for a beneficial interest in a Global Security, the Trustee will (x) cancel such Definitive Security, (y) record an increase in the principal amount of such Global Security equal to the principal amount of such transfer or exchange and (z) in the event that such transfer or exchange involves less than the entire principal amount of the canceled Definitive Security, the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, to the transferring Holder a new Definitive Security representing the principal amount not so transferred.

 

(iv)          If a Definitive Security is transferred or exchanged for another Definitive Security, (x) the Trustee will cancel the Definitive Security being transferred or exchanged, (y) the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, one or more new Definitive Securities in authorized denominations having an aggregate principal amount equal to the principal amount of such transfer or exchange to the transferee (in the case of a transfer) or the Holder of the canceled Definitive Security (in the case of an exchange), registered in the name of such transferee or Holder, as applicable, and (z) if such transfer or exchange involves less than the entire principal amount of the canceled Definitive Security, the Issuer shall execute, and the Trustee shall authenticate and make available for delivery to the Holder thereof, one or more Definitive Securities in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Definitive Securities, registered in the name of the Holder thereof.

 

SECTION 2.2.              Execution and Authentication.  One Officer shall sign the Securities for the Issuer by manual or facsimile signature.  If the Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

 

A Security shall not be valid until an authorized officer of the Trustee manually authenticates the Security.  The signature of the Trustee on a Security shall be conclusive evidence that such Security has been duly and validly authenticated and issued under this Indenture.  A Security shall be dated the date of its authentication.

 

At any time and from time to time after the execution and delivery of this Indenture, the Trustee shall authenticate and make available for delivery:  (1) Initial Securities for original issue on the Issue Date in an aggregate principal amount of $600,000,000, (2) subject to the terms of this Indenture, Additional Securities for original issue in an unlimited principal amount, (3) Exchange Securities for issue only in an exchange offer pursuant to a Registration Rights Agreement or upon resale under an effective Shelf Registration Statement, and only in exchange for Initial Securities or Additional Securities of an equal principal amount and (4) when sold in connection with an effective registration statement, Initial Securities in the form of an Unrestricted Global Note, in each case upon a written order of the Issuer signed by one

 

50

 

Officer of the Issuer (the “Issuer Order”).  Such Issuer Order shall specify whether the Securities will be in the form of Definitive Securities or Global Securities, the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and whether the Securities are to be Initial Securities, Additional Securities or Exchange Securities.

 

The Trustee may appoint an agent (the “Authenticating Agent”) reasonably acceptable to the Issuer to authenticate the Securities.  Any such instrument shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuer.  Unless limited by the terms of such appointment, any such Authenticating Agent may authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by the Authenticating Agent.  An Authenticating Agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

 

In case the Issuer or any Subsidiary Guarantor, pursuant to Article IV or Section 10.2, as applicable, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Issuer or any Subsidiary Guarantor shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Article IV or Section 10.2, as applicable, any of the Securities authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Securities executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon Issuer Order of the successor Person, shall authenticate and make available for delivery Securities as specified in such order for the purpose of such exchange.  If Securities shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section 2.2 in exchange or substitution for or upon registration of transfer of any Securities, such successor Person, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities at the time outstanding for Securities authenticated and delivered in such new name.

 

SECTION 2.3.              Registrar and Paying Agent.  The Issuer shall maintain in the continental United States an office or agency where Securities may be presented for registration of transfer or for exchange (the “Registrar”), and an office or agency where Securities may be presented for payment (the “Paying Agent”).  The Registrar shall keep a register of the Securities and of their transfer and exchange (the “Securities Register”).  The Issuer or any of its Restricted Subsidiaries may act as Registrar or Paying Agent.  The Issuer may have one or more co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any additional paying agent and the term “Registrar” includes any co-registrar.

 

The Issuer shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisions of this Indenture that relate to such agent.  The Issuer shall notify the Trustee of the name and address of each such agent.  If the Issuer fails to

 

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maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.7.  The Issuer or any of its wholly owned Subsidiaries organized in the United States may act as Paying Agent, Registrar or transfer agent.

 

The Issuer initially appoints the Trustee as Registrar for the Securities at its corporate trust office in Dallas, Texas, and as Paying Agent for the Securities at its corporate trust office in Minneapolis, Minnesota.  The Issuer may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above.  The Registrar or Paying Agent may resign at any time upon written notice to the Issuer and the Trustee.

 

SECTION 2.4.              Paying Agent to Hold Money in Trust.  By no later than 11:00 a.m. (New York City time) on the date on which any principal of, premium, if any, or interest on any Security is due and payable, the Issuer shall deposit with the Paying Agent a sum sufficient in immediately available funds to pay such principal, premium or interest when due.  The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all money held by such Paying Agent for the payment of principal of, premium, if any, or interest on the Securities (whether such assets have been distributed to it by the Issuer or other obligors on the Securities), shall notify the Trustee in writing of any default by the Issuer or any Subsidiary Guarantor in making any such payment and shall during the continuance of any default by the Issuer (or any other obligor upon the Securities) in the making of any payment in respect of the Securities, upon the written request of the Trustee, forthwith deliver to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities together with a full accounting thereof.  If the Issuer or a Restricted Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund.  The Issuer at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds or assets disbursed by such Paying Agent.  Upon complying with this Section 2.4, the Paying Agent (if other than the Issuer or a Restricted Subsidiary) shall have no further liability for the money delivered to the Trustee.  Upon any bankruptcy, reorganization or similar proceeding with respect to the Issuer, the Trustee shall serve as Paying Agent for the Securities.

 

SECTION 2.5.              Securityholder Lists.  The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders and shall otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar, or to the extent otherwise required under the TIA, the Issuer, on its own behalf and on behalf of each of the Subsidiary Guarantors, shall furnish or cause the Registrar to furnish to the Trustee, in writing at least five 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 Securityholders and the Issuer shall otherwise comply with TIA § 312(a).

 

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SECTION 2.6.              Transfer and Exchange.

 

(a)           A Holder may transfer a Security (or a beneficial interest therein) to another Person or exchange a Security (or a beneficial interest therein) for another Security or Securities of any authorized denomination by presenting to the Trustee a written request therefor stating the name of the proposed transferee or requesting such an exchange, accompanied by any certification, opinion or other document required by this Section 2.6.  The Trustee shall promptly register any transfer or exchange that meets the requirements of this Section 2.6 by noting the same in the register maintained by the Trustee for the purpose, and no transfer or exchange shall be effective until it is registered in such register.  The transfer or exchange of any Security (or a beneficial interest therein) may only be made in accordance with this Section 2.6 and Section 2.1(e) and 2.1(f), as applicable, and, in the case of a Global Security (or a beneficial interest therein), the applicable rules and procedures of DTC, Euroclear and Clearstream.  The Trustee shall refuse to register any requested transfer or exchange that does not comply with this paragraph.

 

(b)           Transfers of Rule 144A Notes and Institutional Accredited Investor Notes. The following provisions shall apply with respect to any proposed registration of transfer of a Rule 144A Note or an Institutional Accredited Investor Note prior to the date which is one year after the later of the date of its original issue and the last date on which the Issuer or any Affiliate of Issuer was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”):

 

(i)            a registration of transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a beneficial interest therein to a QIB shall be made upon the representation of the transferee in the form as set forth on the reverse of the Security that it is purchasing for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; provided that no such written representation or other written certification shall be required in connection with the transfer of a beneficial interest in the Rule 144A Global Note to a transferee in the form of a beneficial interest in that Rule 144A Global Note in accordance with this Indenture and the applicable procedures of DTC.

 

(ii)           a registration of transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a beneficial interest therein to an IAI shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth in Section 2.8 from the proposed transferee and, if requested by the Issuer, the delivery of an opinion of counsel, certification and/or other information satisfactory to it; and

 

(iii)          a registration of transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a beneficial interest therein to a Non-U.S. Person shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set

 

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forth in Section 2.9 from the proposed transferee and, if requested by the Issuer, the delivery of an opinion of counsel, certification and/or other information satisfactory to it.

 

(c)           Transfers of Regulation S Notes.  The following provisions shall apply with respect to any proposed transfer of a Regulation S Note prior to the expiration of the Restricted Period:

 

(i)            a transfer of a Regulation S Note or a beneficial interest therein to a QIB shall be made upon the representation of the transferee, in the form of assignment on the reverse of the certificate, that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A, is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A;

 

(ii)           a transfer of a Regulation S Note or a beneficial interest therein to an IAI shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth in Section 2.8 from the proposed transferee and, if requested by the Issuer or the Trustee, the delivery of an opinion of counsel, certification and/or other information satisfactory to each of them; and

 

(iii)          a transfer of a Regulation S Note or a beneficial interest therein to a Non-U.S. Person shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth in Section 2.9 hereof from the proposed transferee and, if requested by the Issuer, receipt by the Trustee or its agent of an opinion of counsel, certification and/or other information satisfactory to the Issuer.

 

After the expiration of the Restricted Period, interests in the Regulation S Note may be transferred in accordance with applicable law without requiring the certification set forth in Section 2.8, Section 2.9 or any additional certification.

 

(d)           Restricted Securities Legend.  Upon the transfer, exchange or replacement of Securities not bearing a Restricted Securities Legend, the Registrar shall deliver Securities that do not bear a Restricted Securities Legend.  Upon the transfer, exchange or replacement of Securities bearing a Restricted Securities Legend, the Registrar shall deliver only Securities that bear a Restricted Securities Legend unless (i) Initial Securities are being exchanged for Exchange Securities in an exchange offer pursuant to a Registration Rights Agreement, in which case the Exchange Securities shall not bear a Restricted Securities Legend, (ii) an Initial Security is being transferred pursuant to a Shelf Registration Statement or other effective registration statement or (iii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Issuer and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act.  Any Additional Securities sold in a registered offering shall not be required to bear the Restricted Securities Legend.

 

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(e)           [Reserved].

 

(f)            Retention of Written Communications.  The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.1 or this Section 2.6.  The Issuer shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable prior written notice to the Registrar.

 

(g)           Obligations with Respect to Transfers and Exchanges of Securities.

 

(i)            To permit registrations of transfers and exchanges, the Issuer shall, subject to the other terms and conditions of this Article II, execute and the Trustee shall authenticate Definitive Securities and Global Securities at the Registrar’s request.

 

(ii)           No service charge shall be made to a Holder for any registration of transfer or exchange, but the Issuer may require the Holder to pay a sum sufficient to cover any transfer tax assessments or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charges payable upon exchange or transfer pursuant to Sections 2.2, 2.6, 2.10, 2.12, 3.5, 3.9, 5.8 or 9.5).

 

(iii)          The Issuer (and the Registrar) shall not be required to register the transfer of or exchange of any Security (A) for a period (1) of 15 days before a selection of Securities to be redeemed or (2) beginning 15 days before an interest payment date and ending on such interest payment date or (B) selected for redemption, except the unredeemed portion of any Security being redeemed in part.

 

(iv)          Prior to the due presentation for registration of transfer of any Security, the Issuer, any Subsidiary Guarantor, the Trustee, the Paying Agent or the Registrar may deem and treat the person in whose name a Security is registered as the owner of such Security for the purpose of receiving payment of principal of, premium, if any, and (subject to paragraph 2 of the forms of Securities attached hereto as Exhibits A and B) interest on such Security and for all other purposes whatsoever, including without limitation the transfer or exchange of such Security, whether or not such Security is overdue, and none of the Issuer, any Subsidiary Guarantor, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

 

(v)           Any Definitive Security delivered in exchange for an interest in a Global Security pursuant to Section 2.1(f) shall, except as otherwise provided by Section 2.6(d), bear the Restricted Securities Legend.

 

(vi)          All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange.

 

(h)           No Obligation of the Trustee.  The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, Agent Member or other Person with

 

55

 

respect to the accuracy of the records of DTC or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than DTC) of any notice (including any notice of redemption or purchase) or the payment of any amount or delivery of any Securities (or other security or property) under or with respect to such Securities.  All notices and communications to be given to the Holders and all payments to be made to Holders in respect of the Securities shall be given or made only to or upon the order of the registered Holders (which shall be DTC or its nominee in the case of a Global Security).  The rights of beneficial owners in any Global Security shall be exercised only through DTC subject to the applicable rules and procedures of DTC.  The Trustee may rely and shall be fully protected in relying upon information furnished by DTC with respect to its Agent Members and any beneficial owners.  The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Agent Members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

(i)            Affiliate Holders. By accepting a beneficial interest in a Global Security, any Person that is an Affiliate of the Issuer agrees to give notice to the Issuer, the Trustee and the Registrar of the acquisition and its Affiliate status.

 

SECTION 2.7.              [Reserved].

 

SECTION 2.8.              Form of Certificate to be Delivered in Connection with Transfers to Institutional Accredited Investors.

 

[Date]

 

Antero Resources Corporation
 c/o Wells Fargo Bank, National Association
 750 N. Saint Paul Place, Suite 1750

MAC T9263-170

Dallas, TX 75202
 Attention: Corporate, Municipal & Escrow Services

 

Ladies and Gentlemen:

 

This certificate is delivered to request a transfer of $[         ] principal amount of the 5.0% Senior Notes due 2025 (the “Securities”) of Antero Resources Corporation (the “Issuer”).

 

Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows:

 

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Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Taxpayer   ID Number:
    	
 
    	
 
    
					

 

The undersigned represents and warrants to you that:

 

1.             We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”)) purchasing for our own account or for the account of such an institutional “accredited investor” at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act.  We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risk of our investment in the Securities and we invest in or purchase securities similar to the Securities in the normal course of our business.  We and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

 

2.             We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence.  We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is one year after the later of the date of original issue and the last date on which the Issuer or any affiliate of the Issuer was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”) only (a) to the Issuer or any Subsidiary thereof, (b) pursuant to an effective registration statement under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act, to a person we reasonably believe is a “qualified institutional buyer” under Rule 144A of the Securities Act (a “QIB”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Securities of $250,000 for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws.  The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date.  If any resale or other transfer of the Securities is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act.  Each purchaser acknowledges that the

 

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Issuer and the Trustee reserve the right prior to any offer, sale or other transfer prior to the Resale Termination Date of the Securities pursuant to clauses (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to the Issuer and the Trustee.

 

3.             We [are][are not] an Affiliate of the Issuer.

 

	
 
    	
TRANSFEREE:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BY:
    	
 
    
				

 

SECTION 2.9.              Form of Certificate to be Delivered in Connection with Transfers Pursuant to Regulation S.

 

[Date]

 

Antero Resources Corporation
 c/o Wells Fargo Bank, National Association
 750 N. Saint Paul Place, Suite 1750

MAC T9263-170

Dallas, TX 75202
 Attention: Corporate, Municipal & Escrow Services

 

Re:                             Antero Resources Corporation (the “Issuer”) 
  5.0% Senior Notes due 2025 (the “Securities”)

 

Ladies and Gentlemen:

 

In connection with our proposed sale of $[        ] aggregate principal amount of the Securities, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:

 

(a)           the offer of the Securities was not made to a person in the United States;

 

(b)           either (i) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;

 

(c)           no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(a)(2) or Rule 904(a)(2) of Regulation S, as applicable; and

 

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(d)           the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.

 

In addition, if the sale is made during a restricted period and the provisions of Rule 903(b)(2), Rule 903(b)(3) or Rule 904(b)(1) of Regulation S are applicable thereto, we confirm that such sale has been made in accordance with the applicable provisions of Rule 903(b)(2), Rule 903(b)(3) or Rule 904(b)(1), as the case may be.

 

We also hereby certify that we [are][are not] an Affiliate of the Issuer and, to our knowledge, the transferee of the Securities [is][is not] an Affiliate of the Issuer.

 

You and the Issuer 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.  Terms used in this certificate have the meanings set forth in Regulation S.

 

	
Very truly yours,
    
	
 
    
	
[Name of Transferor]
    
	
 
    
	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signature
    	
 
    

 

SECTION 2.10.            Mutilated, Destroyed, Lost or Stolen Securities.  If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Securityholder (a) satisfies the Issuer or the Trustee that such Security has been lost, destroyed or wrongfully taken within a reasonable time after such Securityholder has notice of such loss, destruction or wrongful taking and the Registrar has not registered a transfer prior to receiving such notification, (b) makes such request to the Issuer or Trustee prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other reasonable requirements of the Trustee; provided, however, if after the delivery of such replacement Security, a protected purchaser of the Security for which such replacement Security was issued presents for payment or registration such replaced Security, the Trustee or the Issuer shall be entitled to recover such replacement Security from the Person to whom it was issued and delivered or any Person taking therefrom, except a protected purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Trustee in connection therewith.  If required by the Trustee or the Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment of the Issuer and the Trustee to protect the Issuer, the Trustee, the Paying Agent and the Registrar from any loss which any of them may suffer if a Security is replaced, and, in the absence of notice to the Issuer, any Subsidiary Guarantor or the Trustee that such Security has been acquired by a protected purchaser, the Issuer shall execute, and upon receipt of an Issuer Order the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Security or in

 

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lieu of any such destroyed, lost or wrongfully taken Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding.

 

In case any such mutilated, destroyed, lost or wrongfully taken Security has become or is about to become due and payable, the Issuer in its discretion may, instead of issuing a new Security, pay such Security.

 

Upon the issuance of any new Security under this Section 2.10, the Issuer may require that such Holder pay a sum sufficient to cover any transfer tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of counsel and of the Trustee) in connection therewith.

 

Subject to the proviso in the initial paragraph of this Section 2.10, every new Security issued pursuant to this Section in lieu of any mutilated, destroyed, lost or wrongfully taken Security shall constitute an original additional contractual obligation of the Issuer, any Subsidiary Guarantor and any other obligor upon the Securities, whether or not the mutilated, destroyed, lost or wrongfully taken Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

 

The provisions of this Section 2.10 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Securities.

 

SECTION 2.11.            Outstanding Securities.  Securities outstanding at any time are all Securities authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding.  A Security does not cease to be outstanding in the event the Issuer or an Affiliate of the Issuer holds the Security; provided, however, that (i) for purposes of determining which are outstanding for consent or voting purposes hereunder, the provisions of Section 12.6 shall apply and (ii) in determining whether the Trustee shall be protected in making a determination whether the Holders of the requisite principal amount of outstanding Securities are present at a meeting of Holders of Securities for quorum purposes or have consented to or voted in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment or modification hereunder, or relying upon any such quorum, consent or vote, only Securities which a Trust Officer of the Trustee actually knows to be held by the Issuer or an Affiliate of the Issuer shall not be considered outstanding.

 

If a Security is replaced pursuant to Section 2.10 (other than a mutilated Security surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Security is held by a protected purchaser.  A mutilated Security ceases to be outstanding upon surrender of such Security and replacement pursuant to Section 2.10.

 

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, by 11:00 a.m. (New York City time) on a Redemption Date or other maturity date money sufficient to pay all principal, premium, if any, and accrued interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or otherwise maturing, as the

 

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case may be, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

 

SECTION 2.12.            Temporary Securities.  In the event that Definitive Securities are to be issued under the terms of this Indenture, until such Definitive Securities are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Securities.  Temporary Securities shall be substantially in the form, and shall carry all rights, of Definitive Securities but may have variations that the Issuer consider appropriate for temporary Securities.  Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate Definitive Securities.  After the preparation of Definitive Securities, the temporary Securities shall be exchangeable for Definitive Securities upon surrender of the temporary Securities at any office or agency maintained by the Issuer for that purpose and such exchange shall be without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Securities, the Issuer shall execute, and the Trustee shall authenticate and make available for delivery in exchange therefor, one or more Definitive Securities representing an equal principal amount of Securities.  Until so exchanged, the Holder of temporary Securities shall in all respects be entitled to the same benefits under this Indenture as a Holder of Definitive Securities.

 

SECTION 2.13.            Cancellation.  The Issuer at any time may deliver Securities to the Trustee for cancellation.  The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment or cancellation and dispose of such Securities in accordance with its internal policies and customary procedures including delivery of a certificate describing such Securities disposed (subject to the record retention requirements of the Exchange Act) or deliver canceled Securities to the Issuer pursuant to written direction by one Officer of the Issuer.  If the Issuer or any Subsidiary Guarantor acquires any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Securities unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.13.  The Issuer may not issue new Securities to replace Securities they have paid or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange.

 

At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, transferred, redeemed, repurchased or canceled, such Global Security shall be returned by DTC or the Securities Custodian to the Trustee for cancellation or retained and canceled by the Trustee.  At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, transferred in exchange for an interest in another Global Security, redeemed, repurchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction.

 

SECTION 2.14.            Payment of Interest; Defaulted Interest.  Interest on any Security which is payable, and is punctually paid or duly provided for, on any interest payment date shall be paid to the Person in whose name such Security (or one or more predecessor

 

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Securities) is registered at the close of business on the regular record date for such payment at the office or agency of the Issuer maintained for such purpose pursuant to Section 2.3.

 

Any interest on any Security which is payable, but is not paid when the same becomes due and payable and such nonpayment continues for a period of 30 days shall forthwith cease to be payable to the Holder on the regular record date, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne by the Securities (such defaulted interest and interest thereon herein collectively called “Defaulted Interest”) shall be paid by the Issuer, at its election in each case, as provided in clause (a) or (b) below:

 

(a)           The Issuer may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner.  The Issuer shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment (the “Special Interest Payment Date”), and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided.  Thereupon the Issuer shall fix a record date (the “Special Record Date”) for the payment of such Defaulted Interest, which date shall be not more than 15 days and not less than 10 days prior to the Special Interest Payment Date and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Issuer shall promptly notify the Trustee of such Special Record Date, and in the name and at the expense of the Issuer, the Trustee shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be given in the manner provided for in Section 12.2, not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

 

(b)           The Issuer may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Issuer to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

Subject to the foregoing provisions of this Section 2.14, each Security delivered under this Indenture upon registration of, transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

 

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SECTION 2.15.            Computation of Interest.  Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months.

 

SECTION 2.16.            CUSIP, Common Code and ISIN Numbers.  The Issuer in issuing the Securities may use “CUSIP”, “Common Code” and “ISIN” numbers and, if so, the Trustee shall use “CUSIP”, “Common Code” and “ISIN” numbers in notices of redemption or purchase as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption or purchase and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption or purchase shall not be affected by any defect in or omission of such CUSIP, Common Code and ISIN numbers.  The Issuer shall promptly notify the Trustee in writing of any change in the CUSIP, Common Code and ISIN numbers.

 

SECTION 2.17.            Trustee, Paying Agent, Registrar Not Responsible for Depositary.  None of the Trustee, any Paying Agent or the Registrar shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in any Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.  The Trustee, any Paying Agent and the Registrar shall be entitled to deal with any Depositary, and any nominee thereof, that is the Holder of any Global Security for all purposes of this Indenture relating to such Global Security (including the payment of principal, premium, if any, and interest, the giving of instructions or directions by or to the owner or holder of a beneficial ownership interest in such Global Security) as the sole Holder of such Global Security and shall have no obligations to the beneficial owners thereof.  None of the Trustee, any Paying Agent or the Registrar shall have any responsibility or liability for any acts or omissions of any such Depositary with respect to any Global Security, for the records of any Depositary, including records in respect of beneficial ownership interests in respect of any Global Security, for any transactions between such Depositary and any participant in such Depositary or between or among any such Depositary, any such participant or any holder or owner of a beneficial interest in any Global Security or for any transfers of beneficial interests in any Global Security.

 

ARTICLE III

 

COVENANTS

 

SECTION 3.1.              Payment of Securities.  The Issuer shall promptly pay the principal of, premium, if any, and interest (including Additional Interest, if any) on the Securities on the dates and in the manner provided in the Securities and in this Indenture.  Principal, premium, if any, and interest (including Additional Interest, if any) shall be considered paid on the date due if by 11:00 a.m. (New York City time) on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal, premium, if any, and interest (including Additional Interest) then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture.

 

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The Issuer shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest (including Additional Interest) at the same rate to the extent lawful.

 

Notwithstanding anything to the contrary contained in this Indenture, the Issuer may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments hereunder.

 

SECTION 3.2.              Limitation on Indebtedness and Preferred Stock.

 

(a)           The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness), and the Issuer will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Issuer may Incur Indebtedness and the Issuer and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date thereof:

 

(1)           the Consolidated Coverage Ratio for the Issuer and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and

 

(2)           no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or its application.

 

(b)           Section 3.2(a) will not prohibit the Incurrence of the following Indebtedness:

 

(1)           Indebtedness under one or more Credit Facilities of (a) the Issuer or any Subsidiary Guarantor Incurred pursuant to this Section 3.2(b)(1) in an aggregate amount not to exceed the greater of (i) $4.0 billion or (ii) the sum of $400.0 million and 30.0% of the Issuer’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom  and (b) any Foreign Subsidiary Incurred pursuant  to this Section 3.2(b)(1) in an aggregate amount not to exceed $50.0 million, in each case outstanding at any one time;

 

(2)           guarantees of Indebtedness Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related guarantee shall be subordinated in right of payment to the Securities or the Guarantee to at least the same extent as the Indebtedness being guaranteed, as the case may be;

 

(3)           Indebtedness of the Issuer owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Issuer or any other Restricted Subsidiary; provided, however, that (a)(i) if the Issuer is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Securities and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Issuer nor another Subsidiary Guarantor, such Indebtedness

 

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must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this Section 3.2(b)(3);

 

(4)           Indebtedness represented by (a) the Securities issued on the Issue Date and all Guarantees, (b) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (2) and 4(a)) outstanding on the Issue Date, (c) any Exchange Securities and related guarantees issued pursuant to a Registration Rights Agreement and (d) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5) or (7) or Incurred pursuant to Section 3.2(a);

 

(5)           Permitted Acquisition Indebtedness;

 

(6)           Indebtedness Incurred in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Issuer or a Restricted Subsidiary 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 (b) obligations represented by letters of credit for the account of the Issuer or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);

 

(7)           Indebtedness of the Issuer or any Restricted Subsidiary represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Issuer or its Restricted Subsidiaries; provided that the aggregate principal amount Incurred by the Issuer or any Restricted Subsidiary pursuant to this Section 3.2(b)(7) outstanding at any time shall not exceed 2.0% of the Issuer’s Adjusted Consolidated Net Tangible Assets; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement or development so financed;

 

(8)           Preferred Stock (other than Disqualified Stock) of any Restricted Subsidiary;

 

(9)           Cash Management Obligations of the Issuer or any Subsidiary Guarantor in an aggregate amount not to exceed $50.0 million outstanding at any one time; and

 

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(10)         in addition to the items referred to in Sections 3.2(b)(1) through (9) above, Indebtedness of the Issuer and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this Section 3.2(b)(10) and then outstanding, will not exceed the greater of $250.0 million or 2.5% of the Issuer’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.

 

(c)           For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this Section 3.2:

 

(1)           in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(a) and (b), the Issuer, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;

 

(2)           all Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 3.2(b)(1);

 

(3)           guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;

 

(4)           if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 3.2(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;

 

(5)           the principal amount of any Disqualified Stock of the Issuer, or Preferred Stock of a Restricted Subsidiary, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;

 

(6)           Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and

 

(7)           the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.

 

Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional Preferred Stock or Disqualified Stock and

 

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unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2.

 

The Issuer will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness (including to issue any Disqualified Stock) other than Non-Recourse Debt.  If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Issuer shall be in Default of this Section 3.2).

 

For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that any Person may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.

 

This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness as subordinated or junior to any other senior Indebtedness merely because it has a junior priority with respect to the same collateral.

 

SECTION 3.3.              Limitation on Restricted Payments.  The Issuer will not, and will not permit any of its Restricted Subsidiaries, directly or indirectly, to:

 

(1)           declare or pay any dividend or make any payment or distribution on or in respect of the Issuer’s Capital Stock (including any payment or distribution in connection with any merger or consolidation involving the Issuer or any of its Restricted Subsidiaries) except:

 

(a)           dividends or distributions by the Issuer payable solely in Capital Stock of the Issuer (other than Disqualified Stock but including options, warrants or other rights to purchase such Capital Stock of the Issuer); and

 

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(b)           dividends or distributions payable to the Issuer or a Restricted Subsidiary and if such Restricted Subsidiary is not a Wholly-Owned Subsidiary, to minority stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation) so long as the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution;

 

(2)           purchase, repurchase, redeem, defease or otherwise acquire or retire for value any Capital Stock of the Issuer or any direct or indirect parent of the Issuer held by Persons other than the Issuer or a Restricted Subsidiary (other than in exchange for Capital Stock of the Issuer (other than Disqualified Stock));

 

(3)           purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations or Guarantor Subordinated Obligations (other than (x) Indebtedness permitted under Section 3.2(b)(3) or (y) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations or Guarantor Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase, redemption, defeasance or other acquisition or retirement for value); or

 

(4)           make any Restricted Investment in any Person;

 

(any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition, retirement or Restricted Investment referred to in clauses (1) through (4) is referred to herein as a “Restricted Payment”), if at the time the Issuer or such Restricted Subsidiary makes such Restricted Payment:

 

(a)           a Default shall have occurred and be continuing (or would result therefrom);

 

(b)           the Issuer is not able to Incur an additional $1.00 of Indebtedness pursuant to Section 3.2(a) after giving effect, on a pro forma basis, to such Restricted Payment; or

 

(c)           the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made subsequent to the Prior Issue Date would exceed the sum of:

 

(i)            50% of Consolidated Net Income for the period (treated as one accounting period) from January 1, 2013 to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which internal financial statements are in existence (or, in case such Consolidated Net Income is a deficit, minus 100% of such deficit);

 

(ii)           100% of the aggregate Net Cash Proceeds and the Fair Market Value of property or securities other than cash (including Capital

 

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Stock of Persons engaged primarily in the Oil and Gas Business or assets used in the Oil and Gas Business), in each case received by the Issuer from the issue or sale of its Capital Stock (other than Disqualified Stock) or other capital contributions subsequent to the Prior Issue Date (other than Net Cash Proceeds received from an issuance or sale of such Capital Stock to (x) management, employees, directors or any direct or indirect parent of the Issuer, to the extent such Net Cash Proceeds have been used to make a Restricted Payment pursuant to clause (5)(a) of the next succeeding paragraph, (y) a Subsidiary of the Issuer or (z) 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 Issuer or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination));

 

(iii)          the amount by which Indebtedness of the Issuer or its Restricted Subsidiaries is reduced on the Issuer’s balance sheet upon the conversion or exchange (other than by a Subsidiary of the Issuer) subsequent to the Prior Issue Date of any Indebtedness of the Issuer or its Restricted Subsidiaries convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Issuer (less the amount of any cash, or the Fair Market Value of any other property (other than such Capital Stock), distributed by the Issuer upon such conversion or exchange), together with the net proceeds, if any, received by the Issuer or any of its Restricted Subsidiaries upon such conversion or exchange; and

 

(iv)          the amount equal to the aggregate net reduction in Restricted Investments made by the Issuer or any of its Restricted Subsidiaries in any Person after the Prior Issue Date resulting from:

 

(A)          repurchases, repayments or redemptions of such Restricted Investments by such Person, proceeds realized upon the sale of such Restricted Investment (other than to a Subsidiary of the Issuer), repayments of loans or advances or other transfers of assets (including by way of dividend or distribution) by such Person to the Issuer or any Restricted Subsidiary;

 

(B)          the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the definition of “Investment”) not to exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously made by the Issuer or any Restricted Subsidiary in such Unrestricted Subsidiary, which amount in each case under this clause (iv) was included in the calculation of the amount of Restricted Payments; provided, however, that no amount will be included under this clause (iv) to the extent it is already included in Consolidated Net Income; and

 

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(C)          the sale by the Issuer or any Restricted Subsidiary (other than to the Issuer or a Restricted Subsidiary) of all or a portion of the Capital Stock of an Unrestricted Subsidiary or a distribution from an Unrestricted Subsidiary or a dividend from an Unrestricted Subsidiary (whether any such distribution or dividend is made with proceeds from the issuance by such Unrestricted Subsidiary of its Capital Stock or otherwise).

 

The provisions of the preceding paragraph will not prohibit:

 

(1)           any Restricted Payment made by exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Issuer (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Issuer or an employee stock ownership plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the Issuer or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination) or a substantially concurrent cash capital contribution received by the Issuer from its shareholders; provided, however, that (a) such Restricted Payment will be excluded from subsequent calculations of the amount of Restricted Payments and (b) the Net Cash Proceeds from such sale of Capital Stock or capital contribution will be excluded from clause (c)(ii) of the preceding paragraph;

 

(2)           any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations of the Issuer or Guarantor Subordinated Obligations of any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Subordinated Obligations of the Issuer or any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Guarantor Subordinated Obligations made by exchange for or out of the proceeds of the substantially concurrent sale of Guarantor Subordinated Obligations that, in each case, is permitted to be Incurred pursuant to Section 3.2; provided, however, that such purchase, repurchase, redemption, defeasance, acquisition or retirement for value will be excluded from subsequent calculations of the amount of Restricted Payments;

 

(3)           any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Disqualified Stock of the Issuer or a Restricted Subsidiary made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of the Issuer or such Restricted Subsidiary, as the case may be, that, in each case, is permitted to be Incurred pursuant to Section 3.2; provided, however, that such purchase, repurchase, redemption, defeasance, acquisition or retirement for value will be excluded from subsequent calculations of the amount of Restricted Payments;

 

(4)           dividends paid or distributions made within 60 days after the date of declaration if at such date of declaration such dividend or distribution would have complied with this Section 3.3; provided, however, that such dividends and distributions will be included in subsequent calculations of the amount of Restricted Payments; and provided further, however, that for purposes of clarification, this clause (4) shall not 

 

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include cash payments in lieu of the issuance of fractional shares included in clause (9) below;

 

(5)           so long as no Default has occurred and is continuing, (a) the repurchase or other acquisition of Capital Stock (including options, warrants, equity appreciation rights or other rights to purchase or acquire Capital Stock) of the Issuer held by any existing or former employees, management or directors of the Issuer or any Restricted Subsidiary or their assigns, estates or heirs, in each case pursuant to the repurchase or other acquisition provisions under employee stock option or stock purchase plans or agreements or other agreements to compensate management, employees or directors, in each case approved by the Issuer’s Board of Directors; provided that such repurchases or other acquisitions pursuant to this subclause (a) during any calendar year will not exceed $2.0 million in the aggregate (with unused amounts in any calendar year being carried over to succeeding calendar years); provided further, that such amount in any calendar year may be increased by an amount not to exceed (A) the cash proceeds received by the Issuer from the sale of Capital Stock of the Issuer to members of management or directors of the Issuer and its Restricted Subsidiaries that occurs after the Prior Issue Date (to the extent the cash proceeds from the sale of such Capital Stock have not otherwise been applied to the payment of Restricted Payments by virtue of clause (c) of the preceding paragraph), plus (B) the cash proceeds of key man life insurance policies received by the Issuer and its Restricted Subsidiaries after the Prior Issue Date, less (C) the amount of any Restricted Payments made pursuant to clauses (A) and (B) of this clause (5)(a); provided further, however, that the amount of any such repurchase or other acquisition under this subclause (a) will be excluded in subsequent calculations of the amount of Restricted Payments and the proceeds received from any such transaction will be excluded from clause (c)(ii) of the preceding paragraph; and (b) loans or advances to employees or directors of the Issuer or any Subsidiary of the Issuer, in each case as permitted by Section 402 of the Sarbanes-Oxley Act of 2002, the proceeds of which are used to purchase Capital Stock of the Issuer, or to refinance loans or advances made pursuant to this clause (5)(b), in an aggregate principal amount not in excess of $2.0 million at any one time outstanding; provided, however, that the amount of such loans and advances will be included in subsequent calculations of the amount of Restricted Payments;

 

(6)           purchases, repurchases, redemptions or other acquisitions or retirements for value of Capital Stock deemed to occur upon the exercise of stock options, warrants, rights to acquire Capital Stock or other convertible securities if such Capital Stock represents a portion of the exercise or exchange price thereof, and any purchases, repurchases, redemptions or other acquisitions or retirements for value of Capital Stock made in lieu of withholding taxes in connection with any exercise or exchange of warrants, options or rights to acquire Capital Stock; provided, however, that such acquisitions or retirements will be excluded from subsequent calculations of the amount of Restricted Payments;

 

(7)           the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Obligation (i) at a purchase price not greater than 101% of the principal amount of such Subordinated Obligation in the event of a Change of Control in accordance with provisions similar to Section 3.9 or (ii) at a 

 

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purchase price not greater than 100% of the principal amount thereof in accordance with provisions similar to Section 3.5; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Issuer has made the Change of Control Offer or Asset Disposition Offer, as applicable, as provided in such Section with respect to the Securities and has completed the repurchase or redemption of all Securities validly tendered for payment in connection with such Change of Control Offer or Asset Disposition Offer; provided, however, that such acquisitions or retirements will be included in subsequent calculations of the amount of Restricted Payments;

 

(8)           payments or distributions to dissenting stockholders pursuant to applicable law or in connection with the settlement or other satisfaction of legal claims made pursuant to or in connection with a consolidation, merger or transfer of assets; provided, however, that any payment pursuant to this clause (8) will be included in the calculation of the amount of Restricted Payments;

 

(9)           cash payments in lieu of the issuance of fractional shares; provided, however, that any payment pursuant to this clause (9) will be excluded in the calculation of the amount of Restricted Payments;

 

(10)         the declaration and payment of scheduled or accrued dividends to holders of any class of or series of Disqualified Stock of the Issuer issued after the Issue Date in accordance with Section 3.2, to the extent such dividends are included in Consolidated Interest Expense; provided, however, that any payment pursuant to this clause (10) will be excluded in the calculation of the amount of Restricted Payments;

 

(11)         Permitted Tax Distributions, if any, prior to October 16, 2013; and

 

(12)         Restricted Payments in an amount not to exceed $25 million in the aggregate since the Prior Issue Date; provided, however, that the amount of such Restricted Payments will be included in subsequent calculations of the amount of Restricted Payments.

 

The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued by the Issuer or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment, except that the Fair Market Value of any non-cash dividend or distribution made within 60 days after the date of declaration shall be determined as of such date. The Fair Market Value of any cash Restricted Payment shall be its face amount and the Fair Market Value of any non-cash Restricted Payment shall be determined in accordance with the definition of that term.  Not later than the date of making any Restricted Payment in excess of $15.0 million that will be included in subsequent calculations of the amount of Restricted Payments, the Issuer shall deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by the this Section 3.3 were computed.

 

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In the event that a Restricted Payment meets the criteria of more than one of the exceptions described in (1) through (12) above or is entitled to be made pursuant to the first paragraph above, the Issuer shall, in its sole discretion, classify such Restricted Payment.

 

The Issuer shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the last sentence of the definition of “Unrestricted Subsidiary.” For purpose of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries (except to the extent such Investments (i) are repaid or (ii) represent Permitted Investments) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investment.” Such designation will be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to the first paragraph of this Section 3.3 or under clause (12) of the second paragraph of this Section 3.3, or pursuant to the definition of “Permitted Investments,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

 

SECTION 3.4.              Limitation on Restrictions on Distributions from Restricted Subsidiaries.  The Issuer will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Restricted Subsidiary to:

 

(1)           pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligations owed to the Issuer or any Restricted Subsidiary (it being understood that the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on Common Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock);

 

(2)           make any loans or advances to the Issuer or any Restricted Subsidiary (it being understood that the subordination of loans or advances made to the Issuer or any Restricted Subsidiary to other Indebtedness Incurred by the Issuer or any Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances); or

 

(3)           sell, lease or transfer any of its property or assets to the Issuer or any Restricted Subsidiary.

 

The preceding provisions will not prohibit:

 

(i)            any encumbrance or restriction pursuant to or by reason of an agreement in effect at or entered into on the Issue Date, including, without limitation, this Indenture as in effect on such date;

 

(ii)           any encumbrance or restriction with respect to a Person pursuant to or by reason of an agreement relating to any Capital Stock or Indebtedness Incurred by a Person on or before the date on which such Person was acquired by the Issuer or another Restricted Subsidiary (other than Capital Stock or Indebtedness Incurred as consideration in, or to provide all or any portion of the funds utilized to consummate, the transaction or series of related transactions pursuant to which such Person was acquired by the Issuer or 

 

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a Restricted Subsidiary or in contemplation of the transaction) and outstanding on such date; provided that any such encumbrance or restriction shall not extend to any assets or property of the Issuer or any other Restricted Subsidiary other than the assets and property so acquired;

 

(iii)          encumbrances and restrictions contained in contracts entered into in the ordinary course of business, not relating to any Indebtedness, and that do not, individually or in the aggregate, detract from the value of, or from the ability of the Issuer and the Restricted Subsidiaries to realize the value of, property or assets of the Issuer or any Restricted Subsidiary in any manner material to the Issuer or any Restricted Subsidiary;

 

(iv)          any encumbrance or restriction with respect to a Unrestricted Subsidiary pursuant to or by reason of an agreement that the Unrestricted Subsidiary is a party to entered into before the date on which such Unrestricted Subsidiary became a Restricted Subsidiary; provided that such agreement was not entered into in anticipation of the Unrestricted Subsidiary becoming a Restricted Subsidiary and any such encumbrance or restriction shall not extend to any assets or property of the Issuer or any other Restricted Subsidiary other than the assets and property so acquired;

 

(v)           with respect to any Foreign Subsidiary, any encumbrance or restriction contained in the terms of any Indebtedness or any agreement pursuant to which such Indebtedness was Incurred if either (1) the encumbrance or restriction applies only in the event of a payment default or a default with respect to a financial covenant in such Indebtedness or agreement or (2) the Issuer determines that any such encumbrance or restriction will not materially affect the Issuer’s ability to make principal or interest payments on the Securities, as determined in good faith by the Board of Directors of the Issuer, whose determination shall be conclusive;

 

(vi)          any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement effecting a refunding, replacement or refinancing of Indebtedness Incurred pursuant to an agreement referred to in clauses (i) through (v) or clause (xii) of this paragraph or this clause (vi) or contained in any amendment, restatement, modification, renewal, supplemental, refunding, replacement or refinancing of an agreement referred to in clauses (i) through (v) or clause (xii) of this paragraph or this clause (vi); provided that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such agreement taken as a whole are no less favorable in any material respect to the holders of the Securities than the encumbrances and restrictions contained in the agreements governing the Indebtedness being refunded, replaced or refinanced;

 

(vii)         in the case of clause (3) of the first paragraph of this Section 3.4, any encumbrance or restriction:

 

(a)           that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease (including leases governing leasehold interests or farm-in agreements or farm-out agreements 

 

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relating to leasehold interests in oil and gas properties), license or similar contract, or the assignment or transfer of any such lease (including leases governing leasehold interests or farm-in agreements or farm-out agreements relating to leasehold interests in oil and gas properties), license (including, without limitation, licenses of intellectual property) or other contract;

 

(b)           contained in mortgages, pledges or other security agreements permitted under this Indenture securing Indebtedness of the Issuer or a Restricted Subsidiary to the extent such encumbrances or restrictions restrict the transfer of the property subject to such mortgages, pledges or other security agreements;

 

(c)           contained in any agreement creating Hedging Obligations permitted from time to time under this Indenture;

 

(d)           pursuant to customary provisions restricting dispositions of real property interests set forth in any reciprocal easement agreements of the Issuer or any Restricted Subsidiary;

 

(e)           restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business; or

 

(f)            provisions with respect to the disposition or distribution of assets or property in operating agreements, joint venture agreements, development agreements, area of mutual interest agreements and other agreements that are customary in the Oil and Gas Business and entered into in the ordinary course of business;

 

(viii)        any encumbrance or restriction contained in (a) purchase money obligations for property acquired in the ordinary course of business and (b) Capitalized Lease Obligations permitted under this Indenture, in each case, that impose encumbrances or restrictions of the nature described in clause (3) of the first paragraph of this Section 3.4 on the property so acquired;

 

(ix)          any encumbrance or restriction with respect to a Restricted Subsidiary (or any of its property or assets) imposed pursuant to an agreement entered into for the direct or indirect sale or disposition of all or a portion of the Capital Stock or assets of such Restricted Subsidiary (or the property or assets that are subject to such restriction) pending the closing of such sale or disposition;

 

(x)           any customary encumbrances or restrictions imposed pursuant to any agreement of the type described in the definition of “Permitted Business Investment”;

 

(xi)          encumbrances or restrictions arising or existing by reason of applicable law or any applicable rule, regulation or order;

 

(xii)         encumbrances or restrictions contained in agreements governing Indebtedness of the Issuer or any of its Restricted Subsidiaries permitted to be Incurred pursuant to an agreement entered into subsequent to the Issue Date in accordance with 

 

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Section 3.2; provided that the provisions relating to such encumbrance or restriction contained in such Indebtedness are not materially less favorable to the Issuer taken as a whole, as determined by the Board of Directors of the Issuer in good faith, than the provisions contained in the Senior Secured Credit Agreement and in this Indenture as in effect on the Issue Date;

 

(xiii)        the issuance of Preferred Stock by a Restricted Subsidiary or the payment of dividends thereon in accordance with the terms thereof; provided that issuance of such Preferred Stock is permitted pursuant to Section 3.2 and the terms of such Preferred Stock do not expressly restrict the ability of a Restricted Subsidiary to pay dividends or make any other distributions on its Capital Stock (other than requirements to pay dividends or liquidation preferences on such Preferred Stock prior to paying any dividends or making any other distributions on such other Capital Stock);

 

(xiv)        supermajority voting requirements existing under corporate charters, bylaws, stockholders agreements and similar documents and agreements;

 

(xv)         restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and

 

(xvi)        any encumbrance or restriction contained in the Senior Secured Credit Agreement as in effect as of the Issue Date, and in any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive with respect to such dividend and other payment restrictions than those contained in the Senior Secured Credit Agreement as in effect on the Issue Date.

 

SECTION 3.5.              Limitation on Sales of Assets and Subsidiary Stock.

 

The Issuer will not, and will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:

 

(1)           the Issuer or any of its Restricted Subsidiaries receives consideration at the time of such Asset Disposition at least equal to the Fair Market Value (such Fair Market Value to be determined on the date of contractually agreeing to such Asset Disposition) of the Capital Stock or other assets subject to such Asset Disposition;

 

(2)           at least 75% of the aggregate consideration received by the Issuer or any of its Restricted Subsidiaries from such Asset Disposition and all other Asset Dispositions since the Issue Date, on a cumulative basis, is in the form of cash or Cash Equivalents or Additional Assets, or any combination thereof; and

 

(3)           except as provided in the next paragraph, an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied, within 365 days from the later of the date of such Asset Disposition or the receipt of such Net Available Cash, by the Issuer or such Restricted Subsidiary, as the case may be:

 

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(a)           to prepay, repay, redeem or purchase Pari Passu Indebtedness of the Issuer (including the Securities) or a Subsidiary Guarantor or any Indebtedness (other than Disqualified Stock) of a Restricted Subsidiary that is not a Subsidiary Guarantor (in each case, excluding Indebtedness owed to the Issuer or an Affiliate of the Issuer); provided, however, that, in connection with any prepayment, repayment, redemption or purchase of Indebtedness pursuant to this clause (a), the Issuer or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid, redeemed or purchased; or

 

(b)           to invest in Additional Assets;

 

provided that pending the final application of any such Net Available Cash in accordance with clause (a) or clause (b) above, the Issuer and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net Available Cash in any manner not prohibited by this Indenture.

 

Any Net Available Cash from Asset Dispositions that is not applied or invested as provided in the preceding paragraph will be deemed to constitute “Excess Proceeds.”  Not later than the 366th day from the later of the date of such Asset Disposition or the receipt of such Net Available Cash, if the aggregate amount of Excess Proceeds exceeds $20.0 million, the Issuer will make an offer (“Asset Disposition Offer”) to all Holders of Securities and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Issuer to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Disposition (“Pari Passu Securities”) to purchase the maximum principal amount of Securities and any such Pari Passu Securities to which the Asset Disposition Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount (or, in the event such Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof) of the Securities and Pari Passu Securities plus accrued and unpaid interest, if any (or in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the procedures set forth in this Section 3.5 or the agreements governing the Pari Passu Securities, as applicable, in each case in minimum principal amount of $2,000 and integral multiples of $1,000 in excess of $2,000. If the aggregate principal amount of Securities surrendered by Holders thereof and other Pari Passu Securities surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds, the Trustee shall select the Securities to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Securities and Pari Passu Securities. To the extent that the aggregate principal amount of Securities and Pari Passu Securities so validly tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the Issuer and its Restricted Subsidiaries may use any remaining Excess Proceeds for general corporate purposes, subject to the other covenants contained in this Indenture. Upon completion of such Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero.

 

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The Asset Disposition Offer will remain open for a period of 20 Business Days following its commencement, except to the extent that a longer period is required by applicable law (the “Asset Disposition Offer Period”). No later than five Business Days after the termination of the Asset Disposition Offer Period (the “Asset Disposition Purchase Date”), the Issuer will purchase the principal amount of Securities and Pari Passu Securities required to be purchased pursuant to this Section 3.5 (the “Asset Disposition Offer Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered and not properly withdrawn, all Securities and Pari Passu Securities validly tendered and not properly withdrawn in response to the Asset Disposition Offer.

 

If the Asset Disposition Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid 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 further interest will be payable to Holders who tender Securities pursuant to the Asset Disposition Offer.

 

On or before the Asset Disposition Purchase Date, the Issuer will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Securities and Pari Passu Securities or portions of Securities and Pari Passu Securities so validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Securities and Pari Passu Securities so validly tendered and not properly withdrawn, in each case in minimum principal amount of $2,000 and integral multiples of $1,000 in excess of $2,000. The Issuer will deliver to the Trustee an Officers’ Certificate stating that such Securities or portions thereof were accepted for payment by the Issuer in accordance with the terms of this Section 3.5 and, in addition, the Issuer will deliver all certificates and notes required, if any, by the agreements governing the Pari Passu Securities. The Issuer or the paying agent, as the case may be, will promptly (but in any case not later than five Business Days after the termination of the Asset Disposition Offer Period) mail or deliver to each tendering Holder of Securities or holder or lender of Pari Passu Securities, as the case may be, an amount equal to the purchase price of the Securities or Pari Passu Securities so validly tendered and not properly withdrawn by such holder or lender, as the case may be, and accepted by the Issuer for purchase, and the Issuer will promptly issue a new Security, and the Trustee, upon delivery of an Officers’ Certificate from the Issuer, will authenticate and mail or deliver such new Security to such Holder, in a principal amount equal to any unpurchased portion of the Security surrendered; provided that each such new Security will be in a minimum principal amount of $2,000 or an integral multiple of $1,000 in excess of $2,000. In addition, the Issuer will take any and all other actions required by the agreements governing the Pari Passu Securities. Any Security not so accepted will be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer will publicly announce the results of the Asset Disposition Offer on the Asset Disposition Purchase Date.

 

The Issuer will comply, to the extent applicable, with the requirements of Rule 14e-1 of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to an Asset Disposition Offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 3.5, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have 

 

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breached its obligations under this Indenture by virtue of its compliance with such securities laws or regulations.

 

For the purposes of clause (2) of the first paragraph of this Section 3.5, the following will be deemed to be cash:

 

(1)           the assumption by the transferee of Indebtedness (other than Guarantor Subordinated Obligations or Disqualified Stock) of the Issuer or Indebtedness of a Restricted Subsidiary (other than Subordinated Obligations or Disqualified Stock of the Issuer and Guarantor Subordinated Obligations or Disqualified Stock of any Restricted Subsidiary that is a Subsidiary Guarantor) and the release of the Issuer or such Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset Disposition (in which case the Issuer will, without further action, be deemed to have applied such deemed cash to Indebtedness in accordance with clause (3)(a) of the first paragraph of this Section 3.5;

 

(2)           with respect to any Asset Disposition of oil and gas properties by the Issuer or any of its Restricted Subsidiaries in which the Issuer or such Restricted Subsidiary still retains an interest, any agreement by the transferee (or any Affiliate thereof) to pay all or a portion of the costs and expenses related to the exploration, development, completion or production of such properties and activities related thereto; and

 

(3)           securities, notes or other obligations received by the Issuer or any Restricted Subsidiary from the transferee that are converted by the Issuer or such Restricted Subsidiary into cash within 180 days after receipt thereof.

 

Notwithstanding the foregoing, the 75% limitation referred to in clause (2) of the first paragraph of this Section 3.5 shall be deemed satisfied with respect to any Asset Disposition in which the cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance with the foregoing provision on an after-tax basis, is equal to or greater than what the after-tax proceeds would have been had such Asset Disposition complied with the aforementioned 75% limitation.

 

The requirement of clause (3)(b) of the first paragraph of this Section 3.5 shall be deemed to be satisfied if an agreement (including a lease, whether a capital lease or an operating lease) committing to make the acquisitions or expenditures referred to therein is entered into by the Issuer or its Restricted Subsidiary within the specified time period and such Net Available Cash is subsequently applied in accordance with such agreement within six months following such agreement.

 

The Issuer will not, and will not permit any Restricted Subsidiary to, engage in any Asset Swaps, unless:

 

(1)           at the time of entering into such Asset Swap and immediately after giving effect to such Asset Swap, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and

 

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(2)           in the event such Asset Swap involves the transfer by the Issuer or any Restricted Subsidiary of assets having an aggregate Fair Market Value in excess of $20.0 million, the terms of such Asset Swap have been approved by a majority of the members of the Board of Directors of the Issuer.

 

SECTION 3.6.              Limitation on Liens.  The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien (the “Initial Lien”) other than Permitted Liens upon any of its property or assets (including Capital Stock of Restricted Subsidiaries), including any income or profits therefrom, whether owned on the date of this Indenture or acquired after that date, which Lien is securing any Indebtedness, unless contemporaneously with the Incurrence of such Lien effective provision is made to secure the Securities or, in respect of Liens on any Restricted Subsidiary’s property or assets, any Guarantee of such Restricted Subsidiary, equally and ratably with (or senior in priority to in the case of Liens with respect to Subordinated Obligations or Guarantor Subordinated Obligations, as the case may be) the Indebtedness secured by such Lien for so long as such Indebtedness is so secured.

 

Any Lien created for the benefit of the holders of the Securities 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 3.7.              [Reserved].

 

SECTION 3.8.              Limitation on Affiliate Transactions.  The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into, make, amend or conduct any transaction (including making a payment to, the purchase, sale, lease or exchange of any property or the rendering of any service), contract, agreement or understanding with or for the benefit of any Affiliate of the Issuer (an “Affiliate Transaction”) unless:

 

(1)           the terms of such Affiliate Transaction are not materially less favorable to the Issuer or such Restricted Subsidiary, as the case may be, than those that could reasonably be expected to be obtained in a comparable transaction at the time of such transaction in arm’s-length dealings with a Person who is not such an Affiliate; and

 

(2)           either:

 

(a)           if such Affiliate Transaction involves an aggregate consideration in excess of $20.0 million but not greater than $50.0 million, the Issuer delivers to the Trustee an Officers’ Certificate certifying that such Affiliate Transaction satisfies the criteria in clause (1) above; or

 

(b)           if such Affiliate Transaction involves an aggregate consideration in excess of $50.0 million, the Issuer delivers to the Trustee a Board Resolution adopted by a majority of the members of the Board of Directors of the Issuer having no personal stake in such transaction approving the terms of such transaction and set forth in an Officers’ Certificate certifying that such Affiliate Transaction satisfies the criteria in clause (1) above.

 

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The preceding paragraph will not apply to:

 

(1)           any Restricted Payment permitted to be made pursuant to Section 3.3 or any Permitted Investment;

 

(2)           any issuance of Capital Stock (other than Disqualified Stock), or other payments, awards or grants in cash, Capital Stock (other than Disqualified Stock) or otherwise pursuant to, or the funding of, employment or severance agreements and other compensation arrangements, options to purchase Capital Stock (other than Disqualified Stock) of the Issuer, restricted stock plans, long-term incentive plans, stock appreciation rights plans, participation plans or similar employee benefits plans and/or insurance and indemnification arrangements provided to or for the benefit of directors and employees approved by the Board of Directors of the Issuer;

 

(3)           loans or advances to employees, officers or directors in the ordinary course of business of the Issuer or any of its Restricted Subsidiaries;

 

(4)           advances to or reimbursements of employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business of the Issuer or any of its Restricted Subsidiaries;

 

(5)           any transaction between the Issuer and a Restricted Subsidiary or between Restricted Subsidiaries, and guarantees issued by the Issuer or a Restricted Subsidiary for the benefit of the Issuer or a Restricted Subsidiary, as the case may be, in accordance with Section 3.2;

 

(6)           any transaction with a joint venture or similar entity which would constitute an Affiliate Transaction solely because the Issuer or a Restricted Subsidiary owns, directly or indirectly, an Equity Interest in or otherwise controls such joint venture or similar entity;

 

(7)           the issuance or sale of any Capital Stock (other than Disqualified Stock) of the Issuer to an Affiliate, or the receipt by the Issuer of any capital contribution from its shareholders;

 

(8)           indemnities of officers, directors and employees of the Issuer or any of its Restricted Subsidiaries permitted by bylaw or statutory provisions and any employment agreement or other employee compensation plan or arrangement entered into in the ordinary course of business by the Issuer or any of its Restricted Subsidiaries;

 

(9)           the payment of reasonable compensation and fees paid to, and indemnity provided on behalf of, officers or directors of the Issuer or any Restricted Subsidiary;

 

(10)         the performance of obligations of the Issuer or any of its Restricted Subsidiaries under the terms of any agreement to which the Issuer or any of its Restricted Subsidiaries is a party as of or on the Issue Date, as these agreements may be amended, modified, supplemented, extended or renewed from time to time; provided, however, that any future amendment, modification, supplement, extension or renewal entered into after 

 

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the Issue Date will be permitted only to the extent that its terms are not materially more disadvantageous, taken as a whole, to the holders of the Securities than the terms of the agreements in effect on the Issue Date;

 

(11)         transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, provided that in the reasonable determination of the Board of Directors of the Issuer or the senior management of the Issuer, such transactions are on terms not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that could reasonably be expected to be obtained in a comparable transaction at such time on an arm’s-length basis from a Person that is not an Affiliate of the Issuer;

 

(12)         transactions with a Person (other than an Unrestricted Subsidiary) that is an Affiliate of the Issuer solely because the Issuer owns, directly or through a Restricted Subsidiary, an Equity Interest in such Person; and

 

(13)         transactions between the Issuer or any Restricted Subsidiary and any Person, a director of which is also a director of the Issuer or any direct or indirect parent of the Issuer, and such director is the sole cause for such Person to be deemed an Affiliate of the Issuer or any Restricted Subsidiary; provided, however, that such director shall abstain from voting as a director of the Issuer or such direct or indirect parent, as the case may be, on any matter involving such other Person.

 

SECTION 3.9.              Purchase of Securities Upon a Change of Control.

 

If a Change of Control occurs, unless the Issuer has previously or concurrently exercised its right to redeem all of the Securities pursuant to Section 5.1 and paragraph 5 of the Securities or one of the other two exceptions described below in the fifth paragraph of this Section 3.9 applies, each Holder will have the right to require the Issuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess of $2,000) of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount of the Securities plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

 

Within 30 days following any Change of Control, unless the Issuer has previously or concurrently exercised its right to redeem all of the Securities pursuant to Section 5.1 and paragraph 5 of the Securities or one of the other two exceptions described below in the fifth paragraph of this Section 3.9 applies, the Issuer will send a notice (the “Change of Control Offer”) to each Holder, with a copy to the Trustee, stating:

 

(1)           that a Change of Control has occurred and that such Holder has the right to require the Issuer to purchase such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount of such Securities plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on a 

 

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record date to receive interest on the relevant interest payment date) (the “Change of Control Payment”);

 

(2)           the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is sent) (the “Change of Control Payment Date”);

 

(3)           that any Security not properly tendered will remain outstanding and continue to accrue interest;

 

(4)           that unless the Issuer defaults in the payment of the Change of Control Payment, all Securities accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

 

(5)           that Holders electing to have any Definitive Securities purchased pursuant to a Change of Control Offer will be required to surrender such Securities, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Securities in certificated form completed, to the Paying Agent specified in the notice 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;

 

(6)           that Holders will be entitled to withdraw their tendered Securities and their election to require the Issuer to purchase such Securities, provided that the Paying Agent receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder of the Securities, the principal amount of Securities tendered for purchase, and a statement that such Holder is withdrawing its tendered Securities and its election to have such Securities purchased;

 

(7)           that if the Issuer is repurchasing a portion of the Security of any Holder, the Holder will be issued a new Note equal in principal amount to the unpurchased portion of the Note surrendered, provided that the unpurchased portion of the Note must be equal to a minimum principal amount of $2,000 and an integral multiple of $1,000 in excess of $2,000; and

 

(8)           the procedures determined by the Issuer, consistent with this Indenture, that a Holder must follow in order to have its Securities repurchased.

 

On the Change of Control Payment Date, the Issuer will, to the extent lawful:

 

(1)           accept for payment all Securities or portions of Securities (in a minimum principal amount of $2,000 and integral multiples of $1,000 in excess of $2,000) properly tendered pursuant to the Change of Control Offer and not properly withdrawn;

 

(2)           deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Securities or portions of Securities accepted for payment; and

 

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(3)           deliver or cause to be delivered to the Trustee the Securities so accepted together with an Officers’ Certificate stating the aggregate principal amount of Securities or portions of Securities being purchased by the Issuer.

 

The Paying Agent will promptly mail or deliver to each Holder of Securities accepted for payment the Change of Control Payment for such Securities, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Security equal in principal amount to any unpurchased portion of the Securities surrendered, if any; provided that each such new Note will be in a minimum principal amount of $2,000 or an integral multiple of $1,000 in excess of $2,000.

 

If the Change of Control Payment Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest, will be paid to the Person in whose name a Security is registered at the close of business on such record date, and no further interest will be payable to Holders who tender pursuant to the Change of Control Offer.

 

The Issuer is not required to make a Change of Control Offer upon a Change of Control if (i) any other Person makes the Change of Control Offer in the manner, at the times and otherwise in compliance with this Section 3.9 applicable to a Change of Control Offer made by the Issuer and purchases all Securities validly tendered and not properly withdrawn under such Change of Control Offer, (ii) notice of redemption of all outstanding Securities has been given pursuant to Section 5.5 of this Indenture, 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 Issuer has made an offer to purchase (an “Alternate Offer”) any and all Securities validly tendered at a cash price equal to or higher than the Change of Control Payment and has purchased all Securities properly tendered in accordance with the terms of such Alternate Offer.

 

A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon the occurrence of a Change of Control, if a definitive agreement is in place for the Change of Control at the time of making the Change of Control Offer.

 

The Issuer will comply, to the extent applicable, with the requirements of Rule 14e-1 of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities as a result of a Change of Control.  To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 3.9, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 3.9 by virtue of its compliance with such securities laws or regulations.

 

If Holders of not less than 90% in aggregate principal amount of the outstanding Securities validly tender and do not withdraw such Securities in a Change of Control Offer or Alternate Offer and the Issuer, or any other Person making a Change of Control Offer in lieu of the Issuer as described above, purchases all of the Securities validly tendered and not withdrawn by such Holders, the Issuer will have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer or Alternate Offer, as applicable, to redeem all Securities that remain outstanding 

 

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following such purchase at a redemption price in cash equal to the applicable Change of Control Payment plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

 

The Issuer’s obligation to make a Change of Control Offer pursuant to this Section 3.9 may be waived or modified or terminated with the consent of the Holders of a majority in principal amount of the Securities then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Securities) prior to the occurrence of such Change of Control.

 

SECTION 3.10.            Provision of Financial Information.  Whether or not the Issuer is subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act, to the extent not prohibited by the Exchange Act, the Issuer will file with the SEC, and make available to the Trustee and the Holders of the Securities without cost to any Holder, the annual reports and the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation within the time periods specified therein with respect to a non-accelerated filer. In the event that the Issuer is not permitted to file such reports, documents and information with the SEC pursuant to the Exchange Act, the Issuer will nevertheless make available such Exchange Act information to the Trustee and the Holders of the Securities without cost to any Holder as if the Issuer were subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act within the time periods specified therein with respect to a non-accelerated filer.

 

If the Issuer has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the financial information required will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in any accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of the Issuer and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries.

 

The availability of the foregoing materials on the SEC’s website or on the Issuer’s website shall be deemed to satisfy the foregoing delivery obligations.

 

For so long as any Securities remain outstanding and constitute “restricted securities” under Rule 144, the Issuer will furnish to the holders of the Securities, and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

The Trustee shall have no obligation to determine if and when the reports, information and documents of the Issuer are filed with the Commission via the EDGAR system and available on the Commission’s EDGAR website.

 

Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, 

 

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including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely conclusively on Officers’ Certificates).  The Trustee is under no duty to examine such reports, information or documents to ensure compliance with the provision of this Indenture or to ascertain the correctness or otherwise of the information or the statements contained therein.

 

SECTION 3.11.            Future Subsidiary Guarantors.  The Issuer will cause (a) each of its Wholly-Owned Subsidiaries (other than a Foreign Subsidiary) formed or acquired after the Issue Date and (b) any other Domestic Subsidiary that is not already a Subsidiary Guarantor that guarantees any of the Issuer’s Indebtedness or any Indebtedness of a Subsidiary Guarantor, in each case to execute and deliver to the Trustee within 30 days a supplemental indenture (in substantially the form specified in Exhibit C to this Indenture) pursuant to which such Subsidiary will unconditionally guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any, and interest on the Securities on a senior basis; provided that any Restricted Subsidiary that constitutes an Immaterial Subsidiary need not become a Subsidiary Guarantor until such time as it ceases to be an Immaterial Subsidiary.

 

SECTION 3.12.            Maintenance of Office or Agency.  The Issuer will maintain an office or agency where the Securities may be presented or surrendered for payment, where, if applicable, the Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuer in respect of the Securities and this Indenture may be served.  The corporate trust office of the Trustee indicated in Section 2.3 shall be such office or agency of the Issuer, unless the Issuer shall designate and maintain some other office or agency for one or more of such purposes.  The Issuer will give prompt written notice to the Trustee of any change in the location of any such office or agency.  If at any time the Issuer shall fail to maintain any such required office or agency or shall fail 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 indicated in Section 12.2, and the Issuer hereby appoint the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

 

The Issuer may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation.  The Issuer will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

 

SECTION 3.13.            Corporate Existence.  Except as otherwise provided in Article IV, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory), licenses and franchises; provided, however, that the Issuer shall not be required to preserve any such right, license or franchise if it shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer.

 

SECTION 3.14.            Payment of Taxes.  The Issuer shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all material taxes, assessments and governmental charges levied or imposed upon the Issuer or any Subsidiary or upon the income, profits or property of the Issuer or any Subsidiary; provided, however, that the 

 

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Issuer shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment or charge the amount, applicability or validity of which is being contested in good faith by appropriate proceedings.

 

SECTION 3.15.            Compliance Certificate.  The Issuer and the Subsidiary Guarantors shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuer ending after the Issue Date a statement (which need not be an Officers’ Certificate) signed by the principal executive officer, the principal accounting officer or the principal financial officer of each of the Issuer and the Subsidiary Guarantors, stating that a review of the activities of the Issuer and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether each of the Issuer and the Subsidiary Guarantors has performed its obligations under this Indenture, and further stating whether or not the signers know of any Default or Event of Default that occurred during such period.  If they do, the certificate shall describe such Default or Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.  The Issuer also shall comply with TIA § 314(a)(4).

 

SECTION 3.16.            Further Instruments and Acts.  Upon request of the Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

SECTION 3.17.            Statement by Officers as to Default.  The Issuer shall, so long as any Security is outstanding, deliver to the Trustee within thirty days after the occurrence of a Default, a written notice setting forth the details of such Default, and what action the Issuer is taking or proposing to take with respect thereto.

 

SECTION 3.18.            Covenant Termination.  From and after the occurrence of an Investment Grade Rating Event, the Issuer and its Restricted Subsidiaries will no longer be subject to the provisions of this Indenture described above in Sections 3.2, 3.3, 3.4, 3.5, 3.8 and Section 4.1(a)(3) hereof.

 

After the foregoing covenants have been terminated, the Issuer may not designate any of its Subsidiaries as Unrestricted Subsidiaries pursuant to the second sentence of the definition of “Unrestricted Subsidiary.” The Issuer shall deliver an Officers’ Certificate to the Trustee, specifying (i) if a termination of the foregoing covenants under this Section 3.18 has occurred and (iii) the date of the commencement of any termination of the foregoing covenants under this Section 3.18. The Trustee shall not have any duty to monitor whether or not a termination of the foregoing covenants has occurred, nor any duty to notify the Securityholders of any of the foregoing.

 

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ARTICLE IV

 

SUCCESSOR COMPANY

 

SECTION 4.1.              Merger and Consolidation.

 

(a)           The Issuer will not consolidate with or merge with or into or wind up into (whether or not it is the surviving Person), or sell, lease, transfer, convey or otherwise dispose of all or substantially all its assets in one or more related transactions to, any Person, unless:

 

(1)           the resulting, surviving or transferee Person (the “Successor Company”) will be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and the Successor Company (if not the Issuer) will expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Issuer under this Indenture and the Securities;

 

(2)           immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any Subsidiary of the Successor Company as a result of such transaction as having been Incurred by the Successor Company or such Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;

 

(3)           immediately after giving effect to such transaction on a pro forma basis and any related financing transactions as if the same had occurred at the beginning of the applicable four quarter period, either (A) the Successor Company would be able to Incur at least an additional $1.00 of Indebtedness pursuant to Section 3.2(a) or (B) the Consolidated Coverage Ratio of the Issuer is equal to or greater than the Consolidated Coverage Ratio of the Issuer immediately before such transaction;

 

(4)           if the Issuer is not the Successor Company, each Subsidiary Guarantor (unless it is the other party to the transactions, in which case clause (1) shall apply) shall have by supplemental indenture confirmed that its Guarantee shall apply to the Successor Company’s obligations in respect of this Indenture and the Securities and that its Guarantee shall continue to be in effect; and

 

(5)           the Issuer shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such transaction and such supplemental indenture (if any) comply with this Indenture.

 

For purposes of this Section 4.1, the sale, lease, transfer, conveyance or other disposition of all or substantially all of the assets of one or more Subsidiaries of the Issuer, which assets, if held by the Issuer instead of such Subsidiaries, would constitute all or substantially all of the assets of the Issuer on a consolidated basis, shall be deemed to be the disposition of all or substantially all of the assets of the Issuer.

 

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The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture; and its predecessor, except in the case of a lease of all or substantially all its assets, will be released from all obligations under this Indenture and the Securities.

 

Notwithstanding the preceding clause (3), (x) any Restricted Subsidiary may consolidate with, merge into or wind up into, or dispose of all or part of its assets to, the Issuer, and the Issuer may consolidate with, merge into or wind up into, or dispose of all or part of its assets to, a Subsidiary Guarantor and (y) the Issuer may merge with or into an Affiliate incorporated solely for the purpose of reorganizing the Issuer in another jurisdiction; and provided further that, in the case of a Restricted Subsidiary that consolidates with, merges into, winds up into or disposes of all or part of its assets to, the Issuer, the Issuer will not be required to comply with the preceding clause (5).

 

(b)           In addition, the Issuer will not permit any Subsidiary Guarantor to consolidate with, merge with or into or wind up into, and will not permit the disposition of all or substantially all of the assets of any Subsidiary Guarantor to, any Person (other than the Issuer or another Subsidiary Guarantor) unless:

 

(1) (a) the resulting, surviving or transferee Person will be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and such Person (if not such Subsidiary Guarantor) will expressly assume, by supplemental indenture, executed and delivered to the Trustee, all the obligations of such Subsidiary Guarantor under its Guarantee; and (b) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the resulting, surviving or transferee Person or any Restricted Subsidiary as a result of such transaction as having been Incurred by such Person or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; or

 

(2)           the transaction results in the release of the Subsidiary Guarantor from its obligations under this Indenture and its Guarantee after and upon compliance with the provisions of Section 10.2 and

 

(3)           the Issuer will have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such transaction and such supplemental indenture (if any) comply with this Indenture.

 

ARTICLE V

 

REDEMPTION OF SECURITIES

 

SECTION 5.1.              Redemption.  The Securities may be redeemed (a) as a whole or from time to time in part, subject to the conditions and at the redemption prices specified in paragraph 5 of the form of Securities set forth in Exhibit A and Exhibit B hereto, which are hereby incorporated by reference and made a part of this Indenture, or (b) as a whole, and not less than as a whole, subject to the conditions and at the redemption price specified in the 

 

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penultimate paragraph of Section 3.9, in each case together with accrued and unpaid interest (including Additional Interest) to the Redemption Date.

 

SECTION 5.2.              Applicability of Article.  Redemption of Securities at the election of the Issuer, as permitted by any provision of this Indenture, shall be made in accordance with such provision and this Article.

 

SECTION 5.3.              Election to Redeem; Notice to Trustee.  The election of the Issuer to redeem any Securities pursuant to Section 5.1 shall be evidenced by an Officers’ Certificate of the Issuer.  In case of any redemption at the election of the Issuer, the Issuer shall, not later than five Business Days prior to giving notice of any redemption pursuant to Section 5.5 (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date and of the principal amount of Securities to be redeemed and, in the case of any redemption of less than all Securities, shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Securities to be redeemed pursuant to Section 5.4.  Any such notice may be cancelled at any time prior to notice of such redemption being sent to any Holder and shall thereby be void and of no effect.

 

SECTION 5.4.              Selection by Trustee of Securities to Be Redeemed.  If less than all the Securities are to be redeemed at any time pursuant to an optional redemption, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the outstanding Securities not previously called for redemption, in compliance with the requirements, as set forth in an Officers’ Certificate delivered by the Issuer to the Trustee, of the principal national securities exchange, if any, on which such Securities are listed, or, if such Securities are not so listed, then on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate (or, in the case of Global Securities, the Trustee will select Securities for redemption based on such method as DTC may prescribe) and which may provide for the selection for redemption of portions of the principal of the Securities in denominations of $2,000 or larger integral multiples of $1,000; provided, however, that no such partial redemption shall reduce the portion of the principal amount of a Security not redeemed to less than $2,000.

 

The Trustee shall promptly notify the Issuer in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the method it has chosen for the selection of Securities and the principal amount thereof to be redeemed.

 

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.

 

SECTION 5.5.              Notice of Redemption.

 

(a)           Notice of redemption shall be given in the manner provided for in Section 12.2, not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, except that that redemption notices may be sent more than 60 days prior to a Redemption Date if the notice is issued in connection with a legal defeasance 

 

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or covenant defeasance of the Securities or a satisfaction and discharge of this Indenture pursuant to Article VIII.  At the Issuer’s request, the Trustee shall give notice of redemption in the Issuer’s name and at the Issuer’s expense; provided, however, that the Issuer shall deliver to the Trustee, at least five Business Days prior to the giving of such notice (unless a shorter period shall be satisfactory to the Trustee), an Issuer Order requesting that the Trustee give such notice at the Issuer’s expense and setting forth the information to be stated in such notice as provided in the following items.

 

All notices of redemption shall state:

 

(1)           the Redemption Date,

 

(2)           the redemption price, if then determinable, and otherwise the method for its determination and the amount of accrued interest (including Additional Interest) to the Redemption Date payable as provided in Section 5.7, if any,

 

(3)           if less than all outstanding Securities are to be redeemed, the identification of the particular Securities (or portion thereof) to be redeemed, as well as the aggregate principal amount of Securities to be redeemed and the aggregate principal amount of Securities to be outstanding after such partial redemption,

 

(4)           in case any Security is to be redeemed in part only, the notice which relates to such Security shall state that on and after the Redemption Date, upon surrender of such Security, the Holder will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed,

 

(5)           that on the Redemption Date, the redemption price (and accrued interest (including Additional Interest), if any, to the Redemption Date payable as provided in Section 5.7) will become due and payable upon each such Security, or the portion thereof, to be redeemed, and, unless the Issuer defaults in making the redemption payment, that interest on Securities called for redemption (or the portion thereof) will cease to accrue on and after said date,

 

(6)           the place or places where such Securities are to be surrendered for payment of the redemption price and accrued interest, if any,

 

(7)           the name and address of the Paying Agent,

 

(8)           that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price,

 

(9)           the CUSIP, Common Code and ISIN numbers, if applicable, and that no representation is made as to the accuracy or correctness of the CUSIP, Common Code and ISIN numbers, if applicable, if any, listed in such notice or printed on the Securities,

 

(10)         the Section of this Indenture or the paragraph of the Securities pursuant to which the Securities are to be redeemed, and

 

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(11)         if in connection with any conditional notice of redemption pursuant to the Issuer’s right to redeem all of the Securities upon a Change of Control,  and in compliance with Section 5.5(b), that such redemption is conditional upon such Change of Control occurring.

 

(b)           Any redemption or notice of redemption may, at the Issuer’s discretion, be subject to one or more conditions precedent and, in the case of a redemption with the Net Cash Proceeds of an Equity Offering, be given prior to the completion of the related Equity Offering.

 

SECTION 5.6.              Deposit of Redemption Price.  Prior to 11:00 a.m., New York City time, on any Redemption Date, the Issuer shall deposit with the Trustee or with a Paying Agent (or, if the Issuer or any of the Issuer’s Restricted Subsidiaries is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.4) an amount of money sufficient (as determined by the Issuer) to pay the redemption price of and accrued interest (including Additional Interest) on, all the Securities which are to be redeemed on that date, other than Securities or portions of Securities called for redemption that are beneficially owned by the Issuer and have been delivered by the Issuer to the Trustee for cancellation.

 

SECTION 5.7.              Securities Payable on Redemption Date.  Notice of redemption having been given as aforesaid, the Securities or portions of Securities so to be redeemed without a condition precedent shall, on the Redemption Date, become due and payable at the redemption price therein specified (together with accrued interest, if any, to the Redemption Date), and from and after such date (unless the Issuer shall default in the payment of the redemption price and accrued interest) such Securities shall cease to bear interest and the only right of the Holders thereof will be to receive payment of the redemption price and, subject to the next sentence, unpaid interest on such Securities to the Redemption Date.  Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Issuer at the redemption price, together with accrued interest, if any, to the Redemption Date, provided, however, that installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holder of such Security, or one or more predecessor Securities, registered as such as of the relevant record date.

 

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the unpaid principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Securities.

 

SECTION 5.8.              Securities Redeemed in Part.  Any Security which is to be redeemed only in part (pursuant to the provisions of this Article) shall be surrendered at the office or agency of the Issuer maintained for such purpose pursuant to Section 3.12 (with, if the Issuer or the Trustee so require, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing), and the Issuer shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security at the expense of the Issuer, a new Security or Securities, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered; provided, that each such new Security will be in a principal amount of $2,000 or larger integral multiple of $1,000.

 

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ARTICLE VI

 

DEFAULTS AND REMEDIES

 

SECTION 6.1.              Events of Default.  An “Event of Default” wherever used herein, means any one of the following events in relation to the Securities (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(1)           default in any payment of interest or Additional Interest, if any, on any Security when due, continued for 30 days;

 

(2)           default in the payment of principal of or premium, if any, on any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration of acceleration or otherwise;

 

(3)           failure by the Issuer or any Subsidiary Guarantor to comply with its obligations Section 4.1;

 

(4)           failure by the Issuer to comply for 30 days (or 180 days in the case of a Reporting Failure) after notice has been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder with Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.8, 3.9, 3.10 and 3.11 (in each case, other than a failure to purchase Securities which will constitute an Event of Default under clause (2) above and other than a failure to comply with Section 4.1 which is covered by clause (3));

 

(5)           failure by the Issuer to comply with any agreement in this Indenture (other than an agreement, a default in or failure to comply with that is elsewhere in this Section specifically dealt with) and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

 

(6)           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 borrowed by the Issuer or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Issuer or any of its Restricted Subsidiaries), other than Indebtedness owed to the Issuer or a Restricted Subsidiary, whether such Indebtedness or guarantee existed at the Issue Date, or was created thereafter, which default:

 

(a)           is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in 

 

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such Indebtedness (and any extensions of any grace period) (“payment default”); or

 

(b)           results in the acceleration of such Indebtedness prior to its Stated Maturity (the “cross acceleration provision”);

 

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 $10.0 million or more;

 

(7)           the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the last audited consolidated financial statements for the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Issuer bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the last audited consolidated financial statements for the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary, under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the last audited consolidated financial statements for the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary, or of any substantial part of its or their property, or ordering the winding up or liquidation of its or their affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or

 

(8)           the commencement by the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the last audited consolidated financial statements for the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it or them to the entry of a decree or order for relief in respect of the Issuer or in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it or them, or the filing by it or them of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it or them to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the last audited consolidated financial statements for the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary or of any substantial part of its or their property, or the making by it or them of an assignment for the benefit 

 

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of creditors, or the admission by it or them in writing of its or their inability to pay its or their debts generally as they become due, or the taking of corporate action by the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the last audited consolidated financial statements for the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary in furtherance of any such action; or

 

(9)           failure by the Issuer or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Issuer and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $10.0 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 or discharged, and there shall be any period of 60 consecutive days following entry of such final judgment or decree during which a stay of enforcement of such final judgment or decree, by reason of pending appeal or otherwise, shall not be in effect (the “judgment default provision”); or

 

(10)         any Guarantee of a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary, ceases to be in full force and effect (except as contemplated by the terms of this Indenture) or is declared null and void in a judicial proceeding or the Issuer or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that, taken together (as of the latest audited consolidated financial statements of the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary, denies or disaffirms its obligations under this Indenture or its Guarantee.

 

However, a default under clauses (4) and (5) of this Section 6.1 will not constitute an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the outstanding Securities notify the Issuer in writing and, in the case of a notice given by the Holders, the Trustee of the default and the Issuer does not cure such default within the time specified in clauses (4) and (5) of this Section 6.1 after receipt of such notice.

 

SECTION 6.2.              Acceleration.  If an Event of Default (other than an Event of Default described in Section 6.1 (7) and (8)) occurs and is continuing, the Trustee by notice to the Issuer, or the Holders of at least 25% in principal amount of the outstanding Securities by notice to the Issuer and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, accrued and unpaid interest, if any, on all the Securities to be due and payable. If an Event of Default described in Section 6.1 (7) and (8) occurs and is continuing, the principal of, premium, if any, accrued and unpaid interest, if any, on all the Securities will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.  Notwithstanding the foregoing, if an Event of Default specified in Section 6.1 (6)  shall have occurred and be continuing, such Event of Default and any consequential acceleration (to the extent not in violation of any applicable law or in conflict with any judgment or decree of a court of competent jurisdiction) shall be automatically rescinded if (i) the Indebtedness that is the subject of such Event of Default has been repaid or (ii) if the default relating to such Indebtedness is waived by the holders of such Indebtedness or 

 

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cured and if such Indebtedness has been accelerated, then the holders thereof have rescinded their declaration of acceleration in respect of such Indebtedness, in each case within 20 days after the declaration of acceleration with respect thereto, and (iii) any other existing Events of Default, except nonpayment of principal, premium or interest on the Securities that became due solely because of the acceleration of the Securities, have been cured or waived.

 

SECTION 6.3.              Other Remedies.  If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of (or premium) or interest (including Additional Interest) on the Securities or to enforce the performance of any provision of the Securities, this Indenture or the Guarantees.

 

The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Securityholder 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.  No remedy is exclusive of any other remedy.  All available remedies are cumulative.

 

SECTION 6.4.              Waiver of Past Defaults.  The Holders of a majority in principal amount of the outstanding Securities by notice to the Trustee (with a copy to the Issuer, but the applicable waiver or rescission shall be effective when the notice is given to the Trustee) may (a) waive, by their consent (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities), an existing Default or Event of Default and its consequences except (i) a Default or Event of Default in the payment of the principal of, or premium, if any, or interest (including Additional Interest) on a Security or (ii) a Default or Event of Default in respect of a provision that under Section 9.2 cannot be amended without the consent of each Securityholder affected and (b) rescind any acceleration with respect to the Securities and its consequences if (1) such rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest (including Additional Interest) on the Securities that have become due solely by such declaration of acceleration, have been cured or waived.  When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right.

 

SECTION 6.5.              Control by Majority.  The Holders of a majority in principal amount of the outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, the Securities or the Guarantees or, subject to Sections 7.1 and 7.2, that the Trustee determines is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.  Prior to taking any such action hereunder, the Trustee shall be entitled to indemnification or security reasonably satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

 

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SECTION 6.6.              Limitation on Suits.  Subject to Section 6.7, a Securityholder may not pursue any remedy with respect to this Indenture or the Securities unless:

 

(1)           such Holder has previously given to the Trustee written notice stating that an Event of Default is continuing;

 

(2)           Holders of at least 25% in principal amount of the outstanding Securities have requested that the Trustee pursue the remedy;

 

(3)           such Holders have offered to the Trustee reasonable security or indemnity, satisfactory to the Trustee, against any loss, liability or expense;

 

(4)           the Trustee has not complied with such request within 60 days after receipt of the request and the offer of security or indemnity; and

 

(5)           the Holders of a majority in principal amount of the outstanding Securities have not waived such Event of Default or otherwise given the Trustee a direction that, in the opinion of the Trustee, is inconsistent with such request during such 60-day period.

 

A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder.

 

SECTION 6.7.              Rights of Holders to Receive Payment.  Notwithstanding any other provision of this Indenture (including, without limitation, Section 6.6), the right of any Holder to receive payment of principal of, premium (if any) or interest (including Additional Interest) on the Securities held by such Holder, on or after the respective due dates expressed or provided for in the Securities, 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 6.8.              Collection Suit by Trustee.  If an Event of Default specified in clauses (1) or (2) of Section 6.1 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.7.

 

SECTION 6.9.              Trustee May File Proofs of Claim.  The Trustee may 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 Securityholders allowed in any judicial proceedings relative to the Issuer or the Subsidiaries of the Issuer or its or their respective creditors or properties and, unless prohibited by law or applicable regulations, may be entitled and empowered to participate as a member of any official committee of creditors appointed in such matter and may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make 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 it for the reasonable compensation, expenses, disbursements 

 

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and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.7.

 

No provision of this Indenture 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 Securities or the rights of any Holder thereof 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 or property pursuant to this Article VI, it shall pay out the money in the following order:

 

FIRST:  to the Trustee for amounts due to it under Section 7.7, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

 

SECOND:  to Holders of Securities for amounts due and unpaid on the Securities for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal, premium, if any, and interest (including Additional Interest), respectively; and

 

THIRD:  to the Issuer 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 Securities 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 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 and expenses, 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 does not apply to a suit by the Trustee, a suit by the Issuer, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in outstanding principal amount of the Securities.

 

ARTICLE VII

 

TRUSTEE

 

SECTION 7.1.              Duties of Trustee.

 

(a)           If an Event of Default has occurred and is continuing, the Trustee shall exercise 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.

 

(b)           Except during the continuance of an Event of Default:

 

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(1)           the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(2)           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, opinions or orders furnished to the Trustee and conforming to the requirements of this Indenture, the Securities or the Guarantees, as applicable.  However, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture, the Securities or the Guarantees, as the case may be (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

 

(c)           The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(1)           this paragraph does not limit the effect of paragraph (b) of this Section;

 

(2)           the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;

 

(3)           the Trustee shall 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 6.5; and

 

(4)           no provision of this Indenture, the Securities or the Guarantees shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or thereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity or security against such risk or liability is not reasonably assured to it.

 

(d)           Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.

 

(e)           The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.

 

(f)            Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)           Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA.

 

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(h)           Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by one Officer of the Issuer.

 

SECTION 7.2.              Rights of Trustee.  Subject to Section 7.1:

 

(a)           The Trustee may conclusively rely on any document (whether in its original or facsimile form) reasonably 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.  The Trustee shall receive and retain financial reports and statements of the Issuer as provided herein, but shall have no duty to review or analyze such reports or statements to determine compliance with covenants or other obligations of the Issuer.

 

(b)           Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate and/or an Opinion of Counsel.  The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel.

 

(c)           The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d)           The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence.

 

(e)           The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture, the Securities or the Guarantees shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder or under the Securities or the Guarantees in good faith and in accordance with the advice or opinion of such counsel.

 

(f)            The Trustee shall not be deemed to have notice of any Default or Event of Default or whether any entity or group of entities constitutes a Significant Subsidiary unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default or of any such Significant Subsidiary is received by the Trustee at the corporate trust office of the Trustee specified in Section 12.2, and such notice references the Securities and this Indenture.

 

(g)           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 to each agent, custodian and other Person employed to act hereunder.

 

(h)           The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture, the Securities or the Guarantees at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which may be incurred therein or thereby.

 

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(i)            The Trustee shall not be deemed to have notice of a Default or an Event of Default unless a Responsible Officer of the Trustee (i) receives written notice of such Default or Event of Default or (ii) has actual knowledge of such Default or Event of Default.

 

(j)            Whenever in the administration of this Indenture, the Securities or the Guarantees the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder or thereunder, the Trustee (unless other evidence be herein specifically prescribed) may request and in the absence of bad faith or willful misconduct on its part, rely upon an Officers’ Certificate.

 

(k)           In no event shall the Trustee be responsible or liable for any special, indirect 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 of such loss or damage and regardless of the form of action.

 

(l)            The parties hereto acknowledge, in accordance with Section 326 of the Patriot Act, that 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 identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The Issuers and the Subsidiary Guarantors agree that they will provide the Trustee with all such information as it may reasonably request in order to satisfy the requirements or its obligations under the Patriot Act.

 

(m)          The Trustee will be under no obligation to exercise any of the rights or powers under this Indenture, the Securities or the Guarantees at the request or direction of any of the Holders unless such Holders have offered the Trustee indemnity or security reasonably satisfactory to the Trustee in its sole discretion against loss or expense.

 

(n)           Any discretion, permissive right or privilege in favor of the Trustee, if any, shall not be construed as a duty or obligation.

 

SECTION 7.3.              Individual Rights of Trustee.  The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Issuer, the Subsidiary Guarantors or their Affiliates with the same rights it would have if it were not Trustee.  Any Paying Agent or Registrar may do the same with like rights.  However, the Trustee must comply with Sections 7.10 and 7.11.  In addition, the Trustee shall be permitted to engage in transactions with the Issuer; provided, however, that if the Trustee acquires any conflicting interest under the TIA, the Trustee must (i) eliminate such conflict within 90 days of acquiring such conflicting interest, (ii) apply to the SEC for permission to continue acting as Trustee or (iii) resign.

 

SECTION 7.4.              Trustee’s Disclaimer.  The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Guarantees or the Securities, shall not be accountable for the Issuer’s use of the proceeds from the sale of the Securities, shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee or any money paid to the Issuer pursuant to the terms of this Indenture and shall not be responsible for any statement of the Issuer in this Indenture or in any

 

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document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.

 

SECTION 7.5.              Notice of Defaults.  If a Default or Event of Default occurs and is continuing and if a Trust Officer has knowledge thereof, the Trustee shall send to each Securityholder at the address set forth in the Securities Register 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), or interest on any Security (including payments pursuant to the optional redemption or required repurchase provisions of such Security), the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders.

 

SECTION 7.6.              Reports by Trustee to Holders.  Within 60 days after each October 15 beginning October 15, 2017 the Trustee shall send to each Securityholder a brief report dated as of such October 15 that complies with TIA § 313(a) if and to the extent required thereby.  The Trustee also shall comply with TIA § 313(b) and TIA § 313(c).

 

A copy of each report at the time it is sent to Securityholders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed.  The Issuer agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof and the Trustee shall comply with TIA § 313(d).

 

SECTION 7.7.              Compensation and Indemnity.  The Issuer shall pay to the Trustee from time to time reasonable compensation for its services hereunder and under the Securities and the Guarantees as the Issuer and the Trustee shall from time to time agree in writing.  The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Issuer shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including, but not limited to, costs of collection, costs of preparing reports, certificates and other documents, costs of preparation and sending of notices to Securityholders.  Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts.  The Issuer shall indemnify the Trustee (including its officers, directors, agents and employees) against any and all loss, liability, damages, claims or expense (including reasonable attorneys’ fees and expenses) incurred by it without willful misconduct or negligence on its part in connection with the administration of this trust and the performance of its duties hereunder and under the Securities and the Guarantees, including the costs and expenses of enforcing this Indenture (including this Section 7.7), the Securities and the Guarantees and of defending itself against any claims (whether asserted by any Securityholder, the Issuer or otherwise).  The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity of which it has received written notice.  Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder except to the extent the Issuer is prejudiced thereby.  The Issuer shall defend the claim and the Trustee shall provide reasonable cooperation at the Issuer’s expense in the defense.  The Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel; provided that the Issuer shall not be required to pay the fees and expenses of such separate counsel if it assumes the Trustee’s defense, and, in the reasonable judgment of outside counsel to the Trustee, there is no conflict of interest between the Issuer and the Trustee in connection with such defense.

 

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To secure the Issuer’s payment obligations in this Section 7.7, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of, premium, if any, and interest on particular Securities.  Such lien shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.  The Trustee’s right to receive payment of any amounts due under this Section 7.7 shall not be subordinate to any other liability or Indebtedness of the Issuer.

 

The Issuer’s payment obligations pursuant to this Section shall survive the discharge of this Indenture or the earlier resignation or removal of the Trustee.  Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a Default specified in clause (7) or clause (8) of Section 6.1, the expenses are intended to constitute expenses of administration under any Bankruptcy Law.

 

SECTION 7.8.              Replacement of Trustee.  The Trustee may resign at any time by so notifying the Issuer in writing.  The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the removed Trustee in writing and may appoint a successor Trustee with the Issuer’s written consent, which consent will not be unreasonably withheld.  The Issuer shall remove the Trustee if:

 

(1)           the Trustee fails to comply with Section 7.10 hereof or TIA §310;

 

(2)           the Trustee is adjudged bankrupt or insolvent;

 

(3)           a receiver or other public officer takes charge of the Trustee or its property; or

 

(4)           the Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns or is removed by the Issuer or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee as described in the preceding paragraph, or if a vacancy exists in the office of the Trustee for any other reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer.  Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall send a notice of its succession to Securityholders.  The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.7.

 

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of at least 10% in principal amount of the Securities may petition, at the Issuer’s expense, any court of competent jurisdiction for the appointment of a successor Trustee.

 

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If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as provided in TIA § 310(b), any Securityholder, who has been a bona fide holder of a Security for at least six months, may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

Notwithstanding the replacement of the Trustee pursuant to this Section 7.8, the Issuer’s obligations under Section 7.7 shall continue for the benefit of the retiring Trustee.

 

SECTION 7.9.              Successor Trustee by Merger.  If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

 

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture, any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; provided that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Securities in the name of any predecessor Trustee shall only apply to its successor or successors by merger, consolidation or conversion.

 

SECTION 7.10.            Eligibility; Disqualification.  This Indenture shall always have a Trustee that satisfies the requirements of TIA § 310(a)(1), (2) and (5) in every respect.  The Trustee shall have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition.  The Trustee shall comply with TIA § 310(b); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) (i) the indenture dated as of May 6, 2014 among the parties thereto relating to the Issuer’s 5.125% Senior Notes due 2022, (ii) the indenture dated as of November 5, 2013 among the parties thereto relating to the Issuer’s 5.375% Senior Notes due 2021, (iii) the indenture dated as of November 19, 2012 among the parties thereto relating to the Issuer’s 6.0% Senior Notes due 2020, (iv) the indenture dated as of March 17, 2015 among the parties thereto relating to the Issuer’s 5.625% Senior Notes due 2023 and (v) any other indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

 

SECTION 7.11.            Preferential Collection of Claims Against the Issuer.  The Trustee shall comply with 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.

 

SECTION 7.12.            Trustee’s Application for Instruction from the Issuer.  Any application by the Trustee for written instructions from the Issuer may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be

 

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effective.  The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any Officer of the Issuer actually receives such application, unless any such Officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

 

ARTICLE VIII

 

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.1.              Discharge of Liability on Securities; Defeasance.

 

(a)           Subject to Section 8.1(c), when (i) either (x) all Securities that have been authenticated (other than Securities replaced or paid pursuant to Section 2.10 and Securities for whose payment money has been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust), have been delivered to the Trustee for cancellation or (y) all outstanding Securities not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or may be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer or any Subsidiary 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, U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient (as determined by the Issuer) without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Securities not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of final maturity or redemption (provided that if such redemption is made as provided in the sixth paragraph of paragraph 5 of the Securities, (1) the amount of cash in U.S. dollars, U.S. Government Obligations, or a combination thereof, that must be irrevocably deposited will be determined using an assumed Applicable Premium calculated as of the date of such deposit and (2) the depositor must irrevocably deposit or cause to be deposited additional money in trust on the redemption date as necessary to pay the Applicable Premium as determined by such date); (ii) in respect of clause (i)(y), 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) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which either the Issuer or any Subsidiary Guarantor is a party or by which either the Issuer or any Subsidiary 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); (iii) the Issuer has paid or caused to be paid all sums payable by it under this Indenture; and (iv) the Issuer has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of such Securities at final maturity or the Redemption Date, as the case may be, then

 

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the Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Issuer (accompanied by an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent specified herein relating to the satisfaction and discharge of this Indenture have been complied with) and at the cost and expense of the Issuer.  If U.S. Government Obligations shall have been deposited in connection with such satisfaction and discharge, then as a further condition to such satisfaction and discharge, the Trustee shall have received a certificate from a nationally recognized firm of independent accountants to the effect set forth in Section 8.2(1).

 

(b)           Subject to Sections 8.1(c) and 8.2, the Issuer at any time may terminate (i) all of its obligations under the Securities and this Indenture (“legal defeasance option”), and after giving effect to such legal defeasance, any omission to comply with such obligations shall no longer constitute a Default or Event of Default or (ii) its obligations under Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.8, 3.9, 3.10 and 3.11 and Section 4.1 (other than Sections 4.1(a)(1), (2), (4) and (5)), and the Issuer may omit to comply with and shall 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 with such covenants shall no longer constitute a Default or an Event of Default under Section 6.1(3) (as it relates to Section 4.1(a)(3)), Section 6.1 (4) (to the extent applicable to such other defeased covenants), Section 6.1(6), Section 6.1(7) (with respect to Significant Subsidiaries), Section 6.1(8) (with respect to Significant Subsidiaries) and Section 6.1(9), and the events specified in such Sections shall no longer constitute an Event of Default (clause (ii) being referred to as the “covenant defeasance option”), but except as specified above, the remainder of this Indenture and the Securities shall be unaffected thereby.  The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.  If the Issuer exercises its legal defeasance or its covenant defeasance option, the Guarantees in effect at such time shall terminate.

 

If the Issuer exercises its legal defeasance option, payment of the Securities may not be accelerated because of an Event of Default.  If the Issuer exercises its covenant defeasance option, payment of the Securities may not be accelerated because of an Event of Default specified in Section 6.1(4) (to the extent applicable to Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.8, 3.9, 3.10 and 3.11), Section 6.1(5), Section 6.1(6), Section 6.1(7) (with respect only to Significant Subsidiaries), Section 6.1(8) (with respect only to Significant Subsidiaries), Section 6.1(9) or Section 6.1(10) or because of the failure of the Issuer to comply with Section 4.1(a)(3).

 

Upon satisfaction of the conditions set forth herein and upon request and expense of the Issuer, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuer terminates.

 

(c)           Notwithstanding the provisions of Sections 8.1(a) and (b) to the extent relating to a satisfaction and discharge or a legal defeasance, the Issuer’s obligations in Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.10, 2.11, 2.12, 2.13, 7.7 and 7.8 and in this Article VIII shall survive until the Securities have been paid in full.  Thereafter, the Issuer’s obligations in Sections 7.7, 8.4 and 8.5 shall survive.

 

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SECTION 8.2.              Conditions to Defeasance.  The Issuer may exercise its legal defeasance option or its covenant defeasance option only if:

 

(1)           the Issuer irrevocably deposits with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, U.S. Government Obligations, or a combination of cash in U.S. dollars and U.S. Government Obligations, in amounts as will be sufficient, in the opinion of an accounting, appraisal or investment banking firm of national standing, to pay the principal of, and premium, if any, and interest, including Additional Interest, if any, due on the outstanding Securities on the Stated Maturity or on the applicable Redemption Date, as the case may be, and the Issuer must specify whether the Securities are being defeased to Stated Maturity or to a particular Redemption Date (provided that if such redemption is made as provided in the sixth paragraph of paragraph 5 of the Securities, (x) the amount of cash in U.S. dollars, U.S. Government Obligations, or a combination thereof, that must be irrevocably deposited will be determined using an assumed Applicable Premium calculated as of the date of such deposit and (y) the depositor must irrevocably deposit or cause to be deposited additional money in trust on the Redemption Date as necessary to pay the Applicable Premium as determined on such date);

 

(2)           in the case of legal defeasance, the Issuer has delivered to the Trustee an Opinion of Counsel (subject to customary assumptions and exclusions) reasonably acceptable to the Trustee confirming that (a) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel will confirm that, the Holders of the respective outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such legal defeasance and will be subject to 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;

 

(3)           in the case of covenant defeasance, the Issuer has delivered to the Trustee an Opinion of Counsel (subject to customary assumptions and exclusions) reasonably acceptable to the Trustee confirming that the Holders of the respective outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to 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;

 

(4)           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 grant of any Lien securing such borrowings);

 

(5)           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,

 

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discharged or replaced) to which the Issuer or any of its Subsidiaries is a party or by which the Issuer or any of its Subsidiaries are bound;

 

(6)           the Issuer must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Issuer with the intent of preferring the Holders of the respective outstanding Securities over the creditors of the Issuer with the intent of defeating, hindering, delaying or defrauding creditors of the Issuer or others; and

 

(7)           the Issuer must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each stating that all conditions precedent relating to the legal defeasance or the covenant defeasance have been complied with; provided, that the Opinion of Counsel required by this clause (7) with respect to a legal defeasance need not be delivered if all Securities not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year or may be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer.

 

SECTION 8.3.              Application of Trust Money.  The Trustee shall hold in trust all money or U.S. Government Obligations (including proceeds thereof) deposited with it pursuant to this Article VIII.  It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture and the Securities to the Holders of the Securities of all sums due in respect of the payment of principal of, premium, if any, and accrued interest on the Securities.

 

SECTION 8.4.              Repayment to the Issuer.  The Trustee and the Paying Agent shall promptly turn over to the Issuer upon request any excess money, U.S. Government Obligations or other securities held by them upon payment of all the Obligations under this Indenture.

 

Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Issuer upon request any money held by them for the payment of principal of or premium, if any, or interest on the Securities that remains unclaimed by the Holders thereof for two years, and, thereafter, Securityholders entitled to the money must look to the Issuer for payment as unsecured general creditors unless an abandoned property law designates another Person and the Trustee and the Paying Agent shall have no further liability with respect to such money.

 

SECTION 8.5.              Indemnity for U.S. Government Obligations.  The Issuer shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

 

SECTION 8.6.              Reinstatement.  If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental

 

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authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Issuer and each Subsidiary Guarantor under this Indenture, the Securities and the Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided, however, that, if the Issuer or the Subsidiary Guarantors have made any payment of principal, premium, if any, or interest (including Additional Interest) on any Securities because of the reinstatement of their obligations, the Issuer or Subsidiary Guarantors, as the case may be, shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

 

The Trustee’s rights under this Article VIII shall survive termination of this Indenture.

 

ARTICLE IX

 

AMENDMENTS

 

SECTION 9.1.              Without Consent of Holders.  The Issuer, the Subsidiary Guarantors and the Trustee may amend or supplement this Indenture, the Securities and the Guarantees without notice to or consent of any Securityholder:

 

(1)           to cure any ambiguity, omission, defect, mistake or inconsistency;

 

(2)           to provide for the assumption by a successor corporation, partnership, trust or limited liability company of the obligations of the Issuer or any Subsidiary Guarantor under this Indenture and the Securities;

 

(3)           to provide for or facilitate the issuance of uncertificated Securities in addition to or in place of certificated Securities; provided, however, that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code;

 

(4)           to add Subsidiary Guarantors with respect to the Securities, or release a Subsidiary Guarantor from its Guarantee and terminate such Guarantee; provided that the release and termination is in accordance with the applicable provisions of this Indenture;

 

(5)           to secure the Securities or the Guarantees;

 

(6)           to add covenants of the Issuer or a Subsidiary Guarantor for the benefit of, or to make changes that would provide additional rights to, the Holders or to surrender any right or power herein conferred upon the Issuer or a Subsidiary Guarantor;

 

(7)           to make any change that does not adversely affect the legal rights under this Indenture of any Securityholder, provided, however, that any change made to conform this Indenture to the “Description of Notes” contained in the Offering Memorandum shall not be deemed to adversely affect such legal rights;

 

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(8)           to comply with any requirement of the SEC in connection with any required qualification of this Indenture under the TIA;

 

(9)           to evidence and provide for the acceptance of an appointment under this Indenture of a successor Trustee; provided that the successor Trustee is otherwise qualified and eligible to act as such under the terms of this Indenture; or

 

(10)         to provide for the issuance of Additional Securities in accordance with limitations set forth in this Indenture.

 

SECTION 9.2.              With Consent of Holders.  The Issuer, the Subsidiary Guarantors and the Trustee may amend or supplement this Indenture, the Securities and the Guarantees without notice to any Securityholder but with the consent of the Holders of a majority in principal amount of the Securities then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities).  Except as provided in Section 6.4, any past default or compliance with the provisions of this Indenture, the Securities or the Guarantees may be waived with the consent of the Holders of a majority in principal amount of the Securities then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities).  However, without the consent of each Securityholder affected, an amendment, supplement or waiver may not:

 

(1)           reduce the principal amount of Securities whose Holders must consent to an amendment or waiver;

 

(2)           reduce the stated rate of interest or extend the stated time for payment of interest or Additional Interest on any Security;

 

(3)           reduce the principal of or extend the Stated Maturity of any Security;

 

(4)           reduce the premium payable upon the redemption of any Security as described in Section 3.9, Article V hereof or paragraph 5 of any Security, change the time at which any Security may be redeemed as described in Section 3.9, Article V hereof or paragraph 5 of any Security (except provisions relating to minimum required notice of optional redemption) or make any change relative to the Issuer’s obligation to make an offer to repurchase the Securities as a result of a Change of Control as described in Section 3.9 after (but not before) the occurrence of such Change of Control;

 

(5)           make any Security payable in money other than that stated in the Security;

 

(6)           impair the right of any Holder to receive payment of principal of, premium, if any, and interest (including Additional Interest) on such Holder’s Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities;

 

(7)           make any change to this Section 9.2;

 

(8)           modify the Guarantees in any manner adverse to the Holders; or

 

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(9)           make any change to or modify the ranking of the Securities that would adversely affect the Holders.

 

It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment or supplement, but it shall be sufficient if such consent approves the substance thereof.  A consent to any amendment, supplement or waiver under this Indenture by any Holder of the Securities given in connection with a tender or exchange of such Holder’s Securities will not be rendered invalid by such tender or exchange.

 

After an amendment or supplement under this Section becomes effective, the Issuer shall send to Securityholders a notice briefly describing such amendment.  The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section.

 

SECTION 9.3.              Compliance with Trust Indenture Act.  Every amendment or supplement to this Indenture, the Securities or the Guarantees shall comply with the TIA as then in effect.

 

SECTION 9.4.              Revocation and Effect of Consents and Waivers.  A consent to an amendment, supplement or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security.  Any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective or otherwise in accordance with any related solicitation documents.  After an amendment, supplement or waiver becomes effective, it shall bind every Securityholder unless it makes a change described in any of clauses (1) through (9) of Section 9.2, and in that case the amendment, supplement, waiver or other action shall bind each Securityholder who has consented to it and every subsequent Securityholder that evidences the same debt as the consenting Holder’s Securities.  An amendment, supplement or waiver under Section 9.2 shall become effective upon receipt by the Trustee of the requisite number of consents, and in relation to any Securities evidenced by Global Securities, such consents need not be in written form and may be evidenced by any electronic transmissions that comport with the applicable procedures of DTC.

 

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture.  If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Securityholders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date.  No such consent shall become valid or effective more than 120 days after such record date.

 

SECTION 9.5.              Notation on or Exchange of Securities.  If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee.  The Trustee may place an appropriate notation on the

 

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Security regarding the changed terms and return it to the Holder.  Alternatively, if the Issuer or the Trustee so determine, the Issuer in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms.  Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment.

 

SECTION 9.6.              Trustee to Sign Amendments.  The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may but need not sign it.  In signing any amendment, supplement or waiver the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and shall be provided with, and (subject to Sections 7.1 and 7.2) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and any Subsidiary Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.3).

 

ARTICLE X

 

GUARANTEE

 

SECTION 10.1.            Guarantee.  Subject to the provisions of this Article X, each Subsidiary Guarantor hereby fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, jointly and severally with each other Subsidiary Guarantor, to each Holder of the Securities, to the extent lawful, and the Trustee the full and punctual payment when due, whether at final maturity, by acceleration, by redemption or otherwise, of the Obligations.  Each Subsidiary Guarantor agrees that the Obligations will rank equally in right of payment with other Indebtedness of such Subsidiary Guarantor, except to the extent such other Indebtedness is subordinate to the Obligations.  Each Subsidiary Guarantor further agrees (to the extent permitted by law) that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it will remain bound under this Article X notwithstanding any extension or renewal of any Obligation.

 

Each Subsidiary Guarantor waives presentation to, demand of payment from and protest to the Issuer of any of the Obligations and also waives notice of protest for nonpayment.  Each Subsidiary Guarantor waives notice of any default under the Securities or the Obligations.

 

Each Subsidiary Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder to any security held for payment of the Obligations.

 

Except as set forth in Section 10.2, the obligations of each Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Obligations in full), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise.  Without limiting the generality of the

 

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foregoing, the obligations of each Subsidiary Guarantor herein shall not be discharged or impaired or otherwise affected by (a) the failure of any Holder to assert any claim or demand or to enforce any right or remedy against the Issuer or any other person under this Indenture, the Securities or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities or any other agreement; (d) the release of any security held by any Holder for the Obligations or any of them; (e) the failure of any Holder to exercise any right or remedy against any other Subsidiary Guarantor; (f) any change in the ownership of the Issuer; (g) any default, failure or delay, willful or otherwise, in the performance of the Obligations; or (h) any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Subsidiary Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law or equity.

 

Each Subsidiary Guarantor agrees that its Guarantee herein shall remain in full force and effect until payment in full of all the Obligations or such Subsidiary Guarantor is released from its Guarantee upon the merger or the sale of all the Capital Stock or assets of the Subsidiary Guarantor or otherwise in compliance with Section 4.1, Section 10.2 or Article VIII, as applicable.  Each Subsidiary Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of, premium, if any, or interest on any of the Obligations is rescinded or must otherwise be restored by any Holder upon the bankruptcy or reorganization of the Issuer or otherwise.

 

In furtherance of the foregoing and not in limitation of any other right which any Holder has at law or in equity against any Subsidiary Guarantor by virtue hereof, upon the failure of the Issuer to pay any of the Obligations when and as the same shall become due, whether at final maturity, by acceleration, by redemption or otherwise, each Subsidiary Guarantor hereby promises to and will, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Trustee or the Trustee on behalf of the Holders an amount equal to the sum of (i) the unpaid amount of such Obligations then due and owing and (ii) accrued and unpaid interest (including Additional Interest) on such Obligations then due and owing (but only to the extent not prohibited by law).

 

Each Subsidiary Guarantor further agrees that, as between such Subsidiary Guarantor, on the one hand, and the Holders, on the other hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated as provided in this Indenture for the purposes of its Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby and (y) in the event of any such declaration of acceleration of such Obligations, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantor for the purposes of this Guarantee.

 

Each Subsidiary Guarantor also agrees to pay any and all reasonable costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or the Holders in enforcing any rights under this Section.

 

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Neither the Issuer nor the Subsidiary Guarantors shall be required to make a notation on the Securities to reflect any Guarantee or any release, termination or discharge thereof and any such notation shall not be a condition to the validity of any Guarantee.

 

SECTION 10.2.            Limitation on Liability; Termination, Release and Discharge.

 

(a)           Any term or provision of this Indenture to the contrary notwithstanding, the obligations of each Subsidiary Guarantor hereunder will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor (including, without limitation, any guarantees under the Senior Secured Credit Agreement) and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Subsidiary Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law and not otherwise being void or voidable under any similar laws affecting the rights of creditors generally.

 

(b)           Upon the sale or disposition of a Subsidiary Guarantor (by merger, consolidation, the sale of a sufficient amount of its Capital Stock so that it no longer qualifies as a “Subsidiary” of the Issuer or the sale of all or substantially all of its assets (other than by lease)) and whether or not the Subsidiary Guarantor is the surviving entity in such transaction, to a Person which is not the Issuer or a Restricted Subsidiary, such Subsidiary Guarantor will be released from all its obligations under this Indenture and its Guarantee if the sale or other disposition does not violate Section 3.5.

 

(c)           Each Subsidiary Guarantor will be released from its obligations under this Indenture and its Guarantee upon the release or discharge of such Subsidiary Guarantor from its guarantee of the other Indebtedness that resulted in the obligation of such Subsidiary Guarantor to guarantee the Securities pursuant to Section 3.11(b), except a discharge or release by or as a result of payment under such guarantee.

 

(d)           Each Subsidiary Guarantor will be released from its obligations under this Indenture and its Guarantee if the Issuer designates such Subsidiary Guarantor as an Unrestricted Subsidiary and such designation complies with the other applicable provisions of this Indenture.

 

(e)           Each Subsidiary Guarantor will be deemed released from all its obligations under this Indenture and its Guarantee, and such Guarantee will terminate, upon the legal defeasance or covenant defeasance of the Securities or upon satisfaction and discharge of this Indenture, in each case pursuant to the provisions of Article VIII hereof.

 

(f)            The release of any Subsidiary Guarantor from its obligations pursuant to this Section 10.2 shall be conditioned upon such Subsidiary Guarantor delivering to the Trustee an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent provided for in this Indenture relating to the transactions specified in clauses (b), (c), (d) or (e) of this Section 10.2 have been complied with.

 

SECTION 10.3.            Right of Contribution.  Each Subsidiary Guarantor hereby agrees that to the extent that any Subsidiary Guarantor shall have paid more than its

 

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proportionate share of any payment made on the obligations under the Guarantees, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and against the Issuer or any other Subsidiary Guarantor who has not paid its proportionate share of such payment.  The provisions of this Section 10.3 shall in no respect limit the obligations and liabilities of each Subsidiary Guarantor to the Trustee and the Holders and each Subsidiary Guarantor shall remain liable to the Trustee and the Holders for the full amount guaranteed by such Subsidiary Guarantor hereunder.

 

SECTION 10.4.            No Subrogation.  Notwithstanding any payment or payments made by each Subsidiary Guarantor hereunder, no Subsidiary Guarantor shall be entitled to be subrogated to any of the rights of the Trustee or any Holder against the Issuer or any other Subsidiary Guarantor or guarantee or right of offset held by the Trustee or any Holder for the payment of the Obligations, nor shall any Subsidiary Guarantor seek or be entitled to seek any contribution or reimbursement from the Issuer or any other Subsidiary Guarantor in respect of payments made by such Subsidiary Guarantor hereunder, until all amounts owing to the Trustee and the Holders by the Issuer on account of the Obligations are paid in full.  If any amount shall be paid to any Subsidiary Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by such Subsidiary Guarantor in trust for the Trustee and the Holders, segregated from other funds of such Subsidiary Guarantor, and shall, forthwith upon receipt by such Subsidiary Guarantor, be turned over to the Trustee in the exact form received by such Subsidiary Guarantor (duly indorsed by such Subsidiary Guarantor to the Trustee, if required), to be applied against the Obligations.

 

ARTICLE XI

 

[RESERVED]

 

ARTICLE XII

 

MISCELLANEOUS

 

SECTION 12.1.            Trust Indenture Act Controls.  If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the provision required by the TIA shall control.  Each Subsidiary Guarantor in addition to performing its obligations under its Guarantee shall perform such other obligations as may be imposed upon it with respect to this Indenture under the TIA.

 

SECTION 12.2.            Notices.  Any notice or communication shall be in writing in the English language and delivered in person, sent by facsimile, other electronic means, delivered by commercial courier service or mailed by first-class mail, postage prepaid, addressed as follows:

 

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if to the Issuer or to any Subsidiary Guarantor: 
    
	
 
    	
 
    
	
 
    	
Antero Resources Corporation
   1615 Wynkoop Street
   Denver, Colorado 80202
   Attention: Chief Financial Officer
   Telecopy: (303) 357-7299
    
	
 
    	
 
    
	
 
    	
with a copy (which shall not constitute notice) to:
    
	
 
    	
 
    
	
 
    	
Vinson & Elkins L.L.P.
   1001 Fannin Street, Suite 2500
   Houston, Texas 77002-6760
   Attention: W. Matthew Strock
   Telecopy: (713) 615-5650
    
	
 
    	
 
    
	
 
    	
if to the Trustee, at its corporate trust office in   Dallas,
   Texas, which corporate trust office for purposes of this
   Indenture is at the date hereof located at: 
    
	
 
    	
 
    
	
 
    	
Wells Fargo Bank, National Association
   750 N. Saint Paul Place, Suite 1750
   MAC T9263-170
   Dallas, TX 75202
   Attention: Corporate, Municipal & Escrow Services
   Telecopy: (214) 756-7401
    

 

The Issuer, any Subsidiary Guarantor or the Trustee by written notice to the others may designate additional or different addresses for subsequent notices or communications.

 

Any notice or communication to the Issuer or the Subsidiary Guarantors shall be deemed to have been given or made as of the date so delivered if personally delivered; when receipt is acknowledged, if telecopied; and five calendar days after mailing if sent by U.S. Postal Service registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee).  Any notice or communication to the Trustee shall be deemed delivered upon receipt by a Trust Officer.  Notices given by publication will be deemed given on the first date on which publication is made.

 

Any notice or communication sent to a Securityholder shall be mailed to the Securityholder at the Securityholder’s address as it appears in the Securities Register and shall be sufficiently given if so mailed within the time prescribed; provided, however, that in any case where DTC or its nominee is the Securityholder, any notice or communication sent to it shall be given in accordance with the applicable procedures of DTC, notwithstanding any contrary indication in this Indenture.

 

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Failure to send a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders.  If a notice or communication is sent in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee shall be effective only upon receipt.

 

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

SECTION 12.3.            Communication by Holders with other Holders.  Securityholders may communicate pursuant to TIA § 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities.  The Issuer, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

 

SECTION 12.4.            Certificate and Opinion as to Conditions Precedent.  Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture (except in connection with the original issuance of Securities on the date hereof), the Issuer shall furnish to the Trustee:

 

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

 

(2)           an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

 

SECTION 12.5.            Statements Required in Certificate or Opinion.  Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:

 

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

 

(2)           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;

 

(3)           a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(4)           a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

 

In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officers’ Certificate or on certificates of public officials.

 

117

 

SECTION 12.6.            When Securities Disregarded.  In determining whether the Holders of the required aggregate principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Issuer, any Subsidiary Guarantor or any Affiliate of them shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.

 

SECTION 12.7.            Rules by Trustee, Paying Agent and Registrar.  The Trustee may make reasonable rules for action by, or at meetings of, Securityholders.  The Registrar and the Paying Agent may make reasonable rules for their functions.

 

SECTION 12.8.            Legal Holidays.  A “Legal Holiday” is a Saturday, a Sunday or other day on which commercial banking institutions are authorized or required to be closed in New York, New York.  If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.  If a regular record date is a Legal Holiday, the record date shall not be affected.

 

SECTION 12.9.            GOVERNING LAW.  THIS INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 12.10.         No Personal Liability of Directors, Officers, Employees and Stockholders.  No director, officer, employee, incorporator, stockholder, member, partner or trustee of the Issuer or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Issuer or any Subsidiary Guarantor under the Securities, this Indenture or the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities.

 

SECTION 12.11.         Successors.  All agreements of the Issuer and each Subsidiary Guarantor in this Indenture and the Securities shall bind their respective successors.  All agreements of the Trustee in this Indenture shall bind its successors.

 

SECTION 12.12.         Multiple Originals.  The parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this Indenture.

 

SECTION 12.13.         Qualification of Indenture.  The Issuer has agreed to qualify this Indenture under the TIA in accordance with the terms and conditions of the initial Registration Rights Agreement, and the Trustee shall be entitled to receive from the Issuer such evidence as it may reasonably request of such qualification.

 

SECTION 12.14.         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

 

118

 

natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

SECTION 12.15.         Table of Contents; Headings.  The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

 

SECTION 12.16.         WAIVER OF JURY TRIAL.   EACH OF THE ISSUER AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

 

119

 

IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed all as of the date and year first written above.

 

 

	
 
    	
ANTERO   RESOURCES CORPORATION
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Alvyn A. Schopp
    
	
 
    	
 
    	
Name:   Alvyn A. Schopp
    
	
 
    	
 
    	
Title:    Chief   Administrative Officer, Regional Senior Vice President and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subsidiary   Guarantors:
    
	
 
    	
 
    	
 
    
	
 
    	
AR   OHIO LLC
    
	
 
    	
MONROE   PIPELINE LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By   
    	
/s/   Alvyn A. Schopp
    
	
 
    	
Name:  Alvyn   A. Schopp
    
	
 
    	
Title:     Chief Administrative   Officer, Regional Senior Vice President and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ANTERO   EXCHANGE PROPERTIES LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By   
    	
/s/   Alvyn A. Schopp
    
	
 
    	
Name: Alvyn A. Schopp
    
	
 
    	
Title:      Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Patrick Giordano
    
	
 
    	
Name: Patrick Giordano
    
	
 
    	
Title: Vice President
    

 

 

EXHIBIT A

 

[FORM OF FACE OF INITIAL SECURITY]

 

[Restricted Securities Legend]
 [Depository Legend, if applicable]
 [Original Issue Discount Legend, if applicable]

 

	
No. [   ]
    	
 
    	
Principal Amount   $[              ],   as
   revised by the Schedule of Increases and
   Decreases in Global Security attached hereto
    
	
 
    	
 
    	
CUSIP NO(1).                         
   ISIN(2):                         
    

 

5.0% Senior Notes, Series A, due 2025

 

Antero Resources Corporation, a Delaware corporation, promises to pay to CEDE & CO., or registered assigns, the principal sum of [               ] Dollars, as revised by the Schedule of Increases and Decreases in Global Security attached hereto, on March 1, 2025.

 

Interest Payment Dates:  March 1 and September 1
 Record Dates:  February 15 and August 15

 

Additional provisions of this Security are set forth on the other side of this Security.

 

	
 
    	
ANTERO RESOURCES   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

(1)  to be inserted as appropriate: 144A Note - 03674X AG1; Reg S Note - U0018L AD2; IAI Note - 03674X AH9

 

(2)  to be inserted as appropriate: 144A Note - US03674XAG16; Reg S Note - USU0018LAD20;  IAI Note - US03674XAH98

 

A-1

 

This is one of the Securities described in the within-mentioned Indenture.

 

	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    	
 
    	
 
    
	
as   Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Authorized   Officer
    	
 
    	
Dated:
    	
 
    

 

A-2

 

[FORM OF REVERSE SIDE OF NOTE]

 

ANTERO RESOURCES CORPORATION

 

5.0% Senior Notes, Series A, due 2025

 

1.   Interest

 

Antero Resources Corporation, a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Issuer”), promises to pay interest on the principal amount of this Security at the rate per annum shown above.

 

The Issuer will pay interest semiannually on March 1 and September 1 of each year commencing March 1, 2017.  Interest on the Securities will accrue from the most recent date to which interest has been paid on the Securities or, if no interest has been paid, from December 21, 2016.  The Issuer shall pay interest on overdue principal, and on overdue premium (plus interest on such interest to the extent lawful), at the rate borne by the Securities to the extent lawful.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

If an exchange offer (the “Exchange Offer”) registered under the Securities Act is not consummated or a shelf registration statement (the “Shelf Registration Statement”) under the Securities Act with respect to resales of the Securities is not declared effective by the SEC or does not become automatically effective on or before the date that is 365 days after the Issue Date (the “Target Registration Date”) in accordance with the terms of the Registration Rights Agreement, dated as of December 21, 2016 (the “Registration Rights Agreement”), among the Issuer, the Subsidiary Guarantors and the initial purchasers named therein, the annual interest rate borne by the Securities shall be increased from the rate shown above by 1.00% per annum thereafter, until the Exchange Offer is completed or the Shelf Registration Statement is declared effective or becomes automatically effective.  The Holder of this Note is entitled to the benefits of such Registration Rights Agreement.  Additional Interest shall be paid to the same Persons, in the same manner and at the same times as regular interest.

 

2.   Method of Payment

 

By no later than 11:00 a.m. (New York City time) on the date on which any principal of, premium, if any, or interest on any Security is due and payable, the Issuer shall irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay such principal, premium, if any, and/or interest (including Additional Interest).  The Issuer will pay interest (except Defaulted Interest) to the Persons who are registered Holders of Securities at the close of business on the February 15 and August 15 next preceding the interest payment date even if Securities are cancelled, repurchased or redeemed after the record date and on or before the interest payment date.  Holders must surrender Securities to a Paying Agent to collect principal payments.  The Issuer will pay principal, premium, if any, and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of Securities represented by a Global Security (including principal, premium, if any, and interest) will be made by the transfer of immediately available funds to the

 

A-3

 

accounts specified by The Depository Trust Company or any successor depository. The Issuer will make all payments in respect of a Definitive Security (including principal, premium, if any, and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Securities may also be made, at the Issuer’s option, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if the Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 15 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

 

3.   Paying Agent and Registrar

 

Initially, Wells Fargo Bank, National Association (the “Trustee”) will act as Trustee, Paying Agent and Registrar.  The Issuer may appoint and change any Paying Agent, Registrar or co-registrar without notice to any Securityholder.  The Issuer or any of its Restricted Subsidiaries may act as Paying Agent or Registrar.

 

4.   Indenture

 

The Issuer issued the Securities under an Indenture dated as of December 21, 2016 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Issuer, the Subsidiary Guarantors and the Trustee.  The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”).  Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all terms and provisions of the Indenture, and Securityholders are referred to the Indenture and the Act for a statement of those terms.

 

The Securities are senior obligations of the Issuer.  The aggregate principal amount of Securities that may be authenticated and delivered under the Indenture is unlimited.  This Security is one of the 5.0% Senior Notes, Series A, due 2025 referred to in the Indenture.  The Securities include (i) $600,000,000 aggregate principal amount of the Issuer’s 5.0% Senior Notes, Series A, due 2025 issued under the Indenture on December 21, 2016 (herein called “Initial Securities”), (ii) if and when issued, additional 5.0% Senior Notes, Series A, due 2025 or 5.0% Senior Notes, Series B, due 2025 of the Issuer that may be issued from time to time under the Indenture subsequent to December 21, 2016 (herein called “Additional Securities”) as provided in Section 2.1(a) of the Indenture and (iii) if and when issued, the Issuer’s 5.0% Senior Notes, Series B, due 2025 that may be issued from time to time under the Indenture in exchange for Initial Securities or Additional Securities in an offer registered under the Securities Act as provided in a Registration Rights Agreement (herein called “Exchange Securities”).  The Initial Securities, Additional Securities and Exchange Securities are treated as a single class of securities under the Indenture.  The Indenture imposes certain limitations on the incurrence of indebtedness, the making of restricted payments, the sale of assets and subsidiary stock, the incurrence of certain liens, the entering into of affiliate transactions, the entering into of agreements that restrict distribution from restricted subsidiaries and the consummation of mergers and consolidations.  The Indenture also imposes requirements with respect to the

 

A-4

 

provision of financial information and the provision of guarantees of the Securities by certain subsidiaries.

 

To guarantee the due and punctual payment of the principal, premium, if any, and interest (including post-filing or post-petition interest) on the Securities and all other amounts payable by the Issuer under the Indenture, the Securities and the Registration Rights Agreement when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Securities and the Indenture, the Subsidiary Guarantors have unconditionally guaranteed (and future guarantors, together with the Subsidiary Guarantors, will unconditionally Guarantee), jointly and severally, such obligations on a senior basis pursuant to the terms of the Indenture.

 

5.   Redemption

 

Except as set forth below or in the penultimate paragraph of Section 3.9 of the Indenture, the Securities will not be redeemable at the option of the Issuer prior to March 1, 2020.  On and after such date, the Securities will be redeemable, at the Issuer’s option, in whole or in part, at any time upon notice as provided in the Indenture, at the following redemption prices (expressed in percentages of principal amount), plus accrued and unpaid interest (including Additional Interest) to, but excluding, the applicable Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on March 1 of the years set forth below:

 

	
Period
    	
 
    	
Redemption Price
    	
 
    
	
2020
    	
 
    	
103.750
    	
%
    
	
2021
    	
 
    	
102.500
    	
%
    
	
2022
    	
 
    	
101.250
    	
%
    
	
2023 and thereafter
    	
 
    	
100.000
    	
%
    

 

In addition, at any time and from time to time on or prior to March 1, 2020 , upon notice as provided in the Indenture, the Issuer may redeem in the aggregate up to 35% of the original principal amount of the Securities (calculated after giving effect to any issuance of Additional Notes), but in an amount not greater than the Net Cash Proceeds of one or more Equity Offerings at a redemption price (expressed as a percentage of principal amount) of 105.0% of the principal amount thereof, plus accrued and unpaid interest (including Additional Interest), if any, to, but excluding, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, that:

 

(1)           at least 65% of the original principal amount of the Securities (calculated after giving effect to any issuance of Additional Securities) must remain outstanding after each such redemption; and

 

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

 

A-5

 

If the Redemption Date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest (including Additional Interest), if any, will be paid on such Redemption Date to the Person in whose name the Security is registered at the close of business on such record date, and no Additional Interest will be payable to Holders whose Securities will be subject to redemption by the Issuer.

 

In the case of any partial redemption, selection of the Securities for redemption will be made by the Trustee in compliance with the requirements of the of the principal national securities exchange, if any, on which such Securities are listed, or, if such Securities are not so listed, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate (or, in the case of Global Securities, the Trustee will select Securities for redemption based on such method as DTC may prescribe), although no Security of $2,000 in original principal amount or less will be redeemed in part.  If any Security is to be redeemed in part only, the notice of redemption relating to such Security shall state the portion of the principal amount thereof to be redeemed. A new Security in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Security.  On and after the Redemption Date, interest will cease to accrue on Securities or portions thereof called for redemption without any condition precedent as long as the Issuer has deposited with the Paying Agent funds in satisfaction of the applicable redemption price pursuant to the Indenture.

 

In addition, at any time prior to March 1, 2020, upon notice as provided in the Indenture, the Issuer may redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

 

“Applicable Premium” means, with respect to a Security at any time, the greater of (i) 1.0% of the principal amount of such Security or (ii) the excess, if any, of (A) the present value at such time of (1) the redemption price of such Security on March 1, 2020 (such redemption price being described in this paragraph 5) plus (2) all required interest payments (excluding accrued and unpaid interest to such Redemption Date) due on such Security through March 1, 2020, computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day calendar months), over (B) the principal amount of such Security.

 

“Treasury Rate” means, with respect to any Redemption Date, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two Business Days prior to the Redemption Date (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 March 1, 2020; provided, however, that if the period from the Redemption Date to March 1, 2020 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which

 

A-6

 

such yields are given, except that if the period from the Redemption Date to March 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 shall be used.

 

The Issuer will (a) calculate the Treasury Rate as of a date no later than the fourth Business Day preceding the applicable Redemption Date and (b) prior to such Redemption Date file with the Trustee an Officers’ Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail.

 

Notice of any redemption shall be given pursuant to Section 5.5 of the Indenture not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, except that that redemption notices may be sent more than 60 days prior to a Redemption Date if the notice is issued in connection with a legal defeasance or covenant defeasance of the Securities or a satisfaction and discharge of the Indenture pursuant to Article VIII.

 

Any redemption or notice of redemption may, at the Issuer’s discretion, be subject to one or more conditions precedent and, in the case of a redemption with the Net Cash Proceeds of an Equity Offering, be given prior to the completion of the related Equity Offering.

 

Once notice of redemption has been given, the Securities or portions of Securities so to be redeemed without a condition precedent shall, on the Redemption Date, become due and payable at the redemption price therein specified (together with accrued interest, if any, to the Redemption Date).

 

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

 

The Issuer and its Subsidiaries may acquire Securities by means other than a redemption or required repurchase, whether by tender offer, open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws, so long as such acquisition does not otherwise violate the terms of the Indenture.

 

6.   Repurchase Provisions

 

(a)           If a Change of Control occurs, unless the Issuer has exercised its right to redeem all of the Securities as described under paragraph 5 of the Securities or one of the other two exceptions described in the fifth paragraph of Section 3.9 of the Indenture applies, each Holder will have the right to require the Issuer to repurchase from each Holder all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) as provided in, and subject to the terms of, the Indenture.

 

(b)           If the Issuer or any Restricted Subsidiary consummates an Asset Disposition, the Issuer may be obligated to make an Asset Disposition Offer to all Holders and

 

A-7

 

all holders of certain other Pari Passu Indebtedness, on the terms and subject to the conditions in Section 3.5 of the Indenture.

 

7.   Denominations; Transfer; Exchange

 

The Securities are in registered form without coupons in denominations of principal amount of $2,000 and whole multiples of $1,000 in excess thereof.  A Holder may transfer or exchange Securities in accordance with the Indenture.  The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay a sum sufficient to cover any taxes and fees required by law or permitted by the Indenture.  The Registrar need not register the transfer of or exchange any Security (A) for a period (1) of 15 days before a selection of Securities to be redeemed or (2) beginning 15 days before an interest payment date and ending on such interest payment date or (B) selected for redemption, except the unredeemed portion of any Security being redeemed in part.

 

8.   Persons Deemed Owners

 

The registered Holder of this Security shall be treated as the owner of it for all purposes.

 

9.   Unclaimed Money

 

If money for the payment of principal, premium, if any, or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property law designates another Person.  After any such payment, Holders entitled to the money must look only to the Issuer for payment as unsecured general creditors unless an abandoned property law designates another Person and not to the Trustee for payment.

 

10.   Defeasance

 

Subject to certain exceptions and conditions set forth in the Indenture, the Issuer at any time may terminate some or all of its obligations under the Securities and the Indenture if the Issuer deposits with the Trustee money or U.S. Government Obligations for the payment of principal, premium, if any, and interest on the Securities to redemption or final maturity, as the case may be.

 

11.   Amendment, Supplement, Waiver

 

Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Securities or the Guarantees may be amended or supplemented by the Issuer, the Subsidiary Guarantors and the Trustee with the consent of the Holders of a majority in principal amount of the then outstanding Securities and (ii) any default (other than with respect to nonpayment or in respect of a provision that cannot be amended without the consent of each Securityholder affected) or noncompliance with any provision may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Securities.  Without the consent of any Securityholder, the Issuer, the Subsidiary Guarantors and the Trustee may amend or supplement the Indenture, the Securities or the Guarantees to cure any ambiguity, omission, defect, mistake

 

A-8

 

or inconsistency, to comply with Article IV of the Indenture, to provide for uncertificated Securities in addition to, or in place of, certificated Securities, to add Subsidiary Guarantors with respect to the Securities, or release a Subsidiary Guarantor from its Guarantee and terminate such Guarantee, provided that the release and termination is in accordance with the Indenture, to secure the Securities or the Guarantees, to add additional covenants of the Issuer or a Subsidiary Guarantor for the benefit of the Holders or to surrender any right or power conferred on the Issuer or a Subsidiary Guarantor, to comply with any requirement of the SEC in connection with qualifying the Indenture under the Act, to make any change that does not adversely affect the rights of any Securityholder, to evidence and provide for the appointment of a successor Trustee or to provide for the issuance of Additional Securities in accordance with limitations set forth in the Indenture.

 

12.   Defaults and Remedies

 

Under the Indenture, Events of Default include (each of which is described in greater detail in the Indenture): (i) default in any payment of interest or Additional Interest, if any (as required by the Registration Rights Agreement), on any Security when due, continued for 30 days; (ii) default in the payment of principal of or premium, if any, on any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration of acceleration or otherwise; (iii) failure by the Issuer or any Subsidiary Guarantor to comply with its obligations under Section 4.1 of the Indenture; (iv) failure by the Issuer to comply for 30 days (or 180 days in the case of a Reporting Failure)  after notice as provided with Section 3.9 or under Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.8, 3.10 and 3.11 of the Indenture (in each case, other than a failure to purchase Securities which will constitute an Event of Default under clause (ii) above and other than a failure to comply with Section 4.1 of the Indenture which is covered by clause (iii)); (v) failure by the Issuer to comply for 60 days after written notice with its other agreements contained in the Indenture; (vi) 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 borrowed by the Issuer or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Issuer or any of its Restricted Subsidiaries), other than Indebtedness owed to the Issuer or a Restricted Subsidiary, whether such Indebtedness or guarantee existed at the Issue Date, or was created thereafter, which default: (a) is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (and any extensions of any grace period) (“payment default”); or (b) 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 $10.0 million or more; (vii) certain events of bankruptcy, insolvency or reorganization of the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Issuer and its Restricted Subsidiaries), would constitute a Significant Subsidiary; (viii) failure by the Issuer or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Issuer and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $10.0 million (to the extent not covered by insurance by a reputable and creditworthy insurance company as to which the insurer has not disclaimed coverage), which judgments are not paid or discharged, and there shall be a period of 60 consecutive days following entry of such

 

A-9

 

final judgment or decree during which a stay of enforcement of such final judgment or decree, by reason of pending appeal or otherwise, shall not be in effect; or (ix)  any Guarantee of a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary, ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or is declared null and void in a judicial proceeding or the Issuer or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that, taken together (as of the latest audited consolidated financial statements of the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary, denies or disaffirms its obligations under the Indenture or its Guarantee.

 

If an Event of Default (other than an Event of Default described in (vii) hereof) occurs and is continuing, the Trustee by notice to the Issuer, or the Holders of at least 25% in principal amount of the outstanding Securities by notice to the Issuer and the Trustee, may, and the Trustee at the request of such Holders shall, declare all the Securities to be due and payable immediately.  If an Event of Default described in clause (vii) of the foregoing paragraph occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest (including Additional Interest) on all the Securities will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

 

Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture.  Subject to the provisions of the Indenture relating to the duties of the Trustee if an Event of Default exists, the Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security.  Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Securityholders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal, premium, if any, or interest) if it determines that withholding notice is in their interest.

 

13.   Trustee Dealings with the Issuer

 

Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.

 

14.   No personal liability of directors, officers, employees and stockholders

 

No director, officer, employee, incorporator, stockholder, member, partner or trustee of the Issuer or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Issuer or any Subsidiary Guarantor under the Securities, the Indenture or the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities.

 

A-10

 

15.   Authentication

 

This Security shall not be valid until an authorized officer of the Trustee (or an Authenticating Agent acting on its behalf) manually signs the certificate of authentication on the other side of this Security.

 

16.   Abbreviations

 

Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors Act).

 

17.   CUSIP, Common Code and ISIN Numbers

 

The Issuer has caused CUSIP, Common Code and ISIN numbers, if applicable, to be printed on the Securities and has directed the Trustee to use CUSIP, Common Code and ISIN numbers, if applicable, in notices of redemption or purchase as a convenience to Securityholders.  No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption or purchase and reliance may be placed only on the other identification numbers placed thereon.

 

18.   Governing Law

 

This Security shall be governed by, and construed in accordance with, the laws of the State of New York.

 

The Issuer will furnish to any Securityholder upon written request and without charge to the Securityholder a copy of the Indenture, which has in it the text of this Security in larger type.  Requests may be made to:

 

Antero Resources Corporation 
 1615 Wynkoop Street
  Denver, Colorado 80202
 Attention: Chief Financial Officer

 

19.   Patriot Act

 

The parties hereto acknowledge that in accordance with Section 326 of the Patriot Act, the Trustee is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.  The parties to the 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 Patriot Act.

 

A-11

 

ASSIGNMENT FORM

 

To assign this Security, fill in the form below:

 

I or we assign and transfer this Security to:

 

	
 
    	
 
    

(Print or type assignee’s name, address and zip code)

 

	
 
    	
 
    

(Insert assignee’s Social Security or Tax I.D. No.)

 

and irrevocably appoint                         agent to transfer this Security on the books of the Issuer.  The agent may substitute another to act for him.

 

 

 

	
Date:
    	
 
    	
 
    	
Your   Signature:
    	
 
    

 

	
Signature   Guarantee:
    	
 
    
	
(Signature must be   guaranteed)
    

 

	
 
    	
 
    

Sign exactly as your name appears on the other side of this Security.

 

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.

 

The undersigned hereby certifies that it o is / o is not an Affiliate of the Issuer and that, to its knowledge, the proposed transferee o is / o is not an Affiliate of the Issuer.

 

In connection with any transfer or exchange of any of the Securities evidenced by this certificate occurring prior to the date that is one year (or 40 days in the case of any Regulation S Notes) after the later of the date of original issuance of such Securities and the last date, if any, on which such Securities were owned by the Issuer or any Affiliate of the Issuer, the undersigned confirms that such Securities are being:

 

CHECK ONE BOX BELOW:

 

	
(1)
    	
 ̈
    	
acquired   for the undersigned’s own account, without transfer; or
    
	
 
    	
 
    	
 
    
	
(2)
    	
 ̈
    	
transferred   to the Issuer; or
    
	
 
    	
 
    	
 
    
	
(3)
    	
 ̈
    	
transferred   pursuant to and in compliance with Rule 144A under the Securities Act of   1933, as amended (the “Securities Act”); or
    
	
 
    	
 
    	
 
    
	
(4)
    	
 ̈
    	
transferred   pursuant to an effective registration statement under the Securities Act; or
    

 

A-12

 

	
(5)
    	
 ̈
    	
transferred   pursuant to and in compliance with Regulation S under the Securities   Act; or
    
	
 
    	
 
    	
 
    
	
(6)
    	
 ̈
    	
transferred   to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),   (3) or (7) under the Securities Act), that has furnished to the Trustee   a signed letter containing certain representations and agreements (the form   of which letter appears as Section 2.8 of the Indenture); or
    
	
 
    	
 
    	
 
    
	
(7)
    	
 ̈
    	
transferred   pursuant to another available exemption from the registration requirements of   the Securities Act of 1933, as amended.
    

 

Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if box (5), (6) or (7) is checked, the Issuer may require, prior to registering any such transfer of the Securities, in its sole discretion, such legal opinions, certifications and other information as the Issuer may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, as amended, such as the exemption provided by Rule 144 under such Act.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
Signature   Guarantee:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Signature   must be guaranteed)
    	
 
    	
Signature
    

 

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.

 

TO BE COMPLETED BY PURCHASER IF BOX (1) OR (3) ABOVE IS CHECKED.

 

The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

	
 
    	
 
    
	
 
    	
Dated:
    

 

A-13

 

[TO BE ATTACHED TO GLOBAL SECURITIES]

 

SCHEDULE OF INCREASES AND DECREASES IN GLOBAL SECURITY

 

The following increases or decreases in this Global Security have been made:

 

	
Date of
   increase/
   decrease
    	
 
    	
Amount of
   decrease in
   Principal Amount
   of this Global
   Security
    	
 
    	
Amount of
   increase in
   Principal Amount
   of this Global
   Security
    	
 
    	
Principal Amount
   of this Global
   Security following
   such decrease or
   increase
    	
 
    	
Signature of
   authorized
   signatory of
   Trustee or
   Securities
   Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

A-14

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you elect to have this Security purchased by the Issuer pursuant to Section 3.5 or 3.9 of the Indenture, check either box:

 

	
 
    	
o
    	
 
    	
o
    	
 
    
	
 
    	
3.5
    	
 
    	
3.9
    	
 
    

 

If you want to elect to have only part of this Security purchased by the Issuer pursuant to Section 3.5 or Section 3.9 of the Indenture, state the amount in principal amount (must be in denominations of $2,000 or an integral multiple of $1,000 in excess thereof):  $                                             and specify the denomination or denominations (which shall not be less than the minimum authorized denomination) of the Securities to be issued to the Holder for the portion of the within Security not being repurchased (in the absence of any such specification, one such Security will be issued for the portion not being repurchased): $                  .

 

	
Date:              Your Signature:
    	
 
    
	
 
    	
(Sign exactly as your name appears on the other side of the   Security)
    

 

	
Signature   Guarantee:
    	
 
    
	
(Signature must be guaranteed)
    

 

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.

 

A-15

 

EXHIBIT B

 

[FORM OF FACE OF SERIES B NOTE]

 

[Depository Legend, if applicable]
 [Original Issue Discount Legend, if applicable]

 

	
No. [         ]
    	
Principal Amount $[                            ],   as revised
    
	
 
    	
by the Schedule of Increases and Decreases in Global
    
	
 
    	
Security attached hereto
    

 

CUSIP NO. 03674X AJ5

ISIN: US03674XAJ54

 

5.0% Senior Notes, Series B, due 2025

 

Antero Resources Corporation, a Delaware corporation, promises to pay to CEDE & CO., or registered assigns, the principal sum of [                                   ] Dollars, as revised by the Schedule of Increases and Decreases in Global Security attached hereto, on March 1, 2025.

 

Interest Payment Dates:  March 1 and September 1
 Record Dates:  February 15 and August 15

 

Additional provisions of this Security are set forth on the other side of this Security.

 

	
 
    	
ANTERO   RESOURCES CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities described in the within-mentioned Indenture.

 

	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    	
 
    	
 
    
	
as   Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Authorized   Officer
    	
 
    	
Dated:
    	
 
    

 

B-1

 

[FORM OF REVERSE SIDE OF SERIES B NOTE]

 

ANTERO RESOURCES CORPORATION

 

5.0% Senior Notes, Series B, due 2025

 

1.   Interest

 

Antero Resources Corporation, a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Issuer”), promises to pay interest on the principal amount of this Security at the rate per annum shown above.

 

The Issuer will pay interest semiannually on March 1 and September 1 of each year commencing March 1, 2017.  Interest on the Securities will accrue from the most recent date to which interest has been paid on the Securities or, if no interest has been paid, from December 21, 2016.  The Issuer shall pay interest on overdue principal, and on overdue premium (plus interest on such interest to the extent lawful), at the rate borne by the Securities to the extent lawful.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

2.   Method of Payment

 

By no later than 11:00 a.m. (New York City time) on the date on which any principal of, premium, if any, or interest on any Security is due and payable, the Issuer shall irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay such principal, premium, if any, and/or interest (including Additional Interest).  The Issuer will pay interest (except Defaulted Interest) to the Persons who are registered Holders of Securities at the close of business on the February 15 and August 15 next preceding the interest payment date even if Securities are cancelled, repurchased or redeemed after the record date and on or before the interest payment date.  Holders must surrender Securities to a Paying Agent to collect principal payments.  The Issuer will pay principal, premium, if any, and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of Securities represented by a Global Security (including principal, premium, if any, and interest) will be made by the transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depository. The Issuer will make all payments in respect of a Definitive Security (including principal, premium, if any, and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Securities may also be made, at the Issuer’s option, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if the Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 15 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

 

B-2

 

3.   Paying Agent and Registrar

 

Initially, Wells Fargo Bank, National Association (the “Trustee”) will act as Trustee, Paying Agent and Registrar.  The Issuer may appoint and change any Paying Agent, Registrar or co-registrar without notice to any Securityholder.  The Issuer or any of its Restricted Subsidiaries may act as Paying Agent or Registrar.

 

4.   Indenture

 

The Issuer issued the Securities under an Indenture dated as of December 21, 2016 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Issuer, the Subsidiary Guarantors and the Trustee.  The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”).  Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all terms and provisions of the Indenture, and Securityholders are referred to the Indenture and the Act for a statement of those terms.

 

The Securities are senior obligations of the Issuer.  The aggregate principal amount of Securities that may be authenticated and delivered under the Indenture is unlimited.  This Security is one of the 5.0% Senior Notes, Series B, due 2025 referred to in the Indenture.  The Securities include (i) $600,000,000 aggregate principal amount of the Issuer’s 5.0% Senior Notes, Series A, due 2025 issued under the Indenture on December 21, 2016 (herein called “Initial Securities”), (ii) if and when issued, additional 5.0% Senior Notes, Series A, due 2025 or 5.0% Senior Notes, Series B, due 2025 of the Issuer that may be issued from time to time under the Indenture subsequent to December 21, 2016 (herein called “Additional Securities”) as provided in Section 2.1(a) of the Indenture and (iii) if and when issued, the Issuer’s 5.0% Senior Notes, Series B, due 2025 that may be issued from time to time under the Indenture in exchange for Initial Securities or Additional Securities in an offer registered under the Securities Act as provided in a Registration Rights Agreement (herein called “Exchange Securities”).  The Initial Securities, Additional Securities and Exchange Securities are treated as a single class of securities under the Indenture.  The Indenture imposes certain limitations on the incurrence of indebtedness, the making of restricted payments, the sale of assets and subsidiary stock, the incurrence of certain liens, the entering into of affiliate transactions, the entering into of agreements that restrict distribution from restricted subsidiaries and the consummation of mergers and consolidations.  The Indenture also imposes requirements with respect to the provision of financial information and the provision of guarantees of the Securities by certain subsidiaries.

 

To guarantee the due and punctual payment of the principal, premium, if any, and interest (including post-filing or post-petition interest) on the Securities and all other amounts payable by the Issuer under the Indenture, the Securities and the Registration Rights Agreement when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Securities and the Indenture, the Subsidiary Guarantors have unconditionally guaranteed (and future guarantors, together with the Subsidiary Guarantors,

 

B-3

 

will unconditionally Guarantee), jointly and severally, such obligations on a senior basis pursuant to the terms of the Indenture.

 

5.   Redemption

 

Except as set forth below or in the penultimate paragraph of Section 3.9 of the Indenture, the Securities will not be redeemable at the option of the Issuer prior to March 1, 2020.  On and after such date, the Securities will be redeemable, at the Issuer’s option, in whole or in part, at any time upon notice as provided in the Indenture, at the following redemption prices (expressed in percentages of principal amount), plus accrued and unpaid interest (including Additional Interest) to, but excluding, the applicable Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on March 1 of the years set forth below:

 

	
Period
    	
 
    	
Redemption Price
    	
 
    
	
2020
    	
 
    	
103.750
    	
%
    
	
2021
    	
 
    	
102.500
    	
%
    
	
2022
    	
 
    	
101.250
    	
%
    
	
2023 and   thereafter
    	
 
    	
100.000
    	
%
    

 

In addition, at any time and from time to time on or prior to March 1, 2020, upon notice as provided in the Indenture, the Issuer may redeem in the aggregate up to 35% of the original principal amount of the Securities (calculated after giving effect to any issuance of Additional Notes), but in an amount not greater than the Net Cash Proceeds of one or more Equity Offerings at a redemption price (expressed as a percentage of principal amount) of 105.0% of the principal amount thereof, plus accrued and unpaid interest (including Additional Interest), if any, to, but excluding, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, that:

 

(1)           at least 65% of the original principal amount of the Securities (calculated after giving effect to any issuance of Additional Securities) must remain outstanding after each such redemption; and

 

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

 

If the Redemption Date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest (including Additional Interest), if any, will be paid on such Redemption Date to the Person in whose name the Security is registered at the close of business on such record date, and no Additional Interest will be payable to Holders whose Securities will be subject to redemption by the Issuer.

 

In the case of any partial redemption, selection of the Securities for redemption will be made by the Trustee in compliance with the requirements of the of the principal national securities exchange, if any, on which such Securities are listed, or, if such Securities are not so

 

B-4

 

listed, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate (or, in the case of Global Securities, the Trustee will select Securities for redemption based on such  method as DTC may prescribe), although no Security of $2,000 in original principal amount or less will be redeemed in part.  If any Security is to be redeemed in part only, the notice of redemption relating to such Security shall state the portion of the principal amount thereof to be redeemed. A new Security in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Security.  On and after the Redemption Date, interest will cease to accrue on Securities or portions thereof called for redemption without any condition precedent, as long as the Issuer has deposited with the Paying Agent funds in satisfaction of the applicable redemption price pursuant to the Indenture.

 

In addition, at any time prior to March 1, 2020, upon notice as provided in the Indenture, the Issuer may redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

 

“Applicable Premium” means, with respect to a Security at any time, the greater of (i) 1.0% of the principal amount of such Security or (ii) the excess, if any, of (A) the present value at such time of (1) the redemption price of such Security on March 1, 2020 (such redemption price being described in this paragraph 5) plus (2) all required interest payments (excluding accrued and unpaid interest to such Redemption Date) due on such Security through March 1, 2020, computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day calendar months), over (B) the principal amount of such Security.

 

“Treasury Rate” means, with respect to any Redemption Date, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two Business Days prior to the Redemption Date (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 March 1, 2020; provided, however, that if the period from the Redemption Date to March 1, 2020 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the Redemption Date to March 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 shall be used.

 

The Issuer will (a) calculate the Treasury Rate as of a date no later than the fourth Business Day preceding the applicable Redemption Date and (b) prior to such Redemption Date file with the Trustee an Officers’ Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail.

 

B-5

 

Notice of any redemption shall be given pursuant to Section 5.5 of the Indenture not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, except that that redemption notices may be sent more than 60 days prior to a Redemption Date if the notice is issued in connection with a legal defeasance or covenant defeasance of the Securities or a satisfaction and discharge of the Indenture pursuant to Article VIII.

 

Any redemption or notice of redemption may, at the Issuer’s discretion, be subject to one or more conditions precedent and, in the case of a redemption with the Net Cash Proceeds of an Equity Offering, be given prior to the completion of the related Equity Offering.

 

Once notice of redemption has been given, the Securities or portions of Securities so to be redeemed without a condition precedent shall, on the Redemption Date, become due and payable at the redemption price therein specified (together with accrued interest, if any, to the Redemption Date).

 

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

 

The Issuer and its Subsidiaries may acquire Securities by means other than a redemption or required repurchase, whether by tender offer, open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws, so long as such acquisition does not otherwise violate the terms of the Indenture.

 

6.   Repurchase Provisions

 

(a)           If a Change of Control occurs, unless the Issuer has exercised its right to redeem all of the Securities as described under paragraph 5 of the Securities or one of the other two exceptions described in the fifth paragraph of Section 3.9 of the Indenture applies, each Holder will have the right to require the Issuer to repurchase from each Holder all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) as provided in, and subject to the terms of, the Indenture.

 

(b)           If the Issuer or any Restricted Subsidiary consummates an Asset Disposition, the Issuer may be obligated to make an Asset Disposition Offer to all Holders and all holders of certain other Pari Passu Indebtedness, on the terms and subject to the conditions in Section 3.5 of the Indenture.

 

7.   Denominations; Transfer; Exchange

 

The Securities are in registered form without coupons in denominations of principal amount of $2,000 and whole multiples of $1,000 in excess thereof.  A Holder may transfer or exchange Securities in accordance with the Indenture.  The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay a sum sufficient to cover any taxes and fees required by law or permitted by the Indenture.

 

B-6

 

The Registrar need not register the transfer of or exchange any Security (A) for a period (1) of 15 days before a selection of Securities to be redeemed or (2) beginning 15 days before an interest payment date and ending on such interest payment date or (B) selected for redemption, except the unredeemed portion of any Security being redeemed in part.

 

8.   Persons Deemed Owners

 

The registered Holder of this Security shall be treated as the owner of it for all purposes.

 

9.   Unclaimed Money

 

If money for the payment of principal, premium, if any, or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property law designates another Person.  After any such payment, Holders entitled to the money must look only to the Issuer for payment as unsecured general creditors unless an abandoned property law designates another Person and not to the Trustee for payment.

 

10.   Defeasance

 

Subject to certain exceptions and conditions set forth in the Indenture, the Issuer at any time may terminate some or all of its obligations under the Securities and the Indenture if the Issuer deposits with the Trustee money or U.S. Government Obligations for the payment of principal, premium, if any, and interest on the Securities to redemption or final maturity, as the case may be.

 

11.   Amendment, Supplement, Waiver

 

Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Securities or the Guarantees may be amended or supplemented by the Issuer, the Subsidiary Guarantors and the Trustee with the consent of the Holders of a majority in principal amount of the then outstanding Securities and (ii) any default (other than with respect to nonpayment or in respect of a provision that cannot be amended without the consent of each Securityholder affected) or noncompliance with any provision may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Securities.  Without the consent of any Securityholder, the Issuer, the Subsidiary Guarantors and the Trustee may amend or supplement the Indenture, the Securities or the Guarantees to cure any ambiguity, omission, defect, mistake or inconsistency, to comply with Article IV of the Indenture, to provide for uncertificated Securities in addition to, or in place of, certificated Securities, to add Subsidiary Guarantors with respect to the Securities, or release a Subsidiary Guarantor from its Guarantee and terminate such Guarantee, provided that the release and termination is in accordance with the Indenture, to secure the Securities or the Guarantees, to add additional covenants of the Issuer or a Subsidiary Guarantor for the benefit of the Holders or to surrender any right or power conferred on the Issuer or a Subsidiary Guarantor, to comply with any requirement of the SEC in connection with qualifying the Indenture under the Act, to make any change that does not adversely affect the rights of any Securityholder, to evidence and provide for the appointment of a successor Trustee

 

B-7

 

or to provide for the issuance of Additional Securities in accordance with limitations set forth in the Indenture.

 

12.   Defaults and Remedies

 

Under the Indenture, Events of Default include (each of which is described in greater detail in the Indenture): (i) default in any payment of interest on any Security when due, continued for 30 days; (ii) default in the payment of principal of or premium, if any, on any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration of acceleration or otherwise; (iii) failure by the Issuer or any Subsidiary Guarantor to comply with its obligations under Section 4.1 of the Indenture; (iv) failure by the Issuer to comply for 30 days (or 180 days in the case of a Reporting Failure)  after notice as provided with Section 3.9 or under Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.8, 3.10 and 3.11 of the Indenture (in each case, other than a failure to purchase Securities which will constitute an Event of Default under clause (ii) above and other than a failure to comply with Section 4.1 of the Indenture which is covered by clause (iii)); (v) failure by the Issuer to comply for 60 days after written notice with its other agreements contained in the Indenture; (vi) 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 borrowed by the Issuer or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Issuer or any of its Restricted Subsidiaries), other than Indebtedness owed to the Issuer or a Restricted Subsidiary, whether such Indebtedness or guarantee existed at the Issue Date, or was created thereafter, which default: (a) is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (and any extensions of any grace period) (“payment default”); or (b) 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 $10.0 million or more; (vii) certain events of bankruptcy, insolvency or reorganization of the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Issuer and its Restricted Subsidiaries), would constitute a Significant Subsidiary; (viii) failure by the Issuer or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Issuer and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $10.0 million (to the extent not covered by insurance by a reputable and creditworthy insurance company as to which the insurer has not disclaimed coverage), which judgments are not paid or discharged, and there shall be a period of 60 consecutive days following entry of such final judgment or decree during which a stay of enforcement of such final judgment or decree, by reason of pending appeal or otherwise, shall not be in effect; or (ix) any Guarantee of a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Issuer and its Restricted Subsidiaries) would constitute a Significant Subsidiary, ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or is declared null and void in a judicial proceeding or the Issuer or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that, taken together (as of the latest audited consolidated financial statements of the Issuer and its Restricted

 

B-8

 

Subsidiaries) would constitute a Significant Subsidiary, denies or disaffirms its obligations under the Indenture or its Guarantee.

 

If an Event of Default (other than an Event of Default described in (vii) hereof) occurs and is continuing, the Trustee by notice to the Issuer, or the Holders of at least 25% in principal amount of the outstanding Securities by notice to the Issuer and the Trustee, may, and the Trustee at the request of such Holders shall, declare all the Securities to be due and payable immediately.  If an Event of Default described in clause (vii) of the foregoing paragraph occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest (including Additional Interest) on all the Securities will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

 

Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture.  Subject to the provisions of the Indenture relating to the duties of the Trustee if an Event of Default exists, the Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security.  Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Securityholders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal, premium, if any, or interest) if it determines that withholding notice is in their interest.

 

13.   Trustee Dealings with the Issuer

 

Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.

 

14.   No personal liability of directors, officers, employees and stockholders

 

No director, officer, employee, incorporator, stockholder, member, partner or trustee of the Issuer or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Issuer or any Subsidiary Guarantor under the Securities, the Indenture or the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities.

 

15.   Authentication

 

This Security shall not be valid until an authorized officer of the Trustee (or an Authenticating Agent acting on its behalf) manually signs the certificate of authentication on the other side of this Security.

 

16.   Abbreviations

 

Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT

 

B-9

 

TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors Act).

 

17.   CUSIP, Common Code and ISIN Numbers

 

The Issuer has caused CUSIP, Common Code and ISIN numbers, if applicable, to be printed on the Securities and has directed the Trustee to use CUSIP, Common Code and ISIN numbers, if applicable, in notices of redemption or purchase as a convenience to Securityholders.  No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption or purchase and reliance may be placed only on the other identification numbers placed thereon.

 

18.   Governing Law

 

This Security shall be governed by, and construed in accordance with, the laws of the State of New York.

 

The Issuer will furnish to any Securityholder upon written request and without charge to the Securityholder a copy of the Indenture, which has in it the text of this Security in larger type.  Requests may be made to:

 

Antero Resources Corporation
 1615 Wynkoop Street
 Denver, Colorado 80202
 Attention: Chief Financial Officer

 

19.   Patriot Act

 

The parties hereto acknowledge that in accordance with Section 326 of the Patriot Act, the Trustee is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.  The parties to the 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 Patriot Act.

 

B-10

 

ASSIGNMENT FORM

 

To assign this Security, fill in the form below:

 

I or we assign and transfer this Security to:

 

	
 
    	
 
    

(Print or type assignee’s name, address and zip code)

 

	
 
    	
 
    

(Insert assignee’s Social Security or Tax I.D. No.)

 

and irrevocably appoint              agent to transfer this Security on the books of the Issuer.  The agent may substitute another to act for him.

 

 

 

	
Date:
    	
 
    	
 
    	
Your   Signature:
    	
 
    

 

	
Signature   Guarantee:
    	
 
    
	
(Signature must be guaranteed)
    

 

	
 
    	
 
    

Sign exactly as your name appears on the other side of this Security.

 

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.

 

B-11

 

[TO BE ATTACHED TO GLOBAL SECURITIES]

 

SCHEDULE OF INCREASES AND DECREASES IN GLOBAL SECURITY

 

The following increases or decreases in this Global Security have been made:

 

	
Date of
   increase/
   decrease
    	
 
    	
Amount of
   decrease in
   Principal Amount
   of this Global
   Security
    	
 
    	
Amount of
   increase in
   Principal Amount
   of this Global
   Security
    	
 
    	
Principal Amount
   of this Global
   Security following
   such decrease or
   increase
    	
 
    	
Signature of
   authorized
   signatory of
   Trustee or
   Securities
   Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

B-12

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you elect to have this Security purchased by the Issuer pursuant to Section 3.5 or 3.9 of the Indenture, check either box:

 

 

	
 
    	
o
    	
 
    	
o
    	
 
    
	
 
    	
3.5
    	
 
    	
3.9
    	
 
    

 

If you want to elect to have only part of this Security purchased by the Issuer pursuant to Section 3.5 or Section 3.9 of the Indenture, state the amount in principal amount (must be in denominations of $2,000 or an integral multiple of $1,000 in excess thereof): $                                             and specify the denomination or denominations (which shall not be less than the minimum authorized denomination) of the Securities to be issued to the Holder for the portion of the within Security not being repurchased (in the absence of any such specification, one such Security will be issued for the portion not being repurchased):  $                 .

 

	
Date:              Your Signature:
    	
 
    
	
 
    	
(Sign exactly as your name appears on the other side of the   Security)
    

 

	
Signature   Guarantee:
    	
 
    
	
(Signature must be guaranteed)
    

 

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.

 

B-13

 

EXHIBIT C

 

FORM OF INDENTURE SUPPLEMENT TO ADD SUBSIDIARY GUARANTORS

 

This Supplemental Indenture, dated as of [                     ], 20   (this “Supplemental Indenture” or “Guarantee”), is among [name of future Subsidiary Guarantor] (the “Subsidiary Guarantor”), Antero Resources Corporation (together with its successors and assigns, the “Issuer”), each other then existing Subsidiary Guarantor under the Indenture referred to below, and Wells Fargo Bank, National Association, as Trustee under the Indenture referred to below.

 

W I T N E S S E T H:

 

WHEREAS, the Issuer, the Subsidiary Guarantors and the Trustee have heretofore executed and delivered an Indenture, dated as of December 21, 2016 (as amended, supplemented, waived or otherwise modified, the “Indenture”), providing for the issuance of an aggregate principal amount of $750 million of 5.0% Senior Notes due 2025 of the Issuer (the “Securities”);

 

WHEREAS, Section 3.11 of the Indenture provides that after the Issue Date the Issuer is required to cause (a) each Wholly-Owned Subsidiary of the Issuer (other than a Foreign Subsidiary) formed or acquired after the Issue Date and (b) any other Domestic Subsidiary that is not already a Subsidiary Guarantor that guarantees any Indebtedness of the Issuer or a Subsidiary Guarantor, in each case to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary will unconditionally guarantee, on a joint and several basis with the other Subsidiary Guarantors, the full and prompt payment of the principal of, premium, if any, and interest on the Securities; and

 

WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee, the Subsidiary Guarantors and the Issuer are authorized to execute and deliver this Supplemental Indenture to amend or supplement the Indenture, without the consent of any Securityholder;

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Subsidiary Guarantor, the Issuer, the other Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Securities as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.1  Defined Terms.  As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined.  The words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

 

C-1

 

ARTICLE II

 

Agreement to Be Bound; Guarantee

 

SECTION 2.1  Agreement to Be Bound.  The Subsidiary Guarantor hereby becomes a party to the Indenture as a Subsidiary Guarantor and as such will have all of the rights and be subject to all of the obligations and agreements of a Subsidiary Guarantor under the Indenture.  The Subsidiary Guarantor agrees to be bound by all of the provisions of the Indenture applicable to a Subsidiary Guarantor and to perform all of the obligations and agreements of a Subsidiary Guarantor under the Indenture.

 

SECTION 2.2   Guarantee.  The Subsidiary Guarantor agrees, on a joint and several basis with all the existing Subsidiary Guarantors, to fully, unconditionally and irrevocably guarantee to each Holder of the Securities and the Trustee the Obligations pursuant to Article X of the Indenture.

 

ARTICLE III

 

Miscellaneous

 

SECTION 3.1   Notices.  All notices and other communications to the Subsidiary Guarantor shall be given as provided in the Indenture to the Subsidiary Guarantor, at its address set forth below, with a copy to the Issuer as provided in the Indenture for notices to the Issuer.

 

SECTION 3.2   Parties.  Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the Indenture or any provision herein or therein contained.

 

SECTION 3.3   Governing Law.  This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

 

SECTION 3.4   Severability Clause.  In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

 

SECTION 3.5   Ratification of Indenture; Supplemental Indentures Part of Indenture.  Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.  This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Securities heretofore or hereafter authenticated and delivered shall be bound hereby.  The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture or with respect to the recitals contained herein, all of which recitals are made solely by the other parties hereto.

 

C-2

 

SECTION 3.6   Counterparts.  The parties hereto may sign one or more copies of this Supplemental Indenture in counterparts, all of which together shall constitute one and the same agreement.

 

SECTION 3.7   Headings.  The headings of the Articles and the Sections in this Supplemental Indenture are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

 

C-3

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

 

	
 
    	
[SUBSIDIARY   GUARANTOR],
    
	
 
    	
as   a Subsidiary Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Address]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ANTERO   RESOURCES CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
AR   OHIO LLC
    
	
 
    	
MONROE   PIPELINE LLC
    
	
 
    	
ANTERO   EXCHANGE PROPERTIES LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:  
    
	
 
    	
 
    	
Title:
    

 

C-4

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